- 1 -

Comments on EPA’s Identification of Priority Classes of Facilities for Development of 

CERCLA § 108(b) Financial Responsibility Requirements

Docket ID No. EPA-HQ-SFUND-2009-0265

These comments are submitted on behalf of the American Chemistry Council, the American 

Petroleum Institute, and the Society of Chemical Manufacturers and Affiliates in response to a 

notice published by the Environmental Protection Agency (EPA) on July 28, 2009, identifying 

hardrock mining as a priority class of facilities for the development of CERCLA § 108(b) 

financial responsibility requirements. We provide these comments to assist EPA as it formulates 

a policy decision by the end of 2009 regarding whether any additional classes warrant priority 

determination under CERCLA §108(b).

I. EPA Should Focus on the Types of Risks Contemplated in CERCLA.

If EPA believes any risk is currently associated with ―the production, transportation, treatment, 

storage, or disposal of hazardous substances,‖ then it should quantify that risk. Qualitative 

evaluations of risk or inferences of risk from data sources such as those used in the July 28 

Notice do not meet EPA’s goals or the statutory obligation to establish financial responsibility 

requirements ―consistent with the degree and duration of risk.‖ 

As EPA highlighted in the July 28 Notice, CERCLA § 108(b) repeatedly refers to the concept of 

―risk.‖ Any financial responsibility requirements imposed under that section must be (1) 

―consistent with the degree and duration of risk associated with the production, transportation, 

treatment, storage, or disposal of hazardous substances.‖ Priority is to be given to classes of 

facilities that present (2) ―the highest level of risk of injury.‖ The level of financial 

responsibility must protect against (3) ―the level of risk which the President believes is 

appropriate based on the payment experience of the Fund, commercial insurers, courts 

settlements and judgments, and voluntary claims satisfaction.‖ 74 Fed. Reg. at 37214 (quoting 

42 U.S.C. § 9608(b)). 

All references to risk in § 108(b) are in the present tense. The first two references to risk ((1) 

and (2) above) clearly refer to the current or future risk of mismanagement of hazardous 

substances. The third reference to risk ((3) above) clearly relates to financial risk, i.e., the risk 

that, as a result of current or future mismanagement of hazardous substances, future Superfund 

Trust Fund-financed remedial action will be necessary. Under the statute, both the risk of 

mismanagement and financial risk are forward-looking, and an evaluation of both is needed and 

required before EPA may decide to impose financial responsibility requirements on a class of 

facilities. 

The section’s consistent future orientation is logical because the purpose of financial 

responsibility in the environmental context is to ensure that an ongoing business has made 

sufficient provision for future cleanup costs that, if the business fails, those funds will be 

available for any required cleanup of that business’s facilities. Financial responsibility 

requirements are calculated by assessing those future costs, using conservative assumptions. 

See, e.g., 40 C.F.R. § 264.142 (rules for estimating the cost of closure of a hazardous waste 

treatment, storage or disposal facility (TSD) under the Resource Conservation and Recovery Act 
- 2 -

(RCRA)). Financial responsibility requirements are not a means to remedy legacy contamination 

from past practices of defunct operations. 

Another corollary of the section’s future orientation is that EPA’s evaluation of the risk of 

mismanagement must take into account the current legal constraints affecting environmental 

management. Any risks posed in the future by a facility’s operations will, by definition, be 

occurring at a time when extensive regulation will be in force. Current environmental laws and 

rules have wrought dramatic changes in business operations, particularly those involving waste 

management, and it would be arbitrary and capricious for EPA to ignore that fact by considering 

practices that no longer occur. Only by considering existing requirements – which also include 

the prospect of Superfund liability, the combined operations of generally accepted accounting 

principles and SEC disclosure requirements, possible tort liability, and insurance underwriting 

standards – can EPA gather information regarding the current ―degree and duration of risk 

associated with the production, transportation, treatment, storage, or disposal of hazardous 

substances.‖

Although EPA's July 28 Notice acknowledges the clear statutory language, the July 28 Notice 

appears to have strayed from the statutory limitations by examining studies, reports, and analyses 

that focus on legacy contamination and the potential risk posed to human health and the 

environment by that legacy contamination. Such a retrospective perspective contravenes the 

statutory language and is improper. For its December notice, we strongly urge EPA to modify its 

methodology to focus solely on risks that could occur in the future, given the modern 

environmental regulations and other constraints under which facilities operate.

II. We Urge EPA to Revisit the Factors Identified in the July 28 Notice, and the Type of 

Information Used To Identify Risk, Before Making a Priority Determination for 

Our Industries. 

In the July 28 Notice, EPA appears to have used eight factors to evaluate risk to human health 

and the environment, relying upon Toxic Release Inventory (TRI) data, Government 

Accountability Office (GAO) reports, EPA Inspector General (IG) reports, National Research 

Council (NRC) reports, EPA’s CERCLIS database, EPA’s confidential financial databases, 

EPA’s Markets and Technology Trends report, and the Environmental Working Group’s website 

on mining company ownership. However, the eight factors EPA identified in its July 28 Notice 

as relevant, and the information used to evaluate those factors, do not support a decision to 

impose financial responsibility requirements, since the factors are not directly related to the 

statutory considerations. We urge EPA to revisit its factor selection, choice of data, and process 

for evaluating risk to human health and the environment prior to making further policy decisions 

and identifying additional classes for future regulation under CERCLA § 108(b). 

The first two factors identified by EPA in the July 28 Notice are:

annual amounts of hazardous substances released to the environment, and

the number of facilities in active operation and production.
- 3 -

Information on these factors is derived from data available from the TRI. While TRI data do 

report current, not legacy, releases, they do not provide information on ―the degree and duration 

of risk associated with the production, transportation, treatment, storage, or disposal of hazardous 

substances.‖ As EPA itself advises, ―TRI data do not reveal whether or to what degree the 

public is exposed to listed chemicals.‖ See 

http://www.epa.gov/tri/tridata/tri01/press/FactorsToConPDF.pdf. In fact, TRI data generally 

encompass releases that are permitted under the Clean Air Act, the Clean Water Act, or the Safe 

Drinking Water Act, as well as the lawful disposal of hazardous substances. Accordingly, we 

believe that TRI data cannot help predict the risk associated with potential mismanagement. 

The next three factors are: 

the physical size of the operation, 

the extent of environmental contamination, and 

the number of sites in CERCLIS. 

Information on these factors can be derived from the CERCLIS database for sites on the 

Superfund National Priorities List (NPL), and EPA extracted further information with respect to 

mining from various GAO, IG, and NRC reports. However, when the July 28 Notice presented 

information from CERCLIS and various reports, it failed to distinguish between ongoing 

operations and legacy contamination. Mining practices from the 19th and early 20th centuries 

have no bearing on current ―risk associated with the production, transportation, treatment, 

storage, or disposal of hazardous substances.‖ The fact that many large Superfund sites arose 

from a single class of facilities with extensive contamination in the CERCLIS database is 

irrelevant if all of those sites represent contamination from discontinued practices. As a result, 

the information presented in the Notice with respect to these three factors has no bearing on a 

determination that financial assurance is appropriate for the mining sector, and similar 

information cannot be used in the future to identify any other sector. 

The sixth factor used by EPA in the July 28 notice is:

government expenditures.

To obtain these data, EPA relies on a non-public, confidential database called Superfund eFacts. 

As required by the Administrative Procedure Act, we request that EPA make this database 

publicly available to allow for comment on the relevance of the information to any determination 

made under CERCLA § 108(b). If the database includes legacy sites, these data cannot inform 

determinations of whether a risk of mismanagement remains or the degree of financial risk 

associated with any remaining mismanagement risk. 

The seventh factor used by EPA in the July 28 notice is:

projected clean-up expenditures.

EPA provides projected site costs for a single mining site (which is currently operating with 

financial guarantees in place by the ―first level‖ corporate parent), again, based on information in 
- 4 -

the confidential eFacts database. EPA also relies on estimates from GAO, IG and NRC reports. 

As discussed above, these reports do not provide relevant information because they do not 

exclude legacy contamination. Finally, EPA relies upon its Market Trends Report (EPA 542-R04-015, ―Cleaning Up the Nation’s Waste Sites: Markets and Technology Trends‖ (2004)). The 

information in the Market Trends Report is not sufficient to support regulatory decision-making. 

This report is intended to encourage remediation companies to continue to invest in remediation 

technologies. ―It was prepared to aid those who are developing, commercializing, and marketing 

new technologies to meet future cleanup demand.‖ Market Trends Report, at 1-1. It is not a 

predictor of cleanup expenditures. ―It cannot be overemphasized that the estimates in this report 

are just estimates.‖ Market Trends Report, at 1-3. And, like the GAO, IG, and NRC reports, the 

Market Trends Report does not distinguish between legacy contamination and current practices. 

The information in this report cannot be used for the purpose of evaluating whether it is 

appropriate to impose financial responsibility requirements on any sector. 

The eighth and final factor used by EPA in the July 28 notice is:

corporate structure and bankruptcy potential.

To evaluate corporate structure and bankruptcy potential, the July 28 Notice relies on one 10-K 

submission from one company. It also references a GAO report that merely makes a general 

comment on corporation law: ―[F]or example, using this structure, a subsidiary that is engaged 

in a business that is at risk of incurring substantial liability, such as mining or chemical 

manufacturing, can protect its assets by transferring the most valuable ones—such as equipment 

and patents—to a related entity, such as the parent or other subsidiary engaged in less risky 

endeavors.‖ GAO-05-658, Environmental Liabilities: EPA Should Do More to Ensure That 

Liable Parties Meet Their Cleanup Obligations (2005), at 21. The fact that corporate structures 

can be used to limit liabilities is not a basis for imposing financial responsibility requirements on 

any specific sector. The July 28 Notice then discusses four mining companies that have entered 

bankruptcy, again not distinguishing between legacy contamination and potential 

mismanagement that is likely to occur today. Finally, to obtain information on corporate 

structure in the mining sector, EPA relies on the web site of an environmental activist group, the 

Environmental Working Group. 74 Fed. Reg. at 37218 n.40. We do not believe that EPA 

should uncritically accept the unilateral allegations of activist groups to support regulatory 

decision-making. EPA has models that estimate the risk of bankruptcy that it uses when 

developing financial assurance regulations under RCRA. However, in the July 28 Notice, EPA 

does not appear to have evaluated the allegations by undertaking its own fact-finding, analysis, 

or modeling. 

III. We Strongly Encourage EPA to Use the Relevant Information EPA Has Developed 

To Evaluate the Need for Action Under CERCLA § 108(b). 

In 2005, EPA initiated an Action Plan for implementing the recommendations of the 120-Day 

Study of the Superfund Program (hereinafter Superfund 120-Day Study). Under that plan, EPA 

conducted an analysis to determine whether action under § 108(b) of CERCLA was appropriate 

(Recommendation 12). This analysis resulted in two exhaustive studies specifically designed to 

help identify classes of facilities for priority consideration under CERCLA § 108(b). These 
- 5 -

studies, labeled ―draft‖ and dated February 2009, are titled: ―CERCLA 108(b) Financial 

Responsibility, Phase 1: Preliminary Analysis‖ (hereinafter Phase 1 Report) and ―CERCLA 

108(b) Financial Responsibility, Phase 2 Preliminary Analysis‖ (hereinafter Phase 2 Report). 

They are both available in the administrative record for the July 28 Notice. Another analysis, 

also recommended by the 120-Day Study (Recommendations 10 and 11), on the sufficiency of 

financial assurance requirements imposed on hazardous waste TSDs regulated under RCRA also 

provides relevant information. See ―Analysis of 40 Potential TSDs: Potential RCRA Treatment, 

Storage, and Disposal Facilities Proposed to the Superfund National Priority List after 1990,‖ 

Office of Solid Waste, January 19, 2007 (hereinafter 40 TSD Study). We recommend that EPA 

utilize these studies as it determines its future actions.

However, instead of relying on the reports developed from four years of exhaustive analysis 

directed to the precise question at issue, EPA appears to have chosen to rely on extraneous and 

potentially irrelevant information. We strongly recommend that EPA revise its approach to 

prioritization before its December action.

The decision to abandon the results of four years of effort is explained in the administrative 

record for the July 28 Notice in a July 2, 2009 memorandum to the record from James R. 

Berlow, Director, Program Implementation and Information Division. The memorandum asserts 

that the CERCLA § 108(b) reports are deficient because they exclude consideration of sites listed 

on the NPL before 1990. Because CERCLA § 108(b) addresses prospective, not legacy, risks, 

excluding sites listed before 1990 is hardly a deficiency in EPA’s previous analysis – it is a 

requirement. A noted above, EPA’s failure to exclude legacy contamination is a serious flaw in 

the analysis described in the July 28 Notice. 

As discussed in the Phase 1 Report, EPA began its CERCLA 108(b) analysis with a review of 

NPL sites because NPL sites generally represent the highest risk. EPA then excluded sites that 

are RCRA TSD sites because these sites are already subject to financial responsibility 

requirements. This exclusion not only makes policy sense, it is required by the language of the 

statute. CERCLA § 108(b) instructs EPA to consider only classes of facilities that are not 

subject to RCRA subtitle C. See 42 U.S.C. § 9608(b)(1) (directing promulgation of financial 

responsibility requirements ―for facilities in addition to those under subtitle C of the Solid Waste 

Disposal Act‖). EPA then excluded federal facility sites, the cleanup of which is funded by the 

United States, and sites listed before 1990. Explaining the decision to exclude sites listed before 

1990, EPA noted:

[M]any Superfund sites are proposed to the NPL strictly as a result of ―legacy‖ 

contamination, i.e., sometimes the result of decades, even centuries of practices that were 

not subject to modern waste management regulations. This analysis aims to identify 

those classes of facilities that still pose threats, even under modern waste management 

regulations. For the purpose of narrowing the initial universe of classes of facilities to 

what would likely be the Agency’s highest priorities, EPA decided to focus on those NPL 

sites that were not listed on the NPL for legacy contamination. In order to distinguish 

legacy contamination, EPA chose a benchmark year of 1990, and considered sites listed 

after 1990 as not resulting from legacy waste; this left 306 sites of the original 1,618 total 

sites. EPA selected the year 1990 because much of the framework for the federal waste 
- 6 -

management standards under RCRA has been put in place, many state programs were 

well-developed, and maturing and Superfund liability was generally understood by 

operating industries. 

Phase I Report, at ES-2. Again, this decision follows the direction in the statute to examine sites 

―in addition to those under Subtitle C,‖ that is, facilities subject to Subtitle C regulation. 

It is important to note that the decision to eliminate from consideration sites listed before 1990 

also is consistent with the analysis performed by EPA to carry out Recommendations 10 and 11 

of the Superfund 120-Day Study. Specifically, to evaluate whether changes to RCRA financial 

assurance requirements were needed, EPA carried out an analysis only of TSDs listed on the 

NPL after 1990, because the Superfund deferral policy was then in place and most of the 

significant regulations required by the Hazardous and Solid Waste Amendments of 1984 had 

been promulgated. See 40 TSD Study, at 3. 

The July 28 Notice, in contrast, provides no rationale for why EPA now considers legacy 

contamination relevant to financial responsibility determinations. While an Agency can change 

its mind, it cannot do so without a reasoned analysis to support the change. See Motor Vehicle 

Mfrs. Ass'n. v. State Farm Mutual, 463 U.S. 29 (1983). 

EPA’s Phase 1 CERCLA § 108(b) analysis closely examined the 306 sites listed after 1990 to 

determine which sites had been listed for non-legacy contamination, i.e., contamination resulting 

from operations that continued after 1990. This analysis left a universe of 70 sites in nine general 

categories.1 Even at these sites, the vast majority began facility operations before 1990. In fact, 

most began operations before 1974, so it is reasonable to assume that most of the contamination 

that led to the NPL listing occurred before RCRA regulations controlled the management of 

hazardous waste. See Phase 1 report, at 9. After completing Phase 1 of its CERCLA § 108(b) 

analysis, EPA proceeded to Phase 2 and carried out an extensive analysis of the 70 sites and the 

classes of facilities they represent. See Phase 2 Report.

The Phase 1 and 2 Reports document several very important findings:

First, the number of facilities in each class that ended up on the NPL is very small, 

compared to the universe of operating facilities.

Second, a handful of high-cost sites represent the bulk of EPA expenditures.

Third, although site operations were ongoing at the 70 facilities at the time they were 

listed, it is reasonable to assume that the contamination that resulted in NPL listing 

occurred before 1990. Thus, it is questionable whether post-1990 contamination actually 

gave rise to any NPL listings.

Finally, increased environmental regulation of many classes of facilities continued after 

1990, and operations at many of the 70 sites identified by EPA’s Phase 1 analysis were 

discontinued in the early 1990s, possibly as a result of that increased regulation. 

 

1

At 202 sites, all the activities causing the contamination ceased before 1990. At 34 sites, there was insufficient 

data to identify the cause of contamination or the dates of operation. See Phase 1 Report at 5. 
- 7 -

For example, in the Phase 2 Report, EPA identified only five sites in the chemical manufacturing 

sector: two petrochemical manufacturers, one alkali and chlorine manufacturer, one cyclic crude 

and intermediate manufacturer, and one pesticide manufacturer. At the petrochemical 

manufacturing sites, operations began in 1905 and 1955 and ceased in the 1990s. Given this 

history, these sites almost certainly are not evidence of current mismanagement of hazardous 

substances that pose a risk that can be addressed by financial responsibility. 

The alkali and chlorine manufacturing site identified by EPA began operation in 1953 and ceased 

operating in 1991. This site also does not present evidence of current mismanagement of 

hazardous substances that pose a risk that can be addressed by financial responsibility. 

The cyclic crude and intermediate manufacturing site identified by EPA began operations in the 

1940s and ceased operating in 1991. This site, too, does not present evidence of current 

mismanagement of hazardous substances that pose a risk that can be addressed by financial 

responsibility. 

EPA provides no information in the Phase 2 report about the pesticide manufacturing site, 

Pesticide Warehouse III. However, it is important to note that operations at that site began in 

1954, and cleanup is being funded by the responsible parties, including the Puerto Rico Land 

Authority, which operated the site from 1954 to 1996. Thus, this site does not provide sufficient 

justification to impose financial assurance requirements on any industrial sector. 

The chemical industry in the United States is a $689 billion enterprise employing 850,000 people 

nationwide.2 The petrochemical industry sector alone is a $101 billion industry employing over 

82,000 people. Similarly, the chlor-alkali sector alone is a $6.37 billion industry employing over 

6,300 people. In its Phase 2 Report, EPA identifies over $4 billion in imports and exports from 

cyclic crude and intermediate manufacturers in 2002 and notes that this sector employs over 

6,000 people. Yet, according to EPA’s Phase 2 report, the five sites it identified in the chemical 

manufacturing sector each had site costs of approximately $3 million. These costs can in no way 

justify imposing financial responsibility requirements on any part of the chemical industry. Any

level of financial responsibility imposed on any part of this industry would not meet the statutory 

standard, which requires financial responsibility to be ―consistent with the degree and duration of 

risk.‖

EPA has therefore developed a record that supports a determination that there is not a sufficient 

remaining risk to justify imposing financial responsibility requirements on any class of chemical 

and petrochemical facilities. It is clear from reviewing the few examples EPA was able to 

identify that these facilities were the tail end of an era of business practices that has now died 

out, at least among the responsible sorts of businesses that would comply with a financial 

responsibility requirement if there were one. In 2009, ―the degree and duration of risk associated 

with the production, transportation, treatment, storage, or disposal of hazardous substances‖ is so 

low that any amount of financial responsibility would not be ―consistent with the degree and 

duration of risk‖ that remains. That may not have been the case in 1980, when CERCLA was 

 

2

See American Chemistry Council, GUIDE TO THE BUSINESS OF CHEMISTRY (2009).
- 8 -

enacted, or even in 1990 – nineteen years ago. However, environmental regulation is vastly 

different today. 

IV. Before Identifying Any Additional Classes of Facilities, EPA Must Identify Current

Risks and Determine That Financial Responsibility Requirements Can Effectively

Reduce Those Risks. 

At the end of the July 28 Notice, EPA identifies eight factors that it may use to identify 

additional classes of facilities, only three of which overlap with the eight factors used in the July 

28 Notice: 

the amounts of hazardous substances released to the environment,

the toxicity of these substances,

the existence and proximity of potential receptors,

contamination historically found from facilities,

whether the causes of this contamination still exist,

experiences from federal cleanup programs,

projected costs of federal cleanup programs, and

corporate structures and bankruptcy potential.

74 Fed. Reg. at 37218. 

EPA says it also intends ―to consider whether financial responsibility requirements under 

CERCLA 108(b) will effectively reduce these risks.‖ 

We strongly urge EPA to narrow its focus to risks that financial responsibility requirements can 

effectively reduce by eliminating consideration of legacy contamination. As noted in Part I, 

above, any financial responsibility requirements imposed under § 108(b) must be ―consistent 

with the degree and duration of risk associated with the production, transportation, treatment, 

storage, or disposal of hazardous substances.‖ Thus, we believe EPA should begin its analysis 

with an examination of the degree to which these risks remain, given modern environmental 

regulation. This means EPA must first eliminate from consideration all risks posed by legacy 

contamination. As the Agency previously determined when carrying out recommendations of 

the Superfund 120-Day Study, discussed above, risks posed by legacy contamination from the 

historic management practices of defunct operations cannot be reduced by imposing financial 

assurance on facilities operating today. And, as EPA found in its previous CERCLA § 108(b) 

analyses, once the legacy sites are eliminated, very little risk remains to be addressed. 

EPA’s previous analysis identified only 70 sites with any non-legacy (i.e., post-1990) 

contamination, and most of those sites had extensive contamination from earlier operations as 

well. Thus, EPA should begin its analysis with those 70 sites and a determination of ―whether 

the causes of this contamination still exist.‖ Once that analysis is complete, it is highly unlikely 

that EPA will be able to demonstrate that any significant current ―risk associated with the 

production, transportation, treatment, storage, or disposal of hazardous substances‖ exists. 

Without a statutory basis for requiring financial responsibility under CERCLA § 108(b), an 

examination of the additional factors is unauthorized. 
- 9 -

In the July 28 Notice, EPA lists five classes of facilities that it intends to examine for its planned 

December 2009 Notice identifying additional classes of facilities for priority consideration for 

the development of CERCLA § 108(b) financial responsibility requirements. Included on that 

list are chemical manufacturers and hazardous waste generators. Chemical manufacturers are 

discussed above. With respect to hazardous waste generators, it is important to note that EPA’s 

Phase 1 and Phase 2 Reports did not provide any information suggesting that hazardous waste 

generators, as a class of facilities, present a current risk. 

EPA reportedly intends to use Biennial Reports filed by large quantity generators under RCRA 

as a data source for the December 2009 Notice.3 Like TRI data, RCRA Biennial Reports provide 

information about hazardous substances that are being properly managed in accordance with 

modern environmental laws. Data in the Biennial Reports are not an indicator of 

mismanagement and provide no information on ―the degree and duration of risk associated with 

the production, transportation, treatment, storage, or disposal of hazardous substances.‖ There 

were over 16,000 large quantity generators of hazardous waste in 2007, yet EPA identified only 

70 NPL sites with any contamination from post-1990 activities. This indicates that the 

regulation of hazardous waste is highly successful and there is no basis for imposing financial 

responsibility requirements on hazardous waste generators. 

Finally, even if EPA finds isolated, anecdotal incidents of mismanagement, those cannot be a 

basis for imposing financial responsibility requirements on all hazardous waste generators. As 

noted above, the chemical industry alone is a $689 billion enterprise employing over 850,000 

people. The oil and gas industry is a $1 trillion industry that supports over 9 million American 

jobs. Facilities in these industries and others may generate hazardous wastes, but modern 

environmental regulation manages the risk associated with the management of those wastes so 

any level of financial assurance imposed on hazardous waste generators would be grossly 

disproportionate to ―the degree and duration of risk.‖

The list of five classes of facilities in the July 28 Notice is essentially the same as the list of 

facilities identified in the March 2008 lawsuit filed by the Sierra Club and others seeking to 

compel EPA action. As noted above, EPA cannot rely on the unilateral allegations of activist 

groups to support regulatory decision-making. There is nothing in EPA’s record to support 

identifying hazardous waste generators as a priority class of facilities. 

V. Financial Responsibility Requirements under CERCLA § 108(b) Are Likely To

Have A Significant Adverse Impact on Small Businesses and Companies that

Export U.S. Products.

As discussed above, CERCLA does not authorize EPA to impose financial responsibility 

requirements on any class of facilities because there is not sufficient remaining risk. Any level 

of financial responsibility that is applied to an entire industry sector will be disproportionate to 

the ―level of risk‖ remaining in this era of modern environmental and business regulation. As a 

 

3

EPA staff presentation to the Small Business Administration Environmental Roundtable (Sept. 10, 2009).
- 10 -

result, financial responsibility requirements would be simply an inappropriate and burdensome 

tax on U.S. companies. Many U.S. companies are small businesses with small profit margins. 

Any company’s ability to pass this tax on to consumers will be limited, particularly if a company 

engages in international trade. If a U.S. company tries to pass the costs of financial 

responsibility on to consumers, companies outside the U.S., which will not have these additional 

costs, will be able to under-cut their prices, reducing U.S. competitiveness and U.S. exports. 

Should EPA decide to identify waste generation as a priority category, we recommend that EPA 

convene a small business review panel. The Administrative Procedure Act (APA) will apply to 

any rulemaking setting financial responsibility requirements, and the Regulatory Flexibility Act 

(RFA) likely will as well.4 Under the RFA, EPA must complete a small entity review panel for 

every regulatory action that would have a significant economic impact on a substantial number 

of small entities.5 Waste generation includes many small firms, and financial responsibility 

requirements are likely to have a significant economic impact on a substantial number of firms. 

Especially in these times of hardship, EPA must do everything it can to ensure that it does not 

inadvertently close marketplaces to the drivers of economic growth. 

VI. Conclusion.

Subtitle C of RCRA was enacted in 1976 to provide for protective waste management. It 

provides for financial assurance by regulated TSDs. CERCLA was enacted four years later 

primarily to address past contamination. Since not all potential Superfund sites were covered by 

RCRA, Congress provided EPA with the authority to impose financial responsibility 

requirements on facilities not regulated under RCRA. During the ensuing decades, EPA focused 

on getting RCRA regulations in place instead of focusing on CERCLA financial assurance. That 

has proved to be a prudent decision because now, in 2009, EPA’s own CERCLA § 108(b) Phase 

1 and Phase 2 analyses lead to the conclusion that CERCLA financial assurance requirements are 

not necessary. Modern environmental regulations are adequately addressing the risk associated 

with ―the production, transportation, treatment, storage, or disposal of hazardous substances,‖ 

and are preventing new contamination that would result in the creation of new NPL sites. EPA 

should acknowledge its successes and focus its next notice on explaining to the public that risks 

associated with the current management of hazardous substances are being addressed and human 

health and the environment is being protected, obviating the need for financial responsibility 

under CERCLA § 108(b). 

 

4

Arguably, EPA’s required publication of notice of priority may qualify as a legislative rulemaking, triggering the 

APA’s notice and comment requirements and the requirements of the RFA. Though CERCLA does not specify a 

procedure for rulemaking to set priorities, it does require a publication of priorities, and the statute does not exempt 

the agency from general rulemaking procedures. Moreover, regardless of how its priority determination is regarded, 

EPA will be required to engage in notice and comment rulemaking to establish financial responsibility requirements, 

triggering the requirements of the RFA. 

5

5 U.S.C. § 609(b).