Ohio requires numerous amounts of training. There is also business meetings to the running of the fire department. The volunteers do a major part of our equipment repair. They do the upkeep of the building, they paint the walls, they scrub the floors, and so forth. They do many service projects at our local schools. And then, of course, there is always the fund raisers to help supplement the tax budget.

The majority of the fire departments in the State of Ohio operate on very small budgets and the majority of them are volunteers, and these are volunteers giving of their personal time for public service. They want to be informed and to be good volunteers, because it is not only for their protection, but also for that of the community, but they are getting tired of being told we have to do this amount of training, and now you have to add this amount of training. It is taking their personal time from their families.

Our Fire Chief recently visited one of the township meetings and he presented a letter to the Trustees concerning the fire department, and one of his statements was the most devastating threat to the exitence of volunteers is regulation at this point.

The Fire Chief feels that our fire department will be in jeopardy unless changes are made concerning the rules and regulations. He does not plan to serve as Fire Chief after December 31st of this year, and he cites too much time, too many regulations, and too much added responsibility for a volunteer.

As we think over the list of volunteers we have, we have many qualified volunteers who could assume that responsibility, but who else wants to take on the responsibility that has haunted our Fire Chief these last few years?

Mr. Chairman, our firemen want to be prepared for hazardous material emergencies. Warren Township is their home, that is where they live and, of course, they want to protect it and keep it well. They want to be the very best that they can.

I feel that we are not trying to shrug our responsibilities. For the underground storage tanks, currently our road department is already measuring the gasoline and diesel fuel tanks twice a day. They measure them when they come in the morning and after they have used them. We do not have a current metered pump to measure the gallons, so we measure in the morning when they come, they measure it when they leave in the evening, and then the next morning they measure it again to make sure we have not had a leak during the night.

As far as the fire department is concerned, they have a more upgraded pump as so they keep a daily log of every gallon that is taken out of the gasoline tanks that are there.

As far as SARA title III, we have 26 volunteers at this time, and they have already started the training. On the first night of training, 25 of the 26 were there. The one that was not there was working, that was the only reason he was not there. So they are not trying, but they are making a real effort. I personally feel the relief has to come for small governments on the basis of our small

ness.

Our underground storage tanks are not the ones causing the big problems. We are not the big players in this situation. We as public officials have a reason to clean up the process, because we are

local, grass roots government, and we are here to stay, and we want our township or village or whatever to stay in the condition that it is in.

As far as I can see, the solution to our problems is the Federal agencies being flexible when making the requirements needed, to make the ability to comply to the regulations.

Thank you, Mr. Chairman, for listening to my comments. I thank you for this time.

Chairman GLENN. Thank you very much.

The next witness, Mr. Jeffrey Leiter, Small Business Legal Representative, Collier, Shannon, Rill and Scott.

Mr. Leiter?

TESTIMONY OF JEFFREY L. LEITER, SMALL BUSINESS REPRESENTATIVE, COLLIER, SHANNON, RILL AND SCOTT 1

Mr. LEITER. Thank you, Mr. Chairman.

As you indicated, I appear today on behalf of small businesses and their trade associations. I would like to confine my testimony this morning to examples and experiences I have encountered over the last 81⁄2 years working on Federal environmental regulations for two small business gasoline marketing organizations, the Society of Independent Gasoline Marketers of America (SIGMA) and the National Association of Convenience Stores (NACS).

In the interests of time, I will summarize my testimony. At the outset, it is unnecessary to explain to the Committee the importance of small businesses to this country's economy. While the definition of a small business will vary, a constant is that the financial resources available to small businesses for complying with environmental regulations are more limited than those available to larger companies.

Small businesses are naturally concerned whether the environmental compliance costs can be passed on to their customers in the form of higher prices. Now, please do not misunderstand me: Small businesses are not seeking to avoid their responsibilities for compliance with environmental regulations. Instead, they seek assurances that there actually will be some incremental environmental benefit for each dollar they are required to spend.

In addition to the significant economic impacts on small businesses, the Committee should keep in mind that small businesses have limited staffs to respond to environmental rule-makings and regulations, and that further they must divert substantial time and resources to paperwork and recordkeeping requirements.

I think it is interesting to point out-and several of my colleagues have touched briefly on it-the fact that EPA has recently identified some 85 new and forthcoming regulations that will become effective over the next 5 years that will affect small businesses as well as small governments.

For example, take SIGMA and NACS members for whom LUST (leaking underground storage tanks) rapidly has become SEX (soaring environmental exposures). The principal environmental regulations beyond underground storage tanks that will affect many of

these small gasoline marketers include the requirement in some non-attainment areas for ozone in this country to install devices on the gasoline pumps, commonly known as stationary Stage II. In addition, we are looking at possible regulation of the allowable lead content in gasoline, as Mr. Lash noted, fuel volatility, diesel fuel standards, used oil and used solvent management, disposal of hazardous wastes, Class V injection wells under the Safe Drinking Water Act, stormwater runoff permits, and compliance with the community right-to-know_provisions, primarily under sections 311 and 312 of title III of the Superfund Amendments and Reauthorization Act of 1986.

I offer this description of environmental regulation—or SEX-to the Committee to highlight several points. First, for some small businesses, such as my gasoline marketer clients, there is significant regulatory activity "on the plate," and it is not going to go away.

Thus, in analyzing the effects of any one particular environmental regulation on small businesses as well as small governments, it is incumbent for EPA to have a clear understanding that its rules do not occur in a regulatory vacuum. The regulatory overlaps need to be considered in developing these rules.

Second, simply learning how to comply with environmental requirements is a time-consuming task for any business, but particularly for small businesses. Moving up the learning curve can be tremendously expensive. All too often, I have seen a significant, initial period of confusion when new regulations are issued by the agency.

Third, the consequential effects of environmental regulations on small businesses often are overlooked. The best example here is that, in order to comply, you need to generate the internal capital to install the necessary equipment and then to maintain it. For many small businesses, going to the bank and obtaining that loan for environmental compliance is difficult, if not impossible.

The banks, because of the legislative-judicial climate, as well as the regulatory climate, have become very leary of making loans for environmental compliance for small businesses, particularly where the property must be used to secure the note.

Recently, we have seen the lending institutions impose very stringent loan conditions, such as substitution of collateral or the acceleration of the note upon the occurrence of an environmental impairment.

Because my time is limited, I do not wish to overdramatize the responsibilities and burdens placed on small businesses by environmental regulations. However, from my brief discussion, I hope it is evident to the Committee that the need for environmental regulations to protect human health and the environment must take into account the abilities, both technical and economic, of small entities to comply with the rules without becoming overburdened and noncompetitive by the responsibilities and the costs.

I should take a brief moment to mention that many small businesses, with their entrepreneurial spirit and talents, do view environmental regulations as possible business opportunities and are taking advantage of that.

My colleagues this morning have done an excellent job of explaining many of the problems that environmental regulations create for State and local governments, particularly municipalities. The range of problems, similar to small businesses, create compliance difficulties, particularly for the smaller communities.

Many municipalities, because of their structured demand for services, have a limited margin, similar to a business, for expanding their financial obligations caused by the requirements of the environmental compliance.

While it is obvious that, on a different tact, small governmental units are regulated entities, under many of these environmental regulations, what is becoming increasingly of concern to many small businesses is that the same governmental units increasingly are being called upon to enforce Federal environmental regulations.

The underground storage tank program and SARA title III are two of the best examples. While logic dictates that the unit of government closest to the problem should be in the best place to enforce, I am not sure this is always the case.

Consistency in application and interpretation of the rules becomes problematic, and, hopefully, we will avoid that with, for example, the corrective action requirements under the underground storage tank program which were promulgated yesterday by the Environmental Protection Agency.

I assume that the EPA and the Small Business Administration witnesses that will follow will describe the requirements and opation of the Regulatory Flexibility Act. While there is always room for improvement, I think I would like to go on record as saying that EPA, as far as the Federal agencies and departments go, has done the best job of incorporating Reg Flex analysis in the rulemaking process. In most cases, the other departments and agencies routinely resist or go out of their way to avoid considering small business impacts, arguing that the rule-makings are exempt from the Reg Flex requirements.

Let me just take a few moments to discuss with the Committee some of the successes small businesses have had under the Reg Flex Act at EPA. Because the final underground storage tank rules were issued only yesterday by EPA-and I should distinguish that the rules that come out yesterday were technical requirements for new and existing tanks, these would go from installation procedures to cleanup requirements.

The financial responsibility rules, that two of my colleagues have discussed, were not released yet. They are due out in another month or 6 weeks.

In any event, Congress, when it issued or directed EPA to implement this tank program back in 1984, told the agency to consider the technical capabilities of small businesses in issuing these rules. Now, I think EPA's Office of Undedrground Storage Tanks, in developing the technical standards for underground storage tanks, conducted extensive Reg Flex analyses. The agency staff and their contractors conducted substantial outreach to the regulated community, including small businesses, to obtain data. Based upon these analyses, I think EPA did a thorough and thoughtful job in the rules they issued yesterday. While I have my problems with

the rules, they did provide substantial flexibility to the regulated community in terms of dealing with their underground storage tanks.

While it is too early to heap praise on the program, particularly when it remains to be seen how many small businesses and small entities may be forced to close or to endure considerable financial problems, I think the lesson that can be learned from the tank program on the technical side, again, is that rules that protect human health and the environment and rules that minimize impacts on small entities are not mutually exclusive.

The success of the tank technical standards, much like the development, will depend on whether small businesses, small governments, EPA, SBA, other tank owners and operators, as well as the environmental community, can work together.

I would just like to mention briefly on the financial responsibility rules, that EPA, at least as far as small businesses are concerned, has done an excellent Reg Flex analysis. I understand what my colleagues have said about the failure of EPA on the financial responsibility side to properly address their concerns.

From what I have been able to gather from talking to EPA staff, I hope my colleagues at the table will be pleasantly surprised when EPA issues its final financial responsibility rules from underground tanks next month.

Another area of success at EPA under Reg Flex has been the title III rules. For example, under the section 311 and 312 reporting requirements for data sheets and routine inventories, EPA is continuing to assess a permanent threshold that would result in less paperwork being generated by small business.

EPA is still interested, for example, in allowing gasoline marketers to submit their tank notifications under the tank program to the title III program in lieu of the routine inventory reports due next March. The agency, I hope, will follow through on that.

I should point out, however, that as part of the title III rules, EPA estimates that typical compliance costs for small business under the community right-to-know program is $10,000 a year.

Where the Reg Flex process and analyses have broken down at EPA, there appears to be several recurring reasons. First, in some instances the Reg Flex analysis has been an afterthought. The appropriate analysis of small business impacts takes place subsequent to the issuance of a notice of proposed rulemaking, and I think that largely the problem that the small government colleagues have had is probably the same thing, that EPA just has not thought about those small entities when going through the process.

In addition, in many instances EPA staff I do not feel have a true appreciation of the pressures, economic and otherwise, on small businesses. This shortsightedness, while I do not believe is intended, largely is the result of a failure to perform outreach to small businesses and their trade associations early on in the regulatory process.

There also is the problem with the consistency of regulatory flexibility analyses at EPA. While the methodology and the quality of data have improved, further progress is necessary. The best example I can offer the Committee here is where the costs of environ