environmental regulations – Dickinson Law's Inside Entrepreneurship Law Blog

By: Lisa Dang

Small business owners must navigate a complex maze of environmental laws. The Environmental Protection Agency (EPA) has issued a number of regulations to oversee and control the impact businesses have on the environment. While businesses must adhere to the EPA’s environmental regulations, these acts are often complex and difficult to understand. To make matters worse, studies have shown that environmental regulations disproportionately burden small businesses and may impose more stringent requirements on new operations.^[1]

Regulations to keep in mind while operation your business

Environmental policies and regulations are constantly changing and being updated. It is important to know which regulations can affect your business.

CLEAN WATER ACT

The Clean Water Act (CWA)^[2] regulates the discharge of pollutants into navigable waters in order to restore and maintain the chemical, physical, and biological integrity of U.S waterways. The CWA prevents businesses from emptying wastewater or other pollutants into surface water (e.g., streams, rivers, lakes, reservoirs, wetlands, and creeks) unless they have a permit. However, a limited number of activities are exempt from acquiring permits, such as qualifying farming activities.

If your business requires discharging pollutants (e.g., sewage, solid waste, chemical waste, discarded equipment, and biological materials) into waterways, it is necessary to obtain a National Pollutant Discharge Elimination System (NPDES) permit. The permit can be issued by the EPA or by state government agencies. NPDES permits, if approved, will provide the right to discharge a limited amount of a specified pollutant.

CLEAN AIR ACT

The purpose of the Clean Air Act (CAA) is to reduce emissions that pollute ambient or outdoor air to protect human health and the environment.^[3]The specific requirements affecting your business will often depend on 1) how badly your local air is polluted, and 2) the kinds and quantities of pollutants your business emits into the air. It is difficult to populate a single list that details every kind of small business that will be affected by the CAA but you should keep in mind that your business may be subject to one or more controls if your business:

- - - Services and repairs motor vehicles or air conditioning systems
    - Performs work involving auto body painting, the degreasing of machinery, and agricultural chemicals
    - Operates a print shop, bakery, or dry cleaners
    - Sells or distributes gasoline, heating oil, or other petroleum products
    - Emits volatile organic compounds and nitrogen oxides in an area where smog has been identified as an air quality problem

HAZARDOUS WASTE REGULATION

Many small businesses may not even be aware that they generate hazardous waste. Almost all retail stores, including grocery or convenience stores, drug stores, and home improvement stores produce hazardous waste. The Resource Conservation and Recovery Act (RCRA) governs the management of hazardous waste.^[4]The EPA has established three categories for the disposal of hazardous waste, which depends on how much waste a business generates:

1. 1. 1. conditionally exempt small quantity generators (CESQG) (produces less than 220 lbs of hazardous waste per month)
    2. small quantity generators (SQG) (produces between 220–2,200 lbs per month)
    3. large quantity generators (LQG) (more than 2,200 lbs per month)

The majority of business owners will probably fall into the first or second category (CESQG or SQG). Similar to small businesses affected by the CAA, waste is typically generated by dry cleaners, construction operations, car repair shops, photo processing shops, and pesticide user/ application services.

What Counts as Hazardous Waste?

Waste is any solid, liquid, or gas that is either chemically or biologically discarded, burned, incinerated, or recycled. Hazardous waste is classified into three broad categories.

1. 1. 1. Listed waste: often comes from manufacturing processes or commercial product chemical waste. Your waste is considered hazardous if it is on one of the four lists published in the Code of Federal Regulations, 40 CFR Part 261.
    2. Character waste: exhibits characteristics of ignitable waste, corrosive waste, reactive waste, or toxic waste.
    3. Mixed Radiological Wastes: has both a hazardous and a radioactive component.

Managing and Disposing of Hazardous Waste

First, most small businesses will fall into the SQG category and therefore must obtain an EPA identification number. CESQGs are exempt from this requirement. Second, SQGs are permitted to accumulate the waste on-site for up to 180 days without a permit. Last, SQG may send their waste only to a regulated Treatment Storage and Disposal Facility or recycler. Managing and disposing of hazardous waste may be complicated. Check with your appropriate state authority to ensure you are properly handling, storing, and transporting hazardous waste.

COMPLIANCE AND PENALTIES: HOW TO AVOID VIOLATIONS

The penalties for violating regulatory acts such as the CWA, CAA, and the improper treatment, storage, or disposal of hazardous waste impose a significant financial burden that small businesses might not be able to absorb. Each year, the EPA publishes an annual inflationary increase to the fine amounts for civil penalties assessed under its authority.^[5] As of January 12, 2022, the penalty for violations are as follows:

- - - Clean Water Act (CWA): $59,973
    - Clean Air Act (CAA): $109,024
    - Resource Conservation and Recovery Act (RCRA, Hazardous waste): $109,024

Over the past decade, the EPA has recognized the burden environmental regulations place on small businesses. The EPA has developed several comprehensive guidelines and has required states to develop assistance programs specifically to address the needs of small businesses to ensure regulatory compliance.^[6] Under the RCRA, the EPA provides industry-specific guidance to help with hazardous waste management.

Furthermore, the EPA will eliminate or significantly reduce penalties for small businesses that voluntarily discover violations of environmental law and promptly disclose and correct them under the Small Business Regulatory Enforcement Fairness Act. A business has 21 days from the time it discovers that a violation has, or may have, occurred to disclose the violation in writing to EPA.

conclusion

Understanding and complying with the various environmental regulations that may affect your small business ensures your business will not bear the significant financial burdens imposed by civil penalties. Although the regulations may seem daunting for a small business, following the guidelines set by the EPA or contacting your state’s Small Business Environmental Assistance Program (SBEAP)^[7] will help you to meet regulatory compliance.

This post has been reproduced with the author’s permission. It was originally authored on February 7, 2022, and can be found here.

Lisa Dang, at the time of this post, is a rising 3L at Penn State–Dickinson Law. Dang hails from Richmond, Virginia, and graduated from the College of William and Mary with a BS in Neuroscience and Philosophy. Before coming to law school, Dang worked as a Research Assistant in the division of Hematology, Oncology & Palliative Care at Virginia Commonwealth University. Dang has a wide-range of interests and has been exploring many different classes and areas of law. In between work and school, Dang plays competitive Ultimate Frisbee.