The Financial Implications of Releasing Small Firm and Small Volume Contributors from Superfund Liability

The Superfund programme provides for the clean up of Britain's worst toxic waste sites. This report examines the costs of releasing firms that are small in size or played only a minor role at the site from libility for clean up costs. 1. Proposals To Reform Superfund's Liability Provisions -- 1.1. The Superfund Program -- 1.2. Proposals To Exempt Parties From Superfund Liability -- 1.3. Contribution Of This Study -- 1.4. Organization Of The Report -- 2. Data And Methods -- 2.1. Data -- 2.2. Analysis Methods -- 3. Type And Size Of Prps At Npl Sites -- 3.1. Types Of Prps At Nonfederal Superfund Sites -- 3.2. Distribution Of Business Firms By Size At Nonfederal Superfund Sites -- 4. Distribution Of Cleanup Costs By Prp Type And Size -- 4.1. Distribution Of Cleanup Costs At Owner-operator Sites -- 4.2. Distribution Of Cleanup Costs At Generator/transporter Sites -- 4.3. Estimated Proportion Of Cleanup Costs Borne By Small Firms -- 4.4. Cleanup Costs Potentially Transferred To Epa By Liability Exemptions -- 5. Releasing Small-volume Contributors From Superfund Liability -- 5.1. Representativeness Of Data Used In Analysis -- 5.2. Distribution Of Volumetric Share At G/t Sites -- 5.3. Distribution Of Volume-based Cleanup Costs By Volumetric Share Category -- 6. Effects Of Liability Reforms In The Prps That Remain Liable -- 6.1. Description Of Method And Data -- 6.2. Distribution Of Number Of Firms And Actual Cleanup Expenditures By Firm Size At 18 Sites -- 6.3. Implications For Distribution Of Benefits Among Prps When Small Or Small-volume Prps Are Released From Liability -- 7. Summary And Conclusions -- 7.1. Effects Of Proposals To Release Small Business Firms From Liability -- 7.2. Effects Of Proposals To Release Small-volume Prps From Liability -- 7.3. Effects Of Liability Reforms On Prps Remaining Liable At The Sites -- 7.4. Concluding Comments -- App. A. Rpm Site Survey -- App. B. Sampling Design And Integration Of Rpm And Sets Data -- App. C. Statistical Methods. Lloyd Dixon. Mr-1171-epa. Prepared For The U.s. Environmental Protection Agency. Includes Bibliographical References (p. 53). Recent congressional proposals to reform the federal Superfund program release potentially responsible parties (PRPs) that are small in size or that only played a minor role at the site from liability for cleanup costs. These reforms transfer the cleanup costs of parties released to the Superfund Trust Fund. This report estimates the number of PRPs that would be released and the cleanup costs that would be transferred to the Fund by recent proposals. It also estimates the costs transferred to the Fund per firm released and the financial consequences for those PRPs that remain liable. Releasing from liability firms that contributed only a small proportion of the waste to a site appears to be more cost-effective than releasing small firms. In addition, although there is evidence that large firms will benefit from the transfer of small firms' costs to the Fund, the effect of such a transfer is ambiguous. Implementing reforms that would release small firms or small-volume firms and transferring their volume-based cleanup costs to the Fund may prove costly in terms of additional transaction costs PREFACE......Page 1 FIGURES......Page 2 TABLES......Page 3 SUMMARY......Page 5 ACKNOWLEDGMENTS......Page 14 1. PROPOSALS TO REFORM SUPERFUND’S LIABILITY PROVISIONS......Page 15 2. DATA AND METHODS......Page 17 3. TYPE AND SIZE OF PRPs AT NPL SITES......Page 27 4. DISTRIBUTION OF CLEANUP COSTS BY PRP TYPE AND SIZE......Page 34 5. RELEASING SMALL-VOLUME CONTRIBUTORS FROM SUPERFUND LIABILITY......Page 46 6. EFFECTS OF LIABILITY REFORMS ON THE PRPs THAT REMAIN LIABLE......Page 50 7. SUMMARY AND CONCLUSIONS......Page 56 Appendix B......Page 61 Appendix C......Page 63 REFERENCES......Page 65 Policymakers have been considering various modifications of Superfund's liability provisions, including exempting small businesses and parties that played only a minor role at a site from liability.