United States

Environmental Protection Agenc y 

# Regulatory Flexibility Act Section 610 Reviewof the Effluent Limitations Guidelines and Standards for the Centralized Wa ste Treatment Industry December 2010December 2010 i Regulatory Flexibility Act Section 610 Review of the Effluent Limitations Guidelines

and Standards for the Centralized Wa ste Treatment Industry Contents 1 Introduction ................................ ................................ ................................ ................................ ................... 1 2 Summa ry of the CWT Regulation and Industry Profile (2000) ................................ ................................ 3 2.1 Summary of CWT Regulation
................................ ................................ ................................ ......................... 3 2.2 Characteristics of CWT Facilities and the Industry (2000)
................................ ................................ ............. 4 2.2.1 Demand for CWT Services
................................ ................................ ................................ ................... 4 2.2.2 Number of CWT Facilities and Firms
................................ ................................ ................................ ... 5 2.2.3 Market Structure
................................ ................................ ................................ ................................ ... 9 3 The Continued Need for the Centralized Waste Treatment Rule ................................ ........................... 10 4 Su mmary of the Complaints and Comments Received by EPA and How EPA has Mitigated the Complexity of the Rule for Small Businesses ................................ ................................ ............................ 11 4.1 The 2001 Small Entity Compliance Guide for CWTs
................................ ................................ ................... 11 4.2 The 2003 Amendment to the CWT Rule
................................ ................................ ................................ ....... 12 4.3 The 2003 and 2006 “Frequently Asked Questions” Documents
................................ ................................ ... 13 5 CWT Overlap and Conflict with Other Government Regulations ................................ ......................... 15 6 CWT Industry Conditions Since Promulgation of the 2000 Final CWT Rule ................................ ....... 17 6.1 Demand for CWT Services
................................ ................................ ................................ ............................ 18 6.2 Number of CWT Facilities and Firms
................................ ................................ ................................ ........... 19 6.2.1 Num

ber of Facilities
................................ ................................ ................................ ............................ 19 6.2.2 Number of Firms
................................ ................................ ................................ ................................ . 21 6.2.3 Number of Small Firms
................................ ................................ ................................ ....................... 22 6.3 Average Employment Size of CWT Firms
................................ ................................ ................................ .... 25 6.4 Market Structure of CWT Industry Segments
................................ ................................ ............................... 26 6.5 Economic Performance in the CWT Industry Segments
................................ ................................ ............... 27 6.5.1 Employment
................................ ................................ ................................ ................................ ........ 27 6.5.2 Revenue, Employment, and Payroll in the CWT Industry Segments
................................ ................. 28 6.6 Financial Performance in the CWT Industry Segments
................................ ................................ ................ 29 7 Conclusion ................................ ................................ ................................ ................................ .................... 34RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 1 

## 1 Introduction EPA first promulgated Effluent Limitations Guidelines (ELG) for the Centralized Wa ste Treatment (CWT) Category (40 CFR Part 437) in 2000 (65 FR 81241 , December 22. 2000 ), with amendments in 2003 (68 FR 71014 , December 22, 2003 ). The CWT industry includes facilities that treat and/or recover hazardous or nonhazardous industrial waste, wastewater, or use d material generated off
- site from industrial facilities. Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (S B REFA), EPA is generally required to prepare a Regulatory Flexibility Analysis describing the impact of the regulatory action on small entities as part of a rulemaking. EPA conducted an analysis for the 2000 Final CWT Rule and did not certify that the R ule would have no significant economic impact on a substantial number of small entities
. Specifically , EPA found that 63 small parent entities owned in
scope CWT facilities in the United States and that the estimated costs for 30 o f tho se parent entities would exceed 3 percent of their revenue. The purpose of this report is to review the 2000 Final CWT Rule and its 2003 Amendments , pursuant to Section 610 of the RFA (5 USC 610) , to determine whether the Guidelines should be continue d, amended, or rescinded in order to minimize impacts on small entities while still meeting Clean Water Act requirements. This document assess es :  the continued need for the rule;  the nature of the complaints or comments received concerning the rule from the public since promulgation;  the complexity of the rule;  the extent to which the rule overlaps, duplicates, or conflicts with other Federal rules, and, to the extent feasible, with State and local government rules: and  the degree to which technology, economic conditions, or other factors have changed in the area of the rule. EPA published a Federal Register Notice, in April 2010 (75FR 21882, April 26, 2010), opening a 90 day comment period in order to obtain public input on the above assessment criteria with respect to the CWT rule
. EPA received no public comments on the section 610 review notice
. Th e remainder of this document is organized as follows:  Section 2 is a summary of the CWT regulation and an overview of the industry a s it existed in 2000, including the general market structure, financial performance, and employment.  Section 3 summarizes the continued need for the CWT Rule.  Section 4 summarizes the nature of the complaints and comments received by EPA concerning the CWT rule, since its promulgation in 2000, and how EPA has mitigated the complexity of the CWT Rule for small businesses.  Section 5 assesses how the existing CWT Rule overlaps and conflicts with other Federal, State, and local government regulations.  Section 6 assesses the changes that have occurred in technology, economic conditions, or other factors that might have had an impact on the CWT industry in general and small CWT parent firms in particular since rule promulgation in 2000. Specifically the section i s a review of CWT industry conditions, including numbers of firms and facilities, sales, employment, market structure, economic and financialRFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

2 December 2010 performance, from the period before promulgation of the 2000 Final CWT Rule to the present, with the objective of assessing whether and how this rule may have affected performance of small businesses in the CWT industry.  Section 7 concludes with a determination, based on the analysis and results outlined in this report, as to whether the 2000 Final CWT Rule should be continued, amended, or rescinded in order to minimize impacts on small entities while still meeting the Clean Water Act requirements.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 3 

## 2 Summary

of the CWT Regulation and Industry Profile (2000) This section provides a summary of the CWT regulation as well as information on the CWT industry profile as prepared at the time of the 2000 Final CWT Rule. The section is divided as follows:  Subsection 2 .1 a brief overview of the CWT regulation.  Subsection 2 .2 a summary of the industry profile for the CWT industry
. All economic information presented in this section is from the Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry (the original 2000 CWT report). 1 

### 2.1 Summary

of CWT Regulation EPA first promulgated Effluent Limitation Guidelines for the CWT Category in 2000 , with amendments made in 2003 . This category is divided into four subcategories based on type of waste received, shown in Table 2
- 1 . The technology basis for the final rule varies by subcategory :  Two
- stage chemical precipitation and filtration for metal
-bearing wastes;  Emulsion breaking, two
- stage gravity separation and dissolved air flotation for oily wastes; and  Equalization and biological treatment for organic wastes. In order to ensure that combined wastes are treated, not simply co
- diluted, facilities that elect to comply with Subpart D, Multiple Wastestreams, would likely have to certify that an equivalent treatment system is installed and properly designed, maintained, and operated. Table 2
- 1 provides more detail on the applicability of each subcategory
. Table 2 - 1 : Subcategories and Subpart A pplicability Subpart Name Subpart Applicability A: Metals Treatment and Recovery The discharge of wastewater from a CWT facility that results from the treatment of, or recovery of

metals from, both metal
-bearing wastes received from off
- site and other CWT wastewater associated with the treatment of, or recovery of metal
-bearing wastes. B: Oils Treatment and Recovery The discharge of wastewater from a CWT facility that

results from the treatment or recovery of oil from both oily wastes received from off
- site and other CWT wastewater associated with the treatment of , or recovery of oily wastes. C: Organics Treatment and Recovery The discharge of wastewater from a CWT facility that results from the treatment of, or recovery of

organic material from both organic wastes received from off
- site and other CWT wastewater associated with the treatment of, or recovery of organic wastes. D: Multiple Wastestreams The discharges of wastewater from a CWT facility that

treats wastes subject to more than one of the previous Subparts must comply with either provisions of this subpart or the applicable provisions of Subpart A, B, or C. The provisions of this subpart are applicable to that portion of wastewater discharges from a centralized waste treatment facility that results from mixing any combination of treated or untreated was te otherwise subject to Subpart A, Subpart B, or Subpart C of this part only if a facility requests the permit writer or control authority to develop Subpart D limitations (or standards) and establishes that it provides equivalent treatment as defined in § 437.2(h).

1 This report is available online at http://www.epa.gov/waterscience/guide/cwt/final/econanal.pdf
.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

4 December 2010 

### 2.2 Characteristics of CWT Facilities and the Industry (2000) EPA developed different effluent limitations and standards for CWT operations depending on the type of waste received by the CWT facilities. Specifically, EPA divided the CWT industry in to the following subcategories based on the types of waste treated or recovered: 1. Metals subcategory: Facilities that treat or recover metal from metal
-bearing waste, wastewater, or used material received from off
- site. 2. Oils subcategory: Facilities that tre at or recover oil from oily waste, wastewater, or used material received from off
- site. 3. Organics subcategory: Facilities that treat or recover organics from organic waste , wastewater, or used material received from off
- site. CWT facilities may offer more than one waste treatment or recovery service and may discharge directly to surface water (direct discharges) and/or to Publicly Owned Treatment Works (POTWs) (indirect discharges). In terms of their relationships with waste generating facilities, privately owned CWT facilities fall into the following three main categories: 1. Commercial: these facilities accept waste only from off
- site generators not under the same ownership as their facility. 2. Noncommercial: these facilities accept waste only from off
- site generators under the same ownership as their facility and/or they accept waste on a contract basis from a small number of adjacent facilities. 3. Mixed: these facilities accept both. To determine the universe of the CWT facilities for the CWT Rule analyses, EPA c onducted a survey questionnaire in 1990. 2 , 3 The majority of survey respondents identified their industry according to the Standard Industry Classification (SIC) system as SIC 4953: Refuse Systems. EPA also collected information on additional oils subcategory CWT facilities through comments to its 1996 Notice of Data Availability (NODA). Based on the 1990 survey and the comments to the 1996 NODA , EPA determined that there were 223 CWT facilities, of which EPA had adequate data on 211 facilities for modeling . Consequently, for the 2000 Final CWT Rule analyses , EPA assumed the CWT universe consisted of 211 facilities. EPA estimated that only 4 of these 211 facilities accepted waste on an exclusively noncommercial basis. 2.2.1 Demand for CWT Services The demand for waste treatment services arises from the generation of waste as a by
-product of manufacturing or other industrial activities. Consequently, the demand for CWT services is derived from and depends on the demand for the goods and services whose industrial activity generates the waste. Waste generating facilities can treat waste in the following three ways: 1. On
- site waste management: Facilities can invest in capital equipment to be able to treat waste on
- site; this is usually the least expensive way to treat large volumes of waste.
2 This survey was a census of 452 CWT facilities identified at that time. See the Development Document for the CWT Point Source Category (http://water.epa.gov/scite ch/wastetech/guide/treatment/develop_index.cfm), Chapter 2 Data Collection and Chapter 5 Industry Subcategorization
. 3 Questionnaire data were available for CWT facilities in the Metals, Oils, and Organics subcategories known at that time. The number of CWT facilities in the oils subcategory grew substantially between the questionnaire and the 1995 Proposed Rule. As a result, EP A issued a Notice of Data Availability (NODA) in 1996 to collect updated information. EPA then modeled oils subcategory facility data using information received in the questionnaire and information received through the comments to NODA together with some publicly available information.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 5 2. On
- site/off

- site waste management: Facilities may partially treat waste on
- site and then send it off
- site for ultimate treatment and disposal. 3. Off
- site waste management: Facilities may send all or some of the waste they generate directly to CWT facilities. The last two groups of facilities make up the demand for CWT services. EPA used Toxic Release Inventory ( TRI) data to determine the largest generators of hazardous waste by industry and to profile the types of waste treated within these facility categories . EPA found that the industries transferring the largest quantities of waste off
- site for either treatment or recycling in 1995 were : SIC 3312 : Blast Furnaces and Steel Mills ; SIC 3691 : Storage batteries ; SIC 3357 : Nonferrous Wire Drawing and Insulating ; SIC 2821 : Plastics Materials and Resins ; SIC 3714 : Motor Vehicle Parts and Accessories ; and SIC 2869 : Industrial Organic Chemicals. Table 2
- 2 presents the quantity of waste transferred off
- site for treatment or recovery reported in TRI for 1991 through 1997. As shown in Table 2
- 2 , the demand for off
- site waste rec overy increased significantly

– by 57 percent

– over the period of analysis. While demand for off
- site waste treatment also incre ased during that time period, this increase was much smaller at 6 percent. Table 2 -2 : Trends in Demand for Off- Site Waste Management Services Year Waste Transferred Off - site for Recovery Waste Transferred Off - site for Treat me nt Quantity (millions of lbs) % Change a Quantity (millions of lbs) % Change a 1991 1.517 na 244.6 N a 1992 1.886 24.32% 215.3
- 11.98% 1993 1.940 2.86% 210.3
- 2.32% 1994 2.170 11.86% 219.1 4.18% 1995 2.450 12.90% 250.6 14.38% 1996 2.3 97
- 2.16% 226.5
- 9.62% 1997 2.381
- 0.67% 258.7 14.22% Annual Average Gro wth Over Period na 8.14% na 0.82% Source: 2000 Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry. a. Year
- over year percent changes were recalculated to correct the values reported in the original 2000 CWT report. 2.2.2 Number of CWT Facilities and Firms 2.2.2.1 Facilities As discussed above, based on the survey conducted in 1990 and comment responses to its 1996 NODA , EPA estimated that 223 CWT facilities would be within the regulation’s scope, and performed cost and economic analysis of 211 facilities for which the Agency had sufficient data. For the cost and economic analysis for the final regulation, EPA accepted the definition of “facility” used in the survey; in some instances a facility is defined as only the waste management part of a plant site, while in others as the entire plant site, including non
CWT operations. Surveyed facilities were located in 38 states; the states with the highest number of CWT facilities were Texas, Ohio, and California. Because not all CWT facilities provide the same service, facilities located nearby may not be competitors, while facilities located far from one another may compete. Facility s ize can be defined in terms of total quantity of waste accepted for treatment or recovery, number of employees, treatment costs, total revenues, or profits at the time of the final rule
. Table 2
- 3 and Table 2
- 4 summarize CWT facility counts by waste quantity
- and employment
- based size categories.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

6 December 2010 Table 2 - 3 : Facility Size Categories Based on Quantity of Commercial Wastewater T reated, by Discharge Categorya Metals Recovery Metals

Treatment Oils

Recovery Oils

Treatment Organics

Treatment or Recovery Wastewater Treated by Direct Discharger s < 5 million gallons 2 2 2 3 2 5 million to 10 million gallons 0 0 3 2 0 10 million to 50 million gallons 0 2 0 0 2 50 to 100 million gallons 0 1 0 0 0 Over 100 million gallons 0 1 0 0 0 Total 2 6 5 5 4 Wastewater Treated by Indirect Discharger s < 5 million gallons 4 27 69 67 12 5 million to 10 million gallons 1 4 24 14 2 10 million to 50 million gallons 1 10 20 15 2 50 to 100 million gallons 0 0 0 0 0 Over 100 million gallons 0 0 0 0 0 Total 6 41 113 96 16 Wastewater Treated by Zero Discharger s b < 5 million gallons 1 7 31 18 4 5 million to 10 million gallons 0 0 0 0 1 10 mill ion to 50 million gallons 0 1 2 0 0 50 to 100 million gallons 0 0 0 0 0 Over 100 million gallons 0 0 0 2 0 Total 1 8 33 20 5 Source: 2000 Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry. a . Data are scaled up to account for the entire universe of CWT facilities. Counts do not include four facilities that do not treat wastewater commercially. b. Zero discharge facilities may dispose of their wastewater by pumping it into underground injection wells, evaporating it, applying it to land, selling it or recycling it, or sending it off
- site to another CWT facility for treatment. Table 2 -4 : Size Distribution of Commercial CWT Facilities by Number of CWT Employees a Total Number of Employees Number of Facilities Percentage 1 to 9 60 29% 10 to 19 50 24% 20 to 29 44 22% 30 to 49 29 14% 50 to 100 19 9% More than 100 5 2% 207 100% Source: 2000 Economic Analysis of Effluent Limitation Guidelines an d Standards for the Centralized Waste Treatment Industry. a. Data are scaled up to account for entire universe of CWT facilities. Counts do not include four facilities that do not treat wastewater commercially. The largest numbers of facilities and the largest quantities of waste treated by commercial facilities are related to the treatment and recovery oils ( Table 2
- 5).RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 7 Table 2 - 5 : Quantity of Waste Treated by Commercial Facilities, by Subcategory (Thousand Gal/Yr) a Number of Facilities Quantity of Waste Treated ( Thousand gal/yr)

Total Average Minimum Maximum Metals Recovery 8 56,538 6,282 25.9 44,702 Metals Treatment 54 555,030 10,091 0.1 129,340 Oils Recovery 156 569,873 5,875 17.9 104,885 Oils Treatment 123 442,359 5,978 0.1 131,000 Organics Treatment and Recovery 24 11,305 4,452 1.4 23,309 Source: 2000 Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry. a. Data are scaled up to account for entire universe of CWT facilities. Counts do not include four facilities that do not treat wastewater commercially. Baseline in
- scope waste treatment projected compliance costs at commercial facilities ranged from $3,641 to over $26 million per facility, with a total and average per facility revenue of $250 million and $1.7 million, respectively, across all 207 commercial CWT facilities. Table 2
- 6 shows a frequency distribution for the baseline cost of treating waste.

Table 2 - 6 : Baseline Waste Treatment Costs at Commercial CWT Facilities a Operating Costs ($1997) Number of Facilities Percentage <$0.1 million 20 10% $0.1 to $1 million 89 43% $1 to $2 million 47 23% $2 to $5 million 40 20% Over $5 million 10 5% Total 207 100% Source: 2000 Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry. a. Data are scaled up to account for entire universe of CWT facilities. Counts do not include four facilities that do not treat wastewater commercially. Treatment and recovery revenues at commercial CWT facilities ranged from $5.1 to $93.3 million with total and average p er facility revenues of $717 million and $4.9 million, respectively. Table 2
- 7 shows a frequency distribution for the baseline treatment and recovery revenues.

Table 2 - 7 : Baseline Treatment and Recovery Revenues for Commercial CWT Facilities a Revenues ($1997) Number of Facilities Percentage <$0.1 million 13 6% $0.1 to $1 million 58 28% $1 to $2 million 31 15% $2 to $5 million 60 29% Over $5 million 45 22% Total 207 100% Source: 2000 Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry. a. Data are scaled up to account for entire universe of CWT facilities. Counts do not include four facilities that do not treat wastewater commercially. Profits for CWT commercial facilities ranged from a loss of $8.0 million to a profit of $375 million. Table 2
- 8 shows a frequency distribution of profit by business size.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

8 December 2010

Table 2 - 8 : Baseline Profits at Commercial CWT Facilities a,b Profits ($1997) Number of Facilities Percentage <$0.1 million 47 23% $0.1 to $1 million 76 37% $1 to $2 million 29 14% $2 to $5 million 28 14% Over $5 million 27 13% Total 207 100% c Source: 2000 Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry. a. Profit = total revenue

– total cost b. Data are scaled up to account for entire universe of C WT facilities. Counts do not include four facilities that do not treat wastewater commercially. c. Does not sum to 100 percent due to rounding. Strictly noncommercial facilities accept waste only from facilities owned by the same company as their CWT fac ility. These CWT facilities are assumed to provide services for the entire parent company; consequently, EPA assumed that compliance costs of noncommercial CWT facilities will be borne by the parent company as a whole and performed the cost and economic im pact analysis for these facilities at the level of the parent firm. 2.2.2.2 Firms CWT parent entities have the capacity to conduct business transactions and make business decisions affecting facilities they own. The parent entities of the CWT facilities are expected to experience the financial impacts of the regulation. Consequently, EPA assessed the financial impact of the 2000 Final CWT Rule at the highest level of corporate ownership. EPA had sufficient data to determine the parent for 145 of the estimated 211 CWT facilities; these 145 facilities were owned by 114 individual firms and the federal government. However, only 118 of these 145 CWT facilities had sufficient financial parent
- level information to support the economic impact analysis; these 118 facilities were owned by 87 companies. 4 Extrapolating from these relationships, the Agency estimated that the total CWT universe of 211 facilities was owned by 167 companies. 2.2.2.3 Small Firms EPA estimated that 82 of these 167 parent entities were small based on the $6 million annual revenue threshold, which was the Small Business Administration (SBA) small entity size criterion at the time of the analysis 5 ( Table 2
- 9). For these 82 small firms , EPA estimated that 63 owned discharging facilities; and of these 63 small firms, 30 were expected to incur compliance costs exceeding 3 percent of their revenues.

Table 2 - 9 : Size Distribution of Potentially A ffected Companies a, b,c Revenue Categories ($1997) Number of

Companies Revenue (Millions; $1997)

Median Minimum Maximum $6 million or less 82 $2.0 $0.0 $5.7 $6 to $20 million 34 $12.1 $6.2 $19.2 $20 to $50 million 14 $35.9 $20.1 $45.9 $50 to $500 million 19 $169.5 $62 .1 $429.0 Over $500 million 16 $1,955.1 $661.9 $40,697.0 Source: 2000 Economic Analysis of Effluent Limitation Guidelines and Standards for the Centralized Waste Treatment Industry. a. Sales distribution of all companies, scaled up to reflect the universe of companies owning CWT facilities. b. Does not include one facility owned by the federal government and another for which no financial data are available. c. I ncludes firms that own discharging and zero
- discharge facilities.

4 To perform the firm
- level analysis for the parents of these 118 facilities, EPA used available parent - level information from the survey; for the remaining 27 facilities, EPA assumed that firm
- level revenues were the same as facility
- level revenues. 5 The 2010 SBA small entity size criterion is $12.5 million in annual revenue.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 9 2.2.3 Market Structure In general, markets for CWT services are regional even though exceptions may occur. Wastewater and concentrated oily or metal
-bearing wastes are extremely heavy and bulky; consequently, they are generally not shipped long distances for treatment
- therefore locali zed geographic markets do exist. 1990 EPA survey responses indicated that most of a CWT ’ s customers were located in the same state as the CWT or within a few adjacent states. B ased on this information EPA assumed markets for CWT services were regional , and defined markets in six geographic regions
- which were assumed to be completely independent. The regions were:  Northeast: CT, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VT  Northwest: WA, OR, ID, MT, WY  Southeast: AL, FL, GA, KY, MS, NC, SC, TN, VA, WV  Southwest: AZ, CA, CO, NM, NV, UT  Upper Midwest: IA, IL, IN, MN, MI, NE, ND, OH, SD, WI  Lower Midwest: AR, KS, LA, MO, OK, TX The markets were further subdivided by baseline waste treatment costs, assuming that treatment cost differences reflect differences in the types of waste being treated or recovered. The number of CWT facilities offering a particular type of CWT service in a region varied from zero to 31. Depending on the number of CWT facilities in a specific waste treatment or reco very market, market structure was modeled as monopoly, duopoly, or perfect competition. Because of the large number of the CWTs in the oils recovery and/or oily wastewater treatment markets, for the purpose of the cost and economic impact analysis EPA assumed that this segment of the CWT industry was perfectly competitive.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

10 December 2010 

## 3 The Continued Need for the Centralized W aste Treatment Rule Congress adopted the Clean Water Act (CWA) to ``restore and maintain the chemical, physical, and biological integrity of the Nation's waters'' (Section 10 1(a), 33 U .S.C. 1251(a)). To achieve this goal, the CWA prohibits the discharge of pollutants into navigable waters except in compliance with the statute. The Clean Water Act confronts the problem of water pol lution on a number of different fronts. Its primary reliance, however, is on establishing restrictions on the types and amounts of pol lutants discharged from various industrial, commercial, and public sources of wastewater. Congress recognized that regulating only those sources that discharge effluent directly into the nation's waters would not be sufficient to achieve the CWA's goals. Consequently, the CWA requires EPA to promulgate nationally applicable pretreatment standards that restrict pollutant discharges for those who discharge wastewater indire ctly through sewers flowing to publicly
- owned treatment works (POTWs) (Section 307(b) and (c), 33 U. S.C. 1317(b) and (c)). National pretreatment standards are esta blished for those pollutants in wastewater from indirect dischargers which may pass through or interfere with POTW operations. Generally, pretreatment standards are designed to ensure that wastewater from direct and indirect industrial dischargers are subject to similar levels of treatment. In addition, POTWs are required to implement local pretre atment limits applicable to their industrial indirect dischargers to satisfy any local requirements (40 CFR 403.5). Direct dischargers must comply with effluent limitations in National Pollutant Discharge Elimination System (NPDES) permits; indirect dischargers must comply with pretreatment standards. These limitations and standards are established by regulation for categories of industrial dischargers and are base d on the degree of control that can be achieved using various levels of pollution control technology. EPA believes that the CWT Rule is needed to ensure appropriate environmental protection. Without the CWT regulation , point source polluting industrial dischargers that are regulated under other effluent limitation s, water quality based standards , or pretreatment standards would be able to ship waste to third party CWT facilities that would be able to discharge wastewater containing pollutants at levels which are not environmentally protective. In 2000, EPA expected compliance with the CWT reg ulation would reduce the discharge of conventional pollutants by at least 9.7 million pounds per year and toxic and non
- conventional pollutants by at least 9.3 million pounds per year6

.

6 Pounds removed data from the 2000 Final CWT Rule Federal Register Notice (65 FR 81241, December 22. 2000).RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 11 

## 4 Summary of the Complaints and Comments Received by EP A and How EP A has Mitig ated the Complexity of the Rule for Small Businesses In December 2000, EPA promulgated effluent guidelines limitations and standards for the Centralized Waste Treatment Point Source Category. This regulation established wastewater discharge limitations and standards for facilities that treat or recover metal
-bearing, oily, and organic wastes, wastewater, or used material received from off
- site. Since promulgation the Agency has received public c omment chiefly in the area s of rule applicability to certain ty pes of facilities and treatment technologies and the effectiveness of treatment technologies for the removal of specific metals
. The Agency’s response has been to develop a Small Entity Compliance Guide for CWTs (SECG), to Amend the CWT Rule in 2003, and to up - date the SECG’s “frequently asked questions” section twice ( in 2003 and again in 2006) . EPA believes that these past efforts remain sufficient and no additional amendments to the Rule are necessary at this time , p articularly in light of the fact that no additional comments were submitted to the Agency in response to the section 610 request for comment published in April 2010. This section is organized as follows:  Subsection 4 .1 offer s a brief overview of the Small Entity Compliance Guide released in June 2001.  Subsection 4 .2 covers the 2003 amendments to the CWT regulations.  Subsection 4 .3 reviews the two revisions of the “frequently asked questions” material available on EPA’s website. 

### 4.1 The 2001 Small Entity Compliance Guide for CWTs EPA published, in June 2001, a compliance support guide, Small Entity Compliance Guide for CWTs (SECG), to help owners and operators of CWT facilities that are small entities

– whether they are small businesses, small government jurisdictions or small non
-profit organizati ons – understand and comply with the CWT effluent guidelines and pretreatment standards. This document is available on the EPA website at: http://www.epa.gov/waterscience/gui de/cwt/CWTcompliance_guide.pdf
. The guide also provides a list of EPA staff whom small entities may contact with CWT
- specific questions. In addition to the information presented in the Guide, EPA provides a number of web site resources that may help smal l entities obtain additional information related to implementation of the CWT effluent limitation guidelines and standards for new and existing sources, and general information about the 2000 Final CWT Rule, related programs, and general EPA policies ( Table 4
- 1 shows updated SECG contact and reference information).RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

12 December 2010 Table 4 - 1 : General Resources Information

Resource Web Address Description General EPA website www.epa.gov P ress releases, proposed and final EPA rules and regulations, and updates to the SECG
. Engineering and Analysis Division website www.epa.gov/ost/guide Federal Register notices of proposed and final effluent limitation guidelines and standard rules, supplemental notices, pre
-proposal documents, background information, draft industry questionnaires, public meeting notices, development documents and other supporting documents, updates to the SECG, and related documents. The site also has a continually updated list of EPA staff ( and their contact information) that are available to answer questions for all effluent limitation guid e lines
. CWT
- Specific EPA website www.epa.gov/ost/guide/cwti.html People may also obtain copies of these documents by contacting the Office of Water Resource Center at (202) 566
- 1729 or by e - mail at: center.water- resource@epa.gov or fax: (202) 566
- 1736. Copies of documents directly related to the CWT effluent guidelines and standards such as the published CWT regulation (December 22, 2000), the published CWT Amendment (December 22, 2003), the Technical Development Document (EPA
- 821
- R
- 00
- 020), the Economic Analysis (EPA
- 821
- R
- 00
- 024), the Cost Effectiveness Analysis (EPA
- 821
- R
00
- 023), the Detailed Costing Document (EPA
- 821
- R
- 00
- 021),and the Environmental Assessment Document (EPA
- 821
- R
- 00
- 022) as well as any revisions to the Effluent Limitations Guidelines and Standards, and the SECG. EPA Small Business Gateway Assistance Program (SBAP) www.epa.gov/smallbusinesswttn/sbap State and local SBAP contacts, SBAP materials, related web sites, me etings and conferences EPA Office of Enforcement and Compliance Assurance: Policy on Compliance Incentives for Small Business website ewww.epa.gov/compliance/incentives/smallbusiness/ index.html s.epa.gov/oeca/smbusi.html Applicability of EPA’s policy to p romote environmental compliance among small businesses. Criteria for civil penalty mitigation. List of Financial Resources for Small Businesses EP A Office of Enforcement and Compliance Assurance: Audit Policy: Incentives for Self
- Policing http://www.epa.gov/smallbusiness/money.htmes.epa. gov/oeca/auditpol.html EPA has compiled a variety of sources to assist small businesses in applying for loans for pollution control. Applicability of EPA’s policy to enhance protection of human health and the environment by encouraging regulated entities to voluntarily discover, and disclose and correct, violations of environmental requirements. List of Financial Resources for Small Businesses http://www.epa.gov/smallbusiness/money.htm EPA has compiled a variety of sources to assist small businesses in applying for loans for pollution control. 

### 4.2 The 2003 Amendment to the CWT Rule Following publication of the December 2000 CWT Final Rule, facilities in the regulated community conducted compliance monitoring studies and began to develop compliance strategies for the regulated pollutants. Based on these efforts, several members of the regulated community and a t rade association submitted new information to the Agency and asked EPA to revise certain aspects of the 2000 final rule. After our own analysis and review of comments received, EPA determined that it should adopt modifications to the 2000 rule as well as s everal additional modifications resulting from additional analyses in the organics subcategory. In December 2003, EPA finalized an Amendment to the CWT regulations which deleted certain pollutants from those subject to effluent limitations guidelines and standards (68 FR 71014, December 22, 2003). A summary list of changes follows:RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 13  First, the changes delete d the selenium limitations and standards from sections of the Metals Treatment and Recovery subcategory and delete d the barium, molybdenum, antimony, and titanium limitations and standards from the Oils Treatment and Recovery subcategory. EPA learned that, under certain circumstances, the treatment technologies used as the basis for the December 2000 limitations and standards did not remove the pollutants as expected.
 Second, the amendments delete d the molybdenum, antimony, aniline, and 2,3
- dichloroaniline limitations and standards from the Organics Treatment a nd Recovery subcategory. EPA learned that these four pollutants did no t meet the criteria for regulation that was used in the December 2000 rule.
 Third, the amendments reflected the changes in the Multiple Wastestreams subcategory, which covers facilities that treat or recover some combination of metal
-bearing, oily, and organic waste receipts.
 Finally, the amendments revise d a direct discharge BOD5 daily maximum limitation in the Multiple Wastestreams subcategory for combined metals and organics waste receipts to correct a publication error in the December 2000 rule. 

### 4.3 Th e 2003 and 2006 “Frequently Aske d Questions” Documents EPA , in an effort to assist small entities with implementation of the CWT rule , has produced two supplemental sets of “Frequently Asked Questions” documents (FAQs)
- the first in 2003 and the second in 2006 . These documents are basi cally collections of questions with associated answers that EPA believes would be useful information for the regulated entities
. The FAQs represent addendums to Chapter 10, Questions and Answers , of the 2001 Small Entity Compliance Guide for CWTs
. The November 6, 2 003 FAQs document (available at http://water.epa.gov/scitech/wastetech/guide/treatment/upload/2006_12_28_guide_cwt_faqs.pdf ) primarily outlined a series of scenarios which differentiates an existing discharger from a new discharger. It highlights the degree to which an existing facility might alter its current waste stream treatment technology or accept new waste sources and still be consi dered an existing source versus triggering new source standards. Additional questions discussed the implementation of the provision in the CWT rule that provides permit writers the ability to establish alternative limitations in cases where the CWT receives wastewater that has a constant profile on a continuous basis from five or fewer generators. If these conditions are met, the permitting authority may apply the CWT rule or set limits on wastewater received by the facility based not on the CWT regulation but on the relevant existing source effluent limitation guideline . The FAQs also dealt with issues concerning the compliance schedule for new wastestreams, what subcategory should be applied to automotive ethylene glycol coolant , and the applicability o f the combined wastestream formula and the multiple wastestreams subcategory. The December 2006 Frequently Asked Questions (available at http: //water.epa.gov/scitech/wastetech/guide/treatment/upload/2006_12_28_guide_cwt_faqs
- 200612.pdf ) provide updated overall guidance on evaluating the applicability of the CWT rule as well as specific guidance on various newly raised applicability questions. In particular the FAQs offer a list of questions that both regulators and potential CWT facilities should use in order to determine if the CWT rule is applicable. These five questions listed below if answered positively would indicate that the CWT rule is applicable. 1. Does the discharging facility accept wastes, wastewater, or used materials from off
- site for treatment and/or recovery? 2. Is the activity appropriately considered treatment and recovery? 3. Are the off

- site wa s tes generated from industrial applications?RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

14 December 2010 4. Are the types of pollution removed and the treatment technologies employed similar to those evaluated during development of the CWT rule? 5. Are resulting wastewaters discharged directly to waters of the U .S. or indirectly to a Publicly Owned Treatment Works (POTW)? The document goes on to answer specific applicability questions with regard to:  mobile activities such as power or truck washing, carpet cleaning, or heat ventilation/air conditioning servicing;  oil or antifreeze change out at gas stations or o il change facilities;  railroad line maintenance operations (including spill clean
-up from railroad operations) at a railroad line maintenance facility;  emergency response or environmental clean
-up/remediation;  ion exchange or resin regenerations;  off
- site medical/hospital sterilization; and  POTW sludge processingRFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 15 

## 5 CWT Overlap and Conflict w ith Other Government Regulations EPA is unaware of any significant overlap or conflict with other government regulations. EPA specifically asked for comment in April 201 0 (75FR 21882, April 26, 2010) on the issue of CWT regulatory overlap and conflicts and received no comments from the public. During development of the final rulemaking, EPA recognized there were circumstances when a CWT facility could also generate and discharge wastewater associated with other activities subject to other categorical effluent guidelines: for example, manufacturing facilities which process their own, on
- site generated process wastewater along with wastewater received from off
- site. EPA developed the applicability of the final rule to clearly differentiate whether the CWT rule would apply, the other ELG would apply or both. In sum, such manufacturing facilities are not considered to be CWT facilities if the only off
- site waste treated is from the same industry (other than the CWT industry) and of a similar nature to the waste generated on site. In that case, the applicable ELG for the manufacturing discharges would apply only. However, if the off
- site wastewater is not similar and compatible (or from the same industry) with the on
- site generated wastewater, then the CWT ELG would apply to discharges of the off
- site treated wastewater and the other applicable ELG would apply to discharges of the on
- site generated wastewater. Section 4 of the SEC G provides a summary table and EPA's determinations of the applicability of the CWT ELG in relation to various other categorical ELGs and Section 14 of the Final Technical Development Document describes how to calculate discharge limitations where more than one ELG applies. In addition, certain facilities whose treatment of off
- site generated wastewater is not compatible with the treatment of wastewater generated on
- site may nevertheless be subject to ELGs based on other categorical ELGs. The final CWT rule included a provision giving permitting authorities the flexibility to develop alternative CWT limitations and standards for certain discharges in a narrow set of circumstances. Under this approach, rather than applying the CWT ELGs, the permit writer could require manufacturing facilities that treat non
- similar off
- site generated wastewaters to meet all otherwise
- applicable ELGs for the industries in which the wastewater was generated. This approach is limited to facilities that receive continuous flows of relatively consistent pollutant profiles from off

- site from no more than five customers. See Chapter 3.1.1 of the Final Technical Development Document for more information on how this provision would be used to determine discharge limitations. Most CWT effluent is discharged to POTWs which are covered by the technology requirements (i.e., secondary treatment) spe cified in the CWA (40 CFR 133), and are not considered CWT facilities within the scope of the rule. However, EPA has promulgated regulations at 40 CFR Part 403 (General Pretreatment Regulations for Existing and New Sources of Pollution) that establish pretreatment standards and requirements that apply to any source introducing pol lutants from a non
- domestic source into a POTW. These standards include a general prohibition on the introduction of any pollutant that might pass through or interfere as well as prohibitions on specific pollutants such as those that may create a fire or explosion hazard or corrosive s tructural damage. EPA has also promulgated national effluent pretreatment standards ( like the pretreatment standards promulgated for the CWT industry) for specific industry categories as separate regulations at 40 CFR subchapter N. The POTW pretreatment programs mandated under Pa rt 403 must require compliance with all applicable pretreatment standards and requirements by industrial users of the POTW (see 40 CFR 403.8(f )(ii)). Furthermore, each POTW developing a pretreatment program must develop and enforce specifi c local limits to implement the general and specific prohibition against pass
-through and interference (see 40 CFR 403.5(c)). Thus, any POT W subject to the requirement to develop a pretreatment program that accepts waste that do es not comply with a general or specific prohibition or with national effluent pretreatment standards is in violation of the regulations. Consequently , POTWs with pretreatment programs that receive wastestreams from CWT facilities that are both subject to and not regulated by national effluent standards and limitations must ensure the wastestreams do notRFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

16 December 2010 violate the requirements of the CWT rule, other national effluent categorical standards , or the requirements under Part 403
.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 17 

## 6 CWT Industry Conditions Since Promulgation of the 2000 Final CWT Rule For the cost and economic analysis for the 2000 Final CWT Rule , EPA relied almost exclusively on information received via the 1990 industry survey and comment responses to its 1996 NODA
. Without a new survey or additional data supplied by the CWT industry in response to EPA’s April 2010 Federal Register request for comment on this RFA 610 review , EPA was not able to assess current CWT industry conditions and the impact of the 2000 Final CWT Rule on small entities with the same level of precision employed for the analysis conducted for the 2000 Final CWT Rule
. Nevertheless, the Agency believes that it was able to make an adequate assessment of CWT industry conditions , by relying on publicly available data. The data used for the analysis o f the 2000 Final CWT R ule and the publicly available data EPA use d for this RFA 610 review of the final rule cannot be directly compared because they either have different sources or, in the case of demand for CWT services , the scope of collected data has changed over the years (even though the data sources are the same)
. 7 Consequently, to assess the potential impact of the 2000 Final CWT Rule on the CWT industry in general and small CWT firms in particular, the Agency could not simply compare the economic, financial, and

/or operational metri cs from the 2000 analysis to values based on recent publicly available data
. Instead, EPA looked at the changes over-time in selected metrics using publicly available data for early to late 19 90s through the most recent year with available data . At the time of this analysis the Statistics of U.S. Businesses (SUSB) data and most data EPA used from the U.S. Census Bureau were available through 2007; firm receipt size data also published by the U.S. Census Bureau were available only through 2002, while TRI and Risk Management Association (RMA) data were available through 2008. By capturing a short period of time before the promulgation year

– i.e., 2000

– the comparison supports an assess ment of whether trend s observed after promulgation of the 20 00 Final CWT Rule were already present in the industry before rule promulgation , and therefore may not be attributed to the 2000 Final CWT Rule
. The following sections review a number of metrics that provide insight into the performance of the CWT industr y and its key operating segments with the objective of understanding the potential effect of the CWT rule on the economic viability and performance of small businesses in the CWT industry. The categories of information reviewed include :  Demand for CWT services  Numbers of CWT facilities and firms

– both in aggregate and by business size  Employment size of CWT firms  Market structure and competitiveness in the CWT industry and segments  Economic and financial performance of the CWT industry and segments. At th e time of this analysis only limited information was available to assess potential effects specifically on small businesses in the CWT industry ; to a large degree, the following assessment looks at information without regard to business size. However, given that the industry is largely comprised of small businesses (see Section 6.2.3 , below, which indicates that 80 to over 90 percent of CWT industry firms , by segment, are small according to the current SBA criteria) , an assessment of industry performance, regardless of business size, is informative of performance and conditions applying to small businesses, specifically. In addition, findings that indicate that the 2000 Final CWT R

ule has had little or no apparent adverse effect on the industry, as a whole , would also indicate that the rule has likewise not had an adverse effect on small businesses in the CWT industry.

7 To assess demand for the CWT services EPA used TRI data for both sets of analysis. However, the data are not comparable becau se of changes to the TRI reporting requirements; in particular, a large number of industries were added in addition to general changes to the database structure and data retrieval options.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

18 December 2010 Overall, this review indicates that there is no basis for concluding that the CWT rule has had an ad verse effect on the viability and performance of small businesses in the CWT industry. 

### 6.1 Demand for CWT Services While some non
- CWT facilities may offer services similar to those provided by CWT facilities, these services are generally not perfect substitutes. 8 Nevertheless, it is possible that an increase in the price of CWT services as the result of compliance requirements of the 2000 Final CWT Rule might have caused some customers to substitute services from non
- CWT facilities for those otherwise provided by CWT facilities. Further, over time, customers mi ght have modified their waste generation processes to reduce their demand for CWT altogether. EPA reviewed data on demand for CWT services as one of several indicators of overall business conditions in the CWT industry. While these demand data cannot be differentiated by large vs. small business facilities, they provide insight into whether business conditions may have declined overall in the CWT industry, as a result of the 2000 Final CWT R

ule. To the extent that demand for CWT services declined and business conditions deteriorated in the industry, because of the CWT rule , this decline could signal the potential for adverse impact on small entities operating in the CWT industry. For this assessment, EPA closely followed the methodology used to capture demand for CWT services for the 2000 Final CWT Rule. In particular, EPA used the amount of waste transfers to non
-POTW off
- site locations , as reported in TRI, as an indicator of the demand for CWT services. 9 , 10 According to TRI data reported in Table 6
- 1 , between 1998 and 2008 , the demand for CWT services fluctuated in all four demand segments: Disposal, Treatment, Energy Recovery, and Recycling
. Overall, between 1998 and 2008, the demand for all CWT services, except Disposal, decreased , with the largest decline (51.5 percent) occurring in the Energy Rec overy segment . For the Disposal services segment, demand increased marginally (3.4 percent) over the total period 1998
- 2008, but de creased by 7.2 percent between 2000 (i.e., promulgation year) and 2008. 11 In all demand segments except Treatment, the largest drop in demand occurred in 2008, which likely result s from declining manufacturing production due to the recent reces sion. The biggest decrease in demand for Treatment occurred in 1999. Demand for chemical waste treatment in the Energy Recovery segment declined almost steadily, while demand in the Treatment, Recycling, and Disposal segments declined irregularly throughout the analysis period. Overall, EPA observes no systematic difference in trends before and after promulgation of the 2000 Final CWT R ule, which suggests that any declines in demand for CWT services over this time frame cannot be solely attributed to this rule
.

8 For example, some non
- CWT facilities may build on
- site waste treatment units. Further, certain activities not subject to the CWT rule, such as underground injection wells, may be substituted for CWT services. 9 Since the 2000 Final CWT Rule analysis was conducted, the Office of Solid Waste (OSW) changed its definition of hazardous waste to identify oily wastes as non - hazardous; consequently, unlike TRI data reported in Table 2
- 2 , TRI data reported in Table 6
- 1 do not include oily wastes. 10 A facility is required to report hazardous and non -hazardous chemicals to TRI if th e facility meets the following criteria: 1) fall s within a TRI reportable sector or are federal facilities, 2) ha s 10+ employees , and 3) manufacture s , process es or otherwise use s certain hazardous and/or nonhazardous chemical s above threshold amounts . A list of TRI reportable industry sectors is available online at http://www.epa.gov/tri/report/rfi/ry2010rfi_010511.pdf
. 11 TRI provides data for years prior to 1998; however, because TRI reporting requirements changed substantially during the years before 1998 and furthermore, because the data reported for earlier years showed some anomalous year
- to - year changes, which may be due to changes in reporting requirements, EPA decided not to include data for the earlier years in the analysis of demand for CWT services.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 19 Table 6 - 1 : Transfers of Toxic Chemical Waste to Off- Site Locations Other Than POTWs (M illion Lbs)

Year Disposal Treat me nt Energy Recovery Recycling

Quantity (M illion Lbs) % Change Quantity (M illion Lbs) % Change Quantity (M illion Lbs) % Change Quantity (M illion Lbs) % Change 1998 554 na 335 na 911 na 2,117 na 1999 574 3.6% 289
- 13.5% 784
- 13.9% 2,219 4.8% 2000 617 7.5% 280
- 3.1% 813 3.8% 2,184
- 1.6% 2001 615
- 0.3% 283 1.1% 842 3.5% 2,043
- 6.5% 2002 597
- 3.0% 277
- 2.3 % 810
- 3.8% 2,038
- 0.2% 2003 592
- 0.7% 290 4.7% 716
- 11.6% 1,932
- 5.2% 2004 611 3.1% 327 12.9% 650
- 9.1% 2,085 7.9% 2005 637 4.3% 336 2.7% 609
- 6.4% 2,096 0.5% 2006 661 3.8% 329
- 2.2% 555
- 8.8% 2,182 4.1% 2007 676 2.2% 287
- 12.7% 525
- 5.4% 2,142
- 1.8% 2008 572
- 15.3% 255
- 11.1% 442
- 15.9% 1,936
- 9.6% 1998

– 2008 Comparison Total % Change na 3.4% na - 23.7% na - 51.5% na - 8.5% Average Annual % Change na 0.3% na - 2.7% na - 7.0% na - 0.9% 2000

– 2008 Comparison Total % Change na - 7.2% na - 9.0% na - 45.7% na - 11.4% Average Annual % Change na - 0.9% na - 1.2% na - 7.3% na - 1.5% Source: Toxic Release Data Inventory 

### 6.2 Number of CWT Facilities and Firms As another indicator of overall business conditions in the CWT industry in the period before and after promul gation of the CWT rule, EPA reviewed the change in numbers of facilities and firms over the period 1998
- 2007. In the same way as described above for CWT services demand, a differential trend of a declining number of facilities and/or firms in the periods b efore and following promulgation of the final CWT rule could signal a potential adverse effect on the level of activity and industry structure due to the final rule , which in turn could lead to an adverse impact on small entities operating in the CWT indus try. 6.2.1 Number of Facilities To assess the changes in the CWT facility universe since promulgation of the 2000 Final CWT R ule , EPA relied on data from the Statistics of U.S. Businesses and the Economic Census published by the U.S. Census Bureau. The Agency i dentified CWT facilities by the primary SI C or North American Industry Classification System (NAICS) codes depending on the years for which the data are available
. As discussed in Section 2 , the majority of the survey respondents identified their industry as SIC 4953: Refuse Systems. This SIC industry sector maps onto five NAICS industry sectors, only three of which represent the CWT industry (highlighted in Table 6
- 2 ). Solid waste landfi lls (NAICS 562212) and solid waste combustors and incinerators (NAICS 562213) are out of scope of the 2000 Final CWT Rule ; wastewater discharges from landfills and commercial waste combustors are regulated by 40 CFR Parts 444 and 445 (the Waste Combustors and Landfills Categories, respectively). For this analysis, EPA assumed that facilities reported in segments NAICS 562211: Hazardous Waste Treatment and Disposal, NAICS 562920: Materials Recovery Facilities, and NAICS 562219: Other Nonhazardous Waste Treatment and Disposal (CWT industry segments or CWT segments) represent the entire CWT industry and are all subject to the 2000 Final CWT Rule
. Itis important to note that the three ELG facility subcategories

– Metals, Oils, and Organics
- do not align with these three CWT NAICS segments.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

20 December 2010 Data for the earlier years are reported in the SIC framework. To ensure time
- series data comparability , EPA used SI C
-to -NAICS allocation factors provided by the Census and reported in Table 6
- 2
. Table 6 -2 : SIC -to - NA ICS A llocation Factors SIC Code SIC Code Meaning NAICS Code NAICS Code Meaning SIC - to -NAICS Allocation Factor 4953 Refuse Systems 562211 Hazardous Waste Treatment and Disposal 24.92% 4953 Ref

use Systems 562212 Solid Waste Landfill 47.56% 4953 Refuse Systems 562213 Solid Waste Combustors and Incinerators 9.77% 4953 Refuse Systems 562219 Other Nonhazardous Waste Treatment and Disposal 6.50% 4953 Refuse Systems 562920 Materials Recovery Facilities 11.25% Source: 1997 Economic Census Bridge Between NAICS and SIC EPA looked at the number of establishments in the three analyzed CWT se gments reported in SUSB
. As reported in Table 6

- 3 , the number of estab lishments fluctuated in all three CWT segments throughout the analysis period of 199 8 through 2007, but increased overall. Specifically , the total number of CWT facilities increased by nearly 30 percent, at an annual average growth rate of nearly 3 percent . Between 199 8 and 2007 , t he total numbers of establishments engaged in Hazardous Waste Treatment and Disposal (NAICS 562211) and in Materials Recovery (NAICS 5629 2 0) increased significantly (5 9
. 4 percent and 19
. 3 percent, respectively) , or at an annual average growth rate of 5 .3 percent and 2 .0 percent, respectively. At the same time, however, the number of establishments in the smallest of the CWT segments

– Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)

– dropped by 6.4 percent . Given the overall increase in the number of establishments in the CWT industry, the final CWT rule appears not to have increase d CWT costs enough to force facilities out of business or to lead to an overall contraction in the industry . Even for the CWT se gment that experienced a decline in the number of establishment

– Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)

– this decline began prior to promulgation of the 2000 Final CWT Rule and therefore cannot be attributed solely , if at all , to this rule
. Table 6 - 3 : Number of Establishments by Industry Sector and Year

Year Hazardous Waste

Treatment and Disposal (NAICS 562211) Other Nonhazardous

Waste Treatment and Disposal Services (NAICS 562219) Materials Recovery (NAICS 562920) Total CWT Number % Change Number % Change Number % Change Number % Change 1998 520 na 299 na 874 na 1,693 na 1999 536 3.1% 280
- 6.4% 837
- 4.2% 1,653
- 2.4% 2000 500
- 6.7% 278
- 0.7% 777
- 7.2% 1,555
- 5.9% 2001 520 4.0% 291 4.7% 73 6
- 5.3% 1,547
- 0.5% 2002 572 10.0% 292 0.3% 831 12.9% 1,695 9.6% 2003 682 19.2% 193
- 33.9% 899 8.2% 1,774 4.7% 2004 687 0.7% 219 13.5% 895
- 0.4% 1,801 1.5% 2005 695 1.2% 250 14.2% 884
- 1.2% 1,829 1.6% 2006 882 26.9% 265 6.0% 923 4.4% 2,070 13.2% 2007 829
- 11.7% 280
- 14.3% 1,043 22.3% 2,152 3.1% 199 8
– 2007 Comparison Total Percent Change 59.4 % - 6.4 % 19.3 % 27.1 % Annual Average Grow th Rate 5.3 - 0. 7 % 2.0 % 2.7 % 2000

– 2007 Comparison Total Percent Change 6 5.8% 0.7 % 34.2 % 3 8 . 4 % Annual Ave rage Grow th Rate 7 .5% 0.1 % 4.3 % 4. 8 % Sources: Statistics of U.S. Businesses (SUSB) Annual Data 1998
- 2007RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 21 6.2.2 Number of Firms CWT parent entities have the capacity to conduct business transactions and make business decisions affecting facilities they own ; consequently, parent entities of the CWT facilities are very likely to have experienced the financial impacts of the 2000 Final CWT Rule
. If compliance costs were high enough, CWT firms might be induced to merge with other (CWT or non
- CWT) firms in order to continue operating, or might be forced out of business altogether. Either effect would result in fewer firms in the industry. Further, high enough compliance costs might have become an entry barrier thereby deterring potential competitors. To assess how CWT industry concentration might have changed over time, EPA looked at the number of firms reported in the Statistics of U.S. Businesses (SUSB). As reported in Table 6

- 4 , similarly to the number of establishments ( Table 6
- 3 ) , the number of firms fluctuated in all three CWT segments throughout the analysis period of 199 8 through 2007 , but increased overall, by 13 percent, or at an annual average growth rate of nearly 2 perc ent . By segment , the number of firms in Hazardous Waste Treatment and Disposal (NAICS 562211) and in M aterials Recovery (NAICS 56290) increased by 19.3 percent and 14.7 percent, respectively. Only in the smallest segment

– the Other Nonhazardous Waste Treatment and Disposal segment (NAICS 562219)

– did the number of number of firms decrease and here by only small amount, a 2.2 percent decrease
. Given the overall increase in the number of firms in the CWT industry, the 2000 Final CWT Rule appears not to have increased CWT costs enough to force firms out of business , to encourage merger s and acquisitions, or to prevent new firms from entering the CWT industry . Even for the CWT segment that experienced a decline in the number of firms

– Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)

– this decline began prior to promulgation of the 2000 Final CWT Rule and therefore cannot be attributed solely , if at all , to this rule
. Table 6 -4 : Number of Firms by Industry S e gment and Year

Year Hazardous Waste

Treatment and Disposal (NAICS 562211) Other Nonhazardous

Waste Treatment and Disposal Services (NAICS 562219) Materials Recovery (NAICS 562920) Total CWT Number % Change Number % Change Number % Change Number % Chang e 1998 378 na 227 na 771 na 1,376 na 1999 398 5.3% 209
- 7.9% 703
- 8.8% 1,310
- 4.8% 2000 384
- 3.5% 198
- 5.3% 653
- 7.1% 1,235
- 5.7% 2001 393 2.3% 219 10.6% 609
- 6.7% 1,221
- 1.1% 2002 402 2.3% 223 1.8% 693 13.8% 1,318 7.9% 2003 447 11.2% 164
- 26.5% 785 13.3% 1,396 5.9% 2004 460 2.9% 188 14.6% 783
- 0.3% 1,431 2.5% 2005 466 1.3% 191 1.6% 765
- 2.3% 1,422
- 0.6% 2006 471 1.1% 203 6.3% 803 5.0% 1,477 3.9% 2007 451
- 4.2% 222 9.4% 884 10.1% 1,557 5.4% 199 8
– 2007 Comparison Total Percent Change 19.3 %
- 2. 2 % 14.7 % 13.2 % Annual Average Gro wth Rate 2. 0 %
- 0. 2 % 1.5 % 1.4 % 2000

– 2007 Comparison Total Percent Change 17.4% 12.1% 35.4% 26.1% Annual Average Gro wth Rate 2.3% 1.6% 4.4% 3.4% Sources: Statistics of U.S. Businesses A nnual Data 1998
-200 7RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

22 December 2010 6.2.3 Number of Small Firms T o assess whether small CWT firms were adversely affected by the 2000 CWT Rule , EPA looked at the number of small CWT firms over time to determine whether there were any significant changes in the number of small firms and compare d the trend in the number of small firms to that of large firms. The Small Business Administration annually provides small business size threshold guidelines ; these thresholds define by industry (by 6
- digit NAICS code) the minimum firm
- level employment or revenue size , below which a business qualifies as a small business under SBA guidelines. 12 According to the SBA size criteria, entities in the three analyzed industry sectors are small if their annual revenue is less than $12.5 million (the SBA annual revenue threshold at the time of the rulemaking analysis was $6 million)
. However, EPA was not able to find data to determine size of entities in the CWT industry based on their revenue 13

. Consequently, the Agency used number of employees data to categorize firms and determine the change in small business presence in the affected industry segments. EPA categorized firms as small businesses if they employed 100 or fewer employees. Although the employment size range do es n’t correspond specifically to the SBA revenue -based size criteria, the firm count data in this smaller employment size classification provide s direct insight into the relative presence of smaller businesses in the affected industry segments. EPA determined the employment
-based threshold of 100 or fewer employees from its review of Receipts Size of Firms data from the Economic Census. At the time of this analysis , these data were not available from the 2007 Economic Census; consequently, EPA used data from the 1997 and 2002 Economic Census to examine change in the presence of small businesses in the affected industry segments
. As shown in Table 6
- 5 , the average number of employees per firm increases with the receipts size category. Firms with annual receipts at $12.5 million

– the SBA size criterion

– are part of the “ $10 ,000,000
- $24 ,000,000” receipts size category; for firms in this category , the average number of employees per firm is approximately 100 across all three CWT segments for both 1997 and 2002
. Thus, EPA interprets the 100 or fewer employees firm size cut
- off as providing an approximate correspondence to the $10,000,000
- $24,000,000 receipts range, which contains the SBA small entity criterion
. To look at the number of small firms in each CWT segment and the CWT industry as a whole , EPA used the number of firms reported by employment size in the Statistics of U.S. Businesses (SUSB)
. Using the “100 or fewe r employees” threshold Table 6
- 6 provides the number of small and large CWT firms determined using the “ 100 or fewer employees ” threshold in 1998 through 2007 , by CWT segment
. During this time, the vast maj ority of entities

– 80 to over 90 percent

– in all three CWT segments are small
. Most of the small firms are in the Materials Recovery segment (NAICS 562920), followed by the Hazardous Treatment and Disposal (NAICS 562211) and Other Nonhazardous Treatment and D isposal (NAICS 562219) segments. This relationship remains true during the entire analysis perio d. Between 1998 and 2007 , the number of firms in the CWT industry with 100 or fewer employees increased by 13
. 5 percent while the number of firms with greater than 100 employees increased by 10. 1 percent. Thus, for the full analysis period, the presence o f smaller firms (based on the “ 100 or fewer employees ” threshold) increased compared to larger firms. Over the period 2000 to 2007 , following promulgation of the 2000 F inal CWT R ule, this difference magnified , with the number of small firms increasing by 2 7
. 6 percent while the number of large firms increased by 3.5 percent. Thus, in the period following rule promulgation, the presence of small firms, according to the 100 employee threshold, increased by a substantially greater amount than did the number of
12 The SBA website provides the most recent size thresholds at http://www.sba.gov/content/table
- small
-business
- size
- standards
. 13 EPA’s original 2000 CWT rule analysis used the 1990 industry questionn aire data and material submitted during the public comment periods for the rule proposal and Notice of Data Availability (NODA) to determine entities’ size using revenue. This data is out of date and could not be used for the current effort.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 23 firms of greater than 100 employees. These data suggest that promulgation of the 2000 F inal CWT R ule did not lead to a reduced presence of small firms in the overall CWT industry. By segment, the pattern of change in the presence of small and large busine ss es is not consistent in the period 1998 to 2007 :  In the Hazardous Waste Treatment and Disposal segment (NAICS 562211), the number of small firms increased by 26
. 5 percent while the number of large firms decreased by 1 5
. 4 percent.  In the Materials Recovery segment (NAICS 562920), the number of small firms increased by 12 .8 percent, while large firms increased by 45
. 5 percent.  In the Other Nonhazardous Waste Treatment and Disposal segment (NAICS 562219) the number of small entities fell by 3
. 9 percent whi le the number of large entities increased by 15 .0 percent. Consequently, while there was a shift towards small entities in the Hazardous Waste Treatment and Disposal segment (NAICS 562211) between 1998 and 2007 , the Other Nonhazardous Waste Treatment and D isposal segment (NAICS 562219) and the Materials Recovery segment (NAICS 562920) saw a shift towards large entities. As described above for the total CWT industry, the trend s in the presence of small and large firms are different when looking at the chang es since the 2000 Final CWT Rule came into effect ( 2000
- 2007 ) compared to the total period of 1998
- 2007
.  Overall, small firms increased by 27
. 6 percent while large firms increased by 12
. 7 percent  In the Hazardous Waste Treatment and Disposal segment (NAI CS 562211), the number of small firms increased by 25
. 3 percent while the number of large firms decreased by 19
. 1 percent.  In the Materials Recovery segment (NAICS 562920), the number of small firms increased by 33
. 6 percent, while large firms increased by 64
. 1 percent.  In the Other Nonhazardous Waste Treatment and Disposal segment (NAICS 562219) the number of small entities fell by 11
. 2 percent while the number of large entities increased by 21
. 1 percent. Given the overall increase in the number of small firms in the CWT industry since promulgation of the 2000 Final CWT Rule , the rule’s requirements appear not to have adversely affected small firms , defined as firms with 100 or fewer employees, in the CWT industry. Even for the CWT segment s where the increase in the number of small firms was less than the increase in the number of large firms

– Materials Recovery (NAICS 562920) and Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)

– this trend began prior to promulgation of the 2000 F inal CWT Rule and therefore cannot be attributed solely , if at all , to this rule
.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

24 December 2010 Table 6 - 5 : A

verage Number of Employees per Firm by Receipts Size
Receipts Size 1997 2002

Number of Firms Number of

Empl oyees Ave Number of

Emp l oyees per Firma Number of Firms Number of Empl oyees a Ave rage Number

of Empl oyees per Firm Hazardous Waste Treatment and Disposal (NAICS 562211) <$100,000 10 15 2 22 37 2 $100,000
- $249,999 39 118 3 47 119 3 $250,000 to $499,999 36 160 4 49 179 4 $500, 000 to $999,999 54 398 7 80 649 8 $1,000,000 to $2,499,999 50 771 15 68 903 13 $2,500,000 to $4,999,999 38 1,031 27 46 1,078 23 $5,000,000 to $9,999,999 28 1,299 46 29 1,418 49 $10,000,000 to $24,999,999 26 2,767 106 17 1,384 81 $25,000,000 to $49,999 ,999 15 2,500 to 4,999 167 to 333 11 2,065 188 $50,000,000 to $99,999,999 6 1,000 to 2,499 167 to 417 6 2,500 to 4,999 417 to 833 >=$100,000,000 4 5,295 1,324 9 10,000 to 24,999 1,111 to 2,778 Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219) <$100,000 29 49 2 11 25 2 $100,000
- $249,999 33 88 3 12 32 3 $250,000 to $499,999 30 124 4 31 149 5 $500,000 to $999,999 19 133 7 23 197 9 $1,000,000 to $2,499,999 40 552 14 29 344 12 $2,500,000 to $4,999,999 11 404 37 12 253 21 $5,000,00 0 to $9,999,999 7 250 to 499 36 to 71 5 250 to 499 50 to 100 $10,000,000 to $24,999,999 9 500 to 999 56 to 111 5 250 to 499 50 to 100 $25,000,000 to $49,999,999 1 100 to 249 100 to 249 2 100 to 249 50 to 125 $50,000,000 to $99,999,999 1 500 to 999 500 to 999 1 250 to 499 250 to 499 Materials Recovery (NAICS 562920) <$100,000 51 103 2 57 107 2 $100,000
- $249,999 110 332 3 112 345 3 $250,000 to $499,999 96 494 5 122 569 5 $500,000 to $999,999 94 878 9 119 900 8 $1,000,000 to $2,499,999 114 1,778 16 15 5 2,337 15 $2,500,000 to $4,999,999 51 1,644 32 69 2,110 31 $5,000,000 to $9,999,999 26 1,390 53 46 2,368 51 $10,000,000 to $24,999,999 10 1,000 to 2,499 100 to 250 25 2,500 to 4,999 100 to 200 $25,000,000 to $49,999,999 4 500 to 999 125 to 250 2 100 to 249 50 to 125 $50,000,000 to $99,999,999 0 0 0 1 100 to 249 100 to 249 Sources: 1997 Economic Census; 2002 Economic Census a. “Average Number of Employees” values are reported as integers.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 25 Table 6 - 6 : Number of Firms by Employment Size, Industry Segment, and Year – Using the “ 100 of Fewer Employees ” SBA Size Threshold

Year Employment

Group Hazardous Waste

Treatment and Disposal (NAICS 562211) Other Nonhazardous

Waste Treatment and Disposal Services (NAICS 562219) Materi als Recovery

(NAICS 562920) Total CWT Number % of Total Number % of Total Number % of Total Number % of Total 1998 <100 313 83% 207 91% 727 94% 1,247 91%

>100 65 17% 20 9% 44 6% 129 9% 1999 <100 328 82% 193 92% 659 94% 1,180 90%

>100 70 18% 16 8% 44 6% 130 10% 2000 <100 316 82% 179 90% 614 94% 1,109 90%

>100 68 18% 19 10% 39 6% 126 10% 2001 <100 329 84% 199 91% 568 93% 1,096 90%

>100 64 16% 20 9% 41 7% 125 10% 2002 <100 344 86% 202 91% 653 94% 1,199 92%

>100 58 14% 21 9% 40 6% 119 8% 2003 <100 400 89% 149 91% 737 94% 1,286 92%

>100 47 11% 15 9% 48 6% 110 8% 2004 <100 412 90% 170 90% 730 93% 1,312 92%

>100 48 10% 18 10% 53 7% 119 8% 2005 <100 412 88% 173 91% 711 93% 1,296 91%

>100 54 12% 18 9% 54 7% 126 9% 2006 <100 413 88% 181 89% 740 92% 1,334 90%

>100 58 12% 22 11% 63 8% 143 10% 2007 <100 396 88% 199 90% 820 93% 1,415 91%

>100 55 12% 23 10% 64 7% 142 9% 1998

– 200 7 Comparison Total Percent Change <100 26 . 5 % -3 . 9 % 12 .8% 13.5 %

>100 - 1 5 . 4 % 1 5 .0% 4 5 . 5 % 10. 1 % Annual Average Grow th Rate <100 2.6% - 0.4% 1.3% 1.4%

>100 - 1.8% 1.6% 4.3% 1.1% 2000

– 200 7 Comparison Total Percent Change <100 25.3% 11.2% 33.6% 27.6%

>100 - 19.1% 21.1% 64.1% 12.7% Annual Average Grow th Rate <100 3.3% 1.5% 4.2% 3.5%

>100 -3.0% 2.8% 7.3% 1.7% Sources: Statistics of U.S. Businesses A nnual Data 1998
-200 7 

### 6.3 Average Employment Size of CWT Firms Change in the average size of firms based on employment provides another indicator of relative small business presence in the CWT industry over the period before and after promulgation of the 2000 Final CWT R ule. Overall, the average size of firms in the CWT industry increased modestly over the 199 8
- 2007 period, from an average of 2 5 employees per firm in 199 8 and 26 employees p er firm in 2000 (the year of CWT rule promulgation) to an average of 27 employees per firm in 200 7 . In addition, the year
-to -year profile of change is relatively directionless, with some year
-to -year changes showing modest increase and others showing modes t decrease ( Table 6
- 7

)
. Similar, relatively directionless patterns are observed at the level of the industry segments, with the firms in the Hazardous Waste Treatment and Disposal segment (NAICS 562211) showing an increase in average number ofRFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

26 December 2010 employees over both the 199 8
- 2007 and 2000
- 2007 periods, the Other Nonhazardous Waste Treatment and Disposal segment (NAICS 562219) and the Materials Recovery segment (NAICS 562920) showing an increase over the 199 8
- 2007 period but a decrease in the 2000
- 2007 period. Given the relatively small and/or directionless profile of changes in average number of employees per firm, there appears to be no systematic change in average firm size that can be attributed to the 2000 Final CWT Rule
. Table 6 - 7 : Av erage Number of Employees per Firm by CWT Se gment and Year

Year Hazardous Waste

Treatment and Disposal (NAICS 562211) Other Nonhazardous

Waste Treatment and Disposal Services (NAICS 562 219) Materials Recovery

(NAICS 562920) Total Number % Change Number % Change Number % Change Number % Change 1998 45 na 19 na 16 na 25 na 1999 46 3.4% 19 2.5% 19 15.2% 27 10.9% 2000 42
- 10.4% 23 19.7% 19 0.0% 26
- 2.5% 2001 42 1.0% 21
- 8.0% 21 13.8% 2 8 5.4% 2002 41
- 2.2% 20
- 6.5% 18
- 13.4% 26
- 8.4% 2003 50 21.1% 17
- 16.7% 17
- 5.5% 28 8.1% 2004 50 0.7% 18 8.5% 19 7.9% 29 3.9% 2005 49
- 1.2% 17
- 4.5% 19 2.8% 29 0.6% 2006 56 13.9% 17 0.0% 20 2.2% 31 7.5% 2007 53
- 6.1% 20 16.5% 16
- 16.7% 27
- 11.4% 19 9 8
– 2007 Comparison Total Percent Change 17.8 % 6.1% 1.4% 12.2% Annual Average Grow th Rate 1.8% 0.7 % 0. 2 % 1.3 % 2000

– 2007 Comparison Total Percent Change 27.2% - 13.6% - 12.0% 3.8% Annual Average Grow th Rate 3.5% - 2.1% - 1.8% 0.5% Sourc es: Statistics of U.S. Businesses Annual Data 1998
-2007 

### 6.4 Market Structure of CWT Industry Segments As discussed in Section 2.2 of this document, in EPA’s analysis for the 2000 Final CWT Rule , because of the large number of the CWTs in the oils recovery and/or oily wastewater treatment markets, it was assumed that the CWT industry is perfectly competitive. Increasing concentration in the CWT industry segments could indicate that the 2000 Final CWT Rule led to reduced competitiveness in the industry, with lower viability of, and increased business risk to, the small businesses in the industry. Industry competitiveness and market concentration data are published at 5
-year intervals as part of the Economic Census, with the most recent data being for the year 2 007
. Based on these data, Table 6
- 8 shows market concentration ratios by CWT se gment for 1992, 1997, 2002 , and 2007
. Table 6
- 8 shows that overall CWT segments are not very concentrated
. 14 In addition, the profile of change in concentration at the 4
- and 8
- firm levels has been inconsistent over the period 1992
- 2007 , with concentration declining in some segments ( according to
14 Under current policy, the U.S. Department of Justice (DOJ) determines the degree of market concentration as measured by the Herfindahl
- Hirschman Index (HHI) as follows: unconcentrated (HHI<1000), moderately concentrated (1000<HHI<1800), and highly concentrated (HHI >1800). An empirical study conducted by DOJ indicates that the 1000 and 1800 HHI thresholds approximately correspond to four
- firm concentration ratios of 50 percent and 70 percent, respectively (see 1982 Merger Guidelines available online at http://www.justice.gov/atr/hmerger/11248.pdf ). Accordingly, for this review, which relies on concentration data, EPA judges that markets with four
- firm concentration ratios exceeding 70 percent are highly concentrated, and between 50 and 70 percent as moderately concentrated. Markets with four
- firm concentration ratios below 50 percent are considered unconcentrated.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 27 some concentration measures ) while increasing in others. Given the inconsistency of direction in these changes, it does not appear that there is any systematic trend of increasing concentration/reduced market competitiveness that could be attributed to the 2000 Final CWT Rule
.

Table 6 - 8 : Ma rket Concentration Ratios a Industry Year Number of Firms 4 Largest

Firms 8 Largest

Firms 20 Largest

Firms 50 Largest

Firms NAICS SIC 562211 4953 1992 570 42.6 49.0 57.6 66.4

1997 362 36.1 46.2 63.7 82.0 2002 45 1 36.8 51.7 71.9 85.1 2007 436 44.6 59.2 75.2 87.5 562219 4953 1992 149 42.6 49.0 57.6 66.4

1997 225 54.7 65.8 80.3 91.2 2002 170 60.3 71.0 82.1 92.4 2007 179 34.7 51.9 70.5 86.9 562920 4953 1992 258 42.6 49.0 57.6 66.4

1997 697 30.6 37.2 46.9 60.8 2002 829 24.1 29.2 39.2 54.4 2007 922 33.3 38.2 47.1 59.9 Sources: Economic Census 1992; Economic Census 1997; Economic Census 2002 ; Economic Census 2007 a. C oncentration ratios for 1992 are reported for SIC 4953 while 1997 and 2002 concentration ratios are reported for NAICS 562211, 562219, and 56920. 

### 6.5 Economic Performance in the CWT Industry Segments I f increased costs due to the 2000 F inal CWT R ule led to declines in the amount of wastes treated and/or declines in profitability in the C WT industry, then these declines would likely manifest as declines in industry employment, revenue, and other measures of economic performance . Accordingly, EPA looked at a range of economic activity measures for the CWT industry segments over the years be fore and following rule promulgation. The economic activity measures reported in this section are not available by business size and, as a result, the insights from looking at these measures apply to the industry segments regardless of business size. Nevertheless, if the rule led to economic declines overall, then these declines would likely have affected the small businesses in the CWT segments. 6.5.1 Employ ment Table 6
- 9 presents number of employees for the overall CWT industry and by segment for 199 8 through 200 7
. Over this period, total industry employment increased substantially, by 26.9 percent , with no apparent change in the trend of employment growth before and after promulgation of the CWT rule. At the segment level, employment performance is consistent with the Hazardous Waste Treatment and Disposal segment (NAICS 562211) and the Materials Recovery segment (NAICS 562920) showing substantial increase s by 40.6 percent and 16.3 percent, respectively, between 199 8 and 2007 and by 49.4 percent and 19.1 percent, respectively, since 2000
. In contrast, in the Other Nonhazardous Treatment and Disposal segment (NAICS 562219) , the number of employees increased by 3.7 percent between 199 8 and 2007 but decreased by 3.1 percent since 2000. Given (1) the increase in the number of employees in the overall CWT industry since 199 8 and also following promulgation of the final rule , (2) the inconsistency of change across industry segments, and (3) the lack of a systematic difference in the employment growth trends in the periods before and after rule promulgation, there is no basis for concluding that the rule caused contractions in activity and reduced employment in the CWT industry.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

28 December 2010

Table 6 - 9 : Number of Employees by CWT Segment and Year

Year Hazardous Waste

Treat me nt and Disposal (NAICS 562211) Other Nonhazardous

Waste Treatment and Disposal Services (NAICS 562219) Materials Recovery

(NAICS 562920) Total CWT Number % Change Number % Ch ange Number % Change Number % Change 1998 16,976 na 4,269 na 12,485 na 33,730 na 1999 18,475 8.8% 4,030
- 5.6% 13,113 5.0% 35,618 5.6% 2000 15,972
- 13.5% 4,570 13.4% 12,185
- 7.1% 32,727
- 8.1% 2001 16,517 3.4% 4,649 1.7% 12,928 6.1% 34,094 4.2% 2002 16, 526 0.1% 4,427
- 4.8% 12,744
- 1.4% 33,697
- 1.2% 2003 22,246 34.6% 2,713
- 38.7% 13,638 7.0% 38,597 14.5% 2004 23,043 3.6% 3,374 24.4% 14,673 7.6% 41,090 6.5% 2005 23,059 0.1% 3,272
- 3.0% 14,744 0.5% 41,075 0.0% 2006 26,556 15.2% 3,477 6.3% 15,820 7.3% 45 ,853 11.6% 2007 23,869
- 10.1% 4,429 27.4% 14,514
- 8.3% 42,812
- 6.6% 199 8
– 2007 Comparison Total Percent Change 40.6 % 3.7 % 16.3 % 26.9 % Annual Average Grow th Rate 3.9 % 0. 4 % 1 .7% 2.7 % 2000

– 2007 Comparison Total Percent Change 49.4% -3.1% 1 9.1% 30.8% Annual Average Grow th Rate 5.9% - 0.4% 2.5% 3.9% Sources: Statistics of U.S. Businesses Annual Data 1998
-2007 6.5.2 Revenue, Employ ment, and Pay roll in the CWT Industry Segments EPA used data from the Economic Census for years 1997, 2002, and 2 007 on revenue, employment, and payroll to provide additional insight into the potential effect of the rule on small businesses in the CWT industry. The data on employment from the Economic Census are, in concept , measuring the same value as reported in the preceding section. However, the employment values reported in this section differ from those reported above because they are not drawn from the same source. 15 However, the trends over time in the employment values do correspond between the two data source s. Overall, these data continue to show a similar profile to that observe d for the other data series, with increases in all metrics for the full CWT industry and the larger industry segments, Waste Treatment and Disposal segment (NAICS 562211) and the Materials Recovery segment (NAICS 562920), also showing increases. The smaller industry segment, Other Nonhazardous Treatment and Disposal segment (NAICS 562219), reported a decrease in the reported metrics. The strength of overall performance, and the generally strong performance at the segment level, continue to suggest that the CWT rule did not have an overall adverse effect on the industry, generally, and, by inference, the small business component. As shown in Table 6

- 10 , b etween 1997 and 2007, revenue, payroll, revenue less payroll (a rough measure of operating margin), and employment all increased 16 for the total CWT industry. At the segment level, performance was somewhat mixed with the Waste Treatment and Dispos al segment (NAICS 562211) and the Materials Recovery segment (NAICS 562920) showing increases in all metrics, with revenue increasing by 29.3 percent and

15 Statistics of U.S. Businesses and Economic Census data may differ as a result of data collec tion methods and publication timing. SUSB data is collected by the IRS, while Census data is collected through a mail survey and is continuously updated. Different time frames for data publication lead to differences in the number of firms, employees, and establishments recorded and their classification into NAICS codes. 16 The revenue, payroll and rough operating margin values are in constant 2009 dollars, so the observed increases are not due merely to inflation.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 29 74.1 percent, respectively, for the two segments; revenue less payroll also increased by 47.0 percent and 209.3 percent, respectively. However, the Other Nonhazardous Treatment and Disposal segment (NAICS 562219) showed decreases with revenue and profitability declining by more than 26 percent. The l ack of true time
- series data increases the degree of uncertainty of any conclusions drawn from these data regarding the impact of the 2000 Final CWT Rule
. H owever, based on the fact that between 1997 and 2007 both revenue and profitability of the CWT industry increased together with other findings presented in this Section, it is likely that the 2000 Final CWT Rule did not adversely affect the CWT industry as a whole or small businesses operating in the industry
. Table 6 - 10 : Key E conomic P erformance Statistics for CWT I ndustry and Segments, 1997 -2007

Year Number of

Esta b lishments Revenue

(M illions; $2009) Annual Payroll

(M illions; $2009) Revenue Less Payroll

(M illions; $2009) Number of Employees Hazardous Waste Treatment and Disposal (NAICS 562211) 1997 512 $3,736 $967 $2,769 17,816 2002 696 $4,131 $1,173 $2,957 21,566 2007 779 $5,970 $1,901 $4,069 34,396 Total Percent Change 1997 -2007 52.1% 59.8% 96.5% 47.0% 93.1% Average Annual Growth Rate 1997 -2007 4.3% 4.8% 7.0% 3.9% 6.8% Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219) 1997 294 $975 $218 $757 5,082 2002 199 $695 $173 $522 3,673 2007 227 $716 $161 $555 3,170 Total Percent Change 1997 -2007 - 22.8% - 26.6% - 26.3% - 26.7% -37.6% Average Annual Growth Rate 1997 -2007 - 2.6% -3.0% -3.0% -3. 1% - 4.6% Materials Recovery (NAICS 562920) 1997 765 $1,686 $368 $1,318 10,846 2002 938 $2,186 $488 $1,699 14,752 2007 1,129 $4,707 $628 $4,078 16,808 Total Percent Change 1997 -2007 47.6% 179.1% 70.8% 209.3% 55.0% Average Annual Growth Rate 1997 -2007 4.0% 10.8% 5.5% 12.0% 4.5% Total CWT 1997 1,571 $6,398 $1,554 $4,844 33,744 2002 1,833 $7,012 $1,834 $5,178 39,991 2007 2,135 $11,392 $2,690 $8,702 54,374 Total Percent Change 1997 -2007 35.9% 78.1% 73.1% 79.7% 61.1% Average Annual Growth Rate 1997 -20 07 3.1% 5.9% 5.6% 6.0% 4.9% Sources: 1997 Economic Census; 2002 Economic Census; 2007 Economic Census 

### 6.6 Financial Performance in the CWT Industry Segments EPA also looked at selected financial performance metrics

– pre -tax income margin, pre -tax return on assets, and interest coverage ratio (earnings before interest and taxes over interest payments)

– as indicators of CWT industry segment performance before and since promulgation of the 2000 Final CWT R ule. EPA used data reported by the RMA for this assessment . RMA compiles and reports financial statement information by industry as provided by me mber commercial lending institutions. Because the financial statements received by RMA are for businesses applying for credit from member institutions, the data do no t represent a random sample. In particular, the RMARFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

30 December 2010 data likely exclude representation from the financially weakest businesses, which are unlikely to seek financing from RMA member lending institutions. However, the RMA data offers the advantage of being available by 6
- digit NAICS codes and for quartile ranges. Creditors and equity investors review the following three measures as criteria to determine whether and under what terms they will provide financing for a business; all three measures are important to financial success and firms’ ability to attract capital :  Pre - Tax Income Margin (PTIM) : As defined by RMA, this measure is the ratio of pre -tax income to net sales. This ratio measures company profitability, i.e., how much out of every dollar of sales a company actually keeps in earnings , independent of its tax circumstances . Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. The PTIM values reported by RMA and presented in this report are the average values from financial statements provided to RMA.  Pre - Tax Return on Assets (PTRA) : As defined by RMA, this measure is the ratio of pre
-tax income to assets . This ratio measures the performance and profitability of a business’ assets independent of tax circumstances. PTRA is a comprehensive measure of a firm’s economic and financial performance. If a firm c ould not sustain a competitive PTRA on a post
- CWT compliance basis, it most likely face d difficulty financing its investments, including the outlays for compliance equipment. The PTRA values reported by RMA and presented in this report are the median values from financial statements provided to RMA.  Interest Coverage Ratio (ICR) : As defined by RMA, this measure is the ratio of earnings before interest and taxes to interest. This ratio measures the firm’s ability to service its debt on the basis of current, ongoing financial performance and to borrow for capital investments. Investors and creditors will be reluctant to provide financing to firms whose operating cash flow does not comfortably exceed its contractual obligations. As ICR increases, the firm’s general ability to meet interest payments and carry credit increases. ICR also provides a measure of the amount of cash flow available for equity after interest payments. The ICR values reported by RMA and presented in this report are the median values from financial statements provided to RMA. To assess the change in financial conditions over time , and assess trends in the three CWT industry segments be fore and following promulgation of the 2000 Final CWT Rule , EPA looked at RMA data for 1997 through 2008 , when possible . Un fortunately, RMA data were not available in a consistent framework for the three CWT segments , for the full analysis period
. For 1997 through 2002 , RMA data are reported in the SIC framework for SI C 4953: Refuse Systems . As mentioned earlier in this document, in addition to the three CWT industry segments , this SIC industry sector also maps onto NAICS 562212: Solid Waste Landfills and NAICS 562213: Solid Waste Combustors and Incinerators
. After 2002 , RMA data are reported in the NAICS framework . Given this inconsistency in the data series over time, EPA organized the data in two ways: 1. Data in the SIC framework are reported for the years 1997
- 2002 as provided by RMA. To provide a consistent time series of the SIC
- framework data for the years following 2002, EPA generated an SIC 4953
- equivalent data series after 2002 by aggregating the data reported for the 6
- digit CWT and non
CWT NAICS, we ighted by the 200 7 value of shipments from the 2007 Economic Census. Because RMA does not provide data for NAICS 562213: Solid Waste Combustors and Incinerators, the SIC 4953
- equivalent data series reported after 2002 include only the three CWT industry se gments and NAICS 562212: Solid Waste Landfills. This data series shows the financial performance for the larger Refuse Systems industry (SIC 4953) , including both the CWT segments and the non - CWT segment. 2. Data are also reported in the NAICS framework beginning with 2002. These data apply to the three specific NAICS segments in the CWT industry as discussed elsewhere in this report.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 31 As shown in F

igure 6
- 1 , the SIC 4953: Refuse Systems industry experienced minor fluctuations in profitability , as measured by pre - tax income margin , throughout the analysis period of 1997 through 2008. While profitability experienced a slight drop in 2001, i.e., the first year after promulgation, the industry rebounded in 2002 and generally experienced growth in profitability through 2007. In 2007, profitability declined significantly, likely resulting from the general slowdown in the U.S. economy. During this year profitability dropped to approximately the pre
-promulgation level. The same pattern generally hold s for the other two financial metrics

– pre -tax return on assets and interest coverage ratio

– except that (1) the decline in both ratios begins in 2006 , also likely due to the general economic decline, as opposed to 2007 ; and (2) these ratios did not decline to the same extent relative to pre - promulgation level

s , as the profitability metric
. Financial performance of all three CWT industry segments after the 2000 Final CWT Rule promulgation generally followed that of the Refuse Systems industry (SIC 4953 ). Consequently, according to these financial performance metrics , the 2000 Final CWT Rule does not appear to have adversely affected financial performance of the CWT industry, either overall, or in the individual CWT segments. RMA al so provides financial data by revenue size category , but for the analyzed CWT industry segments , these data are not sufficiently complete to assess financial performance over
-time for the small entities only. However, based on the reported number of RMA re spondents with revenue less than $12.5 million, at least half of the providers of the data presented in F igure 6
- 1 would be small according to the SBA criterion ( see Table 6
- 11 ). Consequently, the RMA data include a substantial presence of small businesses, and the financial performance data reporte d in F

igure 6
- 1 are largely indicative of small business performance.RFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

32 December 2010 F igure 6 - 1 : Pre -Tax Income Margin , Pre -Tax Return on Assets , and Interest Coverage Ratios by CWT Segment a Pre - Tax Income Margin

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15199719981999200020012002200320042005200620072008

NAIC S 562211 NAIC S 562219 NAIC S 562920 SI C 4953

Pre - Tax Return on Assets

4 5 6 7 8 9 10 11 12 13 14 15199719981999200020012002200320042005200620072008

NAIC S 562211 NAIC S 562219 NAIC S 562920 SI C 4953

Interest Coverage Ratio NAICS SI C NAICS SI CRFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

Ap ril 12, 2011 December 2010 33

0 1 2 3 4 5 6 7 8 9 10199719981999200020012002200320042005200620072008

NAIC S 562211 NAIC S 562219 NAIC S 562920 SI C 4953

Sources: Risk Management Association ; 2002 Economic Census a From 1997 through 2002 the data are reported for SIC 4953: Refuse Systems. From 2002 through 2008 the data are reported for NAICS 562211: Hazardous Waste Treatment and Disposal, NAICS 562219 : Other Nonhazardous Treatment and Dispo sal, and NAICS 562920: Materials Recovery Facilities. The SIC
- equivalent data reported for 2002 through 2008 were estimated as value of shipments
-weighted pre - tax income margin, interest coverage , and pre
- tax return on assets values reported for CWT NAICS 562211: Hazardous Waste Treatment and Disposal, CWT NAICS 562219: Other Nonhazardous Treatment and Disposal, CWT NAICS 562920: Materials Recovery Facilities NAICS 562211 and non
- CWT NAICS 562212: Solid Waste Landfill, all of which map onto SIC 4953: Refuse Systems according to the 1997 Economic Census Bridge Between NAICS and SIC.
Table 6 - 11 : Number of RM A Respondents by CWT Segment and Year: 1997 - 2008
Year Total Number of RMA Respondents Percent of Potentially Small RMA Respondents NAICS SIC NAICS SIC 562211 562219 562920 562212 4953 562211 562219 562920 562212 4953 1997 na na na 271 271 na na na na 72% 1998 na na na 278 278 na na na na 68% 1999 na na na 244 244 na na na na 71% 2000 na na na 247 2 47 na na na na 70% 2001 na na na 232 232 na na na na 68% 2002 22 na 31 218 271 na na 67% 67% 67% 2003 29 na 46 193 268 na na 64% 66% 66% 2004 45 16 40 185 286 56% na 74% 62% 63% 2005 32 14 42 169 257 68% na 69% 60% 63% 2006 49 22 56 131 258 57% na 63 % 56% 58% 2007 65 23 63 121 272 52% na 57% 53% 54% 2008 65 39 87 134 325 52% 45% 63% 53% 55% Source: Risk Management Association SI C NAICSRFA Section 610 Review of the Effluent Limitations Guidelines and Standards for the CWT Industry

34 December 2010 

## 7 Conclusion As describe d in the preceding sections, this assessment finds that the CWT industry overall has shown favorable economic and financial performance according to a range of metrics. Performance at the level of the individual industry segments is more variable, with two of the three CWT segments

– Hazardous Waste Treatment and Disposal segment (NAICS 562211) and the Materials Recovery segment (NAICS 562920)

– showing generally favorable performance, and the third segment Other Nonhazardous Treatment and Disposal segment (NAICS 562219) showing somewhat weaker performance. However, the third CWT segment is the smallest se gment within the CWT industry. Moreover, in several instances, trends of declining revenue or other business performance metrics that are apparent after promulgation of the final rule had begun before the rule , and thus cannot be attributed to the CWT rule
. More specifically, revenue, profitability, number of employees, and number of CWT facilities increased for the two larger industry segments. In addition, the total number of CWT firms as well as the number of small firms increased in all three CWT segments. Finally, financial performance measured in pre
-tax profit margin, pre -tax return on assets, and interest coverage ratio generally improved for the CWT industry as a whole. As described in the introduction to Section 6 , much of this review considered the industry or its segments in aggregate, regardless of business size

– given the data limitations. However, because the CWT industry, overall, is comprised substantially of small businesses, information and related findings that are descriptive of the ind ustry, as a whole, are also generally applicable to the small business component of the industry. Given these findings, EPA sees no basis for concluding that the CWT rule has caused deterioration in the CWT industry, or specifically the viability and perf ormance of the industry’s small business component. EPA has also provided numerous small business tools to help small entities understand and comply with the CWT effluent guidelines limitations and pretreatment standards (Section 4 , above)
. The Agency be lieves there is still a need for the CWT Rule and that it does not overlap or conflict significantly with other government regulations. Also, EPA received no public comments on the section 610 review Federal Register Notice, published in April 2010
. There fore, EPA has determined that the Effluent Limitations Guidelines for the Centralized Waste Treatment Category (40 CFR Part 437) as promulgated in 2000 and amended in 2003 should be left unchanged as of the date of this analysis, December 2010.