(a) The commissioner may provide State assistance to a municipality under ECL 27-1313(5)(g), up to 75 percent of eligible costs as determined by subdivisions (e) and (f) of this section, subject to the conditions and limitations of subdivisions (b), (c) and (d) of this section.

1. (1) it must be a responsible party only by reason of being or having been the owner or operator of the site; and

2. (2) it must enter into an order described in section 375-2.5(a) of this Subpart; or another order acceptable to the department, whereby the municipality is obligated to develop and implement a site remedial program subject to the approval and supervision of the department; and such order must be entered into before submitting an application for State assistance.

   (d) Municipal responsibilities.

   The municipality must:

3. (1) Take all reasonable steps to obtain indemnification or a commitment to indemnify from any insurance carriers; for purposes hereof, the phrase, all reasonable steps to obtain indemnification means:

   1. (i) the diligent conduct of a search to identify all insurers that provided liability coverage for the municipality at any relevant time by reviews of its own records;

   2. (ii) the diligent conduct of negotiations with all identified insurers. Negotiations have been conducted diligently with a particular insurer when the municipality extend an invitation to negotiate concerning indemnification under its policy, and the insurer:

      1. (a) does not respond to the municipality's invitation;
      2. (b) responds to it by refusing to negotiate;
      3. (c) starts negotiations and thereafter discontinues same;
      4. (d) starts negotiations and refuses to indemnify under the policy within nine months after the start of negotiations; and
   3. (iii) when reasonable, the commencement and diligent prosecution of a civil judicial action to obtain appropriate relief from any identified insurer.

4. (2) Make all reasonable efforts to secure voluntary agreement by other responsible parties to perform or pay for the performance of the remedial program for the site. For purposes of this section, the phrase all reasonable efforts to secure voluntary agreement means:

   1. (i) the diligent conduct of a search to identify responsible parties by a method or methods appropriate to the circumstances of the particular site including, but not limited to, reviews of real property records, regulatory files of appropriate government agencies, publicly available financial information, and private business records obtained under ECL 27-0915; ECL 27-1307; and/or ECL 27-1309; and
   2. (ii) the selection of a person responsible for the site that the municipality determines (and in which determination the department concurs) to be an appropriate party with which to negotiate; and
   3. (iii) diligent conduct of negotiations with that potentially responsible party.

5. (3) Conduct diligent negotiations with responsible parties. Negotiations have been conducted diligently with that particular responsible party when:

   1. (i) the municipality extends an offer to negotiate an agreement to perform the municipality's obligation under an order, and that party:

      1. (a) does not respond to the municipality's offer; or
      2. (b) responds to it by refusing to negotiate; or
      3. (c) starts negotiations and thereafter discontinues same; or
      4. (d) starts negotiations and does not agree to undertake the objective of the negotiations within six months after the commencement of negotiations (or such longer period as the department determines will be promotive of attaining the objective of the negotiations); or
      5. (e) demonstrates to the municipality's satisfaction that it is unable to pay for the objective of the negotiation; and
   2. (ii) the department concurs in the reasonableness of the municipality's actions.
6. (4) Assist the department and other State agencies in compelling responsible parties to contribute to the cost of the remedial program, such assistance encompassing, at a minimum, the provision of all information which the municipality has or acquires during the course of project implementation, and thereafter, related to the identification of the responsible parties for the contaminants disposed at, or released from, the site.

7. (5) Cooperate with the State in its cost recovery efforts, including:

   1. (i) the development of evidence or legal argument with respect to:

      1. (a) the equitable allocation of costs to the municipality;
      2. (b) the liability for, and equitable allocation of costs to, other potentially responsible parties;
      3. (c) the implementation of the remedial program and the recoverability of particular costs incurred at the site; and
      4. (d) any other issues likely to substantially affect the State's recovery of costs; and

   2. (ii) negotiation of the settlement (if applicable).

      (e) Eligible costs.

      These costs are eligible for State assistance:

8. (1) The non-Federal share of the approved site remedial program cost less amounts collected from responsible parties or otherwise as contemplated by ECL article 27, title 13 including reasonable costs for engineering and architectural services, plans and specifications, and consultant and legal services.

9. (2) The cost of other activities directly incidental to the conduct of an approved site remedial program.

   (f) Ineligible costs.

   The following costs are not eligible for State assistance. Costs incurred:

10. (1) before the start date identified in the State assistance contract, including those to prepare and submit the State assistance application and those to procure and retain legal, engineering, and other services to undertake the project;
11. (2) to implement site management at the site after construction of the department-approved remedy;
12. (3) to redevelop the site that are not necessary to remediate the site;
13. (4) that are reimbursed by, or recovered from, any other responsible party or insurance carrier or the Federal government;
14. (5) outside the scope of, or in violation of, the order and/or State assistance contract;
15. (6) in violation of applicable statutes or regulations; and
16. (7) for which appropriations are not available.

(b) Eligible sites.

A site must be a class 1 or class 2 site on the Registry due to disposal of a contaminant.

(c) Eligible municipality.

A municipality must meet the following criteria to be eligible: