April 13, 2016
Gulf emerges over plight of small businesses at EPW panel hearing
Sean Reilly, E&E reporter
Are U.S. EPA regulations a burden or boon to small businesses?
A panel of witnesses gave starkly contrasting answers to that question at a Senate Environment and Public Works subcommittee hearing yesterday, with one suggesting that EPA needs more money to better tailor the impact of new rules on smaller companies.
To Emily Reichert, CEO of Greentown Labs, a Boston-area incubator for “clean technology” startups, EPA regulations have been “a catalyst for new business ideas and new, innovative products.”
After the agency in 2012 tightened rules to limit water pollution from aircraft de-icing, Reichert said, one company came up with an electric de-icing method that both saves airlines time and money and potentially ends the use of toxic glycol.
But for Michael Canty, head of a Cleveland manufacturing and welding firm with about 135 employees, EPA strictures are part of an onslaught of government regulations that is forcing him to look abroad for products that have traditionally been made in-house.
“Small businesses want to help, but it is becoming increasingly difficult to do so,” Canty, who was also testifying on behalf of the National Small Business Association, told members of the EPW Subcommittee on Superfund, Waste Management and Regulatory Oversight. “The need for relief is real and immediate.”
Under a 1980 law known as the Regulatory Flexibility Act, EPA and other federal agencies are supposed to publicly gauge proposed regulations’ impact on small businesses and consider less burdensome options if the likely economic effect will be significant, said Thomas Sullivan, a lawyer who once served as chief counsel at the Small Business Administration’s advocacy office.
Small businesses, sometimes defined as firms with no more than 50 employees, are hit disproportionately hard by new regulations, Sullivan said. The good news, he added, is that EPA regularly seeks feedback from small business owners to “sensitize” its approach. The downside is that rulemaking deadlines sometimes push the agency to view the Regulatory Flexibility Act’s requirements as “a set of bureaucratic procedural hurdles.”
He singled out the agency’s handling of the Waters of the United States (WOTUS) rule, saying in prepared testimony that EPA “concocted” an argument that the controversial plan imposes no added cost on small business.
Frank Knapp, the head of the South Carolina Small Business Chamber of Commerce, agreed that even good regulations can carry a “negative impact” but added that EPA — whose budget has been flat in recent years — may need more money. “If you want the regulatory process to be fair to all parties and you set up a mechanism to do that, it has to be adequately resourced,” he said.
Knapp also co-chairs the board of the American Sustainable Business Council, which recently signed onto a friend-of-the-court brief backing the Clean Power Plan, one of the Obama administration’s most contested efforts.
The hearing, which lasted less than an hour and a half, was the latest in a series held by the Oversight subcommittee on EPA’s regulatory practices. No one from the agency was invited to testify; the purpose was to get public input, subcommittee Chairman Mike Rounds (R-S.D.) said afterward.
In his opening statement, Rounds suggested that EPA is lowballing the effect of its mandates.
In periodically revising the national ambient air quality standards for various pollutants, for example, the agency says that the changes will have no major effect on small companies because it is up to states to determine compliance strategies, Rounds indicated. Ultimately, however, “these regulations will lead to significant economic harm on small businesses,” he added.
The subcommittee’s top Democrat, Sen. Ed Markey of Massachusetts, took a contrary view, asking whether environmental regulations don’t create “a bubbling, boiling cauldron of competitiveness.”
“In the end,” Markey said, “it’s pretty clear that the net effects of it are a cleaner, healthier society and many more jobs that were created in solving the problem.”