United States

Environmental Protection

Agency

Regulatory Flexibility Act Section 610 Review of the Effluent
Limitations Guidelines and Standards for the Centralized Waste Treatment
Industry

December 2010

Regulatory Flexibility Act Section 610 Review of the Effluent
Limitations Guidelines 

and Standards for the Centralized Waste Treatment Industry

Contents

  TOC \o "1-3" \h \z \u    HYPERLINK \l "_Toc287871777"  1	Introduction	
 PAGEREF _Toc287871777 \h  1  

  HYPERLINK \l "_Toc287871778"  2	Summary of the CWT Regulation and
Industry Profile (2000)	  PAGEREF _Toc287871778 \h  3  

  HYPERLINK \l "_Toc287871779"  2.1	Summary of CWT Regulation	  PAGEREF
_Toc287871779 \h  3  

  HYPERLINK \l "_Toc287871780"  2.2	Characteristics of CWT Facilities
and the Industry (2000)	  PAGEREF _Toc287871780 \h  4  

  HYPERLINK \l "_Toc287871781"  2.2.1	Demand for CWT Services	  PAGEREF
_Toc287871781 \h  4  

  HYPERLINK \l "_Toc287871782"  2.2.2	Number of CWT Facilities and Firms
  PAGEREF _Toc287871782 \h  5  

  HYPERLINK \l "_Toc287871783"  2.2.3	Market Structure	  PAGEREF
_Toc287871783 \h  9  

  HYPERLINK \l "_Toc287871784"  3	The Continued Need for the Centralized
Waste Treatment Rule	  PAGEREF _Toc287871784 \h  10  

  HYPERLINK \l "_Toc287871785"  4	Summary of the Complaints and Comments
Received by EPA and How EPA has Mitigated the Complexity of the Rule for
Small Businesses	  PAGEREF _Toc287871785 \h  11  

  HYPERLINK \l "_Toc287871786"  4.1	The 2001 Small Entity Compliance
Guide for CWTs	  PAGEREF _Toc287871786 \h  11  

  HYPERLINK \l "_Toc287871787"  4.2	The 2003 Amendment to the CWT Rule	 
PAGEREF _Toc287871787 \h  12  

  HYPERLINK \l "_Toc287871788"  4.3	The 2003 and 2006 “Frequently
Asked Questions” Documents	  PAGEREF _Toc287871788 \h  13  

  HYPERLINK \l "_Toc287871789"  5	CWT Overlap and Conflict with Other
Government Regulations	  PAGEREF _Toc287871789 \h  15  

  HYPERLINK \l "_Toc287871790"  6	CWT Industry Conditions Since
Promulgation of the 2000 Final CWT Rule	  PAGEREF _Toc287871790 \h  17  

  HYPERLINK \l "_Toc287871791"  6.1	Demand for CWT Services	  PAGEREF
_Toc287871791 \h  18  

  HYPERLINK \l "_Toc287871792"  6.2	Number of CWT Facilities and Firms	 
PAGEREF _Toc287871792 \h  19  

  HYPERLINK \l "_Toc287871793"  6.2.1	Number of Facilities	  PAGEREF
_Toc287871793 \h  19  

  HYPERLINK \l "_Toc287871794"  6.2.2	Number of Firms	  PAGEREF
_Toc287871794 \h  21  

  HYPERLINK \l "_Toc287871795"  6.2.3	Number of Small Firms	  PAGEREF
_Toc287871795 \h  22  

  HYPERLINK \l "_Toc287871796"  6.3	Average Employment Size of CWT Firms
  PAGEREF _Toc287871796 \h  25  

  HYPERLINK \l "_Toc287871797"  6.4	Market Structure of CWT Industry
Segments	  PAGEREF _Toc287871797 \h  26  

  HYPERLINK \l "_Toc287871798"  6.5	Economic Performance in the CWT
Industry Segments	  PAGEREF _Toc287871798 \h  27  

  HYPERLINK \l "_Toc287871799"  6.5.1	Employment	  PAGEREF _Toc287871799
\h  27  

  HYPERLINK \l "_Toc287871800"  6.5.2	Revenue, Employment, and Payroll
in the CWT Industry Segments	  PAGEREF _Toc287871800 \h  28  

  HYPERLINK \l "_Toc287871801"  6.6	Financial Performance in the CWT
Industry Segments	  PAGEREF _Toc287871801 \h  29  

  HYPERLINK \l "_Toc287871802"  7	Conclusion	  PAGEREF _Toc287871802 \h 
34  

 

Introduction

EPA first promulgated Effluent Limitations Guidelines (ELG) for the
Centralized Waste Treatment (CWT) Category (40 CFR Part 437) in 2000 (65
FR 81241, December 22. 2000), with amendments in 2003 (68 FR 71014,
December 22, 2003). The CWT industry includes facilities that treat
and/or recover hazardous or nonhazardous industrial waste, wastewater,
or used material generated off-site from industrial facilities. Under
the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., as amended
by the Small Business Regulatory Enforcement Fairness Act (SBREFA), EPA
is generally required to prepare a Regulatory Flexibility Analysis
describing the impact of the regulatory action on small entities as part
of a rulemaking. EPA conducted an analysis for the 2000 Final CWT Rule
and did not certify that the Rule would have no significant economic
impact on a substantial number of small entities. Specifically, EPA
found that 63 small parent entities owned in-scope CWT facilities in the
United States and that the estimated costs for 30 of those parent
entities would exceed 3 percent of their revenue.

The purpose of this report is to review the 2000 Final CWT Rule and its
2003 Amendments, pursuant to Section 610 of the RFA (5 USC 610), to
determine whether the Guidelines should be continued, amended, or
rescinded in order to minimize impacts on small entities while still
meeting Clean Water Act requirements. This document assesses:

the continued need for the rule;

the nature of the complaints or comments received concerning the rule
from the public since promulgation;

the complexity of the rule;

the extent to which the rule overlaps, duplicates, or conflicts with
other Federal rules, and, to the extent feasible, with State and local
government rules: and

the degree to which technology, economic conditions, or other factors
have changed in the area of the rule.

EPA published a Federal Register Notice, in April 2010 (75FR 21882,
April 26, 2010), opening a 90 day comment period in order to obtain
public input on the above assessment criteria with respect to the CWT
rule. EPA received no public comments on the section 610 review notice.

The remainder of this document is organized as follows:

Section   REF _Ref290369248 \r \h  2  is a summary of the CWT regulation
and an overview of the industry as it existed in 2000, including the
general market structure, financial performance, and employment.

Section 3 summarizes the continued need for the CWT Rule.

Section 4 summarizes the nature of the complaints and comments received
by EPA concerning the CWT rule, since its promulgation in 2000, and how
EPA has mitigated the complexity of the CWT Rule for small businesses.

Section 5 assesses how the existing CWT Rule overlaps and conflicts with
other Federal, State, and local government regulations. 

Section 6 assesses the changes that have occurred in technology,
economic conditions, or other factors that might have had an impact on
the CWT industry in general and small CWT parent firms in particular
since rule promulgation in 2000. Specifically the section is a review of
CWT industry conditions, including numbers of firms and facilities,
sales, employment, market structure, economic and financial performance,
from the period before promulgation of the 2000 Final CWT Rule to the
present, with the objective of assessing whether and how this rule may
have affected performance of small businesses in the CWT industry.

Section 7 concludes with a determination, based on the analysis and
results outlined in this report, as to whether the 2000 Final CWT Rule
should be continued, amended, or rescinded in order to minimize impacts
on small entities while still meeting the Clean Water Act requirements.

Summary of the CWT Regulation and Industry Profile (2000) 

This section provides a summary of the CWT regulation as well as
information on the CWT industry profile as prepared at the time of the
2000 Final CWT Rule. The section is divided as follows:

 Subsection 2.1 a brief overview of the CWT regulation.

 Subsection 2.2 a summary of the industry profile for the CWT industry.

All economic information presented in this section is from the Economic
Analysis of Effluent Limitation Guidelines and Standards for the
Centralized Waste Treatment Industry (the original 2000 CWT report).

Summary of CWT Regulation

EPA first promulgated Effluent Limitation Guidelines for the CWT
Category in 2000, with amendments made in 2003. This category is divided
into four subcategories based on type of waste received, shown in Table
2-1. The technology basis for the final rule varies by subcategory: 

Two-stage chemical precipitation and filtration for metal-bearing
wastes; 

Emulsion breaking, two-stage gravity separation and dissolved air
flotation for oily wastes; and 

Equalization and biological treatment for organic wastes. 

In order to ensure that combined wastes are treated, not simply
co-diluted, facilities that elect to comply with Subpart D, Multiple
Wastestreams, would likely have to certify that an equivalent treatment
system is installed and properly designed, maintained, and operated. 

  REF _Ref290373825 \h  \* MERGEFORMAT  Table 2-1  provides more detail
on the applicability of each subcategory.

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  1 : Subcategories
and Subpart Applicability

Subpart Name	Subpart Applicability

A: Metals Treatment and Recovery	The discharge of wastewater from a CWT
facility that results from the treatment of, or recovery of metals from,
both metal-bearing wastes received from off-site and other CWT
wastewater associated with the treatment of, or recovery of
metal-bearing wastes.

B: Oils Treatment and Recovery	The discharge of wastewater from a CWT
facility that

results from the treatment or recovery of oil from both oily wastes
received from off-site and other CWT wastewater associated with the
treatment of, or recovery of oily wastes.

C: Organics Treatment and Recovery	The discharge of wastewater from a
CWT facility that results from the treatment of, or recovery of organic
material from both organic wastes received from off-site

and other CWT wastewater associated with the treatment of, or recovery
of organic wastes.

D: Multiple

Wastestreams	The discharges of wastewater from a CWT facility that

treats wastes subject to more than one of the previous

Subparts must comply with either provisions of this subpart or the
applicable provisions of Subpart A, B, or C. The provisions of this
subpart are applicable to that portion of wastewater discharges from a
centralized waste treatment facility that results from mixing any
combination of treated or untreated waste otherwise subject to Subpart
A, Subpart B, or Subpart C of this part only if a facility requests the
permit writer or control authority to develop Subpart D limitations (or
standards) and establishes that it provides equivalent treatment as
defined in §437.2(h).



Characteristics of CWT Facilities and the Industry (2000)

EPA developed different effluent limitations and standards for CWT
operations depending on the type of waste received by the CWT
facilities. Specifically, EPA divided the CWT industry into the
following subcategories based on the types of waste treated or
recovered:

Metals subcategory: Facilities that treat or recover metal from
metal-bearing waste, wastewater, or used material received from
off-site.

Oils subcategory: Facilities that treat or recover oil from oily waste,
wastewater, or used material received from off-site.

Organics subcategory: Facilities that treat or recover organics from
organic waste, wastewater, or used material received from off-site.

CWT facilities may offer more than one waste treatment or recovery
service and may discharge directly to surface water (direct discharges)
and/or to Publicly Owned Treatment Works (POTWs) (indirect discharges).
In terms of their relationships with waste generating facilities,
privately owned CWT facilities fall into the following three main
categories:

Commercial: these facilities accept waste only from off-site generators
not under the same ownership as their facility.

Noncommercial: these facilities accept waste only from off-site
generators under the same ownership as their facility and/or they accept
waste on a contract basis from a small number of adjacent facilities.

Mixed: these facilities accept both.

To determine the universe of the CWT facilities for the CWT Rule
analyses, EPA conducted a survey questionnaire in 1990., The majority of
survey respondents identified their industry according to the Standard
Industry Classification (SIC) system as SIC 4953: Refuse Systems.  EPA
also collected information on additional oils subcategory CWT facilities
through comments to its 1996 Notice of Data Availability (NODA).  Based
on the 1990 survey and the comments to the 1996 NODA, EPA determined
that there were 223 CWT facilities, of which EPA had adequate data on
211 facilities for modeling. Consequently, for the 2000 Final CWT Rule
analyses, EPA assumed the CWT universe consisted of 211 facilities. EPA
estimated that only 4 of these 211 facilities accepted waste on an
exclusively noncommercial basis. 

Demand for CWT Services

The demand for waste treatment services arises from the generation of
waste as a by-product of manufacturing or other industrial activities.
Consequently, the demand for CWT services is derived from and depends on
the demand for the goods and services whose industrial activity
generates the waste. Waste generating facilities can treat waste in the
following three ways: 

On-site waste management: Facilities can invest in capital equipment to
be able to treat waste on-site; this is usually the least expensive way
to treat large volumes of waste. 

On-site/off-site waste management: Facilities may partially treat waste
on-site and then send it off-site for ultimate treatment and disposal.

Off-site waste management: Facilities may send all or some of the waste
they generate directly to CWT facilities. 

The last two groups of facilities make up the demand for CWT services.
EPA used Toxic Release Inventory (TRI) data to determine the largest
generators of hazardous waste by industry and to profile the types of
waste treated within these facility categories. EPA found that the
industries transferring the largest quantities of waste off-site for
either treatment or recycling in 1995 were: SIC 3312: Blast Furnaces and
Steel Mills; SIC 3691: Storage batteries; SIC 3357: Nonferrous Wire
Drawing and Insulating; SIC 2821: Plastics Materials and Resins; SIC
3714: Motor Vehicle Parts and Accessories; and SIC 2869: Industrial
Organic Chemicals. Table 2-2 presents the quantity of waste transferred
off-site for treatment or recovery reported in TRI for 1991 through
1997. As shown in   REF _Ref290373500 \h  \* MERGEFORMAT  Table 2-2 ,
the demand for off-site waste recovery increased significantly – by 57
percent – over the period of analysis. While demand for off-site waste
treatment also increased during that time period, this increase was much
smaller at 6 percent.

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  2 : Trends in
Demand for Off-Site Waste Management Services

Year	Waste Transferred Off-site for Recovery	Waste Transferred Off-site
for Treatment

	Quantity (millions of lbs)	% Changea	Quantity (millions of lbs)	%
Changea

1991	1.517	na	244.6	Na

1992	1.886	24.32%	215.3	-11.98%

1993	1.940	2.86%	210.3	-2.32%

1994	2.170	11.86%	219.1	4.18%

1995	2.450	12.90%	250.6	14.38%

1996	2.397	-2.16%	226.5	-9.62%

1997	2.381	-0.67%	258.7	14.22%

Annual Average Growth Over Period	na	8.14%	na	0.82%

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Year-over year percent changes were recalculated to correct the
values reported in the original 2000 CWT report.

Number of CWT Facilities and Firms

2.2.2.1	Facilities

As discussed above, based on the survey conducted in 1990 and comment
responses to its 1996 NODA, EPA estimated that 223 CWT facilities would
be within the regulation’s scope, and performed cost and economic
analysis of 211 facilities for which the Agency had sufficient data. For
the cost and economic analysis for the final regulation, EPA accepted
the definition of “facility” used in the survey; in some instances a
facility is defined as only the waste management part of a plant site,
while in others as the entire plant site, including non-CWT operations.
Surveyed facilities were located in 38 states; the states with the
highest number of CWT facilities were Texas, Ohio, and California.
Because not all CWT facilities provide the same service, facilities
located nearby may not be competitors, while facilities located far from
one another may compete. 

Facility size can be defined in terms of total quantity of waste
accepted for treatment or recovery, number of employees, treatment
costs, total revenues, or profits at the time of the final rule.   REF
_Ref290373881 \h  \* MERGEFORMAT  Table 2-3  and   REF _Ref290373890 \h 
\* MERGEFORMAT  Table 2-4  summarize CWT facility counts by waste
quantity - and employment - based size categories.

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  3 : Facility Size
Categories Based on Quantity of Commercial Wastewater Treated, by
Discharge Categorya

	Metals

Recovery	Metals

Treatment	Oils

Recovery	Oils

Treatment	Organics

Treatment or

Recovery

Wastewater Treated by Direct Dischargers

< 5 million gallons	2	2	2	3	2

5 million to 10 million gallons	0	0	3	2	0

10 million to 50 million gallons	0	2	0	0	2

50 to 100 million gallons	0	1	0	0	0

Over 100 million gallons	0	1	0	0	0

Total	2	6	5	5	4

Wastewater Treated by Indirect Dischargers

< 5 million gallons	4	27	69	67	12

5 million to 10 million gallons	1	4	24	14	2

10 million to 50 million gallons	1	10	20	15	2

50 to 100 million gallons	0	0	0	0	0

Over 100 million gallons	0	0	0	0	0

Total	6	41	113	96	16

Wastewater Treated by Zero Dischargers b

< 5 million gallons	1	7	31	18	4

5 million to 10 million gallons	0	0	0	0	1

10 million to 50 million gallons	0	1	2	0	0

50 to 100 million gallons	0	0	0	0	0

Over 100 million gallons	0	0	0	2	0

Total	1	8	33	20	5

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Data are scaled up to account for the entire universe of CWT
facilities. Counts do not include four facilities that do not treat
wastewater commercially.

b. Zero discharge facilities may dispose of their wastewater by pumping
it into underground injection wells, evaporating it, applying it to
land, selling it or recycling it, or sending it off-site to another CWT
facility for treatment.



Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  4 : Size
Distribution of Commercial CWT Facilities by Number of CWT Employeesa

Total Number of Employees	Number of Facilities	Percentage

1 to 9	60	29%

10 to 19	50	24%

20 to 29	44	22%

30 to 49	29	14%

50 to 100	19	9%

More than 100	5	2%

	207	100%

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Data are scaled up to account for entire universe of CWT facilities.
Counts do not include four facilities that do not treat wastewater
commercially.



The largest numbers of facilities and the largest quantities of waste
treated by commercial facilities are related to the treatment and
recovery oils (  REF _Ref290373935 \h  \* MERGEFORMAT  Table 2-5 ).

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  5 : Quantity of
Waste Treated by Commercial Facilities, by Subcategory (Thousand
Gal/Yr)a

	Number of Facilities	Quantity of Waste Treated (Thousand gal/yr)



Total 	Average	Minimum	Maximum

Metals Recovery	8	56,538	6,282	25.9	44,702

Metals Treatment	54	555,030	10,091	0.1	129,340

Oils Recovery	156	569,873	5,875	17.9	104,885

Oils Treatment	123	442,359	5,978	0.1	131,000

Organics Treatment and Recovery	24	11,305	4,452	1.4	23,309

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Data are scaled up to account for entire universe of CWT facilities.
Counts do not include four facilities that do not treat wastewater
commercially.



Baseline in-scope waste treatment projected compliance costs at
commercial facilities ranged from $3,641 to over $26 million per
facility, with a total and average per facility revenue of $250 million
and $1.7 million, respectively, across all 207 commercial CWT
facilities.   REF _Ref290373967 \h  \* MERGEFORMAT  Table 2-6  shows a
frequency distribution for the baseline cost of treating waste.

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  6 : Baseline Waste
Treatment Costs at Commercial CWT Facilitiesa

Operating Costs ($1997)	Number of Facilities	Percentage

<$0.1 million	20	10%

$0.1 to $1 million	89	43%

$1 to $2 million	47	23%

$2 to $5 million	40	20%

Over $5 million	10	5%

Total	207	100%

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Data are scaled up to account for entire universe of CWT facilities.
Counts do not include four facilities that do not treat wastewater
commercially.



Treatment and recovery revenues at commercial CWT facilities ranged from
$5.1 to $93.3 million with total and average per facility revenues of
$717 million and $4.9 million, respectively.   REF _Ref290374005 \h  \*
MERGEFORMAT  Table 2-7  shows a frequency distribution for the baseline
treatment and recovery revenues.

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  7 : Baseline
Treatment and Recovery Revenues for Commercial CWT Facilitiesa

Revenues ($1997)	Number of Facilities	Percentage

<$0.1 million	13	6%

$0.1 to $1 million	58	28%

$1 to $2 million	31	15%

$2 to $5 million	60	29%

Over $5 million	45	22%

Total	207	100%

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Data are scaled up to account for entire universe of CWT facilities.
Counts do not include four facilities that do not treat wastewater
commercially.



Profits for CWT commercial facilities ranged from a loss of $8.0 million
to a profit of $375 million.   REF _Ref290374039 \h  \* MERGEFORMAT 
Table 2-8  shows a frequency distribution of profit by business size.

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  8 : Baseline
Profits at Commercial CWT Facilitiesa,b

Profits ($1997)	Number of Facilities	Percentage

<$0.1 million	47	23%

$0.1 to $1 million	76	37%

$1 to $2 million	29	14%

$2 to $5 million	28	14%

Over $5 million	27	13%

Total	207	100%c

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Profit = total revenue – total cost

b. Data are scaled up to account for entire universe of CWT facilities.
Counts do not include four facilities that do not treat wastewater
commercially.

c. Does not sum to 100 percent due to rounding.



Strictly noncommercial facilities accept waste only from facilities
owned by the same company as their CWT facility. These CWT facilities
are assumed to provide services for the entire parent company;
consequently, EPA assumed that compliance costs of noncommercial CWT
facilities will be borne by the parent company as a whole and performed
the cost and economic impact analysis for these facilities at the level
of the parent firm.

2.2.2.2	Firms

CWT parent entities have the capacity to conduct business transactions
and make business decisions affecting facilities they own. The parent
entities of the CWT facilities are expected to experience the financial
impacts of the regulation. Consequently, EPA assessed the financial
impact of the 2000 Final CWT Rule at the highest level of corporate
ownership. EPA had sufficient data to determine the parent for 145 of
the estimated 211 CWT facilities; these 145 facilities were owned by 114
individual firms and the federal government. However, only 118 of these
145 CWT facilities had sufficient financial parent-level information to
support the economic impact analysis; these 118 facilities were owned by
87 companies. Extrapolating from these relationships, the Agency
estimated that the total CWT universe of 211 facilities was owned by 167
companies. 

2.2.2.3	Small Firms

EPA estimated that 82 of these 167 parent entities were small based on
the $6 million annual revenue threshold, which was the Small Business
Administration (SBA) small entity size criterion at the time of the
analysis (  REF _Ref290374104 \h  \* MERGEFORMAT  Table 2-9 ). For these
82 small firms, EPA estimated that 63 owned discharging facilities; and
of these 63 small firms, 30 were expected to incur compliance costs
exceeding 3 percent of their revenues.

Table   STYLEREF 1 \s  2 -  SEQ Table \* ARABIC \s 1  9 : Size
Distribution of Potentially Affected Companiesa,b,c

Revenue Categories ($1997)	Number of Companies	Revenue (Millions; $1997)



Median	Minimum	Maximum

$6 million or less	82	$2.0	$0.0	$5.7

$6 to $20 million	34	$12.1	$6.2	$19.2

$20 to $50 million	14	$35.9	$20.1	$45.9

$50 to $500 million	19	$169.5	$62.1	$429.0

Over $500 million	16	$1,955.1	$661.9	$40,697.0

Source: 2000 Economic Analysis of Effluent Limitation Guidelines and
Standards for the Centralized Waste Treatment Industry.

a. Sales distribution of all companies, scaled up to reflect the
universe of companies owning CWT facilities.

b. Does not include one facility owned by the federal government and
another for which no financial data are available.

c. Includes firms that own discharging and zero-discharge facilities.



Market Structure

In general, markets for CWT services are regional even though exceptions
may occur. Wastewater and concentrated oily or metal-bearing wastes are
extremely heavy and bulky; consequently, they are generally not shipped
long distances for treatment - therefore localized geographic markets do
exist. 1990 EPA survey responses indicated that most of a CWT’s
customers were located in the same state as the CWT or within a few
adjacent states. Based on this information EPA assumed markets for CWT
services were regional, and defined markets in six geographic regions -
which were assumed to be completely independent. The regions were:

Northeast: CT, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VT

Northwest: WA, OR, ID, MT, WY

Southeast: AL, FL, GA, KY, MS, NC, SC, TN, VA, WV

Southwest: AZ, CA, CO, NM, NV, UT

Upper Midwest: IA, IL, IN, MN, MI, NE, ND, OH, SD, WI

Lower Midwest: AR, KS, LA, MO, OK, TX

The markets were further subdivided by baseline waste treatment costs,
assuming that treatment cost differences reflect differences in the
types of waste being treated or recovered. The number of CWT facilities
offering a particular type of CWT service in a region varied from zero
to 31. Depending on the number of CWT facilities in a specific waste
treatment or recovery market, market structure was modeled as monopoly,
duopoly, or perfect competition. Because of the large number of the CWTs
in the oils recovery and/or oily wastewater treatment markets, for the
purpose of the cost and economic impact analysis EPA assumed that this
segment of the CWT industry was perfectly competitive. 

The Continued Need for the Centralized Waste Treatment Rule

Congress adopted the Clean Water Act (CWA) to ``restore and maintain the
chemical, physical, and biological integrity of the Nation's waters''
(Section 101(a), 33 U.S.C. 1251(a)). To achieve this goal, the CWA
prohibits the discharge of pollutants into navigable waters except in
compliance with the statute. The Clean Water Act confronts the problem
of water pollution on a number of different fronts. Its primary
reliance, however, is on establishing restrictions on the types and
amounts of pollutants discharged from various industrial, commercial,
and public sources of wastewater.

Congress recognized that regulating only those sources that discharge
effluent directly into the nation's waters would not be sufficient to
achieve the CWA's goals. Consequently, the CWA requires EPA to
promulgate nationally applicable pretreatment standards that restrict
pollutant discharges for those who discharge wastewater indirectly
through sewers flowing to publicly-owned treatment works (POTWs)
(Section 307(b) and (c), 33 U.S.C. 1317(b) and (c)). National
pretreatment standards are established for those pollutants in
wastewater from indirect dischargers which may pass through or interfere
with POTW operations. Generally, pretreatment standards are designed to
ensure that wastewater from direct and indirect industrial dischargers
are subject to similar levels of treatment. In addition, POTWs are
required to implement local pretreatment limits applicable to their
industrial indirect dischargers to satisfy any local requirements (40
CFR 403.5).

Direct dischargers must comply with effluent limitations in National
Pollutant Discharge Elimination System (NPDES) permits; indirect
dischargers must comply with pretreatment standards. These limitations
and standards are established by regulation for categories of industrial
dischargers and are based on the degree of control that can be achieved
using various levels of pollution control technology.

EPA believes that the CWT Rule is needed to ensure appropriate
environmental protection.  Without the CWT regulation, point source
polluting industrial dischargers that are regulated under other effluent
limitations, water quality based standards, or pretreatment standards
would be able to ship waste to third party CWT facilities that would be
able to discharge wastewater containing pollutants at levels which are
not environmentally protective.

In 2000, EPA expected compliance with the CWT regulation would reduce
the discharge of conventional pollutants by at least 9.7 million pounds
per year and toxic and non-conventional pollutants by at least 9.3
million pounds per year.

Summary of the Complaints and Comments Received by EPA and How EPA has
Mitigated the Complexity of the Rule for Small Businesses

In December 2000, EPA promulgated effluent guidelines limitations and
standards for the Centralized Waste Treatment Point Source Category.
This regulation established wastewater discharge limitations and
standards for facilities that treat or recover metal-bearing, oily, and
organic wastes, wastewater, or used material received from off-site.
Since promulgation the Agency has received public comment chiefly in the
areas of rule applicability to certain types of facilities and treatment
technologies and the effectiveness of treatment technologies for the
removal of specific metals. The Agency’s response has been to develop
a Small Entity Compliance Guide for CWTs (SECG), to Amend the CWT Rule
in 2003, and to up-date the SECG’s “frequently asked questions”
section twice ( in 2003 and again in 2006).  EPA believes that these
past efforts remain sufficient and no additional amendments to the Rule
are necessary at this time, particularly in light of the fact that no
additional comments were submitted to the Agency in response to the
section 610 request for comment published in April 2010.

This section is organized as follows:

Subsection 4.1 offers a brief overview of the Small Entity Compliance
Guide released in June 2001.

Subsection 4.2 covers the 2003 amendments to the CWT regulations.

Subsection 4.3 reviews the two revisions of the “frequently asked
questions” material available on EPA’s website.

The 2001 Small Entity Compliance Guide for CWTs

EPA published, in June 2001, a compliance support guide, Small Entity
Compliance Guide for CWTs (SECG), to help owners and operators of CWT
facilities that are small entities – whether they are small
businesses, small government jurisdictions or small non-profit
organizations – understand and comply with the CWT effluent
guidelines and pretreatment standards. This document is available on the
EPA website at:   HYPERLINK
"http://www.epa.gov/waterscience/guide/cwt/CWTcompliance_guide.pdf" 
http://www.epa.gov/waterscience/guide/cwt/CWTcompliance_guide.pdf . 

The guide also provides a list of EPA staff whom small entities may
contact with CWT-specific questions. In addition to the information
presented in the Guide, EPA provides a number of web site resources that
may help small entities obtain additional information related to
implementation of the CWT effluent limitation guidelines and standards
for new and existing sources, and general information about the 2000
Final CWT Rule, related programs, and general EPA policies (Table 4-1
shows updated SECG contact and reference information). 

Table 4-  SEQ Table \* ARABIC \s 1  1 : General Resources Information

Resource	Web Address	Description

General EPA website	www.epa.gov	Press releases, proposed and final EPA
rules and regulations, and updates to the SECG.

Engineering and Analysis Division website	www.epa.gov/ost/guide	Federal
Register notices of proposed and final effluent limitation guidelines
and standard rules, supplemental notices, pre-proposal documents,
background information, draft industry questionnaires, public meeting
notices, development documents and other supporting documents, updates
to the SECG, and related documents. The site also has a continually
updated list of EPA staff (and their contact information) that are
available to answer questions for all effluent limitation guidelines.

CWT-Specific EPA website	www.epa.gov/ost/guide/cwti.html

People may also obtain copies of these 

documents by contacting the Office of Water Resource Center at (202)
566-1729 or by e-mail at:

center.water-resource@epa.gov or fax: (202) 566-1736.	Copies of
documents directly related to the CWT effluent guidelines and standards
such as  the published CWT regulation (December 22, 2000), the published
 CWT Amendment (December 22, 2003), the Technical Development Document
(EPA-821-R-00-020), the Economic Analysis (EPA-821-R- 00-024), the Cost
Effectiveness Analysis (EPA-821-R-00-023), the Detailed Costing Document
(EPA- 821-R-00-021),and the Environmental Assessment Document
(EPA-821-R-00-022) as well as any revisions to the Effluent Limitations
Guidelines and Standards, and the SECG. 

EPA Small Business Gateway Assistance Program (SBAP)
www.epa.gov/smallbusinesswttn/sbap	State and local SBAP contacts, SBAP
materials, related web sites, meetings and conferences

EPA Office of Enforcement and Compliance Assurance: Policy on Compliance
Incentives for Small Business website
ewww.epa.gov/compliance/incentives/smallbusiness/index.html
s.epa.gov/oeca/smbusi.html	Applicability of EPA’s policy to promote
environmental compliance among small businesses. Criteria for civil
penalty mitigation.

List of Financial Resources for Small Businesses EPA Office of
Enforcement and Compliance Assurance: Audit Policy: Incentives for
Self-Policing	  HYPERLINK "http://www.epa.gov/smallbusiness/money.htm" 
http://www.epa.gov/smallbusiness/money.htm es.epa.gov/oeca/auditpol.html
EPA has compiled a variety of sources to assist small businesses in
applying for loans for pollution control. Applicability of EPA’s
policy to enhance protection of human health and the environment by
encouraging regulated entities to voluntarily discover, and disclose and
correct, violations of environmental requirements.

List of Financial Resources for Small Businesses	  HYPERLINK
"http://www.epa.gov/smallbusiness/money.htm" 
http://www.epa.gov/smallbusiness/money.htm 	EPA has compiled a variety
of sources to assist small businesses in applying for loans for
pollution control. 



The 2003 Amendment to the CWT Rule

Following publication of the December 2000 CWT Final Rule, facilities in
the regulated community conducted compliance monitoring studies and
began to develop compliance strategies for the regulated pollutants.
Based on these efforts, several members of the regulated community and a
trade association submitted new information to the Agency and asked EPA
to revise certain aspects of the 2000 final rule. After our own analysis
and review of comments received, EPA determined that it should adopt
modifications to the 2000 rule as well as several additional
modifications resulting from additional analyses in the organics
subcategory. In December 2003, EPA finalized an Amendment to the CWT
regulations which deleted certain pollutants from those subject to
effluent limitations guidelines and standards (68 FR 71014, December 22,
2003). A summary list of changes follows: 

First, the changes deleted the selenium limitations and standards from
sections of the Metals Treatment and Recovery subcategory and deleted
the barium, molybdenum, antimony, and titanium limitations and standards
from the Oils Treatment and Recovery subcategory. EPA learned that,
under certain circumstances, the treatment technologies used as the
basis for the December 2000 limitations and standards did not remove the
pollutants as expected.

Second, the amendments deleted the molybdenum, antimony, aniline, and
2,3-dichloroaniline limitations and standards from the Organics
Treatment and Recovery subcategory. EPA learned that these four
pollutants did not meet the criteria for regulation that was used in the
December 2000 rule.

Third, the amendments reflected the changes in the Multiple Wastestreams
subcategory, which covers facilities that treat or recover some
combination of metal-bearing, oily, and organic waste receipts.

Finally, the amendments revised a direct discharge BOD5 daily maximum
limitation in the Multiple Wastestreams subcategory for combined metals
and organics waste receipts to correct a publication error in the
December 2000 rule.

The 2003 and 2006 “Frequently Asked Questions” Documents

EPA, in an effort to assist small entities with implementation of the
CWT rule, has produced two supplemental sets of “Frequently Asked
Questions” documents (FAQs) - the first in 2003 and the second in
2006.  These documents are basically collections of questions with
associated answers that EPA believes would be useful information for the
regulated entities.  The FAQs represent addendums to Chapter 10,
Questions and Answers, of the 2001 Small Entity Compliance Guide for
CWTs.

The November 6, 2003 FAQs document (available at   HYPERLINK
"http://water.epa.gov/scitech/wastetech/guide/treatment/upload/2006_12_2
8_guide_cwt_faqs.pdf" 
http://water.epa.gov/scitech/wastetech/guide/treatment/upload/2006_12_28
_guide_cwt_faqs.pdf ) primarily outlined a series of scenarios which
differentiates an existing discharger from a new discharger.  It
highlights the degree to which an existing facility might alter its
current waste stream treatment technology or accept new waste sources
and still be considered an existing source versus triggering new source
standards.  Additional questions discussed the implementation of the
provision in the CWT rule that provides permit writers the ability to
establish alternative limitations in cases where the CWT receives
wastewater that has a constant profile on a continuous basis from five
or fewer generators.  If these conditions are met, the permitting
authority may apply the CWT rule or set limits on wastewater received by
the facility based not on the CWT regulation but on the relevant
existing source effluent limitation guideline.  The FAQs also dealt with
issues concerning the compliance schedule for new wastestreams, what
subcategory should be applied to automotive ethylene glycol coolant, and
the applicability of the combined wastestream formula and the multiple
wastestreams subcategory.

The December 2006 Frequently Asked Questions (available at   HYPERLINK
"http://water.epa.gov/scitech/wastetech/guide/treatment/upload/2006_12_2
8_guide_cwt_faqs-200612.pdf" 
http://water.epa.gov/scitech/wastetech/guide/treatment/upload/2006_12_28
_guide_cwt_faqs-200612.pdf ) provide updated overall guidance on
evaluating the applicability of the CWT rule as well as specific
guidance on various newly raised applicability questions. In particular
the FAQs offer a list of questions that both regulators and potential
CWT facilities should use in order to determine if the CWT rule is
applicable. These five questions listed below if answered positively
would indicate that the CWT rule is applicable.

Does the discharging facility accept wastes, wastewater, or used
materials from off-site for treatment and/or recovery?

Is the activity appropriately considered treatment and recovery?

Are the off-site wastes generated from industrial applications?

Are the types of pollution removed and the treatment technologies
employed similar to those evaluated during development of the CWT rule?

Are resulting wastewaters discharged directly to waters of the U.S. or
indirectly to a Publicly Owned Treatment Works (POTW)?

The document goes on to answer specific applicability questions with
regard to:

mobile activities such as power or truck washing, carpet cleaning, or
heat ventilation/air conditioning servicing;

oil or antifreeze change out at gas stations or oil change facilities;

railroad line maintenance operations (including spill clean-up from
railroad operations) at a railroad line maintenance facility;

emergency response or environmental clean-up/remediation;

ion exchange or resin regenerations;

off-site medical/hospital sterilization; and

POTW sludge processing

CWT Overlap and Conflict with Other Government Regulations

EPA is unaware of any significant overlap or conflict with other
government regulations.  EPA specifically asked for comment in April
2010 (75FR 21882, April 26, 2010) on the issue of CWT regulatory overlap
and conflicts and received no comments from the public.  

During development of the final rulemaking, EPA recognized there were
circumstances when a CWT facility could also generate and discharge
wastewater associated with other activities subject to other categorical
effluent guidelines:  for example, manufacturing facilities which
process their own, on-site generated process wastewater along with
wastewater received from off-site.  EPA developed the applicability of
the final rule to clearly differentiate whether the CWT rule would
apply, the other ELG would apply or both.  In sum, such manufacturing
facilities are not considered to be CWT facilities if the only off-site
waste treated is from the same industry (other than the CWT industry)
and of a similar nature to the waste generated on site.  In that case,
the applicable ELG for the manufacturing discharges would apply only. 
However, if the off-site wastewater is not similar and compatible (or
from the same industry) with the on-site generated wastewater, then the
CWT ELG would apply to discharges of the off-site treated wastewater and
the other applicable ELG would apply to discharges of the on-site
generated wastewater.  Section 4 of the SECG provides a summary table
and EPA's determinations of the applicability of the CWT ELG in relation
to various other categorical ELGs and Section 14 of the Final Technical
Development Document describes how to calculate discharge limitations
where more than one ELG applies.

In addition, certain facilities whose treatment of off-site generated
wastewater is not compatible with the treatment of wastewater generated
on-site may nevertheless be subject to ELGs based on other categorical
ELGs.  The final CWT rule included a provision giving permitting
authorities the flexibility to develop alternative CWT limitations and
standards for certain discharges in a narrow set of circumstances. 
Under this approach, rather than applying the CWT ELGs, the permit
writer could require manufacturing facilities that treat non-similar
off-site generated wastewaters to meet all otherwise-applicable ELGs for
the industries in which the wastewater was generated.  This approach is
limited to facilities that receive continuous flows of relatively
consistent pollutant profiles from off-site from no more than five
customers.  See Chapter 3.1.1 of the Final Technical Development
Document for more information on how this provision would be used to
determine discharge limitations.

Most CWT effluent is discharged to POTWs which are covered by the
technology requirements (i.e., secondary treatment) specified in the CWA
(40 CFR 133), and are not considered CWT facilities within the scope of
the rule.  However, EPA has promulgated regulations at 40 CFR Part 403
(General Pretreatment Regulations for Existing and New Sources of
Pollution) that establish pretreatment standards and requirements that
apply to any source introducing pollutants from a non-domestic source
into a POTW.  These standards include a general prohibition on the
introduction of any pollutant that might pass through or interfere as
well as prohibitions on specific pollutants such as those that may
create a fire or explosion hazard or corrosive structural damage.  EPA
has also promulgated national effluent pretreatment standards (like the
pretreatment standards promulgated for the CWT industry) for specific
industry categories as separate regulations at 40 CFR subchapter N. 

The POTW pretreatment programs mandated under Part 403 must require
compliance with all applicable pretreatment standards and requirements
by industrial users of the POTW (see 40 CFR 403.8(f)(ii)).  Furthermore,
each POTW developing a pretreatment program must develop and enforce
specific local limits to implement the general and specific prohibition
against pass-through and interference (see 40 CFR 403.5(c)). Thus, any
POTW subject to the requirement to develop a pretreatment program that
accepts waste that does not comply with a general or specific
prohibition or with national effluent pretreatment standards is in
violation of the regulations. Consequently, POTWs with pretreatment
programs that receive wastestreams from CWT facilities that are both
subject to and not regulated by national effluent standards and
limitations must ensure the wastestreams do not violate the requirements
of the CWT rule, other national effluent categorical standards, or the
requirements under Part 403. 

CWT Industry Conditions Since Promulgation of the 2000 Final CWT Rule 

For the cost and economic analysis for the 2000 Final CWT Rule, EPA
relied almost exclusively on information received via the 1990 industry
survey and comment responses to its 1996 NODA. Without a new survey or
additional data supplied by the CWT industry in response to EPA’s
April 2010 Federal Register request for comment on this RFA 610 review,
EPA was not able to assess current CWT industry conditions and the
impact of the 2000 Final CWT Rule on small entities with the same level
of precision employed for the analysis conducted for the 2000 Final CWT
Rule. Nevertheless, the Agency believes that it was able to make an
adequate assessment of CWT industry conditions, by relying on publicly
available data. 

The data used for the analysis of the 2000 Final CWT Rule and the
publicly available data EPA used for this RFA 610 review of the final
rule cannot be directly compared because they either have different
sources or, in the case of demand for CWT services, the scope of
collected data has changed over the years (even though the data sources
are the same). Consequently, to assess the potential impact of the 2000
Final CWT Rule on the CWT industry in general and small CWT firms in
particular, the Agency could not simply compare the economic, financial,
and/or operational metrics from the 2000 analysis to values based on
recent publicly available data. Instead, EPA looked at the changes
over-time in selected metrics using publicly available data for early to
late 1990s through the most recent year with available data. At the time
of this analysis the Statistics of U.S. Businesses (SUSB) data and most
data EPA used from the U.S. Census Bureau were available through 2007;
firm receipt size data also published by the U.S. Census Bureau were
available only through 2002, while TRI and Risk Management Association
(RMA) data were available through 2008. By capturing a short period of
time before the promulgation year – i.e., 2000 – the comparison
supports an assessment of whether trends observed after promulgation of
the 2000 Final CWT Rule were already present in the industry before rule
promulgation, and therefore may not be attributed to the 2000 Final CWT
Rule. 

The following sections review a number of metrics that provide insight
into the performance of the CWT industry and its key operating segments
with the objective of understanding the potential effect of the CWT rule
on the economic viability and performance of small businesses in the CWT
industry. The categories of information reviewed include:

Demand for CWT services

Numbers of CWT facilities and firms – both in aggregate and by
business size

Employment size of CWT firms

Market structure and competitiveness in the CWT industry and segments

Economic and financial performance of the CWT industry and segments. 

At the time of this analysis only limited information was available to
assess potential effects specifically on small businesses in the CWT
industry; to a large degree, the following assessment looks at
information without regard to business size. However, given that the
industry is largely comprised of small businesses (see Section   REF
_Ref279141914 \w  \* MERGEFORMAT  6.2.3 , below, which indicates that 80
to over 90 percent of CWT industry firms, by segment, are small
according to the current SBA criteria), an assessment of industry
performance, regardless of business size, is informative of performance
and conditions applying to small businesses, specifically. In addition,
findings that indicate that the 2000 Final CWT Rule has had little or no
apparent adverse effect on the industry, as a whole, would also indicate
that the rule has likewise not had an adverse effect on small businesses
in the CWT industry. 

Overall, this review indicates that there is no basis for concluding
that the CWT rule has had an adverse effect on the viability and
performance of small businesses in the CWT industry. 

Demand for CWT Services

While some non-CWT facilities may offer services similar to those
provided by CWT facilities, these services are generally not perfect
substitutes. Nevertheless, it is possible that an increase in the price
of CWT services as the result of compliance requirements of the 2000
Final CWT Rule might have caused some customers to substitute services
from non-CWT facilities for those otherwise provided by CWT facilities.
Further, over time, customers might have modified their waste generation
processes to reduce their demand for CWT altogether. 

EPA reviewed data on demand for CWT services as one of several
indicators of overall business conditions in the CWT industry. While
these demand data cannot be differentiated by large vs. small business
facilities, they provide insight into whether business conditions may
have declined overall in the CWT industry, as a result of the 2000 Final
CWT Rule. To the extent that demand for CWT services declined and
business conditions deteriorated in the industry, because of the CWT
rule, this decline could signal the potential for adverse impact on
small entities operating in the CWT industry. 

For this assessment, EPA closely followed the methodology used to
capture demand for CWT services for the 2000 Final CWT Rule. In
particular, EPA used the amount of waste transfers to non-POTW off-site
locations, as reported in TRI, as an indicator of the demand for CWT
services., According to TRI data reported in   REF _Ref278813998 \h  \*
MERGEFORMAT  Table 6-1 , between 1998 and 2008, the demand for CWT
services fluctuated in all four demand segments: Disposal, Treatment,
Energy Recovery, and Recycling. Overall, between 1998 and 2008, the
demand for all CWT services, except Disposal, decreased, with the
largest decline (51.5 percent) occurring in the Energy Recovery segment.
For the Disposal services segment, demand increased marginally (3.4
percent) over the total period 1998-2008, but decreased by 7.2 percent
between 2000 (i.e., promulgation year) and 2008. In all demand segments
except Treatment, the largest drop in demand occurred in 2008, which
likely results from declining manufacturing production due to the recent
recession. The biggest decrease in demand for Treatment occurred in
1999. Demand for chemical waste treatment in the Energy Recovery segment
declined almost steadily, while demand in the Treatment, Recycling, and
Disposal segments declined irregularly throughout the analysis period.
Overall, EPA observes no systematic difference in trends before and
after promulgation of the 2000 Final CWT Rule, which suggests that any
declines in demand for CWT services over this timeframe cannot be solely
attributed to this rule.

Table 6-  SEQ Table \* ARABIC \s 1  1 : Transfers of Toxic Chemical
Waste to Off-Site Locations Other Than POTWs (Million Lbs)

Year	Disposal	Treatment	Energy Recovery	Recycling

	Quantity (Million Lbs)	% Change	Quantity (Million Lbs)	% Change
Quantity (Million Lbs)	% Change	Quantity (Million Lbs)	% Change

1998	554	na	335	na	911	na	2,117	na

1999	574	3.6%	289	-13.5%	784	-13.9%	2,219	4.8%

2000	617	7.5%	280	-3.1%	813	3.8%	2,184	-1.6%

2001	615	-0.3%	283	1.1%	842	3.5%	2,043	-6.5%

2002	597	-3.0%	277	-2.3%	810	-3.8%	2,038	-0.2%

2003	592	-0.7%	290	4.7%	716	-11.6%	1,932	-5.2%

2004	611	3.1%	327	12.9%	650	-9.1%	2,085	7.9%

2005	637	4.3%	336	2.7%	609	-6.4%	2,096	0.5%

2006	661	3.8%	329	-2.2%	555	-8.8%	2,182	4.1%

2007	676	2.2%	287	-12.7%	525	-5.4%	2,142	-1.8%

2008	572	-15.3%	255	-11.1%	442	-15.9%	1,936	-9.6%

1998 – 2008 Comparison

Total % Change	na	3.4%	na	-23.7%	na	-51.5%	na	-8.5%

Average Annual % Change	na	0.3%	na	-2.7%	na	-7.0%	na	-0.9%

2000 – 2008 Comparison

Total % Change	na	-7.2%	na	-9.0%	na	-45.7%	na	-11.4%

Average Annual % Change	na	-0.9%	na	-1.2%	na	-7.3%	na	-1.5%

Source: Toxic Release Data Inventory



Number of CWT Facilities and Firms

As another indicator of overall business conditions in the CWT industry
in the period before and after promulgation of the CWT rule, EPA
reviewed the change in numbers of facilities and firms over the period
1998-2007. In the same way as described above for CWT services demand, a
differential trend of a declining number of facilities and/or firms in
the periods before and following promulgation of the final CWT rule
could signal a potential adverse effect on the level of activity and
industry structure due to the final rule, which in turn could lead to an
adverse impact on small entities operating in the CWT industry.

Number of Facilities

To assess the changes in the CWT facility universe since promulgation of
the 2000 Final CWT Rule, EPA relied on data from the Statistics of U.S.
Businesses and the Economic Census published by the U.S. Census Bureau.
The Agency identified CWT facilities by the primary SIC or North
American Industry Classification System (NAICS) codes depending on the
years for which the data are available. As discussed in Section   REF
_Ref290378368 \r \h  2 , the majority of the survey respondents
identified their industry as SIC 4953: Refuse Systems. This SIC industry
sector maps onto five NAICS industry sectors, only three of which
represent the CWT industry (highlighted in   REF _Ref278818958 \h  \*
MERGEFORMAT  Table 6-2 ). Solid waste landfills (NAICS 562212) and solid
waste combustors and incinerators (NAICS 562213) are out of scope of the
2000 Final  CWT Rule; wastewater discharges from landfills and
commercial waste combustors are regulated by 40 CFR Parts 444 and 445
(the Waste Combustors and Landfills Categories, respectively). For this
analysis, EPA assumed that facilities reported in segments NAICS 562211:
Hazardous Waste Treatment and Disposal, NAICS 562920: Materials Recovery
Facilities, and NAICS 562219: Other Nonhazardous Waste Treatment and
Disposal (CWT industry segments or CWT segments) represent the entire
CWT industry and are all subject to the 2000 Final CWT Rule. It is
important to note that the three ELG facility subcategories – Metals,
Oils, and Organics - do not align with these three CWT NAICS segments.

Data for the earlier years are reported in the SIC framework. To ensure
time-series data comparability, EPA used SIC-to-NAICS allocation factors
provided by the Census and reported in   REF _Ref278818958 \h  \*
MERGEFORMAT  Table 6-2 .

Table 6-  SEQ Table \* ARABIC \s 1  2 : SIC-to-NAICS Allocation Factors

SIC Code	SIC Code Meaning	NAICS Code	NAICS Code Meaning	SIC-to-NAICS
Allocation Factor

4953	Refuse Systems	562211	Hazardous Waste Treatment and Disposal	24.92%

4953	Refuse Systems	562212	Solid Waste Landfill	47.56%

4953	Refuse Systems	562213	Solid Waste Combustors and Incinerators	9.77%

4953	Refuse Systems	562219	Other Nonhazardous Waste Treatment and
Disposal	6.50%

4953	Refuse Systems	562920	Materials Recovery Facilities	11.25%

Source: 1997 Economic Census Bridge Between NAICS and SIC



EPA looked at the number of establishments in the three analyzed CWT
segments reported in SUSB. As reported in   REF _Ref277262400 \h  \*
MERGEFORMAT  Table 6-3 , the number of establishments fluctuated in all
three CWT segments throughout the analysis period of 1998 through 2007,
but increased overall. Specifically, the total number of CWT facilities
increased by nearly 30 percent, at an annual average growth rate of
nearly 3 percent. Between 1998 and 2007, the total numbers of
establishments engaged in Hazardous Waste Treatment and Disposal (NAICS
562211) and in Materials Recovery (NAICS 562920) increased significantly
(59.4 percent and 19.3 percent, respectively), or at an annual average
growth rate of 5.3 percent and 2.0 percent, respectively. At the same
time, however, the number of establishments in the smallest of the CWT
segments – Other Nonhazardous Waste Treatment and Disposal Services
(NAICS 562219) – dropped by 6.4 percent. 

Given the overall increase in the number of establishments in the CWT
industry, the final CWT rule appears not to have increased CWT costs
enough to force facilities out of business or to lead to an overall
contraction in the industry. Even for the CWT segment that experienced a
decline in the number of establishment – Other Nonhazardous Waste
Treatment and Disposal Services (NAICS 562219) – this decline began
prior to promulgation of the 2000 Final CWT Rule and therefore cannot be
attributed solely, if at all, to this rule.

Table 6-  SEQ Table \* ARABIC \s 1  3 : Number of Establishments by
Industry Sector and Year

Year	Hazardous Waste Treatment and Disposal (NAICS 562211)	Other
Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)
Materials Recovery (NAICS 562920)	Total CWT

	Number	% Change	Number	% Change	Number	% Change	Number	% Change

1998	520	na	299	na	874	na	1,693	na

1999	536	3.1%	280	-6.4%	837	-4.2%	1,653	-2.4%

2000	500	-6.7%	278	-0.7%	777	-7.2%	1,555	-5.9%

2001	520	4.0%	291	4.7%	736	-5.3%	1,547	-0.5%

2002	572	10.0%	292	0.3%	831	12.9%	1,695	9.6%

2003	682	19.2%	193	-33.9%	899	8.2%	1,774	4.7%

2004	687	0.7%	219	13.5%	895	-0.4%	1,801	1.5%

2005	695	1.2%	250	14.2%	884	-1.2%	1,829	1.6%

2006	882	26.9%	265	6.0%	923	4.4%	2,070	13.2%

2007	829	-11.7%	280	-14.3%	1,043	22.3%	2,152	3.1%

1998 – 2007 Comparison

Total Percent Change

59.4%

-6.4%

19.3%

27.1%

Annual Average Growth Rate

5.3

-0.7%

2.0%

2.7%

2000 – 2007 Comparison

Total Percent Change

65.8%

0.7%

34.2%

38.4%

Annual Average Growth Rate

7.5%

0.1%

4.3%

4.8%

Sources: Statistics of U.S. Businesses (SUSB) Annual Data 1998-2007 

Number of Firms

CWT parent entities have the capacity to conduct business transactions
and make business decisions affecting facilities they own; consequently,
parent entities of the CWT facilities are very likely to have
experienced the financial impacts of the 2000 Final CWT Rule. If
compliance costs were high enough, CWT firms might be induced to merge
with other (CWT or non-CWT) firms in order to continue operating, or
might be forced out of business altogether. Either effect would result
in fewer firms in the industry. Further, high enough compliance costs
might have become an entry barrier thereby deterring potential
competitors. To assess how CWT industry concentration might have changed
over time, EPA looked at the number of firms reported in the Statistics
of U.S. Businesses (SUSB).

As reported in   REF _Ref277265509 \h  \* MERGEFORMAT  Table 6-4 ,
similarly to the number of establishments (  REF _Ref277262400 \h  \*
MERGEFORMAT  Table 6-3 ), the number of firms fluctuated in all three
CWT segments throughout the analysis period of 1998 through 2007, but
increased overall, by 13 percent, or at an annual average growth rate of
nearly 2 percent. By segment, the number of firms in Hazardous Waste
Treatment and Disposal (NAICS 562211) and in Materials Recovery (NAICS
56290) increased by 19.3 percent and 14.7 percent, respectively. Only in
the smallest segment – the Other Nonhazardous Waste Treatment and
Disposal segment (NAICS 562219) – did the number of number of firms
decrease and here by only small amount, a 2.2 percent decrease. 

Given the overall increase in the number of firms in the CWT industry,
the 2000 Final CWT Rule appears not to have increased CWT costs enough
to force firms out of business, to encourage mergers and acquisitions,
or to prevent new firms from entering the CWT industry. Even for the CWT
segment that experienced a decline in the number of firms – Other
Nonhazardous Waste Treatment and Disposal Services (NAICS 562219) –
this decline began prior to promulgation of the 2000 Final CWT Rule and
therefore cannot be attributed solely, if at all, to this rule.

Table 6-  SEQ Table \* ARABIC \s 1  4 : Number of Firms by Industry
Segment and Year

Year	Hazardous Waste Treatment and Disposal (NAICS 562211)	Other
Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)
Materials Recovery (NAICS 562920)	Total CWT

	Number	% Change	Number	% Change	Number	% Change	Number	% Change

1998	378	na	227	na	771	na	1,376	na

1999	398	5.3%	209	-7.9%	703	-8.8%	1,310	-4.8%

2000	384	-3.5%	198	-5.3%	653	-7.1%	1,235	-5.7%

2001	393	2.3%	219	10.6%	609	-6.7%	1,221	-1.1%

2002	402	2.3%	223	1.8%	693	13.8%	1,318	7.9%

2003	447	11.2%	164	-26.5%	785	13.3%	1,396	5.9%

2004	460	2.9%	188	14.6%	783	-0.3%	1,431	2.5%

2005	466	1.3%	191	1.6%	765	-2.3%	1,422	-0.6%

2006	471	1.1%	203	6.3%	803	5.0%	1,477	3.9%

2007	451	-4.2%	222	9.4%	884	10.1%	1,557	5.4%

1998 – 2007 Comparison

Total Percent Change

19.3%

-2.2%

14.7%

13.2%

Annual Average Growth Rate

2.0%

-0.2%

1.5%

1.4%

2000 – 2007 Comparison

Total Percent Change

17.4%

12.1%

35.4%

26.1%

Annual Average Growth Rate

2.3%

1.6%

4.4%

3.4%

Sources: Statistics of U.S. Businesses Annual Data 1998-2007

Number of Small Firms

To assess whether small CWT firms were adversely affected by the 2000
CWT Rule, EPA looked at the number of small CWT firms over time to
determine whether there were any significant changes in the number of
small firms and compared the trend in the number of small firms to that
of large firms.

The Small Business Administration annually provides small business size
threshold guidelines; these thresholds define by industry (by 6-digit
NAICS code) the minimum firm-level employment or revenue size, below
which a business qualifies as a small business under SBA guidelines.
According to the SBA size criteria, entities in the three analyzed
industry sectors are small if their annual revenue is less than $12.5
million (the SBA annual revenue threshold at the time of the rulemaking
analysis was $6 million). However, EPA was not able to find data to
determine size of entities in the CWT industry based on their revenue.
Consequently, the Agency used number of employees data to categorize
firms and determine the change in small business presence in the
affected industry segments.  EPA categorized firms as small businesses
if they employed 100 or fewer employees. Although the employment size
range doesn’t correspond specifically to the SBA revenue-based size
criteria, the firm count data in this smaller employment size
classification provides direct insight into the relative presence of
smaller businesses in the affected industry segments.

EPA determined the employment-based threshold of 100 or fewer employees
from its review of Receipts Size of Firms data from the Economic Census.
At the time of this analysis, these data were not available from the
2007 Economic Census; consequently, EPA used data from the 1997 and 2002
Economic Census to examine change in the presence of small businesses in
the affected industry segments. As shown in   REF _Ref278718010 \h  \*
MERGEFORMAT  Table 6-5 , the average number of employees per firm
increases with the receipts size category. Firms with annual receipts at
$12.5 million – the SBA size criterion – are part of the
“$10,000,000 - $24,000,000” receipts size category; for firms in
this category, the average number of employees per firm is approximately
100 across all three CWT segments for both 1997 and 2002. Thus, EPA
interprets the 100 or fewer employees firm size cut-off as providing an
approximate correspondence to the $10,000,000 - $24,000,000 receipts
range, which contains the SBA small entity criterion. 

To look at the number of small firms in each CWT segment and the CWT
industry as a whole, EPA used the number of firms reported by employment
size in the Statistics of U.S. Businesses (SUSB). 

Using the “100 or fewer employees” threshold

  REF _Ref278719423 \h  \* MERGEFORMAT  Table 6-6  provides the number
of small and large CWT firms determined using the “100 or fewer
employees” threshold in 1998 through 2007, by CWT segment. During this
time, the vast majority of entities – 80 to over 90 percent – in
all three CWT segments are small. Most of the small firms are in the
Materials Recovery segment (NAICS 562920), followed by the Hazardous
Treatment and Disposal (NAICS 562211) and Other Nonhazardous Treatment
and Disposal (NAICS 562219) segments. This relationship remains true
during the entire analysis period. 

Between 1998 and 2007, the number of firms in the CWT industry with 100
or fewer employees increased by 13.5 percent while the number of firms
with greater than 100 employees increased by 10.1 percent. Thus, for the
full analysis period, the presence of smaller firms (based on the “100
or fewer employees” threshold) increased compared to larger firms.
Over the period 2000 to 2007, following promulgation of the 2000 Final
CWT Rule, this difference magnified, with the number of small firms
increasing by 27.6 percent while the number of large firms increased by
3.5 percent. Thus, in the period following rule promulgation, the
presence of small firms, according to the 100 employee threshold,
increased by a substantially greater amount than did the number of firms
of greater than 100 employees. These data suggest that promulgation of
the 2000 Final CWT Rule did not lead to a reduced presence of small
firms in the overall CWT industry. 

By segment, the pattern of change in the presence of small and large
businesses is not consistent in the period 1998 to 2007:

In the Hazardous Waste Treatment and Disposal segment (NAICS 562211),
the number of small firms increased by 26.5 percent while the number of
large firms decreased by 15.4 percent. 

In the Materials Recovery segment (NAICS 562920), the number of small
firms increased by 12.8 percent, while large firms increased by 45.5
percent. 

In the Other Nonhazardous Waste Treatment and Disposal segment (NAICS
562219) the number of small entities fell by 3.9 percent while the
number of large entities increased by 15.0 percent.

Consequently, while there was a shift towards small entities in the
Hazardous Waste Treatment and Disposal segment (NAICS 562211) between
1998 and 2007, the Other Nonhazardous Waste Treatment and Disposal
segment (NAICS 562219) and the Materials Recovery segment (NAICS 562920)
saw a shift towards large entities. 

As described above for the total CWT industry, the trends in the
presence of small and large firms are different when looking at the
changes since the 2000 Final CWT Rule came into effect (2000-2007)
compared to the total period of 1998-2007. 

Overall, small firms increased by 27.6 percent while large firms
increased by 12.7 percent 

In the Hazardous Waste Treatment and Disposal segment (NAICS 562211),
the number of small firms increased by 25.3 percent while the number of
large firms decreased by 19.1 percent. 

In the Materials Recovery segment (NAICS 562920), the number of small
firms increased by 33.6 percent, while large firms increased by 64.1
percent. 

In the Other Nonhazardous Waste Treatment and Disposal segment (NAICS
562219) the number of small entities fell by 11.2 percent while the
number of large entities increased by 21.1 percent.

Given the overall increase in the number of small firms in the CWT
industry since promulgation of the 2000 Final CWT Rule, the rule’s
requirements appear not to have adversely affected small firms, defined
as firms with 100 or fewer employees, in the CWT industry. Even for the
CWT segments where the increase in the number of small firms was less
than the increase in the number of large firms – Materials Recovery
(NAICS 562920) and Other Nonhazardous Waste Treatment and Disposal
Services (NAICS 562219) – this trend began prior to promulgation of
the 2000 Final CWT Rule and therefore cannot be attributed solely, if at
all, to this rule.

Table 6-  SEQ Table \* ARABIC \s 1  5 : Average Number of Employees per
Firm by Receipts Size

Receipts Size	1997	2002

	Number of Firms	Number of Employees	Ave Number of Employees per Firma
Number of Firms	Number of Employeesa	Average Number of Employees per
Firm

Hazardous Waste Treatment and Disposal (NAICS 562211)

<$100,000	10	15	2	22	37	2

$100,000-$249,999	39	118	3	47	119	3

$250,000 to $499,999	36	160	4	49	179	4

$500,000 to $999,999	54	398	7	80	649	8

$1,000,000 to $2,499,999	50	771	15	68	903	13

$2,500,000 to $4,999,999	38	1,031	27	46	1,078	23

$5,000,000 to $9,999,999	28	1,299	46	29	1,418	49

$10,000,000 to $24,999,999	26	2,767	106	17	1,384	81

$25,000,000 to $49,999,999	15	2,500 to 4,999	167 to 333	11	2,065	188

$50,000,000 to $99,999,999	6	1,000 to 2,499	167 to 417	6	2,500 to 4,999
417 to 833

>=$100,000,000	4	5,295	1,324	9	10,000 to 24,999	1,111 to 2,778

Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)

<$100,000	29	49	2	11	25	2

$100,000-$249,999	33	88	3	12	32	3

$250,000 to $499,999	30	124	4	31	149	5

$500,000 to $999,999	19	133	7	23	197	9

$1,000,000 to $2,499,999	40	552	14	29	344	12

$2,500,000 to $4,999,999	11	404	37	12	253	21

$5,000,000 to $9,999,999	7	250 to 499	36 to 71	5	250 to 499	50 to 100

$10,000,000 to $24,999,999	9	500 to 999	56 to 111	5	250 to 499	50 to 100

$25,000,000 to $49,999,999	1	100 to 249	100 to 249	2	100 to 249	50 to
125

$50,000,000 to $99,999,999	1	500 to 999	500 to 999	1	250 to 499	250 to
499

Materials Recovery (NAICS 562920)

<$100,000	51	103	2	57	107	2

$100,000-$249,999	110	332	3	112	345	3

$250,000 to $499,999	96	494	5	122	569	5

$500,000 to $999,999	94	878	9	119	900	8

$1,000,000 to $2,499,999	114	1,778	16	155	2,337	15

$2,500,000 to $4,999,999	51	1,644	32	69	2,110	31

$5,000,000 to $9,999,999	26	1,390	53	46	2,368	51

$10,000,000 to $24,999,999	10	1,000 to 2,499	100 to 250	25	2,500 to
4,999	100 to 200

$25,000,000 to $49,999,999	4	500 to 999	125 to 250	2	100 to 249	50 to
125

$50,000,000 to $99,999,999	0	0	0	1	100 to 249	100 to 249

Sources: 1997 Economic Census; 2002 Economic Census

a. “Average Number of Employees” values are reported as integers.  



Table 6-  SEQ Table \* ARABIC \s 1  6 : Number of Firms by Employment
Size, Industry Segment, and Year – Using the “100 of Fewer
Employees” SBA Size Threshold

Year	Employment Group	Hazardous Waste Treatment and Disposal (NAICS
562211)	Other Nonhazardous Waste Treatment and Disposal Services (NAICS
562219)	Materials Recovery (NAICS 562920)	Total CWT



Number	% of Total	Number	% of Total	Number	% of Total	Number	% of Total

1998	<100	313	83%	207	91%	727	94%	1,247	91%

	>100	65	17%	20	9%	44	6%	129	9%

1999	<100	328	82%	193	92%	659	94%	1,180	90%

	>100	70	18%	16	8%	44	6%	130	10%

2000	<100	316	82%	179	90%	614	94%	1,109	90%

	>100	68	18%	19	10%	39	6%	126	10%

2001	<100	329	84%	199	91%	568	93%	1,096	90%

	>100	64	16%	20	9%	41	7%	125	10%

2002	<100	344	86%	202	91%	653	94%	1,199	92%

	>100	58	14%	21	9%	40	6%	119	8%

2003	<100	400	89%	149	91%	737	94%	1,286	92%

	>100	47	11%	15	9%	48	6%	110	8%

2004	<100	412	90%	170	90%	730	93%	1,312	92%

	>100	48	10%	18	10%	53	7%	119	8%

2005	<100	412	88%	173	91%	711	93%	1,296	91%

	>100	54	12%	18	9%	54	7%	126	9%

2006	<100	413	88%	181	89%	740	92%	1,334	90%

	>100	58	12%	22	11%	63	8%	143	10%

2007	<100	396	88%	199	90%	820	93%	1,415	91%

	>100	55	12%	23	10%	64	7%	142	9%

1998 – 2007 Comparison

Total Percent Change	<100

26.5%

-3.9%

12.8%

13.5%

	>100

-15.4%

15.0%

45.5%

10.1%

Annual Average Growth Rate	<100

2.6%

-0.4%

1.3%

1.4%

	>100

-1.8%

1.6%

4.3%

1.1%

2000 – 2007 Comparison

Total Percent Change	<100

25.3%

11.2%

33.6%

27.6%

	>100

-19.1%

21.1%

64.1%

12.7%

Annual Average Growth Rate	<100

3.3%

1.5%

4.2%

3.5%

	>100

-3.0%

2.8%

7.3%

1.7%

Sources: Statistics of U.S. Businesses Annual Data 1998-2007



Average Employment Size of CWT Firms

Change in the average size of firms based on employment provides another
indicator of relative small business presence in the CWT industry over
the period before and after promulgation of the 2000 Final CWT Rule.
Overall, the average size of firms in the CWT industry increased
modestly over the 1998-2007 period, from an average of 25 employees per
firm in 1998 and 26 employees per firm in 2000 (the year of CWT rule
promulgation) to an average of 27 employees per firm in 2007. In
addition, the year-to-year profile of change is relatively
directionless, with some year-to-year changes showing modest increase
and others showing modest decrease  (  REF _Ref277271804 \h  \*
MERGEFORMAT  Table 6-7 ). 

Similar, relatively directionless patterns are observed at the level of
the industry segments, with the firms in the Hazardous Waste Treatment
and Disposal segment (NAICS 562211) showing an increase in average
number of employees over both the 1998-2007 and 2000-2007 periods, the
Other Nonhazardous Waste Treatment and Disposal segment (NAICS 562219)
and the Materials Recovery segment (NAICS 562920) showing an increase
over the 1998-2007 period but a decrease in the 2000-2007 period. 

Given the relatively small and/or directionless profile of changes in
average number of employees per firm, there appears to be no systematic
change in average firm size that can be attributed to the 2000 Final CWT
Rule.

Table   STYLEREF 1 \s  6 -  SEQ Table \* ARABIC \s 1  7 : Average Number
of Employees per Firm by CWT Segment and Year

Year	Hazardous Waste Treatment and Disposal (NAICS 562211)	Other
Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)
Materials Recovery (NAICS 562920)	Total

	Number	% Change	Number	% Change	Number	% Change	Number	% Change

1998	45	na	19	na	16	na	25	na

1999	46	3.4%	19	2.5%	19	15.2%	27	10.9%

2000	42	-10.4%	23	19.7%	19	0.0%	26	-2.5%

2001	42	1.0%	21	-8.0%	21	13.8%	28	5.4%

2002	41	-2.2%	20	-6.5%	18	-13.4%	26	-8.4%

2003	50	21.1%	17	-16.7%	17	-5.5%	28	8.1%

2004	50	0.7%	18	8.5%	19	7.9%	29	3.9%

2005	49	-1.2%	17	-4.5%	19	2.8%	29	0.6%

2006	56	13.9%	17	0.0%	20	2.2%	31	7.5%

2007	53	-6.1%	20	16.5%	16	-16.7%	27	-11.4%

1998 – 2007 Comparison

Total Percent Change

17.8%

6.1%

1.4%

12.2%

Annual Average Growth Rate

1.8%

0.7%

0.2%

1.3%

2000 – 2007 Comparison

Total Percent Change

27.2%

-13.6%

-12.0%

3.8%

Annual Average Growth Rate

3.5%

-2.1%

-1.8%

0.5%

Sources: Statistics of U.S. Businesses Annual Data 1998-2007



Market Structure of CWT Industry Segments

As discussed in Section 2.2 of this document, in EPA’s analysis for
the 2000 Final CWT Rule, because of the large number of the CWTs in the
oils recovery and/or oily wastewater treatment markets, it was assumed
that the CWT industry is perfectly competitive. Increasing concentration
in the CWT industry segments could indicate that the 2000 Final CWT Rule
led to reduced competitiveness in the industry, with lower viability of,
and increased business risk to, the small businesses in the industry. 

Industry competitiveness and market concentration data are published at
5-year intervals as part of the Economic Census, with the most recent
data being for the year 2007. Based on these data,   REF _Ref278724288
\h  \* MERGEFORMAT  Table 6-8  shows market concentration ratios by CWT
segment for 1992, 1997, 2002, and 2007.   REF _Ref278724288 \h  \*
MERGEFORMAT  Table 6-8  shows that overall CWT segments are not very
concentrated. In addition, the profile of change in concentration at the
4- and 8-firm levels has been inconsistent over the period 1992-2007,
with concentration declining in some segments (according to some
concentration measures) while increasing in others. Given the
inconsistency of direction in these changes, it does not appear that
there is any systematic trend of increasing concentration/reduced market
competitiveness that could be attributed to the 2000 Final CWT Rule. 

Table   STYLEREF 1 \s  6 -  SEQ Table \* ARABIC \s 1  8 : Market
Concentration Ratiosa

Industry	Year	Number of Firms	4 Largest Firms	8 Largest Firms	20 Largest
Firms	50 Largest Firms

NAICS	SIC







562211	4953	1992	570	42.6	49.0	57.6	66.4



1997	362	36.1	46.2	63.7	82.0



2002	451	36.8	51.7	71.9	85.1



2007	436	44.6	59.2	75.2	87.5

562219	4953	1992	149	42.6	49.0	57.6	66.4



1997	225	54.7	65.8	80.3	91.2



2002	170	60.3	71.0	82.1	92.4



2007	179	34.7	51.9	70.5	86.9

562920	4953	1992	258	42.6	49.0	57.6	66.4



1997	697	30.6	37.2	46.9	60.8



2002	829	24.1	29.2	39.2	54.4



2007	922	33.3	38.2	47.1	59.9

Sources: Economic Census 1992; Economic Census 1997; Economic Census
2002; Economic Census 2007

a. Concentration ratios for 1992 are reported for SIC 4953 while 1997
and 2002 concentration ratios are reported for NAICS 562211, 562219, and
56920.

Economic Performance in the CWT Industry Segments

If increased costs due to the 2000 Final CWT Rule led to declines in the
amount of wastes treated and/or declines in profitability in the CWT
industry, then these declines would likely manifest as declines in
industry employment, revenue, and other measures of economic
performance. Accordingly, EPA looked at a range of economic activity
measures for the CWT industry segments over the years before and
following rule promulgation. The economic activity measures reported in
this section are not available by business size and, as a result, the
insights from looking at these measures apply to the industry segments
regardless of business size. Nevertheless, if the rule led to economic
declines overall, then these declines would likely have affected the
small businesses in the CWT segments. 

Employment

  REF _Ref278732252 \h  \* MERGEFORMAT  Table 6-9  presents number of
employees for the overall CWT industry and by segment for 1998 through
2007. Over this period, total industry employment increased
substantially, by 26.9 percent, with no apparent change in the trend of
employment growth before and after promulgation of the CWT rule. At the
segment level, employment performance is consistent with the Hazardous
Waste Treatment and Disposal segment (NAICS 562211) and the Materials
Recovery segment (NAICS 562920) showing substantial increases by 40.6
percent and 16.3 percent, respectively, between 1998 and 2007 and by
49.4 percent and 19.1 percent, respectively, since 2000. In contrast, in
the Other Nonhazardous Treatment and Disposal segment (NAICS 562219),
the number of employees increased by 3.7 percent between 1998 and 2007
but decreased by 3.1 percent since 2000.

Given (1) the increase in the number of employees in the overall CWT
industry since 1998 and also following promulgation of the final rule,
(2) the inconsistency of change across industry segments, and (3) the
lack of a systematic difference in the employment growth trends in the
periods before and after rule promulgation, there is no basis for
concluding that the rule caused contractions in activity and reduced
employment in the CWT industry.

Table   STYLEREF 1 \s  6 -  SEQ Table \* ARABIC \s 1  9 : Number of
Employees by CWT Segment and Year

Year	Hazardous Waste Treatment and Disposal (NAICS 562211)	Other
Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)
Materials Recovery (NAICS 562920)	Total CWT

	Number	% Change	Number	% Change	Number	% Change	Number	% Change

1998	16,976	na	4,269	na	12,485	na	33,730	na

1999	18,475	8.8%	4,030	-5.6%	13,113	5.0%	35,618	5.6%

2000	15,972	-13.5%	4,570	13.4%	12,185	-7.1%	32,727	-8.1%

2001	16,517	3.4%	4,649	1.7%	12,928	6.1%	34,094	4.2%

2002	16,526	0.1%	4,427	-4.8%	12,744	-1.4%	33,697	-1.2%

2003	22,246	34.6%	2,713	-38.7%	13,638	7.0%	38,597	14.5%

2004	23,043	3.6%	3,374	24.4%	14,673	7.6%	41,090	6.5%

2005	23,059	0.1%	3,272	-3.0%	14,744	0.5%	41,075	0.0%

2006	26,556	15.2%	3,477	6.3%	15,820	7.3%	45,853	11.6%

2007	23,869	-10.1%	4,429	27.4%	14,514	-8.3%	42,812	-6.6%

1998 – 2007 Comparison

Total Percent Change

40.6%

3.7%

16.3%

26.9%

Annual Average Growth Rate

3.9%

0.4%

1.7%

2.7%

2000 – 2007 Comparison

Total Percent Change

49.4%

-3.1%

19.1%

30.8%

Annual Average Growth Rate

5.9%

-0.4%

2.5%

3.9%

Sources: Statistics of U.S. Businesses Annual Data 1998-2007

Revenue, Employment, and Payroll in the CWT Industry Segments

EPA used data from the Economic Census for years 1997, 2002, and 2007 on
revenue, employment, and payroll to provide additional insight into the
potential effect of the rule on small businesses in the CWT industry.
The data on employment from the Economic Census are, in concept,
measuring the same value as reported in the preceding section. However,
the employment values reported in this section differ from those
reported above because they are not drawn from the same source. However,
the trends over time in the employment values do correspond between the
two data sources. 

Overall, these data continue to show a similar profile to that observed
for the other data series, with increases in all metrics for the full
CWT industry and the larger industry segments, Waste Treatment and
Disposal segment (NAICS 562211) and the Materials Recovery segment
(NAICS 562920), also showing increases. The smaller industry segment,
Other Nonhazardous Treatment and Disposal segment (NAICS 562219),
reported a decrease in the reported metrics. The strength of overall
performance, and the generally strong performance at the segment level,
continue to suggest that the CWT rule did not have an overall adverse
effect on the industry, generally, and, by inference, the small business
component.

As shown in   REF _Ref278734149 \h  \* MERGEFORMAT  Table 6-10 , between
1997 and 2007, revenue, payroll, revenue less payroll (a rough measure
of operating margin), and employment all increased for the total CWT
industry. At the segment level, performance was somewhat mixed with the
Waste Treatment and Disposal segment (NAICS 562211) and the Materials
Recovery segment (NAICS 562920) showing increases in all metrics, with
revenue increasing by 29.3 percent and 74.1 percent, respectively, for
the two segments; revenue less payroll also increased by 47.0 percent
and 209.3 percent, respectively. However, the Other Nonhazardous
Treatment and Disposal segment (NAICS 562219) showed decreases with
revenue and profitability declining by more than 26 percent.

The lack of true time-series data increases the degree of uncertainty of
any conclusions drawn from these data regarding the impact of the 2000
Final CWT Rule. However, based on the fact that between 1997 and 2007
both revenue and profitability of the CWT industry increased together
with other findings presented in this Section, it is likely that the
2000 Final CWT Rule did not adversely affect the CWT industry as a whole
or small businesses operating in the industry.

Table   STYLEREF 1 \s  6 -  SEQ Table \* ARABIC \s 1  10 : Key Economic
Performance Statistics for CWT Industry and Segments, 1997-2007

Year	Number of Establishments	Revenue (Millions; $2009)	Annual Payroll
(Millions; $2009)	Revenue Less Payroll (Millions; $2009)	Number of
Employees

Hazardous Waste Treatment and Disposal (NAICS 562211)

1997	512	$3,736	$967	$2,769	17,816

2002	696	$4,131	$1,173	$2,957	21,566

2007	779	$5,970	$1,901	$4,069	34,396

Total Percent Change 1997-2007	52.1%	59.8%	96.5%	47.0%	93.1%

Average Annual Growth Rate 1997-2007	4.3%	4.8%	7.0%	3.9%	6.8%

Other Nonhazardous Waste Treatment and Disposal Services (NAICS 562219)

1997	294	$975	$218	$757	5,082

2002	199	$695	$173	$522	3,673

2007	227	$716	$161	$555	3,170

Total Percent Change 1997-2007	-22.8%	-26.6%	-26.3%	-26.7%	-37.6%

Average Annual Growth Rate 1997-2007	-2.6%	-3.0%	-3.0%	-3.1%	-4.6%

Materials Recovery (NAICS 562920)

1997	765	$1,686	$368	$1,318	10,846

2002	938	$2,186	$488	$1,699	14,752

2007	1,129	$4,707	$628	$4,078	16,808

Total Percent Change 1997-2007	47.6%	179.1%	70.8%	209.3%	55.0%

Average Annual Growth Rate 1997-2007	4.0%	10.8%	5.5%	12.0%	4.5%

Total CWT

1997	1,571	$6,398	$1,554	$4,844	33,744

2002	1,833	$7,012	$1,834	$5,178	39,991

2007	2,135	$11,392	$2,690	$8,702	54,374

Total Percent Change 1997-2007	35.9%	78.1%	73.1%	79.7%	61.1%

Average Annual Growth Rate 1997-2007	3.1%	5.9%	5.6%	6.0%	4.9%

Sources: 1997 Economic Census; 2002 Economic Census; 2007 Economic
Census

Financial Performance in the CWT Industry Segments

EPA also looked at selected financial performance metrics – pre-tax
income margin, pre-tax return on assets, and interest coverage ratio
(earnings before interest and taxes over interest payments) – as
indicators of CWT industry segment performance before and since
promulgation of the 2000 Final CWT Rule. EPA used data reported by the
RMA for this assessment. RMA compiles and reports financial statement
information by industry as provided by member commercial lending
institutions. Because the financial statements received by RMA are for
businesses applying for credit from member institutions, the data do not
represent a random sample. In particular, the RMA data likely exclude
representation from the financially weakest businesses, which are
unlikely to seek financing from RMA member lending institutions.
However, the RMA data offers the advantage of being available by 6-digit
NAICS codes and for quartile ranges.

Creditors and equity investors review the following three measures as
criteria to determine whether and under what terms they will provide
financing for a business; all three measures are important to financial
success and firms’ ability to attract capital:

Pre-Tax Income Margin (PTIM): As defined by RMA, this measure is the
ratio of pre-tax income to net sales. This ratio measures company
profitability, i.e., how much out of every dollar of sales a company
actually keeps in   HYPERLINK
"http://www.investopedia.com/terms/p/profitmargin.asp" \t "_blank" 
earnings , independent of its tax circumstances. Profit   HYPERLINK
"http://www.investopedia.com/terms/p/profitmargin.asp" \t "_blank" 
margin  is very useful when comparing companies in similar industries.
A higher profit margin indicates a more profitable company that has
better control over its costs compared to its competitors. The PTIM
values reported by RMA and presented in this report are the average
values from financial statements provided to RMA. 

Pre-Tax Return on Assets (PTRA): As defined by RMA, this measure is the
ratio of pre-tax income to assets. This ratio measures the performance
and profitability of a business’ assets independent of tax
circumstances. PTRA is a comprehensive measure of a firm’s economic
and financial performance. If a firm could not sustain a competitive
PTRA on a post-CWT compliance basis, it most likely faced difficulty
financing its investments, including the outlays for compliance
equipment. The PTRA values reported by RMA and presented in this report
are the median values from financial statements provided to RMA.

Interest Coverage Ratio (ICR): As defined by RMA, this measure is the
ratio of earnings before interest and taxes to interest. This ratio
measures the firm’s ability to service its debt on the basis of
current, ongoing financial performance and to borrow for capital
investments. Investors and creditors will be reluctant to provide
financing to firms whose operating cash flow does not comfortably exceed
its contractual obligations. As ICR increases, the firm’s general
ability to meet interest payments and carry credit increases. ICR also
provides a measure of the amount of cash flow available for equity after
interest payments. The ICR values reported by RMA and presented in this
report are the median values from financial statements provided to RMA.

To assess the change in financial conditions over time, and assess
trends in the three CWT industry segments before and following
promulgation of the 2000 Final CWT Rule, EPA looked at RMA data for 1997
through 2008, when possible. Unfortunately, RMA data were not available
in a consistent framework for the three CWT segments, for the full
analysis period. For 1997 through 2002, RMA data are reported in the SIC
framework for SIC 4953: Refuse Systems. As mentioned earlier in this
document, in addition to the three CWT industry segments, this SIC
industry sector also maps onto NAICS 562212: Solid Waste Landfills and
NAICS 562213: Solid Waste Combustors and Incinerators. After 2002, RMA
data are reported in the NAICS framework. Given this inconsistency in
the data series over time, EPA organized the data in two ways:

Data in the SIC framework are reported for the years 1997-2002 as
provided by RMA. To provide a consistent time series of the
SIC-framework data for the years following 2002, EPA generated an SIC
4953-equivalent data series after 2002 by aggregating the data reported
for the 6-digit CWT and non-CWT NAICS, weighted by the 2007 value of
shipments from the 2007 Economic Census. Because RMA does not provide
data for NAICS 562213: Solid Waste Combustors and Incinerators, the SIC
4953-equivalent data series reported after 2002 include only the three
CWT industry segments and NAICS 562212: Solid Waste Landfills. This data
series shows the financial performance for the larger Refuse Systems
industry (SIC 4953), including both the CWT segments and the non-CWT
segment. 

Data are also reported in the NAICS framework beginning with 2002. These
data apply to the three specific NAICS segments in the CWT industry as
discussed elsewhere in this report. 

As shown in   REF _Ref278800358 \h  \* MERGEFORMAT  Figure 6-1 , the SIC
4953: Refuse Systems industry experienced minor fluctuations in
profitability, as measured by pre-tax income margin, throughout the
analysis period of 1997 through 2008. While profitability experienced a
slight drop in 2001, i.e., the first year after promulgation, the
industry rebounded in 2002 and generally experienced growth in
profitability through 2007. In 2007, profitability declined
significantly, likely resulting from the general slowdown in the U.S.
economy. During this year profitability dropped to approximately the
pre-promulgation level. The same pattern generally holds for the other
two financial metrics – pre-tax return on assets and interest coverage
ratio – except that (1) the decline in both ratios begins in 2006,
also likely due to the general economic decline, as opposed to 2007; and
(2) these ratios did not decline to the same extent relative to
pre-promulgation levels, as the profitability metric. 

Financial performance of all three CWT industry segments after the 2000
Final CWT Rule promulgation generally followed that of the Refuse
Systems industry (SIC 4953). Consequently, according to these financial
performance metrics, the 2000 Final CWT Rule does not appear to have
adversely affected financial performance of the CWT industry, either
overall, or in the individual CWT segments.

RMA also provides financial data by revenue size category, but for the
analyzed CWT industry segments, these data are not sufficiently complete
to assess financial performance over-time for the small entities only.
However, based on the reported number of RMA respondents with revenue
less than $12.5 million, at least half of the providers of the data
presented in   REF _Ref278800358 \h  \* MERGEFORMAT  Figure 6-1  would
be small according to the SBA criterion (see   REF _Ref278808419 \h  \*
MERGEFORMAT  Table 6-11 ). Consequently, the RMA data include a
substantial presence of small businesses, and the financial performance
data reported in   REF _Ref278800358  \* MERGEFORMAT  Figure 6-1  are
largely indicative of small business performance. 



Sources: Risk Management Association; 2002 Economic Census

a From 1997 through 2002 the data are reported for SIC 4953: Refuse
Systems. From 2002 through 2008 the data are reported for NAICS 562211:
Hazardous Waste Treatment and Disposal, NAICS 562219: Other Nonhazardous
Treatment and Disposal, and NAICS 562920: Materials Recovery Facilities.
The SIC-equivalent data reported for 2002 through 2008 were estimated as
value of shipments-weighted pre-tax income margin, interest coverage,
and pre-tax return on assets values reported for CWT NAICS 562211:
Hazardous Waste Treatment and Disposal, CWT NAICS 562219: Other
Nonhazardous Treatment and Disposal, CWT NAICS 562920: Materials
Recovery Facilities NAICS 562211 and non-CWT NAICS 562212: Solid Waste
Landfill, all of which map onto SIC 4953: Refuse Systems according to
the 1997 Economic Census Bridge Between NAICS and SIC.



Table   STYLEREF 1 \s  6 -  SEQ Table \* ARABIC \s 1  11 : Number of RMA
Respondents by CWT Segment and Year: 1997 - 2008

Year	Total Number of RMA Respondents	Percent of Potentially Small RMA
Respondents

	NAICS	SIC	NAICS	SIC

	562211	562219	562920	562212	4953	562211	562219	562920	562212	4953

1997	na	na	na	271	271	na	na	na	na	72%

1998	na	na	na	278	278	na	na	na	na	68%

1999	na	na	na	244	244	na	na	na	na	71%

2000	na	na	na	247	247	na	na	na	na	70%

2001	na	na	na	232	232	na	na	na	na	68%

2002	22	na	31	218	271	na	na	67%	67%	67%

2003	29	na	46	193	268	na	na	64%	66%	66%

2004	45	16	40	185	286	56%	na	74%	62%	63%

2005	32	14	42	169	257	68%	na	69%	60%	63%

2006	49	22	56	131	258	57%	na	63%	56%	58%

2007	65	23	63	121	272	52%	na	57%	53%	54%

2008	65	39	87	134	325	52%	45%	63%	53%	55%

Source: Risk Management Association

Conclusion

As described in the preceding sections, this assessment finds that the
CWT industry overall has shown favorable economic and financial
performance according to a range of metrics. Performance at the level of
the individual industry segments is more variable, with two of the three
CWT segments – Hazardous Waste Treatment and Disposal segment (NAICS
562211) and the Materials Recovery segment (NAICS 562920) – showing
generally favorable performance, and the third segment Other
Nonhazardous Treatment and Disposal segment (NAICS 562219) showing
somewhat weaker performance. However, the third CWT segment is the
smallest segment within the CWT industry. Moreover, in several
instances, trends of declining revenue or other business performance
metrics that are apparent after promulgation of the final rule had begun
before the rule, and thus cannot be attributed to the CWT rule.

More specifically, revenue, profitability, number of employees, and
number of CWT facilities increased for the two larger industry segments.
In addition, the total number of CWT firms as well as the number of
small firms increased in all three CWT segments. Finally, financial
performance measured in pre-tax profit margin, pre-tax return on assets,
and interest coverage ratio generally improved for the CWT industry as a
whole. 

As described in the introduction to Section 6, much of this review
considered the industry or its segments in aggregate, regardless of
business size – given the data limitations. However, because the CWT
industry, overall, is comprised substantially of small businesses,
information and related findings that are descriptive of the industry,
as a whole, are also generally applicable to the small business
component of the industry. 

Given these findings, EPA sees no basis for concluding that the CWT rule
has caused deterioration in the CWT industry, or specifically the
viability and performance of the industry’s small business component. 
EPA has also provided numerous small business tools to help small
entities understand and comply with the CWT effluent guidelines
limitations and pretreatment standards (Section 4, above).  The Agency
believes there is still a need for the CWT Rule and that it does not
overlap or conflict significantly with other government regulations. 
Also, EPA received no public comments on the section 610 review Federal
Register Notice, published in April 2010. Therefore, EPA has determined
that the Effluent Limitations Guidelines for the Centralized Waste
Treatment Category (40 CFR Part 437) as promulgated in 2000 and amended
in 2003 should be left unchanged as of the date of this analysis,
December 2010. 

 	This report is available online at
http://www.epa.gov/waterscience/guide/cwt/final/econanal.pdf.

 	This survey was a census of 452 CWT facilities identified at that
time. See the Development Document for the CWT Point Source Category
(http://water.epa.gov/scitech/wastetech/guide/treatment/develop_index.cf
m), Chapter 2 Data Collection and Chapter 5 Industry Subcategorization.

 	Questionnaire data were available for CWT facilities in the Metals,
Oils, and Organics subcategories known at that time.  The number of CWT
facilities in the oils subcategory grew substantially between the
questionnaire and the 1995 Proposed Rule.  As a result, EPA issued a
Notice of Data Availability (NODA) in 1996 to collect updated
information. EPA then modeled oils subcategory facility data using
information received in the questionnaire and information received
through the comments to NODA together with some publicly available
information.

 	To perform the firm-level analysis for the parents of these 118
facilities, EPA used available parent-level information from the survey;
for the remaining 27 facilities, EPA assumed that firm-level revenues
were the same as facility-level revenues.

 	The 2010 SBA small entity size criterion is $12.5 million in annual
revenue.

 Pounds removed data from the 2000 Final  CWT Rule Federal Register
Notice (65 FR 81241, December 22. 2000).

 	To assess demand for the CWT services EPA used TRI data for both sets
of analysis. However, the data are not comparable because of changes to
the TRI reporting requirements; in particular, a large number of
industries were added in addition to general changes to the database
structure and data retrieval options.  

 	For example, some non-CWT facilities may build on-site waste treatment
units. Further, certain activities not subject to the CWT rule, such as
underground injection wells, may be substituted for CWT services. 

 	Since the 2000 Final CWT Rule analysis was conducted, the Office of
Solid Waste (OSW) changed its definition of hazardous waste to identify
oily wastes as non-hazardous; consequently, unlike TRI data reported in 
 REF _Ref290373500 \h  \* MERGEFORMAT  Table 2-2 , TRI data reported in 
 REF _Ref278813998 \h  \* MERGEFORMAT  Table 6-1  do not include oily
wastes.

 	A facility is required to report hazardous and non-hazardous chemicals
to TRI if the facility meets the following criteria: 1) falls within a
TRI reportable sector or are federal facilities, 2) has 10+ employees,
and 3) manufactures, processes or otherwise uses certain hazardous
and/or nonhazardous chemicals above threshold amounts. A list of TRI
reportable industry sectors is available online at
http://www.epa.gov/tri/report/rfi/ry2010rfi_010511.pdf.

 	TRI provides data for years prior to 1998; however, because TRI
reporting requirements changed substantially during the years before
1998 and furthermore, because the data reported for earlier years showed
some anomalous year-to-year changes, which may be due to changes in
reporting requirements, EPA decided not to include data for the earlier
years in the analysis of demand for CWT services.

 	The SBA website provides the most recent size thresholds at
http://www.sba.gov/content/table-small-business-size-standards.

 	EPA’s original 2000 CWT rule analysis used the 1990 industry
questionnaire data and material submitted during the public comment
periods for the rule proposal and Notice of Data Availability (NODA) to
determine entities’ size using revenue. This data is out of date and
could not be used for the current effort. 

 	Under current policy, the U.S. Department of Justice (DOJ) determines
the degree of market concentration as measured by the
Herfindahl-Hirschman Index (HHI) as follows:  unconcentrated (HHI<1000),
moderately concentrated (1000<HHI<1800), and highly concentrated
(HHI>1800). An empirical study conducted by DOJ indicates that the 1000
and 1800 HHI thresholds approximately correspond to four-firm
concentration ratios of 50 percent and 70 percent, respectively (see
1982 Merger Guidelines available online at   HYPERLINK
"http://www.justice.gov/atr/hmerger/11248.pdf" 
http://www.justice.gov/atr/hmerger/11248.pdf ). Accordingly, for this
review, which relies on concentration data, EPA judges that markets with
four-firm concentration ratios exceeding 70 percent are highly
concentrated, and between 50 and 70 percent as moderately concentrated.
Markets with four-firm concentration ratios below 50 percent are
considered unconcentrated.

 	Statistics of U.S. Businesses and Economic Census data may differ as a
result of data collection methods and publication timing. SUSB data is
collected by the IRS, while Census data is collected through a mail
survey and is continuously updated. Different time frames for data
publication lead to differences in the number of firms, employees, and
establishments recorded and their classification into NAICS codes.

 	The revenue, payroll and rough operating margin values are in constant
2009 dollars, so the observed increases are not due merely to inflation.


RFA Section 610 Revenue of the Effluent Limitations Guidelines and
Standards for the CWT Industry	

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December 10, 2010 

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RFA Section 610 Review of the Effluent Limitations Guidelines and
Standards for the CWT Industry	

RFA Section 610 Review of the Effluent Limitations Guidelines and
Standards for the CWT Industry	

  PAGE  6 		December 2010

  DOCPROPERTY  "PubDate"  \* MERGEFORMAT    December 2010		  PAGE  7 

NAICS

SIC

SIC

NAICS

NAICS

SIC

