Indemnification or Defense, or Providing Notice to the Department of Defense, Relating to a Third-Party Environmental Claim, 88167-88173 [2016-29367]

Agencies

• DEPARTMENT OF DEFENSE
• Office of the Secretary

[Federal Register Volume 81, Number 235 (Wednesday, December 7, 2016)]
[Proposed Rules]
[Pages 88167-88173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29367]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 175

RIN 0790-AJ54
[Docket ID: DOD-2016-OS-0108]


Indemnification or Defense, or Providing Notice to the Department 
of Defense, Relating to a Third-Party Environmental Claim

AGENCY: Department of Defense (DoD).

ACTION: Proposed rule.

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SUMMARY: The DoD proposes to identify the proper address and 
notification method for an entity making a request for indemnification 
or defense, or providing notice to DoD, of a third-party claim under 
section 330 of the National Defense Authorization Act for Fiscal Year 
1993, as amended (hereinafter ``section 330''), or under section 
1502(e) of the Floyd D. Spence National Defense Authorization Act for 
Fiscal Year 2001, (hereinafter ``section 1502(e)''). This rule also 
identifies the documentation required to demonstrate proof of any 
claim, loss, or damage for indemnification or defense or for providing 
notice to DoD of a third-party claim. This rule also provides the 
mailing address for such requests for indemnification or defense or 
notice to DoD of a third-party claim to be filed with DoD, Office of 
General Counsel, Deputy General Counsel for Environment, Energy, and 
Installations (DoDGC(EE&I)). This will allow for timely review and 
greater efficiency in screening requests for indemnification or defense 
by providing clarity to requesters.

DATES: Written comments on this proposed rule will be accepted on or 
before February 6, 2017.

ADDRESSES: You may submit comments, identified by docket number and/or 
Regulatory Information Number (RIN) number and title, by any of the 
following methods:
     Federal Rulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Department of Defense, Office of the Deputy Chief 
Management

[[Page 88168]]

Officer, Directorate of Oversight and Compliance, Regulatory and 
Advisory Committee Division, 4800 Mark Center Drive, Mailbox #24, 
Alexandria, VA 22350-1700.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this Federal Register document. The 
general policy for comments and other submissions from members of the 
public is to make these submissions available for public viewing on the 
Internet at https://www.regulations.gov as they are received without 
change, including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Mr. Philip Sheuerman, 703-692-2287.

SUPPLEMENTARY INFORMATION: 

Preamble Outline

I. Legal Authority
II. Background
III. Summary of Proposed Rule
IV. Section-by-Section Analysis
    A. Purpose and Objectives
    B. Applicability
    C. Responsibilities
V. Summary of Challenges
VI. Discussion of Other Major Alternatives
    A. Status Quo
VII. Costs and Benefits
VIII. Administrative Requirements
    A. Executive Order 12866, ``Regulatory Planning and Review'' and 
Executive Order 13563, ``Improving Regulation and Regulatory 
Review''
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act
    D. Environmental Justice
    E. Unfunded Mandates
    F. Federalism
IX. References/Docket

I. Legal Authority

    This part is proposed under 10 U.S.C. 113, 5 U.S.C. 301, section 
330 of the National Defense Authorization Act for Fiscal Year 1993, 
Public Law 102-484, October 23, 1992, 106 Stat. 2371, as amended, and 
section 1502(e) of the Floyd D. Spence National Defense Authorization 
Act for Fiscal Year 2001, Public Law 106-398, October 30, 2000, 1014 
Stat. 1654A-350, as amended.

II. Background

    Sections 330 and 1502(e) provide that, subject to certain 
exceptions set forth in the statutes, the Secretary of Defense shall 
hold harmless, defend, and indemnify in full certain persons and 
entities that acquire ownership or control of, in the case of section 
330, any military installation closed pursuant to a base closure law 
or, in the case of section 1502(e), certain portions of the former 
Naval Ammunition Support Detachment on the island of Vieques, Puerto 
Rico (hereinafter ``Detachment''), from and against any suit, claim, 
demand or action, liability, judgment, cost or other fee arising out of 
any claim for personal injury or property damage (including death, 
illness, or loss of or damage to property or economic loss) that 
results from, or is in any manner predicated upon, the release or 
threatened release of any hazardous substance, pollutant or 
contaminant, or petroleum or petroleum derivative \1\ as a result of 
DoD activities at any military installation (or portion thereof) that 
is closed pursuant to a base closure law or the Detachment. (Coverage 
of pollutants and contaminants was added to section 330 by an amendment 
contained in the National Defense Authorization Act for Fiscal Year 
1994, Public Law 103-160, 1002.) It also provides that DoD has certain 
rights in defending third-party claims.
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    \1\ Section 1502(e) does not apply to petroleum or petroleum 
derivatives.
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    The authority to adjudicate requests for indemnification and 
process requests for defense under sections 330 or 1502(e) has been 
delegated from the Secretary of Defense to the DoD General Counsel and 
re-delegated by the General Counsel to DoDGC(EE&I). Requests for 
indemnification or defense or notice to DoD of a third-party claim must 
be sent to DoDGC(EE&I) to be considered.
    The DoD recognizes that some real property transfer documents, such 
as deeds and agreements, entered into in past years provide for 
notification under sections 330 or 1502(e) being made to, e.g., the 
local BRAC program office. Until the promulgation of this rule in its 
final form, DoD has and will continue to honor such notifications made 
in conformance with those transfer documents. Effective 180 days after 
promulgation of this rule, while a requester may continue to provide 
notification in accordance with such transfer documents, a requester 
must also comply with the notice requirements of this rule in order to 
comply with the requirements of sections 330 or 1502(e), particularly 
with regard to when the statutes of limitation in sections 330(b)(1) 
and 1502(e)(2)(A) begin to run. Nothing in this rule should be 
construed as requiring amendment of any such transfer documents.
    The United States Federal Circuit has interpreted the definition of 
a ``claim for personal injury or property damages'' under section 330 
to include, under certain circumstances, notice from an enforcement 
agency to conduct a cleanup. Indian Harbor Insurance Co. v. United 
States, 704 F.3d 949 (Fed. Cir. 2013). Because such notices may 
constitute a claim under section 330, a requester should carefully 
evaluate whether failing to provide notice to the Secretary would 
prevent the Secretary from settling or defending against a claim.
    The timely and proper filing of a request for indemnification or 
defense enables DoDGC(EE&I) to perform its adjudication function for 
requests, maintain oversight of the implementation of sections 330 and 
1502(e), and secure the rights of requesters under sections 330 and 
1502(e). Proper notice to DoD of a claim from a third-party is also 
essential to allow DoD to exercise its right to defend against such a 
claim pursuant to sections 330(c) or 1502(e).
    Under sections 330(c)(2) and 1502(e)(3)(B), the requester must 
allow DoD to defend the claim in order to be afforded indemnification 
for that claim. This regulation makes clear that failure to notify DoD 
immediately of receipt of any claim, or of a release that may lead to a 
claim, could prevent DoD from settling or defending that claim, and on 
that basis, DoD may deny indemnification. Failure to provide necessary 
documents and access will also prevent DoD from exercising its right to 
settle and defend the claim and, on that basis, DoD may deny 
indemnification.
    In the context of a claim from an enforcement agency or third party 
seeking to require a cleanup or response action, failure to notify DoD 
may prevent DoD from exercising its right to defend against the claim. 
If the requester undertakes a cleanup or response action itself prior 
to providing immediate notice to DoD, the requestor's actions may 
interfere with DoD's ability to defend against a claim, which might 
result in denial of indemnification.
    This proposed rule does not affect claims that are made pursuant to 
other authorities such as under a real property covenant contained in a 
deed in accordance with section 120(h) of the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980 
(CERCLA).

III. Summary of Proposed Rule

    This proposal identifies the required process for submitting 
documentation necessary to support a request for indemnification or 
defense or to provide notice to DoD of a third-party claim under 
sections 330 or 1502(e). For a notice to DoD of a third-party claim, 
DoDGC(EE&I) must receive the specified paperwork at the specified 
address no less than 30 days after a requester

[[Page 88169]]

receives a third-party claim or before any action is taken, or an 
agreement is entered into, related to a hazardous substance or a 
pollutant or contaminant, or petroleum or petroleum derivative covered 
by section 330 or a hazardous substance or a pollutant or contaminant 
covered by section 1502(e).

IV. Section-by-Section Analysis

A. Purpose

    To ensure the proper implementation of sections 330 and 1502(e), 
requesters and DoD must communicate effectively and in a timely manner. 
This proposal will provide the necessary information for that 
interaction to take place.

B. Applicability

    This proposal applies to the DoD General Counsel's Office, to the 
Military Departments, and to any person or entity making a request for 
indemnification or defense, or providing notice to DoD, of a third-
party claim pursuant to sections 330 or 1502(e).

C. Definitions

    This proposal defines the terms ``commercial delivery service'', 
``Deputy General Counsel'', ``received'', ``request'', ``requester'', 
``section 330'', ``section 1502(e)'', and ``third-party claim''.

D. Responsibilities

    This proposal advises that the responsibilities of the Secretary of 
Defense under sections 330 and 1502(e) have been delegated to the 
General Counsel of the DoD who has, in turn, re-delegated certain of 
those responsibilities, particularly with regard to adjudication of 
requests for indemnification, to DoDGC(EE&I). DoDGC(EE&I) exercises 
this responsibility through close communication with the military 
department that has property disposal responsibility for the closed 
installation subject of the request for indemnification or defense. 
Such communication includes obtaining review by, and the 
recommendations of, the military department on the merits of the 
request for indemnification or defense. Likewise, DoDGC(EE&I) 
communicates any notice of a third-party claim to the military 
department and works closely with the military department in 
determining what action, if any, the DoD will take in response to the 
notice. The proposal also contains responsibilities of requesters, 
delineated in the body of the rule.

E. Requests for Indemnification or Defense

    This proposal explains the process to be used, timelines that 
apply, and documentation that must be received by DoDGC(EE&I) for a 
request for indemnification or defense. The mailing address and 
required method of delivery are specified. The proposal also requires a 
requester to provide DoD with a right of entry at reasonable times for 
purposes of inspecting the property and obtaining samples. The proposal 
also provides for reconsideration of a DoD determination.

F. Third-Party Claims

    This proposal explains the process to be used, timelines that 
apply, and documentation that must be received by DoDGC(EE&I) relating 
to a notice of a third-party claim. The mailing address and required 
method of delivery are specified. The proposal also requires a 
requester to provide DoD with a right of entry at reasonable times for 
purposes of inspecting the property and obtaining samples. The section 
specifies that a requester must notify DoD within 30 days of receiving 
the third-party claim or 30 days before taking an action in order to 
allow DoD to determine what action to take with regard to the claim.

V. Summary of Challenges

    Informing all affected persons and entities about this rule will 
require communication with relevant non-governmental organizations.

VI. Discussion of Other Major Alternatives

A. Status Quo

    The current process is unclear, inefficient, and time-consuming, 
causes delay, and may be ineffective. This lack of clarity contributes 
to concern that indemnification is not being addressed adequately and 
creates the potential for impairment of DoD's ability to present an 
effective defense of claims under sections 330 or 1502(e). The DoD is 
committed to sound environmental stewardship in all of its activities 
while meeting the goal of encouraging the development of land for 
productive use.

VII. Costs and Benefits

Cost Analysis

    Based on the relatively small number of claims per year, compliance 
costs under this regulation are expected to be minimal. In fact, this 
regulation will reduce compliance costs because it will streamline and 
clarify the process for the submission of information which would have 
to be submitted in any case in order to obtain a determination 
regarding indemnification or defense or provide notice to DoD of a 
third-party claim under sections 330 or 1502(e).

Benefits Analysis

    This proposal will clarify the process for requesters of 
indemnification or defense and promote efficient protection of the 
environment by enhancing communication between requesters and DoD. This 
enhanced and simplified communication process will result in fewer 
burdens for both requesters and DoD in the form of avoiding 
unnecessary, inappropriate, or duplicative paperwork. This proposal 
does not require any greater disclosure of information from a requester 
than sections 330 or 1502(e) already require. Enhancing DoDGC(EE&I)'s 
ability to adjudicate requests for indemnification or respond to 
requests for defense under sections 330 or 1502(e) will reduce the 
burden of information requests upon those entities requesting 
indemnification or defense, or providing notice to DoD, of a third-
party claim under sections 330 or 1502(e). This proposal will promote 
protection of requesters' rights by reducing the possibility of a 
request for indemnification or defense being acted upon by the wrong 
agency or a statute of limitations running due to failure to provide 
timely notification to the proper agency.

VIII. Administrative Requirements

A. Executive Order 12866, ``Regulatory Planning and Review'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review''

    Under E.O. 12866 and E.O. 13563, DoD must determine whether this 
regulatory action is ``significant'' and therefore subject to review by 
the Office of Management and Budget (OMB) and to the requirements of 
this E.O., which include assessing the costs and benefits anticipated 
as a result of the proposed regulatory action. E.O. 12866 defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may: (1) Have an annual effect on the economy of $100 million 
or more or may adversely affect in a material way the economy, a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local, or tribal governments or 
communities; (2) create serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the

[[Page 88170]]

President's priorities, or the principles set forth in E.O. 12866.
    This proposed rule will not have an adverse effect on the economy 
or cost the economy $100 million or more per year. Requests for 
indemnification are small in number and do not approach anywhere near 
$100 million per year, individually or collectively. c Although not 
economically significant, this rule has been designated a ``significant 
regulatory action'' under section 3(f) of Executive Order 12866. 
Accordingly, the rule has been reviewed by OMB under the requirements 
of these Executive Orders.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601, et seq., 
requires Federal agencies to consider ``small entities'' throughout the 
regulatory process. Section 603 of the Regulatory Flexibility Act 
requires an initial screening analysis performance to determine whether 
small entities will be adversely affected by the regulation. If 
affected small entities are identified, regulatory alternatives must be 
considered to mitigate the potential impacts. Small entities as 
described in the Regulatory Flexibility Act are only those ``business, 
organizations and governmental jurisdictions subject to regulation.'' 
It has been certified that this proposed rule will not add to the 
current burden for small entities to report their activities based on a 
request for indemnification or defense under sections 330 or 1502(e). 
This proposal will benefit small entities by streamlining communication 
to reduce the cost of making a request for indemnification or defense, 
or providing notice to DoD, of a third-party claim.

C. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995, 44 U.S.C. 3501, authorizes the 
Director of OMB to review certain information collection requests by 
Federal agencies. The recordkeeping and reporting requirements of this 
proposed rule do not constitute a ``collection of information'' as 
defined in 44 U.S.C. 3502(3), the Paperwork Reduction Act of 1995.

D. Environmental Justice

    Under E.O. 12898 (59 FR 7629 (February 11, 1994)), Federal Actions 
to Address Environmental Justice in Minority Populations and Low-Income 
Populations, Federal agencies are required to identify and address 
disproportionately high and adverse human health and environmental 
effects of Federal programs, policies, and activities on minority and 
low-income populations. Given the application of this proposed rule 
throughout the entire United States, DoD is soliciting comment and 
input from all public entities and government agencies, including 
members of the environmental justice community and members of the 
regulated community.
    Sections 330 and 1502(e) are intended to reduce specified risks 
from development of former military land by aiding and legally 
protecting the entities that take title to land on closed military 
installations for development purposes. Because this rule will equally 
affect reporting associated with the development of land on a national 
basis, a disparate impact on minority and low-income population areas 
is not expected.

E. Unfunded Mandates

    Title II of the Unfunded Mandates Report Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Indian tribal 
governments and the private sector. Under Section 202 of the UMRA, DoD 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and Indian tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year.
    The DoD has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and Indian tribal governments, in the aggregate, or the 
private sector in any one year. Thus, this proposed rule is not subject 
to the requirements of Section 202 of the UMRA.

F. Executive Order 13132, ``Federalism''

    It has been determined that this rule does not have federalism 
implications. This rule does 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 levels of government.

List of Subjects in 32 CFR Part 175

    Indemnification, Claim.

0
Accordingly, 32 CFR part 175 is proposed to be added to read as 
follows:

PART 175--INDEMNIFICATION OR DEFENSE, OR PROVIDING NOTICE TO THE 
DEPARTMENT OF DEFENSE, RELATING TO A THIRD-PARTY ENVIRONMENTAL 
CLAIM

Sec.
175.1 Purpose.
175.2 Applicability.
175.3 Definitions.
175.4 Responsibilities.
175.5 Notice to DoD relating to a third-party claim.
175.6 Filing a request for indemnification or defense.

    Authority:  10 U.S.C. 113, 5 U.S.C. 301, section 330 of the 
National Defense Authorization Act for Fiscal Year 1993, Public Law 
102-484, October 23, 1992, 106 Stat. 2371, as amended, and section 
1502(e) of the Floyd D. Spence National Defense Authorization Act 
for Fiscal Year 2001, Public Law 106-398, October 30, 2000, 1014 
Stat. 1654A-350, as amended.


Sec.  175.1   Purpose.

    This part describes the process for filing a request for 
indemnification or defense, or providing proper notice to DoD, of a 
third-party claim pursuant to section 330 of the National Defense 
Authorization Act for Fiscal Year 1993, Public Law 102-484, October 23, 
1992, 106 Stat. 2371, as amended (hereafter ``section 330''), or 
section 1502(e) of the Floyd D. Spence National Defense Authorization 
Act for Fiscal Year 2001, Public Law 106-398, October 30, 2000, 1014 
Stat. 1654A-350, as amended (hereafter ``section 1502(e)''). This 
process identifies the minimum information that a request for 
indemnification or defense or notice to DoD of a third-party claim for 
indemnification must include, where that information must be sent, how 
to make such a request or provide such a notice, the time limits that 
apply to such a request or notice, and other requirements.


Sec.  175.2   Applicability.

    (a) This part applies to--
    (1) The Office of the General Counsel of the Department of Defense 
and the Military Departments.
    (2) Any person or entity making a request for indemnification or 
defense, or providing notice to DoD, of a third-party claim pursuant to 
section 330 or section 1502(e).
    (b) In the case of a property that is subject to an earlier 
agreement containing different notification requirements, the 
requirement for notice to the Deputy General Counsel in sections 175.5 
and 175.6 are in addition to those notification requirements.


Sec.  175.3   Definitions.

    (a) Commercial delivery service. Federal Express or United Parcel 
Service, or other similar service that provides for delivery of 
packages directly from the sender to the recipient for a fee, but 
excluding the United States Postal Service (USPS).

[[Page 88171]]

    (b) Deputy General Counsel. The Deputy General Counsel 
(Environment, Energy, and Installations), Department of Defense 
(DoDGC(EE&I)).
    (c) Received. Actual physical receipt by the intended recipient.
    (d) Request. Any request for indemnification or defense made to the 
Department of Defense (DoD) by a requester pursuant to section 330 or 
section 1502(e).
    (e) Requester. A person or entity making a request pursuant to 
section 330 or section 1502(e). When the requester is acting by way of 
subrogation, the requester is subject to the same requirements and 
limitations as though it were the subrogee.
    (f) Section 330. Section 330 of the National Defense Authorization 
Act for Fiscal Year 1993, Pub. L. 102-484, October 23, 1992, 106 Stat. 
2371, as amended.
    (g) Section 1502(e). Section 1502(e) of the Floyd D. Spence 
National Defense Authorization Act for Fiscal Year 2001, Public Law 
106-398, October 30, 2000, 114 Stat. 1654A-350. (This provision applies 
only to certain portions of the former Naval Ammunition Support 
Detachment on the island of Vieques, Puerto Rico.)
    (h) Third-party claim. A claim from a person or entity (other than 
the requester) to a requester resulting from a suit, claim, demand or 
action, liability, judgment, cost or other fee, demanding, seeking, or 
otherwise requiring that the requester pay an amount, take an action, 
or incur a liability for alleged personal injury or property damage and 
such payment, action, or liability is eligible for indemnification or 
defense pursuant to section 330 or section 1502(e). A third-party claim 
may consist of a notice, letter, order, compliance advisory, compliance 
agreement, or similar direction from a governmental regulatory 
authority exercising its authority to regulate the release or 
threatened release of any hazardous substance, pollutant or 
contaminant, or petroleum or petroleum derivative if the notice, 
letter, order, compliance advisory, compliance agreement, or similar 
notification imposes, directs, or demands requirements for 
environmental actions or asserts damages related thereto that is 
eligible for indemnification or defense pursuant to section 330 or 
section 1502(e).


Sec.  175.4   Responsibilities.

    (a) The General Counsel of the Department of Defense has been 
delegated the authorities and responsibilities of the Secretary of 
Defense under section 330 or section 1502(e), with certain limitations 
as to re-delegation.
    (b) The General Counsel has re-delegated the authority and 
responsibility to adjudicate requests for indemnification or defense 
and to process notices to DoD of a third-party claim under section 330 
and section 1502(e) to the Deputy General Counsel, Environment, Energy, 
and Installations, of the Department of Defense or, when the position 
of Deputy General Counsel is vacant, the acting Deputy General Counsel. 
The authority to acknowledge receipt of a request has been delegated to 
an Associate General Counsel under the Deputy General Counsel, 
Environment, Energy, and Installations.


Sec.  175.5   Notice to DoD relating to a third-party claim.

    (a) Where to file a notice to DoD of a third-party claim. Notice to 
DoD of receipt of a third-party claim, or intent to enter into, agree 
to, settle, or solicit such a claim, must be received by the Deputy 
General Counsel at the following address: Deputy General Counsel, 
Environment, Energy, and Installations, 1600 Defense Pentagon, Room 
3B747, Washington, DC 20301-1600. Delivering or otherwise filing a 
notice of a third-party claim with any other office or location will 
not constitute proper notice for purposes of this part. Requesters 
should be aware that all delivery services, and particularly that of 
the USPS, to the Pentagon can be significantly delayed for security 
purposes and they should plan accordingly in order to meet any required 
filing deadlines under this part; use of a commercial delivery service 
may reduce the delay.
    (b) Individual requests. A notice to DoD of a third-party claim 
must be filed separately for each person or entity that is filing the 
notice. Notices may not be filed jointly for a group, a class, or for 
multiple persons or entities.
    (c) Means of filing a notice of a third-party claim. A notice of a 
third-party claim must be submitted in writing by mail through the USPS 
or by a commercial delivery service. While the Deputy General Counsel 
will affirmatively acknowledge receipt of a notice of a third-party 
claim, it is recommended that a requester, whether using the USPS or a 
commercial delivery service, mail its notice by registered or certified 
mail, return receipt requested, or equivalent proof of delivery.
    (d) Information to be included in a notice to DoD of a third-party 
claim. A notice to DoD of a third-party claim must include, at a 
minimum, the following information:
    (1) A complete copy of the third-party claim, or, if not presented 
in writing, a complete summary of the claim, with the names of 
officers, employees, or agents with knowledge of any information that 
may be relevant to the claim or any potential defenses. The third-party 
claim may consist of a summons and complaint or, in the case of a 
third-party claim from a governmental regulatory authority, a notice, 
letter, order, compliance advisory, compliance agreement, or similar 
notification.
    (2) A complete copy of all pertinent records, including any deed, 
sales agreement, bill of sale, lease, license, easement, right-of-way, 
or transfer document for the facility for which the third-party claim 
is made.
    (3) If the requester is not the first transferee from DoD, a 
complete copy of all intervening deeds, sales agreements, bills of 
sale, leases, licenses, easements, rights-of-way, or other transfer 
documents between the original transfer from DoD and the transfer to 
the current owner. If the requester is a lender who has made a loan to 
a person or entity who owns, controls, or leases the facility for which 
the request for indemnification is made that is secured by said 
facility, complete copies of all promissory notes, mortgages, deeds of 
trust, assignments, or other documents evidencing such a loan by the 
requester.
    (4) A complete copy of any insurance policies related to such 
facility.
    (5) If the notice to DoD of a third-party claim is being made by a 
representative, agent, or attorney in fact or at law, proof of 
authority to make the notice on behalf of the requester.
    (6) Evidence or proof of any claim, loss, or damage alleged to be 
suffered by the third-party claimant which the requester asserts is 
covered by section 330 or by section 1502(e).
    (7) In the case where a requester intends to enter into, agree to, 
settle, or solicit a third-party claim, a description or copy of the 
proposed claim, settlement, or solicitation, as the case may be.
    (8) To the extent that any environmental response action has been 
taken, the documentation supporting such response action and its costs 
included in the request for indemnification.
    (9) To the extent that any environmental response action has been 
taken, a statement as to whether the remedial action is consistent with 
the National Oil and Hazardous Substances Pollution Contingency Plan 
(Part 300 of title 42, Code of Federal Regulations) or other applicable 
regulatory requirements.

[[Page 88172]]

    (10) A complete copy of any claims made by the requester to any 
other entity related to the conditions on the property which are the 
subject of the claim, and any responses or defenses thereto or made to 
any third-party claims, including correspondence, litigation filings, 
consultant reports, and other information supporting a claim or 
defense.
    (e) Entry, inspection, and samples. The requester must provide DoD 
a right of entry at reasonable times to any facility, establishment, 
place, or property under the requester's control which is the subject 
of or associated with the requester's notice of third-party claim and 
must allow DoD to inspect or obtain samples from that facility, 
establishment, place, or property.
    (f) Additional information. The Deputy General Counsel will advise 
a requester in writing of any additional information that must be 
provided to defend against a claim. Failure to provide the additional 
information in a timely manner may result in denial of a request for 
indemnification or defense for lack of information to adjudicate the 
claim.
    (g) When to file a notice to DoD of a third-party claim.
    (1) A requester must, within 30 days of receiving a third-party 
claim, file with DoD a notice of such claim in accordance with this 
part. Failure to timely file such a notice, if it in any way 
compromises the ability of DoD to defend against such a claim pursuant 
to section 330(c) or section 1502(e)(3), will result in denial of any 
subsequent request for indemnification or defense resulting from such a 
claim. Requesters who take action in compliance with any such third-
party claim, or any part of such claim, without first providing DoD 
with a notice of such claim in accordance with this section do so at 
their own risk.
    (2) A requester must, at least 30 days prior to the earlier of 
entering into, agreeing to, settling, or soliciting a third-party 
claim, file a notice to DoD of such intent in accordance with this 
part. Failure to file such a notice will compromise the ability of DoD 
to defend against such a claim pursuant to section 330(c) or section 
1502(e)(3) and will result in denial of any subsequent request for 
indemnification or defense resulting from such a claim.
    (h) No implication from DoD action. Any actions taken by DoD 
related to defending a claim do not constitute a decision by DoD that 
the requester is entitled to indemnification or defense.
    (i) Notice also constituting a request for indemnification or 
defense. Notice of receipt of a third-party claim may constitute a 
request for indemnification or defense if that notice complies with all 
applicable requirements for a request for indemnification or defense.


Sec.  175.6   Filing a request for indemnification or defense.

    (a) Where to file a request for indemnification or defense. In 
order to notify DoD in accordance with section 330(b)(1) or section 
1502(e)(2)(A), a request for indemnification or defense pursuant to 
section 330 or section 1502(e) must be received by the Deputy General 
Counsel at the following address: Deputy General Counsel, Environment, 
Energy, and Installations, 1600 Defense Pentagon, Room 3B747, 
Washington, DC 20301-1600. Delivering or otherwise filing a request for 
indemnification or defense with any other office or location will not 
constitute proper notice of a request for purposes of section 330(b)(1) 
or section 1502(e)(2)(A). Requesters should be aware that all delivery 
services, and particularly that of the USPS, to the Pentagon can be 
significantly delayed for security purposes and they should plan 
accordingly in order to meet any required filing deadlines under this 
part; use of a commercial delivery service may reduce the delay.
    (b) When to file a request for indemnification or defense. A 
request for indemnification must be received by the Deputy General 
Counsel within two years after the claim giving rise to the request 
accrues. A request for defense must be received by the Deputy General 
Counsel in sufficient time to allow the United States to provide the 
requested defense.
    (c) Means of filing a request for indemnification or defense. A 
request for indemnification or defense must be submitted in writing by 
mail through the USPS or by a commercial delivery service. While the 
Deputy General Counsel will affirmatively acknowledge receipt of a 
request for indemnification or defense, it is recommended that a 
requester, whether using the USPS or a commercial delivery service, 
mail its request by registered or certified mail, return receipt 
requested, or equivalent proof of delivery.
    (d) Individual requests. A request for indemnification or defense 
must be filed separately for each person or entity that is making the 
request. Requests may not be filed jointly for a group, a class, or for 
multiple persons or entities.
    (e) Information to be included in a request for indemnification or 
defense. A request for indemnification or defense must include, at a 
minimum, the following information:
    (1) A complete copy of the third-party claim, or, if not presented 
in writing, a complete summary of the claim, with the names of 
officers, employees, or agents with knowledge of any information that 
may be relevant to the claim or any potential defenses.
    (2) A complete copy of all pertinent records, including any deed, 
sales agreement, bill of sale, lease, license, easement, right-of-way, 
or transfer document for the facility for which the request for 
indemnification or defense is made.
    (3) If the requester is not the first transferee from DoD, a 
complete copy of all intervening deeds, sales agreements, bills of 
sale, leases, licenses, easements, rights-of-way, or other transfer 
documents between the original transfer from DoD and the transfer to 
the current owner. If the requester is a lender who has made a loan to 
a person or entity who owns, controls, or leases the facility for which 
the request for indemnification is made that is secured by said 
facility, complete copies of all promissory notes, mortgages, deeds of 
trust, assignments, or other documents evidencing such a loan by the 
requester.
    (4) A complete copy of any insurance policies related to such 
facility.
    (5) If the request for indemnification or defense is being made by 
a representative, agent, or attorney in fact or at law, proof of 
authority to make the request on behalf of the requester.
    (6) Evidence or proof of any claim, loss, or damage covered by 
section 330 or by section 1502(e).
    (7) In the case of a request for defense, a copy of the documents, 
such as a summons and complaint, or enforcement order, representing the 
matter against which the United States is being asked to defend.
    (8) To the extent that any environmental response action has been 
taken, the documentation supporting such response action and its costs 
included in the request for indemnification.
    (9) To the extent that any environmental response action has been 
taken, a statement as to whether the remedial action is consistent with 
the National Oil and Hazardous Substances Pollution Contingency Plan 
(Part 300 of title 42, Code of Federal Regulations) or other applicable 
regulatory requirements.
    (10) A complete copy of any claims made by the requester to any 
other entity related to the conditions on the property which are the 
subject of the claim, and any responses or defenses thereto or made to 
any third-party claims, including correspondence, litigation filings, 
consultant reports, and

[[Page 88173]]

other information supporting a claim or defense.
    (f) Entry, inspection, and samples. The requester must provide DoD 
a right of entry at reasonable times to any facility, establishment, 
place, or property under the requester's control which is the subject 
of or associated with the requester's request for indemnification or 
defense and must allow DoD to inspect or obtain samples from that 
facility, establishment, place, or property.
    (g) Additional information. The Deputy General Counsel will advise 
a requester in writing of any additional information that must be 
provided to adjudicate the request for indemnification or defense. 
Failure to provide the additional information in a timely manner may 
result in denial of the request for indemnification or defense.
    (h) Adjudication. The Deputy General Counsel will adjudicate a 
request for indemnification or defense and provide the requester with 
DoD's determination of the validity of the request. Such determination 
will be in writing and sent to the requester by certified or registered 
mail.
    (i) Reconsideration. Any such determination will provide that the 
requester may ask for reconsideration of the determination. Such 
reconsideration shall be limited to an assertion by the requester of 
substantial new evidence or errors in calculation. The requester may 
seek such reconsideration by filing a request to that effect within 30 
days of receipt of determination. A request for reconsideration must be 
received by the Deputy General Counsel within 30 days after receipt of 
the determination. Such a request must be sent to the same address as 
provided for in paragraph (a) of this section and provide the 
substantial new evidence or identify the errors in calculation. Such 
reconsideration will not extend to determinations concerning the law, 
except as it may have been applied to the facts. A request for 
reconsideration will be acted on within 30 days from the time it is 
received. If a request for reconsideration is made, the six month 
period referred to in section 330(b)(1) and section 1502(e)(2)(A) will 
commence from the date the requester receives DoD's denial of the 
request for reconsideration.
    (j) Finality of adjudication. An adjudication of a request for 
indemnification constitutes final administrative disposition of such a 
request, except in the case of a request for reconsideration under 
paragraph (i) of this section, in which case a denial of the request 
for reconsideration constitutes final administrative disposition of the 
request.

    Dated: December 2, 2016.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2016-29367 Filed 12-6-16; 8:45 am]
 BILLING CODE 5001-06-P