Section 335.351 - Settlement Agreements(a) General purpose. The commission encourages PRPs to enter into negotiated settlement agreements which shall include an agreed administrative order with the commission so that an effective remedial investigation and remedial action of a facility can be quickly implemented while at the same time resolving PRP's apparent liability for the facility. The goal of the executive director in negotiating PRP settlements is to obtain a complete remedial investigation and remedial action of the facility by PRPs, or to collect from PRPs 100% of the agency's cost of performing a complete remedial investigation and remedial action of the facility. PRPs shall have 60 days after the end of the good faith offer period to negotiate a settlement/final administrative order. Settlement negotiations shall run concurrently with agreed order negotiations. Settlements may also be made after an order is issued.(b) Settlement. (1) In the case of an offer which is less than a good faith offer to fund or perform a remedial investigation or remedial action, the executive director's consideration of the offer may be based on: (A) the relationship between the parties' actions in storing, processing, and disposing of hazardous substances and the remedial action required to eliminate the release or threatened release;(B) the volume of hazardous substances each party is responsible for at the site to the extent that the costs of the remedial action are based on the volume of waste present;(C) consideration of toxicity or other waste characteristics if those characteristics affect the cost to eliminate the release or threatened release;(D) a party's cooperation with state agencies, its cooperation or non-cooperation with the pending efforts to eliminate the release or threatened release, or a party's actions concerning storing, processing, or disposing of hazardous substances, as well as the degree of care that the party exercised; and(E) a party's ability to pay.(2) The commission may consider a settlement proposal for remedial investigation and/or remedial action of less than 100% of a facility's remedial investigation and/or remedial action costs. Upon settling with cooperative parties, the commission will vigorously seek all remaining relief, including full cost recovery of monies expended from the Hazardous and Solid Waste Remediation Fee Account, including penalties, damages, and interest where appropriate, as well as the agency's oversight costs, from parties whose non-cooperation prevented the achievement of a complete settlement.(c) Mixed funding. Mixed Funding means use of funds from federal, state, and private party sources, or any combination of those sources, to fund a timely remedial action. Mixed funding may be used in the following circumstances. (1) In order to achieve an expeditious remedial action of a facility listed on the Registry, the commission may agree to reimburse parties to a settlement agreement from the Hazardous and Solid Waste Remediation Fee Account with interest, for certain costs incurred as a result of the timely implementation of the remedial action that the parties agree to perform but which the commission agrees to finance in whole or in part. The commission may agree to utilize funds from whatever other federal or state sources are available to the commission for the funding of a facility remediation.(2) Mixed funding shall be provided only to PRPs whom the commission has found to be eligible and who have entered into an agreed administrative order with the commission. The agreed administrative order shall identify remedial action tasks to be addressed by the mixed funding, costs to be borne by the Hazardous and Solid Waste Remediation Fee Account and the terms of agreement.(3) A PRP must submit sufficient documentation, as requested by the executive director, to support its request for mixed funding.(4) The commission's granting of a request for mixed funding does not diminish or alter the standard and scope of liability as set out in the Act. The commission will not approve mixed funding based solely on the grounds that a share of wastes at a site may be attributable to an unknown or financially nonviable party. In addition, the availability or the amount of any fund-financing for a particular site will not be dependent on consistency with any volumetric allocation.(5) Good faith negotiations and early cooperation of settlers will be considered in mixed funding requests. The executive director shall only consider mixed funding for remedial action if the PRP meets the following conditions: (A) the PRP participated in the remedial investigation; or(B) the PRP did not participate in the remedial investigation and the PRP agreed to reimburse all agency expenses associated with the remedial investigation.(6) If a PRP is found to be eligible for mixed funding, the executive director shall make an initial determination regarding the amount of funding to be provided. This determination is solely within the discretion of the executive director and is not subject to adjudication in an administrative hearing or appeal to the commission. A determination of eligibility is not a funding commitment as actual funding will depend on availability of funds and approval of the commission.(7) Where a remedial action has been completed at a facility pursuant to a mixed funding agreement, the Hazardous and Solid Waste Remediation Fee Account shall be subject to an obligation for subsequent remedial actions at the same facility only to the extent that such subsequent actions are necessary by reason of failure of the original remedial action. Such obligation shall be in a proportion equal to, but not exceeding, the proportion contributed by the fund for the original remedial action. The fund's obligation for such future remedial action may be met through fund expenditures, or through payment by parties who were not signatories to the original agreement.(d) De minimis settlements. The commission may reach a final settlement with a PRP for only a minor portion of the response costs at a facility if the conditions in either of the following paragraphs (1) or (2) of this subsection are met. (1) A PRP can demonstrate the following: (A) the amount of the hazardous substances contributed by a particular PRP is minimal in comparison to the amounts of other hazardous substances at the facility; or(B) the toxicity or other hazardous effects of the hazardous substances contributed by a particular PRP are minimal in comparison to the toxicity or other hazardous effects of other hazardous substances at the facility.(2) The PRP can demonstrate that it: (A) is the owner of the real property on or in which the facility is located;(B) did not conduct or permit the generation, transportation, storage, treatment, or disposal of any hazardous substance at the facility; and(C) did not contribute to the release or threatened release of a hazardous substance at the facility through any action or omission.(3) Paragraph (2) of this subsection does not apply if the PRP purchased the real property with actual or constructive knowledge that the property was used for the generation, transportation, storage, treatment, or disposal of any hazardous substance.(e) Covenants not to sue. (1) The commission may, in its discretion, provide any PRP with a covenant not to sue concerning any existing or future liability resulting from a release or threatened release of a hazardous substance addressed by a remedial action if each of the following conditions is met:(A) the covenant not to sue is in the public interest as determined by criteria set forth in paragraph (2) of this subsection;(B) the granting of the covenant not to sue would expedite a remedial action approved by the commission; and(C) the PRP is in full compliance with the terms of any order issued by the commission for response to the release or threatened release for the facility concerned.(2) In assessing the appropriateness of granting a covenant not to sue and in determining the appropriate legal scope of such a covenant, the commission shall consider whether the covenant is in the public interest on the basis of such factors as the following:(A) the effectiveness and reliability of the remedial action, in light of other alternative remedies considered for the facility concerned;(B) the nature of the environmental risks remaining at the facility;(C) the extent to which performance standards are included in the order or decree;(D) the extent to which the response provides a complete remedial action for the facility, including a reduction in the hazardous nature of the substances at the facility;(E) the extent to which the technology used in the remedial action is demonstrated to be effective;(F) whether the Hazardous and Solid Waste Remediation Fee Account or other sources of funding would be available for any additional remedial actions that might eventually be necessary at the facility; and(G) whether the remedial action will be carried out, in whole or in significant part, by the PRPs themselves.(3) A covenant not to sue shall be subject to the satisfactory performance by the PRP of its obligations under any order issued by the commission for remedial actions to address the release or threatened release of a hazardous substance at the facility. A covenant not to sue concerning future liability for remediation of the facility shall not take effect until the executive director certifies that the remedial action has been completed or the ordered action has been performed in accordance with any such order issued by the commission.(4) A covenant not to sue a PRP concerning future liability for remediation of a facility may include an exception to the covenant that allows the commission to sue such person where such liability arises out of conditions which are unknown to the executive director at the time he certifies under paragraph (3) of this subsection that the remedial action has been completed at the facility. A covenant not to sue may provide that such future liability may be limited to the same proportion as that established in the original settlement agreement or order issued by the commission.(f) Discharge of liability for other PRPs. Any settlement agreement with the commission which resolves a PRP's liability for remediation of a facility does not discharge the liability of any other PRP unless its terms so provide, but it reduces the potential liability of the other PRPs by the amount of the settlement. A PRP will be afforded the opportunity to comment on any settlement agreement with the commission to which it is not a party.30 Tex. Admin. Code § 335.351
The provisions of this §335.351 adopted to be effective September 9, 1991, 16 TexReg 4624; amended to be effective July 22, 1998, 23 TexReg 7369.