The Honorable Christopher S. Bond
Chairman
Small Business Committee
United States Senate
Washington, DC 20510-6350
Dear Chairman Bond:
This letter is in response to your correspondence regarding specific regulatory activities of the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA). The Office of Advocacy has been following these issues closely.
The Office of Advocacy has been working with federal agencies, the Office of Management and Budget (OMB) and small businesses to encourage compliance with and understanding of the Regulatory Flexibility Act as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). Compliance by EPA and OSHA is being monitored closely by the Office of Advocacy. As requested, we are providing you with a summary of our activities and views on the issues identified in your letter.
Environmental Protection Agency
Toxic Release Inventory - Phase Two (Industry Expansion)
EPA proposed this rule on June 27, one day before the effective date of SBREFA. We worked with EPA and OMB before this rule was proposed on some significant issues. We also filed comments on the published proposal on September 25. Based on our review of EPA's economic analyses, we have concluded that there would be significant economic impacts incurred on small chemical wholesalers and small petroleum bulk plants. In our comments, we pointed out several major inadequacies with the regulatory flexibility analyses, performed to comply with the requirements of the Regulatory Flexibility Act. In our view, EPA needs to explore regulatory alternatives that would substantially reduce the costs of this regulation, and still preserve the right-to-know of the community. To this end, we are continuing to work with EPA and OMB in the final promulgation of this rule.
Toxic Release Inventory - Phase Three (Chemical Use Reporting)
EPA published an advance notice of proposed rulemaking (ANPR) on October 1 with a ninety day comment period. We worked with EPA and OMB in drafting this advance notice. As we informed both agencies, we are very skeptical of how valuable the chemical use data will be in reducing environmental risks. We also are deeply concerned about its costs vis-a-vis benefits. We have urged EPA to complete its study of the value of this information and to compare it to the state-run programs in New Jersey and Massachusetts. Since SBREFA and the RFA do not apply to advance notices, we do not plan to submit comments on the ANPR. However, Advocacy expects to be involved in any proposal that may arise in the future.
National Ambient Air Quality Standards -- Ozone and Particulate Matter
Although Advocacy believes that SBREFA applies to these two proposals, EPA has formally disagreed with this opinion. As you know, at our request, EPA has volunteered to hold a small business panel. The panel will be for both ozone and particulate matter and will run in parallel with the sixty day comment period that began earlier this month. (If EPA had agreed that SBREFA applied, the panel process would have been completed before the proposed rule was published.)
Advocacy provided comments to EPA and OMB in the review of the proposed standards, and we expect to be heavily involved in the panel process for these standards. EPA has produced substantial economic analyses for these two proposals, including small business analyses, which serve the purposes of the RFA. We have not yet seen EPA's final economic analyses, to determine whether the agency has addressed our suggestions. Our preliminary assessment indicates that promulgation of a revised ambient standard would lead to regulations that would have a significant impact on tens of thousands of small businesses. Many of these businesses could experience an annual cost in excess of 3 to 10 percent of sales. Our concerns about potential costs are heightened by the body of evidence suggesting fewer health benefits then estimated by EPA for the revised standard. These scientific differences need to be addressed. We will be submitting comments on these rules as the process continues
Architectural and Industrial Maintenance Coatings
EPA proposed a rule regulating the volatile organics content of architectural coatings in June, before the effective date of SBREFA. We also worked with EPA and OMB on this rule. We shared with you a copy of our June 25, 1996, letter to Congressman Talent about Advocacy's participation in this rulemaking. We have been involved in various industry meetings on the issue and continue to work with EPA and OMB on the rule. We are urging EPA to reduce the significant economic burdens on small firms by way of appropriate regulatory relief, such as small volume exemptions, fee reductions and a delayed effective date.
Occupational Safety and Health Administration
Occupational Injury and Illness Recording and Reporting
Advocacy held a roundtable meeting on this issue in April with small business representatives. We testified at a public meeting on May 31, and submitted written comments on July 1 to OSHA on the proposed rule for recordkeeping. The agency certified that the rule would not have a significant economic impact on a substantial number of small entities and offered as justification that the exemptions for the smallest businesses would minimize the impact. However, many small businesses, primarily manufacturing, will be affected significantly because they are not micro-businesses, ergo, ineligible for the exemption.
The rule will be onerous for several reasons. First, the rule would expand requirements for logging injuries and illnesses, including musculo-skeletal system disorders. Second, the rule puts new paperwork requirements on construction companies with little off-setting benefit. Third, employers would be required to give all employees, former employees and employee representatives access to a variety of confidential records. For these reasons, we believe the certification was inadequate. Advocacy, therefore, proposed several ways to simplify the rule, recommended full evaluation of its impact on specific industries, and suggested eliminating some provisions.
Methylene Chloride
OSHA is expected to publish a final rule for methylene chloride exposure in the coming weeks. During OMB review of this rule, we submitted a letter on August 27, to Administrator Sally Katzen expressing our concerns about the inadequacy of the regulatory flexibility analysis and the lack of alternatives developed for the affected industries. In addition, we expressed reservations since EPA's views on the hazards of methylene chloride seem to differ from OSHA's. If we are correct, the differences need to be reconciled.
We participated in a meeting with OMB, OSHA, EPA and industry representations on the concerns that were raised by small businesses. OSHA has been trying to identify ways to relieve the regulatory burden on the manufacturing sector before publishing the rule. However, we are holding judgment until the final rule and the accompanying analysis are published. We expect to comment on any outstanding issues.
Ergonomics
The ergonomics issue is a major concern of the small business community and the Office of Advocacy. As stated previously, we raised concerns within the context of the recordkeeping proposed rule about regulating muscular-skeletal disorders (i.e., ergonomics). Ergonomics is an indefinite science with many ambiguities. We have in the past and continue to communicate our concerns to OSHA. Advocacy is holding an industry roundtable meeting to discuss the issue with small business. We fully believe this activity warrants a complete analysis under the Regulatory Flexibility Act. Advocacy will make every effort to assure the views of small business are considered and addressed by OSHA.
Violence Guidelines for Night Retail Establishments
The Office of Advocacy met with your staff and staff from the House Small Business Committee to discuss this issue. We also reviewed the draft guide with many small business organizations, including the National Federation of Independent Business and the National Association of Convenience Stores. Advocacy urged OSHA to extend the deadline for comments and hold stakeholder meetings, which the agency did. In addition, we submitted comments on September 30, citing several substantive issues. The most obvious concerns about the guide are its use in OSHA enforcement action and its evidentiary probity as a standard of care in third party litigation. OSHA completed an extended comment period on December 4, and we will follow the developments.
If you or your staff have further questions on these issues, please contact me.
Sincerely,
Jere W. Glover
Chief Counsel for Advocacy
* Last Modified: 6/14/01