(FORTUNE Small Business) – Greg Shierling is every inch a pillar of the community in the all-American city of Quincy, Ill. The franchisee of two McDonald's, he has tutored a legion of the town's teens in the art of business, from making change to mopping floors. He sponsors soccer teams and mans a booth at the local Dogwood Festival. He has donated banquets of burgers to charity events. Now he stands accused by the federal government of being far from a model citizen. The crime: tossing stale hamburger buns and uneaten fries into the town dump. The punishment: $47,000.

Toxic buns? Well, not quite. Fast food is hardly hazardous--except perhaps to your arteries. But thanks to a quirk in the nation's environmental laws, Shierling is being made to pay for the sins of six of the nation's biggest corporations, who befouled the hometown dump. Back in the 1960s and 1970s, Harris Corp., Motorola, and four other big companies polluted the Quincy dump with acids, sludge, and industrial solvents. Two decades later, the federal government sent the six a cleanup bill for $17 million. Divvied among the companies, that hardly seems onerous. But under the law, those companies are permitted to try to squeeze a portion of the tab out of anyone unlucky enough to have sent waste to the same site.

That's why besides Shierling, others are singing the blues in Quincy. In all, 159 companies have been socked with assessments of as much as $160,000. Most say they were guilty of dumping stuff no more toxic than wastepaper. But under the federal environmental laws known commonly as Superfund, the government will go after you even if it isn't certain your waste was hazardous. Most of those smaller businesses eyed the cost of fighting the feds--and the six polluters who fingered them--and figured it was cheaper to pay up. But some vow to battle even while their legal fees soar. "I was brought up with a sense of ethics," Shierling says. "There's right, and there's wrong. We've done nothing wrong."

Quincy isn't alone in its woes. Back in the early 1990s, the federal environmental agency declared a Superfund site in Gettysburg, Pa. There, 185 small business owners were called to help pick up the tab for a cleanup estimated to cost as much as $15 million. They in turn dragged another 550 businesses into the fray, creating a morass of litigation. Most of the businesses settled last September, but dozens remain locked in federal court reenacting the battle of Gettysburg.

Your hometown could be next. The National Federation of Independent Business (NFIB), an advocacy group based in Washington, D.C., estimates the number of Superfund sites with potential liability for small business at 250. Tens of thousands of businesses could be at risk of being hit with the same sorts of assessments as folks in Gettysburg and Quincy. "They may be on the hook for thousands of dollars for legally throwing out garbage," says Tom Sullivan, executive director of the NFIB's legal foundation. Small business could get some relief from a Superfund reform bill now before Congress. But because the bill also includes some tax increases, it's unlikely to pass in an election year.

Back in Quincy, business folks don't have much faith in the system anymore. The Superfund situation is the latest in a series of blows to the city, which sits on the eastern bank of the Mississippi River about two hours north of St. Louis. Floods devastated the region in 1993. But boosters are working hard to revive civic spirit, and signs on the city line hail the high school champion pompon team and the city's designation as a "Tree City U.S.A." Superfund, however, has thrown one big stink bomb into the city's recovery by disrupting what was for many local small businesses the first good year in almost a decade.

Quincy's troubles date back to the environmentally neglectful '60s and '70s. That's when five major manufacturers--tiremaker Bridgestone-Firestone, industrial-equipment maker Coltec Industries, machinery manufacturer Gardner-Denver, broadcast-equipment maker Harris Corp., and electronics giant Motorola--pumped prodigious volumes of toxic acids, sludge, and industrial solvents out of their local plants. They hired waste-removal titan BFI Waste Systems of North America to haul it off to the local landfill. Dumping such waste wasn't illegal when the companies were doing it, but they became liable for cleanup after the Superfund laws were passed in the 1980s.

Eventually, the landfill overflowed, and toxins oozed into nearby ground water. The city closed the landfill in 1978. The U.S. Environmental Protection Agency declared it a Superfund site in 1990. Shortly after that, the feds went after the five manufacturers, BFI, and the city of Quincy to pay cleanup costs.

In 1996, the city and the Big Six--as all the companies were dubbed--agreed to pay approximately $17 million to clean and police the site for the next 30 years. Then, using city records and a list of clients from BFI, the group targeted 159 small businesses that had also sent waste to the site. The EPA calculated each business' share based on the volume of trash it had sent to the dump. Last year, those businesses were told they had two weeks to pay their assessments or they'd be sued. Fearing a costly legal battle, most settled. Those too stubborn--or too poor--to do so continue to soldier on.

But battle takes a toll. Rodney Gooding, an independent trash hauler, was assessed $86,000. For more than a year, he has agonized that the fine would cost him his farm. Amazingly, Gooding says he never took trash to the dump. His father also hauled garbage, some 30 years ago, Gooding says, but it was a completely separate business, and the son says he has the records to prove it. (Kenneth Gooding, his father, is retired and could not be reached for comment.) But landfill records attribute 4,225 cubic yards of solid waste to an unspecified Gooding, and Rodney's business was fingered by the six companies. Gooding says he, his wife, and their three kids scrape by on an annual income of $25,000. The fine, he says, would break him. Perhaps because of that, the Big Six recently dropped his name from the list of small businesses they intend to pursue.

The fight continues for Greg Shierling, however. He was in grade school in the '60s and '70s when his parents hired BFI to take away the garbage from their McDonald's. Shierling grew up in that restaurant. Days after he was born, he was stowed in a playpen there while his mother worked the store. Shierling took over the business from his parents in 1996 and was dumbfounded when he got the letter from the EPA in 1999 telling him he was a polluter to the tune of $65,000. Shock turned to defiance, and he's refusing to settle--even though the feds reduced his fine to $47,000.

Meanwhile, Shierling is paying $4,000 a month in legal bills to fight and faces a six-figure judgment if he loses. He has been forced to lay off two longtime employees, and he says his parents are drawing on their retirement money to help him and his wife support their two young children. Firing loyal workers was one of the hardest things he's ever had to do, he says. He had written a prepared script to help him maintain his composure, but he says he burst into tears anyway. Yet he refuses to buckle under. "I just couldn't feel good about saying, 'I'm sorry, here's $47,000, I'm out,' " he says.

Many of those who settled still seethe about the situation. Just stop by Sprouts Inn, a restaurant that has been in the McClean family for 60 years. It's famous here for its fried chicken and homemade pies, and if you walk in during lunch hour on a weekday you'll see a rangy guy with a four-day beard mingling among the farmers and retirees. That's proprietor Pat McClean, who was hit for $21,900. He says his trash consisted of chicken bones, potato peelings, and soiled napkins. He thought about fighting, but he was demoralized by a recent divorce.

McClean is a weekend biker who likens the assessment to a shakedown. "Paying that $21,900 was like buying a brand-new Harley, loading it up with chrome, and handing it over to the EPA," he says.

John and Tim Spake, identical twins who run Comstock-Castle Stove Co., a small manufacturer, settled for the relatively small sum of $5,927. Still, John is furious about the whole thing, and he's especially steamed at the city of Quincy. More than 1,000 small businesses operated in Quincy during the '60s and '70s, and almost all of them probably sent trash to the landfill. But only companies that had hired BFI were implicated in the cleanup. Why? Unlike a lot of other trash haulers, BFI keeps scrupulous records. John faults the city for refusing to levy a small tax increase to spread around the cost. He's so angry, in fact, that he's threatening to move his company--and its 34 jobs--out of Quincy.

That sparks the ire of Mayor Chuck Scholz, who defends the city's actions. He points out that Quincy paid its share of the cleanup but declined to go after small businesses to recoup some of its costs. As well, he says, the city agreed to give businesses limited indemnification for possible future assessments from other agencies. But Scholz says a tax increase was out of the question. Raising taxes would have made the city a less attractive place to live and invest, he says.

The Big Six say they don't intend to drive anyone into bankruptcy, they just want a fair shake in Quincy. Besides, they say, small businesses got off easy. Gary Justis, the Kansas City, Mo., lawyer who represents the Big Six, says his clients cut small businesses a compassionate deal. Their assessments--the lawyers and the feds don't like to call them fines--were based on the total volume of waste sent to the dump, toxic and otherwise, over the years. As a result, the small businesses paid lower fees than they would have had the feds calculated their share based on the volume brought only by the parties involved in the litigation.

And besides, Justis adds, his clients' waste was proportionally no more toxic. They just deposited more of the stuff, he says, and hence, they're paying several million bucks instead of a few thousand. "Everybody is in the same boat here," he says. He also points out that a lot of people don't realize how broadly the feds define toxic waste. Under current regulations, an empty paint can or a bottle of nail polish remover is considered hazardous waste.

That debate aside, help could be on the way for other communities snared in Superfund troubles, if not for Quincy. U.S. Congressman John Shimkus (R-Ill.), whose district contains the southern edge of Quincy, last year introduced the Small Business Superfund Fairness Act with the backing of some small business organizations. His bill would exempt businesses with fewer than 100 full-time employees from Superfund liability as long as they're generating only household-type waste.

His bill has broad bipartisan support, but that creates a double-edged sword. Folks on Capitol Hill like the bill, but they like it so much that it's being held hostage as a "sweetener" in a package to reform Superfund. That bill also promises some unpopular tax increases. And few politicians want to vote for a tax increase, especially in an election year.

But it's all of little help now to the 159 small business owners in Quincy. Even those who paid their assessments can't put the situation behind them. Spake and others have settled with the U.S. EPA, but different agencies could come after them for additional money. The Illinois EPA hasn't ruled out fines, and the U.S. Department of the Interior could take action if it found that the dump hurt local wildlife.

In such cases, those who have settled are sitting ducks, because they've basically admitted guilt already. "By paying, I thought we had closure," says Eldor Hadler, whose truck dealership was assessed $46,000. He recently sold his business to his son and another partner, although he still frets about the future. "There's a dark cloud hanging over the business," he says. "They could come back at any time."