February 19, 2016

The Honorable Gina McCarthy

Administrator U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW Washington, DC 20460

Dear Administrator McCarthy :

Enclosed for your consideration is the Report of the Small Business Advocacy Review Panel (SBAR Panel or Panel) convened for EPA’s planned proposed rulemaking entitled “ Risk Management

Modernization

. ” This notice of proposed rulemaking is being developed by the U.S. Environmental Protection Agency (EPA) under the Clean Air Act (CAA)

. Both EPA’s 40 CFR part 68 Risk Management Program regulation 1 and the Occupational Safety and

Health Administration’s ( OSHA’s ) 29 CFR 1910.119 P rocess S afety M anagement (PSM) standard were authorized in the CAA Amendments of 1990 (1990 CAAA), in response to a number of catastrophic chemical accidents occurring worldwide that had resulted in public and worker fatalities a nd injuries, environmental damage, and other community impacts. OSHA published the PSM standard in 1992 (57 FR 6356, February 24, 1992), as required by section 304 of the 1990 CAAA, using its authority under 29 U.S.C. §653.

EPA published the Risk Managment Program regulation in two stages. The Agency published the list of regulated substances and threshold quantities in 1994 (59 FR 4478, January 31, 1994) (the “list rule”) and published the Risk Managment Program final regulation, containing risk management requirements for covered sources, in 1996 (61 FR 31668, June 20, 1996) (the “RMP rule”). 2

Both the OSHA PSM standard and the EPA RMP rule aim to prevent or minimize the consequences of accidental chemical releases through implementation of management pro gram elements that integrate process safety technologies, procedures, and management practices. In addition to requiring implementation of management program elements, the RMP rule requires covered sources to submit a document (i.e., Risk Management Plan ( also referred to as a n RMP) summarizing the source’s R isk

M anagement P rogram to EPA. The RMP rule required covered sources to comply with its requirements and submit initial RMPs to EPA by June 21, 1999. Each RMP must be revised and updated at least once every five years from the date the Plan was initially submitted.

On August 1, 2013, President Obama signed Executive Order 13650, entitled Improving Chemical Facility Safety and Security (EO 13650 or the EO). The EO was prompted by recent major chemical accidents, including the explosion at the West Fertilizer facility in West, Texas on April 17, 2013. EO 13650 directs the federal government to carry out a number of tasks whose overall goal is to prevent chemical

accidents. Among the tasks discussed, the EO directs agencies to consider possible changes to existing chemical safety regulations such as EPA’s RMP regulation. On July 31, 2014, EPA published a Request for Information (RFI) notice (79 FR 44604) to solicit comments and information from the public regarding potential changes to EPA’s RMP regulations.

On November 4, 2015 , EPA’s Small Business Advocacy Chairperson convened this Panel under section 609(b) of the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). In addition to its chairperson, the Panel consists of the Director of

1 40 CFR part 68 is titled, “Chemical Accident Prevention Provisions,” but is more commonly known as the “RMP regulation,” the “RMP rule” or the “Risk Management Program.” This document uses all three terms to refer to 40 CFR part 68. The term “RMP” refers to the document required to be submitted under subpart F of 40 CFR part 68, the Risk Management Plan. See http://www 2 .epa.gov/rmp for more information on the Risk Management Program.

2 40 CFR Part 68 applies to owners and operators of stationary sources that have more than a TQ of a regulated substance within a process. The regulations do not apply to chemical hazards other than listed substances held above a TQ within a regulated process.

### ii the Office of Emergency Management’s Regulations Implementation Division (OEM/RID) within EPA’s

Office of Land and Emergency Management (OLEM) 3 , the Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB), and the Chief Counsel for Advocacy of the Small Business Administration (SBA). It is i mportant to note that the Panel’s findings and discussion are based on the information available at the time this report was drafted. EPA is continuing to conduct analyses relevant to the proposed rule, and additional information may be developed or obtain ed during this process as well as from public comment on the proposed rule. The options the Panel identified for reducing the rule’s economic impact on small entities will require further analysis and/or data collection to ensure that the options are pract icable, enforceable, protective of public health, environmentally sound and consistent with the CAA

.



### SUMMARY OF SMALL ENTITY OUTREACH

In 2013 and 2014, as part of the EO 13650 activities, the federal government held a dozen listening
sessions, supplemented by two online webinars. The locations for listening sessions were selected to reach as many and as diverse stakeholder groups as possible. Many listening sessions were held both during and outside of work hours to maximize stakeholder particip ation. 4

EPA also held several meetings with trade associations, include those representing small businesses, to discuss the actions the agency is considering under the EO and how we can partner with industry to improve chemical safety.

Prior to convening the Panel, EPA conducted outreach with small entities that will potentially be affected by these regulations. In September, 2015 , EPA invited SBA, OMB, and 32 potentially affected small entity representatives to a conference call and solicited comments f rom them on preliminary information sent to them. EPA shared the small entities’ written comments with the Panel as part of the Panel convening document.

After the SBAR Panel was convened, the Panel distributed additional information to the small entity

r epresentatives (SERs) on November 4, 2015 , for their review and comment and in preparation for another outreach meeting. On November 19, 2015 , the Panel met with the SERs to hear their comments on the information distributed in these mailings. The SERs wer e asked to provide written feedback on ideas under consideration for the pr oposed rulemaking . The Panel received written comments from the SERs in response to the discussions at this meeting and the o utreach materials. See Section 6 of the

Panel r eport for a complete discussion of SER comments. Their full wr itten comments are also included in Appendix A . In light of these comments, the Panel considered the regulatory flexibility issues specified by RFA/SBREFA and developed the findings and discussion summa rized below.



### PANEL FINDINGS AND DISCUSSION

Under section 609(b) of the RFA, the Panel is to report its findings related to these four items:

1) A description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply. 2) A description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report

or record. 3) Identification, to the extent practicable, of all relevant federal rules which may duplicate, overlap or conflict with the proposed rule.

3 The office previously known as the Office of Solid Waste and Emergency Response (OSWER) has been renamed to the Office of Land and Emergency Management (OLEM). The old office name “OSWER” may be retained on earlier materials prepared for the pre

- Panel an d Panel process.

4 For a list of locations and notes for these sessions go to http://www.regulations.gov

, d ocket # DHS

- 2013

- 0075.

### iii 4) A description of any significant alternatives to the planned proposed rule which would minimize any significant economic impact of the proposed rule on small entities consistent with the stated objectives of the authorizing statute.

The Panel’s most significant findings and discussion with respect to each of these i tems are summarized below. To read the full discussion of the Panel findings an d recommendations, see Section 7 of the

Panel r eport.

A. Number and Types of Entities Affected

For a complete description of the small entities to which the proposed rules m ay apply, see Sections 3

and 4 of the Panel r eport

.

B. Recordkeeping, Reporting, and Other Compliance Requirements

The potential reporting, recordkeeping, and compliance requirements are still under development. EPA expects that the proposed rule would include the following additional reporting, recordkeeping and compliance requirements:

• Hire a third

- party to conduct the compliance audit after a n RMP reportable accident ;

• Conduct and document a root cause analysis after a n RMP reportable accident ;

• Conduct and document an incident investigation, including root cause analysis, after a near miss;

• Conduct and document a saf er technology alternatives analysis;

• Meet and coordinate with local responders;

• Come into compliance with requirements for responding to a release using facility staff, including developing an emergency response plan, conducting exercises, documenting trai ning, and providing information to the Local Emergency Planning Committee ( LEPC ) ;

• Conduct a notification drill to verify emergency contact information;

• Conduct and document emergency response exercises;

• Make certain information related to the risk management program available to the local community;

• Provide the LEPC and local responders with summaries of certain activities under the risk
management program , upon request ; and

• Hold a public meeting within 30 day s of an RMP reportable accident.

The Pa nel recommends that reporting and recordkeeping requirements should be streamlined if practicable. The Panel specifically highlighted a need for streamlining recordkeeping requirements for

exercises. The Panel anticipates that the requirements will be the minimum required by the statute to ensure compliance with the RMP requirements.

C. Related Federal Rules

The Panel recommends that EPA review the Emergency Planning and Community Right

- to

- K now Act ( EPCRA ) to ensure that provisions from this rule are not duplicative of other information reporting requirements. Several SERs commented that the information EPA would require facility owners or operators to report to LEPCs is already being collected and made ava ilable under EPCRA. As such, EPA may find value in reevaluating the information provided under EPCRA to achieve the objectives intended.

See Section 2.4 of the Panel r eport for a discussion of related federal rules.

D. Regulatory Flexibility Alternatives

The Panel agrees that EPA should explore regulatory alternatives and provide flexibility where appropriate. This flexibility can lessen impacts to small entities, as well as to entities not classified as small. The SERs suggested alternative approaches fo r additional regulatory flexibility that are described

further in this section. The Panel recommends that EPA should include SER suggestions for additional

### iv flexibility, where appropriate, and in other cases EPA should request comment on the other alternati ves to give others affected by this rule the opportunity through notice and comment rulemaking to weigh in.

Third

- Party Compliance Audits

Eliminate provision

SERs identified that this provision is unnecessary because the existing incident investigation requirements are adequate, more appropriate, and already accomplish the desired remediation objectives of this provision. SERs also emphasized that internal auditors are more effective at performing these audits because they are more familiar with the faci lity processes and the facilities have a vested interest in completing an objective and thorough audit. SERs suggested that this provision, to require a third

- party audit after an accident, should be deleted. SERs were substantially concerned about the ava ilability of auditors that were knowledgeable in their industry. Finally, SERs pointed out that EPA alread y has authority to compel third

- party audits as a corrective action and therefore can do so on a case

- by

- case basis.

Limit applicability

SERs suggeste d limiting the requirement to a subset of Program 3 facilities. SERs further suggested that the requirement should be limited to those facilities with a major accident that has offsite impacts. EPA notes that the requirement would apply to a subset of faci lities: only facilities with RMP reportable accidents (i.e., accidental releases meeting the criteria of §68.42).

Independence criterion

SERs indicated that EPA should allow auditors who are associated with the company because these personnel have the pro per training and familiarity with processes. SERs indicated that retired employees are among the best source of auditing expertise and suggest that they should not be barred from conducting third

- party audits. The SERs also indicated that they should be al lowed to use firms that have performed past work because these firms tend to have the necessary expertise and familiarity with the facility. One SER suggested EPA consider revising the criteria to be similar to the Department of the

Interior’s Bureau of Sa fety and Environmental Enforce ment (BSEE) provision for third

- party audits in 30 CFR 250.1920(a). BSEE only requires that the person leading the audit team be independent of the facility being audited. This allows the facility to use individuals with speci alized knowledge as part of the

team.

Eliminate independence criterion

SERs suggested that the focus should be on the qualifications of the auditors and the core contents of the acceptable audits rather than restricting post

- accident audits to non

- associat ed or independent auditors as currently defined. SERs also indicated that EPA should allow third

- party auditors who are associated with the company because these personnel have the proper training and familiarity with processes. Examples include: allowing retired employees to conduct audits or limiting the criterion to individuals conducting the audit rather than the entire company. Moreover, the SERs specifically suggested that small business should be allowed to use qualified auditors that are associated with the company because they are less able to ab sorb significant costs of third

- party audi ts done by non

- associated third

- party

auditors.

Professional Engineer ( PE ) requirement

The Panel also heard concerns on whether it is necessary to include a PE in the audit team. SERs expressed concerns that the requirement of a license is too restrictive because it requires five years of experience and two exams to obtain a professional license. SER s also supported that the elements of an RMP audit are within the purview of a safety and environmental professional rather than an engineer. SERs also made specific suggestions about other relevant professional credentials, including Certified Safety Pr ofessional (CSP), Certified Industrial Hygienist (CIH), Certified Fire Protection Specialist (CFPS),

Certified Hazardou s Materials Manager (CHMM), Certified Professional Environmental Auditor (CPEA)

, Dangerous Goods Safety Advisor (DGSA) or Certified Proce ss Safety Auditor (CPSA) qualifications. EPA is proposing that a PE be part of the audit team because these professionals have an ethical obligation to be independent (and not only because of their engineering background).

### v Auditor availability

SERs express ed concerns about the availability of third

- party auditors who are qualified with knowledge and experience with a facility’s process, being able to meet the independence criterion. SERs noted that qualified auditing firms with specific industry expertise c ould be a very few, making it more difficult to choose an unaffiliated firm. SERs emphasized that the problem of auditor availability will be exacerbated

for those facilities in rural areas who will have to seek out contractors outside of their immediate v icinity,

which will add to their costs.

Security

Furthermore, if EPA requires third

- party audits, SERs urged EPA to include protection of confidential business information (CBI) and address other security concerns. SERs requested that EPA include provisio ns to ensure that third

- party auditors do not pose a terrorism concern or release information that could cause a security concern, and the auditor will protect CBI from disclosure, for the facilities that they

audit.

Panel recommendations:

Based on the con cerns and recommendations provided by the SERs, the Panel recommends that EPA consider proposing streamlined independence requirements for small businesses (i.e. based on size of the facility). The Panel also recommends that EPA limit the independence crite ria to individuals participating in the audit rather than the entire company.

The Panel also recommends that EPA seek comments on:

• Eliminating the independence requirement, in its entirety, and retaining existing requirement for compliance audits;

• Limiting applicability of the third

- party audit pr ovision by only requiring third

- party audits, for P3 facilities, triggered by major accidents that have offsite impacts and how to define or characterize “major accidents with offsite impacts”;

• Deleting the current PE requirement and considering other independent accreditation for third

party auditors which also carry ethical requirements, such as CSP, CIH, CFPS, CHMM, CPEA, or CPSA; and

• The impacts a third

- party auditor may have on a facility’s security and the measures that should be included in the rule provision to protect facilities from terrorism or release of CBI from a third

party auditor.

SBA Office of Advocacy recommendations:

The SBA Office of Advocacy recommends that EPA employ the BS EE approach for small firms, using a simplified small business size standard, such as 250 employees. Secondly, the Office recommends that small firms can submit a waiver request of the independence requirement, based on consideration of the specific facts, such as the limited availability of qualified independent auditors. A waiver may be appropriate where the firm has been working closely with highly qualified auditors with specific expertise in the industrial processes.

Incident Investigations & Root Caus e Analysis

Eliminate provision

EPA understands root cause analysis to be a term understood by industry as encompassing several different methodologies, all capable of pointing out the “root cause(s)” of a problem or accident. However, during the Panel outreach meetings and panel discussions, SERs expressed the need for more guidance on what a root cause analysis includes, and questioned whether a root cause analysis provision is necessary based on the current incident investigation provision of the RMP rule. There was discussion, during pre

- panel and panel outreach meetings, about whether EPA was requiring a specific methodology. EPA confirmed that it was not requiring a specific methodology. SERs commented that it is a common business practice to evalu ate the cause of any incident and to address it in a way to prevent its reoccurrence and that this proposal will merely add an additional paper work and reporting requirement.

### vi Limit applicability

SERs suggested limiting the applicability of this provisio n; the SERs questioned whether a root cause analysis is necessary or appropriate for every RMP reportable accident and near miss. Others specifically stated that it may be too burdensome or not feasible to conduct a root cause analysis on every near miss. SERs expressed concern that this would be especially burdensome for small businesses who will need to hire outside experts to conduct these analyses or incur the expense to train an existing employee. SERs also stated that the root cause analyses would be costly. Other SERs suggested that the requirement for a root cause analysis for a near miss should be eliminated altogether and instead should be reserved for

incidents that have actual releases.

New Definitions

SERs also expressed concern over EPA’s definition of “catastrophic release

. ” EPA is proposing to modify the definition of catastrophic release to use the same definition currently being used to identify reportable accidents under the five year accidental history requirement. Some SERs opposed t he proposed changes to the EPA definition of “catastrophic release” and expressed concern that these revisions would expand the scope of when incident investigations are required. Some SERs believed that the redefining of “catastrophic release” was broaden ing the definition to include OSHA jurisdiction

- related events. SERs believed that the catastrophic release definition should be limited to incidents involving loss of life, serious injury or significant damage or loss of offsite property.

SERs requested that EPA clarify what is meant by a “near miss

. ” EPA noted that we will work with OSHA to provide guidance on “near misses

. ” For example, i n the materials presented to the SERs, EPA has

stated that a near miss would trigger analyses of process upsets such as activation of relief valves, interlocks, blowdown systems or rupture disks.

While some SERs recommended that EPA not move forward with these definitions, others recognized the need for clearer definitions and suggested seeking public comment on this iss ue. However, the SERs requesting clearer definitions were not supporting broadening the scope of RMP reportable accidents, only clarity regarding the current definition

.

Panel recommendations:

Based on the concerns and recommendations provided by the SERs

, the Panel recommends that EPA clarify its intent that incident investigations are not intended to cover minor accidents or minor near misses that could not reasonably have resulted in a catastrophic release. The Panel further recommends

that EPA consider proposing to require root cause analysis only for reportable releases, not including

near misses. The Panel recommends that EPA clarify in the preamble the comparative advantages of a root cause analysis to the current incident investigation requirements in §§68.60 and 68.81 of the rule.

The Panel recommends that EPA seek comments on:

• Whether the root cause analysis requirement should be eliminated;

• T he revised definition of catastrophic release and whether it should be limited to loss of life, serious injury or significant damage or loss of offsite property; and

• Examples of near misses.

SBA Office of Advocacy r ecommendations:

The SBA Office of Advocacy recommends that EPA retain the root cause analysis requirement, but not revise the definition of catastrophic release from the 1996 version which SBA believes is limited to major accidents, and maintains consistency with the curr ent OSHA PSM definition of catastrophic release which refers to a “major uncontrolled emission, fire or explosion

, ” presenting a “serious danger.”

### vii Safer Alternatives Analysis (SAA)

Eliminate provision

Several SERs questioned the value of requiring the SAA, which they viewed as a highly labor and resource intensive review, without a requirement to implement the resulting recommendations, which in their view could result in a paperwork exercise and a wast e of resources. SERs predicted that the analysis will likely produce limited options, which will not be justified by the cost of doing the analysis. SERs also cautioned that it could raise liability issues for facilities not implementing recommendations

fr om the analysis. SERs also pointed to EPA’s rationale in the 1996 rule for rejecting this requirement and asserted that there are still no additional benefits gained from this analysis that will not already be gained through the existing process hazard ana lysis ( PHA ) requirements. SERs identified that the SAA requirement would be unnecessary because the existing PHA methodologies already provide successful risk mitigation.

Feasibility

EPA has proposed to define feasible as “[c]apable of being successfully a ccomplished within a reasonable period of time, accounting for economic, environmental, legal, social and technological factors.” SERs raised questions about how the evaluation would determine what is feasible and what is inherently safer technology. SERs asked if the feasibility evaluation takes into account life

- cycle effects, and tradeoffs between costs, safety to the public, workers and effects on the environment. One SER appreciated EPA’s plan to simply require that facilities consider the feasibility of the SAA recommendations, rather than require implementation of these recommendations.

Design stage

Some SERs indicated that safer alternatives should be identified in the design stage of a process or facility, rather than during a PHA, because the costs to incorporate safer alternatives for an existing process could be prohibitive. One SER quoted EPA’s assertion that this type of assessment “had the most benefit in the design of new processes.” Some SERs also noted that this analysis will require

additio nal staffing, such as design engineers, in addition to the chemical and mechanical engineers staffed for PHA analyses. SERs identified that most small facilities do not have design engineers on staff able to conduct this analysis, and as a result, would ha ve to incur additional expense to retain them.

Batch toll manufacturers

Batch toll manufacturer SERs expressed concern that this requirement may result in loss of business if they will be required to evaluate alternatives for custom formula blends. SERs also expressed concerns that the analysis required by this provision will not be feasible for products regulated by the Food and Drug Administration ( FDA ) because they are subject to FDA approval. SERs further questioned whether the SAA should be applied to chemicals or processes that were required by government regulations, suc h as FDA and EPA (under the Federal Insecticide, Fungicide, and Rodenticide Act ).

Panel recommendations:

Based on the concerns and recommendations provided by the SERs

, the Panel recommends that EPA explain what evidence it has that causes it to reconsider the 1996 assessment that analysis of inherently safer technology was unlikely to yield additional benefits.

The Panel further recommends that EPA seek comments on:

• Whether to e liminate this requirement;

• Limiting this provision to require analyses only to be conducted at the design stage of new processes; and

• Exempting batch toll manufacturers from this requirement.

SBA Office of Advocacy r ecommendations:

The SBA Office of Advocacy recommends that small firms (under 250 employees) should not be subject to this provision until three years after the rule’s compliance date for large firms. This would allow EPA to

re

- examine the utility of such a provision for large firms for possible application to the firms for which this

### viii is most burdensome. Experimentation with different regulatory approaches is an innovation recommended by the Administrative Conference of the United States (Administrative Conference

Recommen dation 2014

– 5; Retrospective Review of Agency Rules). “Where it is legally permissible and appropriate, agencies should consider designing their regulations in ways that allow alternative approaches in the rule that could help the agency in a subsequent re view of the rule to determine whether there are more effective approaches to implementing its regulatory objective. For example, agencies could allow for experimentation, innovation, competition, and experiential learning (calling upon the insights of inte rnal statistical offices, as well as policy and program evaluation offices, in order to design plans for reassessing regulations, to the extent they have such resources).” 79 Fed. Reg. 75116 (Dec. 17, 2014). This approach of delaying compliance for small f irms until EPA can review the utility of the provision for large firms is appropriate for a potentially costly new requirement.

The Office also recommends that batch toll processors be exempt from this provision unless the firm has

a contractual relations hip with the customer of five or more years, given that this requirement is unlikely to yield practical information for contracts of short duration.

Local Coordination

The current rule requires facilities to develop an emergency response program in accordance with the requirements of §68.95 except when: the community emergency response plan addresses toxic substances at the facility, or the owner/operator at the facility has coordinated response actions for flammable substances with the local fire department; and has a mechanism in place to notify emergency responders when there is a need for a response.

Responsibility to ensure adequate emergency response capabilities

M ost SERs expressed frustration with the requirement to coordinate with local emergency response officials because some LEPCs are not active or do not have sufficient resources to fully implement EPCRA emergency planning requirements. For example, SER s stat ed that the majority of fire departments are served by volunteers that often do not have the resources to coordinate with facilities. Some SERs believed that the coordination requirement was satisfied simply by notifying the LEPC (for toxic substances) or the local fire department (for flammable substances) of substances without confirming that the facility is included in the community response plan or coordinating response actions with the fire department. SERs suggested that the responsibility to ensure t hat a local community has properly planned for a possible event at a regulated facility should be borne by the community and not by the facility as currently required in EPCRA. However, EPA notes that the current RMP rule includes a corresponding requireme nt for facilities to develop an emergency response program except when the community emergency response plan addresses toxic substances at the facility, or the owner/operator at the facility has coordinated response actions for flammable substances with lo cal fire departments. EPA believes a simple notification does not meet the statutory requirements under CAA section 112(r)(7)(B)(ii)(III) 5 and the pursuant RMP regulatory requirements on when to develop an emergency response program. If an LEPC is inactive , then no community response plan has been developed, and as a result, a source with toxic substances is obligated to develop an emergency response program. In the 1996 final rule, EPA elaborated that when the source is not addressed in the community respo nse plan or has not coordinated response actions with the local fire department , then the source must comply with the emergency response program requirements.

Because many sources covered by this rule may be too small to handle emergency response

themselve s, EPA has provided, in this new section, the actions they must take if they will not respond to releases. Specifically, for sources with regulated toxic substances, the source must be addressed in the community emergency response plan developed under EPCR A section 303. Sources with regulated flammable substances must coordinate response actions with the local fire department. These sources must also establish a mechanism to contact local emergency responders. Sources that do not meet these requirements mus t comply with EPA’s

5 CAA section 112(r)(7)(B)(ii)(III) requ ires a response program providing for spe cific actions to be taken in response to an accidental release of a regulated substance so as to protect human health and the environment, including procedures for informing the public and local agencies responsible for responding to accidental releases, e mergency health care, and employee training measures.

### ix emergency response program requirements. ( emphasis added ; see 61 FR 31712, June 20, 1996.)

Eliminate provision

SERs suggested that EPA address violations of the existing requirements rather than impose additional requirements on facilities. Many SERs expressed concerns of inactive or non

- responsive and non

existing LEPCs; their overall sense is that without actual coordination with LEPCs, the required documentation of coordination will only be a paperwork exercise.

SERs also expressed concerns that the provision will result in additional facilities becoming responders and that this transition will be costly and dif ficult for small businesses to absorb. SERs were also concerned that the consequences of the coordination requirement will incentivize local governments to renounce future response at facilities. SERs noted that small facilities do not have the capability to provide response without the assistance of local responders and forcing them to become responding facilities may run them out of business. EPA has estimated that its clarification of local coordination requirements could cause several thousand facilitie s to become responders. SERs also indicated that EPA underestimated the costs of new responding facilities by not including firefighting equipment costs.

Finally, SERs expressed concerns with the provision empowering LEPCs to require a facility to develop an emergency response program and noted that LEPCs do not have legal authority to evaluate the adequacy of such programs. In sum, the SERs favored elimination of this requirement.

Panel recommendations:

This provision is likely to be one of the most cost ly requirements of the EPA modernization proposal, and thus, requires careful consideration. Based on the concerns and recommendations provided by the SERs

, the Panel recommends that EPA explain how coordination should occur between local emergency

respons e officials and small facilities and clarify requirements for facilities that make a “good faith” effort to coordinate with local emergency response officials.

The Panel also recommends that EPA seek comment on the proposed frequency for annual coordination.

SBA Office of Advocacy r ecommendations:

While EPA believes that the current regulation clearly places responsibilities on the facilities to meet the

emergency respons e requirements alone in the absence of a public response mechanism, the SERs have disagreed with this interpretation. The SBA Office of Advocacy is unsure about which legal interpretation is correct, although the Office does believe that it is not appropri ate to place this responsibility on small firms in these situations.

In a related rulemaking, the 1980 EPA emergency preparedness rule for hazardous waste generators (40 CFR 265.37) only required generators to “attempt” to make arrangements with local resp onders, and to document any failure to complete such arrangements, recognizing the difficulty of achieving such arrangements across the country. Today, just as in 1980, the unavailability of local resources to provide the response function is still a probl em. The Office recommends that EPA use this approach for emergency response within the RMP rule. This is one mechanism whereby the facility can demonstrate its “good faith” in making such arrangements.

Emergency Response Exercises

EPA is considering requiring responding facilities to conduct field exercises every five years, tabletop exercises annually in the interim years, and invite local response programs to participate. Non

- responding and responding facilities would be required to conduct annual n otification exercises. SERs have expressed that the proposed requirements for the field and tabletop exercises are too prescriptive and that the burden is inappropriately being placed on the facilities. SERs also observed that these requirements would crea te more resource demands on the local response community, which is already overburdened by the current requirements. One SER suggested that field exercises should allow for offsite activities such as a week of training at a reputable fire school. EPA notes that the purpose of a full

field exercise is to ensure that the facility’s response plan is appropriate to ensure adequate response capabilities at the facility

- offsite training does not accomplish that goal.

### x SERs also expressed concern that the field ex ercises can be very expensive because it will require using equipment, production curtailment, employee evacuation, local responder participation, and hours of planning and coordinating. SERs also expressed concern that local emergencies may force the faci lity to postpone an exercise which could be difficult to reschedule. SERs further noted that requiring a field exercise for facilities with a small number of employees may not be practical, for instance, when there are only one or two people in the facilit y and local responders are unable to participate. SERs overwhelmingly suggested that the agency should focus its efforts on helping fire departments and LEPCs with their resources instead of applying this requirement to regulated facilities.

Panel recommen dations:

Based on the concerns and recommendations provided by the SERs, the Panel recommends that EPA clarify that participation by local responders is not required for a facility to comply with the requirements in this provision and that field exercises and drills required by other state and federal regulations could meet this requirement if the facility’s emergency response plan is tested as part of those exercises.

Finally, the Panel recommends that EPA seek comments on:

• Whether the exercise provision should be eliminated;

• How to address postponement and rescheduling issues (which SERs have indicated may take up to a year);

• Limiting the requirement to only tabletop exercises; and

• The frequency of required field and table top exercises.

SBA Office of Advocacy r ecommendations:

The SBA Office of Advocacy recommends that the Agency propose tabletop exercises alone, and include no minimum requirements for field exercises. The Office is concerned that LEPCs cannot achieve compli ance with the current EPCRA requirements, and that adding to them would be counterproductive. Field exercises at the facility without LEPC participation would be of limited value.

Information Sharing

Information for LEPCs

SERs expressed concern over the burden of summarizing highly technical information and the capacity for an LEPC to effectively use that information in decision

- making, due to differences in expertise, as well as resource constraints. Specifically, SERs questioned the value of sharing inf ormation on compliance audits and SAA. SERs pointed out that the most useful information is the chemical hazard information. The SERs also indicated that the executive summary requirement of the RMP rule in §68.155 was designed to provide the most relevant and easily understandable information to the public. The executive summary requires facilities to describe the stationary source and the regulated substances handled; accidental release prevention and emergency response policies; general accidental releas e prevention program and chemical

- specific prevention steps; five

- year accident history; the emergency response program; and planned changes to improve safety.

Several SERs suggested allowing an LEPC to request information, such as an accident history for a facility, if needed, rather than requiring all of the information to be provided upfront. SERs expressed concerns that this will be an unnecessary and duplicative provision because adequate information is already being shared under existing requirements. EPA noted that currently, LEPCs may obtain RMPs from EPA, but those plans have limited information concerning facility emergency response programs, accidental releases, compliance audits, etc. In order for LEPCs to fully develop a local emergency

response plan, it is useful for them to have summaries of key analysis, lessons learned, and changes (including information in compliance audits, incident investigations, safer alternatives implemented, and drill and exercise reports) from the facility. Additional ly, EPA noted that EPCRA only requires reporting of chemical inventories and notification of an accidental release. It does not require reporting of results from compliance audits, incident investigations, safer alternatives, and drills/exercises.

### xi Panel recommendations for LEPC information sharing :

In light of these concerns, the Panel recommends that EPA consider only requiring facilities to develop chemical hazard information summaries and allowing LEPCs to make reasonable requests for additional

information. The Panel also recommends making chemical hazard information available upon request by the LEPC rather than requiring it to be automatically submitted by the facility. This will help ensure that the LEPC receives and is able to get the necessary information to help conduct their activities, and is not overburdened by information t hat it has not requested.

The Panel also recommends that EPA seek comment on:

• Narrowing the approach to require a one page summary of each significant chemical hazard during a fire identifying the product, its properties, its location and firefighting measures for responders

-- a one

- page summary of information that addresses chemical hazard information and emergency response measures;

• Limiting the amount of information to be shared with LEPCs; and

• Whether EPA should specify a format for summary informat ion to make it easier for local officials to find and interpret the information that they need.

Information for the public

SERs noted that adequate information is already available for public access through the Right

- to

- Know Network, including the executi ve summary of the RMPs. EPA noted that it is not requiring new information to be provided; 6 instead, it is requiring information to be provided in a more easily accessible manner. SERs also expressed that they are comfortable with responding to specific in formation requests rather than a mandate that repackages existing public information. One SER commented that Chemical Facility

Anti

- Terrorism Standards sites are unable to share the proposed information.

Panel recommendations for public information sharing :

Based on the concerns of the SERs, the Panel recommends that EPA seek comments on:

• Ways to limit the scope of the information elements shared with the public as well as the format in which information should be provided (e.g. a one

- page summary of infor mation that addresses chemical hazard information and emergency response measures );

• Whether the existing RMP data, including the executive summary, are adequate for the public in the absence of a specific request, and

• Whether additional information should only be provided to the public upon request.

Public meetings

Several SERs questioned the value of public meetings and noted that, when held in the past, public meetings were not well attended. SERs further noted that in the absence of an accident, most past public meetings had no public attendees . Some SERs suggested altering the requirement to allow for the request of a public meeting if an LEPC or community felt it was necessary. Additionally, SERs expressed concern about the requirement to hold public meetings 30 days after an accident; the SER suggestions included expanding the timeframe from 60 days to 9 months. SERs indicated that many small business may still be handling the aftermath of accidents, conducting incident investigations, and arranging audits in this time period, with limited attention to devote to educating the public.

Panel recommendations for public meetings :

Given these concerns, the Panel recommends that EPA require that a public meeting be held only after an RMP reportable accident. EPA should consider allowing the public meeting to be combined with any meeting open to the general public (e.g. city council, municipal board, or LEPC meetin g).

The Panel also recommends that EPA seek comments on:

• Whether it is appropriate to require public meetings;

6 With the exception of exercise information because this is a new provision.