25269. The Legislature hereby finds and declares all of the
following:
(a) To enhance cooperation between the department and the
regulated community, and to reduce the state's costs associated with
the oversight of cleanup efforts, the costs of the associated cost
recovery program and the corresponding costs to the responsible
parties involved, the oversight program should be administered in an
efficient, responsible, and accountable manner.
(b) According to information provided to the Legislature, the
department has collected more than seventy-one million dollars
($71,000,000) since the cost recovery effort was begun in the early
1980s and there is approximately seventy million dollars
($70,000,000) to eighty million dollars ($80,000,000) in outstanding
receivables for disputed site cleanup oversight costs. The
information provided to the Legislature indicates that potentially
responsible parties have complained that the department's oversight
costs have been unpredictable, unsubstantiated, and exceedingly high.
(c) Disputes with potentially responsible parties over the
reasonableness of oversight costs have been a major factor in the
difficulty that the department has experienced in conducting cost
recovery. Disputes of that kind substantially increase the cost of
state operations and the cost of doing business for the private
sector, leading to extended negotiations and litigation. The
redirection of resources by both parties in attempting to resolve
those differences most likely inhibit cleanup efforts and affect the
ability of the parties to work together cooperatively, thereby
exacerbating the costs associated with the cleanups. Disputes would
be reduced by clarifying current law by providing definitions of
direct and indirect oversight costs. Further, these high costs affect
the competitiveness of California businesses in national and global
business environments.
25269.1. For purposes of this article, the following terms have the
following meaning:
(a) "Department" means the Department of Toxic Substances Control.
(b) "Direct oversight costs" means the costs to the department of
overseeing a cleanup action, pursuant to the authority specified in
subdivision (a) of Section 25269.2, that can be specifically
attributed to a particular cost objective, including, but not limited
to, sites, facilities, and activities.
(c) "Indirect oversight costs" means the costs to the department
of activity that is of a common or joint purpose benefiting more than
one cost objective and not readily assignable to a single case
objective.
(d) "Pro rata" means the general administrative costs expended by
central service agencies to provide centralized services to state
agencies, as defined in the State Administrative Manual.
25269.2. (a) The department shall comply with this chapter when
recovering oversight costs for corrective action pursuant to Chapter
6.5 (commencing with Section 25100), for removal or remedial action
pursuant to Chapter 6.8 (commencing with Section 25300), and for
response actions pursuant to Chapter 6.85 (commencing with Section
25396).
(b) The department shall develop a concise statement of its cost
recovery policies and billing procedures, including dispute
resolution procedures and availability of program guidance and
policies, and distribute the statement to all responsible parties.
25269.3. The department shall take the following actions with
regard to the tracking of indirect oversight costs:
(a) Ensure that pro rata costs are allocated appropriately to all
departmental activities, so that the department's program will only
bear these pro rata costs in proportion to the benefits received by
potentially responsible parties.
(b) Routinely include operating expenses in the indirect oversight
costs and allocate those expenses using processes that ensure that
the department's program only bears indirect oversight costs in
proportion to the benefits received by potentially responsible
parties.
(c) Exclude, from indirect oversight costs, the costs of grant
development and administration, fee administration, contract
development and administration, and public and governmental
inquiries.
25269.4. (a) The department shall establish rates for indirect
oversight costs that are specific to each program and shall review
and update the indirect cost rates based upon increases or decreases
in the amounts of grants received by the department, department
reorganizations, and other relevant factors, but not less than once
every six months, based upon the previous 12 months of expenditure
data. The department shall apply the indirect oversight cost rates
prospectively and shall not make retroactive adjustments in those
rates.
(b) The department shall review the department's cost recovery
policies at least once every two years.
25269.5. The department shall take the following actions with
regard to the department's relationship with the parties who are
performing the investigation and cleanup of the hazardous substance
release site or taking a hazardous waste corrective action or
response action:
(a) Adopt procedures to improve communication, facilitate the
exchange of ideas, eliminate surprises, and allow better financial
planning by the department and potentially responsible parties,
including a meet and confer process which includes, but is not
limited to, all of the following:
(1) An estimate of the cost of site remediation by the department
for the next phase of the site remediation activity, including a list
of estimated personnel labor rates.
(2) An estimate of the total hours that the department expects the
department staff to incur in the next phase of the site mitigation
process, to the extent that the department can project its time and
costs in advance. That estimate shall include the projected hours of
the project manager, and the costs of public participation, legal
counsel, and technical consultations.
(3) A discussion of the schedule for the remediation action,
including a thorough review of the services that the department
expects to provide, deliverables, timeframes, expectations of both
parties, a process for status reporting by both parties, systematic
billing at least once every three months by the department, and an
agreement on how the work plan will be modified, and how the costs
will be estimated.
(b) Develop a concise statement of its cost recovery policies and
billing procedures, including dispute resolution procedures and the
availability of program guidance and policies, which shall be
distributed to all potentially responsible parties before any site
remediation commences, as part of the meet and confer process.
(c) Review all informal guidance documents for the cost recovery
program, including fee bulletins, management memos, policies, and
procedures, and review and update those documents, as appropriate.
(d) Establish a procedure, when there is a change of project
manager for a remediation action, to provide for a detailed status
briefing to identify the highlights of past work and identify the
current areas of agreement and disagreement among the parties.
25269.6. The department shall adopt a billing system for oversight
costs which meets all of the following criteria:
(a) Invoices shall be issued within 60 days to the extent
practicable, with appropriate incentives for prompt payment. In no
event shall invoices be issued less frequently than on a quarterly
basis.
(b) Invoices shall be mailed to the correct person for the
potentially responsible party.
(c) Sufficient detail shall be included with each invoice, so that
the potentially responsible party can relate the items on the
invoice to the benefits received, and additional details, including
daily timesheet personnel data, shall be made readily available.
(d) Invoices shall be supplemented with statements of any changes
in rates and a detailed justification for any such changes.
(e) Invoices shall be reviewed for accuracy and appropriateness by
a member of the department staff who has direct knowledge of the
remediation action.
(f) Invoices shall be reasonably consistent with expectations
regarding costs, benefits, and outcomes developed during the meet and
confer process specified in subdivision (a) of Section 25269.5, if
the department's knowledge of site conditions or other factors which
may substantially impact the department's costs associated with the
site, have not changed significantly since the last conference.
(g) A process for the timely review and settlement of any
outstanding accounts shall be developed and implemented.
25269.8. The department shall take all of the following actions
with regard to uncollectible accounts:
(a) Review all current outstanding receivables and make an
appropriate adjustment for estimated uncollectible amounts,
consistent with current accounting practices and recognizing the
present value of future collection. The department may, if warranted,
write off or write down those receivable amounts.
(b) Maintain and report an analysis of outstanding receivables and
other control analyses.
(c) Consider whether to enter into a contract with a private
collection agency to collect substantially past-due accounts and, for
longer term receivables, consider whether credit arrangements should
be made with banks or other institutions willing to assist in
financing a potentially responsible party's obligation for
remediation.
25269. The Legislature hereby finds and declares all of the
following:
(a) To enhance cooperation between the department and the
regulated community, and to reduce the state's costs associated with
the oversight of cleanup efforts, the costs of the associated cost
recovery program and the corresponding costs to the responsible
parties involved, the oversight program should be administered in an
efficient, responsible, and accountable manner.
(b) According to information provided to the Legislature, the
department has collected more than seventy-one million dollars
($71,000,000) since the cost recovery effort was begun in the early
1980s and there is approximately seventy million dollars
($70,000,000) to eighty million dollars ($80,000,000) in outstanding
receivables for disputed site cleanup oversight costs. The
information provided to the Legislature indicates that potentially
responsible parties have complained that the department's oversight
costs have been unpredictable, unsubstantiated, and exceedingly high.
(c) Disputes with potentially responsible parties over the
reasonableness of oversight costs have been a major factor in the
difficulty that the department has experienced in conducting cost
recovery. Disputes of that kind substantially increase the cost of
state operations and the cost of doing business for the private
sector, leading to extended negotiations and litigation. The
redirection of resources by both parties in attempting to resolve
those differences most likely inhibit cleanup efforts and affect the
ability of the parties to work together cooperatively, thereby
exacerbating the costs associated with the cleanups. Disputes would
be reduced by clarifying current law by providing definitions of
direct and indirect oversight costs. Further, these high costs affect
the competitiveness of California businesses in national and global
business environments.
25269.1. For purposes of this article, the following terms have the
following meaning:
(a) "Department" means the Department of Toxic Substances Control.
(b) "Direct oversight costs" means the costs to the department of
overseeing a cleanup action, pursuant to the authority specified in
subdivision (a) of Section 25269.2, that can be specifically
attributed to a particular cost objective, including, but not limited
to, sites, facilities, and activities.
(c) "Indirect oversight costs" means the costs to the department
of activity that is of a common or joint purpose benefiting more than
one cost objective and not readily assignable to a single case
objective.
(d) "Pro rata" means the general administrative costs expended by
central service agencies to provide centralized services to state
agencies, as defined in the State Administrative Manual.
25269.2. (a) The department shall comply with this chapter when
recovering oversight costs for corrective action pursuant to Chapter
6.5 (commencing with Section 25100), for removal or remedial action
pursuant to Chapter 6.8 (commencing with Section 25300), and for
response actions pursuant to Chapter 6.85 (commencing with Section
25396).
(b) The department shall develop a concise statement of its cost
recovery policies and billing procedures, including dispute
resolution procedures and availability of program guidance and
policies, and distribute the statement to all responsible parties.
25269.3. The department shall take the following actions with
regard to the tracking of indirect oversight costs:
(a) Ensure that pro rata costs are allocated appropriately to all
departmental activities, so that the department's program will only
bear these pro rata costs in proportion to the benefits received by
potentially responsible parties.
(b) Routinely include operating expenses in the indirect oversight
costs and allocate those expenses using processes that ensure that
the department's program only bears indirect oversight costs in
proportion to the benefits received by potentially responsible
parties.
(c) Exclude, from indirect oversight costs, the costs of grant
development and administration, fee administration, contract
development and administration, and public and governmental
inquiries.
25269.4. (a) The department shall establish rates for indirect
oversight costs that are specific to each program and shall review
and update the indirect cost rates based upon increases or decreases
in the amounts of grants received by the department, department
reorganizations, and other relevant factors, but not less than once
every six months, based upon the previous 12 months of expenditure
data. The department shall apply the indirect oversight cost rates
prospectively and shall not make retroactive adjustments in those
rates.
(b) The department shall review the department's cost recovery
policies at least once every two years.
25269.5. The department shall take the following actions with
regard to the department's relationship with the parties who are
performing the investigation and cleanup of the hazardous substance
release site or taking a hazardous waste corrective action or
response action:
(a) Adopt procedures to improve communication, facilitate the
exchange of ideas, eliminate surprises, and allow better financial
planning by the department and potentially responsible parties,
including a meet and confer process which includes, but is not
limited to, all of the following:
(1) An estimate of the cost of site remediation by the department
for the next phase of the site remediation activity, including a list
of estimated personnel labor rates.
(2) An estimate of the total hours that the department expects the
department staff to incur in the next phase of the site mitigation
process, to the extent that the department can project its time and
costs in advance. That estimate shall include the projected hours of
the project manager, and the costs of public participation, legal
counsel, and technical consultations.
(3) A discussion of the schedule for the remediation action,
including a thorough review of the services that the department
expects to provide, deliverables, timeframes, expectations of both
parties, a process for status reporting by both parties, systematic
billing at least once every three months by the department, and an
agreement on how the work plan will be modified, and how the costs
will be estimated.
(b) Develop a concise statement of its cost recovery policies and
billing procedures, including dispute resolution procedures and the
availability of program guidance and policies, which shall be
distributed to all potentially responsible parties before any site
remediation commences, as part of the meet and confer process.
(c) Review all informal guidance documents for the cost recovery
program, including fee bulletins, management memos, policies, and
procedures, and review and update those documents, as appropriate.
(d) Establish a procedure, when there is a change of project
manager for a remediation action, to provide for a detailed status
briefing to identify the highlights of past work and identify the
current areas of agreement and disagreement among the parties.
25269.6. The department shall adopt a billing system for oversight
costs which meets all of the following criteria:
(a) Invoices shall be issued within 60 days to the extent
practicable, with appropriate incentives for prompt payment. In no
event shall invoices be issued less frequently than on a quarterly
basis.
(b) Invoices shall be mailed to the correct person for the
potentially responsible party.
(c) Sufficient detail shall be included with each invoice, so that
the potentially responsible party can relate the items on the
invoice to the benefits received, and additional details, including
daily timesheet personnel data, shall be made readily available.
(d) Invoices shall be supplemented with statements of any changes
in rates and a detailed justification for any such changes.
(e) Invoices shall be reviewed for accuracy and appropriateness by
a member of the department staff who has direct knowledge of the
remediation action.
(f) Invoices shall be reasonably consistent with expectations
regarding costs, benefits, and outcomes developed during the meet and
confer process specified in subdivision (a) of Section 25269.5, if
the department's knowledge of site conditions or other factors which
may substantially impact the department's costs associated with the
site, have not changed significantly since the last conference.
(g) A process for the timely review and settlement of any
outstanding accounts shall be developed and implemented.
25269.8. The department shall take all of the following actions
with regard to uncollectible accounts:
(a) Review all current outstanding receivables and make an
appropriate adjustment for estimated uncollectible amounts,
consistent with current accounting practices and recognizing the
present value of future collection. The department may, if warranted,
write off or write down those receivable amounts.
(b) Maintain and report an analysis of outstanding receivables and
other control analyses.
(c) Consider whether to enter into a contract with a private
collection agency to collect substantially past-due accounts and, for
longer term receivables, consider whether credit arrangements should
be made with banks or other institutions willing to assist in
financing a potentially responsible party's obligation for
remediation.
25269. The Legislature hereby finds and declares all of the
following:
(a) To enhance cooperation between the department and the
regulated community, and to reduce the state's costs associated with
the oversight of cleanup efforts, the costs of the associated cost
recovery program and the corresponding costs to the responsible
parties involved, the oversight program should be administered in an
efficient, responsible, and accountable manner.
(b) According to information provided to the Legislature, the
department has collected more than seventy-one million dollars
($71,000,000) since the cost recovery effort was begun in the early
1980s and there is approximately seventy million dollars
($70,000,000) to eighty million dollars ($80,000,000) in outstanding
receivables for disputed site cleanup oversight costs. The
information provided to the Legislature indicates that potentially
responsible parties have complained that the department's oversight
costs have been unpredictable, unsubstantiated, and exceedingly high.
(c) Disputes with potentially responsible parties over the
reasonableness of oversight costs have been a major factor in the
difficulty that the department has experienced in conducting cost
recovery. Disputes of that kind substantially increase the cost of
state operations and the cost of doing business for the private
sector, leading to extended negotiations and litigation. The
redirection of resources by both parties in attempting to resolve
those differences most likely inhibit cleanup efforts and affect the
ability of the parties to work together cooperatively, thereby
exacerbating the costs associated with the cleanups. Disputes would
be reduced by clarifying current law by providing definitions of
direct and indirect oversight costs. Further, these high costs affect
the competitiveness of California businesses in national and global
business environments.
25269.1. For purposes of this article, the following terms have the
following meaning:
(a) "Department" means the Department of Toxic Substances Control.
(b) "Direct oversight costs" means the costs to the department of
overseeing a cleanup action, pursuant to the authority specified in
subdivision (a) of Section 25269.2, that can be specifically
attributed to a particular cost objective, including, but not limited
to, sites, facilities, and activities.
(c) "Indirect oversight costs" means the costs to the department
of activity that is of a common or joint purpose benefiting more than
one cost objective and not readily assignable to a single case
objective.
(d) "Pro rata" means the general administrative costs expended by
central service agencies to provide centralized services to state
agencies, as defined in the State Administrative Manual.
25269.2. (a) The department shall comply with this chapter when
recovering oversight costs for corrective action pursuant to Chapter
6.5 (commencing with Section 25100), for removal or remedial action
pursuant to Chapter 6.8 (commencing with Section 25300), and for
response actions pursuant to Chapter 6.85 (commencing with Section
25396).
(b) The department shall develop a concise statement of its cost
recovery policies and billing procedures, including dispute
resolution procedures and availability of program guidance and
policies, and distribute the statement to all responsible parties.
25269.3. The department shall take the following actions with
regard to the tracking of indirect oversight costs:
(a) Ensure that pro rata costs are allocated appropriately to all
departmental activities, so that the department's program will only
bear these pro rata costs in proportion to the benefits received by
potentially responsible parties.
(b) Routinely include operating expenses in the indirect oversight
costs and allocate those expenses using processes that ensure that
the department's program only bears indirect oversight costs in
proportion to the benefits received by potentially responsible
parties.
(c) Exclude, from indirect oversight costs, the costs of grant
development and administration, fee administration, contract
development and administration, and public and governmental
inquiries.
25269.4. (a) The department shall establish rates for indirect
oversight costs that are specific to each program and shall review
and update the indirect cost rates based upon increases or decreases
in the amounts of grants received by the department, department
reorganizations, and other relevant factors, but not less than once
every six months, based upon the previous 12 months of expenditure
data. The department shall apply the indirect oversight cost rates
prospectively and shall not make retroactive adjustments in those
rates.
(b) The department shall review the department's cost recovery
policies at least once every two years.
25269.5. The department shall take the following actions with
regard to the department's relationship with the parties who are
performing the investigation and cleanup of the hazardous substance
release site or taking a hazardous waste corrective action or
response action:
(a) Adopt procedures to improve communication, facilitate the
exchange of ideas, eliminate surprises, and allow better financial
planning by the department and potentially responsible parties,
including a meet and confer process which includes, but is not
limited to, all of the following:
(1) An estimate of the cost of site remediation by the department
for the next phase of the site remediation activity, including a list
of estimated personnel labor rates.
(2) An estimate of the total hours that the department expects the
department staff to incur in the next phase of the site mitigation
process, to the extent that the department can project its time and
costs in advance. That estimate shall include the projected hours of
the project manager, and the costs of public participation, legal
counsel, and technical consultations.
(3) A discussion of the schedule for the remediation action,
including a thorough review of the services that the department
expects to provide, deliverables, timeframes, expectations of both
parties, a process for status reporting by both parties, systematic
billing at least once every three months by the department, and an
agreement on how the work plan will be modified, and how the costs
will be estimated.
(b) Develop a concise statement of its cost recovery policies and
billing procedures, including dispute resolution procedures and the
availability of program guidance and policies, which shall be
distributed to all potentially responsible parties before any site
remediation commences, as part of the meet and confer process.
(c) Review all informal guidance documents for the cost recovery
program, including fee bulletins, management memos, policies, and
procedures, and review and update those documents, as appropriate.
(d) Establish a procedure, when there is a change of project
manager for a remediation action, to provide for a detailed status
briefing to identify the highlights of past work and identify the
current areas of agreement and disagreement among the parties.
25269.6. The department shall adopt a billing system for oversight
costs which meets all of the following criteria:
(a) Invoices shall be issued within 60 days to the extent
practicable, with appropriate incentives for prompt payment. In no
event shall invoices be issued less frequently than on a quarterly
basis.
(b) Invoices shall be mailed to the correct person for the
potentially responsible party.
(c) Sufficient detail shall be included with each invoice, so that
the potentially responsible party can relate the items on the
invoice to the benefits received, and additional details, including
daily timesheet personnel data, shall be made readily available.
(d) Invoices shall be supplemented with statements of any changes
in rates and a detailed justification for any such changes.
(e) Invoices shall be reviewed for accuracy and appropriateness by
a member of the department staff who has direct knowledge of the
remediation action.
(f) Invoices shall be reasonably consistent with expectations
regarding costs, benefits, and outcomes developed during the meet and
confer process specified in subdivision (a) of Section 25269.5, if
the department's knowledge of site conditions or other factors which
may substantially impact the department's costs associated with the
site, have not changed significantly since the last conference.
(g) A process for the timely review and settlement of any
outstanding accounts shall be developed and implemented.
25269.8. The department shall take all of the following actions
with regard to uncollectible accounts:
(a) Review all current outstanding receivables and make an
appropriate adjustment for estimated uncollectible amounts,
consistent with current accounting practices and recognizing the
present value of future collection. The department may, if warranted,
write off or write down those receivable amounts.
(b) Maintain and report an analysis of outstanding receivables and
other control analyses.
(c) Consider whether to enter into a contract with a private
collection agency to collect substantially past-due accounts and, for
longer term receivables, consider whether credit arrangements should
be made with banks or other institutions willing to assist in
financing a potentially responsible party's obligation for
remediation.
