Appendix 10 Interim Enforcement Discretion Policy Concerning Windfall Liens Under §107(r) of CERCLA

• Author: Allison Rumsey/Michael Daneker
• Pages: 333-362

Page 333

U. S Env ir o nmen t al P r ot e ct i on Ag en cy U. S.

De par t men t o f J us t ic e

July 16, 2003

SUBJECT: Interim Enforcement Discretion Policy Concerning “Windfall Liens” Under

Section 107(r) of CERCLA

FROM: Susan E. Bromm, Director /s/

Office of Site Remediation Enforcement

Office of Enforcement and Compliance Assurance

U.S. Environmental Protection Agency

Bruce S. Gelber, Chief /s/

Environmental Enforcement Section

Environment and Natural Resources Division

U.S. Department of Justice

TO: Director, Office of Site Remediation and Restoration, Region I

Director, Emergency and Remedial Response Division, Region II

Director, Hazardous Site Cleanup Division, Region III

Director, Waste Management Division, Region IV

Directors, Superfund Division, Regions V, VI, VII and IX

Assistant Regional Administrator, Office of Ecosystems Protection and

Remediation, Region VIII

Director, Office of Environmental Cleanup, Region X

Director, Office of Environmental Stewardship, Region I

Director, Environmental Accountability Division, Region IV

Regional Counsel, Regions II, III, V, VI, VII, IX, and X

Assistant Regional Administrator, Office of Enforcement, Compliance, and

Environmental Justice, Region VIII

Assistant Chiefs, Environmental Enforcement Section, U.S.

Department of Justice

Chief, Assistant Chiefs, Environmental Defense Section, U.S. Department of

Justice

Page 334 Superfund Deskbook

Table of Contents

I. INTRODUCTION ......................................................1

II. BACKGROUND .......................................................1

III.  DISCUSSION ..........................................................3

A. EPA’s Windfall Lien Enforcement Discretion Policy . . . . . . . . . . . . . . . . . . . . . . 3

1. To Perfect, or Not to Perfect ...................................3

a. Factors That May Lead EPA to Perfect a Windfall Lien . . . . . . . . 3

b. Situations Where EPA Will Generally Not Seek to Perfect a

Windfall Lien .........................................4

(1) Post-Cleanup Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . 5

(2) Previous Full Resolution of Potential Windfall . . . . . . . . . 5

(3) Specific Types of Expenditures . . . . . . . . . . . . . . . . . . . . . 6

(4) Specific Property Uses............................6

(5) Full Cost Recovery From Potentially Responsible Parties

(PRPs) ........................................7

(6) Applicability of Enforcement Discretion Policies . . . . . . . 7

2. Settling With Bona Fide Prospective Purchasers . . . . . . . . . . . . . . . . . . . 8

a. EPA’s Windfall Lien Valuation Approach . . . . . . . . . . . . . . . . . . 8

b. Determining the Increase in Fair Market Value After A Bona Fide

Prospective Purchaser Acquires the Property . . . . . . . . . . . . . . .

10

c. Existing CERCLA § 107(l) Liens . . . . . . . . . . . . . . . . . . . . . . . . 11

B. Vehicles for Addressing Windfall Lien Liability Concerns . . . . . . . . . . . . . . . . 12

1. Comfort/Status Letters for Situations Where EPA Will Generally Not

Pursue a Windfall Lien ......................................12

2. Windfall Lien Resolution Documents for Situations Where EPA is Likely

to Pursue a Windfall Lien ....................................14

IV. CONCLUSION ....................................................... 15

V. DISCLAIMER ........................................................ 15