From the March 1997 issue of Entrepreneur

Proposed EPA rules on air quality standards have some small businesses gasping for breath.

Chemicals and soot aren't the only air pollutants of concern in the U.S. Environmental Protection Agency's (EPA) hotly contested rule-making on ozone and particulate matter levels in the atmosphere. Political rhetoric quickly reached suffocating levels in Washington as soon as the EPA issued its proposed rule in
November.

Trade associations and lobbying groups nationwide immediately sent out broadsides condemning the EPA and noting the likely apocalyptic impact on small business of reducing the ozone standard from .12 parts ozone per million parts air (ppm) measured over one hour to .08 ppm measured over eight hours, and of reducing the size of particulate matter (PM) that would be regulated from 10 microns or smaller to 2.5 microns.

But more than a few small-business hands in Washington were quick to point out that the new standards would affect only a few small-business sectors: service stations/convenience stores, restaurants, trucking companies and some construction businesses. It is big business that is much more likely to be hurt, particularly by the PM standard, which could require the Fortune 500 crowd to spend substantial sums on new controls for factory combustion sources.

The majority of small businesses, if impacted at all, will be hurt indirectly. Mary Bernhard, manager of environment policy for the U.S. Chamber of Commerce, says cities that will become ozone nonattainment areas as a result of the new standards will have to consider transportation reduction measures that could significantly impact local economic development. This might translate into shopping centers not being built, the end of free parking at shopping malls, and bans on drive-thru service at local restaurants.

EPA Administrator Carol M. Browner has gone out of her way to emphasize that she is open to public comments from small business on the new standards. She seems to be laying the groundwork so she could retreat on the ozone standard if politics so dictated. "They potentially left themselves some wiggle room," agrees Bernhard.

In The Zone

Browner's rationale for the new standards is better respiratory protection for the 133 million American adults and 40 million children in metropolitan areas that, for the first time, would be covered by one or both of these standards. Ozone and its main component, smog, is formed by the release of volatile organic chemicals, particularly sulfur from gasoline and smokestacks during the summer. Particulate matter, better known as soot, is produced by combustion from sources such as power plants and large incinerators.

The changes could have been worse. The EPA has also proposed changing the way it measures ozone exceedences. Now, if ozone levels are over .12 ppm for any one-hour period during the day, it counts as an exceedence. Readings for the .08 ppm standard, however, would be taken over an eight-hour day, then averaged.

Clark notes another conciliatory intention: The EPA may adopt a new implementation policy to go with the new standard. That new policy might divide ozone nonattainment areas into subcategories, such as ones whose ozone levels are caused by drifting ozone from nearby cities. The EPA has already tried to bend current policy to help cities like Muskegon, Michigan, which owes its nonattainment status to its location downwind of Chicago and Milwaukee.

Whatever levels the EPA chooses in June, they will not go into effect for five or six years. States would have to submit plans for PM in 2002 and for ozone in 2000. Compliance deadlines would come sometime later.

Despite an outpouring of opposition from businesses, cities and states, it's important to remember key Clinton political constituencies pressed for even tougher standards. The American Lung Association (ALA) has pushed for a .07 ppm, and environmental groups supported that position. "We hope to persuade the EPA that there is more than enough science to justify a tighter standard," says Paul Billings of the ALA.

The political equation could become important in July if Browner decides to issue a final rule based on her November proposal and if business groups contest it. Industry could ask legislators to cancel any final ozone and PM standards under a provision of the Small Business Regulatory Enforcement Fairness Act (SBREFA) Congress passed last year. The Republican majority in the House is very thin, however, so it seems doubtful the House would override the EPA on a key environmental rule.

The question then becomes whether business groups can take the EPA to court under a second provision of SBREFA, which allows for "judicial review" of a final rule if--and this is a big if--the agency performed the kind of full-blown economic-impact analysis called for by the Regulatory Flexibility Act of 1980.

The EPA's Clark says no Regulatory Flexibility analysis is needed since ozone and PM standards won't force small business to do anything. Only states, cities and counties are directly affected. He concedes, however, that when the EPA proposes an "implementation" rule--laying out different policies local governments can choose from--the agency may well have to do a Regulatory Flexibility analysis.

Violent Opposition

OSHA guidelines spark debate from retailers.

he public comment period closed in early December on guidelines proposed by the Occupational Safety and Health Administration (OSHA) regarding nighttime violence in retail establishments. Though these are only guidelines, and voluntary ones at that, the convenience store and franchise industry associations have complained vociferously. The groups believe OSHA inspectors might interpret the guidelines to require two clerks to be on duty during nighttime hours in certain suspect downtown locations.

Marc Katz of the National Association of Convenience Stores says he thinks OSHA has heard his group's concerns. "We think we've gotten our point across," he says. "But what [OSHA] says and what it does--well, we'll have to see."

Final guidelines are due out later this year. They were proposed in mid-1996 because of the number of employees hurt or killed at businesses during nighttime hours.

SBA Update

The unparalleled changes in telecommunications law that took place in 1996 mean new opportunities for business. To help entrepreneurs take advantage of these changes, the SBA's Office of Advocacy has begun the SBA Telecommunications Roundtable.

Open to any small business, the meetings are attended by associations and businesses involved in the telephone, cable, broadcasting, satellite and wireless industries. Members discuss industry issues and share information.

The first meeting, held last July, focused on the Federal Communications Commission's (FCC) "market entry barriers proceeding," which is designed to eliminate regulatory barriers hampering small businesses from competing in telecommunications markets. Subsequent meetings discussed issues such as how small businesses can make their voices heard by the FCC.

"It is more important than ever for smaller telecommunications firms to play an active role in FCC matters," says Chief Counsel for Advocacy Jere Glover, who led the meetings. "[We] hope this round table empowers small telecommunications companies to enter and compete in the new markets."

Meetings generally take place in Washington, DC. For information, contact David Zesiger at the Office of Advocacy, 409 Third St. S.W., 7th Fl., Washington, DC 20416, or via e-mail at david.zesiger@adv.sba.gov. To be placed on a fax list to receive notice of upcoming meetings, fax your name, business address, and telephone and fax numbers to Zesiger at (202) 205-6928. --Philip Lader

Contact Sources

American Lung Association, 1726 M St. N.W., #902, Washington, DC 20036, (202) 785-3355;

National Association of Convenience Stores, 1605 King St., Alexandria, VA 22314-2792, (703) 684-3600;

Small Business Administration, 409 Third St. S.W., 7th Fl., Washington, DC 20416, david.zesiger@sba.gov;

U.S. Chamber of Commerce, 1615 H St. N.W., Washington, DC 20062, (202) 463-5533;

U.S. Environmental Protection Agency, (http://www.epa.gov/airlinks).

Stephen Barlas is a freelance business reporter who writes monthly Washington columns for 15 magazines.