EFFLUENT LIMITATIONS GUIDELINES AND PRETREATMENT STANDARDS FOR THE INDUSTRIAL LAUNDRIES POINT SOURCE CATEGORY; PROPOSED RULE: 62 Fed. Reg. 66,181 (Dec. 17, 1997) Docket No. W-97-14 JOINT COMMENTS OF THE TEXTILE RENTAL SERVICES ASSOCIATION OF AMERICA AND THE UNIFORM & TEXTILE SERVICE ASSOCIATION ON THE ENVIRONMENTAL PROTECTION AGENCY'S NONCOMPLIANCE WITH SBREFA AND THE REGULATORY FLEXIBILITY ACT March 19, 1998 John C. Contney Executive Director, TRSA David F. Hobson President and CEO, UTSA Of Counsel: Keith Noman Cole Richard S. Davis Michelle A. Wenzel Beveridge & Diamond, P.C. 1350 I Street, N.W. Washington, D.C. 20005 (202) 789-6000 SUMMARY OF COMMENTS These comments focus on the small business aspects of the proposed rule because 93 percent of all IL firms—the vast majority of which are Association members—have less than $10.5 million in annual receipts and thus qualify as "small businesses" under the RFA. Accordingly, EPA's fulfillment of the statutory mandate of SBREFA is of particular importance to the industry. As Congress acknowledged when it enacted SBREFA, small businesses have specific, legitimate concerns about the effects of federal regulatory programs on their ability to compete in the marketplace. As discussed in Part III below, EPA's IRFA for this rule does not meet the minimum statutory requirements established under Section 603(b) of the RFA. EPA therefore has misinformed small entities and foreclosed their opportunity to submit meaningful comments on the proposed rule. Contrary to what is required by Section 603(b), the IRFA does not describe the purpose, need, or objectives of the proposed rule. The IRFA does not describe the reporting, monitoring, or recordkeeping requirements the new rule will impose on small entities. It does not describe other compliance burdens that small entities will bear under the proposal, such as hiring certified wastewater treatment system operators or purchasing land upon which to build treatment facilities. The IRFA does not identify federal rules that duplicate, overlap, or conflict with the proposed rule, such as the National Pretreatment Program, the Pollution Prevention Act, and EPA's Office of Solid Waste initiative on industrial shop towels. As discussed in Part IV below, EPA's IRFA for this rule does not meet the minimum statutory requirements established under Section 603(a) of the RFA. EPA therefore has misinformed small entities and foreclosed their opportunity to submit meaningful comments on the proposed rule. Contrary to what is required by Section 603(a), the IRFA does not adequately describe for small entities the potential impacts on them caused by the proposed rule. EPA's small business analysis inadequately assesses impacts on small entities because it is derived from EPA's firm failure and facility closure analyses. In those analyses, EPA: (1) improperly uses Altman Z"-scores to predict firm failures; (2) improperly understates the degree of market competition and the potential for market shifts to laundry substitutes; and (3) draws inconsistent conclusions on the number of small facilities that will close as a result of the proposed rule. Moreover, the IRFA should address a number of issues that EPA has ignored. The IRFA (and the firm failure and facility closure analyses) does not assess impacts based on how small businesses actually make financial decisions, nor do the analyses consider the much higher compliance costs per pound of production that small businesses will be forced to bear under the rule. The IRFA fails to examine the impacts on small entities of consolidation pressures, and it fails to examine the impacts of the rule on small governments that operate POTWs. As discussed in Part V below, EPA's IRFA for this rule does not meet the minimum statutory requirements established under Section 603(c) of the RFA. EPA therefore has misinformed small entities and foreclosed their opportunity to submit meaningful comments on the proposed rule. Contrary to what is required by Section 603(c), the IRFA does not consider significant regulatory alternatives because EPA improperly assessed the cost effectiveness of the model treatment option, chemical precipitation. Moreover, the IRFA does not consider significant regulatory alternatives such as best management practices or the "no regulation" option. Finally, EPA improperly used its economic impact models to establish the exclusion from regulation: a proper use of the models would have provided a more accurate examination of significant alternatives that have fewer impacts on small entities. As discussed in Part VI below, EPA failed to comply with SBREFA because it did not provide relevant information to the SBREFA panel or small entity representatives. Further, the Agency did not incorporate the panel's findings into the IRFA or the proposed rule. In short, EPA's analysis is so inadequate that the Agency has failed, as a matter of law, to properly conduct a complete IRFA. A properly conducted IRFA is a critical requirement of the RFA, and EPA's failure to conduct such an IRFA cannot now be remedied. In order to meet its statutory obligations under the RFA, EPA must withdraw this proposed rule, conduct a proper SBREFA panel process, draft a proper IRFA, and provide an opportunity for public comment before promulgating the rule in final form. [ Consumer | Public | Members | ASK TRSA First!] ©1996-99 TRSA, 1130 E. Beach Blvd. Suite B, Hallandale, Florida, 33009. All Rights Reserved.