[Federal Register Volume 72, Number 84 (Wednesday, May 2, 2007)]
[Rules and Regulations]
[Pages 24496-24522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-7990]



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Part V





Environmental Protection Agency





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40 CFR Parts 9 and 35



 Cooperative Agreements and Superfund State Contracts for Superfund 
Response Actions; Final Rule

  Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / Rules 
and Regulations  

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9 and 35

[FRL-8306-2]
RIN 2050-AE62


Cooperative Agreements and Superfund State Contracts for 
Superfund Response Actions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This final rule amends the regulation for Superfund 
Cooperative Agreements and Superfund State Contracts. The revisions to 
the regulation: Incorporate EPA policy changes since 1990 that impact 
this regulation; reduce the burden placed by this regulation on 
Cooperative Agreement recipients and parties to Superfund State 
Contracts; increase reliance on the Federal Government's uniform 
administrative requirements for grants and Cooperative Agreements to 
State and local governments, wherever possible; authorize procedures 
that required deviations, on multiple occasions, under the existing 
regulation; expressly authorize previous program initiatives that were 
proven successful on a pilot basis; provide additional regulatory 
flexibility without negatively impacting cost recovery actions; update 
cross-references to other regulations that have changed or been 
removed; and eliminate references to obsolete forms. The revisions 
affect States, Indian Tribes, intertribal consortia, and political 
subdivisions. The revisions will improve the administration and 
effectiveness of Superfund Cooperative Agreements and Superfund State 
Contracts.

DATES: This rule is effective July 2, 2007.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-SFUND-2006-0498. All documents in the docket are listed on 
the www.regulations.gov Web site. Although listed in the index, some 
information is not publicly available, e.g., confidential business 
information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, is 
not placed on the Internet and will be publicly available only in hard 
copy form. Publicly available docket materials are available either 
electronically through www.regulations.gov or in hard copy at the 
Superfund Docket, EPA/DC, EPA West, 1301 Constitution Ave., NW., 
Washington, DC.


    Note: The EPA Docket Center suffered damage due to flooding 
during the last week of June 2006. The Docket Center is continuing 
to operate. However, during the cleanup, there will be temporary 
changes to Docket Center telephone numbers, addresses, and hours of 
operation for people who wish to visit the Public Reading Room to 
view documents. Consult EPA's Federal Register notice at 71 FR 38147 
(July 5, 2006) or the EPA Web site at http://www.epa.gov/epahome/dockets.htm for current information on docket status, locations and 
telephone numbers.


FOR FURTHER INFORMATION CONTACT: Angelo Carasea, Office of Solid Waste 
and Emergency Response, Office of Superfund Remediation and Technology 
Innovation, (5204P), Environmental Protection Agency, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460; telephone number: (703) 603-8828, fax 
number: (703) 603-9112, e-mail address: [email protected].

SUPPLEMENTARY INFORMATION:

I. Statutory Authority
II. Applicability
III. Background
IV. Description of Key Changes
V. Section-by-Section Analysis
VI. Statutory and Executive Order Reviews

Statutory Authority

    This rule is issued under section 104(a)-(j) of the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980 (42 
U.S.C. 9601 et seq.) as amended (hereinafter CERCLA).

II. Applicability

    The final regulation requirements shall apply to all new 
Cooperative Agreements and Superfund State Contracts, funded under 
CERCLA, which EPA signs on or after the effective date of this 
regulation. EPA may agree to amend existing Cooperative Agreements or 
Superfund State Contracts to make the final regulation requirements 
applicable to work performed on and after the date EPA signs the 
amendment.

III. Background

    CERCLA launched the nation's first centralized and substantial 
commitment to clean up hazardous substance sites. CERCLA, or Superfund, 
provided Federal authority and resources to respond directly to 
releases (or threatened releases) of hazardous substances, pollutants, 
or contaminants that could endanger human health or the environment. 
The law also authorized enforcement action and cost recovery from those 
responsible for a release of a hazardous substance.
    This regulation authorizes two types of Superfund response 
agreements for State, Tribal (including intertribal consortium) and 
political subdivision participation in CERCLA implementation: 
Cooperative Agreements and Superfund State Contracts. These agreements 
ensure State and Tribal involvement, consistent with section 121 of 
CERCLA, 42 U.S.C. 9621 (hereinafter section 121), and section 126 of 
CERCLA, 42 U.S.C. 9626, (hereinafter section 126) and are used to 
obtain State assurances required under section 104 of CERCLA, 42 U.S.C. 
9604, (hereinafter section 104) before EPA begins a remedial action.
    EPA uses Cooperative Agreements to transfer funds to a State, 
political subdivision, or Indian Tribe that assumes responsibility as 
the lead or support agency for Superfund responses. Core Program 
Cooperative Agreements are used to fund non-site-specific activities 
that support a State or Indian Tribe's involvement in CERCLA responses.
    A Superfund State Contract is used to document a State's CERCLA 
section 104 assurances when either EPA or a political subdivision has 
the lead role in the implementation of a remedial action. The 
regulation is revised to authorize, but not require, a three-party 
Superfund State Contract whenever a political subdivision takes the 
lead for a remedial action.
    The role of States, Indian Tribes, and political subdivisions in 
Superfund has evolved substantially since 1990 when the original 40 CFR 
part 35 subpart O regulation was promulgated. The recipients' cleanup 
programs have matured and become more sophisticated. In addition, EPA 
has actively sought to fulfill CERCLA's mandate in sections 121 and 126 
to provide States and Indian Tribes a ``substantial and meaningful 
involvement'' in Superfund by providing Core Program funding for the 
development of State and Tribal infrastructure. The current subpart O 
imposes more restrictive requirements on recipients than 40 CFR part 31 
because, in 1990, EPA believed these requirements were necessary for 
enforcement and cost recovery purposes. With the maturing of State and 
Tribal programs, some of these added burdens have been judged to be 
unnecessary. In the amended subpart O, EPA allows recipients to follow 
the less burdensome 40 CFR part 31 requirements, wherever this is 
possible, without compromising cost recovery or other Superfund-
specific requirements.

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For example, with respect to procurement procedures, the amended 
subpart O eliminates the burdensome requirement for grantees to certify 
that their procurement systems meet the requirements of this subpart. 
The final regulation retains current requirements for awarding funds 
and tracking costs by site, activity, and operable unit, when 
appropriate, to ensure adequate documentation of costs. Retention of 
such documentation requirements will meet Superfund cost recovery 
requirements.

IV. Description of Key Changes

    EPA made limited revisions to certain sections of the regulation. 
The following is a brief description of the key changes.

A. Combining Certain Activities Into a Single Cooperative Agreement

    This revision enables EPA to award a single Cooperative Agreement 
for a single activity or multiple activities; a single activity at 
multiple sites; and multiple activities at multiple sites. For example, 
EPA may award a single Cooperative Agreement for Core Program, pre-
remedial and support agency activities. EPA will not award or amend a 
Cooperative Agreement to a political subdivision to conduct multiple 
activities at multiple sites. The revised regulation requires a single 
Cooperative Agreement for each State, political subdivision or Indian 
Tribe-lead remedial action and certain removal actions.

B. Core Program

    This revision provides for the maintenance of program elements 
previously developed using Core Program funding; however, EPA funding 
of the recipients' Core Program activities is dependent on the 
availability of EPA funds. Also this revision does not require Indian 
Tribes, including intertribal consortia, to meet the Core Program match 
requirements.

C. Indian Tribes

    In light of the many and varied interests that Indian Tribes have 
in the Superfund cleanup process, EPA is reducing unnecessary obstacles 
to Tribal involvement. When EPA promulgated the current regulation, it 
made a policy decision to require Indian Tribes to meet the criteria at 
40 CFR 300.515(b), which include establishing jurisdiction under 40 CFR 
300.515(b)(3), to be eligible for any Cooperative Agreement under this 
subpart. The revised regulation eliminates the requirement for 
demonstrating jurisdiction for all Tribal Core Program and most Tribal 
support agency agreements. To reflect the reduced emphasis on 
jurisdiction and to make the regulation's language more precise, the 
regulation is modified in several appropriate places to delete 
references to Tribal ``jurisdiction,'' and refer instead to a Tribal 
``area of Indian country.'' The regulation also removes cost share 
requirements for Core Program and support agency Cooperative 
Agreements. As a result, Indian Tribes have no cost share requirements 
under the revised regulation. Finally, an Indian Tribe will not need to 
acquire an interest in or accept transfer of an interest in real 
property acquired with CERCLA funds. This is not required under CERCLA 
section 104(j).

D. Intertribal Consortium

    Under the revised regulation, an intertribal consortium can enter 
into a Cooperative Agreement with EPA. This change implements the 
Federal Register notice, ``Update to EPA Policy On Certain Grants to 
Intertribal Consortia,'' (See, 67 FR 67181 (November 4, 2002)). An 
intertribal consortium must meet the same subpart O requirements for 
applying for and administering a Cooperative Agreement as an Indian 
Tribe.

E. Progress Reports

    The revised subpart O relaxes current reporting requirements that 
mandate quarterly reports. In the revised regulation, the EPA award 
official may specify that progress reports be submitted annually, semi-
annually, or quarterly.

F. Five-year Review

    Participation in five-year reviews of the continuing effectiveness 
of a remedial action is added as an eligible support agency activity.

G. Cost Share for the Support Agency

    The 10 percent cost share requirement for remedial action support 
agency activities at EPA-lead sites is eliminated.

H. Program Income

    With respect to program income, the revised regulation adds the 
following: ``Recoveries of Federal cost share amounts are not program 
income, and whether such recoveries are received before or after 
expiration of the Cooperative Agreement, must be reimbursed promptly to 
EPA.''

I. Credit Verification Procedures

    EPA may use other financial reviews in lieu of an audit to verify 
expenditures submissions.

J. Excess Cash Cost Share Contributions/Over Match Revisions

    The recipient may direct EPA to return the excess funds or to use 
the over match at one site to meet the cost share obligations at 
another site.

K. Thresholds for Force Accounts, Small Purchases and Cost Analysis

    Force accounts, small purchases, and cost analysis dollar amount 
thresholds are linked to the simplified acquisition threshold, as 
defined in the Office of Federal Procurement Policy Act (41 U.S.C. 403, 
Definitions). The dollar amount for the simplified acquisition 
threshold is currently set at $100,000.

L. Unalterable Electronic Format

    An unalterable electronic format may be substituted for original 
records if it is performed in accordance with the technical regulations 
concerning Federal Government records and EPA record management 
requirements. The unalterable electronic format requirement replaces 
the microform requirement.

M. Three-Party Superfund State Contract

    Under the revised regulation, the three-party Superfund State 
Contract is optional rather than mandatory. EPA has found that it is 
sometimes advantageous for the Superfund State Contract to be signed 
only by the State and EPA to obtain needed State CERCLA assurances, and 
to rely on a separate EPA Cooperative Agreement with a political 
subdivision. This revised regulation adds the requirement that EPA 
obtain State concurrence before awarding a Cooperative Agreement for 
remedial action to a political subdivision. EPA is making this change 
because EPA believes that it is important to maintain close 
communication and coordination with the State in all CERCLA responses.

N. Obsolete References

    This revision updates cross-references to other regulations that 
have changed or been removed, and eliminates references to obsolete 
forms.

V. Section-by-Section Analysis

Section 35.6000 Authority

    This section remains the same, except for a more specific citing of 
CERCLA.

 Section 35.6005 Purpose and Scope

    In paragraph (a), the word ``CERCLA-funded'', is deleted from the 
phrase, ``for administering CERCLA-funded Cooperative Agreements,'' and 
a reference to CERCLA section 104(d)(1) is added after this phrase.

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    Paragraph (b) is eliminated because it cites program authorities, 
which are not within the scope of CERCLA section 104 (a) through (j). 
The remaining paragraphs are resequenced to reflect deletion of 
paragraph (b).

Section 35.6010 Indian Tribe and Intertribal Consortium Eligibility

    This section's title is changed from ``Eligibility,'' to ``Indian 
Tribe and Intertribal Consortium Eligibility.'' The words ``States'' 
and ``political subdivisions'' are removed from this section, leaving 
text that is devoted exclusively to Indian Tribe eligibility. The 
revised section adds, in paragraph (a), that an Indian Tribe is not 
required to demonstrate jurisdiction under 40 CFR 300.515(b)(3) of the 
National Oil and Hazardous Substances Pollution Contingency Plan 
(National Contingency Plan or NCP) to be eligible for Core Program 
Cooperative Agreements, or those support agency Cooperative Agreements 
for which jurisdiction is not needed for the Tribe to carry out the 
support agency activities of the work plan. Finally, the revised 
section contains a new paragraph (c), which states that an intertribal 
consortium is eligible only if each consortium member is an eligible 
Tribe and that all members authorize the consortium to apply for and 
receive assistance.

Section 35.6015 Definitions

    The following changes are made in this section.
    The definition of CERCLA is shortened to refer only to the United 
States Code citation.
    Under the Core Program Cooperative Agreement definition, the word 
``support'' is replaced with the words ``develop and maintain''. This 
change clarifies that the Core Program funding can be made available 
for continuing program activities and operations. Also, the revised 
regulation corrects the omission of Indian Tribes from the definition 
in the previous regulation.
    The definition of ``Indian Tribe'' is revised by adding a sentence 
stating that the term also includes an intertribal consortium 
consisting of two or more federally recognized Tribes.
    The National Priorities List definition is revised to conform it 
with the definition in the NCP at 40 CFR 300.5.
    The revised regulation defines two additional terms: (a) 
Intertribal consortium and (b) simplified acquisition threshold. The 
intertribal consortium definition is based on the definition found in 
EPA's revised policy concerning certain grants to intertribal consortia 
(See, 67 FR 67181 (November 4, 2002)). The simplified acquisition 
threshold definition is taken from 41 U.S.C. 403, Definitions.
    The revised regulation deletes the definition for ``excess 
property.'' This term is not used in the regulation.

Section 35.6020 Requirements for Both Applicants and Recipients

    The text in Sec.  35.6020, ``Other statutory provisions'' is 
removed. The text in Sec.  35.6560 is revised to provide updated 
references to EPA's codifications of the Government-wide debarment and 
suspension rules, and drug-free workplace rules; the revised section is 
retitled, ``Requirements for Both Applicants and Recipients,'' and 
renumbered as Sec.  35.6020. Conforming amendments are made to cross-
references appearing in the revised regulation at Sec. Sec.  
35.6550(a)(6) and 35.6610(a).

Section 35.6055 State-Lead Pre-Remedial Cooperative Agreements

    In paragraph (a)(2)(i), the phrase ``project officer'' is changed 
to ``EPA project officer.''
    Paragraphs (a)(3) to (a)(6) are deleted and replaced with a new 
paragraph (a)(3), which states that the applicant must submit all 
applicable forms and information authorized by 40 CFR 31.10.

Section 35.6060 Political Subdivision-Lead Pre-Remedial Cooperative 
Agreements

    Paragraphs (c) and (d) are deleted. A three-party Superfund State 
Contract is authorized, but not required under Sec.  35.6800.

Section 35.6105 State-Lead Remedial Cooperative Agreements

    The following changes are made in this section.
    In paragraph (a), a new second sentence is added to indicate that 
applications for additional funding need only include the revised 
pages. This change is consistent with 40 CFR 31.10(b)(4).
    Paragraphs (a)(3) to (a)(6) are deleted and replaced with a new 
paragraph (a)(3) that requires the applicant to submit all applicable 
forms and information authorized by 40 CFR 31.10.
    Several editorial changes are made to paragraphs (b)(1) and (b)(2) 
to conform the text to CERCLA section 104(c)(3), and to add a reference 
to 40 CFR 300.510(c)(1).
    New text is added to paragraph (b)(5) to make clear that a State 
must provide the real property assurance even if the State transfers 
its interest to a third party or political subdivision. In addition, if 
the political subdivision defaults, the State will accept transfer of 
the interest. Finally, the new text provides that if the State or 
political subdivision disposes of the transferred real property, it 
shall comply with the requirements for real property in 40 CFR 
31.31(c)(2).

Section 35.6110 Indian Tribe-Lead Remedial Cooperative Agreements

    The following changes are made in this section.
    In paragraph (a), the phrase, ``and, if appropriate, Sec.  
35.6105(b)(5),'' is deleted. Also, paragraph (b)(2) is deleted. An 
Indian Tribe will not be required to assure EPA that it will take title 
to, acquire interest in, or accept transfer of an interest in real 
property acquired with CERCLA funds. Such an assurance is not required 
by CERCLA section 104.
    Paragraph (b)(3) is resequenced to (b)(2). The phrase ``out of 
jurisdiction'' is replaced with the phrase, ``out-of-an-Indian-Tribal-
area-of-Indian-country''.
    A new paragraph (b)(3) is added to make clear that CERCLA does not 
require Indian Tribes to share in the cost of CERCLA-funded remedial 
actions.

Section 35.6115 Political Subdivision-Lead Remedial Cooperative 
Agreement

    The sentences under paragraph (a) are deleted and replaced with the 
following sentences: ``General. If the State concurs, EPA may allow a 
political subdivision with the necessary capabilities and 
jurisdictional authority to conduct remedial response activities at a 
site. EPA will award the political subdivision a Cooperative Agreement 
to conduct remedial response and enter into a parallel Superfund State 
Contract with the State if required (See Sec.  35.6800, when a 
Superfund State Contract is required). The political subdivision may 
also be a signatory to the Superfund State Contract. The political 
subdivision must submit to the State a copy of all reports provided to 
EPA.''
    Paragraph (b) is deleted.
    The changes to paragraphs (a) and (b) are made because a three-
party Superfund State Contract is authorized, but it is not required 
under Sec.  35.6800.
    Paragraph (c) is resequenced to paragraph (b).

Section 35.6120 Notification of the Out-of-State or Out-of-an-Indian-
Tribal-Area-of-Indian-Country Transfer of CERCLA Waste

    The title of Sec.  35.6120 is changed. The phrase ``out-of-
jurisdiction'' is replaced with the phrase, ``Out-of-an-Indian-Tribal-
Area-of-Indian-Country.'' A corresponding change is made in

[[Page 24499]]

paragraph (a). In paragraph (b)(2), the phrase, ``The appropriate 
Indian Tribal official, who has jurisdictional authority in the area 
where the waste management facility is located,'' is replaced with the 
phrase, ``An appropriate official of an Indian Tribe in whose area of 
Indian country the waste management facility is located''.

Section 35.6205 Removal Cooperative Agreements

    In paragraph (e), the word, ``jurisdiction,'' is replaced with the 
phrase, ``area of Indian country''.

Section 35.6215 Eligibility for Core Program Cooperative Agreements

    In paragraph (a), the word ``support'' is replaced with the phrase 
``develop and maintain.'' This change clarifies that the Core Program 
funding can be made available for continuing program activities and 
operations.

Section 35.6225 Activities Eligible for Funding Under Core Program 
Cooperative Agreements

    In paragraph (a) and paragraph (a)(5), the word ``support'' is 
replaced with the phrase ``develop and maintain''. This change 
clarifies that the Core Program funding can be made available for 
continuing program activities and operations.

Section 35.6230 Application Requirements

    The text in paragraph (d) is replaced with a cross-reference to 40 
CFR 31.10.

Section 35.6235 Cost Sharing

    Indian Tribes are not required to provide cost share for Core 
Program activities. This change supports EPA's objectives under EPA 
Policy for the Administration of Environmental Programs on Indian 
Reservations (located at Web site: http://www.epa.gov/indian/pdfs/indian-policy-leavitt-pr.pdf) to (a) take affirmative steps to 
encourage and assist Tribes in assuming regulatory and program 
management responsibilities for reservation lands, and (b) take 
appropriate steps to remove existing legal and procedural impediments 
to working directly with Tribal government programs. Further, the word 
``recipient'' is changed to ``State'' since only a State is required to 
provide cost share for Core Program activities.

Section 35.6245 Allowable Activities

    A sentence is added to clarify that a five-year review is an 
eligible support agency activity.

Section 35.6250 Support Agency Cooperative Agreement Requirements

    In paragraph (a), the citation to ``part 29'' is corrected to read 
``40 CFR part 29''. In the penultimate sentence of paragraph (a), the 
phrase ``with the exception of remedial action support agency 
activities, which require cost share and must be applied for within a 
site-specific budget,'' is deleted. The last sentence in this section 
is also deleted. States and Indian Tribes receiving a support agency 
Cooperative Agreement will no longer be required to develop an 
estimated budget for each remedial action site as this requirement was 
determined to be unnecessary and overly burdensome. However, State and 
Indian Tribe accounting systems must continue to track expenses by 
site, activity and operable unit as required in Sec.  35.6270.

Section 35.6255 Cost Sharing

    This section is deleted. EPA has eliminated the 10 percent cost 
share requirement for remedial action support agency activities at EPA-
lead sites because the costs of these activities are minimal. EPA will 
not agree to waive the cost share requirements under support agency 
Cooperative Agreements that were awarded before the effective date of 
this rule.

Section 35.6260 Combining Cooperative Agreement Sites and Activities.

    The current regulation describes specific types of Cooperative 
Agreements. This new section authorizes multiple activities at both 
single and multiple sites when the recipient demonstrates certain 
qualifications (i.e., administrative, technical, and financial 
management capabilities).
    EPA will not award or amend a Cooperative Agreement to a political 
subdivision to conduct multiple activities at multiple sites. The 
revised regulation requires a single Cooperative Agreement for each 
remedial action and eligible removal action (i.e., a removal action 
that exceeds the statutory monetary ceiling or whenever a consistency 
waiver is likely to be sought). This approach (e.g., the combining of 
Core, pre-remedial, and support agency activities under a single 
Cooperative Agreement) has been used successfully for several years 
under EPA's ``Block Funding Administrative Reform.''

Section 35.6270 Standards for Financial Management Systems

    In paragraph (a)(5), the two sentences are deleted and replaced 
with the following: ``All support agreements will be assigned a single 
Superfund activity code designated specifically for support agency 
activities. All support agency costs, however, must be documented site 
specifically in accordance with the terms and conditions specified in 
the Cooperative Agreement.''

Section 35.6280 Payments

    Paragraph (a)(2) is revised to cross-reference the identical 
requirements in 40 CFR 31.21(i), ``Interest earned on advances.'' The 
only new effect of this revision is that recipients will be allowed to 
keep up to $100 per year for administrative expenses. See the last 
sentence of 40 CFR 31.21(i).

Section 35.6285 Recipient Payment of Response Costs

    Changes to this section include:
    In paragraph (c)(1), the phrase ``as defined in CERCLA section 
101(24), that are consistent with the permanent remedy at the site,'' 
is added after the phrase ``remedial action'' to clarify the scope of 
activities that may be eligible for a State credit.
    In paragraph (c)(1)(ii), the text is revised to indicate that after 
a site is listed on the NPL, the State may be eligible for credit only 
if the State initiated the remedial action after obtaining EPA's 
written approval.
    In paragraph (c)(2), the phrase ``Expenditures incurred before a 
site is listed on the NPL'' is deleted because the credit submission 
requirements are the same whether the expenses were incurred before or 
after listing.
    Paragraph (c)(2)(ii) is deleted because the requirement is 
addressed under (c)(1)(ii).
    The title of paragraph (c)(4) is changed from ``Credit 
verification'' to ``Credit verification procedures.'' To ensure a 
timely review of State credits, the regulation is modified to permit a 
financial review as an alternative to an audit.
    The title of paragraph (d) is changed from ``Over match'' to 
``Excess cash cost share contributions/over match''. The revised 
paragraph gives the State the option of directing EPA to return the 
excess funds or to use the over match at one site to meet the cost 
share obligations at another site.

Section 35.6290 Program Income

    A new sentence is added that states, ``Recoveries of Federal cost 
share amounts are not program income, and whether such recoveries are 
received before or after expiration of the Cooperative Agreement, must 
be reimbursed promptly to EPA.''

[[Page 24500]]

Section 35.6305 Obtaining Supplies

    In the second sentence, the phrase, ``in the above listed 
sections'', is replaced with, ``Sec. Sec.  35.6300, 35.6315(b), 35.6325 
through 35.6340, and 35.6350''.

Section 35.6400 Acquisition and Transfer of Interest

    The following changes are made under paragraph (a)(2):
    In the first sentence, the phrase, ``or Indian Tribes to the extent 
of its legal authority,'' is deleted. In the second sentence, the 
phrase, ``and Indian Tribe,'' and the phrase, ``and 35.6110(b)(2) 
respectively,'' are deleted. CERCLA section 104(j) does not require an 
Indian Tribe to provide assurances for real property.
    In the first sentence, the phrase ``of the NCP'' is appended to the 
citation: 40 CFR 300.510(f).

Section 35.6500 General Requirements

    Under paragraph (b), the ``$25,000'' limit is changed to ``the 
simplified acquisition threshold.''

Section 35.6550 Procurement System Standards

    Paragraphs (a)(1) through (a)(3) are replaced with a reference to 
40 CFR 31.36(a), and for States, a list of the eight additional subpart 
O procurement paragraphs and sections with which a State recipient must 
comply. The last sentence of this revised paragraph lists the 
procurement requirements for political subdivisions and Indian Tribes.
    Paragraphs (a)(4) through (a)(12) are resequenced (a)(2) through 
(a)(10).

Section 35.6555 Competition

    Paragraph (b)(2) is revised to read: ``Any contract or subcontract 
awarded by an Indian Tribe or Indian intertribal consortium shall 
comply with the requirements of 40 CFR 31.38, `Indian Self 
Determination Act'.'' The latter regulation, added to 40 CFR part 31 on 
January 19, 2001 (66 FR 3794), requires Indian Tribes and consortia to 
provide, to the extent feasible, employment preferences and training 
opportunities to Indians in connection with the administration of 
contracts and subcontracts under Federal financial assistance. In 
addition, award preferences are to be provided for Indian organizations 
and Indian-owned economic enterprises.

Section 35.6560 Master List of Debarred, Suspended, and Voluntarily 
Excluded Persons.

    This section is removed. The text of the current Sec.  35.6560 is 
revised to provide updated references to EPA's codifications of the 
Government-wide debarment and suspension rules and drug-free workplace 
rules; the revised section is retitled, ``Requirements for both 
applicants and recipients'', and renumbered as Sec.  35.6020. 
Conforming amendments are made to cross-references appearing in 
Sec. Sec.  35.6550(a)(6) and 35.6610(a).

Section 35.6565 Procurement Methods

    In paragraph (a), the ``$25,000'' limit is changed to the 
``simplified acquisition threshold''.

Section 35.6585 Cost and Price Analysis

    In paragraph (a)(1), the ``$25,000'' limit is changed to the 
``simplified acquisition threshold''.

Section 35.6590 Bonding and Insurance

    Paragraph (b) is deleted because the Agency's comprehensive 
guidelines on CERCLA section 119(c) indemnification are set forth in 
``Superfund Response Action Contractor Indemnification,'' 58 FR 5972 
(January 25, 1993). These guidelines provide that, in general, the 
Agency will not offer to indemnify response action contractors.
    The current paragraph (c) is resequenced to paragraph (b).

Section 35.6595 Contract Provisions

    Paragraph (b)(1) is amended by deleting the reference to the 1975 
enactment of the Energy Policy Conservation Act and substituting a 
reference to the U.S. Department of Energy's regulations governing 
State energy conservation programs.
    Paragraph (b)(2), entitled ``Violating facilities'', of Sec.  
35.6595 is deleted because it refers to the Agency's former regulations 
on Clean Air Act and Clean Water Act disqualifications, which were 
codified at 40 CFR part 15. Those statutory disqualifications and the 
procedures for reinstatement have been governed, since November 26, 
2003 (68 FR 66544, 66620, 66622) by subpart J of 40 CFR part 32, 
``Government-wide Debarment and Suspension (Nonprocurement); and 
Statutory Disqualification Under the Clean Air Act and Clean Water 
Act.'' The 40 CFR part 32 regulations apply to all EPA covered non-
procurement transactions, including those under 40 CFR part 35 subpart 
O.
    Paragraph (b)(3) is resequenced to (b)(2). Paragraph (b)(4) is 
resequenced to paragraph (b)(3) and revised to read, ``The recipient 
must comply with the requirements of 40 CFR 31.36(i)(3) through (6).'' 
The cross-referenced part 31 provisions specify the identical equal 
employment opportunity and labor requirements prescribed in paragraph 
(b)(3). The only effect of this revision is to eliminate the 
requirement that recipients include a copy of the obsolete EPA Form 
5720-4 in each construction contract.
    Paragraph (c), containing a requirement that recipient contracts 
include the model clauses described in 40 CFR 33.1030 (1987), is 
removed because 40 CFR part 33, ``Procurement under Assistance 
Agreements,'' was removed in 1996 (61 FR 6067).

Section 35.6650 Progress Reports

    The section title is changed from ``Quarterly Progress Reports'' to 
``Progress Reports.''
    Paragraph (a) is revised to read, ``The recipient must submit 
progress reports as specified in the Cooperative Agreement. Progress 
reports will be required no more frequently than quarterly, and will be 
required at least annually. The reports shall be due within 30 days 
after the reporting period. The final progress report shall be due 90 
days after expiration or termination of the Cooperative Agreement.'' In 
paragraph (b), the word ``quarterly'' is deleted.

Section 35.6665 Procurement Report

    Paragraph (a) is removed. The Department of Labor reports are no 
longer used.

Section 35.6700 Project Records

    In paragraph (d)(ii)(2), the ``$25,000'' limit is changed to the 
``simplified acquisition threshold.''

Section 35.6705 Records Retention

    The title of paragraph (c) is changed from the current 
``Substitution of microform'' to ``Substitution of an unalterable 
electronic format.'' The first sentence of the revised paragraph (c) 
authorizes recipients to substitute original records with copies in an 
unalterable electronic format that is acceptable to EPA. The second 
sentence requires that such copies be produced in accordance with the 
Federal records requirements of 36 CFR parts 1220 through 1234 and with 
EPA records management requirements.

Section 35.6780 Closeout

    EPA has a continuing interest in the effectiveness of completed 
remedies. Therefore, paragraph (c) is added, which states, ``After 
closeout, EPA may monitor the recipient's compliance with the assurance 
to provide all future operation and maintenance as required under 
CERCLA section 104(c) and addressed in 40 CFR 300.510(c)(1) of the 
NCP.''

[[Page 24501]]

Section 35.6800 Superfund State Contract

    The title of this section is changed from ``General'' to 
``Superfund State Contract.'' The introductory paragraph is rewritten 
to clarify that the primary purpose of the Superfund State Contract 
(SSC) is to ensure State and Tribal involvement and to obtain State 
assurances before EPA can fund remedial actions pursuant to section 104 
of CERCLA. The SSC may also be utilized to document other response 
actions and third-party involvement.

Section 35.6805 Content of an SSC

    Several changes are made to this section.
    In paragraph (i)(1), the second sentence, ``The State's 
responsibility for operation and maintenance generally begins when EPA 
determines that the remedy is operational and functional or one year 
after construction completion, whichever is sooner (See, 40 CFR 
300.435(f)),'' is added to clarify when the State's responsibility for 
operation and maintenance begins.
    In paragraph (i)(4), the sentence, ``An Indian Tribe must provide 
assurances pursuant to Sec.  35.6100(b)(2),'' is deleted. Indian Tribes 
are not required to provide real property assurances under CERLCA 
section 104(j).
    In paragraph (j)(3), the phrase, ``Final payment must be made by 
completion of all activities in the site-specific Statement of Work,'' 
is replaced with the phrase, ``Upon completion of activities in the 
site-specific Statement of Work, EPA shall invoice the State for its 
final payment.''
    The title of paragraph (q) is changed from ``Joint inspection of 
the remedy'' to, ``Final inspection of remedy.'' The sentences under 
this paragraph are deleted and replaced with the sentence, ``The SSC 
must include a statement that following completion of the remedial 
action, the State and EPA shall jointly inspect the project to 
determine that the remedy is functioning properly and is performing as 
designed.''
    In paragraph (v), the phrase, ``out-of-Indian-Tribal 
jurisdiction,'' is replaced with the phrase, ``out-of-an-Indian-Tribal-
area-of-Indian-country.''

Section 35.6815 Administrative Requirements

    Under paragraph (a)(1), the sentence, ``The State or political 
subdivision must make payments during the course of the site-specific 
project and must complete payments by completion of activities in the 
site-specific Statement of Work,'' is deleted. The requirement is under 
Sec.  35.6805(j)(3). The sentence, ``See Sec.  35.6255 of this subpart 
for requirements concerning cost sharing under a support agency 
Cooperative Agreement,'' is deleted. Section 35.6255 is deleted in this 
revision.
    Under paragraph (c)(2), the word ``quarterly'' modifying ``progress 
report'' is deleted.

Section 35.6820 Conclusion of the SSC

    Paragraphs (a) through (c) are resequenced (a)(1) through (a)(3). 
In the revised paragraph (a)(3), the sentence ``undertake 
responsibility for O&M, and, if applicable, accept transfer in real 
property (See Sec.  35.6805(i)(4))'' is deleted and replaced with 
paragraph (a)(4), containing the language, ``Assume responsibility for 
all future operation and maintenance as required by CERCLA section 
104(c) and addressed in 40 CFR 300.510 (c)(1) of the NCP, and if 
applicable, accept transfer of any Federal interest in real property 
(See Sec.  35.6805(i)(4)).''
    A new paragraph (b) is added to this section that states, ``After 
the administrative conclusion of the Superfund State Contract, EPA may 
monitor the signatory's compliance with assurances to provide all 
future operation and maintenance as required by CERCLA section 104(c) 
and addressed in 40 CFR 300.510 (c)(1) of the NCP.''
    These changes are made to help ensure long-term requirements for 
operation and maintenance and certain institutional controls remain in 
effect even after the Superfund State Contract expires.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Reviews

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action.'' Accordingly, EPA 
submitted this action to the Office of Management and Budget (OMB) for 
review. Any changes made in response to OMB recommendations have been 
documented in the docket for this action.

B. Paperwork Reduction Act

    The Office of Management and Budget (OMB) has approved the 
information collection requirements contained in this rule under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and 
has assigned OMB control number 2050-0179.
    This ICR authorizes the collection of information under 40 CFR part 
35, subpart O, which establishes the administrative requirements for 
Cooperative Agreements funded under CERCLA for State, political 
subdivisions, and federally recognized Indian Tribal government 
response actions. This regulation also codifies the administrative 
requirements for Superfund State Contracts for non-State-lead remedial 
responses. This regulation includes only those provisions mandated by 
CERCLA, required by OMB Circulars, or added by EPA to ensure sound and 
effective financial assistance management. The information is collected 
from applicants and/or recipients of EPA assistance and is used to make 
awards, pay recipients, and collect information on how Federal funds 
are being spent. EPA requires this information to meet its Federal 
stewardship responsibilities. Recipient responses are required to 
obtain a benefit (Federal funds) under 40 CFR part 31, Uniform 
Administrative Requirements for Grants and Cooperative Agreements to 
State and Local Governments and under 40 CFR part 35, State and Local 
Assistance. This rule does not contain any collection of information 
requirements beyond those already approved. It is estimated there will 
be approximately 654 respondents, with an average hourly burden per 
response of 7.75 hours per response. This provides an estimated overall 
annual burden to State, local or Tribal governments of 5073 hours. 
There are no estimated capital or operations and maintenance costs 
associated with this grant rule. Burden means the total time, effort, 
or financial resources expended by persons to generate, maintain, 
retain, disclose or provide information to or for a Federal agency. 
This includes the time needed to review instructions; develop, acquire, 
install, and utilize technology and systems for the purposes of 
collecting, validating, and verifying information, processing and 
maintaining information, and disclosing and providing information; 
adjust the existing ways to comply with any previously applicable 
instructions and requirements; train personnel to be able to respond to 
a collection of information; search data sources; complete and review 
the collection of information; and transmit or otherwise disclose the 
information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. In addition, EPA is 
amending the table in 40 CFR part 9 of currently approved

[[Page 24502]]

OMB control numbers for various regulations to list the regulatory 
citations for the information requirements contained in this final 
rule.

C. Regulatory Flexibility Act

    Today's final rule is not subject to the Regulatory Flexibility Act 
(RFA), which generally requires an agency to prepare a regulatory 
flexibility analysis for any rule that will have a significant economic 
impact on a substantial number of small entities. The RFA applies only 
to rules subject to notice and comment rulemaking requirements under 
the Administrative Procedure Act (APA) or any other statute. This rule 
is not subject to notice and comment requirements under the APA or any 
other statute because this rule pertains to grants which the APA 
expressly exempts from notice and comment rulemaking requirements under 
5 U.S.C. 553(a)(2). Moreover, CERCLA also does not require EPA to issue 
a notice of proposed rulemaking prior to issuing this rule. The Agency 
has determined that this rule does not adversely impact small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal Agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under section 202 of the UMRA, 
Federal agencies generally must prepare a written analysis, including a 
cost-benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures to State, local and Tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. Moreover, section 205 allows Federal 
agencies to adopt an alternative other than the least costly, most 
cost-effective or least burdensome alternative if the Administrator 
publishes with the final rule an explanation why that alternative was 
not adopted. Before promulgating a rule for which a written statement 
is needed, section 205 of the UMRA requires Federal agencies to 
identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, most cost-effective, or least burdensome 
alternative that achieves the objectives of the rule. The provisions of 
section 205 do not apply when they are inconsistent with applicable 
law. Before a Federal agency establishes any regulatory requirements 
that may significantly or uniquely affect small governments, including 
Tribal governments, it must have developed, under section 203 of the 
UMRA, a small government agency plan. The plan must provide for 
notifying potentially affected small governments, enabling officials to 
have meaningful and timely input in the development of regulatory 
proposals, and informing, educating and advising small governments on 
compliance with the regulatory requirements.
    This final rule does not include Federal mandates that may result 
in expenditures of $100 million or more to State, local, or Tribal 
governments in the aggregate, because the UMRA generally excludes from 
the definition of ``Federal intergovernmental mandate'' duties that 
arise from participation in a voluntary Federal program. States are not 
legally required to have or maintain a CERCLA authorized program. 
Therefore, today's final rule is not subject to the requirements of 
sections 202 or 205 of UMRA. EPA has determined that this rule contains 
no regulatory requirements that might significantly or uniquely affect 
small governments, because participation by small governments in this 
program is voluntary and is funded by EPA.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires Federal agencies to develop an accountable process 
to ensure ``meaningful and timely input by State and local officials in 
the development of regulatory policies that have federalism 
implications.'' The Executive Order defines ``policies that have 
federalism implications'' to include regulations that have 
``substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.'' This 
final rule does not have federalism implications. It does not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132.
    This final rule mainly makes minor changes to the regulation, under 
which the program has been operating since June, 1990. Apart from the 
minor changes, this rule adds new provisions that increase State 
flexibility, so it does not have federalism implications as that phrase 
is defined for purposes of Executive Order 13132. Further, because this 
is a rule that primarily conditions the use of Federal assistance, it 
does not impose substantial direct compliance costs on States.
    EPA did consult with representatives of State governments in 
developing this rule. Specifically, State representatives have been 
participating members of the workgroup revising this rule throughout 
the entire process, and were given the opportunity to review and 
comment on drafts of this rule. Representatives from two States (Kansas 
and Illinois) were selected to participate in the work group meetings, 
and these States discussed rule options and draft rule language with 
EPA throughout the development of the rule. Also, the draft rule was 
provided to the Association of State and Territorial Solid Waste 
Management Officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by Tribal officials in the development of regulatory 
policies that have Tribal implications.'' Although this rule will have 
Tribal implications, it will not impose substantial direct compliance 
costs on Tribal governments, preempt Tribal law, or establish Federal 
standards. The Agency consulted with Tribes under its EPA Indian 
Policy, and in light of CERCLA sections 121 and 126 providing that 
Indian Tribes should have ``substantial and meaningful involvement'' in 
Superfund.
    EPA has consulted with Tribal officials early in the process of 
developing this regulation to permit them to have meaningful and timely 
input into its development. During the early deliberations on the 
revisions to this rule, a Tribal representative was actively involved 
in the regulatory workgroup, and helped identify issues of likely 
concern to Tribal governments. EPA, in turn, discussed those issues 
with Tribal representatives participating in a concurrent initiative to 
enhance the State and Tribal roles in Superfund. And the rule was 
informed to a large extent by the experiences of Tribes and EPA during 
16 years of experience working under the old regulation. Ultimately, 
the EPA regulatory workgroup used the knowledge gained from 
consultation and experience to identify and incorporate beneficial 
changes for Tribes into the regulation. The principal changes 
(discussed further in section IV), were (a) to waive the cost share 
requirement for Tribes receiving Core Program and support

[[Page 24503]]

agency Cooperative Agreement, (b) to eliminate requirements to show 
jurisdiction for all Core agreements and most support agency 
agreements, and (c) to include intertribal consortia as eligible 
entities to receive Cooperative Agreements. After drafting this 
regulation, EPA solicited input from all the federally recognized 
Indian Tribes and the National Tribal Environmental Council by mailing 
a summary explaining the Tribal portions of the revised subpart O 
regulation. Most recently, the Agency also discussed the proposed 
changes and solicited direct feedback from Indian Tribes at the 11th 
Annual Conference, ``Community Environmental Stewardship for the 
Future,'' sponsored by the Inter-Tribal Environmental Council (ITEC).
    As required by section 7(a), EPA's Tribal Consultation Official has 
certified that the requirements of the Executive Order have been met in 
a meaningful and timely manner. A copy of the certification is included 
in the docket for this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. This final 
rule is not subject to Executive Order 13045 because it is not 
``economically significant'' as defined under Executive Order 12866. 
Further, it does not concern an environmental health or safety risk 
that EPA has reason to believe may have a disproportionate effect on 
children.

H. Executive Order 13211 (Energy Effects)

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. Further, we have 
concluded that this rule is not likely to have any adverse energy 
effects.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards. This 
action does not involve technical standards. Therefore, EPA did not 
consider the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Under Executive Order 12898, ``Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations,'' as well as through EPA's National Environmental Justice 
Advisory Council, EPA has undertaken to incorporate environmental 
justice into its policies and programs. EPA is committed to addressing 
environmental justice concerns, and is assuming a leadership role in 
environmental justice initiatives to enhance environmental quality for 
all residents of the United States. The Agency's goals are to ensure 
that no segment of the population, regardless of race, color, national 
origin, or income, bears disproportionately high and adverse human 
health and environmental effects as a result of EPA's policies, 
programs, and activities, and all people live in clean and sustainable 
communities. No action from this rule will have a disproportionately 
high and adverse human health and environmental effect on any segment 
of the population. In addition, this rule does not impose substantial 
direct compliance costs on those communities. Accordingly, the rule 
does not raise issues regarding Executive Order 12898.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). The subpart O regulation is effective July 2, 2007.

List of Subjects

40 CFR Part 9

    Environmental protection, Reporting and recordkeeping requirements.

40 CFR Part 35

    Administrative practices and procedures, Environmental protection, 
Grant programs-environmental protection, Reporting and recordkeeping.

    Dated: April 19, 2007.
 Stephen L. Johnson,
Administrator.

0
For the reasons set out in the preamble, 40 CFR parts 9 and 35 are 
amended as follows:

PART 9--[AMENDED]

0
1. The authority citation for part 9 continues to read as follows:

    Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003, 
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330, 
1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 
1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 
300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 
300j-3, 300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542, 
9601-9657, 11023, 11048.

0
2. In Sec.  9.1, the table is amended under the heading, ``State and 
Local Assistance,'' as follows:
0
a. By revising entries for ``35.6055(a)(2)'', ``35.6055(b)(1)'', 
``35.6055(b)(2)(i)-(ii)'', ``35.6105(a)(2)(i)-(v), (vii)'', 
``35.6120'', ``35.6145'', ``35.6155(a), (c)'', ``35.6230(a), (c)'', 
``35.6300(a)(3)'', ``35.6315(c)'', ``35.6320'', ``35.6340(a)'', 
``35.6350'', ``35.6500'', ``35.6550(b)(1)(iii)'', ``35.6550(b)(2)(i)'', 
``35.6585'', ``35.6595(a), (b)'', ``35.6600(a)'', ``35.6650'', 
``35.6655'', ``35.6660'', ``35.6665(a), (b)'', ``35.6700'',

[[Page 24504]]

``35.6705'', ``35.6710'', ``35.6805'', and ``35.6815(a), (c), (d)''.
0
b. By removing entries for ``35.6110(b)(2)'' and ``35.6550(a)(1)(ii)''.


Sec.  9.1  OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
                                                                 OMB
                      40 CFR citation                        control No.
------------------------------------------------------------------------
 
                                * * * * *
                 State and Local Assistance
35.6055(a)(2)..............................................    2050-0179
35.6055(b)(1)..............................................    2050-0179
35.6055(b)(2)(i)-(ii)......................................    2050-0179
35.6105(a)(2)(i)-(v), (vii)................................    2050-0179
35.6120....................................................    2050-0179
35.6145....................................................    2050-0179
35.6155(a), (c)............................................    2050-0179
35.6230(a), (c)............................................    2050-0179
35.6300(a)(3)..............................................    2050-0179
35.6315(c).................................................    2050-0179
35.6320....................................................    2050-0179
35.6340(a).................................................    2050-0179
35.6350....................................................    2050-0179
35.6500....................................................    2050-0179
35.6550(b)(1)(iii).........................................    2050-0179
35.6550(b)(2)(i)...........................................    2050-0179
35.6585....................................................    2050-0179
35.6595(a), (b)............................................    2050-0179
35.6600(a).................................................    2050-0179
35.6650....................................................    2050-0179
35.6655....................................................    2050-0179
35.6660....................................................    2050-0179
35.6665(a), (b)............................................    2050-0179
35.6700....................................................    2050-0179
35.6705....................................................    2050-0179
35.6710....................................................    2050-0179
35.6805....................................................    2050-0179
35.6815(a), (c), (d).......................................    2050-0179
 
                                * * * * *
------------------------------------------------------------------------

* * * * *

PART 35--[AMENDED]

0
3. Subpart O is revised to read as follows:
Subpart O--Cooperative Agreements and Superfund State Contracts for 
Superfund Response Actions

General

Sec.
35.6000 Authority.
35.6005 Purpose and scope.
35.6010 Indian Tribe and intertribal consortium eligibility.
35.6015 Definitions.
35.6020 Requirements for both applicants and recipients.
35.6025 Deviation from this subpart.

Pre-Remedial Response Cooperative Agreements

35.6050 Eligibility for pre-remedial Cooperative Agreements.
35.6055 State-lead pre-remedial Cooperative Agreements.
35.6060 Political subdivision-lead pre-remedial Cooperative 
Agreements.
35.6070 Indian Tribe-lead pre-remedial Cooperative Agreements.

Remedial Response Cooperative Agreements

35.6100 Eligibility for remedial Cooperative Agreements.
35.6105 State-lead remedial Cooperative Agreements.
35.6110 Indian Tribe-lead remedial Cooperative Agreements.
35.6115 Political subdivision-lead remedial Cooperative Agreements.
35.6120 Notification of the out-of-State or out-of-an-Indian-Tribal-
area-of-Indian-country transfer of CERCLA waste.

Enforcement Cooperative Agreements

35.6145 Eligibility for enforcement Cooperative Agreements.
35.6150 Activities eligible for funding under enforcement 
Cooperative Agreements.
35.6155 State, political subdivisions or Indian Tribe-lead 
enforcement Cooperative Agreements.

Removal Response Cooperative Agreements

35.6200 Eligibility for removal Cooperative Agreements.
35.6205 Removal Cooperative Agreements.

Core Program Cooperative Agreements

35.6215 Eligibility for Core Program Cooperative Agreements.
35.6220 General.
35.6225 Activities eligible for funding under Core Program 
Cooperative Agreements.
35.6230 Application requirements.
35.6235 Cost sharing.

Support Agency Cooperative Agreements

35.6240 Eligibility for support agency Cooperative Agreements.
35.6245 Allowable activities.
35.6250 Support agency Cooperative Agreement requirements.

Combining Cooperative Agreements

35.6260 Combining Cooperative Agreement sites and activities.

Financial Administration Requirements Under a Cooperative Agreement

35.6270 Standards for financial management systems.
35.6275 Period of availability of funds.
35.6280 Payments.
35.6285 Recipient payment of response costs.
35.6290 Program income.

Personal Property Requirements Under a Cooperative Agreement

35.6300 General personal property acquisition and use requirements.
35.6305 Obtaining supplies.
35.6310 Obtaining equipment.
35.6315 Alternative methods for obtaining property.
35.6320 Usage rate.
35.6325 Title and EPA interest in CERCLA-funded property.
35.6330 Title to federally owned property.
35.6335 Property management standards.
35.6340 Disposal of CERCLA-funded property.
35.6345 Equipment disposal options.
35.6350 Disposal of federally owned property.

Real Property Requirements Under a Cooperative Agreement

35.6400 Acquisition and transfer of interest.
35.6405 Use.

Copyright Requirements Under a Cooperative Agreement

35.6450 General requirements.

Use of Recipient Employees (``Force Account'') Under a Cooperative 
Agreement

35.6500 General requirements.

Procurement Requirements Under a Cooperative Agreement

35.6550 Procurement system standards.
35.6555 Competition.
35.6565 Procurement methods.
35.6570 Use of the same engineer during subsequent phases of 
response.
35.6575 Restrictions on types of contracts.
35.6580 Contracting with minority and women's business enterprises 
(MBE/WBE), small businesses, and labor surplus area firms.
35.6585 Cost and price analysis.
35.6590 Bonding and insurance.
35.6595 Contract provisions.
35.6600 Contractor claims.
35.6605 Privity of contract.
35.6610 Contracts awarded by a contractor.

Reports Required Under a Cooperative Agreement

35.6650 Progress reports.
35.6655 Notification of significant developments.
35.6660 Property inventory reports.
35.6665 Procurement report.
35.6670 Financial reports.

Records Requirements Under a Cooperative Agreement

35.6700 Project records.
35.6705 Records retention.
35.6710 Records access.

Other Administrative Requirements for Cooperative Agreements

35.6750 Modifications.
35.6755 Monitoring program performance.
35.6760 Enforcement and termination for convenience.
35.6765 Non-Federal audit.
35.6770 Disputes.
35.6775 Exclusion of third-party benefits.
35.6780 Closeout.
35.6785 Collection of amounts due.
35.6790 High risk recipients.

Requirements for Administering a Superfund State Contract (SSC)

35.6800 Superfund State Contract.
35.6805 Contents of an SSC.
35.6815 Administrative requirements.
35.6820 Conclusion of the SSC.

    Authority: 42 U.S.C. 9601 et seq.

[[Page 24505]]

Subpart O--Cooperative Agreements and Superfund State Contracts for 
Superfund Response Actions

General


Sec.  35.6000  Authority.

    This subpart is issued under section 104(a) through (j) of the 
Comprehensive Environmental Response, Compensation, and Liability Act 
of 1980, as amended (CERCLA)(42 U.S.C. 9601 et seq.).


Sec.  35.6005  Purpose and scope.

    (a) This subpart codifies recipient requirements for administering 
Cooperative Agreements awarded pursuant to section 104(d)(1) of CERCLA. 
This subpart also codifies requirements for administering Superfund 
State Contracts (SSCs) for non-State-lead remedial responses undertaken 
pursuant to section 104 of CERCLA.
    (b) 40 CFR part 31, ``Uniform Administrative Requirements for 
Grants and Cooperative Agreements to State and Local Governments,'' 
establishes consistency and uniformity among Federal agencies in the 
administration of grants and Cooperative Agreements to State, local, 
and Indian Tribal governments. For CERCLA-funded Cooperative 
Agreements, this subpart supplements the requirements contained in part 
31 for States, political subdivisions thereof, and Indian Tribes. This 
subpart references those sections of part 31 that are applicable to 
CERCLA-funded Cooperative Agreements.
    (c) Superfund monies for remedial actions cannot be used by 
recipients for Federal facility cleanup activities. When a cleanup is 
undertaken by another Federal entity, the State, political subdivision 
or Indian Tribe can pursue funding for its involvement in response 
activities from the appropriate Federal entity.


Sec.  35.6010  Indian Tribe and intertribal consortium eligibility.

    (a) Indian Tribes are eligible to receive Superfund Cooperative 
Agreements only when they are federally recognized, and when they meet 
the criteria set forth in 40 CFR 300.515(b) of the National Oil and 
Hazardous Substances Pollution Contingency Plan (the National 
Contingency Plan or NCP), except that Indian Tribes shall not be 
required to demonstrate jurisdiction under 40 CFR 300.515(b)(3) of the 
NCP to be eligible for Core Program Cooperative Agreements, and those 
support agency Cooperative Agreements for which jurisdiction is not 
needed for the Tribe to carry out the support agency activities of the 
work plan.
    (b) Although section 126 of CERCLA provides that the governing body 
of an Indian Tribe shall be treated substantially the same as a State, 
the subpart O definition of ``State'' does not include Indian Tribes 
because they do not need to comply with all the statutory requirements 
addressed in subpart O that apply to States.
    (c) Intertribal consortium: An intertribal consortium is eligible 
to receive a Cooperative Agreement from EPA only if the intertribal 
consortium demonstrates that all members of the consortium meet the 
eligibility requirements for the Cooperative Agreement, and all members 
authorize the consortium to apply for and receive assistance.


Sec.  35.6015  Definitions.

    (a) As used in this subpart, the following words and terms shall 
have the following meanings:
    Activity. A set of CERCLA-funded tasks that makes up a segment of 
the sequence of events undertaken in determining, planning, and 
conducting a response to a release or potential release of a hazardous 
substance. These include Core Program, pre-remedial (i.e., preliminary 
assessments and site inspections), support agency, remedial 
investigation/feasibility studies, remedial design, remedial action, 
removal, and enforcement activities.
    Allowable costs. Those project costs that are: Eligible, 
reasonable, necessary, and allocable to the project; permitted by the 
appropriate Federal cost principles; and approved by EPA in the 
Cooperative Agreement and/or Superfund State Contract.
    Architectural or engineering (A/E) services. Consultation, 
investigations, reports, or services for design-type projects within 
the scope of the practice of architecture or professional engineering 
as defined by the laws of the State or territory in which the recipient 
is located.
    Award official. The EPA official with the authority to execute 
Cooperative Agreements and Superfund State Contracts and to take other 
actions authorized by EPA Orders.
    Budget period. The length of time EPA specifies in a Cooperative 
Agreement during which the recipient may expend or obligate Federal 
funds.
    CERCLA. The Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980, as amended (42 U.S.C. 9601--9657).
    Change order. A written order issued by a recipient, or its 
designated agent, to its contractor authorizing an addition to, 
deletion from, or revision of, a contract, usually initiated at the 
contractor's request.
    Claim. A demand or written assertion by a contractor seeking, as a 
matter of right, changes in contract duration, costs, or other 
provisions, which originally have been rejected by the recipient.
    Closeout. The final EPA or recipient actions taken to assure 
satisfactory completion of project work and to fulfill administrative 
requirements, including financial settlement, submission of acceptable 
required final reports, and resolution of any outstanding issues under 
the Cooperative Agreement and/or Superfund State Contract.
    Community Relations Plan (CRP). A management and planning tool 
outlining the specific community relations activities to be undertaken 
during the course of a response. It is designed to provide for two-way 
communication between the affected community and the agencies 
responsible for conducting a response action, and to assure public 
input into the decision-making process related to the affected 
communities.
    Construction. Erection, building, alteration, repair, remodeling, 
improvement, or extension of buildings, structures or other property.
    Contract. A written agreement between an EPA recipient and another 
party (other than another public agency) or between the recipient's 
contractor and the contractor's first tier subcontractor.
    Contractor. Any party to whom a recipient awards a contract.
    Cooperative Agreement. A legal instrument EPA uses to transfer 
money, property, services, or anything of value to a recipient to 
accomplish a public purpose in which substantial EPA involvement is 
anticipated during the performance of the project.
    Core Program Cooperative Agreement. A Cooperative Agreement that 
provides funds to a State or Indian Tribe to conduct CERCLA 
implementation activities that are not assignable to specific sites but 
are intended to develop and maintain a State's or Indian Tribe's 
ability to participate in the CERCLA response program.
    Cost analysis. The review and evaluation of each element of 
contract cost to determine reasonableness, allocability, and 
allowability.
    Cost share. The portion of allowable project costs that a recipient 
contributes toward completing its project (i.e., non-Federal share, 
matching share).
    Equipment. Tangible, nonexpendable, personal property having a 
useful life of more than one year and an acquisition cost of $5,000 or 
more per unit.

[[Page 24506]]

    Fair market value. The amount at which property would change hands 
between a willing buyer and a willing seller, neither being under any 
compulsion to buy or sell and both having reasonable knowledge of the 
relevant facts. Fair market value is the price in cash, or its 
equivalent, for which the property would have been sold on the open 
market.
    Health and safety plan. A plan that specifies the procedures that 
are sufficient to protect on-site personnel and surrounding communities 
from the physical, chemical, and/or biological hazards of the site. The 
health and safety plan outlines:
    (i) Site hazards;
    (ii) Work areas and site control procedures;
    (iii) Air surveillance procedures;
    (iv) Levels of protection;
    (v) Decontamination and site emergency plans;
    (vi) Arrangements for weather-related problems; and
    (vii) Responsibilities for implementing the health and safety plan.
    In-kind contribution. The value of a non-cash contribution 
(generally from third parties) to meet a recipient's cost sharing 
requirements. An in-kind contribution may consist of charges for real 
property and equipment or the value of goods and services directly 
benefiting the CERCLA-funded project.
    Indian Tribe. As defined by section 101(36) of CERCLA, any Indian 
Tribe, band, nation, or other organized group or community, including 
any Alaska Native village but not including any Alaska Native regional 
or village corporation, which is recognized as eligible for the special 
programs and services provided by the United States to Indians because 
of their status as Indians. For the purposes of this subpart, the term, 
``Indian Tribe,'' includes an intertribal consortium consisting of two 
or more federally recognized Tribes.
    Intergovernmental Agreement. Any written agreement between units of 
government under which one public agency performs duties for or in 
concert with another public agency using EPA assistance. This includes 
substate and interagency agreements.
    Intertribal consortium. A partnership between two or more federally 
recognized Indian Tribes that is authorized by the governing bodies of 
those Indian Tribes to apply for and receive assistance agreements. An 
intertribal consortium must have adequate documentation of the 
existence of the partnership, and the authorization to apply for and 
receive assistance.
    Lead agency. The Federal agency, State agency, political 
subdivision, or Indian Tribe that has primary responsibility for 
planning and implementing a response action under CERCLA.
    Minority Business Enterprise (MBE). A business which is:
    (i) Certified as socially and economically disadvantaged by the 
Small Business Administration;
    (ii) Certified as a minority business enterprise by a State or 
Federal agency; or
    (iii) An independent business concern which is at least 51 percent 
owned and controlled by minority group member(s). A minority group 
member is an individual who is a citizen of the United States and one 
of the following:
    (A) Black American;
    (B) Hispanic American (with origins from Puerto Rico, Mexico, Cuba, 
South or Central America);
    (C) Native American (American Indian, Eskimo, Aleut, native 
Hawaiian); or
    (D) Asian-Pacific American (with origins from Japan, China, the 
Philippines, Vietnam, Korea, Samoa, Guam, the U.S. Trust Territories of 
the Pacific, Northern Marianas, Laos, Cambodia, Taiwan or the Indian 
subcontinent).
    National Priorities List (NPL). The list, compiled by EPA pursuant 
to CERCLA section 105, of uncontrolled hazardous substance releases in 
the United States that are priorities for long-term remedial evaluation 
and response. The NPL is published at Appendix B to 40 CFR Part 300.
    Operable unit. A discrete action, as described in the Cooperative 
Agreement or Superfund State Contract, that comprises an incremental 
step toward comprehensively addressing site problems. The cleanup of a 
site can be divided into a number of operable units, depending on the 
complexity of the problems associated with the site. Operable units may 
address geographical portions of a site, specific site problems, or 
initial phases of an action, or may consist of any set of actions 
performed over time or any actions that are concurrent but located in 
different parts of a site.
    Operation and maintenance. Measures required to maintain the 
effectiveness of response actions.
    Personal property. Property other than real property. It includes 
both supplies and equipment.
    Political subdivision. The unit of government that the State 
determines to have met the State's legislative definition of a 
political subdivision.
    Potentially Responsible Party (PRP). Any individual(s) or 
company(ies) identified as potentially liable under CERCLA for cleanup 
or payment for costs of cleanup of Hazardous Substance sites. PRPs may 
include individual(s), or company(ies) identified as having owned, 
operated, or in some other manner contributed wastes to Hazardous 
Substance sites.
    Price analysis. The process of evaluating a prospective price 
without regard to the contractor's separate cost elements and proposed 
profit. Price analysis determines the reasonableness of the proposed 
contract price based on adequate price competition, previous experience 
with similar work, established catalog or market price, law, or 
regulation.
    Profit. The net proceeds obtained by deducting all allowable costs 
(direct and indirect) from the price. (Because this definition of 
profit is based on applicable Federal cost principles, it may vary from 
many firms' definition of profit, and may correspond to those firms' 
definition of ``fee.'')
    Project. The activities or tasks EPA identifies in the Cooperative 
Agreement and/or Superfund State Contract.
    Project manager. The recipient official designated in the 
Cooperative Agreement or Superfund State Contract as the program 
contact with EPA.
    Project officer. The EPA official designated in the Cooperative 
Agreement as EPA's program contact with the recipient. Project officers 
are responsible for monitoring the project.
    Project period. The length of time EPA specifies in the Cooperative 
Agreement and/or Superfund State Contract for completion of all project 
work. It may be composed of more than one budget period.
    Quality Assurance Project Plan. A written document, associated with 
remedial site sampling, which presents in specific terms the 
organization (where applicable), objectives, functional activities, and 
specific quality assurance and quality control activities and 
procedures designed to achieve the data quality objectives of a 
specific project(s) or continuing operation(s).
    Real property. Land, including land improvements, structures, and 
appurtenances thereto, excluding movable machinery and equipment.
    Recipient. Any State, political subdivision thereof, or Indian 
Tribe which has been awarded and has accepted an EPA Cooperative 
Agreement.

[[Page 24507]]

    Services. A recipient's in-kind or a contractor's labor, time, or 
efforts which do not involve the delivery of a specific end item, other 
than documents (e.g., reports, design drawings, specifications). This 
term does not include employment agreements or collective bargaining 
agreements.
    Simplified acquisition threshold. The dollar amount specified in 
the Office of Federal Procurement Policy Act, 41 U.S.C. 403. The 
threshold is currently set at $100,000.
    Small business. A business as defined in section 3 of the Small 
Business Act, as amended (15 U.S.C. 632).
    State. The several States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the 
Virgin Islands, the Commonwealth of Northern Marianas, and any 
territory or possession over which the United States has jurisdiction.
    Statement of Work (SOW). The portion of the Cooperative Agreement 
application and/or Superfund State Contract that describes the purpose 
and scope of activities and tasks to be carried out as a part of the 
proposed project.
    Subcontractor. Any first tier party that has a contract with the 
recipient's prime contractor.
    Superfund State Contract (SSC). A joint, legally binding agreement 
between EPA and another party(ies) to obtain the necessary assurances 
before an EPA-lead remedial action or any political subdivision-lead 
activities can begin at a site, and to ensure State or Indian Tribe 
involvement as required under CERCLA section 121(f).
    Supplies. All tangible personal property other than equipment as 
defined in this section.
    Support agency. The agency that furnishes necessary data to the 
lead agency, reviews response data and documents, and provides other 
assistance to the lead agency.
    Task. An element of a Superfund response activity identified in the 
Statement of Work of a Superfund Cooperative Agreement or a Superfund 
State Contract.
    Title. The valid claim to property that denotes ownership and the 
rights of ownership, including the rights of possession, control, and 
disposal of property.
    Unit acquisition cost. The net invoice unit price of the property 
including the cost of modifications, attachments, accessories, or 
auxiliary apparatus necessary to make the property usable for the 
purpose for which it was acquired. Other charges, such as the cost of 
installation, transportation, taxes, duty, or protective in-transit 
insurance, shall be included or excluded from the unit acquisition cost 
in accordance with the recipient's regular accounting practices.
    Value engineering. A systematic and creative analysis of each 
contract term or task to ensure that its essential function is provided 
at the overall lowest cost.
    Women's Business Enterprise (WBE). A business which is certified as 
a Women's Business Enterprise by a State or Federal agency, or which 
meets the following definition. A Women's Business Enterprise is an 
independent business concern which is at least 51 percent owned by a 
woman or women who also control and operate it. Determination of 
whether a business is at least 51 percent owned by a woman or women 
shall be made without regard to community property laws.
    (b) Those terms not defined in this section shall have the meanings 
set forth in section 101 of CERCLA, 40 CFR part 31, and 40 CFR part 300 
(the National Contingency Plan).


Sec.  35.6020  Requirements for both applicants and recipients.

    Applicants and recipients must comply with the applicable 
requirements of 40 CFR part 32, ``Governmentwide Debarment and 
Suspension (Non-procurement); and Statutory Disqualification under the 
Clean Air Act and Clean Water Act,'' and of 40 CFR part 36, 
``Governmentwide Requirements for Drug-Free Workplace (Financial 
Assistance).''


Sec.  35.6025  Deviation from this subpart.

    On a case-by-case basis, EPA will consider requests for an official 
deviation from the non-statutory provisions of this subpart. Refer to 
the requirements regarding additions and exceptions described in 40 CFR 
31.6 (b), (c), and (d).

Pre-Remedial Response Cooperative Agreements


Sec.  35.6050  Eligibility for pre-remedial Cooperative Agreements.

    States, political subdivisions, and Indian Tribes may apply for 
pre-remedial response Cooperative Agreements.


Sec.  35.6055  State-lead pre-remedial Cooperative Agreements.

    (a) To receive a State-lead pre-remedial Cooperative Agreement, the 
applicant must submit an ``Application for Federal Assistance'' (SF-
424) for non-construction programs. Applications for additional funding 
need include only the revised pages. The application must include the 
following:
    (1) Budget sheets (SF-424A).
    (2) A Project narrative statement, including the following:
    (i) A list of sites at which the applicant proposes to undertake 
pre-remedial tasks. If the recipient proposes to revise the list, the 
recipient may not incur costs on a new site until the EPA project 
officer has approved the site;
    (ii) A Statement of Work (SOW) which must include a detailed 
description, by task, of activities to be conducted, the projected 
costs associated with each task, the number of products to be 
completed, and a quarterly schedule indicating when these products will 
be submitted to EPA; and
    (iii) A schedule of deliverables.
    (3) Other applicable forms and information authorized by 40 CFR 
31.10.
    (b) Pre-remedial Cooperative Agreement requirements. The recipient 
must comply with all terms and conditions in the Cooperative Agreement, 
and with the following requirements:
    (1) Health and safety plan. (i) Before beginning field work, the 
recipient must have a health and safety plan in place providing for the 
protection of on-site personnel and area residents. This plan need not 
be submitted to EPA, but must be made available to EPA upon request.
    (ii) The recipient's health and safety plan must comply with 
Occupational Safety and Health Administration (OSHA) 29 CFR 1910.120, 
entitled ``Hazardous Waste Operations and Emergency Response,'' unless 
the recipient is an Indian Tribe exempt from OSHA requirements.
    (2) Quality assurance. (i) The recipient must comply with the 
quality assurance requirements described in 40 CFR 31.45.
    (ii) The recipient must have an EPA-approved non-site-specific 
quality assurance plan in place before beginning field work. The 
recipient must submit the plan to EPA in adequate time (generally 45 
days) for approval to be granted before beginning field work.
    (iii) The quality assurance plan must comply with the requirements 
regarding split sampling described in section 104(e)(4)(B) of CERCLA, 
as amended.


Sec.  35.6060  Political subdivision-lead pre-remedial Cooperative 
Agreements.

    (a) If the Award Official determines that a political subdivision's 
lead involvement in pre-remedial activities would be more efficient, 
economical and appropriate than that of a State,

[[Page 24508]]

based on the number of sites to be addressed and the political 
subdivision's history of program involvement, a pre-remedial 
Cooperative Agreement may be awarded under this section.
    (b) The political subdivision must comply with all of the 
requirements described in Sec.  35.6055.


Sec.  35.6070  Indian Tribe-lead pre-remedial Cooperative Agreements.

    The Indian Tribe must comply with all of the requirements described 
in Sec.  35.6055, except for the intergovernmental review requirements 
included in the ``Application for Federal Assistance'' (SF-424).

Remedial Response Cooperative Agreements


Sec.  35.6100  Eligibility for remedial Cooperative Agreements.

    States, Indian Tribes, and political subdivisions may apply for 
remedial response Cooperative Agreements.


Sec.  35.6105  State-lead remedial Cooperative Agreements.

    To receive a State-lead remedial Cooperative Agreement, the 
applicant must submit the following items to EPA:
    (a) Application form, as described in Sec.  35.6055(a). 
Applications for additional funding need to include only the revised 
pages. The application must include the following:
    (1) Budget sheets (SF-424A) displaying costs by site, activity and 
operable unit, as applicable.
    (2) A Project narrative statement, including the following:
    (i) A site description, including a discussion of the location of 
each site, the physical characteristics of each site (site geology and 
proximity to drinking water supplies), the nature of the release 
(contaminant type and affected media), past response actions at each 
site, and response actions still required at each site;
    (ii) A site-specific Statement of Work (SOW), including estimated 
costs per task, and a standard task to ensure that a sign is posted at 
the site providing the appropriate contacts for obtaining information 
on activities being conducted at the site, and for reporting suspected 
criminal activities;
    (iii) A statement designating a lead site project manager among 
appropriate State offices. This statement must demonstrate that the 
lead State agency has conducted coordinated planning of response 
activities with other State agencies. The statement must identify the 
name and position of those individuals who will be responsible for 
coordinating the State offices;
    (iv) A site-specific Community Relations Plan or an assurance that 
field work will not begin until one is in place. The Regional community 
relations coordinator must approve the Community Relations Plan before 
the recipient begins field work. The recipient must comply with the 
community relations requirements described in EPA policy and guidance, 
and in the National Contingency Plan;
    (v) A site-specific health and safety plan, or an assurance that 
the applicant will have a final plan before starting field work. Unless 
specifically waived by the award official, the applicant must have a 
site-specific health and safety plan in place providing for the 
protection of on-site personnel and area residents. The site-specific 
health and safety plan must comply with Occupational Safety and Health 
Administration (OSHA) 29 CFR 1910.120, entitled, ``Hazardous Waste 
Operations and Emergency Response,'' unless the recipient is an Indian 
Tribe exempt from OSHA requirements;
    (vi) Quality assurance--(A) General. If the project involves 
environmentally related measurements or data generation, the recipient 
must comply with the requirements regarding quality assurance described 
in 40 CFR 31.45.
    (B) Quality assurance plan. The applicant must have a separate 
quality assurance project plan and/or sampling plan for each site to be 
covered by the Cooperative Agreement. The applicant must submit the 
quality assurance project plan and the sampling plan, which 
incorporates results of any site investigation performed at that site, 
to EPA with its Cooperative Agreement application. However, at the 
option of the EPA award official with program concurrence, the 
applicant may submit with its application a schedule for developing the 
detailed site-specific quality assurance plan (generally 45 days before 
beginning field work). Field work may not begin until EPA approves the 
site-specific quality assurance plan.
    (C) Split sampling. The quality assurance plan must comply with the 
requirements regarding split sampling described in section 104(e)(4)(B) 
of CERCLA, as amended.
    (vii) A schedule of deliverables to be prepared during response 
activities.
    (3) Other applicable forms and information authorized by 40 CFR 
31.10.
    (b) CERCLA Assurances. Before a Cooperative Agreement for remedial 
action can be awarded, the State must provide EPA with the following 
written assurances:
    (1) Operation and maintenance. The State must provide an assurance 
that it will assume responsibility for all future operation and 
maintenance of CERCLA-funded remedial actions for the expected life of 
each such action as required by CERCLA section 104(c) and addressed in 
40 CFR 300.510(c)(1) of the NCP. In addition, even if a political 
subdivision is designated as being responsible for operation and 
maintenance, the State must guarantee that it will assume any or all 
operation and maintenance activities in the event of default by the 
political subdivision.
    (2) Cost sharing. The State must provide assurances for cost 
sharing as follows:
    (i) Ten percent. Where a facility, whether privately or publicly 
owned, was not operated by the State or political subdivision thereof, 
either directly or through a contractual relationship or otherwise, at 
the time of any disposal of hazardous substances at the facility, the 
State must provide 10 percent of the cost of the remedial action, if 
CERCLA-funded.
    (ii) Fifty percent or more. Where a facility was operated by a 
State or political subdivision either directly or through a contractual 
relationship or otherwise, at the time of any disposal of hazardous 
substances at the facility, the State must provide 50 percent (or such 
greater share as EPA may determine appropriate, taking into account the 
degree of responsibility of the State or political subdivision for the 
release) of the cost of removal, remedial planning, and remedial action 
if the remedial action is CERCLA-funded.
    (3) Twenty-year waste capacity. The State must assure EPA of the 
availability of hazardous waste treatment or disposal facilities within 
and/or outside the State that comply with subtitle C of the Solid Waste 
Disposal Act and that have adequate capacity for the destruction, 
treatment, or secure disposition of all hazardous wastes that are 
reasonably expected to be generated within the State during the 20-year 
period following the date of the response agreement. A remedial action 
cannot be funded unless this assurance is provided consistent with 40 
CFR 300.510 of the NCP. EPA will determine whether the State's 
assurance is adequate.
    (4) Off-site storage, treatment, or disposal. If off-site storage, 
destruction, treatment, or disposal is required, the State must assure 
the availability of a hazardous waste disposal facility that is in 
compliance with subtitle C of the Solid Waste Disposal Act and is 
acceptable to EPA. The lead agency of the State must provide the 
notification required at Sec.  35.6120, if applicable.

[[Page 24509]]

    (5) Real property acquisition. If EPA determines in the remedy 
selection process that an interest in real property must be acquired in 
order to conduct a response action, such acquisition may be funded 
under a Cooperative Agreement. EPA may acquire an interest in real 
estate for the purpose of conducting a remedial action only if the 
State provides assurance that it will accept transfer of such interest 
in accordance with 40 CFR 300.510(f) of the NCP. The State must provide 
this assurance even if it intends to transfer this interest to a third 
party, or to allow a political subdivision to accept transfer on behalf 
of the State. If the political subdivision is accepting the transferred 
interest in real property, the State must guarantee that it will accept 
transfer of such interest in the event of default by the political 
subdivision. If the State or political subdivision disposes of the 
transferred real property, it shall comply with the requirements for 
real property in 40 CFR 31.31(c)(2). (See Sec.  35.6400 for additional 
information on real property acquisition requirements.)


Sec.  35.6110  Indian Tribe-lead remedial Cooperative Agreements.

    (a) Application requirements. The Indian Tribe must comply with all 
of the requirements described in Sec.  35.6105(a). Indian Tribes are 
not required to comply with the intergovernmental review requirements 
included in the ``Application for Federal Assistance'' (SF-424). 
Consistent with the NCP (40 CFR 300.510(e)(2)), this subpart does not 
address whether Indian Tribes are States for the purpose of CERCLA 
section 104(c)(9).
    (b) Cooperative Agreement requirements. (1) The Indian Tribe must 
comply with all terms and conditions in the Cooperative Agreement.
    (2) If it is designated the lead for remedial action, the Indian 
Tribe must provide the notification required at Sec.  35.6120, 
substituting the term ``Indian Tribe'' for the term ``State'' in that 
section, and ``out-of-an-Indian-Tribal-area-of-Indian-country'' for 
``out-of-State''.
    (3) Indian Tribes are not required to share in the cost of CERCLA-
funded remedial actions.


Sec.  35.6115  Political subdivision-lead remedial Cooperative 
Agreements.

    (a) General. If the State concurs, EPA may allow a political 
subdivision with the necessary capabilities and jurisdictional 
authority to conduct remedial response activities at a site. EPA will 
award the political subdivision a Cooperative Agreement to conduct 
remedial response and enter into a parallel Superfund State Contract 
with the State, if required (See Sec.  35.6800, when a Superfund State 
Contract is required). The political subdivision may also be a 
signatory to the Superfund State Contract. The political subdivision 
must submit to the State a copy of all reports provided to EPA.
    (b) Political subdivision Cooperative Agreement requirements--(1) 
Application requirements. To receive a remedial Cooperative Agreement, 
the political subdivision must prepare an application which includes 
the documentation described in Sec.  35.6105(a)(1) through (a)(3).
    (2) Cooperative Agreement requirements. The political subdivision 
must comply with all terms and conditions in the Cooperative Agreement. 
If it is designated the lead for remedial action, the political 
subdivision must provide the notification required at Sec.  35.6120, 
substituting the term ``political subdivision'' for the term ``State'' 
in that section.


Sec.  35.6120  Notification of the out-of-State or out-of-an-Indian-
Tribal-area-of-Indian-country transfer of CERCLA waste.

    (a) The recipient must provide written notification of off-site 
shipments of CERCLA waste from a site to an out-of-State or out-of-an-
Indian-Tribal-area-of-Indian-country waste management facility to:
    (1) The appropriate State environmental official for the State in 
which the waste management facility is located; and/or
    (2) An appropriate official of an Indian Tribe in whose area of 
Indian country the waste management facility is located; and
    (3) The EPA Award Official.
    (b) The notification of off-site shipments does not apply when the 
total volume of all such shipments from the site does not exceed 10 
cubic yards.
    (c) The notification must be in writing and must provide the 
following information, where available:
    (1) The name and location of the facility to which the CERCLA waste 
is to be shipped;
    (2) The type and quantity of CERCLA waste to be shipped;
    (3) The expected schedule for the shipments of the CERCLA waste; 
and
    (4) The method of transportation of the CERCLA waste.
    (d) The recipient must notify the State or Indian Tribal government 
in which the planned receiving facility is located of major changes in 
the shipment plan, such as a decision to ship the CERCLA waste to 
another facility within the same receiving State, or to a facility in 
another State.
    (e) The recipient must provide relevant information on the off-site 
shipments, including the information in paragraph (c) of this section, 
as soon as possible after the award of the contract and, where 
practicable, before the CERCLA waste is actually shipped.

Enforcement Cooperative Agreements


Sec.  35.6145  Eligibility for enforcement Cooperative Agreements.

    Pursuant to CERCLA section 104(d), States, political subdivisions 
thereof, and Indian Tribes may apply for enforcement Cooperative 
Agreements. To be eligible for an enforcement Cooperative Agreement, 
the State, political subdivision or Indian Tribe must demonstrate that 
it has the authority, jurisdiction, and the necessary administrative 
capabilities to take an enforcement action(s) to compel PRP cleanup of 
the site, or recovery of the cleanup costs. To accomplish this, the 
State, political subdivision or Indian Tribe, respectively, must submit 
the following for EPA approval:
    (a) A letter from the State Attorney General, or comparable local 
official (of a political subdivision) or comparable Indian Tribal 
official, certifying that it has the authority, jurisdiction, and 
administrative capabilities that provide a basis for pursuing 
enforcement actions against a PRP to secure the necessary response;
    (b) A copy of the applicable State, local (political subdivision) 
or Indian Tribal statute(s) and a description of how it is implemented;
    (c) Any other documentation required by EPA to demonstrate that the 
State, local (political subdivision) or Indian Tribal government has 
the statutory authority, jurisdiction, and administrative capabilities 
to perform the enforcement activity(ies) to be funded under the 
Cooperative Agreement.


Sec.  35.6150  Activities eligible for funding under enforcement 
Cooperative Agreements.

    An enforcement Cooperative Agreement application from a State, 
political subdivision or Indian Tribe may request funding for the 
following enforcement activities:
    (a) PRP searches;
    (b) Issuance of notice letters and negotiation activities;
    (c) Administrative and judicial enforcement actions taken under 
State or Indian Tribal law;
    (d) Management assistance and oversight of PRPs during Federal 
enforcement response;

[[Page 24510]]

    (e) Oversight of PRPs during a State, political subdivision or 
Indian Tribe enforcement response contingent on the applicant having 
taken all necessary action to compel PRPs to fund the oversight of 
cleanup activities negotiated under the recipient's enforcement 
authorities. If the State, political subdivision, Indian Tribe or EPA 
cannot obtain PRP commitment to fund such oversight activities, then 
these activities will be considered eligible for CERCLA funding under 
an enforcement Cooperative Agreement.


Sec.  35.6155  State, political subdivision or Indian Tribe-lead 
enforcement Cooperative Agreements.

    (a) The State, political subdivision or Indian Tribe must comply 
with the requirements described in Sec.  35.6105 (a)(1) through (a)(3), 
as appropriate.
    (b) The CERCLA section 104 assurances described in Sec.  35.6105(b) 
are not applicable for enforcement Cooperative Agreements.
    (c) Before an enforcement Cooperative Agreement is awarded, the 
State, political subdivision or Indian Tribe must:
    (1) Assure EPA that it will notify and consult with EPA promptly if 
the recipient determines that its laws or other restrictions prevent 
the recipient from acting consistently with CERCLA; and
    (2) If the applicant is seeking funds for oversight of PRP cleanup, 
the applicant must:
    (i) Demonstrate that the proposed Statement of Work or cleanup plan 
prepared by the PRP satisfies the recipient's enforcement goals for 
those instances in which the recipient is seeking funding for oversight 
of PRP cleanup activities negotiated under the recipient's own 
enforcement authorities; and
    (ii) Demonstrate that the PRP has the capability to attain the 
goals set forth in the plan;
    (iii) Demonstrate that it has taken all necessary action to compel 
PRPs to fund the oversight of cleanup activities negotiated under the 
recipient's enforcement authorities.

Removal Response Cooperative Agreements


Sec.  35.6200  Eligibility for removal Cooperative Agreements.

    When a planning period of more than six months is available, 
States, political subdivisions and Indian Tribes may apply for removal 
Cooperative Agreements.


Sec.  35.6205  Removal Cooperative Agreements.

    (a) The State must comply with the requirements described in Sec.  
35.6105(a). To the extent practicable, the State must comply with the 
notification requirement at Sec.  35.6120 when a removal action is 
necessary and involves out-of-State shipment of CERCLA wastes, and 
when, based on the site evaluation, EPA determines that a planning 
period of more than six months is available before the removal 
activities must begin.
    (b) Pursuant to CERCLA section 104(c)(3), the State is not required 
to share in the cost of a CERCLA-funded removal action, unless the 
removal is conducted at a site that was publicly operated by a State or 
political subdivision at the time of disposal of hazardous substances 
and a CERCLA-funded remedial action is ultimately undertaken at the 
site. In this situation, the State must share at least 50 percent in 
the cost of all removal, remedial planning, and remedial action costs 
at the time of the remedial action as stated in Sec.  
35.6105(b)(2)(ii).
    (c) If both the State and EPA agree, a political subdivision with 
the necessary capabilities and jurisdictional authority may assume the 
lead responsibility for all, or a portion, of the removal activity at a 
site. Political subdivisions must comply with the requirements 
described in Sec.  35.6105(a). To the extent practicable, political 
subdivisions also must comply with the notification requirement at 
Sec.  35.6120 when a removal action is necessary and involves the 
shipment of CERCLA wastes out of the State's jurisdiction, and when, 
based on the site evaluation, EPA determines that a planning period of 
more than six months is available before the removal activities must 
begin.
    (d) The State must provide the cost share assurance discussed in 
paragraph (b) of this section on behalf of a political subdivision that 
is given the lead for a removal action.
    (e) Indian Tribes must comply with the requirements described in 
Sec.  35.6105(a). To the extent practicable, Indian Tribes also must 
comply with the notification requirement at Sec.  35.6120 when a 
removal action is necessary and involves the shipment of CERCLA wastes 
out of the Indian Tribe's area of Indian country, and when, based on 
the site evaluation, EPA determines that a planning period of more than 
six months is available before the removal activities must begin.
    (f) Indian Tribes are not required to share in the cost of a 
CERCLA-funded removal action.

Core Program Cooperative Agreements


Sec.  35.6215  Eligibility for Core Program Cooperative Agreements.

    (a) States and Indian Tribes may apply for Core Program Cooperative 
Agreements in order to conduct CERCLA implementation activities that 
are not directly assignable to specific sites, but are intended to 
develop and maintain a State's or Indian Tribe's ability to participate 
in the CERCLA response program.
    (b) Only the State or Indian Tribal government agency designated as 
the single point of contact with EPA for CERCLA implementation is 
eligible to receive a Core Program Cooperative Agreement.
    (c) When it is more economical for a government entity other than 
the recipient (such as a political subdivision or State Attorney 
General) to implement tasks funded through a Core Program Cooperative 
Agreement, benefits to such entities must be provided for in an 
intergovernmental agreement.


Sec.  35.6220  General.

    The recipient of a Core Program Cooperative Agreement must comply 
with the requirements regarding financial administration (Sec. Sec.  
35.6270 through 35.6290), property (Sec. Sec.  35.6300 through 
35.6450), procurement (Sec. Sec.  35.6550 through 35.6610), reporting 
(Sec. Sec.  35.6650 through 35.6670), records (Sec. Sec.  35.6700 
through 35.6710), and other administrative requirements under a 
Cooperative Agreement (Sec. Sec.  35.6750 through 35.6790). Recipients 
may not incur site-specific costs. Where these sections entail site-
specific requirements, the recipient is not required to comply on a 
site-specific basis.


Sec.  35.6225  Activities eligible for funding under Core Program 
Cooperative Agreements.

    (a) To be eligible for funding under a Core Program Cooperative 
Agreement, activities must develop and maintain a recipient's abilities 
to implement CERCLA. Once the recipient has in place program functions 
described in paragraphs (a)(1) through (a)(4) of this section, EPA will 
evaluate the recipient's program needs to sustain interaction with EPA 
in CERCLA implementation as described in paragraph (a)(5) of this 
section. The amount of funding provided under the Core Program will be 
determined by EPA based on the availability of funds and the 
recipient's program needs in the areas described in paragraphs (a)(1) 
through (a)(4) of this section:
    (1) Procedures for emergency response actions and longer-term

[[Page 24511]]

remediation of environmental and health risks at hazardous waste sites 
(including but not limited to the development of generic health and 
safety plans, quality assurance project plans, and community relation 
plans);
    (2) Provisions for satisfying all requirements and assurances 
(including the development of a fund or other financing mechanism(s) to 
pay for studies and remediation activities);
    (3) Legal authorities and enforcement support associated with 
proper administration of the recipient's program and with efforts to 
compel potentially responsible parties to conduct or pay for studies 
and/or remediation (including but not limited to the development of 
statutory authorities; access to legal assistance in identifying 
applicable or relevant and appropriate requirements of other laws; and 
development and maintenance of the administrative, financial and 
recordkeeping systems necessary for cost recovery actions under 
CERCLA);
    (4) Efforts necessary to hire and train staff to manage publicly-
funded cleanups, oversee responsible party-lead cleanups, and provide 
clerical support; and
    (5) Other activities deemed necessary by EPA to develop and 
maintain sustained EPA/recipient interaction in CERCLA implementation 
(including but not limited to general program management and 
supervision necessary for a recipient to implement CERCLA activities, 
and interagency coordination on all phases of CERCLA response).
    (b) Continued funding of tasks in subsequent years will be based on 
an evaluation of demonstrated progress toward the goals in the existing 
Core Program Cooperative Agreement Statement of Work.


Sec.  35.6230  Application requirements.

    To receive a Core Program Cooperative Agreement, the applicant must 
submit an application form (``Application for Federal Assistance,'' SF-
424, for non-construction programs) to EPA. Applications for additional 
funding need include only the revised pages. The application must 
include the following:
    (a) A project narrative statement, including the following:
    (1) A Statement of Work (SOW) which must include a detailed 
description of the CERCLA-funded activities and tasks to be conducted, 
the projected costs associated with each task, the number of products 
to be completed, and a schedule for implementation. Eligible activities 
under Core Program Cooperative Agreements are discussed in Sec.  
35.6225; and
    (2) A background statement, describing the current abilities and 
authorities of the recipient's program for implementing CERCLA, the 
program's needs to sustain and increase recipient involvement in CERCLA 
implementation, and the impact of Core Program Cooperative Agreement 
funds on the recipient's involvement in site-specific CERCLA response.
    (b) Budget sheets (SF-424A).
    (c) Proposed project and budget periods for CERCLA-funded 
activities. The project and budget periods may be one or more years and 
may be extended incrementally, up to 12 months at a time, with EPA 
approval.
    (d) Other applicable forms and information authorized by 40 CFR 
31.10.


Sec.  35.6235  Cost sharing.

    A State must provide at least ten percent of the direct and 
indirect costs of all activities covered by the Core Program 
Cooperative Agreement. Indian Tribes are not required to share in the 
cost of Core Program activities. The State must provide its cost share 
with non-Federal funds or with Federal funds, authorized by statute to 
be used for matching purposes. Funds used for matching purposes under 
any other Federal grant or Cooperative Agreement cannot be used for 
matching purposes under a Core Program Cooperative Agreement. The State 
may provide its share using in-kind contributions if such contributions 
are provided for in the Cooperative Agreement. The State may not use 
CERCLA State credits to offset any part of its required match for Core 
Program Cooperative Agreements. (See Sec.  35.6285 (c), (d), and (f) 
regarding credit, excess cash cost share contributions/over match, and 
advance match, respectively.)

Support Agency Cooperative Agreements


Sec.  35.6240  Eligibility for support agency Cooperative Agreements.

    States, political subdivisions, and Indian Tribes may apply for 
support agency Cooperative Agreements to ensure their meaningful and 
substantial involvement in response activities, as specified in 
sections 104 and 121(f)(1) of CERCLA and the NCP (40 CFR part 300).


Sec.  35.6245  Allowable activities.

    Support agency activities are those activities conducted by the 
recipient to ensure its meaningful and substantial involvement. The 
activities described in section 121(f)(1) of CERCLA, as amended, and in 
subpart F of the NCP (40 CFR part 300), are eligible for funding under 
a support agency Cooperative Agreement. Participation in five-year 
reviews of the continuing protectiveness of a remedial action is also 
an eligible support agency activity.


Sec.  35.6250  Support agency Cooperative Agreement requirements.

    (a) Application requirements. The applicant must comply with the 
requirements described in Sec.  35.6105(a)(1) and (3), and other 
requirements as negotiated with EPA. (Indian Tribes are exempt from the 
requirement of Intergovernmental Review in 40 CFR part 29.) An 
applicant may submit a non-site-specific budget for support agency 
activities.
    (b) Cooperative Agreement requirements. The recipient must comply 
with the requirements regarding financial administration (Sec. Sec.  
35.6270 through 35.6290), property (Sec. Sec.  35.6300 through 
35.6450), procurement (Sec. Sec.  35.6550 through 35.6610), reporting 
(Sec. Sec.  35.6650 through 35.6670), records (Sec. Sec.  35.6700 
through 35.6710), and other administrative requirements under a 
Cooperative Agreement (Sec. Sec.  35.6750 through 35.6790).

Combining Cooperative Agreements


Sec.  35.6260  Combining Cooperative Agreement sites and activities.

    (a) EPA may award a Cooperative Agreement to a recipient for:
    (1) A single activity, or multiple activities;
    (2) A single activity at multiple sites; and
    (3) Except as provided in paragraphs (b), (c), and (d) of this 
section, multiple activities at multiple sites.
    (b) EPA will not award or amend a Cooperative Agreement to a 
political subdivision to conduct multiple activities at multiple sites. 
Before awarding or amending a Cooperative Agreement to permit multiple 
activities at multiple sites, EPA must determine that the State or 
Indian Tribe has adequate administrative, technical, and financial 
management and tracking capabilities. A State's or Indian Tribe's 
request for such a Cooperative Agreement will be considered only if EPA 
determines that consolidating these activities under one Cooperative 
Agreement would be in the Agency's best interests.
    (c) EPA will not award a single Cooperative Agreement to conduct 
multiple remedial actions at multiple sites.
    (d) EPA will require separate Cooperative Agreements for eligible 
removal actions that exceed the statutory monetary ceiling or whenever 
a consistency waiver is likely to be sought.

[[Page 24512]]

Financial Administration Requirements Under a Cooperative Agreement


Sec.  35.6270  Standards for financial management systems.

    (a) Accounting system standards--(1) General. The recipient's 
system must track expenses by site, activity, and, operable unit, as 
applicable, according to object class. The system must also provide 
control, accountability, and an assurance that funds, property, and 
other assets are used only for their authorized purposes. The recipient 
must allow an EPA review of the adequacy of the financial management 
system as described in 40 CFR 31.20(c).
    (2) Allowable costs. The recipient's systems must comply with the 
appropriate allowable cost principles described in 40 CFR 31.22.
    (3) Pre-remedial. The system need not track expenses by site. 
However, all pre-remedial costs must be documented under a single 
Superfund account number designated specifically for the pre-remedial 
activity.
    (4) Core Program. Since all costs associated with Core Program 
Cooperative Agreements are non-site-specific, the systems need not 
track expenses by site. However, all Core Program costs must be 
documented under the Superfund account number(s) designated 
specifically for Core Program activity.
    (5) Support Agency. All support agency agreements will be assigned 
a single Superfund activity code designated specifically for support 
agency activities. All support agency costs, however, must be 
documented site specifically in accordance with the terms and 
conditions specified in the Cooperative Agreement.
    (6) Accounting system control procedures. Except as provided for in 
paragraph (a)(3) of this section, accounting system control procedures 
must ensure that accounting information is:
    (i) Accurate, charging only costs attributable to the site, 
activity, and operable unit, as applicable; and
    (ii) Complete, recording and charging to individual sites, 
activities, and operable units, as applicable, all costs attributable 
to the recipient's CERCLA effort.
    (7) Financial reporting. The recipient's accounting system must use 
actual costs as the basis for all reports of direct site charges. The 
recipient must comply with the requirements for financial reporting 
contained in Sec.  35.6670.
    (b) Recordkeeping system standards. (1) The recipient must maintain 
a recordkeeping system that enables site-specific costs to be tracked 
by site, activity, and operable unit, as applicable, and provides 
sufficient documentation for cost recovery purposes.
    (2) The recipient must provide this site-specific documentation to 
the EPA Regional Office within 30 working days of a request, unless 
another time frame is specified in the Cooperative Agreement.
    (3) In addition, the recipient must comply with the requirements 
regarding records described in Sec. Sec.  35.6700, 35.6705, and 
35.6710. The recipient must comply with the requirements regarding 
source documentation described in 40 CFR 31.20(b)(6).
    (4) For pre-remedial and Core Program activities, the recordkeeping 
system must comply with the requirements described in paragraphs (a)(3) 
and (a)(4) of this section.


Sec.  35.6275  Period of availability of funds.

    (a) The recipient must comply with the requirements regarding the 
availability of funds described in 40 CFR 31.23.
    (b) Except as permitted in Sec.  35.6285, the Award Official must 
sign the assistance agreement before costs are incurred. The recipient 
may incur costs between the date the Award Official signs the 
assistance agreement and the date the recipient signs the agreement, if 
the costs are identified in the agreement and the recipient does not 
change the agreement.


Sec.  35.6280  Payments.

    (a) General. In addition to the following requirements, the 
recipient must comply with the requirements regarding payment described 
in 40 CFR 31.21 (f) through (h).
    (1) Assignment of payment. The recipient cannot assign the right to 
receive payments under the recipient's Cooperative Agreement. EPA will 
make payments only to the payee identified in the Cooperative 
Agreement.
    (2) Interest. The interest a recipient earns on an advance of EPA 
funds is subject to the requirements of 40 CFR 31.21(i), ``Interest 
earned on advances.''
    (b) Payment method--(1) Letter of credit. In order to receive 
payment by the letter of credit method, the recipient must comply with 
the requirements regarding letter of credit described in 40 CFR 31.20 
(b)(7) and 31.21(b). The recipient must identify and charge costs to 
specific sites, activities, and operable units, as applicable, for 
drawdown purposes as specified in the Cooperative Agreement.
    (2) Reimbursement. If the recipient is unable to meet letter of 
credit requirements, EPA will pay the recipient by reimbursement. The 
recipient must comply with the requirements regarding reimbursement 
described in 40 CFR 31.21(d).
    (3) Working capital advances. If the recipient is unable to meet 
the criteria for payment by either letter of credit or reimbursement, 
EPA may provide cash on a working capital advance basis. Under this 
procedure EPA shall advance cash to the recipient to cover its 
estimated disbursement needs for an initial period generally geared to 
the recipient's disbursing cycle. Thereafter, EPA shall reimburse the 
recipient for its actual cash disbursements. In such cases, the 
recipient must comply with the requirements regarding working capital 
advances described in 40 CFR 31.21(e).


Sec.  35.6285  Recipient payment of response costs.

    The recipient may pay for its share of response costs using cash, 
services, credits or any combination of these, as follows:
    (a) Cash. The recipient may pay for its share of response costs in 
the form of cash.
    (b) Services. The recipient may provide equipment and services to 
satisfy its cost share requirements under Cooperative Agreements. The 
recipient must comply with the requirements regarding in-kind and 
donated services described in 40 CFR 31.24.
    (c) Credit--(1) General credit requirements. Credits are limited to 
State site-specific expenses that EPA determines to be reasonable, 
documented, direct, out-of-pocket expenditures of non-Federal funds for 
remedial action, as defined in CERCLA section 101(24), that are 
consistent with a permanent remedy at the site. Credits are established 
on a site-specific basis. Only a State may claim credit.
    (i) The State may claim credit for response activity obligations or 
expenditures incurred by the State or political subdivision between 
January 1, 1978, and December 11, 1980.
    (ii) The State may claim credit for remedial action expenditures 
made by the State after October 17, 1986. If such expenditures occurred 
after the site was listed on the NPL (Appendix B to 40 CFR Part 300), 
they will be eligible for a credit only if the State initiated the 
remedial action after obtaining EPA's written approval.
    (iii) The State may not claim credit for removal actions taken 
after December 11, 1980.
    (2) Credit submission requirements. Although EPA may require 
additional documentation, the State must submit

[[Page 24513]]

the following before EPA will approve the use of the credit:
    (i) Specific amounts claimed for credit, by site (estimated amounts 
are unacceptable), based on supporting cost documentation;
    (ii) Units of government (State agency, county, local) that 
incurred the costs, by site;
    (iii) Description of the specific function performed by each unit 
of government at each site;
    (iv) Certification (signed by the State's fiscal manager or the 
financial director for each unit of government) that credit costs have 
not been previously reimbursed by the Federal Government or any other 
party, and have not been used for matching purposes under any other 
Federal program or grant; and
    (v) Documentation, if requested by EPA, to ensure the actions 
undertaken at the site are cost eligible and consistent with CERCLA, as 
amended, and the NCP requirements in 40 CFR part 300. This requirement 
does not apply for costs incurred before December 11, 1980.
    (3) Use of credit. The State must first apply credit at the site at 
which it was earned. With the approval of EPA, the State may use excess 
credit earned at one site for its cost share at another site (See 
CERCLA section 104(c)(5)). Credits must be applied on a site-specific 
basis, and, therefore, may not be used to meet State cost share 
requirements for Core Program Cooperative Agreements. EPA will not 
reimburse excess credit.
    (4) Credit verification procedures. Expenditure submissions are 
subject to verification by audit or other financial review. EPA may 
conduct a technical review (including inspection) to verify that the 
claimed remedial action is consistent with CERCLA and the NCP (40 CFR 
part 300).
    (d) Excess cash cost share contributions/overmatch. The recipient 
may direct EPA to return the excess funds or to use the overmatch at 
one site to meet the cost share obligation at another site. The 
recipient may not use contributions in excess of the required cost 
share at one site to meet the cost share obligation for the Core 
Program cost share. Overmatch is not ``credit'' pursuant to paragraph 
(c)(3) of this section.
    (e) Cost sharing. The recipient must comply with the requirements 
regarding cost sharing described in 40 CFR 31.24. Finally, the 
recipient cannot use costs incurred under the Core Program to offset 
cost share requirements at a site.
    (f) Advance match. (1) A Cooperative Agreement for a site-specific 
response entered into after October 17, 1986, cannot authorize a State 
to contribute funds during remedial planning and then apply those 
contributions to the remedial action cost share (advance match).
    (2) A State may seek reimbursement for costs incurred under 
Cooperative Agreements which authorize advance match.
    (3) Reimbursements are subject to the availability of appropriated 
funds.
    (4) If the State does not seek reimbursement, EPA will apply the 
advance match to off-set the State's required cost share for remedial 
action at the site. The State may not use advance match for credit at 
any other site, nor may the State receive reimbursement until the 
conclusion of CERCLA-funded remedial response activities. Also, the 
State may not use advance match for credit against cost share 
obligations for Core Program Cooperative Agreements.
    (5) Claims for advance match are subject to verification by audit.


Sec.  35.6290  Program income.

    The recipient must comply with the requirements regarding program 
income described in 40 CFR 31.25. Recoveries of Federal cost share 
amounts are not program income, and whether such recoveries are 
received before or after expiration of the Cooperative Agreement, must 
be reimbursed promptly to EPA.

Personal Property Requirements Under a Cooperative Agreement


Sec.  35.6300  General personal property acquisition and use 
requirements.

    (a) General. (1) Property may be acquired only when authorized in 
the Cooperative Agreement.
    (2) The recipient must acquire the property during the approved 
project period.
    (3) The recipient must:
    (i) Charge property costs by site, activity, and operable unit, as 
applicable;
    (ii) Document the use of the property by site, activity, and 
operable unit, as applicable; and
    (iii) Solicit and follow EPA's instructions on the disposal of any 
property purchased with CERCLA funds as specified in Sec. Sec.  35.6340 
and 35.6345.
    (b) Exception. The recipient is not required to charge property 
costs by site under a pre-remedial or Core Program Cooperative 
Agreement.


Sec.  35.6305  Obtaining supplies.

    To obtain supplies, the recipient must agree to comply with the 
requirements in Sec. Sec.  35.6300, 35.6315(b), 35.6325 through 
35.6340, and 35.6350. Supplies obtained with Core Program funds must be 
for non-site-specific purposes. All purchases of supplies under the 
Core Program must comply with the requirements in Sec. Sec.  35.6300, 
35.6315(b), 35.6325 through 35.6340, and 35.6350, except where these 
requirements are site-specific.


Sec.  35.6310  Obtaining equipment.

    To obtain equipment, the recipient must agree to comply with the 
requirements in Sec. Sec.  35.6300 and 35.6315 through 35.6350.


Sec.  35.6315  Alternative methods for obtaining property.

    (a) Purchase equipment with recipient funds. The recipient may 
purchase equipment with the recipient's own funds and may charge EPA a 
fee for using equipment on a CERCLA-funded project. The fee must be 
based on a usage rate, subject to the usage rate requirements in Sec.  
35.6320.
    (b) Borrow federally owned property. The recipient may borrow 
federally owned property, with the exception of motor vehicles, for use 
on CERCLA-funded projects. The loan of the federally owned property may 
only extend through the project period. At the end of the project 
period, or when the federally owned property is no longer needed for 
the project, the recipient must return the property to the Federal 
Government.
    (c) Lease, use contractor services, or purchase with CERCLA funds. 
To acquire equipment through lease, use of contractor services, or 
purchase with CERCLA funds, the recipient must conduct and document a 
cost comparison analysis to determine which of these methods of 
obtaining equipment is the most cost effective. In order to obtain the 
equipment, the recipient must submit documentation of the cost 
comparison analysis to EPA for approval. The recipient must obtain the 
equipment through the most cost-effective method, subject to the 
following requirements:
    (1) Lease or rent equipment. If it is the most cost-effective 
method of acquisition, the recipient may lease or rent equipment, 
subject only to the requirements in Sec.  35.6300.
    (2) Use contractor services. (i) If it is the most cost-effective 
method of acquisition, the recipient may hire the services of a 
contractor.
    (ii) The recipient must obtain award official approval before 
authorizing the contractor to purchase equipment with CERCLA funds. 
(See Sec.  35.6325, regarding the title and vested interest of 
equipment purchased with CERCLA funds.) This does not apply for

[[Page 24514]]

recipients who have used the sealed bids method of procurement.
    (iii) The recipient must require the contractor to allocate the 
cost of the contractor services by site, activity, and operable unit, 
as applicable.
    (3) Purchase equipment with CERCLA funds. If equipment purchase is 
the most cost-effective method of obtaining the equipment, the 
recipient may purchase the equipment with CERCLA funds. To purchase 
equipment with CERCLA funds, the recipient must comply with the 
following requirements:
    (i) The recipient must include in the Cooperative Agreement 
application a list of all items of equipment to be purchased with 
CERCLA funds, with the price of each item.
    (ii) If the equipment is to be used on sites, the recipient must 
allocate the cost of the equipment by site, activity, and operable 
unit, as applicable, by applying a usage rate subject to the usage rate 
requirements in Sec.  35.6320.
    (iii) The recipient may not use CERCLA funds to purchase a 
transportable or mobile treatment system.
    (iv) Equipment obtained with Core Program funds must be for non-
site-specific purposes. All purchases of equipment must comply with the 
requirements in Sec. Sec.  35.6300, and 35.6310 through 35.6350, except 
where these requirements are site-specific.


Sec.  35.6320  Usage rate.

    (a) Usage rate approval. To charge EPA a fee for use of equipment 
purchased with recipient funds or to allocate the cost of equipment by 
site, activity, and operable unit, as applicable, the recipient must 
apply a usage rate. The recipient must submit documentation of the 
usage rate computation to EPA. The EPA-approved usage rate must be 
included in the Cooperative Agreement before the recipient incurs these 
equipment costs.
    (b) Usage rate application. The recipient must record the use of 
the equipment by site, activity, and operable unit, as applicable, and 
must apply the usage rate to calculate equipment charges by site, 
activity, and operable unit, as applicable. For Core Program and pre-
remedial activities, the recipient is not required to apply a usage 
rate.


Sec.  35.6325  Title and EPA interest in CERCLA-funded property.

    (a) EPA's interest in CERCLA-funded property. EPA has an interest 
(the percentage of EPA's participation in the total award) in both 
equipment and supplies purchased with CERCLA funds.
    (b) Title in CERCLA-funded property. Title in both equipment and 
supplies purchased with CERCLA funds vests in the recipient.
    (1) Right to transfer title. EPA retains the right to transfer 
title of all property purchased with CERCLA funds to the Federal 
Government or a third party within 120 calendar days after project 
completion or at the time of disposal.
    (2) Equipment used as all or part of the remedy. The following 
requirements apply to equipment used as all or part of the remedy:
    (i) Fixed in-place equipment. EPA no longer has an interest in 
fixed in-place equipment once the equipment is installed.
    (ii) Equipment that is an integral part of services to individuals. 
EPA no longer has an interest in equipment that is an integral part of 
services to individuals, such as pipes, lines, or pumps providing 
hookups for homeowners on an existing water distribution system, once 
EPA certifies that the remedy is operational and functional.


Sec.  35.6330  Title to federally owned property.

    Title to all federally owned property vests in the Federal 
Government.


Sec.  35.6335  Property management standards.

    The recipient must comply with the following property management 
standards for property purchased with CERCLA funds. The recipient may 
use its own property management system if it meets the following 
standards.
    (a) Control. The recipient must maintain:
    (1) Property records for CERCLA-funded property which include the 
contents specified in Sec.  35.6700(c);
    (2) A control system that ensures adequate safeguards for 
prevention of loss, damage, or theft of the property. The recipient 
must make provisions for the thorough investigation and documentation 
of any loss, damage, or theft;
    (3) Procedures to ensure maintenance of the property are in good 
condition and periodic calibration of the instruments used for 
precision measurements;
    (4) Sales procedures to ensure the highest possible return, if the 
recipient is authorized to sell the property;
    (5) Provisions for financial control and accounting in the 
financial management system of all equipment; and
    (6) Identification of all federally owned property.
    (b) Inventory and reporting for CERCLA-funded equipment--(1) 
Physical inventory. The recipient must conduct a physical inventory at 
least once every two years for all equipment except that which is part 
of the in-place remedy. The recipient must reconcile physical inventory 
results with the equipment records.
    (2) Inventory reports. The recipient must comply with requirements 
for inventory reports set forth in Sec.  35.6660.
    (c) Inventory and reporting for federally owned property--(1) 
Physical inventory. The recipient must conduct a physical inventory:
    (i) Annually;
    (ii) When the property is no longer needed; and
    (iii) Within 90 days after the end of the project period.
    (2) Inventory reports. The recipient must comply with requirements 
for inventory reports in Sec.  35.6660.


Sec.  35.6340  Disposal of CERCLA-funded property.

    (a) Equipment. For equipment that is no longer needed, or at the 
end of the project period, whichever is earlier, the recipient must:
    (1) Analyze two alternatives: The cost of leaving the equipment in 
place, and the cost of removing the equipment and disposing of it in 
another manner.
    (2) Document the analysis of the two alternatives in the inventory 
report. See Sec.  35.6660 regarding requirements for the inventory 
report.
    (i) If it is most cost-effective to remove the equipment and 
dispose of it in another manner:
    (A) If the equipment has a residual fair market value of $5,000 or 
more, the recipient must request disposition instructions from EPA in 
the inventory report. See Sec.  35.6345 for equipment disposal options.
    (B) If the equipment has a residual fair market value of less than 
$5,000, the recipient may retain the equipment for the recipient's use 
on another CERCLA site. If, however, there is any remaining residual 
value at the time of final disposition, the recipient must reimburse 
the Hazardous Substance Superfund for EPA's vested interest in the 
current fair market value of the equipment at the time of disposition.
    (ii) If it is most cost-effective to leave the equipment in place, 
recommend in the inventory report that the equipment be left in place.
    (3) Submit the inventory report to EPA, even if EPA has stopped 
supporting the project.
    (b) Supplies. (1) If supplies have an aggregate fair market value 
of $5,000 or more at the end of the project period, the recipient must 
take one of the following actions at the direction of EPA:

[[Page 24515]]

    (i) Use the supplies on another CERCLA project and reimburse the 
original project for the fair market value of the supplies;
    (ii) If both the recipient and EPA concur, keep the supplies and 
reimburse the Hazardous Substance Superfund for EPA's interest in the 
current fair market value of the supplies; or
    (iii) Sell the supplies and reimburse the Hazardous Substance 
Superfund for EPA's interest in the current fair market value of the 
supplies, less any reasonable selling expenses.
    (2) If the supplies remaining at the end of the project period have 
an aggregate fair market value of less than $5,000, the recipient may 
keep the supplies to use on another CERCLA project. If the recipient 
cannot use the supplies on another CERCLA project, then the recipient 
may keep or sell the supplies without reimbursing the Hazardous 
Substance Superfund.


Sec.  35.6345  Equipment disposal options.

    The following disposal options are available:
    (a) Use the equipment on another CERCLA project and reimburse the 
original project for the fair market value of the equipment;
    (b) If both the recipient and EPA concur, keep the equipment and 
reimburse the Hazardous Substance Superfund for EPA's interest in the 
current fair market value of the equipment;
    (c) Sell the equipment and reimburse the Hazardous Substance 
Superfund for EPA's interest in the current fair market value of the 
equipment, less any reasonable selling expenses; or
    (d) Return the equipment to EPA and, if applicable, EPA will 
reimburse the recipient for the recipient's proportionate share in the 
current fair market value of the equipment.


Sec.  35.6350  Disposal of federally owned property.

    When federally owned property is no longer needed, or at the end of 
the project, the recipient must inform EPA that the property is 
available for return to the Federal Government. EPA will send 
disposition instructions to the recipient.

Real Property Requirements Under a Cooperative Agreement


Sec.  35.6400  Acquisition and transfer of interest.

    (a) An interest in real property may be acquired only with prior 
approval of EPA.
    (1) If the recipient acquires real property in order to conduct the 
response, the recipient with jurisdiction over the property must agree 
to hold the necessary property interest.
    (2) If it is necessary for the Federal Government to acquire the 
interest in real estate to permit conduct of a remedial action, the 
acquisition may be made only if the State provides assurance that it 
will accept transfer of the acquired interest in accordance with 40 CFR 
300.510(f) of the NCP. States must follow the requirements in Sec.  
35.6105(b)(5).
    (b) The recipient must comply with applicable Federal regulations 
for real property acquisition under assistance agreements contained in 
part 4 of this chapter, ``Uniform Relocation Assistance and Real 
Property Acquisition for Federal and Federally Assisted Programs.''


Sec.  35.6405  Use.

    The recipient must comply with the requirements regarding real 
property described in 40 CFR 31.31.

Copyright Requirements Under a Cooperative Agreement


Sec.  35.6450  General requirements.

    The recipient must comply with the requirements regarding 
copyrights described in 40 CFR 31.34. The recipient must comply with 
the requirements regarding contract copyright provisions described in 
Sec.  35.6595(b)(2).

Use of Recipient Employees (``Force Account'') Under a Cooperative 
Agreement


Sec.  35.6500  General requirements.

    (a) Force Account work is the use of the recipient's own employees 
or equipment for construction, construction-related activities 
(including architecture and engineering services), or repair or 
improvement to a facility. When using Force Account work, the recipient 
must demonstrate that the employees can complete the work as 
competently as, and more economically than, contractors, or that an 
emergency necessitates the use of the Force Account.
    (b) Where the value of Force Account services exceeds the 
simplified acquisition threshold, the recipient must receive written 
authorization for use from the award official.

Procurement Requirements Under a Cooperative Agreement


Sec.  35.6550  Procurement system standards.

    (a) Recipient standards. (1) In addition to the basic procurement 
policies and procedures described in 40 CFR 31.36(a), the State shall 
comply with the requirements in the following: Paragraphs (a)(5), 
(a)(9), and (b) of this section, Sec. Sec.  35.6555(c), 35.6565 (the 
first sentence in this section, the first sentence in paragraph (b) of 
this section, and all of paragraph (d) of this section), 35.6570, 
35.6575, and 35.6600. Political subdivisions and Tribes must follow all 
of the requirements included or referenced in this section through 
Sec.  35.6610.
    (2) EPA review. EPA reserves the right to review any recipient's 
procurement system or procurement action under a Cooperative Agreement.
    (3) Code of conduct. The recipient must comply with the 
requirements of 40 CFR 31.36(b)(3), which describes standards of 
conduct for employees, officers, and agents of the recipient.
    (4) Completion of contractual and administrative issues. (i) The 
recipient is responsible for the settlement and satisfactory completion 
in accordance with sound business judgment and good administrative 
practice of all contractual and administrative issues arising out of 
procurements under the Cooperative Agreement.
    (ii) EPA will not substitute its judgment for that of the recipient 
unless the matter is primarily a Federal concern.
    (iii) Violations of law will be referred to the local, State, 
Tribal, or Federal authority having proper jurisdiction.
    (5) Selection procedures. The recipient must have written selection 
procedures for procurement transactions.
    (i) EPA may not participate in a recipient's selection panel except 
to provide technical assistance. EPA staff providing such technical 
assistance:
    (A) Shall constitute a minority of the selection panel (limited to 
making recommendations on qualified offers and acceptable proposals 
based on published evaluation criteria) for the contractor selection 
process; and
    (B) Are not permitted to participate in the negotiation and award 
of contracts.
    (ii) When selecting a contractor, recipients:
    (A) May not use EPA contractors to provide any support related to 
procuring a State contractor.
    (B) May use the Corps of Engineers for review of State bidding 
documents, requests for proposals and bids and proposals received.
    (6) Award. The recipient may award a contract only to a responsible 
contractor, as described in 40 CFR 31.36(b)(8), and must ensure that 
each contractor performs in accordance with all the provisions of the 
contract. (See also Sec.  35.6020.)
    (7) Protest procedures. The recipient must comply with the 
requirements

[[Page 24516]]

described in 40 CFR 31.36(b)(12) regarding protest procedures.
    (8) Reporting. The recipient must comply with the requirements for 
procurement reporting contained in Sec.  35.6665.
    (9) Intergovernmental agreements. (i) To foster greater economy and 
efficiency, recipients are encouraged to enter into intergovernmental 
agreements for procurement or use of common goods and services.
    (ii) Although intergovernmental agreements are not subject to the 
requirements set forth in this section through Sec.  35.6610, all 
procurements under intergovernmental agreements are subject to these 
requirements except for procurements that are:
    (A) Incidental to the purpose of the assistance agreement; and
    (B) Made through a central public procurement unit.
    (10) Value engineering. The recipient is encouraged to include 
value engineering clauses in contracts for construction projects of 
sufficient size to offer reasonable opportunities for cost reductions.
    (b) Contractor standards--(1) Disclosure requirements regarding 
Potentially Responsible Party relationships. The recipient must require 
each prospective contractor to provide with its bid or proposal:
    (i) Information on its financial and business relationship with all 
PRPs at the site and with the contractor's parent companies, 
subsidiaries, affiliates, subcontractors, or current clients at the 
site. Prospective contractors under a Core Program Cooperative 
Agreement must provide comparable information for all sites within the 
recipient's jurisdiction. (This disclosure requirement encompasses past 
financial and business relationships, including services related to any 
proposed or pending litigation, with such parties);
    (ii) Certification that, to the best of its knowledge and belief, 
it has disclosed such information or no such information exists; and
    (iii) A statement that it shall disclose immediately any such 
information discovered after submission of its bid or proposal or after 
award. The recipient shall evaluate such information and if a member of 
the contract team has a conflict of interest which prevents the team 
from serving the best interests of the recipient, the prospective 
contractor may be declared nonresponsible and the contract awarded to 
the next eligible bidder or offeror.
    (2) Conflict of interest--(i) Conflict of interest notification. 
The recipient must require the contractor to notify the recipient of 
any actual, apparent, or potential conflict of interest regarding any 
individual working on a contract assignment or having access to 
information regarding the contract. This notification shall include 
both organizational conflicts of interest and personal conflicts of 
interest. If a personal conflict of interest exists, the individual who 
is affected shall be disqualified from taking part in any way in the 
performance of the assigned work that created the conflict of interest 
situation.
    (ii) Contract provisions. The recipient must incorporate the 
following provisions or their equivalents into all contracts, except 
those for well-drilling, fence erecting, plumbing, utility hook-ups, 
security guard services, or electrical services:
    (A) Contractor data. The contractor shall not provide data 
generated or otherwise obtained in the performance of contractor 
responsibilities under a contract to any party other than the 
recipient, EPA, or its authorized agents for the life of the contract, 
and for a period of five years after completion of the contract.
    (B) Employment. The contractor shall not accept employment from any 
party other than the recipient or Federal agencies for work directly 
related to the site(s) covered under the contract for five years after 
the contract has terminated. The recipient agency may exempt the 
contractor from this requirement through a written release. This 
release must include EPA concurrence.
    (3) Certification of independent price determination. The recipient 
must require that each contractor include in its bid or proposal a 
certification of independent price determination. This document 
certifies that no collusion, as defined by Federal and State antitrust 
laws, occurred during bid preparation.
    (4) Recipient's Contractors. The recipient must require its 
contractor to comply with the requirements in Sec. Sec.  35.6270(a)(1) 
and (2); 35.6320 (a) and (b); 35.6335; 35.6700; and 35.6705. For 
additional contractor requirements, see also Sec.  35.6710(c); 
35.6590(b); and 35.6610.


Sec.  35.6555  Competition.

    The recipient must conduct all procurement transactions in a manner 
providing maximum full and open competition.
    (a) Restrictions on competition. Inappropriate restrictions on 
competition include the following:
    (1) Placing unreasonable requirements on firms in order for them to 
qualify to do business;
    (2) Requiring unnecessary experience and excessive bonding 
requirements;
    (3) Noncompetitive pricing practices between firms or between 
affiliated companies;
    (4) Noncompetitive awards to consultants that are on retainer 
contracts;
    (5) Organizational conflicts of interest;
    (6) Specifying only a ``brand name'' product, instead of allowing 
``an equal'' product to be offered and describing the performance of 
other relevant requirements of the procurement; and
    (7) Any arbitrary action in the procurement process.
    (b) Geographic and Indian Tribe preferences--(1) Geographic. When 
conducting a procurement, the recipient must prohibit the use of 
statutorily or administratively imposed in-State or local geographical 
preferences in evaluating bids or proposals. However, nothing in this 
section preempts State licensing laws. In addition, when contracting 
for architectural and engineering (A/E) services, the recipient may use 
geographic location as a selection criterion, provided that when 
geographic location is used, its application leaves an appropriate 
number of qualified firms, given the nature and size of the project, to 
compete for the contract.
    (2) Indian Tribe. Any contract or subcontract awarded by an Indian 
Tribe or Indian intertribal consortium shall comply with the 
requirements of 40 CFR 31.38, ``Indian Self Determination Act.''
    (c) Written specifications. The recipient's written specifications 
must include a clear and accurate description of the technical 
requirements and the qualitative nature of the material, product or 
service to be procured.
    (1) This description must not contain features which unduly 
restrict competition, unless the features are necessary to:
    (i) Test or demonstrate a specific thing;
    (ii) Provide for necessary interchangeability of parts and 
equipment; or
    (iii) Promote innovative technologies.
    (2) The recipient must avoid the use of detailed product 
specifications if at all possible.
    (d) Public notice. When soliciting bids or proposals, the recipient 
must allow sufficient time (generally 30 calendar days) between public 
notice of the proposed project and the deadline for receipt of bids or 
proposals. The recipient must publish the public notice in professional 
journals, newspapers, or publications of general circulation over a 
reasonable area.

[[Page 24517]]

    (e) Prequalified lists. Recipients may use prequalified lists of 
persons, firms, or products to acquire goods and services. The list 
must be current and include enough qualified sources to ensure maximum 
open and free competition. Recipients must not preclude potential 
bidders from qualifying during the solicitation period.


Sec.  35.6565  Procurement methods.

    The recipient must comply with the requirements for payment to 
consultants described in 40 CFR 31.36(j). In addition, the recipient 
must comply with the following requirements:
    (a) Small purchase procedures. Small purchase procedures are those 
relatively simple and informal procurement methods for securing 
services, supplies, or other property that do not cost more than the 
simplified acquisition threshold in the aggregate. If small purchase 
procurements are used, the recipient must obtain and document price or 
rate quotations from an adequate number of qualified sources.
    (b) Sealed bids (formal advertising). (For a remedial action award 
contract, except for Architectural/Engineering services and post-
removal site control, the recipient must obtain the award official's 
approval to use a procurement method other than the sealed bid method.) 
Bids are publicly solicited and a fixed-price contract (lump sum or 
unit price) is awarded to the responsible bidder whose bid, conforming 
with all the material terms and conditions of the invitation for bids, 
is the lowest in price.
    (1) In order for the recipient to use the sealed bid method, the 
following conditions must be met:
    (i) A complete, adequate, and realistic specification or purchase 
description is available;
    (ii) Two or more responsible bidders are willing and able to 
compete effectively for the business; and
    (iii) The procurement lends itself to a fixed-price contract and 
the selection of the successful bidder can be made principally on the 
basis of price.
    (2) If the recipient uses the sealed bid method, the recipient must 
comply with the following requirements:
    (i) Publicly advertise the invitation for bids and solicit bids 
from an adequate number of known suppliers, providing them sufficient 
time prior to the date set for opening the bids;
    (ii) The invitation for bids, which must include any specifications 
and pertinent attachments, must define the items or services in order 
for the bidder to properly respond;
    (iii) Publicly open all bids at the time and place prescribed in 
the invitation for bids;
    (iv) Award the fixed-price contract in writing to the lowest 
responsive and responsible bidder. Where specified in bidding 
documents, the recipient shall consider factors such as discounts, 
transportation cost, and life cycle costs in determining which bid is 
lowest. The recipient may only use payment discounts to determine the 
low bid when prior experience indicates that such discounts are usually 
taken advantage of; and
    (v) If there is a sound documented reason, the recipient may reject 
any or all bids.
    (c) Competitive proposals. The technique of competitive proposals 
is normally conducted with more than one source submitting an offer, 
and either a fixed-price or cost-reimbursement type contract is 
awarded. It is generally used when conditions are not appropriate for 
the use of sealed bids. If the recipient uses the competitive proposal 
method, the following requirements apply:
    (1) Recipients must publicize requests for proposals and all 
evaluation factors and must identify their relative importance. The 
recipient must honor any response to publicized requests for proposals 
to the maximum extent practical;
    (2) Recipients must solicit proposals from an adequate number of 
qualified sources;
    (3) Recipients must have a method for conducting technical 
evaluations of the proposals received and for selecting awardees;
    (4) Recipients must award the contract to the responsible firm 
whose proposal is most advantageous to the program, with price and 
other factors considered; and
    (5) Recipients may use competitive proposal procedures for 
qualifications-based procurement of architectural/engineering (A/E) 
professional services whereby competitor's qualifications are evaluated 
and the most qualified competitor is selected, subject to negotiation 
of fair and reasonable compensation. This method, where price is not 
used as a selection factor, may only be used in the procurement of A/E 
professional services. The recipient may not use this method to 
purchase other types of services even though A/E firms are a potential 
source to perform the proposed effort.
    (d) Noncompetitive proposals. (1) The recipient may procure by 
noncompetitive proposals only when the award of a contract is 
infeasible under small purchase procedures, sealed bids or competitive 
proposals, and one of the following circumstances applies:
    (i) The item is available only from a single source;
    (ii) The public exigency or emergency for the requirement will not 
permit a delay resulting from competitive solicitation (a declaration 
of an emergency under State law does not necessarily constitute an 
emergency under the EPA Superfund program's criteria);
    (iii) The award official authorized noncompetitive proposals; or
    (iv) After solicitation of a number of sources, competition is 
determined to be inadequate.
    (2) When using noncompetitive procurement, the recipient must 
conduct a cost analysis in accordance with the requirements described 
in Sec.  35.6585.


Sec.  35.6570  Use of the same engineer during subsequent phases of 
response.

    (a) If the public notice clearly stated the possibility that the 
firm or individual selected could be awarded a contract for follow-on 
services and initial procurement complied with the procurement 
requirements, the recipient of a CERCLA remedial response Cooperative 
Agreement may use the engineer procured to conduct any or all of the 
follow-on engineering activities without going through the public 
notice and evaluation procedures.
    (b) The recipient may also use the same engineer during subsequent 
phases of the project in the following cases:
    (1) Where the recipient conducted the RI, FS, or design activities 
without EPA assistance but is using CERCLA funds for follow-on 
activities, the recipient may use the engineer for subsequent work 
provided the recipient certifies:
    (i) That it complied with the procurement requirements in Sec.  
35.6565 when it selected the engineer and the code of conduct 
requirements described in 40 CFR 31.36(b)(3).
    (ii) That any CERCLA-funded contract between the engineer and the 
recipient meets all of the other provisions as described in the 
procurement requirements in this subpart.
    (2) Where EPA conducted the RI, FS, or design activities but the 
recipient will assume the responsibility for subsequent phases of 
response under a Cooperative Agreement, the recipient may use, with the 
award official's approval, EPA's engineer contractor without further 
public notice or evaluation provided the recipient follows the rest of 
the procurement requirements to award the contract.

[[Page 24518]]

Sec.  35.6575  Restrictions on types of contracts.

    (a) Prohibited contracts. The recipient's procurement system must 
not allow cost-plus-percentage-of-cost (e.g., a multiplier which 
includes profit) or percentage-of-construction-cost types of contracts.
    (b) Removal. Under a removal Cooperative Agreement, the recipient 
must award a fixed-price contract (lump sum, unit price, or a 
combination of the two) when procuring contractor support, regardless 
of the procurement method selected, unless the recipient obtains the 
award official's prior written approval.
    (c) Time and material contracts. The recipient may use time and 
material contracts only if no other type of contract is suitable, and 
if the contract includes a ceiling price that the contractor exceeds at 
its own risk.


Sec.  35.6580  Contracting with minority and women's business 
enterprises (MBE/WBE), small businesses, and labor surplus area firms.

    (a) Procedures. The recipient must comply with the six steps 
described in 40 CFR 31.36(e)(2) to ensure that MBEs, WBEs, and small 
businesses are used whenever possible as sources of supplies, 
construction, and services. Tasks to encourage small, minority, and 
women's business utilization in the Superfund program are eligible for 
funding under Core Program Cooperative Agreements.
    (b) Labor surplus firms. EPA encourages recipients to procure 
supplies and services from labor surplus area firms.
    (c) ``Fair share'' objectives. It is EPA's policy that recipients 
award a fair share of contracts to small, minority and women's 
businesses. The policy requires that fair share objectives for minority 
and women-owned business enterprises be negotiated with the States and/
or recipients, but does not require fair share objectives be 
established for small businesses.
    (1) Each recipient must establish an annual ``fair share'' 
objective for MBE and WBE use. A recipient is not required to attain a 
particular statistical level of participation by race, ethnicity, or 
gender of the contractor's owners or managers.
    (2) If the recipient is awarded more than one Cooperative Agreement 
during the year, the recipient may negotiate an annual fair share for 
all Cooperative Agreements for that year. It is not necessary to have a 
fair share for each Cooperative Agreement. When a Cooperative Agreement 
is awarded to a recipient with which a ``fair share'' agreement has not 
been negotiated, the recipient must not award any contracts under the 
Cooperative Agreement until the recipient has negotiated a fair share 
objective with EPA.


Sec.  35.6585  Cost and price analysis.

    (a) General. The recipient must conduct and document a cost or 
price analysis in connection with every procurement action including 
contract modification.
    (1) Cost analysis. The recipient must conduct and document a cost 
analysis for all negotiated contracts over the simplified acquisition 
threshold and for all change orders regardless of price. A cost 
analysis is not required when adequate price competition exists and the 
recipient can establish price reasonableness. The recipient must base 
its determination of price reasonableness on a catalog or market price 
of a commercial product sold in substantial quantities to the general 
public, or on prices set by law or regulation.
    (2) Price analysis. In all instances other than those described in 
paragraph (a)(1) of this section, the recipient must perform a price 
analysis to determine the reasonableness of the proposed contract 
price.
    (b) Profit analysis. For each contract in which there is no price 
competition and in all cases in which cost analysis is performed, the 
recipient must negotiate profit as a separate element of the price. To 
establish a fair and reasonable profit, consideration will be given to 
the complexity of the work to be performed, the risk borne by the 
contractor, the contractor's investment, the amount of subcontracting, 
the quality of its record of past performance, and industry profit 
rates in the surrounding geographical area for similar work.


Sec.  35.6590  Bonding and insurance.

    (a) General. The recipient must meet the requirements regarding 
bonding described in 40 CFR 31.36(h). The recipient must clearly and 
accurately state in the contract documents the bonds and insurance 
requirements, including the amounts of security coverage that a bidder 
or offeror must provide.
    (b) Accidents and catastrophic loss. The recipient must require the 
contractor to provide insurance against accidents and catastrophic loss 
to manage any risk inherent in completing the project.


Sec.  35.6595  Contract provisions.

    (a) General. Each contract must be a sound and complete agreement, 
and include the following provisions:
    (1) Nature, scope, and extent of work to be performed;
    (2) Time frame for performance;
    (3) Total cost of the contract; and
    (4) Payment provisions.
    (b) Other contract provisions. Recipients' contracts must include 
the following provisions:
    (1) Energy efficiency. A contract must comply with mandatory 
standards and policies on energy efficiency contained in the State's 
energy conservation plan, which is issued under 10 CFR part 420.
    (2) Patents inventions, and copyrights. All contracts must include 
notice of EPA requirements and regulations pertaining to reporting and 
patent rights under any contract involving research, developmental, 
experimental or demonstration work with respect to any discovery or 
invention which arises or is developed while conducting work under a 
contract. This notice shall also include EPA requirements and 
regulations pertaining to copyrights and rights to data contained in 40 
CFR 31.34.
    (3) Labor standards. The recipient must comply with 40 CFR 
31.36(i)(3) through (6).
    (4) Conflict of interest. The recipient must include provisions 
pertaining to conflict of interest as described in Sec.  
35.6550(b)(2)(ii).


Sec.  35.6600  Contractor claims.

    (a) General. The recipient must conduct an administrative and 
technical review of each claim before EPA will consider funding these 
costs.
    (b) Claims settlement. The recipient may incur costs (including 
legal, technical and administrative) to assess the merits of or to 
negotiate the settlement of a claim by or against the recipient under a 
contract, provided:
    (1) The claim arises from work within the scope of the Cooperative 
Agreement;
    (2) A formal Cooperative Agreement amendment is executed 
specifically covering the costs before they are incurred;
    (3) The costs are not incurred to prepare documentation that should 
be prepared by the contractor to support a claim against the recipient; 
and
    (4) The award official determines that there is a significant 
Federal interest in the issues involved in the claim.
    (c) Claims defense. The recipient may incur costs (including legal, 
technical and administrative) to defend against a contractor claim for 
increased costs under a contract or to prosecute a claim to enforce a 
contract provided:

[[Page 24519]]

    (1) The claim arises from work within the scope of the Cooperative 
Agreement;
    (2) A formal Cooperative Agreement amendment is executed 
specifically covering the costs before they are incurred;
    (3) Settlement of the claim cannot occur without arbitration or 
litigation;
    (4) The claim does not result from the recipient's mismanagement;
    (5) The award official determines that there is a significant 
Federal interest in the issues involved in the claim; and
    (6) In the case of defending against a contractor claim, the claim 
does not result from the recipient's responsibility for the improper 
action of others.


Sec.  35.6605  Privity of contract.

    Neither EPA nor the United States shall be a party to any contract 
nor to any solicitation or request for proposals.


Sec.  35.6610  Contracts awarded by a contractor.

    The recipient must require its contractor to comply with the 
following provisions in the award of contracts (i.e. subcontracts). 
(This section does not apply to a supplier's procurement of materials 
to produce equipment, materials and catalog, off-the-shelf, or 
manufactured items.)
    (a) The requirements referenced in Sec.  35.6020.
    (b) The limitations on contract award in Sec.  35.6550(a)(6).
    (c) The requirements regarding minority and women's business 
enterprises, and small business in Sec.  35.6580.
    (d) The requirements regarding specifications in Sec.  35.6555 
(a)(6) and (c).
    (e) The Federal cost principles in 40 CFR 31.22.
    (f) The prohibited types of contracts in Sec.  35.6575(a).
    (g) The cost, price analysis, and profit analysis requirements in 
Sec.  35.6585.
    (h) The applicable provisions in Sec.  35.6595 (b).
    (i) The applicable provisions in Sec.  35.6555(b)(2).

Reports Required Under a Cooperative Agreement


Sec.  35.6650  Progress reports.

    (a) Reporting frequency. The recipient must submit progress reports 
as specified in the Cooperative Agreement. Progress reports will be 
required no more frequently than quarterly, and will be required at 
least annually. The reports shall be due within 30 days after the 
reporting period. The final progress report shall be due 90 days after 
expiration or termination of the Cooperative Agreement.
    (b) Content. The progress report must contain the following 
information:
    (1) An explanation of work accomplished during the reporting 
period, delays, or other problems, if any, and a description of the 
corrective measures that are planned. For pre-remedial Cooperative 
Agreements, the report must include a list of the site-specific 
products completed and the estimated number of technical hours spent to 
complete each product.
    (2) A comparison of the percentage of the project completed to the 
project schedule, and an explanation of significant discrepancies.
    (3) A comparison of the estimated funds spent to date to planned 
expenditures and an explanation of significant discrepancies. For 
remedial, enforcement, and removal reports, the comparison must be on a 
per task basis.
    (4) An estimate of the time and funds needed to complete the work 
required in the Cooperative Agreement, a comparison of that estimate to 
the time and funds remaining, and a justification for any increase.


Sec.  35.6655  Notification of significant developments.

    Events may occur between the scheduled performance reporting dates 
which have significant impact upon the Cooperative Agreement-supported 
activity. In such cases, the recipient must inform the EPA project 
officer as soon as the following types of conditions become known:
    (a) Problems, delays, or adverse conditions which will materially 
impair the ability to meet the objective of the award. This disclosure 
must include a statement of the action taken, or contemplated, and any 
assistance needed to resolve the situation.
    (b) Favorable developments which enable meeting time schedules and 
objectives sooner or at less cost than anticipated or producing more 
beneficial results than originally planned.


Sec.  35.6660  Property inventory reports.

    (a) CERCLA-funded property--(1) Content. The report must contain 
the following information:
    (i) Classification and value of remaining supplies;
    (ii) Description of all equipment purchased with CERCLA funds, 
including its current condition;
    (iii) Verification of the current use and continued need for the 
equipment by site, activity, and operable unit, as applicable;
    (iv) Notification of any property which has been stolen or 
vandalized; and
    (v) A request for disposition instructions for any equipment no 
longer needed on the project.
    (2) Reporting frequency. The recipient must submit an inventory 
report to EPA at the following times:
    (i) Within 90 days after completing any CERCLA-funded project or 
any response activity at a site; and
    (ii) When the equipment is no longer needed for any CERCLA-funded 
project or any response activity at a site.
    (b) Federally owned property--(1) Content. The recipient must 
include the following information for each federally owned item in the 
inventory report:
    (i) Description;
    (ii) Decal number;
    (iii) Current condition; and
    (iv) Request for disposition instructions.
    (2) Reporting frequency. The recipient must submit an inventory 
report to the appropriate EPA property accountable officer at the 
following times:
    (i) Annually, due to EPA on the anniversary date of the award;
    (ii) When the property is no longer needed; and
    (iii) Within 90 days after the end of the project period.


Sec.  35.6665  Procurement report.

    (a) The recipient must report on its use of MBE (minority business 
enterprise) and WBE (women's business enterprise) firms by submitting a 
completed Minority and Women's Business Utilization Report (SF-334) to 
the award official. Reporting commences with the recipient's award of 
its first contract and continues until it and its contractors have 
awarded their last contract for the activities or tasks identified in 
the Cooperative Agreement. The recipient must submit the MBE/WBE 
Utilization Report within 30 days after the end of each Federal fiscal 
quarter, regardless of whether the recipient awards a contract to an 
MBE or WBE during that quarter.
    (b) The recipient must also report on its efforts to encourage MBE 
participation in the Superfund program pursuant to CERCLA Sec. 105(f). 
Information on the recipient's efforts to encourage MBE participation 
in the Superfund program may be included in each SF-334 submitted 
quarterly, but is required in the SF-334 submitted for the fourth 
quarter, due November 1 of each year.


Sec.  35.6670  Financial reports.

    (a) General. The recipient must comply with the requirements 
regarding financial reporting described in 40 CFR 31.41.
    (b) Financial Status Report--(1) Content. (i) The Financial Status 
Report (SF-269) must include financial information by site, activity, 
and operable unit, as applicable.

[[Page 24520]]

    (ii) A final Financial Status Report (FSR) must have no 
unliquidated obligations. If any obligations remain unliquidated, the 
FSR is considered an interim report and the recipient must submit a 
final FSR to EPA after liquidating all obligations.
    (2) Reporting frequency. The recipient must file a Financial Status 
Report as follows:
    (i) Annually due 90 days after the end of the Federal fiscal year 
or as specified in the Cooperative Agreement; or if quarterly or 
semiannual reports are required in accordance with 40 CFR 31.41(b)(3), 
due 30 days after the reporting period;
    (ii) Within 90 calendar days after completing each CERCLA-funded 
response activity at a site (submit the FSR only for each completed 
activity); and
    (iii) Within 90 calendar days after termination or closeout of the 
Cooperative Agreement.

Records Requirements Under a Cooperative Agreement


Sec.  35.6700  Project records.

    The lead agency for the response action must compile and maintain 
an administrative record consistent with section 113 of CERCLA, the 
National Contingency Plan, and relevant EPA policy and guidance. In 
addition, recipients of assistance (whether lead or support agency) are 
responsible for maintaining project files described as follows.
    (a) General. The recipient must maintain project records by site, 
activity, and operable unit, as applicable.
    (b) Financial records. The recipient must maintain records which 
support the following items:
    (1) Amount of funds received and expended; and
    (2) Direct and indirect project cost.
    (c) Property records. The recipient must maintain records which 
support the following items:
    (1) Description of the property;
    (2) Manufacturer's serial number, model number, or other 
identification number;
    (3) Source of the property, including the assistance identification 
number;
    (4) Information regarding whether the title is vested in the 
recipient or EPA;
    (5) Unit acquisition date and cost;
    (6) Percentage of EPA's interest;
    (7) Location, use and condition (by site, activity, and operable 
unit, as applicable) and the date this information was recorded; and
    (8) Ultimate disposition data, including the sales price or the 
method used to determine the price, or the method used to determine the 
value of EPA's interest for which the recipient compensates EPA in 
accordance with Sec. Sec.  35.6340, 35.6345, and 35.6350.
    (d) Procurement records--(1) General. The recipient must maintain 
records which support the following items, and must make them available 
to the public:
    (i) The reasons for rejecting any or all bids; and
    (ii) The justification for a procurement made on a noncompetitively 
negotiated basis.
    (2) Procurements in excess of the simplified acquisition threshold. 
The recipient's records and files for procurements in excess of the 
simplified acquisition threshold must include the following 
information, in addition to the information required in paragraph 
(d)(1) of this section:
    (i) The basis for contractor selection;
    (ii) A written justification for selecting the procurement method;
    (iii) A written justification for use of any specification which 
does not provide for maximum free and open competition;
    (iv) A written justification for the choice of contract type; and
    (v) The basis for award cost or price, including a copy of the cost 
or price analysis made in accordance with Sec.  35.6585 and 
documentation of negotiations.
    (e) Other records. The recipient must maintain records which 
support the following items:
    (1) Time and attendance records and supporting documentation;
    (2) Documentation of compliance with statutes and regulations that 
apply to the project; and
    (3) The number of site-specific technical hours spent to complete 
each pre-remedial product.


Sec.  35.6705  Records retention.

    (a) Applicability. This requirement applies to all financial and 
programmatic records, supporting documents, statistical records, and 
other records which are required to be maintained by the terms, program 
regulations, or the Cooperative Agreement, or are otherwise reasonably 
considered as pertinent to program regulations or the Cooperative 
Agreement.
    (b) Length of retention period. The recipient must maintain all 
records for 10 years following submission of the final Financial Status 
Report unless otherwise directed by the EPA award official, and must 
obtain written approval from the EPA award official before destroying 
any records. If any litigation, claim, negotiation, audit, cost 
recovery, or other action involving the records has been started before 
the expiration of the ten-year period, the records must be retained 
until completion of the action and resolution of all issues which arise 
from it, or until the end of the regular ten-year period, whichever is 
later.
    (c) Substitution of an unalterable electronic format. An 
unalterable electronic format, acceptable to EPA, may be substituted 
for the original records. The copying of any unalterable electronic 
format must be performed in accordance with the technical regulations 
concerning Federal Government records (36 CFR parts 1220 through 1234) 
and EPA records management requirements.
    (d) Starting date of retention period. The recipient must comply 
with the requirements regarding the starting dates for records 
retention described in 40 CFR 31.42(c) (1) and (2).


Sec.  35.6710  Records access.

    (a) Recipient requirements. The recipient must comply with the 
requirements regarding records access described in 40 CFR 31.42(e).
    (b) Availability of records. The recipient must, with the exception 
of certain policy, deliberative, and enforcement documents which may be 
held confidential, ensure that all files are available to the public.
    (c) Contractor requirements. The recipient must require its 
contractor to comply with the requirements regarding records access 
described in 40 CFR 31.36(i)(10).

Other Administrative Requirements for Cooperative Agreements


Sec.  35.6750  Modifications.

    The recipient must comply with the requirements regarding changes 
to the Cooperative Agreement described in 40 CFR 31.30.


Sec.  35.6755  Monitoring program performance.

    The recipient must comply with the requirements regarding program 
performance monitoring described in 40 CFR 31.40 (a) and (e).


Sec.  35.6760  Enforcement and termination for convenience.

    The recipient must comply with all terms and conditions in the 
Cooperative Agreement, and is subject to the requirements regarding 
enforcement of the terms of an award and termination for convenience 
described in 40 CFR 31.43 and 31.44.

[[Page 24521]]

Sec.  35.6765  Non-Federal audit.

    The recipient must comply with the requirements regarding non-
Federal audits described in 40 CFR 31.26.


Sec.  35.6770  Disputes.

    The recipient must comply with the requirements regarding dispute 
resolution procedures described in 40 CFR 31.70.


Sec.  35.6775  Exclusion of third-party benefits.

    The Cooperative Agreement benefits only the signatories to the 
Cooperative Agreement.


Sec.  35.6780  Closeout.

    (a) Closeout of a Cooperative Agreement, or an activity under a 
Cooperative Agreement, can take place in the following situations:
    (1) After the completion of all work for a response activity at a 
site; or
    (2) After all activities under a Cooperative Agreement have been 
completed; or
    (3) Upon termination of the Cooperative Agreement.
    (b) The recipient must comply with the closeout requirements 
described in 40 CFR 31.50 and 31.51.
    (c) After closeout, EPA may monitor the recipients' compliance with 
the assurance to provide all future operation and maintenance as 
required by CERCLA section 104(c) and addressed in 40 CFR 300.510(c)(1) 
of the NCP.


Sec.  35.6785  Collection of amounts due.

    The recipient must comply with the requirements described in 40 CFR 
31.52, regarding collection of amounts due.


Sec.  35.6790  High risk recipients.

    If EPA determines that a recipient is not responsible, EPA may 
impose restrictions on the award as described in 40 CFR 31.12.

Requirements for Administering a Superfund State Contract (SSC)


Sec.  35.6800  Superfund State Contract.

    A Superfund State Contract (SSC) with a State is required before 
EPA can obligate or expend funds for a remedial action at a site within 
the State and before EPA or a political subdivision can conduct the 
remedial action. An SSC also ensures State or Indian Tribe involvement 
consistent with CERCLA sections 121(f) and 126, respectively, and 
obtains the required section 104 assurances (See Sec.  35.6105(b)). An 
SSC may also be used to document the roles and responsibilities of a 
State, Indian Tribe, and political subdivision during any response 
action at a site. A political subdivision may be a signatory to the 
SSC.


Sec.  35.6805  Contents of an SSC.

    The SSC must include the following provisions:
    (a) General authorities, which documents the relevant statutes and 
regulations (of each government entity that is a party to the contract) 
governing the contract.
    (b) Purpose of the SSC, which describes the response activities to 
be conducted and the benefits to be derived.
    (c) Negation of agency relationship between the signatories, which 
states that no signatory of the SSC can represent or act on the behalf 
of any other signatory in any matter associated with the SSC.
    (d) A site description, pursuant to Sec.  35.6105(a)(2)(i).
    (e) A site-specific Statement of Work, pursuant to Sec.  
35.6105(a)(2)(ii) and a statement of whether the contract constitutes 
an initial SSC or an amendment to an existing contract.
    (f) A statement of intention to follow EPA policy and guidance.
    (g) A project schedule to be prepared during response activities.
    (h) A statement designating a primary contact for each party to the 
contract, which designates representatives to act on behalf of each 
signatory in the implementation of the contract. This statement must 
document the authority of each project manager to approve modifications 
to the project so long as such changes are within the scope of the 
contract and do not significantly impact the SSC.
    (i) The CERCLA assurances, as appropriate, described as follows:
    (1) Operation and maintenance. The State must provide an assurance 
pursuant to Sec.  35.6105(b)(1). The State's responsibility for 
operation and maintenance generally begins when EPA determines that the 
remedy is operational and functional or one year after construction 
completion, whichever is sooner (See, 40 CFR 300.435(f)).
    (2) Twenty-year waste capacity. The State must provide an assurance 
pursuant to Sec.  35.6105(b)(3).
    (3) Off-site storage, treatment, or disposal. If off-site storage, 
destruction, treatment, or disposal is required, the State must provide 
an assurance pursuant to Sec.  35.6105(b)(4); the political subdivision 
may not provide this assurance.
    (4) Real property acquisition. When real property must be acquired, 
the State must provide an assurance pursuant to Sec.  35.6105(b)(5).
    (5) Provision of State cost share. The State must provide 
assurances for cost sharing pursuant to Sec.  35.6105(b)(2). Even if 
the political subdivision is providing the actual cost share, the State 
must guarantee payment of the cost share in the event of default by the 
political subdivision.
    (j) Cost share conditions, which include:
    (1) An estimate of the response action cost (excluding EPA's 
indirect costs) that requires cost share;
    (2) The basis for arriving at this figure (See Sec.  35.6285(c) for 
credit provisions); and
    (3) The payment schedule as negotiated by the signatories, and 
consistent with either a lump-sum or incremental-payment option. Upon 
completion of activities in the site-specific Statement of Work, EPA 
shall invoice the State for its final payment, with the exception of 
any change orders and claims handled during reconciliation of the SSC.
    (k) Reconciliation provision, which states that the SSC remains in 
effect until the financial settlement of project costs and final 
reconciliation of response costs (including all change orders, claims, 
overpayments, reimbursements, etc.) ensure that both EPA and the State 
have satisfied the cost share requirement contained in section 104 of 
CERCLA, as amended. Overpayments in an SSC may not be used to meet the 
cost-sharing obligation at another site. Reimbursements for any 
overpayment will be made to the payer identified in the SSC.
    (l) Amendability of the SSC, which provides that:
    (1) Formal amendments are required when alterations to CERCLA-
funded activities are necessary or when alterations impact the State's 
assurances pursuant to the National Contingency Plan and CERCLA, as 
amended. Such amendments must include a Statement of Work for the 
amendment as described in paragraph (e) of this section; and
    (2) Any change(s) in the SSC must be agreed to, in writing, by the 
signatories, except as provided elsewhere in the SSC, and must be 
reflected in all response agreements affected by the change(s).
    (m) List of support agency Cooperative Agreements that are also in 
place for the site.
    (n) Litigation, which describes EPA's right to bring an action 
against any party under section 106 of CERCLA to compel cleanup, or for 
cost recovery under section 107 of CERCLA.
    (o) Sanctions for failure to comply with SSC terms, which states 
that if the signatories fail to comply with the terms of the SSC, EPA 
may proceed under the provisions of section 104(d)(2) of CERCLA and may 
seek in the

[[Page 24522]]

appropriate court of competent jurisdiction to enforce the SSC or to 
recover any funds advanced or any costs incurred due to a breach of the 
SSC. Other signatories to the SSC may seek remedies in the appropriate 
court of competent jurisdiction.
    (p) Site access. The State or political subdivision or Indian Tribe 
is expected to use its own authority to secure access to the site and 
adjacent properties, as well as all rights-of-way and easements 
necessary to complete the response actions undertaken pursuant to the 
SSC.
    (q) Final inspection of the remedy. The SSC must include a 
statement that following completion of the remedial action, the State 
and EPA shall jointly inspect the project to determine that the remedy 
is functioning properly and is performing as designed.
    (r) Exclusion of third-party benefits, which states that the SSC is 
intended to benefit only the signatories of the SSC, and extends no 
benefit or right to any third party not a signatory to the SSC.
    (s) Any other provision deemed necessary by all parties to 
facilitate the response activities covered by the SSC.
    (t) State review. The State or Indian Tribe must review and comment 
on the response actions pursuant to the SSC. Unless otherwise stated in 
the SSC, all time frames for review must follow those prescribed in the 
NCP (40 CFR part 300).
    (u) Responsible party activities, which states that if a 
Responsible Party takes over any activities at the site, the SSC will 
be modified or terminated, as appropriate.
    (v) Out-of-State or out-of-an-Indian-Tribal-area-of-Indian-country 
transfers of CERCLA waste, which states that, unless otherwise provided 
for by EPA or a political subdivision, the State or Indian Tribe must 
provide the notification requirements described in Sec.  35.6120.


Sec.  35.6815  Administrative requirements.

    In addition to the requirements specified in Sec.  35.6805, the 
State and/or political subdivision must comply with the following:
    (a) Financial administration. The State and/or political 
subdivision must comply with the following requirements regarding 
financial administration:
    (1) Payment. The State may pay for its share of the costs of the 
response activities in cash or credit. As appropriate, specific credit 
provisions should be included in the SSC consistent with the 
requirements described in Sec.  35.6285(c). The State may not pay for 
its cost share using in-kind services, unless the State has entered 
into a support agency Cooperative Agreement with EPA. The use of the 
support agency Cooperative Agreement as a vehicle for providing cost 
share must be documented in the SSC. If the political subdivision 
agrees to provide all or part of the State's cost share pursuant to a 
political subdivision-lead Cooperative Agreement, the political 
subdivision may pay for those costs in cash or in-kind services under 
that agreement. The use of a political subdivision-lead Cooperative 
Agreement as a vehicle for providing cost share must also be documented 
in the SSC. The specific payment terms must be documented in the SSC 
pursuant to Sec.  35.6805.
    (2) Collection of amounts due. The State and/or political 
subdivision must comply with the requirements described in 40 CFR 
31.52(a) regarding collection of amounts due.
    (3) Failure to comply with negotiated payment terms. Failure to 
comply with negotiated payment terms may be construed as default by the 
State on its required assurances, even if the political subdivision is 
responsible for providing all or part of the cost share. (See Sec.  
35.6805(i)(5).)
    (b) Personal property. The State, Indian Tribe, or political 
subdivision is required to accept title. The following requirements 
apply to equipment used as all or part of the remedy:
    (1) Fixed in-place equipment. EPA no longer has an interest in 
fixed in-place equipment once the equipment is installed.
    (2) Equipment that is an integral part of services to individuals. 
EPA no longer has an interest in equipment that is an integral part of 
services to individuals, such as pipes, lines, or pumps providing 
hookups for homeowners on an existing water distribution system, once 
EPA certifies that the remedy is operational and functional.
    (c) Reports. The State and/or political subdivision or Indian Tribe 
must comply with the following requirements regarding reports:
    (1) EPA-lead. The nature and frequency of reports between EPA and 
the State or Indian Tribe will be specified in the SSC.
    (2) Political subdivision-lead. The political subdivision must 
submit to the State a copy of all reports which the political 
subdivision is required to submit to EPA in accordance with the 
requirements of its Cooperative Agreement. (See Sec.  35.6650 for 
requirements regarding progress reports.)
    (d) Records. The State and political subdivision or Indian Tribe 
must maintain records on a site-specific basis. The State and political 
subdivision or Indian Tribe must comply with the requirements regarding 
record retention described in Sec.  35.6705 and the requirements 
regarding record access described in Sec.  35.6710.


Sec.  35.6820  Conclusion of the SSC.

    (a) In order to conclude the SSC, the signatories must:
    (1) Satisfactorily complete the response activities at the site and 
make all payments based upon project costs determined in Sec.  
35.6805(j);
    (2) Produce a final accounting of all project costs, including 
change orders and outstanding contractor claims;
    (3) Submit all State cost share payments to EPA (See Sec.  
35.6805(i)(5));
    (4) Assume responsibility for all future operation and maintenance 
as required by CERCLA section 104(c) and addressed in 40 CFR 300.510 
(c)(1) of the NCP, and if applicable, accept transfer of any Federal 
interest in real property (See Sec.  35.6805(i)(4)).
    (b) After the administrative conclusion of the Superfund State 
Contract, EPA may monitor the signatory's compliance with assurances to 
provide all future operation and maintenance as required by CERCLA 
section 104(c) and addressed in 40 CFR 300.510(c)(1) of the NCP.

[FR Doc. E7-7990 Filed 5-1-07; 8:45 am]
BILLING CODE 6560-50-P