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V� Department of Toxic Substances Control Meredith Williams, Ph.D. Yana Garcia Director Gavin Newsnrrr Secretary for 8800 Cal Center Drive Governor Environmental Protection Sacramento, California 95826-3200 NON-BINDING PRELIMINARY ALLOCATION OF RESPONSIBILITY Health and Safety Code (HSC) section 25356.1(e) requires the Department of Toxic Substances Control (DTSC) to prepare a preliminary non-binding allocation of responsibility (the "NBAR") among all identifiable potentially responsible parties (PRPs). The intention of the NBAR requirement in section 25356.1 was to establish which PRPs will have an aggregate allocation in excess of 50% and therefore convene arbitration if they so choose, even though the NBAR is otherwise not binding on anyone, including PRPs, DTSC, or the arbitration panel. However, the arbitration provisions of Chapter 6.8 of Division 20 of the California Health and Safety Code (California Health and Safety Code Sections 25356.2 through 25356.10) were repealed by Senate Bill 1018 (Stats 2012, Chap 39), effective June 27, 2012. Accordingly, all statutory provisions and procedures associated with the arbitration proceeding were repealed. Since the arbitration provisions no longer exist, the only remaining purpose of an NBAR is to promote settlement and reduce transaction costs. Under the United States Environmental Protection Agency's "Interim Guidelines for Preparing Nonbinding Preliminary Allocation of Responsibility," there are situations where an NBAR should probably not be prepared. Specifically, where the number of PRPs is so small that an NBAR would not expedite settlement. Under the circumstances of this case, the preparation of an NBAR with a specific allocation of percentages of liability to the various PRPs would not promote settlement by the parties or reduce transaction costs. e Printed on Recycled Paper