[Federal Register Volume 62, Number 242 (Wednesday, December 17, 1997)]
[Proposed Rules]
[Pages 66182-66214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30240]



[[Page 66181]]

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Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 441



Effluent Limitations Guidelines and Pretreatment Standards for the 
Industrial Laundries Point Source Category; Proposed Rule

Federal Register / Vol. 62, No. 242 /  Wednesday, December 17, 1997 / 
Proposed Rules

[[Page 66182]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 441

[FRL-5922-2]
RIN 2040-AB97


Effluent Limitations Guidelines and Pretreatment Standards for 
the Industrial Laundries Point Source Category

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would limit the discharge of pollutants 
into waters of the United States and publicly owned treatment works 
(POTWs) from existing and new industrial laundries by establishing 
pretreatment standards for existing and new sources (PSES and PSNS, 
respectively). These standards are based on a determination of the 
degree to which pollutants pass through or interfere with POTWs; the 
best available technology economically achievable for PSES; and best 
available demonstrated control technology for PSNS. EPA estimates the 
proposed rule would cost approximately $139.4 million ($1997 pretax 
total social cost) annually (posttax compliance costs to affected 
facilities would be $93.9 million annually) while it reduces the 
discharge of toxic and nonconventional pollutants to POTWs by 
approximately 13 million pounds resulting in reduced discharges of 5 
million pounds per year of such pollutants as well as significant 
amounts of other conventional pollutants per year to waters of the U.S. 
This proposed rule would also reduce the impacts of these discharges to 
aquatic life and human health and reduce potential interference with 
POTW operations. EPA is reserving effluent limitations guidelines for 
direct dischargers since EPA has identified no direct dischargers and 
has no means to evaluate performance to determine the appropriate level 
of control. If any such discharges were to occur, they would be subject 
to limitations set on a best professional judgement basis.

DATES: EPA must receive comments on the proposal by February 17, 1998.
    EPA will conduct a public hearing on pretreatment standards on 
January 15, 1998 from 9am EST to 12 noon.

ADDRESSES: Submit comments in writing to W-97-14, Ms. Marta Jordan, 
Engineering and Analysis Division (4303), U.S. EPA, 401 M. St. SW, 
Washington, DC 20460. Please submit any references cited in your 
comments. EPA requests an original and three copies of your comments 
and enclosures (including references). Commenters who want EPA to 
acknowledge receipt of their comments should enclose a self-addressed, 
stamped envelope. No facsimiles (faxes) will be accepted. For 
additional information on how to submit electronic comments see 
SUPPLEMENTARY INFORMATION ``How to Submit Comments''.
    The public record for this proposed rulemaking has been established 
under docket number W-97-14 and is located in the Water Docket, Room 
M2616, 401 M. St. SW, Washington, DC 20460. The record is available for 
inspection from 9:00 a.m. to 4:00 p.m., Monday through Friday, 
excluding legal holidays. For access to the docket materials call (202) 
260-3027 to schedule an appointment. You may have to pay a reasonable 
fee for copying.
    EPA will conduct a public hearing on pretreatment standards in 
EPA's Auditorium, Waterside Mall, 401 M. St. SW, Washington, DC. 
Persons wishing to present formal comments at the public hearing should 
have a written copy for submittal.

FOR FURTHER INFORMATION CONTACT: For technical information contact Ms. 
Marta E. Jordan at (202) 260-0817. For economic information contact Mr. 
George Denning at (202) 260-7374.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    This proposed rule would apply to industrial laundries. An 
industrial laundry is any facility that launders industrial textile 
items from off-site as a business activity (i.e., launders industrial 
textile items for other business entities for a fee or through a 
cooperative arrangement). Either the industrial laundry facility or the 
off-site customer may own the industrial laundered textile items. This 
definition includes textile rental companies that perform laundering 
operations. For this proposed rule, laundering means washing with 
water, including water washing following dry cleaning. This proposed 
rule would not apply to laundering exclusively through dry cleaning. 
Industrial textile items include, but are not limited to, industrial: 
shop towels, printer towels/rags, furniture towels, rags, mops, mats, 
rugs, tool covers, fender covers, dust-control items, gloves, buffing 
pads, absorbents, uniforms, filters and clean room items. If any of 
these items otherwise considered to be industrial textile items are 
used only by hotels, hospitals, or restaurants, they are not industrial 
items and would not be covered by this rule.

------------------------------------------------------------------------
                                                Examples of regulated   
                 Category                             entities          
------------------------------------------------------------------------
Industry..................................  Facilities that launder     
                                             industrial textile items   
                                             from off-site as a business
                                             activity.                  
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated by this proposed 
action. To determine whether your facility is regulated by this 
proposed action, you should carefully examine the Industrial Laundries 
Definition section of the proposed rule. If you have any questions 
regarding the applicability of this proposed action to a particular 
entity, consult the person(s) listed in the ``For Further Information 
Contact'' section of this proposed rule.
    The proposed rule would not apply to discharges from: on-site 
laundering at industrial facilities, laundering of industrial textile 
items originating from the same business entity, and facilities that 
exclusively launder linen items, denim prewash items, new items (i.e., 
items directly from textile manufacturers, not yet used for intended 
purpose), any other laundering of hospital, hotel, or restaurant items 
or any combination of these items. This proposed rule would apply to 
hotel, hospital, or restaurant laundering of industrial textile items 
from off-site industrial users, (e.g., shop towels). In addition, this 
proposed rule would not apply to the discharges from oil-only treatment 
of mops.
    By linen items, EPA means: sheets, pillow cases, blankets, bath 
towels and washcloths, hospital gowns and robes, tablecloths, napkins, 
tableskirts, kitchen textile items, continuous roll towels, laboratory 
coats, household laundry (such as clothes, but not industrial 
uniforms), executive wear, mattress pads, incontinence pads, and 
diapers. This list is meant to be all inclusive. By linen items, EPA 
does not mean to specify a particular type of fabric, but instead the 
types of items listed above.
    For facilities covered under the Industrial Laundry definition, 
wastewater from all water washing operations would be covered, 
including the washing of linen items as long as these items do not 
constitute 100 percent of the items washed.

[[Page 66183]]

Exclusions

    Under Pretreatment Standards for Existing Sources (PSES), EPA is 
proposing to exclude existing facilities that launder less than one 
million pounds of incoming laundry per calendar year and less than 
255,000 pounds of shop and/or printer towels/rags per calendar year. 
EPA proposes this exclusion in order to eliminate unacceptable 
disproportionate adverse economic impacts on these smaller facilities. 
The excluded facilities would be disproportionately adversely affected 
relative to all facilities covered by this proposed rule, as discussed 
further below. If any excluded facility launders one million pounds or 
more of incoming laundry per calendar year or 255,000 pounds or more of 
shop and/or printer towels/rags per calendar year, it will no longer be 
excluded from the standards. All of the excluded facilities are small 
entities under the Small Business Administration (SBA) definition of 
small entity. The excluded facilities account for less than three 
percent of the pollutant removals from the waters of the U.S. than 
would occur if the proposed rule were implemented without the 
exclusion.
    Under Pretreatment Standards for New Sources (PSNS), EPA is 
proposing no exclusion since the economic projections indicate that 
there would be no barrier to entry as a result of the proposed new 
source standards.

Supporting Documentation

    The basis for this proposed rule is detailed in five documents, 
each of which is supported in turn by additional information and 
analyses in the rulemaking record. EPA's technical foundation for the 
regulation is presented in the Technical Development Document for 
Proposed Pretreatment Standards for Existing and New Sources for the 
Industrial Laundries Point Source Category. (Hereafter, ``Development 
Document''; EPA Report No. EPA-821-R-97-007). EPA's economic analysis 
is presented in the Economic Assessment for Proposed Pretreatment 
Standards for Existing and New Sources for the Industrial Laundries 
Point Source Category. (Hereafter, ``Economic Assessment''; EPA Report 
No. EPA-821-R-97-008) and the Cost-Effectiveness Analysis for Proposed 
Pretreatment Standards for Existing and New Sources for the Industrial 
Laundries Point Source Category (Hereafter, ``Cost-Effectiveness 
Analysis''; EPA Report No. EPA-821-R-97-005). EPA's statistical 
analysis is presented in the Statistical Support Document for Proposed 
Pretreatment Standards for Existing and New Sources for the Industrial 
Laundries Point Source Category. (Hereinafter, ``Statistical Support 
Document''; EPA Report No. EPA-821-R-97-006). EPA's environmental 
benefits analysis is presented in the Water Quality Benefits Analysis 
for Proposed Pretreatment Standards for Existing and New Sources for 
the Industrial Laundries Point Source Category. (Hereinafter, ``WQBA''; 
EPA Report No. EPA-821-R-97-009). These background documents are 
available from the Office of Water Resource Center, RC-4100, at the 
U.S. EPA, Washington, DC address shown above; telephone (202) 260-7786 
for the voice mail publication request line.

How to Submit Comments

    Comments may be filed electronically to 
Jordan.M<a href="/cdn-cgi/l/email-protection#90f1e2e4f1d0f5e0f1fdf1f9fcbef5e0f1bef7ffe6"><span class="__cf_email__" data-cfemail="4c2d3e382d0c293c2d212d252062293c2d622b233a">[email protected]</span></a>. Electronic comments must be submitted as 
an ASCII or WordPerfect 6.1 file avoiding the use of special characters 
and any form of encryption. Electronic comments must be identified by 
the docket number W-97-14 and must be received by midnight of February 
17, 1998. Electronic comments on this notice may be filed online at 
many Federal Depository Libraries. No confidential business information 
(CBI) should be sent via e-mail.

Protection of Confidential Business Information

    EPA notes that many documents in the record supporting the proposed 
rule have been claimed as confidential business information (CBI) and 
therefore, are not included in the record that is available to the 
public in the Water Docket. To support the rulemaking, EPA is 
presenting certain information in aggregated form or is masking 
facility identities to preserve confidentiality claims. Further, the 
Agency has withheld from disclosure some data not claimed as CBI 
because release of this information could indirectly reveal information 
claimed to be confidential.
    Some facility-specific data, claimed as CBI, are available to the 
company that submitted the information. To ensure that all CBI is 
protected in accordance with EPA regulations, any requests for company-
specific data should be submitted to EPA on company letterhead and 
signed by a responsible official authorized to receive such data. The 
request must list the specific data requested and include the following 
statement, ``I certify that EPA is authorized to transfer confidential 
business information submitted by my company, and that I am authorized 
to receive it.''

Organization of this Document

I.  Legal Authority
II.  Summary of Proposed Pretreatment Standards
III.  Background
    A.  Clean Water Act Statutory Requirements
    B.  Pollution Prevention Act
    C.  Industrial Laundries Definition
    D.  Summary of Public Participation
IV.  Description of the Industry
V.  Summary of Data Gathering Efforts
VI.  Development of the Pretreatment Standards
    A.  Wastewater Characteristics
    B.  Selection of Pollutant Parameters to be Regulated
    C.  Available Treatment Technologies
    D.  Technology and Regulatory Options Considered
    E.  Costs
    F.  Rationale for Selection of PSES and PSNS
    G.  Determination of Long-Term Averages (LTAs), Variability 
Factors, and Limitations for PSES and PSNS
VII.  Economic Analysis
    A.  Introduction
    B.  Economic Impact Methodology
    C.  Summary of Costs and Economic Impacts
    D.  Cost-Benefit Analysis
    E.  Cost-Effectiveness Analysis
VIII. Non-Water Quality Environmental Impacts
IX.  Environmental Benefits Analysis
    A.  Introduction
    B.  Overview of the Industrial Laundry Industry's Effluent 
Discharges
    C.  Benefits of the Proposed Rule
    D.  Human Health Benefits
    E.  Ecological Benefits Valued on the Basis of Enhanced 
Recreational Fishing Opportunities
    F.  Benefits From Reduced Cost of Sewage Sludge Disposal and 
Reduced Incidence of Inhibition
    G.  Discussions With POTW Operators and Pre-Treatment 
Coordinators
X.  Related Acts of Congress, Executive Orders, and Agency 
Initiatives
    A.  Regulatory Flexibility Act (RFA) as Amended by the Small 
Business Regulatory Enforcement Fairness Act (SBREFA)
    B.  Executive Order 12866

    C.  Unfunded Mandates Reform Act (UMRA)
    D.  Paperwork Reduction Act
    E.  National Technology Transfer and Advancement Act
XI.  Related Rulemakings
    A.  Office of Solid Waste (OSW) Activities Related to This 
Effort
XII.  Regulatory Implementation
    A.  Upset and Bypass Provisions
    B.  Variances and Modifications
Appendix A--Abbreviations, Acronyms, and Other Terms Used in This 
Notice

I. Legal Authority

    This regulation is being proposed under the authority of sections 
301, 304, 306, 307, 308, and 501 of the Clean

[[Page 66184]]

Water Act (CWA), 33 U.S.C. sections 1311, 1314, 1316, 1317, 1318, and 
1361.

II. Summary of Proposed Pretreatment Standards

    EPA proposes to establish ``Pretreatment Standards for Existing 
Sources'' (PSES), and ``Pretreatment Standards for New Sources'' 
(PSNS). Under PSES, EPA is proposing pretreatment standards for the 
entire facility wastestream based on Chemical Precipitation treatment 
of the portion of facility wastewater generated by laundering the 
industrial items only (CP-IL). EPA's data shows that these standards 
can be met by treating only this portion of wastewater. EPA finds this 
option to be the best available technology economically achievable 
based on the data collected during development of the proposed rule. 
CP-IL also provides effective treatment to minimize/prevent pass 
through and interference at POTWs. Under PSNS, EPA is also proposing 
standards based on Chemical Precipitation treatment of the portion of 
facility wastewater generated only by laundering of the industrial 
items since it is the best available demonstrated technology for 
pretreatment and the costs are not projected to be a barrier to entry.
    EPA is not developing effluent limitations guidelines and New 
Source Performance Standards for direct dischargers because EPA has 
identified no direct dischargers and there is no available information 
with which to accurately determine ``Best Available Technology 
Economically Achievable'' (BAT) or ``Best Available Demonstrated 
Control Technology'' (BADCT) performance for direct dischargers. 
Proposed limitations based on pretreatment control technologies would 
not likely represent best available technology or best available 
demonstrated technology for direct dischargers because the treatment 
technologies at existing industrial laundries that EPA evaluated were 
not designed for treatment prior to discharging directly to surface 
waters. The type or design (i.e., size) of treatment would not 
represent BAT because in all cases facilities rely on additional 
treatment at POTWs. For the pollutants evaluated in this proposed rule, 
the POTW's biological treatment removes from 4%-99% depending on the 
pollutant. Because EPA has not identified any POTWs receiving a very 
large proportion of their load (70-100%) from an industrial laundry, a 
determination of direct discharge effluent limitations cannot be 
performed. Thus, EPA is reserving effluent limitations guidelines and 
standards for direct dischargers in this rulemaking.
    This proposed rule would not apply to discharges from: on-site 
laundering at industrial facilities, laundering of industrial textile 
items originating from the same business entity, and facilities that 
exclusively launder linen items, denim prewash items, new items (i.e., 
items directly from textile manufacturers, not yet used for intended 
purpose), any other laundering of hotel, hospital, or restaurant items 
or any combination of these items. This proposed rule would apply to 
hotel, hospital, or restaurant laundering of industrial textile items. 
In addition, this proposed rule would not apply to laundering 
exclusively through dry cleaning and the oil-only treatment of mops.
    The rule also would not apply to certain small industrial 
laundries; see ``Regulated Entities'' discussion above, industrial 
laundries definition, and rule text below.
    Pursuant to CWA section 307(b)(1), indirect dischargers are 
required to comply with pretreatment standards for existing sources by 
three years of the effective date of the final rule. For purposes of 
this rule, indirect dischargers must comply with this rule by three 
years after the date of publication of the final rule.

III. Background

A. Clean Water Act Statutory Requirements

    The objective of the Clean Water Act (CWA) is to ``restore and 
maintain the chemical, physical, and biological integrity of the 
Nation's waters.'' CWA section 101(a). To assist in achieving this 
objective, EPA issues effluent limitation guidelines, pretreatment 
standards, and new source performance standards for industrial 
dischargers. These standards relevant to this rulemaking are summarized 
here:
1. Best Available Technology Economically Achievable (BAT)--Section 
304(b)(2) of the CWA
    BAT effluent limitations guidelines apply to direct dischargers of 
toxic and nonconventional pollutants. In general, they represent the 
best existing economically achievable performance of plants in the 
industrial subcategory or category. The factors considered in assessing 
BAT include the age of equipment and facilities involved, the process 
employed, potential process changes, non-water quality environmental 
impacts, including energy requirements, and such factors as the 
Administrator deems appropriate. EPA retains considerable discretion in 
assigning the weight to be accorded these factors. An additional 
statutory factor considered in setting BAT is economic achievability. 
Generally, the achievability is determined on the basis of total costs 
to the industrial subcategory and the rule's effect on the overall 
industry financial health. Where existing performance is uniformly 
inadequate, BAT may be transferred from a different subcategory or 
category. BAT may be based upon process changes or internal controls, 
even when these technologies are not common industry practice.
2. New Source Performance Standards (NSPS)--Section 306 of the CWA
    NSPS are based on the best available demonstrated control 
technology (BADCT) and apply to all pollutants (conventional, 
nonconventional, and toxic). New facilities have the opportunity to 
install the best and most efficient production processes and wastewater 
treatment technologies. Under NSPS, EPA is to consider the best 
demonstrated process changes, in-plant controls, and end-of-process 
control and treatment technologies that reduce pollution to the maximum 
extent feasible. In establishing NSPS, EPA is directed to take into 
consideration the cost of achieving the effluent reduction and any non-
water quality environmental impacts and energy requirements.
3. Pretreatment Standards for Existing Sources (PSES)--Section 307(b) 
of the CWA
    PSES are designed to prevent the discharge of pollutants that pass 
through, interfere with, or are otherwise incompatible with the 
operation of publicly owned treatment works (POTWs). The CWA authorizes 
EPA to establish pretreatment standards for pollutants that pass 
through POTWs or interfere with treatment processes or sludge disposal 
methods at POTWs. Pretreatment standards are technology-based and 
analogous to BAT effluent limitations guidelines.
    The General Pretreatment Regulations, which set forth the framework 
for the implementation of categorical pretreatment standards, are found 
at 40 CFR part 403. Those regulations contain a definition of pass 
through that addresses localized rather than national instances of pass 
through and establish pretreatment standards that apply to all non-
domestic dischargers. See 52 FR 1586 January 14, 1987.

[[Page 66185]]

4. Pretreatment Standards for New Sources (PSNS)--Section 307(b) of the 
CWA
    Like PSES, PSNS are designed to prevent the discharges of 
pollutants that pass through, interfere with, or are incompatible with 
the operations of POTWs. New indirect dischargers have the opportunity 
to incorporate into their plants the best available demonstrated 
technologies. The Agency considers the same factors in promulgating 
PSNS as it considers in promulgating NSPS.
5. Best Management Practices (BMPs)
    Section 304(e) of the CWA gives the Administrator the authority to 
publish regulations, in addition to the effluent limitations guidelines 
and standards listed above, to control plant site runoff, spillage or 
leaks, sludge or waste disposal, and drainage from raw material storage 
that the Administrator determines may contribute significant amounts of 
pollutants. Some industrial laundry facilities have BMPs in place and 
these BMPs are further discussed in Sections III.B. and VI.C.1. below 
and in more detail in the Development Document.
6. CWA Section 304(m) Requirements
    Section 304(m) of the CWA requires EPA to establish schedules for 
(I) reviewing and revising existing effluent limitations guidelines and 
standards and (ii) promulgating new effluent limitations. On January 2, 
1990, EPA published an Effluent Guidelines Plan (55 FR 80), in which 
schedules were established for developing new and revised guidelines 
for several industry categories, including the industrial laundries 
point source category. Natural Resources Defense Council, Inc., 
challenged the Effluent Guidelines Plan in a suit filed in the U.S. 
District Court for the District of Columbia, (NRDC et al v. Reilly, 
Civ. No. 89-2980). On January 31, 1992 the Court entered a consent 
decree (the ``304(m) Decree''), which establishes schedules for, among 
other things, EPA's proposal and promulgation of effluent guidelines 
for a number of point source categories, including the industrial 
laundries point source category. The most recent Effluent Guidelines 
Plan Update was published in the Federal Register on February 26, 1997 
(62 FR 8726). This plan requires, among other things, that EPA propose 
the Industrial Laundries Effluent Limitations Guidelines and 
Pretreatment Standards by September 1997 and take final action on the 
Guidelines and Standards by June 1999.

B. Pollution Prevention Act

    The Pollution Prevention Act of 1990 (PPA) (42 U.S.C. 13101 et 
seq., Pub. L. 101-508, November 5, 1990) ``declares it to be the 
national policy of the United States that pollution should be prevented 
or reduced whenever feasible; pollution that cannot be prevented should 
be recycled in an environmentally safe manner, whenever feasible; 
pollution that cannot be prevented or recycled should be treated in an 
environmentally safe manner whenever feasible; and disposal or release 
into the environment should be employed only as a last resort * * *'' 
(Sec. 6602; 42 U.S.C. 13101(b)). In short, preventing pollution before 
it is created is preferable to trying to manage, treat or dispose of it 
after it is created. The PPA directs the Agency to, among other things, 
``review regulations of the Agency prior and subsequent to their 
proposal to determine their effect on source reduction'' (Sec. 6604; 42 
U.S.C. 13103(b)(2)). This effluent guideline was reviewed for its 
incorporation of pollution prevention.
    According to the PPA, source reduction reduces the generation and 
release of hazardous substances, pollutants, wastes, contaminants or 
residuals at the source, usually within a process. The term source 
reduction ``include[s] equipment or technology modifications, process 
or procedure modifications, reformulation or redesign of products, 
substitution of raw materials, and improvements in housekeeping, 
maintenance, training or inventory control. The term ``source 
reduction'' does not include any practice which alters the physical, 
chemical, or biological characteristics or the volume of a hazardous 
substance, pollutant, or contaminant through a process or activity 
which itself is not integral to or necessary for the production of a 
product or the providing of a service.'' 42 U.S.C. 13102(5). In effect, 
source reduction means reducing the amount of a pollutant that enters a 
waste stream or that is otherwise released into the environment prior 
to out-of-process recycling, treatment, or disposal.
    EPA has undertaken several pollution prevention related activities 
involving the industrial laundries industry. Part of the efforts were 
Agency wide, including the Office of Research and Development (ORD) and 
EPA's Region 9, while other efforts were included as part of the 
engineering studies in the development of the proposed rule.
    The Agency-wide efforts, called the Industrial Pollution Prevention 
Project (IP3), were multi-media and examined how industrial pollution 
prevention can be incorporated into EPA's regulatory framework and how 
the pollution prevention ethic can be promoted throughout industry, the 
public and government. A report summarizing the results of these 
efforts, entitled ``Summary Report of the Industrial Pollution 
Prevention Project (IP3),'' EPA-820-R-95-007, July 1995, included the 
results of two case studies involving industrial laundries. More 
detailed discussions of the two studies are contained in the individual 
reports, ``Pollution Prevention at Industrial Laundries: Assessment 
Observations and Waste Reduction Options,'' EPA-820-R-95-010, July 
1995, and ``Pollution Prevention at Industrial Laundries: A 
Collaborative Approach in Southern California,'' EPA-820-R-95-012. 
These studies identified a number of ``best management practices'' 
(BMP's) and water and energy savings technologies as potential 
pollution prevention practices at industrial laundries.
    Similarly, during the engineering study phase of the development of 
the proposed rule, a number of potential pollution prevention practices 
and technology applications were identified. Discussion of the 
pollution prevention technologies and practices and their uses with 
respect to this proposed rule are contained later in Section VI of this 
preamble and in the Development Document.

C. Industrial Laundries Definition

    An industrial laundry is any facility that launders industrial 
textile items from off-site as a business activity (i.e., launders 
industrial textile items for other business entities for a fee or 
through a cooperative arrangement). Either the industrial laundry 
facility or the off-site customer may own the industrial laundered 
textile items. This definition includes textile rental companies that 
perform laundering operations. For this proposed rule, laundering means 
washing with water, including water washing following dry cleaning. 
This proposed rule would not apply to laundering exclusively through 
dry cleaning. Industrial textile items include, but are not limited to 
industrial: shop towels, printer towels/rags, furniture towels, rags, 
mops, mats, rugs, tool covers, fender covers, dust-control items, 
gloves, buffing pads, absorbents, uniforms, filters and clean room 
garments. If any of these items are used by hotels, hospitals, or 
restaurants, they are not industrial items.
    The proposed rule would not apply to discharges from: on-site 
laundering at industrial facilities, laundering of

[[Page 66186]]

industrial textile items originating from the same business entity, and 
facilities that exclusively launder linen items, denim prewash, new 
items (i.e. items directly from textile manufacturers, not yet used for 
intended purpose), any other laundering of hotel, hospital, or 
restaurant items or any combination of these items. This proposed rule 
would apply to hotel, hospital, or restaurant laundering of industrial 
textile items. In addition, this rule would not apply to discharges 
from the oil-only treatment of mops.
    The focus of this rule is on industrial laundries that function 
independently of other industrial activities that generate wastewater. 
The reason EPA is excluding from applicability on-site laundries is 
that EPA believes it is more appropriate to address on-site laundry 
discharges at industrial facilities as part of the effluent from the 
facility as a whole, for several reasons. First, many such facilities 
commingle laundry wastewater with wastewater from other processes. 
Second, EPA anticipates that contaminants removed from laundered items 
can best be treated with process wastewater containing similar 
contaminants. EPA has already established effluent limitations 
guidelines and standards for 51 industries (see Development Document). 
These regulations generally apply to wastewater generated from these 
industries, including on-site laundering. For example, the OCPSF 
effluent guidelines control discharges from garment laundering at OCPSF 
facilities. For industries not yet covered by effluent limitations 
guidelines and standards, it makes sense to examine these industries 
and the wastewater treatment processes at these industrial facilities 
in the context of the entire industrial facility, not just the 
laundering portion of the facility. Addressing on-site laundering 
discharges along with other industrial discharges in an industry allows 
EPA to examine all of the production and processing equipment used by 
the industry, all of the discharges in an industry, all the potential 
wastewater treatment applicable to the industry, and all of the 
economic impacts of any such national regulation for the industrial 
subcategory as a whole. This is consistent with EPA's efforts to make 
common-sense regulatory decisions.
    EPA has also considered concerns expressed by industrial launderers 
that by excluding on-site laundering of industrial items, EPA has 
created an incentive for businesses to switch from using industrial 
launderers covered by the rule to on-site laundering. EPA does not 
believe this will happen because the average increased price per pound 
of laundering as a result of the proposed rule ($0.003 per pound) is so 
small that the cost of buying the equipment and operating the equipment 
on-site (capital, operation and maintenance including labor, chemicals, 
water) to do on-site laundering rather than using industrial launderers 
would not be justified. Furthermore, an increase in pollutant loads at 
the facility may necessitate additional changes in the facility's NPDES 
permit if it is a direct discharger or its pretreatment permit issued 
by the local POTW if it is an indirect discharger. See Section 8 of the 
EA and Chapter 6 of the Development Document.
    EPA also looked at the types of items that were water washed to 
determine if any specific items should be excluded from regulation. EPA 
reviewed the available data to determine differences in types of items 
laundered, and determined that wastewater characteristics of denim 
prewash items and linen items are significantly different from the 
wastewater characteristics of industrial items, based on a statistical 
comparison of untreated wastewater pollutant concentrations. The 
pollutant concentrations in wastewater from laundering denim prewash 
items and linen items are lower on average than industrial item 
wastewater concentrations. The available data indicate that the 
pollutant concentrations are lower for denim prewash items and linen 
items, and POTWs can adequately treat wastewater streams generated from 
these types of items. Therefore, EPA is excluding facilities 
discharging 100 percent denim prewash items and linen item wastewater 
from the scope of this proposed rule.
    EPA is excluding new items from regulation since these items are 
laundered prior to being used for their intended purpose and therefore 
may not contain pollutants at concentrations that are incompatible with 
or interfere with POTWs.
    The rule also would not apply to certain small facilities; see 
``Regulated Entities'' discussion above and rule text below.

D. Summary of Public Participation

    EPA encouraged full public participation in developing the proposed 
rule. During the data gathering activities that preceded development of 
the proposed rule, EPA met with industry trade associations, state and 
local governments, and industrial laundry and linen facilities. EPA has 
also participated in numerous industry talks and meetings. To further 
public participation on this rule, on March 4, 1997, EPA held a public 
meeting about the content and status of the proposed regulation. The 
meeting was announced in the Federal Register (62 FR 3849; January 27, 
1997) and information packages were distributed at the meeting. The 
public meeting also gave interested parties an opportunity to provide 
information, data, and ideas or comments on key issues.
    During the development of the proposed rule, EPA sent a screener 
questionnaire to assess the number of facilities that could potentially 
be considered industrial laundries, and followed this with a detailed 
questionnaire to a stratified random sample of the industry under 
authority of section 308 of the CWA. During the design of the detailed 
questionnaire, EPA met with industry trade associations to discuss 
EPA's plans to issue a questionnaire; and distributed several drafts of 
the questionnaire to both the industry trade associations and the 
Natural Resources Defense Council, Inc., for review and comment. The 
detailed questionnaire was subsequently completed, reviewed and 
approved by the Office of Management and Budget (OMB) and sent to 
industrial laundry facilities. Two trade associations, the Textile 
Rental Services Association of America (TRSA) and Uniform and Textile 
Service Association (UTSA) sent letters to OMB supporting EPA's data 
collection efforts, particularly the detailed questionnaire. EPA held 
workshops for the public on how to complete the detailed questionnaire.
    EPA also sent a screener questionnaire to hotels, hospitals, and 
prisons to assess whether these facilities should be included in the 
scope of the industrial laundries regulation. Also, following receipt 
of the detailed questionnaire responses and as part of the technology 
performance data gathering effort, EPA requested detailed monitoring 
data from 37 facilities that had already received the detailed 
questionnaire so that data specific to these facilities could be 
evaluated as part of EPA's analyses.

IV. Description of the Industry

    Industrial laundry facilities are located in all 50 states and all 
10 EPA regions. By State, the largest number of industrial laundries 
are in California. By EPA Region, the largest concentration of 
industrial laundries is in Region V. Most of the industrial laundering 
facilities are in large urban areas. EPA estimates that there are 1,747 
facilities nationwide.
    Industrial laundries vary in size from one- or two-person 
facilities to large corporations that operate many facilities

[[Page 66187]]

with hundreds of employees nationwide. Annual laundry production per 
facility ranges from 44,100 to 32,620,000 pounds.
    Facilities launder most items using water washing. Water washing 
involves washing items in water. Some facilities launder items using 
dry cleaning, which involves washing items in an organic solvent. 
Facilities that only dry clean (with solvent washing) are not covered 
by this proposed rule. Dry cleaning is not a water washing process and 
generates little, if any, wastewater, therefore EPA excluded this 
process from this proposed rule. The pollutants generated in the dry 
cleaning operation are recovered from the solvent through distillation 
and then disposed of off-site as a hazardous waste. Air emissions from 
dry cleaning may be controlled by EPA in Maximum Achievable Control 
Technology (MACT) standards issued under the Clean Air Act. In some 
cases, facilities combine the two processes to wash items that have 
large amounts of both water soluble and organic-solvent soluble soils. 
When water washing and dry cleaning are performed in series without 
drying the items between the solvent and water phases, the process is 
called dual-phase washing. The order in which these processes are 
performed depends on the solvent used, type of soil, and drying energy 
requirements. Typically, in dual-phase washing, the solvent wash occurs 
prior to the water wash; none of the facilities responding to the 
detailed questionnaire reported performing water washing followed by 
solvent wash. Facilities performing dual-phase washing of industrial 
items are covered by this proposed rule if they process industrial 
textile items.
    At some facilities, dust mops are not water washed, but are cleaned 
and treated with heated oil instead of water. After cleaning, the oil 
is extracted from the mops, leaving them coated with the desired 
quantity of oil. Since the oil treatment of mops is not a water washing 
process and generates no wastewater, EPA excluded this process from 
this proposed regulation.
    A more detailed description of the industry is included in the 
Industrial Laundries Development Document contained in the record for 
this proposed rule.

V. Summary of Data Gathering Efforts

    EPA has collected data from various sources. EPA has collected 
industry-supplied data from industrial laundries through the screener 
questionnaires, detailed questionnaires and the detailed monitoring 
data requests. EPA has also collected data through site visits and 
sampling activities. EPA distributed a screener questionnaire in 1993 
and a supplemental screener questionnaire in 1994 to develop the scope 
of the rule, identify the population of the industry, and select 
facilities to receive the more-detailed questionnaire. Also, in 
response to comments from industrial laundry and linen trade 
associations, EPA mailed 100 screener questionnaires in January 1995 to 
hospitals, hotels, and prisons, which potentially operate on-site 
laundries.
    The industrial laundries industry detailed questionnaires were sent 
to a stratified random sample of facilities that were identified from 
two sources: Trade association mailing lists and information obtained 
from Dun & Bradstreet. These sources produced a list of 3,726 possible 
facilities generating industrial laundry wastewater. Based on responses 
to the screener questionnaires, EPA estimated there were 1,960 
facilities generating industrial laundry wastewater.
    To minimize the burden on the respondents to the trade association 
screener questionnaire, EPA chose to send detailed questionnaires to 
only a selected sample group of facilities. EPA grouped facilities by 
the type of items they laundered, their 1992 revenues, and the type of 
wastewater treatment they had in place. The Dun & Bradstreet detailed 
questionnaire (which was identical to the trade association detailed 
questionnaire in content) was based on groupings of Standard Industrial 
Classification codes of 7218 (industrial laundering) and 7213 (linen 
supply servicing). This technique is known as stratification of the 
population. Depending on the number of facilities within the strata, 
EPA either censused or chose a random sample of facilities within each 
strata. The chosen facilities were given survey weights based on a 
facility's probability of selection. If the stratum was censused, those 
facilities represent themselves only. Otherwise, the facility is given 
a survey weight that allows them to represent themselves and other 
facilities, within that stratum, that were not selected to receive a 
detailed questionnaire.
    Of the 1,960 facilities generating industrial laundry wastewater, 
255 received detailed questionnaires and were used to develop survey 
weights. After analyzing responses to the questionnaires, EPA chose to 
exclude facilities that launder 100% linen items. EPA was left with 193 
complete responses representing 1,747 industrial laundry facilities 
nationwide. After examining economic impacts, EPA then decided to 
exclude existing facilities that launder less than one million pounds 
of incoming laundry per calendar year and less than 255,000 pounds of 
shop and/or printer towels/rags per calendar year. Therefore, EPA 
estimates the total number of facilities that currently would be 
subject to the standards in this proposed rule to be 1,606 facilities. 
All analyses of impacts of the rule are based on 193 questionnaire 
respondent facilities and then the survey weight is applied to develop 
national estimates for all facilities. See the Statistical Support 
Document for the Industrial Laundries Pretreatment Standards for 
additional information on the development of survey weights.
    The responses to the detailed questionnaires provided EPA with 
detailed technical, economic, and financial information from industrial 
laundry and linen supply facilities. EPA used the information reported 
to develop an industry profile, characterize industry production and 
water use, develop pollutant loadings and reductions estimates, and 
develop compliance cost estimates.
    In 1995, EPA mailed out 37 requests for detailed monitoring data to 
a selected group of industrial laundries. EPA identified this selected 
group of facilities because they indicated in their initial responses 
in the detailed questionnaires that they had available monitoring data 
that EPA determined might be useful in characterizing performance of 
certain treatment technologies. EPA has also collected data through 
site visits and sampling activities. EPA conducted more than 30 site 
visits between 1992 and 1997 to collect information about industrial 
laundry processes, water use practices, pollution prevention practices, 
wastewater treatment technologies, and waste disposal methods. EPA 
conducted eight sampling episodes to characterize industrial laundry 
wastewaters and to assess treatment technology effectiveness. A more 
detailed description of these data collection efforts can be found in 
Chapter 3 of the Industrial Laundries Development Document.

VI. Development of the Pretreatment Standards

A. Wastewater Characteristics

    Industrial laundry facilities generate wastewater discharges from 
water washing industrial textile items. All of the facilities 
identified in the data gathering phase of this rulemaking were found to 
be indirect dischargers and discharge all laundry process wastewater to 
publicly owned treatment works.

[[Page 66188]]

    The detailed questionnaires requested information on the types of 
analytes tested during wastewater sampling activities performed at the 
facilities in 1993. The facilities reported analytes in the following 
categories: oil and grease/total petroleum hydrocarbons (O&G/TPH), 
conventional pollutants, metals, organics, and pesticides.
    Based on data collected through the detailed questionnaires and 
sampling and analysis of industry wastewater, EPA has determined that 
67% of the total industry raw wastewater toxic pollutant loading is 
generated from laundering of shop and printer towels. Shop and printer 
towels represent 80% of the raw wastewater toxic pollutant loading from 
industrial laundry items.

B. Selection of Pollutant Parameters To Be Regulated

1. Pollutants Regulated
    EPA collected data to determine the conventional, toxic/priority, 
and nonconventional pollutants present in industrial laundries 
wastewaters. EPA analyzed industrial laundries wastewater for 315 
pollutants consisting of four conventional, 98 toxic or priority, and 
213 nonconventional organic and metal pollutants, during the 1993-1996 
industrial laundries sampling program. This section of the preamble 
discusses how EPA determined the pollutants to be regulated under the 
selected option. Other options have the same list of regulated 
pollutants, although EPA's rationale for regulating these pollutants 
varies depending on the option. This is discussed in Chapter 7 of the 
Development Document.
    EPA reduced the list of 315 pollutants to 72 pollutants for further 
consideration for control using the following criteria: eliminating 
pollutants never detected in laundry wastewater, pollutants detected 
only a small percentage of the time in laundry wastewater (less than 
10% of the time), pollutants detected in source water at concentrations 
similar to concentrations in laundry wastewater, pollutants analyzed 
for screening purposes, but not analyzed in a quantitative manner due 
to a lack of acceptable analytical methods, and pollutants likely to be 
adequately regulated on a case-by-case basis by POTWs using the current 
regulations on controlling pass through and interference. (See 
Development Document, Chapter 7).
    For the selected option (CP-IL), the 72 pollutants were 
subsequently reduced to 59 pollutants by eliminating n-alkanes (11 
separate pollutants), which make up part of TPH as measured by SGT-HEM, 
as well as two pollutants used as treatment chemicals (Aluminum and 
Iron). EPA also eliminated 31 pollutants from regulation because these 
pollutants are not removed by the treatment technology for the selected 
option or because these pollutants were present below treatable 
concentrations in wastewaters influent to the treatment system and 
therefore would not be substantially removed by the treatment 
technology. For purposes of this rule, EPA considers treatable 
concentrations to be greater than 10 times the method detection level. 
Based on these analyses, this left EPA with 28 pollutants under 
consideration for regulation.
    Before proposing pretreatment standards, EPA examines whether the 
pollutants discharged by the industry pass through a POTW to waters of 
the U.S. or interfere with the POTW operation or sludge disposal 
practices. Generally, in determining whether pollutants pass through a 
POTW, EPA compares the percentage of the pollutant removed by well-
operated POTWs achieving secondary treatment with the percentage of the 
pollutant removed by facilities meeting BAT effluent limitations. In 
this case, where only pretreatment standards are being considered, EPA 
compared the POTW removals with removals achieved by indirect 
dischargers using the candidate technology that satisfies the BAT 
factors. For specific pollutants, such as volatile organic compounds or 
highly biodegradable compounds, EPA may use other means to determine 
pass through. For volatile compounds, a volatile override test based on 
the Henry's Law Constant is used to determine pass through. If a 
pollutant has a Henry's Law Constant greater than 2.4 x 10-5 atm-m \3\/
mole, it is generally determined to pass through because it is assumed 
to be sufficiently volatile such that a significant portion of the 
compound would not be treated by the POTW. For highly biodegradable 
compounds, the pass through determination may be conducted using 
engineering modeling.
    The primary source of POTW data was the Fate of Priority Pollutants 
in Publicly Owned Treatment Works (also known as the 50 POTW Study). 
Since the 50 POTW Study did not cover all the pollutants detected in 
industrial laundry wastewater, EPA used additional data from the Risk 
Reduction Engineering Laboratory (RREL) database. The RREL database EPA 
used included data relating to activated sludge and aerated lagoons 
reflecting POTW secondary treatment from domestic and industrial 
wastewater sources.
    EPA eliminated three conventional pollutants (O&G, BOD, and TSS) 
from regulation without conducting the percent removal comparison 
because EPA believes POTWs adequately treat these parameters in the 
concentrations found in IL wastewaters. Thus, these parameters are 
deemed to not pass through. EPA conducted the pass through analysis on 
the remaining 25 pollutants.
    For this proposed rule, the percent removal comparison between 
indirect dischargers using the candidate PSES-BAT technology and POTWs 
and the volatile override test were used to determine pass through. 
Since EPA has not identified any direct dischargers, EPA used PSES 
percent removals for evaluating pass through. EPA finds that a 
pollutant passes through when the average percentage removed nationwide 
by well-operated POTWs (those meeting secondary treatment requirements) 
is less than the percentage removed by facilities meeting candidate 
PSES standards for that pollutant.
    EPA eliminated POTW and PSES data from the analysis where the 
influent levels for the pollutant were less than 10 times the method 
detection level because EPA reasoned that low removals may simply 
reflect low influent rather than ineffective treatment. For pollutants 
for which none of the POTW influent concentrations exceeded 10 times 
the method detection level, in order to conduct the analysis using the 
50 POTW Study, EPA modified its editing criteria to eliminate data 
where the influent values were less than 20 <greek-m>g/L or the method 
detection level. EPA selected 20 <greek-m>g/L or the method detection 
level because for pollutants with low influent concentrations, i.e., 
less than 20 <greek-m>g/L or the method detection level, the effluent 
concentrations were consistently below the detection level and could 
not be precisely quantified.
    EPA then averaged the remaining influent data and the remaining 
effluent data. The percent removals achieved for each pollutant were 
determined from these averaged influent and effluent levels. This 
percent removal was then compared to each of the PSES treatment 
technology options.
    Of the 25 pollutants that were evaluated, 23 were found to pass 
through. A more detailed description of the results of the pass through 
analysis is provided in Chapter 7 of the Development Document.
    The remaining 23 pollutants were reviewed in an attempt to 
streamline the control and compliance process. To do this, EPA 
determined whether certain pollutants could serve as ``indicator''

[[Page 66189]]

pollutants for others. Because many of the pollutants originate from 
similar sources and have similar treatability properties, setting 
standards for some ``indicator'' pollutants would effectively control a 
broader set of pollutants. Based on this analysis, EPA determined that 
setting limits for 11 pollutants would control the remaining 23 
pollutants. The list of 11 pollutants is as follows: SGT-HEM, Copper, 
Lead, Zinc, Bis(2-Ethylhexyl) Phthalate, Ethylbenzene, Naphthalene, 
Tetrachloroethene, Toluene, m-Xylene and o&p-Xylene. The limitations 
for the Xylenes parameters contained in the proposed rule are based on 
data obtained from EPA sampling episodes using EPA Method 1624 and 
detailed monitoring questionnaires which reported EPA Method 624 which 
are contained in Part 136 but not identified for use in measuring 
Xylenes. A more detailed description of the selection of the regulated 
pollutants and the pollutants controlled by regulation of these 
pollutants is in Chapter 7 of the Development Document.
    EPA is proposing to establish PSES and PSNS that would regulate 
SGT-HEM as an indicator pollutant controlling the discharge of toxic 
and nonconventional pollutants. Chemical precipitation technology has 
shown that the SGT-HEM limitation is a good indicator reflecting the 
correct operation of the control technology that results in removals of 
both organic and metal compounds. EPA is regulating SGT-HEM rather than 
total recoverable oil and grease since SGT-HEM more closely corresponds 
to the toxic portion of oil and grease in industrial laundry 
wastewaters, while POTWs can generally treat the other portions of oil 
and grease consisting of vegetable oils, animal fats, soaps, etc. Also, 
since petroleum-based oils degrade slowly at the POTWs, if sufficient 
quantities exist in the influent, it can pass through the treatment 
plant as discussed in Pretreatment of Industrial Wastes prepared by the 
Water Environment Federation, 1994. The SGT-HEM measurement used to 
develop the limitations is based on the proposed analytical method 1664 
(Silica Gel Treated N-Hexane Extractable Material; ``SGT-HEM'') (61 FR 
1730; January 23, 1996) and not on the current method contained in 40 
CFR Part 136, which uses freon extraction. The data collected from the 
detailed monitoring questionnaires are based on the current Part 136 
method of measuring TPH, while the EPA sampling data are based on the 
proposed Method 1664, which measures SGT-HEM. EPA proposes to regulate 
SGT-HEM based on calculating limitations with EPA sampling data only. 
EPA is soliciting comment or information on any additional data 
regarding the use of this analytical method.
    EPA is also regulating SGT-HEM based on interference. Petroleum-
based oils have a low rate of biodegradation at the POTWs. These oils 
tend to coat the biological organisms, preventing or reducing oxygen 
transfer and degradation of other organics as discussed in Pretreatment 
of Industrial Wastes prepared by the Water Environment Federation, 
1994. Pretreatment coordinators have indicated that interference can be 
a problem at POTWs as discussed further in Section IX.G.
2. Pollutants Not Regulated
    Tables 7-3,7-4, and 7-5 in Chapter 7 of the Development Document 
list the pollutants EPA proposes not to regulate and the bases for 
these decisions.

C. Available Treatment Technologies

1. Current Practice
    Facilities in the detailed questionnaire reported having a range of 
wastewater treatment equipment from no treatment to well-operated 
Chemical Precipitation (CP) or Dissolved Air Flotation (DAF) systems. 
Many industrial laundry facilities currently have no treatment (approx. 
87%). Although many facilities have no treatment, some facilities have 
reported that they have best management practices in place to limit 
pollution. Many laundries have adopted the practice of requiring 
incoming laundry to have no free liquids. Liquids may be removed 
through various mechanisms at the laundry or by the customer (e.g., 
hand wringing, mechanical wringing, or centrifuging).
    EPA, based on responses to the detailed questionnaire, considered 
several technologies to develop standards for this industry. The major 
wastewater treatment technologies reported included: Chemical Emulsion 
Breaking (CEB), DAF, and CP. Other technologies reported included: 
screening, equalization, gravity settling, sludge dewatering, pH 
adjustment, ultrafiltration, centrifugation, filtration, oil/water 
separation, carbon adsorption, air stripping and vacuum degassing. In 
addition, facilities reported dry cleaning and steam tumbling as in-
process treatment technologies to remove pollutants from items prior to 
water washing.
    During the site visit and field sampling phase of the proposed rule 
development and as follow up to responses in the detailed 
questionnaires, EPA identified three major technologies for further 
evaluation. These major technologies, CEB, DAF and CP are described 
below.
    CEB is used primarily to remove oil and grease, as well as other 
related pollutants, from process wastewater streams. CEB is effective 
in treating wastewater streams having stable oil-in-water emulsions. 
The treatment consists of lowering the pH of the wastewater to break 
the emulsions, and skimming the surface of the water to remove the 
floating substances.
    DAF is used to remove suspended solids, oil, and some dissolved 
pollutants from process wastewater. DAF treatment involves coagulating 
and flocculating the solids and oil and grease and then floating the 
resulting floc to the surface using pressurized air injected into the 
unit and removing the floating material. Some DAF systems also have the 
means to remove material that settles to the bottom of the tank on a 
continuous basis.
    CP is used to remove dissolved pollutants from process wastewater. 
Precipitation aids, such as lime, work by reacting with the cations 
(e.g., metals) and some anions to convert them into an insoluble form 
(e.g., metal hydroxides). The pH of the wastewater also affects how 
much pollutant mass is precipitated, as pollutants precipitate more 
efficiently at different pH ranges. Coagulation and flocculation aids 
are usually added to facilitate the formation of large agglomerated 
particles that settle more readily and can be removed from the bottom 
of the clarifiers.
    In addition to these major technologies identified and described 
above, a number of controls that are common to or make up part of the 
treatment systems at many facilities include: screening, equalization, 
gravity settling and pH adjustment or neutralization.
    Screening is often performed prior to subsequent treatment to 
remove grit and suspended solids that may potentially damage or clog 
process equipment located downstream.
    Equalization controls fluctuations in flow and pollutant loadings 
in process wastewater prior to treatment to overcome operational 
problems that may result from the fluctuations, reduce the size and 
cost of the downstream treatment units, and improve the overall 
performance of these units.
    Gravity settling is primarily used to remove suspended solids, 
including pollutants that are in insoluble particulate form such as 
metals from industrial laundry process wastewater.

[[Page 66190]]

Most facilities currently have gravity settling alone without chemical 
addition. The wastewater is typically collected in a catch basin where 
the water is detained for a period of time, allowing solids with a 
higher specific gravity to settle to the bottom of the tank and solids 
with a lower specific gravity to float to the surface. The 
effectiveness of the solids settling depends on the characteristics of 
the laundry wastewater, the length of time the wastewater is held in 
the catch basin and the regular maintenance of the basin, especially 
regular removal of the solids.
    pH adjustment is used to increase treatment effectiveness--since 
many treatment technologies used in this industry are sensitive to pH 
fluctuations--and to meet discharge requirements.
    Other wastewater treatment technologies identified as being used in 
this industry are carbon adsorption, air stripping with and without 
carbon adsorption, ultrafiltration, centrifugation, sludge dewatering, 
filtration, oil/water separation without chemical addition, and vacuum 
degassing.
    <bullet> Carbon adsorption uses activated carbon to remove 
dissolved VOCs from process wastewater.
    <bullet> Air stripping is normally performed in a countercurrent, 
packed tower, or tray tower column. The wastewater is introduced at the 
top of the column and allowed to flow downward through the packing 
material or trays. Air is simultaneously introduced at the bottom of 
the column and blows upward through the water stream. Volatile organics 
are stripped from the water stream, transferred to the air stream, and 
carried out of the top of the column with the air, preferably through 
activated carbon. The treated water is discharged out of the bottom of 
the column.
    <bullet> Ultrafiltration uses semipermeable polymeric membranes to 
separate emulsified or colloidal materials suspended in the process 
wastewater stream by pressurizing the liquid so that it permeates the 
membrane.
    <bullet> Centrifugation applies centrifugal forces to settle and 
separate higher density solids from process wastewater. Some facilities 
use centrifugation as a method to separate solids from wastewater; and 
centrifugation can be chemically enhanced to remove additional 
pollutants.
    <bullet> Sludge dewatering processes remove water from sludge 
generated from the wastewater treatment process. Many industrial 
laundry facilities (31%), including some of those with only screening 
or gravity settling but no additional treatment, reported dewatering 
their sludge prior to disposal. The types of dewatering devices used in 
the industrial laundries industry include: plate and frame filters, 
rotary vacuum filters, and sludge dryers.
    <bullet> Industrial laundries use bag and sand filters to remove 
solids from wastewater. Among the facilities visited or responding to 
the detailed questionnaire, filtration most common to this industry 
included bag filters and sand filters.
    <bullet> Oil/water separation without chemical addition technology 
removes a separated oil layer. The oil layer can be removed by a 
skimming device or decanted from the wastewater.
    <bullet> EPA sampled one facility using vacuum degassing. At this 
facility the vacuum degasser was intended to remove organic compounds.
    EPA identified the following in-process treatment technologies that 
remove pollutants from industrial laundry items prior to water washing:
    <bullet> Dry cleaning involves cleaning soiled items with an 
organic-based solvent that removes VOCs as well as organic pollutants 
(e.g., oil and grease). The pollutants generated in the dry cleaning 
operation are recovered from the solvent through distillation and then 
disposed of off-site as a hazardous waste.
    <bullet> Steam tumbling involves agitating soiled items within a 
modified washer/extractor while steam is injected into the chamber. The 
tumbling items contact the steam, which removes the VOCs. The steam is 
condensed, and the pollutants are recovered through a phase separation 
and are then disposed of as a hazardous waste.
2. Technologies Rejected From Further Consideration
    The technologies described above were those reported in the 
detailed questionnaire. EPA then determined that certain major 
technologies should be considered as best available in the industry and 
chose to sample these candidate technologies.
    Based on the data EPA gathered and evaluated, EPA rejected the 
following technologies from further consideration: bag filtration, sand 
filtration, ultrafiltration, oil/water separation and vacuum degassing.
    EPA removed sand and bag filtration from the list of technology 
options because data for both sand filtration and bag filtration showed 
poor removals of most pollutants.
    EPA sampled one facility using ultrafiltration. Based on 
conversations with industrial laundries and corporate contacts, many 
laundry facilities that have tried ultrafiltration as wastewater 
treatment have reported problems with fouling, and solids building up 
in the unit requiring constant maintenance and/or inhibiting the 
performance of the unit. Some facilities have replaced ultrafiltration 
units with dissolved air flotation or chemical precipitation units. 
Therefore, EPA did not further consider ultrafiltration as a regulatory 
option.
    EPA investigated oil/water separation as part of the data analysis. 
After some assessment, EPA determined that oil/water separation without 
chemical addition to lower the pH is not nearly as effective as CEB. 
EPA sampled one facility using CEB.
    Vacuum degassing, which was sampled for the removal of organics, 
did not remove organic pollutants effectively. Therefore, EPA did not 
continue evaluating this technology as an option. See Chapter 9 of the 
Development Document.

D. Technology and Regulatory Options Considered

1. Initial Regulatory Options for PSES and PSNS
    For the proposed rule, EPA initially developed the following 
regulatory options based on evaluating screener and detailed 
questionnaire data submitted by industry. In addition to using the 
major technologies described above (CEB, DAF, and CP), EPA considered 
regulatory options using stream splitting, a common practice at some 
facilities. Stream splitting provides a means of treating a portion of 
the total wastewater generated at industrial laundries. Stream 
splitting may be used to isolate and treat a stream with a higher 
pollutant load, while a stream with a lower load is either recycled and 
reused or discharged to the POTW without treatment. A divided trench 
and sump system is used to split process wastewater streams. Washer 
modification (dual valves) is also part of stream splitting.
    The initial regulatory options included standards based on: 
Chemical Emulsion Breaking of wastewater from the washing of heavy 
industrial items only (CEB-heavy), Dissolved Air Flotation of 
wastewater from the washing of heavy industrial items only (DAF-heavy), 
Chemical Precipitation of wastewater from the washing of heavy 
industrial items only (CP-heavy), Dissolved Air Flotation of all 
wastewater (DAF-all), Chemical Precipitation of all wastewater (CP-all) 
and a Combined Option establishing limits based on using either DAF or 
CP of all wastewater (Combo-all). For the

[[Page 66191]]

``heavy'' options in this proposed rule, heavy is defined as wastewater 
from the laundering of shop towels, printer towels, fender covers, 
filters and mops. As part of the options listed above EPA also included 
gravity settling, screening, equalization, pH adjustment, sludge 
dewatering (for CP and DAF only), and the use of common pollution 
prevention practices (or best management practices).
    Based on evaluation of the effluent concentration data from these 
site visits and sampling, some of the initial options were no longer 
pursued, or were further modified. The DAF-heavy and CP-heavy options 
were determined not to be appropriate because at some facilities the 
untreated waste streams for those items not considered to be heavy by 
the facility had higher concentrations of pollutants than the average 
treated effluent concentrations for the same pollutants. This problem, 
in part, was caused by the different mix of ``heavy'' items being 
laundered at the different facilities from which wastewater data were 
obtained. If sufficient treated effluent data could be obtained related 
to the laundering of the same set of ``heavy'' items, the heavy option 
may be a feasible alternative for the final rule. However, any option 
that would regulate only the wastewater from washing heavy industrial 
items would require an in-plant compliance monitoring location or a 
separate discharge point to the sewer after the treatment system which 
could increase the compliance burden on the control authority. In some 
cases where the end-of-pipe monitoring for some parameters was still 
required based on local limits, the costs of this option would increase 
due to the in-plant plus end-of-pipe monitoring. At the same time, EPA 
recognizes that targeting the rule to heavy items only could reduce 
costs to the regulated community by removing some facilities from the 
scope of the rule. Some facilities could also save money by segregating 
heavy items from other items and treating only the heavy items. The 
CEB-heavy option was determined not to be feasible due to less 
pollutant removals at higher costs than the DAF-heavy and CP-heavy 
options. See Chapters 9 and 10 of the Development Document. EPA 
solicits comments and data on the feasibility of either the DAF or CP 
heavy only options where the definition of heavy includes only the 
laundering of printer rags, shop towels, mops, fender covers and 
filters.
2. Modified Regulatory Options
    EPA evaluated proposing pretreatment standards for the entire 
facility wastestream based on only a portion being treated, 
specifically only the portion of facility wastewater generated by 
laundering industrial items was costed for treatment by DAF and CP. The 
basis for costing partial treatment is that EPA's data shows these 
standards can be met by treating only the portion of wastewater from 
laundering industrial items. EPA called these options DAF-IL, CP-IL, 
Combo-IL and Combo-IL2Lim.
    EPA evaluated the combo option in two scenarios. Under the first 
scenario (Combo-IL) either DAF or CP would form the basis of the 
standards by establishing one set of standards based on the less 
stringent of the two standards for each regulated pollutant for the two 
technologies. Having one set of such standards would allow some 
flexibility for facilities with either technology to meet the 
limitations. This option would base the standard for each parameter on 
the lesser performance between DAF and CP, and based on current data, 
remove less total pollutants.
    Under the second combo scenario (Combo-IL2Lim), facilities with DAF 
in place as of the publication date of the proposal would have to 
comply with the standards based on DAF and all other facilities would 
have to comply with standards based on CP.
    EPA additionally considered an organics control option, which 
involves the use of steam tumbling for treatment of shop and printer 
towels and mops for removal of organic pollutants.
    EPA also considered proposing a no regulation option, but rejected 
it because the available discharge loadings data identified a number of 
pollutants that were estimated to pass through or have the potential to 
interfere with POTW operations.
    Under Section 307(b) of the CWA, EPA is directed to establish 
pretreatment standards that prevent the discharge of pollutants to 
POTWs that interfere with, pass-through, or are otherwise incompatible 
with the operation of POTWs. EPA has interpreted the pass-through 
provision to mean that a pollutant ``passes through'' the POTW if the 
removal efficiency of an available pretreatment option is greater than 
the removal efficiency of the POTW. Based on available data, EPA 
believes that pretreatment technology is available to the industrial 
laundries industry that removes some pollutants with greater efficiency 
than is achieved by most POTWs.
    Nonetheless, both the Small Business Regulatory Enforcement 
Fairness Act (SBREFA) panel, which is comprised of representatives from 
three federal agencies (EPA, the Small Business Administration, and the 
Office of Management and Budget), and small entity representatives 
recommended that EPA solicit comments on a no regulation option. EPA 
has the discretion under the CWA to decline to regulate an industrial 
subcategory based on lack of pollutant loadings, the small number of 
affected facilities, or other relevant factors, one of which could be a 
determination that there is no pass through or interference due to the 
pollutant discharges of the industry. The SBREFA Panel noted, among 
other things, that ``the total pollutant loadings (pre-regulation) are 
not as high for this industry as they were for most industries with 
effluent guidelines in place and that the regulatory options are not as 
cost-effective as those selected for most other effluent guidelines.'' 
In addition, EPA notes that if we did not use a toxic weighting factor 
for TPH (see Section VII.E below), the cost per pound equivalent 
removed of this rule relative to previous rules would be still higher.
    As indirect dischargers, industrial laundries are subject to the 
general prohibitions in the pretreatment requirements and any 
additional pretreatment requirements set by local POTWs. Any pass-
through or interference problems potentially caused by a laundry can be 
directly addressed by the POTW through the establishment of appropriate 
local limits. Some POTWs support the no regulation option because it 
provides them with the flexibility to design less stringent local 
pretreatment requirements that are appropriate to local conditions. 
Other POTWs prefer to have EPA establish uniform pretreatment standards 
because of the resources required to determine and enforce local limits 
on a case-by-case basis.
    EPA solicits comments on the no regulation option and encourages 
commenters to support such arguments with information and data, 
particularly data on the loadings and the degree of pass through at 
POTWs. Further, EPA encourages commenters to explain how the no 
regulation option would be consistent with those requirements of 
sections 301, 304 and 307 of the CWA that require the control of 
pollutants discharged to POTWs that pass through or interfere with POTW 
operations.
    Based on the above evaluations, EPA decided to evaluate the 
following options: organics control(OC), combo-IL, combo-IL2Lim, DAF-
IL, and CP-IL.

E. Costs

    EPA estimated the cost for industrial laundries to implement each 
of the

[[Page 66192]]

model technologies considered for the proposed standards. These 
estimated costs are summarized in this section and discussed in more 
detail in the Development Document. All cost estimates in this preamble 
are expressed in 1997 dollars. The cost components reported in this 
section represent estimates of the investment cost of purchasing and 
installing equipment, and the annual operating and maintenance costs 
associated with that equipment. In section VII, costs are expressed in 
terms of a different cost component, total annualized costs, which are 
used to estimate economic impacts. Annualized costs better describe the 
actual compliance costs that a facility/company would incur, allowing 
for interest, depreciation, and taxes. A summary of the economic impact 
analysis for the proposed regulation is contained in section VII of 
today's notice. See also the Economic Assessment.
    EPA estimated the cost for implementing the candidate PSES by 
calculating the engineering costs of meeting the required effluent 
reductions for each industrial laundry facility. EPA used information 
from the 193 in-scope facilities responding to the questionnaire as the 
basis for the cost estimates calculated by the cost model for these 
facilities. Using statistically calculated facility weighting factors, 
EPA then extrapolated the results to the entire industrial laundries 
industry. The facility-specific engineering cost assessment for PSES 
began with a review of present wastewater treatment technologies at 
each facility. For facilities without treatment-in-place equivalent to 
the candidate PSES technology options, EPA estimated the cost to 
upgrade the facility's existing treatment technology or if none was in 
place install treatment to achieve the proposed discharge standards. 
EPA based these estimates on vendor quotes and engineering judgment. 
Facilities that had treatment in place equivalent to that option were 
costed for monitoring only. EPA believes that this approach 
overestimates the costs to achieve the candidate PSES standards because 
many facilities can achieve the standards without using all of the 
components of the technology basis or by treating wastewater from 
certain items only. For the current options, EPA assumed treating all 
wastewater except for wastewater from linen items, denim prewash items, 
and new items. EPA solicits comments on these costing assumptions. See 
Development Document for more details. The following table summarizes 
by option, the capital expenditures, the annual operating and 
maintenance costs, and the annual pretax cost for implementing PSES. 
Note that pretax costs are presented here, but are not used in 
determining economic achievability of the proposed rule on the 
industrial laundries industry. Rather, the posttax costs, the costs 
industry actually bears, are used to determine economic achievability 
(see Table VII.C.3.1). The annual costs in this table below also 
account for the ability of some facilities to haul wastewater at a 
lower cost than the cost of installing and operating the pollution 
control technology.

          Table VI.E.1. Costs of Implementing PSES Regulations          
                      [In millions of 1997 dollars]                     
------------------------------------------------------------------------
                                                  Annual                
                                                operating               
              Options                 Capital      and         Annual   
                                       costs   maintenance   pretax cost
                                                  costs                 
------------------------------------------------------------------------
OC.................................       290         35.0          65.7
CP-IL..............................       470         86.6         136.4
DAF-IL.............................       364        138.2         176.8
Combo-IL...........................       440         98.5         145.1
Combo-IL2Lim.......................   364-470   86.6-138.2   136.4-176.8
------------------------------------------------------------------------

    In addition to costs, EPA estimated the removals for industrial 
laundry facilities for the following technology options.

                 Table VI.E.2. Removals for PSES Options                
------------------------------------------------------------------------
                        Option                          Removals (lb-eq)
------------------------------------------------------------------------
OC...................................................              5,278
CP-IL................................................            407,358
DAF-IL...............................................            402,921
Combo-IL.............................................            402,253
Combo-IL2Lim.........................................    402,921-407,358
------------------------------------------------------------------------

    The estimated removals summarized in the table are discussed in 
more detail in the Development Document. The removals are based on the 
difference between each facility's current discharge load and each 
facility's discharge load after implementation of the proposed rule.

F. Rationale for Selection of PSES and PSNS

1. Existing Sources
    After considering all of the technology options described above, 
and in light of the factors specified in section 304(b)(2)(B) of the 
CWA, EPA has tentatively selected Chemical Precipitation-IL (CP-IL) as 
the technology basis for the pretreatment standards for existing 
sources in the proposed rule. As discussed in more detail below, the 
proposed rule would exclude existing facilities laundering less than 
one million pounds of incoming laundry per calendar year and less than 
255,000 pounds of shop and/or printer towels/rags per calendar year. 
However, these excluded facilities would still be subject to local 
pretreatment standards where appropriate. If any excluded facility 
launders one million pounds or more of incoming laundry or 255,000 
pounds of shop and/or printer towels/rags per year, it will no longer 
be excluded from the standards. Further, once a facility is subject to 
the standards, even if the facility becomes ``small'' as defined by the 
rule's exclusion, it would still be subject to the rule. This is 
because once a facility has installed wastewater treatment to meet the 
requirements of the rule, it is technologically available and 
economically achievable for the facility to continue to comply with the 
standards.
    The record establishes that this option is technically available. 
As discussed in more detail below, EPA also tentatively concludes that 
this option is economically achievable and represents the best 
performance that is economically achievable. Further, this option has 
acceptable non-water quality environmental impacts.
    The specific standards proposed in this rule were derived based on 
a statistical analysis of the performance of

[[Page 66193]]

chemical precipitation in industrial laundries that are sufficiently 
similar to all facilities that are subject to the standards, as 
discussed below and in the Development Document. Although chemical 
precipitation is currently only used at 3 percent of industrial laundry 
facilities, chemical precipitation is a widely used technology in other 
industries such as the metal products and machinery industry, chemicals 
and allied products industry and centralized waste treatment industry.
    Thus, although CP is only used at three percent of industrial 
laundry facilities, EPA is well within its authority to select it as 
BAT. BAT means not that the technology be in routine use, but rather 
that the technology must be available at a cost and at a time that the 
Administrator determines to be reasonable, and that the technology has 
been adequately demonstrated if not routinely applied. See American 
Frozen Food Institute v. Train, 539 F.2d 107, 132 (D.C. Cir. 1976), 
citing ``A Legislative History of the Water Pollution Control Act 
Amendments of 1972'' (Comm. Print 1973), at 1469-1470. See also 
Kennecott v. United States EPA, 780 F.2d 445, 448 (4th Cir. 1985). (The 
BAT standard reflects the intention of Congress to use the latest 
scientific research and technology in setting effluent limits, pushing 
industries toward the goal of zero discharge as quickly as possible. In 
setting BAT, EPA uses not the average plant, but the optimally 
operating plant--the pilot plant that acts as a beacon to show what is 
possible.); Association of Pacific Fisheries v. EPA, 615 F.2d 794, 816 
(9th Cir. 1980) (BAT can be based on statistics from a single plant).
    EPA has determined that the selected option for the industrial 
laundries category is economically achievable for the following 
reasons. EPA estimates that the proposed standards would cause 33 
industrial laundry facility closures and a direct loss of 2,872 jobs 
from facility closure (although longer term, net direct losses are 
estimated to total only 470 as the market equilibrates). The number of 
incremental closures (33) is about 1.9 percent of in-scope industrial 
laundry facilities (1,747) and 2.1 percent of the (1600) facilities in 
the facility level analysis. The loss of jobs associated with these 
closures is about two percent (short-term) or 0.4 percent (longer term) 
of the category employment. EPA's bankruptcy analysis shows that 65 
firms (of 681 total firms in the firm level analysis, or 9.5 percent) 
move into the bankruptcy likely category under the proposed standards 
(i.e., they would have trouble obtaining the financing necessary to 
install the required pollution control equipment). In all cases, these 
are single-facility firms where EPA's closure analysis shows that the 
facility would still be financially viable (making money) after 
complying with the rule if financing could be obtained. In this 
industry in particular, where demand is relatively inelastic and 
facilities are geographically tied to their service areas, production 
is not easily shifted to another geographic area. Therefore, EPA 
predicts that these bankruptcies do not mean that the facilities will 
close down, but rather that they may be a target for acquisition by 
another entity that has better access to financing for pollution 
control equipment and continue to operate with all or nearly all 
employees. Based on this analysis, EPA finds the standards to be 
economically achievable as that term is used in the CWA.
    EPA has concluded that application of the selected option is not 
economically achievable for the smallest industrial laundries that 
launder less than one million pounds of incoming laundry per calendar 
year and less than 255,000 pounds of shop and/or printer towels/rags 
per calendar year. If EPA were to require standards based on chemical 
precipitation, the closure rate among facilities with annual revenues 
less than $1 million, would be 28.9 percent, as compared to 4.4 percent 
for the category as a whole without the size exclusion. This economic 
impact is clearly disproportionate and EPA is exercising its discretion 
under sections 301 and 304 of the CWA to determine what is economically 
achievable to establish this exclusion.
    Further, EPA believes that it is appropriate to establish this 
exclusion because it alleviates the harshest economic impact, facility 
closure, without excluding from the national standards a significant 
pollutant load. A chart illustrating what EPA found follows:

                        Table VI.F.1.1--Closures and Removals With and Without Exclusion                        
----------------------------------------------------------------------------------------------------------------
                                                             Closures               Pollutant Removals (lb-eq)  
                                                 --------------------------------    taking POTW removals into  
                                                                                              account           
                     Option                           Without                    -------------------------------
                                                     exclusion    With exclusion      Without                   
                                                                                     exclusion    With exclusion
----------------------------------------------------------------------------------------------------------------
CP-IL...........................................              70              33         416,920         407,358
----------------------------------------------------------------------------------------------------------------

    As the chart demonstrates, the exclusion would alleviate closures 
for the smallest facilities. EPA also notes that the excluded 
facilities account for less than three percent of the pollutant 
removals from the waters of the U.S. that would occur if the rule were 
implemented without the exclusion. Thus, the exclusion represents a 
reasonable approach to addressing the disproportionate adverse economic 
impacts of the rule consistent with the objectives and requirements of 
the CWA.
    The Agency also evaluated higher thresholds reflecting up to 3 to 5 
million pounds of total production and from 255,000 to 500,000 pounds 
of shop and/or printer towels. See Section X.A. for more discussion of 
the SBREFA panel findings. The Agency solicits comments on these 
alternative exclusions as well as the exclusion proposed today.
    Finally, EPA has determined that the selected option has acceptable 
non-water quality environmental impacts discussed further in section 
IX, below and in chapter 14 of the Development Document.
    EPA evaluated the organics control option as a low cost 
alternative, however, this technology was not effective in terms of 
pollutant removals and was rejected.
    EPA, based on the data gathered to date, did not select DAF-IL 
because EPA's current data show that CP technology achieves slightly 
higher toxic pollutant removals. While, DAF is currently more prevalent 
in the industry than CP (EPA estimates that approximately eight percent 
of the industry are currently using DAF compared to approximately four 
percent using CP) EPA estimates that DAF is more costly to operate than 
CP on an annualized basis. DAF requires a smaller initial capital 
investment and

[[Page 66194]]

may be attractive to many facilities for this reason, however, EPA 
estimates that its lower capital costs are more than offset by higher 
operating and maintenance costs associated with the need to chemically 
condition the flotation residual sludges, making it more expensive than 
CP overall.
    The Combo-IL option would base the standard for each parameter on 
the lesser performance between DAF and CP, and current data indicate 
that it would remove slightly fewer pounds of pollutants than if all 
facilities were required to meet standards based on CP only.
    EPA also rejected the Combo-IL2Lim option because current data 
indicate that overall this option did not remove as many pollutants as 
the CP option and would cost more than the selected CP-IL option. See 
Chapters 9 and 12 of the Development Document. EPA solicits additional 
information and data on the costs and performance of both CP and DAF 
technologies used to treat wastewaters from laundering industrial 
textile items. Although EPA rejected the options based on DAF, the 
pollutant removals were similar enough for further consideration of the 
DAF and Combo options. If additional data and information provides 
support that DAF is generally comparable to CP in removing pollutants, 
EPA would consider for the final rule basing standards on either the 
less stringent of CP or DAF standards or on DAF for those facilities 
that already have it in place and on CP for all other facilities.
    If the standards for the final rule are based on the Combo-IL2Lim 
option, the standards based on DAF technology would apply to those 
facilities with DAF in place as of the publication date of this 
proposal. Although EPA estimates that CP is cheaper to operate on an 
annualized basis than DAF (even for facilities that already have DAF 
installed), EPA's costing analysis for the Combo-IL and Combo-IL2Lim 
options assumed that some facilities that already have DAF installed 
would continue to operate it if given the choice because of constraints 
on financing. This is the explanation for the results in Table VI.E.1 
that a less stringent regulatory option would apparently have higher 
compliance costs. EPA recognizes that while its cost estimates are 
based on simplifying assumptions that it believes to be correct on 
average, actual costs will vary from facility to facility, so that DAF 
may in fact be the cheaper technology for some facilities. This is 
particularly likely for facilities that already have DAF installed. In 
this case, the Combo-IL and Combo-IL2Lim options would be expected to 
entail lower national compliance costs than either the DAF-IL or the 
CP-IL options. EPA is soliciting information that may help it refine 
its estimates of the relative costs on a facility-by-facility basis of 
DAF and CP. Given that EPA's estimates that CP's removals are only 
slightly better than DAF, this could also be a factor in determining 
whether CP only, or both CP and DAF represent BAT and/or BADCT in 
addition to the other factors specified in Section III of this 
preamble.
2. New Sources
    After considering all of the technology options described above, 
and in light of the factors specified in sections 306 and 307 of the 
CWA, EPA has selected CP-IL as the technology basis for the 
pretreatment standards for new sources in the proposed rule. As stated 
in Section III.A. of the preamble, PSNS are analogous to NSPS, which in 
turn are based on best available demonstrated control technology. New 
facilities have the opportunity to install the most efficient treatment 
technologies and under NSPS, EPA is to consider standards that will 
eliminate pollution to the maximum extent feasible. These PSNS are 
based on the performance of CP at one or more facilities using CP 
depending on the pollutant. Although CP is currently only used at three 
percent of industrial laundry facilities, CP is a widely used 
technology in other industries such as the metals products and 
machinery, chemicals and allied products, and centralized waste 
treatment industries. See, e.g., American Iron and Steel Institute v. 
EPA, 526 F.2d 1027, 1058 (3rd Cir. 1975) (By demonstration, it will be 
sufficient that there be one operating facility which demonstrates that 
the level can be achieved or that there is sufficient information and 
data from a relevant pilot plant or semi-work plant to provide the 
needed economic and technical justification for such new source).
    EPA has determined that the proposed PSNS are economically 
achievable and present no barrier to entry. EPA has found that overall 
impacts from the proposed IL standards on new sources would not be any 
more severe than those on existing sources, since the costs faced by 
new sources generally will be the same as or less than those faced by 
existing sources. It is typically easier to incorporate pollution 
prevention technologies such as those identified in the Development 
Document in Chapter 8 & 10, and it is less expensive to incorporate 
pollution control equipment into the design at a new plant than it is 
to retrofit the same pollution control equipment in an existing plant 
because no demolition is required, and space constraints, which can add 
to costs if specifically designed equipment must be ordered, are not an 
issue in new construction. Because most new sources face either less or 
similar costs than existing sources, EPA has determined that PSNS 
requirements should not pose a barrier to entry on the basis of 
competitiveness for new facilities based on available data. EPA also 
has shown CP to be an economically achievable option for existing 
sources. Therefore, the same requirements for PSNS also should have an 
acceptable level of impact on new facilities.
    EPA also examined whether there would be a barrier to entry for 
small new sources. EPA's analysis showed no closures of new sources at 
single-facility firms. See section VII.C.2.b of this preamble or the EA 
for more details. Thus, EPA proposes not to exclude these new sources 
based on a finding that it is economically achievable for these new 
sources to comply with the CP standards contained in the proposed rule. 
EPA solicits comments on its proposed finding that the proposed CP 
option is economically achievable and does not constitute a barrier to 
entry for new small sources and on its proposal not to include a small 
facility exclusion for PSNS. See also section VII.B. below.

G. Determination of Long-Term Averages (LTAs), Variability Factors, and 
Limitations for PSES and PSNS

    Although chemical precipitation (CP) is widely used in other 
industries, CP only exists at an estimated three percent of industrial 
laundry facilities. EPA based the proposed standards on sampling data 
EPA gathered at one industrial laundry facility using CP and from data 
submitted by as many as four CP facilities (depending on the pollutant) 
in response to EPA's detailed monitoring questionnaire. Because 
effluent from even the best performers in an industry can reasonably be 
expected to vary both above and below the long-term average (LTA) 
concentration for a given pollutant, even when treatment systems are 
operating optimally, EPA calculates limitations and standards by 
multiplying LTAs by variability factors to insure that reasonable 
excursions from the LTAs do not result in violation of the CWA.
    The proposed limitations, as presented in today's notice, are 
provided as daily maximums and monthly averages for SGT-HEM and daily 
maximums for all other regulated pollutants. Monitoring was assumed to 
occur four times per month for SGT-

[[Page 66195]]

HEM and one day per month for all other pollutants. Monitoring 
requirements are determined by the pretreatment control authority, but 
EPA has assumed a schedule that might be appropriate. However, EPA 
notes the high costs to facilities ($20,000-$23,000 annually) of 
monitoring at this frequency and requests comment on whether it should 
recommend a less frequent schedule to pretreatment control authorities.
    The limitations for a pollutant are the product of the pollutant 
long-term average and the pollutant variability factor. The procedures 
used to estimate the pollutant LTAs and variability factors are briefly 
described below. A more detailed explanation is provided in the 
Statistical Support Document.
    The LTA of a pollutant for each facility was calculated based on 
either an arithmetic average or the expected value of the distribution 
of the samples, depending on the number of total samples and the number 
of detected samples for that pollutant at that facility. The pollutant 
long-term average for a treatment technology was the median of the 
long-term averages from the facilities using CP.
    EPA calculated variability factors by fitting a statistical 
distribution to the data. The distribution was based on an assumption 
that the furthest excursion from the LTA that a well operated plant 
using chemical precipitation could be expected to make on a daily basis 
was a point below which 99% of the data for that facility falls, under 
the assumed distribution. The daily variability factor for each 
pollutant at each facility is the ratio of the estimated 99th 
percentile of the distribution of the daily pollutant concentration 
values divided by the expected value of the distribution of the daily 
values. The pollutant variability factor for a treatment technology was 
the median of the pollutant variability factors from the facilities 
with that technology. The daily maximum limitation is a product of the 
pollutant long-term average and the pollutant variability factor.
    The monthly maximum limitation is also calculated as the product of 
the pollutant long-term average and the pollutant variability factor, 
but the pollutant variability factor is based on the 95th percentile of 
the distribution of daily pollutant concentrations.
    By accounting for these reasonable excursions above the LTA, EPA's 
use of variability factors results in standards that are generally well 
above the actual LTAs. Thus, if a facility operates its treatment 
system to meet the relevant LTA, EPA expects the plant to be able to 
meet the standards. Variability factors ensure that normal fluctuations 
in a facility's treatment are accounted for in the limitations.
    As stated above, EPA rejected an option that would be based on one 
set of standards for facilities with DAF currently in place and another 
set of standards based on CP for all other facilities. Although EPA has 
rejected this option for the reasons stated in section VI.D above, EPA 
has also provided standards based on sampling data EPA gathered at two 
facilities using DAF and from data submitted in response to EPA's 
detailed monitoring questionnaire by as many as four facilities 
(depending on the pollutant) that were using DAF. These DAF standards 
are shown for comparative purposes below. EPA solicits comments on both 
the proposed CP and DAF standards and encourages commenters to 
substantiate their comments by submitting data.

                                      Table VI.G.1--Pretreatment Standards                                      
----------------------------------------------------------------------------------------------------------------
                                                                DAF                             CP              
                                                 ---------------------------------------------------------------
               Pollutant parameter                     Daily          Monthly      Daily Maximum      Monthly   
                                                   Maximum(mg/L)  Average (mg/L)      (mg/L)      Average (mg/L)
----------------------------------------------------------------------------------------------------------------
Bis (2-Ethylhexyl) Phthalate....................            0.44  ..............            0.13  ..............
Ethylbenzene....................................            0.73  ..............            1.64  ..............
Naphthalene.....................................            0.24  ..............            0.23  ..............
Tetrachloroethene...............................            1.35  ..............            1.71  ..............
Toluene.........................................            5.63  ..............            2.76  ..............
m-Xylene........................................            2.11  ..............            1.33  ..............
o&p-Xylene......................................            0.98  ..............            0.95  ..............
Copper..........................................            1.83  ..............            0.24  ..............
Lead............................................            0.52  ..............            0.27  ..............
Zinc............................................            3.47  ..............            0.61  ..............
TPH (as measured by SGT-HEM)....................           42.9            21.3            27.5            15.4 
----------------------------------------------------------------------------------------------------------------

    EPA is proposing concentration-based limits. An alternative is 
mass-based limits calculated by multiplying the concentrations in the 
table above by the 75th percentile production normalized flow of 3.13 
gallons per pound laundered. However, EPA found no relationship between 
gallons per pound laundered and items washed, total production or the 
amount of recycle/reuse. Because of this, even if operators were 
employing the appropriate level of control, it would be difficult to 
develop achievable mass limits.
    Some stakeholders have advocated mass-based standards while others 
prefer concentration-based standards. POTWs generally prefer 
concentration-based standards because it is much easier for them to 
implement. Mass-based standards require information about flow and/or 
production both to set the standards and to enforce them, but have the 
added advantage of encouraging flow reduction. EPA solicits comments on 
this issue.

VII. Economic Analysis

A. Introduction

    This section describes the capital investment and annualized costs 
of compliance with the proposed industrial laundries pretreatment 
standards and the potential impacts of these compliance costs on 
current and future facilities and firms in the industrial laundries 
industry. EPA's economic assessment is presented in detail in the 
Economic Assessment (EA) included in the rulemaking record. The EA 
estimates the economic effect of compliance costs on facilities, firms, 
employment, domestic and international markets, inflation, 
distribution, environmental justice and industrial laundries customers. 
EPA also has conducted an Initial Regulatory Flexibility Analysis 
(IRFA) under the Regulatory Flexibility Act (RFA) as amended by the 
Small Business Regulatory Enforcement Fairness Act (),

[[Page 66196]]

which estimates effects on small entities, and a cost-effectiveness 
analysis of all evaluated options. Except where otherwise noted, only 
the results for the option used as the basis for the proposed rule are 
presented here. Impacts for other options are presented in Section C.3 
below and in the EA.

B. Economic Impact Methodology

1. Introduction
    This section (and, in more detail, the EA and record for the 
proposed rule) evaluates several measures of economic impacts that 
result from compliance costs. The analysis in the EA consists of eight 
major components: (1) an assessment of the number of facilities that 
could be affected by this rule; (2) an estimate of the annual aggregate 
cost for these facilities to comply with the rule using facility-level 
capital and operating and maintenance (O&M) costs; (3) an evaluation, 
using a financial model, of compliance cost impacts on facilities' cash 
flow (closure analysis); (4) an evaluation, using a financial model, of 
compliance cost impacts on the financial health of firms in the 
industry (firm failure analysis); (5) an evaluation of secondary 
impacts such as those on employment, markets, inflation, distribution, 
environmental justice and industrial laundry customers; (6) an 
assessment of the potential for impact on new sources (barrier to 
entry); (7) an analysis of the effects of compliance costs on small 
entities pursuant to the RFA as amended by; and (8) a cost-benefit 
analysis pursuant to E.O. 12866.
    All costs are reported in this preamble in 1997 dollars, with the 
exception of cost-effectiveness results, which, by convention, are 
reported in 1981 dollars. The EA report presents all costs in 1993 
dollars. In the EA, any costs not originally in the base year (1993) 
dollars have been inflated or deflated to 1993 dollars using the 
Engineering News Record Construction Cost Index, unless otherwise noted 
in that report (see the EA for details). This same cost index is used 
to further inflate costs to 1997 dollars for this preamble. Generally, 
other indices are used to inflate benefits to 1997 dollars, as cited in 
the EA. The primary source of data for the economic analysis is the 
1994 Industrial Laundries Industry Detailed Questionnaire (Section 308 
Survey). Other sources include government data from the Bureau of the 
Census, industry trade journals, and several preliminary surveys of the 
industry, including the 1989 Preliminary Data Summary for Industrial 
Laundries, the 1993 Industrial Laundries Industry Screener 
Questionnaire, the 1994 Industrial Laundries Supplemental Screener 
Questionnaire, and EPA's Development Document for this rulemaking.
2. Methodology Overview
    Central to the EA is the cost annualization model, which uses 
facility-specific cost data and other inputs (discussed in Chapter 12 
of the Development Document) to determine the annualized capital and 
operating and maintenance (O&M) costs of improved wastewater treatment. 
This model uses these costs along with an annual compliance monitoring 
cost with the industry-specific real cost of capital (discount rate) 
over a 16-year analytic time frame to generate the annual cost of 
compliance for the selected option, as well as the other options 
considered during the course of the proposal effort. EPA chose the 16-
year time frame for analysis based on the depreciable life for 
equipment of this type, 15 years according to Internal Revenue Service 
(IRS) rules, plus approximately one year for purchasing and installing 
the equipment. As an alternative to installing wastewater treatment, 
facilities may choose, within many of the technology options 
considered, to have wastewater hauled offsite (a decision handled 
within the model, as discussed below). The model generates the 
annualized cost for each option (including the annual cost of hauling 
wastewater) for each facility in the survey, which is then used in the 
facility and firm analyses, discussed below.
    In the facility analysis, EPA models the economic impacts of 
regulatory costs on individual industrial laundry facilities, 
irrespective of ownership. In this part of the analysis, the model uses 
the annualized costs of each option, compares them to the alternative 
annual wastewater hauling costs (where this alternative is available), 
and selects the lowest of the two.
    EPA then reduces this resulting cost to take into account that 
portion of compliance costs that can be passed through to customers. 
Compliance costs are adjusted downward by a factor (the cost pass-
through factor) that is calculated using EPA's model of the industrial 
laundries market. This model, which quantifies the price and quantity 
changes in the industrial laundries market due to the proposed rule, 
shows that the industry will be able to pass some portion of the 
compliance costs of the proposed rule through to their customers and 
calculates the percentage that can be passed through. The market model 
is a simultaneous equation for determining price and quantity using 
supply and demand curves for the industry that EPA developed based on 
data in the Section 308 Survey and U.S. Census Bureau economic data. 
EPA estimates, for this industry, that 32 percent of compliance costs 
can be passed through to customers. Although EPA believes that its cost 
pass-through projection is reasonable, an analysis in the EA shows that 
a zero-cost pass through assumption produces nearly identical closure 
analysis results.
    EPA then converts the adjusted annual cost for each facility into a 
present value change in cash flow, which is subtracted from the 
estimated baseline present value of facility cash flow. Estimated 
baseline present value of facility cash flow is based on the average of 
three years of financial data from each facility in the Section 308 
survey under an assumed no-growth scenario (i.e., the annual cash flow, 
calculated as the 3-year average, is expected to remain the same over 
the 16-year period of analysis). If the change in present value of cash 
flow (which is derived from the adjusted annualized costs of 
compliance) causes a facility's estimated cash flow to change from 
positive in the baseline to zero or negative after implementing the 
requirements of the proposed rule over the 16-year period of analysis, 
EPA considers the facility likely to close (i.e., liquidate) as a 
result of the regulation. This approach is somewhat different from 
methodologies used in other EAs and economic impact analysis for 
manufacturing industries, since salvage value is not considered in the 
closure analysis here. For a number of reasons, outlined in the EA (see 
Section 5 and Appendix C), EPA found that using salvage value in a 
closure analysis for this industry is not the best way for determining 
whether a facility would be liquidated. EPA found that baseline 
closures calculated using salvage value accounted for a large 
percentage (nearly 30 percent) of existing facilities. Furthermore, EPA 
found that many of these closures using salvage value were driven by 
current assets. EPA believes that firms would not be likely to 
liquidate on the basis of high current assets (cash on hand) relative 
to cash flow. EPA also believes that costs of liquidation could easily 
equal or exceed salvage value in low-asset service industries such as 
this one, unlike in the more highly capital-intensive manufacturing 
industries.
    Note that facilities that reported negative cash flow over the 3-
year period of the survey are considered baseline closures and are not 
considered affected by the rule for several reasons:
    (1) Many of these facilities (50 non-excluded facilities) are 
nonindependent

[[Page 66197]]

facilities owned by multifacility firms. These facilities may be 
transferring production (laundering services at or near cost) from 
other facilities owned by the same parent company, or otherwise not 
expected to be self-supporting by the parent. EPA analyzes the parent 
firms of these facilities in the firm-level analysis and as long as the 
parent firm can afford to install and operate compliance equipment in 
these facilities, EPA assumes these facilities will close neither in 
the baseline nor postcompliance. (2) OMB guidance suggests that 
agencies develop a baseline that is ``the best assessment of the way 
the world would look absent from the proposed regulation. That 
assessment may consider a wide range of factors, including the likely 
evolution of the market * * *'' EPA's best assessment is that some 
facilities currently operating may not remain in business to install 
and operate the pollution control equipment. EPA cannot say for certain 
which facilities these may be, but can assert that those facilities 
that are currently considered not financially viable because their cash 
flow is zero or negative (among those not owned by multifacility 
firms--57 non-excluded facilities) are the likeliest facilities to 
close without ever installing and operating pollution control 
equipment. It is possible that a facility estimated to be a baseline 
closure may remain open, but the converse is also true--a facility 
projected to remain open until it is subject to the rule may actually 
close independently of the effects of the rule (both results might be 
equally possible). Thus, consistent with OMB guidance, EPA estimated 
postcompliance closures by counting closures that are projected to 
close solely due to the effect of the proposed rule.
    In the firm failure analysis, EPA uses the adjusted annualized 
costs to compute a change in earnings, assets, liabilities, and working 
capital at the firm level (accounting for costs for multiple 
facilities, where applicable). These postcompliance financial figures 
are used in a computerized model of financial health on a firm-by-firm 
basis. The model uses an equation known as ``Altman's Z'', which was 
developed based on empirical data to characterize the financial health 
of firms. This equation calculates one number, based on the financial 
data, that can be compared to index numbers that define ``good'' 
financial health, ``indeterminate'' financial health, and ``poor'' 
financial health. All firms whose ``Altman's Z'' number changes such 
that the firm goes from a ``good'' or ``indeterminate'' baseline 
category to a ``poor'' postcompliance category are classified as likely 
to have significant difficulties raising the capital needed to comply 
with the proposed rule, which can indicate the likelihood of firm 
bankruptcy, or loss of financial independence.
    As the panel noted, there is uncertainty associated with both the 
methodology for predicting facility and firm closures, and the figures 
used to make those projections, such as interest rate, assumption of 
the life of the pollution control equipment and compliance costs. One 
of the small entity representatives consulted during the outreach 
process specifically questioned several of EPA's costing assumptions, 
relating to interest rate, use life of equipment, and labor 
requirements to operate a treatment system. EPA recognizes the 
uncertainties associated with its analyses, and has performed 
sensitivity analyses in the EA that addresses some of these issues. EPA 
believes that its choice of methodology and input data is appropriate 
and results in a conservative calculation of costs and facility and 
firm closures, but solicits comments and data that would support more 
refined analyses for the final rule.
    EPA also notes that a methodological concern has been raised 
regarding its facility closure analysis that relates to its use of cash 
flow as the appropriate measure of funds available to cover the 
compliance costs of the proposed rule. Cash flow is defined as income 
plus depreciation. It has been suggested that calculating a facility's 
costs without including depreciation fails to account for the future 
cost of replacing existing capital as it wears out, and thus 
underestimates long-term costs and overstates funds available for 
compliance. EPA, however, believes it is appropriate to include 
depreciation in the funds available for compliance because, while under 
standard accounting practices depreciation is deducted from gross 
revenue during the calculation of income, it does not represent an 
expenditure actually incurred in the current period but rather an 
amortization of costs incurred in a previous period. EPA requests 
comments on its use of cash flow as an appropriate measure of funds 
available for compliance.
    In the employment analysis, EPA undertakes several types of 
analyses, all based in part on a type of analysis known as input-output 
analysis. These employment analyses include: (1) a national-level 
analysis for estimating employment gains and losses throughout the U.S. 
economy in all industry sectors using both compliance costs and 
employment losses driven by facility closures to determine a range of 
possible gross and net (losses minus gains) impacts at the national 
level; (2) a regional impact analysis using employment losses driven by 
facility closures (closure losses) to determine whether impacts on 
individual communities might be experienced; and (3) an analysis using 
EPA's estimate of market-determined production losses to derive an 
estimate of direct, net employment losses in the industrial laundries 
industry alone. This last analysis is undertaken to determine losses 
within the industrial laundries industry alone because while closure 
losses can be considered the immediate impact of the proposed rule on 
the industry, production-driven losses might be greater or less than 
closure losses over time, as equilibrium in the market is attained. 
Furthermore, closure losses do not account for the fact that some 
portion of production workers might transfer wholly or in part to 
operating pollution control equipment, thus some accounting for 
employment gains within the industry is necessary.
    National-level analysis. EPA uses input-output analyses to 
determine the effects of the regulation using national-level employment 
and output multipliers. Input-output multipliers allow EPA to estimate 
the effect of a loss in output in the industrial laundries industry on 
the U.S. economy as a whole. Every loss in output in the industrial 
laundries industry results in employment losses in that industry. 
Additionally, these losses have repercussions throughout the rest of 
the economy, and the output and employment multipliers allow EPA to 
calculate the total losses in output and employment nationally using 
the output loss estimated for the industrial laundries industry alone. 
See Section Seven of the EA for more details.
    Regional-level analysis. EPA also determines the impacts on 
regional-level employment, which is estimated using facility closures 
and employment at those closing facilities. These analyses are based on 
the use of Bureau of Economic Analysis RIMS II input-output regional 
(not national-level) multipliers, which allow EPA to determine 
employment impacts on other sectors of the regionally economy that 
depend on the industrial laundries industry. EPA uses the regional-loss 
estimates using the facility closure-driven estimates of employment 
losses to perform a community impact analysis, which investigates the 
potential for impacts on community unemployment rates based on the

[[Page 66198]]

immediate dislocation effects of facility closures. Firm failures are 
not considered in the job loss or community impact analyses because in 
all cases, these firms are single-facility firms whose facility is 
shown to be financially viable after complying with the rule. The 
impact of the proposed rule on these facilities thus might be the loss 
of their financial independence, as they would likely be purchased by a 
larger firm and continue to operate with all or nearly all employees. 
This is not always the case in all industries, but in this industry, 
facilities are geographically tied to their service areas and thus 
their production is not easily shifted to another geographic area. 
Furthermore, they are generally not asset-rich and are thus not 
suitable for acquisition for the purpose of selling off assets rather 
than for operation.
    EPA conducts a regional analysis because even if net employment 
effects (losses minus gains) are relatively small on a national level, 
an employment loss might still have a substantial negative effect on an 
individual community (see the EA for more details).
    Industry level analysis. Facility closure losses could overstate or 
understate employment losses strictly within the industrial laundries 
industry on a longer-term basis, since total longer-term employment 
losses are driven by production losses and employment losses from 
closures are driven by costs of compliance, and these two losses may 
not be equal. Therefore, EPA uses its market model to predict any 
reductions in production and the subsequent employment effects 
(production-driven effects) within the industrial laundries industry 
alone. This analysis also accounts for some gains within the industrial 
laundries industry due to a need for operators of pollution control 
equipment. This analysis also uses the national-level input-output 
multipliers to compute a direct loss of employment on the basis of 
output effects. EPA considers this employment loss the longer-term 
impact of the rule on the industrial laundries industry.
    EPA investigates additional secondary impacts qualitatively and 
quantitatively. These impacts include impacts on domestic and 
international markets, impacts on substitutes for industrial laundry 
services, impacts on inflation, distributional impacts, and impacts on 
environmental justice. EPA also investigates the impact of the rule on 
domestic markets. The rule will affect domestic markets to the extent 
that excluded facilities can affect market share. EPA makes an 
assessment of the potential for effect on domestic market on the basis 
of pounds of laundry processed by excluded facilities to the total 
pounds processed by the industry.
    EPA also looks at impacts on customers. The agency obtained IRS 
data on the major customer groups and summed total operating costs for 
their major customers. Under the worst-case assumption that all 
compliance costs would be borne by only 10 percent of these major 
customers, EPA conservatively determined a percentage by which total 
operating costs might increase due to the proposed rule. Additionally, 
EPA investigates the potential for any impacts on hotels, hospitals, 
prisons and other such establishments should they be accepting 
industrial items from off-site sources.
    Another key analysis EPA performs is an analysis to determine 
impacts on new sources, which is primarily a ``barriers-to-entry 
analysis'' to determine whether the costs of the PSES would prevent a 
new source from entering the market. This analysis looks at whether new 
industrial laundries would be at a competitive disadvantage compared 
with existing sources. Market effects and barriers to entry associated 
with the small source exclusion also are qualitatively investigated.
    Also, pursuant to E.O. 12866, EPA performs a cost-benefit analysis. 
This analysis looks at the social cost of the regulation measured as 
the pretax costs of compliance plus government administrative costs 
plus the costs of administering unemployment benefits. See Section IX 
of this preamble for more details of the benefits analysis.

C. Summary of Costs and Economic Impacts

1. Overview of the Economic Assessment Analyses
    The EA focuses first on the costs and economic impacts of the 
proposed rule, using the best data and information available--that 
reported by industry in the Section 308 Survey data--as representative 
of the regulatory baseline. The analysis addresses costs and economic 
impacts of the pretreatment (PSES and PSNS) requirements for industrial 
laundries wastewater. As noted earlier, EPA has elected to reserve Best 
Practicable Control Technology Currently Available (BPT), Best 
Conventional Pollutant Control Technology (BCT), BAT, and NSPS 
requirements. Direct discharger requirements will be determined on a 
case-by-case basis under CWA section 402(a)(1).
2. Total Costs and Impacts of the Proposed Rule
    This section presents the total costs and impacts of the standards 
in this proposed rule. EPA estimates that there are 1,747 industrial 
laundries facilities (given the items processed, the definition of an 
industrial laundry item in the proposed rule, and Section 308 Survey 
statistical weights). Of these, 141 facilities meet the definition of 
``small'' under EPA's proposed designation of the small industrial 
laundries exclusion. This exclusion is defined as all facilities 
laundering less than one million pounds of incoming laundry per 
calendar year and less than 255,000 pounds of shop and/or printer 
towels/rags per calendar year. Of these excluded facilities, all meet 
the definition of ``small'' under Small Business Administration (SBA) 
Guidelines. There are 903 firms owning the 1,747 facilities. A total of 
837 out of the 903 firms or 93 percent are ``small businesses'' 
according to SBA Guidelines (revenues less than $10.5 million per 
year). The analysis looks separately at single-facility firms (those 
firms where the firm and the facility are a single entity) and 
multifacility firms (firms that own more than one facility; generally, 
these firms are larger than single facility firms). There are a total 
of 830 single-facility firms out of 903 total firms in the industry (92 
percent), the vast majority of which meet the SBA definition of small.
    The total cost of the proposed rule is based on engineering cost 
estimates. To develop these estimates, EPA identified candidate end-of-
pipe treatment technologies and grouped appropriate technologies into 
regulatory options. EPA then developed cost equations for capital and 
O&M costs for each of the technologies.
    For each wastewater treatment technology, EPA developed a cost 
module. The following cost modules make up the selected CP option: 
screen, stream splitting, equalization, chemical precipitation, pH 
adjustment, sludge dewatering, building and monitoring. For further 
detail, see Chapter 12 of the Development Document.
    Total costs of the proposed regulation are estimated to be $93.9 
million (see Table VII.C.2.1).

         Table VII.C.2.1.--Costs of Proposed PSES Option ($1997)        
------------------------------------------------------------------------
                                                               Posttax  
                                                                Annual  
                           Option                              Costs ($ 
                                                               million) 
------------------------------------------------------------------------
PSES: CP-IL................................................        $93.9
------------------------------------------------------------------------


[[Page 66199]]

a. Impacts From Pretreatment Standards for Existing Sources (PSES)
    EPA estimates that the proposed rule would result in 33 facilities 
(2.1 percent of all facilities in the facility-level analysis and 1.9 
percent of all in-scope facilities) closing as a result of compliance 
costs. All are single-facility firms. EPA estimates total direct job 
loss of 2,872 full-time equivalents (1 FTE = 2,080 hours of labor) as a 
result of the facility closures projected under the proposed rule. The 
employment losses associated with closures overstate actual net losses 
to the industry, because some employment gains in the industry will 
occur (although the gains may not occur in the same geographic location 
or at the same time as the losses). These gains include operators of 
pollution control systems that might be hired by facilities and 
additional workers hired to expand some production at facilities 
located in market areas with facility closures (lost production from 
closures is estimated to exceed the amount of reductions required to 
meet market equilibrium conditions). EPA estimates the actual net 
direct losses in the industrial laundries industry would be 470 FTEs 
(0.36 percent of total industry employment), considerably less than the 
number of direct losses predicted solely on the basis of closures.
    Additional to these closures, EPA predicts that the proposed 
regulatory option would affect the ability of 65 firms (all of which 
are single-facility firms) to raise the capital needed to purchase and 
install the pollution control equipment. This impact may result in the 
loss of financial freedom for these firms, up to and including the sale 
of the firms to larger multifacility firms. This impact does not mean 
that these firms will close; all these firms are viable at the facility 
level and are thus considered likely to be of interest to other firms 
for acquisition and operation.
    EPA predicts employment impacts to the national-level economy on 
the basis of input-output analysis described above. Based on this 
analysis, which estimates both national employment losses stemming from 
increased output in the industrial laundries industry and offsetting 
gains stemming from increased output of pollution control equipment, 
the proposed option would result in a net loss of employment at the 
national level in all industry sectors of 582 to 5,534 FTEs, which is 
about 0.0005 to 0.005 percent of the U.S. labor force in 1997. Net 
output loss would be thus $100.7 million at most, which is about 0.001 
percent of Gross Domestic Product in 1997. Thus EPA expects, at the 
national level, that the IL Standards would have negligible impact on 
U.S. employment and output.
    EPA also investigated employment impacts in the industrial 
laundries industry alone. EPA determined that within the industrial 
laundries industry, many nonclosing facilities might actually 
experience gains in production (and thus gains in output and 
employment). This is because when facilities close, other nonclosing 
facilities in the local market area might expand production to take 
over a portion of the closing facility's production. Thus, while the 
proposed rule is estimated to produce a long-term net employment loss 
to the industrial laundries industry of 470 FTEs, this is less than the 
short-term direct employment and output losses that would be calculated 
on the basis of closures alone.
    For the community-level analysis, under the conservative approach 
for estimating community employment impacts described above, EPA 
determined that most closures will result in a maximum change in a 
community's unemployment rate of 0.32 percent or less and EPA estimates 
no single community will sustain impact on its unemployment rate of 
greater than one percent.
    EPA expects the proposed rule to have a minimal impact on 
international markets. Domestic markets might initially be slightly 
affected by the exclusion for very small facilities, since these 
facilities may not be subject to the same requirements; however, the 
number of these facilities, the small volume of their production 
relative to total industry production (0.7 percent), and the likelihood 
that they are not concentrated in any one market area, are expected to 
limit the effects of any competitive advantages they may have. EPA's 
economic analysis shows that there is a very slight increase in price 
($0.003 per pound) and that customers are not very sensitive to price 
changes; therefore, dischargers subject to the proposed rule would be 
able to compete with those dischargers excluded from the proposed rule. 
Further, if any excluded facility annually launders more than one 
million pounds of laundry or more than 255,000 pounds of shop and/or 
printer towels/rags per calendar year, it will no longer be excluded 
from the standards. The small excluded facilities are also the most 
likely of any size group to exit the market regardless of the rule. 
Given these observations, it is likely that this group of existing 
sources would shrink in size over time, and any small market effects 
would be reduced. As discussed below in the Regulatory Flexibility 
Analysis section, EPA believes that the small impacts of the exclusion 
on markets are far outweighed by the benefits of reducing adverse 
economic impacts on the most vulnerable firms in the industry.
    EPA also expects the proposed rule to have minimal impacts on 
inflation, insignificant distributional effects, and no major impacts 
on environmental justice. The rule also would have minimal impacts on 
industrial laundries customers. The price increase expected as a result 
of the proposed option is an average of $0.003 per pound, or 0.4 
percent of current average price. Because this percentage increase is 
so small compared to even the modest rates of inflation currently 
experienced, it is unlikely that most customers would be able to 
distinguish this effect from the effect of inflation. If EPA assumes 
that only 10 percent of the customers in the major groups of customers 
absorb 100 percent of the cost of the rule, total compliance costs 
would increase customers' operating costs by an average of less than 
0.02 percent. Therefore, EPA does not expect price increases to have a 
major impact on customers.
    EPA also investigated the likelihood that customers might 
substitute disposable items for laundered items or begin operating on-
site laundries. Both the substitution of disposable items for laundered 
items and the installation and operation of on-site laundries are 
associated with potential negative impacts on customers that might 
deter them from choosing these potential substitutes. Disposable items 
can be more expensive to use than laundered items, may not meet quality 
requirements (e.g., disposable printer towels tend to be linty) and 
are, in certain circumstances, regulated under other environmental 
statutes. Meanwhile because of the high initial costs to install 
equipment on-site and the small increase in price of industrial laundry 
services discussed earlier, on-site laundries could require years 
before any cost savings might be realized. Also, EPA's market model 
provides a means for estimating price increase and reduction in 
quantity demanded for industrial laundering services at the higher 
price. This analysis shows a very small decrease in production as a 
result the proposed rule, 0.3 percent of baseline production. Given the 
disincentives towards those substitutes indicated above, EPA does not 
expect the proposed rule to cause customers to substitute disposable 
items for laundered items or commence industrial laundering on-site for 
industrial laundries services in any major way.

[[Page 66200]]

The small reduction in production of 0.3 percent is more likely to 
occur from customers delaying cleaning (rather than weekly pickups of 
mats, for example, some might substitute biweekly pickups) or dropping 
certain rental items, such as uniforms used only for image purposes. 
This decline in production is negligible compared to the approximate 4 
percent per year growth in revenues seen for the industry between 1990 
and 1993, according to Section 308 data.
    EPA also determined that impacts on hotels, hospitals, and prisons, 
which could be processing industrial laundry from offsite sources are 
likely to be negligible. First, EPA's survey of a subset of hotels, 
hospitals, and prisons turned up no facilities that were currently 
accepting industrial items from offsite sources. Second, EPA's survey 
shows that some of these sources could meet the definition of the small 
industrial laundry exclusion. Several process considerably less than 1 
million pounds of laundry per year, thus it is possible that if any of 
these types of establishments do accept industrial items from offsite 
sources, some might be excluded from coverage on the basis of pounds 
laundered. Finally, if there were facilities large enough not to 
qualify for an exclusion, their major source of revenues are from their 
primary business, not from operating a laundry. Therefore, EPA expects 
that these facilities can afford to comply with the proposed 
limitations by offsite shipping of industrial laundry wastewater. 
Because EPA's data on these types of establishments is not exhaustive, 
however, the Agency solicits comment and additional data on this issue.
b. Impacts From Pretreatment Standards for New Sources (PSNS)
    EPA investigated all options considered under PSES as potential 
PSNS options. EPA has tentatively selected the CP-IL option for both 
sets of proposed standards. This section presents EPA's assessment of 
impacts on new sources. EPA assesses impacts on new sources by 
determining whether the proposed rule would result in a barrier to 
entry into the market.
    EPA has found that overall impacts from the proposed IL Standards 
on new sources would not be any more severe than those on existing 
sources, since the costs faced by new sources generally will be the 
same as or less than those faced by existing sources. It is typically 
less expensive to incorporate pollution control equipment into the 
design at a new plant than it is to retrofit the same pollution control 
equipment in an existing plant because no demolition is required, and 
space constraints, which can add to costs if specifically designed 
equipment must be ordered, are not an issue in new construction. 
Because most new sources and existing sources face similar costs, EPA 
has determined that PSNS requirements should not pose a barrier to 
entry on the basis of competitiveness for most new facilities. EPA also 
has shown CP-IL to be an economically achievable option, having an 
acceptable level of impact on existing sources. Therefore, the same 
requirements for PSNS also should have an acceptable level of impact on 
most new facilities.
    EPA also examined whether there would be a barrier to entry for 
small new sources. EPA proposes not to exclude these new sources 
because it has found it to be economically achievable for these new 
sources to comply with the CP-IL standards contained in the proposed 
rule. Based on the Section 308 Survey data, EPA expects that new 
sources generally exceed the threshold size cutoff that EPA proposed 
for existing sources. EPA investigated facilities in the Section 308 
Survey that indicated they were new or relatively new at the time of 
the survey. The number of new source facilities coming on line each 
year is extremely small. Over a three year period (1991, 1992, and 
1993), according to Section 308 Survey data, laundry operations began 
only at about 80 facilities (and it is not absolutely clear from the 
data whether these facilities were actually new dischargers or were 
existing dischargers acquired in that year by a different firm). Over 
the 3-year period, this amounts to 27 new sources a year at most, or 
only 1.5 percent of existing facilities. Given the small level of 
growth in the industrial laundries industry, EPA believes that new 
sources are primarily replacing production from closing facilities that 
exit the market.
    Of these facilities identified as new or relatively new facilities, 
EPA determined that the average revenues of this group exceeded $4 
million per year, and the amount of laundry processed averaged over 5 
million pounds per year. Only 24 facilities out of 80 total newer 
facilities (weighted), or 30 percent, would meet the size threshold for 
the exclusion applicable to existing sources. On a yearly basis (given 
that 24 facilities started up over the 3 years of the survey) EPA 
estimates that up to 8 facilities of the size that would meet an 
exclusion similar to that for existing sources might be started up each 
year. Overall, in the group of 80 facilities, only 6 facilities 
(weighted) were identified as postcompliance closures (based on a 
closure by one surveyed nonindependent facility). No single-facility 
firm would close postcompliance. EPA is less concerned about a closure 
of a nonindependent facility, since nonindependent facilities often can 
fall back on their parent firm during the financially shaky first few 
start up years. Furthermore, these 6 facilities are represented by a 
survey facility that might, on the basis of the types of laundry 
processed, be able to meet the requirements of the rule possibly 
without having to install any pollution control whatsoever (that is, 
their current effluent might not exceed the CP-IL based standards). EPA 
has conservatively assigned this facility compliance costs because the 
Agency has no sampling data from this facility to support this 
assertion. Given the above results, EPA finds that not excluding new 
sources laundering less than one million pounds of incoming laundry per 
calendar year and less than 255,000 pounds of shop and/or printer 
towels/rags per calendar year from PSNS will be economically achievable 
and will present no barriers to entry.
    EPA also investigated whether there might be a barrier to entry due 
to competitive disadvantages for all new sources in markets where 
excluded facilities are located. According to the Section 308 Survey, 
excluded facilities process only 0.7 percent of the laundry processed 
by all facilities represented in the survey. EPA thus concludes that 
the market share of excluded facilities is so small that excluded 
facilities are unlikely to have a measurable impact in the market for 
industrial laundry services. Furthermore, EPA has shown that even if no 
compliance costs are passed through to customers, the impacts are 
similar to the results assuming cost pass-through does occur, and thus 
new sources should be able to compete with excluded facilities on price 
(by not raising prices) even if they perceive the need. EPA thus 
concludes that competition with excluded facilities will not pose a 
barrier to entry.
3. Economic Impacts of Rejected Options
    The economic impacts from rejected options are as follows.
    The OC option is associated with the lowest level of economic 
impacts of all options considered. This option is associated with 3 
facility closures, and only 22 firms are projected to be likely to fail 
(but not close) and are thus likely to lose their financial 
independence. A net direct total of 275 FTEs would be lost in the 
industrial laundries industry (direct, production-driven losses) had 
EPA chosen this option, and other

[[Page 66201]]

secondary impacts (effects on trade, inflation, and customers) would be 
negligible. The option basing limits on the lesser performance between 
DAF-IL and CP-IL is associated with nearly identical impacts as EPA's 
preferred CP-IL option. Facility closures are estimated to be 33, and 
65 firms are estimated to be likely to fail (but not close) and thus 
are likely to lose their financial independence. A net total of 456 
FTEs would be lost in the industrial laundries industry (direct, 
production-driven losses), and, as for the CP-IL option, this option 
would most likely have minimal additional secondary impacts.
    EPA investigated a variant to the Combo option based on both CP-IL 
and DAF-IL. In this option, rather than setting limits based on the 
lesser performance, EPA would set limits based on DAF limits for all 
those currently operating DAF systems, with CP limits for all others. 
Costs would be very slightly less than the other CP/DAF option, with 
impacts being approximately the same (in no case would costs or impacts 
be less than CP-IL).
    Under the DAF-IL option facility closures are estimated to total 
34. A total of 66 firms are expected to be likely to fail (but not 
close) and are thus likely to lose their financial independence. A net 
421 FTEs would be lost in the industrial laundries industry (direct, 
production-driven losses), if EPA had chosen this option. Other 
secondary impacts would be greater than those for the proposed option, 
but still minimal. Table VII.C.3.1 compares the economic impacts of the 
rejected option with those of the preferred option.

                     Table VII.C.3.1.--Impacts of the Preferred Option vs. Rejected Options                     
----------------------------------------------------------------------------------------------------------------
                                                                                                    Net direct  
                                                                                                    employment  
                                                          Annualized      Facility       Firm      losses (FTEs)
                        Option                          posttax costs     closures     failures   as a result of
                                                         ($ MM 1997)                                production  
                                                                                                      losses    
----------------------------------------------------------------------------------------------------------------
OC...................................................            $46.0            3           22             275
CP-IL................................................             93.9           33           65             470
Combo-IL2Lim*........................................  <nearly-eq>99             33           65  <nearly-eq>450
Combo-IL.............................................             99.5           33           65             456
DAF-IL...............................................            118.6           34           66             421
----------------------------------------------------------------------------------------------------------------
*DAF-IL limits for existing DAF systems; CP-IL limits for all others.                                           

D. Cost-Benefit Analysis

    The proposed option is expected to have a total annual social cost 
of $139.4 million ($1997), which includes $136.4 million in pretax 
compliance costs, $2.9 million in administrative costs, and $0.1 
million in unemployment benefits administration costs. Annual monetized 
benefits are expected to range from $2.9 million to $10.6 million, 
which includes $0.09 million to $0.5 million for human health benefits, 
$1.9 million to $6.7 million for recreational benefits, $0.9 million to 
$3.4 million from nonuse benefits, and $0.006 million to $0.01 million 
for POTW sewage sludge benefits. Table VII.D.1 summarizes the results 
of the cost-benefit analysis.

          Table VII.D.1.--Results of the Cost-Benefit Analysis          
------------------------------------------------------------------------
                                                           Dollar value 
                        Category                             (millions  
                                                              $1997)    
------------------------------------------------------------------------
Costs:                                                                  
    Pretax Costs of Compliance..........................   $136.4       
    Administrative Costs of Permitting..................      2.9       
    Administrative Costs of Unemployment Benefits.......      0.1       
                                                         ---------------
        Total Social Costs..............................    139.4       
Monetized Benefits:                                                     
    Human Health Benefits...............................     $0.09-0.5  
    Recreational Benefits...............................      1.9-6.7   
    Nonuse Benefits.....................................      0.9-3.4   
    Benefits to POTWs...................................      0.006-0.01
                                                         ---------------
        Total Monetized Benefits........................      2.9-10.6  
------------------------------------------------------------------------

    There are a number of additional benefits associated with the 
proposed IL Standards that could not be monetized. Examples include: 
reduced noncancer health effects, reduced POTW operating and 
maintenance costs, reduced administrative costs at the local level to 
develop and defend individually derived local limits for industrial 
laundries, improved aesthetic quality of near discharge outfalls, 
enhanced water-dependent recreation other than fishing, benefits to 
wildlife and to threatened or endangered species, tourism benefits, and 
biodiversity benefits.

E. Cost-Effectiveness Analysis

    In addition to the foregoing analyses, EPA has conducted cost-
effectiveness analyses for all options it considered. Results of these 
analyses are presented in the Cost-Effectiveness Analysis (C-E), which 
is included in the rulemaking record. C-E analysis evaluates the 
relative efficiency of options in removing toxic and nonconventional 
pollutants. Costs evaluated include the pretax direct compliance costs, 
such as capital expenditures and O&M costs, including compliance 
monitoring.
    Cost-effectiveness results are expressed in terms of the 
incremental and average costs per ``pound equivalent'' (PE) removed. PE 
is a measure that addresses differences in the toxicity of pollutants 
removed. Total PEs are derived by taking the number of pounds of a 
pollutant removed and multiplying this number by a toxic weighting 
factor (TWF). EPA calculates TWFs for priority pollutants and some 
additional nonconventional pollutants using ambient water quality 
criteria and toxicity values. The TWFs are then standardized by 
relating them to a particular pollutant, in this case, copper. As of 
1985 the water quality criterion for copper was revised, thus the TWF 
for copper also has been revised. PEs are calculated only for 
pollutants for which TWFs have been estimated, thus they do not reflect 
potential toxicity of some nonconventional and, to date, any 
conventional pollutants though the newly added TWF for TPH does capture 
a large portion of the more toxic components of the conventional 
pollutant, oil and grease. EPA's standard procedure is to rank the 
options considered for each waste stream in order of increasing PE 
removed. EPA then calculates incremental cost-

[[Page 66202]]

 effectiveness as the ratio of the incremental annual costs to the 
incremental PE removed under each option, compared to the previous 
(less effective) option. Average cost-effectiveness is calculated for 
each option as a ratio of total costs to total PE removed. In the case 
of pretreatment standards, EPA does not include pollutant removals if 
those pollutants could be removed at the POTW, but only includes the 
removal of pollutants that would pass through the POTW in its cost-
effectiveness determination. (Note that EPA assumes for this analysis 
that POTW removal efficiency is the same for treated influent as for 
untreated influent. To the extent that the removal efficiency is lower 
for influent that has already been pretreated this methodology could 
overestimated removals resulting from the pretreatment standards. EPA 
reports annual costs for all cost-effectiveness analyses in 1981 
dollars, to enable limited comparisons of the cost-effectiveness among 
regulated industries. Incremental cost-effectiveness is the appropriate 
measure for comparing one regulatory option to an alternative, less 
stringent regulatory option for the same rule. Some believe that it may 
also be used to compare cost-effectiveness across rules when 
considering how the last increment of stringency in one rule compares 
to the last increment of stringency in another. For comparing the 
overall cost-effectiveness of one rule to another, average cost-
effectiveness may be a more appropriate measure, but must be considered 
in context with caution. (Average cost-effectiveness can be thought of 
as the ``increment'' between no regulation and the selected option, for 
any given rule).
    As part of the cost-effectiveness analysis for this proposed rule, 
the nonconventional pollutant parameter TPH (SGT-HEM) was included and 
individual components of TPH, such as the alkanes, were removed from 
the cost-effectiveness calculations to avoid double counting removals. 
Although TPH has not been included in cost-effectiveness calculations 
for past rules, EPA believes that it is appropriate to include it here 
because, for this industry, a large portion of the toxic constituents 
of TPH are compounds not specifically included in the database of toxic 
substances and associated toxic weighting factors that past cost-
effectiveness calculation have relied upon. In fact, TPH constitutes 
over 90 percent of the pounds equivalent removals that EPA has 
estimated for this proposed rule.
    The inclusion of TPH were based on alkanes data to estimate POTW 
removal and soluble hydrocarbon data to represent toxicity of TPH to 
calculate the toxic weighting factor (TWF). The POTW removal of 65 
percent was estimated using the U.S. EPA Risk Reduction Engineering 
Laboratory (RREL) Treatability Data Base's average percent removal for 
the three N-alkanes with available percent removal data. EPA recognizes 
that this approach may not adequately characterize removals of the 
soluble hydrocarbons on which its TWF is based and requests comment on 
how the estimate might be improved. The TWF was calculated using an 
aquatic life toxicity value of 560 <greek-m>g/L for soluble 
hydrocarbons (EPA's Water Quality Criteria, 1976) multiplied by an 
application factor of 0.01 (EPA's 1986 Quality Criteria for Water) and 
divided into the criteria for copper (5.6 <greek-m>g/L) to give a value 
of 0.1. EPA solicits additional information and data related to these 
results and the methodology used to calculate both the POTW removal 
rate and the TWF. EPA also solicits comments on the appropriateness of 
its inclusion of TPH in the cost-effectiveness calculation for this 
proposed rule.
    Table VII.E.1. presents the cost-effectiveness of the OC and CP-IL 
options using TPH data in lieu of the alkanes data. The other options 
considered for industrial laundries wastewater treatment, DAF-IL, and 
Combo-IL (including Combo-IL2Lim), are not presented in this table 
because they remove fewer pollutants at a greater cost. EPA's cost-
effectiveness methodology requires non cost-effective options to be 
removed before incremental cost-effectiveness is calculated, since the 
incremental cost per pound equivalent removed would be negative for the 
next higher option. See the C-E for more details. As the table shows, 
the incremental cost-effectiveness of the proposed option is $108 per 
PE, and the average cost effectiveness of the proposed option is $206 
per PE.

                               Table VII.E.1.--Cost-Effectiveness Analysis Results                              
----------------------------------------------------------------------------------------------------------------
                                          Total annual               Incremental                                
                                   ---------------------------------------------------- Incremental  Average C-E
              Option                             Cost ($Mil.               Cost ($Mil.   C-E $1981)  ($1981) ($/
                                     PE removed     1981)      PE removed     1981)     ($/lb. eq.)    lb. eq.) 
----------------------------------------------------------------------------------------------------------------
OC................................        5,278        $40.3        5,278        $40.3       $7,640       $7,640
CP-IL.............................      407,358         83.7      402,080         43.4          108          206
----------------------------------------------------------------------------------------------------------------

    Table 4-1 in the Cost-Effectiveness Analysis compares the 
incremental cost-effectiveness of this proposed rule with the 
incremental cost-effectiveness of 21 other pretreatment standards that 
EPA has promulgated previously. The table shows that 18 of these were 
more cost-effective on an incremental basis than this proposed rule. 
However, as noted earlier, average (rather than incremental) cost-
effectiveness is generally a more appropriate measure to use in 
comparing the overall cost-effectiveness of one rule to another. Unlike 
incremental cost-effectiveness, average cost-effectiveness is not 
affected by the particular choice of alternative options that were 
considered and rejected. In this proposed rule, the incremental or 
marginal cost-effectiveness is lower than average cost-effectiveness 
because the proposed option (CP) is being compared to the (OC) option 
that costs about half as much as CP but removes only slightly more than 
one percent of the pound equivalents that are removed by the CP option. 
Due to data limitations and time constraints, EPA has not included in 
the Cost-Effectiveness Analysis a comparison of the average cost 
effectiveness of this proposed rule to that of previously promulgated 
rules. Such a comparison may show this rule to be even less cost-
effective relative to other rules than appears from Table 4-1. Care 
should be used in interpreting this comparison, however. Because the 
initial focus of regulatory efforts was on highly polluting 
manufacturing industries, it is not surprising that over time, fewer 
and fewer toxic removals should come at higher and higher costs, as the 
initial less treated, higher pollutant concentration wastewaters are 
addressed and the focus of regulation move increasingly to less 
polluting

[[Page 66203]]

service industries and those which are already regulated.
    EPA also analyzed the cost effectiveness of these same options 
using the alkanes data and not using the TPH toxic weighting factor and 
POTW removal. Under this assumption, the incremental cost effectiveness 
of the proposed option is $1,660 per PE, and its average cost 
effectiveness is $2,664 per PE.
    EPA recognizes that the proposed rule is not very cost-effective. 
However, cost-effectiveness analysis only considers pollutants for 
which a toxic weighting factor has been estimated. Although this 
proposed rule would eliminate over 13 million pounds of toxic and 
nonconventional pollutants to POTWs (See Table IX.C.1), only 1.3 
million pounds of these pollutants are considered in the cost-
effectiveness analysis.
    Furthermore, cost-effectiveness is not a factor to be directly 
considered under the CWA in setting such standards. Elsewhere in this 
preamble, EPA has requested comment on the option of not regulating 
this industry and on whether such a decision would be consistent with 
the CWA.

VIII. Non-Water Quality Environmental Impacts

    As required by sections 304(b) and 306 of the Clean Water Act, EPA 
has considered the non-water quality environmental impacts associated 
with the treatment technology options for the industrial laundries 
industry. Non-water quality impacts are impacts of the proposed rule on 
the environment that are not directly associated with wastewater. Non-
water quality impacts include changes in energy consumption, air 
emissions, and solid waste generation of oil and sludge. In addition to 
these non-water quality impacts, EPA examined the impacts of the 
proposed rule on noise pollution, and water and chemical use. Based on 
these analyses, EPA finds the relatively small increase in non-water 
quality impacts resulting from the proposed rule to be acceptable.

1. Air Pollution

    Industrial laundry facilities generate wastewater that contains 
significant concentrations of organic compounds, some of which are on 
the list of Hazardous Air Pollutants (HAPs) in Title 3 of the Clean Air 
Act Amendments (CAAA) of 1990. Atmospheric exposure of the organic-
containing wastewater may result in volatilization of both volatile 
organic compounds (VOCs) and HAPs from the wastewater. VOCs and HAPs 
are emitted from the wastewater beginning at the point where the 
wastewater first contacts ambient air. Thus, VOCs and HAPs may be of 
concern immediately as the wastewater is discharged from the process 
unit. Emissions occur from wastewater collection units such as process 
drains, manholes, trenches, and sumps, and from wastewater treatment 
units such as screens, equalization basins, DAF and CP units, and any 
other units where the wastewater is in contact with the air.
    EPA believes that air emissions from industrial laundry wastewater 
would be similar before and after implementation of the proposed rule 
because the wastewater from all industrial laundries currently has 
contact with ambient air as it flows to the POTW. At facilities that do 
not currently have treatment on site, the wastewater typically flows 
from the washers to an open or partially open catch basin, then to the 
sewer and on to the POTW, where the wastewater is typically treated in 
open aerated basins or lagoons. Air emissions from the wastewater occur 
as the wastewater flows from the facility to the POTW. At a facility 
with treatment the wastewater would have more contact with air while 
still at the facility as it is treated in open units such as 
equalization basins and CP units prior to flowing through the sewer to 
the POTW. Air emissions from the treated wastewater occur at the 
treatment units at the facility, as well as while the wastewater flows 
to the POTW. Thus, EPA expects that the location of a portion of air 
emissions from industrial laundry wastewater would shift from the POTW 
collection and treatment system to the facility treatment system, but 
EPA believes that the overall amount of air emissions from industrial 
laundries wastewater would not change.
    EPA examined the total air emissions from one industrial laundry's 
untreated wastewater stream assuming all volatile pollutants volatilize 
from that stream. EPA considered whether this total amount of air 
emissions would be acceptable assuming it represented incremental air 
emissions due to the proposed rule. (EPA does not believe that the 
total amount of air emissions, as calculated below, represents 
incremental air emissions because the air emissions would be similar 
before and after implementation of the rule.) EPA estimated that, in 
the worst-case scenario, 14 Mg per year of HAPs would be emitted from 
an industrial laundry's wastewater on an annual basis. Under the CAAA, 
major sources of HAP(s) emissions are defined as having either a total 
emission of 25 Mg per year or higher for the total of all HAP emitted 
by a facility or an emission of 10 Mg per year or higher for a single 
HAPs emitted by a facility.
    Based on the worst-case scenario and this definition industrial 
laundries would not emit HAP(s) to the degree that they would be 
classified as a major source as defined by the CAAA. EPA also believes 
that no adverse air impacts would be expected to occur due to the 
proposed regulations. Thus, because EPA does not expect an overall 
increase in the amount of air emissions as a result of the proposed 
rule and based on EPA's determination of the total emissions from one 
industrial laundry's untreated wastewater, EPA finds the air emissions 
impacts of the proposed rule to be acceptable.

2. Solid Waste Generation

    The proposed regulations are based on the use of CP followed by 
dewatering of the sludge generated from CP. Based on information 
collected in the industrial laundries detailed questionnaires, most 
industrial laundry sludge from CP or DAF treatment systems is disposed 
of in nonhazardous landfills. Based on site visits to industrial 
laundries, EPA has found that some facilities voluntarily dispose of 
their sludge as hazardous waste even though hazardous waste disposal is 
not required by law.
    EPA estimates that the incremental increase in sludge generation 
(not including savings in the volume of sludge generated at POTWs that 
would result from the proposed rule) for the 1,606 facilities in the 
industry covered by the rule would be 74 thousand tons per year of wet 
sludge, or 26,000 tons per year of dry solids. For more details, see 
Chapter 14 of the Development Document. Approximately 430 million tons 
(dry basis) of industrial nonhazardous waste was sent to landfills in 
the U.S. in 1986 (Subtitle D Study Phase I: Report EPA No. 530SW86-
054). This proposed rule would result in only a 0.006% increase in 
sludge generation. Data, from the Waste Treatment Industry Phase II: 
Landfills, suggests that current landfill capacity can accept this 
increase in solid waste generation. Therefore, EPA believes the solid 
waste impacts of the proposed rule are acceptable.

3. Energy Requirements

    EPA estimates that implementation of the proposed regulation would 
result in a net increase in energy consumption for the industrial 
laundries industry. The incremental increase is based on electricity 
used to operate wastewater treatment equipment at facilities that are 
not currently operating treatment

[[Page 66204]]

systems comparable with the proposed CP option.
    EPA estimates that the incremental increase in electricity use for 
the industrial laundries industry as a result of the proposed rule 
would be 76 million kilowatt hours per year. Approximately 2,805 
billion kilowatt hours of electric power were generated in the U.S. in 
1990. The incremental increase in energy use for the industrial 
laundries industry corresponds to 0.0027% of the national energy 
requirements. EPA estimates the incremental energy increase to be a 
small percentage of electricity currently used by the industrial 
laundries industry to operate all washing, drying, and treatment 
equipment. For these reasons, energy impacts of the proposed rule are 
acceptable.

IX. Environmental Benefits Analysis

A. Introduction

    This section describes results of EPA's environmental benefits 
analysis. For more details, see the WQBA.

B. Overview of the Industrial Laundry Industry's Effluent Discharges

    EPA's record indicates that industrial laundry facilities 
nationwide currently discharge to POTWs 4.9 million pounds per year of 
priority and nonconventional pollutants (excluding COD, TOC, and SGT-
HEM), and 35.9 million pounds of HEM. Of the 35.9 million pounds of 
HEM, 13.2 million pounds are SGT-HEM (see Table IX.C.1 for loadings of 
all pollutants). SGT-HEM, consisting of polycyclic aromatic 
hydrocarbons, are components of HEM; SGT-HEM is being used as an 
indicator for priority and nonconventional pollutants.
    For this rulemaking, EPA evaluated the environmental benefits of 
controlling the pollutant discharges from industrial laundries 
facilities to POTWs through national analyses of the primary treatment 
options: OC, DAF-IL, CP-IL, and Combo-IL. Since EPA determined that the 
OC option removed smaller amounts of organics than the other options, 
EPA did not perform a separate environmental assessment for this 
option.
    Discharges of priority and nonconventional pollutants into 
freshwater and estuarine ecosystems may alter aquatic habitats, 
adversely affect aquatic biota, and adversely impact human health 
through the consumption of contaminated fish and water. Furthermore, 
these pollutants may interfere with POTW operations through 
contamination of sewage sludge, thereby restricting the method of 
disposal, or through inhibition of the microbes present in activated 
sewage sludge. Many of the pollutants of concern from industrial 
laundries have at least one toxic effect (human health carcinogen and/
or non-cancer toxicant or aquatic toxicant). In addition, many of these 
pollutants bioaccumulate in aquatic organisms and persist in the 
environment.

C. Benefits of the Proposed Rule

    EPA estimates that the proposed standards would significantly 
reduce pollutant discharges to POTWs, as shown by the loadings 
estimates in Table IX.C.1 for five categories of pollutants. Note that 
there is significant overlap among some of the pollutants listed. These 
five categories were segregated in order to minimize the double 
counting of pollutants within each category, although some overlap 
remains (e.g., some TOC is also measured as COD). It is not appropriate 
to sum loadings across categories as there is overlap between 
categories, for example, BOD and COD. Reductions in industrial laundry 
pollutant discharges to POTWs would result in a number of benefits, 
including: reduced cost of disposal or use of municipal sewage sludge 
that is affected by industrial laundry pollutant discharges; and 
reduced occurrence of biological inhibition of activated sludge at 
POTWs. Resulting reductions in discharges from POTWs to surface waters 
of the US would have additional benefits: improved quality of 
freshwater, estuarine, and marine ecosystems; increased survivability 
and diversity of aquatic life and terrestrial wildlife; and reduced 
risks to human health through consumption of fish or water taken from 
affected waterways.

            Table IX.C.1.--Summary of Estimated Pollutant Loadings from Industrial Laundries to POTWs           
                                               [Natioal Estimates]                                              
----------------------------------------------------------------------------------------------------------------
                                                                                       Other          Other     
                                       Priority and          HEM        SGT-HEM    conventional  nonconventional
        Regulatory option            nonconventional     (million lb/ (million lb/  pollutants      pollutants  
                                        pollutants         yr) \2\        yr)      (million lb/  (million lb/yr)
                                    \1\(million lb/yr)                                yr) \3\          \4\      
----------------------------------------------------------------------------------------------------------------
Baseline........................               4.9              35.9         13.2           176            346  
DAF-IL..........................               2.9              15.9          2.6           137            252  
CP-IL...........................               2.9              15.2          2.4           139            258  
Combo-IL........................               3.1              15.9          2.6           139            258  
----------------------------------------------------------------------------------------------------------------
\1\ Excludes Total Organic Carbon (TOC), Silica Gel Treated N-Hexane Extractable Material (SGT-HEM), and        
  Chemical Oxygen Demand (COD).                                                                                 
\2\ Includes the pounds of SGT-HEM.                                                                             
\3\ Includes Biological Oxygen Demand (BOD) and Total Suspended Solids (TSS).                                   
\4\ Includes Chemical Oxygen Demand (COD) and Total Organic Carbon (TOC).                                       

    EPA assessed the benefits from the expected pollutant reductions in 
three broad classes: human health, ecological, and economic 
productivity benefits. Each class is composed of a number of more 
narrowly defined benefit categories. EPA expects that benefits will 
accrue to society in all of these categories. However, because of data 
limitations and the understanding of how society values some of these 
benefit categories, EPA was not able to analyze all of these categories 
with the same level of rigor. At the highest level of analysis, EPA was 
able to quantify the expected effects for some benefit categories and 
attach monetary values to them. Benefit categories for which EPA 
developed dollar estimates include reduction in cancer risk from fish 
consumption and increased value of recreational fishing opportunities, 
reduced risk to aquatic life, and other non-use benefits. For other 
benefit categories, reduced risk of non-cancer toxic effects to human 
health from consumption of fish and drinking water; and reduced costs 
of biological inhibition at POTWs, EPA was able to quantify expected 
effects but not able to estimate monetary values for them. Finally, 
there is an additional non-quantified, non-monetized benefit

[[Page 66205]]

categories of enhanced water-dependent recreation other than fishing. 
Note that benefits to wildlife and to threatened or endangered species; 
and biodiversity benefits are often included as non-quantified benefits 
but in the current analysis an attempt has been made to monetize them.

D. Human Health Benefits

    EPA analyzed the following measures of health-related benefits from 
the proposed rule in the WQBA: reduced cancer risk from fish 
consumption; reduced risk of non-cancer toxic effects from fish and 
water consumption; and, reduced occurrence of in-waterway pollutant 
concentrations in excess of human health-based ambient water quality 
criteria (AWQC) or in excess of documented toxic effect levels for 
those chemicals for which EPA has not published water quality criteria. 
Of these measures, EPA was able to monetize only the reduction in 
cancer risk.
    EPA first predicted steady-state, in-stream pollutant 
concentrations by assuming complete immediate mixing with no loss from 
the system. Of the 172 in-scope respondent facilities, EPA was unable 
to include 33 facilities in the benefits analysis because of incomplete 
information on the POTWs to which these sample facilities discharge. 
The remaining 139 facilities are discharging to 118 POTWs that in turn 
discharge to 113 water bodies (88 rivers/streams, 21 bays/estuaries, 
and 4 lakes).
    EPA then extrapolated the environmental assessment results for the 
sample facilities to the entire regulated population of industrial 
laundry facilities nationwide (approximately 1,606 facilities 
discharging to 1,178 POTWs). For this extrapolation, each sample 
facility received a sample weight based on the varying number of 
additional facilities of the same approximate size engaged in similar 
activities under similar economic conditions. EPA then estimated the 
change in aggregate cancer risk through consumption of fish in 
waterbodies where the identified POTWs discharge. EPA predicted 
pollutant concentrations in fish by using the in-stream pollutant 
concentration based on modeled POTW effluent concentrations due to 
pass-through, and pollutant-specific bioconcentration factors that 
account for the degree to which the pollutant in the water will be 
concentrated in fish tissue. EPA used data on licensed fishing 
populations by state and county, presence of fish advisories, fishing 
activity rates, and average household size to estimate the exposed 
population of recreational and subsistence anglers and their families 
that would benefit from reduced pollutant concentrations in fish. EPA 
used fish consumption rates for recreational and subsistence anglers to 
estimate the change in cancer risk among these populations.
    For the proposed rule, the benefits associated with reduced 
incidence of cancer from fish consumption are estimated to range from 
$0.089 million to $0.50 million per year ($1997), depending on the 
choice of willingness-to-pay value that is used to value the avoided 
cancer events and depending on the treatment option considered. For 
combined recreational and subsistence angler household populations, EPA 
projects that the treatment options would eliminate approximately 0.04 
cancer cases per year from a baseline of about 0.1 cases estimated at 
the current discharge level (see Table IX.D.1). EPA valued the reduced 
cancer cases using estimated willingness-to-pay values for avoiding 
premature mortality. The values used in this analysis are based on a 
range of values recommended by EPA's Office of Policy Analysis from a 
review of studies quantifying individuals' willingness to pay to avoid 
increased risks to life. In 1997 dollars, these values range from $2.4 
million to $12.5 million per statistical life saved.

  Table IX.D.1.--Estimated Annual Avoided Cancer Cases From Freshwater  
                            Fish Consumption                            
------------------------------------------------------------------------
                                                              Number of 
                                                                cases   
                     Regulatory option                         avoided  
                                                              (National 
                                                              estimates)
------------------------------------------------------------------------
Baseline...................................................           --
CP-IL......................................................         0.04
DAF-IL.....................................................         0.04
Combo-IL...................................................         0.04
------------------------------------------------------------------------

    To estimate the reduced risk of non-cancer health effects (e.g., 
systemic effects, reproductive toxicity, and developmental toxicity) 
from fish and water consumption for each treatment option, EPA used 
risk reference doses, in conjunction with in-stream pollutant 
concentrations, to calculate a hazard score. A value of one or greater 
for a hazard score indicates the potential for non-cancer hazards to 
occur. In this analysis, EPA analyzed only pollutant loadings from 
industrial laundries to particular water bodies, i.e., EPA did not 
consider background loadings from other sources. The hazard score, 
which EPA calculated by summing over all pollutants, was less than one 
for baseline conditions as well as for all treatment options.
    EPA also evaluated reduced occurrence of in-waterway pollutant 
concentrations in excess of human-health based AWQC. At current 
discharge levels, in-stream concentrations of two pollutants--bis(2-
ethylhexyl)phthalate and tetrachloroethene--are projected to exceed 
human health criteria (developed for consumption of water and 
organisms) in 9 receiving streams nationwide (see Table IX.D.2) for a 
total of 17 exceedences. The proposed PSES regulated discharge levels 
would eliminate the occurrence of pollutant concentrations in excess of 
the human health-based AWQCs in 7 of 9 affected streams.

 Table IX.D.2. Discharge Reaches with Pollutant Concentrations Exceeding
 AWQC Limits for Protection of Human Health, and Reductions Achieved by 
                           Regulatory Options                           
------------------------------------------------------------------------
                                                             Number of  
                                                           reaches with 
                                                          concentrations
                                                             exceeding  
                                                           health-based 
                    Regulatory option                        AWQCs for  
                                                             water and  
                                                             organisms  
                                                             (national  
                                                              basis)    
------------------------------------------------------------------------
Baseline................................................               9
CP-IL...................................................               2
DAF-IL..................................................               2
Combo-IL................................................               2
------------------------------------------------------------------------

E. Ecological Benefits Valued on the Basis of Enhanced Recreational 
Fishing Opportunities

    EPA analyzed one measure of ecological benefits from the proposed 
regulation: reduced occurrence of in-waterway pollutant concentrations 
in excess of acute and chronic AWQCs that protect aquatic life. EPA 
used the findings from the analysis of reduced occurrence of pollutant 
concentrations in excess of both EPA's ecological and human health 
AWQCs to assess improvements in recreational fishing habitats and, in 
turn, to estimate a monetary value for the enhanced recreational 
fishing opportunities.
    To assess aquatic life benefits, EPA estimated the effect of 
facility discharges of regulated pollutants on pollutant concentrations 
in affected waterways. EPA compared the estimated concentrations on a 
baseline and post-compliance basis, with the Agency's AWQCs for acute 
and chronic exposure impacts to aquatic life. Pollutant concentrations 
in excess of these values indicate potential impacts to aquatic life. 
EPA's analysis found that

[[Page 66206]]

78 stream reaches exceed chronic AWQC values at baseline discharge 
levels for a total of 93 exceedences (see Table IX.E.1). Under three 
options, EPA estimates that the proposed regulation would eliminate 
concentrations in excess of the chronic AWQC values for aquatic life in 
66 affected reaches. EPA predicts that no pollutants under current or 
proposed discharge levels would exceed acute AWQC.
    EPA expects that society will value improvements in aquatic species 
habitat, resulting from the reduction of pollutant concentrations in 
excess of the chronic AWQC values, by a number of mechanisms. For this 
analysis, EPA estimated a partial monetary value of ecological 
improvements based on the value of enhanced recreational fishing 
opportunities. Specifically, the elimination of pollutant 
concentrations exceeding AWQC limits for protection of aquatic species 
and human health is expected to generate benefits to recreational 
anglers. Such benefits are expected to manifest as increases in the 
value of the fishing experience per day fished or the number of days 
anglers subsequently choose to fish the cleaner waterways. These 
benefits, however, do not include all of the benefits that are 
associated with improvements in aquatic life. For example, recreational 
benefits do not capture the benefit of increased assimilative capacity 
of a receiving waterbody, improvements in the taste and odor of the 
instream flow, or improvements to other recreational activities such as 
swimming and wildlife observation that may be enhanced by improved 
water quality.

 Table IX.E.1.--Discharge Reaches with Pollutant Concentrations Exceeding Chronic AWQC Limits for Protection of 
                         Aquatic Species, and Reductions Achieved by Regulatory Options                         
----------------------------------------------------------------------------------------------------------------
                                                                                     Number of                  
                                                                     Number of     reaches with        Total    
                                                                    pollutants    concentrations  exceedences of
                        Regulatory option                          estimated to      exceeding     chronic AWQC 
                                                                  exceed chronic   chronic AWQC       limits    
                                                                    AWQC limits       limits                    
----------------------------------------------------------------------------------------------------------------
Baseline........................................................               3              78              93
CP-IL...........................................................               2              12              19
DAF-IL..........................................................               2              12              19
Combo-IL........................................................               2              12              19
                                                                                                                
  None of the acute AWQC limits were estimated to be exceeded in the baseline.                                  
----------------------------------------------------------------------------------------------------------------

    EPA calculated the value of enhanced recreational fishing 
opportunities from the proposed rule based on the concept of 
achievement of a contaminant-free fishery. For this analysis, EPA 
assumed for an affected waterway that elimination of all instances in 
which industrial laundry pollutant concentrations exceed AWQCs that 
protect human health or aquatic species may be interpreted as 
approximately equivalent to the achievement of a contaminant-free 
fishery. EPA first estimated a baseline value of those fisheries in 
which all instances of industrial laundry pollutant concentrations in 
excess of AWQCs are estimated to be eliminated by regulation. This 
value is based on the number of annual fishing days at the affected 
waterway and the value of a fishing day. Second, EPA estimated the 
value of improving the water quality in these fisheries based on the 
incremental percentage increase in value to anglers of freeing the 
fishery of contaminants (Lyke, 1992). Estimates of the increase in 
value of recreational fishing to anglers range from $1.9 million to 
$6.7 million annually ($1997) for all three treatment options, 
depending on the baseline value of the fishery and the estimated 
incremental benefit values associated with freeing the fishery from 
contaminants. This analysis does not account for sources of pollutant 
contamination other than industrial laundries or for pollutants not 
discharged by industrial laundries.
    EPA also estimated non-market non-use benefits. These non-market 
non-use benefits are not associated with current use of the affected 
ecosystem or habitat; instead, they arise from (1) the realization of 
the improvement in the affected ecosystem or habitat resulting from 
reduced effluent discharges and (2) the value that individuals place on 
the potential for use sometime in the future. Because nonuse value is a 
sizable component of the total economic value of water resources, EPA 
estimated change in nonuse values in proportion to recreational fishing 
benefits. For this analysis, as was done in the Great Lakes Water 
Quality Guidance, EPA conservatively estimated that nonuse benefits 
compose one-half of recreational fishing benefits. For all three 
treatment options, this method yields non-use benefits attributable to 
the proposed regulation ranging from $0.94 million to $3.4 million 
($1997) per year.

F. Benefits From Reduced Cost of Sewage Sludge Disposal and Reduced 
Incidence of Inhibition

    EPA expects that reduced effluent discharges from the industrial 
laundries industry would also yield economic productivity benefits. For 
this analysis, EPA estimated productivity benefits for two benefit 
categories: (1) reduced pollutant contamination of effluent discharged 
by industrial laundry facilities to sewage treatment systems and (2) 
associated savings in sewage sludge use or disposal costs; and, a 
reduction in biological inhibition of activated sludge. For the former 
category, EPA examined the following: (1) whether industrial laundry 
baseline discharges would prevent POTWs from being able to meet the 
metals concentration limits required for certain lower cost sewage 
sludge use or disposal practices--beneficial land application and 
surface disposal; and (2) whether limitations on the selection of 
management practices would be removed under regulatory options.
    EPA has promulgated regulations establishing standards for sewage 
sludge when it is applied to the land, disposed of at dedicated sites 
(surface disposal), and incinerated (40 CFR Part 503). In addition, EPA 
has also established standards for sewage sludge when it is disposed of 
in municipal solid waste landfills (40 CFR Part 258). For land 
application, the regulations include three sets of pollutant limits for 
ten metals: (1) Pollutant Ceiling Limits, which all land applied sewage 
sludge must meet with certain limitations, (2) Cumulative Pollutant 
Loading Limits (which limit the cumulative amount of metal which may be 
applied to the soil) and (3) more stringent Pollutant Concentration 
Limits, which provide more favorable terms for land

[[Page 66207]]

application of sewage sludge. Sewage sludge that meets only the less 
stringent Ceiling Limits may be applied to land; however, the use of 
the sewage sludge is subject to pollutant loading limits, which 
restrict the quantity of sewage sludge that may be applied to a given 
site. If the sewage sludge meets the more stringent Concentration 
Limits, it is considered high quality sewage sludge and is not subject 
to the cumulative limits on land application and other regulatory 
requirements in the land application subpart, i.e., general conditions 
and certain management practices, such as more extensive recordkeeping 
requirements. Thus, disposing of high quality sewage sludge costs less 
than disposing of low quality sewage sludge that meets only the ceiling 
concentrations for metals.
    EPA estimated sewage sludge concentrations of ten metals for sample 
facilities under baseline and post-regulatory options discharge levels. 
EPA compared these concentrations with the relevant metal concentration 
limits for the following sewage sludge management options: Land 
Application-High (Concentration Limits), Land Application-Low (Ceiling 
Limits), and Surface Disposal. In the baseline case, EPA estimated that 
concentrations of one pollutant (lead) at 10 POTWs would fail the Land 
Application-High limits while meeting the Land Application-Low limits. 
EPA estimated that no POTWs would fail any of the Surface Disposal 
limits. Under all three options, EPA estimated that all 10 POTWs would 
meet the Land Application-High limits and that an estimated 6,200 dry 
metric tons (DMT) of annual disposal of sewage sludge would newly 
qualify for beneficial use under the Land Application-High limits. EPA 
estimated the reduced time required for record-keeping for sewage 
sludge meeting the more stringent Land Application-High criteria, and, 
on this basis, developed a partial estimate of monetary benefits from 
reduced metals contamination of sewage sludge. For all three options, 
the proposed regulation is expected to result in benefits from sewage 
sludge quality improvements of $0.006 million to $0.01 million ($1997) 
annually. (EPA notes that the rule would also generate additional 
metals-contaminated sludge at industrial laundries, but has already 
included the costs of disposing of this sludge in the compliance costs 
of the rule.)
    EPA estimated inhibition of POTW operations by comparing predicted 
POTW influent concentrations to available inhibition levels for 45 
pollutants. At current discharge levels, EPA estimates POTW 
concentrations of lead exceed biological inhibition criteria at two 
POTWs. Under all treatment options, inhibition problems are eliminated.
    EPA based the POTW inhibition and sludge values upon engineering 
and health estimates contained in guidance or guidelines published by 
EPA and other sources. Because the values used in this analysis are 
not, in general, regulatory values, EPA did not base the proposed 
pretreatment discharge standards directly on this approach. However, 
the values and methodology used in this analysis are helpful in 
identifying potential benefits for POTW operations and sludge disposal 
that may result from the compliance with proposed pretreatment 
discharge requirements.

G. Discussions With POTW Operators and Pre-Treatment Coordinators

    To understand the frequency and characteristics of problems to 
POTWs resulting from industrial laundry discharges, EPA obtained 
information from discussions with EPA regional staff, and with POTW 
operators representing 40 POTWs that receive discharges from industrial 
laundries. Of these 40 POTWs, 11 encounter some difficulty resulting 
from industrial laundry discharges either currently or in the recent 
past. A number of the other POTWs that encountered problems with 
industrial laundry discharges in the past have established local limits 
applicable to laundries to address those problems. Problems encountered 
by POTWs, as reported by the operators, included: oil and grease, which 
may clog pipes and pump stations, inhibit activated sludge and 
otherwise inhibit POTW operations; metals, which may also inhibit 
activated sludge; and pH fluctuations, which can injure POTW workers 
and deteriorate concrete pipes and manholes. The Water Quality Benefits 
Analysis notes that there are solutions available to POTWs for these 
problems, although they do entail costs to the POTWs. A further 
analysis of three case studies do not document substantial problems 
from industrial laundries discharges that would be reduced by 
regulation.

X. Related Acts of Congress, Executive Orders, and Agency 
Initiatives

A. Regulatory Flexibility Act (RFA) as Amended by the Small Business 
Regulatory Enforcement Fairness Act (SBREFA)

    Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
as amended by SBREFA, EPA generally is required to conduct an initial 
regulatory flexibility analysis (IRFA) describing the impact of the 
proposed rule on small entities. Under section 605(b) of the RFA, if 
the Administrator certifies that the rule will not have a significant 
economic impact on a substantial number of small entities, EPA is not 
required to prepare the IRFA.
    EPA conducted an IRFA pursuant to section 603(b) of the RFA 
addressing:
    <bullet> The need for, objectives of, and legal basis for the rule;
    <bullet> A description of, and where feasible, an estimate of the 
number of small entities to which the rule would apply;
    <bullet> The projected reporting, recordkeeping, and other 
compliance requirements of the rule, including an estimate of the 
classes of small entities that would be subject to the rule and the 
types of professional skills necessary for preparation of the report or 
record;
    <bullet> An identification, where practicable, of all relevant 
Federal rules which may duplicate, overlap or conflict with the 
proposed rule;
    <bullet> A description of any significant regulatory 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. Consistent with the stated 
objectives of the CWA, the analysis discusses significant alternatives 
such as--
    (1) establishing differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities;
    (2) clarification, consolidation, or simplification of compliance 
and reporting requirements under the rule for such small entities;
    (3) the use of performance rather than design standards;
    (4) an exclusion from coverage of the rule, or any part thereof, 
for such small entities. The IFRA is presented in Chapter 9 of the EA. 
Based on the IRFA and other factors, this proposed rule incorporates an 
exclusion to eliminate disproportionate impacts on small businesses and 
also reduces the number of small businesses affected by the proposed 
rule.
    Pursuant to the RFA as amended by SBREFA, EPA convened a Small 
Business Advocacy Review Panel. The Panel is comprised of 
representatives from three federal agencies: EPA, the Small Business 
Administration, and the Office of Management and Budget. The Panel 
reviewed materials EPA prepared in connection with the RFA, and 
collected the advice and recommendations of small entity 
representatives. For this proposed rule, the small entity 
representatives

[[Page 66208]]

included owners of small industrial laundries and trade association 
representatives. The Panel prepared a report (available in the public 
docket for this rulemaking) that summarizes the outreach to small 
entities and the comments submitted by the small entity 
representatives. The Panel's report also presents their findings on 
issues related to the elements of an IRFA.
    As part of the findings, the Panel recommended that the Agency 
evaluate other thresholds for excluding small businesses, in addition 
to the proposed one million pounds of total production and 255,000 
pounds of shop and/or printer towels. Examples of alternative 
thresholds that the Panel recommended EPA solicit comment on are three 
to five million pounds of total production with shop and/or printer 
towel thresholds between 255,000 and 500,000 pounds.
    EPA evaluated a total of 17 threshold combinations as possible 
bases for excluding small businesses. The analysis of 13 threshold 
combinations are presented in a table in the final Panel report. In 
response to the recommendations in the Panel report, EPA analyzed 4 
additional threshold combinations. The results of all 17 threshold 
combinations are found in Appendix E of the EA.
    The thresholds (i.e., exemption cutoffs) ranged from one million to 
five million pounds of production, both with and without cutoffs 
related specifically to shop and/or printer towels. The shop and/or 
printer towel cutoffs ranged from 255,000 to 500,000 pounds. In 
addition, EPA analyzed threshold cutoffs involving only ``heavy 
production,'' defined as shop and/or printer towels, mops, fender 
covers, and filters, and excluding all small businesses (as defined by 
revenues less than $10.5 million per year).
    Results of these higher threshold analyses suggest that, by using 
the three to five million pounds of production levels, between 15 and 
34 percent of the pollutant removals would be excluded from regulation. 
As noted earlier, with EPA's proposed exclusion, the excluded 
facilities would account for less than 3 percent of the pollutant 
removals from the waters of the U.S. than would occur if the proposed 
rule were implemented without the exclusion. Furthermore, with the 
higher thresholds, approximately 600 to 1000 facilities (depending on 
the actual threshold) would be excluded from coverage by the proposed 
regulation, while closures resulting from the proposed rule would be 
reduced by only two facilities. Costs for the proposed rule could be 
reduced by up to 60 percent with higher thresholds and cost per toxic 
pound equivalent removed could also be reduced by up to 40 percent. See 
the Cost-Effectiveness Analysis. The total amount of removals excluded 
under the highest threshold considered (about 150,000 PE), while a 
significant share of potential removals from the industrial laundries 
industry, is small compared to removals by other effluent guidelines 
for primary manufacturing industries. The SBREFA Panel also noted the 
statement by one of the small entity representatives that the number of 
small facilities has declined since EPA surveyed the industry in 1993. 
If this is true, it would mean that both the cost savings and the 
amount of potential removals excluded for any particular small business 
exclusion would be less than estimated. A table summarizing the results 
of the 17 threshold analyses is contained in Appendix E of the EA and a 
table summarizing the results of the original 13 threshold analyses is 
contained in the Panel report. The Agency solicits comments on these 
alternative exclusion levels as well as the exclusion level proposed 
today.

B. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.''
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is a ``significant regulatory action''. As 
such, this action was submitted to OMB for review. Changes made in 
response to OMB suggestions or recommendations will be documented in 
the public record.

C. Unfunded Mandates Reform Act (UMRA)

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this proposed rule would contain a Federal 
mandate that may result in expenditures of $100 million or more for the 
private sector in any one year. Accordingly, EPA has prepared the 
written statement required by section 202 of the UMRA. This statement 
is contained in the EA for the rule and is summarized below. EPA has 
determined that this rule contains no regulatory requirements that 
might significantly or uniquely affect small governments and thus this 
rule is not subject to the requirements of section 203 of UMRA. 
Nevertheless, EPA has consulted with state and local governments as 
described in Section III of this preamble.

[[Page 66209]]

    EPA prepared several supporting analyses for the proposed rule. 
Throughout this preamble and in the supporting analyses, EPA has 
responded to the UMRA section 202 requirements. As anticipated by OMB, 
most considerations with respect to costs, benefits, and regulatory 
alternatives are addressed in the EA, which is summarized in Sections 
VII and IX of this preamble and presented in detail in Section Ten of 
the EA. A very brief summary follows.
    The statutory authority for this proposal is found in multiple 
sections of the CWA (see section I of this preamble). In part, these 
sections of the CWA authorize EPA to issue standards to address 
effluent discharges.
    EPA prepared a qualitative and quantitative cost-benefit assessment 
of the federal requirements imposed by today's proposed rule. In large 
part, the private sector, not other governments, will incur the costs. 
Specifically, the costs of this federal mandate are compliance costs to 
be borne by the regulated industrial laundry facilities. In addition, 
although some States and local governments will incur costs to 
implement standards, these costs to governments will not exceed the 
thresholds established by UMRA and in general, these standards will 
make it easier for POTWs to establish limits on discharges to POTWs.
    EPA estimates that the total annualized costs for the private 
sector to comply with the federal mandate are $93.9 million (post-tax)/
$136.4 million (pre-tax). The mandate's benefits are primarily in the 
areas of reduced health risk and improved water quality. The EA 
describes, qualitatively, such benefits. The analysis also quantifies a 
portion of the benefits and monetize a subset of these benefits. EPA 
estimates that annual monetized benefits would be $2.9 to $10.3 
million.
    EPA does not believe that there will be any disproportionate 
budgetary effects of the rule on any particular areas of the country, 
particular types of communities, or particular industry segments. EPA's 
basis for this finding is the analysis of economic impacts, which is 
summarized in section VII of the preamble and in the EA. A key feature 
of the analysis is the estimation of financial impacts for each 
facility incurring compliance costs. EPA considered the costs, impacts 
and other effects and found no disproportionate budgetary effects on 
any specific regions or individual communities. The EA also describes 
the rule's effects on the national economy in terms of effects on 
productivity, economic growth, and international competitiveness; EPA 
found such effects to be minimal.
    For each regulatory decision in today's proposal, EPA believes it 
has selected the ``least costly, most cost-effective, or least 
burdensome alternative'' that achieves the objective of the rule. This 
satisfies the section 205 of the UMRA. Some, including members of the 
SBREFA panel, have suggested that EPA consider other options including 
no regulation or higher thresholds for the small business exclusion and 
EPA is soliciting comments on those alternatives. EPA believes, 
however, that the proposed option appropriately reflects what is 
economically achievable for the reasons elsewhere discussed in this 
preamble.

D. Paperwork Reduction Act

    The proposed industrial laundries pretreatment standards contain no 
new information collection activities beyond that which is already 
required in 40 CFR Part 403, and therefore, no information collection 
request will be submitted to OMB for review in compliance with the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

E. National Technology Transfer and Advancement Act

    Under section 12(d) of the National Technology Transfer and 
Advancement Act, the Agency is required to use voluntary consensus 
standards in its regulatory activities unless to do so would be 
inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, business practices, 
etc.) that are developed or adopted by voluntary consensus standard 
bodies. Where available and potentially applicable voluntary consensus 
standards are not used by EPA, the Act requires the Agency to provide 
Congress, through the Office of Management and Budget, an explanation 
of the reasons for not using such standards. This section summarizes 
EPA's response to the requirements of the NTTAA for the analytical test 
methods promulgated as part of today's effluent limitations guidelines 
and standards. EPA performed literature searches to identify any 
analytical methods from industry, academia, voluntary consensus 
standard bodies and other parties that could be used to measure the 
analytes in today's proposed rulemaking. The results of this search 
formed the basis for EPA's analytical method development and validation 
in support of this proposed rulemaking.
    EPA's analytical test method development is consistent with the 
requirements of the NTTAA. Although the Agency initiated data 
collection for these effluent guidelines many years prior to enactment 
of the NTTAA, traditionally, analytical test method development has 
been analogous to the Act's requirements for consideration and use of 
voluntary consensus standards.
    The proposed rule would require dischargers to monitor for SGT-HEM, 
Copper, Lead, Zinc, Bis (2-Ethylhexyl) Phthalate, Ethylbenzene, 
Naphthalene, Tetrachloroethene, Toluene, m-Xylene, and o-&p-Xylene. 
Except for SGT-HEM and Xylenes, methods for monitoring these pollutants 
are specified in tables at 40 CFR Part 136. When available, methods 
published by voluntary consensus standards bodies are included in the 
list of approved methods in these tables. Specifically, voluntary 
consensus standards from the American Society for Testing and Materials 
(ASTM) and from the 18th edition of Standard Methods (published jointly 
by the American Public Health Association, the American Water Works 
Association and the Water Environment Federation) are approved for 
Copper, Lead and Zinc. In addition, USGS methods are approved for these 
three inorganic pollutants. Voluntary consensus standards from the 18th 
edition of Standard Methods are also approved for Bis (2-Ethylhexyl) 
Phthalate, Ethylbenzene, Naphthalene, Tetrachloroethene, and Toluene.
    For SGT-HEM, EPA is proposing to use EPA Method 1664. This method 
was proposed for promulgation in 40 CFR Part 136 on January 23, 1996 
(61 FR 1730). Method 1664 was developed by EPA to replace previously 
used gravimetric procedures (for determination of oil and grease and 
total petroleum hydrocarbons) that employed Freon-113, as part of EPA's 
efforts to reduce the dependency on the use of chlorofluorocarbons 
pursuant to Title VI of the Clean Air Act. EPA is unaware of the 
existence of an appropriate non-Freon method from a voluntary consensus 
standards body.
    For the Xylenes, EPA proposes to use EPA Methods 1624 and 624 which 
are promulgated at 40 CFR Part 136. These analytical methods were used 
in data collection activities in support of today's proposed 
limitations although the xylenes are not specified as analytes in the 
methods. EPA has not identified any methods from a voluntary consensus 
standards body that could be used to measure these analytes.
    EPA requests comments on the discussion of NTTAA, on the

[[Page 66210]]

consideration of various voluntary consensus standards, and on the 
existence of other voluntary consensus standards that EPA may not have 
found.

XI. Related Rulemakings

A. Office of Solid Waste (OSW) Activities Related to This Effort

    Solvent-contaminated industrial shop towels have been a 
longstanding issue within the Resources Conservation and Recovery Act 
(RCRA) program. As mentioned earlier, a free liquids inspection policy 
exists in the industry. The industrial laundry trade association also 
has established guidance for industrial laundries and their customers 
to use in the management of solvent-contaminated shop towels--foremost 
being that the industrial laundry not accept any shop towels bearing 
free liquids and their customers use a collection system or other 
process to remove any free liquids. OSW is currently collecting data to 
better understand the use and management of both disposable and 
reusable solvent-contaminated industrial shop towels. The objective of 
this range-finding effort is to assist the Agency in determining 
whether the Agency's rules and policies should be modified to address 
current problems with the regulation of these materials. Questions 
being addressed in this study include:
Site Visits
    1. What are the demographics of industry using solvents and shop 
towels/wipers; i.e., type of industry, size of firm, Material Safety 
Data Sheets, type of wipers used, number of wipers used monthly or 
annually, range of solvent amounts put on wiper, amount of solvent used 
monthly or annually, RCRA regulatory status [Small Quantity Generator 
(SQG)/Large Quantity Generator(LQG)], other environmental permits, 
removal technology utilized, material disposition (municipal landfill, 
laundry, incineration, etc.), etc.
    2. What is the variability of solvent amounts placed on shop 
towels?
    3. What is the variability of solvent remaining on shop towels 
immediately after usage and after 18-24 hours? How were shop towels 
stored to derive results? What factors explain low evaporation rates?
    4. What is the variability of solvents in usage? How often are 
``high risk'' solvents used, at what percentage?
    5. Does percolation occur during storage? What factors might 
influence or explain any percolation seen?
    6. What removal technologies were used in the site-visits? What are 
their removal efficiencies?
    7. How are shop towels managed after usage? Open containers/closed 
containers/placed on shelves, etc.
Lab results
    8. What are the absorbability rates for different types of shop 
towels? What factors explain these findings?
    9. What were the removal efficiencies for different types of shop 
towels and solvents? What can we conclude in terms of variability or 
consistency? What factors might explain these results?
    10. What were the evaporation rates we found for different types of 
solvents and shop towels? What factors help explain these results?
    11. What were the percolation rates we found in our experiments? 
What were the experiments we conducted? What factors might explain 
results?
Risks
    12. What are the relative risks to the air, ground water and 
surface water for the solvent constituents? What was the methodology 
used to derive these results?
    13. Based upon the above analysis, are there solvent constituents 
that deserve further analysis to clearly determine whether they pose 
little or no risk to human health and the environment? Are there 
solvent constituents that we should clearly discourage?

XII. Regulatory Implementation

A. Upset and Bypass Provisions

    A ``bypass'' is an intentional diversion of wastestreams from any 
portion of a treatment facility in an emergency situation. An ``upset'' 
is an exceptional incident in which there is unintentional and 
temporary noncompliance with technology-based permit effluent 
limitations because of factors beyond the reasonable control of the 
permittee. EPA's regulations for indirect dischargers concerning 
bypasses and upsets are set forth at 40 CFR 403.16 and 403.17.

B. Variances and Modifications

    The CWA requires application of the pretreatment standards 
established pursuant to sections 304 and 307 to all indirect 
dischargers. However, the statute provides for the modification of 
these national requirements in a limited number of circumstances. 
Moreover, the Agency has established administrative mechanisms to 
provide an opportunity of relief from the application of national 
pretreatment standards for categories of existing sources.
    1. Fundamentally Different Factors (FDFs) Variances
    EPA may develop pretreatment standards different from the otherwise 
applicable requirements for existing sources if an existing facility is 
fundamentally different with respect to factors considered in 
establishing the standards applicable to the individual facility. Such 
a modification is known as a FDF variance. See 40 CFR 403.13. 
Dischargers subject to PSNS are not eligible for an FDF variance.
    In the Water Quality Act of 1987, Congress added new section 301(n) 
of the Act to authorize modification of the otherwise applicable BAT 
effluent limitations or categorical pretreatment standards for existing 
sources if a facility is fundamentally different with respect to the 
factors specified in 403 (other than costs) from those considered by 
EPA in establishing the effluent limitations or pretreatment standards. 
Section 301(n), also defined the conditions under which EPA may 
establish alternative requirements. Under section 301(n), an 
application for approval of FDF variance must be based solely on (1) 
information submitted during the rulemaking raising the factors that 
are fundamentally different or (2) information the applicant did not 
have the opportunity to submit. The alternate limitation or standard 
must be no less stringent than justified by the difference and not 
result in markedly more adverse non-water quality environmental impacts 
than the national limitation or standard.
    EPA regulations at 40 CFR Part 403, authorizing the Regional 
Administrators to establish alternative standards, further detail the 
substantive criteria used to evaluate FDF variance requests for 
existing dischargers to POTWs. Thus, 40 CFR 403.13(d) identifies six 
factors (e.g., volume of process wastewater, age and size of a 
discharger's facility) that may be considered in determining if a 
facility is fundamentally different. The Agency must determine whether, 
on the basis of one or more of these factors, the facility in question 
is fundamentally different from the facilities and factors considered 
by the EPA in developing the nationally applicable pretreatment 
standards. The regulation also lists four other factors (e.g., 
infeasibility of installation within the time allowed or a discharger's 
ability to pay) that may not provide a basis for an FDF variance. In 
addition, under 40 CFR 403.13(c)(2), a request for limitations less 
stringent than the national limitation may be approved only if 
compliance with the pretreatment standards would result in either (a) a 
removal cost wholly out of proportion to the removal cost considered 
during development of the

[[Page 66211]]

standards, or (b) a non-water quality environmental impact (including 
energy requirements) fundamentally more adverse than the impact 
considered during development of the standards.
    The legislative history of section 301(n) underscores the necessity 
for the FDF variance applicant to establish eligibility for the 
variance. EPA's regulations at 40 CFR 403.13 are explicit in imposing 
this burden upon the applicant. The applicant must show that the 
factors relating to the discharge controlled by the applicant's permit 
that are claimed to be fundamentally different are, in fact, 
fundamentally different from those factors considered by the EPA in 
establishing the standards. While EPA encourages facilities, or 
categories of facilities, that believe they qualify for the FDF 
variance to apply for it, EPA also recognizes that the circumstances 
under which it can be granted are limited to specific statutory factors 
that few applicants have satisfied.
2. Removal Credits
    The CWA establishes a discretionary program for POTWs to grant 
``removal credits'' to their indirect dischargers. This credit in the 
form of a less stringent pretreatment standard, allows an increased 
concentration of a pollutant in the flow from the indirect discharger's 
facility to the POTW. See 40 CFR 403.7. EPA has promulgated removal 
credit regulations as part of its pretreatment regulations. In 
addition, currently five of the approximately 1500 authorized 
pretreatment programs have the authority to issue removal credits. 
Under EPA's pretreatment regulations, the availability of a removal 
credit for a particular pollutant is linked to the POTW method of using 
or disposing of its sewage sludge. The regulations provide that removal 
credits are only available for certain pollutants regulated in EPA's 40 
CFR Part 503 sewage sludge regulations (58 FR 9386). The pretreatment 
regulations at 40 CFR Part 403 provide that removal credits may be made 
potentially available for the following pollutants:
    (1) If a POTW applies its sewage sludge to the land for beneficial 
uses, disposes of it on surface disposal sites or incinerates it, 
removal credits may be available, depending on which use or disposal 
method is selected (so long as the POTW complies with the requirements 
in Part 503). When sewage sludge is applied to land, removal credits 
may be available for ten metals. When sewage sludge is disposed of on a 
surface disposal site, removal credits may be available for three 
metals. When the sewage sludge is incinerated, removal credits may be 
available for seven metals and for 57 organic pollutants (40 CFR 
403.7(a)(3)(iv)(A)).
    For this proposed rule, removal credits would be available for the 
following pollutant parameters being regulated under each of the 
criteria discussed: (1) land application--Copper, Lead and Zinc; (2) 
surface disposal--none; (3) incineration--in addition to Lead, removal 
credits would also be available for Bis(2-Ethylhexyl) Phthalate, 
Ethylbenzene, Tetrachloroethene, and Toluene if the requirements in 40 
CFR part 403, Appendix G.I.(1) are met.
    (2) In addition, when sewage sludge is used on land or disposed of 
on a surface disposal site or incinerated, removal credits may also be 
available for additional pollutants so long as the concentration of the 
pollutant in sludge does not exceed a concentration level established 
in Part 403. When sewage sludge is applied to land, removal credits may 
be available for two additional metals and 14 organic pollutants. When 
the sewage sludge is disposed of on a surface disposal site, removal 
credits may be available for seven additional metals and 13 organic 
pollutants. When the sewage sludge is incinerated, removal credits may 
be available for three other metals (40 CFR 403.7(a)(3)(iv)(B)).
    Under this proposed rule, additional pollutant parameters that 
would be available for removal credits are as follows: (1) land 
application--none; (2) surface disposal--Bis(2-Ethylhexyl) Phthalate, 
Copper, Lead and Zinc and (3) incineration--Copper, and Zinc.
    (3) When a POTW disposes of its sewage sludge in a municipal solid 
waste landfill (MSWLF) that meets the criteria of 40 CFR Part 258, 
removal credits may be available for any pollutant in the POTW's sewage 
sludge (40 CFR 403.7(a)(3)(iv)(C)). Thus, given compliance with the 
requirements of EPA's removal credit regulations,<SUP>1</SUP> following 
promulgation of the pretreatment standards being proposed today, 
removal credits may be authorized for any pollutant subject to 
pretreatment standards if the applying POTW disposes of its sewage 
sludge in a municipal solid waste landfill that meets the requirements 
of 40 CFR Part 258. If the POTW uses or disposes of its sewage sludge 
by land application, surface disposal or incineration, removal credits 
may be available for the following metal pollutants (depending on the 
method of use or disposal): Arsenic, Cadmium, Chromium, Copper, Iron, 
Lead, Mercury, Molybdenum, Nickel, Selenium and Zinc. Given compliance 
with Sec. 403.7, removal credits may be available for the following 
organic pollutants (depending on the method of use or disposal) if the 
POTW uses or disposes of its sewage sludge: Benzene; 1,1-
Dichloroethane; 1,2-Dibromoethane; Ethylbenzene; Methylene Chloride; 
Toluene; Tetrachloroethene; 1,1,1-Trichloroethane; 1,1,2-
Trichloroethane and Trans-1,2-Dichloroethene.
---------------------------------------------------------------------------

    \1\ Under 40 CFR 403.7, a POTW is authorized to give removal 
credits only under certain conditions. These include applying for, 
and obtaining, approval from the Regional Administrator (or Director 
of a State NPDES program with an approved pretreatment program), a 
showing of consistent pollutant removal and an approved pretreatment 
program. See 40 CFR 403.7(a)(3)(I), (ii), and (iii).
---------------------------------------------------------------------------

    Some facilities may be interested in obtaining removal credit 
authorization for other pollutants being considered for regulation in 
this rulemaking for which removal credit authorization would not 
otherwise be available under Part 403. Under Sections 307(b) and 405 of 
the CWA, EPA may authorize removal credits only when EPA determines 
that, if removal credits are authorized, that the increased discharges 
of a pollutant to POTWs resulting from removal credits will not affect 
POTW sewage sludge use or disposal adversely. As discussed in the 
preamble to amendments to the Part 403 regulations (58 FR 9382-9383), 
EPA has interpreted these sections to authorize removal credits for a 
pollutant only in one of two circumstances. Removal credits may be 
authorized for any categorical pollutant (1) for which EPA has 
established a numerical pollutant limit in Part 503; or (2) which EPA 
has determined will not threaten human health and the environment when 
used or disposed of in sewage sludge. The pollutants described in 
paragraphs (1)-(3) above include all those pollutants that EPA either 
specifically regulated in Part 503 or evaluated for regulation and 
determined would not adversely affect sewage sludge use and disposal.
    Consequently, in the case of a pollutant for which EPA did not 
perform a risk assessment in developing its Round One sewage sludge 
regulations, removal credit for pollutants will only be available when 
the Agency determines either a safe level for the pollutant in sewage 
sludge or that regulation of the pollutant is unnecessary to protect 
public health and the environment from the reasonably anticipated 
adverse effects of such a pollutant. <SUP>2</SUP>
---------------------------------------------------------------------------

    \2\  In the Round One sewage sludge regulation, EPA concluded, 
on the basis of risk assessments, that certain pollutants (see 
Appendix G to Part 403) did not pose an unreasonable risk to human 
health and the environment and did not require the establishment of 
sewage sludge pollutant limits. As discussed above, so long as the 
concentration of these pollutants in sewage sludge are lower than a 
prescribed level, removal credits are authorized for such 
pollutants.

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

[[Page 66212]]

    EPA has concluded that a POTW discharge of a particular pollutant 
will not prevent sewage sludge use (or disposal) so long as the POTW is 
complying with EPA's Part 503 regulations and so long as the POTW 
demonstrates that use or disposal of sewage sludge containing that 
pollutant will not adversely affect public health and the environment. 
Thus, if the POTW meets these two conditions, a POTW may obtain removal 
credit authority for pollutants other than those specifically regulated 
in the part 503 regulations. What is necessary for a POTW to 
demonstrate that a pollutant will not adversely affect public health 
and the environment will depend on the particular pollutant, the use or 
disposal means employed by the POTW and the concentration of the 
pollutant in the sewage sludge. Thus, depending on the circumstances, 
this effort could vary from a complete 14-pathway risk assessment 
modeling exercise to a simple demonstration that available scientific 
data show that, at the levels observed in the sewage sludge, the 
pollutant at issue is not harmful. As part of its initiative to 
simplify and improve its regulations, at the present time, EPA is 
considering whether to propose changes to its pretreatment regulations 
so as to provide for case-by-case removal credit determinations by the 
POTWs' permitting authority.
    EPA has already begun the process of evaluating several pollutants 
for adverse potential to human health and the environment when present 
in sewage sludge. In November 1995, pursuant to the terms of the 
consent decree in the Gearhart case, the Agency notified the United 
States District Court for the District of Oregon that, based on the 
information then available at that time, it intended to propose only 
two pollutants for regulation in the Round Two sewage sludge 
regulations dioxins/dibenzofurans (all monochloro to octochloro 
congeners) and polychlorinated biphenyls.
    The Round Two sewage sludge regulations are not scheduled for 
proposal until December, 1999, and promulgation in December 2001. 
However, given the necessary factual showing, as detailed above, EPA 
could propose that removal credits should be authorized for identified 
pollutants before promulgation of the Round Two sewage sludge 
regulations. However, given the Agency's commitment to promulgation of 
effluent limitations and guidelines under court-supervised deadlines, 
it may not be possible to complete review of removal credit 
authorization requests by the time EPA must promulgate these 
pretreatment standards.

Appendix A--Abbreviations, Acronyms, and Other Terms Used in This 
Notice

    Administrator--The Administrator of the U.S. Environmental 
Protection Agency.
    Agency--The U.S. Environmental Protection Agency.
    Annually--For purposes of the exclusion, annually would mean per 
calendar year.
    AWQS--Ambient Water Quality Standards are provisions of State or 
Federal law that consist of a designated use or uses for the waters 
of the United States and water quality criteria for such waters 
based upon such uses. Water Quality Standards are designed to 
protect health or welfare, enhance the quality of the water and 
serve the purposes of the Act (40 CFR 131.3).
    BADCT--best available demonstrated control technology, as 
described in section 306 of the CWA.
    BAT--The best available technology economically achievable, as 
described in section 304(b)(2) of the CWA.
    BMPs--Best Management Practices--As authorized by section 304(e) 
and 402 of the CWA. Gives the Administrator the authority to publish 
regulations to control plant site runoff, spillage or leaks, sludge 
or waste disposal, and drainage from raw material storage.
    BCT--Best Conventional Pollutant Control Technology, as 
described in section 304(b)(4) of the CWA.
    BPT--Best Practicable Control Technology Currently Available, as 
described in section 304(b)(1) of the CWA.
    CAA--Clean Air Act, 33 U.S.C. 7401-7671q.
    CBI--Confidential Business Information.
    CEB--Chemical Emulsion Breaking.
    C-E--Cost-Effectiveness Analysis
    Conventional pollutants--The pollutants identified in section 
304(a)(4) of the CWA and the regulations thereunder 
(BOD<INF>5</INF>, total suspended solids, oil and grease, fecal 
coliform, and pH).
    Cooperative--An enterprise or organization owned by and operated 
for the benefit of those using its services. For purposes of this 
rule, a laundry serving like facilities owned by and/or operated for 
the benefit of those facilities.
    CP--Chemical Precipitation.
    CWA--Clean Water Act. The Federal Water Pollution Act, 33 U.S.C. 
1251 et seq.
    DAF--Dissolved Air Flotation.
    Daily discharge--The discharge of a pollutant measured during 
any calendar day or any 24-hour period.
    Direct discharger--A facility that discharges treated or 
untreated pollutants into waters of the United States.
    Dry cleaning--The cleaning of fabrics using an organic-based 
solvent rather than water-based detergent solution.
    EA--Economic Assessment.
    EIA--Economic Impact Analysis.
    Effluent--Wastewater discharges.
    Effluent limitation--Any restriction, including schedules of 
compliance, established by a State or the Administrator on 
quantities, rates, and concentrations of chemical, physical, 
biological, and other constituents that are discharged from point 
sources into navigable waters, the waters of the contiguous zone, or 
the ocean. (CWA Sections 301(b) and 304(b)).
    EPA--The U.S. Environmental Protection Agency.
    E.O.--Executive Order.
    Facility--A facility is all contiguous property owned, operated, 
leased or under the control of the same person, or corporate or 
business entity. The contiguous property may be divided by public or 
private right-of-way.
    FDF--Fundamentally Different Factor--Section 301(n) of the CWA. 
This section authorizes modification of the otherwise applicable BAT 
effluent limitations or categorical pretreatment standards for 
existing sources if a facility is fundamentally different with 
respect to the factors specified at 40 CFR 403.13.
    FTE--Full-time Equivalent.
    HAPs--Hazardous Air Pollutants.
    HEM--N-Hexane Extractable Material.
    Indirect discharger--A facility that discharges or may discharge 
pollutants into a publicly owned treatment works.
    IL--Industrial Laundry.
    Industrial laundry facility--any facility that launders 
industrial textile items from off-site as a business activity. 
Either the industrial laundry facility or the off-site customer may 
own the industrial laundered textile items. This includes textile 
rental companies that perform laundering operations.
    Industrial textile items--items such as, but are not limited to: 
shop towels, printer towels/rags, furniture towels, rags, mops, 
mats, rugs, tool covers, fender covers, dust-control items, gloves, 
buffing pads, absorbents, uniforms, filters, and clean room 
garments.
    IRFA--Initial Regulatory Flexibility Analysis.
    IRIS--Integrated Risk Information System.
    IRS--Internal Revenue Service.
    Laundering--washing items with water, including water washing 
following dry cleaning.
    Linen--items such as sheets, pillow cases, blankets, bath towels 
and washcloths, hospital gowns and robes, tablecloths, napkins, 
tableskirts, kitchen textile items, continuous roll towels, 
laboratory coats, family laundry, executive wear, mattress pads, 
incontinence pads, and diapers. This list is intended to be an 
inclusive list.
    LTA--Long Term Average. For purposes of the pretreatment 
standards, average pollutant levels achieved over a period of time 
by a facility, subcategory, or technology option. LTAs were used in 
developing the standards in today's proposed rule.
    MACT--Maximum Achievable Control Technology.
    NTTAA--National Technology Transfer and Advancement Act

[[Page 66213]]

    New Source--``New source'' is defined in section 306 of the CWA 
and at 40 CFR 122.12 and 122.29 (b).
    Non-conventional pollutants--Pollutants that are neither 
conventional pollutants nor priority pollutants listed at 40 CFR 
part 401.
    Non-detect value--A concentration-based measurement reported 
below the sample specific detection limit that can reliably be 
measured by the analytical method for the pollutant.
    Non-water quality environmental impact--An environmental impact 
of a control or treatment technology, other than to surface waters 
(including energy requirements).
    NPDES--The National Pollutant Discharge Elimination System 
authorized under Section 402 of the CWA. NPDES requires permits for 
discharge of pollutants from any point source into waters of the 
United States.
    NSPS--New Source Performance Standards--Based on BADCT and apply 
to all pollutants (conventional, nonconventional, and toxic). 
Section 306 of the CWA.
    OC--Organics Control.
    O&G--Oil and Grease.
    OMB--Office of Management and Budget.
    Off-Site--``Off-site'' means outside the boundaries of a 
facility.
    On-site--``On-site'' means within the boundaries of a facility.
    OSW--USEPA Office of Solid Waste.
    POTW/POTWs--Publicly owned treatment works, as defined at 40 CFR 
403.3(o).
    Pretreatment standard--A regulation that establishes industrial 
wastewater effluent quality required for discharge to a POTW.
    Priority pollutants--The pollutants designated by EPA as 
priority in 40 CFR part 423, Appendix A.
    PSES--Pretreatment standards for existing sources on indirect 
discharges, under Section 307 (b) of the CWA.
    PSNS--Pretreatment standards for new sources of indirect 
discharges, under Section 307(b) and (c) of the CWA.
    RCRA--Resources Conservation and Recovery Act (Pub. L. 94-580) 
of 1976, as amended.
    RFA--Regulatory Flexibility Act.
    RREL--Risk Reduction Engineering Laboratory.
    SBA--Small Business Administration.
    SBREFA--Small Business Regulatory Enforcement Fairness Act.
    SGT-HEM--Silica Gel Treated N-Hexane Extractable Material.
    SIC--Standard Industrial Classification.
    Small Business--Businesses with annual revenues less than $10.5 
million. This is the higher of the two Small Business Administration 
definition of small business for SIC codes 7218 and 7213.
    TPH--Total Petroleum Hydrocarbons.
    TRSA--Textile Rental Services Association of America.
    TSS--Total suspended solids.
    TWF--Toxic Weighting Factor.
    UMRA--Unfunded Mandates Reform Act (PL 104-4), establishes 
requirements for Federal agencies to assess the effects of their 
regulatory actions on State, local and tribal governments and the 
private sector.
    UTSA--Uniform and Textile Service Association.
    Variability factor--The daily variability factor is the ratio of 
the estimated 99th percentile of the distribution of daily values 
divided by the expected value, median or mean, of the distribution 
of the daily data. The monthly variability factor is the estimated 
95th percentile of the distribution of the monthly averages of the 
data divided by the expected value of the monthly averages.
    VOC--Volatile Organic Compound.
    Water washing--The process of washing laundry items in which 
water is the solvent used.

List of Subjects in 40 CFR Part 441

    Environmental protection, Industrial laundry discharges, Water 
pollution control, Waste treatment and disposal.

    Dated: November 7, 1997.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended by adding part 
441 as follows:

PART 441--THE INDUSTRIAL LAUNDRIES INDUSTRY POINT SOURCE CATEGORY

General Provisions

Sec.
441.1  General definitions.
441.2  Applicability.
441.21  Pretreatment Standards for Existing Sources (PSES).
441.22  Pretreatment Standards for New Sources (PSNS).
Table 1 to Part 441--Pretreatment Standards

    Authority: 33 U.S.C. 1311, 1314, 1316, 1317, 1318, and 1361.

General Provisions


Sec. 441.1  General definitions.

    In addition to the definitions set forth in 40 CFR Part 401, the 
following definitions apply to this part:
    (a) Dry cleaning--The cleaning of fabrics using an organic-based 
solvent rather than water-based detergent solution.
    (b) Off-site--``Off-site'' means outside the boundaries of a 
facility.
    (c) On-site--``On-site'' means within the boundaries of a facility.
    (d) Water washing--The process of washing laundry items in which 
water is the solvent used.


Sec. 441.2  Applicability.

    (a) Except as stated in paragraphs (b) through (e) of this section, 
the provisions of this part apply to wastewater discharges from 
industrial laundry facilities. An industrial laundries facility is any 
facility that launders industrial textile items from off-site as a 
business activity (i.e., launders industrial textile items for other 
business entities for a fee or through a cooperative arrangement). 
Either the industrial laundry facility or the off-site customer may own 
the industrial laundered textile items. This definition includes 
textile rental companies that perform laundering operations. Laundering 
means washing with water, including water washing following dry 
cleaning. Industrial textile items include, but are not limited to 
industrial: shop towels, printer towels/rags, furniture towels, rags, 
mops, mats, rugs, tool covers, fender covers, dust-control items, 
gloves, buffing pads, absorbents, uniforms, filters and clean room 
garments. If any of these items are used by hotels, hospitals, or 
restaurants, they are not industrial items.
    (b) The provisions of this part do not apply to discharges from: 
on-site laundering at industrial facilities, laundering of industrial 
textile items originating from the same business entity, and facilities 
that exclusively launder linen items, denim prewash items, new items 
(i.e. items directly from textile manufacturers, not yet used for 
intended purpose), any other items that come from laundering of hotel, 
hospital, or restaurant items or any combination of these items. This 
part does apply to hotel, hospital, or restaurant laundering of 
industrial textile items. In addition, the provisions of this part do 
not apply to discharges from the oil-only treatment of dust mops. 
Furthermore, the provisions of this part do not apply to laundering 
exclusively through dry cleaning.
    (c) By linen items EPA means: sheets, pillow cases, blankets, bath 
towels and washcloths, hospital gowns or robes, tablecloths, napkins, 
tableskirts, kitchen textile items, continuous roll towels, laboratory 
coats, household laundry, executive wear, mattress pads, incontinence 
pads, and diapers. This list is an inclusive list.
    (d) For facilities covered under the Industrial Laundry definition, 
wastewater from all water washing operations is covered, including the 
washing of linen items as long as these items do not constitute 100 
percent of the items washed.
    (e) The provisions of this part do not apply to industrial laundry 
facilities that as of [the effective date of the final rule] always 
launder less than one million pounds of incoming laundry per year and 
launder less than 255,000 pounds of shop and/or printer towels/rags per 
year. By per year, EPA means on a calendar year basis for the 
industrial laundry facility. If any excluded facility launders one 
million pounds or more of incoming laundry per year or 255,000 pounds 
or more of shop and/or printer towels/rags per

[[Page 66214]]

year, it will no longer be excluded from the standards.


Sec. 441.21  Pretreatment Standards for Existing Sources (PSES).

    Pursuant to the CWA section 307(b)(1), indirect dischargers are 
required to comply with pretreatment standards for existing sources by 
three years of [the effective date of the final rule]. For purposes of 
this part, indirect dischargers must comply with this part by three 
years after [the date of publication of the final rule].


Sec. 441.22  Pretreatment Standards for New Sources (PSNS).

    Except as provided in 40 CFR 403.7, any new source subject to this 
part that introduces pollutants into a publicly owned treatment works 
must comply with 40 CFR part 403 and achieve as pretreatment standards 
for new sources (PSNS) the same standards as those specified in 
Sec. 441.21 for existing sources (PSES).

               Table 1 to Part 441--Pretreatment Standards              
------------------------------------------------------------------------
                                                              CP--Daily 
                    Pollutant parameter                      maximum (mg/
                                                                  L)    
------------------------------------------------------------------------
Bis (2-Ethylhexyl) Phthalate...............................         0.13
Ethylbenzene...............................................         1.64
Naphthalene................................................         0.23
Tetrachloroethene..........................................         1.71
Toluene....................................................         2.76
m-Xylene...................................................         1.33
o&p-Xylene.................................................         0.95
Copper.....................................................         0.24
Lead.......................................................         0.27
Zinc.......................................................         0.61
SGT-HEM \1\................................................         27.5
------------------------------------------------------------------------
\1\ Monthly average limitation for SGT-HEM under CP option is 15.4 mg/L.

[FR Doc. 97-30240 Filed 12-16-97; 8:45 am]
BILLING CODE 6560-50-P


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