Final Report
                   of the
SBREFA Small Business Advocacy Review Panel
        on EPA's Planned Proposed Rule for the
 National Pollutant Discharge Elimination System
          Storm Water Phase II
               August?, 1997

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                                  AUG - 7 1997
 Ms. Carol M. Browner
 Administrator
 United States Environmental Protection Agency
 401 M. Street S.W.
 Washington, D.C. 20460
Dear Administrator Browner

       Attached is the Report of the Small Business Advocacy Review Panel convened on July
19, 1997, for EPA's proposed rulemaking to revise the National Pollutant Discharge Elimination
System (NPDES) regulations under Clean Water Act Section 402(p)(6).  The proposed
regulations would address currently unregulated discharges of storm water and provide
regulatory relief to industrial facilities where industrial materials and activities are not exposed to
storm water. The Panel was convened in accordance with section 609(b) of the Regulatory
Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act
of 1996 (SBREFA). Members of the Panel include Thomas E. Kelly (Chair), EPA's Small
Business Advocacy Chairperson; Michael B. Cook,  EPA's Office of Water; .Jere W. Gloyer,
Chief Counsel for Advocacy, Small Business Administration; and Sally Katzen, Administrator of
OMB's Office of Information and Regulatory Affairs. The Panel hereby transmits its Report for
your consideration. The Report includes a summary of the comments received from
representatives of the small entities that may be affected by this proposed rule and the Panel's
findings with regard to certain regulatory flexibility  issues. The full Panel Report is enclosed;
this letter summarizes its main points.        :

       It is important 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 obtained during
the remainder of the rule development process and from public comment on the proposed rule.
Any options the Panel identifies for reducing the rule's regulatory impact on small entities may
require further analysis and/or data collection to ensure that the options are practicable,
enforceable, environmentally sound and consistent with the statute authorizing the proposed rule.

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 Summary pf Small Entity Outreach

       The Storm Water Phase II proposed rule would apply to two types of small entities: small
 governmental jurisdictions and small businesses.  The small businesses would include small
 construction firms and small industrial facilities.  Since 1992, EPA has been conducting
 extensive outreach to all stakeholders regarding this proposed rule, including small entities. For
 the past two.yearSi EPA has worked closely with various stakeholders through the Federal
 Advisory Committee Act process.  This outreach has increased the Agency's understanding of
 the nature of small entities and the challenges they face, and given their representatives an
 opportunity to actively participate hi both the design and details of the draft proposed rule.

       Even prior to the FACA meetings, however, EPA had conducted extensive public
 outreach hi anticipation of the significant public interest hi storm water regulations. The
 outreach began hi 1992 with a Federal Register notice inviting comment, as well as several
 public meetings. The details of the Agency's outreach are included in the full Panel Report.

       Recently, EPA has had additional contact with representatives of small entities that would
 be affected by the proposed rule as required by the Regulatory  Flexibility Act.  On April 10,
 1997, EPA notified the SB A Chief Counsel for Advocacy that  a Small Business Advocacy
 Review Panel would likely be required and provided the Chief Counsel with a list of suggested
 small entity representatives developed during EPA's previous outreach. The Chief Counsel
 provided EPA with some additional names. The Chief Counsel and EPA subsequently agreed on
 a final set of 29 small entity representatives and streamlining representatives (representatives of
 entities for whom the proposed rule may provide regulatory relief) to participate in this outreach.
 Many of these small entity representatives have been working closely with EPA in developing
 the proposed rule through the FACA process. A list of representatives is included hi the
 enclosed Panel report.

      The full Panel Report summarizes the comments, oral and written, received from each of
 the small entity representatives and appends their written comments. In light of these comments,
the Panel considered the regulatory flexibility issues specified by RFA/ SBREFA and developed
the findings and discussion summarized below.

Panel Findings and Discussion

      Under the RFA, the Panel is to consider four regulatory flexibility issues related to the
potential impact of the rule on small entities:  (1) the type and number of small entities to which
the rule will apply; (2) record'keeping, reporting and other compliance requirements applicable to
those small entities; (3) the rule's interaction with other Federal rules; and (4) regulatory
alternatives that_would minimize the impact on small entities consistent with the stated
objectives of the statute authorizing the rule.  The Panel's findings and discussion with respect
to each of these issues are summarized below.

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       Type and Number of Affected Small'1 Entities.  As indicated above, the types of small
 entities to which the rule would apply include small governmental jurisdictions that own or
 operate a municipal separate storm sewer system (MS4) and small businesses. Small businesses
 include small construction firms and small industrial facilities.  Tables .1,2,3, and 4 of the Panel
 report provide ranges that reasonably indicate, given the available data, the number of small
 entities that may be affected by the proposed rule.  The tables show that approximately 3,000
 small government jurisdictions hi urbanized areas would be covered by the rule and
 approximately 18,000 small government jurisdictions  outside of urbanized areas could be
 covered if the NPDES permitting authority determined that they were discharging significant
 pollutant loadings. The rule may also affect up to 200,000 construction firms, 98% of which are
 small. EPA estimates, however, that there will be only 122,000 construction starts subject to the
 rule (i.e., on sites of 1  to 5 acres) by the year 2000, suggesting that not all 200,000 firms in the
 construction industry will be affected. The Panel also finds that "light" industrial facilities with
 no actual pollution discharge resulting from stonnwater runoff (currently estimated at 40 to 75
 percent of the roughly 400,00 such facilities) would incur additional burden by having to fill out
 a self-certification form to take advantage of the proposed "no exposure" exemption.

       Recordkeeping. Reporting, and Other Compliance Requirements.  The recordkeeping,
 reporting, and other compliance requirements associated with the construction component of the
 proposed rule would be similar to those required of discharges from larger construction sites
 under existing storm water regulations. However, the  best management practice (BMPs)
 typically implemented for discharges from the newly regulated smaller construction sites would
 be less sophisticated and less expensive than those implemented-for discharges from the larger.
 construction sites already regulated. The proposed rule would provide the NPDES permitting
 authority with discretion not to require notices of intent (NOIs) in general permits for discharges
 from the newly regulated construction activities. NOIs are required for discharges from the
 larger, already regulated construction activities. The recordkeeping, reporting, and other
 compliance requirements for the municipal component of the proposed rule would be
 substantially less than those required from municipalities under the existing program for larger
 municipalities. .                            '

       Operators of industrial facilities that claim no exposure to storm water would need to file
 a self-certification form to document their exemption from otherwise applicable permit
 requirements. An earlier version of the self-certification form would have required a facility to
 determine whether its discharge causes an "interference" with water quality standards. Small
 entity cbmmenters believed this requirement would have been excessively burdensome.  After
 discussions at the first meeting of the Panel and later discussions with the Urban Wet Weather
 FACA Committee, EPA deleted this requirement and substituted a simple question indicating the
extent to which actions of the discharger to reduce exposure would increase impervious surface
area by one acre_or more. The answer to this question  along with other information would enable
the NPDES permitting authority to determine if the discharge would interfere with the attainment
of water quality standards, but the burden of making this determination would not be placed on
the facility..                                               .

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        Interaction with Other Federal Ruies.  The Panel received comments that the proposed
 rule may conflict with the requirements of the Clean Air Act, the Endangered Species Act,
 Section 404 of the Clean Water Act as administered jointly by the EPA and the Corps of
 Engineers, and EPA regulation requirements associated with the Great Lakes Initiative.
 Municipal representatives indicated that street sweeping activities designed to reduce pollutants
 in urban run-off may create "dust" or "soot" that could cause a violation of the National Ambient
 Air Quality Standards for particulate matter. The Panel requests that the Agency further evaluate
 in its regulatory flexibility analysis whether this proposed rule would conflict with those federal
 rules identified by commenters and revise the rule to address such conflicts as appropriate.
                                        .       .              '          i
        Regulatory Alternatives. Also in response to small entity comments, OMB and SBA
 recommend that the preamble invite public comment on whether municipalities with populations
 of less than. 1,000 located within an urbanized area should be exempted from coverage unless the
 NPDES permitting authority determines that their discharge produces significant adverse water
 quality impacts.  The current draft proposal would treat all Tribes of less than 1,000 and
 municipalities of less than 10,000 located outside an urbanized area in this manner.

       The Panel received many comments questioning the need to regulate construction
 activities that result in the land disturbance of 1 acre up to 5 acres. While the Panel has not
 thoroughly evaluated the merits of each of these; concerns, the Panel recommends that the
 preamble to the proposed rule invite comments on alternatives to the proposed requirements for
 regulation of construction sites that result in the disturbance of 1 to 5 acres. The request for
 comments should include a discussion of concerns expressed by small entity representatives and
 suggestions they have made for addressing them.

       The Panel also received comments from municipal and industrial representatives that
 requirements for construction activities undertaken by municipalities or industrial facilities and
 industrial facilities operated by municipalities should be incorporated within their respective
 permits (provided that the permits detail sediment and erosion controls) to avoid redundancy.
 The Panel recommends that EPA explore and request comment on this idea in the preamble of
 the  proposed rule. The Panel finds that this option may be appropriate for municipalities or
 industrial facilities with individually-issued NPDES permits but may be administratively difficult
to implement under NPDES general permits. The Panel also supports and encourages efforts to
minimize paperwork burden on municipalities, which are ultimately responsible for the success
of their storm water plans.

       The Panel also received comments that the February 1997 draft of the no exposure
provision would prevent facilities that undergo a "temporary operational change" or
transportation facilities that provide "non-pollutant generating outdoor maintenance of vehicles"
from certifying to no exposure^ The Panel requests that EPA examine these comments, discuss

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   these comments with the.Urban Wet Weather Flows Federal Advisory Committee, and revise the
   no exposure language to allow, to the extent possible, all facilities with no actual discharge of
   pollutants to make use of the no exposure certification.
                                    Sincerely,
Thomas E. Kelly, Chair
Small Business Advocacy-
Environmental Protection Agency
Sally Katzen, Administrator
Office of Information and Regulatory Affairs
Office of Management and Budget
JereW. Glover
Chief Counsel for Advocacy
U.S. Small Business Administration
Michael B. Cook, Director
Office of Wastewater Management
Office of Water
U.S. Environmental Protection Agency
Enclosure

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              Report of the Small Business Advocacy Review Panei

                     on EPA's Planned Proposed Rule for the

                National Pollutant Discharge Elimination System

                               Storm Water Phase II
 INTRODUCTION

       This report describes the review by the Small Business Advocacy Review Panel
 convened for the proposed rulemaking by the Environmental Protection Agency (EPA) that
 would revise National Pollutant Discharge Elimination System (NPDES) regulations to address
 currently unregulated discharges of storm water.  On June 19,1997, 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 of 1996
 (SBREFA). Section 609(b)(l) requires convening of a review panel prior to publication of an
 initial regulatory flexibility analysis that an agency is required to prepare under the RFA. In
 addition to its chairperson, the Panel consists of representatives of EPA's Office of Water (the
 EPA program.office responsible for developing the rale), the Office of Information and
 Regulatory Affairs within the Office of Management and Budget, and the Chief Counsel for
 Advocacy of the Small Business Administration.

      This report provides background information on the proposed rule being developed and
the types of small entities that would be subject to the proposed rule, describes efforts to obtain
 the advice and recommendations of representatives of those small entities, and summarizes the
comments, advice and recommendations that have been received to date from those
representatives.  The complete written comments  of the representatives are attached to this
report.                 .
        \          f                               •      . •
      Section 609(b) of the RFA directs the review panel to report on the comments of small
entity representatives and make findings as to issues related to identified elements of an initial
regulatory flexibility analysis (IRFA) under section 603 of the RFA. Those elements of an IRFA
are:

•     The number of small entities to which the  proposed rule will apply.
•     Projecte4 reporting, record keeping, and other compliance requirements of the proposed
      rule, inducting the classes of small entities which will be subject to the requirements and
      the type of professional skills necessary for preparation of the report or record.
•     Other relevant Federal rules which may duplicate, overlap, or conflict with the proposed
      rule.

                                         1

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       Any significant alternatives to the proposed rule which accomplish the stated objectives
       of applicable statutes and which minimize any significant economic impact of the
       proposed rule on small entities.

 Once completed, the Panel report is provided to the agency issuing the proposed rule and
 included in the rulemaking record. In light of the Panel report, the agency is to make changes to
 the proposed rule or the IRF A for the proposed rule, where appropriate.

       It is important 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 obtained during
 the remainder of the rule development process. The Panel makes its report at an early stage of
 the process of development of a proposed rule and its report should be considered in that light.
 At the same time, the report provides the Panel and the Agency with a timely opportunity to
 identify and explore potential ways of shaping the proposed rule to rninimize the burden of the
 rule on small entities while achieving the rule's statutory purposes. Any options the Panel
 identifies for reducing the'rule's regulatory impact on small entities may require further analysis
 and/or data collection to ensure that the options are practicable, enforceable, environmentally
 sound and consistent with the statute authorizing the proposed rule.
BACKGROUND

       In 1987, Congress amended the Clean Water Act to require EPA to develop a phased
regulatory program focusing on controlling contaminated discharges associated with storm
water runoff.1 In the 1987 Water Quality amendments, Congress established a tiered approach
to address certain industrial, municipal, and other storm water discharges.  In the first phase of
the program, Congress directed the EPA and authorized States to control discharges of
industrial storm water and storm water from municipal separate storm sewer systems (MS4)
serving populations over  100,000, with the .intent of identifying an appropriate second tier of
sources following two Congressionally mandated studies.                         .

       To implement these requirements, EPA published the initial permit application
requirements (Phase I) for the priority categories of storm water discharges identified by
Congress.2 Generally, Phase I sources include storm water associated with certain industrial
activities, medium  and large municipalities, and  large construction sites. Staggered deadlines
were established for permit applications for these sources, with the last of the applications
scheduled for submission by May, 1993.
   1 CWA, § 402(p).

   2 55 FR 47990 (November 16,1990).

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        To control industrial sources, Phase 1 regulations cover "storm water discharges
 associated with industrial activity" which means the discharge from any conveyance which is
 used for collecting and conveying storm water and which is directly related to manufacturing,
 processing, or raw material storage areas at an industrial plant. EPA estimates that this
 definition applies to approximately 100,000 facilities nationwide (U.S. EPA, 1990a).  To
 facilitate permitting,  EPA established various permit application options for  industrial activity
 including individual permit applications and group applications. EPA and authorized States
 have issued (or modified) individual permits and general permits based on these respective
 forms of application.  Large construction sites (disturbing 5 acres  or greater) are regulated in
 Phase I as an industrial activity, but with permit requirements that differ from those applicable
 to other industrial discharges.

        To control municipal discharges, the Phase I rule requires  NPDES permits for
 discharges into municipal separate storm sewer systems serving populations greater than
 100,000.  This universe of regulated municipalities includes 173 cities and 47 counties having
 large unincorporated, urbanized areas.  EPA regulations require that NPDES permits for
 municipal storm water programs regulated in Phase I include requirements to effectively
 prohibit non-storm water discharges into the storm sewers and controls to reduce the discharge
 of pollutants to the maximum extent practicable (including management practices, control
 techniques, and system design and engineering methods, and other provisions appropriate for
 the control of such pollutants).

        In March 1995, EPA completed and submitted to Congress a study entitled, Storm
 Water Discharges Potentially Addressed by Phase II of the National Pollutant Discharge
 Elimination System Storm Water Program: Report to  Congress. As required under CWA
 §402(p)(5), this report identified the remaining unregulated storm  water discharges, which by
 this time were known as Phase n. The report also characterized the nature and extent of
 pollutants in such discharges. The Phase n storm water report identified two major classes of
 potential Phase n storm water discharges: discharges from municipal separate storm sewers
 systems not subject to Phase I regulations and discharges from individual facilities not subject
 to Phase I. In a document entitled, "President Clinton's Clean Water Initiative" (February
 1994), EPA summarized procedures and methods to control Phase, n storm water discharges
 sufficient to mitigate impacts on water quality. This document responded to  the requirement
 for an additional report under CWA §402(p)(5).  This document recommended that the second
phase of the storm water program focus on urbanized areas because EPA concluded that the
urbanized areas that were not regulated under the Phase I requirements contributed 60 percent
 of the pollutant loads hi storm water discharged from urban areas.3
   3 Phase I of the NPDES storm water program addresses 81.7 million people in portions of 136 urbanized areas. EPA
estimated that 28 percent of pollutant loads in storm water discharged from urbanized areas come from those portions of these
136 urbanized areas not subject to Phase I regulations. In addition, EPA estimated that 32 percent of the pollutant loads in storm
water discharged from urbanized areas come from the 269 urbanized areas not regulated under Phase I. Storm Water Phase II
Report to Congress, ES-7.                                            .

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        In August 1995,, EPA published a final rule that established a sequential application
 process in two tiers for the remaining unpermitted discharges of storm water (Phase n) .4 This
 rule allows the NPDES permitting authority to require permits for.Phase n dischargers
 contributing to water quality impairment, and requires all other Phase n storm water
 dischargers to apply for NPDES permits by August 7, 2001. The August, 1995 Phase n rule
 was published, in part, to protect Phase n dischargers from CWA citizen  suit liability in the
 absence of Agency action to establish more focused regulations. The preamble to the August
 7, 1995 rule explained that the Phase n regulatory program would undergo further
 development.  The Phase n rule would replace the August 7, 1995 rule.

        EPA is currently subject to a court order to propose supplemental rules under
 §402(p)(6) of the CWA by September 1, 1997, and finalize these rules by March 1, 1999.  See
 Natural Resources Defense Council. Inc. v.  Browner, Civ. No. 95-634 PLF (D.D.C.,  April 6,
 1995).  On July 16, 1997, EPA and NRDC jointly moved the Court to extend the date for
 proposal from September 1 to November 25, 1997.
OVERVIEW OF PROPOSED PHASE H RULE

        EPA's current draft of the proposed Phase H storm water regulation would address
storm water discharges associated with two categories of sources: small municipal separate
storm sewer systems (small MS4s) and construction activities at small construction sites.
Under the draft proposed rule, many of these Phase El sources would be required to obtain
NPDES permit coverage under an individual or general NPDES permit to address their storm
water discharges.

       The small MS4s  that would be covered include those located within incorporated
places, counties, or other places under the jurisdiction of a governmental entity (including
Tribal or Territorial governments) that are located in an urbanized area but not included in
Phase I.5-6 Also covered would be MS4s that are connected to and contribute substantially to
pollutant loadings in another covered MS4. Finally, the rule would cover small MS4s in any
incorporated place,  county, or other place under the jurisdiction of a governmental entity  that
is designated by the NPDES permitting authority as requiring a permit based on the system's
potential for impacting water quality.  The permitting authority would be required to evaluate
   4 60 FR 40229 (August 7,1995).                                                       .

   5 The existing storm water regulations ("Phase I") addresses large and medium MS4s. Generally, a large MS4 includes
incorporated .places witri populations of 250,000 or more, while a medium MS4 includes incorporated places with populations of
100,000 or more, but less than 250,000.

  _6 Excluding Federal Indian Reservations located within urbanized areas and having a population of less than 1,000 persons.

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 places outside urbanized areas that have a popularion density of greater than 1,000 per square
 mile and a population of greater than 10,000 people against specified water quality-related
 criteria7 and determine whether these require permits.  In addition, the permitting authority
 may designate other communities as subject to permit requirements based on their contribution
 to water quality impairment.8

        Under the draft proposed rule, small MS4s would develop and implement a storm
 water management program designed to reduce pollutants to the maximum extent practicable
 and protect water quality. Such programs would include, at a minimum, measures to address
 requirements concerning public education and outreach, public involvement, illicit discharge
 detection and elimination, construction site storm water runoff control, post-construction storm
 water management in new development and redevelopment, and pollution prevention and good
 housekeeping of municipal operations.

        The draft proposed Phase n storm water regulation would also address storm water
 discharges associated with construction activity (e.g., clearing, grading, and excavating
" activities) resulting hi the land disturbance of greater or equal to one acre and less than five
 acres.  In addition, sites disturbing less than one acre would be subject to regulation if they are
 part of a larger common plan of development or sale. Similar to MS4s, the NPDES permitting
 authority could designate construction activities as  subject to regulation based on the potential
 for the activity to  adversely impact water quality or be a significant source of pollutants. The
 NPDES permitting authority may also waive storm water discharges  from construction
 activities  that disturb less than five acres where specified conditions are satisfied.

       The draft proposed rule would maintain the NPDES permitting authority's residual
 designation authority to require any discharge that contributes to a violation of a water quality
 standard or is a significant contributor of pollutants to waters of the United States to seek
 coverage under an NPDES permit:

       The draft proposed rule also contains a "no exposure" provision that would make all
 classes of industrial facilities eligible for waivers from the identification as "associated with
 industrial activity" under the existing regulations. The draft proposal represents a significant
 expansion in the scope of the no exposure provision originally promulgated'hi the 1990 rule [55
FR 47990 (November 16,1990)] for discharges only from facilities classified as "light industry."
The intent of this provision is to provide a simplified method of complying with §402(p) for
   7 Under the proposed Phase II regulation, the NPDES permitting authority must develop and apply criteria to evaluate
whether a storm water, discharge results or has the potential to result in significant water quality impacts (including habitat and
biological impacts).

   8 The Phase II rule would also provide that persons can petition the NPDES permitting authority to add an MS4 for
coverage under the storm water program. And the permitting authority may waive an MS4 from coverage where specified
conditions are satisfied.

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 industrial facilities which are entirely indoors, such as within a larger office building, or at which
 the only items .permanently exposed to precipitation are roofs, parking lots, vegetated areas, and
 other non-industrial areas or activities.                     •
                  I
       In order to be covered under the no exposure provision, EPA would propose that an
 owner or operator of an otherwise regulated facility would need to submit to the NPDES
 permitting authority a certification that the facility meets the no exposure requirements. The
 facility would need to allow the NPDES permitting authority (or operator of a municipal separate
 storm sewer system if the discharge occurs through a municipal system) to inspect the facility
 and to make such inspection reports publicly available, upon request. Finally, EPA would
 propose that the certification require only minimal amounts of information from the facility
 claiming the no exposure exemption. The NPDES permitting authority would maintain a simple
 registration list which should impose ininimal administrative burden, but which would allow for
 a way of tracking which industrial facilities are exercising the exemption. EPA developed these
 two aspects of the proposed no exposure provision (applicability to all forms of industrial storm
 water discharge and certification/tracking) hi order to respond to a judicial remand that found the
 original no exposure provision to be "arbitrary and capricious" for its distinction between types
 of industrial discharge and  for failure of the rule to either require self-reporting of actual
 exposure or to require EPA to inspect and monitor such facilities.
APPLICABLE "SMALL ENTITY" DEFINITIONS

       The draft proposed rule to revise existing requirements hi the National Pollutant
Discharge Elimination System (NPDES) storm water program may impose a regulatory burden
on two types of small entities. The first type of small entities that may be affected is a "small
governmental jurisdiction".9  A governmental jurisdiction is usually, though not always, the
owner or operator of a small municipal separate storm sewer system (MS4). The second type of
small entity is a "small business".  One class of small business is the operator responsible for the
discharge from a construction activity that results in the land disturbance of between one acre and
five acres. The operator of a construction activity is usually a construction contractor. The
second class of small business that may be affected by this proposed rule are "light industries" in
Category xi that would need to certify to the no exposure provision. The current version of the
proposed rule includes a "no-exposure" provision that would provide regulatory relief to Phase I
industrial/commercial facilities. This report includes tables showing the estimated numbers of
small entities that may be affected by the proposed rule.
  -9 EPA uses the Regulatory Flexibility Act's definition of small governmental jurisdiction" as the government of a city,
county, town, school district or special district with a population of less than 50,000.

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 MUNICIPAL SEPARATE STORM SJE
       Regarding municipal separate storm sewer systems, the proposed rule uses the term
 "small municipal separate storm sewer system" to refer to all municipal separate storm sewers
 that are located in an incorporated place with a population of less than 100,000 as determined by
 the latest Decennial Census by the Bureau of Census. The owner or operator of a covered small
 MS4 may or- may not be a "small governmental jurisdiction" as defined by the Small Business
 Administration (SB A).  The proposed rule would affect three categories of small MS4s  that are
 also small governmental jurisdictions that own or operate a MS4. (See Table 1)

 CONSTRUCTION ACTIVITIES

       Regarding construction activities, the proposed rule would not directly target individual
 "small businesses" but the construction activity itself. However, EPA expects most, if not all,
 construction activities that would be covered by this proposed rule would be performed by
 construction contractors in Standard Industrial Classification (SIC) Group 15 and 16. The SB A
 defines small business by the category of business using SIC codes and uses different cut-offs for
 different SIC codes. (See Tables 2 & 3)

 "NO-EXPOSURE" PROVISION

       The proposed rule would provide regulatory relief to many small businesses that would
 not have storm water discharges "associated with industrial activity" if they certify to the "no-
 exposure" provision. Facilities under the following SIC codes are potentially subject to
regulation under Phase I of the NPDES storm water program: 10-14, 20-3 9, 40 1 1 , 40 1 3 , 4 1 -42,
4221, 4222, 4225, 4226, 431 1, 44, 45, 491, 5015, 5093, and 5171. Therefore, those facilities that
would potentially benefit from the no exposure provision are also under these SIC code groups.
(See Table 4).

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                                           Tabie 1:
                      Small Governmental Jurisdictions That May be
                                 Affected by Proposed Rule
                               Automatic
                               Coverage
                               Required
                            Watershed-based
                         Evaluation for Potential
                          Designation/Coverage
                          by NPDES permitting
                               authority
                               Optional
                           Watershed-based
                        Evaluation for Potential
                         Designation/Coverage
                         by NPDES permitting
                               authority
Coverage
MS4s < 50,000 &
Located in an Urbanized
Area
                        * Approx. # = 3,031
MS4s from 10,000-
50,000 & and population
density > 1000/sqmi
Located outside an
Urbanized Area

•Approx. # = 583
MS4s < 10,000 &
Located outside an
Urbanized Area
                                                * Approx. # = 17,540
                                                MS4 contributing
                                                substantially to the
                                                pollutant loadings of a
                                                regulated MS4.

                                                •Number is unknown.
Waiver from Coverage
1. MS4s<1.000&
Located in an Urbanized
Area with 1) no water
quality impacts and 2) no
direct or indirect
connection to a regulated
MS4.

*Number is unknown.

2. Indian Tribes <  1,000
are automatically-waived
from coverage.

*Approx. # is = 8

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                                               Table!:
                               Estimated Range of Small Businesses
                                          in SIC Group 15
                             That May be Affected by Proposed Rule
                       When They Undertake Construction Activities That
                                 Disturb from 1 to 5 Acres of Land
MAJOR GROUP 15** BUILDING CONSTRUCTION**GENERAL CONTRACTORS
AND OPERATIVE BUILDERS
SIC
Code
1521
1522
1531
1541
1542
Description
General Contractor* - Single-Family Houses
General Contractor! - Residential Buildings, Other
Than Single-Family
Operative Builders
General Contractors'— Industrial buildings and
Warehouses
General Contractors — Nonresidential Buildings,
Other Than Industrial Buildings and Warehouses
Size
Standard
by Millions
of Dollars10
$17.0
$17.0
$17.0
$17.0
$17.0
Establish-
ments
with <10
million
annual
revenue11
107,289
6,367
16,200
7,330
27,871
Establish-
ments
with >10
million
annual
revenue
206
123
789
353
1,868
   10 The Small Business Administration defines a small business within each of these SIC codes as a firm having annual
revenue of not greater than $17 million.

   '' Data is from the U.S. Bureau of the Census's Economic Census 1992. The Bureau of the Census uses an "establishment"
as the unit of data. A firm may have more than one establishment As a result, the number of firms is less than the number of
establishments listed. The Economic Census 1992 did not have data corresponding to SBA's $17 million size cut-off.  The
highest cut-off is $10 million hi annual revenue. Therefore, the actual number of establishments that are below the $17 million
cut-off is greater than the number listed in this column.

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                                               Table 3:
                               Estimated Range of Small Businesses
                                          in SIC Group 16
                             That May be Affected by Proposed Rule
                       When They Undertake Construction Activities That
                                 Disturb from 1 to 5 Acres of Land
MAJOR 16**HEAVY CONSTRUCTION OTHER THAN
BUILDING CONSTRUCTION**CONTRACTORS
SIC
Code


1611
1622
1623
1629
Description


Highway and Street Construction, Except Elevated
Highwayj
Bridge, Tunnel, and Elevated Highway Construction
Water, Sewer. Pipeline, and Communications and
Power Line Construction
Heavy Construction, N.E..C.
EXCEPT, Dredging and Surface Cleanup Activities
(where size standard cut-off is $13.51)
Size
Standard
by Millions
of Dollars'2

$17.0
$17.0
$17.0
$17.0
Establish-
ments
with <10
million
annual
revenue13
9,205
878
9,882
15,311
Establish-
ments
with >10
million
annual
revenue
885
163
351
505
    12 The Small Business Administration defines a small business within each of these SIC codes as a firm having annual
revenue of not greater than $ 17 million.
           -.'"••."        ••                        '                     .
    13 Data is from the U.S. Bureau of the Census's Economic Census 1992. The Bureau of the Census uses an "establishment"
as the unit of data. A firm may have more than one establishment As a result, the number of firms is less than the number of
establishments listed. The Economic Census 1992 did not have data corresponding to SBA's S17 million size cut-off. The
highest cut-off is $10 million in annual revenue. Therefore, the actual .number of establishments that are below the $17 million
cut-off is greater than the number listed in this column.
                                                  10

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                                                               Table 4:
                                            Estimated Number of Facilities14 That Could
                                      Potentially Benefit from the "No-Exposure" Provision
Parti Total Facilities Nationwide

Total Number of Facilities Nationwide (including Category xi facilities)
Potentially Subject to Regulation under Phase I15
Percentage Range of Facilities That Could Potentially Benefit
from the "No-Exposure" Provision
Estimated Range of All Facilities (including Category xi facilities) That
Could Potentially Benefit from the "No-Exposure" Provision
Mean
Number of Facilities
636.4S4
30% - 60%
210,030 - 388,237
299,133
Source •
Census Bureau;
Dunn & Bradstreet
EPA estimate


Part 2 Category xi Facilities Nationwide
Total Number of Category xi Facilities Nationwide Potentially Subject to
Regulation under Phase I11
Percentage of Category xi Facilities That Could Potentially Benefit
from the "No-Exposure" Provision
Estimated Number of Category xi Facilities That Could Potentially
Benefit from the "No-Exposure" Provision
Mean
394,983
40% - 75%
161,943 - 300,187
229,090
Census Bureau;
Dunn & Bradstreet
EPA estimate
•

   l4Given the complexity, there has been no attempt to calculate the number of facilities that are both 1) a "small business" as defined by the Small Business
Administration and 2) could potentially benefit from the "no-exposure" provision.
 i
   "Facilities under the following SIC codes are potentially subject to regulation under Phase I: 10-14,20-39,'4011,4013,41-42,4221,4222,4225,4226,
4311,44,45,491, 5015,5093, and 5171. The number of facilities was obtained from individual State County Business Patterns 1993, Bureau of the Census,
U.S. Dept. of Commerce.  Data for SIC codes 4011 and 4013 was obtained from Dun & Bradstreet's database (data run on 7/18/96).
                                                                   11

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 SUMMARY OF SMALL ENTITY OUTREACH

       Tribes, States, local governments, industries, and environmental groups have provided
 extensive input throughout the development of the NPDES Storm Water Phase II proposed rule's
 draft language.  Since 1992, EPA has made a consistent effort to reach out to all stakeholders
 regarding this proposed rule.

       First, EPA provided Tribes, States, local governments, industries, and environmental
 groups with the opportunity to comment on alternative approaches for the Phase II regulations
 through publishing a notice requesting information and public comment on the approach for the
 Phase n regulations required under §402(p)(6)  of the Clean Water Act (See 57 FR 41344;
 9/9/92). The September 9, 1992, notice presented a range of alternatives on a variety of issues
 in an attempt to illustrate, and obtain input on,  the full range of potential approaches for the
 regulation of unregulated sources to protect water quality. EPA received more than 130
 comments on the September 9, 1992, notice. Approximately 43 percent of the comments came
 from municipalities, 29 percent from trade groups or industries, 24 percent from State or
 Federal agencies, and approximately 4 percent  from other miscellaneous sources. These
 comments are summarized in Appendix J of Storm Water Discharges Potentially Addressed by
 Phase II of the National Pollutant Discharge Elimination System Storm Water Program: Report
 to Congress (March, 1995).  EPA considered these comments in developing many of the
 provisions in today's proposed rule, including.reliance on the NPDES program framework
 (including general permits), providing State and local governments with flexibility hi selecting
 Phase II sources, focusing on high priority polluters and providing certain waivers for facilities
 that do not pollute, focusing on pollution prevention and BMPs, and incorporating watershed-
 based concerns in targeting.

       Second, in early 1993, EPA and the Rensselaerville Institute held public and expert
 meetings to assist in developing and analyzing options for identifying unregulated storm water
 sources and possible controls. These meetings again allowed participants an opportunity to
 provide input into the Phase II program development process.  The proposed rule reflects several
 of the key concerns identified by these groups, including provisions that provide flexibility to the
 States and other permitting authorities to select sources to be controlled hi a manner consistent
 with criteria developed by EPA.

      Third, EPA convened the Urban Wet Weather Flows Advisory Committee (the "FACA
 Committee"), including the Storm Water Phase II Subcommittee, to assist EPA in the
 development of cost-effective solutions for controlling the environmental and human health
 impacts of wet weather flows with a minimum of regulatory burden.  The Phase n proposed rule
was discussed in the overall UWWF FACA committee. The UWWF FACA committee has
been developing the framework and language of the no exposure provision for two years.
Consistent with the Federal Advisory Committee Act, the membership of the Phase n
Subcommittee was balanced among the  EPA's various outside stakeholder interests,  including
representatives from municipalities, industrial and commercial sectors, agriculture,

                                         12

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 environmental and public interest groups, States, Indian Tribes, and EPA.  As of February
 1997, the Storm Water Phase II Subcommittee has met 11 times for two-day periods,
 approximately every other month between September 1995 and February 1997. In addition to
 the FACA Subcommittee meetings, other meetings, conference calls, and correspondence,
 Subcommittee members were provided three opportunities to comment in writing on the
 preliminary draft approaches to the Phase II proposed rule.  EPA distributed to Subcommittee
 members three preliminary drafts approaches of the Phase II proposed rule on September 30,
 1996, November 15/22,1996, and February 14,1997. This resulted in three rounds of written
 comments from Subcommittee members. These comments were taken into consideration as EPA
 revised the preliminary draft language to respond to the Subcommittee's concerns. The 32
 FACA Subcommittee members have utilized these numerous opportunities for input to shape the
 development of the Storm Water Phase II proposed rule. The Agency intends to continue to
 meet with the Phase II Subcommittee hi the development of this rule.

       Recently, EPA conducted additional outreach to representatives of small entities that
 would be affected by the proposed rule as required by the Regulatory Flexibility Act, as amended
 by the Small Business Regulatory Enforcement Fairness Act (SBREFA). EPA, in consultation
 with the Small Business Administration, invited 29 small entity representatives and streamlining
 representatives to participate in this outreach. Many of these small entity representatives have
 been working closely with EPA in developing this proposed rule through the FACA process.16
 Small entity representatives included the following Phase II Subcommittee and Urban Wet •
 Weather Committee members: Dr. Roy Cameron, Mr. Tom Delaney, Ms. Beth Gotthelf,  Mr.
 Roger James, Mr. Stephen Jenkins, the Honorable David Kubiske, the Honorable Jean Michaels
 (alternate: Ms. Diane Shea), Mr. Don Moe, the Honorable Jim Naugle (alternate:  Ms. Carol
 Kocheisen), the Honorable Jeffrey Wenneberg, and the Honorable Annabeth Surbaugh.
 Although Ms. Shea and Ms. Kocheisen are alternate small entity representatives, they are  full
 fledged FACA members.

       EPA's Office of Wastewater Management distributed a briefing package to each
 representative and prepared additional documents hi response to requests from the
 representatives. EPA conducted two telephone conference calls on May 14 and May 15,1997 to
 brief representatives on the draft proposed rule.  In addition, an all-day meeting was held at EPA
 Headquarters on May 22,1997, with representatives.  OMB and SB A officials participated in the
 conference calls and all-day meeting. In addition, EPA's Small Business Advocacy Chairperson
participated hi the all-day meeting: As of June 13,1997, EPA received 12 sets of written
   16 EPA has concluded that the RFA does not require an agency to conduct an initial regulatory flexibility analysis for a rule
that significantly reduces the regulatory impact on a substantial number of small entities. RFA sections 603 and 604 both require
an agency in conducting regulatory flexibility analyses to identify and consider regulatory alternatives that would "minimize"
any significant economic impact on a substantial number of small entities. Since it would make no sense to minimize the
beneficial impacts of deregulation, EPA interprets the RFA as requiring analyses of only new or additional regulatory
requirements. However, EPA has agreed in the case of this rule to include in the Panel's outreach efforts representatives of
small entities that might benefit from the rule's deregulatory aspects. In this document, EPA refers to the representatives of these
small entities as "streamlining representatives."

                                           13

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comments from representatives. These comments as well as all documents distributed to
representatives were presented to the Panel for its review.   On June 23,1997, EPA's Small
Business Advocacy Chairperson sent a letter to each_small entity and streamlining representative
requesting any additional or remaining comments that they would like to communicate directly
to the Panel.  In his letter, the Chairperson included a summation of the comments that
representatives had submitted to EPA's Office of Wastewater Management for their review and
comment.  .
                     •
      The Chairperson received one comment.  Thiscommentwasaresubmissionofa
comment that had been previously received by EPA's Office of Wastewater Management during
its outreach. A summary of all comments is attached to this report.
                                        14

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 SMALL-ENTITY REPRESENTATIVES

       EPA, in consultation with the Small Business Administration, invited the following 12
 small entity representatives to participate in its outreach efforts on the Storm Water Phase II
 proposed rule. Many of these representatives also submitted written comments.

 Indian Tribes

 Dr. Roy Cameron                            Construction
 Tribal Advisor
 Representing-Certain New England Indian        Ms. Lee Garrigan
 Tribes                                      Associated General Contractors of
                                            America
 Municipalities
                                            Mr. DonMoe
 Mr. Stephen Jenkins                         National Assoc. of Homebuilders
 Director, Env. & Engineering Dept.
 City of San Marcos                            Mr. Michael Wilson
                                            Associated Builders and Contractors
 Ms. Carol Kocheisen-ALTERNATE
 National League of Cities

 The Honorable David Kubiske
 Supervisor
 Ida Township, MI
                 <
 The Honorable Jean Michaels
 Chair, Board of County Commissioners
 Olmstead County, Minnesota

 The Honorable Jim Naugle
 Mayor, City of Ft. Lauderdale

 Ms. Diane Shea-ALTERNATE
National Association of Counties

The Honorable Annabeth Surbaugh
County Commissioner
Johnson County Board of Commissioners

The Honorable Jeffrey Wenneberg,
Mayor of Rutland, Vermont
                                       15

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 STREAMLINING REPRESENTATIVES

       EPA, in consultation with the Small Business Administration, invited the following 17
 streamlining representatives to participate in its outreach efforts on the Storm Water Phase II
 proposed rule. Many of these representatives also submitted written comments.

 Industrial/Commercial
 Mr. Brian Bursiek
 American Feed Industry Association

 Mr. Tom Delaney
 Professional Lawn Care Assoc. of
 America
 Ms. Tracy Alaimo Mattson
 Automotive Recyclers Association

 Mr. Mark Morgan
 Petroleum Transportation and Storage
 Association
Mr. Clay Detlefsen
International Dairy Foods Association

Mr. John DiFazio Jr.
Chemical Specialties Manufacturers
Association

Ms. Beth Gotthelf
National Association of Metal
Finishers

Mr. Steve Hensley
American Trucking Associations

Mr. JohnHuber
Petroleum Marketers Assoc of America
Mr. John Oliver
Porcelain Enamel Institute, Inc.

Mr. Russ Snyder
Roof Coatings Manufacturers
       Association
Asphalt Roofing Manufacturers
       Association

Mr. William Sonntag
National Association of Metal
       Finishers
American Electroplaters and Surface
       Finishers Society
Metal Finishers Suppliers'
       Association
Mr. Roger James
American Public Works Assoc.
Mr. Jack Waggener
Resource Consultants Inc.
Mr. Jeffrey Longsworth
American Car Rental Association
Independent Lubricant
      Manufacturers Association
National Association of Convenience
      Stores  !
Society of Independent Gasoline
      Marketers of America    ;
Ms. Robin Wiener
Institute of Scrap Recycling Industries

Mr. John Whitescarver
National Stonnwater Center
                                        16

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INPUT FROM REPRESENTATIVES
      The Panel received 12 sets of written comments from representatives. In addition, oral
comments were submitted during the two telephone conference calls on May 14 and 15,1997
and during the all-day meeting on May 22,1997, at EPA Headquarters. A summary of the
written comments and those oral comments that raise issues not raised in the written comments is
attached as Appendix A. The complete written comments of representatives are attached at the
end of this document as Attachment A. A summary of the telephone conference calls and a
record of the all-day meeting are found on pages 91-105 of Attachment B.

                                    TableS:
                  SBREFA Outreach Written Comments Received
                    on the Storm Water Phase II Proposed Rule
Number
1
2
3
4
.5
6
7
Name
>
John Huber
Municipal Representatives
a, JimNaugle
b. Jean Michaels
c. Scott Tucker
d. Carol Kocheisen
e. Diane S. Shea
f. Susan Gilson
Steve Hensley
Stephen Jenkins
Lee D. Garrigan
Donald Moe
Michael E. Wilson
Organization
Petroleum Marketers Association of
America
a. National League of Cities
b. National Association of Counties
c. Nation Association of Flood &
Stormwater Management Agencies
d. National League of Cities
e. National Association of Counties
f. Nation Association of Flood &
Stormwater Management Agencies
American Trucking Associations
City of San Marcos, Texas
Associated General Contractors of
America
National Association of Home Builders
Associated Builders & Contractors
Date
Received
5/28/97
6/5/97
6/6/97
6/6/97
6/6/97
6/6/97
6/6/97
Number
of Pages
1
11
2
2
2
14
4
                                      17

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Number

Name

Organization

Date
Received
Number
of Pages
CONTINUATION OF TABLE 5
8
9












10
11
12

John Whitescarver
Industrial Representatives
a. Brian Bursiek
b. John E. DiFazio Jr.
c. JohnHuber
• •
d. Tracy Alaimo Mattson •
e. John Oliver
f. William Sonntag

g. JackWaggener
h. Clay Detlefsen
i. Steve Hensley
j. Jeffrey S. Longsworth



k. Russell Snyder

1. Tom Tyler (for Robin
Wiener)
m. John Whitescarver
Dave Kubiske
Mark S. Morgan
Jack E. Waggener
11
National Stormwater Center
a. American Feed Industry Association
b. Chemical Specialties Manufacturers
Association
c. Petroleum Marketers Association of
America
d. Automotive Recyclers Association
e. Porcelain Enamel Institute, Inc.
f. American Electroplaters and Surface
Finishers Society
Metal Finishers Suppliers' Association
National Association of Metal
Finishers
g. Resource Consultants, Inc.
h. International Dairy Foods Association
i. American Trucking Associations
j. American Car Rental Association
Independent Lubricant Manufacturers
Association
National Association of Convenience
Stores
Society of Independent Gasoline
Marketers of America
k. Asphalt Roofing Manufacturers
Association
Roof Coatings Manufacturers
Association
1. Institute of Scrap Recycling Industries
m. National Stormwater Center
Ida Township, Michigan
Petroleum Transportation & Storage
Association
Resource Consultants
i
6/6/97
6/6/97












6/10/97
6/1 1/97
6/13/97
(re-
submitted
6/27/97)
2
10












3.
4
3

18

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 PANEL FINDINGS AND DISCUSSION
                           •

       The Panel's findings and discussion are arranged below according to the elements of the
 IRF A and the category of activity that would be regulated by the proposed rule, where
 appropriate.

 The Types and Number of Small Entities to Which the Proposed Rule Would Apply
                      *
       As indicated earlier in the report, the types of small entities to which the Storm Water
 Phase II proposed rule would apply include small governmental entities that own or operate a
 municipal separate storm sewer systems and small businesses.  Small businesses include small
 construction firms and small industrial facilities.  The Panel considers the ranges that EPA has
 provided (listed hi this report as Tables  1,2,3, and 4) as reasonable indicators, given the
 available data, of the number of small entities that would be affected by the proposed rule.

    .   The Panel notes that small entities raised comments concerning the existing permit
 requirements applicable to storm water discharges from Category xi facilities in general. In
 addition, the Panel also received small entity comments on the issue of whether the proposed rule
 increases burden on Category xi facilities with no exposure.  EPA has stated that it believes all
 Category xi facilities are currently subject to NPDES coverage.  Category xi facilities with
 exposure to storm water were required to obtain a permit by October 1994 [57 FR 60446].
 Category xi facilities where there is no txposure to storm water are required to obtain permit
 coverage effective August 2001 [60 FR 17953]. the Panel finds that the proposed rule would
 not affect Category xi facilities with exposure. However, the Panel also finds that, as a practical
 matter, the proposed rule would represent additional  burden for Category  xi facilities with no
 exposure, [see Classes of Small Entities below]

 Projected Reporting, Record Keeping, and Other Compliance Requirements of the
 Proposed Rule, Including the Classes  of Small Entities Which Will Be Subject to the
 Requirements and the Type of Professional Skills Necessary for Preparation of the Report
 or Record

       The above section entitled, "Overview of Proposed Phase II Rule" describes the basic
 elements  of the proposed rule. The record keeping, reporting, and other compliance
requirements associated with the construction component of the proposed rule would be similar
to those required by currently regulated Phase I construction activities.  However, EPA
anticipates that the best management practices (BMPs) that typically would be implemented on
construction sites below 5 acres to achieve compliance would be less sophisticated and less
expensive than those BMPs implemented on a Phase I site.  The proposed rule would provide
the NPDES permitting authority with the discretion not to require notices of intent (NOIs) in
general permits for storm water discharges from Phase IT construction activities. NOIs are
required of Phase I construction activities. The record keeping and reporting requirements for
the municipal component of the proposed rule would be substantially less than those required for

                                          19

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 municipalities under the Phase I program. Currently regulated Phase I facilities that claim no
 exposure would need to file a self-certification form to document their exemption from otherwise
 applicable permit requirements.

 Projected Reporting, Record Keeping, and Other Compliance Requirements
                            »
       The Panel received many comments stating that the proposed rule would impose
 administrative and compliance burdens on small entities. The Panel supports EPA's efforts to
 explore ways to reduce these burdens on small entities while protecting water quality.

 No Exposure:

       Municipal representatives questioned the need for facilities with no exposure to so certify
 if they are not required, as a matter of law, to obtain an NPDES permit anyway. Industrial
 representatives stated that a five year certification and a one-tune notice of termination (NOT)
 would be an acceptable burden for the small businesses they represent. However, industrial
 representatives and other commenters had significant concerns regarding the language in the "no
 exposure" self-certification form itself. They believe that to determine if there is an
 "interference" with water quality standards would require significant financial costs, for example,
 the need to hire a qualified engineer to make a determination. Additionally, both municipal and
 industrial representatives stated that there should be no requirement to assess flow impacts in the
 certification form,  [see Type of Professional Skills below]
                                       i
       The Panel notes that, since the discussion in the first Panel meeting, EPA has responded
 to some commenters' concerns by deleting the requirement for "self-certifiers" to determine "no
 interference" with water quality standards hi the no exposure self-certification form, thus, also
 removing any requirement to assess flow impacts.  EPA has substituted a new question to ask
 whether actions to qualify for no exposure result in increased impervious surface area.
 Answering "yes" to this question would not disqualify a facility from the no exposure exemption.
 The answer to this question and other information, however, would enable the NPDES
 permitting authority to determine if the discharge would be likely to interfere with attainment of
 water quality standards, in which case, the permitting authority could exercise its existing
 authority under the Clean Water Act to disallow the no exposure exemption and require coverage
 under either a general or an individual permit, as appropriate.. The Panel supports this revision
to the earlier draft of the self-certification form and expects that it would reduce the
 administrative and financial burden on small industrial facilities wishing to make use of the no
 exposure self-certification provision, [see Type of Professional Skills below]
                               i
 Classes of Small Entities      ,
         *.:""'"•.'       '      .                         .
       As noted above, the Panel received comments stating that Category xi facilities  are not
currently subject to NPDES coverage and that therefore this proposed rule  would expand
coverage to a new class of small entities. EPA disagrees with these comments and  maintains

                                          20

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 that Category xi facilities are currently covered under the NPDES program and that in fact many
 Category xi facilities with actual exposure have sought coverage under NPDES permits. Under
 EPA's interpretation of the current regulations, Category xi facilities with no exposure are
 required to obtain NPDES permits by August 2001.

        The Panel notes that the proposed rule does not include any regulatory requirements
 applicable to Category xi facilities except the no exposure self-certification provision and
 therefore imposes no regulatory burden on Category xi facilities other than those wishing to
 make use of this provision.  However, as a practical matter the Panel also finds that the proposed
 rule would represent additional burden for Category xi facilities claiming no exposure and
 considers this group to be a newly regulated class of small entities. At the same time, the Panel
 notes that EPA has attempted, both through consultation with its Stormwater Phase II
 Subcommittee and  in response to comments from small entity representatives,  to structure the no
 exposure self-certification provision in a way that minimizes the burden on facilities'making use
 of it. In addition, by expanding the availability of the no exposure provision to all Phase I
 facilities that meet its requirements, EPA would provide significant regulatory relief to a large
 number of currently regulated entities, both large and small.

 Type of Professional Skills

 Municipal Program:

        Municipal representatives stated, and the Panel agrees, that implementation of some
 program elements would not necessarily require staff with education beyond a high school
 diploma.  However, municipal representatives also stated  that some of the minimum control
 measures would definitely require a person with advanced education or significant work
 experience beyond high school. Specifically, these municipal representatives referred to the
 minimum control measures for: (1) post-construction storm water management, (2) pollution
 prevention, and (3)  evaluation and effectiveness.

        EPA has stated its commitment to develop guidance materials and training to ensure that
 the level of professional skills required to implement the municipal program would be kept to a
 minimum. The Panel supports EPA's efforts in providing guidance materials and training to
 assist hi the implementation of the proposed program.
•No Exp<

-------
 Other Relevant Federal Rules Which May Duplicate, Overlap, or Conflict with the
 Proposed Rule

       The Panel received comments that the proposed rule .may conflict with the requirements
 of the Clean Air Act, the Endangered Species Act, the Great Lakes Initiative, and Section 404 of
 the Clean Water Act as administered jointly by the EPA and the Corps of Engineers.  Municipal
 representatives indicated that street sweeping activities designed to reduce pollutants in urban
 run-off may create "dust" or "soot" that could cause a violation of the National Ambient Air
 Quality Standards for particulate matter.    .

       The Panel recommends that the Agency further evaluate in its regulatory flexibility
 analysis whether the proposed rule would conflict with those federal rules identified by
 commenters and revise the rule to address such conflicts as appropriate.
.Any Significant Alternatives to the Proposed Rule which Accomplish the Stated Objectives
 of Applicable Statutes and Which Minimize Any Significant Economic Impact of the
 Proposed Rule on Small Entities

       Before addressing specific alternatives suggested by commenters during the SBREFA
 outreach process to minimize the impacts of the rule on small entities, the Panel wishes to note
 and commend EPA's efforts over the past two years to work with stakeholders, including small
 entities, through the Stonnwater Phase II Subcommittee of its Urban Wet Weather Flows
 Advisory Committee, as described above. Because of the extensive outreach already conducted
 and the Agency's responsiveness in addressing stakeholder concerns, commenters during the
 SBREFA process raised fewer significant concerns than might otherwise have been the case.
 However, the Panel did receive comments on the following issues.

 Municipal Coverage                 _

       Municipal representatives expressed concern that the waiver provision for municipalities
 in urbanized areas with populations under 1,000 would be difficult to use in practice because
 these are exactly the municipalities that would be unlikely to have the resources to demonstrate
 that their activities have no water quality impacts.  Furthermore, they raised concerns that tying
 the waiver provision to TMDL or watershed assessments will make it even more difficult to use.
 The Panel notes that where EPA or a State has conducted such the watershed assessments and
 developed any necessary TMDLs (as the Agency fully anticipates will occur), the municipal
 concern should prove unwarranted. In such cases, a municipality would not need to make any
 such demonstration but merely'certify that a TMDL (or watershed plan) applies and does not
 assign any responsibilities to reduce pollutant loads. In cases where such assessment work is not
 completed by EPA or a State, however, the Panel shares the concern and recommends that the
 preamble invite comment on the concern.

                                          22

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    .   The municipal representatives also questioned the rationale for treating Tribes under
 1,000 differently from municipalities under 1,000. OMB and SB A recommend that the preamble
 invite public comment on whether both municipalities and Tribes under 1,000 located within an
 urbanized area should be treated like MS4s under 10,000 located outside an urbanized area,
 which is the approach EPA is proposing for Tribes under 1,000.  That is, the preamble should
 invite comment on whether both municipal separate storm sewer systems serving a population of
 less than 1000 and urban Tribes with a population of less than 1000 should be exempt unless
 either (1) they contributed significantly to the pollutant loadings  of a covered MS4 or (2) the
 permitting authority determines that they have a significant impact on water quality.  This
 alternative would place the burden of proof for coverage on the permitting authority, which
 would have better resources for making the appropriate water quality impact determinations than
 the very small municipality or small urban Tribe.  EPA believes that the rationale for inclusion of
 very small municipal separate  storm sewer systems differs from the rationale for exclusion of
 small urban tribes. EPA believes that small urban tribes should be treated differently because it
 believes the population density should be much lower than the very small municipal separate
 storm sewer systems and because small urban tribes cannot rely on a State in the same way as a
 very small municipal separate  storm sewer system (a political subdivision of a State).
Construction:

       The Panel received many comments questioning the need to regulate construction
activities that result in land disturbance of 1 to 5 acres. Several of the small entity
representatives noted that there are many local control programs already in place. They stated
that regulation below 5 acres would have significant economic impact on small businesses and
that the proposed rule would greatly increase the number of affected small businesses. Several
commenters also questioned whether regulation of such activities would provide significant
water quality benefits.

       Some of the commenters provided advice and recommendations.  Onecommenter
suggested an exemption for "routine maintenance" activities such as repairing potholes, clearing
out drainage ditches, and maintaining fire break? because these activities often involve rights-of-
way extending across multiple regulatory jurisdictions. The  commenter suggested that, at most,
these activities be required to adhere to generic best management practices. A number of
commenters encouraged EPA to adopt a voluntary program,  including guidance and perhaps
incentives, for construction sites below 5 acres. One commenter stated that many small operators
may lack the resources to put together a good site plan.

       Municipal commenters stated that regulation of construction sites below 5 acres will
create a major burden to local governments and should be at  the discretion of the permitting
authority. Another commenter suggested that construction sites, regardless of size, that are
located within a Phase I regulated MS4 be required only to comply with the requirements of the
                                          23

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 municipality. Several coninienters suggested that if EPA does regulate construction sites under 5
 acres, NOIs should not be required for these sites.

       While the Panel has not thoroughly evaluated the merits of each of the small entity
 concerns, the Panel recommends that the preamble to the proposed rule invite comments on
 alternatives to the proposed requirements for regulation of construction sites that result in the
 disturbance of 1 to 5 acres.17  The request for comments should include a discussion of concerns
 expressed by small entity .representatives and suggestions they have made for addressing them.
 The request should ask for comment on the extent to which a nonregulatory voluntary program,
 or one that relies on the discretion of the permitting authority or covered MS4, would provide
 adequate protection against water quality impairment due to run-off from small construction
 sites, and on any specific experience commenters may have had in the past with voluntary
 regulation of discharges from such sites based on best management practices.  The Panel also
 encourages EPA to consider revisions to the proposal itself that address some of the technical
 concerns raised by small entity commenters, such as the difficulty of obtaining permits for
 routine right-of-way maintenance involving multiple jurisdictions.

       The Panel also received comments from municipal and industrial representatives
 suggesting that construction activities undertaken by municipalities or industrial facilities could
 be covered under these entities' existing stormwater permits, provided that such existing permits
 detail soil and erosion controls. Municipal representatives also recommended that any industrial
 facility operated by the municipality be covered by its MS4 permit and that the municipality be
 allowed to determine if there is exposure for these facilities as part of its MS4 plan without filing
 a separate no exposure self-certification.  The Panel recommends that the preamble to the
 proposed rule explore and request comment on the ideas discussed in this paragraph. The Panel
 believes that the option for construction sites may be appropriate for municipalities or industrial
 facilities with individual NPDES permits but may be administratively difficult to implement
 under NPDES general permits. The Panel also supports and encourages efforts to minimize
 paperwork burden on municipalities, which are ultimately responsible for the success of their
 stormwater plans.
   17  In order to avoid unnecessary regulatory duplication, the Small Business Administration
recommends that EPA consider a regulatory option that would allow permit authorities to rely
solely on the local program where the local program exceeds reasonable minimum criteria for
program effectiveness. Many localities and states have sediment and erosion control programs
that target the primary pollutants of construction sites.  These local programs are often
specifically designed to address the watershed specific issues and resources of those local areas.
SB A also suggests that EPA relax the stringency of some of the draft minimum criteria of the'
proposed regulatory option, or SBA's suggested option, where applicable. In SBA's view, the
minimum criteria would not necessarily require regulation for sites smaller than five acres in
size. An NPDES permit would not be required tp.be issued for each site. Regular inspections of
these small sites would not be required as part of the minimum criteria.

                                          24

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       The Panel received comments suggesting that the no exposure self-certification provision
as written would not allow facilities that undergo a "temporary operational change" or
transportation facilities that provide "non-pollutant generating outdoor maintenance of vehicles"
to make use of the provision. One commenter suggested that concern over temporary operational
changes could be addressed through the requirement of a management practice designed to
prevent exposure as a result of a tempory change in operations. Commenters were also
concerned about the requirement that there be no exposed containers that "might leak," since any
container "might leak," and suggested that the provision should only prohibit exposed containers
that are actually leaking.
                                            A
       The Panel is aware that EPA has been developing the no exposure language with
extensive stakeholder involvement through the Urban Wet Weather Flows Federal Advisory
Committee  for the past two years.  The Panel suggests that EPA examine these comments and
discuss them with the Advisory Committee.  The Panel hopes that the no exposure language can
be revised to allow, to the extent possible, all facilities with no actual discharge of pollutants to
make use of the  no exposure self-certification provision.
Appendix A:         Document: "Summary of Written Comments"    ;

Attachment A:       Complete Written Comments Received from Representatives

Attachment B:       All Documents that Were Distributed to Representatives
                                         25

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               APPENDIX A:  SUMMARY OF WRITTEN COMMENTS

 (Order of Summary follows Table 6; Page numbers refers to numbering in Attachment A)
 1.     Petroleum Marketers Association of America
       (John Huber, VP and Chief Council)
       [pagel]

       PMAA "believefs] that EPA has made great progress in their efforts on this rule and it
 appears that the process has been worthwhile. It is particularly noteworthy that resources are to
 be directed at the potential and real problems and administrative expenses will be minimized."

        PMAA believes that small sites with limited construction activity do not need to be
 permitted. Instead this commenter encourages EPA to develop a best management protocol for
 contractors which would be used regardless of the size of .the site in question. However, this
 commenter also "encourage(s) the use of the general permit approach for the many small
 transitory construction sites, which may for a short time be greater than one acre." [See page 1 of
 Appendix A]
2.     Municipal Representatives
       (Jim Naugle, Jean Michaels, Scott Tucker, Carol Kocheisen, Diane Shea, and Susan
       Gilson)
       [pages 2-12]

NOTE:      At the face-to-face small entity outreach meeting, the municipal representatives
             expressed concern about summaries of the rule prepared for the small entities,
             as well as summaries of the status of Federal Advisory Committee deliberations.
             Therefore, EPA staff would remind the reader that for a complete
             understanding of any comments the reader should NOT rely on prepared
             summaries of the comments, but rather focus on the actual comments
             themselves.

Background/General
       The Municipal representatives state that urban run-off is not the only source of pollution
causing stream degradation. They believe that in most cases the non-point sources of pollution
are the major contributors. The commenters also have concerns that the data being used to
support the proposed rule, in particular the 1984 NURP study, does not accurately reflect
developments since then, such as new sewage plants. "It is entirely possible that the degradation
documented by the NURP study may be significantly different today."  They were also
concerned with the rule's process. These commenters stated that §402(p)(5)(c) of the Clean
                                         26

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 Water Act specifically requires development of the rule with State and local officials and not
 necessarily with the panoply of stakeholders who participated in the FACAs.

       In regards to the municipal program, the municipal representatives state that local
 governments must be allowed the flexibility to "design and redesign" their storm water programs
 as they gain more experience, and not be penalized for making these changes.

 Municipal Coverage
       The municipal.representatives state that "EPA has never provided any documentation that
 (a) small municipalities within urbanized areas contribute to water quality problems or (b) small
 municipalities outside of urbanized areas do not." In addition, these commenters state that the
 Phase H rule should not in any way apply to areas where the preponderance of stormwater
conveyances are Combined Sewer Overflows. They are also "concerned about the implications
 for local land use planning authority of such [designation] criteria as "high growth or growth
 potential." They state that it inappropriately creates a nationwide disincentive on community
 growth.

       The municipal representatives want to have it made clear that the 854 entities quoted as
 covered by the Phase I program includes only 646 cities, towns, and counties that meet the
population requirement of over 100,000. The balance were designated by permitting authorities.

 Waivers
       Municipal representatives are concerned that the proposed waiver option places the
burden of proof on the local government while municipalities of under 1,000 are in no "position
to demonstrate that their activities have no water quality impacts" due to limited resources and
capabilities.  They are also not supportive of a waiver based on TMDLs since "the entire TMDL
process is frought with the potential to place the entire burden for attainment of designated uses
on point sources, including small municipalities with separate storm sewers." Nor do these
commenters believe that Tribes under 1,000 population should be treated any differently from a
municipality under 1,000.

Municipal Requirements
       In regards to the municipal construction minimum measure requirements, "the municipal
caucus believes the one-acre cut off will present a major burden to all local governments covered
under both the Phase I and Phase  II stormwater programs" and also considers the pollution
prevention/good housekeeping provision to be "too prescriptive and intrusive in the day-to-day
operations of a local government."

Construction Site Activities   ,            ,
       Municipal representatives prefer a 5 acre cut off and feel it can be justified. They
suggest that construction sites between 1 and 5  acres be included at the discretion of the
permitting authority.  They also state that the construction site activities provision should not
pre-empt local authority to regulate such activities.  Furthermore, these commenters state that

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 construction activities undertaken by a municipality should be incorporated in the municipal
 permit to avoid redundancy.                                      .
       "Local government organizations can support the chosen waiver option only if (a) the
 TMDLs cover pollutants of concern and (b) these waivers do not pre-empt local authority to
 regulate construction activities within their boundaries." The municipal representatives support
 waiving coverage where there is negligible rainfall and add that the waiver determination should
 be made by the permitting authority, not the construction site operator.

 Industrial/Commercial Facilities
       The municipal representatives found no reason for the no exposure provision if a "facility
 with no exposure to the elements is not required - as a matter of law - to have a permit." They
 did not understand why a facility that is not-required to obtain an NPDES permit would still have
 to certify that they do not require a permit.  They also find any reference to flow in the no
 exposure provision to be unacceptable.

        These commenters want any municipally owned and/or operated industrial facility to be
 covered by the municipal MS4 permit in order to avoid duplication of time and effort. In
 addition, they assume that the no exposure provision will apply to such facilities and "such a
 determination should be at the discretion of the municipality in developing its MS4 plan and
 should not require a separate filing or additional paperwork."

 Interaction with Other Federal Rules
       "Local governments believe the proposed municipal stormwater regulations may also
 conflict with requirements of the Clean Air Act (e.g. street sweeping activities designed to reduce
 pollutants in urban run-off may create "dust" or "soot" that would cause a violation of the PM
 standard)."  These commenters also "believe analyses should be conducted on the potential for
 conflict with the Endangered Species Act and Section 404 of the Clean Water Act as
 administered jointly by the EPA and the Corps of Engineers. Such analyses should be requested
 from the Department of the Interior and the Department of Transportation." [see page 12]

 Reporting and Record Keeping                   •
       The municipal representatives disagree with EPA regarding the type of professional skills
 necessary to implement all components of the municipal storm water program.  These
 commenters concede that some of the mechanical aspects of the .tasks can probably be
 accomplished by a high school education or related work experience, but some cannot.  They
 offer some examples of when a college degree is more appropriate, [see page 10]
3.     American Trucking Associations
       (Steve Hensley, Environmental Specialist)
       [pages 13-14]
                                          28

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       Note: ATA's comments all pertain to the no exposure provision.

       "ATA is concerned that current wording could be used to terminate a facility's no-
 exposure status due to a temporary and/or minor operational change. Furthermore, several of the
 industry's environmental officers have pointed out that they would be unable to guarantee 100%
 no-exposure because of the potential for a temporary operational change. However, they would
 be able to guarantee a management practice implementation to avoid exposure from any
 temporary shift in operations until normal operations resumed."

       "Recommendation #1: Redefine the definition of No-Exposure in the checklist and the
       preamble to the following: No-exposure exists at an industrial facility when: all
       industrial materials or activities, including, but not limited to, material handling
       equipment, industrial machinery, raw materials, intermediate products, by-products or
       •waste products, however packaged, are protected by a storm resistant shelter so as to not
       be exposed to rain, snow, snowmelt, or runoff; and when management practices are
       implemented and maintained for the life of the certification to insure that temporary but
       necessary changes to facility operation do not adversely impact water quality."

       "Recommendation #2: Alternatively,  include in a separate section of the checklist a
       check-off box and the following statement: The facility certifies that, if necessary,  it is
       currently implementing, and will continue to implement, management practices designed
       to maintain a no-exposure status.  Yes No  N/A"
4.     Stephen M. Jenkins, The City of San Marcos
       [pages 15-16]

       Mr. Jenkins states that "presently, there exists no comprehensive analysis of the water
quality monitoring efforts of Phase I to declare storm water regulation successful in preserving or
enhancing water quality." He also states that EPA should require, and not just encourage, that
NPDES permitting authorities use brief reporting formats under Phase II. He requests'that EPA
further specify the nature and extent of the information required for each report. Mr. Jenkins
recommends that EPA prohibit the NPDES permitting authorities from requiring MS4s to
conduct monitoring.

       In regards to construction activities, Mr. Jenkins states that "including construction sites
of one to five acres outside of an urbanized area is unnecessary  and is not proven to protect or
enhance water quality." He states that in areas such as West Texas, issuing permits and
enforcement would be problematic due to factors such as distance and government organization.
         •*.""'•»•           i
       Mr. Jenkins also states that EPA should not attempt to regulate stormwater volume and/or
rate of flow since it would encroach on local authority and land use planning.
                                          29

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 5.     The Associated General Contractors of America
        (Lee D. Garrigan)
        [pages 17-18]

        The "AGC continues to question the need for the EPA to regulate small sites under five
 acres" since they represent "a small percentage of the problem." AGC recommends control of
 these sites "through voluntary compliance in the form of best management practices."  If EPA
 still decides to permit sites between one and five acres, then "AGC believes that the EPA should
 make a distinction between significant construction activities and those that are routine
 maintenance. Routine maintenance activities should not be included under the rule." Finally,
 AGC states that notices of intent (NOIs) should not be required from small construction sites.
 6.     National Association of Home Builders
        (Donald Moe, NAHB Small Business Representative)
   .     [pages 19-32]

    ;    Note:  NAHB only addressed the issue of construction activity on sites between one and
              five acres.

        NAHB expressed concern as to whether EPA will give meaningful consideration to the
 information it receives through the Small Business Outreach process, due to its tight court-
 ordered deadlines.

        NAHB referred to the findings in the 1990 National Water Quality Inventory Report to
 Congress as support for their statement that "small [construction] sites are responsible for a
 substantially small percentage of the problem." [See page 25 of Appendix A for their description
 of findings.]  In addition, "since many of these federally unregulated discharges are regulated or
 otherwise controlled under state or local programs devoted to storm management and/or
 sediment and erosion control, and their impact is typically de minimis in nature, the direct federal
 regulation of these sources might well be considered unwarranted and unnecessary."  •

        NAHB, in considering alternatives for alleviating the burden on small businesses,
 recommends that "EPA should be required to revisit the 5 acre exemption."  NAHB also
 recommends "that the Phase II rule provide that construction sites, regardless of size, that are
 located within a Phase I regulated municipal separate storm sewer system need only comply with
 the requirements of the municipality" hi order to avoid duplicative and unnecessary federal
 regulation. NAHB supports the. idea of controlling at a local level since it allows for the program
 to be tailored to local conditions and would ensure that only problem sources would be regulated.
. For municipalities not regulated under Phase I, NAHB believes that they should develop a
 compliance program for controlling discharges if found necessary based on accurate data.
                                           30

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       NAHB stales-that "many owners and small site builders lack the resources or expertise to
 put together a good site plan" and therefore suggests that a "simple, understandable mechanism
 for small sites is the key to good compliance." NAHB believes that any alternative approaches
 must have two principle goals: (1) "eliminate redundant regulation by requiring permits from
 small construction sites only in limited instances in cases involving so-called "bad actors," and
 (2) "encourage voluntary compliance through education and the creation of incentives."  [See
 page 32 of Appendix A for suggested educational efforts and targeted audiences, as well as ideas
 for incentives.]
 Number of Small Entities Affected
       NAHB believes that by extending federal regulation down to one acre of land, an
 innumerable number of small business entities will be affected.  Due to the "trickle-down" effect,
 this impact will be felt by all associated businesses including engineers, architects, marketing
 specialists and consultants.

 Interaction With Other Federal Rules
       NAHB, like the municipal representatives, have concerns that the Phase n rule might
 overlap or conflict with requirements under the Clean Air Act or the Great Lakes Initiative.

 Reporting and Record Keeping
       A pennit-by-rule approach, which "could result in fewer reporting and record keeping
 requirements for small businesses, would be supported by the NAHB."
7.     Associated Builders and Contractors, Inc.
       (Michael E. Wilson, Manager, Federal Regulations)
       [pages 33-36]

       Note: Most of ABC's concerns mirror those of NAHB and, like NAHB, they only
       commented on the issue of federal permitting of construction activity on sites between
       one and five acres.
                       t               •              .
       ABC expressed concern with the amount of time EPA has to properly review the
SBREFA Panel's recommendations and finalize the proposed rule by the deadline.

       ABC refers to the findings of the 1990 National Water Quality Inventory Report to
Congress as support for their claim that "small [construction] sites are responsible for a
substantially small percentage of the problem!' and discharges are typically de minimis in nature.
Therefore,""direcf federal regulation of these sources is unwarranted and unnecessary."

       ABC believes that EPA should reconsider the 5 acre exemption since most of these small
sites are already regulated at the local level,.and there is no need for a duplication of efforts.

                                          31

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        Drawing from the experience of Phase I, "it is ABC's judgement that a program based on
  voluntary compliance, coupled with education, incentives and self-policing, increases the
  program's legitimacy with the regulated community." "Such a system reduces administrative
  burdens and costs" while "education achieves compliance and enhances environmental
  protection."

        ABC recommends as one alternative "that the Phase II rule provide that construction
  sites, regardless of size, that are located within a Phase I regulated municipal separate storm
  sewer system need only comply with the requirements of the municipality" hi order to avoid
  duplicative and unnecessary federal regulation. Overall, ABC believes that the rule must allow
  municipalities to establish storm water management programs as they deem necessary and
  appropriate in order to best address problem sources and to prevent overregulation of
  insignificant sources.

        ABC supports alternative procedures that focus on two goals: (1) require permits for
•  small construction sites only hi limited instances, and (2) encourage voluntary compliance
  through education and incentives.

        Finally, ABC believes that notices of intent are not necessary for small construction sites
  since "the benefits gamed from filing NOIs does not justify the paperwork burden placed on both
 the regulated community and the regulators." [See page 35 for further discussion]

 Number of Small Entities Affected
        ABC believes that by extending federal regulation down to one acre of land disturbance,
 an innumerable number of small business entities would be affected.  Due to the "trickle-down"
 effect, this impact will be felt by all associated businesses including engineers, architects,
 marketing specialists and consultants.

 Reporting and Record Keeping
        A permit-by-rule approach, which "could result in fewer reporting and recprd keeping
 requirements for small businesses, would be supported by ABC."
 8.      National Stormwater Center
        (John Whitescarver, Director)
        [pages 37-38]

 Exclusion of Glasses and Categories
        The NSC is concerned that the exclusion of large commercial facilities and Phase I
 industrial category (xi) from the proposed Phase II rule is not equitable due to the added burden
 it places on regulated dischargers, including small industrial entities.
                                           32

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        The NSC refers to the 1995 Report r0 Congress on Stonvwafer Discharges Potentially
 Addressed by Phase II of the NPDES Program to support their claim that commercial facilities
 should be included. "That Report contains sufficient information and data to justify the inclusion
 of commercial, facilities that contribute large pollutant loads while excluding small entities with
 less pollutant load because of their size. The Phase I program was initiated without the group
 application data. In the same manner, classes and categories of commercial facilities can be
 identified for permit coverage using "expert and best professional judgement" on a national
 scale."

 No Exposure
        NSC supports the no exposure exemption but request that EPA consider the following:

        "(1) NPDES permits are issued for the discharge of pollutants regardless of the source of
        the pollutants. Run-on from adjacent properties that result in the discharge of pollutants
        requires that a permit be issued to the operator of the facility where the discharge occurs.
        Also, in the case of CMC Pontiac Fiero Plant, the roof of the facility was the source of
        toxic pollutants. Clearly, providing cover does not assure that pollutants will not be
        discharged.  Facilities requesting this exclusion should submit analytical data to support
        their no-exposure exclusion."                             ,                     .

        "(2) The draft rule imposes a significant liability on the certifying official to maintain the
        no-exposure condition at all times and over a five-year period. Please spell out the civil
        and criminal liability of a permittee and the certifying official should exposure take place
        or the status of the certifying official change during the five-year period. Also, please
        address the potential for third party litigation when exposure is observed by a third
       party."
9.     Industry Representatives                                        (
       (Brian Bursiek, John E. DiFazio Jr., John Huber, Tracy Alaimo Mattson, John Oliver,
       William Sonntag, Jack Waggener, Clay Detlefsen, Steve Hensley, Jeffrey S. Longsworth,
       Russell Snyder, Tom Tyler (for Robin Wiener), and John Whitescarver)
       [pages 39-48]                             ..                     ,

Category XI Status
       The Industry Representatives state that EPA must "revisit the Ninth Circuit opinion and
the December 18,1992 final rule and provide clarification on the legal status, according to EPA,
of the category (xi) facilities." They also state that after a determination has been made, EPA
"must identify and consider alternative options that would minimize the impacts of increased
regulatory burdens on small businesses" which should include alternatives to the NPDES
permitting program.

No Exposure

                                           33

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        The Industry Representatives are concerned that inclusion of the concept of interference
 with the attainment of water quality standards, without any guidance, would make the
 certification process "risky and cost-prohibitive." They state that "any discharge of a pollutant
 can contribute to an "interference" with the attainment or maintenance of water quality standards
 and designated uses. Depending on the receiving water body and the pollutants involved, even
 the substitution of a trace amount of one pollutant (e.g. metals off a new roof) for significant
 amounts of other pollutants (e.g. leaking drums) might not qualify the facility for the no exposure
 exemption without undertaking significant receiving water studies that confirm a lack of
 "interference."

        These commenters believe that the NPDES permitting authorities should prevent any
 abuse of the no exposure certification process and suggest language for the provision, [see page
 42]  Their proposed language mandates individual permits for those discharges that are -
 preventing or significantly impeding the attainment of designated uses and denied certification.

       The Industrial Representatives also believe that although the no exposure exemption is an
 option to all regulated industrial categories, "the structure of the no exposure exemption could be
 interpreted to act as a dc facto prohibition for certain industries.  Many industries, particularly
 those relating to transportation, would not qualify for the no exposure exemption, principally due
 to activities that occur that do not impact storm water discharges. For example, these facilities
 may conduct limited non-pollutant generating outdoor maintenance on vehicles (e.g. headlight
 changes, tire changes, etc.) That otherwise might disqualify them from the currently drafted no
 exposure exemption under the proposed language. This is. not a logical or desirable result. EPA
 should clarify the practical, economical activities that occur only during dry weather (e.g.,
 transferring dry packages goods from one truck to another to avoid tying up a loading dock or
 utilizing mobile refueling services) do not disqualify a facility from the no exposure exemption."

        The Industry representatives comment on all four of the no exposure options [see page
 42-43] but prefer the chosen option — Option 3— and state that a five year certification and a one-
 time notice of termination is an acceptable burden-for the small businesses they represent.
     •     \   .

       Sharing a concern with the municipal representatives, the industrial  representatives
 believe that regulating flow is outside the statutory authority granted EPA in the Clean Water
Act. Therefore, they believe that there should not be any reference to flow in the No Exposure
 Certification Check List.

       The Industrial Representatives request that.EPA reasonably define what is meant by
"however packaged" and also recognize the fact that everything has the "potential" to leak. They
believe that "whether or not a container may leak should not be the focus of the Agency's
concern - the  issue, should be if the container is leaking." Furthermore, "if a spill or leak is
corrected before the next discharge, then the no-exposure status should remain unchanged" (this
is in reference to the Preamble language). These commenters suggest that the language "or
which have the potential to leak" be deleted.

                                           34

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       The Industrial Representatives also have some concerns about the use of the term "when
 in active use."  These commenters state it doesri't make sense to eliminate'facilities from no
 exposure consideration merely because they store adequately maintained mobile equipment
 outdoors. They state it is not cost-effective or necessary for these fleets to be covered since they
 "do not constitute a threat, per se, to water quality." They urge EPA to correct this oversight and
 recognize that mobile equipment, whether in active use or not, may be exposed to precipitation
 (provided not leaking or source of pollutants).

        These commenters state that EPA must provide an explanation in the Preamble regarding
 the proper application of Checklist item G. "products intended for outdoor use." They also
 propose some language (see top of page 46).

        These commenters encourage EPA to promulgate the no exposure exemption through a
 direct final rulemaking in order to. avoid potential delays. They believe that since the UWWF
 Federal Advisory Committee has fully embraced the concept of no exposure, there should not be
 significant adverse comments.

 Construction
       The Industrial Representatives have two significant ctimments regarding the construction
 activities between one and five acres provision:

       (1) "any industrial facility that has obtained previously a storm water permit that requires
       the facility to consider soil and erosion controls should not have to obtain a separate
       construction permit for construction activities occurring on the property that is subject to
       the industrial permit."

       (2) "in light of... {our}... concerns regarding proper adherence to the Ninth Circuit Court
       of Appeals opinion in NRDC v. EPA, we  encourage EPA to review the Ninth Circuit
       opinion and confirm the Agency' s Phase II proposal adheres to the remand relating to
       arbitrary size limitations for construction permitting."   •

Reporting and Record Keeping
       The Industrial Representatives believe that, as the no exposure provision stands now, it
would require someone with an advanced degree  in engineering, chemistry, and/or water
hydrology to properly determine if there is an "interference" with water quality standards.
These commenters state that "a more clearly  delineated standard would significantly reduce the
educational requirements of the certifier." They recommend that EPA simplify the No Exposure
Certification language as much as possible and develop guidance to aid in the process.
10.    Ida Township, Michigan
       (Dave Kubiske)
       [pages 49-51]

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 General Comments
       Mr. Kubiske states that "as the wording for the proposed Phase II Stormwater final rule
 has evolved over the last two years, there have been a number of changes which I believe will
 benefit small localities, while encouraging better stormwater management." Yet, he requests that
 EPA provide "strong guidance and encouragement" to foster flexibility and reduce compliance
 costs.                                .

 Waivers
       Mr. Kubiske requests that all reasonable waivers be "openly encouraged in the EPA rule
 and in the EPA guidance to follow" because, "states will regulate to the maximum extent to
 which a rule may be construed, as opposed to a prudent interpretation, based on state and local
 circumstances and resources." Mr. Kubiske also requested that if Indian Tribes under  1,000 were
 automatically waived, federal funds should be available to small municipalities of the same size
 that wish to demonstrate they qualify for a waiver.                              . •     .

 Coordination
       Mr. Kubiske requests that EPA's various program offices should get together and
 coordinate their requirements to reduce regulatory burden. He states:

       "The Safe Drinking Water Act (SDWA) Amendments of 1996 require that all states
       conduct source water assessments for all public drinking water systems. States may
       voluntarily set-aside up to 10% of their 1997 Drinking Water State Revolving Fund
       (DWSRF) to pay for these assessments.  In. addition to the storm water management plans
       in the Phase II Storm Water rules, there are a number of other important environmental
       planning requirements in process or on the horizon: the pollution loading assessments as
       part of the reinventing the Total Daily Maximum Load (TMDL) program; the condition
       and vulnerability determinations of 2,000 watersheds through the National Watershed ,
       Assessment Project (NWAP); and the often parallel planning requirements in the 1996
       Farm Bill.  Has there been any thought of various EPA offices getting together  and
       helping states do it once and do it right for every program's needs?  With the proper
       guidance from the Office of Stormwater, I believe that not only could a number of
       eligible systems receive waivers at no cost to themselves, but a number of others could
       coordinate with state-based assessment efforts to satisfy the six minimum control.
       measures." ...

       Mr. Kubiske also believes EPA should encourage municipalities to develop their storm
water programs with the Intended Use Plan for the DWSRF to satisfy the public outreach and
involvement minimum control measure and the illegal discharge and elimination minimum
control measure of the proposed rule. He also recommends that EPA coordination with "USD A
funding programs might bring critical members of the agricultural community to the table for
stormwater discussions, a major concern and objective of the municipal caucus."
                                          36

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 Regulatory Alternatives
       Mr. Kubiske  recommends that decision-making and compliance determinations for storm
 water control should be assigned to the lowest, or most immediate authority, rather than the
 highest.  "Localities should continue to have planning and zoning authority over responsible land
 use and not have the stormwater regulations act as a surrogate 'no growth' moratorium." Finally,
 Mr. Kubiske requests that EPA take into consideration the financial and administrative burden of
 this proposed rule.
                                                                  \
       "Many older collection and drainage systems were not built to deal with the increasingly
       complex loadings or with what we know now about the problems caused by stormwater.
       We can afford to change practices and upgrade where financially feasible, but in most
       small towns, we cannot afford replacement if systems have a remaining useful life."

 11.    Petroleum Transportation & Storage Association
       (Mark Morgan)
       [pages 52-55]

Applicability
       PTSA requests that EPA clearly define the criteria that will be used by the permitting
authority to bring municipalities under the proposed rule "while maintaining maximum
flexibility for states to make their own determination that controls are necessary."  PTS A
believes the criteria are "very vague, open-ended and subject to many different interpretations."
                                                                                 o
NPDES Permitting Process
       PTS A does not support a NPDES permitting approach because it is "too lengthy,
restrictive, and complicated" and results in programs that "do not address the needs of the  .
watershed" while wasting time and money. Instead of NPDES permits, PTSA proposes that
"EPA give permitting authorities the ability to establish best management practices" tailored to
the "individual watershed area." PTSA believes this would give the permitting authority
flexibility while providing effective control of stormwater run-off.

       If the NPDES permitting structure is used, PTSA requests that permits be limited to
municipalities.  Small businesses should not be  required to obtain permits because of their
financial and administrative burden.

       Mr. Morgan supports the no exposure provision in the proposed  rule and urges EPA to
make the process "as simple and straight forward as possible" so that it would not be "more
costly and time consuming" than using BMPs or obtaining~an§^DES permit.

NPDES Permitting Authority
       PTSA requests that EPA encourage States to obtain permitting authority. They believe
States "should have the ability to determine every aspect of the stormwater programs because
they are much more attuned to the needs of small business than EPA."

                                          37

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Construction Activities
       PTSA requests that EPA "demonstrate very clearly that the one acre threshold is
necessary given the economic.burden it will place on small businesses." PTSA also requests that
EPA raise the acreage threshold.
12.    Resource Consultants
       (Jack E. Waggener)
       [pages 56-58]

Construction Activities
       This commenter requests that EPA exempt construction sites under five acres from
coverage. He states that these construction sites do not represent a major source of pollution and
regulation would burden the regulated community and EPA. He proposes a voluntary program.
If EPA docs elect to regulate these sites, he recommends that NOI should not be required.

Exempting Routine Maintenance Activities
       This commenter requests that EPA exempt "routine maintenance" activities undertaken
by "many utilities; city, county, and state highway departments; railroads; and others" to
maintain their right-of-way on a continuous basis.  These activities cross numerous jurisdictions
that may all be "independent regulatory authorities on storm water". The commenter states that
"[a]t most, these types of operations should be required to have a best management plan that is
generic to these types of operations." There should be no NOI for these activities. This
commenter provides examples of what he considers to be "routine maintenance".

       "Examples of routine maintenance would include such things as the periodic
       grading and filling .to smooth and repair potholes in the hundreds of thousands of
       miles [of] gravel and dirt roads and conveyances. Along with this activity, these
       conveyances have ditches that require periodic cleaning with backhoe type.
       excavators as they are plugged with vegetation; existing-fire breaks are
       maintained several times a year to keep them effective. All of these items are the
       simple, routine maintenance of existing structures and conveyances to maintain
      their viability  and should not be considered as new construction that is required
      to be in the system for any size project."
                                          38

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 SUMMARY OF ORAL COMMENTS THAT RAISE FSSUES NOT RAISED IN THE
 WRITTEN COMMENTS
 [Please refer to pages 91-105 of Attachment B]

    ..  Diane Shea (National Association of Counties-alternate) inquired as to whether EPA
 knew how many MS4s would be designated due to their "significant contribution to the pollutant
 loadings of a regulated MS4" and urged EPA to gather information from the States in order to
 achieve that estimate.   *                                  ».    •

       There was much discussion as to theprofessional level needed to implement the rule.  It
 was suggested that perhaps implementation depended on de-skilling the "professional skills" or
 having EPA provide guidance materials. Carol Kocheisen (National League of Cities-alternate)
 requested that EPA specify that implementation of the rule is dependant upon the availability of
 the appropriate guidance materials. Jeff Longsworth (American Car Rental Association, etc.)
 noted that experience on the job. should be the driving factor, not level of education, and
 supported Ms. Kocheiscn's request that there be a link between the rule and guidance materials.

       There was also some debate over the interpretation of the remand language concerning
 the category xi facilities/no exposure provision.  EPA was asked to clarify in the panel report as
 to whether the remand vacated only the no exposure provision and not all category xi facilities,
 or vacated both, which some participants believed to be the case.

       Carol Kocheisen expressed some concern with the TMDL/watershed waiver option. She
 pointed out that because very few TMDL analyses have been done across the nation, the waiver
 wouldn't apply to enough States to make it purposeful.

       Jeff Longsworth suggested another construction waiver option for industrial facilities
 with existing NPDES general permits.  He stated that those permits that detail soil and erosion
 considerations hi pollution prevention plans should be given a waiver. He suggested that this
 could apply at least to construction between 1 and 5 acres, while sites over 5 acres would still
 need to be covered by a separate permit. He then added that he thought this was agreed to by the
 Urban Wet Weather Flows Federal Advisory Committee.

       Diane Shea pointed out hi Document 10 that the provision that allows a "small MS4 to
 satisfy its NPDES permit obligations if another governmental entity  is already  implementing a
minimum control measure" does not allow for an agreement with a State if the State's activity is
 voluntary.

       It was questioned as to why a non-NPDES program had to be incorporated into a NPDES
permit instead of just relying on compliance with these other requirements hi order to avoid
having to obtain multiple permits.
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       There was general agreement that it was difficult to respond to EPA's proposed chosen
options more thoroughly without first being able to examine the cost analysis.

       It was also agreed that there is a need for clarification regarding who has the
responsibility to make "no exposure" determinations based on water quality impacts.

     •  Jeff Longsworth further questioned the requirements for determining "no exposure," for
example, was an EIS or monitoring required..  It was suggested that there be clarification of this
in the Certification Form.
                          s-'                 •   /
       Industry representatives also opposed the provision which requires facilities to provide
copies of their certification form to the public on request. Instead, they asked EPA to direct such
requests to the permitting authority, as is the practice for all other permit information.
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