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May 18, 2011

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SOCMA Submits Testimony on Impact of EPA Regulations on Small Businesses

In response to a recent U.S. House of Representatives Small Business Subcommittee on Investigations, Oversight and Regulations hearing regarding the economic impact of EPA regulations on small businesses, the Society of Chemical Manufacturers and Affiliates (SOCMA) on Monday submitted written testimony, calling for congressional attention to the issue.

"With 71 percent of our membership having fewer than 100 employees, SOCMA knows firsthand how EPA regulations can disproportionately impact small businesses," said Bill Allmond, SOCMA's vice president of government relations. "As a result, the association and our members have made it a priority to highlight and minimize the impact of these regulations."

In Monday’s written testimony, SOCMA cited three examples of rules that have an adverse economic impact on SOCMA members who have small businesses. These include the EPA’s Chemical Manufacturing Area Sources (CMAS) Final Rule, the Definition of Solid Waste Rule, and reregistration of current, EPA-registered pesticide products.

During CMAS rulemaking, an economic impact analysis of the proposed rule found that the agency had significantly underestimated projected costs. While the final rule was an improvement, it still contains provisions that are burdensome and costly for small businesses, including a requirement that certain area sources get a costly Title V permit. EPA is currently reconsidering portions of the rule.

The final amendments to the Definition of Solid Waste rule would have allowed for increased recycling of secondary materials and, in doing so, would have simultaneously saved SOCMA small business members tens or hundreds of thousands of dollars. Unfortunately, because of unrelated concerns to other portions of the rule, the vast majority of states have not adopted it. EPA will be soon issue a new related proposed rule, further extending the regulatory uncertainty on the subject.

Finally, the process for reregistration of current EPA-registered pesticide products seems to place small businesses at significant competitive disadvantages.

SOCMA will continue to work with the House subcommittee and Congress to ensure that the economic impact of EPA regulations on small businesses is not easily dismissed.

Previously, SOCMA urged the administration and congressional leaders to “cease further consideration of legislation that could have a negative financial impact on small- and mid-sized chemical manufacturers by adding to the burden of regulatory compliance.” In January 2010, SOCMA answered Representative Darrell Issa’s call for stakeholder feedback on the cost impact of regulations more broadly. SOCMA also submitted comments on EPA’s subsequent solicitation for feedback on the design of a Retrospective Review Plan of existing regulations, and urged the agency to consider the impact of its regulations on small businesses in those comments.
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