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ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Part 35 

[FRL-####-#] 

RIN 2050-AG58

Cooperative Agreements and Superfund State Contracts for Superfund Response Actions: 

Amendments 

AGENCY: ENVIRONMENTAL PROTECTION AGENCY (EPA). 

ACTION: Final rule: Amendments. 

_________________________________ 

SUMMARY: This rule amends 40 CFR part 35 subpart O by allowing interim progress reports 

to be due in 60 days, instead of the current 30 day requirement. In addition, this amendment 

allows the recipient of a Superfund State Contract to request that EPA apply any overpayment of 

cost share to another site. 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. 

DATE: This rule is effective [insert date 60 days after the date of publication in the Federal 

Register]. 
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ADDRESS: EPA has established a docket for this action under Docket ID No. EPA-HQSFUND-2010-0085. 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 CERCLA Docket, 

EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal 

holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the 

telephone number for the CERCLA docket is (202) 566-0276. 

FOR FURTHER INFORMATION CONTACT: Angelo Carasea, Assessment and 

Remediation Division, 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; email address: 

carasea.angelo@epa.gov. 

SUPPLEMENTARY INFORMATION:

I. Statutory Authority 
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II. Applicability 

III. Background 

IV. Description of Key Changes 

V. Section-by-Section Analysis 

VI. Statutory and Executive Order Reviews 

I. 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 
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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. 

CERCLA 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. 
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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. 

On May 2, 2007, EPA promulgated a final regulation, which amended 40 CFR part 35 subpart O, 

to reduce the burden on recipients to receive and administer Cooperative Agreements and 

Superfund State Contracts. This rule amends 40 CFR part 35 subpart O to further reduce the 

recipients’ burden by allowing interim progress reports to be due in 60 days, instead of 30 days. 

Also, under a Superfund State Contract, the recipient may request that the overpayment of cost 

share from one site be applied to meet the cost share requirement of another site. 

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. Progress Reports 

This rule revises 40 CFR part 35 subpart O by relaxing the current reporting requirements that 

require the interim progress report to be due within 30 days after the reporting period. In the 
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revised regulation, interim progress reports are now due within 60 days after the reporting 

period. This change codifies a recommendation under EPA initiative, “Burden Reduction for 

State Grants.” 

B. Financial Report 

This revision corrects a citation error to CFR 31.41(b)(3) for quarterly and semiannual financial 

reports requirement. The correct citation is CFR 31.41(b)(4), which requires quarterly and 

semiannual financial reports due 30 days after the reporting period. 

C. Overpayment 

In the revised regulation, a State may also direct EPA to use the excess cash cost share funds 

(overmatch) at one site to meet the cost share obligations at another State site. This change was 

made to provide greater flexibility to a State on how it wants to address the overmatch of cost 

share under a Superfund State Contract. 

V. Section-by-Section Analysis 

Section 35.6650 Progress reports.
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Paragraph (a) is revised to read, “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. Notwithstanding 40 CFR 

31.41(b)(4), the reports shall be due within 60 days after the reporting period. The final progress 

report shall be due 90 days after expiration or termination of the Cooperative Agreement.” The 

reporting period for quarterly and semiannual progress reports was changed from 30 to 60 days. 

Section 35.6670 Financial Reports.

Paragraph (b)(2)(i) is revised to read, “If a Financial Status Report is required annually, the 

report is due 90 days after the end of the Federal fiscal year or as specified in the Cooperative 

Agreement. If quarterly or semiannual Financial Status Reports are required, reports are due in 

accordance with 40 CFR 31.41(b)(4).” The reference citation to 40 CFR 31.41(b)(3) was 

changed to 40 CFR 31.41(b)(4), and the redundant statement, “due 30 days after the reporting 

period,” was deleted. 40 CFR 31.41(b)(4) requires quarterly and semiannual reports to be due 30 

days after the reporting period. 

Section 35.6805 Contents of an SSC.

Paragraph (k) is revised to read, “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, overmatch of cost share, reimbursements, etc.) ensures that 

both EPA and the State have satisfied the cost share requirement contained in section 104 of 
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CERCLA, as amended. The recipient may direct EPA to return the overmatch or to use the 

excess cost share payment at one site to meet the cost share obligation at another site in 

accordance with 40 CFR 35.6285(d). Reimbursements for any overpayment will be made to the 

payer identified in the SSC.” The revised regulation permits the recipient also to request the 

overmatch be applied to the cost share requirements of another site. Under the current regulation, 

EPA must return the overpayment to the recipient. 

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 under EO 12866 and any changes made in response to OMB 

recommendations have been documented in the docket for this action. 

B. Paperwork Reduction Act 

This action does not impose any new information collection burden, because it makes only 

minimal changes in the current 40 CFR part 35 subpart O requirements. However, the Office of 

Management and Budget (OMB) has previously approved the information collection 

requirements contained in the existing regulations in 40 CFR part 35 under the provisions of the 
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Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2050-

0179. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. 

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. 

D. Unfunded Mandates Reform Act 

This action contains no Federal mandates under the provisions of Title II of the Unfunded 

Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal 

governments or the private sector. UMRA excludes from the definition of "Federal 

intergovernmental mandate" duties that arise from participation in a voluntary Federal program. 

Therefore, this action is not subject to the requirements of sections 202 or 205 of UMRA.
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This action is also not subject to the requirements of section 203 of UMRA because it contains 

no regulatory requirements that might significantly or uniquely affect small governments. 

Participation by small governments in this program is voluntary and is funded by EPA. 

E. Executive Order 13132: Federalism 

This final rule does not have federalism implications. This action will 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 level of government, as 

specified in Executive order 13132. This final rule makes minor changes to the regulation, under 

which the 40 CFR part 35 subpart O program has been operating since May 2007. 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. Thus Executive order 13132 does not apply 

to this final rule. 

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

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 

67249, November 9, 2000). It does not have substantial direct effects on Tribal governments, on 

the relationship between the Federal government and Indian Tribes, or the distribution of power 

between and responsibilities between the Federal government and Indian tribes. Thus, 

Executive Order 13175 does not apply to this action. 
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G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks 

EPA interprets EO 13045 (62 F.R. 19885, April 23, 1997) as applying only to those regulatory 

actions that concern health or safety risks, such that the analysis required under section 5-501 of 

the EO has the potential to influence the regulation. This action is not subject to EO 13045 

because it does not establish an environmental standard intended to mitigate health or safety 

risks. 

H. Executive Order 13211 (Energy Effects) 

This action is not a “significant energy action” as defined in Executive Order 13211 (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 No. 104-113, 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 
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adopted by voluntary consensus standards bodies. 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 involved 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 

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy 

on environmental justice. Its main provision directs federal agencies, to the greatest extent 

practicable and permitted by law, to make environmental justice part of their mission by 

identifying and addressing, as appropriate, disproportionately high and adverse human health or 

environmental effects of their programs, policies, and activities on minority populations and lowincome populations in the United States. 

EPA has determined that this final rule will not have disproportionately high and adverse human 

health and environmental effects on minority or low-income populations because it does not 

affect the level of protection provided to human health or the environment. This rule amends 40 

CFR part 35 subpart O by allowing interim progress reports to be due in 60 days, instead of the 

current 30 day requirement. In addition, this amendment allows the recipient of a Superfund 

State Contract to request that EPA apply any overpayment of cost share to another site. The 
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regulation 40 CFR part 35 subpart O codified: (1) recipient requirements for administering 

Cooperative Agreements awarded pursuant to section 104(d)(1) of CERCLA; and (2) 

requirements for administering Superfund State Contracts for non-State-lead remedial responses 

undertaken pursuant to section 104 of CERCLA. 

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. While this action is not a “major rule” as defined by 5 U.S.C. 

804(2), the final rule becomes effective 60 days after publication in the Federal Register on 

[insert date 60 days after publication of the rule in the Federal Register]. 

List of Subjects in 40 CFR Part 35 

40 CFR Part 35

Administrative practices and procedures, Environmental protection, Grant programsenvironmental protection, Reporting and recordkeeping. 
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__________________ ____________________ 

Dated: Lisa P. Jackson, 

 Administrator. 

For the reasons set out in the preamble, 40 CFR part 35 is amended as follows: 

Part 35 -- State and Local Assistance 

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

Actions 

1. the authority citation for 40 CFR part 35 subpart O continues to read as follows: 

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

 

2. Amend §35.6650 by revising paragraph (a) to read as follows: 

§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. Notwithstanding 40 CFR 31.41(b)(4), the reports shall be 
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due within 60 days after the reporting period. The final progress report shall be due 90 days after 

expiration or termination of the Cooperative Agreement. 

***** 

3. Amend §35.6670 by revising paragraph (b)(2)(i) to read as follows: 

§35.6670 Financial Reports.

***** 

 (b) *** 

 (2) *** 

 (i) If a Financial Status Report is required annually, the report is due 90 days after the end 

of the Federal fiscal year or as specified in the Cooperative Agreement. If quarterly or 

semiannual Financial Status Reports are required, reports are due in accordance with 40 CFR 

31.41(b)(4); 

***** 

4. Amend §35.6805 by revising paragraph (k) to read as follows: 
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§35.6805 Contents of an 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, overmatch of cost share, reimbursements, etc.) ensures that both EPA and 

the State have satisfied the cost share requirement contained in section 104 of CERCLA, as 

amended. The recipient may direct EPA to return the overmatch or to use the excess cost share 

payment at one site to meet the cost share obligation at another site in accordance with 40 CFR 

35.6285(d). Reimbursements for any overmatch will be made to the recipient identified in the 

SSC. 

*****