Report of the Small Business Advocacy Review Panel
                               on
                   EPA's Planned Proposed Rule
                               for
          Effluent Limitations Guidelines and Standards
                               for
            The Centralized Waste Treatment Industry
                        January 23, 1998

INTRODUCTION

     The Small Business Advocacy Review (SBAR) Panel has prepared
this report for the rulemaking entitled "Effluent Limitations
Guidelines and Standards for the Centralized Waste Treatment
Industry" that the Environmental Protection Agency (EPA) is
currently developing.  On November 6, 1997, EPA's Small Business
Advocacy Chairperson, Thomas E. Kelly, convened the Panel
pursuant to Section 609(b) of the Regulatory Flexibility Act
(RFA) as amended by the Small Business Regulatory Enforcement
Fairness Act of 1996 (SBREFA).  In addition to its chairperson,
members of the Panel include Sheila E. Frace, Acting Director of
the Engineering and Analysis Division within EPA's Office of
Water; Sally Katzen, Administrator of the Office of Information
and Regulatory Affairs within the Office of Management and
Budget;  and Jere W. Glover, Chief Counsel for Advocacy of the
Small Business Administration.
     
     The Panel collects the advice and recommendations of
representatives of small entities that may be affected by a
proposed rule and reports their comments as well as the Panel's
findings on issues related to the key elements of an initial
regulatory flexibility analysis (IRFA) under Section 603 of the
RFA.  The elements of an IRFA are:
-    The number of small entities to which the proposed rule will
     apply.
-    Projected reporting, record keeping, and other compliance
     requirements of the proposed rule, including the classes of
     small entities which will be subject to the requirements and
     the type of professional skills necessary for preparation of
     the report or record.
-    Other relevant Federal rules which may duplicate, overlap,
     or conflict with the proposed rule.
-    Any significant alternatives to the proposed rule which
     accomplish the stated objectives of applicable statutes and
     which minimize any significant economic impact of the
     proposed rule on small entities.

     Once completed, the Panel report is provided to the agency
issuing the proposed rule and is included in the rulemaking
record.  In light of the Panel report, the agency then modifies
the proposed rule, the IRFA, and/or the decision on whether an
IRFA is required as appropriate.

     This report by the Panel for the Centralized Waste Treatment
Industry (CWT) planned proposed rule includes a summary of the
advice and recommendations received from each of the small entity
representatives identified for purposes of the panel process.
EPA or the Panel conducted three conference calls/meetings with
small entity representatives to discuss their comments and obtain
additional input.  Summaries of these calls are included as
Attachments A, B, and C.  The full written comments submitted by
the representatives are also provided in Attachment D to the
report. The report also presents the Panel's findings and a
discussion of issues related to the elements of an IRFA
identified above.

SCOPE AND BACKGROUND

     The objective of the Clean Water Act (CWA) is to "restore
and maintain the chemical, physical, and biological integrity of
the Nation's waters."  In order to achieve this objective, the
CWA establishes as a national goal the elimination of the
discharge of pollutants into navigable waters.  To promote
further progress in achieving the objective and to comply with
sections 304 and 307 of the CWA, EPA is developing effluent
limitations guidelines and pretreatment standards for existing
and new centralized waste treatment facilities.  These will limit
the discharge of pollutants into waters of the United States and
the introduction of pollutants into publicly owned treatment
works (POTWs) by centralized waste treatment facilities.  CWTs
treat and/or recover waste, wastewater, and/or used material
received from off-site generators.  The off-site materials are
the result of industrial activities and may be classified as
hazardous or non-hazardous materials under the Resource
Conservation and Recovery Act (RCRA).  Some CWTs treat off-site
waste exclusively while others treat on-site generated waste
along with off-site generated waste.

     The wastewater flows covered by this rule include all off-
site waste receipts and all on-site wastewater generated as a
result of centralized waste treatment operations such as
solubilization wastewater, emulsion breaking/gravity separation
wastewater, used oil processing wastewater, treatment equipment
washes, transport washes (tanker truck, drum, roll-off boxes),
laboratory-derived wastewater, air pollution control wastewater,
incinerator wastewater from on-site incinerators, landfill
wastewater from on-site landfills, and contaminated storm water.
In summary, all wastewater discharges from CWT facilities will be
subject to provisions of the planned CWT rule unless specifically
excluded in the regulation.

     When it is issued, the CWT proposal will present the result
of the Agency's reconsideration of the January 27, 1995 proposal
for national effluent limitations guidelines and pretreatment
standards for the centralized waste treatment industry.  EPA is
re-proposing the CWT rule in order to clarify the scope of the
guidelines, incorporate changes in the composition of the
industry since original data collections, revise the regulatory
alternatives, and address many of the issues raised in public
comments.

     EPA's current plans would subcategorize this industry based
on the type of materials treated or recovered.  EPA plans to
propose three subcategories:

    Metal Bearing Waste Treatment and Recovery Subcategory
     ("Metals");
    Oily Waste Treatment and Used Oil Recovery Subcategory
     ("Oils"); and
    Organic Waste Treatment Subcategory ("Organics").

EPA estimates that there are 60 facilities in the metals
subcategory (including 7 facilities owned by small firms), 165
facilities in the oils subcategory (including 51 facilities owned
by small firms) and 27 facilities in the organics subcategory
(including 2 facilities owned by small firms).

PROFILE OF THE INDUSTRY

     Centralized waste treatment facilities are service
businesses which treat other company's waste streams. The
creation of central treatment facilities was encouraged by
earlier effluent guidelines.  In developing these effluent
guidelines for categorical industries, EPA has generally
classified facilities which ship their waste off-site to CWTs as
zero or alternative dischargers whose costs are not evaluated in
developing the categorical standards.  Additionally, RCRA
regulations, such as the 1992 used oil management requirements
(40 CFR 279) significantly influenced the size and services
provided by this industry.

     Centralized waste treatment facilities vary by size and the
type of  waste streams they accept.  Some treat waste streams
from a few generating facilities while others treat waste streams
from hundreds of generators.  Some treat certain types of waste
streams exclusively while others accept a variety of  waste
streams.  Some treat non-hazardous waste streams only while
others treat hazardous and non-hazardous waste streams. For some,
their primary business is the treatment of other company's waste
streams and, for others, centralized waste treatment is ancillary
to their main business.

     Based upon responses to EPA's data collection efforts, the
Agency estimates that there are approximately 208 centralized
waste treatment facilities in 39 states, of which 55 are owned by
small businesses. (Note that the numbers of facilities in each
subcategory add up to more than 208 because some facilities fit
into more than one subcategory).  The major concentration of CWT
facilities is in EPA Regions 4, 5, and 6 due to the proximity of
the industries generating the wastes undergoing treatment.

     EPA estimates that the CWT industry annually discharges 4.4
million pounds of priority pollutants, 20 million pounds of non-
priority metal and organic pollutants, and 490 million pounds of
conventional pollutants (which may slightly overlap with the
priority and non-priority pollutants).  EPA sampling has detected
over 100 different pollutants that are reduced through treatment
in CWT wastewater.  EPA has not yet determined the final list of
pollutants which will be regulated.
APPLICABLE SMALL BUSINESS DEFINITIONS

     EPA has carefully considered the appropriate definition for
a small entity. The Agency reviewed SBA's small business
definition for all Standard Industrial Classification (SIC) codes
for this industry.  Although firms that own facilities that
provide centralized waste treatment services are found in more
than 24 SIC codes, the majority of facilities (over 70%) reported
in the 1991 Waste Treatment Industry Questionnaire a SIC code of
4953 (Refuse Systems) which has a $6.0 million annual revenue
(firm level) definition.

     During the Panel process, seven CWTs provided SIC codes.  Of
these, four are also in SIC code 4953 and two are in SIC code
5093 (Scrap and Waste Materials) which has a small business
definition of $5.0 million annual revenue.

     Based on the above, for purposes of its initial regulatory
flexibility analysis, EPA has defined a facility as a "small
business" if it is owned by a firm with annual revenues of $6.0
million or less.

SUMMARY OF OUTREACH ACTIVITIES

     Outreach to the regulated community is an important part of
regulation development.   EPA has actively involved stakeholders
in the development of the proposed rule in order to ensure the
quality of information, identify and understand potential
implementation and compliance issues, and explore regulatory
alternatives.  EPA conducted a survey of the industry and
received completed detailed questionnaires from 416 facilities.
In addition, EPA published two Federal Register Notices
(including the 1995 proposal) presenting information and
requesting input on various issues related to the CWT effluent
guideline.  EPA has received over 200 written comments from these
notices.  EPA sponsored two public meetings, one prior to the
original proposal on March 8, 1994 and one on July 27, 1997.
Following the 1995 proposal, EPA also held a workshop and public
hearing to discuss topics of interest to stakeholders and to
receive oral comments.  EPA has performed 41 site visits to CWT
facilities and has participated in numerous meetings, seminars,
and workshops that included substantial small business
representation.

     Since 1996, EPA has been particularly proactive in its
outreach activities.  EPA has participated in numerous
conferences in various locations throughout the United States
with  small business participation.  EPA mailed copies of the
1996 Federal Register Notice and Notification of the 1997 Public
Meeting to all facilities that it could identify which may be
subject to this rule.  EPA also plans to mail copies of the
upcoming proposal to each affected facility.  Additionally, EPA
has worked closely with the various industry groups, particularly
the National Oil Recycler's Association (NORA), to ensure that
small businesses are informed of our activities and to ensure
that small business concerns are voiced to the Agency.

SUMMARY OF SBREFA OUTREACH

     As part of its SBREFA outreach, EPA tentatively identified
one small entity representative (SER) "for the purpose of
obtaining advice and recommendations . . . about the potential
impacts of the proposed rule;" (SBREFA,  244(b)(2)) and provided
the name to the Chief Counsel for Advocacy of the Small Business
Administration on May 16, 1997: the National Oil Recyclers
Association (NORA).  On May 30, 1997, based on conversations with
EPA and a review of comments to the original proposal, SBA
suggested the addition of two other SERs:  the Environmental
Technology Council and the Synthetic Organic Chemical
Manufacturers Association.  The Synthetic Organic Chemical
Manufacturers Association subsequently indicated that they were
not interested in participating in this process and that their
members were not centralized waste treatment facilities.  In
October, an associate at Seyburn, Kahn, Ginn, Bess, Deitch, and
Serlin, a law firm that represents nine CWT businesses,
volunteered to participate.  The final list of the SERs is as
follows:

                    
SERs                Company or Trade Association
                    
Jack Waggener       Resource Consultants, Inc., for the
                    National Oil Recyclers Association
                    
David Case          Environmental Technology Council
                    
Beth Gotthelf       Seyburn, Kahn, Ginn, Bess, Deitch, and
                    Serlin, for the CWT Coalition

     Attachment E lists all of the materials that EPA provided to
the SERs and to the Panel.
EPA's outreach to the SERs prior to convening the Panel and the
Panel's subsequent outreach is summarized below:

         EPA sent CWT background materials and information on
          projected impacts and regulatory options to the SERs on
          September 15, 1997.
         EPA provided information on engineering costs,
          analytical costs, methodologies and alternatives to
          minimize small business impacts on October 23, 1997.
         EPA held a meeting with SERs to discuss the background
          materials and to address questions on October 30, 1997
          (summarized in Attachment A).
         EPA held a conference call with SERs on November 5,
          1997 to further discuss the information provided on
          October 23, 1997 (summarized in Attachment B).
         The SBREFA Small Business Advocacy Review
          Panel, convened November 6,  held a
          conference call with SERs on November 20,
          1997 to discuss their written comments
          (summarized in Attachment C).
         SERs provided written comments to the Panel
          (Attachment D).  The Panel notes that
          comments were received up to and beyond the
          sixty day statutory period for the Panel.
          Limited consideration was given to those
          comments received late in the process.

SUMMARY OF INPUT FROM SMALL ENTITY REPRESENTATIVES

Number of Small Entities

     Beth Gotthelf, of the law firm of Seyburn, Kahn, Ginn, Bess,
Deitch, and Serlin, representing a coalition of centralized waste
treatment facilities, commented that EPA has underestimated the
number of small businesses which will be subject to the CWT rule.
She believes that a significant portion of CWTs has not been
identified by EPA.  She provided a list of CWTs in the Michigan
area that she believed were not accounted for in EPA's estimate,
and conceded that it is often difficult to identify CWTs.  She
also questioned SBA's use of a $6 million threshold since many
small entities in the industry tend to be above that threshold.
She requested that SBA explain how the $6 million threshold was
determined.

     Jack Waggener, from Resource Consultants Inc., representing
the National Oil Recyclers Association (NORA), agreed with Ms.
Gotthelf that EPA has underestimated the total population of CWTs
and, therefore, the number of small entities.  He was unable to
offer any additional ways to identify CWTs that EPA had not
already utilized, and provided no independent estimates.

Reporting, Record keeping and Other Compliance Requirements
     
     Ms. Gotthelf provided detailed information on the
monitoring, reporting and compliance requirements to which CWTs
are already subject.  She expressed concern that additional
monitoring, reporting, and other compliance requirements would
increase the burden that exists for an already heavily-regulated
industry.  Members of her coalition estimated that they already
spend over twelve percent of their work force fulfilling
requirements of regulatory programs.  She also commented that
these regulatory programs do not exempt small businesses or
decrease the reporting or record keeping requirements on small
businesses.  She expressed concern over the ability of small
businesses to fulfill their regulatory requirements since many of
these facilities lack employees with the required professional
skills.

     Ms. Gotthelf suggested that EPA consider limiting the
required analyses to an indicator parameter.  She commented that
this was a way to reduce costs and maintain the integrity of the
regulation.  She suggested that CWTs analyze for an indicator
parameter such as total organic carbon (TOC) or total suspended
solids (TSS).   If a facility's effluent exceeds the limitation
on the indicator parameter, then the facility would be required
to run a full organic scan or full metals scan.  Ms. Gotthelf
also stated that if EPA chose to require full scans rather than
an indicator parameter, the monitoring frequency should be twice
per month to reduce burden while assuring the variability of the
wastestreams is captured through monitoring.  Finally, Ms.
Gotthelf responded to a Panel question as to the appropriateness
of using silica gel treated n-hexane extractable materials (SGT-
HEM) as an indicator parameter for the oils subcategory.  Ms.
Gotthelf's facilities responded that this would be problematic
due, in part, to inconsistencies and the accuracy of the
analytical method for SGT-HEM.

     Additionally, Ms. Gotthelf suggested that EPA provide
additional time for small businesses to install pollution control
devices as a way to reduce burden.

     Mr. Waggener concurred with Ms. Gotthelf that CWTs are
already subject to many reporting and record keeping requirements
and that the burden to small facilities was of particular
concern.

     Mr. Waggener commented that EPA had done a good job of
estimating monitoring compliance costs and noted that EPA had
reduced its monitoring frequencies from the 1995 proposal.  He
stated that facilities generally monitor for metals, semi-
volatiles organics and volatile organics no more than once a
quarter and at the most, once a month.  He recommended an
analytical monitoring frequency of no more than once per month
for the industry and reduced monitoring of once per quarter for
small entities.

     Mr. Waggener is also receptive to the idea of an indicator
parameter.  He noted that SGT-HEM or total petroleum hydrocarbons
(TPH) can be used as an indicator parameter to identify that
emulsion breaking and dissolved air flotation (DAF) are working
effectively and that the use of a indicator parameter would
significantly reduce the costs of compliance monitoring.
However, he expressed concern over the use of  SGT-HEM or TPH as
indicator parameters since meeting these limits can be very
expensive.  Mr. Waggener added that a TPH limit should be several
hundred milligrams per liter to be appropriate.  He believes that
a standard for indirect dischargers based on one of these
parameters would result in many facilities installing and
operating expensive treatment systems with relatively small
amounts of toxics being removed from their wastestreams.  He
first stated his belief that facilities which discharge to a POTW
generally are not subject to oil and grease limitations, but
later stated that they have oil and grease limitations between
100 and 500 mg/L. He thus believes that most CWTs already achieve
most of the toxic removals that EPA projects for the proposed
rule.  He echoed Ms. Gotthelf's concern about the testing method
for SGT-HEM.

Interaction with other Federal Rules

     Ms. Gotthelf provided detailed information on other Federal
Rules to which CWTs are subject.  She noted that CWTs may be
subject to the Used Oil Management Standard, 40 CFR 279; Section
313 of the Emergency Planning and Community Right-to-Know Act
(EPCRA, or the Toxic Release Inventory); the Oil Pollution Act;
Resource Conservation and Recovery Act (RCRA); National Emissions
Standards for Hazardous Air Pollutants under the Clean Air Act;
and the NPDES and pretreatment programs under the Clean Water
Act.  Mr. Waggener concurred with Ms. Gotthelf.  They both
agreed, however, that none of these rules would duplicate or
conflict with the proposed CWT effluent guidelines and
pretreatment standards.  Mr. Waggener indicated, however, that he
believed the existing pretreatment program without categorical
standards was adequate for indirect dischargers in the oils
subcategory.

Suggested Regulatory Alternatives

     Other than options to reduce burden already discussed, Ms.
Gotthelf did not suggest any additional regulatory alternatives
for small businesses.  She stated that the facilities she
represents do not believe that any CWT facilities should be
excluded from the regulation.  Furthermore, she stated that if
EPA were to provide an exclusion, the basis should not be whether
the off-site receipts were classified by RCRA as hazardous or non-
hazardous.  She stated that hazardous waste facilities are
already highly regulated and subject to close scrutiny from
regulators.  Non-hazardous facilities, in many cases, are much
less regulated. Ms. Gotthelf and the coalition of CWTs which she
represents believe it is important to regulate all CWT facilities
to ensure protection of the environment and to avoid the
development of an unnecessary competitive advantage.  Mr. Case
also indicated that he was not in favor of flow-based exclusions
and that an exclusion for non-hazardous facilities would give
them an economic advantage over facilities that treat both
hazardous and non-hazardous waste.  Both Ms. Gotthelf and Mr.
Case feel that regulations are necessary to protect the image of
CWTs as firms that provide an environmental service and that any
exclusion would harm that image.

     Mr. Waggener suggested that EPA has all of the information
it currently needs to exclude the oils subcategory, especially
those with non-hazardous waste streams, regardless of whether or
not they are small businesses under SBA's size standard.  Mr.
Waggener based his suggestion on his analysis of EPA's estimate
of the toxic pound equivalent removals per year.  As discussed in
the "other comments" section, Mr. Waggener has questioned EPA's
estimation of toxics removed by this regulation particularly in
regards to boron and benzo(a)pyrene, which together account for
ninety percent of the estimated toxic removals for this
subcategory.  He therefore believes that EPA has overstated these
toxic removals by as much as ninety percent.  As such, he
believes that the toxic pound equivalents being discharged by
these small facilities do not warrant additional regulation by
EPA.  He believes that local limitations under the existing
pretreatment programs provide sufficient protection of the
environment. Mr. Waggener also noted that, absent the proposed
CWT regulation, all of the CWT indirect discharge facilities are
currently required to meet the pretreatment requirements of their
local POTWs which are governed by general pretreatment
regulations.  He believes that, due to these requirements, most
of these CWT facilities have oil and grease limitations that
range between 100 and 500 mg/L, and that most CWTs are, in
effect, meeting most of the toxic removal requirements that EPA
is contemplating by the proposed CWT regulation.

     Mr. Waggener also suggested that, as an alternative, the
Agency consider a flow-based exclusion that would exclude all
facilities treating under thirty million gallons per year.  He
further suggested this flow-cut off exclusion could be combined
with a provision that facilities discharging more than 30 million
gallons per year that are also owned by firms with revenues of
under six million dollars per year also be excluded if they
document their revenue.

      Both Ms. Gotthelf and Mr. Waggener responded to a Panel
question concerning the use of revenue to identify small
businesses for exclusion purposes.  They both stated that their
members support the use of revenue to identify small businesses
for regulatory relief purposes.  Their facilities are receptive
to providing this type of information to their POTWs provided
that the POTWs treat the information as confidential in a method
similar to that used by EPA.

Other Comments

     Beth Gotthelf provided a detailed discussion of centralized
waste treatment operations.  She provided general information on
the centralized waste treatment business and detailed information
on their waste pre-qualification and acceptance procedures.  She
expressed concern over classifying each wastestream into one of
the three subcategories.  She is concerned that state and local
regulators will require an additional level of record keeping to
classify each and every wastestream into one of the
subcategories.  She suggested that facilities be allowed to
determine, based on their knowledge of their facility and their
customers, what percentage of each of the three types of wastes
it receives.  Since the wastestreams can vary daily, she also
suggests that facilities be allowed to round the percentages to
the nearest ten percent.

     Ms. Gotthelf  also raised a concern about the application of
the combined waste stream formula or "building block approach" to
the proposed CWT effluent guidelines and limitations which would
be required if a CWT facility treats waste in more than one
subcategory and commingles the waste streams for discharge. She
stated that applying the combined waste stream formula is labor
intensive and impractical.  As an example, she noted that the
percentage of waste being treated at a typical CWT in each
subcategory could change on a daily basis and, thus, the CWT
could be out of compliance if their permit limitations were
calculated based on a single set of percentages.  She suggested
that EPA propose a fourth subcategory which would be a single set
of limits for mixed waste streams.  She suggested establishing
these limits based on the most stringent standards from any
subcategory for each parameter.  In order to prevent treatment by
"dilution", she suggested requiring a professional engineer to
certify that the treatment equipment in place is capable of
treating the wastestreams received.

     Mr. Waggener provided comments on some of EPA's post-
proposal oily waste sampling data that he obtained directly from
the facilities. Mr. Waggener noted that many of the organic
pollutant loadings for the oily waste indirect subcategory are
based on the sampling data of three treatment systems (out of
seven).  In the case of one of these systems, almost all of the
toxic organic concentrations are at or below sample specific
detection levels.  This plant treats only non-hazardous
wastewaters, which he states is representative of at least 75 to
85% of the oily waste subcategory.  Mr. Waggener also
particularly questioned the data for boron.  Based on EPA's
sampling data at one facility, one-third of the boron entering
the treatment system is being removed.  He questioned the
validity of that conclusion.  He also questioned EPA's current
performance and post-regulation estimates of boron removals.  He
believes that boron removals are more likely zero due to the
solubility of boron in wastewater and that the apparent removals
are due to reported influent boron measurements that are higher
than actual because of problems with the boron testing procedure.
He suggested that EPA re-examine its testing procedure and the
resulting data and conclusions.
     
     Mr. Waggener also questioned EPA's current performance and
post regulation estimates of benzo(a)pyrene used in EPA's
loadings calculations.  He questioned the actual presence of
benzo(a)pyrene in oily wastes - particularly in non-hazardous
oily wastes.  He provided data from two treatment trains sampled
by EPA which showed that benzo(a)pyrene was only detected in one
out of ten samples.  As a result, he questioned EPA's conclusion
that benzo(a)pyrene should even be a pollutant of concern for
this subcategory.  He additionally questioned the methodology EPA
used in assigning benzo(a)pyrene concentrations levels in their
current performance estimates.  He strongly suggested that EPA re-
visit its loadings estimation methodology, especially as it
relates to benzo(a)pyrene.  Mr. Waggener also noted his belief
that the bis(2-ethylhexyl)phthalate influent concentration used
in EPA's loadings appeared to be extremely high.

     Mr. Waggener additionally questioned EPA's cost models for
dissolved air flotation.  He stated that EPA's estimates for
facilities with flow below eleven million gallons per year (the
majority of the oils facilities) were two to three times below
"real world" costs.  He stated that EPA's cost estimates for
facilities with approximately 55 million gallons per year appear
to converge with "real world" costs.

     Both Ms. Gotthelf and Mr. Waggener expressed concern that
the regulation may have a substantial economic impact on the
industry.

PANEL FINDINGS AND DISCUSSION

     It is important to note the Panel's findings and discussion
are necessarily based on the information available at the time
this report was drafted.  EPA is continuing to conduct analyses
relevant to the proposed rule, and additional information may be
developed or obtained during this process and from public comment
on the proposed rule.  Any options the Panel identifies for
reducing the rule's regulatory impact on small entities may
require further analysis and/or data collection to ensure that
the options are practicable, enforceable, environmentally sound,
and consistent with the Clean Water Act.

Number of Small Entities.

     The Panel noted the SER concerns that the estimate of
affected facilities (and small entities) that would fall within
the scope of the CWT effluent guideline and pretreatment
standards may not include the entire universe of CWTs.  As
discussed earlier, Ms. Gotthelf  provided a list of facilities in
the Michigan area that she believed would be within the scope of
the proposal, but were not accounted for in EPA's estimate.  EPA
reviewed its record and found that it had identified eight of the
twelve facilities on the list, as well as twelve other facilities
in Michigan not on the submitted list.  This suggests that EPA
may have underestimated the universe of CWTs by as much as one-
sixth.  However, EPA notes that this is a rapidly changing
industry and believes its estimate was accurate at the time the
data on which it was based was collected.  Since the SERs did not
suggest any other ways of identifying additional CWTs, the Panel
recommends that EPA again solicit names and addresses of CWTs in
the re-proposal.

Record keeping, Reporting and other Compliance Requirements.

     The proposed rule contains no specific record keeping or
reporting requirements. Monitoring for compliance with any
limitations established on regulated pollutant parameters will be
determined under current EPA regulations at 40 CFR, Parts 122 and
403.  However, since EPA bases its regulatory limits on its
assumed monitoring regime, EPA recommends that permitting
authorities consider this regime in determining appropriate
monitoring frequencies.  Facility operators may also be reluctant
to conduct less frequent monitoring (than that assumed by EPA),
because it would leave them vulnerable to being found in
noncompliance due to a single high reading that might still be
within the range of normal variation for a well operated system.
The Panel notes that monitoring costs represent a significant
share of compliance costs for the proposed rule, and thus devoted
considerable time to discussing various options for reducing
these costs.

     One suggestion made by SERs was to identify an indicator
parameter for a large number of pollutants and base regulatory
limits on this parameter alone.  To be effective, such a
parameter would have to be reasonably well correlated with the
pollutants for which it is a proxy.  EPA is currently exploring
the possibility of using silica gel treated n-hexane extractable
materials (SGT-HEM) as a proxy for semi-volatile and organic
pollutants.  The SERs raised several concerns with the use of
SGT-HEM as an indicator and suggested several other
possibilities, such as total organic carbon (TOC) or total
suspended solids (TSS).  One commenter agreed that TPH (as
measured by SGT-HEM) is a good indicator of whether or not
emulsion breaking and dissolved air flotation (DAF) are working
effectively, but stressed the need to set realistic limits.  He
further added that the limit should be several hundred milligrams
per liter to be appropriate.  Another commenter noted several
technical difficulties with the use of SGT-HEM, which EPA is also
aware of and is continuing to explore.  The Panel strongly
endorses EPA's efforts to find a suitable indicator parameter
that could result in significant monitoring cost reductions for
all facilities.

     The Panel next discussed the possibility of reducing the
recommended minimum monitoring frequencies for small businesses,
in the event that a suitable indicator parameter cannot be
identified or that monitoring costs remain high even with the use
of an indicator parameter.  For costing the proposed rule, EPA
assumed daily monitoring for conventional pollutants by direct
dischargers, and monitoring for toxic and nonconventional
pollutants by both direct and indirect dischargers as follows:
for the metals subcategory, daily monitoring for metals, and for
the oils and organics subcategories, weekly monitoring for both
metals and organics.  EPA believes these frequencies are
appropriate given the variability of receipts generally seen on a
day-to-day and week-to-week basis at CWT facilities.  The bulk of
the costs associated with this monitoring regime are for metals
and organics.

     Recognizing the high costs of monitoring for this industry,
EPA also prepared an alternative reduced monitoring proposal.
Under this proposal, the metals subcategory monitoring frequency
would be reduced from daily (20 times per month) to monthly (once
per month) for all regulated parameters.  The monitoring
frequency for the oils and organics subcategories for
conventional pollutants would be reduced from daily to quarterly
(4 times per year), while the frequency for all other parameters
in these subcategories would be reduced from weekly (4 times per
month) to quarterly.  These monitoring frequencies are lower than
that currently required for some facilities.

     By EPA's estimates, this would reduce the annual monitoring
costs for a typical facility by about 80-90 percent, which
represents a savings of about $30,000 - $80,000 per year
(assuming one outfall).  For small businesses, such savings would
be especially significant.  If the reduced monitoring approach
can be adopted without significantly undermining the
environmental benefits of the rule, the Panel strongly recommends
that EPA do so in the proposed rule, at least for small
businesses ($6 million in revenue and below).  As discussed
earlier, all the SERs supported reduced monitoring for small
businesses.

     The Panel recognizes that EPA can only recommend monitoring
frequency requirements to state and local permitting authorities.
State and local permitting authorities have historically used
factors such as raw waste variability, treatment, and compliance
history to determine appropriate monitoring frequency.
Nevertheless, the Panel believes permitting authorities may also
consider the monitoring frequencies on which limits are based in
determining site specific monitoring requirements and believes it
is appropriate for them to do so.  The Panel notes that the
majority of CWTs are currently required to monitor less
frequently than under the monitoring regime on which EPA is
currently considering basing its limits.  The Panel believes,
therefore, that basing limits on, and recommending to permitting
authorities, a reduced monitoring regime for small businesses may
result in significant monitoring relief for some of these
businesses.  The Panel recognizes, though, that this will
ultimately depend on local permitting authorities.

     During the Panel's discussion of the reduced monitoring
alternative, EPA raised several concerns with this approach.
Reduced monitoring frequencies would require corresponding
increases in the regulatory limits for monthly average
concentration, since each monthly average would be made up of
fewer measurements and would therefore be subject to greater
variability.  However, if these limits were based on the same
long term average, then facility operators would generally need
to maintain the same level of performance from their treatment
systems in order to ensure compliance as they would under a more
frequent monitoring regime with lower regulatory limits.  The
only case in which this would not be true is if an operator tried
to "game" the system by monitoring more frequently in months when
the initial reading was over the limit.  The Panel believes,
however, that this situation can be adequately addressed on a
case-by-case basis by the permitting authority.

     EPA also questioned whether it would be practical to base
any regulatory distinction, including monitoring requirements, on
firm revenue, since this would require local permitting
authorities to evaluate such data and to make provisions to
ensure its confidentiality, which EPA believes they would be
reluctant to do.  The Panel recognizes this concern but believes
it must be weighed against the significant saving in compliance
costs that reduced monitoring would generate.  The Panel also
notes that the NPDES permit program already makes regulatory
distinctions based on revenue (e.g., at the $100,000 level in the
NPDES application form 2C), and that most permitting authorities
already have provisions to protect CBI.  If some standardized
measure of revenue were used, such as the figure that appears on
the firm's federal income tax return, some members of the Panel
believe it would not be difficult for permitting authorities to
base monitoring requirements on it.  EPA notes that some
pretreatment coordinators have expressed enforcement concerns
relative to independent verification of revenue reports.

     The Panel discussed alternatives to firm revenue as a basis
for identifying small businesses that warrant monitoring relief.
The Panel discussed the possibility of basing monitoring relief
on flow since it is a parameter which is easily measured.
However, EPA noted that there does not appear to be a strong
relationship between revenue (which establishes whether a
business is small or large) and flow.  The Panel specifically
solicited ideas from the SERs on ways to identify small
businesses for these purposes.  Both of the SERs which commented
on the issue agreed that revenue would be a suitable criterion
and that facilities would be comfortable providing economic
information given that confidentiality is protected.  Some
members of the Panel believe, based on currently available data,
that revenue is the most appropriate basis.  The Panel encourages
EPA, however, to continue evaluating other potential bases for
providing monitoring relief.

     Finally, the Panel notes that reduced monitoring from the
regime EPA is currently considering might be appropriate for
other plants, in addition to those owned by small businesses,
because of the significant share of total compliance costs that
monitoring represents.   Reduction of monitoring requirements is
worth consideration as a possible way of reducing burden without
significantly undermining environmental benefits.

     The Panel also noted the concern of one commenter that some
permit writers would impose additional and substantial record
keeping burden in order to apply the combined waste stream
formula for facilities that are in more than one subcategory.
This commenter suggested that EPA provide a fourth subcategory
for such facilities, with the strictest regulatory limits from
each of the other three, as an alternative.  EPA does not believe
this would address its concerns about dilution, instead of
treatment, occurring as a result of commingling different types
of waste streams, but is sensitive to the potential record
keeping burden at facilities with combined waste streams and is
exploring ways to address it in this rulemaking.

Interaction with Other Federal Rules

     The Panel did not identify any other federal rules which
duplicate or conflict with the requirements that would be imposed
by the proposed effluent guidelines and pretreatment standards.
However, two of the SER commenters noted that CWT facilities are
already heavily regulated under a variety of environmental
statutes and programs.  Depending on the facility's RCRA status,
these could include waste tracking requirements (RCRA, EPCRA),
waste management planning requirements (RCRA), spill prevention
and emergency response requirements (SPCC, EPCRA), and NPDES and
the national pretreatment program.  The latter is intended to
ensure that facilities discharging into POTWs do not discharge
pollutants that pass through or interfere with the operation of
the POTW. Many facilities are also subject to additional state
and local requirements.  One commenter provided estimates of the
time required by a typical CWT facility to comply with these
requirements.  The total time for compliance with all
requirements ranged from 1,500 to 3,500 hours per year.  The SER
commenter also noted that a significant level of professional
expertise is needed to successfully comply with these
requirements, and that most of the programs do not have
exclusions for small businesses, which means they bear a
disproportionate cost burden measured as a percentage of revenue,
relative to large firms.  While the Panel did not consider that
any of these requirements conflict with those in the proposed
rule, the Panel agrees with commenters that these requirements
provide an important context in which to consider the impact of
additional regulation on small CWT facilities.  The Panel also
notes that all direct dischargers in the CWT industry are already
subject to NPDES permits and all indirect dischargers are subject
to local limits and/or the general pretreatment provisions.

Regulatory Alternatives

     The Panel discussed the nature of the centralized waste
treatment industry as part of its consideration of regulatory
alternatives.  CWT facilities are in the business of treating
wastes from other facilities.  As such, they provide an
alternative to on-site treatment of industrial wastes and have
benefited from effluent guidelines and RCRA regulations requiring
such treatment.  Some stakeholders have suggested that the
absence of categorical standards for CWTs
has been a major "loophole" in the effluent guidelines program,
allowing wastes to be treated off-site less effectively than
would be required of the same wastes if treated on-site.  Others
have suggested that the existence of CWTs is an important "safety
valve" which provides an affordable and effective treatment
alternative for industrial facilities that would otherwise find
it
prohibitively expensive to comply with industry-specific
categorical treatment requirements (as well as requirements under
other statutes, such as RCRA, that may affect wastewater
discharges).  Both views were represented on the Panel.
     
     Based on EPA data indicating that the largest concentration
of small businesses in the CWT industry is among indirect
dischargers in the oils subcategory, the Panel focused its
consideration of regulatory flexibility alternatives on this
group.  The Panel invested considerable effort in examining the
characteristics of this group in an attempt to develop a specific
recommendation for providing regulatory relief to small
businesses that would not jeopardize the pollutant removals (and
corresponding environmental benefits) anticipated to result from
the rule.  Unfortunately, the Panel was not able to reach
consensus on such a
recommendation.  The Panel did agree, however, that at a minimum
the Agency should include a reduced monitoring alternative for
small businesses in the event that the high monitoring costs of
the rule could not be reduced through the adoption of an
indicator pollutant parameter (see above).  The Panel recognizes
that further consideration of other regulatory relief provisions
will likely take place prior to publication of the proposed rule
and strongly supports this process.  Hopefully, it will be
informed by a resolution of some of the methodological issues
discussed below.

     Beyond that, the Panel discussed the possibility of
excluding small businesses from the scope of the guideline.  EPA
was reluctant to adopt such an approach because the Agency could
not find, based on existing data, any clear relationship between
revenue (the defining characteristic of small businesses), and
either flow, types of waste received, or estimated pollutant
discharges.  Because of the high variability of the wastes
treated by this industry, even a small business may treat a
significant volume of highly concentrated waste and be a
significant discharger of pollutants.

     However, recognizing the potentially high costs of the rule
to small businesses, EPA analyzed several bases for not including
small businesses within the scope of the proposal.   (Note that
these analyses, provided to both small entity representatives and
Panel members in a memo dated October 20, 1997 entitled Analysis
of Small Entity Regulatory Alternatives, are preliminary and some
of the underlying data is still being revised.)  The alternatives
analyzed were: excluding  all indirect dischargers with flows
under 3.5 million gallons per year (MGY), excluding indirect
dischargers that manage non-hazardous waste only with flows under
either 3.5 MGY or 7.5 MGY, and excluding all indirect dischargers
owned by small businesses (i.e., those with annual revenue under
$6 million).  Based on these preliminary analyses, the option
which would exclude all indirect dischargers with flows under 3.5
MGY would address over half the small businesses potentially
covered by the rule, reduce compliance costs among indirect
dischargers by about 25% while reducing pollutant removals by
about 6% (if current facility receipts do not change), and
minimize projected facility closures and job losses among all of
the options considered.

     SBA, after consideration of the methodological issues
discussed below, believes the preliminary analyses would support
an exclusion for all small businesses.  As estimated, this would
achieve about the same overall cost savings as not including all
facilities under 3.5 MGY, would reduce pollutant removals by
about 12% (if current facility receipts do not change), and
minimize process closures.  It would result in somewhat more
facility closures and job losses than excluding all facilities
under 3.5 MGY, but the relief provided would be more directly
targeted to small businesses. (Excluding all facilities under 3.5
MGY would also remove about 25% of facilities not owned by small
businesses from the scope of the rule.)  Although removals from
indirect dischargers would be reduced by about 12% (if current
facility receipts do not change), SBA believes that the total
amount of lost removals (currently estimated to be about 200,000
pound-equivalents annually) would not be environmentally
significant, especially taking into consideration the
methodological issues discussed below.

     SBA also notes that EPA projects annual regulatory costs in
excess of 3 percent of annual sales for 45 percent of affected
indirect facilities owned by small firms, but projects closures
for only 7.5 percent of such facilities.  SBA is concerned that
EPA may have underestimated these closures on two grounds: (1)
the closure methodology may not provide an accurate estimate of
closures (for example, it relies in large part on untested
assumptions regarding the proportion of cost increases that can
be passed through to customers) and (2) the compliance costs
themselves may be substantially underestimated for small firms,
at least in the oils subcategory (one commenter asserted that
they would be about twice as high for low-flow facilities in this
subcategory as EPA has currently estimated).  Although EPA
understand's SBA's concerns, EPA believes that, in the absence of
empirical data, its assumptions regarding cost pass through are
reasonable.  EPA is again searching the empirical literature on
this question and will share the results of this search during
interagency review.  EPA also has reason to suspect that its
current cost estimates may be conservative (high) in general, but
will again solicit data on the costs for low-flow facilities in
the oils subcategory based on the SER comment.

     EPA's primary concern with an exclusion based on these
preliminary analyses is that they represent one snapshot of a
rapidly changing industry.  EPA is concerned that if  any segment
of the industry were excluded, even a segment which does not
currently appear to account for a significant share of pollutant
discharges, that segment might quickly expand as a result of the
exclusion, leading to much greater discharges within a few years
than predicted by existing data.  While the cutoff itself would
provide some protection against this possibility (if a facility
grew beyond the revenue or flow cutoff it would no longer be
eligible), EPA believes that many small businesses have
substantial unused capacity, some of which might be below the
cutoff, depending on what cutoff was used.

     The Panel discussed several ways of addressing this concern.
One way would be to put a mass-based limit on receipts as part of
the eligibility requirements for the exclusion.  This could
ensure that significant volumes of highly contaminated wastes
would not be handled by excluded facilities.  However, it would
also limit the flexibility of small businesses benefiting from
this exclusion, and might require them to give up a significant
share of their existing business.

     Another approach that might provide relief to small
businesses is a streamlined variance procedure.  The Panel
understands that EPA can grant variances from categorical
pretreatment standards based on a showing of fundamentally
different factors (FDF).  In deciding whether to grant such a
variance, EPA may consider the specific pollutants found in a
facility's raw waste, the volume of its discharge, non-water
quality environmental and energy impacts of the otherwise
required treatment, age and size of the facility, processes
employed (including any process changes), and costs of
compliance.  The Panel also understands that under current
statutory requirements, such variances are usually granted on a
case-by-case basis to individual "requesters."  The CWA limits
FDF variances to circumstances in which a facility applies for a
variance based solely on information and data the facility has
submitted to EPA during the rulemaking comment periods.  However,
given the potential burden to individual small businesses of
applying for such a variance and developing the necessary
supporting information, the Panel encourages EPA to consider, and
solicit comment on, appropriate ways to streamline the process
for small businesses.  This might include providing the ability
for facilities to submit a "group" FDF request to the extent
permitted by the Clean Water Act.

     Small entity commenters were divided on the issue of
granting an exclusion to small businesses.  One commenter
believed it was appropriate to exclude all indirect dischargers
in the oils subcategory, and that this was especially appropriate
for those treating only non-hazardous wastes, based on his belief
that pollutant discharges from this group are small.  The other
commenters opposed this approach.  These commenters believed that
an exclusion would adversely impact the image of the industry and
were concerned that an exclusion for facilities that treated only
non-hazardous waste would give those facilities an economic
advantage over facilities that treat hazardous waste as well as
non-hazardous waste. One of these commenters preferred reduced
monitoring and also suggested that small businesses might be
granted additional time to comply with the new standards, rather
than not including those businesses within the scope of the rule.

     SBA also suggested that, instead of a small business
exclusion for indirect discharges in the oils subcategory, EPA
should consider a less costly technological alternative -
specifically emulsion breaking and secondary gravity separation.
The two commenters which provided input on this option supported
this approach for small businesses.  SBA urges that EPA consider
whether this level of treatment is adequate, and whether
appropriate limits and cost estimates can be developed to reflect
this technology, given the wide variability in the wastes treated
and the limited data available on this technology option.  Given
the current local pretreatment requirements, SBA believes it is
important to consider whether there is any significant
environmental benefit from requiring dissolved air flotation over
emulsion breaking and secondary gravity separation for small
businesses, and if so, whether it justifies the additional costs
imposed on these businesses.

     The Panel recommends that EPA include a full and balanced
discussion of possible small business relief measures in the
preamble to the proposed rule and solicit both comments and data
that might address some of the concerns that have been raised.
Examples of such data would include plant capacity, as well as
influent and effluent concentrations along with the percent of
hazardous and non-hazardous wastes those concentrations
represent.  The Panel further recommends that EPA strongly
consider developing some form of regulatory relief for small
businesses for the final rule if its analyses continue to show
significant economic impacts on a substantial number of small
businesses.

     The Panel also discussed EPA's preferred treatment option
for new sources in the metals subcategory.  Here the issue is not
significant economic impacts on existing small businesses, but
potential barriers to entry for future small businesses.  EPA is
considering a treatment sequence consisting of selective primary
metals precipitation, followed by liquid/solid separation,
secondary precipitation, followed by more liquid/solid
separation, tertiary precipitation, and clarification for new
sources in this subcategory.  This option appears to be over
three times as costly as the treatment sequence that EPA is
considering for existing sources, which consists of batch primary
precipitation, liquid/solid separation, secondary precipitation,
and sand filtration.

     It also appears that for existing sources the less costly
option achieves 98% of the pollutant removals achievable by the
more costly option.  Although annualized cost and removal figures
for the two options have been calculated only for existing
sources, the figures suggest that there would be little
difference in environmental benefits from the two options for new
sources as well.  The cost differential between the two options
would be less for new sources than for existing sources because
it is virtually always cheaper to incorporate treatment into the
design of new facilities than to retrofit existing ones.
According to EPA's preliminary analysis, it appears that the
incremental cost-effectiveness of increasing the stringency from
the less costly to the more costly option for existing sources
would be quite high relative to other effluent guidelines and
pretreatment standards (for existing indirect dischargers the
incremental cost-effectiveness would be $940 per pound
equivalent).

     EPA believes that the requirement under the Clean Water Act
to base new source standards on best available demonstrated
technology (BADT) limits its ability to consider cost-
effectiveness in setting the standard.  Some members of the Panel
are concerned, however, that competition from new small
businesses might be inappropriately restricted due to much higher
regulatory costs being imposed on new facilities than on existing
ones, with little corresponding environmental benefit.  These
Panel members recommend, therefore, that EPA carefully consider
the degree of flexibility available under the Clean Water Act to
select a reasonable, cost-effective treatment option on which to
base new source standards for the metals subcategory, and in
doing so take into account the requirements of the Regulatory
Flexibility Act and Executive Order 12866 as well.

Methodological Issues

     The Panel discussed several methodological issues related to
the manner in which EPA has calculated baseline pollutant
loadings for this industry, and the pollutant removals that would
result from the proposed rule.  Some members of the Panel are
concerned that the Agency's current estimates of baseline
loadings, post-regulation loadings, and pollutant removals may be
too high for certain parameters, for the reasons discussed below.
At the same time, the Panel recognizes that the estimates are
preliminary and that the Agency is still refining them.  The
Panel recognizes that there may not be time or available data for
the Agency to completely resolve the issues discussed below prior
to publication of the proposed rule, but urges EPA to do as much
as possible in order to facilitate informed public comment on the
environmental benefits of the rule.  The Panel further recommends
that the Agency identify the limitations of the loading estimates
in the preamble, along with a request for comment on their
significance and suggestions and/or additional data that might
address them.

     The Panel notes that the Agency's estimates of baseline and
post-regulation loadings are based on pollutant concentrations
measured at a relatively small number of centralized waste
treatment plants that EPA believes characterize typical
conditions of the industry as a whole at baseline and post-
regulation.  For a given pollutant, the analysis of a particular
sample generally resulted in either a measured concentration, or
a "non-detect" associated with an estimated sample-specific
detection limit.  Depending on the other constituents of the
sample, the sample-specific detection limit may have been quite
high.  In some cases sample-specific detection limits were
hundreds of times the analytical method minimum level. This was
particularly true in highly concentrated influent samples.  For
example, the sample-specific detection limit for benzo(a)pyrene
in one of the influent samples was 340 times the analytical
method minimum level.  These high sample-specific detection
limits led to several anomalies in the interpretation of data.
For example, at some facilities, pollutants were detected in the
effluent (post-treatment) that were not detected in the influent
to treatment at the influent sample-specific detection level.
EPA generally assigned a value equivalent to the sample-specific
detection limit as the influent concentration when determining
baseline loadings.  This may have resulted in an overestimate of
baseline loadings, but is consistent with the methodology EPA
used in evaluating effluent non-detects in the determination of
effluent limitations.  (When determining effluent long term
averages based upon a combination of detected values and non-
detects, EPA generally assigns the sample-specific detection
limit to the non-detect as the effluent concentration.)  It may
also have resulted in an overestimate of pollutant removals due
to treatment, as influent sample-specific detection limits are
generally much higher than effluent sample-specific detection
limits.
     For the oils subcategory, in cases where the influent sample-
specific detection limits were greater than 500mg/L, EPA was
concerned that using the sample-specific detection limit would be
an unreasonable assumption.  In these instances, EPA generally
transferred data from another treatment system which had a
comparable concentration of oil and grease.  Oil and grease was
used to judge the transfer of data because of its correlation
with measured organic pollutants throughout the range of
facilities.  In some cases, the value was imputed by averaging
the data from several treatment systems.  This methodology may
have resulted in either an over-estimate or an under-estimate for
these facilities.

     At certain facilities, EPA had reason to believe that
certain parameters were present despite non-detect values at both
the influent and effluent sample-specific detection limits.
Again, this occurred in highly concentrated wastes where the
sample-specific detection limits were extremely high.  If the
parameter was detected at lower levels in similar, but generally
less concentrated, waste streams, EPA followed the same procedure
as outlined above for influent values but continued to assign the
effluent sample-specific detection limit for use in limitations
development.  The particular method that EPA used to deal with
influent sample-specific detection limits greater than 500mg/L in
the oils subcategory (i.e., imputing readings to one plant based
on samples from one or more other plants) resulted in some data
being weighted more heavily in the analysis than others, though
it is not clear in which direction this may have influenced the
results.  If the Agency continues to believe that imputing
concentrations to non-detect samples is appropriate, the Panel
recommends that it consider addressing this concern by using all
plants for which actual values are available in calculating the
imputed concentrations rather than the plant for which the
concentration of oil and grease most closely matches.  Another
way to estimate these influent values, for cases in which a
pollutant was detected in the effluent but not the influent,
would be to start with the effluent values and back-calculate the
influent values by adjusting for treatment removal efficiency.

     Some members of the Panel are concerned that the use of
sample-specific detection limits provides an upper bound estimate
of baseline and post-regulation loadings.  That is, the true
concentration value of a non-detect is expected to be below its
sample-specific detection limit and any loadings calculated with
these detection limits are upper bounds of the true loadings
values.  One of the commenters stated this concern even more
strongly, claiming that the procedure "grossly over-estimates the
amount of potential toxics in a waste stream."  Because sample-
specific detection limits were usually higher for the influent
samples than for the effluent samples, it is likely that the
estimated removals are also high.  It is possible that EPA's
procedure for adjusting (downward) the assigned concentrations
for pollutants with sample-specific detection limits over 500
ug/L may have compensated for any over-estimates.  (EPA noted the
use of concentrations of benzo(a)pyrene at approximately 10
percent of the sample-specific detection limit.)

     One way to address the concern with sample-specific
detection limits may be to assume that pollutants not detected in
the influent or the effluent are not present, or to assume that
they are present at some concentration below the sample-specific
detection limit (for example, half of it).  Assuming the
contaminant was not present would give a lower bound estimate of
loadings, while assuming something below the sample-specific
detection limit would give an intermediate estimate.

     EPA used  the methodology described above in estimating oily
waste subcategory baseline loadings for benzo(a) pyrene, which
was detected in the influent at two treatment systems.  Two other
treatment plants had influent sample-specific detection limits
for benzo(a)pyrene at or below 26mg/L.  The remaining three
sampled treatment plants had influent sample-specific detection
limits above 500mg/L (the minimum level of the analytical method
1625 is 10 ug/L).  For one of these plants, EPA imputed the
detected value from the plant with the closest concentration of
oil and grease as was done for other parameters (see above).  The
other two plants had influent concentrations of oil and grease
greatly exceeding that of any of the other sampled plants.  For
these two plants, EPA assumed benzo(a)pyrene influent
concentrations at the average of the two detected values; this
average was approximately 10 percent of the sample-specific
detection limits for these two plants.  Although this
modification should reduce the magnitude of any over-estimate
(and could result in an underestimate), the Panel discussed the
concerns relative to the accuracy of the baseline loading
estimate for benzo(a)pyrene at length because of the impact of
these estimates on the total toxic loading estimated for the oily
waste subcategory. (Benzo(a)pyrene accounts for about 40% of the
estimated toxic removals for this subcategory.)

     The Panel notes that for some pollutants, the estimates for
an entire subcategory may be based on detection at a single
facility, with the actual values being assigned using the
procedure described above.  Some members of the Panel believe
that EPA should reconsider whether it is appropriate to attribute
a pollutant to an entire subcategory based on detection at a
single facility.  EPA notes that in some of these cases, the
pollutant, while detected at only one plant,  was detected in
separate treatment systems on multiple days.

     The Panel also discussed the method by which EPA estimated
baseline pollutant loadings for oily waste subcategory facilities
with no available effluent concentration data.  For this
subcategory, EPA has sampling data from seven treatment systems.
The concentrations resulting from the gravity separation/emulsion
breaking stage at the seven treatment systems range from highly
concentrated to fairly dilute.  EPA randomly assigned one of the
seven concentration data sets to each of the 74 indirect plants
with known flows to estimate the corresponding loadings for that
plant at the gravity separation/emulsion breaking stage.  This
randomization procedure results in unbiased estimates of
pollutant loadings (i.e., estimates that are equally likely to be
high or low with respect to the true values).  At the same time,
the procedure may produce an  estimate for total baseline
loadings that differs considerably from the true value.
Nevertheless, EPA believes it represents a reasonable procedure
for estimating the required loadings for this industry using
sparse data.  Baseline loading estimates were then made by
factoring out removals beyond the gravity separation/emulsion
breaking stage due to treatment in place.

     The seven concentration data sets were assigned to 81
indirect facilities (i.e., 74 randomly assigned plus the 7
original facilities) with a group of 11 to 13 facilities assigned
to each data set.  As it turned out, three of the four most
concentrated data sets (as measured by oil and grease) were
assigned to the groups with the highest total flows.  The
estimate of total baseline loadings is thus higher than what
would have resulted if the data from each of the seven sampled
facilities had been weighted equally in the analysis.  EPA
considered, and rejected, the approach of applying the average
concentration from the seven sampled facilities to all of the
other plants (which would have ensured that each sampled facility
was given equal weight) because it determined that it is
important to retain the substantial, real-world variability in
influent concentrations to adequately account for non-linear
treatment costs.  The Panel discussed the merits of modifying the
random assignment procedure to ensure that each of the seven
concentration data sets are assigned to groups of facilities
whose combined total flow are approximately the same and also
have the same approximate distributions of treatment in place and
firm revenue.  In this way, each sampled plant would receive
equal weight in the analysis but the variability in influent
concentrations would be preserved.  EPA is considering the
practicality of adopting this modified procedure.  EPA also
intends to request actual influent and effluent data from the
three facilities with the highest flows to assist in further
evaluation of the estimation procedure.

     The Panel also notes that toxic removals from indirect
dischargers are apparently attributed to the rule even for
pollutants for which pretreatment limitations will not be
established.  Phenanthrene, for example, which accounts for about
4% of estimated removals from indirect dischargers in the oils
subcategory, is removed by POTWs with 95% efficiency, while it is
removed by EPA's currently preferred treatment option with only
90% efficiency.  Since pollutants which are more effectively
removed by POTWs than by pretreatment are generally considered
not to pass through the POTW, it is not clear to some Panel
members that it is appropriate to include incremental removals of
such pollutants (estimated to be 4.5% in the case of
phenanthrene) in the toxic removals attributed to the rule.
These Panel members recommend that EPA reexamine this issue.

     The Panel also noted the concern raised by one of the SER
commenters that the baseline loadings and removals associated
with boron may be inflated due to a problem with the laboratory
test procedure.  This commenter does not believe that boron is
likely to be removed by the emulsion breaking, gravity separation
and dissolved air flotation treatment that EPA is currently
considering for this industry, due to its high solubility in
water.  He believes that the difference between the influent and
effluent concentrations is likely due to contamination of the
influent samples from the borosilicate glass containers in which
the testing was done.  He bases this hypothesis on the fact that
much heavier digestion is required for the highly contaminated
influent samples than for the treated effluent samples.  The
Panel discussed this issue, which is significant to EPA's
environmental benefits estimates because boron accounts for half
of the total toxic removals currently estimated for indirect
dischargers in the oils subcategory (which includes most of the
small businesses affected by the rule).  EPA re-evaluated the
sampling data to determine if contamination due to the analytical
techniques could have been responsible for the estimated boron
removals.  The Analytical Methods Staff found no evidence of
boron contamination due to sample handling techniques in the
analysis of influent samples.  They also researched boron
contamination reported by others and found no literature
supporting the premise that boron contamination of samples could
occur at a magnitude measured in EPA's influent sampling.  The
Panel recommends that EPA search available databases for
additional information regarding boron removals in dissolved air
flotation systems and other common water treatment technologies.
Furthermore, the Panel also notes that a large portion of the
boron loadings is attributable to one plant whose measured boron
influent concentration was approximately thirty times higher than
the average influent of the other six model plants, and that this
high concentration was assigned to plants with the highest flows
of all seven groups that made up the loadings model.

     The Panel is also concerned that EPA's data can not
distinguish between hazardous and non-hazardous waste flows.
EPA's current data are ambiguous regarding the relative loadings
of hazardous and non-hazardous pollutants.  The influent sample
with the highest concentration of toxics can not be identified as
either hazardous or non-hazardous.  EPA has verified that some of
the waste receipts in treatment systems that EPA initially
identified as non-hazardous were in fact hazardous flows.  The
two plants without a RCRA permit, where cross contamination is
not an issue, have the lowest toxic loadings.

     If it were the case, as one SER commenter claims, that
non-hazardous flows contain relatively low pollutant loadings
compared to hazardous flows, then the Panel believes that it
might be appropriate to develop different regulatory requirements
for the two types of flows and/or adjust the treatment costs for
compliance for the non-hazardous wastes accordingly.  If
determined to be appropriate, this could target the rule to the
discharges of greatest concern, and if different requirements
were developed, would likely significantly reduce the cost of the
rule.   The Panel notes that two other SER commenter recommended
against imposing different regulatory requirements on hazardous
and non-hazardous waste flows.  These commenters argued that
hazardous flows are already heavily regulated while non-hazardous
flows are not, and that it is thus important that the proposed
rule apply equally to both types of flows.  They further noted
that the different requirements for facilities that treat only
non-hazardous waste could create a competitive disadvantage for
those facilities that treat both hazardous and non-hazardous
waste.  The Panel notes that neither type of flow is currently
subject to categorical effluent guidelines or pretreatment
standards, and remains concerned that the same standards and
guidelines may not be appropriate to waste flows with very
different characteristics.  The Panel thus recommends that EPA
solicit additional data and perhaps itself perform additional
sampling to determine if an adequate basis exists for developing
different regulatory requirements for hazardous and non-hazardous
flows.

     Finally, the Panel notes that if EPA has overestimated the
pollutant loadings for this subcategory, specifically for the non-
hazardous flows, it may also have overestimated the costs of
complying with the rule.  EPA's costing methodology is based on
the current performance estimates.  For each facility, EPA
compares the current performance estimates to the long term
averages for the pollutants of concern.  If a facility's current
performance estimate for a single pollutant of concern exceeds
the long term average by greater than ten percent, then the
facility is costed for the entire treatment train which forms the
technology basis for the long term averages -- even though
achievement of compliance may not require installation of the
full suite of treatment considered for the rule.

     The participation of the small entity representatives was
critical in enabling  the Panel to better understand the data and
the various methodological issues.  It is quite clear that the
rulemaking process needs to be transparent in order to aid the
full participation of the public in the comment period.
Therefore, the Panel recommends that the agency provide
sufficient data for each subcategory that would allow commenters
to analyze the specific economic effects associated with the
various regulatory alternatives.  This data should be provided in
a manner that protects confidential business information while
providing sufficient detail for the public to view the specific
assumptions and data used to develop the pollutant loadings,
removals, costs, and economic impacts for each subcategory.
                          Attachment A:
              Small Entity Representatives Meeting
                        October 30, 1997
                                
                             Summary

     The Small Entity Representatives (SERs) met with the
Environmental Protection Agency by conference call on Thursday,
October 30, 1997.  This is a summary of that meeting.

     The SERs attending the conference call were Jack Waggener
(Resource Consultants, National Oil Recyclers Association) and
Beth Gotthelf (The CWT Coalition).  The Engineering and Analysis
Division representatives present were Sheila Frace (Acting
Division Director), Debra Nicoll (Assistant Acting Division
Director), Elwood Forsht (Chemicals and Metals Branch Chief),
Neil Patel (Economics and Statistics branch chief), Jan Matuszko
(Project Manager), Tim Connor (Project Engineer), William Wheeler
(Project Economist), James Covington (Economist), and Kevin
Tingley (Engineer).  Other representatives of the EPA present
were Tom Kelly (OPPE, EPA's Small Business Advocacy Chair), Tom
McCully (OPPE), Stuart Miles-McLean (OPPE), and Richard Witt
(OGC, CWT Lead Council).  Representatives from other government
agencies present were Jim Laity (OMB), Damon Dozier (SBA), and
Kevin Bromberg (SBA).

     Mr. Kelly began by explaining the Small Business Regulatory
Enforcement Fairness Act (SBREFA).  He explained that SBREFA was
a statute passed in March 1996 intended, among other things, to
promote regulatory flexibility through amendments to the
Regulatory Flexibility Act.  When the Agency determines that a
planned proposed rule may have a significant economic impact on a
substantial number of small entities, then under Section 609 of
the RFA, as amended by SBREFA, EPA must convene a Small Business
Advocacy Review Panel to consider the input of small entities
that will be subject to the rule.  The Federal Panel is made up
of senior Federal officials representing SBA, EPA, and OMB.

     Mr. Kelly then stated that EPA has done a fair job of
outreach and defining who will be affected by the CWT regulation.
He stressed that today's meeting was to be informal; an
opportunity for delivery of information, and for affected
entities to have face-to-face access to EPA.  The statute
requires that the panel convene and complete its work within 60
days (starting next week).  Mr. Kelly anticipated three meetings:
the kickoff, in which introductions will be made and a schedule
will be set; a second meeting, which may be face-to-face or in
the form of a conference call; and a third, in which final
comments and conclusions will be developed.  Then, by the 60th
day, the final Panel report shall be prepared and signed by each
Panel member.

     Introducing himself, Mr. Waggener explained that he
represents the National Oil Recyclers Association: a group of
businesses around the U.S., that among other things, recycle
fuels and collect and treat wastewaters primarily contaminated
with oily materials (may have metals and organics too).  This
latter aspect forms a big part of the business for most of the
100-130 organizations in NORA.  He added that he was also
involved in the Transportation Equipment Cleaning Effluent
Guidelines SBREFA process, and said that it was a good process
that contributed to the development of a better proposal.

     Ms. Gotthelf introduced herself as an attorney representing
a group (formed in 1988) of approximately nine CWT facilities in
Detroit, Michigan, with between 12 and 75 employees each.  These
CWTs treat wastes in all three categories, usually combining them
during treatment.  But she emphasized that the CWT facilities
would like to keep their waste streams separate so as to avoid
the necessity of using the combined waste stream formula, which
she described as a `nightmare'.

     Ms. Matuszko then noted the absence of David Case, of the
Environmental Technology Council, who has been involved with CWT
and other rulemakings from the beginning, for both large and
small businesses.  She then responded to Ms. Gotthelf's concern
about the combined waste stream formula by saying that this rule
is being developed, in part, because having the "reg follow the
waste" and attempting to keep track of each and every waste
stream and applying the combined waste stream formula would
indeed be a `nightmare' for some facilities.   She then spoke of
the schedule.  With the 60 day SBREFA review, the rule is
scheduled to arrive at OMB at the end of January.  OMB has been
asked for expeditious review.  If this is granted, the rule will
complete OMB review in March.  If not, it will be May.  The
project has already gone through option selection with the
Assistant Administrator for the Office of Water, Bob Perciasepe.
The project team is currently working on producing documentation,
specifically the preamble, the development document, and the
environmental and economic assessments.  August 15, 1999 is the
court-ordered deadline for rule promulgation.

NUMBER OF ENTITIES EFFECTED BY THE RULE

     Mr. Waggener started by saying that he had not had enough
time to thoroughly review the letter of October 22, and that his
questions and comments would be preliminary.  Mr. Kelly assured
him that there would be ample opportunity to submit written
comments.

     Mr. Waggener said that he understood that the number of
small business facilities came from the surveys.  He estimated
130 oily waste facilities, while the materials say 50.  He asked
what was meant by revenues less than $6 million per year, and Ms.
Matuszko responded that they were firm-based revenues rather than
by facility .  Ms. Gotthelf added that she knew of facilities
that had been missed.  Mr. Connor and Ms. Matuszko clarified that
EPA can scale the population of facilities to accommodate the
uncounted facilities.  Ms. Matuszko added that only 50% of
recipients (facilities believed to be in scope) commented on the
Notice of Data Availability, and that EPA is estimating that half
of non-commenters are in scope.

     Mr. Forsht reminded everyone that there is no standard
industrial code (SIC) for this industry, and that EPA has tried
very hard to use several methods for identifying facilities.  The
yellow pages were originally used to get the industry list.  New
names were identified through public comments on the 1995
proposal.  Ms. Matuszko added that industry directories were
used.  Ms. Gotthelf mentioned there are always hard-to-identify
facilities.  Mr. Waggener said that EPA has done a good job using
associations, but estimated that double the number that belong to
associations do not belong to associations.  He conceded that he
had no idea how to get others--that it would be `like pulling
teeth'.  Mr. Forsht closed the discussion of the topic by
suggesting that the SERs send us names and addresses.

PROJECT REPORTING RECORD KEEPING AND COMPLIANCE

     Ms. Gotthelf listed the number of regulations with which the
CWTs she represents have to currently comply: the Used Oil Regs,
toxic resource inventory, national emission standards for
hazardous air pollutants, Spill Prevention and Control, Subpart
CC (air), RCRA (for haz waste handlers) and wastewater Regs.  She
estimated the time required to comply with each of these
regulations.  In all, she estimates that one employee spends all
of his time on environmental regulations (more for haz waste
handlers).  Added to this are the approval screening and waste
characteristics that the CWTs require internally which she
estimates requires a minimum of 10% of an employee's time.  Mr.
Laity indicated that it would be very useful to see this
breakdown in writing.  Mr. Kelly suggested that this is part of
the reason small businesses are less well represented in the
regulation development process- because they have less time to
respond with comments.  Mr. Waggener concurred with Ms. Gotthelf
regarding the regulatory burden.  He added that EPA had done a
good job of estimating monitoring costs.  He stated that
sometimes the cost of compliance exceeds the cost of treatment.
He also said that frequency of monitoring in the 1995 proposed
rule does not necessarily reflect what is done in the field.  For
metals, volatiles and semi-volatiles, for example, he mentioned
that most cities don't require these to be monitored more than
once a month, especially after the facility has been in business
for a while.  Some only require monitoring once a quarter or
less.

     Mr. Forsht explained that the frequencies outlined are used
because they form the basis for limits.  Mr. Waggener stated that
it was his fear that the preamble dictated sample frequencies are
often utilized by permit writers and would be excessive.  He
suggested once a month for metals and organics and once a week
for conventionals as this is the current practice.   Mr. Forsht
said that EPA could use monthly monitoring, but would only
establish a daily maximum.  Ms. Matuszko clarified EPA's sampling
frequencies used for costing purposes.  Additionally, Ms.
Matuszko and Mr. Connor added that EPA has costed a reduced
monitoring option for small businesses changing some daily
monitoring to monthly, some daily to quarterly, and some weekly
to quarterly.

     Ms. Gotthelf suggested decreasing the number of measured
parameters from the original proposal.  She also suggested the
use of indicator parameters such as fats oil and grease (FOG) and
total organic carbon (TOC).  She disagreed with Mr. Waggener's
once a month suggestion.  She suggested twice a month.  Ms.
Gotthelf indicated that waste streams vary from day to day, month
to month, and year to year and that twice a month sampling would
allow facilities better control.   If a problem is encountered,
the facility could go to additional analysis.  Mr. Bromberg asked
what would be the benefit, to which Ms. Gotthelf replied there
would be a closer watch on compliance.  Mr. Forsht stated that
effluent guidelines do not dictate monitoring requirements-
permit writers decide on the requirements on a case-by-case
basis.  However, he noted that a basis for costing the regulation
and for establishing limits must be developed.  Mr. Bromberg
asked what was lost with weekly  monitoring vs. monthly
monitoring.  Mr. Forsht said that it depends.  Mr. Waggener added
that FOG would not be a good parameter (Ms. Matuszko agreed)
because meeting FOG goals can be very expensive, and facilities
which discharge to a POTW generally do not have oil and grease
limitations.

     Ms. Matuszko offered the list of considered pollutants.  She
said that the rule will not cover them all specifically, but that
any indicator parameter should represent them.  Mr. Bromberg and
Mr. Waggener asked which of the pollutants drive the cost
effectiveness.  They requested a list of lb-equivalent loadings
for each pollutant and each option on a subcategory basis broken
down into direct and indirect discharges.  Ms. Frace replied that
the analysis has not been performed in this manner and that there
is no time to reformat it due to the schedule.  Mr. Forsht added
that EPA would prefer to wait and not release working drafts.
Mr. Connor stated that it takes a great deal of time to prepare
data for release due to its CBI nature.  Ms. Matuszko asked what
would be the SERs minimum needs.  Mr. Waggener and Mr. Bromberg
asked for each pollutant load by subcategory, direct and
indirect, baseline and post-proposal.  Mr. Connor estimated that
this would take three days, minimum.  Ms. Matuszko said that we
may do something like this, but not before changes to the
applicability of the proposed rule were made.

     Mr. Kelly reminded the group that the only statutory
requirement of the panel is to answer the four questions outlined
in the letter.  Often the SERs request information on issues not
specifically outlined in the statutory requirements in order to
advise the Panel on additional issues which they feel are
important.  But decisions must be made how best to allocate
resources to these efforts.  Mr. Waggener responded that the
pollutant loadings information, arranged by subcategory, and
split between direct and indirect dischargers, would be very
useful.  Mr. Laity acknowledged that the information is changing,
but stated that the loadings split this way would at least
provide useful input.  Ms. Frace re-emphasized that EPA will lose
time if we have to do work that will have to be re-done later.
Mr. Waggener countered that similar information provided during
the TECI process was very helpful.

RCRA

     Ms. Matuszko indicated that EPA's cost of compliance
estimates includes $30,000 for RCRA permitted facilities to
change their RCRA permit due to possible changes in their
treatment system.  Ms. Gotthelf pointed out that this does not
include the zoning change, which would be an extra $30,000 for
all facilities--hazardous and non-hazardous facilities.  Mr.
Waggener said that some facilities are TSDs, not generators, and
that the fact that they have a RCRA number does not necessarily
mean that they deal in hazardous waste.  Some only filed a RCRA
permit as a defensive measure, and only around 5% accept RCRA
waste.  Ms. Matuszko replied that, while we agree that Mr.
Waggener's comment has merit for some facilities, in looking at
small business alternatives, a cutoff based on RCRA status was
chosen for simplicity.  Mr. Waggener suggested a exclusion for
RCRA small facilities.  Ms. Matuszko said that, based on our
sampling data, we don't know the difference in effluent between
hazardous and non-hazardous facilities, so it would not be
possible to make an exclusion cut-off without more data.  Mr.
Waggener promised to get back to EPA on this.

     Ms. Gotthelf reiterated that TSDs have to track tank
emissions, and that this overlaps with TRI, Air regs, Subpart CC
(in which there might be a consistency issue, e.g. definition of
organics).  A higher level of expertise will be needed by the
facilities to comply with the reporting requirements.  Mr. Dozier
asked if she had any estimate of the amount of extra time that
would be needed.  Ms. Gotthelf replied that it had not been done,
because of uncertainties in the options, whether the rule would
include air emissions technologies or not, and whether the
combined waste stream formula would be included.

ALTERNATIVES TO THE PROPOSED RULE

     Ms. Gotthelf suggested that if a combined waste stream
formula approach is used, there should be a threshold (10, 15%)
before one needs to include calculations involving the specific
subcategory.  Otherwise there would be a significant burden on
facilities to determine their wastewater characteristics.  Ms.
Matuszko asked why the facilities couldn't use `fingerprint'
screening to analyze their incoming waste.  Ms. Gotthelf
countered that the fingerprint screening is not detailed enough.
She then stated that variability leads to a high tracking burden
and more analysis cost.  Ms. Matuszko argued that all the
facilities she has visited are able to easily estimate the
breakdown of what they are taking (ex. `90% metals, 10% oily
waste').  Mr. Forsht spoke of the difficulty in sampling.  He
said he knows of facilities in which metals are combined with
other wastes until the metals are too dilute.  He asked how EPA
can be sure that this isn't done?  Mr. Waggener stated that he
didn't think this was a problem, since the same treatment (DAF)
takes care of all three subcategories.  Ms. Matuszko responded
that DAF is not effective treatment for all three subcategories
and noted that treatment by DAF is inefficient for concentrated
metals streams.   Mr. Waggener agreed.

     Just before leaving, Mr. Kelly reminded the group that the
date for answering the four SBREFA questions in writing is
Monday, 11/17.  Mr. Laity asked Ms. Gotthelf and Mr. Waggener to
put the combined waste stream problem in writing by that time.

REGULATORY ALTERNATIVES ANALYSIS

     Mr. Connor discussed the 10/20/97 regulatory alternatives
analysis document.  He showed how the EPA attempted to look for
technologically based data trends using four breakdowns:
production, employment, revenue, and discharge rate.  Production
made little sense, since CWTs are a service industry.  Employment
showed no trend, since industry is capital, not employment,
intensive.  Implementation of alternative regulations based on
revenue would be difficult, since permit writers have no access
to revenue data.   Additionally, there seemed to be no trend
based on revenue and loadings.

     Somewhat of a trend was evident for discharge rate vs.
loadings.  Basically, 75% of small businesses are below 9 MGY.
Mr. Connor showed results for five regulatory alternatives:

     -<7.5 MGY, indirects, non-hazardous exempt
     -Monitoring relief for small businesses
     -<3.5 MGY indirects exempt
     -<3.5 MGY indirects non-hazardous exempt
     -All small indirects exempt

     He then showed economic impacts for these five scenarios
plus the base case.  Mr. Waggener asked for a breakdown by
subcategory.  Dr. Wheeler said that could be done fairly easily.
Mr. Bromberg asked for flows by subcategory.  Mr. Connor
demonstrated how to calculate these flows.  Mr. Bromberg then
asked why the analysis was stopped at 9 MGY, and why it was not
divided by subcategory.  Ms. Matuszko responded that by
considering an exclusion for all small businesses, EPA had looked
at the extremes.  Additionally, since the total amount of
pollutants being collectively discharged by facilities at 9 MGY
or less was excessive, EPA stopped there.

MISCELLANEOUS

     Ms. Gotthelf asked if PCBs were included.  Ms. Matuszko said
no.

     Ms. Gotthelf asked if a parameter was not found in the
screening, would it be necessary to look for it in the effluent?
She also asked what would be done if the limit is below the
detection limit (due to sample dilution and its effect on the
detection limit).  Mr. Forsht and Ms. Matuszko responded that
there are ways to deal with these issues.
                                
                          Attachment B:
           Small Entity Representative Conference Call
                        November 5, 1997
                                
                                
     The Small Entity Representatives (SERs) met with the
Environmental Protection Agency by conference call on Wednesday,
November 5, 1997.  This is a summary of that meeting.

     The SERs attending the conference call were Jack Waggener
(Resource Consultants, National Oil Recyclers Association), David
Case (Environmental Technology Council) and Beth Gotthelf (The
CWT Coalition).  Representatives of several CWTs which Ms.
Gotthelf represents, also participated in the conference call.
The Engineering and Analysis Division representatives present
were Jan Matuszko (Project Manager), William Wheeler (Project
Economist),  Elwood Forsht (Chemicals and Metals Branch Chief),
Tim Connor (Project Engineer) and James Covington (Economist).
Stuart Miles-McLean was also present representing EPA's Office of
Policy, Planning and Evaluation (OPPE). Representatives from
other government agencies present were Damon Dozier (SBA) and Kay
Ryan (SBA).

     Jan Matuszko opened the meeting by requesting input on some
of the regulatory alternatives that EPA had considered.  Beth
Gotthelf indicated that RCRA permits and wastewater flow rates
are not good bases for an exclusion and that her operators are
concerned that CWTs maintain a reputation as "good guys" in terms
of protecting the environment.  She also noted that she believes
that EPA has underestimated the universe of CWT facilities and
that therefore any exclusion would allow more pounds of
pollutants to be discharged than EPA has estimated.  She
suggested less frequent monitoring, monitoring on fewer
parameters, or indicator parameters as alternative methods of
regulatory relief.  Tim Connor noted that EPA is considering
indicator parameters.

     Damon Dozier asked why the industry would rather be
regulated than have an exclusion and asked about Scenario 6,
which excluded all small businesses.  David Case noted that
significant removals (13 percent) are lost with that exclusion.
Jan Matuszko pointed out that EPA did not consider Scenario 6 to
be realistic because of permitting difficulties.  Jack Waggener
disagreed with David Case and Beth Gotthelf, stating that he
thought flow-based exclusions were a good idea.  Beth Gotthelf
asked about the definition of small businesses for this rule and
expressed concern that an exclusion would create an uneven
playing field.  Jan Matuszko explained that the definition of a
small business was $6 million in annual revenue.

     David Case stated that all members of his group treat
hazardous and non-hazardous waste and would not favor a non-
hazardous exclusion; these members accept costs of regulations as
necessary for public assurances.  He also favored reduced
monitoring costs.  He foresees many problems with implementation
and compliance for flow-based exclusions.

     Jan Matuszko asked about hazardous and non-hazardous
exclusions.  Beth Gotthelf answered that her facilities treated
many combinations of hazardous and non-hazardous waste and the
CWT operators participating on the call attempted to break down
their treatment flows by hazardous and non-hazardous waste (one
facility treated oils with about 20-30 percent hazardous, another
treated approximately 50 percent hazardous and non-hazardous
waste).  One of Beth Gotthelf's CWT operators stated that RCRA
permitees do not treat only hazardous waste and was concerned
that an exclusion for non-hazardous facilities would cause him to
lose his non-hazardous business.  Jack Waggener stated that most
NORA members are not RCRA facilities and do not treat hazardous
waste.  Some NORA members do have RCRA permits, but often don't
accept hazardous wastes.  David Case agreed with Ms. Gotthelf
that a non-hazardous exclusion would create perverse economic
incentives.  Jack Waggener questioned whether or not facilities
treating hazardous and non-hazardous waste were truly small
businesses.

     Beth Gotthelf again mentioned the $6 million definition.
Jack Waggener indicated that he would like to see more detail on
the oils subcategory and asked if there had been any analysis of
less treatment.  Jan Matuszko indicated that EPA considers less
treatment to be baseline and, in response to a question from
Damon Dozier, indicated willingness to describe all options
considered but noted that DAF was cheaper than those options.

     Beth Gotthelf questioned the combined waste stream (CWS)
formula, noting that it was difficult to implement and would make
in difficult to reduce monitoring costs.  David Case expressed
concern about the monitoring and paperwork costs of the CWS
formula across multiple subcategories.  Elwood Forsht explained
that the CWS formula was only used once to establish parameters
in the permit, but Beth Gotthelf expressed concern that a POTW
might not accept a CWT's estimate and might require documentation
of daily flows.  She further stated that she was afraid of
implementation of the CWS--tracking numbers every day and the
possibility that permits might only be for 1, 2, or 3 years. Jack
Waggener agreed.
     
     Elwood Forsht indicated that he was interested in technical
ideas to discourage dilution by plants that commingled metals and
oils to avoid treatment.  Jack Waggener asked how the Agency
would classify wastes that were both metals and organics.  Beth
Gotthelf indicated that there was some ambiguity about categories
and concern about waste from multiple subcategories.  Elwood
Forsht reiterated his concern about dilution.
     
     Damon Dozier asked about the costs of conducting their pre-
qualification and waste acceptance process.  He was particularly
interested in the analytical costs associated with screening the
incoming wastes.  Beth Gotthelf's operators indicated costs
ranging from $40,000/year to $150,000/year, and stated that they
considered this a fixed cost of the business.

     In concluding, Beth Gotthelf expressed a willingness to
further investigate monitoring costs and frequency, indicator
parameters and the CWS formula.

     Following the conclusion of the conference call, Jack
Waggener expressed a belief that the other SERs did not represent
small entities and EPA staff agreed to look into the sizes of
firms represented by each of the SERs.

                          Attachment C:
           Small Entity Representative Conference Call
                        November 20, 1997
                                
                                
     The Small Entity Representatives (SERs) met with the SBAR
Panel by conference call on Thursday, November 20, 1997.  This is
a summary of that meeting.

     The SERs attending the conference call were Jack Waggener
(Resource Consultants, National Oil Recyclers Association) and
Beth Gotthelf (The CWT Coalition).  Lyle Salfbury of Edwards Oil,
a small CWT which Ms. Gotthelf represents, also participated in
the conference call.  The Panel Members participating in the
conference call were Sheila Frace (EPA), Jere Glover (SBA) and
Jim Laity (OMB).  Other  representatives present from EPA's
Engineering and Analysis Division were Debra Nicoll (Assistant
Acting Division Director), Jan Matuszko (Project Manager - CWT),
William Wheeler (Project Economist), and James Covington
(Economist).  Other representatives of the EPA present were Tom
Kelly (OPPE, Panel Chair), Stuart Miles-McLean (OPPE), and
Richard Witt (OGC, CWT Lead Council).  Representatives from other
government agencies present in addition to the Panel members were
Desi Crouther (OMB), Damon Dozier (SBA), and Kevin Bromberg
(SBA).

     Beth Gotthelf was asked to begin the meeting by summarizing
her written comments.   She stated that CWTs already have a lot
of regulations to comply with and that many of the regulations
overlap.  She is particularly concerned about upcoming used oil
requirements which require  a biennial report, the first of which
is due by March 1998.  At the same time, she is concerned about
protecting the environment while decreasing the burden to small
facilities.  She suggested one way to meet that goal is to use an
indicator parameter such as TOC.  This would protect the
environment yet reduce the cost of monitoring substantially.
They are not in favor of exempting any facilities.  If EPA chose
to exempt facilities, Ms. Gotthelf stated that flow is not a good
basis.  As an example, she stated that Edward's Oil (one member
of her group) has a flow of 14 million gallons (twice the
significant industrial user (SIU) flow), but their total revenue
is below the small business cut-off.

     Jack Waggener stated that he does not believe that 7.5 MGY
(SIU flow)  is a good cut-off even though it is a good starting
point to consider exclusions.  He does not believe that this cut-
off gives small businesses a break.  Mr. Salfbury agreed with Mr.
Waggener.  Mr. Waggener stated the fee to treat non-hazardous
oily wastewater is approximately twelve cents a gallon.
Therefore, many small facilities in terms of revenue would be
treating in excess of 7.5 million gallons per year.

     Ms. Gotthelf continued that her coalition is not in favor of
distinguishing between hazardous and non-hazardous facilities.
She believes many non-hazardous facilities are putting as much
pollution down the drain as non-hazardous facilities.  She
believes EPA has underestimated current loadings by non-hazardous
facilities.

     Jim Laity then asked the small entity representatives a few
questions.  He questioned whether the SERs had looked at EPA's
reduced monitoring option.  He wanted some input from them on the
option.  Ms. Gotthelf answered that her facilities prefer the
concept of a single indicator.  Mr. Waggener answered that he
supports quarterly monitoring of organics and metals.  He also
stated that monitoring of organics and metals should not be in
excess of once a month.  He also likes the idea of an indicator
parameter and concurred that TOC has good potential.  Ms.
Matuszko requested that Mr. Waggener review the sampling data
that the sampled facilities had provided to him before making a
final recommendation on the use of TOC as a indicator parameter.

     Mr. Laity asked Mr. Salfbury whether they could handle the
costs associated with the reduced monitoring option for the oils
subcategory.  Mr. Salfbury replied it would be no problem,  but
since they were both an oils and metals facility, they would
still have to monitor more frequently for metal constituents.

     Mr. Laity then asked the SERs about providing a small
business cut-off based on flow.  He specifically requested input
on differentiating between hazardous and non-hazardous.  He
wanted to know if the SERs felt a different flow cut-off was
warranted for hazardous and non-hazardous flows.  Mr. Waggener
replied that hazardous and non-hazardous flows should be
considered separately.  Ms. Gotthelf replied that her coalition
did not feel that a distinction should be made between hazardous
and non-hazardous flows.  She stated that 50% of the facilities
she represents accept hazardous wastes for treatment and 50% only
accept non-hazardous wastes for treatment.  They prefer reduced
monitoring costs and longer compliance times.  Mr. Salfbury
concurred with Ms. Gotthelf.  Mr. Laity responded that he was
confused about this position and could they elaborate.  Mr.
Salfbury replied that his facility accepted both hazardous and
non-hazardous wastes.  Hazardous facilities are more regulated.
Many of his non-hazardous competitors are not as closely
scrutinized.  As such, he believes hazardous wastes are treated
better than non-hazardous wastes.  Mr. Waggener disagreed with
Mr. Salfbury.  He said 85% of NORA members are non-hazardous.  He
believes the loads being discharged by non-hazardous facilities
are less and that the economic impacts on the non-hazardous
facilities are greater.

     Mr. Waggener was then asked to summarize his written
comments.  He reiterated his earlier request for the DAF cost
models.  He believes that EPA probably underestimated costs of
these models.  Ms. Matuszko replied that she had the information
at the meeting and Mr. Miles-McLean would distribute the
information to the SERs following the meeting.

     Mr. Waggener stated that, based on his analysis of the two
plants EPA sampled after the original proposal,  the major
pollutants of concern were only in the hazardous waste streams.
As such, he believes EPA has overestimated the current loadings
which can be attributed to non-hazardous CWTs.  He suggests EPA
should exempt all non-hazardous facilities.  He believes this is
true regardless of the size of the company and suggested EPA
should consider excluding non-hazardous facilities with flows up
to 50 million gallons.  Once again, he stated that if a facility
is only receiving twelve cents a gallon to treat oily wastewater
then they can accept much more than 7.5 MGY and still be a small
business.  Ms. Matuszko questioned Mr. Waggener about his
estimates.  She noted that he only provided revenue based on oily
wastewater treatment and that most facilities also perform oil
recovery.  A facility can charge different amounts for oil
recovery versus oily wastewater treatment.  Additionally, a
facility usually generates revenue from selling the recovered
oil.  She stated that EPA's information on flow and revenue was
provided by the facilities that commented to the Notice.  As a
result of this discussion, Dr. Wheeler agreed to provide
additional information on EPA's estimates of baseline and with
regulation prices for oily wastewater treatment and recovery to
the Panel members and the SERs.

     Mr. Waggener continued his discussion concerning the
pollutants which are driving the cost effectiveness analysis.  He
stated that benzo(a)pyrene, a significant pollutant in this
analysis, is removed at the POTW by 95%.  Ms. Frace stated that
EPA has taken the POTW removals into account when estimating
current loadings.  He also discussed boron, another pollutant
which has a significant effect on the cost effectiveness of this
rule.  Mr. Waggener stated that DAF does not remove boron since
boron is very soluble in water.  He noted that the sampling data
from the non-hazardous facility showed that boron was not removed
in the DAF.  He noted that EPA's sampling data showed boron
removals at the concentrated facility only.  He stated that while
the boron appeared to be removed, it was a problem with the
analytical procedure. He stated that boron contamination of
aqueous samples digested in borosilicate glass containers is
common in concentrated samples and that the method overestimates
the amount of boron in the influent sample.  Ms. Matuszko stated
that she had provided Mr. Waggener's comments to EAD's Analytical
Methods Staff and that they were reviewing the data.  The
Analytical Methods Staff stated that boron contamination above
0.1 mg/L is infrequent, but that they would review the data for
those episodes.  Ms. Matuszko noted that the boron influent
levels were much higher than 0.1 mg/L for those episodes and that
EPA would provide the results to Mr. Waggener when the review was
completed.

     Mr. Waggener asked when the SERs would receive additional
information on loadings for oils option 8.  Ms. Matuszko replied
that they would be sent out by November 26.  Mr. Waggener then
expressed concern that he would have difficulty meeting the
deadline for final written comments which had be set for December
4.  The Panel agreed to extend the deadline until December 8.

     Ms. Matuszko asked the SERs if they had an opinion on the
use of SGT-HEM as an indicator parameter.  Mr. Waggener was not
especially supportive of this parameter.  He stated that many
indirect facilities did not have an oil and grease limit and that
he was concerned the facilities would be treating for the sake of
treating only.  Ms. Matuszko requested Mr. Waggener look at the
sampling data before making a final recommendation on this point.

     Mr. Dozier asked Mr. Salfbury about fingerprint parameters
that they already analyze for in the waste receipts: pH, flash
point, color, turbidity, etc.  Mr. Dozier wanted to know if any
of these parameters would make good indicator parameters,
particularly for the metals subcategory.  Mr. Salfbury responded
that the pH of a waste is a good indication of the metals
concentration.  Ms. Matuszko responded that the concentration of
each metal is pH specific and that pH is not a good indicator for
all metals.

     Mr. Bromberg asked the SERs for comment on how to control
the environmental problem if EPA chooses to exclude non-hazardous
facilities.  Mr. Waggener responded that local ordinances are
sufficient to handle the problem.  Ms. Gotthelf questioned if
local ordinances were sufficient.

     Mr. Laity then asked Ms. Gotthelf about her written comments
concerning the number of affected facilities.  Ms. Gotthelf
stated that she believes EPA has underestimated the population of
CWTs in general and, therefore, the number of small entities.
She stated EPA had identified ten facilities in the state of
Michigan.  She also stated she knew of twelve facilities that EPA
had not identified.  In the state of Michigan alone, EPA has
underestimated the population by as much as 50%.  Ms. Matuszko
asked Ms. Gotthelf if these additional facilities were oils
facilities.  Ms. Gotthelf replied that the vast majority were
oils facilities.  Ms. Matuszko agreed that EPA may have
underestimated the population of CWTs and that EPA has spent a
great deal of effort and money identifying CWTs.  However, she
does not believe that EPA has underestimated the universe of CWTs
by as much as Ms. Gotthelf's analysis indicates.  Since most of
the facilities identified by Ms. Gotthelf are oils facilities,
they are probably accounted for in the scale-up procedure for
that subcategory.  Ms. Matuszko will verify that conclusion. Mr.
Waggener supported both Ms. Gotthelf's and Ms. Matuszko's
comments.

     Ms. Gotthelf questioned the Panel on the $6 million dollar
small business cut-off.  Dr. Wheeler noted that this industry
does not have an SIC code.  However, the SIC code which the
majority of CWTs claim is 4593.  SBA has defined a small business
for that SIC code at $6 million in revenue.  The other SIC code
that many CWTs claim is 5093.  The small business cut-off is $5
million for that SIC code.  Ms. Gotthelf then questioned SBA as
to how they derived their cut-offs.  Mr. Glover responded that
SBA would get back to the SERs with a detailed explanation.

     The SERs were reminded that final comments were due by
December 8, 1997.
                          Attachment D:
                                
               WRITTEN COMMENTS RECEIVED FROM THE
                  SMALL ENTITY REPRESENTATIVES
                          Attachment E

              MATERIALS PROVIDED TO SERs and PANEL

EPA provided the following materials to the Panel and the Small
Entity Representatives.  Copies of these materials will be
available in the public docket for the proposed rule.

1.September 15, 1997 background materials sent:
     a.Proposed CWT rule - January 27, 1995 (60FR5464)
     b.CWT Notice of Data Availability - September 16, 1996
(61FR48806)
     c.1997 CWT Public Meeting Package
     d.Re-proposal option selection analyses

2.October 23, 1997 additional information provided to SERs
     in preparation of initial SER meeting:
     a.List of the CWT Small Entity Representatives
     b.Estimated costs for each facility (capital, O&M,
          Land, RCRA monitoring) and accompanying memo.
     c.Two memos (dated 3/3/97 and 9/29/97) detailing
          the compliance monitoring cost analyses
     d.Reduced monitoring option and costs for small
          businesses and accompanying memo
     e.1995 Detailed Costing Document for the Centralized Waste
          Treatment Industry
     f.Memo discussing small business regulatory
     alternatives.
     g.Results of our small business regulatory alternative
     analyses
     h..Memo describing economic methodology

3.October 27, 1997 Additional information provided:
     a.Applicable sections of the 1995 Economic Impact
          Analysis of Proposed Effluent Limitations
          Guidelines and Standards for the Centralized Waste
          Treatment Industry provided on October 27, 1997
     b.Updated tables of results of small business
          regulatory alternative analyses which
          included the number of facilities and the
          number granted relief and accompanying memo.

4.November 20, 1997 response to data requests provided:
     a.Preliminary assessment of several raw wastewater
          constituents in the oily waste treatment and
          recovery subcategory of the centralized waste
          treatment industry
     b.Oils subcategory cost equations and accompanying
          memo

5.November 27, 1997 response to additional data request
     provided:
     a.Pollutant loadings and removals for indirect
          oils option 8 and accompanying memo
     b.Baseline and with-regulation prices and
          quantities for each treatment and recovery
          market by region and the nation and
          accompanying memo

                   MATERIALS PROVIDED TO PANEL

In addition to the materials listed above, EPA provided the
following materials to the Panel Members only.  Copies of these
materials will be in the public docket for the proposed rule
unless indicated as CBI.  Copies of the materials will be in the
CBI record.

1.November 17, 1997 response to Panel data requests provided:
     a.1995 Development Document for Proposed Effluent
          Limitations Guidelines and Standards for the
          Centralized Waste Treatment Industry
     b.1995 Cost-Effectiveness analysis of Proposed
          Effluent Limitations Guidelines and Standards
          for the Centralized Waste Treatment Industry

2.November 25, 1997 memorandum detailing the methodology
     changes from proposal analysis to re-proposal analysis
     provided:

3.November 26, 1997 response to Panel data requests provided:
     a.Pollutant pass-through analysis for indirect
          oils option 8
     b.Breakdown of flow by oils subcategory modeling
          group used in estimating current performance
          loadings
     c.Data sets used in establishing current discharge
          loadings and accompanying memo - CBI

4. December 19, 1997 memo discussing possible understatement of
     impact of costs