[Federal Register Volume 85, Number 35 (Friday, February 21, 2020)]
[Proposed Rules]
[Pages 10128-10146]
[FR Doc No: 2020-03401]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 320

[EPA-HQ-OLEM-2019-0086; FRL-10005-53-OLEM]
RIN 2050-AH05

Financial Responsibility Requirements Under CERCLA Section 108(b)
for Facilities in the Chemical Manufacturing Industry

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA or the Agency) is
proposing to not impose financial responsibility requirements for
facilities in the Chemical Manufacturing industry under Section 108(b)
of the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA). Section 108(b) addresses the promulgation of
regulations that require classes of facilities to establish and
maintain evidence of financial responsibility consistent with the
degree and duration of risk associated with the production,
transportation, treatment, storage, or disposal of hazardous
substances.

DATES: Comments must be received on or before April 21, 2020.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
SFUND-2019-0086, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the Web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: For more information on this document,
contact Charlotte Mooney, U.S. Environmental Protection Agency, Office
of Resource Conservation and Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC 20460; telephone<PHONE_NUMBER> or
(email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

How can I get copies of this document and other related information?

    This Federal Register proposed rule and supporting documentation
are available in a docket EPA has established for this action under
Docket ID No. EPA-HQ-OLEM-2019-0086. All documents in the docket are
listed in the http://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly
available docket materials are available either electronically at
http://www.regulations.gov or in hard copy at EPA/DC, WJC West, Room
3334, 1301 Constitution Ave. NW, Washington, DC 20460. This Docket
Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (202)
566-0276. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m.,
Monday through Friday, excluding legal holidays. The telephone number
for the Public Reading Room is<PHONE_NUMBER>.

Table of Contents

I. Executive Summary
    A. Overview
    B. Purpose of This Action
    C. Summary of the Major Provisions of the Regulatory Action
    D. Costs and Benefits of the Regulatory Action
II. Authority
III. Background Information
    A. Overview of Section 108(b) and other CERCLA Provisions
    B. History of Section 108(b) Rulemakings
    1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
    2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
    3. 2014 Petition for Writ of Mandamus
    4. Additional Classes 2017 Notice of Intent To Proceed With
Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed Rule
VI. Chemical Manufacturing Industry Overview
    A. Identification of Chemical Manufacturing Industry
    B. Overview of Current Industry Operation
    C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
    A. Cleanup Site Evaluations
    B. Role of Federal and State Programs and Voluntary Protective
Industry Practices at Facilities in the Chemical Manufacturing
Industry
    C. Existing State and Federal Financial Responsibility Programs
    D. Compliance and Enforcement History
VIII. Decision to Not Propose Requirements
    A. Solicitation of Public Comment on This Proposal
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
    I. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations

I. Executive Summary

A. Overview

    Section 108(b) of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) directs EPA to develop
regulations that require classes of

facilities to establish and maintain evidence of financial
responsibility consistent with the degree and duration of risk
associated with the production, transportation, treatment, storage, or
disposal of hazardous substances. The statute further requires that the
level of financial responsibility be established to protect against the
level of risk that the President, in his discretion, believes is
appropriate, based on factors including the payment experience of the
Hazardous Substance Superfund (Fund). The President's authority under
this section for non-transportation-related facilities has been
delegated to the EPA Administrator.
    This proposal is based on EPA's interpretation of the statute and
analysis of its record developed for this rulemaking.\1\ EPA has
analyzed the need for financial responsibility based on risk of
taxpayer funded cleanups at facilities in the Chemical Manufacturing
Industry operating under modern management practices and modern
environmental regulations, i.e., the type of facilities to which
financial responsibility regulations would apply.
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    \1\ EPA's interpretation of the statute was upheld by the D.C.
Circuit in Idaho Conservation League v. Wheeler, No. 18-1141, slip
op. at 9-12 (D.C. Cir. July 19, 2019).
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    That risk is identified by examining the management of hazardous
substances at such facilities, as well as by examining Federal and
state regulatory controls on that management and Federal and state
financial responsibility requirements.
    Based on that examination, EPA is proposing that, in the context of
CERCLA section 108(b), the degree and duration of risk associated with
the modern production, transportation, treatment, storage or disposal
of hazardous substances by the Chemical Manufacturing Industry does not
present a level of risk of taxpayer funded response actions that
warrant imposition of financial responsibility requirements for this
sector.
    In August 2014, the Idaho Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a
Better Environment filed a lawsuit in the U.S. Court of Appeals for the
District of Columbia Circuit, seeking a writ of mandamus requiring
issuance of CERCLA Section 108(b) financial responsibility rules for
the hardrock mining industry, and for the three additional industries
identified by EPA in the 2010 Advance Notice of Proposed Rulemaking
(ANPRM),\2\ that is, Chemical Manufacturing; Petroleum and Coal
Products Manufacturing; and Electric Power Generation, Transmission,
and Distribution. Following oral arguments, EPA and the petitioners
submitted a Joint Motion for an order on Consent, filed on August 31,
2015, which included a schedule for further administrative proceedings
under CERCLA Section 108(b). The court order granting the motion was
issued on January 29, 2016. A copy of the order can be found in the
docket for this rulemaking.
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    \2\ 75 FR 816 (Jan. 6, 2010).
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    In addition to requiring EPA to publish a proposed rule on hardrock
mining financial requirements by December 1, 2016, the January 2016
order required EPA to sign for publication in the Federal Register a
determination whether EPA will issue a notice of proposed rulemaking on
financial assurance requirements under Section 108(b) in the (a)
chemical manufacturing industry; (b) petroleum and coal products
manufacturing industry; and (c) electric power generation,
transmission, and distribution industry by December 1, 2016. EPA signed
the required determination on December 1, 2016; the notice was
published on January 11, 2017 \3\ and announced EPA's intent to proceed
with rulemakings for all three of the classes.
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    \3\ 82 FR 3512 (Jan. 11, 2017).
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B. Purpose of This Action

    The purpose of this action is to propose that financial
responsibility requirements under CERCLA Section 108(b) at facilities
in the Chemical Manufacturing industry are not necessary and to solicit
comments on this proposal. EPA has reached this conclusion based on the
analyses described in Parts VI and VII of this proposal. The evidence
provided in these analyses contributed to EPA's proposed finding that
the degree and duration of risk posed by the Chemical Manufacturing
industry does not warrant financial responsibility requirements under
CERCLA Section 108(b).
    The analysis and proposed finding in this proposal are not
applicable to and do not affect, limit, or restrict EPA's authority (1)
to take a response action or enforcement action under CERCLA with
respect to any facility in the Chemical Manufacturing industry,
including any currently operating facilities or those described in this
proposal and in the background documents for this proposal, and (2) to
include requirements for financial responsibility as part of such
response action. The set of facts in the rulemaking record related to
the individual facilities discussed in this proposed rulemaking support
the Agency's proposal not to issue financial responsibility
requirements under Section 108(b) for this class. At the same time, a
different set of facts could demonstrate a need for a CERCLA response
action at an individual site. This proposed rulemaking also does not
affect the Agency's authority under other authorities that may apply to
individual facilities, such as the Clean Air Act (CAA), the Clean Water
Act (CWA), the Resource Conservation and Recovery Act (RCRA), and the
Toxic Substances Control Act (TSCA).

C. Summary of the Major Provisions of the Regulatory Action

    EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Chemical Manufacturing industry. Thus, there are no proposed regulatory
provisions associated with this action.

D. Costs and Benefits of the Regulatory Action

    EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Chemical Manufacturing industry. EPA, therefore, has not conducted a
Regulatory Impact Analysis for this action.

II. Authority

    This proposed rule is issued under the authority of Sections 101,
104, 108 and 115 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C 9601,
9604, 9608 and 9615, and Executive Order 12580 (52 FR 2923, January 29,
1987).

III. Background Information

A. Overview of Section 108(b) and Other CERCLA Provisions

    CERCLA, as amended by the Superfund Amendments and Reauthorization
Act of 1986 (SARA), establishes a comprehensive environmental response
and cleanup program. Generally, CERCLA authorizes EPA \4\ to undertake
removal or remedial actions in response to any release or threatened
release into the environment of ``hazardous substances'' or, in some
circumstances, any other ``pollutant or

contaminant.'' As defined in CERCLA Section 101, removal actions
include actions to ``prevent, minimize, or mitigate damage to the
public health or welfare or to the environment,'' and remedial actions
are ``actions consistent with [a] permanent remedy[.]'' Remedial and
removal actions are jointly referred to as ``response actions.'' CERCLA
Section 111 authorizes the use of the Hazardous Substance Superfund
established under title 26, United States Code, to finance response
actions undertaken by EPA. In addition, CERCLA Section 106 gives EPA
\5\ authority to compel action by liable parties in response to a
release or threatened release of a hazardous substance that may pose an
``imminent and substantial endangerment'' to public health or welfare
or the environment.
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    \4\ Although Congress conferred the authority for administering
CERCLA on the President, most of that authority has since been
delegated to EPA. See Exec. Order No. 12580, 52 FR 2923 (Jan. 23,
1987). The executive order also delegates to other Federal agencies
specified CERCLA response authorities at certain facilities under
those agencies' ``jurisdiction, custody or control.''
    \5\ CERCLA Sections 106 authority is also delegated to other
Federal agencies in certain circumstances. See Exec. Order No.
13016, 61 FR 45871 (Aug. 28, 1996).
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    CERCLA Section 107 imposes liability for response costs on a
variety of parties, including certain past owners and operators,
current owners and operators, and certain generators, arrangers, and
transporters of hazardous substances. Such parties are liable for
certain costs and damages, including all costs of removal or remedial
action incurred by the Federal Government, so long as the costs
incurred are ``not inconsistent with the national contingency plan''
(the National Oil and Hazardous Substances Pollution Contingency Plan
or NCP).\6\ Section 107 also imposes liability for natural resource
damages and health assessment costs.\7\
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    \6\ CERCLA Section 107 (a)(4)(A).
    \7\ CERCLA Section 107 (a)(4)(C)-(D).
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    Section 108(b) establishes authority to require owners and
operators of classes of facilities to establish and maintain evidence
of financial responsibility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' In turn,
Section 108(b)(2) directs that the level of financial responsibility
shall be initially established, and, when necessary, adjusted to
protect against the level of risk that EPA in its discretion believes
is appropriate based on the payment experience of the Fund, commercial
insurers, court settlements and judgments, and voluntary claims
satisfaction. Section 108(b)(2) does not, however, preclude EPA from
considering other factors in addition to those specifically listed. The
statute prohibited promulgation of such regulations before December
1985.
    In addition, Section 108(b)(1) provides for publication within
three years of the date of enactment of CERCLA of a ``priority notice''
identifying the classes of facilities for which EPA would first develop
financial responsibility requirements. It also directs that priority in
the development of requirements shall be accorded to those classes of
facilities, owners, and operators that present the highest level of
risk of injury.

B. History of Section 108(b) Rulemakings

1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
    On March 11, 2008, Sierra Club, Great Basin Resource Watch, Amigos
Bravos, and Idaho Conservation League filed suit in the U.S. District
Court for the Northern District of California against then EPA
Administrator Stephen Johnson and then Secretary of the U.S. Department
of Transportation Mary E. Peters. Sierra Club, et al. v. Johnson, No.
08-01409 (N. D. Cal.). On February 25, 2009, that court ordered EPA to
publish the Priority Notice required by CERCLA Section 108(b)(1) later
that year. The 2009 Priority Notice and supporting documentation
presented the Agency's conclusion that hardrock mining facilities would
be the first class of facilities for which EPA would issue CERCLA
Section 108(b) requirements.\8\ Additionally, the 2009 Priority Notice
stated EPA's view that classes of facilities outside of the hardrock
mining industry may warrant the development of financial responsibility
requirements.\9\ The Agency committed to gather and analyze data on
additional classes of facilities and to consider them for possible
regulation. The court later dismissed the remaining claims.
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    \8\ 74 FR 37214 (July 28, 2009).
    \9\ Id. at 37218.
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2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
    On January 6, 2010, EPA published an Advance Notice of Proposed
Rulemaking (ANPRM),\10\ in which the Agency identified three additional
industrial sectors for the development, as necessary, of proposed
Section 108(b) regulation. To develop the list of additional classes
for the 2010 ANPRM, EPA used information from the CERCLA National
Priorities List (NPL) and analyzed data from the RCRA Biennial Report
(BR) and the Toxics Release Inventory (TRI).
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    \10\ 75 FR 816 (Jan. 6, 2010).
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    EPA specifically requested public comment in the 2010 ANPRM on
whether to propose a regulation under CERCLA Section 108(b) for each of
the three industries, or any class or classes within those industries,
including information demonstrating why such financial responsibility
requirements would or would not be appropriate for those particular
classes. In addition, the Agency requested information related to the
industry categories discussed in the ANPRM, including data on facility
operations, information on past and expected future environmental
response actions, use of financial responsibility mechanisms by the
industry categories, existing financial responsibility requirements,
and other information the Agency might consider in setting financial
responsibility levels. Finally, EPA requested information from the
insurance and financial sectors related to instrument availability and
implementation, and to potential instrument conditions.\11\ Comments
received on the ANPRM are summarized in the Additional Classes 2017
Notice of Intent to Proceed with Rulemakings, section III.B.4 below.
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    \11\ 75 FR 816, 830-831 (Jan. 6, 2010).
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3. 2014 Petition for Writ of Mandamus
    In August 2014, the Idaho Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a
Better Environment filed a new lawsuit in the U.S. Court of Appeals for
the District of Columbia Circuit, seeking a writ of mandamus requiring
issuance of CERCLA Section 108(b) financial assurance rules for the
hardrock mining industry and for three other industries: Chemical
manufacturing; petroleum and coal products manufacturing; and electric
power generation, transmission, and distribution. Thirteen companies
and organizations representing business interests in the hardrock
mining and other sectors sought to intervene in the case.
    Following oral argument, the court issued an order in May 2015
requiring the parties to submit, among other things, supplemental
submissions addressing a schedule for further administrative
proceedings under CERCLA Section 108(b). Petitioners and EPA requested
an order from the court with a schedule calling for the Agency to sign
a proposed rule for the hardrock mining industry by December 1, 2016,
and a final rule by December 1, 2017. The joint motion also included a

requested schedule for the additional industry classes, which called
for EPA to sign by December 1, 2016, a determination on whether EPA
would issue a notice of proposed rulemaking for classes of facilities
in any or all of the other industries, and a schedule for proposed and
final rules for the additional industry classes as follows:

    EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the first additional industry by July 2,
2019, and sign for publication in the Federal Register a notice of
its final action by December 2, 2020.
    EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the second additional industry by December
4, 2019, and sign for publication in the Federal Register a notice
of its final action by December 1, 2021.
    EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the third additional industry by December
1, 2022, and sign for publication in the Federal Register a notice
of its final action by December 4, 2024.\12\
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    \12\ In Re: Idaho Conservation League, No. 14-1149 (D.C. Cir.
Jan. 29, 2016) (order granting joint motion).

    While the joint motion identified the three additional industries
as the Chemical Manufacturing industry, the Petroleum and Coal Products
Manufacturing industry, and the Electric Power Generation, Transmission
and Distribution industry, and set a rulemaking schedule, the motion
did not indicate which industry would be the first, second or third.
The Joint Motion specified that it did not alter the Agency's
discretion as provided by CERCLA and administrative law.\13\
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    \13\ See Joint Motion at 6 (``Nothing in this Joint Motion
should be construed to limit or modify the discretion accorded EPA
by CERCLA or the general principles of administrative law.'')
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    On January 29, 2016, the court granted the joint motion and issued
an order that mirrored the submitted schedule in substance. The order
did not mandate any specific outcome of the rulemakings.\14\ The court
order can be found in the docket for this rulemaking. The signing of
this proposed rule by December 1, 2022, will satisfy one component of
the court order.
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    \14\ In granting the Joint Motion, the court expressly stated
that its order ``merely requires that EPA conduct a rulemaking and
then decide whether to promulgate a new rule--the content of which
is not in any way dictated by the [order].'' In re Idaho
Conservation League, at 17 (quoting Defenders of Wildlife v.
Perciasepe, 714 F.3d 1317, 1324 (D.C. Cir. 2013).
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4. Additional Classes 2017 Notice of Intent To Proceed With Rulemakings
    Consistent with the January 2016 court order, EPA signed on
December 1, 2016, a determination regarding rulemakings for the
additional classes--a Notice of Intent to Proceed with Rulemakings for
all three of the classes. The notice was published in the Federal
Register on January 11, 2017.\15\
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    \15\ 82 FR 3512 (Jan. 11, 2017).
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    The notice formally announced EPA's intention to move forward with
the regulatory process and to publish a notice of proposed rulemaking
for classes of facilities within the three industries identified in the
2010 ANPRM. The announcement in the notice was not a determination that
requirements were necessary for any or all of the classes of facilities
within the three industries, or that EPA would propose such
requirements. In addition, the notice gave an overview of some of the
comments received on the 2010 ANPRM and initial responses to those
comments. The comments on the ANPRM which specifically addressed the
need for CERCLA Section 108(b) regulation for the three additional
classes fell into four categories: (1) Other laws with which the
industry complies that obviate the need for CERCLA Section 108(b)
regulation; (2) the sources of data that EPA used to select the
industries; (3) past versus current practices within each industry; and
(4) the overall need for financial responsibility for each industry. In
discussing the ANPRM comments in the 2017 notice, the Agency stated its
intent to use other, more industry-specific and more current sources of
data to identify risk; to consider site factors that reduce risks,
including those that result from compliance with other regulatory
requirements; and to develop a regulatory proposal for each rulemaking.
    At the time of the 2017 notice, EPA had not identified sufficient
evidence to determine that the rulemaking process was not warranted,
nor had EPA identified sufficient evidence to establish CERCLA Section
108(b) requirements. The notice described a process to gather and
analyze additional information to support the Agency's ultimate
decision, including further evaluation of the classes of facilities
within the three industry sectors. The notice stated that EPA would
decide whether proposing requirements was necessary and, accordingly,
that EPA would propose appropriate requirements or would propose not to
impose requirements.
5. CERCLA Section 108(b) Proposal for Facilities in the Electric Power
Generation, Transmission, and Distribution Industry
    On July 29, 2019, EPA published a notice of proposed rulemaking on
the first of the three additional industries. In that notice, the
Agency proposed to not impose financial responsibility requirements for
the Electric Power Generation, Transmission, and Distribution industry
and described the analyses and results that were used to reach that
decision. The court's January 2016 order requires that a final action
on the first additional industry be signed by December 2, 2020.\16\
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    \16\ 84 FR 36535 (Jul. 29, 2019).
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IV. Statutory Interpretation

    CERCLA Section 108(b) provides general instructions on how to
determine what financial responsibility requirements to impose for a
particular class of facility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' Section
108(b)(2) directs that the ``level of financial responsibility shall be
initially established and, when necessary, adjusted to protect against
the level of risk'' that EPA ``believes is appropriate based on the
payment experience of the Fund, commercial insurers, courts settlements
and judgments, and voluntary claims satisfaction.'' EPA interprets the
risk to be addressed by financial assurance under Section 108(b) to be
the risk of the need for taxpayer financed response actions. Read
together, the statutory language on determining the degree and duration
of risk and on setting the level of financial responsibility confers a
significant amount of discretion on EPA.
    Section 108(b)(1) directs EPA to evaluate risk from a selected
class of facilities, but it does not suggest that a precise calculation
of risk is either necessary or feasible. Although the cost of response
associated with a particular site can be ascertained only once a
response action is required, any financial responsibility requirements
imposed under Section 108(b) would be imposed before any such response
action was identified. The statute thus necessarily confers on EPA wide
latitude to determine, in a Section 108(b) rulemaking proceeding, what

degree and duration of risk are presented by the identified class.
    Section 108(b)(2) in turn directs that EPA establish the level of
financial responsibility that EPA in its discretion believes is
appropriate to protect against the risk. This statutory direction does
not specify a methodology for the evaluation. Rather, this decision is
committed to the discretion of the EPA Administrator. While the statute
provides a list of information sources on which EPA is to base its
decision--the payment experience of the Superfund, commercial insurers,
courts settlements and judgments, and voluntary claims satisfaction--
the statute does not indicate that this list of factors is exclusive,
nor does it specify how the information from these sources is to be
used, such as by indicating how these categories are to be weighted
relative to one another.
    EPA believes that sections 108(b)(1) and (b)(2) are sufficiently
interrelated that it is appropriate to evaluate the degree and duration
of risk under subsection (b)(1) by considering the factors enumerated
in subsection (b)(2). EPA therefore concludes that Congress intended
the risk associated with a particular class of facilities to mean the
risk of future Fund-financed cleanup actions in that industry. This
reading is supported by the structure of the statute, as Section 108(b)
appears between two provisions related to cost recovery. Section
108(a), concerning financial assurance requirements for certain
vessels, refers specifically to cleanup costs. And Section 108(c),
concerning recovery of costs from guarantors who provide the financial
responsibility instruments, refers specifically to liability for
cleanup costs. EPA thus reads ``risk'' in Section 108(b) consistent
with its meaning in sections 108(a) and (c); that is, the risk of Fund-
financed cleanup. EPA adopted this interpretation in assessing the need
for financial responsibility requirements under CERCLA Section 108(b)
for facilities in the first class of facilities it evaluated: The
Hardrock Mining industry.\17\ In its opinion deciding the challenge to
the Final Action for the Hardrock Mining industry, the U.S. Court of
Appeals for the District of Columbia Circuit held that EPA's
interpretation that the provisions of Section 108(b) ``relate only to
ensuring against financial risks associated with cleanup costs,'' is
reasonable and entitled to deference.\18\
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    \17\ 83 FR 7556, 7561-62 (Feb. 21, 2018).
    \18\ Idaho Conservation League v. Wheeler, No. 18-1141, slip op.
at 12 (D.C. Cir. July 19, 2019).
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    For the Chemical Manufacturing industry, EPA has investigated the
payment history of the Fund, and enforcement settlements and judgments,
to evaluate, in the context of this CERCLA Section 108(b) rulemaking,
the risk of a Fund-financed response action at facilities that would be
subject to CERCLA financial responsibility requirements. The statute
also authorizes EPA to consider the existence of Federal and state
regulatory requirements, including any financial responsibility
requirements. Section 108(b)(1) directs EPA to promulgate financial
responsibility requirements ``in addition to those under subtitle C of
the Solid Waste Disposal Act and other Federal law.'' According to the
1980 Senate Report on legislation that was later enacted as CERCLA,
Congress considered it appropriate for EPA to examine those additional
requirements when evaluating the degree and duration of risk under what
was later enacted as CERCLA Section 108(b):

    The bill requires also that facilities maintain evidence of
financial responsibility consistent with the degree and duration of
risks associated with the production, transportation, treatment,
storage, and disposal of hazardous substances. These requirements
are in addition to the financial responsibility requirements
promulgated under the authority of Section 3004(6) of the Solid
Waste Disposal Act. It is not the intention of the Committee that
operators of facilities covered by Section 3004(6) of that Act be
subject to two financial responsibility requirements for the same
dangers.\19\
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    \19\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.

    While the Senate Report mentions RCRA Section 3004(6) specifically,
it is consistent with congressional intent for EPA to consider other
potentially duplicative Federal financial responsibility requirements
when examining the ``degree and duration of risk'' in the context of
CERCLA Section 108(b) to determine whether and what financial
responsibility requirements are appropriate. It is also consistent with
congressional intent for EPA to consider state laws before imposing
additional Federal financial responsibility requirements.
    Consideration of state laws before developing financial
responsibility regulations is consistent with CERCLA Section 114(d),
which prevents states from imposing financial responsibility
requirements for liability for releases of the same hazardous
substances after a facility is regulated under Section 108 of CERCLA.
Just as Congress intended to prevent states from imposing duplicative
financial assurance requirements after EPA had acted to impose such
requirements under Section 108, it is reasonable to also conclude that
Congress did not mean for EPA to disrupt existing state programs that
are successfully regulating industrial operations to minimize risk,
including the risk of taxpayer liability for response actions under
CERCLA, and that specifically include appropriate financial assurance
requirements under state law. Reviews of both state programs and other
Federal programs help to identify whether and at what level there is
current risk that is appropriate to address under CERCLA Section 108.
    EPA also believes that, when evaluating whether and at what level
it is appropriate to require evidence of financial responsibility, EPA
should examine information on Chemical Manufacturing facilities
operating under modern conditions. In other words, EPA should assess
the types of facilities to which any new financial responsibility
regulations would apply. Financial responsibility requirements under
Section 108(b) would not apply to legacy operations that are no longer
operating. Rather, any requirements would apply to facilities that
follow current industry practices and are subject to the modern
regulatory framework (i.e., the regulations currently in place that
apply to this industry). These modern conditions include state and
Federal regulatory requirements and financial responsibility
requirements that currently apply to operating facilities. This reading
of Section 108(b) is consistent with statements in the legislative
history of the statute. The1980 Senate Report states that the
legislative language that became Section 108(b) ``requires those
engaged in businesses involving hazardous substances to maintain
evidence of financial responsibility commensurate with the risk which
they present.'' \20\ This approach is also consistent with the analysis
that EPA undertook, in developing its Final Action on Financial
Responsibility Requirements Under CERCLA Section 108(b) for Classes of
Facilities in the Hardrock Mining Industry.\21\ EPA's approach was
recently upheld by the U.S. Court of Appeals for the District of
Columbia Circuit.\22\
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    \20\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
    \21\ 83 FR 7556 (Feb. 21, 2018).
    \22\ Idaho Conservation League v. Wheeler, No. 18-1141 (D.C.
Cir. July 19, 2019).
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    This statutory interpretation is reflected in today's proposal. Any
financial responsibility requirements imposed under Section 108(b)
would apply to currently operating facilities.

EPA thus sought to examine the extent to which hazardous substance
management at currently operating Chemical Manufacturing facilities as
a class continues to present risk. Moreover, the statutory direction to
identify requirements consistent with identified risks guides EPA's
interpretation that imposition of financial responsibility requirements
under Section 108(b) would not be necessary for currently operating
facilities that present minimal current risk of a Fund-financed
response action. The interpretation in this proposal does not extend to
any site-specific determinations of risk made in the context of
individual CERCLA site responses. Those decisions will continue to be
made in accordance with preexisting procedures.
    EPA thus examined records of releases of hazardous substances from
facilities operating under a current regulatory framework and data on
the actions taken and expenditures incurred in response to such
releases. The data collected do not reflect historical practices, many
of which would be illegal under current environmental laws and
regulations. Instead, EPA has considered current Federal and state
regulation of hazardous substance production, transportation,
treatment, storage, or disposal applicable to facilities in the
Chemical Manufacturing industry.

V. Approach To Developing This Proposed Rule

    Based on the statutory interpretation described above, EPA
developed an analytical approach to determine whether the current risk
under the modern regulatory framework within the Chemical Manufacturing
industry rises to the level that warrants imposition of financial
responsibility requirements under CERCLA Section 108(b). Specifically,
EPA designed the analytical approach to determine the need for
financial responsibility for this industry based on the degree and
duration of risk of a Fund-financed response action associated with the
industry's production, transportation, treatment, storage, or disposal
of hazardous substances.
    The approach, described in detail below, looks at risks by
examining records of releases of hazardous substances from facilities
in the industry in combination with the payment history of the Fund and
enforcement settlements and judgments. To enable EPA to base its
decision on risk posed by facilities operating under modern conditions,
i.e., the types of facilities to which financial responsibility
requirements would apply, EPA developed an approach to identify and
consider relevant state and Federal regulatory requirements and
financial responsibility requirements that currently apply to operating
facilities, as well as voluntary protective practices.
    EPA sought to determine the level of risk of a Fund-financed
response action at current Chemical Manufacturing operations. Relevant
to this decision are requirements of existing regulatory programs and
voluntary practices, including existing financial responsibility
requirements, which can reduce costs to the taxpayer; EPA's experience
with cleanups in the Chemical Manufacturing industry; and enforcement
actions, which may reduce the need for Federally-financed response
action at facilities in the Chemical Manufacturing industry.
    As part of scoping the Chemical Manufacturing industry for this
proposal, EPA sought to understand general characteristics of the
industry that may be relevant to financial responsibility under Section
108(b). To do this, EPA compiled industry features, including the types
of activities undertaken and wastes handled or produced. Additionally,
EPA looked at the financial condition of the industry to assess the
ability of facilities in this class to pay for any environmental
obligations they may incur. Discussion of these aspects of the industry
is included in section VI of this proposal.
    Section VII.A describes EPA's evaluation of cleanup cases at
facilities in the Chemical Manufacturing industry. So-called ``cleanup
cases'' are sites in the Chemical Manufacturing industry where releases
and cleanup actions occurred. To perform this evaluation EPA developed
an analytic approach that considered cleanup cases to identify risk at
currently operating facilities and where taxpayer funds were expended
for response action. EPA first examined each site to determine the
nature and timing of release. EPA used this information to determine if
releases occurred under current regulations. As an initial screen,
releases that occurred prior to 1980 were deemed to be legacy releases
that occurred before the advent of the modern environmental regulatory
framework and were therefore screened out of our analysis. Once EPA
identified those sites with more recent releases occurring under a
modern regulatory framework, EPA then focused on those response actions
that were paid for by the taxpayer by looking at those sites with Fund-
financed cleanup activity.
    As described in section VII.B, to understand the modern regulatory
framework applicable to currently operating facilities within the
Chemical Manufacturing industry, EPA compiled applicable Federal and
state regulations. Specifically, EPA looked to regulations that address
the types of releases identified in the cleanup cases. This review also
considered industry voluntary programs that could reduce risk of
releases. EPA also identified financial responsibility regulations that
apply to facilities in the Chemical Manufacturing industry in section
VII.C, and compliance and enforcement history for the relevant
regulations in section VII.D.
    EPA considered payments from commercial insurers as well but
determined that it was not necessary to conduct a detailed analysis of
this potential information source in light of the analyses of cleanup
cases and enforcement data. The cleanup cases and enforcement data, in
addition to addressing the payment experience of the Fund, court
settlements and judgments, and voluntary claims satisfaction, also
encompasses amounts from commercial insurance payments. For example, at
three of the Chemicals Manufacturing NPL sites identified and reviewed,
EPA recovered funds from a commercial insurer that had issued a policy
to a potentially responsible party (PRP) that was a liable party at all
three sites. Furthermore, payments from commercial insurers may have
helped finance the work conducted by PRPs in the cleanup cases
identified or may have been included in settlements, judgments, or
enforcement cases identified by EPA. However, in the event there were
significant payments from commercial insurers associated with
facilities in the Chemical Manufacturing industry that were not already
indirectly captured, this information would neither indicate greater
risk to the Fund nor suggest a need for financial responsibility
requirements under CERCLA Section 108(b).
    In considering how to structure its analysis and what data sources
to examine, EPA reviewed prior analysis done for selection of industry
classes in the 2010 ANPRM and public comments responding to EPA's
approach. In the public comment period for the ANPRM, EPA received a
total of 67 comments from 30 commenters on the Chemical Manufacturing
industry, Petroleum and Coal Products Manufacturing industry, and the
Electric Power Generation, Transmission, and Distribution industry. In
addition, EPA received five comments to the Hardrock Mining Proposed
Rule that were related to the additional classes of facilities.

    EPA received comments from the American Chemistry Council and the
Society of Chemical Manufacturers and Affiliates, among others.
Commenters indicated that EPA should concentrate on current practices
and not legacy contamination. Commenters also said that EPA should not
impose financial responsibility requirements on facilities that are
already subject to other Federal laws. Lastly, many commenters believe
that EPA placed too much emphasis on TRI data and RCRA BR data and
expressed their opinions that these data sources are not designed or
intended to provide risk-based information.
    In its 2017 Notice of Intent to Proceed with Rulemakings \23\ EPA
acknowledged limitations on information that can be gained from TRI and
BR data and announced its intention to use industry-specific and
current sources of data to identify risk for the purposes of the
rulemakings. EPA also analyzed those limitations in the final action
for the Hardrock Mining rule.\24\ Accordingly, in the analysis
conducted to assess risk in the Chemical Manufacturing industry for
this action, EPA chose not to rely on TRI and BR data. While, at the
time of the 2010 ANPRM, the Agency found those data sources appropriate
for identifying classes of facilities to examine further, the Agency
does not find the data sources valuable for assessing current risk of a
Fund-financed response action in the industry.
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    \23\ 82 FR 3512 (Jan. 11, 2017).
    \24\ 83 FR 7570 (Feb. 21, 2018).
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VI. Chemical Manufacturing Industry Overview

A. Identification of Chemical Manufacturing Industry

    For this proposal and the associated analyses, EPA reviewed
facilities classified under the North American Industry Classification
System (NAICS) code 325. The most recent available census data lists
the size of the industry at 13,480 establishments nationally.\25\
Chemical Manufacturing facilities transform raw materials (e.g., oil,
natural gas, water, minerals, metals) into tens of thousands of
different products, including pigments, synthetic fibers, bulk
chemicals, plastics, pharmaceuticals, and consumer goods, as well as
produce inputs to agriculture, manufacturing, and construction
industries.
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    \25\ 2016 Economic Census of the United States, NAICS 325.
---------------------------------------------------------------------------

B. Overview of Current Industry Operation

    As discussed in the approach section, to provide a backdrop for its
analyses, EPA reviewed, and characterizes here, the operation of the
chemical manufacturing industry from a broad perspective. Operational
and decommissioning practices in industrial sectors and their
associated firms can ultimately affect the ability of individual firms
to responsibly minimize their impact on human health and the
environment. Commodity chemical manufacturers create products in large
quantities under continuous processing conditions, generally in large
volumes in response to homogenous specifications. Specialty-batch
chemical manufacturers develop products for focused markets, making
complex products in small quantities that are then processed into
higher value-added products. These manufacturers change their process
lines several times a year, providing more opportunities for
environmental improvements but also making environmental compliance
more complicated. To consider the potential for releases as part of its
decision making, EPA prepared a high-level review of industry practices
and the environmental profile of the Chemical Manufacturing industry,
which includes a summary of relevant operational and decommissioning
materials and wastes in a background document, which is available in
the docket for this rulemaking.\26\
---------------------------------------------------------------------------

    \26\ Chemical Manufacturing Industry Practices and Environmental
Characterization.
---------------------------------------------------------------------------

    Potentially hazardous materials are frequently used in this
industry. These materials can include a large variety of chemicals and
compounds. The many different processes used in the Chemical
Manufacturing industry result in many different wastes. Typical wastes
from Chemical Manufacturing facilities can include, for example, spent
solvents, distillation bottoms and side-cuts, off-specification and
unused chemicals, wastewater, wastewater treatment sludge, emission
control sludges, filter cake, spent catalysts, byproducts, reactor
cleanout wastes, and container residues. Chemical Manufacturing
facilities typically handle large volumes of chemicals using above and
below ground bulk storage tanks, transfer equipment, process piping,
and raw material/final product storage areas. Due to the nature of this
industry, it is not surprising that it generates high volumes of
hazardous waste.\27\
---------------------------------------------------------------------------

    \27\ According to the 2017 Hazardous Waste Report, facilities in
this sector reported the generation of 21.7 million tons of
hazardous waste. https://rcrapublic.epa.gov/rcrainfoweb/action/modules/br/naics.
---------------------------------------------------------------------------

    Some wastes may be found on site in surface impoundments, bulk
storage tanks, waste piles, and disposal pits. All these areas may
contribute to soil and groundwater contamination. Decommissioning
wastes can include all the chemicals and substances listed above, as
well as contaminated soil and building materials, sludges,
neutralization liquids, and cleaning solvents. If such wastes are
hazardous, then they must be managed in accordance with RCRA
regulations.
    Industry practices in certain subsectors of the Chemical
Manufacturing industry, including All Other Basic Organic Chemical
Manufacturing (325199), Other Basic Inorganic Chemical Manufacturing
(325180), Cyclic Crude, Intermediate, and Gum and Wood Chemical
Manufacturing (325194), and Synthetic Dye and Pigment Manufacturing
(325130), use more hazardous substances and generate larger volumes of
hazardous waste. Several sectors use fewer hazardous substances and
generate lower amounts of hazardous waste, including Custom Compounding
of Purchased Resins (325991), Printing Ink Manufacturing (325910),
Polish and other Sanitation Good Manufacturing (325612), Phosphatic
Fertilizer Manufacturing (325312), and Ethyl Alcohol Manufacturing
(325193). Further information on industry practices is provided in the
background document for this section, which is available in the docket
for this rulemaking.\28\
---------------------------------------------------------------------------

    \28\ Chemical Manufacturing Industry Practices and Environmental
Characterization.
---------------------------------------------------------------------------

    Sites contaminated by the industry contain a wide variety of
contaminants, including but not limited to toxic organics, such as
benzene, polychlorinated biphenyls (PCBs), phenol, and volatile organic
hydrocarbons (VOCs); chemical substances, such as benzo(b)fluoranthene,
carbon tetrachloride, methyl methacrylate, methylene chloride,
nitroglycerin, phosphoric acid, and sodium hypochlorite; and metals,
such as arsenic, barium, cadmium, chromium, iron, lead, manganese,
mercury, thorium, and zinc.
    Facilities in the Chemical Manufacturing industry are subject to a
wide range of environmental regulation and enforcement oversight as
discussed in Sections VII.B and VII.D below, and have adopted voluntary
practices that can be effective at reducing pollution, as discussed in
Section VII C.

C. Industry Economic Profile

    Economic trends and financial health in industrial sectors and
their associated firms can ultimately affect the ability of individual
firms to responsibly address their environmental liabilities.
Circumstances in which firms face financial stress can potentially
contribute to the abandonment of facilities and the creation of orphan
waste sites requiring cleanup. To consider the potential for firms to
default on their financial obligations, EPA prepared a high-level
economic profile of the Chemical Manufacturing industry, which includes
a summary of relevant financial metrics, industry default statistics
and trends, and a broad discussion outlining environmental liabilities
under Chapter 11 of the Bankruptcy Code. This analysis, summarized in
this section, looked at the industry as a whole and additionally
focused on four subsectors individually, providing an industry profile,
evaluation of the potential universe of regulated entities, and
discussion of the subsectors' financial health and relative volatility.
The full analysis is found in the background document for this section,
and is available in the docket for this rulemaking.\29\
---------------------------------------------------------------------------

    \29\ CERCLA 108(b) Economic Sector Profile: Chemical
Manufacturing Industry.
---------------------------------------------------------------------------

    Generally, this analysis found the sector to be financially stable
and able to pay off short-term obligations, though some subsectors
experienced declining profitability and increased risk in recent years.
Overall, financial ratios indicate healthy financial performance,
despite an overall decrease in the total value of shipments and
receipts for services in the sector. The report also notes that firms
generally remain liable for environmental compliance obligations under
Chapter 11 debt restructuring. Sections 101(5) and 1141(d) of the
Bankruptcy Code only provide for a discharge of monetary rights to
payment and not for compliance obligations where the Federal government
has not sought the payment of money.

VII. Discussion of Cleanup Sites Analysis

A. Cleanup Site Evaluations

    As described in the Approach to Developing the Proposed Rule,
Section V above, to evaluate the need for financial responsibility
regulations in the Chemical Manufacturing industry, EPA sought examples
of pollution that occurred under a modern regulatory framework, and
that required a taxpayer-funded CERCLA cleanup. In its evaluation, EPA
focused first on identifying response actions at Superfund National
Priorities List (NPL) sites and sites using the Superfund Alternative
Approach (SAA),\30\ as those are generally larger cleanups both in
terms of amounts of contaminants removed and in terms of costs to carry
out these cleanups. EPA also looked at Superfund removals at non-NPL
sites.
---------------------------------------------------------------------------

    \30\ The Superfund Alternative Approach (SAA) uses the same
CERCLA authority and investigation and cleanup process and standards
that are used for NPL sites. The threshold criteria for using the
SAA are: (1) The site must have contamination significant enough to
make it eligible for listing on the NPL; (2) the site is anticipated
to need remedial action; and, (3) there must be a cooperative,
viable, capable PRP that will sign a CERCLA agreement with EPA to
perform the necessary cleanup.
---------------------------------------------------------------------------

    To identify the relevant cleanup cases in the Chemical
Manufacturing industry, EPA included the NPL sites already identified
in the 2010 ANPRM,\31\ and supplemented the dataset with additional NPL
sites that had been identified since the ANPRM, sites using the SAA,
and non-NPL sites identified in EPA's Superfund Enterprise Management
System (SEMS) database. EPA collected information on the timing and
nature of releases or threatened releases at these sites. Specifically,
EPA sought to identify, as applicable, facility operation end dates,
release dates, sources of contamination, NPL proposal dates,
contaminated media, type of contaminant, cleanup lead, and information
on Superfund expenditures at the site, as well as other information.
For this collection, EPA relied on information previously collected as
part of the ANPRM, information available in Superfund site documents
(e.g., NPL listing narratives, Records of Decision, Action Memos, Five-
Year Reviews), and information in EPA's SEMS as of March 2018. The
cleanup case identification and site information collection processes
are described in greater detail in the relevant background documents,
which are available in the docket for this rulemaking.\32\
---------------------------------------------------------------------------

    \31\ 75 FR 816 (Jan. 6, 2010).
    \32\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA)
Cleanup Cases in the Chemical Manufacturing Industry and
Identification and Evaluation of CERCLA 108(b) Chemical
Manufacturing Industry non-National Priorities List (NPL) Removal
Sites.
---------------------------------------------------------------------------

    After compiling information about the risks and history of each
site, EPA sought to identify instances in which releases occurred under
the modern regulatory framework that resulted in Fund-financed response
actions. To do so, EPA's methodology applied sequenced screens to the
identified sites. EPA first screened out any NPL sites or sites using
the SAA where the contaminant release or cleanup activity occurred
before 1980. EPA chose 1980 as the cutoff point to initially screen out
legacy contamination because it was the year when CERCLA was enacted,
as well as the date of the initial regulations under RCRA Subtitle C
governing the generation, treatment, storage, and disposal of hazardous
waste. EPA chose to give these significant RCRA and CERCLA milestones
greatest consideration due to the large number of issues of waste
management, land disposal, and soil contamination identified in the
review of the NPL and SAA cases. EPA believes the 1980 cutoff date is a
conservative screen (i.e., retains more sites in the analysis) in that
only the initial RCRA regulations were in place in 1980 and they were
refined, expanded and enhanced several times over the next decades.
Moreover, the Agency's enforcement authorities expanded in the 1980s as
the RCRA program matured. Notably, the passage of the Hazardous and
Solid Waste Amendments (HSWA) in 1984 resulted in many regulatory
changes and enhanced enforcement mechanisms. More specifically, HSWA
created the Land Disposal Restrictions (LDR) program, codified in 40
CFR part 268, which prohibits the land disposal of untreated hazardous
wastes. HSWA also substantially expanded corrective action authorities
for both permitted RCRA treatment, storage and disposal (TSD)
facilities and facilities operating under interim status,\33\ requiring
facilities to address the release of hazardous wastes and demonstrate
financial responsibility for completing the required corrective
actions, further reducing the risks that sites would have to be
addressed under CERCLA. For further detail on these requirements, see
section VII. B below.
---------------------------------------------------------------------------

    \33\ Interim status facilities are facilities that were in
existence on the effective date of the regulations and subject to
the requirement to have a RCRA permit.
---------------------------------------------------------------------------

    Next, EPA sought to remove from the analysis sites where
significant Fund expenditures had not occurred, because response
actions that were paid for by private parties do not support the need
for CERCLA Section 108(b) financial responsibility regulations. Using
the ``Action Lead'' field in SEMS associated with each site, EPA
screened out the potentially responsible party (PRP) lead sites. This
left only the Mixed Lead Construction or Government Performed
Construction sites in the analysis, under the assumption that PRP
Performed

Construction \34\ sites did not present significant expenses to the
Fund.
---------------------------------------------------------------------------

    \34\ These terms are used in the SEMS database to identify the
party that had primary responsibility for construction at the sites.
---------------------------------------------------------------------------

    EPA then reviewed the remaining sites (i.e., those with both
pollution dates of 1980 or later and Mixed Lead Construction or
Government Performed Construction designation in SEMS) individually in
greater detail. Specifically, EPA considered the site history and each
of the contamination sources at the site in the context of the
regulations that would be applicable to that facility today. More
information on the regulations EPA considered is available in Section
VII.B.
    Findings from EPA's analysis of the cleanup cases are discussed
below, with more detailed information available in background documents
available in the docket for this rulemaking.\35\ These background
documents provide the list of sites identified and remaining at each
stage of the analysis, as well as the information considered in the
screening and review process.
---------------------------------------------------------------------------

    \35\ Identification and Evaluation of National Priorities List
(NPL) Sites and sites using the Superfund Alternative Approach (SAA)
Cleanup Cases in the Chemical Manufacturing Industry and
Identification and Evaluation of CERCLA 108(b) Chemical
Manufacturing non-National Priorities List (NPL) Removal Sites.
---------------------------------------------------------------------------

    Using the data sources described above for the Chemical
Manufacturing industry, EPA identified 199 NPL sites and eight sites
using the SAA, as well as 290 non-NPL CERCLA removal action sites,\36\
to evaluate according to the methodology described above. As explained
further below, the majority of the contamination at NPL sites and sites
using the SAA were ultimately considered to involve releases that
occurred before the modern regulatory framework or they were cases
where no taxpayer funds were used. Similarly, for the removal sites,
the majority of cases, albeit to a lesser extent as compared to NPLs,
showed no releases of hazardous substances under the modern regulatory
framework or required minimal or no taxpayer-funded cleanups, as
described below.
---------------------------------------------------------------------------

    \36\ None of these 290 removal sites are associated with an NPL
site. Removal actions that have taken place at NPL sites or sites
using the SAA, either before or after listing or designation, are
tracked in SEMS as NPL or SAA level actions and not as separate
removal records.
---------------------------------------------------------------------------

    The 199 NPL sites and eight sites using the SAA that were evaluated
include different industry groups within the Chemical Manufacturing
sector. While multiple manufacturing activities can occur at a site,
facilities that were engaged in manufacturing pesticides, fertilizers,
and agricultural chemicals show up more prevalently on the Chemical
Manufacturing NPL list (about 42%), closely followed by facilities
engaged in basic Chemical Manufacturing (about 39%). Other
manufacturing activities observed to a lesser extent include resin,
synthetic rubber, and artificial synthetic fibers and filaments
manufacturing, paint, coating, and adhesive manufacturing, and
``other'' types of Chemical Manufacturing activities.
    A review of the history of environmental contamination at these NPL
and NPL-like sites revealed that the most common types of environmental
damage were contamination of soil and ground water (approximately 90%),
while impacts to surface water bodies were also relatively common
(nearly 60%). To a lesser extent, impact to air and sediments were also
observed. The primary source of the contamination was contaminated
soils (approximately 62% of sites) that resulted from inappropriate
waste and material handling, leaks and spills, fires and explosions,
lack of stormwater management, and poor housekeeping practices. Other
significant sources include disposal into unlined ponds and wastewater
lagoons (approximately 40%) \37\ and the abandonment of hazardous waste
and materials in drums and other containers (approximately 32%).\38\
Detailed discussions of the impacted media and sources of contamination
identified at these NPL and NPL-like sites are presented in supporting
technical background documents, which are available in the docket for
this rulemaking.\39\
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    \37\ The regulations covering management of hazardous waste in
surface impoundments are in 40 CFR part 264/265 Subpart K. Also see
discussion in Section VII.B of this notice.
    \38\ The regulations covering management of hazardous waste in
containers are in 40 CFR part 264/265 Subpart I. Also see discussion
in Section VII.B of this notice.
    \39\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach
(SAA)in the Chemical Manufacturing Industry.
---------------------------------------------------------------------------

    After characterizing the industrial activities and contamination
history at these sites, EPA applied the screens described above to
remove PRP-Performed Construction sites and sites where the
environmental releases occurred pre-1980 to the 199 NPL sites and the
eight sites using the SAA approach. Based on these criteria, EPA
screened out 127 sites. Additionally, EPA also excluded 46 sites from
the analysis where, upon further review, the industrial activities were
found to fall outside of the relevant class of facilities under
consideration in this rulemaking. Thirty-four NPL sites remained after
those screens that were either Government Performed Construction or
Mixed Lead Construction (i.e., a combination of Government and PRP)
sites and had releases that arose in 1980 or later. None of the sites
using SAA remained after those screens.
    To assess the remaining 34 sites, EPA first conducted a detailed
review to compare the environmental issues (e.g. contamination) at the
sites against the regulations applicable today. Based on the detailed
review, EPA concluded that notwithstanding the screens applied at
earlier stages of the analysis, the releases at 30 of the 34 NPL sites
resulted largely from legacy practices and contamination. An example of
such a case is Baird & McGuire Inc., a 20-acre facility in Holbrook,
Massachusetts, that operated as a chemicals manufacturing and batching
company from 1912 to 1983. EPA did not initially screen out the site
because case files on this site showed documented discharges of black
oily substances into a nearby wetland between 1981 and 1982. Despite
these releases, EPA concluded that the most significant contamination
at the site occurred largely from legacy waste disposal practices
(included direct discharge into the soil, lagoons, and wetlands) and
improper storage of chemicals during the 70 years of operation that
began in 1912. Because of these practices, on-site soil, ground water,
surface water, and municipal water supplies were contaminated, which
prompted EPA to list the site on the NPL in 1983. When these disposal
practices were assessed against today's modern regulatory framework,
the releases were all found to have occurred before the promulgation of
RCRA Subtitle C regulations. Moreover, enforcement records further
corroborate the presence of significant compliance issues at this site
before 1980, as the owner and operator had been fined at least 35 times
between 1954 and 1977 by various state and Federal agencies for
numerous violations.\40\ For discharges of oily substances into
wetlands identified post-1980s, EPA's case file also showed Baird &
McGuire had voluntarily taken actions, including removing the discharge
pipes and applying absorbent pads to the wetland to soak up the oil.
Appendix 4 of the background document provides more detailed
discussions on this site and the 29 other NPL sites that EPA deemed as
legacy issues after the detailed reviews.\41\
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    \40\ The NPL Site Narrative for Baird & McGuire, https://cumulis.epa.gov/supercpad/SiteProfiles/index.cfm?fuseaction=second.Cleanup&id=0100392#bkground.
    \41\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA)
in the Chemical Manufacturing Industry.

---------------------------------------------------------------------------

    Regarding the four out of the 34 NPL sites that remained after the
screens, EPA's detailed review indicated that these sites appeared to
have significant releases or threatened releases of hazardous
substances under the modern regulatory framework and required
significant taxpayer-funded cleanups. The four sites are Diaz Chemical
Corporation in Holley, New York (which operated from 1974 through
2002), Eldorado Chemical Company in Live Oak, Texas (which operated
from 1978 through 2007), Mississippi Phosphates Corporation in
Pascagoula, Mississippi (which operated from the 1950s through 2014),
and White Chemical Corporation in Newark, New Jersey (which operated
from 1983 through 1990).
    In all four cases, the facilities had a long history of compliance
issues and were cited numerous times for violations under various
statutes, including CAA, CWA, and RCRA. At three of the four sites
(Diaz Chemical, Mississippi Phosphates, and White Chemical Corp.),
companies filed for bankruptcy before ceasing operations and abandoning
their sites. EPA listed three of the four sites (Diaz Chemical,
Eldorado Chemical, and Mississippi Phosphates) on the NPL post-2000.
    In the cases of Diaz Chemical, Eldorado Chemical Company, and White
Chemical Corp., poor housekeeping practices, spills, and improper
handling of drums resulted in the release of a range of chemical
substances to the air, water, soil, and ground water. In addition, when
Diaz and White Chemical Corp. filed for bankruptcy and abandoned their
facilities, the owner and operators left behind hundreds of hazardous
drums and tanks containing hazardous chemicals and waste. These
releases or threatened releases occurred at these sites despite the
promulgation and implementation of applicable RCRA Subtitle C
regulations in 1980 and HSWA in 1984. Evaluation of EPA's Fund
expenditure data for these sites showed the Fund incurred over $28
million to address site contamination at Diaz Chemical and $47 million
at White Chemical Company. Fund expenditures at Eldorado Chemical were
relatively small at $568,000; however, the site was just listed on the
NPL in 2016, and Fund expenditures at the site will likely continue.
    Regarding Mississippi Phosphates, the plant ceased its operations
in December 2014 following a bankruptcy. When the company abandoned the
site, more than 700 million gallons of low-pH, contaminated wastewater
was left behind in on-site ponds. Enforcement records also showed that
during its years of operation, the facility received numerous
Administrative Orders and Notices of Violation related to noncompliance
with its National Pollutant Discharge Elimination System (NPDES)
permit. The most severe violation occurred in August 2013, when the
facility released 38 Mgal of acidic water to Bayou Casotte, killing an
estimated 47,000 fish, and resulting in the company's entering a guilty
plea to a criminal violation of the Clean Water Act. More information
on this case is in the enforcement background document, which is
available in the docket.\42\
---------------------------------------------------------------------------

    \42\ Enforcement, Court Settlements and Judgments in the
Chemical Manufacturing Industry.
---------------------------------------------------------------------------

    EPA's review of Fund expenditures showed significant Fund
expenditures at Mississippi Phosphates. Based on the limited
expenditure data obtained from Superfund's Integrated Financial
Management System (IFMS) database, EPA has spent $8.3 million as of
Fall 2018. However, in an April 2018 Action Memorandum,\43\ EPA
indicated the total cost of the removal action at this site would be
$132.6 million through December 2020. The memo also mentioned that EPA
continued to treat 2 to 4 million gallons of contaminated water each
day, which was estimated to cost $1 million a month. More detailed
information can be found in the background document and supporting
spreadsheets, which are available in the docket for this
rulemaking.\44\ The background document includes the list of sites
identified for analysis, as well as the data and information considered
in the screening and review process. The summary results of the
analysis are presented in Table 1 below.
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    \43\ 2018 Action Memorandum for a Non-Time Critical Removal
Action, Consistency Exemption Request and Ceiling Increase at
Mississippi Phosphates Corporation National Priorities List Site,
Pascagoula, Jackson County, Mississippi.
    \44\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA)
in the Chemical Manufacturing Industry.

                                Table 1--Evaluation Results for NPL and SAA Sites in the Chemical Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Detailed review identified a   Cases with release(s) under
  Total NAICS 325 NPL & SAA    Number of NAICS 325 NPL & SAA    Detailed review concluded      possible modern regulation      modern regulation that
       sites evaluated          sites screened out based on   release occurred prior to the    release but no significant     required taxpayer-funded
                                pre-1980, or PRP lead status   modern regulatory framework       taxpayer expenditures                response
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  207 \45\                   127(46) \46\                             30     .............................                          4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Additionally, EPA looked at the major removal cases found in the
SEMS database to supplement this analysis. For this sector, EPA
identified 290 non-NPL removal sites. Applying the methodology, EPA
screened out 148 sites because the environmental releases occurred
before 1980 or PRPs led the response action. EPA also excluded an
additional 81 sites deemed as out of the scope because EPA determined
that the industrial activities that resulted in the release of
hazardous substances were not Chemical Manufacturing. Twenty-seven
other sites were also left out of the analysis because of insufficient
documentation (i.e., not enough to verify whether the sites included
pollution attributable to a NAICS 325 facility, or the nature/date of
the releases at the site).
---------------------------------------------------------------------------

    \45\ Includes 8 sites addressed through Superfund Alternative
Approach (SAA).
    \46\ The number in the parentheses indicates the sites that were
also removed at this stage of the analysis because EPA determined
the industrial activities did not involve chemical manufacturing.
---------------------------------------------------------------------------

    To assess the 34 sites that remained after those screens, EPA first
conducted a detailed review of case files to compare the environmental
issues at the sites to the regulations applicable today. Based on this
assessment, EPA concluded that the releases at four removal sites were
one-time incidents (e.g., drum spill, chemical plant fire, accidental
releases to air). While these releases were all found to have occurred
after contemporary regulations, according to site documents reviewed,
the PRPs had responded to the emergencies, and none of these sites

required significant Fund expenditure; at one of the four sites, EPA
spent $19,500 in Fund money to conduct an air assessment.
    For the remaining 30 removal sites, the releases or threatened
releases were associated mainly with the abandonment or improper
storage of drums, tanks, and other containers that contained various
chemicals, including hazardous substances and waste. In seven of these
cases, chemical explosions or fires resulted from storing incompatible
chemicals near one another. Most of these cases involved releases that
occurred since the year 2000, which EPA determined to be releases that
occurred under the modern regulatory framework that required taxpayer-
funded cleanup.
    As described in more detail in the Role of Federal and State
Programs section below, the primary regulations governing the storage
and handling of hazardous chemicals have been in place since the 1980s
including: Occupational Safety and Health Act (OSHA) standards for
storage and handling of flammable liquids (29 CFR 1910.106) and
compressed gas (29 CFR 1910); Section 311 and 312 of the Emergency
Planning and Community Right-to-Know Act (EPCRA) requirements
concerning reporting of hazardous chemical inventory to local and state
emergency responders; and EPCRA Section 304 requirements for emergency
release notification for ``reportable quantity.'' In addition, drums
and tank systems used to store hazardous waste for more than 90 days,
or stored at locations that are not the site of generation, have been
regulated under RCRA (requirements found in 40 CFR parts 264 and 265)
since 1981 for drums and other containers \47\ and since 1986 for tank
systems.\48\
---------------------------------------------------------------------------

    \47\ 46 FR 2866 (Jan. 2, 1981).
    \48\ 51 FR 25472 (Jul. 14, 1986).
---------------------------------------------------------------------------

    Review of Fund expenditure data associated with these 30 sites
indicates that the Fund incurred estimated costs ranging from $30,000
to $3 million for response and enforcement activities. For 19 of the 30
sites, the Fund incurred costs under $500,000 with an average cost of
$218,000 per site. For the remaining 11 sites where the response
actions resulted in Fund expenditures above $500,000 per site, the
average cost was $1.4 million.
    More detailed information can be found in the background document
and supporting spreadsheets, which are available in the docket for this
rulemaking.\49\ The background document includes the list of sites
identified for analysis, as well as the data and information considered
in the screening and review process. Table 2 presents the summarized
results of the analysis.
---------------------------------------------------------------------------

    \49\ Identification and Evaluation of CERCLA 108(b) Chemical
Manufacturing non-National Priorities List (NPL) Removal Sites.
    \50\ The number in parentheses indicates the sites that were
also removed at this stage in the analysis: 81 Sites for which EPA
determined the industrial activities did not involve chemical
manufacturing, and 27 sites for which there was not enough
documentation to be included in the analysis.

                             Table 2--Evaluation Results for Superfund Removal Sites in the Chemical Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Number of NAICS 325 superfund                                  Detailed review identified a   Cases with release(s) under
  Total NAICS 325 superfund      removal cases screened out     Detailed review concluded      possible modern regulation      modern regulation that
   removal cases evaluated       based on pre-1980, or PRP    release occurred prior to the   release, but no significant     required taxpayer-funded
                                        lead status            modern regulatory framework       taxpayer expenditures                response
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       290                  148(108) \50\     .............................                           4                            30
--------------------------------------------------------------------------------------------------------------------------------------------------------

Prevalent Sources of Releases
    EPA's analysis of cleanup cases compiled information, where
discernable, on the root cause of releases. Across the industry
overall, the most prevalent issue was contaminated soils that resulted
from inappropriate waste and material handling, leaks and spills, fires
and explosions, lack of stormwater management, and poor housekeeping
practices. Other significant sources include disposal into unlined
ponds and wastewater lagoons and the abandonment of hazardous waste and
materials in drums and other containers. Beyond these, a common issue
observed at removal sites but not as commonly at NPL sites, was
abandonment and improper storage of drums, tanks, and other containers
that contained various chemicals, including hazardous substances and
waste. As discussed in the next section, there are regulations in place
that address these types of releases.

B. Role of Federal and State Programs and Voluntary Protective Industry
Practices at Facilities in the Chemical Manufacturing Industry

    In the 2010 ANPRM, EPA recognized that the NPL data reflects
releases arising from activity that, in some cases, predates CERCLA,
RCRA, and other modern environmental requirements. The Agency welcomed
information about current releases of hazardous substances to the
environment to help inform EPA's future actions. As discussed in the
Approach section of this proposal, to enable EPA to base its decision
on risk posed by facilities operating under modern conditions, i.e.,
the types of facilities to which financial responsibility requirements
would apply, EPA developed an approach to identify and consider
relevant state and Federal regulatory requirements and financial
responsibility requirements that currently apply to operating
facilities, as well as voluntary protective practices. EPA thus
undertook an effort to gather information about Federal and state
environmental programs and industry voluntary programs that have been
implemented and are applicable to currently operating facilities within
the Chemical Manufacturing industry today. EPA evaluated the extent to
which activities that contributed to the risk associated with the
production, transportation, treatment, storage, or disposal of
hazardous substances are now regulated. EPA recognizes that substantial
advances have been made in the development of manufacturing, pollution
control, and waste management practices, as well as the implementation
of Federal and state regulatory programs to prevent and address
releases at these facilities. In part, EPA's proposed decision to not
issue financial responsibility requirements for this industry is based
on EPA's review and analysis of Federal regulations and complemented by
state program regulations. EPA's proposed findings and conclusions
about the impact of Federal and state environmental programs, along
with industry voluntary programs, are discussed in the following
section.

Overview of Federal and State Regulatory Programs and Industry
Voluntary Practices Applicable to Facilities in the Chemical
Manufacturing Industry
    EPA evaluated Federal and state regulations that address the
potential for release of hazardous substances to the range of
environmental media that may be affected by a release from a facility
in the Chemical Manufacturing industry. EPA found that a comprehensive
regulatory framework has developed since the enactment of CERCLA.
Federal statutes such as the CAA, CWA, TSCA, RCRA, and EPCRA are
applicable across the entire industry and lay the foundation for this
regulatory framework. Specific regulations are discussed in the
background document according to the affected media that the
regulations address: Air pollution, water pollution, emergency planning
and response, hazardous substances management, and hazardous and non-
hazardous waste management and disposal. This background document is
available in the docket for this rulemaking.\51\
---------------------------------------------------------------------------

    \51\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
---------------------------------------------------------------------------

Regulations Addressing Prevalent Sources of Releases Identified in
Analysis of Cleanup Cases
    EPA's analysis of the cleanup cases found that the most prevalent
releases involved:
     Soil contamination from inappropriate handling of wastes
and materials,
     Releases from leaks, spills, fires, and explosions,
     Lack of stormwater management,
     Disposal into unlined ponds and lagoons,
     Abandonment of hazardous substances and waste in drums,
tanks or other containers,
    The comprehensive regulations for the management and disposal of
hazardous waste, promulgated under the authority of RCRA, were designed
to prevent these types of releases and assure that past spills are
cleaned up by facility owners and operators. Specifically, Subtitle C
of RCRA required EPA to establish a hazardous waste management program,
and EPA developed a ``cradle to grave'' approach to control the
generation, transportation, treatment, storage, and disposal of
hazardous waste.\52\ EPA's regulatory approach under RCRA includes
standards specific to types of hazardous wastes, types of hazardous
waste disposal facilities, and types of hazardous waste disposal
activities; EPA enforces these standards through permitting, reporting
and inspection programs.\53\
---------------------------------------------------------------------------

    \52\ ``EPA History: Resource Conservation and Recovery Act,''
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act.
    \53\ ``EPA History: Resource Conservation and Recovery Act,''
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act; ``Summary of the Resource
Conservation and Recovery Act,'' EPA, at: https://www.epa.gov/laws-regulations/summary-resource-conservation-and-recovery-act.
---------------------------------------------------------------------------

    In 1980, under the authority of RCRA Subtitle C, EPA promulgated
the initial hazardous waste management and permitting regulations.
These regulations included the identification of hazardous wastes that
would be regulated under RCRA Subtitle C. Under Subtitle C, generators
of hazardous waste are required to ensure and fully document that the
hazardous waste they produce is properly identified, managed, tracked,
and treated prior to recycling or disposal. The degree of regulation to
which each generator is subject depends to a large extent on how much
waste each generator produces every calendar month. Early in the
development of the RCRA program, EPA recognized that a relatively small
number of industrial facilities generated the majority of the nation's
hazardous waste. EPA initially focused on these large quantity
generators, i.e., those that generate 1,000 kilograms or more of non-
acute hazardous waste per month (or more than 1 kilogram of acute
hazardous waste per month). These facilities must obtain an EPA
identification number and report the quantities and types of hazardous
waste they generate, as well as the intended receiving facility for
treatment and disposal, unless the waste will be managed onsite. Large
quantity generators who send their waste offsite are responsible for
the proper packaging and labeling of the waste before transport and the
tracking of the waste to the destination facility using the uniform
hazardous waste manifest. Large quantity generators may store their
waste on site for less than 90 days before transport to a treatment and
disposal facility; that storage is subject to the same unit-specific
standards (described below) applicable to treatment, storage, and
disposal facilities.
    RCRA Subtitle C also established standards for hazardous waste
treatment, storage, and disposal facilities (TSDFs). Operators that
handle or manifest hazardous waste at any point in its lifecycle,
including generators and transporters, are required to notify EPA of
these activities. To keep track, TSDF owners and operators must keep
records and make reports to EPA. TSDFs are required to track hazardous
waste they receive through EPA's hazardous waste manifest system, among
other recordkeeping and reporting standards.
    RCRA Subtitle C regulations created a permitting program for
hazardous waste TSDFs. The TSDF permitting regulations include
application procedures, permit approval conditions, and monitoring and
reporting requirements. TSDFs must have permits for the entirety of the
active life of the permitted units, including during closure of waste
management units. New and existing hazardous waste TSDFs must submit a
RCRA permit application at least 180 days before the commencement of
construction and/or hazardous waste management activities.\54\ Both
permitted and interim status TSDFs must comply with general facility
operating standards, preparedness and prevention, contingency plans and
emergency procedures, as well as specific technical standards designed
to insure that hazardous waste management units such as storage tanks
and containers, landfill, surface impoundments, waste piles, land
treatment of hazardous waste, and solid waste management units are
operated in a manner that prevents releases. To minimize the potential
for leachate to threaten human health and the environment, EPA
developed design and operating standards that use a combination of
different technologies and good operating practices to detect, contain,
and clean up any leaks that might occur. To prevent releases of
hazardous waste into the environment, containers holding liquid
hazardous wastes at a permitted TSDF must have a secondary containment
system. Secondary containment is emergency short-term storage designed
to hold leaks from hazardous waste management units.
---------------------------------------------------------------------------

    \54\ 45 FR 33063 (May 19, 1980).
---------------------------------------------------------------------------

    Slightly later in the 1980s, EPA promulgated regulations that set
financial assurance requirements for TSDFs.\55\ The TSDF standards
eventually included air emission standards for process vents, equipment
leaks, tank systems, surface impoundments, and containers. The
regulations covering proper management of surface impoundments, found
in 40 CFR parts 264/265, Subpart K, require facilities that store
hazardous

waste in surface impoundments to meet specific design requirements,
which include a double liner system, leachate collection, and removal
systems and a leak detection system. The regulations for containers,
found in 40 CFR parts 264/265, Subpart I, include provisions regarding
design and operating requirements, and inspections. Certain 40 CFR part
265 standards also apply to hazardous waste containers at generator
sites.
---------------------------------------------------------------------------

    \55\ 45 FR 33063 (May 19, 1980); 47 FR 15047 (Apr. 7, 1982).
---------------------------------------------------------------------------

    HSWA was enacted in 1984, largely in response to citizen concerns
that existing methods of hazardous waste disposal, particularly land
disposal, were not safe. With HSWA, Congress sought to minimize waste
generation and phase out land disposal of hazardous waste. Accordingly,
in 1986, EPA promulgated a suite of regulations that established
standards and restrictions for land disposal of hazardous waste. While
the regulations set stringent guidelines for the land disposal of
hazardous waste, some hazardous wastes and some types of land disposal
are prohibited altogether. Although there are exceptions, operators are
generally prohibited from diluting hazardous waste as a substitute for
treatment. In addition, operators can land dispose hazardous waste only
following treatment and only in appropriate land treatment units,
landfills and surface impoundments, Further, operators must meet
testing, removal, recordkeeping, and design requirements. Additional
standards, restrictions, and prohibitions are in place for hazardous
waste that exhibit ignitability, corrosivity, reactivity, or
toxicity.\56\
---------------------------------------------------------------------------

    \56\ 51 FR 40572 (Nov. 7, 1986).
---------------------------------------------------------------------------

    HSWA required that all landfills and surface impoundments install
groundwater monitoring, comply with technical requirements, such as
double liners and leachate collection, and obtain financial assurance.
The HSWA amendments also added to RCRA's regulations for small quantity
generators, facilities that generated between 100 to 1,000 kilograms
per month of hazardous waste, which were previously exempt from RCRA
rules. These small quantity generator rules took effect in 1986.
Generators of less than 100 kilograms per month of hazardous waste
(i.e., conditionally-exempt small quantity generators) remained subject
to significantly reduced requirements.\57\ EPA amended the hazardous
waste generator provisions in 2016, largely to clarify the
requirements.\58\
---------------------------------------------------------------------------

    \57\ Id.
    \58\ 81 FR 85732 (Nov. 28, 2016).
---------------------------------------------------------------------------

    HSWA also established closure and post-closure requirements for
hazardous waste TSDF facilities. The regulations require facilities to
develop closure plans for all hazardous waste management units. All
TSDFs are required to prepare and submit written closure plans. A
permitted facility submits this plan as part of its permit application.
Once the plan is approved by the permitting agency, it becomes part of
the facility's operating permit. Interim status facilities \59\ must
have written closure plans within six months of becoming subject to the
closure regulations. Upon the completion of closure of a hazardous
waste disposal unit, owners and operators must submit a certification
of closure to the relevant state or EPA regional office. Following
closure, facilities must implement a post-closure plan that abides by
post-closure property use and care guidelines. The standard post-
closure care period is 30 years, but this can be shortened or extended
on a case-by-case basis by the permitting authority (i.e., the EPA
Region or the authorized state regulatory agency). Post-closure
notification and security requirements remain in place so long as
hazardous waste is present at the facility, even after the 30-year
post-closure period.\60\
---------------------------------------------------------------------------

    \59\ Interim status facilities are facilities that were already
in existence at the time of the enactment of the permitting
regulations. Interim status facilities must comply with the
requirements in 40 CFR part 265 until they receive their permit.
    \60\ 51 FR 16444 (May 2, 1986).
---------------------------------------------------------------------------

    HSWA provided EPA with authority to develop a broader corrective
action program. Under this program, EPA requires owners and operators
of facilities that treat, store or dispose of hazardous waste to
investigate and clean up hazardous releases into soil, groundwater,
surface water and air, thus reducing the likelihood that these
facilities would require cleanup under Superfund. RCRA permits issued
to TSDFs must include provisions for both corrective action and
financial assurance to cover the costs of implementing those cleanup
measures. EPA also possesses additional authorities to order corrective
action through enforcement orders, which are not contingent upon a
facility's permit. In addition, facilities may voluntarily choose to
clean up their contamination.
    In addition to Subtitle C requirements, RCRA Subtitle D established
a program for management and disposal of non-hazardous industrial and
municipal solid waste through state solid waste management plans that
conform with Federal guidelines. RCRA Subtitle I requires EPA to
promulgate technical standards and corrective action requirements for
owners and operators of underground storage tanks (USTs), including
underground storage tanks that contain hazardous substances or
petroleum products. The UST regulations include requirements for
design, installation, notification, operational procedures, release
reporting, release response, and corrective action procedures for
underground storage tank systems that contain hazardous substances. The
regulations also include financial responsibility requirements for
underground storage tank owners and operators. In addition, EPA has
established guidelines for the approval of state underground storage
tank programs.\61\
---------------------------------------------------------------------------

    \61\ 53 FR 37082 and 43322 (Nov. 27, 2018).
---------------------------------------------------------------------------

    In addition to the regulatory scheme that RCRA imposes on the
management of hazardous waste in underground storage tanks that store
chemicals, Chemical Manufacturing plants are subject to a number of
additional regulatory provisions that reduce the potential for the
plants to pose a risk for a Federally-financed response action.
Catastrophic releases of hazardous substances and the use of toxic
chemicals and other hazardous substances are additional environmental
and safety concerns for Chemical Manufacturing facilities. Several
environmental laws authorize regulations requiring the development of
response plans for various emergencies in order to reduce the effects
of a release, and to notify local emergency response personnel and
facilitate cooperation. For example, EPA implements the Chemical
Accident Prevention Provisions of Section 112(r) of the Clean Air Act
Amendments, which require certain facilities to generate Risk
Management Plans (RMPs) to mitigate the effects of a chemical accident
and to coordinate with local response personnel. Emergency Action Plan
(EAP) regulations under OSHA require that employers prepare a written
EAP to create practices to follow during workplace emergencies. EPA
implements regulations under the EPCRA that impose emergency planning,
reporting, and notification requirements for hazardous and toxic
chemicals.
    The U.S. Chemical Safety Board (CSB), authorized by the CAA
Amendments of 1990, is involved in investigating accidental releases at
Chemical Manufacturing facilities. Specifically, the principal role of
the CSB is to investigate accidents to determine the conditions and
circumstances which led up to the event

and to identify the cause or causes so that similar events might be
prevented. Implementation of recommendations resulting from
investigations can prevent future releases of hazardous substances to
the environment. The CSB's investigative function is completely
independent of the rulemaking, inspection, and enforcement authorities
of both EPA and OSHA.\62\
---------------------------------------------------------------------------

    \62\ www.csb.org.
---------------------------------------------------------------------------

    Hazardous substances management regulations address the storage and
transportation of hazardous substances. These regulations are
implemented by EPA, OSHA, and the Pipeline and Hazardous Materials
Safety Administration (PHMSA). The regulations address the registration
and reporting of hazardous substances that are manufactured or produced
through industrial processes; hazardous substance release prevention;
mitigation of harm caused by hazardous substance releases; safety and
catastrophe prevention for facilities that handle hazardous substances;
and standards for the transportation of hazardous substances. EPA
implements hazardous substances management regulations largely under
the authority of the TSCA and the Pollution Prevention Act (PPA), while
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) applies
to the manufacture and distribution of pesticides.
    TSCA provides EPA with authority to issue rules requiring
reporting, record-keeping, and testing of specific chemicals and to
establish regulations that restrict the manufacturing (including
import), processing, distribution in commerce, use, and disposal of
chemicals and mixtures. TSCA authorizes EPA to prevent unreasonable
risks by regulating chemicals and mixtures, ranging from requiring
hazard warning labels to the outright ban on the manufacture,
processing, distribution in commerce or use of certain chemicals and
mixtures. TSCA and its amendments have also established specific
programs for the management of certain chemicals--namely, PCBs,
asbestos, radon, lead, mercury, and formaldehyde.
    The PPA, passed in 1990, created a national policy framework to
focus industry, government, and public attention on pollution and to
prevent or reduce pollution at the source through technology
modifications, modifications of production processes, product redesign,
and improvements in maintenance, training, and inventory control. PPA
regulations require, among other things, that facility owners and
operators include toxic chemical source reduction and recycling reports
with their annual toxic chemical release filing.
    Pesticides are outside the scope of TSCA's regulatory authority;
EPA explicitly regulates pesticides under the authority of FIFRA. The
modern pesticide regulatory framework came into being with the 1972
Federal Environmental Pesticide Control Act, which further amended
FIFRA. The amendments created registration procedures for pesticides,
including data requirements, Agency review protocols, and
classification procedures. In order to obtain registration,
manufacturers and distributors must submit the pesticide's ingredients,
its target crop, use practices, and storage and disposal practices. The
review includes a determination regarding the pesticide's potential to
cause unreasonable adverse effects on the environment. Classification
procedures involve the categorization of pesticide components as active
or inert. Manufacturers must renew their registration for each
pesticide every 15 years. Following registration, EPA has the authority
to initiate special review procedures if information comes to light
indicating that the use of a pesticide may cause unreasonable adverse
effects on the environment. Regulations under FIFRA also cover the
management and disposal of pesticides through standards and
requirements for containers, repackaging procedure, and the use of
containment structures.\63\ The amendments granted EPA authority to
stop the distribution of, and to remove from use, any pesticide the
Agency finds to be in violation of FIFRA.
---------------------------------------------------------------------------

    \63\ 53 FR 15975; 50 FR 49001; 40 FR 28268; 71 FR 47422;
``Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and
Federal Facilities,'' EPA, accessed October 17, 2018 at: https://www.epa.gov/enforcement/federal-insecticide-fungicide-and-rodenticide-act-fifra-and-federal-facilities; ``About Pesticide
Registration,'' EPA, accessed November 26, 2018 at: https://www.epa.gov/pesticide-registration/about-pesticide-registration.
---------------------------------------------------------------------------

    In addition to registration and reporting requirements for
pesticide products, FIFRA regulations also establish registration and
reporting requirements for pesticide manufacturing facilities. Any
establishment that produces pesticide products or substances used as
active ingredients in pesticides must provide facility and company
information to EPA upon registration. Relevant facilities must also
submit annual reports to EPA that detail the amount of pesticide
product produced and distributed each year, as well as production
estimates for the following year. In connection with the compilation of
annual reports, facilities must keep production, distribution and sale,
shipment, inventory, and testing records.\64\
---------------------------------------------------------------------------

    \64\ 53 FR 35058; 45 FR 54338; ``Federal Insecticide, Fungicide,
and Rodenticide Act (FIFRA) and Federal Facilities,'' EPA, accessed
October 17, 2018 at: https://www.epa.gov/enforcement/federal-insecticide-fungicide-and-rodenticide-act-fifra-and-federal-facilities.
---------------------------------------------------------------------------

    With respect to workplace management of hazardous substances, OSHA
promulgated Process Safety Management (PSM) standards in 1992. The PSM
standards address the potential for unexpected releases of toxic,
reactive, or flammable liquids and gases in processes involving highly
hazardous chemicals. Under PSM, processes include the use, storage,
manufacture, handling, or transportation of hazardous chemicals. The
standards identify approximately 130 toxic and reactive chemicals; they
apply to facilities that manage quantities of those chemicals above a
specific chemical's established threshold. PSM standards also apply to
facilities that manage flammable liquids and gases in quantities of
10,000 pounds or greater. Facilities must compile information on the
hazards of highly hazardous chemicals, including toxicity, reactivity
data, corrosivity data, stability data, and permissible exposure
limits. Facilities must also collect information on the technology used
by each relevant industrial process. With this information, facilities
must complete a process hazardous analysis (PHA) for each relevant
process. The PHA for a facility is a review of possible releases of
hazardous chemicals that may result from the process and safeguards
that the facility will implement to prevent releases.\65\
---------------------------------------------------------------------------

    \65\ ``Process Safety Management,'' OSHA, accessed September 19,
2018 at: https://www.osha.gov/Publications/osha3132.html; 57 FR
6403.
---------------------------------------------------------------------------

    In 2011, OSHA initiated the Chemical Plant National Emphasis
Program (NEP) under its PSM regulations. Through the NEP, OSHA conducts
inspections of randomly selected facilities that handle, manage, or
store highly hazardous chemicals in quantities that meet the PSM
threshold. The inspections include fact gathering related to PSM
requirements and verification that employers have met PSM
standards.\66\
---------------------------------------------------------------------------

    \66\ ``OSHA Issues New National Emphasis Program for Chemical
Facilities,'' OSHA, November 30, 2011, accessed November 29, 2018
at: https://www.osha.gov/news/newsreleases/trade/11302011-0.
---------------------------------------------------------------------------

    Contamination of surface water is largely addressed by the CWA.
Under CWA, EPA has implemented pollution control measures, including
Federal

water quality standards and industry wastewater and Effluent Limitation
Guidelines (ELGs). These regulations set standards for industrial
wastewater discharge to surface water on an industry-specific basis,
identifying key processes and materials to regulate within each
industry. The standards require industrial discharges to meet
technological specifications in their treatment and discharge systems,
rather than pollutant specific quality standards for discharges. ELGs
may set one, all, or a combination of the following types of
technological standards, which facilities within each industry must
meet: Best practicable control technology currently available, best
conventional pollutant control technology, best available technology
economically achievable, new source performance standards, pretreatment
standards for new sources, pretreatment standards for existing sources,
and best management practices.\67\
---------------------------------------------------------------------------

    \67\ ``Industrial Effluent Guidelines,'' EPA at: https://www.epa.gov/eg/industrial-effluent-guidelines; ``Learn About
Effluent Guidelines,'' EPA at: https://www.epa.gov/eg/learn-about-effluent-guidelines; 39 FR 4532 (Feb. 1, 1974).
---------------------------------------------------------------------------

    EPA published industry-specific effluent guidelines for pesticides
in 1978, for inorganic chemicals manufacturing in 1982, and for organic
chemicals, plastics, and synthetic fibers in 1987.\68\ The pesticide
guidelines include even more specific standards for organic pesticide
chemicals manufacturing and metallo-organic pesticide chemicals
manufacturing.\69\ With respect to organic chemicals manufacturing, EPA
promulgated specific standards for facilities that manufacture benzene,
polypropylene, polyvinyl chloride, rubber precursors, chlorinated
solvents, toluene, rayon, nylon, and polyester.\70\
---------------------------------------------------------------------------

    \68\ 43 FR 17776 (Apr. 25, 1978); 47 FR 28278 (Jun. 29, 1982);
52 FR 42522 (Nov. 5, 1987).
    \69\ 43 FR 17776 (Apr. 25, 1978).
    \70\ 52 FR 42522 (Nov. 5, 1987).
---------------------------------------------------------------------------

    Additionally, the CWA established the NPDES permit program, which
controls point source discharges to surface water, and the National Oil
and Hazardous Substances Pollution Contingency Plan (NCP), which sets a
blueprint for responding to oil spills and hazardous substance
releases. At its inception in 1968, the NCP provided a comprehensive
Federal system of accident reporting, spill containment, and cleanup of
oil spills. In 1972, the CWA expanded it to include hazardous substance
releases.\71\
---------------------------------------------------------------------------

    \71\ ``National Oil and Hazardous Substances Pollution
Contingency Plan (NCP) Overview,'' EPA at: https://www.epa.gov/emergency-response/national-oil-and-hazardous-substances-pollution-contingency-plan-ncp-overview.
---------------------------------------------------------------------------

State Regulatory Programs
    Some states impose requirements on the Chemical Manufacturing
industry in addition to requirements related to Federal programs. These
stricter or additional standards for emissions, spill prevention,
emergency preparedness, and hazardous substance management on
facilities that handle toxic or hazardous chemicals can reduce risk at
facilities that manage hazardous substances. EPA researched state
environmental regulations relevant to the Chemical Manufacturing
industry for a representative sample of states. The states with the
highest number of Chemical Manufacturing facilities include California,
Texas, Illinois, Ohio, Florida, New Jersey, Pennsylvania, New York, and
Georgia. A discussion of these state regulations, as well as the
methodology EPA used in selecting the 11 states that it researched in a
background document, is available in the docket for this
rulemaking.\72\
---------------------------------------------------------------------------

    \72\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
---------------------------------------------------------------------------

    One example of a state with standards for Chemical Manufacturing
facilities that are stricter than Federal requirements is Illinois,
which has separate standards for sewage discharges from Chemical
Manufacturing facilities, and additional standards for solid waste
landfills with chemical constituents. Another example is California,
which requires a land covenant upon facility closure, corrective
action, remedial or response action, or any other response action when
hazardous materials, hazardous wastes or constituents, or hazardous
substances remain at a property in levels exceeding suitable use
standards.\73\ California also requires financial responsibility for
owners and operators of underground storage tanks, which includes an
Underground Storage Tank Cleanup Fund that funds eligible corrective
actions.\74\ For producers of extremely hazardous waste, California
also operates an Extremely Hazardous Waste Permit system.\75\
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    \73\ 22 California Code of Regulation (CCR) 67391.
    \74\ 23 CCR 2803.
    \75\ 22 CCR 67430.
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Industry Voluntary Practices
    EPA reviewed facility RMPs, industry materials, governmental
literature, and academic literature to locate voluntary programs that:
(1) Attempt to address CERCLA hazardous substance management or
disposal, and release prevention, mitigation, and response; (2) are
relevant to Chemical Manufacturing facilities; and (3) in which
Chemical Manufacturing facilities participate. Industry voluntary
programs fall into three categories: Those sponsored by Federal, state
or local governmental agencies; those fostered within industry
associations or non-governmental organizations; and those implemented
by individual firms. These programs set or publish environmental
management and safety standards that facilities may follow to
supplement Federal and state requirements with additional standards and
may come with a certification from the government agency or industry
group that establishes the standards. Voluntary programs may also serve
as forums for coordination and collaboration among companies,
facilities, and government agencies to develop best practice standards
and improve emergency preparedness. EPA's review of available studies
found that the industry voluntary programs can be effective at reducing
both pollution and the frequency of government enforcement actions.
    At the federal level, OSHA and FEMA sponsor or collect information
about industry voluntary programs. National and international nonprofit
organizations and industry associations, such as the International
Organization for Standardization (ISO), International Electrotechnical
Commission (IEC) and Global Environmental Management Initiative (GEMI),
also provide environmental management and safety standards and
procedures that facilities may follow, in addition to regulatory
requirements, and certify facilities that meet these specifications.
    The American Chemistry Council, an industry trade association for
chemical companies, adopted the Responsible Care program, which is a
global initiative to further the chemical manufacturing industry's
environmental, health, safety, and security performance efforts, with a
focus on safe chemicals management throughout chemical lifecycles. To
obtain membership in the American Chemistry Council, a company must
participate in the Responsible Care program. Responsible Care requires
that companies commit to and are compliant with the program's guiding
principles and requirements. Participants are subject to reporting
requirements and mandatory facility audits under the program.\76\ A
discussion of industry voluntary practices, as well as the

methodology used by EPA, is available in the docket for this
rulemaking.\77\
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    \76\ ``Responsible Care,'' American Chemistry Council, accessed
October 16, 2018 at: https://responsiblecare.americanchemistry.com/.
    \77\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
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C. Existing State and Federal Financial Responsibility Programs

    To help inform the level of risk of a Fund-financed response action
associated with classes of facilities in the Chemical Manufacturing
industry, EPA reviewed existing state and Federal financial
responsibility programs that may be applicable to the industry and that
cover a wide range of liabilities, including liabilities for closure,
post-closure care, corrective action, third-party personal injury/
property damage, and natural resource damages. EPA focused on these
types of financial responsibility programs for two reasons. First,
these categories of damages, actions and costs are like those that
could be covered by CERCLA Section 108(b) rulemaking, and thus they
help inform the need for CERCLA Section 108(b) financial responsibility
for this industry. Secondly, the existence of financial responsibility
requirements can help create incentives for sound practices, reducing
the risk of releases requiring CERCLA response action. EPA also sought
to identify state cleanup funds that are at least partially funded by
industry (e.g., through a tax on hazardous wastes generated), and that
could cover future CERCLA liabilities that may arise at Chemical
Manufacturing facilities. EPA's report focused on the 25 states
reviewed in EPA's reports on existing state regulatory and voluntary
programs (excluding financial responsibility programs) that may be
applicable to Chemical Manufacturing facilities.
    Finally, EPA reviewed existing financial responsibility
requirements in the following Federal programs: (1) RCRA Subtitle C
TSDFs; (2) TSCA commercial PCB waste facilities; and (3) EPA Safe
Drinking Water Act Underground Injection Control wells. The RCRA
Subtitle C regulations require all TSDFs to demonstrate that they will
have the financial resources to properly close the facility or unit
when its operational life is over, perform post-closure care (if
necessary) and provide the appropriate corrective action in the case of
a release. Additionally, the RCRA liability coverage regulations
require all owners and operators of hazardous waste TSDFs to maintain
accident liability insurance during the active life of their hazardous
waste management units or facilities. These requirements would apply to
facilities in the Chemical Manufacturing industry that treat store or
dispose of a hazardous waste.
    The TSCA regulations for PCB commercial storage facilities require
all commercial storage facilities to demonstrate financial assurance
for closure of the facility. Under the Safe Drinking Water Act
regulations designed to protect underground sources of drinking water,
owners or operators of underground injection control operations are
required to maintain financial responsibility for plugging and
abandonment of wells. These requirements apply to owners and operators
of permit-authorized class I, II, III and geologic sequestration class
VI wells. The report is available in the docket for this
rulemaking.\78\
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    \78\ Review of Existing Financial Responsibility Laws
Potentially Applicable to Classes of Facilities in the Chemical
Manufacturing Industry.
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    EPA identified a range of existing financial responsibility
programs that may be applicable to facilities in the Chemicals
Manufacturing industry. The programs include the Federal programs
mentioned above as well as state programs related to:
     Financial Responsibility for petrochemical manufacturing
facilities,
     Financial Responsibility for phosphate fertilizer
manufacturing facilities,
     Financial Responsibility for hazardous waste TSDFs,
     Financial Responsibility for underground injection of
hazardous wastes,
     Financial Responsibility for PCB storage or disposal
facilities,
     Corrective action financial responsibility to address
hazardous waste or hazardous constituents,
     Facility remediation financial responsibility associated
with transfer in ownership or facility closure,
     Financial Responsibility for storage tanks containing
hazardous substances, and
     Other authorities to require financial responsibility to
assure compliance with orders.
    The applicability of these programs will depend on a variety of
facility-specific factors, for example, use of a specific piece of
equipment (e.g., an underground storage tank that contains regulated
substances) or engaging in a specified activity (e.g., a release of a
hazardous substance). Furthermore, state financial responsibility
programs vary by state and some types of financial responsibility
programs exist only in limited subsets of the states reviewed. EPA
believes that state and Federal financial responsibility programs help
reduce risk of a Fund-financed response action at facilities where they
are applicable. While financial responsibility programs vary in
structure and function, they may reduce such risk in a myriad of ways.
For example, they may help ensure undercapitalized firms do not engage
in environmentally risky enterprises, reduce the incentive to abandon
properties with extensive contamination, ensure compliance with
protective requirements, and incentivize better environmental
practices.

D. Compliance and Enforcement History

    To understand the experience of court settlements and judgments,
EPA looked at compliance and enforcement in the Chemical Manufacturing
industry. EPA believes that compliance assistance, compliance
monitoring, and enforcement are important components of the regulatory
framework discussed above. Through inspections, compliance monitoring
can identify noncompliance at regulated facilities. Enforcement actions
may result in legal instruments that ensure correction of deficiencies
to achieve compliance with environmental requirements. Some functions
of compliance and enforcement actions are particularly pertinent to the
risk determination for rulemaking under CERCLA Section 108(b). First,
if noncompliance causes release of a hazardous substance, then EPA can
ensure through negotiated agreements that the responsible party carries
out or pays for the cleanup. Second, enforcement actions can result in
orders and settlements that compel a responsible party to return to
compliance. Third, the prospect of financial penalties that can
accompany these enforcement instruments can encourage compliance. All
of these functions support the regulatory structure in reducing risk of
Fund expenditures.
    EPA looked at enforcement activities as well as historical
enforcement and compliance data in the development of this proposal.
EPA obtained data from the EPA Enforcement and Compliance History
Online (ECHO) system and provides a review of the Federal environmental
enforcement settlements and judgments data from FY 1972 through FY
2017.\79\ Facilities whose primary NAICS codes indicate Chemical
Manufacturing sector activities (NAICS 325) were included in EPA's
review.

ECHO data show that initiatives and normal review or inspection of
facilities resulted in over 7700 civil enforcement cases in the
Chemical Manufacturing industry from FY 1972 through FY 2017. CAA (32%)
and FIFRA (17%) cases were the most common. There are a smaller number
of cases in RCRA (12%), CERCLA (12%), CWA (11%), EPCRA (11%), and TSCA
(6%). Further description of this review is in the background document,
which is available in the docket for this rulemaking.\80\