THIS REFERRAL REQUESTS INITIATION OF LITIGATION TO RECOVER RESPONSE COSTS INCURRED AT THE CANNELTON INDUSTRIES SITE IN SAULT STE. MARIE, MICHIGAN (THE SITE). THE SITE, WHICH IS LISTED ON THE NATIONAL PRIORITIES LIST (NPL), WAS THE LOCATION OF A TANNERY FACTORY. THE WASTE FROM THIS OPERA- TION CONTAMINATED THE SURROUNDING SOIL, SEDIMENT AND GROUND- WATER. THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (U.S. EPA OR EPA) CONDUCTED SEVERAL REMOVAL ACTIONS AT THE SITE, AS WELL AS A REMEDIAL INVESTIGATION AND FEASIBILITY STUDY (RI/FS). A RECORD OF DECISION (ROD) FOR THE SITE WAS ISSUED ON SEPTEMBER 30, 1992, AND A ROD AMANDMENT WAS PUBLISHED ON SEPTEMBER 27, 1996. THE POTENTIAL RESPONSIBLE PARTY (PRP), WHILE NOT CONDUCTING THE RI/FS, DID AGREE IN AN ADMINISTRATIVE ORDER ON CONSENT (AOC) TO CONDUCT THE REMEDIAL DESIGN OF THE SELECTED REMEDY AND, BY A UNILATERAL ADMINISTRATIVE ORDER (1998 UAO), TO CONDUCT THE REMEDIAL ACTION. AS OF DECEMBER 31, 1997, U.S. EPA HAS INCURRED $2,650,611.77 IN UNIMBURSED RESPONSE COSTS AT THE SITE. U.S. EPA'S OVERSIGHT COSTS FOR THE REMEDIAL DESIGN AND REMEDIAL ACTION ARE BEING PAID PURSUANT TO THE ISSUED AOC AND 1990 UAO, EXCEPT FOR A CHALLENGE TO ANNUAL ALLOCATION COSTS, WHICH TOTAL $40,556.14. THIS AMOUNT IS INCLUDED IN THE ABOVE FIGURE OF $2,650,611.77 FOR UNREIMBURSED COSTS. THUS, THE ONLY COSTS SOUGHT IN THIS REFERRAL BY EPA ARE PAST COSTS. THE CANNELTON INDUSTRIES, IN