The Honorable Michael S. Regan, Administrator, Environmental Protection Agency (June 29, 2023)

Summary

The House Committee on Small Business writes to EPA Administrator Regan to inquire about the recent proposed rule change that would ban the manufacture and use of Perchloroethylene (PCE). The letter states that the proposed rule prohibits the importation, manufacture, and use of PCE in most industrial and commercial enterprises and creates a 10-year PCE phaseout plan for dry cleaning and spot cleaning businesses, and that the EPA estimates it may cost each business up to $10.4 million. It requests information no later than July 13, 2023, including the projected average cost for an individual small business, given that the proposed rule indicates approximately 12,202 small businesses would be impacted.

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Full text

                                               June 29, 2023

The Honorable Michael S. Regan
Administrator
Environmental Protection Agency
1700 G Street NW
Washington, D.C. 20552

Dear Administrator Regan:

        The House Committee on Small Business writes to inquire about the recent proposed rule
change that would ban the manufacture and use of Perchloroethylene (PCE). This proposed rule
prohibits the importation, manufacture, and use of PCE in most industrial and commercial
enterprises, establishes prescriptive workplace controls for PCE in laboratory uses, and creates a
10-year PCE phaseout plan for dry cleaning and spot cleaning businesses. 1 This would force
thousands of small businesses to buy new machines and products that do not use PCE—which
the EPA estimates may cost each business up to $10.4 million.2 It appears that the EPA may not
have properly considered small entities during this rulemaking process.

       It is important for agencies to correctly evaluate small businesses interests—which make
up 99.9 percent of all businesses in the United States—when passing any new rule. America’s
small businesses deserve to have their voices heard and considered. We therefore request the
following information as soon as possible but no later than July 13, 2023:

    1. The proposed rule indicates that approximately 12,202 small businesses would be
       impacted by this rule, and that the estimated cost for each business could range from
       $850 to $10.4 million.3 Given this substantial variation, what is the projected average cost
       for an individual small business?
    2. What is the total cost a small business could expect to pay to retool their facilities to no
       longer use PCE, including costs incurred by small businesses throughout the 10-year
       phase-out period?

    3. How would this rule alter the cost for entrepreneurs seeking to start a business in one of
       these industries?

1
  Perchloroethylene (PCE); Regulation Under the Toxic Substances Control Act (TSCA), 88 Fed. Reg. 39652 (2023)
(to be codified at 40 CFR 751).
2
  Id. at 39703.
3
  Id.
The Honorable Michael S. Regan
June 29, 2023
Page 2 of 2

          4. The proposed rule anticipates that removing PCE from the production process would cost
             small businesses approximately 1 percent of their annual revenues, and that dry cleaners,
             who represent under half of the effected industries, have a profit margin of approximately
             4.8 percent of annual sales.4 What is the current average profit margin for the remaining
             6,000 small businesses impacted by this rule?

          5. To what extent will large dry cleaners, many of whom have already switched to PCE-free
             dry cleaning, benefit from this regulation?

       To schedule the delivery of your response or ask any related follow-up questions, please
contact Committee on Small Business Majority Staff at (202) 225-5821. The Committee on
Small Business has broad authority to investigate “problems of all types of small business” under
House Rule X. Thank you in advance for your cooperation with this inquiry.

                                                 Sincerely,




_________________________                                 _________________________
Roger Williams                                            Pete Stauber
Chairman                                                  Member
Committee on Small Business                               Committee on Small Business



_________________________                                 _________________________
Dan Meuser                                                Beth Van Duyne
Member                                                    Member
Committee on Small Business                               Committee on Small Business



_________________________                                 _________________________
Maria Salazar                                             Jake Ellzey
Member                                                    Member
Committee on Small Business                               Committee on Small Business




cc:          The Honorable Nydia M. Velasquez, Ranking Member
             Committee on Small Business

4
    Id.


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