## Economic Analysis of the

Bulk Pesticides

Containment Structures Final Regulation

June 1, 2006Executive Summary

The Environmental Protection Agency (EPA) is finalizing the standa rds for bulk pesticide containment structures as required under Sectio n 19 of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). The final standards include design requirements for new and existing secondary containment structures and pads at bulk ag ricultural pest icide storage facilities. Improvements in the containment of bulk pesticides at these facilities will help to protect humans and the environment from leaks and spills from bu lk pesticide storage, and to protect soil and

water from contamination due to pesticide dispensing operations.

The total annual cost of compliance with the final standards for bulk pesticide containment structures to the regulated i ndustries (i.e., agricultural pest icide refillers and agricultural commercial applicators) is estimated to be $2.93 million. This estimate is based on an examination of the current level of complian ce for bulk agricultural pesticide containment facilities with the final standards, and the cost of moving from the current level of compliance to the final standards. The annual cost to agricult ural pesticide refillers is estimated to be $2.71 million, while agricultural commercial applicat ors are estimated to incur costs of $0.23 million per year. The analysis of the estimated small business impacts of the final standards for bulk pesticide containment structures suggests that there will not be a sign ificant number of small bulk pesticide storage facilities impacted by the final standards.

The final bulk pesticide containmen t standards are expected to resu lt in benefits to both humans

and the environment due to a reduction in the numb er of accidental spills and leaks of pesticides at bulk pesticide storage facilities. The benefits from avoiding the costs of remediation of such spills are estimated to be between $12.2 milli on and $18.6 million annually. Due to a lack of

data on human and environmental effects from exposure to pesticides from bulk pesticide containment related spills, the qua ntified benefits of the final st andards do not include the value of reducing risk to humans and the environment. However, a number of published studies document contamination at bulk agricultural pestic ide storage facilities, a nd it is expected that

the benefits to humans and the environment of reducing the number of accidental pesticide releases from these facilities could be significant.

The bulk pesticide containment regulations we re proposed in 1994. In response to public comments a number of changes were made to the proposed bulk pesticide containment standards, and these changes are reflected in the final rule . Due to these changed standards, the total estimated cost of compliance fell by more th an two-thirds, from $12.96 million for the proposed rule to $2.93 million for the final rule. Among the more significant changes in the standards that

led to a lower estimated cost for the final rule are the elimination of requirements to retrofit existing structures during the interim peri od, the elimination of a hydraulic conductivity standard, and a reduction in capacity requirements.The estimated benefits of compliance with the bulk pesticide containment structures regulations increased 60% from the proposed to the final rule. The increase is due to the different assumptions made in each analysis regarding the probability of an accidental release from a bulk pesticide storage facility (i.e., 1.5% for the proposed regula tions versus 1.0% for the final regulations), and the number of bulk storage facilities that could have an accidental releas e (i.e., 3,000 bulk pesticide storage facilities for the proposed regulations ve rsus 5,811 bulk pesticide storage facilities for the final regulations). The analysis of the proposed re gulations did not quantify the benefits of reduced

risk to humans and the environment. As is th e case with the current analysis of the final containment standards, the lack of available data on the human and e nvironmental effects of pesticide exposure from the bulk pe sticide storage facilities made such an analysis infeasible.7/13/2006 Containment EA, page i 

### Table of Contents

1.0 Introduction............................................................................................................... ............... 1 1.1 The Need for Regulation................................................................................................ 2 1.2 Pesticide Container Design and Residue Removal and Containment Structures: Regulatory Background of the Final Rule ..................................................................... 4 1.3 Scope of the Economic Analysis for the Final Pesticide Contai nment Regulations...... 5 1.4 Estimated Costs and Benefits of Complia nce with the Final Pe sticide Containment Regulations.................................................................................................................... . 6
2.0 Final Bulk Pesticide Containment Regulations and Changes in the Regulations from the Proposed to Final Rule......................................................................................................... .... 8 2.1 Final Bulk Pesticide Containment Regulations.............................................................. 8 2.2 Standards for New and Existing Pe sticide Containment Structures .............................. 9 2.2.1 Final Critical, Performance-Based Crite ria for Existing Containment Structures

............................................................................................................................ 9

2.2.2 Final Standards for New Pesticide Containment Structures............................. 10

2.2.3 State Pesticide Containment Standards............................................................. 11 2.3 Changes in the Final Pesticide Containm ent Regulations from the Proposed to the

Final Rule..................................................................................................................... 12 2.3.1 General Requirements....................................................................................... 12 2.3.2 Capacity Standards............................................................................................ 15 2.3.3 Interim Standards for Existing Structures......................................................... 16 2.3.4 Scope of the Containment Regulations............................................................. 16 2.4 Comparison of the Estimated Costs and Bene fits of the Final and Proposed Standards

17
3.0 Baseline Compliance Profile of the Regulated Community.................................................. 19 3.1 Compliance Profile of Agricu ltural Pesticide Refillers ............................................... 24 3.1.1 Total Number of Agricultural Pesticide Refillers............................................. 24 3.1.2 Number of Agricultural Pesticide Ref illers with Bulk Pesticide Storage......... 27 3.1.3 Agricultural Pesticide Refillers Requ iring Installation of New Containment

Structures ......................................................................................................... 29 3.1.4 Agricultural Pesticide Refillers Requ iring Retrofitting of Existing Containment

Structures ......................................................................................................... 31 3.2 Compliance Profile of Agricultu ral Commercial Applicators ..................................... 34 3.2.1 Total Number of Agricultural Commercial Applicators................................... 34 3.2.2 Number of Agricultural Commercial Applicators With Bulk Pesticide Storage

.......................................................................................................................... 36 3.2.3 Independent Applicators Requiring Installation of Ne w Containment Structures

.......................................................................................................................... 36 3.2.4 Agricultural Commercial Applicat ors Requiring Retrofitting of Existing

Containment Structures.................................................................................... 37

3.3 Baseline Economic Profile of the Regulated Community ........................................... 38 3.3.1 Economic Profile of Agricult ural Pesticide Refillers ....................................... 42 3.3.2 Economic Profile of Agricultur al Commercial Applicators ............................. 44
4.0 Facility Impact Analysis................................................................................................... ..... 467/13/2006 Containment EA, page ii 4.1 Compliance Costs for New Containment Structures ................................................... 48 4.1.1 Representative Facility Costs (Non-Di scounted) for Agricultural Refillers..... 53 4.1.2 Representative Facility Annualized Costs to Agricultural Refillers................. 56 4.1.3 Representative Facility Costs (Non-Di scounted) for Commercial Applicators 64 4.1.4 Representative Facility Aggreg ate Annualized Costs to Commercial Applicators ....................................................................................................... 64 4.1.5 Total Aggregate Annualized Costs ................................................................... 66 4.2 Compliance Costs for Existi ng Containment Structures.............................................. 69 4.2.1 Representative Facility Costs (Non-Di scounted) for Agricultural Refillers..... 71 4.2.2 Representative Facility and Aggreg ate Annualized Costs to Agricultural

Refillers............................................................................................................ 74 4.2.3 Representative Facility Costs (Non-Di scounted) for Commercial Applicators 76 4.2.4 Representative Facility and Aggreg ate Annualized Costs to Commercial Applicators ....................................................................................................... 78 4.2.5 Uncertainty of Cost Estimates .......................................................................... 81 4.2.6 Total Aggregate Annualized Costs ................................................................... 82
5.0 Industry and State Impact Analysis ....................................................................................... 83 5.1 Aggregate Compliance Costs of Regulations .............................................................. 83 5.1.1 Aggregate Annualized Costs under the Final Regulations ............................... 83 5.1.2 Comparison of Aggregate Annualized Costs: Proposed Versus Final Regulations....................................................................................................... 87 5.2 Economic Impacts of the Final Pe sticide Containment Regulations ........................... 93 5.2.1 Facility-Level Impacts for Agri cultural Refiller Facilities ............................... 94 5.2.2 Facility-Level Impacts for Comm ercial Applicator Businesses ....................... 95

5.3 State Level Costs.......................................................................................................... 97

6.0 Benefits of Bulk Pestic ide Storage Containment................................................................... 98 6.1 Types and Evidence of Spills and Leakage................................................................ 100 6.1.1 Evidence of the Occurrence of Spills.............................................................. 100

6.1.2 Evidence of On-Site and Off-Site Contamination .......................................... 102

6.2 Valuation of the Benefits of the Pesticide Containment Rule.................................... 108 6.2.1 Theoretical Approach...................................................................................... 108

6.2.2 An Outline of the Estimation of the Tota l Benefits of a Pesticide Containment

Rule ................................................................................................................ 111

6.3 Estimation of the Partial Benefits fr om Avoided Costs of Remediation ................... 111

6.3.1 Avoided Costs of Remediation to Agricultural Pesticide Refillers and Agricultural Commerci al Applicators............................................................ 112

6.3.2 Uncertainties in the Estimate of Avoided Remediation Costs........................ 116

6.3.3 Uncertainties in the Estima te of the Benefits of th e Pesticide Containment Rule

........................................................................................................................ 117

6.4 The Potential Human Health Risks Asso ciated with Exposure to Pesticides ............ 118 6.4.1 Exposed Populations....................................................................................... 118

6.4.2 Pesticides Evaluated........................................................................................ 120 6.5 The Potential Ecological Damages Associ ated with Exposure to Pesticides ............ 122 6.5.1 Exposed Populations....................................................................................... 124

6.5.2 Pesticides Evaluated........................................................................................ 1247/13/2006 Containment EA, page iii 6.6 Summary of the Benefits of the Final Bulk Pesticide Storage Containment Regulations and Comparison with Proposed Regulations ............................................................. 125 6.6.1 Summary of the Benefit of the Final Containment Regulations..................... 125 6.6.2 Comparison of the Benefits of the Fi nal and Proposed Containment Regulations

........................................................................................................................ 126

References..................................................................................................................... .............. 127



### Appendixes

Appendix A: Methodology for Calculat ing Annualized Compliance Costs .............................. 136
Appendix B: Non-Discounted Facility-Level Costs of Compliance for the Bulk Pesticide

Containment Standards........................................................................................................ 13 8
Appendix C: Comparison of Critical and State Containment Standards.................................... 149
Appendix D: Overview of Current Federal and State Regulations............................................. 155 D.1 Federal Regulations.................................................................................................... 155 D.2 State Regulations........................................................................................................ 15 6

D.3 Business and Market Considerations ......................................................................... 159
Appendix E: EPA’s Proposed Pestic ide Containment Standards............................................... 160 E.1 General Requirements for Containment Structures ................................................... 160 E.2 Secondary Containment for Stat ionary Liquid Bulk Containers ............................... 161 E.3 Secondary Containment for Stat ionary Dry Bulk Containers.................................... 161 E.4 Secondary Containment for Pesticide Dispensing Areas........................................... 161 E.5 Recordkeeping Requirements .................................................................................... 162 E.6 Stationary Containers Included ..................................................................................... 163
Appendix F: Comparison of the Proposed and Final Containment Regulations........................ 164
Appendix G. Estimated Number of Affected Facilities............................................................. 168
Appendix H. Representative Facility Costs of Compliance with Secondary Containment Regulations .................................................................................................................... ...... 179
Appendix I. Facility Annualized Co sts as a Share of Annual Revenue...................................... 1967/13/2006 Containment EA, page iv 

### Tables and Figures

Table 1.1. Quantified Costs and Benefits of the Final Containment Regulations (2005$) a .......... 7

Table 2.1. Critical Standards for Ex isting Containment Structures............................................. 10

Table 2.2. Bulk Pesticide Containment Standards in Addition to the Critical Standards for New

Containment Structures ......................................................................................................... 11
Table 2.3. Annual Compliance Cost Comp arison Between the Final and Proposed Pesticide Containment Standards (2005$)............................................................................. 17

Table 2.4. Comparison of Benefits for the Prop osed and Final Containment Standards (2005$)18

Table 3.1. Industries Regulated by EPA’s Containment Regulations ......................................... 21
Table 3.2. Regulatory Compliance Baseline, Agricultural Pesticide Refillers and Commercial (Aerial and Ground) Applicators........................................................................................... 26
Table 3.3. Representative Agricultural Pesticid e Refilling Facilities, Bulk Pesticide Storage Containers and Pesticide Dispensing Areas a ......................................................................... 39
Table 3.4. Economic Profile of Agricultural Pesticide Refiller s by Entity Size.......................... 41
Table 3.5. Representative Agricu ltural Aerial Application Faci lities, Bulk Pesticide Storage Containers, and Pesticide Dispensing Areas a ........................................................................ 42
Table 4.1. Storage Area and Wall Height of Repr esentative Agricultural Refiller Facilities ..... 50
Table 4.2. Summary of Facility-Level Costs (2 005$) to Install New Secondary Containment Units and Pads, Representative Agricultural Re filler and Commercial Applicator Facilities

54
Table 4.3. Summary of Annualized Costs for Compliance with Containment Regulations, Representative Facility Size for Agricultura l Refillers and Commercial Aerial and Ground Applicators, a Install NEW Secondary Containment Units, 2005$, 3% Discount Rate ........ 57

Table 4.4. Summary of Annualized Costs for Compliance with Containment Regulations, Representative Facility Size for Agricultura l Refillers and Commercial Aerial and Ground Applicators, a Install NEW Secondary Containment Units, 2005$, 7% Discount Rate ........ 58

Table 4.5. Summary of Annualized Costs for Co mpliance with Containment Regulations, Representative Facility Size for Agricultura l Refillers and Commercial Aerial and Ground Applicators, Install NEW Secondary Cont ainment Units and Pads, 2005$, 3% Discount

Rate a

............................................................................................................................... ........ 60
Table 4.6. Summary of Annualized Costs for Compliance with Containment Regulations, Representative Facility Size for Agricultura l Refillers and Commercial Aerial and Ground Applicators, Install NEW Secondary Cont ainment Units and Pads, 2005$, 7% Discount

Rate a

............................................................................................................................... ........ 61
Table 4.7. Summary of Annualized Costs to In stall New Secondary Containment Units and Pads, Representative Agricultural Refillers, 3% Discount Rate............................................ 62
Table 4.8. Summary of Annualized Costs to In stall New Secondary Containment Units and Pads, Representative Agricultural Refillers, 7% Discount Rate............................................ 63
Table 4.9. Summary of Annualized Costs to In stall New Secondary Containment Units and Pads, Representative Commercial Applicat or Facilities, 3% Discount Rate ........................ 677/13/2006 Containment EA, page v Table 4.10. Summary of Annualized Costs to Install New Secondary Containment Units and Pads, Representative Commercial Applicat or Facilities, 7% Discount Rate ........................ 68
Table 4.11. Summary of Facil ity-Level Costs (2005$) to Retrofit Existing Secondary Containment Units and Pads, Representativ e Agricultural Refillers and Commercial Applicator Facilities.......................................................................................................... ..... 73
Table 4.12. Summary of Aggregate Industry Annualized Costs (2005$) a to Retrofit Existing Secondary Containment Units and Pads and Li quid Bulk Containers for Representative Agricultural Refillers and Commercial Applicator Faci lities, 3% Discount Rate................. 76
Table 4.13. Summary of Aggregate Industry Annualized Costs (2005$) a to Retrofit Existing Secondary Containment Units and Pads and Li quid Bulk Containers for Representative Agricultural Refillers and Commercial Applicator Faci lities, 7% Discount Rate................. 77
Table 4.14. Summary of facility-l evel annualized costs to comply with containment regulations representative by facility size for agricultura l refillers and commerc ial aerial and ground applicators to retrofit existing secondary containment units and pads, and liquid bulk containers (2005$), 3% discount rate .................................................................................... 80
Table 4.15. Summary of facility-l evel annualized costs to comply with containment regulations representative by facility size for agricultura l refillers and commerc ial aerial and ground applicators to retrofit existing secondary containment units and pads, and liquid bulk containers (2005$), 7% discount rate .................................................................................... 80
Table 5.1. Annualized Industry Costs of Compliance Under EP A’s Final Rule (2005$), 3%

Discount Rate.................................................................................................................. ....... 84
Table 5.2. Annualized Industry Costs of Compliance under EPA’ s Final Rule (2005$), 7%

Discount Rate.................................................................................................................. ....... 85
Table 5.3. Annualized Industry Costs of Compliance under EP A’s Proposed Regulation ......... 89
Figure 6.1. Flow Diagram of Potential Damage s from Pesticide Containment Structures ......... 99
Table 6.1. Reported Incidence of Spills from Pesticide Bulk Storage Facilities....................... 101

Table 6.2. Pesticides Identified in Wells on or Near Agricultural Facilities in Illinois............. 104
Figure 6.2. The Costs and Benefits of Remediati on (Cleanup) in the Baseline Scenario and the

Calculation of the Benef its of Avoiding a Spill................................................................... 110
Table 6.3. Estimation of Average Costs for Asse ssment and Remediation of Uncontrolled Spills at Agricultural Chemical D ealers and Applicators.............................................................. 114

Table 6.4. Potential Health Effects of Selected Pesticides ........................................................ 121



### Appendix Tables

Table B.1. Non-Discounted Costs of Complying w ith the Bulk Pesticide Containment Standards for New Structures, Agricult ural Refillers (2005$)............................................................. 138

Table B.2. Non-Discounted Costs of Complying w ith the Bulk Pesticide Containment Standards for New Structures, Commerc ial Applicators (2005$)........................................................ 140

Table B.3. Non-Discounted Costs of Complying w ith the Bulk Pesticide Containment Standards for New Structures, Agricultural Ref illers and Commercial Applicators ........................... 1417/13/2006 Containment EA, page vi Table B.4. Non-Discounted Costs of Complying w ith the Bulk Pesticide Containment Standards for Existing Structures, Sm all-Small F acilities ................................................................... 143
Table B.5. Non-Discounted Costs of Complying w ith the Bulk Pesticide Containment Standards for Existing Structures, Me dium-Small Facilities ............................................................... 145
Table B.6. Non-Discounted Costs of Complying w ith the Bulk Pesticide Containment Standards for Existing Structures, Large- Small and Large Facilities .................................................. 147
Table D.1. State Regulations of Bulk Pesticide Storage............................................................ 157
Table E.1. Containment Proposed Rule Options Costs (2005$)................................................. 163

Table F.1. Comparison of Proposed and Final Standards for New Containment Structures..... 165
Table G.1. Estimated Number of Agricultu ral Pesticide Refillers by State, 1992 * ................. 168
Table G.2. Regulatory Complian ce Baseline for Agricultural Pe sticide Refillers with Bulk Pesticide Storage ***.......................................................................................................... . 171

Table G.3. Number of Bulk Pesticide Containm ent Facilities to Install New Units and Pads* 175

Table G.4. Number of Bulk Pesticide Contai nment Facilities Affected by EPA’s Containment Regulations to Retrofit Existi ng Containment Structures ................................................... 177
Table H.1. Capital Costs of Compliance with Secondary Containment Regulations for SmallSmall, Medium-Small, Large-Small and Large Agricultural Refilling Representative Facility to Install NEW Secondary Containment of Outdoor Bulk Liquid Pesticides, 2005$ a ........ 179
Table H.2. Operating and Management (Annual ) and Intermittent Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Facility to Install NEW Sec ondary Containment of Outdoor Bulk Liquid Pesticides, 2005$ a ............................................................................. 180
Table H.3. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Representa tive Facilities to Install NEW Secondary Containment of Indoor Bulk Liquid Pesticides, 2005$ a .............. 181
Table H.4. Operating and Management and Inte rmittent Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Facilities to Install NEW Secondary Containment of Indoor Bulk Liquid Pesticides, 2005$ a ............................................................................................................... 182
Table H.5. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Represen tative Facility to Install NEW Secondary Containment of Stationary Dry Bulk Storage, 2005$ a ................. 183
Table H.6. Operating and Management (Annual ) and Intermittent Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Faciliti es to Install NEW Secondary Containment of Stationary Dry Bulk Pesticide Storage, 2005$ a .................................................................. 184
Table H.7. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Represen tative Facility to

Install NEW Outdoor Containment Un its and Pads, 2005$ (Scenarios 1 & 2) a ................. 185
Table H.8. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Represen tative Facility to Install NEW Containment Pads, 2005$ a ............................................................................. 1867/13/2006 Containment EA, page vii Table H.9. Operating and Management (Annual ) and Intermittent Costs of Compliance with Containment Regulation for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Facility to Install NEW Containment Pad Regulations for Indoor and Outdoor Storage Facilities, 2005$ a ............................................................. 188
Table H.10. Capital, O&M, and Intermittent Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, and Large-Small Commercial Aerial and Ground Applicator Facility to Install NEW Outdoor Secondary Containment Structures, 2005$ a,b

............................................................................................................................... 189
Table H.11. Capital, Initial, O&M and Interm ittent Costs of Complia nce with Containment Regulations by Representative Facility Size for Agricultural Refillers and Commercial Aerial and Ground Applicators to Retrofit EXISTING Secondary Containment Structures, 2005$ a

............................................................................................................................... .. 190
Table H.12. Capital, Initial, O&M and Interm ittent Costs of Complia nce with Containment Regulations by Representative Facility Size for Agricultural Refillers and Commercial Aerial and Ground Applicators to Re trofit EXISTING Containment Pads, 2005$ f ........... 192
Table H.13. Capital, Initial, O&M and Interm ittent Costs of Complia nce with Containment Regulations by Representative Facility Size for Agricultural Refillers and Commercial Aerial and Ground Applicator s to Retrofit EXISTING Liquid Bulk Containers, 2005$ e .. 194
Table I.1. Total Facility Annualized Costs as a Share of Annual Revenue to Install New Secondary Containment Units and Contai nment Pads, Agricultural Refillers and Commercial Applicators ( 2005$), 3% Discount Rate ......................................................... 196

Table I.2. Total Facility Annualized Costs as a Share of Annual Revenue to Install New Secondary Containment Units and Contai nment Pads, Agricultural Refillers and Commercial Applicators ( 2005$), 7% Discount Rate ......................................................... 198

Table I.3. Total Facility Annua lized Costs as a Share of Annua l Revenue to Retrofit Existing Secondary Containment Units and Contai nment Pads, Agricultural Refillers and Commercial Applicators ( 2005$), 3% Discount Rate ......................................................... 200

Table I.4. Total Facility Annua lized Costs as a Share of Annua l Revenue to Retrofit Existing Secondary Containment Units and Contai nment Pads, Agricultural Refillers and Commercial Applicators ( 2005$), 7% Discount Rate ......................................................... 2027/13/2006 Containment EA, page 1 

### Economic Analysis of Bulk Pesticide Containment Structures Final Regulations

1.0 Introduction

The Environmental Protection Agency (EPA) is imposing requirements under the Federal Insecticide, Fungicide and R odenticide Act (FIFRA) for container design for pesticide containers. EPA is also imposi ng procedures, standards, and labe l language to facilitate removal of pesticides from containers prior to disposal. Additionally, EPA is imposing requirements for bulk pesticide containment and procedures for c ontainer refilling operations. These regulations are necessary to implement statutory authority re quiring EPA to develop regulations for the safe storage and disposal of pesticides as a means of protecting human health and the environment.

Sections 19(e) and (f) of FIFRA grant EPA broad authority to establish st andards and procedures to assure the safe use, reuse, storage, and dis posal of pesticide containe rs. FIFRA Section 19(e) requires EPA to promulgate regulations for “the design of pesticide containers that will promote the safe storage and disposal of pesticides.” Th e regulations must ensure, to the fullest extent practicable, that the containers:
(1) Accommodate procedures used for removal of pe sticides from the containers and rinsing of

the containers.
(2) Facilitate safe use of the containers, including elimina tion of splash and leakage.
(3) Facilitate safe disposal of the containers.
(4) Facilitate safe refill and reuse of the containers.

FIFRA Section 19(f) requires EPA to promulga te regulations “prescri bing procedures and standards for the removal of pesticides from containe rs prior to disposal.” The statute states that the regulations may:
(1) Specify, for each major type of pesticide cont ainer, procedures and standards for, at a minimum, triple rinsing or the equi valent degree of pesticide removal.
(2) Specify procedures that can be implemented pr omptly and easily in various circumstances

and conditions.
(3) Provide for reuse, whenever practicable, or disposal of rins e water and residue.
(4) Be coordinated with requirements imposed under the Resource Conservation and Recovery Act (RCRA) for rinsing containers.
Section 19(f) also provides that EPA, in its di scretion, may exempt products intended solely for

household use.

Section 19(h), titled “R elationship to Solid Waste Disposal Act,” specifies that nothing in

Section 19 shall diminish the authorities or re quirements of RCRA. Also, the Food Quality Protection Act (FQPA) of 1996 amended Section 19(h) of FIFRA to add an exemption for certain antimicrobial pesticides.

The following economic analysis (EA) is one of two economic analyses that estimate the costs and benefits of compliance with th e regulations for the safe storage and disposal of pesticides. It presents the estimated costs and benefits of compliance with the bulk pesticide containment requirements of the final rule. The second EA pr ovides estimates of the costs and benefits of7/13/2006 Containment EA, page 2 compliance with the pesticide c ontainer design and residue rem oval requirements of the final rule, including the container refilling requirements and the label language requirements for pesticide container residue removal. 1

The bulk pesticide containment EA is organized into six chapters. The first two chapters present the regulatory background of the rule, a descript ion of the final containment regulations, and a summary of the results of the EA . Chapters 3 presents the estimates of bulk storage facilities’ compliance with the final pesticide containmen t regulations. Chapters 4 and 5 present the estimated costs of compliance with the final c ontainment regulations. And Chapter 6 presents the estimated benefits of compliance with th e final containment regu lations. (Section 1.3 presents a more detailed descrip tion of the scope of the EA.)

1.1 The Need for Regulation

Past management practices associated with the bulk storage of pestic ides have resulted in uncontrolled releases of pesticides into the enviro nment. These releases have ranged from smallvolume, chronic operational spills that occur when pipes, hoses , or other dispensing equipment leaks or fails to major, large-volume spills resulting from ruptured tanks.

Minor, small-volume spills are generally not report ed to state or federal agencies and thus, not well-documented. However, there is ample evidence that chronic small spills have resulted in soil, surface water, and groundwater contamination at many agrichemical fa cility sites across the nation. The Illinois Department of Health found pesticide residue s in groundwater samples from wells on or adjacent to 65–75 percent of the agri chemical dealerships sampled in the state (Long, 1989). Michigan’s Department of Natural Re sources documented 180 agriculture pollution incidents in the 1987 to 1991 period through th eir Pollution Emergency Alerting System (MDNR, 1991). A conservative estimate is that at least 8 percent of those reported incidents were related to pesticide storage or loading/re filling releases. Wisconsin’s Department of Agriculture randomly selected 25 pesticide mixing and loading sites in the state and determined that 18 have significant soil contamination and nine have groundwater contamination above

standards.

EPA analyzed data provided by the National Response Center for a reporting period of 1982 through May 1991 and identified 39 incidents in which spills appeared to be associated with bulk pesticide containers (USDHS, 2005). The reported quantities of pesticide released ranged from only 2 gallons to an estimated 1,000 gallons. Th e most frequent listed causes of spills as reported in this database are:

1 Two separate economic analyses are co nducted for the rule primar ily because the standards for pesticide containers

and the standards for containment of bulk pesticides are different, and, as a result, require two distinct economic analyses. That is, because the standards regulate different structures (containers vers us bulk containment), and different industries (registrants, agricultural refillers , and swimming pool supply companies for the container standards; agricultural refillers and commercial pesticide applicators for the bulk containment standards), different assumptions and inputs will be used in the EA for each se t of standards. Rather than creating a single, lengthy document containing two different economic analyses, the Agency chos e to write a separate document for each EA.7/13/2006 Containment EA, page 3 • 36 percent transfer mishaps (e.g., hoses or coup lings failing or dislodging during load-in or load-out);

• 31 percent appurtenance failure (e .g., leaks or breaks in pipes or valves, valves left open, sight gauge failure);

• 13 percent container failur e (corroded, collapsed);

• 13 percent overfilling;

• 5 percent vandalism; and

• 2 percent cause not specified.

There are many case studies of spill incidents that have occurred at agrichemical facilities. For example, a firm in Lincoln, Nebraska, that conduct s site assessments found high levels of nitrates and agricultural chemicals in the Ladd area of several agrichem ical dealers. At one site, groundwater had not yet been affected, so the co ntaminated soil was removed and applied to a field according to the rate specified in the pesticide label. At another site, however, contamination had made its way into groundwater, and pumps were installed to remove all the contaminated water. Because the buyer of that particular property had been conducting operations at the site for several years, he and th e seller negotiated, and settlement costs were in excess of $30,000 (Cole, 1991).

Examples of operator error and mechanical fa ilures have also been documented. At an agrichemical facility, approxima tely 200,000 gallons of contaminated water were filtrated, with an equal amount incinerated when an employee for got to turn off the recirculating pump in a bulk pesticides tank, and the pesticide ran off the site into surface water. The cost of cleanup was $184,000. A recirculation pump was also left on at another site, with cleanup costing $105,000 (Paulson, 1992). At another facility, th e PVC plug on a bulk pesticide storage tank failed, releasing 1,200 gallons of herbicide. The cost of cleanup was $207,514 (Paulson, 1992).

In southern Louisiana, pesticide runoff from aerial applicator activit ies has been linked to kills of as many as one-half million fish and an unknown numb er of birds, turtles, and alligators at 13 sites. Three aerial app licators had their licenses suspended while investigations were conducted on mixing, loading, and rinsing proc edures. The license of one of these operators was suspended because pesticide waters and rins ate were not contained and were allowed to discharge into a ditch. The operator will not be allowed to resu me service until he has installed a “satisfactory

washout and reclamation mechanism to eliminat e runoff of unused chemicals into a nearby ditch” ( Pesticide & Toxic Chemical News, 1991a,b; and Commission of Agriculture & Forestry, 1991).

The above examples demonstrate the need for cont ainment structures to capture and contain any spill or leak that might occur in bulk pesticid e storage. At new facilities, contamination can largely be avoided through good management practi ces such as secondary containment structures for bulk tanks and containment pads for mixing/lo ading, refilling refillable containers, rinsing containers and equipment, and similar activities. Use of containment pads in operational areas will prevent further contamination of soil and groundwater from chronic, low-volume spills at existing facilities.7/13/2006 Containment EA, page 4 1.2 Pesticide Container Design and Residue Removal and Containment Structures: Regulatory Background of the Final Rule

In a Notice of Proposed Rulemaking (NPRM) issued on February 11, 1994 (59 FR 6712), EPA proposed standards for pesticide containers and containment structures. This proposal included requirements for non-refillable and refillable contai ners that would ensure the safe use, refill, reuse, and disposal of the containers. The pr oposal also included st andards for containment structures, which would promote safe storage of pesticides in bulk contai ners. Additionally, the proposed rule contained amendments to the labe ling regulations in 40 CFR Part 156 to ensure adequate levels of residue removal from containers.

The public comment period for the NPRM cl osed on July 11, 1994. EPA received about 1,900 pages of comments from more than 200 comment ers, including many trade associations and individual companies from the pesticide ma nufacturing, pesticide retail, and container manufacturing industries as well as many state regulatory agencies.

EPA received many comments during the public co mment period on a few i ssues; in particular, the scope of the container sta ndards and the relationship between the 1994 proposed rule and the Department of Transportation ( DOT) standards for hazardous mate rials packaging. A third issue arose from the 1996 passage of the FQPA, which amended Section 19(h) of FIFRA to add an exemption for certain antimicrobial pesticides. To solicit comment on EP A’s interpretation of the new statutory language on exempting antimicr obial pesticides and to reopen comment on the scope of the container regulati ons and an approach for incorp orating DOT’s standards, EPA published a supplemental notice in the Federal Register (EPA, 1999). The notice also provided

an alternative definition of sma ll business for certain sectors of the pesticide industry for use in analyzing the potential impacts to small businesses that were presented as part of the economic analysis. 2

The public comment period for the supplem ental notice closed on March 20, 2000. EPA

received comments from about 70 respondents, including many trade associations and individual companies from the pesticide manufacturing, pes ticide retail, and cont ainer manufacturing industries as well as many st ate regulatory agencies.

On June 30, 2004, EPA reopened the comment period for 45 days to solicit public input on any policies, market practices, technolo gy, or other issues re lating to this rule’s requirements that would not have been available, or could not have been addresse d, at the time of either the proposed rule in 1994 or the s upplemental notice in 1999. While EPA has attempted to stay current on developments in pesticide container and containment structure policies, regulations, technology, and practices, the Agency believed that it was appropriate to solicit input from the regulated community, state regulator s, and others to ensure full aw areness of the current state of the pesticide container and containment universe before finalizing the pesticide container and

2 As discussed by EPA in the 1999 Supplemental Notice on Standards for Pesticide Containers and Containment (EPA, 1999b), the alternative definition disaggregates small businesses as defined by the Small Business Administration (SBA) into three size cat egories: small-small, medium-small, and large-small businesses. EPA is concerned that using an overly broad definition of small business in the economic analysis of the regulations may result in significant economic impacts on smaller entities that will be camouflaged when combined with information about potential impacts on facilities that meet the SBA size standard for small business but are not typical of a small business in that industry sector. (See Chapter 3 for industry-specific small business definitions.)7/13/2006 Containment EA, page 5 containment regulations. The comment period generated 50 comments mainly from pesticide manufacturers, state regulatory agencies, and agri cultural pesticide dealers. (See the preamble to the proposed rule and Section 2.3 of this document for a more complete discussion of comments received by EPA.)

Prior to 1995, recommendations rega rding procedures for storage a nd disposal of pesticides and pesticide containers were listed under 40 CFR Part 165. On June 19, 1995, as part of the federal government’s initiative to streamline regulations , Part 165 was deleted as unnecessary (60 FR 32094) because it contained recommendations rather than requirements. Subpart A of Part 165 covered the scope and definitions in the recomme ndations. Subpart B dealt with EPA’s disposal of suspended and canceled pesticides, and EPA ha s completed disposal of all pesticides for which it was responsible under those regulati ons. Subparts C and D contained recommended procedures for storage and disposal of pesticid e containers. Subparts A, B, C, and D were superseded by the passage of the Resource C onservation and Recovery Act in 1976. FIFRA Section 19, as revised in 1988 and 1996, contains authority for EPA in the area of pesticide storage and disposal, and the fi nal pesticide container and cont ainment regulations promulgated are being inserted into a newly established Part 165.

1.3 Scope of the Economic Analysis for the Final Pesticide Containment Regulations

The EA conducted for the final pesticide containmen t regulations estimates the costs and benefits of compliance (installa tion of new containment structures and retrofitting of existing containment structures) for the regulated commun ity. The components of the EA for the final pesticide containment regulations include:
(1) A profile of the regulated community (i.e., agricultural pesticide refillers and commercial applicators). This includes specific economic characteristics of each industry regulated under the containment regulations—such as North American Industry Classification System (NAICS) codes, the average company size, reve nues for the average company, total industry revenues, the distri bution of firms between small and large— to be used to estimate the costs and impacts of the containmen t regulations. (See Chapter 3.)
(2) A profile of bulk pesticide st orage facilities’ compliance with the final containment regulations. The profile contains the estimates and analysis of the baseline estimated number

of bulk containment facilities and the estimated number of facilities not in compliance with the final regulations, which will either have to inst all new containment st ructures or retrofit existing structures to come into compliance. (See Chapter 3.)
(3) An analysis of the cost of compliance with th e final pesticide contai nment regulations. The analysis includes the methodology for calculating the costs of compliance and the estimates

of the costs:
(a) to install new secondary containm ent units and containment pads; and
(b) to retrofit existing secondary co ntainment units and containment pads.
The estimated costs are presented at different levels of aggregation for all regulated industries, each industry, and fo r representative facilities in each industry. (See Chapters 4 and 5.)
(4) An analysis of the small business impacts of compliance with the final pesticide containment regulations for each regulated industry. Thes e impacts are presented using both the Small Business Administration (SBA) definition of a sm all business, and the alternative definition7/13/2006 Containment EA, page 6 of a small business adopted specifically for this rule. 3 Impacts are estimated as the proportion of increased facility costs to cu rrent facility revenu es. (See Chapter 5.)
(5) An analysis of the human and environmental be nefits of compliance with the final pesticide containment regulations. Benefits are measured in terms of the avoided costs of remediation following a release from a bulk pesticide storage facility. (See Chapter 6.)

1.4 Estimated Costs and Benefits of Complian ce with the Final Pesticide Containment Regulations

The pesticide containment regulations certify a number of standards that create costs to the regulated community of bringing bulk pesticide storage facilities into compliance with the containment regulations, as well as benefits to humans and the environment. Improvements in containment of bulk pesticides will benefit humans and the environment by reducing the

contamination of soil and water resources from unintended bulk pesticide releases.

The total annualized costs of compliance with th e final pesticide containment regulations are estimated to be approximately $2.93 million a nd $2.90 million at a 3 percent and a 7 percent discount rate, respectively, 4 while the total estimated annua lized benefits range from $12.2 million to $18.6 million (see Table 1.1). More than 90 percent (or $2.69 million) of the total cost of compliance is from the construction of ne w containment structures, and the remaining 10 percent (or $0.25 million) is from retrofitting existing containment structures. The estimated cost to agricultural refillers is $2.71 million, while commercial applicators are estimated to face
costs of $0.23 million.

States also face costs of compliance with the final regulations in the first year. For the 19 States that currently have bulk pesticide containment stru ctures regulations, total costs are estimated to be approximately $8,000 to prepare documentation that their regulations provide environmental protection equivalent to the fede ral regulations. For the remaini ng 31 States without regulations, total costs are estimated to be approximate ly $5,500 to comply with the recordkeeping requirements of the final regulations. (See Chapte rs 4 and 5 for specific cost information.)

The benefits of compliance with the final contai nment regulations include the cost savings from avoiding cleanup of spills from bulk pesticide stor age areas. Because data are not available on human and environmental effects from pesticid e exposure due to bulk pesticide c ontainment– related spills, the estimated benefits do not include the benefits of the final containment regulations to humans and the environment. Howeve r, it is expected that these benefits could be significant (see Chapter 6 for a description of th e benefits of the final regulations for bulk pesticide containment).

3 See footnote 2.

4 For ease of presentation, we will present only the estima tes using the 3 percent discount rate for the remainder of the analysis in this chapter. Chapte rs 4 and 5 present the estimated costs of compliance with the final containment regulations at both the 3 percent and 7 percent rates. Th e estimated costs at the two different rates are similar because the majority of the estimated co sts of compliance are incurred in the fi rst year of compliance as capital or initial costs of compliance.7/13/2006 Containment EA, page 7 Table 1.1. Quantified Costs and Benefits of the Final Containment Regulations (2005$) a

Quantified Cost/Benefit Category Annualized Cost/Benefit at a

3% Discount Rate Annualized Cost/Benefit at a

7% Discount Rate Total Quantified Costs $2.93 million $2.90 million

Construction of New Containment

Facilities $2.69 million $2.66 million

Retrofitting of Existing Containment

Structures $0.25 million $0.24 million

Total Quantified Benefits $12.2 million–$18.6 million $12.2 million–$18.6 million

a Benefits that have not been quantified include the adverse effects to humans and the environment from exposure to pesticides as a result of spills and leaks of pesticides at bulk pesticide storage facilities. Total may not add because of rounding.

Having presented the statutory basis for the promulgation of the final rule on pesticide containment structures, a summary of the regulato ry history of the standards, and a summary of the results of the EA in this introductory chapte r, the remaining chapters of the EA present the analysis of the impacts on the regulated indus tries of the final bulk pesticide containment regulations. Chapter 2 presents a descripti on of the final standards for bulk pesticide containment structures and the changes in the st andards from the proposed to the final rule. Chapter 2 is followed by analyses of compliance of bulk pesticide containment facilities with the final regulations (Chapter 3), of the costs of compliance with the final regulations (Chapters 4 and 5), and of the benefits of compliance with the final regula tions (Chapter 6).7/13/2006 Containment EA, page 8 

### 2.0 Final Bulk Pesticide Containment Regulations and Changes in the Regulations from the Proposed to Final Rule

Chapter 1 presented the regulatory history of the pesticide contai ner and bulk pesticide containment rule, an analysis of the scope of the EA for the final bul k pesticide containment regulations, and a summary of the results of the EA. In Chapte r 2, the response to comments to the proposed standards, the economic impacts (i.e ., the change in the costs and benefits of compliance) of the changes from the proposed to the final standards and the final bulk pesticide containment regulations are presented. These ar e the standards for which compliance with the final regulations is estimated for bulk pesticide storage facilities in Chapter 3, and for which the costs of compliance are estimated in Chapters 4 and 5, and the benefits of compliance are estimated in Chapter 6. Chapter 2 also presents a description of the changes made in the bulk pesticide containment regulations from proposed to final.

2.1 Final Bulk Pesticide Containment Regulations

EPA’s final pesticide containment regulations in clude criteria for design, maintenance, and operation of bulk pesticide containment structures at agricultural facilities. These criteria are intended to provide national standa rds that will introduce basic safeguards in states that currently lack containment regulations and reinforce containment requirements in states where containment safety programs already exist. The Agency believes that the federal containment standards, together with requirements for fede ral container design and residue removal, are essential for ensuring the safe use, reuse, and refilling of pesticide cont ainers as required under

FIFRA Section 19.

The final pesticide containment rule defines “ bulk” storage requirements for both liquid and dry agricultural pesticides, and specifies standards for containm ent structures, including secondary containment units for stationary bulk containers and containment pads for pesticide dispensing activities. “Stationary bulk containers” are define d as any bulk containers that hold pesticides, including transport vehicles (e.g., trucks and railcars). The follo wing qualify as bulk containers and require secondary containment:

• Containers with capacity to store liquid pe sticides greater than 1,893 liters (500 gallons);

• Containers with capacity to store dry pesticides greater than 1,814 kilograms (4,000 pounds);

and

• Mobile containers with capaci ty greater than 500 gallons or 4000 pounds (only if they remain more than 30 days at one location).

Under the rule, a “containment structure” is define d to mean either a secondary containment unit or a containment pad. For compliance, certain stationary bulk containe rs require a “secondary containment unit,” which refers to a backup cont ainment structure to protect against leaks or spills from the bulk container. Such leaks coul d range from relatively small volumes (e.g., slow drips from a poorly sealed valve) to the release of the entire contents of the bulk container, such as during a container failure. The rule also ou tlines requirements for pesticide dispensing areas, and covers certain areas where pe sticides are transferred out of or into a container or other vessel. Besides containers, the vessels from whic h or into which the pesticide is transferred may include application equipment and transport vehicles. The pesticid e being transferred can be in7/13/2006 Containment EA, page 9 the form “as sold and distributed” or in dilu ted form for field application and/or container cleaning operations.

Certain pesticide dispensing areas will requir e protection by a containment pad, which is a structure that provides a means of spill contro l at a dispensing area. Under the rule, a containment pad can be separate or constructed as an integral component of a secondary unit.

Separate categories of requirements are discusse d in greater detail in the following sections.

2.2 Standards for New and Existing Pesticide Containment Structures

Until now, the containment of bulk pesticides has been guided only by an interrelated combination of federal regulations 5 and state regulations (see Appendix D for a complete discussion of these standards). These regulations and standards form the basis for the pesticide containment regulations. The result is that with a large set of standards al ready in existence, the pesticide containment rule is primarily a ha rmonizing and consolidation exercise, and EPA estimates that most bulk pesticide storage facili ties are in compliance with many aspects of the

rule because these facilities are already meeting a variety of other standards, as discussed in more detail in the pesticide containment compliance profile (see Chapter 3).

The pesticide containment regulati ons as described below are the e nd result of revisions made to the 1994 proposed standards for pesticide contai nment structures, based on the public comments submitted and discussions with a number of interested parties, including other EPA offices, government agencies, and the regulated comm unity (see Section 2.3 and Appendix F for a description of the changes made in the contai nment regulations between the proposed and the final rule).

The final pesticide containment regulations are di vided into two parts: (1) critical performancebased standards for existing structures, and (2) sta ndards for new structures. These standards, as well as existing state standards and their consider ation in the final rule , are discussed below.

2.2.1 Final Critical, Performance-Based Criteria for Existing Containment Structures

Under the final rule, all existi ng containment structures must meet EPA’s critical standards (Table 2.1). The Agency believes the critical standards will ensure human and environmental protection while avoiding excessive retrofitting costs. Based on its State of the States Report (EPA, 1992) and its own review of the text of state regulations (Appendix C), EPA believes the critical standards and existing state standards are comparable. Existing structures in states with or without state standards are required to comply with the critical standa rds within 2 years after promulgation of the final rule.

The Agency considers the critical standards to be the minimum requirements needed to ensure adequate environmental protecti on. States have the option of requiring existing structures to

meet the full federal standards instead. Given th at monthly inspections and recordkeeping must occur, documentation of a facility’s performance will be available, and st ates will be able to make decisions on problematic containment struct ures on a case-by-case basis. EPA is also

5 Comprehensive Environmental Response, Compen sation, and Liability Act (CERCLA) and others.7/13/2006 Containment EA, page 10 encouraging states to require that any structure that must undergo significant upgrading to comply with the critical standards must inst ead comply with the full federal standards. Additionally, EPA recommends that states require that any structure enlarged by more than 50 percent capacity or having a record of freque nt spills or environmental contamination be upgraded to comply with the full federal standards.

Table 2.1. Critical Standards for Existing Containment Structures

(1) Bulk storage containers must be located within a ri gid, liquid tight secondary containment facility, free of visible cracks and defects. Cracks and gaps must be repaired, and no pesticide must be stored or dispensed within the structure until suitable repairs have been made.
(2) The facility must be constructed with pesticide-compa tible materials, such as steel or concrete, and be leakproof with seams and joints sealed. a
(3) Storage containers and appurtenances, including pipes, must be protected against damage from operating personnel and moving equipment.
(4) At least monthly during periods when pesticides are being stored or dispensed, the owner/operator must inspect each bulk container and its appurtenances and containment structure for visible signs of leakage.
(5) Spills and leaks must be collected and cleaned up no later than the end of the day on which they occurred. The structure must be operated in a way that prevents pesticides or material containing pesticides from escaping from the containment structure.
(6) The secondary containment for bulk liquid pesticides must have a volume sufficient to contain the capacity of 100 percent of the single largest co ntainer within it, plus the displaced volume of other containers and
appurtenances. (7) The secondary containment for bulk dry pesticides must be protected from wind and precipitation, and be placed on pallets or a raised concrete platform to prev ent the accumulation of water in or under the pesticide. The storage area must be enclosed by a minimum of a six- inch high curb that extend s at least two feet beyond the perimeter of the bulk container.
(8) Pads for operational area containment must be of adequate design and size to contain a minimum of 750 gallons of discharged liquid.
(9) Containment pads must have a means of removing and recovering spilled material or rainfall, such as by a pump. Automatic pumps without automatic overflow cutoff switches are prohibited.
(10) All pesticide transfers must be attended, and lockab le valves, if required by §165.124, must be locked.

a Some state regulatory agencies define “chemically compa tible” as the ability of the containment structure materials to withstand anticipated exposure to stored or transfer red materials without losing their ability to provide the required containment.

2.2.2 Final Standards for New Pestic ide Containment Structures

New structures are required to comply with the full federal standards, wh ich are slightly more detailed and stringent than the crit ical standards. All of the criti cal standards are required of new

structures as well. Standards different from or additional to the critical standards are illustrated

in Table 2.2.7/13/2006 Containment EA, page 11 Table 2.2. Bulk Pesticide Containment Standards in Addition to the Critical Standards for

New Containment Structures

(1) Secondary containment for bulk liquid pesticides without protection from precipitation must have a volume sufficient to contain the capacity of 110 percent of th e single largest container within it, plus the displaced volume of other containers and appurtenances. Secondary containment for bulk liquid pesticides with protection from precipitation must have a volume sufficient to contain the capacity of 100 percent of the single largest container within it, plus the displ aced volume of other cont ainers and appurtenances.
(2) Containment pads must be sloped to a liquid-tight sump where liquids can be collected for removal.
(3) No appurtenance, discharge outlet, or gravity drain is allowed through the base or wall, except for direct interconnections between adjacent containmen t structures that meet the standards.
(4) Appurtenances must be configured so that spills or leaks can be readily observed.

2.2.3 State Pesticide Containment Standards

The Agency believes that national standards are necessary, but recognizes the proactive efforts many states have made in implementing their own containment regulations, as well as the substantial financial investments made by facilities in complying with those regulations. Due to concern that not all states may have regulations that ensure an acceptable level of environmental protection, EPA conducted an extens ive review of existing state regulations (Appendix C). EPA determined that all regulations, as written, seem to provide eq uivalent protection (Appendix C), with the possible exception of st ates that allow use of earth or asphalt as the construction material. Three states (Minnesota, Vermont, an d Wisconsin) specifically allow earth or asphalt secondary containment with liner s, and six other states (Kansa s, Louisiana, Missouri, North Dakota, Ohio, and West Virginia) do not spec ify construction materi al but give general performance standards that could be met by lined ear th or asphalt. There is evidence that lined earthen berms in these states are used principally, if not exclusively, for fertilizer storage. While EPA has no evidence that earth or asphalt with an impermeable liner provides insufficient spill protection, the final rule is main taining a more conservative a pproach by requiring “reinforced concrete or other rigid, liquid-tight materials.” The Agency de termined that despite considerable variation, most of the 19 states with existing regulations appear to provide equivalent or more stringent environmental safeguards in their containment programs.

The Agency has decided that states with contai nment regulations already in place may petition EPA to make a determination of equivalency of their regulations to the federal containment regulations. States wishing to request an e quivalency determination may submit correspondence to EPA, accompanied by any supporting documentati on, indicating that the state’s program (for both existing and new structures) provides environm ental protection equivale nt to that provided by EPA’s containment regulations. If EPA agrees , states will be provi ded with correspondence authorizing them to continue implementation of their state containment program in lieu of the

federal standards.

Facilities in states w ithout containment regulations must comply with federal requirements for both new and existing structures. Some existing fac ilities will incur expenses to meet the critical standards, and all new facilities will have to co mply with the full standards. EPA expects this rule to affect agricultural pesticide refillers; namely, agrichemical deal ers and commercial (forhire) agricultural a pplicator businesses.7/13/2006 Containment EA, page 12 Compared to other options that would require st ates to change their regulations or require facilities to retrofit to the full standards, EPA ha s decided that the chosen approach will be less burdensome for states and for existing facilities.

2.3 Changes in the Final Pesticide Containmen t Regulations from the Proposed to the

Final Rule

As previously mentioned, EPA received appr oximately 1,900 pages of comments from more than 200 commenters (e.g., trade asso ciations, pesticide manufacturer s, pesticide retailers, and many state regulatory agencies) on the proposed rule. Based on these comments, EPA made a number of changes to the proposed regulations. The most significant of these changes for the

final rule are as follows:

(1) The final rule deletes hydrau lic conductivity standards and associated recordkeeping and inventory reconciliation.
(2) The final rule deletes the interim standards, and establishes a set of standards for existing structures and more stringent fu ll standards for new structures.
(3) The final rule adjusts capacity standa rds for new and existing structures.
(4) The final rule reduces recordkeeping responsibilities.
(5) The final rule changes the size requirement of bulk containers.

As a result of these and other changes (as di scussed below and in Appendix F), the estimated economic impacts on the regulated community under the final regulations will be different from the estimated economic impacts under the propose d regulations (see Chapters 5 and 6 for a comparison of the estimated costs and benef its of the proposed and final regulations, respectively). The changes made to the propos ed containment regulations are described under the following main areas: (1) general require ments (Section 2.3.1); (2 ) capacity standards (Section 2.3.2); (3) inter im standards (Section 2.3.3); and (4) scope of the standards (Section 2.3.4).

2.3.1 General Requirements

Comments received by EPA pertaining to the propos ed rule’s general requirements are divided into five groups: (1) containment design, (2 ) standards for sumps, (3) recordkeeping, (4) rainwater management and (5) rinsate management.

Containment Design. The proposed rule required that cont ainment structures be sufficiently resistant to penetration by pesticides to prevent le aching and release. It specified that structures had to meet specific quantitative crit eria for hydraulic conductivity (1 x 10 -6 cm/sec for existing

structures and 1 x 10 -7 cm/sec for new structures) (§165.146). Well-constructed concrete has

been demonstrated to have a hydraulic conductivity of 1 x 10 -7 cm/sec or less, the standard proposed for wood preservative drip pads under RCRA. Few state regulations require a hydraulic conductivity standard, and most that do cite a value of 1 x 10 -6 cm/sec for liners. The proposed rule also required that containment walls be pesticide-resistant, and that containment

units be constructed of reinforced concrete or other rigid material capab le of withstanding the full hydrostatic head, load, and impact of any pe sticides, equipment, a nd appurtenances placed within the structure (§165.146).7/13/2006 Containment EA, page 13 Based on an analysis of the public comments submitted and current technology, the Agency determined that use of a numeric hydraulic c onductivity standard for secondary containment would be unnecessarily burdensome. For the fina l rule, EPA decided to eliminate the hydraulic conductivity standard from the requirements sin ce such a numeric standard would result in a

substantial increase in cost without a demonstrable equivalent benefit for environmental safety. Furthermore, compliance with this standard coul d not be readily proven on existing structures. Instead, based on state agency comments, EPA decided that effective pesticide secondary containment by the structures would be sati sfactorily achieved if properly constructed, maintained, and inspected. Field experience with existing state standards further indicates that the requirement for a hydraulic conductivity standard would be excessive. The regulatory language in the final rule therefore eliminat es any reference to the hydraulic conductivity standard or the interim period. The word “res istant” was replaced with “compatible,” due to comments by states that “pesticide-resistant” woul d be difficult to define , and that compatible can be defined as a material’s ability to withst and anticipated exposure to stored or transferred

materials.

Sump Standards. The proposed rule required that the ba se of a containment pad slope toward a liquid-tight sump (for new but not existing pads), as well as requiring a method for removing accumulated liquids (§165.152(b)(2)). The standa rds prohibited any automatically activated pumps that lack automatic overflow cutoff switche s for the receiving container. EPA requested comments on whether performance criteria for the sump should differ from general containment requirements.

For the final regulations, EPA concluded that since the general standards for containment structures also apply to sumps, which are an integral part of the containment structure, sumps must be liquid-tight with sealed seams and joints. Since spills and leaks must be collected and cleaned up no later than the end of the day on which they occurred, sumps would not be allowed to retain leaked pesticides or wash water. However, even a regularly cleaned sump may contaminate surrounding areas if it is not liquid- tight. The Agency concluded that the sump’s

adherence to the standard c ould be demonstrated in a number of ways, although compliance monitoring will be left to local enforcement of ficials familiar with conditions in their area.

Recordkeeping. The proposed rule required facilities to maintain records on inspection, maintenance, and monthly inventory reconciliation of containment stru ctures for at least 3 years. Records were also required for bulk containers not protected by secondary containment, including records on their duration at the same location (§165.157). The rule proposed that

facilities would have to maintain written confirmation of hydraul ic conductivity as long as the containment structure was in use and for 3 year s thereafter. Monthly inventory reconciliation was required only during the proposed interim pe riod as a means to de tect leakage from bulk containers that are difficult to inspect for l eaks (e.g., containers that are not elevated).

For the final rule, EPA retained the requireme nt for recordkeeping of monthly containment inspections as a necessary st andard procedure. However, since the numerical hydraulic conductivity standard was eliminat ed from the final rule requir ements, recordkeeping on that issue and on inventory reconciliation is no l onger required. In response to comments on the rule’s proposed residence time, the Agency deci ded to raise the residence time for non-fixed bulk containers to 30 days. Bulk container status, including residence time, will be included in the7/13/2006 Containment EA, page 14 monthly inspection recordkeeping, providing relief to facilities from circumstances outside their

control.

Rainwater Management. Precipitation may enter a containm ent structure either directly or through stormwater runoff from su rrounding land or structures. EPA is especially concerned about containment structures on poorly draine d areas. To reduce stormwater runoff, the proposed rule required that containment be desi gned, at a minimum, to prevent liquids from seeping into it or flowing onto it from adjacent land or structures during a 25-year, 24-hour rainfall event (§165.146(b)(1)). The 25-year, 24- hour storm criterion is used by the National Pollution Discharge Elimination System (NPDES) as a standard for containment structures, and some states have adopted it as a standa rd for pesticide secondary containment. 6

After reviewing the comments to the proposed rule , the Agency decided not to require a 25-year,

24-hour storm criterion. This is consistent with the final EPA rule on Oil Pollution Prevention and Response: Non-Transportation-Related Ons hore and Offshore Facilities (67 FR 47042, July 17, 2002). The oil pollution prevention rule states that while a 25-year, 24-hour storm event standard is appropriate for most facilities and protective of the environment, it may be difficult and expensive for some facilities to secure recen t information concerning such storm events at

this time. Recent data do not exist for all areas of the United States, or may be costly for small operators to secure. Instead, at this time, the final rule require s that the containment structure have sufficient freeboard to contain precipita tion and prevent water a nd other liquids from seeping into or flowing onto it from adjacent land or structures. Most states with containment regulations do not use a 25-year, 24-hour storm criterion and ha ve indicated that in their experience, requiring a numerical capacity (110 percent) or suffi cient freeboard to accommodate local precipitation conditions provides adequate protection.

Rinsate Management. The proposed rule specifically exempted bulk containers containing rinsates or wash waters from the requirement for secondary containment, because EPA did not

have sufficient information on the risks from storage of such dilute pesticides (§165.142).

The final rule recommends but does not require that new facilities place rinsate tanks within secondary containment. State re gulations can be more stringent and require rinsate tanks within secondary containment, if they deem it necessa ry. During the rule’s implementation, EPA will work with states and industry to develop guidance on good management practices, including a recommendation that rinsate tanks be placed on or in secondary containment. The Agency believes that many existing structures are not cons tructed to accommodate rinsate tanks, and that the low potential risk from release of such dilute solutions does not warr ant a regulation that may be economically burdensome. EPA expects that rinsate is used as a diluent and that facilities typically maintain low rinsate inventories. In new facilities that wish to follow the recommendations (or that are re quired to do so by state law) , somewhat larger secondary

containment will incur minor additional costs to account for the volume of the rinsate tank (usually not the largest tank within the containment).

6 The standard represents a 24-hour rainfall event with a pr obable recurrence interval of once in 25 years (National Weather Service, 1961).7/13/2006 Containment EA, page 15 2.3.2 Capacity Standards

The proposed containment rule specified capacity standards for liquid bulk containers, dry bulk containers, and containment pads. The following are summaries of the proposed standards as

well as EPA’s decision for the final rule.

Liquid Bulk. For liquid bulk pesticides in outdoor facilities, EPA’s proposed permanent standards required that secondary containment structures have a minimum holding capacity of at least 125 percent of the volume of the largest container, plus the displaced volume of other containers and appurtenances. For indoor facili ties not exposed to pr ecipitation, a capacity of 110 percent of the largest container volume plus the displaced volume was required. During the interim period, capacity requirements were prop osed at 110 percent ( outdoor) and 100 percent (indoor) of the volume of the largest pestic ide container plus th e displaced volume.

EPA believes that many of the public comments on the proposed capacity standards for liquid pesticide containment presented reasonable alternatives to the proposed rule. Existing outdoor facilities with 110 percent capacity have had no reported overflows. The proposed 125 percent capacity for outdoor liquid bulk can be reduced to 110 percent without sacr ificing environmental protection. The alternative of a six-inch free board (approximately equa l to a 25-year, 24-hour storm capacity in certain states) would be inappropriate for drye r states. Although it is unlikely (but possible) that a heavy storm would occur on the same day as the complete failure of a completely full tank, the extra 10 percent capacity is easily calculated and will ensure that such

an event would not result in overflow. An extr a 10 percent is not needed indoors as long as the displaced volume of other tanks and appurtenances within the containment has been included. Thus, EPA decided to retain the 110 per cent (outdoor) and 100 pe rcent (indoor) capacity requirement for bulk liquid pesticide storag e for both new and existing facilities.

Dry Bulk. For dry bulk pesticides, EPA’s proposed standards required that secondary containment structures have a minimum holding cap acity of at least 100 percent of the largest dry bulk container plus any displaced volume.

The Agency believes that the public comment s submitted on this issue provide adequate justification for treating dry bulk differently than liquid bulk. Instead of specifying a percent capacity requirement, the final rule requires that dry pesticides be protected from wind and rain by being raised on pallets or a concrete platform to prevent the flow of water in or under the pesticide. The structure must be enclosed by a si x-inch high curb that ex tends at least two feet beyond the perimeter of the container.

Pads. The proposed standards for new structures re quired that all containment pads have a minimum holding capacity of 1,000 gallons. If no equipment used on the pad exceeded 1,000 gallons, then at least 100 percen t of the capacity of the larges t equipment used on the pad was required.

After reviewing public comments on the proposed capacity standards for containment pads, the Agency agreed that there was little documenta tion to support a choice of a 1,000 gallon capacity, and little difference, in function, between a 1,000 gallon pad and a 750-gallon pad. The final rule requires a pad capacity of 750 gallons, or, if no container on the pad exceeds 750 gallons, a minimum capacity of 100 percent of the volume of the largest container or pesticide-holding7/13/2006 Containment EA, page 16 equipment on the pad. The Agency believes th at such a pad will provide environmental protection, since the requirement that transfers be attended by an operator makes it unlikely that an entire tank or nurse truck would empty onto the pad before remedial action could be taken.

2.3.3 Interim Standards for Existing Structures

EPA’s proposal specified requirements for new a nd existing containment structures and pads by describing full and interim standards, respectivel y. A number of requirements applied to both new and existing containment structures and pads , applicable after a 2- year “interim” period, including: (1) construction with rigid materials; (2) use of pesticide-resistant materials; (3) stormwater run-on protection for a 25-year, 24-hour storm; (4) anchoring of non-elevated bulk containers; (5) protection of appurtenances and containers; (6) sealed joints and cracks; (7) capacity requirements; and (8) hydraulic conductivity le ss than or equal to 1 x 10 -6 cm/sec. Standards applicable to new structures after th e first 2 years and existing structures after an additional 8-year “interim” peri od included: (1) hydraulic conduc tivity less than or equal to

1 x 10 -7 cm/sec; (2) plumbing configur ed to facilitate leak detect ion; (3) no drains or pipes penetrating the containment structure; (4) mi nimum secondary containment capacity based on 110 percent/125 percent (indoors/outdoor s) of the largest liquid c ontainer and on 100 percent of the largest dry bulk container; (5 ) bulk containers elevated for leak observation; and (6) pads sloped to sumps.

After reviewing the public comments, the Agency agrees that the interim standards and interim period are less desirable than some of the sugge sted alternatives. The Agency considered grandfathering all existing structures, but was con cerned that some substandard structures might be allowed to operate virtually “forever” wit hout a need to retrofit. Although the Agency estimates that more than 80 per cent of containment structures and pads are in states with containment regulations, there remain many pestic ide storage facilities th at require secondary containment structures and pads in non-regulated states. Grandf athering these structures with no time limit for compliance would have presente d unknown environmental risks. The Agency therefore decided to promulgate two sets of pe rmanent standards, one for existing and one for new structures. For any existi ng facilities that must undergo si gnificant renovations to comply with the critical standards, EPA is recommending th at states encourage such facilities to make the additional effort to come into compliance with the full standards. States continue to have the option of requiring existi ng structures to comply with the full federal standards. To accommodate states with containment regulations al ready in place, the Agency is allowing states to petition for an equivalency determination (discussed in Section 2.2.3).

2.3.4 Scope of the Containment Regulations

The proposed scope was based on EPA’s ability to characterize the potential contamination problems at bulk pesticide storage facilities, incorporating evidence of contamination and a reasonably accurate estimate of the number of each type of facility. The scope under the proposed rule included retail refillers and commercial applic ators with bulk agricultural pesticides but specifically excluded some groups , including farms, distributor/registrants, and non-agricultural facilities.

For the final rule, EPA decided to keep the scop e the same as in the proposal, since commenters did not provide sufficient evidence of contamina tion or other problems at these facilities.7/13/2006 Containment EA, page 17 However, if a pervasive pattern of contamination or other ha ndling problems at any of the excluded sites arises, EPA will consider the need for future federal re gulation at that time.

In the proposed scope, containers that hold undivided quantities of agricultural pesticides greater than 793 gallons of liquid pesticide or greater than 4,409 pounds of dry pesticide were subject to the containment regulations. Many commenters recommended reducing the capacity threshold for containers for which secondary containmen t is required. Based on these comments, the Agency has decided to reduce the capacity thres hold to 500 gallons for containers holding liquid pesticide and to 4,000 pounds for cont ainers holding dry pesticides.

As modified, the final bulk pest icide containment standards form the basis for the remainder of the analysis.

2.4 Comparison of the Estimated Costs and Bene fits of the Final and Proposed Standards

As described in Section 2.3, EPA made a numbe r of significant cha nges to the pesticide container standards from the proposed to the final st andards. As a result, there are differences in the level of compliance with these standards, le ading to differences in the estimated costs and benefits of compliance with th e pesticide containment standard s between the proposed and final rule. Tables 2.3 and 2.4 present the estimated cost s and benefits of compliance for the final and proposed pesticide containment standards.

Table 2.3. Annual Compliance Cost Compar ison Between the Final and Proposed Pesticide Containment Standards (2005$)

Cost Item Compliance Cost for Final

Containment Standards a Compliance Cost for Proposed

Containment Standards b

Total Cost of Compliance $2.94 million $12.96 million

Total Cost of Compliance by Regulated Industry

Agricultural Pesticide Refillers $2.71 million $10.82 million

Commercial Applicators $0.23 million $2.14 million

Total Cost of Compliance by Standard

New Containment Structures $2.69 million $9.71 million

Retrofitting Existing Containment

Structures $0.25 million $3.25 million

a Cost based on 3 percent discount rate. See Chapter 4 and 5 for the cost analysis of the pesticide containment regulations.

b Based on the costs estimated for Regulatory Option 2 in the proposed rule RIA for pesticide containers, which was EPA’s preferred option in the proposed rule. The figures are inflated to 2005 dollars to account for general price inflation over the period using CPI-U “All Items” (BLS, 2005)

The total cost of compliance with the final standa rds is estimated to be lower than the estimated total cost of compliance with the proposed standa rds (see Table 2.3). This is primarily the result of the changes in the rule requirements from the proposed to final rule. One of the significant changes between the proposed and final pesticide containment rule is the elimination of the interim period requirements to retr ofit existing structures and also elimination of the more costly requirements of the proposed rule , such as the hydrau lic conductivity standard and reduction in the capacity requirements. The annualized cost of the final rule is also lower because it extends

the time for which costs are calculated from a 15-year period to a 20-ye ar period. Differences7/13/2006 Containment EA, page 18 between estimated costs of the proposed and final ru les are also partially at tributable to the fact that more states regulate pesticide bulk storage fa cilities. However, the bulk of reduction in costs is due to changes in regulatory requirements rather than changes in the size of the regulated community. Chapters 4 and 5 present more detail s on the specific cost items for the final and proposed rule.

Table 2.4. Comparison of Benefits for the Proposed and Final Containment Standards (2005$)

Benefit Category Final Containment Standards a Proposed Containment Standards b

Human Health-Related Benefits

Not Estimated

Non-Human Health-Related Benefits

Probability of Release • 1% • 1.5%

Facilities with Accidental

Release • 5811 facilities • 3000 facilities

Avoided Costs of

Remediation • $12.2 million to $18.6 million • $9.3 million to $15.6 million

a See Chapter 6.

b The figures are inflated to 2005 do llars to account for general price infl ation over the period using CPI-U “All Items” (BLS, 2005).

The benefits from the final containment regula tions exceed those from the proposed containment regulations, with the estimated benefits ranging from $12.2 million to $18.6 million under the final rule as compared to $9.3 million to $15.6 m illion from the proposed regulation (see Table 2.4). The differences arise because of the assumpti ons used in the calculation of avoided costs of remediation (see Chapter 6).

In summary, Chapter 2 presented the final bulk pesticide containment regulations. Specific details of the containment regulation standard s were described for both the new and existing containment structures. Changes in regulation from the proposed to the final standards were also presented. The most significant changes in cluded deletion of the hydraulic conductivity standards, deletion of the interi m standards and more stringent fu ll standards for new structures. The final rule also adjusts capacity standards for new and existing structures and reduces the record keeping responsib ilities. This chapter also presen ted the responses to the comments received to the proposed rule. Based on the co mments received the final rule lowers the size threshold of liquid bulk containers from 793 gallons to 500 gallons. Finally, this chapter provided a comparison of the cost and be nefits from the final and proposed rule.7/13/2006 Containment EA, page 19 

### 3.0 Baseline Compliance Profile of the Regulated Community

This chapter establishes a baseline regulatory compliance profile of facilities affected by the final pesticide containment rule, which specifies st andards for both new and existing containment structures. The first two sections of this chap ter discuss the developmen t of a baseline regulatory compliance profile, including the number of fac ilities expected to install new containment structures or to retrofit existing containment structures for both agricultural pesticide refillers (i.e., agrichemical dealers) (S ection 3.1) and agricultural commercial applicators (Section 3.2). Section 3.3 presents an economic profile of agri cultural pesticide refill ers and agricultural commercial applicators.

The regulated community affected by the pesticide containment regulations are facilities that use one or more stationary bulk ag ricultural pesticide containers, mobile bulk agricultural pesticide

containers that remain in one location for at le ast 30 consecutive days, and containment pads for agricultural pesticide dispensing ar eas. Affected fac ilities include farm supply and agrichemical dealers, commercial aerial and ground applicator s not associated with a dealership, and other farm sector industries. These agricultural businesse s sell pesticides to th e end user and/or apply pesticides as a service.

Several factors influence U.S. agricultural businesse s’ use of bulk pesticide storage for particular pesticide products. Demand for a particular pe sticide is among the mo st critical factors determining whether a specific pesticide is stor ed in bulk quantities. Without sufficient demand, agrichemical dealers would not find it economica lly feasible to store a pesticide in bulk quantities. The size of the overall regional or national market area for a pesticide is also a determining factor, since special transportation equipment is need ed to ship bulk quantities of pesticides (Bradley, 1991). Therefore, most bulk pesticide storage at the dealer level is associated with pesticides for crops that are extensively grown within the area served by the dealership, as well as on a broade r regional and/or national scale.

The price of a pesticide may also influence whic h products are likely to be stored in bulk. Dealers are not generally willing to assume the liability of storing large volumes of concentrated pesticide (Lewis, 1991). Currently, EPA’s Bulk Pesticides Enforcement Policy July, 1977 (41 FR 55932) allows dealers to refill containers designed and constructed to accommodate volumes exceeding 55 gallons. The feasibility of bulk st orage at the dealer level depends, however, on the purchase of large quantities of pesticides by end users. In many cases, dealers also require customers to accept custom application services provided by the dealer. An alternative involves a dealer that has a licensed repackaging agreem ent with the pesticide manufacturer to permit dispensing of the product into cont ainers designed with a capacity of 55 gallons or less. Industry representatives, trying to promote the trend toward using refillable containers, have increased the use of “toll” repackaging agreements to facilita te use of 15 and 30 gallon refillable containers. 7
The safeguards specified in the Bulk Pesticides Enforcement Policy are incorporated in the final container regulations through the requirements re garding registrant and refilling establishment

7 EPA policy allows manufacturers to enter into agreements with dealers for the repackag ing of pesticide products. There are two types of repackaging: bulk and contract/toll. Toll repackaging involves the use of containers less than 56 gallons liquid or 100 pounds dry capacity.7/13/2006 Containment EA, page 20 repackaging responsibilities. The Bulk Pesticides Enforcement Policy will be rescinded after the regulations are final.

Bulk storage of pesticides is closely correlate d with specific major crops. Based on information from state agencies and pesticide manufacturers, most bulk pesticide storage is associated with the production of corn, soybeans, wheat, rice, and cotton. Other crops incl ude peanuts and apple and pear orchards (Lewis, 1991; Bradley, 1991; Musselman, 1991; Ki rby, 1991; Broadbent, 1991). Regional production patterns of these crops are also reflected in the use of bulk storage for pesticides.

Pesticides stored in bulk are usually those applied at relative ly high rates per acre, typically greater than 1 gallon pe r acre (Musselman, 1991). Pesticides typically applied at low rates per acre do not generate sufficient demand for dealers to store them in bulk quantities (Fulton, 1991; Gingery, 1991); examples are pesticides for minor crops, pesticides for major crops that are grown only to a limited extent in a given area, pes ticides that are not popula r with the farmers in the service area, and pesticid es targeting pests that are seldom of economic concern.

Herbicides, which account for nearly one-half of total agricultural pesticide use (EPA, 2002), are more frequently stored in bulk c ontainers at the dealer level than are other types of pesticides (Fulton, 1991). Corn herbicides, in particular, are the main pesticide stored in liquid bulk containers by dealers, according to state agricu ltural agency representatives and various pesticide manufacturers (Musselman, 1991; Lewis, 1991; Brad ley, 1991). Several cont acts indicated that bulk storage of agricultural pest icides is common primarily in the Midwestern Corn Belt states, many of which have existing regulations governi ng the bulk storage of pesticides. However, according to industry representatives, use of bul k storage is increasing, and some companies are beginning to offer bulk quantities in states that have no experience in containment of large pesticide tanks, particularly in the southern United States.

The majority of bulk pesticide storage facilities a ffected by this rule are classified in the farm supplies industry under one North American I ndustry Classification System (NAICS) code, 422910–Farm Supplies Wholesalers (SIC code 5190). NAICS 422910 includes both farm supply dealers and fertilizer de alers (frequently referred to as agrichemical facilities or businesses), as well as other establishments e ngaged in the distribution of animal feeds, fertilizers, agricultural chemicals, pesticides, seed s, and other farm supplies, except grains (U.S. Department of Commerce, 2002). Agricultural (aerial and ground) commercial applicators are also affected by the rule. A ma jority of these industries ar e classified under NAICS 115112–Soil Preparation, Planting, and Cultivating. A number of agricultural services , such as cultivation, pollination, detasseling of corn, hoeing, and prun ing, are included under this NAICS code. The following sections provide an overview of the poten tial number of affected agricultural pesticide refilling and commercial applicat or facilities under the rule.

This economic analysis considers alternative definitions of small entities or businesses potentially affected by the containment regu lations by disaggregating SBA-defined small businesses into three size categories: small-small (SS), medium-small (MS), and large-small (LS) businesses. EPA proposed alternative defi nitions of small businesses for some industry sectors in the 1999 Supplemental Notice on Standards for Pesticid e Containers and Containment (EPA, 1999). EPA is concerned that using an ov erly broad definition of small business in the7/13/2006 Containment EA, page 21 economic analysis of the containment regulati ons may result in significant economic impacts on smaller entities that will be camouflaged wh en combined with info rmation about potential impacts on facilities that meet the SBA size standard for small business but are not typical of a small business in that industry sector.

Table 3.1 presents a summary of the industries likely to be a ffected by the final pesticide containment standards, highligh ting industries that are included in the cost analysis. The majority of affected businesses are agrichemical facilities that serve as refilling establishments (agricultural pesticide refillers) and agricultura l (aerial and ground) commercial applicators. Agricultural commercial applicators and other bu siness types comprise about one-third of the

number of affected establishmen ts under the rule. Two of the i ndustry sectors considered in the 1999 supplemental notice were pesticide agrich emical dealers and independent commercial applicators. These regulate d entities correspond with agricu ltural pesticide refillers and commercial applicators, respectively, in this economic analysis (EA).

Table 3.1. Industries Regulated by EPA’s Containment Regulations

Affected Industries Included

in EA (Y/N) Notes

All agricultural pesticide refillers. a Outdoor and indoor facilities that store liquid and/or dry bulk pesticides, requiring both secondary containment units and containment pads. Includes non-bulk facilities that handle or dispense bulk pesticides, requiring a containment pad. The EA focuses on stationary storage units. Mobile storage units are assumed not to be affected by the rule.

SBA Definitions b EPA Alternative Definitions

Small-Small 1 to 9 employees

Medium-Small 10 to 49 employees Small 100 or fewer employees

Large-Small 50 to 100 employees Agricultural pesticide

refillers (NAICS 422910, Farm Supplies Wholesalers)

Facilities with bulk pesticide storage only. Y

Large 101 or more employees Large 101 or more employees7/13/2006 Containment EA, page 22 Table 3.1. Industries Regulated by EPA’ s Containment Regulations (Continued)

All aerial applicators; large ground applicators. a Outdoor facilities that store liquid bulk pesticides, requiring both secondary containment units and containment pads. The EA assumes that all independent applicators store bulk pesticides outdoors only, and that they do not store dry bulk pesticides. Non-bulk facilities that handle/dispense bulk pesticides are not examined separately in the economic analysis.

SBA Definitions b EPA Alternative Definitions

Small-Small 1 plane plus $93,750

in sales

Medium-Small 2 to 4 planes plus $375,000 in sales Small Maximum

revenues of $6.0 million

Large-Small 5 or more planes plus $750,000 in sales Agricultural

commercial applicators (NAICS 115112 Soil Preparation, Planting, and Cultivating)

Facilities with bulk pesticide storage only. Y

Large Revenues greater than $6.0 million Large Revenues greater than $6.0 million

Custom blenders N

Seed treatment

facilities N It is assumed that most of these facilities are captured within estimates of either agricultural pesticide refille rs and/or agricultural commercial applicators. No data are available on the few independent facilities that may be affected by the rule.

Forestry businesses N Most forestry businesses are assumed no t to be affected by the rule, based on a review of pesticide storage practices. No data are available on the few facilities that may be potentially affected by the rule.

Farm sites N Not covered by scope of rule.

a Facilities without secondary containment units and containment pads will be affected by the standards for new containment structures; facilities that have secondary co ntainment units and containment pads and are not in compliance with the critical performance-based standards w ill be affected by requirements for existing containment

structures.

b The SBA definition is based on the primary NAICS code or codes that best represen t(s) the regulated entity.

Several other types of agricu ltural businesses may have bulk and non-bulk pesticide storage facilities requiring containment structures that are not covered in this EA: independent custom

blenders and seed treatment facilities , forestry businesses, and farm sites. 8 Custom blenders are typically identified either as agricultural pest icide refillers or, more rarely, as commercial applicators (Eckermann, 1991; Owens, 1991; Licht, 1991; Faulconer, 1991).

Similarly, seed treatment businesses may be affiliated with dealers or are considered dealers under state regulations. Since the majority of th ese businesses are likely to be included in the number of agricultural pesticide refillers and independent applic ators, these businesses are not considered separately in the cost analysis. Although independent businesses will be affected by the containment regulations, data on these faciliti es are not available. Furthermore, the number of facilities is likely to be small based on info rmation obtained from state agricultural agency staff and other industry experts.

8 A more detailed discussion of the rationale for excluding these businesses from the cost analysis is provided in EPA (1993a).7/13/2006 Containment EA, page 23 Businesses involved in commerci al timber production are among the end users of pesticide products that may store pesticides on-site. Nevertheless, based on information obtained from forestry business representatives, the U.S. Forest Service and state-level forestry agents, forestryrelated businesses are not included in the scope of the new containment regulations. None of the large commercial timberland businesses that we contacted store pesticid es in stationary bulk containers (Crooker, 19 91; Gomersall, 1991; Stilwell, 1991), a nd some businesses claimed not to store any pesticides at their tim berland facilities (Borem, 1991; Striley, 1991). Businesses that provide forest maintenance services are also un likely to have permanent bulk storage facilities for pesticides (Striley, 1991). Furthermore, timberland businesses commonly contract out pesticide application services (Borem, 1991; Gomersall, 1991; Stilwe ll, 1991; Striley, 1991). Many large commercial timberland businesses, as well as state and federal forest service agencies, have specific operating procedures and practices that set standards for pesticides use and storage. These guidelines typically meet or exceed state requirements (Crooker, 1991; Parker, 1991; Stilwell, 1991; Stri ley, 1991). Although some forestry businesses may be affected by the regulations, data are not available to include them in the economic analysis.

Finally, farm sites may also use bulk storage an d permanent mixing and loading facilities. Use of bulk storage and permanent mixing and loading facilities on farms varies considerably among states and among regions. Information from most state experts indicate s that few farms store pesticides in bulk quantities, as defined by EPA’s containment regulations (Coldman, 1991; Fulton, 1991; Vest, 1991). Current disincentives for on-farm bulk st orage include the expense of permanent facilities and the increased hand ling requirements (Owens , 1991). However, bulk farm storage may be common in some states (Donaldson, 1991; Faulconer, 1991; Owens, 1991). When on-farm bulk storage is used, a large farm may store more of a chemical than a small dealership (Faulconer, 1991). In the western st ates, agricultural pestic ide refillers loan out mobile pesticide storage units to farmers who purchase bulk quantities of chemicals, to allow farmers to store chemicals in the field prior to use (Donaldson, 1991). A few of the largest growers may own their own bulk st orage tanks for similar purposes.

Farms with bulk pesticide storage are not includ ed in this economic analysis because EPA did not include farms under the scope of the rule. Fa rms engage only occasionally in bulk pesticide activities, and there is limited evidence that cont amination originating from farm mixer/loader pads is widespread, as compared to environmen tal contamination from refilling establishments. Moreover, data are not available to estimate the nu mber of farms with bulk pesticide storage. A representative of the Il linois Department of Agriculture asse rted that there are three farms in Illinois with storage of over 300 gallons of pesticides, while the Kansas Department of Agriculture estimates that six farms statewide st ore pesticides in bulk containers (EPA, 2005). A contact from the Colorado Department of Agricultu re said there are very few pesticide containers over 500 gallons on farms in Colorado (EPA, 2005). Comments submitted to EPA by some state regulatory agencies suggest that there are less than six farmer locations with bulk containers greater than 500 gallons in Minne sota. While these estimates s uggest that few farms have bulk storage of pesticides, other state contacts suggest ed that the practice is more common. A statelevel contact estimated that less than 1 percent of all farms in Iowa (about 800), and 3 percent of all farms in the United States (about 62,000 farms) , may store pesticides in bulk tanks (Owens, 1991). A representative of the Washington State Department of Agriculture estimated that 15% of farms have pesticide tanks larger than 500 gallons, although it is po ssible that this figure7/13/2006 Containment EA, page 24 includes fertilizer tanks, as well (EPA, 2005). Thes e estimates are much higher than an earlier estimate of 1,500 farms, based on 50 percent of all corn, soybean, and cotton farms that have sufficient acreage to use more than 3,000 liters of herbicid es in a year. At this time, there is insufficient information to jus tify including farms in the rule.

3.1 Compliance Profile of Agricultural Pesticide Refillers

Agricultural pesticide refilling facilities affected by the pesticide containment regulations include sites with bulk pesticid e storage (liquid and dry) and dealers without bu lk storage that conduct pesticide dispensing activities requiring a containment pad. We derived an estimate of the number of these regulated faciliti es from previous estimates of a ll agricultural pesticide refillers in the United States, adjusted for availabl e state industry statisti cs and methodological assumptions. Specifically, we provide estimates of the number of affected facilities for the following categories of agricultural pesticide refi llers: (1) the total number of agricultural pesticide refillers that qualify as refilling es tablishments; (2) a subcategory of all refilling establishments, representing the number of agricultural pesticide refillers with bulk pesticide tanks; (3) agricultura l pesticide refillers with bulk tanks but without se condary containment that will need to install new structures; and (4) agricu ltural pesticide refillers with bulk tanks that have substandard secondary containment and will need to retrofit existing structures. These estimates are described in the following sections and presented in Tabl es G.1 through G.4 of Appendix G.

3.1.1 Total Number of Agricultur al Pesticide Refillers

Data on agricultural pesticide refillers with bul k pesticide storage subject to the pesticide containment regulations (with bulk tank capaci ty greater than 500 ga llons or 4,000 pounds) are not available for the nation as a whole. Instead, a state- and regional-base d approach was used to develop an estimate of the current status of bulk pesticide storage facilities. This approach was deemed necessary given the significant differe nces in the use of bulk pesticide storage nationwide, as well as differences in bulk pest icide storage regulations among states. Although pesticides are used on most crops in most parts of the country, fe w pesticides are used in such quantities in a given area to wa rrant the storage of bulk quantitie s at the dealer level. Where available, data are supplemented by informati on obtained from state-level personnel in key agricultural states. 9

The number of agricultural pestic ide refillers is based on published national and state-level data.

Published data sources include American Busi ness Information and the U.S. Department of Commerce, both of which provide a national ove rview of the number of farm supply and fertilizer dealerships by state. Since these aggregate estimates tend to overestimate the actual number of facilities, given the inclusion of businesses that are not actually involved in selling agricultural chemicals, the number of refilling esta blishments is estimated from available state

information. 10 These data are then adjusted to focus onl y on those facilities that store pesticides in bulk quantities, with capacity subject to the regulations (i.e ., greater than 500 gallons or 4,000

9 According to CropLife America, ther e are increasing numbers of bulk facilities being built in states without bulk containment structures. However, no data are cu rrently available to substantiate these claims.

10 As shown in Table G.1, similarities exist between the published data and various state-level estimates of the number of agricultural pesticide refilling (agrichemical) facilit ies, although there are significant differences in some

states.7/13/2006 Containment EA, page 25 pounds), and/or those that have pesticide dispensing areas. NAI CS- and/or SIC-based data are

used when more detailed state estimates are not available or where available information is contradictory or inconsistent.

As shown in Table 3.2, an estimated 16,795 refilli ng facilities could poten tially sell ag ricultural chemicals (though not necessarily store them in bul k containers). This estimate is from the proposed EPA containment rule RIA, which is based on 1992 data. By using these data, EPA

assumes that the number of facilities in the indus try did not change since 1992. The information on commercial applicators presented in Table 3.2 is discussed in Secti on 3.2. The number of agricultural refillers is further adjusted, as describe d below, to reflect the number of facilities that store bulk quantities of pesticides on-site and/or that engage in handling/dispensing activities that require containment structures. Approximately 5,040 bulk facilities (inc ludes 175 facilities with dry containers) located at agricultural pesticide refilling establishments are affected, because the bulk tank containment regulations only affect tanks greater than 500 gallons or 4,000 pounds in capacity.7/13/2006 Containment EA, page 26 Table 3.2. Regulatory Compliance Baseline, Agricultural Pesticide Refillers and Commercial (Aerial and Ground) Applicators

Secondary

Containment c Containment Pad c
Type of Applicator Total Facilities

with Bulk Storage b With Without With Without

Agricultural Pesticide Refillers

Total Agrichemical Dealers 16,795 a

Retail Liquid bulk (>500 gal) 5,040 b 4,548 c 491 4,206 d 834

Retail Dry bulk (>4,409 lbs) 175 e 147 f 28 -- --

Non-bulk 561 g -- -- -- 561

Commercial Applicators

Total Commercial Applicators 3,000 h 210 i 189 j 21 175 j 35

Aerial applicators 2,000 160 144 16 134 26

Ground applicators 1,000 50 45 5 42 8

Totals may not add due to rounding.

a See Table G.1.

b See Table G.2.

c Assumes that 100% of facilities in regulated states an d that 40% of facilities in non-regulated states have containment structures in place. Remaining facilities are assumed to not have containment structures and will need to install both secondary containment structures and pads. This estimate is derived from the proposed EPA containment rule RIA. (See Table G.2.)

d Assumes that 100% of facilities in regulated states and 25% of facilities in non-regulated states have containment structures in place. Remaining facilities are assumed to not have containment pads and will need to install pads. This estimate is derived from the proposed containment rule RIA. (See Table G.2.)

e These facilities are part of the 5,040 bulk liquid facilities b ecause it is assumed that dry bulk containers are jointly located at facilities that also have liqui d bulk storage. This forecast is ta ken from the propos ed EPA containment rule RIA, based on a review of state agency and industry information.

f Assumes that 90% (158 facilities) of dry bulk facilities ar e located in eight states (IN, IL, IA, MI, MN, ND, OH, SD). Based on a review of containment regulations in these states, weighted against the number of liquid bulk facilities in these states, 140 facilities (89%) are in complia nce. Among the facilities in the remaining states, it is assumed that 40% (seven facilities) are in compliance, gi ven lack of better information. Assumes all dry bulk containment facilities are jointly located at facilities that also have liquid bulk storage.

g Difference between the number of bulk dealers with bulk liquid containment less than 55 gallons and the number of facilities with containment greater than 500 gallons. (See Table G.2.)

h American Business Information reported an estimated 3,936 independent applicator facilities in 1992. For this analysis, it is assumed that 2,000 are aerial applicators (National Agricultura l Aviation Association, 2001). An estimated 1,000 ground applicator facilities are assumed. The remaining facilities are not reviewed because it is assumed that they do not handle/dispense bulk pesticides.

i Based on industry and state-level data, it is assumed that an overall estimate of 8 percent of all aerial applicators (160 facilities) have bulk pesticide stor age containers greater than 500 gallons or 4,409 pounds. About 5 percent of the estimated number of independent ground applicators ( 50 facilities) are assumed to have bulk storage facilities for agricultural pesticides in containers greater than 500 gallons or 4,409 pounds.

j Based on information for agricultural pesticide refillers (see Table G.2), 90% of all agrichemical bulk facilities are in compliance with the secondary containment standards and 83% of facilities are expected to be in compliance with the containment pad standards. Assumes that the estim ated number of facilities without secondary containment units also do not have pads (i.e., 10 aerial applicator facilities and three ground a pplicator facilities will require containment pads only).7/13/2006 Containment EA, page 27 The following sections discuss the assumptions us ed to estimate the number of facilities that require secondary containment of bulk pesticide st orage (liquid and dry), as well as the number of bulk and non-bulk facilities that require co ntainment pads for di spensing activities.

3.1.2 Number of Agricultural Pesticide Refi llers with Bulk Pesticide Storage

The number of agrichemical ref illing facilities with stationary bulk storage of liquid or dry pesticides is estimated in the following sections (see Table 3.2).

Facilities with stationary bulk liquid pesticide storage. No published data are available to document the number of agri cultural pesticide dealers with bulk liquid pesticide storage facilities by state. National estimates of 3,500 (Myrick, 1991a) and 3,000 bulk stor age facilities (Gilding, 1991) have been reported. The difference betwee n the estimates highlight s the need to develop an independent estimate. To derive such an es timate, information and data from several states were examined, most of which have existing pesticide containment regulations: Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Main e, Michigan, Minnesota, Mississippi, Montana, North Carolina, North Dakota, Ohio, South Dakot a, Vermont, West Virginia, and Wisconsin. State agency personnel in these states provided information on the percentage of dealers with bulk storage, which was used to estimate the numbe r of bulk dealers (or visa versa). All dealers were assumed to handle pesticide co ntainers greater than 55 gallons.

Information obtained from these states was also used to derive an estimate of the percentage of dealers that have bulk storage faci lities in states where data are not available. The average of all available state percentages of deal ers that have bulk storage is a bout 40 percent. This figure is based on information on the Corn Belt states, wh ere the use of bulk stor age for agricultural pesticides is greater than in other parts of the country. 11 Additionally, these states define “bulk” storage as stationary containe rs (i.e., not a minibulk or other container designed to be transported) with a capacity of greater than 55 gall ons. This definition is similar to that used in most of the states with existing pesticide containment regulations.

Data from state agricultural agency representati ves outside the Corn Belt region indicate a much lower use of bulk storage of agricultural pesticid es. Contacts in Maine, Mississippi, and West Virginia indicated that less than 10 percent of th eir pesticide dealers have bulk storage facilities; contacts in Vermont and North Carolina provi ded information indicating that less than 20 percent of their agricultural pesticide dealers have bulk storage facilities. Accordingly, it was not deemed reasonable to assume that the same percen tage of bulk facilities in other agricultural regions is the same as the percen tage in the Corn Belt states. Th erefore, a regional approach was adopted to estimate the number of dealers of bulk pesticides. The ec onomic analysis assumes that 50 percent of pesticide deal ers in the Corn Belt region and 25 percent of all dealers in the other major agricultural states store pesticides in bulk containers. In 25 states that have less agricultural production (see Table G. 2 for the full listing), it is a ssumed that about 10 percent of refillers store pesticides in bulk containers. Based on this methodology, the total number of U.S.

11 The Corn Belt states are Illinois, Indiana, Iowa, Mi chigan, Minnesota, Missouri, Nebraska, Ohio and South Dakota. Major agricultural states not included in the Corn Belt states are California, Colorado, Kansas, Kentucky, Louisiana, Montana, New York, North Dakota, Pennsylvania, Washington and Wisconsin. The remaining 25 states are those with less ag ricultural production.7/13/2006 Containment EA, page 28 pesticide dealers with bulk storage of liquid pes ticides in containers gr eater than 55 gallons is estimated at about 5,601 (see Table G.2).

Facilities that store pesticides in containers wi th a capacity greater than 500 gallons are affected by the regulations. Since most stationary bulk st orage containers hold at least 1,000 gallons, it is assumed that 90 percent of all bulk facilities st ore pesticides in undivide d quantities of greater than 500 gallons. This percentage is based on data provided by various state agency personnel and on professional judgment. Based on these calculations, an estimated 5,040 agrichemical facilities with bulk liquid storage tanks handle pesticide containers gr eater than 500 gallons (Table 3.2 and Table G.2) and are subj ect to the containment regulations.

Facilities with stationary bulk dry pesticide storage. Bulk storage of dry pesticide formulations is a fairly recent i nnovation compared to liquid bulk pesticide storage. Only a few pesticide companies market their dry pesticide fo rmulations in bulk; thes e products are typically

corn herbicides. The fixed tanks used to store dry bulk pesticides are si milar to those used for liquid pesticides and may hold up to 90,000 pounds of product. The tanks are loaded pneumatically, involving a filtration system to avoid contamination from dust. Unlike liquid pesticide tanks, tanks for dry bulk pesticides have no hydraulic pressure to force a dry product out of the tank should a leak occur. When spills do occur, dry bulk pesticides are more easily contained than liquid pesticides.

Manufacturers of dry bulk pesticides do not require storage tanks to be installed within a diked area, although the same manufactur ers require secondary containmen t for liquid bulk pesticides. The dry bulk tanks are typically in stalled on concrete pads, which may be several feet thick and are designed to support the weight of the tank and its contents. While not specifically designed to prevent runoff or run on, the pads are often curbed or sloped toward the center. About 50 percent of existing tanks have b een installed within existing s econdary containment structures designed for and shared by liquid bulk pesticid e tanks. Manufacturers typically require an operational pad in front of dry bulk tanks for loading and unloading (Helmer, 1991).

Dry bulk pesticide systems were developed to fill a market niche that underwent rapid expansion in the early 1990s. One industry contact estimated a 33 percent increase in the number of dry bulk tanks between 1991 and 1992, while another indi cated that an increase of more than 90 percent could have occurred within the same period (H elmer, 1991, Keffer, 1991). To estimate the number of facilities with dry bulk, the propo sed EPA containment rule regulatory impact analysis (RIA) tried to account fo r a potential increase in the number of facilities with dry bulk. Discussions with State agencies suggest that the growth in dry bulk storage did not continue. As a result, this economic analysis assumes the sa me number of dry bulk facilities as in the proposed EPA containment rule RIA, amounting to a total of 175 tank fa cilities (Table 3.2).

These facilities are concentrated in three states—I llinois, Indiana, and Io wa. Dry bulk facilities are also located in Michigan, Minnesota, North Dakota, Ohio, and South Dakota. These eight states are assumed to account for most (90 percen t) of the dry bulk pesticide storage facilities (158 facilities), with the remain ing facilities located in all ot her states (17 facilities). All facilities that store bulk quantitie s of dry pesticide are assumed to be located in states that regulate pesticide containment structures. Only medium-small, large-small, and large facilities are expected to be affected by requirements for dr y pesticide storage. A ll dry bulk containers are assumed to be jointly located at faciliti es that also have liquid bulk storage.7/13/2006 Containment EA, page 29 Facilities with mobile bulk pesticide storage. The pesticide containment regulations are assumed to affect agricultural refilling businesses th at store pesticides in a mobile container with a capacity greater than 500 gallons (liquid) or 4,409 pounds (dry) for more than 30 consecutive days at one location (i.e., primar ily agrichemical facilities with st ationary bulk pesticide storage).

Other facilities will also be affected by the containment regul ations, including agrichemical

facilities that conduct non-bulk refi lling activities that require cont ainment. This analysis does

not estimate costs for mobile containers since it is assumed that facilities using mobile containers will not be affected by the regulations.

The following sections discuss the assumptions us ed to estimate the number of facilities that require secondary containment of bulk pesticide st orage (liquid and dry), as well as the number of bulk and non-bulk facilities that require co ntainment pads for di spensing activities.

3.1.3 Agricultural Pesticide Refillers Requiri ng Installation of New Containment

Structures

The final containment rule out lines standards for both secondary containment units and containment pads. Agrichemical refilling facilit ies that will be affected by standards for new

containment structures include facilities with out door and indoor bulk storage (liquid and dry). Facilities with non-bulk storage of liquid pesticides are also incl uded if the dealers engage in activities (i.e., dispensing or refilling) that requ ire a pesticide containment pad. Tables located in Appendix G provide estimates of the number of bulk pesticide containment facilities without existing containment structures that are affected by regula tions governing new containment structures (see Table G.3). The baseline number of agricultural pesticide refillers is from the proposed EPA containment rule RIA.

No data are available to assess the compliance status of bulk pesticid e storage facilities. However, many structures are locate d in states that already regulat e bulk pesticide storage. To evaluate the applicability of these state standards to the federal requirements, EPA conducted a comprehensive review of existing regulations in 19 states: Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota , Missouri, Nebraska, New Hampshire, North Dakota, Ohio, South Dakota, Vermont, Wash ington, West Virginia, and Wisconsin (see Appendix C). Each EPA requirement was chec ked against individual state regulations to determine the percentage of stru ctures in those states that wo uld also be in compliance with requirements if the final rule.

This economic analysis assumes that all facilities in states that regulate bulk pesticide storage have secondary containment and containment pads, a nd that all facilities in regulated states are in compliance with containment rule requirements. In the unregulated states, we assume that 40 percent of bulk facilities have secondary containment (see Ta ble G.2). Using these assumptions,

we estimated the number of facilities that will either be required to install new containment structures or to retrofit existing containment structures to comply with the standards for existing

and new structures.

Facilities with bulk liquid pesticide storage th at require installation of new structures. An estimated 5,040 facilities handle, dispense, and/ or store bulk quantities of liquid pesticides subject to containment regulations (Table 3.2). Cu rrently, 19 states have re gulations that specify7/13/2006 Containment EA, page 30 standards for secondary containment of bulk pesticides. An estimated 4,220 facilities (84 percent of refilling facilities with bulk storage) are located in states that regulate bulk pesticide storage subject to containment regulations (T able G.2 in Appendix G). Of the remaining facilities, it is assumed that appr oximately 40 percent of all facilities in unregulated states have secondary containment. 12 Therefore, an estimated 491 (60 percent of 820) bulk liquid storage facilities do not have secondary containment a nd will need to install both new secondary containment units and pads (Table G.2).

Excluding the estimated 28 facilities that also require structures for dry bulk pesticide containment (see next section), 463 facilities wi ll need containment structures for bulk liquid storage only. For the purposes of this analysis, it is assumed that 70 percent of these facilities are outdoors and that 30 percent of facilities are indoors. 13 Therefore, 324 faci lities (70 percent of 463 facilities) would require inst allation of outdoor containment st ructures, and 139 facilities (30 percent of 463 facilities) would require installation of indoor containment structures (see Table G.3).

Containment pads are also s ubject to the standards. An estimated 4,206 facilities, or approximately 83 percent of all facilities with bulk liquid storage, currently have containment pads for pesticide dispensing areas (see Table G.2). This total assumes that all facilities that handle pesticide containers greater than 500 gallons in states with contai nment regulations would comply with state requirements. However, not all these states regulate containment pads according to EPA standards. Currently, 16 of the 19 regulated states have standards for containment pads (excluding Kansas, Louisiana, a nd North Dakota) that app ear to be consistent with EPA standards (see Appendix D). Kansas , Louisiana, and Nort h Dakota do not have standards for containment pads that are consiste nt with EPA standards and are assumed to have compliance similar to the unregulated states.

All bulk pesticide storage facilities in the 16 re gulated states are assumed to have containment pads. An assumed measure of 25 percent of facil ities in states without existing regulations (and in Kansas, Louisiana, and North Dakota) are as sumed to have containment pads. There are a total of 834 facilities in unregulat ed states (including Kansas, Loui siana, and North Dakota) that do not have containment pads and would need to construct new pads (see Table G.2). Most of these facilities (491 f acilities) are expected to construct pads in addition to secondary containment structures under the containment regu lations (included in previous estimates). The remaining 343 facilities (834 facil ities less 491 facilities) will onl y require installation of new containment pads. Approximately 240 (70 percen t) facilities will require outdoor pads, whereas 103 (30 percent) facilities are ex pected to require indoor cont ainment pads (see Table G.3).

Facilities with bulk dry pesticide storage th at require installation of new structures. This analysis assumes that all dry bulk containers are jointly located at facilities that also have liquid bulk storage. An estimated 175 agrichemical facilities (among the 5,040 liquid bulk dealers) handle, dispense, or store bulk quantities of dry pe sticides (Table 3.2). Of these, 158 facilities (90 percent) are assumed to be located in eight states (Indiana, Illinois, Iowa, Minnesota, North

12 Data from one state with containment regulations indicat ed that two facilities did not have secondary containment units and pads. These two facilities were added to the total number of facilities not in compliance with containment regulations.

13 Estimate from the proposed EPA containment rule RIA based on information obtained from industry contacts.7/13/2006 Containment EA, page 31 Dakota, Ohio and South Dakota), all of which ha ve containment regulations of varying degrees of stringency. There are 17 facilities in states without regulations (175 - 158). A majority of

these facilities will need new structures.

Weighted against the number of liquid bulk containment structures in the states with regulations equivalent to EPA’s (Table G.2) 14 it is assumed that 140 (approxi mately 90 percent) of the 158 facilities in those states have secondary cont ainment units and containment pads that meet federal requirements. 15 For the 17 facilities with dry bulk st orage in states without regulations, it is assumed, based on professional ju dgment, that 40 percent (7 fac ilities) are in compliance and 10 will need new structures. Therefore, an estimat ed 147 facilities have existing dry bulk storage structures and an estimated 28 facilities (175 - 147) will need to construct both new secondary containment units and containment pads to meet federal requirements (see Table G.3).

Facilities with non-bulk pesticide activities that require installation of new structures. Some agricultural pesticide refi llers who conduct activities that do not involve bulk quantities of pesticides are also subject to the requirement for a pesticide containment pad. For example, a dealer involved in refilling pesticide contai ners from non-bulk contai ners must have a containment pad. No information is available regarding the number of businesses that conduct such activities. An estimated 5 percent of all ag ricultural pesticide refill ers that do not have bulk pesticide storage facilities carry out activities that are subject to the containment pad requirements (Howard, 1991). For this analysis, all the remaining facili ties (i.e., those with containers between 55 gallons and 500 ga llons) are assumed to conduct pesticide refilling/dispensing activities a nd require a containment pad. It is assumed that none of these 561 facilities (5,601 minus 5,040 bulk f acilities) currently have c ontainment pads and all will need to construct new pads to be in compliance (see Table G.3).

3.1.4 Agricultural Pesticide Refillers Requiring Retrofitting of Existing Containment

Structures

This section estimates the number of agricultural pesticide refilling facili ties with liquid and dry bulk pesticide storage that will n eed to retrofit existing containment structures to comply with the final standards. Agricultural pesticide refilli ng facilities will be a ffected by standards for existing secondary containment structures prot ecting bulk liquid and dry containers, and for existing containment pads. Table G.4 summarizes the number of bulk pesticide containment facilities with existing containment structures th at are affected by the final rule. The baseline number of agricultural pesticid e refillers is from the proposed EPA containment rule RIA.

No data are available to assess the compliance st atus of facilities with existing containment structures or bulk storage cont ainers. Many structures, however , are located in states that regulate pesticide containment. To estimate the ra te of compliance, this analysis first considers the number of facilities with secondary containm ent and/or containment pads that potentially comply with EPA requirements, based on a comp rehensive EPA review of regulations in 19 states (Appendix C) and broad-ba sed assumptions derived from st ate regulatory agencies and industry information. The results of the compar ison between state and federal standards were

14 This analysis assumes that all dry bulk containers are jointly located at facilities that also have liquid bulk storage.

15 Although these dry bulk facilities are assumed to be locat ed in regulated states, not all state requirements are adequate to meet federal standards.7/13/2006 Containment EA, page 32 used to derive the percentage compliance for fa cilities in states that regulate bulk pesticide
storage. 16 It was assumed that one-half of the structur es in unregulated states are in compliance, because of existing pesticide manufacturer requir ements, regulations already being implemented (e.g., effluent regulations under the EPA Office of Water), or the presumed use of basic good management practices.

3.1.4.1 Facilities with Bulk Liquid Pesticides That Require Retrofitting of Existing

Structures

Existing secondary containment units. Facilities with bulk liquid pesticides may need to retrofit existing secondary containment struct ures and containment pads. Approximately 328 facilities in states without regu lations are estimated to require retrofitting of existing secondary containment for bulk liquid pesticides (i.e., 4,548 total facilities less th e 4,220 facilities with secondary containment units in regulated stat es – Table G.2). In addition, although most facilities in regulated states are in compliance with the critical standards, it is estimated that 4 percent will have to retrofit due to some discrepancy between th e critical standards and state regulations (see Table G.4). Subs equent estimates of the number of affected facilities are based on a review of state regulations in conjuncti on with information from industry experts.

Agricultural pesticide refilling facilities w ith stationary liquid bulk storage in existing

containment structures are assumed to incur co mpliance costs to: (1) se al floor drains or discharge outlets, (2) se al all cracks, and (3) conduct mont hly inspection and recordkeeping. Based on a review of state regulations and othe r industry information, approximately 96 percent of secondary containment structures in stat es with existing regulations are assumed in compliance with the standards to seal floor dr ains and discharge outlets and will not incur retrofitting costs. About 50 per cent of structures in states w ithout regulations are assumed in compliance. Accordingly, a total of 333 structures [(4,220*0.04)+(328*0.50)] are not in compliance and must retrofit by sealing floor dr ains or discharge outlets. The number of

facilities that will need to seal all cracks ar e estimated based on the assumption in the proposed

rule RIA that all structures in states with re gulations and 10 percent of structures in states without regulations are in compliance. Theref ore, an estimated 295 structures (328*0.9) will incur costs to seal cracks. (See Table G.4.)

Weekly or monthly inspections of containment st ructures are currently required in 11 of the 19 states with containment regulations. 17 Weighted against the number of liquid bulk facilities in these regulated states, approximately 67 percent of all facilities in states with regulations are in compliance. An estimated 30 percent of the 328 facilities in states without regulations are assumed to have secondary containment units th at are in compliance with monthly inspection requirements. Accordingly, 1,602 faciliti es [(4,220*0.33)+(328*0.70)] will incur monthly inspection and recordkeeping costs.

16 Where necessary, this economic analysis utilizes percen tage compliance estimates derived in the proposed rule RIA. These estimates were based on a review of complian ce in several states, most of which regulate bulk pesticide containment structures: Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Michigan, Minnesota, Mississippi, Montana, North Carolina, North Dakota, Ohio, South Dakota, Vermont, West Virginia, and Wisconsin.

17 Of the state regulatory review conducted by EPA (Appendi x C), eight states do not meet EPA’s requirements for monthly inspections and recordkeeping: three states (Kansas, North Dakota, and Ohio) do not specify an inspection requirement; five states (Louisiana, Indiana, Missouri, South Dakota, and Wisconsin) have inspection requirements that do not match the federal requirement.7/13/2006 Containment EA, page 33 Existing pads. An estimated 205 facilities with pads are assumed not in compliance and will need to retrofit to meet EPA standards (f rom Table G.2, 4,206 total facilities less the 4,001 facilities with containment pads in states with regulations). Requirements for existing containment pads include the pad’s ability to contain 750 gallons (such as by adding a curb and/or a sump), a way to clean up spills (such as a pump), floor drains sealed, cracks repaired, and monthly inspection and recordkeeping.

The number of facilities that will need to seal existing drains is estimated assuming that 96 percent of containment pads in states with regula tions and 50 percent of the 205 facilities in nonregulated states comply with EPA standa rds. Thus, 263 pads [(4,001*0.04)+(205*0.50)] are out of compliance and must seal existing drains. Pads not in compliance are assumed to lack a capacity of 750 gallons, either by use of a curb or sump. Sloping is not required for existing facilities, and flat pads can be in compliance with or without a sump if they have a means of containing 750 gallons (such as with a curb) and the ability to pump out spills and leaks. The number of facilities that will require a sump or curb is estimated assuming that 94 percent of containment pads in states with regulations and 50 percent of pads in st ates without regulations have a capacity of at least 750 gallons. As a re sult, approximately 343 faci lities are considered out of compliance and will need to retrof it pads [(4,001*0.06)+(205*0.50)]. Retrofit estimates

are based on the cost of a curb or berm. The cost for a portable pump and hose for removing collected liquid materials and/or rainfall is cons idered part of the cost to retrofit secondary

containment structures. It is assumed that all facilities either already have a portable pump or will purchase one.

It is assumed that all existing pads in regulat ed states are in compliance because of state requirements to seal all cracks, gaps, and s eams, but that only 10 percent of pads in nonregulated states are in compliance. An estim ated 185 pads (205*0.90) are not in compliance and will incur costs to seal all cracks, gaps, and seams. In states with regulations, approximately 67 percent of all facilities are assumed in compliance with monthly inspection and recordkeeping requirements. In states wit hout regulations, 30 percent of all facilities are assumed in compliance. A total of 1,445 facilitie s with existing pads [(4,001*0.33)+(205*0.70)] are estimated to incur inspection and recordkeeping costs.

3.1.4.2 Facilities with Bulk Dry Pesticides That Require Retrofitting of Existing

Structures

Some facilities with bulk dry pesticides may need to retrofit existi ng secondary containment

structures. An estimated 147 facilities have ex isting structures for secondary containment of bulk dry pesticides (Section 3.1.3).

For this analysis, the number of dry bulk facilities needing retr ofit is calculated from data for liquid bulk facilities (see Table G.4), which show that 90 pe rcent of all facilities are in compliance with the standards for secondary cont ainment units. This compliance percentage is applied toward the number of facilities with ex isting dry bulk containmen t units, indicating that approximately 15 facilities (147*0.10) are not in compliance and will need to retrofit to comply with EPA standards for repairing cracks, gaps, and seams.7/13/2006 Containment EA, page 34 Approximately 70 facilities will incur inspection and recordkeeping costs. Of the 158 facilities assumed in compliance in the eight states used for the analysis, it is assumed that 67 percent (106) are in compliance with r ecordkeeping and inspection. Thus , the remaining 52, plus the 17 in the remaining states (175 - 158), will in cur inspection and recordkeeping costs.

3.2 Compliance Profile of Agricultural Commercial Applicators

The compliance profile of agricultural applicators in the United States that will be affected by the pesticide containment regulations centers on ae rial and ground applicators with bulk storage facilities requiring containment structures. Estimates of the number of agricultural commercial applicators that will be affected by EPA’s c ontainment standards are compiled from available information, supplemented by derived data on agricultu ral pesticide refillers. Affected facilities

must either install new containment stru ctures or retrofit existing structures.

Pesticide applicators that handle pesticides in bul k quantities and apply agri cultural pesticides for compensation (other than trading of personal se rvices between agricultu ral producers) will be affected by the final requirements. The anal ysis includes independe nt aerial and ground applicators, but excludes commercial applicat ors associated with agrichemical dealers (businesses that would be included in a complian ce overview of agricultural pesticide refillers). It is assumed that independent applicators have outdoor facilities only and do not engage in bulk storage and dispensing activities fo r dry bulk pesticides. All indepe ndent applicator facilities are assumed to be located in states that regulate bulk pesticide storage and operational pads for pesticide dispensing areas.

3.2.1 Total Number of Agricultural Commercial Applicators

Source data on the total number of commercial applicators th at are not associated with agrichemical dealers are limited compared to th e information available on agricultural pesticide refillers. In 1993, the total numbe r of licensed agricultural (pla nt) commercial applicators was estimated at 95,445 (EPA, 1993b). However, data on the number of businesses (rather than individual applicators) are not readily available, and estimate s that span different business categories vary. For example, the number of i ndividual aerial applicators is estimated at 13,031 (Myrick, 1991a). The number of businesses is much smaller.

In 1992, American Business Information (ABI) reported 1,361 businesses in the “Spraying, Horticultural” category and 1,816 businesses in the “Weed Control Service” category, representing a total of 3,177 busin esses. This figure does not include aerial applicators, but instead includes non-agricultural businesses such as lawn care serv ices and right-of-way maintenance businesses. In 1993, there were 3,936 establishments in the crop services industry (U.S. Department of Commerce, 1993), which includes all aerial and independent ground applicators, custom blenders, and other crop serv ices such as cultivation, detasseling of corn, pruning, or harvesting. The total number of “aer ial applicators (service)” was reported at 2,225 (ABI, 1992). For this analysis, an estimate of 2,000 aerial applic ation businesses is used, based on an estimate of 2,000 to 2,100 businesses throu gh a spokesperson for the National Agricultural Aviation Association (Collins, 1991). These busin esses have a total flee t of about 6,000 planes plus an unknown number of backup planes (Collins, 1991).7/13/2006 Containment EA, page 35 According to the Small Business Administ ration (SBA, 2002), agricultural commercial applicators are likely to be associated with NAICS Code 115112 (Soil Preparation, Planting, and Cultivation). Data are not available to separate out the affected establishments by those that practice insect, weed, or diseas e control of crops through gro und application of pesticides; cultivation services; detasseling of corn; hoeing; pruning; harvesting; cotton ginning; etc. As a rough approximation, this analysis assumes that a maximum of 1,000 establishments under NAICS Code 115112 are independent ground applicator s. The remaining number of businesses provide other crop services and are not expect ed to be directly affected by the rule.

An estimated 35 percent to 40 percent of all agri cultural pesticides are applied aerially (Fertig, 1991). Aerial applicators represent the largest group of agricultural commercial applicators, and are less likely to be associated with agrichem ical dealers or other businesses than are ground applicators. Aerial applicator s are typically indepe ndent businesses either based at municipal airports or private, often on-farm, airports . General information regarding the location (municipal or private airports) of aerial app lication businesses nationw ide is not available, although information is available for some states. In Iowa, for example, it is estimated that about 50 percent of aerial applicat ors are based at municipa l airports (Eckermann, 1991).

In addition to applying pesticid es, aerial application businesse s may apply fertilizers and sow seeds, and may also seed or apply chemicals to non-agricultural lands such as rights-of-way and forests. Non-pesticide and non-agricultural as pects of aerial application account for about 5 percent of all aerial applica tion businesses. However, only about 1 percent of all aerial application businesses specialize exclusively in these areas (Collins, 1991).

Aerial applicators may operate in one of two ways: (1) businesses may both supply and apply the selected pesticide for the farmer; or (2) bus inesses may provide only the service of applying a pesticide provided to them by the farmer. Of al l aerial applicators, those that sell both the chemicals and the application services to the fa rmer are the most likely to have bulk storage facilities (Faulconer, 1991; Hardcastle, 1991). These businesses may also provide consulting services to farmers; some may even have en tomologists on their staff (Hardcastle, 1991). Applicators may also sell products at retail to farmers, especially those businesses that have bulk storage for pesticides. In some states, these busin esses are legally considered to be agrichemical dealers (Hardcastle, 1991), and some of these facilities may be incl uded in the data on agricultural pesticide refillers presented previousl y. Aerial applicators th at only apply chemicals supplied by the farmer are unlikely to have bulk storage facilities. 18

Most agricultural commercial applicators that provide ground application services are affiliated with agrichemical dealers, either as employees or under contract. One state contact estimated that 80 percent of all commercial applicators are affiliated with dealers, while the remaining 20 percent are with independent ( non-dealer) businesses (Myrick, 1991a ). Of that 20 percent, 70

18 Aerial applicators based at county or municipal airports may face unique ch allenges in establishing secondary containment structures or containment pa ds since they do not own the property, and the property may be subject to Federal Aviation Administration regulations or local regu lations (Eckermann, 1991). Until more information is obtained regarding whether aerial applicators working ou t of municipal airports will experience difficulty in obtaining the needed permission to construct secondary containment and/or containment pad structures, or until the feasibility of using non-permanent (porta ble) containment pads is determined, this analysis assumes that aerial applicators will be able to comply with the proposed regulations.7/13/2006 Containment EA, page 36 percent are estimated to be independent aerial applicators. The remaining 30 percent represent one estimate of the number of independent gr ound applicators. Agricultural commercial applicators with bulk storage may al so sell the bulk product directly to the end user (i.e., refill minibulks), as a sideline to dir ect application of the product to the customers’ fields (Rowdowca, 1991). These businesses are often regulated as pesticide dealers under state laws and are assumed to have been included as part of th e overview of agricultur al pesticide refillers.

3.2.2 Number of Agricultural Commercial App licators With Bulk Pesticide Storage

There are an estimated 2,000 aerial applicators and 1,000 i ndependent ground applicator businesses nationwide. Only a subsection of these facilities handle, dispen se, and/or store bulk quantities of pesticides. Estimates of the numbe r of aerial and ground appl icator facilities are provided in Table 3.2, contrasti ng the total number of aerial a nd ground commercial applicators

and the estimated number of facilities that maintain bulk pesticide quantities.

Aerial applicators. Aerial applicators with bulk storag e typically have one or two pesticide storage tanks, each with a capac ity of up to 2,000 gallons (Hardcas tle, 1991). Some facilities may have three tanks, and some may have tanks as large as 10,000 gallons (Breedlove, 1991).

Data from Iowa indicate that up to 5 percent of aer ial applicators in the state may have bulk storage (Eckermann, 1991). Few aer ial applicators in southern Te xas have bulk storage, while up to 10 percent of aerial applicators in north ern Texas may have bulk storage (Hardcastle, 1991). Mississippi, which require s registration of bulk tanks used by aerial applicators, reported that 24 out of 152 aerial applicator s (16 percent) have bulk storag e tanks with capacity greater than 800 gallons (Fulton, 1991). Based on these da ta, combined with professional judgment, it is assumed that an overall estimated 8 percent of all aerial applicators, or 16 0 facilities, have bulk pesticide storage containers.

Ground applicators. For this analysis, it is assumed that about 5 percent of the estimated total number of independent ground a pplicators (50 facilities) have bulk storage facilities for agricultural pesticides that are applied with gr ound rigs. The estimated 50 facilities with bulk storage are profiled as loading pesticides into and unloading pesticides from bulk tanks, filling and cleaning bulk storage equipment, and loading e quipment at the facility or refilling minibulk

containers for use as shuttles to transport chemicals to the fi eld. The remaining 950 independent ground applicators that do not have bulk storage f acilities likely mix and load chemicals in the fields where they are working, rather than at a fixed location (Myrick, 1991a).

3.2.3 Independent Applicators Requiring Insta llation of New Containment Structures

Regulations covering new structures specify standards for bot h secondary containment units and containment pads. Table G.3 shows the number of independent applicators with bulk pesticide storage that do not currently have containment st ructures in place and will be affected by EPA’s regulation of new containment structures.

An estimated 160 aerial facilities and 50 ground applicator faciliti es handle, dispense, and/or store bulk quantities of liquid pes ticide (Table 3.2). Data are not available to profile the current secondary containment status of bulk storage facilities at aerial and ground applicator facilities, and it is not known how many applicators with bulk pe sticide storage containers are in states that regulate secondary containment. It is therefore assumed that all independ ent applicators are in7/13/2006 Containment EA, page 37 states with regulations. Assuming that the use of bulk storage at i ndependent applicator facilities follows a similar regional pattern of use as that for agrichemical dealer facilities, 90 percent of

all facilities are es timated to be in compliance with s econdary containment standards and 83 percent of all facilities are es timated to be in compliance with containment pad standards.

Using these percentage compliance estimates, it is assumed that 144 aerial facilities and 45 ground applicator facilities are in compliance with the final standa rds for secondary containment. Accordingly, an estimated 16 aerial applicators and five ground applicator s with bulk storage are not in compliance and will require installation of both new secondary containment units and pads. Similarly, an estimated 134 aerial faciliti es and 42 ground applicat or facilities are in compliance with EPA containment pad requirements (this assumes that the estimated number of facilities without secondary containment units also do not have pads.). The number of facilities that are not in compliance and that will need to install new pads is estimated at 10 aerial applicator facilities (144 need ing both units and pads minus 134 already having pads) and three ground applicator facilities (45 needing both units and pads minus 42 already having pads). (See Tables 3.2 and G.3.)

3.2.4 Agricultural Commercial Applicators Requiring Retrofitting of Existing Containment

Structures

Regulations covering existing stru ctures specify standards for s econdary containment units and containment pads. Table G.4 shows the number of bulk pesticide containment facilities that currently have containment structures in place an d will need to retrofit existing structures to comply with the critical standards.

Facilities with existing seconda ry containment are estimated at 144 aerial applicators and 45 ground applicator facilities (Table 3.2). Facilities w ith existing containment pads are estimated at 134 aerial applicators and 42 gr ound applicator faciliti es. Not all of thes e existing structures are in compliance with the standards for exis ting secondary containment units and pads. Subsequent estimates of the number of facilities that are not in compliance and are affected by EPA’s regulations are derived based on informa tion on state regulations and information from industry experts. It is assumed that all agricultural commercial a pplicators are located in states that regulate pesticide containment.

Facilities with bulk liquid pesticides that require retrofitting of existing structures. The 189 aerial and ground facilities with existing containm ent structures may need retrofitting (Table 3.2). Assuming that 96 percent of secondary contai nment structures in regulated states are in compliance with standards for existing structures, the number of facilities not in compliance that

will incur costs to seal floor drains or discha rge outlets is estimated to be eight (189*0.04). Because all regulated states have a requirement to seal all cracks, and because all independent applicator structures are assumed to be located in regulated states , no structure is affected by this requirement as a result of the rule.

Weekly or monthly inspections of containment st ructures are currently re quired within 11 of the 19 states with containment regulations. Weighted against the number of liquid bulk facilities in these regulated states, approximate ly 67 percent of all facilities in regulated states are in compliance. Since all facilities are assumed to be located in regulated states, 62 facilities (189*0.33) will incur monthly inspection and recordkeeping costs (See Table G.4).7/13/2006 Containment EA, page 38 An estimated 175 applicator (aer ial and ground) facilities with existing structures may be required retrofit existing containm ent pads (Table 3.2). Requirements for existing containment pads include: ensure 750-gallon capacity, have a berm, seal floor drai n, repair cracks, and conduct monthly inspection and recordkeeping. It is assumed that all applic ators are in regulated states, but not all states require pad capacity equal to or greater than 750 gallons. Assuming that 96 percent of containment pads in regulated states meet EPA standard for sealing drains, 7 facilities (175*0.04) must seal exis ting drains. Assuming that 94 percent of containment pads in regulated states already have a berm or are sloped to a sump, 11 facilities (175*0.06) must add a berm. All facilities are assumed to repair crack s that are likely to develop in the concrete over time. A total of 57 existing pads (175*0.33) are estimated to require inspection and recordkeeping, assuming that 67 pe rcent of all facilities are in states that require weekly or monthly inspections (See Table G.4).

3.3 Baseline Economic Profile of the Regulated Community

This section presents an economic and fina ncial overview of the regulated community, consisting of SBA-defined busine ss sizes (large and small) and EPA-defined alternative small business sizes (large-small, medium-small, and small-small) 19 for agricultural pesticide refillers (based on NAICS 422910 – Farm Supplies and Whol esale Sector) and commercial applicators (based on NAICS 115112 – Soil Preparation, Planting, and Cultivating).

The economic analysis of EPA’s containment re gulations is based on the projected impacts on representative bulk pesticide storage and disp ensing facilities. Econom ic profiles of these facilities were developed to repr esent typical operationa l and revenue characte ristics of affected entities. Examples of operational characteri stics include the number of employees and the

number and size of bulk pesticide containers.

The number of representative facilities included in this analysis is intended to capture the broad range of facility sizes (based on SBA and EPA alternative definitions) and facility types (primarily agricultural pesticide refillers and comm ercial applicators). Only those facilities with bulk pesticide storage containe rs and/or pesticide dispensi ng areas were considered.

The following subsections describe the two main cat egories of representative facilities in the analysis: agricultural pesticide re fillers and agricultural aerial a pplicators. The specific methods and assumptions used to develop the models are also discussed. A third type of representative facility representing independent ground applicator s is not considered. Only about 50 facilities may be affected by the regulation, and since sufficient information is not available to

characterize these entitie s, we assume that the ground applicators have the same financial

19 This economic analysis considers an alternative to SBA’s definition of small entities or businesses potentially affected by containment regulations by disaggregating SBA-defined small businesses into three size categories: small-small (SS), medium-small (MS), and large-small (LS) businesses. EPA proposed alternative definitions of small businesses for some industry sectors in the 1999 supplemental notice on Standards for Pesticide Containers and Containment. EPA is concerned that using an over ly broad definition of small business in the economic analysis of the containment regulations may result in si gnificant economic impacts on smaller entities that will be camouflaged when combined with information about potential impacts on those facilities that meet the SBA size standard for small business but are not typical of a small business in that industry sector.7/13/2006 Containment EA, page 39 characteristics as aerial applic ators. Summary exhib its of representative characteristics are provided in Tables 3.3, 3.4, and 3.5.

Table 3.3. Representative Agricultural Pesticid e Refilling Facilities, Bulk Pesticide Storage Containers and Pesticide Dispensing Areas a

Representative Facility Size

Characteristics SmallSmall MediumSmall LargeSmall Large Industry

Total

Operating Characteristics

Number of industry establishments b 13,996 2,395 251 153 16,795

Number of industry establishments with bulk pesticides liquid storage and pesticide dispensing areas c 2,241 2,395 251 153 5,040

Number and size of bulk pesticides liquid storage containers d 1-1,500 gal 3-2,000 gal 2-4,000 gal 3-3,000 gal 2-1,500 gal 2-4,000 gal 3-3,000 gal 2-1,500 gal 13,400

Number of industry establishments with bulk pesticides dry storage e 0 105 35 35 175

Number and size of bulk pesticides dry storage containers f 0 1-90,000 lb 1-90,000 lb 1-90,000 lb --

Number of industry establishments with pesticide dispensing areas associated with smaller (non-bulk) containers g 561 -- -- -- 561

Number of employees h
Range in number of employees 3

1 to 9 19

10 to 49 71

50 to 100 448

101 or more 173,858

--
Revenue Characteristics

Average Revenue (2005$, millions) i $0.8 $6.7 $22.7 $191.6 $62,319

a The majority of agricultural pesticide refilling facilities with bulk storage and dispensing areas are classified under NAICS Code 422910, Farm Supplies Wholesalers. A Dun an d Bradstreet (D&B) sample data set was extracted for businesses identified by NAICS Code 422910 to develop representative characteristics of agricultural pesticide refillers based on SBA-defined small and large businesse s and EPA alternative definitions for small businesses (small-small, medium-small, and large-small). Characteris tics of the D&B sample data set were applied to the estimated total number of agricultural pesticide refillers used in the analysis (16,795).

b For this analysis, small-small firms have been defined as those having 1 to 9 employees, medium-small firms 10 to 49 employees, large-small firms 50 to 10 0 employees, and large firms 101 or more employees. According to analysis of the D&B sample data set for firms with NAICS Code 422910, about 83.3 percent had 1 to 9 employees, 14.3 percent had 10 to 49 employees, 1.5 percent had 50 to 100 employees, with the remaining 0.9 percent of establishments having more than 100 employees. The 16,795 U.S. agricultural pesticide re fillers estimated earlier in this analysis are distributed in roughly the same proportio ns to small-small, medium-small, large-small, and large representative firms, respectively.

c The number of agricultural pesticide refilling facilities having bulk storage of pesticides was estimated earlier in this analysis at 5,040. It is assumed that all Large, Large- Small, and Medium-Small facilities have bulk storage, with the remainder assigned to the Small-Small facility category.

d The number and size of bulk liquid containers by size of facility is based on information provided by agricultural experts across the country, with more weight given to that information representative of the Midwest. While the total number of bulk liquid containers in the industry is not known, a rough estimate of 12,060 polyethylene and 1,340 steel containers for a total of 13,400 bulk containers is made for purposes of analysis. This number does not add to the number based on representative facility (12,254).

e About 130 dry bulk tanks were known to exist in the spring of 1991, with an expected 33 percent increase in such tanks within a year. It is assumed that 175 tanks will be in place and potentially affected by the proposed regulations. We assumed distribution as follows: medium-small (60%), large-small (20%), and large (20%).7/13/2006 Containment EA, page 40 f Manufacturer information indicates most dry bulk tanks pur chased by agrichemical facilities have a capacity of 90,000 pounds. We assumed one tank per medium-small and large-small facility, and one tank per large facility.

Table 3.3. Representative Agricultural Pesticid e Refilling Facilities, Bulk Pesticide Storage Containers and Pesticide Dispensing Areas a (Continued)

g 561 small-small agricultural pesticide refillers are estimat ed to carry out activities that will subject them to the containment pad requirements. See Table G.1.

h According to the analysis of the D&B sample data set for firms with NAICS Code 422910, small-small representative facilities are profiled as having three employees, medium-small facilities 19 employees, large-small facilities 71 employees, and large facilities 448 employees. The total number of employees in the agricultural pesticide refiller industry was estimated to be 173,858.

i We estimated revenue levels for each representative facility based on sales da ta associated with businesses profiled in the D&B sample data set for firms with NAICS Code 422910.7/13/2006 Containment EA, page 41Table 3.4. Economic Profile of AgriculturalPesticide Refillers by Entity SizeD&B Sample Data Set for NAICS 422910Agricultural PesticideRefillersEntity SizeCategory DefinitionTotalCompaniesPercent ofTotalCompaniesTotalRevenue forAllCompanies(million)Percent ofTotalRevenueAverageRevenue perCompany(million)AverageNumber ofEmployeesper CompanyTotalEntitiesaTotalRevenue forAll Entities(million)bSBA-Defined SizesLarge 101 or moreemployees114 0.9% $21,843 47.1% $191.6 448 153 $29,322Small 100 or feweremployees12,397 99.1% $24,580 52.9% $2.0 6 16,642 $32,997Total 12,511 100.0% $46,423 100.0% $3.7 10 16,795c$62,319EPA Alternative Small Business SizesdLarge-Small 50 to 100employees187 1.5% $4,246 9.2% $22.7 71 251 $5,700Medium-Small 10 to 49employees1,784 14.3% $12,001 25.9% $6.7 19 2,395 $16,110Small-Small 1 to 9employees10,426 83.3% $8,333 18.0% $0.8 3 13,996 $11,187Total 12,397 99.1% $24,580 52.9% $2.0 6 16,642 $32,997aThe percentage of total companies in the D&B sample data setwas applied to the estimated number of agricultural pesticide refillers used in the analysis.bThe average revenue of agricultural pesticide refillers for each entity size categorywas multiplied by the total number of entities for the given size category.cEPA estimate based on state estimates where available; otherwise,SIC 5191.02 + 5191.14 from the American Business InformationLists of 9 Million Businesses, 1990.The same total number is estimated as presented in the 1999 Supplemental Notice on Standards for Pesticide Containers and Containment (EPA, 1999b).dEPA discussed alternative definitions of small businesses for some industry sectors in the 1999 Supplemental Notice on Standards for Pesticide Containers andContainment (EPA, 1999b). EPA is concerned that using an overlybroad definition of small business in the economic analysis ofthe container regulations may result insignificant economic impacts on smaller entities that will be camouflaged when combined with information about potential impacts on those facilities that meet the SBAsize standard for small business but are not typical of a small business in that industry sector.7/13/2006 Containment EA, page 42 Table 3.5. Representative Agricultural Aeri al Application Facili ties, Bulk Pesticide Storage Containers, and Pesticide Dispensing Areas a

Representative Facility Size

Characteristics Small-Small Medium-Small Large-Small Industry Total

Operating Characteristics

Number of industry establishments b
Number with bulk storage c

Number and size of bulk tanks d

Number of planes e

Number of acres treated f 780

15 1-1,500

1 25,000 1,120

110 2-2,000

2-4 100,000 100

35 1-6,000 2-2,000

5 or more

200,000 2,000

160

Unknown

6,000+

Revenue Characteristics

Application price/acre ($) g Premium on chemical/acre ($) h
Revenues (2005$) i 3.75

0.27 100,580 3.75

0.27 401,250 3.75

0.27 802,500 --

--

--

a Similar characteristics are as sumed for ground applicators.

b The analysis assumes that no agricultu ral aerial applicators meet the SBA definition for a large business (>$6.0 million in revenue). The total number of industry esta blishments and the number of EPA alternative small business

sizes is based on information obtained from the Nationa l Agricultural Aviation Association (NAAA) for small-small facilities with one plane, and expert opinion and profession al judgment to estimate the number of medium-small and large-small facilities (NAAA, 2001).

c Based on information provided by several sources, it is estimated that no more than 8 percent of aerial applicators nationwide have bulk pesticide storage. No data exist on whether those estimated 8 percent of industry facilities (160) are small-small, medium-small, large-small, or large facilities. For this analysis, it is assumed that about 2 percent (15) of the small-small facilities have bulk storag e, 10 percent (110) of the medium-small facilities have bulk storage, and 35 percent (35) of the large-small facilities have bulk storage.

d Preliminary estimates, based on limited information.

e Based on information provided by the NAAA that the total fleet size of all aerial applicat ors is about 6,000 plus an unknown number of backup planes (NAAA, 2001).

f Assumes that each plane flies a minimu m of 250 hours per year with an av erage of 100 acres treated per hour.

g Based on information from aerial applicators in several states (North Dakota, Nebraska, Kansas, and Texas), an average application price charged per acre is about $3.50.

h Aerial applicators try to achieve some margin per acre on th e chemicals they apply. This margin varies by region, and estimates obtained for this analysis ranged from $0.10 per acre to $0.50 per acre. This analysis assumes that a margin on chemicals of $0.25 per acre is attained. Some farmers provide their own chemicals or will work through a dealer to provide the chem icals to the aerial applicator. Thus, no t all aerial applicators earn a premium on chemicals for all acres treated. However, this analysis is relevant to those a pplicators that store pesticides in bulk quantities, and such applicators are likely to provide their own chemicals.

i Revenues = (Number of acres treated )(Application price per acr e)+(Number of acres treated)(Premium on chemical per acre).

3.3.1 Economic Profile of Agricu ltural Pesticide Refillers

Agricultural pesticide refillers repackage and su pply the majority of pesticides to farmers and other agricultural end users. Agricultural pe sticide refillers are generally represented under NAICS 422910 (Farm Supplies and Wholesale Sector), which c onsists of “establishments primarily engaged in wholesaling farm supplies, such as animal feeds, fertilizers, agricultural chemicals, pesticides, plant seeds and plant bulbs” (U.S. Department of Commerce, 1997).

To establish a regulatory compliance baseline, we solicited expert opinion to profile operational characteristics of typical large, large-small, medium-small, and small-small agricultural pesticide7/13/2006 Containment EA, page 43 refillers with bulk pesticide storage facilities. The total volume of pesticides stored by facilities

is both a function of the number of bulk tanks and the size of the individual tanks. Agricultural pesticide refillers vary widely with respect to the number and size of bul k storage containers, as well as the total volume of pesticides stored. Fo r example, a facility with only one bulk pesticide storage tank could have a very small 500-gallon tank or a very large 12,000-gallon tank. Such cases are exceptions, however, with the majority of tanks used having capacities of 1,000 to 4,000 gallons.

Table 3.3 summarizes the characteri stics of the representative ag ricultural pesticide refilling facilities, organized by four sizes: large, large-small, medium-small, and small-small. Each type of facility incorporates different assumptions regarding the bulk storage capacity, number of employees, and financial profile of the representativ e entity. Small-small refillers are assumed to have one liquid pesticide bulk storage tank with a capacity of 1,500 gallons. Facilities with three 2,000 gallon tanks are considered medium-small f acilities (total capacity of 6,000 gallons). Large-small and large refillers are assumed to have seven bulk liqui d tanks (two 4,000 gallon, three 3,000 gallon, and two 1,500 gallon) fo r a total capacity of 20,000 gallons. 20

In addition to facilities with liquid bulk containe rs, representative facilities with dry bulk tanks are also characterized (see Tabl e 3.3). As discussed in the previous section, this analysis estimates that approximately 175 dry bulk ta nks, most with a capacity of 90,000 pounds, are considered potentially affected by the proposed regulations. While most dealers have only one dry bulk tank, a few may have two. For this analysis, it is assumed that 105 medium-small facilities, 35 large-small facilities, and 35 larg e facilities each have a single dry bulk tank. 21

We extracted revenue and employee data from the Dun & Bradstreet (D&B) database for all establishments with NAICS 422910 designations to ge nerate the agricultural pesticide refillers economic profile. We assume that financial information extracted from D&B for the NAICS 422910 market sector is representati ve of the agricultural pesticid e refiller entity subject to the containment regulations. As a result, 24,360 reco rds were pulled from the D&B database, with 21,599 establishments having sufficient financial data to be included in the analysis. These data were consolidated by Domestic Ultimate DUNS nu mber in order to aggregate facilities by parent company designation, resulting in a tota l of 12,511 unique companies identified 22 . It appears that D&B inconsistently reports revenue and employee information at the Domestic Ultimate DUNS level. In few instances where discrepancie s arise, we used the maximum values for the

20 For this analysis, Small-Small firms have been defined as those having 1 to 9 employees, Medium-Small firms 10 to 49 employees, Large-Small firms 50 to 100 em ployees, and Large firms 101 or more empl oyees (see Table 3.4). According to analysis of the D&B sample data set for firms with NAICS Code 422910, about 83.3 percent had 1 to 9 employees, 14.3 percent had 10 to 49 employees, 1.5 percent had 50 to 100 employees, wi th the remaining 0.9 percent of establishments having greater than 100 employees. The 16,795 U.S. agricultural pesticide refillers estimated earlier in this analysis are distributed in rou ghly the same proportions to Small-Small, Medium-Small, Large-Small, and Large representative firms, respectively.

21 About 130 dry bulk tanks were known to exist in the spring of 1991, and it is expected that this number is now not larger than 175. Therefore, it is assumed that 175 tanks will be in place and potent ially affected by the final regulations. The 175 tank s are distributed as follows: medium-small ( 60%), large-small (20%) and large (20%).

22 The DUNS Number is a unique nine-digit identification sequence, which provides unique identifiers of single business entities, while linking corporate family structur es together. D&B links the DUNS Numbers of parents, subsidiaries, headquarters and branch es on more than 90 million corpor ate family members around the world.7/13/2006 Containment EA, page 44 D&B data fields “Employees Total” and “Sales Volume (US$)” associated with each Ultimate

DUNS number.

The D&B sample data set was broken down into small and large entity sizes according to the SBA small business definition for NAICS 422910 (i .e., SBA defines a small business for NAICS 422910 as having 100 employees or fewer). As illustrated in Table 3.4, 99 percent of the 12,511 unique parent companies identified were cons idered small by SBA definition. Based on EPA alternative small business definitions presente d in Table 3.1, approximately 83 percent were small-small, 14 percent were medium-small, a nd 2 percent were large-small (see Table 3.4).

It was determined that no single NAICS code was unique to agrichemical dealers or agricultural pesticide refillers. Theref ore the economic profile for th e sample of 12,511 companies was applied to the total universe of 16,795 agricultural pesticide refillers , as illustrated in Table 3.3. The estimated number of agricultural pesticid e refillers (16,795 companies) is based on the information presented in the 1999 Supplemen tal Notice for Pesticide Containers and Containment Structures (EPA, 1999). This estimate is considered to be a reasonable estimate for the current total number of entities potentially affected by the containment regulations.

3.3.2 Economic Profile of Agricult ural Commercial Applicators

Crop services affected by containment struct ure regulations include aerial application, independent ground application of pesticides, chemigation, and custom blending. Companies that provide these services and ar e not associated with an agrichemical dealership are likely to be classified under NAICS Code 115112 – Soil Prepar ation, Planting, and Cultiv ation. Commercial applicators are often hired by farmer s to apply pesticides to a vari ety of crops. The two primary types of agricultural commercial applicators are ae rial applicators and ground applicators. These operations require the use and refilling of bul k pesticide containers and smaller minibulk containers used for pesticide applic ation from airplanes and/or trucks.

The industry profile used here is based on info rmation collected from 1,968 aerial pesticide application businesses in a 1998 survey c onducted by the National Agricultural Aviation Association (NAAA, 2001). No comparable source of data was identified to characterize and profile the financial conditions for ground applicator s. Given that the SBA definition of a small business for commercial applicators (based on NAICS Code 115112) is no more than $6 million in annual revenues, all commercial applicators considered in this analysis are assumed to be SBA-defined small businesses based on analysis of the NAAA data. Because no equivalent information is available for ground applicators, we assume that the gr ound applicators have the

same financial characteristics as aerial applicators (see Table 3.5). This anal ysis estimates that 2,000 of the “soil preparation, planting, and cultiv ation” establishments (included in NAICS Code 115112) are aerial applicat ors and that 1,000 are indepe ndent ground applicators.

Insufficient data exist to develop representativ e facilities for the ag ricultural commercial application industry. Instead, we consulted st ate-level experts to pr ofile these businesses according to the number of planes per business, th e number of acres treated per business, and the price charged per acre by the ae rial applicator. Tabl e 3.5 summarizes these characteristics of the aerial application industry by facility size. The representative small-small aerial applicator is defined as having one plane a nd one bulk container of 1,500 gall ons, and treating approximately7/13/2006 Containment EA, page 45 25,000 acres annually. The representative medium-sma ll facility is defined as having two to four planes and two 2,000 gallon bulk pesticide stor age containers, and treating approximately 100,000 acres per year. The representative large-sma ll aerial applicator has five or more planes (some are known to have as many as 10 planes) and three bulk containers w ith a total capacity of 10,000 gallons, and treating at least 200,000 acres annually. Again, no large commercial applicators are considered in this analysis.

Although some commercial applicators may be affilia ted with pesticide registrants or agricultural pesticide refillers, most commercial applicat or operations are independently owned. No

definitive information is available to determ ine which or how many agricultural commercial applicator operations are part of larger compan ies otherwise subject to regulations. We assume the 2,000 aerial and 1,000 ground applic ators considered in this an alysis to be independently owned and operated and directly imp acted by containment requirements.

The resulting breakdown of the num ber of affected entities and financial characteristics for representative fac ilities by EPA alternative small business definition is presented in Table 3.5. Because insufficient data are available for ground applicators, the entity size breakdown and

financial characteristics for aerial applicators were appl ied to the estimated 1,000 ground applicators affected by containment regulations.

In summary, this chapter presented the econom ic profile of the agri cultural refillers and commercial applicators, and provided the estimates of the number of facilities not in compliance with the final containment regula tions (i.e., will have to instal l new containment units and/or pads, or will have to retrofit existing containment units and/or pads). This information will be used together with the information on the cost s of compliance described in the next chapter (Chapter 4) to estimate the impacts of comp liance with the final containment regulations (described in Chapter 4 and Chapter 5).7/13/2006 Containment EA, page 46 

### 4.0 Facility Impact Analysis

The preceding chapter (Chapter 3) described the compliance of bulk pesticide containment facilities with the final containment regulations, presenting estimates of the number of facilities

that will need to install new containment units and pads and those facilities that will need to retrofit existing containment units and pads for compliance with the fina l regulations. We use this information, along with the information on unit costs presented in this chapter, to estimate the impacts of compliance with the final regulat ions for the average entity in each of the regulated industries.

This chapter presents the estimated facility-lev el cost to construct new containment units and pads (Section 4.1), as well as to retrofit existing containmen t structures under the final regulations (Section 4.2). Costs are estimated for small-small, medium-small, large-small, and large representative facilities of agricultural pe sticide refillers (agrichemical dealerships) and independent, for-hire commercial (a erial and ground) applicators. 23 The general approach used to develop the costs of complian ce, per facility and in aggregat e, involved the following steps:

(1) Compile unit costs for secondary contai nment units and containment pads;
(2) Apply unit costs to the expected equipment and materials required to bring both new and existing containment structures into compliance;
(3) Calculate facility-level compliance costs (non -discounted) and then discount and annualize those costs; and 24

(4) Calculate aggregate costs and assess economic impacts by representative facility and for

affected industries.

Appendix A presents a more deta iled discussion of the disco unting and annualization methods we apply in this analysis. It is important to note, however, th at this analysis considers two

discount/interest rate scenar ios: a 3 percent scenario and a 7 percent scenario. 25

The final containment regulations affect bulk pe sticide storage facilities that have existing containment structures, as well as facilities th at will require new containment structures to comply with the rule. For bulk storage facilities w ithout existing secondary containment units and/or containments pads, the cost to construct new containment structures is estimated. These estimates cover the cost to construct secondary containment units for stat ionary bulk pesticide containers of liquid and/or dry pesticides. Th e estimates also include the cost to construct containment pads for areas where pesticides are di spensed from and into bulk containers, as well

23 Note that this is a departure from the facility size categ ories used in the proposed containment regulations RIA, where facility sizes were categorized as small, medium, and large. We transfer cost assumptions from the proposed RIA as follows: small cost assumptions are applied to sma ll-small facilities; medium cost assumptions are applied to medium-small facilities; and large cost assumptions ar e applied to both large-small and large facilities.

24 The average number and size of containers in representa tive facilities have an impact on the construction cost for containment units because they affect the total storage area. This is the only way in which the number of containers

affects the cost.

25 Where applicable, all discounted and annualized costs are presented using both a 3 percent and 7 percent discount

rate scenario in their calculation. The cost tables will be presented for both discount rates, but the text will only describe the estimated costs at the 3 percent discount rate.7/13/2006 Containment EA, page 47 as for areas where refillable containers are cl eaned and/or refilled. Agricultural refillers and applicator businesses with existi ng containment structures that do not meet the critical standards will incur costs to retrofit or replace existing structures in order to co mply with the final rule.

Facility-level costs are calcul ated using unit costs from the 1992 period, developed to estimate costs for the RIA of the proposed rule. To update final industry compliance costs to current year (2005) dollars, we apply a CPI-U “All Items” based adjustment f actor to account for general price inflation (U.S. Department of Labor, 2005). The results of th e facility impact analysis are then used to evaluate the aggregate industr y impacts of the final pesticide containment regulations (see Chapter 5). A ppendix H presents the unit costs of compliance with the final regulations.

Many businesses requiring pesticide containment st ructures under this rule may already have secondary containment units and/or containment pads in place, particularly in states with existing bulk storage regulations. Other affected busines ses have no pesticide containment structures. Accordingly, compliance costs per facility will vary greatly, depending on whether containment structures are already in place, and if so, the extent to which such structures will require retrofitting to comply with the final rule.

Equipment and materials required for the construc tion of necessary secondary containment units and pads are based on information from vari ous published and industr y sources, including guidance specifications and manuals , engineering cost studies, i ndustry publications, vendor and manufacturer literature, and information recei ved from industry contacts. Unit costs were compiled from published data sources, including Means Site Work Cost Data and Building

Construction Cost Data (R.S. Means Company, Inc., 1991a, 1991b, 1992), and from estimates provided by equipment manuf acturers and vendors.

Where data were not available, we simply tran sferred cost assumptions from similar unit cost categories. For example, new bulk liquid outdoor st orage cost data were not available for smallsmall, medium-small, and large-small commercial ap plicators. To fill this cost gap, we assumed that the new bulk liquid outdoor st orage cost data associated with small-small, medium-small, and large-small agricultural refillers were re presentative of cost s incurred by commercial applicators and transfer red the costs accordingl y. All facility-level costs were originally calculated in 1992 dollars, based on the reported unit costs in the proposed containment rule RIA. As stated above, figures are inflated to 2005 dollars to account for general price inflation over the period. All final cost estimates expressed in terms of annualized costs are in 2005

dollars.

We calculated facility-level costs according to total capital, initial, intermittent, and operating and management (O&M) costs for secondary containment units and for containment pads at each representative facility. These costs are combined and convert ed to an annualized cost by first calculating the present discounted value of the stream of complia nce costs associated with the containment regulations for the length of the co mpliance period. We then annualized the present discounted value for the same compliance period. Once the annualized cost has been calculated for each representative facility, the annualized costs are multiplied by the estimated number of7/13/2006 Containment EA, page 48 facilities expected to incur thos e costs. This procedure result s in an aggregate annual cost by industry.

Compliance with the regulations is required 3 years after promulgation of the final rule

. Containment structures are project ed to have a 20-year life, and this economic analysis computes costs across a 20-year period, alt hough the engineering design, th e level of maintenance, and

climate factors can result in a l onger (or shorter) life. Regulations are assumed to be published in year 1, with construction of new containment stru ctures occurring in years 2 and 3, and with full compliance by the beginning of year 4. All capita l (depreciable) or ini tial (non-depreciable) costs are assumed incurred in year 3; annual (O&M) costs occur each ye ar after the compliance date is reached (year 4 through year 20 in the 20 -year period of analysis); and intermittent costs occur every fifth year following full compliance.

4.1 Compliance Costs for New Containment Structures

This section discusses the cost assumptions a nd unit cost data that are used to compute compliance costs, followed by a presentation of the results of the facility-level cost analysis. Costs of compliance with EPA standards for new containment structures are presented by representative facility for agricultural refill ers and for independent (for-hire) commercial applicators, followed by a discussi on of aggregate industry costs.

New Secondary Containment Units. For this analysis, a new secondary containment unit consists of an impermeable pad with a wall arou nd its perimeter, within which stationary bulk storage containers are placed. Conc rete is assumed to be the primary material currently used to construct secondary containment units, although other compatible materials of equivalent strength and imperviousness woul d also comply with the rule. 26

The final containment regulations require that precipitation and pesticide rinsate 27 that fall on secondary containment structures be disposed of properly. Several design options are feasible to manage pesticide rinsate and pr ecipitation within secondary c ontainment units. Containment structures can be built with or without a sump, a nd with or without a roof . Adding a roof to an outdoor bulk pesticide storage area will reduce the amount of precipitation collected in a

26 Under EPA’s requirements, concrete is listed among other recommended materials from which to construct pesticide containment facilities, including steel, reinforced concrete, or other rigid materials that are liquid-tight. Asphalt and earthen material, however, are prohibited.

27 “Rinsate” is defined as any liquid containing relatively low concentrations of pesticides (i.e., less than field strength application concentrations) that can accumulate on the surface or in the sump of a containment structure (Kammel et al., 1991). Rinsates attri butable to the proposed regulations are:

• Water from cleaning refillable containers

• Water from the wash down of a containment structure

• Precipitation falling on a containment structure.

Rinsate can generally be reused. However, it becomes “wast e” if there is no longer an opportunity to use it in an acceptable manner and it is discarded as waste. An incomp atible pesticide rinsate mixt ure may occur when two or more incompatible pesticides are allowed to mix in a ri nsate collection area (e.g., a sump). Depending on the pesticide mixture, this incompatible mixture may be dispos ed at a hazardous waste disposal facility, incinerated at an acceptable facility, or recycled in a rinsate recycling system. These re cycled materials will not necessarily become wastes. Not all incompatible rinsates will become hazardous wastes.7/13/2006 Containment EA, page 49 secondary containment unit that mu st be used as make-up water, which may be applied to a field as a pesticide product or discarded as waste.

The regulatory option depicted for this economic an alysis includes a sump system (i.e., a pit or reservoir for collecting rinsate/precipitati on) and a storage tank to hold accumulated rinsate/precipitation prior to reus e or proper disposal. The design option does not depict roofed outdoor storage within a secondary containmen t unit, although a roof or other sufficient overhang would prevent the accumulation of signif icant quantities of precipitation. The Agency is recommending but not requ iring a roofed structure. 28 All structures, re gardless of design, will require a portable pump and hose to clean up spil ls. The same pump can be used to remove rinsate/precipitation, as required.

Indoor facilities are assumed to already have concrete floor s. Secondary containment of indoor stationary bulk containers is assumed to re quire thorough cleaning of the existing concrete

structure and the additio n of a wall for containment. A por table pump and hose are considered essential for cleaning up any spills. The result is a “new” containment structure (i.e., the existing concrete floor by itself is not considered a secondary containment unit in the baseline).

Both flat-bottomed and cone-shaped containers are used for bulk pesticide storage, and we initially analyzed secondary containment for bot h types of containers. Consistent with the proposed regulations, the previous analysis (the proposed containm ent rule RIA) estimated costs for flat-bottomed containers assuming at least minimal elevation to allow for observation of leakage from the base area. 29 Flat-bottomed containers have higher capital costs, because of greater displacement volume and the need for a higher wall. Cone-shaped containers have higher O&M costs, because more concrete within the containment area is generally exposed and subject to deterioration. There ar e no significant differences in ove rall costs due to the type of container(s) in use at a facility. The number and size of stationary bulk containers to be contained, and whether such containers are i ndoors or outdoors, will influence the cost of secondary containment at affected facilities.

Contractors’ fees associated w ith the construction of new seconda ry containment structures are estimated at 30 percent of direct costs for outdoor stru ctures and 25 percent of direct costs for indoor structures. Contingency fees also asso ciated with the construction of new secondary containment structures are estimated at 5 percent of direct costs plus co ntractor’s fees. These

have also been added to th e overall construction costs.

For this economic analysis, the size of secondary containment areas is based on the storage area and wall heights shown in Table 4.1 for each of th e four representative agricultural refilling facilities. The average number and size of containe rs at each representative facility, specified in Chapter 3, determine the storage area and wall he ights presented in Table 4.1. These storage

areas allow for a 3-foot clearance between all cont ainers and between contai ners and the edges of the walled area. The wall height is then sized to allow containment equal to 100 percent (indoor

28 EPA requires protection from precipitation for dry bulk; ho wever, some facilities achieve this with tarpaulins over sealed tanks. EPA believes that it is not necessary to sp ecify a protection method because it is in a facility’s best interest to protect the dry product it has purchased.

29 The requirement to elevate storage tanks was subsequently deleted from the regulation.7/13/2006 Containment EA, page 50 structures) or 110 percent (outdoo r structures) of the volume of the largest stationary bulk container plus the volume displaced by the bottom of the container(s); pump(s); other containers within the containment area; a nd pipes, hoses, and other appurt enances. We transfer these storage area specifications to same-sized (s mall-small, medium-small, and large-small) commercial applicators.

Table 4.1. Storage Area and Wall Height of Repres entative Agricultural Refiller Facilities

Representative Agricultural Refiller Facility Size Storage Area Wall Height

Small-Small (indoor) Small-Small (outdoor) 12’ x 12’

12’ x 12’ 1.5’ - 2’

2’

Medium-Small (indoor) Medium-Small (outdoor) 13’ x 33’

13’ x 33’ 1’

1’

Large-Small (indoor) Large-Small (outdoor) 26’ x 40’

26’ x 40’ 1’

1’

Large (indoor) Large (outdoor) 26’ x 40’

26’ x 40’ 1’

1’

The major cost factor for facilities with bulk pest icide storage is the price of concrete, which is assumed to be the primary construction material for secondary containment units. It is assumed that 6-inch thick, reinforced concrete will be th e primary material used for construction of the concrete pad upon which the bulk containers will be stored. Unit costs for concrete are assumed at $5.48 per square foot (ft 2 ) (see Table H.1). Indoor secondary containment units are not expected to incur concrete costs for floors sinc e it is assumed that these containers are all

installed over concrete. Wa ll unit costs range from $9.53/ft 2 to $17.82/ft 2 , depending on the wall height (see Table H.3).

The analysis assumes that all st ationary bulk containers, liquid or dry, indoor or outdoor, are already on concrete pads. Dry bulk storage containers must be encl osed within a 6-inch curb or berm extending at least 2 feet beyond the perimeter of the container. 30 Typically, stationary dry bulk pesticide storage containers ar e installed over concrete pads. To ensure sufficient protection from wind and rain, the facility w ould have to use either a roof or tarpaulin, but the rule does not specify how that protection is to be achieved. The existing pad must be extended and surrounded by a berm.

Unit costs for concrete are assumed at $5.48/ft 2 ; berm unit costs are estimated at $13.74/ft (consistent with unit costs estimated for berm he ights of about 1 foot) (Table H.1). Dry bulk only needs a berm of 6 inches. Reinforcement bars are used to join the existing and new areas of concrete, and are estimated at $3.02/ft (Table H.5, H.12). A portable pump and hose necessary for secondary containment units are estimated to cost $548 (Table H.1). Sump costs for secondary containment units are estimated at $959 for a small-small facility, $1,644 for a medium-small facility, and $3,013 for large-small and large facilities (Table H.1). Costs to new

30 This requirement in the final rule specifies that dry pesticides be stored on pallets or on a concrete platform in order to protect from wind and rain and to prevent water in or under the pesticide. Costs incurred under the final regulations are based on the requirement of a 6-inch high curb that extends at least 2 feet beyond the perimeter of the

container.7/13/2006 Containment EA, page 51 facilities are not estimated for stormwater protection, appurtenan ces easily observed for leaks, lockable valves, attended transfer, and rinsate management, since these costs/activities are assumed to be part of a facility’s routine ope ration and therefore alr eady accounted for in the

O&M costs.

EPA is not requiring rinsate tanks, but is reco mmending that they be pa rt of bulk pesticide

containment structures. Neverthele ss, rinsate tanks represent an i ndirect cost of the rule since facilities will have to manage rinsate in any cas e. New facilities will need to purchase rinsate tanks as part of the package to comply with the rinsate management required by the secondary containment regulations. 31 The rinsate tanks could, according to good management practice, be placed inside the same containment as the pesticid e storage. The added cement for the displaced volume of the rinsate tanks as compared to the pesticide tanks is expected to be negligible.

This economic analysis calculates the cost of rins ate tanks for new facilitie s, but not for existing

facilities. 32 To comply with the final rule’s criteria for rinsate management, it is assumed that every new facility will have to ha ve a rinsate tank, even faciliti es with dry bulk storage, unless

all their containers are dedi cated to single products. All existing agricultu ral refilling establishments (indoor and outdoor) are likely to have acquired rinsate tanks in order to comply with the 1996 EPA Office of Water effluent gui deline regulations, and so should have already incurred costs for tanks (EPA, 1996). The effl uent regulations, however, do not necessarily apply to the same sectors of the pesticide indu stry as the pesticide containment rule. As a conservative measure, rinsate tank costs are added to all new facility structures as part of this economic analysis. Rinsate tank costs are not estim ated for existing facilitie s, since it is assumed that all existing facilities already have tanks in place.

Rinsate storage typically consists of three to six tanks ranging from 100 to 500 gallons each. Most facilities will have two rinsate tanks, which tend to be smaller than the pesticide tanks. Alternatively, many outdoor facilities will use large 3,000 gallon rinsate tanks. 33 A small facility may opt to use 55-gallon drums to store rinsate. The cost of rinsate tanks also varies for outdoor

versus indoor containment structures. In the ca se of outdoor liquid bulk fa cilities, rinsate tanks also function as precipitation storage, and so tend to be larger. Inside facilities also require tanks, but since they only collect rins ate these tanks may be smaller.

Based on information obtained from a contai ner manufacturer, tanks of cross-linked polyethylene are often cheaper than stainless st eel and provide a reasonable option for collecting

dilute solutions like rinsate. Maximum tank costs for rinsate tanks per facility assumed for this economic analysis are as follows:

• Tank costs for outdoor liquid stru ctures (secondary units and c ontainment pads) are estimated at $589 for a small-small facility, $1,653 for a medium-small facility, and $2,356 for largesmall and large facilities (Table H.1).

31 The economic analysis estimates rinsate tank costs for all facilities, even small facilities.

32 The analysis of the final rule includes costs for rinsate containers at facilities of all sizes.

33 In 1998, costs for large rinsate tanks were quoted at $1,000 ($1,180 in 2005$) for a flat-bottomed tank and about $2,300 ($2,715 in 2005$) for a cone-shaped tank on a steel support.7/13/2006 Containment EA, page 52 • Tank costs for indoor liquid stru ctures and for dry bulk cont ainers (indoor and outdoor) are estimated at $342 for a small-small facility, $589 for a medium-small facility, and $1,301 for large-small and large facil ities (Tables H.3 and H.5). 34

For large-small and large facilities, these costs ar e assumed to cover the range of expense options associated with the purchase of either a 3,000- gallon tank or two 1,000-gall on tanks. Since there are very few crops, with the exception of corn, that use large quantities of pesticides, even a large facility will not need more th an two or three rinsate tanks. 35

New Containment Pads. Facilities that have stationary bulk pesticide storage containers must have a containment pad adjacent to the bulk contai ners for activities such as loading into or unloading from the bulk contai ners, and rinsing and/or refilling containers or equipment from the bulk containers. Pad size will vary among facilit ies, depending on site-specific needs. Although facilities may choose to have more than one pad, it is assumed that one sufficiently sized pad may be used as a multi-purpose pad. Typical mu lti-purpose pad sizes are as follows: a small pad is 15 feet by 30 feet; a medium pad is 25 feet by 50 feet; and a large pad is 60 feet by 50 feet. We assume that small-small and medium-small ag ricultural refillers require a small containment pad, large-small and large agricu ltural refillers as well as gro und applicators require a medium pad, and aerial applicators require a large pad to accommodate a plane. The smaller containment pad (15 feet by 30 feet) is assumed sufficient for f acilities that do not have bulk storage, but that

use and clean refill able containers.

This analysis assumes that new containment pads will be constructed of concrete. Concrete costs for a pad are estimated at $5.48/ft 2 . The cost of the berm around the perimeter of the pad includes concrete costs at $1.78/ft 2 ; forms at $2.74/ft; and grout at $1.24/ft. Sump costs for containment pads are estimated at $274 for a sm all-small facility and at $411 for a mediumsmall, large-small, and larg e facility. (See Table H.7.)

As with new secondary containment units, preci pitation and pesticide ri nsate that collect on outdoor containment pads must be stored and used or disposed of properly. Appropriate storage

containers must contain rinsate/ precipitation volumes associated with small, medium, and large outdoor containment pads. Indoor bulk storage faci lities are assumed to have a concrete floor where dispensing into and out of the bulk containe rs is conducted. In this analysis, existing

floors are assumed to be flat and of uniform el evation without sumps. For new containment pads in existing facilities, unit costs were develope d for two indoor containment pad scenarios: (1) concrete is added to the exis ting floor to allow for the required slope and a sump is added and (2) the existing concrete floor is removed and a new sloped pad is constructed. Rinsate tank costs are presented in the previous se ction on new secondary containment units.

34 These costs are based on prices quoted from manufacturers in 1998. For consistency, these costs are presented in 2005 dollars for the facility-level analysis based on an inflation factor derived from the CPI-U “All Items” Index (U.S. Department of Labor, 2005).

35 To avoid double counting, costs for only one set of rinsat e tanks is calculated for outdoor facilities that have both a containment pad and secondary containment.7/13/2006 Containment EA, page 53 4.1.1 Representative Facility Costs (Non-D iscounted) for Agricultural Refillers

This section presents estimated capital costs, O&M costs, and intermittent costs for new secondary containment structures and pads by re presentative facility for agricultural refilling establishments. Costs for new secondary containm ent structures and pads are estimated for both indoor and outdoor liquid storage and for statio nary bulk storage of dry pesticides. Nondiscounted costs are later presented as an equivalent, constant-l evel cost per year.

Tables H.1 through H.10 in Appendix H show the estimated capital, O&M, and intermittent costs to install new secondary containm ent units and pads at agricultura l refillers. These costs were initially calculated in 1992 dolla rs. These facility-level costs are presented in the discussion

below in terms of 2005 dollars and have been in flated using the CPI-U “All” index, reported by the Bureau of Labor Statistics (U.S. Department of Labor, 2005). Table 4.2 presents a summary

of these estimated 2005 costs.

New Containment Structures: Outdoor Bulk Liquid Storage. Table 4.2 presents the estimated capital, O&M, and intermittent costs for the secondary containment of outdoor bulk liquid storage containers. Cap ital costs range from $5,600 at the small-small representative facility to $18,250 at the large representative f acility for a design option that includes a sump and a rinsate/precipitation container. O&M costs cover monthly inspections/recordkeeping, spill cleanup, rinsate/precipitation pumpi ng, and removal of collected ri nsate/precipitation to an offsite area for application as a pest icide (see Table H.2). Facilities th at can use all or part of the rinsate/precipitation as make-up water will incur lower O&M costs. Annual O&M costs associated with these secondary containment uni ts range from $1,160 for the small-small facility to $2,760 for the large facility, assuming that a ri nsate/precipitation tank and a sump are used. Intermittent costs are incurred to repair cracks, gaps, and seams (see Table H.2). Intermittent costs are estimated to range from $50 for the sm all-small facility to $130 for the large facility.7/13/2006 Containment EA, page 54 Table 4.2. Summary of Facility-Level Costs (2005$) to Install New Secondary Containment Units and Pads, Representative Agricultural Refiller and Commercial A pplicator Facilities

$ per Facility a

Compliance Cost Item Small-Small Facility Medium-Small Facility Large-Small Facility Large Facility

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Capital 5600 10300 18250 18250

O&M 1160 1540 2760 2760

Intermittent 50 120 130 130

Secondary Containment - Bulk Liquid/Indoor

Capital 2170 2500 3780 3780

O&M 740 1050 1490 1490

Intermittent 50 120 130 130

Secondary Containment -Bulk Dry (1 Container)

Capital na 5230 5230 5230

O&M na 850 850 850

Intermittent na 100 100 100

AERIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Capital 5600 10300 18250 na

O&M 1160 1550 2790 na

Intermittent 50 120 130 na

GROUND APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Capital na na 10300 na

O&M na na 1550 na

Intermittent na na 120 na

REFILLERS & APPLICATORS

Containment Pads - Outd oor (Scenarios 1 & 2) b

Capital 5,850-6,600 16,110-18,310 34,060-34,810 34,060-34,810

O&M 1190 2210 5100 5100

Intermittent 40 50 70 70

Containment Pads - In door (Scenarios 1 & 2) c

Capital 6,860-8,790 18,730-23,970 50,570-53,840 50,570-53,840

O&M 740 1100 1490 740

Intermittent 40 50 70 40

a Inflated from 1992$ costs (Tables H.1 to H.10) trends in the Consumer Price Index “All Items” (U.S. Department of Labor, 2005). Figures may not match totals in Appendix H due to rounding.

b Scenario 1 (both secondary containment units and containment pads) and Scenario 2 (pad only). Avoids duplicating costs.

c Scenario 1 (use existing concrete floor as base) and Scenario 2 (demolish/remove existing concrete floor; reconstruct pad).7/13/2006 Containment EA, page 55 New Containment Structures: Indoor Bulk Liquid Storage. Table 4.2 presents the estimated capital, O&M, and intermittent costs of sec ondary containment units for indoor bulk liquid storage containers. Capital cost s range from $2,170 for the small-sm all representative facility to $3,780 for the large facility. Costs include a be rm, rinsate/precipitation tank, portable pump and hose, pipes and fixtures, and cont ractor’s and contingency fees (see Table H.3). No costs are estimated for a concrete pad, because it is assu med that all existing tanks are installed over a

concrete floor. Annual O&M costs are be tween $740 and $1,490 per faci lity, and include the cost of spill cleanup and monthly inspection/recordkeeping. Interm ittent costs to repair cracks, gaps, and seams are estimated between $50 for a small-small facility and $130 for a large facility. (See Table H.4 for itemized O&M and intermittent costs.)

New Containment Structures: Stationary Bulk Dry Storage. Capital, O&M, and intermittent costs are estimated for secondary containment of stationary bulk storage containers for dry pesticides (bulk solids) for one container (Table 4.2). A facility with on e dry bulk container is expected to incur capital cost s of $5,230 (see Table H.5 for itemized capital costs). Annual
O&M costs are estimated at $850 for one container and consist of spill cleanup, rinsate/precipitation pumping, and monthly inspectio n/recordkeeping costs. Intermittent costs incurred to repair cracks, ga ps, and seams are estimated at $100. (See Table H.6 for itemized O&M and intermittent costs.) No costs are estima ted for small-small refiller facilities with outdoor bulk dry storage, since it is assumed that only medium-small, large-small, and large facilities handle dry bulk pesticides.

New Containment Pads: Ou tdoor Bulk Liquid Storage. Table 4.2 presents estimated capital, O&M, and intermittent costs for two outdoor contai nment pad scenarios. Scenario 1 evaluates the capital costs of fac ilities that also must have sec ondary containment of bulk storage containers. For these facilities, costs range from $5,850 for the small-small pad to $34,060 for the large pad. Scenario 2 estimates capital costs to faci lities that require only a new containment pad, including the costs of a pump and hose. Costs at these facilities are estimated to range from $6,600 for a small-small pad to $34,810 for a large pa d. Capital costs under Scenario 1 are lower than those estimated under Scenario 2 because the costs of a portable pump and hose have already been accounted for within the overall secondary containment costs under Scenario 1. (See Table H.7 for itemized capital costs.) O&M a nd intermittent costs are the same across both scenarios. Annual O&M costs cover spill cl eanup, rinsate/precipitati on pumping, transporting the rinsate/precipitation off-site for applic ation to crops, and m onthly inspection and recordkeeping. These costs are estimated to ra nge from $1,190 per year for the small-small pad to $5,100 per year for the large pad. Intermittent co sts are estimated at no more than $70 for all pad sizes to cover the repair of cracks, gaps, and seams. (See Table H.9 for itemized O&M and intermittent costs.)

New Containment Pads: Indoor Bulk Liquid Storage. Table 4.2 presents the estimated capital, O&M, and intermittent costs for two indoor containment pad scenarios. Scenario 1 estimates capital costs for pads built over existing concrete floors. For these facilities, costs range from $6,860 for the small-small pad to $5 0,570 for the large pad. Scenario 2 estimates capital costs for facilities where the existing conc rete floor is removed prior to construction of the containment pad. Costs at these facilities are between $8, 790 for the small-small pad and $53,840 for the large pad. The condition and age of the existing concrete floor will likely be a7/13/2006 Containment EA, page 56 primary factor in deciding whether to remove it prior to construction. (See Table H.8 for itemized capital costs.) Annual O&M costs for spill cleanup, rins ate/precipitation pumping, and monthly inspections/recordkeepi ng are estimated to be between $740 for the small-small indoor containment pad and $1,490 for the large pad (Table 4.2). Intermittent costs to repair cracks are no more than $70 for all pad sizes (Table 4.2). (See Table H.9 for itemized O&M and intermittent costs.)

4.1.2 Representative Facility Annualized Costs to Agricultural Refillers

Compliance costs have been converted to repr esent the annual costs associated with the construction of new secondary containment units and containment pads, based on the facilitylevel costs previously discussed. Appendix B presents the non-disc ounted facility-level schedule of costs across the 20-year analysis period fr om which annualized costs are based. Summary tables of annualized costs (using the methodology discussed in Appendix A) are provided in

Tables 4.3-4.6.

Annualized Costs: Secondary Containment Units. Tables 4.3 and 4.4 present the estimated annual requirements (calculated using a 3 pe rcent and 7 percent discount/interest rate, respectively) across representativ e facility sizes for both outdoor (liquid and dry) and indoor (liquid) secondary containment. 36 For small-small facilities, annualized costs are estimated at $1,253 for sites with outdoor bulk liquid storag e and $718 for sites with indoor bulk liquid storage. For medium-small f acilities, estimated annualized costs are $1,842 for sites with outdoor liquid storage and $991 for sites with indoor liquid storag e. For large-small and large facilities, estimated annualized costs are $3,277 for sites with outdoor liquid storage and $1,415 for sites with indoor liquid storage. Medium-sma ll, large-small, and large facilities that also have dry bulk storage will incur ad ditional annualized costs of $994 for one dry bulk container.

No costs are estimated for small-small refiller fa cilities with outdoor bulk dry storage, since it is assumed that only medium-small, large-small, and large facilities handle dry bulk pesticides. (See Table 4.3.)

Annualized Costs: Secondary Containment Pads. Annualized costs for containment pads for

outdoor and indoor facilities are sh own under two different scenarios in Tables 4.5 and 4.6. It is assumed that small-small and medium-small facilities will require a small pad and large-small and large agricultural refiller facili ties will require a medium-sized pad. 37 The containment pad annualized costs for indoor agricultural facilities range from $997 at a small-small facility to $1,990 at a large facility, if existing concrete floors are used as the base for a new containment pad. If the existing floor is removed prior to constructing a new pad, es timated annualized costs range from $1,112 at a small-small facility to $2,303 at a large facilit y. (See Table 4.5.)

Outdoor pad scenarios are calculated for facilitie s that require both secondary units and pads (Scenario 1) and facilities that require pads only (Scenario 2). For outdoor bulk storage, a smallsmall and medium-small facility will incur annu alized costs for a small containment pad of

36 Note: All annual revenue figures are calculated using both a 3 percent and 7 percent discount rate in the discounting procedure and both a 3 percent and 7 percent interest rate in the annualization procedure. When referred to in the text, the annual costs at the 3 percent rate will be presented. A separate table is presented for costs at each

rate.

37 Costs for a large pad are applicab le only to aerial applicators.7/13/2006 Containment EA, page 57 between $1,290 under Scenario 1 and $1,335 under Scenario 2. 38 Small-small agricultural

refiller facilities that need only a containment pad because they are conducting operational

activities from

Table 4.3. Summary of Annualized Costs for Compliance with Containment Regulations, Representative Facility Size for Agricultur al Refillers and Commercial Aerial and Ground Applicators, a Install NEW Secondary Containment Units, 2005$, 3% Discount Rate

Location/Design Option Small-Sma ll Medium-Small Large-Small Large

Secondary Containment, Agricultural Refillers

Liquid bulk, outdoors Liquid bulk, indoors 1,253

718 1,842

991 3,277 1,415 3,277 1,415

Dry bulk, outdoors

One container

Two containers n/a

n/a 994 1,351 994 1,351 994 1,351

Secondary Containment, Commercial Applicators

Liquid bulk, outdoors b

Aerial c

Ground d 1,253

n/a 1,850

n/a 3,301 1,850 n/a

n/a

a Annualized costs based on non-discounted cost estim ates, annualized using the methodology discussed in Appendix A. Individual non-discounted cost estimates are shown in Appendix B. Estimated 1992 facility-level costs have been inflated to 2005 dollars based on reported trends in the Consumer Price Index, “All Items” (U.S. Department of Labor, 2005).

b No independent commercial applicators are known to st ore bulk quantities of dry pesticides (greater than 4000 pounds).

c The annualized cost for the small-small, medium-small an d large-small representative agricultural facility is used as a proxy for any affected small-small, medium-s mall and large-small commercial aerial applicators.

d The annualized cost for the medium-small representative ag ricultural facility is used as a proxy for any affected large commercial ground applicators.

38 Costs are higher under Scenario 2 because the cost for a pump and portable hose is included. This cost is included as a “secondary containment” cost under Scenario 1 and is not included to avoid double-counting.7/13/2006 Containment EA, page 58 Table 4.4. Summary of Annualized Costs for Compliance with Containment Regulations, Representative Facility Size for Agricultur al Refillers and Commercial Aerial and Ground Applicators, a Install NEW Secondary Containment Units, 2005$, 7% Discount Rate

Location/Design Option Small-Sma ll Medium-Small Large-Small Large

Secondary Containment, Agricultural Refillers

Liquid bulk, outdoors Liquid bulk, indoors 1,225

682 1,838

932 3,270 1,335 3,270 1,335

Dry bulk, outdoors

One container

Two containers n/a

n/a 986 1,338 986 1,338 986 1,338

Secondary Containment, Commercial Applicators

Liquid bulk, outdoors b

Aerial c

Ground d 1,225

n/a 1,838

n/a 3,270 1,838 n/a

n/a

a Annualized costs based on non-discounted cost estim ates, annualized using the methodology discussed in Appendix A. Individual non-discounted cost estimates are shown in Appendix B. Estimated 1992 facility-level costs have been inflated to 2002 dollars based on reported trends in the Consumer Price Index, “All Items” (U.S. Department of Labor, 2005).

b No independent commercial applicators are known to st ore bulk quantities of dry pesticides (greater than 4000 pounds).

c The annualized cost for the small-small, medium-small an d large-small representative agricultural facility is used as a proxy for any affected small-small, medium-s mall and large-small commercial aerial applicators.

d The annualized cost for the medium-small representative ag ricultural facility is used as a proxy for any affected large commercial ground applicators.

smaller non-bulk containers have annualized co sts of $1,335 for the small pad. Annualized costs range from $2,706 under Scenario 1 to $2,838 under Scenario 2 for the medium pad used by large-small and large agricultura l refillers. (See Table 4.5.)

Annualized Costs: Secondary Containment Units and Pads. To comply with the final containment standards, many refillers may incur costs across more than one of the individual cost components evaluated in this analysis. These costs are combined to derive the total annualized cost estimate for a single representa tive facility (Tables 4.7 and 4.8). For this economic analysis, a small-small ag ricultural refiller wi th outdoor liquid bulk storage that needs both secondary containment and a containment pad will have annualized costs estimated at $2,544 per facility. A medium-small facility requir ing both structures ha s estimated annualized costs of $3,133 per facility, and large-small and large facilities have annualized costs of $5,983 per facility. Small-small and medium-small facil ities requiring only a containment pad will have annualized costs of $1,335 per facility. Large- small and large facili ties requiring only a (medium) containment pad have estimated annua lized costs of $2,838 per facility. Both largesmall and large facilities that require a containment pad only are assumed to already have secondary containment structures in place. (See Table 4.7.)

Small-small agricultural refillers that do not have bulk storage but that re quire a containment pad for certain operational activiti es associated with smaller non-bulk containers (e.g., refilling

refillable containers from a 500-gallon container) have estimat ed annualized costs of $1,335 per7/13/2006 Containment EA, page 59 facility (Table 4.7). Facilit ies with indoor storage facili ties requiring both secondary containment and a pad will have annualized costs between $1,715 (small-small facility) and $3,405 (large facility). Indoor faci lities that require only a new containment pad have estimated annualized costs ranging from $1,112 at a small- small and a medium-small facility to $2,303 at a large-small and a large f acility. (See Table 4.7.)

Refillers with both liquid and dry bulk storage face the highest annual cost to comply with the final containment regulations. In addition to co sts for a containment pad, such facilities have been assigned two annualized costs for secondary containment: one for the liquid bulk containers and one for a single dry bulk container. Separa te secondary containment units are assumed for liquid and dry pesticides, but it is assumed that liquid and dry pesticides will be placed in close proximity so that one containment pad may be used for dispensing activities of both types. Under these conditions, annualized costs per facility are estima ted at $4,483 for the mediumsmall representative facility and $5,983 for the large- small and large facilities (Table 4.7). If the dry bulk container at actual facilities is not adjace nt to the liquid bulk containers, costs will likely be greater. In that case, a second containmen t pad would be needed and additional annualized costs of $2,838 per facility would be incurred (Table 4.7). Annualized costs for secondary containment may be overstated, if the dry bulk container can be contai ned within the same secondary containment structure as the liquid bulk containers.

Aggregate industry costs are then computed by multiplying the estimated annualized costs by the estimated number of facilities potentially affected by the regulations (see Chapter 3 for a description of the number of aff ected agricultural refiller facilit ies). Aggregate industry costs

incurred to construct new containmen t structures at agricultural ref iller facilities are estimated at $2.47 million on an annualized basis (Table 4.7). The breakdown of this estimated aggregate cost by type of facility is as follows: (1) for agri cultural refillers with outdoor liquid bulk storage,

the estimated cost across all faci lities is $0.88 million; (2) for agricu ltural refillers that also have dry bulk storage, the estimated cost across all facilities is an additional $0.14 million; (3) for agricultural refiller s with indoor liquid bulk storage, the estimated cost acro ss all facilities is $0.25 million; (4) for agricultural refillers with indoor liquid bulk storage that need only containment pad, the estimated cost across all f acilities is $0.12 million, and (5) for agricultural refillers refilling from smalle r (non-bulk) storage containers, the estimated cost across all facilities is $0.75 million. By facility size, the aggregate industry costs are estimated at $2.00 million for small-small refiller facilities, $0.32 m illion for medium-small re filler facilities, $0.08 million for large-small refiller facilities, and $0.06 million for large refiller facilities. (See Table 4.7.)7/13/2006 Containment EA, page 60 Table 4.5. Summary of Annualized Costs for Co mpliance with Containment Regulations, Representative Facility Size for Agricultur al Refillers and Commercial Aerial and Ground Applicators, Install NEW Secondary Contai nment Units and Pads, 2005$, 3% Discount

Rate a

All Affected Facilities ($/Facility)

Small Pad (15’ x 30’) Medium Pad b

(25’ x 50’) Large Pad (60’ x 50’)

OUTDOOR CONTAINMENT PADS

Scenario 1: Facilities requiring both se condary containment and containment pads

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller Any size aerial applicator (Small-, Medium-, and Large-Small) Large-Small ground applicator 1,290

---

---

--- --- 2,706

---

2,706 ---

--- 6,054

--- Scenario 2: Facilities requiring only a containment pad for compliance c

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller Any size aerial applicator (Small-, Medium-, and Large-Small) Large-Small ground applicator 1,335

---

---

--- --- 2,838

---

2,838 ---

--- 6,098

---

INDOOR CONTAINMENT PADS d

Scenario 1: Use existing concrete fl oor as base for new containment pad

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller 997

--- --- 1,990 ---

--- Scenario 2: Demolish existing concrete floor and construct new containment pad

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller 1,112

--- --- 2,303 ---

---

a Annualized costs based on non-discounted cost estim ates, annualized using the methodology discussed in Appendix A. Individual non-discounted cost estimates are shown in Appendix B. Estimated 1992 facility-level costs have been inflated to 2005$ dollars based on reported trends in the Consumer Price Index, “All Items” (U.S. Department of Labor, 2005).

b The annualized costs for the medium-sized containment pad have been assigned to both the large-small and large representative agricultural facilities. The large for-hire gr ound applicator has been assigned the same annualized cost as the large-small agricultural facility.

c The cost for a pad is higher than und er Scenario 1 because the cost for a pump and portable hose are included. That cost is included as a “secondary co ntainment” cost under Scenario 1 and is not included as a pad cost to avoid double counting.

d Indoor bulk pesticide storage facilities that dispense in to or out of indoor bulk containers are assumed to be conducting such activities over a concrete floor. Owners/ope rators may elect to use the existing concrete as a base for the containment pad, or they may choose to demolish the existing concrete prior to construction of the pad.

Annualized costs are shown for both s cenarios. The annualized cost for the medium containment pad has been assigned to both the large-small and large representative agri cultural facilities. The large for-hire ground applicator has been assigned the same annualized cost as the large-small agricultural facility.7/13/2006 Containment EA, page 61 Table 4.6. Summary of Annualized Costs for Compliance with Containment Regulations, Representative Facility Size for Agricultur al Refillers and Commercial Aerial and Ground Applicators, Install NEW Secondary Contai nment Units and Pads, 2005$, 7% Discount

Rate a

All Affected Facilities ($/Facility)

Small Pad (15’ x 30’) Medium Pad b

(25’ x 50’) Large Pad (60’ x 50’)

OUTDOOR CONTAINMENT PADS

Scenario 1: Facilities requiring both se condary containment and containment pads

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller Any size aerial applicator Large ground applicator 1,262

---

---

--- --- 2,719

--- 2,719 ---

--- 6,046

--- Scenario 2: Facilities requiring only a containment pad for compliance c

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller Any size aerial applicator Large ground applicator 1,316

---

---

--- --- 2,878

--- 2,878 ---

--- 6,100

---

INDOOR CONTAINMENT PADS d

Scenario 1: Use existing concrete fl oor as base for new containment pad

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller 1,019

--- --- 2,128 ---

--- Scenario 2: Demolish existing concrete floor and construct new containment pad

Small-Small/Medium-Small agricultural refiller Large-Small/Large agricultural refiller 1,158

--- --- 2,505 ---

---

a Annualized costs based on non-discounted cost estim ates, annualized using the methodology discussed in Appendix A. Individual non-discounted cost estimates are shown in Appendix B. Estimated 1992 facility-level costs have been inflated to 2005$ dollars based on reported trends in the Consumer Price Index, “All Items” (U.S. Department of Labor, 2005).

b The annualized costs for the medium-sized containment pad have been assigned to both the large-small and large representative agricultural facilities. The large for-hire gr ound applicator has been assigned the same annualized cost as the large-small agricultural facility.

c The cost for a pad is higher than und er Scenario 1 because the cost for a pump and portable hose are included. That cost is included as a “secondary co ntainment” cost under Scenario 1 and is not included as a pad cost to avoid double-counting.

d Indoor bulk pesticide storage facilities that dispense in to or out of indoor bulk containers are assumed to be conducting such activities over a concrete floor. Owners/ope rators may elect to use the existing concrete as a base for the containment pad, or they may choose to demolish the existing concrete prior to construction of the pad.

Annualized costs are shown for both s cenarios. The annualized cost for the medium containment pad has been assigned to both the large-small and large representative agri cultural facilities. The large for-hire ground applicator has been assigned the same annualized cost as the large-small agricultural facility. As compared to existing facilities, the pad size requirements are different (see Table 4.11). Existing facilities are more overbuilt (see Section 4.2), therefore it is assumed that for new facilities agricultural refillers will require smaller pad.7/13/2006 Containment EA, page 62 Table 4.7. Summary of Annualized Costs to Install New Secondary Containment Units and Pads, Representative Agricultural Refillers, 3% Discount Rate

Compliance Cost Item SmallSmall Facility MediumSmall Facility Large-Small Facility Large Facility All

Facilities

AGRICULTURAL REFILLERS

Outdoor Liquid Storage (A) Secondary Containment + Pad

Number of Affected Facilities a 270 46 5 3 324

Annualized Cost/facility ($) b 2,544 3,133 5,983 5,983 0

Subtotal, aggregate cost c 687,138 1,44,797 28,991 17,673 8,78,599

(B) Containment Pad Only

Number of Affected Facilities 200 34 4 2 240

Annualized Cost/facility ($) 1,335 1,335 2,838 2,838 0

Subtotal, aggregate cost 2,66,845 45,660 10,173 6,201 3,28,879

Outdoor Dry Storage (A) Secondary Containment + Pad

Number of Affected Facilities n/a 17 6 6 28

Annualized Cost/facility ($) n/a 4,483 5,983 5,983 0

Subtotal, aggregate cost n/a 76,158 33,882 33,882 1,43,922

Indoor Liquid Storage (A) Secondary Containment + Pad d

Number of Affected Facilities 116 20 2 1 139

Annualized Cost/facility ($) 1,715 1,988 3,405 3,405 0

Subtotal, aggregate cost 1,98,559 39,381 7,070 4,310 2,49,320

(B) Containment Pad Only

Number of Affected Facilities 86 15 2 1 103

Annualized Cost/facility ($) 1,112 1,112 2,303 2,303 0

Subtotal, aggregate cost 95,258 16,300 3,538 2,157 1,17,253

Non-Bulk Storage/Dispensing e (A) Containment Pad

Number of Affected Facilities 561 n/a n/a n/a 561

Annualized Cost/facility ($) 1,335 n/a n/a n/a 0

Subtotal, aggregate cost 7,49,049 n/a n/a n/a 7,49,049

ALL AG. REFILLERS INDUSTRY

TOTAL 19,96,849 3,22,296 83,654 64,224 2,467,023

a Number of facilities taken from Table G.3.

b Represents an aggregation of all relevant annualized costs per facility. Costs in the table may not add due to rounding. Annualized costs are based on those presented in Tables 4.3 and 4.5.

c Subtotals are not the exact product of number of affected facilities and Cost/F acility shown here due to rounding of

number of facilities.

d Assumes affected facilities will use existing concrete floor as a base for building a containment pad.

e Refillers that conduct activities such as refilling ref illable containers from smaller (non-bulk) containers.7/13/2006 Containment EA, page 63 Table 4.8. Summary of Annualized Costs to Install New Secondary Containment Units and Pads, Representative Agricultur al Refillers, 7% Discount Rate

Compliance Cost Item SmallSmall Facility MediumSmall Facility Large-Small Facility Large Facility All Facilities

AGRICULTURAL REFILLERS

Outdoor Liquid Storage (A) Secondary Containment + Pad

Number of Affected Facilities a 270 46 5 3 324

Annualized Cost/facility ($) b 2,487 3,101 5,988 5,988 0

Subtotal, aggregate cost c 671,837 143,322 29,015 17,688 861,863

(B) Containment Pad Only

Number of Affected Facilities 200 34 4 2 240

Annualized Cost/facility ($) 1,316 1,316 2,878 2,878 0

Subtotal, aggregate cost 263,105 45,020 10,317 6,289 324,731

Outdoor Dry Storage (A) Secondary Containment + Pad

Number of Affected Facilities n/a 17 6 6 28

Annualized Cost/facility ($) n/a 4,439 5,988 5,988 0

Subtotal, aggregate cost n/a 75,404 33,910 33,910 143,224

Indoor Liquid Storage (A) Secondary Containment + Pad d

Number of Affected Facilities 116 20 2 1 139

Annualized Cost/facility ($) 1,701 1,951 3,462 3,462 0

Subtotal, aggregate cost 196,939 38,645 7,190 4,383 247,158

(B) Containment Pad Only

Number of Affected Facilities 86 15 2 1 103

Annualized Cost/facility ($) 1,158 1,158 2,505 2,505 0

Subtotal, aggregate cost 99,169 16,969 3,849 2,346 122,332

Non-Bulk Storage/Dispensing e (A) Secondary Containment + Pad

Number of Affected Facilities 561 n/a n/a n/a 561

Annualized Cost/facility ($) 1,316 n/a n/a n/a 0

Subtotal, aggregate cost 738,552 n/a n/a n/a 738,552

ALL AG. REFILLERS

INDUSTRY TOTAL 1,969,603 319,360 84,280 64,617 2,437,860

a Number of facilities taken from Table G.3.

b Represents an aggregation of all relevant annualized costs per facility. Costs in the table may not add due to rounding. Annualized costs based on those presented in Tables 4.4 and 4.6.

c Subtotals are not the exact product of number of affected facilities and Cost/F acility shown here due to rounding of

number of facilities.

d Assumes affected facilities will use existing concrete floor as a base for building a containment pad.

e Refillers that conduct activities such as refilling ref illable containers from smaller (non-bulk) containers.7/13/2006 Containment EA, page 64 4.1.3 Representative Facility Costs (Non-D iscounted) for Commercial Applicators

This section presents estimated capital costs, operating and management (O&M) costs, and intermittent costs for new secondary containment st ructures and pads by representative facility for commercial (for-hire) aerial and ground applicators. These f acility-level cost tables are aggregated are in Appendix H. All final costs are converted to current 2005 dollars, adjusting for inflation based on reported trends in the Consumer Price Inde x (U.S. Department of Labor, 2005). Costs are also presented as cons tant-level, annualized costs per year.

All independent commercial applicators (aerial and ground) are assumed to be small (i.e., smallsmall, medium-small, and large-small), and all bulk storage facilities for aerial and ground applicators are assumed to be outdoors. Furthermor e, it is assumed that independent commercial applicators do not store bulk quant ities of dry pesticides (i.e., there are no known facilities with containers that have a capacity greater than two metric tons).

New Containment Structures: Co mmercial Aerial Applicators. To estimate capital, O&M, and intermittent costs applicable for commercial aer ial applicators with total bulk liquid storage ranging from 1,500 gallons to 20,000 gallons, we ha ve transferred the cost estimates from similarly sized agricultural refille r facilities (e.g., small-small re presentative aerial applicator

facilities are assumed to have the same sec ondary containment costs as the small-small representative agricultural refi ller, because both have one 1,5 00 gallon container). (Table H.10 lists facility-level compliance costs transferred from similarl y sized agricultural refiller facilities.)

Inflated to current 2005 dollars, estimated non-disc ounted capital costs to construct a secondary containment structure at aerial ap plicator facilitie s range from $5,600 at a small-small facility to $18,250 at a large-small facility, covering the cost for a precipitation/rins ate tank and sump, and other related construction costs (Table 4.2) . Annual O&M costs are between $1,160 (smallsmall) and $2,760 (large-small). Intermittent repair costs are between $50 (small-small) and $130 (large-small) (Table 4.2). (See Table H.1 for itemized capital costs and Table H.2 for itemized O&M and intermittent costs.)

New Containment Structures: Commercial Ground Applicators. Preliminary research indicates that the majority of commercial ground applicators work from non-bulk containers such as minibulks (Myrick, 1991a). Ground applicator s are not profiled as representative facilities, but are considered to be comprised of all larg e-small facilities. For this analysis, ground applicators have been assigned the same capital, O&M, and intermittent costs as those estimated for medium-small agricultural ref illers. Accordingly, capital co sts for secondary containment structures are $10,300 per large-sm all facility. Annual O&M costs are $1,550 per facility, and intermittent costs are $120 per large-small fac ility (Table 4.2). (See Table H.1 for itemized capital costs and Table H.2 for itemized O&M and intermittent costs.)

4.1.4 Representative Facility Aggregate Annualized Costs to Commercial Applicators

Compliance costs have been converted to a nnualized costs and repr esent the annual costs associated with the construction of new secondary containment units and containment pads from the facility-level costs presented previously. Appendix B presents the non-discounted facility-7/13/2006 Containment EA, page 65 level schedule of costs across th e 20-year analysis period from which annualized costs are based. Summary tables of annualized costs (using the methodology discussed in Appendix A) are provided in Tables 4.3-4.6.

Annualized Costs: Secondary Containment Units. Aerial applicators with liquid bulk storage may incur annualized costs for secondary cont ainment units that range from $1,253 for smallsmall facilities to $3,277 for larg e-small facilitie s (Table 4.3). 39 Large-small ground applicators are assumed to incur annualized costs for secondary containment similar to that estimated for small-medium agricultural refille rs at $1,842per facility (Table 4.3).

Annualized Costs: Secondary Containment Pads. Facilities that on ly require a large pad (aerial applicators) may face annua lized costs of $6,061 per facility for facilities requiring both a secondary containment unit and a pad, and $6,106 pe r facility for facilities requiring a pad only (Table 4.5). 40 The same annualized cost for a medium containment pad estimated for largesmall/large agricultural refillers is assumed for ground applicators: $2,708 per facility for facilities requiring both a s econdary containment unit and a pad, and $2,840 per facility for facilities requiring a pad only (Table 4.5).

Annualized Costs: Secondary Containment Units and Pads. Combined annualized costs to aerial applicator facilitie s that require secondary containmen t units and a large containment pad range from $7,307 for a small-small facility to $9 ,355 for a large-small faci lity (Table 4.9). The annualized costs for ground applic ator facilities are $4,556 for fac ilities that require secondary containment structures and a pad, and $2,838 for f acilities that require on ly a pad (Table 4.9). 41

Aggregate industry costs are then computed by multiplying the estimated annualized costs by the estimated number of affected facilities (see Chapte r 3 for a description of the number of affected commercial applicator facilities ). For commercial aerial and ground applicators, the aggregate industry cost to construct new containment st ructures is estimated at $0.22 million on an annualized basis (Table 4.9). The breakdown of estimated costs by ca tegory of facility is estimated at $0.12 million for aerial applicator facilities with outdoor liquid bulk storage requiring secondary containment units and pads , and is estimated at $0.02 million for ground applicators with outdoor liquid bulk storage requiring secondar y containment units and pads (Table 4.9). For aerial applicat or and ground applicator facilities requiring only the installation of a pad, estimated costs are $0.06 million and $0.01 million, respectively (Table 4.9).

The breakdown in costs by facility size is estim ated at $0.05 million for small-small commercial applicators, $0.12 million for medium-small a pplicators, and $0.06 million for large-small applicators (Table 4.9).

39 Note: All annual revenue figures are calculated using both a 3 percent and 7 percent discount rate in the discounting procedure and both a 3 percent and 7 percent interest rate in the annualization procedure. When referred to in the text, annual costs will be presented using the 3 pe rcent rate. Tables 4.7 and 4.9 present the estimated costs at a 3 percent discount rate, while Tables 4.8 and 4.10 present the estimated costs at a 7 percent discount rate.

40 The cost for a pad is higher when both secondary contai nment units and pads are required, because the costs for a pump and portable hose are included as “secondary containment” costs. To avoid double-counting, these costs are not included when only a pad is required.

41 See Table 4.10 for annualized costs at a 7 percent discount rate.7/13/2006 Containment EA, page 66 4.1.5 Total Aggregate Annualized Costs

The total aggregate annualized co sts to install new containment structures for all agricultural refillers and commercial applic ators is $2.7 million (Table 4.9). Given that there are significantly more agricultural refiller facilitie s affected by the containment regulations, more than 90 percent (or $2.5 million) of the total cost of the in stallation of new containment structures is incurred by agricultu ral refillers. The breakdown in estimated costs by facility size is $2.0 million for small-small facilities (agr icultural refillers account for 95 percent), $0.44

million for medium-small facilitie s (agricultural refillers acc ount for 75 percent), $0.14 million for large-small facilities (agricultural refillers account for 60 percent), and $0.06 million for large facilities (agricultural refill ers account for 100 percent—ther e are assumed to be no large commercial applicators in th is analysis—see Table 4.9.)7/13/2006 Containment EA, page 67 Table 4.9. Summary of Annualized Costs to Install New Secondary Containment Units and Pads, Representative Commercial Applic ator Facilities, 3% Discount Rate

Compliance Cost Item Small-Small Facility MediumSmall Facility Large-Small Facility Large Facility a All Facilities

AERIAL APPLICATORS

Outdoor Liquid Storage (A) Secondary Containment + Pad

Number of Affected Facilities b 6 9 1 0 16

Annualized Cost/facility ($) c 7,307 7,903 9,355 0 0

Subtotal, aggregate cost 45,594 70,815 7,484 0 1,23,893

(B) Containment Pad Only

Number of Affected Facilities na 7 3 0 10

Annualized Cost/facility ($) na 6098 6,098 0 0

Subtotal, aggregate cost na 44,721 19,166 0 63,887

GROUND APPLICATORS d

Outdoor Liquid Storage (A) Secondary Containment + Pad

Number of Affected Facilities na na 5 0 5

Annualized Cost/facility ($) na na 4,556 0 0

Subtotal, aggregate cost na na 22,779 0 22,779

(B) Containment Pad Only

Number of Affected Facilities na na 3 0 3

Annualized Cost/facility ($) na na 2,838 0 0

Subtotal, aggregate cost na na 9,291 0 9,291

ALL COMMERCIAL

APPLICATORS

INDUSTRY TOTAL 45,594 1,15,536 58,720 0 2,19,850

ALL AG. REFILLERS

INDUSTRY TOTAL e 1,996,849 3,22,296 83,654 64,224 2,467,023

ALL REFILLERS &

APPLICATORS

COMBINED INDUSTRY TOTAL (Install New Structures) 2,042,443 437,832 142,374 64,224 2,686,874

a There are no commercial applicators that fit the definition of a large facility.

b Number of facilities taken from Table G.3.

c Represents an aggregation of all relevant annualized costs per facility. Costs in the table may not add due to rounding. Annualized costs based on those presented in Tables 4.3 and 4.5.

d All bulk facilities are assumed to be large-small, w ith a bulk storage profile similar to the medium-small agricultural refiller (e.g., annualized costs calculated for the medium-small agricultural refiller are used as proxies for the large-small ground applicator).

e Estimates from Table 4.7.7/13/2006 Containment EA, page 68 Table 4.10. Summary of Annualized Costs to Install New Secondary Containment Units and Pads, Representative Commercial Appl icator Facilities, 7% Discount Rate

Compliance Cost Item SmallSmall Facility MediumSmall Facility Large-Small Facility Large Facility a All Facilities

AERIAL APPLICATORS

Outdoor Liquid Storage (A) Secondary Containment + Pad

Number of Affected Facilities b 6 9 1 0 16

Annualized Cost/facility ($) c 7,271 7,884 9,316 0 0

Subtotal, aggregate cost 45,370 70,645 7,453 0 123,468

(B) Containment Pad Only

Number of Affected Facilities na 7 3 0 10

Annualized Cost/facility ($) na 6,100 6,100 0 0

Subtotal, aggregate cost na 44,736 19,173 0 63,909

GROUND APPLICATORS d

Outdoor Liquid Storage (A) Secondary Containment + Pad

Number of Affected Facilities na na 5 0 5

Annualized Cost/facility ($) na na 4,557 0 0

Subtotal, aggregate cost na na 22,785 0 22,785

(B) Containment Pad Only

Number of Affected Facilities na na 3 0 3

Annualized Cost/facility ($) na na 2,878 0 0

Subtotal, aggregate cost na na 9,422 0 9,422

ALL COMMERCIAL

APPLICATORS

INDUSTRY TOTAL 45,370 115,381 58,832 0 219,584

ALL AG. REFILLERS

INDUSTRY TOTAL e 1,969,603 319,360 84,280 64,617 2,437,860

ALL REFILLERS &

APPLICATORS

COMBINED INDUSTRY TOTAL (Install New Structures) 2,014,973 434,741 143,113 64,617 2,657,444

a There are no commercial applicators that fit the definition of a large facility.

b Number of facilities taken from Table G3.

c Represents an aggregation of all relevant annualized costs per facility. Costs in the table may not add due to rounding. Annualized costs based on those presented in Tables 4.4 and 4.6.

d All bulk facilities are assumed to be large-small, w ith a bulk storage profile similar to the medium-small agricultural refiller (e.g., annualized costs calculated for the medium-small agricultural refiller are used as proxies for the large-small ground applicator).

e From Table 4.8.7/13/2006 Containment EA, page 69 4.2 Compliance Costs for Existing Containment Structures

This section presents the cost assumptions and un it cost data that are used to compute the costs of complying with EPA’s “critical” standards for existing containment structures. The results of the facility-level cost analysis are also presented. To comp ly with the final containment regulation, facilities will incur co sts to retrofit existing second ary containment structures and pads. Costs of compliance with these standards are calculated by representative facility for agricultural refillers and for commercial (for-hire) applicators. Actual costs per facility will depend on the number of structures to retrofit and the degree to whic h such structures or containers are out of compliance (see Chapter 3 fo r a description of the le vel of compliance). Many facilities may have only a secondary cont ainment structure, and some may have only a containment pad.

Existing Secondary Containment Units. All existing secondary cont ainment units are assumed to already comply with the requirement that c onstruction materials be re inforced concrete or some other rigid material compatible with the pestic ide(s) stored within the unit. As a result, unit costs were not developed to represent the retrofit of existing structures to concrete from some other material, such as natural earthen material, unfired clay, a nd asphalt, which are specifically prohibited construction materials. Even though so me states may allow lined earthen containment

structures, 42 no facility is known to have such a stru cture for pesticide containment. Earthen structures are generally used to provide containment for larger fe rtilizer storage containers. In addition, all existing bulk liquid un its are assumed to have the containment capacity required by

the critical standards to store 100 percent of the volume of th e largest container, plus any displacement volume. Furthermore, existing wall s have sufficient freeboard to prevent water from seeping or flowing onto the containment st ructures from adjacent land. These assumptions are based on information obtained from industry experts and state agency personnel, indicating that most secondary containment units are “overbu ilt” in terms of capacity. As a result, the cost items for retrofitting existing secondary containm ent units include the cost to seal floor and discharge outlets; repair all cr acks, gaps, and seams; and conduct monthly inspections and keep inspection and maintenan ce records. All costs are in 2005 dollars based on trends in the

Consumer Price Index. 43 The unit costs are presented in Appendix H (Table H.11).

To estimate costs associated with sealing all cracks, gaps, and s eams, we used a unit cost of $2.84/ft for routing, cleaning, and grouting cracks—whether to ini tially seal cracks to comply with the final regulations or to routinely seal cracks over time . Any floor drains or discharge outlets must also be sealed: labor and grout costs are estimated at $54.78 per hour and at
$11.41/ft 3 , respectively. The cost for a portable pump and hose to remove collected precipitation

or other material is estima ted at $548. (See Table H.11.)

42 Minnesota, Vermont, and Wisconsin have pesticide containment regulations specifying that earth or asphalt with a liner may be used. Regulations in six states (Kansas, Lo uisiana, Missouri, North Dako ta, Ohio, and West Virginia) do not specify the type of containment material.

43 To update final industry compliance co sts to current year dollars (April 2 005), we apply a CPI-U “All Items” based adjustment factor to account for general price inflation (U.S. Department of Labor, 2005).7/13/2006 Containment EA, page 70 No unit costs were developed for the protection of appurtenances and containers against damage from personnel and moving equipment. 44 Unit costs were also not developed for O&M requirements, such as the handling of collected pesticide residues or the cleanup of spills or leaks, since owners/operators of existing containment units are already managing these activities. However, monthly inspection and recordkeepin g costs of $28 per hour are included (Table H.11).

Typically, stationary dry bulk pest icide storage containers are inst alled over concrete pads. The facilities are expected to incur co st to repair cracks, gaps and seams. These estimates are the same as those for the bulk liquid containers. Si nce only the medium-small, large-small and large agricultural refillers are assumed to have bulk dry containers; thes e costs are applicable to only these categories.

Existing Containment Pads. Retrofitting containment pads to comply with the critical criteria specified in the final containmen t regulations will involve sealing cracks, gaps, and seams in the structure; repairing new cracks as they a ppear; and conducting mont hly inspections and recordkeeping. To calculate costs, similar unit costs apply as those represented for new containment structures (see Section 4.1). Some existing containment pads are expected to have drains that will require sealing. Unit labor costs are estimated at $54.78 per hour. Grout is
estimated at $11.41/ft 3 . (See Table H.12.)

A significant number of existing containment pads are assumed to be flat, with no sump. Although sloping to a sump is not required by the final rule for existing pads, 750-gallon capacity is required and could be achieved by a berm and/or a sump. For the purpose of this analysis, the cost of both a sump and a berm we re included. Unit costs are based on the addition of a sump to an existing concrete containment pa d. Unit costs for the sump include cutting into the existing concrete at $4.95/ft; demolishi ng the concrete over the sump area at $5.66/ft 2 ; excavation at $5.14 per cubic yard; gravel at $15. 28 per cubic yard; reinforced concrete at $268 per cubic yard; steel edging (frame ) at $11.58/ft; and a grate at $6.76/ft 2 . (See Table H.12.)

The analysis also assumes that th e height of the berm must be increased. The unit cost to rough up the existing concrete and apply a bonding agent is estimated at $4.10/ft 2 . Concrete forms are calculated at $2.74/ft, and reinforcem ent bars are estimated at $3.02/ft. The cost of concrete for
the berm is between $1.78/ft 2 and $3.02/ft 2 , depending on the height of the berm. The excavation, gravel, and concrete uni t costs for concrete ramps are the same as those assumed for the sump. (See Table H.12.) The unit cost for repa iring cracks gaps and seams is the same as those assumed for existing secondary containment structures.

Existing bulk pesticide storage containers. The final rule requires existing containers to be anchored to prevent flotation in case of a spill. In order to prevent flotation, new containers must be anchored or elevated. Typi cal bulk liquid storage containers at agricultural refiller and applicator facilities have an assumed capacity range of 1,500 gallons to 6,000 gallons, and are

44 Possible means of protection include supports to prevent sagging, flexible connections, the use of guardrails, barriers, and protective cages. The berm itself should se rve as a protection for bulk st orage containers within a secondary containment unit, and simple blocks of wood or concrete blocks can be used, at an insignificant cost, to prevent the sagging of piping.7/13/2006 Containment EA, page 71 constructed of either plastic or steel. Owner s/operators may replace flat-bottomed containers with cone-shaped containers, but costs will likely be greater and will vary, depending on the capacity and construction material of the container. We assume that all facilities incur the same anchoring cost regardless of facility size and bulk container type (plastic or steel). Initial costs are $479 per container to move the container and to cover the labor for drilling in anchors and altering the plumbing. Contract or’s and contingency fees ar e $72 and $28, respectively. Annual costs to inspect the containers and maintain records are $32. 45 (See Table H.13.)

4.2.1 Representative Facility Costs (Non-D iscounted) for Agricultural Refillers

This section presents capital, O&M, and inte rmittent costs to retrofit existing containment structures and bulk storage contai ners of bulk liquid and dry pestic ides. Costs associated with meeting the critical standards are estimated by re presentative facility for agricultural refillers (refilling establishments). Costs (non-discoun ted) are estimated at the facility level for representative firms in 2005 dollars . These facility-level cost tabl es are aggregated in Appendix H (Tables H.11-H.13). All final costs, discusse d below, are inflated to current 2005 dollars based on reported trends in the Consumer Price Index, and are also converted to constant-level, annualized costs as per the method described in Appendix A. Appendix B presents the nondiscounted facility-level schedule of costs across the 20-ye ar analysis period from which

annualized costs are based.

Existing Secondary Containment Structures. Compliance costs to re trofit existing secondary containment units for bulk liquid storage contai ners include the seali ng of floor drains or discharge outlets; the repair of cracks, gaps, and seams; and mont hly inspection of facilities. Costs associated with expanding liquid containment capacity are not estimated, since all existing liquid bulk units are already assumed to have the required containmen t capacity to store 100 percent of the volume of the largest container. For dry bulk storage, costs are estimated for the repair of all cracks, gaps, and seams; a nd for monthly inspecti on of facilities.

Initial costs (i.e., seal floor dr ains and outlets, and repair exis ting cracks, gaps, and seams) for bulk liquid containment are $740 for all facility sizes (Table 4.11). Intermittent costs (i.e., repair existing cracks, gaps, and seams) are incurred every 5 years (years 8, 13, and 18) assuming that

the containment structure would be brand new in the compliance year throughout the life of the existing units. Assuming that these structures meet the requirement that secondary containment structures be leakproof, the intermittent cost s are estimated between $40 for a small-small facility and $140 for a large f acility. Annual O&M costs incl ude monthly inspection and the recording of inspection information, estimated at $30 across all facility sizes. For dry bulk containment at medium-small, large-small, and large agricultural refiller facilities, intermittent costs are estimated at $100. O&M costs are also $30 per facility for bulk dry containers (Table 4.11). (See Table H.11 for itemized costs.)

Existing Containment Pads. Table 4.11 presents the costs for facilities to comply with the critical standards for existing containment pads , expressed in 2005 dollars . Compliance costs to retrofit existing pads include the addition of a 750 -gallon capacity sump, the sealing of all drains; the repair of all cracks, gaps, and seams; and monthly inspection of f acilities (Table H.12).

45 The numbers in table are rounded to the nearest $10.7/13/2006 Containment EA, page 72 Capital costs of adding a sump range from $1,660 for a small-small facility to $4,870 for a large facility. Initial costs to seal drains or discharge outlets in th e containment pad are estimated at $80 per pad, regardless of size. Sealing all existing cracks, gaps, and seams costs $30 for a small containment pad, $60 for a medium pad, and $70 for a large pad. O&M costs include $30 for monthly inspections/recordkeeping per facility. (See Table 4.11.)

Existing bulk pesticide storage containers. We assume that all facilities incur the same anchoring cost regardless of facility size and bulk container type (plastic or steel) (Table H.13). Initial costs are $580 for moving th e container, the labor for dril ling in anchors and altering the plumbing, as well as the contractor’s and contin gency fees. Annual O&M costs to inspect the

containers and maintain r ecords are $30. (See Table 4.11.)7/13/2006 Containment EA, page 73 Table 4.11. Summary of Facility-Level Cost s (2005$) to Retrofit Existing Secondary Containment Units and Pads, Representative Agricultural Refillers and Commercial Applicator Facilities

$ per Facility a

Compliance Cost Item Small-Small Facility MediumSmall Facility Large-Small Facility Large Facility

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Capital 0 0 0 0

Initial 740 740 740 740

O&M 30 30 30 30

Intermittent 40 110 140 140

Secondary Containment - Bulk Dry/Outdoor b

Capital 0 0 0 0

Initial 0 0 0 0

O&M 0 30 30 30

Intermittent (1 container) 0 100 100 100

COMMERCIAL APPLICATORS b

Secondary Containment - Bulk Liquid Storage (Outdoor)

Capital 0 0 0 0

Initial 740 740 740 na

O&M 30 30 30 na

Intermittent 40 110 140 na

REFILLERS AND APPLICATORS

Containment Pads - Ou tdoor (Scenarios 1&2) c

Capital 1660 2560 4870 4870

Initial 80 80 80 80

O&M 30 30 30 30

Intermittent 30 60 70 70

Container Anchoring (Plastic and Steel)

Capital 0 0 0 0

Initial 580 580 580 580

O&M 30 30 30 30

Intermittent 0 0 0 0

a Inflated to 2005$ from trends in the Consumer Price Index “All Items” (U.S. Department of Labor, 2005). See Tables H.11-H.13 for unit costs. Figures may not match totals in Appendix H due to rounding.

b Both aerial and ground applicators.

c Applicable to facilities based on pad size requirements: small-small agricultural facility (small pad); medium-small facility (medium pad); and large-small and large facility (l arge pad). As compared to new facilities the pad size requirements are different (see Table 4.6). Existing f acilities are more overbuilt (see Section 4.2), therefore it is assumed that for new facilities agricultural refillers will requ ire smaller pad. All aerial applicators are assumed to have containment pads of similar size (large), sufficient in width to allow for the entire wingspan of airplanes (plus some margin) to be over the pad area. Ground applicators are assumed to require a medium pad.7/13/2006 Containment EA, page 74 4.2.2 Representative Facility a nd Aggregate Annualized Costs to Agricultural Refillers

Table 4.14 presents the facility-lev el annualized costs to retrofit existing containment structures among agricultural refiller to comply w ith the final containment regulations. 46 For secondary liquid containment units, annualized facility-level cost s to retrofit are esti mated at between $73 for a small-small facility and $87 for a large-small facility. For secondary dry containment units, the annualized facility-level costs are same for all facility size categories at $37.

Aggregate annualized costs are be st presented in terms of to tal industry costs because of differences in the number of facilities that will be affected by the individual rule requirements for existing containers, aggregate annualized costs are best presented in terms of total industry costs (Table 4.12). Facilities may onl y be subject to portions of a particular standard for existing containment structures. Due to the way we estima te the number of facilities that are subject to the existing containment standards (see Table G.4 fo r the estimated number of facilities required to retrofit existing containers), we are unable to estimate the extent to which each individual facility will incur multiple complia nce costs (capital, initial, O&M, and intermittent) associated with a particular standard. Furthermore, the num ber of impacted facilities presented in Table G.4 do not reflect any particular f acility-size category but the number of impacted facilities in the industry as a whole. To split out the number of impacted facilities by containment standard and size category, we apply the industry-wide percen t distribution of small- small, medium-small, large-small, and large facilities for agricu ltural refillers and the industry-wide percent distribution of small-small, medium-small, and large-small commercial applicators (see Chapter 3). 47 With these considerations in mind, we therefore do not present the total number of aggregated facilities impacted by the standard s for existing containment structures. We do, however, present the number of facilities impacted by regulation and compliance cost type in the economic impact analysis presented in Chapte r 5. The costs presented in Table 4.12 are calculated by multiplying the annualized cost (pre sented as total of capital, initial O&M and intermittent in Tables 4.14 and 4.15) with the total number of fac ilities expected to incur these costs (Table G.4) to arrive at industry level costs. 48 These costs are then distributed by size category based on the industry-wi de percent distribution of small-small, medium-small and large-small commercial applicators. 49

For agricultural refiller facili ties that handle bulk liquid pestic ides, annualized industry costs are $45,063 across all small-small agricultural refill er facilities, $8,106 across all medium-small

46 Tables 4.14 and 4.15 present costs calculated using both the 3 percent and the 7 percent discount/interest rate scenarios, respectively. All annual re venue figures are calculated using both a 3 percent and 7 percent discount rate in the discounting procedure and both a 3 percent and 7 percent interest rate in the annualization procedure. When referred to in the text, annual costs will be presented at th e 3 percent rate. Appendix B presents the non-discounted facility-level schedule of costs across the 20-year anal ysis period from which annualized costs are based.

47 The industry-wide facility size distribution for agricultura l refillers is: 83.33 percent small-small, 14.26 percent medium-small, 1.50 percent large-small, and 0.91 percent large. The industry-wide facility size distribution for commercial applicators is: 39 percent small-small, 56 percent medium-small, and 5 percent large-small.

48 For example, out of the $73 facility level cost for small-small agriculture refillers for secondary liquid containment reported in Table 4.14, $44 is for initial, $24 for O&M and $5 is for intermittent. These are multiplied by the number of facilities expected to incur each of these expenses presente d in Table G.4 (333 will incur initial, 1602 O&M and 295 will incur intermittent). To obtain the cost for small-sma ll refillers, each of the cost item was multiplied by 83.33 (see footnote 47) and then these components were added to obtain 45,063 =($44*333+$24*1602+$5*295)*83.33 (components do not add because of rounding).

49 See footnote 47.7/13/2006 Containment EA, page 75 agricultural refiller facilities, $867 acro ss all large-small agricultural refiller facilities, and $529 across all large agricultural refille r facilities. Across all medium-small, large-small, and large agricultural refiller facilities that handle li quid and dry bulk pesticides, annualized costs are $264, $28, and $17, respectively. Annualized costs to retrofit containment pads are $58,372 across all small-small agricultural refiller faci lities, $12,719 across all medium-small agricultural refiller facilities, $2,043 across all large-small agricultural refiller facilities, and $1,246 across all large agricultural refiller facilities. Annua lized costs to anchor bulk containers are $91,739 across all small-small agricultural refiller faci lities, $15,698 across all medium-small agricultural refiller facilities, $1,645 across all large-small agricultural refiller facilities, and $1,003 across all large agricultural refiller facilities. (See Table 4.12.)

Aggregate industry costs incurred to retrofit existing containm ent structures and anchor bulk containers at agricultural ref iller facilities are es timated to be $195,174 across all small-small facilities, $36,787 across all medium-small facilitie s, $4,584 across all large- small facilities, and $2,794 across all large facil ities. Aggregate industry costs am ong agricultural ref illers to retrofit existing containment structures are estimated at $0.25 million on an annualized basis. The breakdown by category of structure estimated at $0.06 million for refiller facilities with liquid bulk storage, $0.0003 million for refiller facilities with liquid and dry bulk storage, $0.07 million for containment pads, and $0.11 million for anch oring liquid bulk containers. (See Table 4.12.) 50

50 The numbers are rounded off from the tables for the text. For example, the aggregate industry cost to retrofit existing containment structures is $245,126 in Table 4.12, which is rounded off to $0.25 million in the text.7/13/2006 Containment EA, page 76 Table 4.12. Summary of Aggregate Industry Annualized Costs (2005$) a to Retrofit Existing Secondary Containment Units and Pads and Liquid Bulk Containers for Representative Agricultural Refillers and Co mmercial Applicator Facilities, 3% Discount

Rate

Item Small-Small

Facilities MediumSmall

Facilities LargeSmall

Facilities Large

Facilities Total

AGRICULTURAL REFILLERS

Secondary Liquid Containment Industry annualized costs for facilities 45,063 8,106 867 529 54,565

Secondary Dry Containment b
Industry annualized costs for facilities na 264 28 17 309

Containment Pads Industry annualized costs for facilities 58,372 12,719 2,043 1,246 74,380

Bulk Liquid Containers (Anchoring) Industry annualized costs for facilities 91,739 15,698 1,645 1,003 110,085

AGRICULTURAL REFILLERS

INDUSTRY TOTAL 195,174 36,787 4,584 2,794 239,339

COMMERCIAL APPLICATORS

Secondary Liquid Containment Industry annualized costs for facilities 704 1,011 90 na 1,805

Containment Pads Industry annualized costs for facilities 944 1,672 222 na 2,838

Bulk Liquid Containers (Anchoring) Industry annualized costs for facilities 446 641 57 na 1,144

COMMERCIAL APPLICATORS,

INDUSTRY TOTAL 2,094 3,324 369 na 5,787

ALL REFILLERS & APPLICATORS, COMBINED INDUSTRY TOTAL (Retrofit Existing Structures) 197,268 40,111 4,953 2,794 245,126

a Represents an aggregation of all relevant annualized costs per facility adjusted against the estimated number of

affected facilities. The information that feeds into thes e calculations (number of affected facilities; annualized costs/facility; subtotal, aggregate cost) is derived from Ta ble G.4 and Table 4.14 and the percentage of facilities by size class. The industry-wide facility size distribution for agricultural refillers is: 83.33 percent small-small, 14.26 percent medium-small, 1.50 percent large-small, and 0.91 percent large. The industry-wide facility size distribution for commercial applicators is: 39 percent small-small, 56 percent medium-small, and 5 percent large-small

b All bulk dry storage containers are assumed to be lo cated at medium-small, large-small, and large facilities.

4.2.3 Representative Facility Costs (Non-D iscounted) for Commercial Applicators

This section presents capital, O&M, and interm ittent costs incurred by applicators that must retrofit existing containment structures and bulk storage containers of bulk liquid and dry pesticides. Costs associated with meeting the cr itical standards are estimated for all independent commercial applicators combined, both aerial and ground applicators. Aerial and ground applicators are assumed to have only bulk liquid storage, with no costs attributable to the containment of bulk dry containe rs. It is assumed that all facilities meet the containment capacity requirement, and that commercial applic ators with existing containment structures are located in states with containment regulations.7/13/2006 Containment EA, page 77 Costs (non-discounted) calculated at the facility level for represen tative firms are aggregated in Appendix H (Tables H.11–H.13). All final costs are in 2005 dollars based on reported trends in the Consumer Price Index (U.S . Department of Labor, 2005). 51 Appendix B presents the nondiscounted facility-level schedule of costs across the 20-ye ar analysis period from which

annualized costs are based.

Table 4.13. Summary of Aggregate Industry Annualized Costs (2005$) a to Retrofit Existing Secondary Containment Units and Pads and Liquid Bulk Containers for Representative Agricultural Refillers and Co mmercial Applicator Facilities, 7% Discount

Rate

Item Small-Small

Facilities MediumSmall

Facilities LargeSmall

Facilities Large

Facilities Total

AGRICULTURAL REFILLERS

Secondary Liquid Containment Industry annualized costs for facilities 44,052 7,873 840 512 53,278

Secondary Dry Containment b
Industry annualized costs for facilities na 235 25 15 275

Containment Pads Industry annualized costs for facilities 61,312 13,747 2,296 1,400 78,754

Bulk Liquid Containers (Anchoring) Industry annualized costs for facilities 85,343 14,603 1,531 933 102,410

Agricultural Refill ers Industry Total 190,706 36,458 4,692 2,860 234,717

COMMERCIAL APPLICATORS

Secondary Liquid Containment Industry annualized costs for facilities 670 962 86 na 1,718

Containment Pads Industry annualized costs for facilities 975 1,782 247 na 3,003

Bulk Liquid Containers Industry annualized costs for facilities 416 597 53 na 1,067

Commercial Applicators, Industry

Total 2,061 3,341 386 na 5,788

ALL REFILLERS & APPLICATORS, COMBINED

INDUSTRY TOTAL (Retrofit Existing Structures) 192,768 39,800 5,077 2,860 240,505

a Represents an aggregation of all relevant annualized costs per facility adjusted against the estimated number of

affected facilities. The information that feeds into thes e calculations (number of affected facilities; annualized costs/facility; and subtotal, aggregate cost) are derived fr om Table G.4, Table 4.15 and the industry-wide facility size distribution for agricultural refillers (83.33 percent small-small, 14.26 percent medium-small, 1.50 percent large-small, and 0.91 percent large) and the industry-wide facility size distribution for commercial applicators (39 percent small-small, 56 percent medium -small, and 5 percent large-small).

b All bulk dry storage containers are assumed to be lo cated at medium-small, large-small, and large facilities.

51 Note: All annual revenue figures are calculated using both a 3 percent and 7 percent discount rate in the discounting procedure and both a 3 percent and 7 percent interest rate in the annualization procedure. When referred to in the text, annual costs will be presented at the 3 percent rate.7/13/2006 Containment EA, page 78 Existing Secondary Containment Structures. Actions required to retrofit secondary containment units for bulk liquid storage contai ners at commercial a pplicator facilities are similar to those incurred by agricultural refillers: seal floor drains or discharge outlets; anchor bulk tanks; repair cracks, gaps, and seams; and inspect facilities. Initial estimated costs to seal floor drains are $740 for all facility sizes (Tab le 4.11). Intermittent costs will be incurred to repair cracks in the structure, on average, every 5 years (Table H.11); repair costs are between $40 for a small-small facility and $140 for a large- small facility. Annual O&M costs to maintain monthly inspections and other recordkeeping requir ements are estimated at $30 per facility. (See Table 4.11).

Existing Containment Pads. Table 4.11 presents the potential costs for facilities to comply with EPA’s critical standards for existing containm ent pads. The costs of large containment pads are relevant only to aerial appli cators, given that the pads are re quired to accommodate airplanes. Large-small ground (land) applicator businesses are assumed to requ ire a medium pad. Costs to retrofit containment pads include adding a sump; sealing all drains; repa iring all cracks, gaps, and seams; and making monthly inspections (Table H.12).

All commercial applicators are assumed to be lo cated in regulated states. Therefore, these facilities already must m eet requirements to seal cracks in th e containment pad, and no additional compliance costs for sealing are incurred. Sump (capital) costs are estimated at between $1,660 for small-small commercial applicator f acilities and $4,870 for large-small commercial applicator facilities. Drains or discharge outlets (initial costs) in containment pads must be sealed at a cost of $80 per pad. Intermittent repa ir costs (repairing all cracks, gaps, and seams) are estimated at between $30 for a small-small f acility and $70 for a la rge-small facility. Monthly inspections and written records of inspec tions and related maintenance (O&M costs) are estimated at $30 per facility. (See Table 4.11.)

Existing Bulk Storage Containers. Facility-level costs to retrofit bulk containers at agricultural facilities apply equally to commerc ial applicators, and include th e cost of anchors and monthly inspection/recordkeeping costs. Anchoring of bulk containers (p lastic and steel) is required, costing $580 per container. O&M costs for mont hly inspections and reco rdkeeping are estimated at $30 per container. (See Table 4.11.)

4.2.4 Representative Facility a nd Aggregate Annualized Costs to Commercial Applicators

Table 4.14 presents the aggregated annualized costs to retrofit existing containment structures among independent commercial applicators to comp ly with the final containment regulations. 52 For secondary liquid containment units, annualized f acility-level costs to re trofit are estimated at between $73 for a small-small facility and $87 for a la rge-small facility. Faci lities that require a medium containment pad (ground applicators) wi ll incur annualized cost s of $189 per facility;

52 Tables 4.14 and 4.15 present costs calculated using both the 3 percent and the 7 percent discount/interest rate scenarios, respectively. All annual re venue figures are calculated using both a 3 percent and 7 percent discount rate in the discounting procedure and both a 3 percent and 7 percent interest rate in the annualization procedure. When referred to in the text, annual costs will be presented at th e 3 percent rate. Appendix B presents the non-discounted facility-level schedule of costs across the 20-year anal ysis period from which annualized costs are based.7/13/2006 Containment EA, page 79 and facilities that require a larg e containment pad (aerial applicat ors) will incur annualized costs of $329 per facility. (See Table 4.14 for facility-level annualized costs.)7/13/2006 Containment EA, page 80 Table 4.14. Summary of facility-level annua lized costs to comply with containment regulations representative by facility size fo r agricultural refillers and commercial aerial and ground applicators to retrofit existing secondary containment units and pads, and liquid bulk containers ( 2005$), 3% discount rate

Retrofit Item Small-Small Facility Medium-Small Facility Large-Small Facility Large Facility

Agricultural Refillers
Secondary Liquid Containment 73 83 87 87

Secondary Dry Containment n/a 37 37 37

All Applicators
Secondary Liquid Containment 73 83 87 n/a

Agricultural Refillers and All Applicators

Containment Pads 132 189 329 329
Bulk Liquid Containers a 58 58 58 58

a One plastic or steel flat-bottomed bulk storage container is assumed per facility.

Table 4.15. Summary of facility-level annua lized costs to comply with containment regulations representative by facility size fo r agricultural refillers and commercial aerial and ground applicators to retrofit existing secondary containment units and pads, and liquid bulk containers ( 2005$), 7% discount rate

Retrofit Item Small-Small Facility Medium-Small Facility Large-Small Facility Large Facility

Agricultural Refillers
Secondary Liquid Containment 79 87 90 90
Secondary Dry Containment n/a 32 32 32

All Applicators
Secondary Liquid Containment 79 87 90 0

Agricultural Refillers and All Applicators

Containment Pads 150 218 386 386

Bulk Liquid Containers a 63 63 63 63

a One plastic or steel flat-bottomed bulk storage container is assumed per facility.

Aggregate annualized costs are be st presented in terms of to tal industry costs because of differences in the number of facilities that will be affected by the individual rule requirements for existing containers (Table 4.12). 53 For applicators that need to retrofit existing bulk liquid

53 Facilities may only be subject to portions of a particular standard for existing containment structures. Due to the way we estimate the number of facilities that are subject to the existing containment standards (see Table G.4 for the estimated number of facilities required to retrofit existing containers), we are una ble to estimate the extent to which each individual facility will in cur multiple compliance costs (c apital, initial, O&M, and intermittent) associated with a particular standard. Furthermore, the number of imp acted facilities presented in Table G.4 does not reflect any particular facility-size category but the number of impacted facilities in the industry as a whole. To split out the number of impacted facilities by containment standard by size category, we apply the industry-wide percent distribution of small-small, medium-small, large-small, a nd large facilities for agricultural refillers and the industry-7/13/2006 Containment EA, page 81 secondary units, annualized industry costs ar e $704 across all small-small facilities, $1,011 across all medium-small facilities, a nd $90 across all large-small facilities. 54 The estimated costs to retrofit containment pads are $944 annually across all small-small f acilities, $1,672 across all

medium-small facilitie s, and $222 across all large-small faciliti es. The estimated costs to anchor existing bulk containers are $446 across all sma ll-small facilities, $641 across all medium-small facilities, and $57 across all large- small facilities. (See Table 4.12.)

For commercial aerial and ground ap plicators, the aggregate indus try cost to retrofit existing containment structures is estimated at $0.006 mill ion on an annualized basis. The breakdown in estimated costs by category of facility is estima ted at $0.002 million for app licator facilities with secondary liquid containment, $0.003 million for containment pads, and $0.001 million for anchoring of liquid bulk containers. 55 The breakdown in estimated costs by facility size is estimated at $0.002 million for small-small a pplicators, $0.003 million for medium-small applicators, and $0.0004 million for large-sm all applicators. (See Table 4.12.)

4.2.5 Uncertainty of Cost Estimates

Many of the assumptions present in the complia nce cost analysis discussion are inherently uncertain, though every effort has been made to use the best available data to inform our assumptions. Despite efforts to minimize the un certainty, the sensitivit y of certain key inputs and assumptions are discussed in this section ba sed on the magnitude of the impact on the total regulatory compliance costs estimated.

The total compliance cost estimate varies considerably based on assumptions used for estimating the number of regulated entities a ffected and the unit cost of eac h regulatory requirement. For example, in this analysis we have assumed that 100 percent of facilities in the states that have regulations for bulk storage have secondary containm ent units and that 40 per cent of facilities in the unregulated states have secondary containmen t. Similarly, we assume that 100 percent of

facilities in states with mixi ng/loading or operational pad regu lations meet EPA’s containment pad requirements and that 25 percent of facilities in other states have a pad. Further, as discussed in detail in the sections above, we make additional assumptions about the percent of facilities that might be affected by the EPA’ s containment regulations to retrofit existing

containment structures and to install new units and pads (see Tables G.3 and G.4). Even though, these assumptions are based on inputs from vari ous states, and have been the basis of the economic analysis in the proposed containment rule economic impact analysis, it is possible that these percentages can be somewhat different from our assumptions. We exp ect that there is less uncertainty about our assumption that 100 percent of all facilities in regula ted states will be in

wide percent distribution of small-small, medium-small, and large-small commercial app licators (see Chapter 3). With these considerations in mind, we therefore do not present the total number of aggregated facilities impacted by the standards for existing containment st ructures. The costs presented in Tabl e 4.12 are calculated by multiplying the annualized cost (capital, initial O&M and intermittent) with the total number of facilities expected to incur these costs (Table 3.2) to arrive at industry level costs. These costs are then di stributed by size category based on the industry-wide percent distribution of small-small, medium-s mall and large-small commercial applicators. We do, however, present the number of facilities impacted by re gulation and compliance cost type in the economic impact analysis presented in Chapter 5 (Table I.3).

54 The annualized industry costs are calculated similar to the process described in section 4.2.2.

55 The numbers are rounded off from the tables for the text. For example, th e aggregate industry costs to retrofit existing containment structures is $245,915 in Table 4.12, which is rounded off to $0.25 million in the text.7/13/2006 Containment EA, page 82 compliance. The estimates of the number of fac ilities that are in compliance, on the other hand, may be either 5 percent greater or smaller which should not affect our cost estimates significantly.

Another source of uncertainty is our assumption that 90 percent of all bulk facilities store in undivided quantities greater than 50 0 gallons and are theref ore regulated. We have verified this assumption by contacting several state-level government and agri cultural extension staff. However, it is possible that this percentage varies across different states, which might affect the

total cost estimates.

4.2.6 Total Aggregate Annualized Costs

The total estimated aggregate annualized costs to retrofit existing containment structures for all agricultural refillers and commerc ial applicators is $0.25 million (Table 4.12). Given that there are significantly more agricultural refiller facili ties affected by the containment regulations, more than 95 percent (or $0.24 million) of the total cost of retrofitting existing containment structures is incurred by agricultural refill ers. The breakdown in estimated costs by facility size is $0.20 million for small-small facilities (agricultu ral refillers account for 99 percent), $0.04 for medium-small facilities (agricul tural refillers account for 92 percent), $0.005 million for largesmall facilities (agricultural refillers account for 93 per cent), and $0.003 mill ion for large facilities (agricultural refill ers account for 100 percent—ther e are assumed to be no large commercial applicators in this analysis). (See Table 4.12.)

In summary, this chapter has presented all of the estimated facility-lev el costs of compliance with the final pesticide bulk containment regulat ions for agricultural refillers and commercial applicators. Building on the estimates of facility compliance with the final containment regulations presented in Chapter 3 for new and existing facilities with bulk containment, Chapter 4 presented, by facility size for ag ricultural refillers and commercial applicators, the unit costs of compliance for new and existing liquid and dry secondary containment units and containment pads; and the discounted and annualized cost of compliance for new and existing containment structures. The estimated aggregate industry costs of compliance were also presented for agricultural refillers and commercial applicators to install new containment units and pads, and to retrofit existing containment un its and pads. The next chapter, Chapter 5, presents the total estimated annualized industry costs of complia nce, along with a comparison of the estimated costs of compliance with the final containment regulations and the proposed regulations.7/13/2006 Containment EA, page 83 

### 5.0 Industry and State Impact Analysis

Chapter 4 presented the facil ity-level costs of compliance with the final containment regulations for agricultural refillers and commercial applicators. This chapter presents the total costs of compliance with the final containment re gulations, which are simply an aggregation of the compliance costs presented in Chapter 4. Th e chapter also compares the estimated economic impacts (i.e., costs of compliance) of both the proposed and final containment regulations and presents additional analyses of the costs of co mpliance to agricultural and commercial applicator

businesses.

The first section (Section 5.1) describes the results of the facility-level cost analysis developed in the previous chapter and compares economic im pacts under the proposed and the final rules. Section 5.2 provides an economic impact assessme nt of the pesticide containment regulations, measured in terms of compliance costs as a share of facility revenue.

5.1 Aggregate Compliance Costs of Regulations

This section presents the results of the facili ty-level cost analysis in terms of aggregate (annualized) industry costs to cons truct new containment structur es and to retrofit existing

containment structures under EPA’s fina l pesticide containment standards.

5.1.1 Aggregate Annualized Costs under the Final Regulations

From the core facility-level cost analysis deve loped for this economic analysis (presented in Chapter 4), we can determine aggregate industry costs. Total industr y regulatory costs are calculated from estimated annualized costs per f acility multiplied by the number of affected facilities with bulk pesticide storage in the agri cultural refiller and commercial applicator industries. Industry costs are es timated across all facilities with bulk pesticide storage that will be required either to install new containment st ructures (new facilitie s and facilities without secondary containment units and containment pads) or to retrofit existing containment structures (facilities with containment structures that do no t meet EPA’s critical st andards). Tables 5.1 and 5.2 present the total compliance costs to agricultura l refillers and to commercial (for-hire) aerial and ground applicators under EPA’ s final pesticide containment rule. This analysis of compliance costs considers two discount/interest rate scenarios: a 3 percent scenario and a 7 percent scenario. 56 Where applicable, all discounted and annualized costs are presented using the 3 percent rate.

The final rule defines existing containment structures as those for which “installation” began on

or before 3 months after the date of publication of the final rule in the Federal Register. The “beginning of installation” is defined as: the owne r or operator has obtained all federal, state, and local approvals or permits necessary to begin phys ical construction of the containment structure,

and either

56 Note: All annual revenue figures are calculated using both a 3 percent and 7 percent discount rate in the discounting procedure and both a 3 percent and 7 percent interest rate in the annualization procedure. When referred to in the text, annual costs will be presented at the 3 percent rate.7/13/2006 Containment EA, page 84Table 5.1. Annualized Industry Costs of Compliance Under EPA’s Final Rule (2005$), 3% Discount RateAgricultural Refillers(Refilling Establishments)For-Hire Commercial Applicators(Aerial and Ground)Industry Annualized CostsSmallSmallFacilitiesMediumSmallFacilitiesLargeSmallFacilitiesLargeFacilities SubtotalSmallSmallFacilitiesMedium-SmallFacilitiesLargeSmallFacilities SubtotalTOTALPercentof TotalConstruction of New Containment StructuresOutdoor liquid bulk storage(secondary containment +pads) 687,138 144,797 28,991 17,673 878,599 45,594 70,815 30,263 146,673 1,025,272 35.0%Outdoor liquid bulk storage(containment pads only)266,845 45,660 10,173 6,201 328,879 na44,721 28,457 73,178 402,057 13.7%Outdoor liquid & dry bulkstorage (secondary containment+ pads) na 76,158 33,882 33,882 143,922 na na na na 143,922 4.9%Indoor liquid bulk storage(secondary containment + pads)198,559 39,381 7,070 4,310 249,320 na na na na 249,320 8.5%Indoor liquid bulk storage(containment pads only)95,258 16,300 3,538 2,157 117,253 na na na na 117,253 4.0%Outdoor liquid non-bulk storage(containment pads only)749,049 na na na 749,049 na na na na 749,049 25.5%Subtotal 1,996,849 322,296 83,654 64,224 2,467,023 45,594 115,536 58,720 219,850 2,686,874 91.6%Retrofitting of Existing Containment StructuresSecondary containment,bulk liquid storage containers45,063 8,106 867 529 54,565 704 1,011 90 1,805 56,370 1.9%Secondary containment,bulk dry storage containers na 264 28 17 309 na na na na 309 0.0%Containment pads58,372 12,719 2,043 1,246 74,380 944 1,672 222 2,838 77,218 2.6%Bulk storage pesticidecontainers 91,739 15,698 1,645 1,003 110,085 446 641 57 1,144 111,229 3.8%Subtotal 195,174 36,787 4,584 2,794 239,339 2,094 3,324 369 5,787 245,126 8.4%Total IndustryAnnualized Costs 2,192,023 359,083 88,238 67,018 2,706,362 47,688 118,860 59,089 225,637 2,932,000 100.0%Source: Tables 4.7, 4.9, and 4.12.7/13/2006 Containment EA, page 85Table 5.2. Annualized Industry Costs of Complianceunder EPA’s Final Rule (2005$), 7% Discount RateAgricultural Refillers(Refilling Establishments)For-Hire Commercial Applicators(Aerial and Ground)Industry Annualized CostsSmallSmallFacilitiesMediumSmallFacilitiesLargeSmallFacilitiesLargeFacilities SubtotalSmallSmallFacilitiesMedium-SmallFacilitiesLargeSmallFacilities SubtotalTOTALPercentof TotalConstruction of New Containment StructuresOutdoor liquid bulk storage(secondary containment + pads) 671,837 143,322 29,01517,688 861,863 45,370 70,645 30,238 146,253 1,008,116 34.8%Outdoor liquid bulk storage(containment pads only) 263,105 45,020 10,317 6,289 324,731 na 44,736 28,595 73,331 398,062 13.7%Outdoor liquid & dry bulkstorage (secondary containment+ pads) na 75,404 33,910 33,910 143,224 na na na na 143,224 4.9%Indoor liquid bulk storage(secondary containment + pads)196,939 38,645 7,190 4,383 247,158 na na na na 247,158 8.5%Indoor liquid bulk storage(containment pads only)99,169 16,969 3,849 2,346 122,332 na na na na 122,332 4.2%Outdoor liquid non-bulk storage(containment pads only)738,552 na na na 738,552 na na na na 738,552 25.5%Subtotal1,969,603 319,360 84,280 64,617 2,437,860 45,370 115,381 58,832 219,584 2,657,444 91.7%Retrofitting of Existing Containment StructuresSecondary containment,bulk liquid storage containers44,052 7,873 840 512 53,278 670 962 86 1,718 54,996 1.9%Secondary containment,bulk dry storage containers na 235 25 15 275 na na na na 275 0.0%Containment pads61,312 13,747 2,296 1,400 78,754 975 1,782 247 3,003 81,757 2.8%Bulk storage pesticidecontainers 85,343 14,603 1,531 933 102,410 416 597 53 1,067 103,476 3.6%Subtotal190,706 36,458 4,692 2,860 234,717 2,061 3,341 386 5,788 240,505 8.3%Total IndustryAnnualized Costs2,160,309 355,819 88,972 67,477 2,672,576 47,431 118,722 59,218 225,372 2,897,948 100.0%Source: Tables 4.8, 4.10, 4.13.7/13/2006 Containment EA, page 86 continuous on-site physical constr uction has begun, or contractua l obligations for construction

are in effect and cannot be cance led or modified without substa ntial loss. The rule defines new containment structures as those for which inst allation began more than 3 months after the publication of the final rule. Th e critical standards apply to existing structures in existing facilities or establishments. If an existing facili ty or establishment has bulk pesticide storage and no secondary containment structures, the containmen t unit or pad that must be constructed will be considered “new” and subject to the full federal standards. If a facili ty or establishment has such minimal secondary containment that the expense of retrofitting to the critical standards would require substantial expense, it is expect ed that state authorities would recommend or require construction to full federal standards. If major reconstruc tion is necessary, the incorporation of the a dditional requirements of the full standards would provide additional environmental protection at minimal additional cost.

Compliance costs for all agricultural refiller and commercial applicator facilities to construct

new containment structures that meet EPA standa rds are estimated at $2.69 million (an estimated $2.47 million for agricultural refillers and an estimated $0.22 million for commercial applicators). Compliance costs across both sectors to retrofit existing containment structures are estimated at $0.25 million ($0.24 million for agri cultural refillers and $0.006 million for commercial applicators). Combined compliance co sts (i.e., the compliance cost to install new containment structures plus the co st to retrofit existing containmen t structures) to all agricultural refiller and commercial applic ator facilities under EPA’s final pesticide containment standards are estimated at $2.93 million ($2.71 million for agricultural refillers and $0.23 for commercial applicators, as shown in Table 5.1).

These cost figures show that nearly 93 percent of the estimated total i ndustry costs of compliance are expected to be incurred by agricultural refill ers, including 92 percent of the cost to install new containment structures and 98 percent of th e costs to retrofit existing structures. The remaining costs will be borne by comme rcial aerial and ground applicators.

Aggregate industry costs incurred to construct new containment structures at agricultural refiller facilities are estimated at $2.47 milli on on an annualized basis (Table 5.1). By facility size, the aggregate industry costs to install new structur es are estimated at $2.00 million for small-small businesses, $0.32 million for medium-small facilitie s, $0.08 million for large-small facilities, and $0.06 million for large agricultural refiller faci lities. Aggregate industry costs among agricultural refillers to retrofit existing containment structures is estimated at $0.25 million on an annualized basis. The breakdown in costs by facility size is estimated at $0.196 million for small-small refillers, $0.037 million for medium -small refillers, $0.005 million for large-small facility refillers, and $0.003 million fo r large facilities. (See Table 5.1.)

For commercial aerial and ground applicat ors, the aggregate industry cost to install new containment structures is estimated at $0.22 million on an annualized basis (Table 5.1). Breakdown in costs by facility size is estimated at $0.05 million for small-small applicators, $0.12 million for medium-small applicators, an d $0.06 million for large-small applicators. 57 The aggregate industry costs for commercial applicators to retrofit existing containment structures are estimated at $0.006 million on an annualized basis. Breakdown in costs by facility size is

57 In this analysis, it is assumed that th ere are no large commercial applicators.7/13/2006 Containment EA, page 87 estimated at $0.002 million for small-small a pplicators, $0.003 million for medium-small applicators, and $0.0004 million for large-sm all applicators. (See Table 5.1.)

5.1.2 Comparison of Aggregate Annualized Cost s: Proposed Versus Final Regulations

As discussed in the preceding section, combined compliance costs to all agricultural refillers and commercial applicator facilities under EPA’s final pesticide cont ainment standards are estimated at $2.94 million (Table 5.1). This compares to $12.96 million in economic impacts to bulk pesticide storage facilities estim ated under EPA’s proposed rule, 58 marking a more than twothirds reduction in regulatory cost s under both discount/interest rate scenarios. This reduction in expected costs is attributable to changes in the rule requirements , as recommended by the Agency following a review of the public comments to the proposed rule and further deliberations by EPA. Among these changes are the elimination of the interim period requirements to retrofit existing structures and also elim ination of the more costly requirements of the proposed rule, such as the hydraulic conductivity standard and reduction in capacity requirements. The current analysis also extends the time for which costs are calculated; from a 15-year period of analysis to a 20-year period. Due to the discounting and annua lization of facility costs, a longer period of analysis results in lower annualized costs.

Table 5.1 and Table 5.3 present th e industry costs of compliance for agricultural refillers and commercial applicators under the final and pr oposed pesticide containment standards, respectively.

Differences between estimated costs of the proposed and final rules are also partially attributable

to the fact that more states now regulate pesticide bulk storage facilities. Consequently, fewer

facilities located in these states are affected by the final rule. During the early 1990s, 14 states regulated pesticide containment structures, acco unting for 71 percent of all agricultural bulk storage facilities. By 1998, 19 states had passed containment regulations and other states had regulations pending, accounting for 85 percent of all bulk storage facilities in th e agricultural refiller industry. For this ec onomic analysis, the number of a ffected facilities excludes those facilities that are assumed to be in compliance with the rule based on their location in states with regulations that meet EPA’s require ments for pesticide containment.

Since most facilities with bulk pesticide storag e are already covered under state regulations, costs

are not assessed for these facilities in this econom ic analysis. For example, in the analysis for the proposed rule, it was estimated that 765 agri cultural refiller facili ties would require both secondary containment units and pads and that 5 62 facilities would need new pads only. For the final rule, it is estimated that 491 refiller facilities would require both units and pads and 343 facilities would require pads only. For commercial applicators, the number of facilities estimated to require construction of new containment units and pads declined from 147 facilities

58 EPA (1993), inflated to 2005$. The estimated $12.96 million in economic impacts was under Regulatory Option 2 for the proposed rule, which was EPA’s recommended option. The requirements of this option are discussed in detail in Chapter 2 and Appendices E and F. Regulatory Option 1 represented the baseline; leaving 40 CFR Part 165 unchanged by retaining the current recommendations for pesticide storage. There were no increased costs estimated for compliance with this option. Regulatory Option 3 represented a higher level of stringency than Option 2. Additional requirements under this op tion included at each facility a ground water monitoring system and leachate detection system. The estimated cost of compliance with Regulatory Option 3 was $34.91 million in 2005$.7/13/2006 Containment EA, page 88 under the proposed rule to 21 facilities under the final rule, determined from compliance information for agricultural refillers (i.e., a pproximately 90 percent of all agricultural bulk facilities are assumed in compliance with the secondary containment standards based on the

distribution of facilities across st ates with and without existing regulations). Thus, changes in

the estimated size of the affected community have contributed to the differences in total industry

costs shown in Tables 5.1 and 5.3. In some cas es, these differences reflect shifts between categories of costs to construct new facilities and costs to retrofit existing ones.

Despite the above-mentioned effects of changes in the size of the regulated community on the estimated regulatory costs, changes in the actual regulatory requirements ha ve contributed to the bulk of the reduction in incremental regulatory co sts, as discussed in the following sections.7/13/2006 Containment EA, page 89Table 5.3. Annualized Industry Costs of Compliance under EPA’s Proposed RegulationAgricultural Refillers(Refilling Establishments)For-Hire Commercial Applicators(Aerial and Ground)Industry Annualized CostsSmallFacilitiesMediumFacilitiesLargeFacilitiesSubtotalSmallFacilitiesMediumFacilitiesLargeFacilitiesSubtotalTOTALPercentof TotalConstruct New Containment StructuresOutdoor liquid bulk storage(secondary containment +pads)963,585 1,901,136 50,908 2,915,630 202,694 1,076,414 571,079 1,850,187 4,765,816 36.8%Outdoor liquid bulk storage(containment pads only)434,728 1,024,600 43,840 1,503,168 0 130,943 86,202 217,144 1,720,312 13.3%Outdoor liquid & dry bulkstorage (secondarycontainment + pads)n/a 254,541 392,977 647,518 n/a n/a n/a 0 647,518 5.0%Indoor liquid bulk storage(secondary containment +pads)274,151 544,389 12,274 830,814 n/a n/a n/a 0 830,814 6.4%Indoor liquid bulk storage(containment pads only)140,643 304,042 15,655 460,339 n/a n/a n/a 0 460,339 3.6%Outdoor liquid non-bulk storage(containment pads only)1,281,302 n/a n/a 1,281,302 n/a n/a n/a 0 1,281,302 9.9%Subtotal 3,094,409 4,028,709 515,654 7,638,771 202,694 1,207,356 657,280 2,067,331 9,706,102 74.9%Retrofit Existing Containment Structures, Interim PeriodSecondary containment, bulkliquid storage containers 29,754 105,021 5,146 139,921 127 1,127 377 1,631 141,552 1.1%Secondary containment, bulk drystorage containersn/a 237 647 885 n/a n/a n/a 0 885 0.0%Containment pads 37,575 149,914 6,243 193,731 117 1,370 549 2,037 195,768 1.5%Bulk storage pesticide containers 20,271 195,898 27,753 243,922 32 2,407 1,427 3,865 247,787 1.9%Subtotal 87,600 451,070 39,790 578,459 276 4,905 2,353 7,533 585,992 4.5%7/13/2006 Containment EA, page 90Table 5.3. Annualized Industry Costs of Compliance under EPA’s Proposed Regulation (Continued)Agricultural Refillers(Refilling Establishments)For-Hire Commercial Applicators(Aerial and Ground)Industry Annualized CostsSmallFacilitiesMediumFacilitiesLargeFacilitiesSubtotalSmallFacilitiesMediumFacilitiesLargeFacilitiesSubtotalTOTALPercentof TotalRetrofit Existing Containment Structures, after Interim PeriodSecondary containment, bulkliquid storage containers70,761 397,488 34,042 502,291 373 4,324 2,376 7,073 509,364 3.9%Secondary containment, bulk drystorage containers n/a 9,261 22,243 31,504 n/a n/a n/a 0 31,504 0.2%Containment pads215,199 1,668,259 69,628 1,953,085 4,206 39,566 13,669 57,441 2,010,526 15.5%Bulk storage pesticide containers10,946 90,505 10,861 112,311 48 606 471 1,125 113,436 0.9%Subtotal 296,906 2,165,513 136,773 2,599,1914,627 44,495 16,516 65,638 2,664,830 20.6%Total IndustryAnnualized Costs 3,478,914 6,645,291 692,216 10,816,421 207,598 1,256,756 676,149 2,140,503 12,956,924 100.0%Source: EPA (1993), inflated to 2005$.7/13/2006 Containment EA, page 91 5.1.2.1 Costs to Construct New and Retrofit Existing Structures

Under the proposed regulation, nearly 75 percent ($9.7 million) of the estimated industry costs of compliance were expected to be incurred by agricu ltural refillers and commercial applicators to

install new containment structures. The rema ining 25 percent of costs ($3.3 million) were expected to cover the retrofitti ng expenses for existing containment structures. Under the final rule, aggregate costs to install new containment structures constitute 92 percent (or $2.6 million) of the total costs, and costs to retrofit existing structures constitute the remaining 8 percent (or $0.2 million) of total costs. (See Tables 5.1 and 5.3.)

The estimated reduction in retrofitting costs reflec ts the elimination in the final rule of the interim period requirements and the establishment of critical sta ndards for existing structures. Existing structures that do not meet EPA’s cr itical standards in the final rule will incur retrofitting costs to meet them without an interi m period. Still, the requirements under the final rule represent a substantial reduction in comp liance costs compared to the proposed regulation, estimated at 75 percent less for facilities with existing contai nment structures ($3.3 million versus $0.2 million). The major regulatory requirem ent that contributes to this reduction is the elimination of the hydraulic conductivity st andard (and related coating/recoating and recordkeeping requirements). Other changes in the regulatory requirements that contribute to

this decline in estimated costs are a reduction in the capacity requirements and elimination of the requirement that containers be elevated to facili tate leak detection. Inaddition, the requirement in the proposed rule that existing pads be slope d to a sump after the interim period has been

removed.

The estimated reduction in construction costs for new secondary containment structures and pads primarily reflects the removal of the coating requirement for floor s, pads, and berms required in conjunction with meeting a hydraulic conductivity standard. For outdoor and indoor secondary structures, elimination of this requirement resulted in roughly a 20 pe rcent decrease in all facility-level costs. For pads, removal of all coating costs in the final cost analysis resulted in facility-level costs of one-third less than that estimated under the proposed rule cost analysis. Related contractor and contingenc y costs, which are calculated as a percentage of total direct costs, as well as additional recordkeeping requirements, also lowered facility-level costs. For agricultural refiller facilities with secondary dry bulk cont ainment, costs estimated for the final analysis were one-third of those estimated fo r the proposed rule, due to the reduction in the capacity requirements that resulted in a subs tantial decrease in concrete and berm costs. For all new containment structures, costs were adde d in the final analysis to include expenses for the addition of rinsate and preci pitation tanks. Although neither th e proposed nor the final rule required rinsate tanks, they ar e recommended as good management practice, and their cost is included. The Agency is not requiring st ructures to enclose the rinsate tanks.

5.1.2.2 Costs to Agricultural Refillers and Commercial Applicators

Agricultural refillers are expected to incur $2.7 million in regulatory costs to install new and retrofit existing containment stru ctures, constituting the bulk (93 percent) of the total estimated compliance costs under the final rule (Table 5.1). Expressed on a percentage basis, this is a larger proportion of total costs than the dist ribution observed under the proposed rule, which was estimated at more than $10.8 million (84 percent) of the total industry costs of compliance (Table7/13/2006 Containment EA, page 92 5.3). Since several additional ope rational scenarios are assumed fo r agricultural refillers based on the types of structures required for bulk pe sticide storage, as compared to commercial applicators, the reductio n in costs was proportionally greater for agricultural refillers. For example, large cost reductions due to cha nges in the capacity requirements for dry bulk containment—which are assumed to apply to agricultural refiller facilities only—pushed aggregate costs for agricultural refillers downward. Costs were also lowered due to the removal of the hydraulic conductivity standard and associ ated coating/recoating requirements. Also, because of proportionately lesser reductions in the rule’s pad requirements, which are the major cost component for commercial applicators, co sts to individual faci lities did not change substantially. Nevertheless, reduc tions in the regulato ry requirements for secondary containment structures and pads lowered overall estimated co sts to commercial appl icators from $2.1 million under the proposed rule to $0.2 million under the final rule. (See Tables 5.1 and 5.3.)

For agricultural refillers, the co sts to construct new secondary c ontainment units and pads in the final rule comprise the bulk of all regulatory costs, estimated at $2.5 million (Table 5.1). Costs to retrofit existing contai nment structures at agricultural ref iller facilities account for a much smaller share of total costs, estimated at $0.24 m illion (Table 5.1). Compared to estimated costs under the proposed rule (a combined total of $3.2 million for interim and full standards), retrofitting costs are signif icantly lower (Table 5.3).

Among commercial applicators, costs to retrof it existing structures in the final rule ($0.006 million) comprise a smaller share of the total costs, accounting for approximately 3 percent of total commercial applicator cost s to retrofit existing structures under the final rule (Table 5.1).

This is less than that estimated for th e proposed rule ($0.07 million) (Table 5.3).

In addition to regulatory changes between the proposed containment regulations and the final regulations that lowered costs, the differences in costs between the tw o analyses are largely attributed to the change in th e mix of facilities subject to th e containment requirements. The change in the mix of facilities manifests itself in two ways. First, because the final analysis

assumes that all facilities in th e states with existin g bulk pesticide containment programs are in compliance with the final regulations, the actual number of facilities subject to the containment requirements is less for the final regulations th an for the proposed regulations. This will, obviously, lead to a reduction in indust ry-level regulatory compliance costs.

Second, of the facilities included in the current analysis for the final containment regulations, we

consider more facilities “small” than in the anal ysis of the proposed rule. Because costs are less for smaller facilities, a distribution skewed toward smaller facilities will result in lower overall regulatory compliance costs compared to a distributi on of facilities skewed toward larger facility sizes. In the proposed rule, the number of contai ners was split between small, medium, and large size categories with unit cost s of compliance calculated based on size assumptions. That analysis assumed that 25 percent of all agricultu ral refillers were small, 72 percent were medium, and 3 percent were large. For commercial applicat ors, the proposed rule analysis assumed that 9 percent of applicators were small, 69 percent we re medium, and 22 percent were large. In the current analysis, facilities are assigned to small-small, medium-small, large-small, and large facility size categories (only agri cultural refillers have “large” f acilities; commercial applicators do not). Based on the latest data on the percenta ge of companies in the different size categories7/13/2006 Containment EA, page 93 in the D&B database, we assume that 83 percent of refillers are small-small facilities, 14 percent are medium-small facilities, 2 percent are large-small facilities, and 1 percent are large

facilities. 59 For commercial applicators, we assume th at 39 percent are small-small facilities, 56 percent are medium-small facilitie s, and 5 percent are large-small facilities. The larger percentage of facilities in smaller facility size categories results in lower regulatory compliance costs than if those facilities were in larger si ze categories, since the unit costs of compliance are

less for small facilities.

5.1.2.3 Distribution of Costs among Representative Facilities

Across all small-small, medium-small, large-small, and large agricultural refiller and commercial applicator facilities in the final rule, nearly 77 percent of the tota l industry costs (or $2.23 million) are expected to be incurred by sma ll-small agricultural refiller and commercial applicator facilities. About 16 percent of all costs (or $0.48 million) are estimated to be borne by medium-small firms. Large-small firms are esti mated to account for 5 percent of total costs ($0.15 million). Large firms are estimated to acc ount for the remaining 2 percent of all costs ($0.07 million). (See Table 5.1.) In total, thes e costs are roughly 30 percent of the costs estimated in the cost analysis for the proposed rule: small firms ($3.7 million); medium-sized firms ($7.9 million); and large firms ($1.4 million) (Table 5.3). Because of the different definitions for facility sizes used in each anal ysis, it is difficult to compare the differences between the two analyses by facility sizes.

5.2 Economic Impacts of the Final Pe sticide Containment Regulations

The economic impacts of EPA’s containment regulati ons are estimated at th e facility level, in terms of annualized costs as compared to represen tative facility revenues (as provided in Chapter 3, section 3.3). As evaluated for this economic analysis, it is not expect ed that a substantial number of small facilities will be significantly impacted by the final containment regulations.

Costs have been assessed at the facility leve l based on the estimated annualized costs for each representative facility, as pres ented in Chapter 4. Annualized costs include capital costs and other related operating and management costs, c overing the full 20-year period of analysis. To

examine the effects of the final rule at the faci lity level, we compare estimated annualized costs of the rule by representative f acility with total facility-level revenue. For purposes of the SBREFA (Small Business Regulatory Enfo rcement and Fairness Act) analysis, 60 the three subcategories as defined for the final rule within the “small” size class (i.e., small-small, mediumsmall, and large-small) were combined into a single “small” size class (as defined by the Small Business Administration) for each regulated ent ity type (See Appendix I, Tables I.1 - I.4). 61 The estimated impacts are presented for both the gene ral, small facility size class and for each subcategory of small business.

59 The detailed procedure for assigning facilities to size categories is discussed in Chapter 3 (Table 3.4).

60 Regulatory Flexibility Act (RFA) as amended by the 1996 SBREFA.

61 All annual revenue figures are calculated using both a 3 percent and 7 percent discount rate in the discounting procedure and both a 3 percent and 7 percent interest rate in the annualization procedure. When referred to in the text, annual costs will be presented at the 3 percent rate. Tables I.1 and I.3 present costs at the 3 percent rate, and Tables I.2 and I.4 present costs at the 7 percent rate.7/13/2006 Containment EA, page 94 Economic impacts are estimated for businesses th at will be required e ither to install new structures or to retrofit existing structures. Tables I.1 and I.2 pr esent the results of the economic analysis and show, respectively, total facility-l evel annualized costs as a share of current

revenues to both install new sec ondary containment units and pads and to retrof it existing units and pads. A threshold for regulations potentially causing significant impacts to small businesses

is an annual cost to revenue rati o of greater than 1 percent. A nother consideration is the number of facilities that are affected beyond this threshol d. The economic impacts are not expected to be significant if the number of faciliti es with annual cost to revenue ration greater than the 1 percent threshold is small. Potentially affected industr ies under the rule include agricultural refillers and commercial applicators with bulk pesticide storage.

To further assist in the examination of small business impacts, Tables I.1 and I.2 present the number of facilities impacted by each containm ent standard. It should be noted, however, that not all facilities impacted by the same containmen t standard for existing structures will incur the same costs. As described in Chapter 3, some facilities may only need to comply with portions of a particular standard. For example, because st ates may already have standards in place that cover one or more of the components of this standard, agricultural refillers subject to the secondary containment standards for existing bulk liquid outdoor st orage may be subject to one or all of the standards’ component s. These include (1) the initial co st of sealing the floor drain or discharge outlet, (2) the operating and maintenance (O&M ) cost of recordkeeping and maintenance, and (3) the intermittent cost of repairs.

In the compliance profile (Chapter 3), we estimate the level of compliance by making assumptions about the extent to which facilities with existing secondary containment structures,

both within and outside of states with state-level containment re gulations, are or are not already in compliance with the national containment standards (see Table G .4). Because these compliance assumptions apply to different facili ties, it is impossible to estimate one single, facility-level cost associated with complian ce with the containment standards for existing structures. To calculate facility-level economic impacts, however, we make the conservative assumption that the average fac ility will incur all costs associ ated with bringing its existing containment structure into compliance with th e national standards. Though this is an overestimate of the facility-level compliance costs that most faci lities will incur (both refillers and applicators), the impact analysis still re veals that the overall economic impacts of the existing containment structure standards are le ss than 0.28 percent of revenues for all size categories (Table I.3).

5.2.1 Facility-Level Impacts for Agricultural Refiller Facilities

This section describes estimated facility-level economic impacts for agricultural refillers that install new containment structures or retrofit existing structures. Facility-level impacts are

assessed in terms of annualized costs as compared to facility-level revenue.

Under the containment rule, some facilities with bulk pesticide storage will incur costs to install a new secondary containment unit and a containment pad. Table I.1 compares the total facility annualized costs with the facility ’s revenue, and indicates that re presentative agri cultural refiller facilities will not be adversely impacted by the final containment regulations.7/13/2006 Containment EA, page 95 Across all small facilities (small-small, medium-s mall, and large-small), the economic impacts of installing a new secondary containment unit and pa d are estimated to be small, with estimated annualized costs for secondary containment accounting for no more than 0.14 percent of revenues. Total facility impacts to install onl y a containment pad are similar across each bulk pesticide storage facility type; only small fac ilities with non-bulk activ ities have a higher compliance cost to revenue ratio (0.18 percent). For small-small agricultural refillers, estimated annualized costs for new secondary containmen t structures account for no more than 0.34 percent of revenue across all bulk storage facility types. Economic impacts on medium-small, large-small, and large facilities are also not significant, with annual cost to revenue ratios estimated at no more than 0.07 percent for both disc ount/interest rate scenarios. (See Table I.1.)

Table I.3 compares facility revenues to the maxi mum potential facility-lev el annualized costs to retrofit existing secondary containm ent units and pads. The results of this analysis indicate that agricultural refiller facilities with existing structures will not incur signific ant adverse economic impacts in complying with EPA’s critical standard s. A small agricultural refiller facility with both types of containment structures and one bulk storage container is estimated to incur annualized compliance costs under 0.02 percent of to tal revenue. All other small facility types (i.e., bulk liquid storage, bulk dry storage, cont ainment pad only, or bulk liquid container) have even smaller compliance cost to revenue ratios. Small-small facilities face estimated compliance costs that are less than 0.04 percen t of revenues. Medium-small, la rge-small, and large facilities have higher annual costs but estimated lower eco nomic impacts due to larger revenues. (See Table I.3.)

As mentioned above, a threshold for regulations po tentially causing significant impacts to small businesses is an annual cost to revenue ratio of gr eater than 1 percent. Based on this we find that the impact of containment regula tions on agriculture refiller faci lities is not significant.

5.2.2 Facility-Level Impacts for Commercial Applicator Businesses

This section describes estimated facility-level ec onomic impacts at commercial (for-hire) aerial and ground applicator businesses needing to inst all new containment structures or retrofit existing structures. Facility-level impacts are assessed in terms of annualized compliance costs as compared to current facility-level revenue.

Estimated facility-level economic impacts to install secondary containment structures at representative small (including small-small, medi um-small, and large-small) for-hire applicator businesses with bulk pesticide st orage are shown in Table I.1. The combined effects on aerial applicator facilities that requi re construction of both a second ary containment unit and pad, as

well as those facilities that re quire a new pad only, indicate that small representative facilities may experience economic impacts larger than thos e experienced by agricultu ral refillers. Small aerial applicators requiri ng both a secondary containment unit and pad have an estimated annual cost to revenue ratio of 2.7 percent (Table I.1). This is greater than th e 1 percent threshold; however, only an estimated 16 facilities (six sma ll-small facilities, nine medium-small facilities, and one large-small facil ity)—out of a total of 160 aerial appli cator facilities with bulk storage— are likely to face this level of impact. For small-small facilities the annual cost to revenue ratio is estimated to be higher than the general small facility category, at 7.8 percent, while mediumsmall and large-small aerial facilities needing both a secondary containment unit and pad have an7/13/2006 Containment EA, page 96 annual cost to revenue ratio that is lower, 2.1 percent and 1.3 percent, respectively. (See Table I.1.) Even though this is greater than the 1 percent threshold, the overall impact is not expected to be significant because only six facilities will be affected.

Small aerial applicator facilities requiring only a containment pad have an estimated annual cost to revenue ratio of 1.25 percent, which is agai n greater than the threshold of 1 percent for regulations potentially causing significant impacts to small businesses. An estimated 10 facilities (seven medium-small fac ilities and three large-small f acilities)—out of a total of 160 aerial applicator facili ties with bulk storage—could face this level of impact. Using the alternative definition of small business, medi um-small facilities and large-small facilities needing just a containment pad 62 have estimated annualized costs of 1.63 percent and 0.81 percent of revenues, resp ectively. (See Table I.1.)

Table I.3 presents the aggregate facility-level impact s to retrofit existing secondary containment units and pads at commercial applicator faci lities. As shown, commercial applicators with existing structures are not expe cted to be significantly affect ed by the rule requirements to retrofit existing structures. Across all small appli cators required to retrof it existing containment, aggregate annualized costs are estimated to be 0.11 percent of current annual revenues. Aggregate annualized costs to small-small aerial a pplicators with exis ting containment are estimated to account for 0.28 of revenues, while medium-small and large-small aerial applicators

have annualized costs estimated less than 0.09 percent of revenues. Large-small ground applicators with existing structur es are estimated to have annua l cost to revenue ratios below 0.06 percent. (See Table I.3.)

In summary, the number of small businesses si gnificantly impacted by the final containment regulations is not expected to be substantial for agricultural refillers. The facility-level impact on commercial applicators is significant; however, only a small number of facilities is likely to be

affected. Measured in terms of a ratio between the annualized co st of compliance with the final regulations to current annual reve nues (i.e., annual cost to reve nue ratio), the impacts to small agricultural refiller facilities to install new c ontainment structures and to retrofit existing structures is less than 0.3 percent for all small fa cilities, which is less than the threshold of 1 percent for regulations potentiall y causing significant impacts to small businesses. For small commercial aerial applicator facilities, 26 fac ilities (out of a total of 160 facilities with bulk pesticide storage) may face cost to revenue ra tios of more than 1 percent to install new

containment structures. The cost to revenue ratio for small aerial applicators to retrofit existing structures is less than 0.3 per cent for all small facilities. Th e cost to revenue ratio for ground applicator facilities to install ne w containment structures and to re trofit existing structures is less than 1 percent for all small facilities.

The cost analysis presented in Chapters 4 and 5 has shown that the total industry costs of compliance with the final containment regulations are estimated at $2.93 million (Table 5.1), and that the impacts of compliance with the final regu lations on small facilities are not expected to be significant (Tables I.1 and I.3). The next and final chapter, Chapter 6, presents the estimated benefits of compliance with the final containment regulations.

62 It is assumed that only medium-small and large-sma ll aerial facilities are affected by the containment pad requirement; small-small facilities are not expected to engage in activities that require a pad.7/13/2006 Containment EA, page 97 5.3 State Level Costs

The burden on the State agencies considered in this analysis is the administrative burden associated with determining whether a State’ s regulations for bulk pesticide containment structures, if they exist, offer equivalent environmental protection to the federal regulations. If a State has bulk pesticide containment structures regulations, the State may choose to prepare documentation that the State regulations provide environmental protectio n equivalent to the federal regulations. This is not required, but it is assumed that the 19 States which currently regulate bulk pesticide containment structures will choose to submit the documentation. For these States the following activities would a pply: reading the rule instructions, planning activities, gathering a nd creating information, monitoring and enforcing the regulations, storing and maintaining data, and corresponding with the Agency regarding their regulations. For the remaining 31 States, which do not currently have regulations for bulk pesticide containment structures, only a subset of these activities woul d apply (i.e., reading the instructions, monitoring and enforcing, and storing and maintaining data), so their burden will be less. The paperwork burden is only expected to occur in the first year of the regulations.

For the 19 States which currently have bulk pestic ide containment regulations, it is estimated that nine and one half hours will be spent on informati on collection activities. At a cost of $43 per

hour for state administrative labor 63 , the estimated yearly cost fo r nine and one half hours of time spent on the information collection, per St ate, is $409.50. The total paperwork burden across all States with bulk pesticide containmen t regulations, assuming th at 19 States currently have regulations, is 180.5 hours. The total co st across all 19 States is an estimated $7,761.50.

The annual burden for the States without bulk pes ticide containment regulations is an estimated four hours per state or $172 per state. The total annual paperwork burden across all States, assuming 31 states do not currently have bulk pe sticide containment regul ations, is 124 hours.

The total cost across al l 31 States is an estimated $5,332. In cluding the cost for those 19 States with bulk pesticide containment regulations, the total cost of the paperwork burden is $13,093.50.

63 Source: US Bureau of Labor Statistics. State and Local Government, by major occupational and industry group. http://www.bls.gov/news .release/ecec.t03.htm7/13/2006 Containment EA, page 98 

### 6.0 Benefits of Bulk Pesticide Storage Containment

This chapter discusses the human health and envi ronmental benefits estimated to result from fewer uncontrolled releases of pesticides into the environment as a result of the final containment regulations, and the magnitude or value of such benefits. These benefits will include fewer and less severe incidents of damage to natural re sources and public and private property, reductions in cleanup and remediation costs, and lower he alth risks to workers and area residents.

The final standards for containmen t of pesticides at bulk pesticide storage facilities are intended to prevent pesticide contamination of soil and wate r resources at facilities where pesticides are

stored in bulk containers and f acilities where container refillin g operations occur. One useful categorization of pesticide contamination result ing from accidental releases at bulk storage facilities is (1) on-site co ntamination versus (2) off-site contam ination. The distinction is useful because on-site and off-site contamination pose di fferent potential risks. On-site contamination poses potential health risks to wo rkers on the site at th e time of the release. If the released pesticides are transported off-site via surface ru noff or groundwater flow, they can pose health risks to the general population and to ecological systems that are not necessarily in the immediate vicinity of the containment structur e. The information and methods necessary to quantify off-site risks are differe nt from those necessary to qu antify on-site risks. A flow diagram of the links between accident al releases of pesticides from bulk storage facilities and the different types of risk posed is shown in Figure 6.1.

As in any benefit analysis, the benefits of the pesticide containment rule depend in part on how the baseline scenario (i.e., “the world in the abse nce of the rule”) is defined. This analysis incorporates into the baseline the fact that large a ccidental releases of pest icides are likely to be followed by remediation efforts. That is, so me of the potential human health risk and environmental damage resulting from a spill would be avoided in the baseline scenario, at some remediation cost. If cleanup were complete and instantaneous, th en none of the three categories of damages shown in Figure 6.1 would be relevant because none would occur; all that would be relevant to a benefits analysis would be the remediation costs a voided. As discussed more fully below in Section 6.3, however, this is not likely to be the case, nor would it be optimal. The total benefits of the pesticide containment rule are therefore comprised of both the avoided

remediation costs and the value of avoiding the human health ri sks and ecological damages that would occur prior to remediation efforts and/or re main after remediation efforts in the baseline

scenario.

A quantitative analysis of the total benefits expe cted to result from the rule would require a

substantial amount of informati on, beginning with the id entification of the specific pesticides accidentally released from such facilities and the human heal th risks and ecological risks associated with acute and/or chronic exposure to those pesticides. There is currently insufficient information, however, to support such a quantitative an alysis of the total bene fits of the pesticide containment rule. An analysis of the partial benef its of avoided remediation costs, however, provides lower-bound estimates of benefits. This a pproach estimates the remediation costs in the baseline scenario (in the absence of the pesticid e containment rule) that would be avoided in the control scenario (i.e., with the implementation of the rule).7/13/2006 Containment EA, page 99 Figure 6.1. Flow Diagram of Potential Damage s from Pesticide Containment Structures

Spills and Leakage

On-site Contamination Transport of pesticides off-site via runoff and groundwater flow

Off-site contamination Occupational Health Risks

Contamination of Ecosystems Contamination of drinking water

Ecological damage Public health risks7/13/2006 Containment EA, page 100 This chapter presents the results of the analys is of partial benefits supported by the available information, as well as an outline of the analysis of total benefits that would be carried out if

there were sufficient information. Section 6.1 di scusses the types of releases that occur and presents the evidence of these releases. Section 6 .2 discusses the valuation of the benefits of the pesticide containment rule and pr esents the results of an analys is of the partial benefits of avoided remediation costs. Section 6.3 outlines the information necessary to estimate the potential total benefits of a pe sticide containment rule. Finall y, Sections 6.4 and 6.5 qualitatively discuss the two broad categories of risk shown in Figure 6.1, huma n health risks and ecological damage, respectively. Human hea lth risks resulting from both on-site occupational exposure and from off-site drinking water e xposure are considered jointly.

6.1 Types and Evidence of Spills and Leakage

In general, uncontrolled releases from pesticide bulk storage facilities fall into two categories: (1) infrequent, large-volume accidental releas es and (2) chronic, small-volume operational releases (drippage, spillage, a nd equipment washoff). Although chronic small leaks from bulk containers and appurtenances may often be resp onsible for environmental contamination, the less frequent, large-volume accidental spills are better documented, perhaps because of existing reporting requirements under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Secti on 403, and the Environmental Planning and Community Rightto-Know Act (EPCRA) Section 304.

In its Federal Register notice of the proposed rule (59 FR 6712, February 11, 1994), EPA cited the causes of major spills as “(1) bulk container failu re (due to structural defects, corrosion of the containers by incompatible pesticides, improper installation, fire, collisions with equipment, etc.), (2) failure of pipes, hoses, valves, or pumps , (3) operator errors (e.g. , neglecting to shut off valves, overfilling, leaving transfer operat ions unattended), and (4) vandalism.”

6.1.1 Evidence of the Occurrence of Spills

The evidence of the occurrence of spills, which comes from both federal and state sources, is presented in Table 6.1 below. In some cases the number of incidents during the reporting period is given, but there is insufficient informati on from which to estimate an annual release probability; in other cases, the estimated freque ncy per year out of a known number of bulk storage facilities is given, from which annual release probabilities can be derived. Although the

available information on the o ccurrence of spills is undoubtedly incomplete, it provides an indicator of the magnitude of the problem, and is used to estimate the frequency of spills per year, a necessary input to th e estimation of avoided remediation costs resulting from the pesticide containment rule (see Section 6.2 below).7/13/2006 Containment EA, page 101 Table 6.1. Reported Incidence of Spills fr om Pesticide Bulk Storage Facilities

Source of

Information Reporting Period Number of Incidents During

the Reporting

Period Estimated

Annual

Release Probability a Range of

Release Quantity Pesticides Spilled

National Response Center (U.S. Coast Guard) 1982 - 1991

40

--- 2 - 1,000 gallons 70% herbicides

Nebraska Dept. of

Environmental

Control 1981 - 1991

20

--- a few gallons to

1,400 gallons all herbicides

Wisconsin Dept. of Agriculture, Trade

and Consumer

Protection 1981 - mid-1984

9

--- a few gallons to

1,700 gallons ---

Michigan Dept. of

Natural Resources 1987 - early 1991 15 b 4/300 (1.3%) --- ---

MacDonald, 1991 1984 - 1990

--- 0.9% of

Nebraska’s

350

containment

sites --- ---

EPA (Howard, 1991) 1986 - 1990 --- 1.0 – 1.5% --- ---

a The annual release probability is esti mated as the number of accidental rel eases divided by the number of bulk storage facilities.

b Estimate based on reported characteristics of incident.

The last three entries in Tabl e 6.1 provide limited information on the frequency of spills from bulk storage facilities. The Michigan Depa rtment of Natural Resources (MDNR) Pollution Emergency Alerting System (PEAS) was used to compile a summary of agriculture-related pollution emergency incidents from 1987 th rough early 1991. This compilation covered incidents pertaining to fertilizers, pesticides, unspecified chemicals, and animal wastes (manure, offal, carcasses, and blood). An inspection of the incidents show that they relate to lawn care, nurseries, and other non-agricultural activities as well as to traditional agricult ure. In general, the types of activit ies covered include application, transportation, and storage.

The MDNR data cover 180 agri culture pollution incidents for the period of 1987 to early 1991. Using a process of elimination that subjectively considers the source, the nature of the complaint, and the volume of material, incidents that sugg ested a possible major bulk storage or loading

release were identified. It was estimated that 15 of th e 180 incidents, or 8.3 percent, were related to pesticide storage or loading/refilling releases.

Over the 5-year period, the 15 MDNR agricultural emergency incidents conservatively classified as storage or loading/refilling rel eases equate to about three to fi ve releases occurring per year from pesticide dealers. Assuming these are prim arily from bulk storage or refilling activities, this implies that about one out of every 75 Mich igan pesticide dealers experiences an emergency release annually (4 out of 300). Thus, the pr obability of a release would be about 0.013 (1.3 percent).7/13/2006 Containment EA, page 102 EPA obtained similar data for the state of Nebraska (MacDonald, 1991), which indicate that reported storage or refilling spills occurred at th e rate of about three per year for the period 1984 through 1990. With an estimated 350 bulk storag e and refilling facilities in Nebraska, the resulting spill or leak incide nce rate would be 0.9 percent.

These findings are consistent with independe nt estimates obtained from EPA (Howard, 1991), which solicited spill/leak incide nce data from registrants whose products are frequently stored by dealers in bulk. Two registrants provided appr oximations of the percentage of dealers’ bulk storage sites that experience leaks or spills with their products. On e registrant estimated that for the period of 1986 through 1990, about 1.5 percent of the sites experience d a leak or spill each year. The other registrant estimated that about 1. 0 percent of the sites pe r year experienced such

releases.

While there is general agreement on estimated spill or release frequency from the sources mentioned above, the rate of spills and releases may actually be greater th an estimated. Factors such as the following could result in unreported spills and leaks:

• Reporting of incidents involving certain chemi cals or spills may not be required by law;

• Facility operators may be unaware of low-volum e, chronic leaks, or may not perceive them as spills significant enou gh to warrant reporting; and

• Facilities may be reluctant to report some inci dents due to liability and publicity concerns.

6.1.2 Evidence of On-Site and Off-Site Contamination

Evidence that spills and leakage result in both on-site and off-site contamination comes from

several sources. Sources in seve ral states have documented soil, surface water, and groundwater contamination from various operations of agricult ural chemical distribut ors, repackagers, and applicators.

Illinois Department of Health Study. Dr. Thomas Long of the Illinois Department of Health sampled groundwater pesticide contamination in 1987 and 1988 at or adjacent to agricultural pesticide refillers in the st ate (Long, 1989). The samples show ed pesticide residues in groundwater at between 65 and 75 per cent of the agricultura l pesticide refiller facilities sampled.

Although Dr. Long’s research does no t identify site-speci fic sources of this pollution, he points

out that it could occur due to “back-siphonage, sloppy mixing and loading procedures, lack of rinsate collection and improper wast e disposal...” He also points out that “production wells at facilities are often shallow, improperly constructe d or poorly located” with respect to facility activities and implies that wells, too, are part of the problem.

The degree to which pesticide residues in gr oundwater result in pot ential human exposure, however, depends on several factors, including the location of point s ources in relation to drinking wells and the nature of the wells themselves. Dr. Long (1989) notes that:

Despite the pesticide and nitrate contamination beneat h these facilities, the potential human exposure may be limited or non-existent in many such circumstances . Many of these facilities are isolated, and the wells7/13/2006 Containment EA, page 103 are not sources of drinking water. Even when the wells are sources of potable water, they usually do not serve as the sole source of cooking and drinking water for exposed individuals.

In certain instances, however, this gr oundwater contamination can affect su rrounding wells. In a number of small communities, agrichemical mixing and loading facilities are close to homes with private drinkingwater wells. Most of these private wells are old, sha llow, and poorly constructed. Thus, they are highly susceptible to deterioration due both to surface runoff and groundwater c ontamination. At least 10 such sites are within a 25-mile radius of Springfield, Illinois.

Illinois Environmental Protection Agency Studies. Similar cases of pe sticide groundwater contamination at agricultural pe sticide refiller facilities have been documented by A.G. Taylor, Agriculture Advisor for the Illinois Environmen tal Protection Agency (Taylor, undated), as summarized in Table 6.2. Mr. Taylor’s findings were presented as testimony for proposed state regulations regarding pesticide storage and handling. Although the direct cause of contamination in his case studies was usually unknown, the findi ngs indicate that ground water contamination is associated with the types of facilities that would be subject to regulation.

Iowa. There were similar findings of contaminati on of public or private drinking water wells located near Iowa farm supply dealerships. Hallber (1986) cites 10 Io wa case studies where pesticide concentrations in gr oundwater near dealerships were 100-fold or more concentrated than background levels. Further, in Iowa, in mo re than 80 percent of the instances in which

herbicides other than atrazine have been detected in public we lls, the wells were located near commercial applicator and ag ricultural pesticide refillers facilitie s (Fawcett, 1989).

The Iowa Fertilizer and Chemical Association (IFCA) es timates that approximately 90 percent of the Iowa agricultural chemical dealer sites have some level of de tectable environmental contamination and that up to 40 to 50 percent wi ll require some form of eventual remediation. They attribute most of these environmental con cerns primarily to “past practices before our

investment in dikes and containment.” Furthermor e, IFCA indicates that containment “is not the total answer, but when combined with other mana gement changes, future contamination can be

avoided.” IFCA believes that di kes and containment have been in stalled at over 800 sites but is pressing for legislative action to help finance the cleanup of th e environmental contamination that occurred before containment was installed (Frieberg, 1991).7/13/2006 Containment EA, page 104Table 6.2. Pesticides Identified in Wells onor Near Agricultural Facilities in IllinoisLocationPesticides DetectedConcentrationWell TypePotential CauseDetection in OtherNearby Wells(Y = Yes; N = No)Ag-Pro Chemical CompanyWoosung, ILOgle CountyAtrazineAlachlorMetolachlorDiazinonChlorpyrifos180 ppb38 ppb145 ppb5 ppb19 ppbResidential welllocated near facilityUnknown YBurrough’s TruckingCompanyRutland, ILLaSalle CountyAlachlor Trace levels Well located insidefertilizer storagebuildingUnknown ---Crop Protection ServiceaBiggsville, ILHenderson County5 herbicides Detectable levels Facility well Backsiphonage ---Erie Ag ServiceErie, ILWhiteside County3 herbicides$USEPA healthadvisory levelsFacility well Unknown NGalesville ChemicalCompanyGalesville, ILPiatt CountyAlachlorAtrazineMetolachlorMetribuzin> 200 ppb Non-domestic useprivate welldowngradient fromfacilityMixing & Loading NKaiser Agricultural ChemicalCompanyCantrall, ILSangamon CountyVarious Trace levels Several wells in vicinityof dealershipbUnknown YKaiser Agricultural ChemicalCompanyOconee, ILChristian CountyVarious 3.09 ppm Non-drinking water wellfacilityUnknown YcMDM FertilizerSharpsburg, ILChristian CountyVarious 300 ppb Facility well Unknown Yd7/13/2006 Containment EA, page 105Table 6.2. Pesticides Identified inWells on or Near AgriculturalFacilities in Illinois (Continued)LocationPesticides DetectedConcentrationWell TypePotential CauseDetection in OtherNearby Wells(Y = Yes; N = No)Montgomery County ServiceCompanyButler, ILMontgomery CountyAtrazineAlachlorMetolachlor21 ppb12 ppb54 ppbOld facility well Unknown NeRusk Spraying ServiceKankakee, ILKankakee CountyAlachlor Trace Facility well Mixing/loadingoperationscontaminating soils---Sidwell Farm ServiceOhlman, ILMontgomery County4 herbicides 1.1 ppb - 21.0 ppb Facility well Unknown YfWaller Farm ServiceBardolph, ILMcDonough CountyAlachlorgTrace Private well on propertynext toChronic spillage andrunoff---Webb Fertilizer Service, Inc.Fairview, ILFulton CountyAtrazineMetolachlorCyanazineAlachlor49 ppb17 ppb3.6 ppb7 ppbNon-functional facilitywellUnknown NhaExtensive soil and surface water contamination also found.bIncluded one well on elementary school property. The well on-site also contained over 200 ppm nitrates.cSeveral herbicide chemicals and nitrate-Nconcentrations exceeding 400 ppm were detected in a private well used by a nearby auto repair shop.dEleven of 17 wells sampled were contaminatedwith herbicide chemicals. The highest concentrations analyzed were in samples from the MDM Fertilizer well.eFour residential wells near the facility were tested and no pesticides were detected.fA residence one-half mile from the facilityalso showed trace levels of herbicides.Wells at three neighboring residences showed trace levels of alachlor,metolachlor, and Malathion.gSurface drainage contained high concentrations of herbicide and fertilizer products.hA private well 100 yards from the facility tested the same day did not contain herbicides.7/13/2006 Containment EA, page 106 Michigan. In a 1989 survey, the Michigan Department of Agriculture sampled well water from 50 bulk storage sites of commercia l agricultural pesticide refiller s. The Department reasoned that the combined conditions of permeable geologi cal strata and intensive handling of pesticides and fertilizers would represent a “worst case scenario for agricultural chemical impacts on groundwater quality.” Pesticides were detected and confirmed in well water from eight (16 percent) of the sites (pesticide concentrations in soils were not determined). Health advisory levels for pesticides were exceeded in three (6 pe rcent) of the wells. The draft report concluded that bulk storage operations of agricultural pesticide refillers located on hydrogeologically vulnerable sites pose a threat to groundwater quality (Michigan Department of Agriculture, 1989).

Utah. A study of pesticide dealerships in Utah f ound pesticide contamination resulting from a variety of handling activities, including spills of pesticides in bulk storage and dispensing operations, mixing and loading of pesticides into application equipment (for dealerships that engaged in custom application), and equipment cleaning activities, among others. The pesticide

detections were located in the pesticide handling areas of the f acilities as well as off-site in ponded depressions, drainage-ways, gravel driveways, and parking lots (Novak, 1991).

Wisconsin. The Wisconsin Department of Agricu lture, Trade, and Consumer Protection (WDATCP) and the Wisconsin Department of Natu ral Resources (WDNR) jointly investigated 20 Wisconsin facilities to provide more spec ific information on: sources of pesticide contamination; pesticide concentrations in surf ace water and groundwater; the total concentration of pesticide compounds in soil; specific co mpound concentration in the surface soils and multiple soil depth; and pre- and post-invest igation concentrations where remediation was implemented. The WDATCP/WDNR study resulted in several general conclusions (Habecker, 1989):

• Contamination comes from a wide range of pestic ides, and the level of residues for each type is highly variable.

• Chronic release areas had the hi ghest number of pesticide resi due types and greatest ranges of pesticide residue levels found.

• The compounds most frequently found in soil s at the sites were alachlor, atrazine, and metolachlor, with 80 percent of the facili ties containing all three of these compounds.

• The three most highly contaminated facility areas were acute spill areas, burn areas, and mixing/loading areas.

• Follow-up soil sampling indicated that spillage appears to be an ongoing problem, especially in the mixing/loading and pest icide equipment parking areas.

In 1991, the Wisconsin agencies re ported the results of a related environmental survey of 27 randomly selected agricultural pesticide applicat ion business sites. (T he study was designed to assess operations representative of the industr y as a whole, since contamination had not previously been reported at these study sites.) The inves tigation revealed the presence of pesticides in soil at 25 of the 27 locations. So il samples from 18 (66 percent) of the sites had concentrations exceeding field application rates, and these facilities may eventually require soil remediation. Pesticides were also found in groun dwater at more than half (55 percent) of the7/13/2006 Containment EA, page 107 sites; at nine of these locations (33 percent of all s ites), groundwater contamination levels were greater than allowed by Wisconsin enforcement standards.

Given these results, the agencies subsequently concluded that between 45 and 75 percent of the state’s commercial mix/load sites may need so me soil remediation and that 29 to 63 percent potentially exceed the state’s groundwater enforcem ent standard. Many of the latter may also require remediation (Morrison and Kefer, 1991).

Some monitoring programs have found pesticide concentrations in groundwater wells far in excess of state enforcement standards (which are usually based on health and/or ecological effects). For example, alachlor has a state enfo rcement standard of 0.5 parts per billion (ppb) in Wisconsin, but it was found at levels up to 1,800 ppb at a groundwater supply well (Habecker, 1989). EPA’s maximum concentration level fo r alachlor is 2 ppb (EPA, 2005c). Atrazine, metolachlor, and other pesticides shown in Ta ble 6.2 have also been found at levels exceeding state standards or guidelines. The National Survey of Pest icides in Groundwater estimates that approximately 10 percent of the co mmunity water system wells in the United States contain one or more pesticides and that 4 percent of the natio n’s rural domestic wells c ontain pesticides. It is not known, however, to what extent th e presence of pesticides in th e wells covered in this survey is due to accepted application practices or to inci dents such as spills, leaks, misuse, or improper disposal.

While the data from the various sources cited above are not statistically comparable, they do confirm that pesticide releases and contamination are occurring at agricultural pesticide refiller facilities. In addition, various fi eld contacts and general press revi ews suggest that releases from bulk pesticide storage and ref illing/repackaging activities are specific problem areas, and containment is perceived as a major deficiency at some operations. Most of these releases may

occur from accidents or acts of vandalism and not from deterioration of tanks and equipment (Beal, Ohio Department of Agriculture, 1991; Gi ngery, Montana Department of Agriculture, 1991; Flowers, Arkansas Plant Board, 1991; Roge rs, Mississippi Department of Environmental Quality, 1991; Frank, West Virg inia Department of Agricu lture, 1991; Uram, Pennsylvania Department of Agriculture, 1991; Chada, Oklaho ma Department of Agriculture, 1991). The frequency or magnitude of releases from dispen sing/refilling areas is unk nown but likely to be on the same order of magnitude as large volume releas es from storage facilities. Drippage and other chronic, small-volume releases are likely to oc cur more frequently for dispensing/refilling areas

than for bulk container areas.

An indirect form of evidence for the potential thre at of spills and leaks is that major registrants have established safety programs for dealers handling their products in bulk. Syngenta provides price incentives and fire, theft, and pollution insurance for their produc ts if dealers have approved bulk storage and rinsate pad containment. Other companies also operate bulk storage programs for herbicides which requi re containment for bulk storage containers prior to sales of product to a dealer. Also, the Mid America CropLife Association has developed model bulk pesticide guidelines that recommend contai nment in both the bulk storage and permanent handling and loading areas.7/13/2006 Containment EA, page 108 As additional indirect evidence, 19 states (see Table G.2), most of which are major agricultural states with large numbers of agricultural pestic ide refiller facilities (f arm supply and fertilizer dealers), have already promulgated regulations for the bulk storage of pes ticides. Minnesota is one state that has introduced more stringent bulk pesticide storage rules; however, a 1996 survey

found that contamination continues to be a problem (MDA, 1996). In 1989, data concerning pesticide leaching and contamination of groundw ater around agrichemical facilities became widely available. In response the Minnesota retailers improved th eir pesticide handling practices. The 1996 sampling plan was designed to find a “before and after” comparison in which 30 agrichemical facilities were selected at random and sampled during the summer of

1996. Pesticides were detected in soil at 28 of the 30 facilities. Of the 93 samples taken, 68 percent had detection of pesticid es registered after 1989, indicati ng that even after the improved practices the problem persists. The greatest numbe r of pesticide detections occurred in the bulk pesticide mix and load areas. Results of the Minnesota Department of Agriculture study show

that the current Minnesota bulk pesticide storage rules are an excellent base line regulation helping to prevent contamination from large rele ases, but that they canno t be effective without proper management and adequate housekeeping.

6.2 Valuation of the Benefits of the Pesticide Containment Rule

6.2.1 Theoretical Approach

For this analysis, remediation e fforts and associated costs are a ssumed as part of the baseline scenario. The benefit of a pesticide containmen t rule is therefore the difference between the

social cost of accidental releases in the absen ce of the rule, assuming that spills are followed by remediation efforts, and the social cost in the pr esence of the rule. The social costs associated with a single spill are diagrammed in Figure 6.2.

Figure 6.2a shows the case in whic h the level of remediation undert aken in the baseline scenario is optimal, i.e., the case in whic h the percentage of the spill cl eaned up (p*) is such that the marginal cost of cleanup equals the marginal bene fit of cleanup, so that th e net benefit of cleanup

is maximized. The total benefit of remediation is shown as the area under the marginal benefit curve to the left of p*, or areas 1 plus 2. The cost of the cleanup is th e area under the marginal cost curve to the left of p*, or area 2. The net benefit of cleanup is area 1, total benefit less cost of cleanup. At this optimal leve l of cleanup in the baseline s cenario there is contamination remaining, with the potential for environmental damage. The valu e of avoiding this damage is depicted as the area under the ma rginal benefit curve to the right of p*, or area 3, which is less than the cost of cleaning it up (ar ea 3 plus area 4). The benefit of preventing the spill in the first place (i.e., the benefit that would be achieved by the pesticide containment rule if it prevented the spill) is the sum of the avoided remediati on costs (area 2) and the value of the avoided environmental damage that would remain afte r cleanup, or area 3. The benefit achieved by the pesticide containment rule by preventing this spill is therefore area 2 plus area 3.

Figure 6.2b shows two cases in which the level of remediation undertak en in the baseline scenario is suboptimal. Cleanup of p 1 percent is a case of insu fficient cleanup; cleanup of p 2 percent is a case of too much cl eanup. Whatever the level of cleanup in the baseline, however, the calculation of the benefit of preventing the spill in the first place follows the same logic as when the optimal level of cleanup was undertaken. The value of avoiding the spill is the value of avoided remediation cost (the area under the marg inal cost curve to the left of the level of7/13/2006 Containment EA, page 109 cleanup) plus the value of avoiding the environmen tal damages that would have occurred prior to and/or remain after remediation was undertaken (t he area under the marginal benefit curve to the right of the level of cleanup).

If, for example, the level of clea nup in the baseline scenario is p 1 (i.e., if there is insufficient cleanup), then the value of avoiding the spill in the first place is area 2 (the avoided remediation costs) plus the sum of areas 3, 4, and 5 (the va lue of avoiding the environmental damage that would have remained after cleanup). If the le vel of cleanup in the ba seline scenario is p 2 (i.e., if there is too much cleanup), then the value of avoiding the spill in the first place is the sum of areas 2, 4, and 6 (the avoided remediation cost s) plus area 5 (the value of avoiding the environmental damage that would have remained after cleanup).

Figure 6.2 illustrates several things . First, it shows that there ar e two components to the benefit of avoiding a spill: (1) the avoided remediati on costs, and (2) the value of avoiding the environmental damages (i.e., the human health risks and ecological damages) that would occur prior to and/or remain even after remediati on had occurred. Second, it illustrates that the magnitude of the benefit of avoiding the spill depends on what would have been done in the baseline scenario (i.e., in the absence of the pest icide containment rule)—in particular, it depends

on the level of remediation that would have been undertaken. Finally, it shows that how well an estimate of avoided remediation cost approximates the total benefit of avoiding the spill in the first place depends on the percent cleanup that would be undertaken in the baseline scenario. If in the baseline scenario a spill was 100 percent cleaned up (which would not be the optimal level of cleanup), then the avoided remediation cost woul d be the total benefit of avoiding the spill. As the baseline level of cleanup decreases, however , avoided remediation cost constitutes less of the total benefit of avoiding the spill, and so becomes a poorer es timate of the total benefit of avoiding the spill.7/13/2006 Containment EA, page 110 Figure 6.2. The Costs and Benefits of Remediation (Cleanup) in the Baseline Scenario and the Calculation of the Benefits of Avoiding a Spill



### Figure 2a: The Optimal Level of Cleanup

Figure 2b: The Suboptimal Level of Cleanup $

$

Percent Cleanup Marginal

Benefit of Cleanup

Marginal Cost of Cleanup

Percent Cleanup Marginal

Benefit of Cleanup

Marginal Cost of Cleanup 100%

100% P 1 P*

P 2 

### 1

2 4 5 1 7
6 3 3 4

27/13/2006 Containment EA, page 111 6.2.2 An Outline of the Estimation of the Total Benefits of a Pesticide Containment Rule

As noted above, this analysis assumes that some remediation will occur in the baseline scenario. Given this assumption, the total be nefits of a pesticid e containment rule would be comprised of the avoided remediation costs plus the value of avoiding the environmental damage (the human health risks and ecological damage) that would o ccur prior to and/or re main after remediation

was undertaken.

The general sequence of steps for a comple te benefits analysis is as follows:

• Identify the specific pesticides accidentall y released from bulk storage facilities;

• Estimate the change in probability of releases that would be expected to result from implementing the proposed standards;

• Estimate the avoided remediation costs expected to result from the reduced probability of release;

• Estimate the change in human health risks a nd ecological damages occu rring prior to and/or remaining after remediation efforts that would result from the predicted changes in releases; 64

• Value those risk and damage reductions; and

• Add the value of risk and damage reducti ons to the avoided remediation costs.

The estimation of avoided remediation costs will be discussed in discussed in Section 6.3. To

derive an estimate of the total benefits of the pesticide containment rule, in addition to estimating the avoided remediation costs, it would be necessary to estimate (1) what health and ecological damages would be likely to occur prior to reme diation and/or remain af ter remediation efforts and (2) the value of avoiding those damages. For adverse effects associated with off-site contamination in particular, th e estimation of the ch anges in risks that would result from reductions in the frequency of accidental releases would require an analysis of the fate and transport of the pesticides released. Such an an alysis is beyond the scope of what is feasible here. Valuing the risk and damage reductions is al so particularly difficult, and, due in large part to limitations in the available data, will not be atte mpted in this analysis. However, the final two sections, 6.4 and 6.5, present a qualitative discussi on of the human health and ecological benefits of the final containment regulations.

6.3 Estimation of the Partial Benefits from Avoided Cost s of Remediation

This section provides an estimate of the partial be nefits of the pesticide containment rule from avoided costs of remediation following a release from a bulk pesticide storage facility. An estimate of the total benefits, including the valu e of risk reduction from avoided human health and ecological damage, cannot be determined without additional research. This benefits analysis

therefore uses the available information on reme diation costs to provide partial (lower-bound) estimates of the benefits that are likely to result from the pesticide containment rule. The total (upper-bound) benefits are not es timated, but a qualitative discussion of the human health and ecological benefits that would accrue under the pesticide containment rule is provided in

Sections 6.4 and 6.5.

64 The health risks and ecological damage associated with a given pesticide will depend on the levels at which exposure occurs. Not only the incidence of a given (human health or ecological) endpoint but also the type of endpoint may change as the exposure level and duration change.7/13/2006 Containment EA, page 112 6.3.1 Avoided Costs of Remediation to Agricultur al Pesticide Refillers and Agricultural Commercial Applicators

Estimation of the avoided remediation costs that would result from the pesticide containment rule requires information on the number of bulk storage facilities covered by the rule, the probability of a release at a bul k storage facility with and wit hout the rule, and the cost of remediating such releases.

There are several unknown factors that preclude quantifying with accuracy the partial benefits

that would accrue from avoided remediation cost s. Perhaps the principal unknown is the percent probability that a release will occur. Other unkno wn factors include the value of the damage, which will tend to be highly variable according to the severity of the spill, and site-specific considerations. Also, the baseli ne level of cleanup required at th ese spill sites is generally not

known. Even in those cases in which estimates of remediation costs are available, such estimates do not indicate the percent cleanup associated with those costs. In additio n, there is insufficient information to estimate the value of avoiding th e environmental damages occurring prior to or remaining after remediation. For this analysis , these numbers have been approximated based on available data and information, and other general underlying assumptions.

This benefits analysis therefore uses the ava ilable information on remedi ation costs to provide

lower-bound estimates of the benefits that are li kely to result from the pesticide containment rule. Depending on the baseline degree of reme diation and the valuati on of the benefits of cleanup, these may substantially und erstate the total benefits that would result from the rule.

The avoided remediation costs attributab le to the regulation are calculated as:

C

= N * Δ p * m

where:

• C = the total cost of remediation;

• N = the number of bulk storage fac ilities covered by the regulation;

• p o = the probability of a releas e at each of the N bulk storag e facilities in the baseline case (without the regulation);

• p 1 = the probability of a release at each of the N bulk storage facilities in the control case (with the regulation);

• Δ p = p o - p 1 = the change in probability of a re lease induced by the regulation; and

• m = the average cost of remediation.

The values for most of these variables are no t well documented. Therefore, only general ranges of estimates are presented here based on estimates shown below.

6.3.1.1 Estimation of the Number of Bulk Stor age Facilities Covered by the Rule (N)

As shown in Chapter 3, approximately 5,250 agri cultural pesticide refiller and commercial applicator facilities stor e agricultural pesticides in bulk storage containers. These facilities plus

an additional 561 facilities that store agricultural pesticides, but are classified as non-bulk7/13/2006 Containment EA, page 113 storage, perform dispensing/refilli ng activities that could be subject to regulati on. This results in a total of 5,811 (= 5,250 + 561) units (see Table 3.2). 65

6.3.1.2 Estimation of the Baseline Accidental Release Probability (p

o )

As summarized in Table 6.1, the limited number of estimates of the annual frequency of spills from bulk storage facilities ranges from 0.9 pe rcent to 1.5 percent. That is, the annual probability of an accidental release from a randomly selected bulk storage facility is anywhere from 0.009 to 0.015. A reasonably conservative es timate, then, based on the limited information available, would be 0.01 (a 1 percent probability). This means that, out of the approximately 5,811 facilities in the United States, about 58 (= 0.01 x 5,811) would be e xpected to experience an accidental release annually in the baseline scenario.

The 58 accidental releases in the baseline scenario would be expected to occur either at those facilities with existing containment structures that need to be retr ofitted to comply with the new rule, or at those bulk storage f acilities without existing containment structures. Because the estimate of a 1 percent release probability is ba sed on information from pa st years (the reporting periods were from the mid-1980s to 1990 or 1991, as shown in Table 6.1), the estimate of 1 percent may be biased either up or down. In particular, if the percentage of bulk storage facilities without existing containment structures or with exis ting containment structures in need of retrofitting is substantially smaller at present than during th e reporting periods listed in Table 6.1 (for example, if many facili ties are now in compliance with state regulations implemented since those reporting periods), then the estimate of 1 percent could be biased upward. For reasons noted above, however, the estimate of 1 percent could be biased downward (because, for example, it most likely excludes many non-reported spills and chronic leak s). Because there are two possible biases in opposite di rections, and in the ab sence of further information on the extent of the possible biases, this analysis uses the estimate of a 1 percent release probability, noting that this estimate could change in the futu re if further information becomes available.

6.3.1.3 Estimation of the Average Cost of Remediation per Release (m)

Remediation costs are highly variable and are dependent on the magnitude of the release and other site-specific c onditions. Based on available da ta and information, however, a representative range would be $10,000 to $1 million per spill. This range was determined based on the following information a nd is presented in Table 6.3.

From approximately 100 dealership remediation cas es, the Minnesota Department of Agriculture has estimated that 50 to 60 percent of the contam inated sites will be remediated for at least $20,000 to $50,000, not counting certain costs such as attorney fees; 20 percent will be remediated for $50,000 to $200,000; and 20 percent for more than $200,000, with costs occasionally crossing the million-dollar mark (EPA, 2005a).

65 The 5,040 agricultural pesticide refiller facilities, 56 1 non-bulk facilities, and 210 agricultural commercial applicator facilities include facilities with bulk pesticide st orage both with existing containment structures and those without existing containment structures. Facilities withou t existing containment structures will have to install structures to comply with the new rule. Some facilities with existing containment structures will already be in compliance with the new rule; others will have to retrofit to be in compliance.7/13/2006 Containment EA, page 114 The Illinois Environmental Protec tion Agency noted that, while firm substantiating data do not yet exist, it seems likely that two-thirds of the state’s 1,500 commercial ag richemical sites could eventually be found to warrant some degree of remediation for contamination “hot spots.” Typical costs for assessment and remediation for most facilities are estimated to average between $15,000 and $50,000. Fifteen percent of the facilities are projected to require more extensive cleanup (cost range $50,000 to $250,000), and 2 per cent to 5 percent c ould encounter even greater remediation costs (Taylor, 1991).

Table 6.3. Estimation of Average Costs for Assessment and Remediation of Uncontrolled Spills at Agricultural Chemical Dealers and Applicators

Cost Category a Frequency Distribution b Weighted Average Cost c

Range Point

Estimate Low Cost High Cost Low Cost High Cost

$1 to $19,999 $13,800 25% 10% $3,450 $1,380

$20,000 to $99,999 $82,800 35% 25% $28,980 $20,700

$100,000 to $249,999 $241,500 20% 35% $48,300 $84,525

$250,000 to $499,999 $517,500 15% 20% $77,625 $103,500

$500,000 to $999,999 $1,035,000 5% 9% $51,750 $93,150

$1,000,000 or more $1,725,000 0% 1% $0 $17,250

TOTAL—Calculated (Rounded) 100% 100% $210,105 ($210,000) $320,505 ($320,000)

a Costs represent the remediation of individual uncontrolle d spill events. Therefore, the costs do not represent the costs for cleanup of sites with a long-term contamination history.

b DPRA Incorporated estimates based on a review of litera ture and field contacts. Key sources include EPA (2005) in Minnesota and Taylor (1991) in Illinois for the low-cost estimate. The high-cost scenario reflects consideration that certain transaction costs (lawyer fees and management costs) may not be included and future remediation requirements and costs will be more stringent.

c Weighted average costs are calculated by multiplyi ng the point estimate with the corresponding frequency distribution. For example, fo r the $1-$19,999 range, the weighted average cost (low) is [13,800*0.25] = 3,450. Cost ranges and point estimates are based on data from the early 1990s and are reported in 2005 dollars.

In 1993, the State of Illinois comp leted a study on the cost of reme diating agrichemical sites in

the state. State officials estimat ed that the cost of site charact erization and remediation for all sites in the state (1,200 sites) would be about $48 million to $124 million or $40,000 to $100,000 per site. This is interpreted as a mean for all sites; several sites are not likely to incur any remediation costs. Also, the cost estimates do not include any costs fo r groundwater remediation because of data limitations and do not include engineering costs associated with site characterization, which can range between $5,000 and $20,000 per facility (Illinois Department of Agriculture, 1993).

Similarly, a study conducted by the WDATCP indicates that 45 to 75 percent of the commercial pesticide mixing and loading facilities are likely to require soil remediation, and many may also need groundwater remediation (Morrison and Kefe r, 1991). Typical costs for soil remediation range from $10,000 to $50,000. However, if gr oundwater contamination is encountered, especially if municipal water supp lies are affected, the costs can be much higher. For example, in a case with which the WDATCP was involved, an agricultural pesticide refiller facility paid about $100,000 to characterize a gr oundwater contamination plum e that affects a municipal7/13/2006 Containment EA, page 115 drinking water supply. The facility projects th at it will pay an additional $250,000 to install groundwater remediation equipment. Operationa l costs will add another $20,000 for each year the equipment is used. In addition, the facility may need to demolish, excavate below, and replace a new $30,000 containment system that was built over contaminated soil (Morrison, 1991).

In Iowa, where roughly half of the pesticide de alerships are estimated to require remediation,

direct costs for site assessments and monitori ng and remediation of dealerships could reach $50 million to $100 million (Frieberg, 1991). The Io wa Natural Heritage Foundation completed 22

case studies of site remediati on for agricultural chemical dealers covering remediation for chronic releases as well as sudden spills. At the time of the study, costs of $1.8 million had been incurred at the 22 sites, but onl y five had conducted or were c onducting remediation. Most sites had been conducting only assessment and monitoring. Costs varied greatly, but the site farthest along in remediation had spent $325,000. Another site had already spent $400,000 in 3 years to achieve an earlier stage of the remediation proce ss. The study concluded, however, that cleaning up contamination from single spills, for which pe sticide containment woul d be most useful, was less expensive (Gannon, undated).

The State of Illinois has established a fund to help dealers pay for environmental cleanup costs after a pesticide release incident. This progr am, administered by the Illinois Department of Agriculture, will reimburse dealers for up to $0.5 million annually for cleanup costs (Simmonds and Brosten, 1991). At two or three incidents pe r year, this is equivalent to costs of $170,000 to $250,000 per incident. However, there are documen ted instances where remediation costs for a major soil and groundwater contamination incident are expected to be much greater. An example of this is a March 28, 1990, incident at My ers, Inc., an agricultura l pesticide refiller in Lexington, Illinois, that had a fire (Simmonds and Brosten, 1991). Cleanup at this site will cost $1.0 to $1.5 million. Similarly, insurance companies recommend that agricultural chemical dealers have a minimum of $1 million in po llution insurance coverage (Pelzer, 1992).

6.3.1.4 Estimation of the Total Cost of Remediation (C)

The above information does not, in itself, provide an estimate of the average cost of remediation. For this analysis, we developed a high estimat e and a low estimate of the average cost of remediation, based on the documented general range of costs and two reas onable distributions (a “high-cost” distribution and a “low-c ost” distribution) of remediati on costs. A simple average of

the two distributions was taken to arrive at average high and low estimates. These two cost distributions and the resulting lo w and high estimates of the aver age cost of remediation are

shown in Table 6.3. 66

Based on these distributions, the average avoide d remediation costs would range from about $210,000 to $320,000 per incident avoided. These cost s are assumed to be applicable for both bulk storage releases and dispensing/refilling/mi xing/loading area releases as no information is available to justify a difference, although the dispensing/refilling type incidents might be smaller.

66 The low and high cost estimated in Table 6.3 is based on the point estimate for each range of remediation cost and the probability of that remediation cost occurring.7/13/2006 Containment EA, page 116 The costs are also assumed to occur over a rela tively short time period because responses to sudden spills start rapidly 67 and are assumed to be completed in less than 1 year.

The estimation of avoided remediation costs assu mes that all accidental releases would be prevented by the pesticide containm ent rule. That is, given that the initial probability of release was 0.01 and it will be reduced to zero, the ch ange in the probabil ity of a release ( Δ p) is assumed to be 0.01. Given 5,811 facilities c overed by the rule, and using the lower-bound estimate of $210,000 as the average remediation co st per release, the lower-bound estimate of avoided remediation costs to agricultural pest icide refillers and agricultural commercial applicators with bulk pes ticide storage would be:

C

= N * Δ p * m = 5,811 * 0.01 * $210,000 = $12.2 million

Using the upper-bound estimate of $320,000 as the av erage remediation cost per release, the upper-bound estimate of avoided remediation cost s to agricultural pesticide refillers and agricultural commercial applicators would be:

C

= N * Δ p * m = 5,811 * 0.01 * $320,000 = $18.6 million

As mentioned earlier, these estimates represen t the partial (lower- bound) estimates of the benefits that are likely to result from the pesticide cont ainment rule. The total (upper-bound)

benefits that would include the benefits of risk reduction to human health and ecological systems

are not valued due to a lack of available data.

6.3.2 Uncertainties in the Estimate of Avoided Remediation Costs

Some uncertainty surrounds all three component inputs used to calculate the remediation costs that would be avoided by implemen ting the pesticide containment rule (N, Δ p, and m.). The number of facilities covered by the rule (N) is not readily available, and is based primarily on 1992 data from multiple sources in the proposed EP A containment rule RIA. EPA’s efforts to validate this estimate failed to provide a more accu rate estimate of the actual number of facilities covered by the rule, which may now be either higher or lower.

As discussed above, there is substantial uncertain ty surrounding the estimates of the change in the probability of an accidental release that would be induced by the rule ( Δ p ). There are just three studies available that provide an estim ate of the baseline probability of release (p

o ) , and these studies may or may not be indicative of the probability of release for all facilities covered by the rule. These studies were published in th e early 1990’s, and severa l States have since promulgated containment regulations. The probabili ty of release in States with regulations may be lower than 1%. On the other hand, two of the studies reporting incident s were in States that have regulations. There is also the potential for a higher baseline probabilit y of release in States without containment regulations. The estimate of a 1% probability of release may be an

underestimate or overestimate of th e actual probability of release.

67 We contacted state officials in Ohio, Nebraska, Wisconsin, Florida, and Kansas by telephone regarding the timing of cleanup for pesticide spills. Their responses indicated that cleanups of major spills at tank facilities are initiated quickly; responses ranged from immediately (MacKedanz, 1993 ; Lee, 1993; Kline, 1993); within hours (Buttermore, 1993; Belt, 1993); to within days (Beal, 1993).7/13/2006 Containment EA, page 117 The analysis also assumes full compliance with the regulations and that there will be no accidental releases with full compliance. Howeve r, there may be facili ties that do not fully comply with the regulations, resul ting in a probability of release with the re gulation greater than zero. As mentioned above, two studies report in cidents in States with regulations. Possible explanations are that the regula tions in these States were not as comprehensive as the EPA regulations, resulting in accidental releases, or that facilities were not in full compliance with the States’ regulations.

There is also uncertainty in the estimate of the average remediation cost per accidental release (m). Similar to the other inputs, the information on the cost per accidental release is not readily available, and the available data are not recent. The estimates are based on eight studies from the early 1990s. Although the analysis accounts for th e range of costs presen ted in these studies, these studies may not represent the full range of remediation costs.

Any change in the assumptions made regarding N, Δ p, and m will result in a different estimate of

the remediation costs avoided as a result of the regulations . Since the direction of the uncertainty is unknown, the impact of the uncertainty on the estimate of avoided costs (i.e., whether the uncertainty results in higher or lo wer costs) is unknown, as well.

The following example demonstrates the impacts of varying these assump tions on the estimated

remediation costs avoided. Suppose that the baseline pr obability of a release (p

o ) is actually 0.004 (rather than 0.01). Suppose further that instead of reducing the probability of an accidental release to 0 (as was assumed in the analysis), th e pesticide containment ru le reduces the control scenario release probability to 20 percent of the baseline s cenario release probability—or 0.2 x 0.004 = 0.0008. The change in release probability ( Δ p) would then be 0.004 - 0.0008 = 0.0032.

Given the original estimates of N and m, the lower-bound estimate of av oided remediation cost to agricultural pesticide refillers and agricultural commercial applicators would be:

C

= N * Δ p * m = 5,811 * 0.0032 * $210,000 = $3.9 million.

The upper-bound estimate of avoided remediation costs would be:

C

= N * Δ p * m = 5,811 * 0.0032 * $320,000 = $6.0 million.

6.3.3 Uncertainties in the Estimate of the Bene fits of the Pesticide Containment Rule

Various sources of uncertainty in the estimati on of the benefits that would result from implementation of the pesticide containment rule have been discussed in previous sections. Recalling the discussion of total benefits in Section 6.2, there are two broad categories of benefits that would be expected to result from implementation of the pesticide containment rule: (1) avoided remediation costs and (2) the bene fits of avoiding the hum an health risks and ecological damages that would occur prior to an d/or remain after remediation efforts were undertaken. The second component of benefits was not estimated for this analysis, but we provide a qualitative discussion of the benefits that may accrue from reduced risks to human health (Section 6.4) and ecologi cal systems (Section 6.5).7/13/2006 Containment EA, page 118 The relevant uncertainty is how well the estimate of avoided remediation costs approximates the

total benefits of implementing the pesticide cont ainment rule. Restated, there are two broad sources of uncertainty: (1) uncertainty about how well avoided remediation costs are estimated, and (2) uncertainty about how well avoided reme diation costs estimate total benefits. The uncertainties surrounding the estimate of avoide d remediation costs are discussed in Section 6.3.2. How well avoided remediation costs approxima te total benefits depends on the shapes of the marginal cost and marginal benefit (of reme diation) curves (diagrammed in Figure 6.2) and on the percent cleanup that would be undertaken in the baseline scenar io. As the percent

remediation that would be undertaken in the ba seline scenario increase s, avoided remediation costs provide a better approximati on of the total benefits of th e pesticide containment rule.

6.4 The Potential Human Health Risks Asso ciated with Exposure to Pesticides

The benefits of the pesticide containment regulat ions include reductions in health risks both to the general population in the geogra phic areas in which the bulk storage facilities are located and to pesticide handlers from improved containmen t of bulk pesticides in facilities operated by agricultural refiller s and commercial applicators. As di scussed in Section 6.1, there is ample evidence that spills and leaks ar e occurring at agricultural refi ller and commercial applicator facilities with bulk pesticide containment. Unfo rtunately, data are not av ailable to quantify the effects of these spills and leak s on humans (or the environment).

The limited data that are available provide some information on the frequency of exposure (i.e., frequency of leaks and spills) and on the types of pesticides that are being spilled (see Section 6.1). For example, based on the available data , we estimate that as many as 58 accidental releases occur each year from bulk storage faciliti es (see Section 6.3), and that pesticides, such as atrazine, alachlor, chlorpyrifos and diazinon, are frequently det ected on or near agricultural facilities in Illinois (see Table 6.2) . However, information on the level of human exposure from these spills is not readily available, nor is information on the human health effects of this exposure. In the absence of these data, we canno t estimate any human health benefits associated with the final containment regulations.

The following two sections describe, first (in Section 6.4.1), the exposed populations and the data limitations on identifying the frequency and level of exposure for these populations relative to bulk pesticide containment, and second (in Section 6.4.2), the pesticid es that the at-risk populations are more often exposed to and risks associated with these pesticides.

6.4.1 Exposed Populations

6.4.1.1 The General Population

Releases from bulk storage areas may allow pesticides to enter the air, soil, or water. The nature of the contaminated media will depend on the type of release (e.g., sudden or chronic) as well as on the physical and chemical characteristics of the pesticides and their inert ingredients. Improvements in bulk storage facilities are an ticipated to reduce exposure of the general population that has resulted in the past from pestic ides being released from bulk storage facilities by accidental spills, fires, or leakage. To re sult in exposure of the general population, these7/13/2006 Containment EA, page 119 releases have had to migrate into aquifers, volatil ize into the air, and/or contaminate soil used to grow food.

Food contamination may occur: (1) through di rect exposure (e.g., dir ect spillage onto food products); (2) through food plant uptake from contaminated soil or water; and (3) through bioaccumulation in plant or animal life that is itse lf a food source or is food for animals that are ultimately consumed by people.

Airborne releases may occur due to simple volatilization or as a result of fires. The latter type of release is often more serious (Buzicky, et al., 1992). The water used in fire management may spread the pesticide widely, contaminating soil and water. With this rel ease scenario, the public is, again, primarily exposed via water.

There are a number of sources of data on spills. However, it is im portant to note that these data only describe spill incidents that were clea rly noticeable. Chronic small spills largely go unnoticed. Further, the data do not specify the cau se of the spill (e.g., a breach in pesticide containment, which is necessary to associate the spill with the final pesticide containment standards), the population exposed, or the level of exposure. The data sources include a federal reporting mechanism in place at the National Response Center (NRC), for some specified substances above a threshold quantity. In addi tion, the Nebraska Department of Environmental Control maintains a spill incident database th at includes reports of pesticide spills. The Wisconsin Department of Agriculture, Trade and Consumer Protecti on (WDATCP) also has information on pesticide spills. Finally, the Mich igan Department of Agriculture has a compiled summary of agriculture-relate d pollution emergency incident s that includes bulk storage

facilities.

6.4.1.2 Pesticide Handlers

Pesticide handlers will interact with safer contai nment equipment as a result of the rule, which should reduce the number of spills and human contact. This reduction is expected to consequently reduce inhalation and dermal exposure. Data do not specifically address exposure at containment facilities. However, the Califor nia Department of Pesticide Regulation (CDPR) conducts ongoing surveillance of people and the envi ronment to detect the potential for pesticide exposure as part of its pesticide safety program. CDPR’s Pesticide Illness Surveillance Program (PISP) has required mandatory reporting of pes ticide illnesses since 1971, making it the most comprehensive monitoring program in the country. Under a California state statute, physicians are required to report any suspected case of pesticide-related illness or injury to the local health officer within 24 hours of examining the patient.

In addition, CDPR reviews doctor’s reports for wo rkers’ compensation claims under PISP. Staff members investigate any claim that mentions (1) pesticides as a possible cause of illness or injury or (2) unspecified chemicals if the setting is one in which pesticide use is likely. CDPR also works with the California Poison Control Syst em to facilitate reporting of pesticide-related illnesses by health care workers. In 1999, CDPR reported 1,201 episodes in which the pesticide exposure was at least a possible contributing factor to illness or injury (CDPR, 2001a,b).7/13/2006 Containment EA, page 120 However, the CDPR data largely have information on small container spills, and no episodes

were found in the database related to bulk pesticide containment-related spills. 68

6.4.2 Pesticides Evaluated

Pesticide-contaminated soil a nd groundwater on, or near, comm ercial agricultural chemical

facilities have been measured in numerous stat es. Dozens of chemicals have been found. For purposes of this benefits assessment, we examin ed a short list of pes ticides found in a major agricultural state, Illinois, for potential human health effects.

A list of the pesticides identified in wells on or ne ar agricultural faciliti es in Illinois, and the contaminant level measured, was presented in Table 6.2. 69 Although the potential cause of contamination is not listed for many facilities, lo ss from bulk storage facilities through leakage or spills probably contributes to the contaminan t levels. Table 6.2 contains results from one of many well studies. No national st udies are available that enumer ate pesticides specifically associated with spills and leakage from containment facilities.

The Illinois data are used as a reasonable sampli ng of pesticide contamination that is likely to occur. The pesticides identified in wells in Table 6.2 are in high use in many agricultural areas

of the United States. 70 The observed human health effects asso ciated with the pesticides listed in Table 6.4 provide an indication of th e types of risks that are likely to be reduced as a result of improvements in bulk storage facilities. 71

68 For the container rule, EPA examined case summaries from the Pesticide Illness Surveillance Program (PISP) database maintained by the California Department of Pesticide Regulation (CDPR) for 1999 (CDPR 2001a,b) and

estimated the number of cases that ar e “very likely,” “possibly,” and “unlikely” to be avoided as a result of the regulations. The estimates of cases that were “very likely” to be avoided as a result of the regulations were used to calculate the ratio of pesticide container design/residue-related cases to total pesticide product incidents in California. EPA applied this state-leve l proportion to the United States as a whole to estimate the annual national number of avoided pesticide product illnesses that are expe cted as a result of the container design and residue removal regulations.

69 Fifty-six wells near commercial pesticide facilities were te sted in Illinois by the Department of Health. Fortythree (77 percent) were contaminat ed by pesticides (Fawcett, 1989).

70 The WDATCP/WDNR study (discussed in Section 6.2) found several of the same pesticides (e.g., alachlor, atrazine, and metolachlor) as soil contaminants at 20 fac ilities in Wisconsin (Habecker, 1989) as were found in the Illinois study.

71 The health effects information provided in Table 6.4 is a summary of health effects reported from numerous sources. The text source (Cunningham and Hallenbeck, 1984) lists health effects reported primarily from the egistration data submitted to EPA by pesticide manufacturers. In addition, toxicology texts and journal articles were used to develop the lists of effects report ed in this book (full citations in text).7/13/2006 Containment EA, page 121Table 6.4. Potential Health Effects of Selected PesticidesPesticide Class Health Effectsalachlor acetanilide abdominal distress, anemia, ataxia, brown blood, cancer, chills, collapse, convulsions, cyanosis, dermal effects (irritation,dermatitis, sensitization), diarrhea, dizziness, dyspnea, eye irritation, gastrointestinal irritation, jaundice, liver damage,mucous membrane irritation, muscular weakness, nausea, nephritis, ocular damage, postnatal damage, prenatal damage,shock, sweating, vomiting, death due to central nervous system depression, circulatory or respiratory failure.atrazine triazine abdominal pain, adrenal function impairment,adrenal degeneration, anemia, anorexia, brain edema and dystrophy, cardiacdilation, central nervous system abnormalities, convulsions, dermatitis, diarrhea, erythema, eye irritation, conjunctivitis,exopthalmia, corneal opacity, iritis, growthretardation, hematocrit depression, hemoglobin depression, hypothermia, liverhemorrhage, mutagenesis, nausea, ovarian hemorrhage, paralysis, prenatal damage, respiratory edema and hemorrhage,pneumonia, bronchitis, bradypnea, dyspnea, hyperpnea, salivation, spasms, spleen hemorrhage, thiamine and riboflavinfunction disturbed, tremors, vomiting. (Bioaccumulates in fat of animals and humans.)chlorpyrifos organophosphate(One of the mostcommon pesticidesin reports ofhuman poisonings)acidosis, presence of alkyl phosphates in urine, anorexia, anoxia, aphasia, areflexia, ataxia, cardiac abnormalities(bradycardia/tachycardia, heart block), cholinesterase inhibition, central nervous system impairment, coma, confusion,convulsions, cyanosis, dermatitis, diarrhea, dizziness/vertigo,electroencephalograph abnormalities, eye abnormalities(miosis/mydriasis, pain, pressure, tearing, dark or blurred vision, cataracts), gastrointestinaldistress (hyperperistalsis, heartburn, cramps), hallucinations, headache, hyperglycemia, hypertension, hyperthermia, incontinence, leukopenia, liverdamage, muscle atrophy and twitching, nausea, pallor, paresis,parethesias, psychosis, renal damage, respiratory distress(apnea, rales, ronchi, wheezing, pulmonary edema), salivation,shock, somnolence, sweating,vomiting, weakness, deathdue to respiratory failure.cyanazine triazine abdominal pain, adrenal degeneration, adrenal function impairment, anemia, dermal sensitization, dermatitis,diarrhea, eyeirritation, hepatic degeneration, myocardial degeneration, mucous membrane irritation, nausea, renal degeneration, thiamineand riboflavin function disturbed, vomiting. (Bioaccumulates in fat of animals and humans.)diazinon organophosphate acidosis, presence of alkyl phosphates in urine, anorexia, anoxia, aphasia, areflexia, ataxia, cardiacabnormalities(bradycardia/tachycardia, heart block), cholinesterase inhibition, central nervous system impairment, coma, confusion,convulsions, cyanosis, dermatitis, diarrhea, dizziness/vertigo,electroencephalograph abnormalities, eye abnormalities(miosis/mydriasis, pain, pressure, tearing, dark or blurredvision, cataracts), gastrointestinal distress (hyperperistalsis,heartburn, cramps), hallucinations, headache, hyperglycemia, hypertension, hyperthermia, incontinence, leukopenia, liverdamage, muscle atrophy and twitching, nausea, pallor, paresis,parethesias, psychosis, renal damage, respiratory distress(apnea, rales, ronchi, wheezing, pulmonary edema), salivation,shock, somnolence, sweating,vomiting, weakness, deathdue to respiratory failure.metolachlor acetanilidesabdominal distress, anemia, ataxia, brown blood, cancer,chills, collapse, convulsions, cyanosis, dermal (irritation,dermatitis, sensitization), diarrhea, dizziness, dyspnea, eye irritation, gastrointestinal irritation, jaundice, liver damage,mucous membrane irritation, muscular weakness, nausea, nephritis, prenatal damage, shock, sweating, vomiting, death dueto central nervous system depression, circulatory, or respiratory failure.metribuzin triazine abdominal pain, adrenal function impaired,anemia, dermatitis, diarrhea, eye irritation, mucous membrane irritation, nausea,thiamine and riboflavin function disturbed, vomiting. (Bioaccumulates in fat of animals and humans.)Source: Cunningham and Hallenbeck, 1984.7/13/2006 DRAFT Containment EA, page 122 6.5 The Potential Ecological Damages Associ ated with Exposure to Pesticides

The final pesticide containment regulations wi ll reduce the adverse effects on ecosystems of sudden and chronic releases of pe sticides from containment facili ties. This includes reductions in adverse impacts on flora and fauna including fis h, mammals, reptiles, insects, and plants. Due to the complex interrelationships among plants an d animals and the ability of toxic chemicals to move through the food chain, pestic ide contamination of biomateria ls is often difficult to track, contain, or remedy. In some cases contamina tion can move up the food chain and become a

human health risk.

To estimate the benefits associated with avoided environmental incidents, data are needed from which one can relate containment-related spills to property damage and the related costs of cleanup. However, the extent to which pesticid e-related environmental incidents occur in the United States is not very well documented. Th e primary clearinghouse for the reporting of such incidents is the Ecological Inci dent Information System (EIIS), a database maintained by the Ecological Fate and Effects Division of the Of fice of Pesticide Programs. The two primary source of incident reports that are submitted to th e EIIS are reports filed by pesticide registrants and government agencies. Although FIFRA requires that pesticide registrants or manufacturers report to EPA any information related to known adve rse environmental effect s due to releases of their registered pesticides, many of these ecol ogical incidents are probably not observed or reported.

For example, the California Department of Pestic ide Regulations (CDPR) is thought to be at the forefront of state agencies in terms of pes ticide recordkeep ing, management, monitoring, and reporting. However, very few ecolo gical incidents that occur in California are logged into the CDPR’s database of priority investigations—their only statewide database that tracks such events (EPA, 2005a). In California, pesticide-rela ted releases are initiall y investigated by county agricultural commissioners. If a particular rel ease is deemed to meet “priority investigation status,” it is referred to the CD PR and logged into their database of priority investigations. An annual summary of all priority i nvestigations, if any, are then pr ovided to the EPA for input into

the EIIS. For non-health incide nts, the current thresholds fo r categorizing an environmental incident as a priority investigation in California include:

Animals and Wildlife: Any pesticide incident with associated level of mortality that exceeds the following: Non-Target Birds: 50 Non-Target Fish: 500 Listed Endangered or Threatened Species: 1 Domesticated, Game, or Ot her Non-Target Animals: 5

As one can see from the priority investigation cr iteria, it is likely that many pesticide-related

incidents occur but never warrant priority investigati on status. California maintains no records of such incidents, and of the records it does main tain and submit to EPA, only three spill-related environmental incidents were reporte d between 1968 and the present.

The spill/leak-related incidents are singled out in the EIIS since th ey are the incidents most likely to be avoided by the promulgation of the pesticid e containment regulations. Within the EIIS,7/13/2006 DRAFT Containment EA, page 123 there have been 43 spill/leak-related aquatic and terrestrial environm ental incidents reported since its inception in 1992 (with reports dating back to 1968). In total, 15 states have submitted spill-related environmental incide nt reports with varying degrees of severity. Incidents have ranged from an unknown number of species incapaci tated to thousands of acute cases of animal mortality. Species affected in clude minnow, trout, catfish, larg emouth bass, salmon, blue crab, banded water snake, American allig ators, egrets, wood storks, and turkey vultures to name only a few. Of the spill-related incidents, however, the cause of only a handful can be categorized as potentially pesticide containment-related.

In fact, of the 43 spill-related in cidents in the EIIS database that had sufficient description in the incident report, only two could be considered containment-related. They are summarized as

follows:

• Chlorpyrifos termicide leaked while a technician was repairing a tank. A significant quantity spilled onto the driveway. The technician washed the spilled chemical into a storm drain, which ran into a public duck pond resulting in a possible fish kill. The total number of species affected was not reported (EIIS #I001849-001).

• A fish kill occurred on a creek in Sangamon County, Illinois, due to a leaking sight valve on a 1,000 gallon tank. The type of pestic ide was not reported (EIIS #I0000659-001).

The extent of national pesticide containment-relate d environmental incidents reported in the EIIS is likely an underestimate of the actual number of containment-re lated incidents. Therefore, caution should be taken in using EIIS to char acterize the number and si ze of national pesticide

containment-related incidents that could be a voided once the final regulations are in place. Though this type of benefit is not quantified in the current analysis , it should be noted that such benefits are likely to exist in association with the pesticide containment standards.

Apart from EIIS, another database that tracks h azardous material releas es is the Accidental Release Information Program (ARIP) databa se, maintained by the Chemical Emergency Preparedness and Prevention Office (CEPPO) with in the Office of Solid Waste and Emergency Response (OSWER). This database contains 4,9 46 records of incidents that occurred between

1986 and 1999. EPA administers the ARIP to le arn about the causes and consequences of

accidental releases of hazardous substances from fi xed facilities and the actions that have been or could have been effective in prev enting them from occurring. EPA uses select releases collected in the Emergency Response Notification System da tabase for the ARIP questionnaire, targeting

those accidental releases at fixe d facilities that resulted in off-s ite consequence or environmental damage. Unfortunately, a search of the database and the questionnaire sugge sts that there is not sufficient information to identify containment-related spills.

Similar to the human health-related benefits section above (Section 6.4), the following two sections describe, first (in S ection 6.5.1) the exposed populations, and, second (in Section 6.5.2), the pesticides that the at-risk populations are mo re often exposed to and risks associated with these pesticides.7/13/2006 DRAFT Containment EA, page 124 6.5.1 Exposed Populations

Ecosystems are complex systems comprised of many interactions and interdependencies among species. Consequently, a minor deleterious effect at a low trophic level of the food chain can have major ramifications at higher levels. Altera tions may or may not directly affect a species. They may affect its habitat or metabolic m echanisms, thereby alte ring survival, density, diversity, and reproduction (Mor rison and Meslow, 1984a and 1984b; Rattner et al., 1982a and 1982b). The initially exposed population may not be th e population that is ultimately of greatest concern. Pesticides may bioaccumulate up the food chain, reaching much higher concentrations (and greater toxicity) in the higher le vels of an ecosystem (Cooper, 1991).

Assessment of exposed populations requires determ ination of the various species inhabiting the different portions of an ecosystem. These typi cally include avian, terre strial, and waterborne animals, as well as plants. Because species ar e interdependent, a direct impact on one species may have a cascade effect on numerous others. It is therefore reasonable to assume that a reduction in exposure of any species may have benefits for multiple species in the same geographic area (occupying the same ecosystem).

Unlike human exposures, where the waterborne pathway is anticipated to be the primary mechanism of exposure, both water and soil cont amination may be a substantial concern with respect to damage of biomateria ls. Microorganisms and small insects that are critical to maintaining the food web of lower animals are a ffected by soil contamination. In addition, lower animals often interact directly with soil, and soil contamination may be delivered to target tissues through oral, dermal, or inhalation exposures. Soil contamination may directly and quickly kill insects; microorganisms; and, under high-dose conditions, small animals.

Waterborne contaminants may pose greater problems due to the rapid movement of water out of

the immediate area of contaminati on. Under normal circumstances, water is anticipated to carry pesticide releases much greater distances, ther eby causing more widespread contamination. In addition, aquatic organisms are intermittently or continuously submerged, resulting in relatively greater exposure as compared with other expos ure pathways. Water contamination has been identified in fish and bird kills over many d ecades. Bioaccumulation of contaminants in fish who survive their exposure has led to toxic burd ens in mammals that use them as food sources.

6.5.2 Pesticides Evaluated

The pesticides listed in Table 6.2 may also cause damage to most animals, and there exist similar research and data as presented in Table 6.4 on sp ecies-specific effects. There is no national listing of pesticides released from agricultural chemical facilities and their ecological effects. However, as discussed earlier (Section 6.4), the pe sticides observed in Illinois are a reasonably representative subset of pesticides that may be rel eased from bulk storage facilities.

Most pesticides are not species-specific in their effects. They cause th e same types of effects across species (e.g., cholinesterase inhibition) and are capable of pois oning both target and nontarget species (Cooper, 1991). Wh ile not identical in all respec ts, the functioning of the major organ systems is strikingly similar across most mammalian species. It is also similar in most respects to that of birds, fis h, and reptiles. Various toxicologi cal source data are available that provide acute and chronic toxicity measures for selected species.7/13/2006 DRAFT Containment EA, page 125 Because of differences in the size, absorption, distribution, metabolism, presence or absence of target tissues, elimination, and detoxification mechanisms of different species, there are

differences in the doses that wi ll cause toxic effects and the oc currence of effects in different species (Cooper, 1991). For example, most sma ll animals have a more rapid metabolism than larger animals and consequently consume more food in relation to their body weight. As a result of this, their exposure to contaminants will be gr eater on the basis of weight (in mg/kg). Some species have detoxification mechan isms for specific types of chemicals that cause them to be less susceptible than others. This makes prediction of adverse effects on specific species from a single study difficult and uncertain. EPA requires testing of pestic ides on biomaterials, and the test data can provide additional insight into potential impacts. However, there are limited data of this type.

Fish and birds have unique susceptibilities due to their specialized breathing and movement adaptations. These have led to anatomical a nd physiological adaptations that increase their susceptibilities to some contaminants. A well-r ecognized example of this is the softening of eggshells among birds exposed to DDT (Cooper, 1991) , which led to the near-extinction of some avian species. Fish, being immersed in water, have a much greater intake of and exposure to waterborne pesticides than most other species. Considerable pe sticide-specific information is available regarding the toxic effect s of pesticides to wildlife (C ooper, 1991). This information is readily available through the EPA Of fice of Pesticide Programs Web site (http://www.epa.gov/pesticides).

The benefits of avoiding damage to ecosystems include maintenance of species diversity and critical population levels. Dest ruction of members of a speci es may reduce the population to

levels that cannot be sustained in an area. Impairment of reproduction (a common effect of pesticides—see Table 6.4) may lead to the same consequences. As noted above, the species in an ecosystem are interdependent, so that elim ination of one species may have an impact on

numerous others.

6.6 Summary of the Benefits of the Final Bulk Pesticide Storage Containment Regulations and Comparison with Proposed Regulations

6.6.1 Summary of the Benefit of the Final Containment Regulations

Uncontrolled releases of pesticides into the environment are well documented. The establishment of regulations for bulk pesticide containment structures at agricultural refiller and commercial applicator facilities will reduce such uncontrolled releases. This analysis attempted to measure the benefits of such regulations in reducing environmental contamination. In summary, the analysis estimates a cost savings from the final containment regulations of $12.2 million to $18.6 million from avoiding the cleanup of accidental releases from bulk pesticide containment facilities (Section 6.3). Due to a lack of av ailable data on the human and environmental effects of exposure from accidental pesticide releases, the benefits of a reduction

in the number of accidental releases to humans and the environment (i.e., a reduction in the exposure to pesticides) is not valu ed in this analysis. If quant ified, these benef its would likely result in significantly higher benefits associ ated with the final c ontainment regulations.7/13/2006 DRAFT Containment EA, page 126 6.6.2 Comparison of the Benefits of the Fina l and Proposed Containment Regulations

The analysis of the benefits of the proposed containment regulati ons is similar to the analysis presented here for the final containment regulation s. The primary differences in the analyses are the assumptions made in the analysis of the avoide d costs of remediation. As in this analysis, the main component of the value of the benefits of the proposed containm ent regulations is the estimation of the cost savings from a reduction in the number of accidental releases of pesticides from bulk storage facilities; and, due to th e lack of available data on the human and environmental effects of pesticide exposure from bul k pesticide storage facil ities, the analysis of the benefits of the proposed regul ations did not estimate the benef its of the regulations to humans

and the environment.

The primary differences between the two analyses are the assumptions used in the calculation of

the avoided costs of remediation between the tw o analyses. The benefits analysis of the proposed containment regulations assumes that the probability of release is 1.5 percent, whereas the benefits analysis of the final regulations assu mes 1 percent. Also, the benefits analysis for the proposed regulations assumes that 3,000 bulk pesticide storage facili ties could have an accidental release, whereas the benefits analysis of the final regulations assumes that 5,811 bulk pesticide

facilities could have an accidental release. These differences result in an estimate of the benefits of the proposed regulations of $9.3 million to $15.6 million; and an estimate of the benefits of the final regulations of $12.2 million to $18.6 million.7/13/2006 DRAFT Containment EA, page 127 

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### Appendix A: Methodology for Calculating Annualized Compliance Costs

The analysis of the bulk pesticid e containment standards calculates costs across a 20-year period.

Affected facilities incur some compliance costs only once (initial and capital costs), other costs annually (operations and maintenance), and other co sts at regular future intervals (intermittent costs). We therefore need to account for the time dimension of this analysis.

We calculate the annual cost of complyi ng with the containment standards by:

• Calculating the non-discounted cost in each year of the 20-year period;

• Calculating the present discounted value of the resulting stre am of costs; and

• Annualizing this present discounted value.

Facilities will have 3 years to come into co mpliance with regulations under the containment regulations. We assume that initial and capital costs associated with th e containment regulations will be incurred beginning at the end of the thir d year. Operation and maintenance costs will be incurred in each year beginning in year 4 and continuing to year 20. Intermittent costs will be incurred in every fifth year af ter the end of the compliance pe riod (years 8, 13, and 18). To calculate the present discounted va lue of the costs of a regulation, all costs are discounted back to the beginning of the first year of the 20-year period.

The costs incurred in a single year are the sum of initial, capital, operation and maintenance, and intermittent costs, if any of the four cost types occur in that year. If:

• INTLn denotes the initial cost of comp lying with the regulation in the n th year ( n =1, ..., 20),

• CAPn denotes the capital cost of comp lying with the regulation in the n th year,

• OMn denotes the operation and maintenance cost of complying with th e regulation in the n th

year,

• INTERn denotes the intermittent cost of complying with the regulation in the n th year, and

• N denotes the number of fac ilities out of compliance w ith the regulation annually,

Then the cost of complying with the regulation in the n th year is:

(INTLn + CAPn + OMn + INTERn) * N.

Regulatory costs, however, may differ for facilities in different size classes, and the cost analysis attempts to capture those differences whenever po ssible. For example, it is more expensive for a large agricultural refiller to install a new outdoor bulk liquid stor age structure with a containment pad than a small-small agricultural refiller because the large facility requir es a storage area with more square footage, including a larger containment pad. This re sults in substantially greater compliance costs for the average large agricultura l refiller than the average small-small one.

We display the 20-year schedules of facility-l evel, non-discounted costs associated with the

containment standards for the av erage agricultural re filler and commercia l (aerial and ground) applicator in each size class in Appendix B.7/13/2006 DRAFT Containment EA, page 137 The present discounted value (pdv) of the 20-year stream of compliance costs (CC) associated

with the i th regulation for the average facility in the j th size class is:



## ∑

= + = 20

1 ) 1 (

n n ijn pdv
ij d CC CC

where d is the discount rate. We considered tw o discount rates: 3 percent and 7 percent.

For example, costs to install a new outdoor s econdary containment stru cture for bulk liquids begin in year 3 and continue through year 20. In year 3, there are capital costs associated with the construction of the structure; in subsequent year s there are operating a nd maintenance costs associated with the structure (years 4-20) and inte rmittent costs associated with the repair of the structure (years 8, 13, and 18). The (undiscounted ) compliance cost associated with new bulk liquid outdoor containment structures for a small-sm all agricultural refiller, for example, in year 3 is $5,610. The (undiscounted) compliance cost associated with new bulk liquid outdoor containment structures in subsequent years 4-7, 9-12, 14-17, and 19-20 is $1,160. The (undiscounted) compliance cost associated with the same structures in intermittent years 8, 13, and 18 is $1,220. Table B.1 in Appendix B deta ils each of the non-discounted regulatory compliance costs for the entire 20-year policy scen ario period. Using a 3 percent discount rate, and discounting back to the beginning of year 1, the present discounted value of the stream of costs associated with the regul ations requiring a new bulk liqui d outdoor containment structure for a small-small agricultural refiller is $19,234 and the annualized cost of this at the 3 percent discount rate is $1,255.

The present discounted value of the cost of co mplying with a regulati on was then annualized over the 20-year period, us ing two interest rates (r) that were assumed to be the same as the two discount rates used to obtain present discounte d values (that is, when the discount rate was assumed to be 3 percent, the interest rate was also assumed to be 3 percent, and similarly for 7 percent). We calculated the annua lized cost of complying with the i th regulation for the average facility in the j th size class, using interest rate r, as: 72

pdv
ij ann ij CC

r r r CC ∗ ⎟ ⎟ ⎠ ⎞ ⎜ ⎜ ⎝ ⎛

+

− ∗ + =

− ] ) 1 ( 1 [ ] 1 [ 20 .

We show the estimated facility-l evel annual cost of complying with the containment standards for new structures in each facility size class in Tables I.1-I.4. We display the industry-wide cost of complying with the containment standards for ex isting structures in each facility size class in

Tables I.1-I.4. We assume bot h a discount rate and an intere st rate of 3 and 7 percent.

72 The procedure for annualization is based on the guidelin es for economic analyses that are published by EPA (EPA, 2000)7/13/2006 DRAFT Containment EA, page 138 

### Appendix B: Non-Discounted Facility-Level Costs of Compliance for the Bulk

Pesticide Containment Standards

Table B.1. Non-Discounted Costs of Comply ing with the Bulk Pesticide Containment Standards for New Structures, Ag ricultural Refillers (2005$)

Year a
Compliance Cost Item b 3 4 5 6 7 8 9 10

Secondary Containment - Bulk Liquid/Outdoor

Small-Small 5600 1160 1160 1160 1160 1210 1160 1160

Medium-Small 10300 1540 1540 1540 1540 1660 1540 1540

Large-Small/Large c 18250 2760 2760 2760 2760 2890 2760 2760

Secondary Containment - Bulk Liquid/Indoor

Small-Small 2170 740 740 740 740 790 740 740

Medium-Small 2500 1050 1050 1050 1050 1170 1050 1050

Large-Small/Large c 3780 1490 1490 1490 1490 1620 1490 1490

Secondary Containment - Bulk Dry, 1 Container

Small-Small d na na na na na na na na

Medium-Small 5230 850 850 850 850 950 850 850

Large-Small/Large c 5230 850 850 850 850 950 850 850

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Cost taken from Table 4.2

c Large-small and large facilities are assumed to incur the same costs.

d No costs are estimated for small-small refiller facilities, because it is assumed that only medium-small, largesmall, and large facilities have outdoor bulk dry storage.7/13/2006 DRAFT Containment EA, page 139 Table B.1 (Continued). Non-Discounted Cost s of Complying with the Bulk Pesticide

Containment Standards for New Struct ures, Agricultural Refillers (2005$)

Year a
Compliance Cost Item b 11 12 13 14 15 16 17 18 19 20

Secondary Containment - Bulk Liquid/Outdoor

Small-Small 1160 1160 1210 1160 1160 1160 1160 1210 1160 1160

Medium-Small 1540 1540 1660 1540 1540 1540 1540 1660 1540 1540

Large-Small/Large c 2760 2760 2890 2760 2760 2760 2760 2890 2760 2760

Secondary Containment - Bulk Liquid/Indoor

Small-Small 740 740 790 740 740 740 740 790 740 740

Medium-Small 1050 1050 1170 1050 1050 1050 1050 1170 1050 1050

Large-Small/Large 1490 1490 1620 1490 1490 1490 1490 1620 1490 1490

Secondary Containment - Bulk Dry, 1 Container

Small-Small na d na na na na na na na na na

Medium-Small 850 850 950 850 850 850 850 950 850 850

Large-Small/Large 850 850 950 850 850 850 850 950 850 850

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.2.

c Large-small and large facilities are assumed to incur the same costs.

d No costs are estimated for small-small refiller facilities, because it is assumed that only medium-small, largesmall, and large facilities have outdoor bulk dry storage.7/13/2006 DRAFT Containment EA, page 140 Table B.2. Non-Discounted Costs of Comply ing with the Bulk Pesticide Containment Standards for New Structures, Commercial Applicators (2005$)

Year a
Compliance Cost Item b 3 4 5 6 7 8 9 10

AERIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Small-Small 5600 1160 1160 1160 1160 1210 1160 1160

Medium-Small 10300 1550 1550 1550 1550 1670 1550 1550

Large-Small 18250 2790 2790 2790 2790 2920 2790 2790

GROUND APPLICATORS c

Secondary Containment - Bulk Liquid/Indoor

Small-Small na na na na na na na na

Medium-Small na na na na na na na na

Large-Small 10300 1550 1550 1550 1550 1670 1550 1550

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.2.

c Ground applicators are considered to be comprised of all large-small facilities. For this analysis, ground applicators have been assigned the same costs as those estimated for medium-small agricultural refillers.

Table B.2 (Continued). Non-Discounted Cost s of Complying with the Bulk Pesticide

Containment Standards for New Struct ures, Commercial Applicators (2005$)

Year a
Compliance Cost Item b 11 12 13 14 15 16 17 18 19 20

AERIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Small-Small 1160 1160 1210 1160 1160 1160 1160 1210 1160 1160

Medium-Small 1550 1550 1670 1550 1550 1550 1550 1670 1550 1550

Large-Small 2790 2790 2920 2790 2790 2790 2790 2920 2790 2790

GROUND APPLICATORS c

Secondary Containment - Bulk Liquid/Indoor

Small-Small na na na na na na na na na na

Medium-Small na na na na na na na na na na Large-Small 1550 1550 1670 1550 1550 1550 1550 1670 1550 1550

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.2.

c Ground applicators are considered to be comprised of all large-small facilities. For this analysis, ground applicators have been assigned the same costs as those estimated for medium-small agricultural refillers.7/13/2006 DRAFT Containment EA, page 141 Table B.3. Non-Discounted Costs of Comply ing with the Bulk Pesticide Containment Standards for New Structures, Agricultur al Refillers and Commercial Applicators

Year a
Compliance Cost Item b 3 4 5 6 7 8 9 10

Containment Pads - Outdoor Scenario 1 c

Small-Small 5850 1190 1190 1190 1190 1230 1190 1190

Medium-Small 16100 2210 2210 2210 2210 2260 2210 2210

Large-Small/Large 34060 5100 5100 5100 5100 5170 5100 5100

Containment Pads - Outdoor Scenario 2 c

Small-Small 6600 1190 1190 1190 1190 1230 1190 1190

Medium-Small 18310 2210 2210 2210 2210 2260 2210 2210

Large-Small/Large 34060 5100 5100 5100 5100 5170 5100 5100

Containment Pads - Indoor Scenario 1 d

Small-Small 6860 740 740 740 740 780 740 740

Medium-Small 18730 1100 1100 1100 1100 1150 1100 1100

Large-Small/Large 50570 1490 1490 1490 1490 1560 1490 1490

Containment Pads - Indoor Scenario 2 d

Small-Small 8790 740 740 740 740 780 740 740

Medium-Small 23970 1100 1100 1100 1100 1150 1100 1100

Large-Small/Large 53840 1490 1490 1490 1490 1560 1490 1490

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.2.

c Outdoor Scenario 1 evaluates the capital costs of facilitie s that must also have secondary containment of bulk storage containers. Scenario 2 estimates capital costs to facilities that require only a new containment pad, including the costs of a pump and a hose. Capital costs under Scenario 1 are lower than Scenario 2 because the costs of a portable pump and hose have already been accounted for within th e overall secondary containment costs

under Scenario 1.

d Indoor Scenario 1 estimates capital costs for pads built ove r existing concrete floors. Scenario 2 estimates capital costs for facilities where the existing concrete floor is removed prior to construction of the containment pad.7/13/2006 DRAFT Containment EA, page 142 Table B.3 (Continued). Non-Discounted Cost s of Complying with the Bulk Pesticide

Containment Standards for New Struct ures, Agricultural Refillers and Commercial Applicators

Year a
Compliance Cost Item b 11 12 13 14 15 16 17 18 19 20

Containment Pads - Outdoor Scenario 1 c

Small-Small 1190 1190 1230 1190 1190 1190 1190 1230 1190 1190

Medium-Small 2210 2210 2260 2210 2210 2210 2210 2260 2210 2210

Large-Small/Large 5100 5100 5170 5100 5100 5100 5100 5170 5100 5100

Containment Pads - Outdoor Scenario 2 c

Small-Small 1190 1190 1230 1190 1190 1190 1190 1230 1190 1190

Medium-Small 2210 2210 2260 2210 2210 2210 2210 2260 2210 2210

Large-Small/Large 5100 5100 5170 5100 5100 5100 5100 5170 5100 5100

Containment Pads - Indoor Scenario 1 d

Small-Small 740 740 780 740 740 740 740 780 740 740

Medium-Small 1100 1100 1150 1100 1100 1100 1100 1150 1100 1100

Large-Small/Large 1490 1490 1560 1490 1490 1490 1490 1560 1490 1490

Containment Pads - Indoor Scenario 2 d

Small-Small 740 740 780 740 740 740 740 780 740 740

Medium-Small 1100 1100 1150 1100 1100 1100 1100 1150 1100 1100

Large-Small/Large 1490 1490 1560 1490 1490 1490 1490 1560 1490 1490

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.2.

c Outdoor Scenario 1 evaluates the capital costs of facilitie s that must also have secondary containment of bulk storage containers. Scenario 2 estimates capital costs to facilities that require only a new containment pad, including the costs of a pump and a hose. Capital costs under Scenario 1 are lower than Scenario 2 because the costs of a portable pump and hose have already been accounted for within th e overall secondary containment costs

under Scenario 1.

d Indoor Scenario 1 estimates capital costs for pads built ove r existing concrete floors. Scenario 2 estimates capital costs for facilities where the existing concrete floor is removed prior to construction of the containment pad.7/13/2006 DRAFT Containment EA, page 143 Table B.4. Non-Discounted Costs of Comply ing with the Bulk Pesticide Containment Standards for Existing Struct ures, Small-Small Facilities

Year a
Compliance Cost Item b 3 4 5 6 7 8 9 10

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Initial 740 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 40 0 0

Secondary Containment - Bulk Dry/Outdoor

Initial n/a n/a n/a n/a n/a n/a n/a n/a

Overhead & Maintenance n/a n/a n/a n/a n/a n/a n/a n/a

Intermittent n/a n/a n/a n/a n/a n/a n/a n/a

COMMERCIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Initial 740 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 40 0 0

REFILLERS AND APPLICATORS

Containment Pads - Outd oor (Scenarios 1&2)

Capital 1660 0 0 0 0 0 0 0

Initial 80 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 30 0 0

Container Anchoring (Plastic and Steel)

Initial 580 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.11. Facility compliance with the standards for existing containment structures is not

uniform across facilities. Different facilities will have to comply to the existing containment standards to varying degrees, incurring some or all of the capital, initial, overh ead and maintenance, and intermittent costs associated with each standard. Because complia nce and the associated costs of co mpliance do not accrue to facilities uniformly, we present the capital, initial, overhead and maintenance, and intermittent costs separately.7/13/2006 DRAFT Containment EA, page 144 Table B.4 (Continued). Non-Discounted Cost s of Complying with the Bulk Pesticide Containment Standards for Existing Structures, Small-Small Facilities

Year a Compliance Cost Item b 11 12 13 14 15 16 17 18 19 20

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 4 0 0 0 0 0 40 0 0

Secondary Containment - Bulk Dry/Outdoor

Initial n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Overhead & Maintenance n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Intermittent n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

COMMERCIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 4 0 0 0 0 0 40 0 0

REFILLERS AND APPLICATORS

Containment Pads - Outd oor (Scenarios 1&2)

Capital 0 0 0 0 0 0 0 0 0 0

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 3 0 0 0 0 0 30 0 0

Container Anchoring (Plastic and Steel)

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.11. Facility compliance with the standards for existing containment structures is not

uniform across facilities. Different facilities will have to comply to the existing containment standards to varying degrees, incurring some or all of the capital, initial, overh ead and maintenance, and intermittent costs associated with each standard. Because complia nce and the associated costs of co mpliance do not accrue to facilities uniformly, we present the capital, initial, overhead and maintenance, and intermittent costs separately.7/13/2006 DRAFT Containment EA, page 145 Table B.5. Non-Discounted Costs of Comply ing with the Bulk Pesticide Containment Standards for Existing Structures, Medium-Small Facilities

Year a

Compliance Cost Item b 3 4 5 6 7 8 9 10

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Initial 740 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 110 0 0

Secondary Containment - Bulk Dry/Outdoor

Initial 0 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 110 0 0

COMMERCIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Initial 740 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 110 0 0

REFILLERS AND APPLICATORS

Containment Pads - Outd oor (Scenarios 1& 2)

Capital 2560 0 0 0 0 0 0 0

Initial 80 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 60 0 0

Container Anchoring (Plastic and Steel)

Initial 580 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.11. Facility compliance with the standards for existing containment structures is not

uniform across facilities. Different facilities will have to comply to the existing containment standards to varying degrees, incurring some or all of the capital, initial, overh ead and maintenance, and intermittent costs associated with each standard. Because complia nce and the associated costs of co mpliance do not accrue to facilities uniformly, we present the capital, initial, overhead and maintenance, and intermittent costs separately.7/13/2006 DRAFT Containment EA, page 146 Table B.5 (Continued). Non-Discounted Cost s of Complying with the Bulk Pesticide Containment Standards for Existing Structures, Medium-Small Facilities

Year a Compliance Cost Item b 11 12 13 14 15 16 17 18 19 20

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 11 0 0 0 0 0 110 0 0

Secondary Containment - Bulk Dry/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 11 0 0 0 0 0 110 0 0

COMMERCIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 11 0 0 0 0 0 110 0 0

REFILLERS AND APPLICATORS

Containment Pads - Outd oor (Scenarios 1& 2)

Capital 0 0 0 0 0 0 0 0 0 0

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 6 0 0 0 0 0 60 0 0

Container Anchoring (Plastic and Steel)

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.11. Facility compliance with the standards for existing containment structures is not

uniform across facilities. Different facilities will have to comply to the existing containment standards to varying degrees, incurring some or all of the capital, initial, overh ead and maintenance, and intermittent costs associated with each standard. Because complia nce and the associated costs of co mpliance do not accrue to facilities uniformly, we present the capital, initial, overhead and maintenance, and intermittent costs separately.7/13/2006 DRAFT Containment EA, page 147 Table B.6. Non-Discounted Costs of Comply ing with the Bulk Pesticide Containment Standards for Existing Structures, Large-Small and Large Facilities

Year a

Compliance Cost Item b 3 4 5 6 7 8 9 10

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Initial 740 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 140 0 0

Secondary Containment - Bulk Dry/Outdoor

Initial 0 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 100 0 0

COMMERCIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Initial 740 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 140 0 0

REFILLERS AND APPLICATORS

Containment Pads - Outd oor (Scenarios 1&2)

Capital 4870 0 0 0 0 0 0 0

Initial 80 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

Intermittent 0 0 0 0 0 70 0 0

Container Anchoring (Plastic and Steel)

Initial 580 0 0 0 0 0 0 0

Overhead & Maintenance 0 30 30 30 30 30 30 30

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.11. Facility compliance with the standards for existing containment structures is not

uniform across facilities. Different facilities will have to comply to the existing containment standards to varying degrees, incurring some or all of the capital, initial, overh ead and maintenance, and intermittent costs associated with each standard. Because complia nce and the associated costs of co mpliance do not accrue to facilities uniformly, we present the capital, initial, overhead and maintenance, and intermittent costs separately.7/13/2006 DRAFT Containment EA, page 148 Table B.6 (Continued). Non-Discounted Cost s of Complying with the Bulk Pesticide Containment Standards for Existing Struct ures, Large-Small and Large Facilities

Year a Compliance Cost Item b 11 12 13 14 15 16 17 18 19 20

AGRICULTURAL REFILLERS

Secondary Containment - Bulk Liquid/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 14 0 0 0 0 0 140 0 0

Secondary Containment - Bulk Dry/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 10 0 0 0 0 0 100 0 0

COMMERCIAL APPLICATORS

Secondary Containment - Bulk Liquid/Outdoor

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 14 0 0 0 0 0 140 0 0

REFILLERS AND APPLICATORS

Containment Pads - Outd oor (Scenarios 1& 2)

Capital 0 0 0 0 0 0 0 0 0 0

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

Intermittent 0 0 7 0 0 0 0 0 70 0 0

Container Anchoring (Plastic and Steel)

Initial 0 0 0 0 0 0 0 0 0 0

Overhead & Maintenance 30 30 30 30 30 30 30 30 30 30

a The period of analysis for the bulk pesticide containment standard cost analysis is 20 years. We assume that there is a 3-year compliance period. Compliance costs and initial costs are incurred at the end of the third year.

Overhead and maintenance costs occur in each year after the compliance period (years 4-20). Intermittent costs occur every 5 years after the complia nce period (years 8, 13, and 18).

b Costs taken from Table 4.11. Facility compliance with the standards for existing containment structures is not

uniform across facilities. Different facilities will have to comply to the existing containment standards to varying degrees, incurring some or all of the capital, initial, overh ead and maintenance, and intermittent costs associated with each standard. Because complia nce and the associated costs of co mpliance do not accrue to facilities uniformly, we present the capital, initial, overhead and maintenance, and intermittent costs separately.7/13/2006 DRAFT Containment EA, page 149 

### Appendix C: Comparison of Critic al and State Containment Standards

State Standard Comment Source

TOPIC: Material Critical: Rigid, watertight (no earth, asphalt).

CO Permeability 1x10 -7 ; material compatible w. pesticide, resist corrosion; rigid steel, concrete or synthetic. 1994 regs., p.5

IL Steel, concrete, solid masonry; 1x10 -6 (constructed),

1x10 -6 (maintained). 1990 Dept. of Ag. regs, p.10

IN Steel, poured concrete, solid masonry; full hydrostatic head of discharged liq. + wt. of construction material. 1992 IN regs/rules, p. 13

IA Concrete, steel or impervious material, compatible w. pesticides stored/shipped;1x10 -6 (constructed), 1x10 -6
(maintained). 1991 Regs. Dept. of Ag. Stewardship, p. 2

KS Material of sufficient thickness & density, composition to confine discharged liquid or solid material; compatible with pesticides and conditions of storage. 1993 KS Board of Ag. rules, p. 1

LA Solidly constructed of impervious material sufficient to contain leaks, spills, accumula ted pesticides/rinsates. 1984 Dept. Ag. & Forestry regs., p.42

MI Steel, reinforced concrete, solid masonry, precast concrete

modules. 1982 MI Dept. Ag. regs. p. 5

MN Ferrous metal, inorganic soil, stainless steel, reinforced concrete, solid masonry; full hydrostatic head. 1989 rules, Dept. Ag., p. 12

MO Suitable material compatible w. specs. of product being stored; synthetic liner option; 1x10 -7

. 1992 Dept. Nat. Rscs. rules, p. 82.

NE Concrete or solid masonry lined vault/synthetic, metal liner; tank inside another tank is acceptable. 1992 rules/regs., Dept. Envir. Qual., p. 9

NH Reinforced concrete or other rigid material; full hydrostatic head; hydraulic conductivity 10 -6 interim,

1x10 -7 new. Rules/regs. p. 6

ND Material sufficient to contain spills, discharges, leaks. Telcon Barry Coleman 701 328 4756.

OH Sufficient thickness, density, composition to contain spills or discharges. 1984 OH Pesticide Law

SD Concrete, excluding blocks, bricks of sufficient thickness, strength; hydrostatic head . Steel, or cross-linked polyolefin. Pesticide Rules, p. 35, 43, 44.

VT Earth, steel, concrete or solid masonry to withstand hydrostatic pressure; liners can be used. 1991 Dept. Ag. regs. p. 65

WA Steel, poured reinforced concrete, solid masonry, precast concrete; solid masonry; hydrostatic capacity; sealed to prevent leaks. 1997 Dept. Ag. rules, p. 3

WV Constructed w. 2ndary containment to prevent discharge, facilitate recovery; sufficient thickness, density, composition. Liquid tight. Title 61 Legislative Rules p. 5

WI Walls of earth, steel, concrete or solid masonry; full hydrostatic head. Earth walls must be lined to meet specific requirements. Admin. Code Ag./Trade & Consumer Protection, p. 6957/13/2006 DRAFT Containment EA, page 150 State Standard Comment Source

TOPIC: Appurtenances Critical: Protected against damage.

CO Constructed, installed, maintained to prevent discharge of liq. pesticide; resistant to corrosion, puncture, cracking. 1994 Regs., p. 7

IL Designed to handle operating and other foreseeable

mechanical stresses. 1990 Dept. Ag. regs. p. 14

IN Designed to handle operating stresses (static head, pressure build-up) and other mechanical stresses. 1992 IN rules/regs. p. 7

IA Containers, pipes, valves protected against reasonably foreseeable risks of damage by moving vehicles. 1991 regs. Dept. of Ag., p. 3

KS None Telcon Greg Krissek 913 296 0086

LA Must all be within 2ndary containment area. Telcon Larry Lejeune 504 925 3713

MI Containers, pipes, valves protected against reasonably foreseeable risks of damage by moving vehicles. 1992 regs. MI Dept. Ag., p. 6

MN Containers, pipes, valves protected against reasonably foreseeable risks of damage by moving vehicles. 1989 regs. Dept. of Ag., p. 9

MO Able to handle operating stresses, hydrostatic head, pressure build-up, mechanical stresses, moving vehicles;

located within containment. 1992 Dept. Nat. Rscs. rules, p. 82

NE Containers, pipes, valves protected against reasonably foreseeable risks of damage by moving vehicles. 1992 rules/regs. Dept. Env. Qual. p.

17

OH Containers, pipes, valves protected against reasonably foreseeable risks of damage by moving vehicles. Rules/regs. p. 8

ND No specific regs. Telcon Barry Coleman 701 328 4756

OH No Telcon Jim Belt 614 728 6987

SD No specific regs. Telcon Brad Barron 605 773 3724

VT Designed to handle operating stresses (static head, pressure build-up) and other mechanical stresses from pumps, compressors and moving vehicles. 1991 regs., Dept. of Ag. p. 62, 64

WA Containers, pipes, valves protected against reasonably foreseeable risks of damage by moving vehicles. 1997 rules Dept. Ag. p. 5

WV No specifics, but recommend lock on gate valve to protect drains in secondary containment. Telcon Doug Hudson 304 558 2209

WI Should not be located where they can be run over or backed into. Protected, e.g. , by overhead suspension, large curb, RR ties or dike wall. Admin. Code Ag./Trade & Consumer Protection, p. 9

TOPIC: Inspection Critical: Monthly

CO Visually inspected at least once a week. 1994 regs., p. 11

IL At least once a week 1990 Dept. Ag. regs. p. 17

IN 2ndary containment: intervals of not > 6 months; valves, appurtenances weekly; vents at least monthly. 1992 IN regs./rules, p. 16

IA Routine inspection against concrete cracks. 1991 regs. part of Ag/Land Stewardship Law p. 6

KS None Telcon Gary Krissek 913 296 00867/13/2006 DRAFT Containment EA, page 151 State Standard Comment Source

LA Use internal checklist; annual inspections; more frequently when circumstances warrant. Telcon Larry Lejeune 504 925 3763

MI Regular inspections/mainten ance on a monthly basis. MDA staff conducts annual official inspection. 1992 regs, MDA p. 8

MN Container/appurtenances weekly; containment area monthly. 1989 Dept. Ag. rules p. 17

MO Inspection before permit issued; no other inspection requirement. Telcon Roger Korneberg 573 526

5804.

NE Weekly facility inspections; monthly bulk container measurements; quarterly inventory reconciliation of pesticides. 1992 rules/regs. p. 18 Dept. Envir. Qual.

NH Monthly when pesticides stored/handled; when no suitable means to observe leaks, reconcile pesticide contents weekly. Rules/regs. p. 10/12

ND None Telcon Barry Coleman 701 328 6987

OH None Telcon Jim Belt 614 728 6987

SD Inspection of new, existing, or altered storage facility prior to permit; biennial or more frequent as determined at time of permit. Telcon Brad Barvan 605 773 3724

VT Valves, appurtenances weekly; contents of bulk storage measured weekly; containment monthly. 1991 regs., Dept. Ag. p. 67

WA Containers/appurtenances monthly when in use. 1997 Dept. Ag. p. 10

WV Containers/appurtenances at least weekly; 2ndary containment and operational areas at least monthly. Title 61 Legislative rules p. 8

WI 2ndary containment inspected at intervals not greater than

12 months. Admin. Code Ag./Trade & Consumer Protection, p. 9

TOPIC: Spill Cleanup Critical: End of day at latest

CO Promptly recovered. 1994 regs. p. 6

IL Daily cleanup. 1990 Dept. of Ag. regs. p. 18

IN Promptly recovered. 1993 IN regs./rules p. 11

IA Promptly recovered to the maximum extent possible. 1991 regs. Dept. Ag. Land Stew. p. 2

KS None Telcon Gary Krissek 913 296 0086

LA Requirement to maintain area in an orderly fashion, end of work shift, end of day. Telcon Larry Lejeune 504 925 3763

MI Manually activated pump /sump and containment area cleanup within 18 hour s of accumulation. 1992 regs. MDA p. 7

MN Recovered ASAP - must be used, stored or disposed. 1989 rules Dept. Ag. p. 14

MO Recovered promptly. 1992 Dept. Nat. Rscs. rules p. 14

NE Contaminated material shall be promptly recovered and used or disposed. 1992 rules/regs. p. 16 Dept. Env. Qual. p. 16

NH Clean up ASAP; traveling spills or leaks cleaned immediately. Rules/regs. p. 15

ND Immediately. Telcon Barry Coleman 701 328 4756

OH Follow building and product label instructions. Telcon Jim Belt 614 728 69877/13/2006 DRAFT Containment EA, page 152 State Standard Comment Source

SD Immediately recovered using absorbent materials, pumps

or similar means Telcon Brad Barron 605 773 3724

VT Discharges promptly recovered. 1991 regs. Dept. Ag. p. 64

WA Dry pesticide spills/promptly cleaned & recovered. Bulk spills immediately recovered. 1997 rules Dept. Ag. p. 5, 9

WV Discharges immediately and fully recovered in operational

area. Title 61 Legislative rules p. 3

WI Discharges at storage facility promptly recovered. Admin. Code Ag./Trade & Consumer Protection, p. 697

TOPIC: Liquid Bulk Critical: 100% of Largest Container

CO 110% indoor 1994 Regs p. 4

IN 100% I/O (indoor/outdoor) + 6” freeboard if outdoors Reg 2/92

IL 100% + 6” freeboard (25-yr/24-hr) + displaced volume SoS Report - 92

IA 100%/110% I/O + displaced volume SoS Report - 92

KS 110% outdoor; suitable design indoor Fitz - 93

Sub-std for indoors

LA 110% if outdoor SoS Report - 92

Indoor?

MI 100%/110% I/O + displaced volume + 6” freeboard if

outdoor Fitz - 93

MN 110%/125% I/O + displaced volume SoS Report - 92

MO 110%/125% I/O + displaced volume Fitz - 93

NE 110% + displaced volume, + 25-yr/24-hr storm if outside SoS Report - 92

NH Interim:110% of the largest unprotected from precipitation/100% protected; when interim period expires: 125% unprotected, 100% protected regs/rules p. 11

ND 110%/120% I/O + max. rain accumulation of 25% of containment capacity or 7 days Fitz - 93

OH 110% outdoor, suitable measures for indoor Fitz - 93 May be sub-std for indoor

SD 110% + displaced volume Fitz - 93

VT 110% + displaced volume SoS Report - 92

WA Indoor: 100% + displaced volume; outdoor: 125% + displaced volume 1997 rules, Dept. of Ag., p.3

WV Outdoor: 110% of largest + displaced vol. of tanks,
appurtenances, etc. Indoor: 100% + displaced, etc., as

with outdoor SoS Report - 92

WI 100%/125% I/O + displaced volume Fitz - 93

TOPIC: Dry Bulk Critical: Protected from preci pitation; 6” curb 2’ away

MO Pesticides stored inside/surface water runoff diverted away from storage/individual catchment basins. 1992 Dept. of Nat. Rscs. rules p. 83

NE None.7/13/2006 DRAFT Containment EA, page 153 State Standard Comment Source

NH Contain 100% of volume of largest stationary bulk

container. rules/regs. p. 12

ND 6” curb, 3’ away from containers; roof or tarp. against rain. Concrete/impervious floor/pallets on raised platform. 1992 D. Ag. p. 34

OH Follow building or product label instructions. Telcon Jim Belt 614 728 6987

SD No specifics; no distinction between wet/dry (110% capacity indirectly covers dry bulk). Telcon Brad Barron 605 773 3724

VT Roof/tarp/pallets or raised concrete platform. 1991 Dept. Ag. p.62

WA Pallets or raised platform with roof/tarp. M/L done on a paved surface of size/design to contain and allow for spill

collection. 1997 rules Dept. Ag. p.8

WV Tarps or other suitable synthetic material to withstand all foreseeable loading conditions/compatible w. pesticides. Title 61 Legislative rules p. 3

WI Roof/tarp/raised on pallets or concrete platform. Admin. Code Consumer Protection, p.

698

TOPIC: Pad Capacity Critical: At least 750 gallons

CO 150% of largest container/minimum of 1,800 gallons of discharged liquid. 1994 regs/, p. 6

IL Volume of largest tank + precipitation of 6” rain. Dept. Ag. p. 13

IN Combined total of at least 750 gallons. 1992 regs. p. 11

IA Volume of largest tank parked (average 1,000 gal.). Overriding factors: transfers attended by person who is responsible and liable for spills if pad smaller than required. Telcon Chick Eckermann 515 281

8590

KS 110% of largest container. Telcon Greg Krissek

913 296 2263

LA Only states that immediate notification must be made of spill. 1984 Dept. Ag. p. 46

MI Minimum 10’ wide, 2’ long; adequate catch basins designed to contain minimum of 1500 gallon discharge.

Unless container or mobile container less than 1000 gallons, then basin adequate to hold 110% of whichever is larger (container or mobile container). 1992 MDA p. 6

MN Minimum of 1,000 gallons. 1989 Dept. Ag. p. 10

MO Contain spills for amount of time needed for cleanup and

recovery. 1992 Dept. Nat. Rscs. p. 84

NE Minimum of 1,800 gallons or 1.5 times largest container,

whichever is smaller. 1992 regs. Dept. Env. Qual. p. 13

NH 1,000 gal. or 100% of largest tank if none exceeds 1,000 gallons. Rules/regs. p. 13

ND No specifics. Telcon Barry Coleman 701 328 4756

OH Applicator responsible for containing spills to pad. Telcon Jim Belt 614 728 6987

SD Sufficient capacity & ar ea to contain discharge from largest container/application system operated within and prevent spillage into unprotected area. Minimum capacity 250 gals. 1992 Pesticide Rules p. 447/13/2006 DRAFT Containment EA, page 154 State Standard Comment Source

VT 125% of largest mobile container. 1991 Dept. Ag. p. 64

WA 125% of largest container/equipment up to a maximum of 1,500 gallons. 1997 rules DA p. 12-13

WV Minimum of 250 gallons, and must provide 125% of largest container or vehicle operated in area. Title 61 rules p. 3

WI Large enough to contain spillage from all portions of vehicle involved in loading. Minimum size 10’ by 10’ with curb, 15” by 15” if only slope is used w/o curb. Administrative Code p. 87/13/2006 DRAFT Containment EA, page 155 

### Appendix D: Overview of Current Federal and State Regulations

The storage of pesticides in bulk quantities is regulated by an interrelated combination of federal regulations, state regulations, market forces, and public pressures. The development of specific containment regulations will alter the regulatory ba seline and will correct deficiencies within the current regulatory scheme, as summarized below.

D.1 Federal Regulations

Secondary containment for bulk pesticide storage c ontainers and containment pads to be used in conjunction with pesticide dispensing activities ar e not directly regulated by federal statutes. However, federal regulations or laws do indirect ly provide significant incentives to properly manage pesticide storage, including c onstruction of containment structures.

The federal law providing the greatest incentive to install such structures is the Comprehensive Environmental Response, Compensation, and Li ability Act (CERCLA) and its subsequent amendments. CERCLA’s liability requirements make operators; owners; and, in some cases, lenders liable for cleanup costs and envir onmental damages due to pollution. Owners and operators reduce their liability through safer operating procedures that reduce the potential for

release into the environment.

Moreover, lenders are highly sensitive to CERCL A liability exposure and will not make loans on collateral that they perceive may become contam inated and then go into default, leaving the lender responsible for the cleanup. Thus, to obt ain loans, pesticide dealers must exhibit improved environmental risk management. The significance of this is exemplified through recent actions by the American Bankers Associa tion’s Agricultural Bankers Division to develop a handbook to provide guidance to bankers on ex ercising environmental “due diligence” and assessing environmental risk. The ABA handbook, Agricultural Lenders Guide to Environmental Liability (1990), sends a strong message to ag ribusiness to minimize bankers’ and their own exposure to environmental risks/damages if they wish to continue to have access to debt financing.

At the time of the proposed rule, the existing re gulations regarding procedures for storage and disposal of pesticides and pesticide containers were listed under Part 165 of Title 40 of the Code of Federal Regulations (40 CFR Part 165). In March 1995, as part of President Clinton’s initiative to streamline regulat ions, Part 165 was deleted as unn ecessary (60 FR 32094). Subpart A contained scope and definitions. Subpart B dealt with EPA’s disposal of suspended and canceled pesticides, and EPA has completed dis posal of all pesticides for which it was responsible under these regulati ons. Subparts C and D containe d recommended procedures for storage and disposal of pesticid e containers. These subparts were superseded by the passage of the Resource Conservation and Recovery Act in 1976. FIFRA Section 19, as revised in 1988 and 1996, contains authority for EPA in the area of pesticide storage and disposal, and the final pesticide container and containment regulations promulgated are being in serted into a newly

established Part 165.7/13/2006 DRAFT Containment EA, page 156 Part 165 of the Code of Federal Regulations contained recommended pro cedures and criteria for the storage of pesticides and pesticide containers (40 CFR §165.10). Secondary containment

was addressed as follows for storage sites (§165.10(b)):

“...Where warranted, drainage from the site s hould be contained (by na tural or artificial barriers or dikes), monitored...”

This was only a recommendation, rather than a requirement, and, by itself, probably had limited effect on the use of secondary c ontainment in bulk storage areas.

Other federal regulations that influence pesticide storage activ ities include the Occupational Safety and Health Act (OSHA), the Effluent Limitations Guid elines and Standards under the Clean Water Act, the Environmental Planning and Community Right-to-Know Act (EPCRA), and the Resource Conservation and Recovery Act (RCRA). OSHA, in general, outlines safety standards and guidance for worker safety at pesticide storage faci lities. The effluent guidelines

establish limitations on the pollutants discharged into U.S. wate rs from industrial point sources, including pesticide formulating, packaging, and repackaging (refil ling) establishments. EPCRA was enacted as part of the S uperfund Amendments and Reauthoriz ation Act of 1986 (SARA). Its purpose is to alert communities a bout dangerous chemicals present in their area and to plan for emergency releases before they happen. In the ca se of pesticides, this could cause some dealers to install secondary containment, although such ac tion is not specifically required. This law was prompted by such disastrous pesticide release incidents as in Institute, West Virginia, and Bhopal, India. RCRA has a lesser influence on st orage except that contaminated soil resulting from a pesticide storage tank release or other pesticide spill could be a RCRA waste (40 CFR §261.33(d)). Secondary containment and/or containment pads would reduce the quantity of waste generated from cleanup of a release.

The overall effect of these federal regulations cannot be documented. However, they do represent a set of factors that en courage installation of some cont ainment structures for pesticide bulk storage and for dispensing activities.

D.2 State Regulations

By October 1998, 19 states had promulgated containm ent regulations for bulk pesticide storage. These states are Colorado, Illi nois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, North Dakota, Ohio, South Dakota, Vermont, Washington, West Virginia, and Wisconsin. In a ddition to the states with existing regulations, Massachusetts and North Carolina have draft regu lations pending. A summary of regulations in these states is provided in Appendix C, base d on a comprehensive review conducted by EPA’s Office of Pesticide Programs in January 1998.

For purposes of this analysis, it is assumed that a ffected facilities in the 19 regulated states will

not incur additional costs as a result of federal re gulations, unless it is evident that the states’ regulations do not address a genera l federal requirement. Rather, it is assumed that the affected

facilities have incurred or will soon incur costs as a result of state regulations. Facility-level costs are calculated for the two states with pendi ng regulations since facilities in these states are7/13/2006 DRAFT Containment EA, page 157 expected to incur costs as a result of the fe deral regulations prior to enactment of state regulations.

A review of the regulations promulgated by severa l states indicates that there are differences between states regarding the volum e of pesticides in one containe r that triggers “bulk” storage criteria, differences in the site activity that triggers compliance, differences in secondary containment requirements (for example, differe nces in the capacity required for secondary containment structures), differences in ope rational containment pad requirements, and differences in the entities to be regulated. Adju sted against the number of facilities with bulk pesticide storage in each state based on commerc ial, state, and government business census data, facilities in the 19 states with containment regul ations (4,220 facilities) represent approximately 84 percent of total number of bulk de alers (5,040) in the United States.

Table D.1. State Regulations of Bulk Pesticide Storage

State Secondary

Containment

Required Operational Containment Pad(S) Required Last Revision

Colorado Yes Yes 1992

Illinois Yes Yes 1991

Indiana Yes Yes 1993

Iowa Yes Yes 1991

Kansas Yes No b 1985

Kentucky Yes Yes 1998

Louisiana Yes No b 1984

Michigan Yes Yes 1993

Minnesota Yes Yes 1989

Missouri Yes Yes 1992

Nebraska Yes Yes 1992

New Hampshire Yes Yes 1985

North Dakota Yes No b 1992

Ohio Yes Yes 1991

South Dakota Yes Yes 1992

Vermont Yes Yes 1992

Washington Yes Yes 1994

West Virginia Yes Yes 1993

Wisconsin Yes Yes 1989

Massachusetts a Yes Yes TBD

North Carolina a Yes Yes TBD
Source: Regulatory Review conducted by EPA’s Office of Pesticide Programs, Pesticide Management, and Disposal Staff (January 1998) from personal communications with various state agency personnel; review of state regulations.

a Regulations pending.

b Regulations do not specify operational pad, but do require secondary containment for storage/handling of bulk pesticide, defined as any container greater than 55 gallons.7/13/2006 DRAFT Containment EA, page 158 Some state regulations, however, do not adequa tely address all federal requirements. For example, Louisiana and North Dakota have prom ulgated containment regulations that do not strictly meet EPA’s containment pad requirements. Louisiana’s containment regulations apply to handling facilities as well as storage facilities . However, the regulati ons specify only immediate notification of spills, and not construction requi rements. Requirements in North Dakota do not specifically mention containment pads, although the regulations specify that “bulk storage containers and loading areas must be construc ted and located on a site in a manner so that pesticides will not contaminate streams and water supplies.” Therefore, co sts are calculated to construct pads that meet federa l requirements in these states.

In addition, nine states have regulations that may not be consistent with EPA’s recommended containment material: three states (Minnesota, Vermont, and Wisconsin) sp ecifically allow earth or asphalt secondary containment with liners. Six other states (Kansas, Louisiana, Missouri, North Dakota, Ohio, West Virginia) do not spec ify construction materi al but give general performance standards that could be met by lined earth or asphalt.

Pesticide containment regulations in Minnesota, Vermont, and Wisc onsin are virtually identical, specifying that when earth or asphalt are used, bo th the walls and base of the containment must be lined with reinforced concrete, a synthetic li ner, inorganic soil, ferro us metal, or stainless

steel. 73 No facilities have been id entified in these three states that store pesticides with lined earth or asphalt secondary containment; however , such containment structures are used for fertilizer storage. No problems of leakage or sp ills have been noted from the fertilizer storage, and state representatives have stat ed a policy that future pesticid e storage facilities would not be approved for use with lined earth or asphalt. Facilities in Vermont currently store only fertilizer in such containment structures. Representatives would not necessarily ru le out approval of a future pesticide bulk storage facil ity; however, they would evaluate approval of such a facility on a case-by-case basis, considering the size, geology, and hydrology of the area.

State regulations in Kansas, Loui siana, Missouri, North Dakota, Ohio, and West Virginia were

also reviewed. These states have containmen t regulations that do not specify containment

material but define the characte ristics of secondary containment walls in such a way that they could be satisfied by lined earth or asphalt. N one of these six states have existing pesticide storage facilities that use earth or asphalt cont ainment, but most have a few fertilizer storage

facilities with lined earth containment. Ohio estimates that less than 5 percent of fertilizer facilities use earthen containment, but they are inspected and must ensure permeability less than

1 x 10 -5 cm/sec. It is possible that Ohio offici als would approve future pesticide storage

containment constructed of earth if it could be proven to be im pervious. Missouri does not allow asphalt, and estimates that 5 percen t of its fertilizer f acilities are contained within earthen walls. Such facilities protect large outdoor tanks (up to 1 million gall ons) and are required to have a containment capacity of 125 percen t of the volume of th e largest tank within the containment.

73 Requirements in these states include: (1) containment walls that withst and a full hydrostatic head of any released liquid; (2) walls must be lined and protected from erosion, and must have a horizontal to vertical slope of at least 3 to 1, unless a steeper slope is consiste nt with good engineering practice; (3) walls may not exceed 6 feet in height above the interior grade; and (4) liners may be concrete, synthetic (minimum thickness 0.8 mm, chemically compatible, photo-resistant and puncture-resistant, with 12 inches of soil above and 6 inches below), or soil. Soil liners may be inorganic soil treated with bentonite clay. Specifications are given in the regulation for thickness, permeability, plasticity, and soil particle size.7/13/2006 DRAFT Containment EA, page 159 Louisiana, North Dakota, and Kans as stated that lined earth or asphalt would not be approved for pesticide containment structures. West Virginia would strongly discourage such a construction if it were proposed.

D.3 Business and Market Considerations

The combination of federal and state regulati ons, insurance considera tions, public relations, consumer demands, and business risks creates a business or market climate that encourages better stewardship of the distributi on and use of pesticides. One re sult of this is the increased adoption of such practices as secondary containment.

Many of the major registrants of pesticides (i ncluding Monsanto and BA SF) require secondary containment for bulk storage containers at facili ties that purchase their products in bulk. One major registrant, Syngenta, provides price incen tives and various types of insurance for its products if dealers have approve d bulk storage and rinsate pad containment. Some companies and associations have developed bulk storage guid elines for bulk pesticide handlers. Thus, many facilities in unregulated states will be in compliance with the proposed regulations because of manufacturers’ requirements. In addition, insurance companies pr ovide dealers with loss control surveys that suggest improved pesticide bulk storage practices (Tatman, 1991). While these business and market forces are real, the extent of their influence is uncertain.7/13/2006 DRAFT Containment EA, page 160 

### Appendix E: EPA’s Proposed Pe sticide Containment Standards

This Appendix describes the requirements to cons truct new and to retrofit existing containment structures and pads, as proposed in the 1994 Federal Register Notice of the Proposed Rule (EPA, 1994) Separate categories of the proposed requi rements included: (1) general requirements for containment structures; (2) secondary containm ent for stationary liquid bulk containers; (3) secondary containment for stationary dry bulk containers; (4) containment for pesticide dispensing areas; and (5) recordk eeping requirements. Several of these requirements have been

modified or eliminated from the final rule requirements following the public comment period and subsequent deliberations by the Agency.

Compliance with federal standard s was initially proposed within 2 years after publication of the final rule for new structures and within 10 year s for existing structures. An 8 year phase-in period was provided for existing co ntainment structures, during wh ich time “interim” standards would apply rather than the “full” standards. The phase-in period was to begin 24 months after publication of the final rule in the Federal Register. Full standards for existing facilities, which

included structural features that might not be readily incorpor ated without major modification, were to be required 10 years af ter the publication of the final rule. This compliance period represented one-half to two-thirds of the 15- to 20-year service lif e of an average well-built and

well-maintained containment structure.

E.1 General Requirements fo r Containment Structures

Certain general requirements affecting both seco ndary containment structures and containment pads did not differ between the interim and fu ll standards under the proposed rule. These included: (1) materials of construction; (2) stor mwater controls; (3) prot ection of appurtenances and containers; (4) anchoring of liquid bulk tanks; (5) ha ndling of collected pe sticide, spills, and rinsates; (6) presence of an attendant duri ng transfer of pesticid es; (7) inspection and maintenance; and (8) sealing of cracks and gaps.

General requirements applicable after the in terim period under the pr oposed full standards

included:

• Hydraulic Conductivity: To prevent pesticides from penetr ating into the concrete or other material of construction, a hydrauli c conductivity standa rd of <1 x 10 -6 centimeters per second (cm/sec) had to be met during the interim period, and a standard of <1 x 10 -7 cm/sec applied after the interim period would have expi red. Since even minor fractures or cracks would reduce the hydraulic conduct ivity of concrete below the proposed standard, surface sealants or coatings, liners bene ath the structure, or some comb ination thereof had to be used

to meet the full standard.

• Appurtenances: No appurtenances, discharge outlets, or gravity drains through the base or

wall of the containment structure were allowe d under the full standards, and appurtenances were to be configured so that leakage can be readily observed (not applicable during the interim period).7/13/2006 DRAFT Containment EA, page 161 E.2 Secondary Containment for Stat ionary Liquid Bulk Containers

The full standards for new liquid bulk containment structures in the 1994 proposed rule specified that secondary containment struct ures not protected from precipita tion should have a capacity of at least 125 percent of the capac ity of the largest stationary bulk container within the containment unit, plus the volume displaced by other containers and appurtenances. If the structure were protected from pr ecipitation (e.g., an indoor storage facility or an outdoor storage area with a roof), capacity would have had to be at least 110 percent of the capacity of the largest bulk container plus the volume displaced by other containers and appurtenances.

For existing structures, the proposed capacity requ irements for secondary containment structures

were set lower under the interim standards than under the full standards. Under the interim standards, a secondary containm ent area protected from precipita tion would have been required to have a minimum capacity equal to 100 percent of the capacity of the largest stationary bulk container within the area plus the displaced volume. If the container was not protected from precipitation, the proposed rule specified a minimum capacity equal to 110 percent of the capacity of the largest stationary container within the area plus the displaced volume of other containers and appurtenances. This was subseq uently referred to as the 100/110 standard for interim period facilities. Follo wing expiration of the interim pe riod, the proposed full standard would have been more stringent at 110/125 (i .e., the capacity requirement for the largest container within a secondary containment area wa s proposed at 110 percent for a protected area and 125 percent for an unprotected area).

Under the full standards, the rule proposed that the seconda ry containment area allow for the observation of leakage from the base of any enclosed stationary bulk container. Two types of containers are commonly used by pesticide refil ling and dispensing facilities: cone-shaped and flat bottomed containers. Leakage from cone-shaped containers is easily observed. Flatbottomed containers, on the other hand, rest flush with the floor of the containment area, and would have required a method for leak detection to meet the full standards. To comply with the proposed rule, flat-bottomed containers would ha ve needed to be elev ated through the use of legs, skids, raised beds of gravel, or other methods to meet the full standards. During the interim period, any tanks not easily observed for leakage were to be inventorie d and reconciled each month. All stationary bulk containers were to be anchored to prevent flotation, should the containment area become completely filled with liquid. This requirement applied under both the

interim and full standards.

E.3 Secondary Containment for Stationary Dry Bulk Containers

The proposed full standards for new dry bulk containm ent structures required capacity of at least 100 percent of the volume of the largest stationary dry bulk cont ainer within the containment, plus the volume displaced by other containers and appurtenances. No minimum capacity requirements were proposed for existing secondary containment structures for stationary dry bulk containers during the interim period.

E.4 Secondary Containment for Pesticide Dispensing Areas

For existing and new pesticide dispensing ar eas, the proposed standards required that containment pads have a minimum holding capac ity of 1,000 gallons, or, if no equipment used7/13/2006 DRAFT Containment EA, page 162 on the pad exceeded 1,000 gallons, at least 100 per cent of the capacity of the largest equipment used on the pad. All existing and new pads also had to have a means of removing and recovering spilled, leaked, or discharg ed material and rainfall.

The proposed rule required that, after the interi m period, all pads had to slope toward a liquidtight sump, maintaining the requirement for rem oval and recovery. Manually activated pumps were allowed, but pumps lacking automatic overflow cutoff switches were prohibited.

The rule proposed three conditions under whic h a pesticide dispensing area would be exempt from the containment pad requirements: (1) if th e only pesticides handled in the dispensing area are pesticides that would be gase ous if released at 20°C and at s ea level; (2) if the only pesticide containers refilled within the pesticide dispensi ng area are stationary bulk containers protected by a secondary containment structure meeting the standards; or (3) if the pesticide dispensing area is used solely for dispensing pesticides from a railcar that is not a stationary bulk container.

E.5 Recordkeeping Requirements

Recordkeeping requirements under both the prop osed interim and full standards would have required that records be kept of each inspec tion and all maintenance for each containment structure and stationary bulk container and its appurtenances . Also required under both the

interim and full standards were records of the duration for whic h a pesticide remained in the same location in any bulk container not protected by a secondary containment area. Written confirmation of hydraulic conductiv ity and pesticide-resistance statements were required under both the interim period and full standards, coveri ng the entire period duri ng which the referenced product was used at a facility. Records of i nventory and reconciliati on, kept only during the interim period for tanks not readily observable for leakage, were al so required under the proposed rule.7/13/2006 DRAFT Containment EA, page 163 E.6 Stationary Containers Included

In the proposed rule, stationary bulk containers designed to hold undivided quantities of agricultural pesticides greater th an 793 gallons of liquid pestic ides or greater than 4,409 pounds of dry pesticides were subject to the containment regulations. The rule did not require containers with capacity less than these volume/weight th resholds to be protected with a secondary containment unit. A stationary bulk container includes any bulk contai ner, including transport

vehicles that are fixed or remain at a facility for at least 30 consecutive days.

Table E.1. Containment Proposed Rule Options Costs (2005$)

Regulation Option 1 Option 2 Option 3

Costs General Requirements for

Containment Structures a 361,223 365,442

Secondary Containment for Stationary Liquid Bulk

Containers 6,247,546 18,823,259

Secondary Containment for Stationary Dry Bulk Containers 679,907 1,332,786

Secondary Containment for Pesticide Dispensing Areas b 5,668,247 14,049,479

Recordkeeping Requirements Regulatory Option 1 is no change in the

containment requirements, with no

additional cost.

Incorporated in containment cost estimates.
Total Costs 0 12,956,923 34,570,965 Benefits $9.3 million-$ 15.6 million

a This is the cost under the proposed rule of complying pesticide container requirements, including having containers anchored or elevated to prevent floatation in the event th at the secondary containment unit fills to capacity with liquid. If not elevated, all containers would be required to be inventoried and reconciled monthly to detect leakage. The General Requirements for Containment Structures in the proposed rule also includes many other provisions, such as standards for secondary containment construction.

b For facilities that would be required to install both new bulk storage secondary containment and new containment pads for dispensing areas, the Regulatory Impact Analysis for the proposed rule reported the costs of both together.

The combined costs are included here under Sec ondary Containment for Bulk Storage Containers.7/13/2006 DRAFT Containment EA, page 164 

### Appendix F: Comparison of the Propos ed and Final Containment Regulations

Table F.1 presents a comparison of the propos ed and final pesticide bulk containment regulations. Compared to the proposed standard s, the most significant changes under the final

rule are as follows:

• The final rule deletes hydrau lic conductivity standards and associated recordkeeping and inventory reconciliation.

• The final rule deletes the interim standards, and establishes a set of standards for existing structures and more stringent fu ll standards for new structures.

• The final rule adjusts capacity standa rds for new and existing structures.

• The final rule reduces recordkeeping responsibilities.7/13/2006 DRAFT Containment EA, page 165Table F.1. Comparison of Proposed and Final Standards for New Containment StructuresCriteriaProposedFinalFacilities§165.141Facilities including refilling establishments, customblenders, and applicators for compensation.Same.Bulk Containers§165.142aAll stationary bulk containersin affected facilities musthave secondary containment except emptied tanks, rinsateand wash water tanks, gas pesticide tanks, and nonpesticide use tanks.Same.PesticideDispensing Areas§165.142bPesticide dispensing areas include: (1) dispensing orrefilling pesticides from a stationary bulk container for anypurpose; (2) dispensing from a non-stationary bulkcontainer for refilling; (3) emptying, cleaning, or rinsingrefillables; (4) filling a stationary bulk container from atransport vehicle.Same, except for: (4) filling arefillablecontainer from atransport vehicle.Define New§165.144Begin installation at least 3 months after final rule ispublished.Same.Material§165.146aReinforced concrete or other rigid material to withstand fullhydrostatic head. Asphalt and earthen material prohibited.Same.HydraulicConductivity§165.146a3Interim period standards: 1 X 10-6cm/sec.Permanent standards: 1 X 10-7.cm/sec.Delete all references to specific hydraulic conductivitystandard.Sealants§165.146a3Sealants can be used to achieve hydraulic conductivitystandard.Delete tests and five-year replacement costs from cost analysis.Facility may voluntarily choose sealants to achieve liquidtightness.Material§165,146a(4)Pesticide resistant. Pesticide compatible.Design - Stormwater§165.146b(1)Prevents water from seeping or flowing onto it fromadjacent land structures during a 25-year, 24-hour rainevent.Has sufficient freeboard to prevent water from seeping orflowing onto it from adjacent land.Appurtenances§165.146b(2) & (3)Appurtenances protected, no outlets or drains at base.Configured so leaks can be observed.Same.Operation§165.146c(1)-(4)Prevents escape of pesticide; all transfers attended; lockablevalves; cleanup no later than end of day of spill.Same.7/13/2006 DRAFT Containment EA, page 166Table F.1. Comparison of Proposed and Final Standards for New Containment Structures (Continued)CriteriaProposedFinalInspection§165.146d(1)Monthly when pesticides are stored or dispensed. Same.Maintenance§165.146d(2)-(3)Repair cracks or gaps, removal of pesticide. No storageuntil repaired.Same, except deletion of reference to hydraulic conductivitystandard.Liquid Capacity§165.148aInterim: 110 percent / 100 percent (outdoor/indoor)Permanent: 125 percent / 110 percent (outdoor/indoor)Delete reference to interim period. Retain 110 percent / 100percent for permanent standard.Design - Elevation &Anchoring§165.148bAssured by elevation of bulk container on legs, gravel, etc.Anchored to prevent flotation.Delete reference to interim period. Delete requirement forelevated tanks. Retain requirement to anchor tanks to preventflotation.Inventory Reconciliation§165.148cMonthly during interim period. Delete.Dry Bulk Capacity§165.150a - B100 percent of largest container plus displaced volume. Protected from wind/rain,on pallets or concrete platform toprevent water in or under the pesticide. Enclosed by 6-inchhigh curb that extends at least 2 feet beyond the perimeter ofcontainer.Pad Capacity§165.152a1,000 gallons or 100 percent of largest container.750 gal or 100 percent of largest container.Pad Design§165.152bIntercept spills, base sloped toward liquid-tight sump;means of removing discharged material or rainfall. Surfaceextends completely beneath any container on pad excepttransport vehicles, for which pad must accommodatecoupling devices.Same.Integrated Systems§165.153Pads and secondary containmentunits may be combined. Same.Segregation§165.153Multiple pesticides can be stored in same containment. Same.Compliance Date§165.1562 year (interim) / 8 year (permanent) Delete reference to interim period. Three years for existingstructures to meet critical standards; 3 years for new structuresto meet full standards.Recordkeeping andInspection §165.157Monthly inspection. Maintain records for 3 years:inventory reconciliation during interim period; nonstationary bulk tanks duration at facility; hydraulicconductivity.Delete recordkeeping for inventory reconciliation andhydraulic conductivity. Retain monthly inspection and 3-yearrecordkeeping for inspection and non-stationary bulk tanks.7/13/2006 DRAFT Containment EA, page 1677/13/2006 DRAFT Containment EA, page 168Appendix G. Estimated Number of Affected FacilitiesTable G.1. Estimated Number of Agricultural Pesticide Refillers by State, 1992 *1992 American Business Information’s Lists of 9.3 Million Businessesa1992 Census ofWholesale TradeFarm Supply Dealers(SIC 5191.02)Fertilizer Dealers(SIC 5191.14)Agchem Dealers(SIC 5191.02 +5191.14)Farm Supply(SIC 5191)bStateStateReg.(Y/N)# Estab.% Total# Estab.% Total# Estab.% Total# Estab.% Total# of DealersEstimatedby StateExpertsTotalAgriculturalPesticide Refillers(Adjusted)cAlabama N 215 3.69% 178 1.71% 393 2.42% 303 1.73% 393AlaskaN10.02%10.01%20.01%90.05%2Arizona N 24 0.41% 72 0.69% 96 0.59% 181 1.04% 96ArkansasN1482.54%1481.42%2961.82%3492.00%350d350California N 32 0.55% 283 2.72% 315 1.94% 1129 6.46% 315ColoradoY581.00%1831.76%2411.48%2001.14%241Connecticut N 6 0.10% 47 0.45% 53 0.33% 57 0.33% 53DelawareN70.12%220.21%290.18%370.21%29DC N 0 0.00% 0 0.00% 0 0.00% 1 0.01% 0FloridaN1642.81%3393.26%5033.10%6653.81%503Georgia N 240 4.12% 287 2.76% 527 3.25% 510 2.92% 527HawaiiN00.00%260.25%260.16%500.29%26Idaho N 57 0.98% 147 1.41% 204 1.26% 203 1.16% 204IllinoisY3475.96%9098.73%1,2567.74%10335.91%1,256Indiana Y 188 3.23% 547 5.26% 735 4.53% 627 3.59% 500e500IowaY2914.99%5755.53%8665.33%9535.46%866Kansas Y 158 2.71% 450 4.32% 608 3.75% 304 1.74% 1,799f608KentuckyY3005.15%1951.87%4953.05%4212.41%495Louisiana Y 148 2.54% 139 1.34% 287 1.77% 284 1.63% 287MaineN200.34%210.20%410.25%470.27%41Maryland N 53 0.91% 107 1.03% 160 0.99% 141 0.81% 160MassachusettsP130.22%500.48%630.39%1080.62%63Michigan Y 158 2.71% 253 2.43% 411 2.53% 365 2.09% 4117/13/2006 DRAFT Containment EA, page 169Table G.1. Estimated Number ofAgricultural Pesticide Refillersby State, 1992 (Continued)1992 American Business Information’s Lists of 9.3 Million Businessesa1992 Census ofWholesale TradeFarm Supply Dealers(SIC 5191.02)Fertilizer Dealers(SIC 5191.14)Agchem Dealers(SIC 5191.02 +5191.14)Farm Supply(SIC 5191)bStateStateReg.(Y/N)# Estab.% Total# Estab.% Total# Estab.% Total# Estab.% Total# of DealersEstimatedby StateExpertsTotalAgriculturalPesticide Refillers(Adjusted)cMinnesotaY1773.04%5004.80%6774.17%6743.86%1,335g677Mississippi N 201 3.45% 167 1.60% 368 2.27% 257 1.47% 438h438MissouriY2504.29%5635.41%8135.01%7074.05%813Montana N 62 1.06% 91 0.87% 153 0.94% 146 0.84% 580i153NebraskaY1552.66%3393.26%4943.04%5293.03%700j700Nevada N 9 0.15% 10 0.10% 19 0.12% 45 0.26% 19New HampshireY60.10%150.14%210.13%230.13%21New Jersey N 19 0.33% 59 0.57% 78 0.48% 220 1.26% 78New MexicoN200.34%490.47%690.43%880.50%69New York N 124 2.13% 147 1.41% 271 1.67% 642 3.68% 271North CarolinaP2654.55%4123.96%6774.17%5533.17%996k677North Dakota Y 69 1.18% 252 2.42% 321 1.98% 161 0.92% 321OhioY2223.81%3823.67%6043.72%5583.19%660l660Oklahoma N 131 2.25% 232 2.23% 363 2.24% 293 1.68% 370m370OregonN520.89%1231.18%1751.08%2691.54%175Pennsylvania N 103 1.77% 155 1.49% 258 1.59% 471 2.70% 216n216Rhode IslandN10.02%50.05%60.04%230.13%6South Carolina N 126 2.16% 141 1.35% 267 1.64% 214 1.23% 267South DakotaY560.96%1471.41%2031.25%2041.17%600o300Tennessee N 232 3.98% 194 1.86% 426 2.62% 356 2.04% 225p225TexasN3796.50%6526.27%1,0316.35%1,3397.67%1,500q1,500Utah N 39 0.67% 30 0.29% 69 0.43% 84 0.48% 69VermontY230.39%200.19%430.26%510.29%43Virginia N 172 2.95% 212 2.04% 384 2.37% 322 1.84% 384WashingtonY801.37%2051.97%2851.76%4062.32%285West Virginia Y 40 0.69% 20 0.19% 60 0.37% 87 0.50% 140r1407/13/2006 DRAFT Containment EA, page 170Table G.1. Estimated Number ofAgricultural Pesticide Refillersby State, 1992 (Continued)1992 American Business Information’s Lists of 9.3 Million Businessesa1992 Census ofWholesale TradeFarm Supply Dealers(SIC 5191.02)Fertilizer Dealers(SIC 5191.14)Agchem Dealers(SIC 5191.02 +5191.14)Farm Supply(SIC 5191)bStateStateReg.(Y/N)# Estab.% Total# Estab.% Total# Estab.% Total# Estab.% Total# of DealersEstimatedby StateExpertsTotalAgriculturalPesticide Refillers(Adjusted)cWisconsinY1692.90%2782.67%4472.75%7154.09%447Wyoming N 17 0.29% 28 0.27% 45 0.28% 55 0.31% 45Totals5,827100%10,407100%16,234100%17,469100%16,795Totals may not add due to rounding. Y = State regulations as of 2002. P = Pending proposed regulations.State Reg. indicates whether or not the state has statecontainment regulations. * The estimated number of agriculturalpesticide refillers is from the proposed EPA containment ruleRIA, which is based on 1992 data. Byusing these data, EPA assumes that the number of facilities in the industry did not change.aFor this analysis based on 1992 data, SIC codes were used instead of NAICS codes for convenience. American Business Information data was identified as the onlysource of information found that provides separate data for farm supply and fertilizer dealer categories within SIC 5191.bSIC 5191 at the 4-digit level includes all establishments primarily engaged in the wholesale distribution of animal feeds, fertilizers, agricultural chemicals, pesticides,seeds, and other farm supplies, except grains. Thus, many ofthe establishments listed in SIC 5191 do not handle pesticides.cState estimates where available; otherwise, SIC 5191.02 + SIC 5191.14 from the American Business Information Lists of 9 Million Businesses, 1990.dFlowers, Plant Board, Little Rock, AR; Registered Use Pesticide (RUP) dealers, with a fewnon-RUP dealers in the state.eScott, IN State Chemist’s Office.fBreedlove, KS Department of Agriculture.gNarikawa, MN Department of Agriculture; includes all pesticide storage facilities, including those handling non-agricultural pesticides in small packages of less than 56gallons. Estimates by SIC code are believed to more closelyrepresent agricultural pesticide refillers (agchemical dealers).hFulton, MS Department of Agriculture and Commerce;estimate reflects Registered Use Pesticide dealers.iGingery, MT Department of Agriculture; includes both agricultural and industrial pesticide dealers. Estimates by SIC code arelikely more representative of agriculturalpesticide refillers (agchemical dealers).jHeitman, Environmental Control Department, Lincoln, NE; estimate represents fertilizer/agricultural dealers.kDixon, NC Department of Agriculture; estimate reflects number of licensed commercialpesticide dealers in NC. Since this estimate includes non-agdealers, estimatesby SIC are likely more representative of agricultural pesticide refillers (agchemical dealers).lBeal, OH Department of Agriculture.mChada, OK Department of Agriculture; Restricted Use Pesticide dealers.nUram, PA Department of Agriculture; estimate reflects 25% of the 864 licensed pesticide dealers in PA. Remaining 75% represent stores such as K-Mart that sell nonrestricted pesticides.oBerven, SD Department of Agriculture; estimate likely includesindustrial and other non-ag dealers, so is adjusted downward for state total.pFoster, TN Department of Agriculture; estimate reflects 75% of300 Restricted Use Pesticide dealers as agricultural; remaining25% non-ag.qRenchie, Texas Department of Agriculture.rFrank, WV Department of Agriculture; estimate reflects Registered Use Pesticide dealers.7/13/2006 DRAFT Containment EA, page 171Table G.2. Regulatory Compliance Baseline for Agricultural Pesticide Refillers withBulk Pesticide Storage ***SecondaryContainmenteRoofed or IndoorStorageContainment PadsStateState Reg(Y/N)Adjusted #AgchemDealersaPercentDealers withBulkbNo. of bulkdealers(>55 gal.)cTotal bulkdealers(>500 gal.)dWith WithoutWithfWithoutgWithhWithoutiAlabama N 393 10% 39 35 14 21 11 25 9 26AlaskaN210%00000000Arizona N 96 10% 10 9 4 5 3 6 2 7ArkansasN35011%j403614221125927California N 315 25% 79 71 28 43 21 50 18 53ColoradoY24125%605454*01638540Connecticut N 53 10% 5 5 2 3 2 4 1 4DelawareN2910%33121212D.C. N 0 10% 0 0 0 0 0 0 0 0FloridaN50310%5045182714321134Georgia N 527 10% 53 47 19 28 14 33 12 35HawaiiN2610%32111112Idaho N 204 10% 20 18 7 11 5 13 5 14IllinoisY1,256100%k1,2501,1251,125*03387881,1250Indiana Y 500 50%l250 225 225*0 68 158 225 0IowaY86692%m800720m720*02165047200Kansas** Y 608 26%n157 141 141*0 42 99 35 106KentuckyY49525%124111111*033781120Louisiana** Y 287 25% 72 65 65*0 19 45 16 48MaineN4110%44221313Maryland N 160 10% 16 14 6 8 4 10 4 11MassachusettsP6310%66232425Michigan Y 411 73%o300 270 270*0 81 189 270 0MinnesotaY67775%p505455455*01363184550Mississippi N 438 5%q23 21 8 13 6 15 5 16MissouriY8139%r756868*020476807/13/2006 DRAFT Containment EA, page 172Table G.2. Regulatory Compliance Baselinefor Agricultural Pesticide Refillers with Bulk Pesticide Storage (Continued)SecondaryContainmenteRoofed or IndoorStorageContainment PadsStateState Reg(Y/N)Adjusted #AgchemDealersaPercentDealers withBulkbNo. of bulkdealers(>55 gal.)cTotal bulkdealers(>500 gal.)dWith WithoutWithfWithoutgWithhWithoutiMontana N 153 34%s53 47 19 28 14 33 12 35NebraskaY70050%350315315*0952213150Nevada N 19 10% 2 2 1 1 1 1 1 2New HampshireY2110%222*01110New Jersey N 78 10% 8 7 3 4 2 5 2 5New MexicoN6910%76242425New York N 271 25% 68 61 24 37 18 43 15 46North CarolinaP67710%6861243718431546North Dakota** Y 321 30%t96 86 86*0 26 60 22 65OhioY66044%u292263263*0791842630Oklahoma N 370 14%v50 45 18 27 14 32 11 34OregonN17510%1816610511412Pennsylvania N 216 25% 54 49 20 29 15 34 12 37Rhode IslandN610%11010101South CarolinaN26710%27241014717618South Dakota Y 300 40%w120 108 108*0 65w43 108 0TennesseeN2253%x65232414Texas N 1,500 10%y150 135 54 81 41 95 34 101UtahN6910%76242425Vermont Y 43 16%z7 6 6*0 2 4 6 0VirginiaN38410%383514211125926Washington Y 285 25% 71 64 64* 0 19 45 64 0West VirginiaY1402%aa333*012307/13/2006 DRAFT Containment EA, page 173Table G.2. Regulatory Compliance Baselinefor Agricultural Pesticide Refillers with Bulk Pesticide Storage (Continued)SecondaryContainmenteRoofed or IndoorStorageContainment PadsStateState Reg(Y/N)Adjusted #AgchemDealersaPercentDealers withBulkbNo. of bulkdealers(>55 gal.)cTotal bulkdealers(>500 gal.)dWith WithoutWithfWithoutgWithhWithoutiWisconsin Y 447 35%ab154 139 139*0 7ab132 139 0WyomingN4510%54221313Totals16,7955,6015,0404,5484911,5103,5304,206834States w/ regsStates w/o regs9,0717,7244,6889134,2208204,22032804911,2642462,9565744,001205219615Totals may not add due to rounding. Y = State regulations. P = Pending regulations.*Secondary containment standards required by state regulations. ** Stateregulations do not specify standards for pads. *** The estimatesof compliance and the number of agricultural chemical dealersare based on the proposed EPAcontainment rule RIA. For the final rule the estimates of compliance were updated based on discussions with State agencies anda review of State agency information.aAdjusted # of dealers from Table G.1.bRegional factors used if state estimatenot available; Corn Belt states= 50%, other major ag states = 25%, remaining states =10%.cThe baseline estimate of bulk facilities based primarily on datafrom states which regulate all undivided quantities greater than 55 gallons as bulk.dBased on the estimate in the proposed EPA containment rule RIA that 90% of all bulk facilities store in undivided quantities greater than 500 gallons.eAssumes 100% of facilities in states regulating bulk storage (>250 gallons) have secondary containment units. In unregulatedstates, 40% of bulk facilities are assumedto have secondary containment.fState estimates of roofed or indoor facilities range from 5% to60%; figures in this column are based on the estimates used inthe proposed EPA containment rule RIA,with a value of 30% unless footnoted.gTotal bulk dealers less number of facilitieswith roofs.hAssumes 100% of facilities in state with mixing/loading or operational pad regulations meet EPA’s containment pad requirements; otherwise, we estimate 25% offacilities currently have pads, based on estimates used in the proposed EPA containment rule RIA.iTotal bulk dealers less number of dealers with mixing/loading or containment pads.jFlowers, Plant Board, Little Rock, AR; 40 to 50 bulk “sites”registered by manufacturer; some dealers may have more than one “site.”kIllinois Fertilizer and Chemical Association (1991). Registeredagrichemical facilities. Adjusted to exclude formulators.lScott, State Chemist’s Office, IN; estimate reflects 50% of pesticide dealers have bulk facilities.mEckerman, IA Department of Agriculture; 813 regulated facilities; 13 are formulators. All facilities are greater than 250 gallons. Adjusted to exclude formulators.nKansas Department of Agriculture data base; adjusted to exclude formulators.oDarling, MI Department of Agriculture, midpoint of estimated 200 to 400 bulk facilities.pNarikawa, MN Department of Agriculture; 1990 pesticide storage survey results indicate 180 firms with containers from 56 to 499 gallons; 325 firms with containersgreater than 500 gallons.qFulton, MS Department of Agriculture and Commerce; 20 to 25 dealers with bulk facilities.rLeslie, MO Department of Agriculture; 50% of the estimated 150 bulk facilities handle only minibulks.sGingery, MT Department of Agriculture; 200 out of 580 agricultural and industrial pesticide dealers have bulk facilities.tPeterson, ND Department of Agriculture; 100 permanent bulk facilities; most are dealers and distributors; less than 5 solely commercial applicators.uBeal, OH Department of Agriculture; about 300 bulk facilities; afew may be non-agricultural. Adjusted to exclude formulators.vChada, OK Department of Agriculture; about 50 bulk storage facilities.7/13/2006 DRAFT Containment EA, page 174wBerven, SD Department of Agriculture; at least 150 facilities, ofwhich 80% are dealers. 60% of bulk storage facilities are indoors.xFoster, TN Department of Agriculture; one large distribution center for cooperatives; 5 or 6 other bulk facilities.yRenchie, TX Department of Agriculture; 7.5 to10% of pesticide dealers have bulk facilities.zRogler, VT Department of Agriculture; 6 or 7 facilities.aaFrank, WV Department of Agriculture; 2 or 3 facilities.abMorrison, WI Department of Agriculture, Trade and Consumer Protection; 250 facilities, including 10 manufacturers or formulators and 30 wood preservers.7/13/2006 DRAFT Containment EA, page 175 Table G.3. Number of Bulk Pest icide Containment Facilities to Install New Units and Pads*

Number of Affected Facilities

Item SmallSmall Facility MediumSmall Facility LargeSmall Facility Large Facility Total

Agricultural Pesticide Refillers a

Outdoor Liquid Bulk Storage: Secondary containment + containment pad

Number of affected facilities 270 46 5 3 324 b

Containment pad only

Number of affected facilities 200 34 4 2 240 b

Outdoor Liquid and Dry Bulk Storage: Secondary containment + containment pad

Number of affected facilities n/a 17 6 6 28 c

Indoor Liquid Bulk Storage: Secondary containment + containment pad

Number of affected facilities 116 20 2 1 139 b

Containment pad only

Number of affected facilities 86 15 2 1 103 b

Outdoor Non-bulk Storage: Small containment pad only

Number of affected facilities 561 n/a n/a n/a 561 d

Independent Aerial Applicators e

Outdoor Liquid Bulk Storage: Secondary containment + large containment pad

Number of affected facilities 6 9 1 n/a 16 f

Large containment pad only

Number of affected facilities n/a 7 3 n/a 10 f

Independent Ground Applicators e

Outdoor Liquid Bulk Storage: Secondary containment + medium containment pad

Number of affected facilities n/a n/a 5 n/a 5 f

Medium containment pad only

Number of affected facilities n/a n/a 3 n/a 3 f

Totals may not add due to rounding. * 2005 estimates based on the proposed EPA containment rule RIA.

a Distribution of agricultural pesticide refillers among sma ll, medium and large representative facilities assumes the following percent shares across all facilities: small-small (83.3%); medium-small (14.3%); large-small (1.5%); andlarge (0.9%) (see Table 3.4). Two exceptions made for “Outdoor Liquid and Dry Bulk Storage” and ‘Outdoor NonBulk Storage” are described under footnotes b and f, respectively.

b The number of agricultural pesticide refillers without se condary containment and pads is estimated at 491 facilities

and the number of facilities without cont ainment pads is estimated at 834 fac ilities (Table 3.2). Excluding the 491 facilities that require secondary containment units and pads, the remaining 343 facilities (834-491) will require containment pads only. Excluding the estimated 28 facilities that handle both liquid and dry pesticides, the distribution of the remaining 463 facilities between those th at require outdoor and indoor secondary structures is assumed at 70%-30% split (324 and 139 facilities, respectiv ely). Similarly, the distribution of the estimated 343 facilities that require containment a pad only, also assu mes a 70%-30% split between outdoor-indoor structures (240 and 103 facilities, respectively), and further assumes that aff ected facilities will use existing concrete floor as a base for building a containment pad.7/13/2006 DRAFT Containment EA, page 176 Table G.3. Number of Bulk Pest icide Containment Facilities to Install New Units and Pads (Continued)

c An estimated 175 agrichemical facilities handle, dispense or store bulk quantities of dry pesticides. It is assumed that 90% (158 facilities) of dry bulk facilities are located in eight states (IN, IL, IA, MI, MN, ND, OH, SD). Based on a review of containment regulations in these states, weighted against the number of liquid bulk facilities in these states, 140 facilities (89 percent) are in compliance. Among the facilities in the remaining states, it is assumed that 40% (7 facilities) are in compliance, given lack of better information. Therefore, an estimated 147 facilities have existing dry bulk storage structures and an estimated 28 facilities will need to construct new secondary units and pads. Assumes all dry bulk containment facilities are jointly located at facilities that also have liquid bulk storage. Assumed distribution: medium-small (60%); large-small (20%); and large (20%).

d An estimated 561 non-bulk facilities that may require pad construction based on the numb er of facilities with bulk liquid storage less than 500 gallons ( 5601-5040 facilities). See Table G.2.

e Distribution of agricultural commercial applicators among small, medium and large representative facilities is based on the assumption in the container rule EIA and assumes th e following percent shares across all facilities: small-small (39%); medium-small (56%); and large-small (5%) (EPA, 20 05b). The analysis assumes that no large agricultural commercial applicators exist. Only medium-small and larg e-small aerial facilities are assumed to be affected by containment pad requirements, with 70% and 30% shares of the affected facilities, respectively. Small-small facilities are not expected to engage in activities that require a pad. It is assumed that only large-small ground applicators are affected by containment pad requirements.

f The estimated number of agricultural commercial applicator facilities with bulk facilities is estimated at 160 aerial applicators and 50 ground applicators (s ee Table 3.2). Based on information fo r agricultural pesticide refillers, 90% of all facilities are estimated to be in compliance with th e secondary containment standards and 83% of all facilities are expected to be in compliance with the containment pa d standards. Therefore, an estimated 189 facilities have existing secondary containment, and an estimated 21 facilitie s (16 aerial applicators and 5 ground applicators) will need to construct new secondary units and pads. An estimated 13 facilities (10 aerial applicators and 3 ground applicators) will need to construct new containment pads onl y. It is assumed that only medium-small and large-small aerial facilities affected by containment pad requirements ; Small-small facilities are not expected to engage in activities that require a pad. It is assumed that only larg e-small ground applicators are affected by containment pad requirements.7/13/2006 DRAFT Containment EA, page 177 Table G.4. Number of Bulk Pesticide Cont ainment Facilities Affected by EPA’s Containment Regulations to Retrofit Existing Containment Structures

Number of Affected Facilities

Item Agricultural Pesticide

Refillers a Agricultural

Commercial Applicators b

Secondary Containment - Bulk Liquid Containers

Seal floor drain or discharge outlet 333 8

Seal all cracks/gaps/seams 295 0

Monthly inspection/records of inspection and maintenance 1,602 62

Secondary Containment - Bulk Dry Containers

Repair all cracks/gaps/seams 15 n/a

Monthly inspection/records of inspection and maintenance 70 n/a

Containment Pads

Seal drain 263 7

Add sump and berm 343 11

Repair all cracks/gaps/seams 185 n/a

Monthly inspection/records of inspection and maintenance 1,445 57

Totals may not add due to rounding. For this analysis, compliance rates have been calculated for bulk pesticide storage facilities based on a review of current containment regulations in 19 states (Appendix C) to identify those states with regulations that are consistent with EPA sta ndards. Compliance in the identified number of states has been weighted against the number of bulk liquid pesticid e storage facilities in those states. Where data are not

available or where it is not clear whether state requirements are consiste nt with EPA standards, rates that were established for use in the RIA of the proposed rule are used. These rates were estimated in the proposed EPA containment rule RIA estimates based on a review of state regulations in conjunction with information from industry

source data.

a SECONDARY CONTAINMENT, AGRICULTURAL PESTICIDE REFILLERS: Number of facilities with existing secondary containment structures for bulk liquid containers 4,548 (100%) Number of facilities in regulated states 4,220 (93%) Number of facilities that also have bulk dry containers 28 Number of facilities in non-regulated states 328 (7%) STATIONARY BULK LIQUID CONTAINMENT: Seal floor drain or discharge outlet: An estimated 96 percent of secondary containment structures in regulated states are in compliance with EPA standard s. It is assumed that about half th at percentage, or 50 percent, are in compliance in non-regulated states. Thus, 333 st ructures are not in compliance and must retrofit [(4220*0.04)+(328*0.50)] by sealing floor drains or discharge outlets. Seal all cracks: Assumes that 100 per cent of structures in regulated states are in compliance because of state requirements to seal all cracks/gaps/seams, but assumes that 10 percent of structures in non-regulated states are in compliance. An estimated 295 structur es (328*0.90) are not in compliance. Monthly inspection/recordkeeping: Weekly or monthly inspections of containment structures are currently required within 11 of the 19 states with containment regulations. Weighted against the number of liquid bulk facilities in these regulated states, an estimated 67% of a ll facilities in regulated states are in compliance. About 30% all remaining facilities are in compliance. Overa ll, the number of facilities that will require monthly inspection under the rule is estimated at 1,602 facilities [(4220*0.325)+(328*0.70)].

STATIONARY DRY BULK CONTAINERS: An estimated 147 facilities have existing structures (see Table 3.2). Repair cracks: Although all regulated states have a requir ement to seal all cracks, and although all facilities with dry bulk storage are assumed to be located in regulated states, it is assumed that 90 % of all facilities (15) with existing structures (147*0.10) will be affected by this requirement.7/13/2006 DRAFT Containment EA, page 178 Table G.4. Number of Bulk Pesticide Cont ainment Facilities Affected by EPA’s Containment Regulations to Retrofit Existing Containment Structures (Continued)
Monthly inspection/recordkeeping: See footnote under ‘Stationary Bulk Liquid Containment: Agricultural pesticide refillers” for analytical method used to derive percentage compliance rates. Overall, the number of facilities that will require monthly inspection und er the rule is estimated at 70 facilities.

CONTAINMENT PADS , AGRICULTURAL PESTICIDE REFILLERS:

Estimated number of facilities with exis ting containment pads 4,206 (100%) Number of facilities in regulated states 4,001 (95%) Number of facilities in non-regulated states 205 (5%) Seal drain: About 96 percent of containment pads in regulated states meet the standard for no drains. It is assumed that about 50 percent meet the standa rd in non-regulated states. Thus, 263 structures are out of compliance [(4,001*0.04)+(205*0.50)] and must seal existing drains. Add berm: An estimated 94 percent of containment pads in regulated states have a minimum capacity of 750 gallons or 100% of the largest container on the pad and are in compliance. It is assume d that about 50 percent of existing pads in non-regulated states are in compliance. The estimated number of pads required to retrofit is 343 [(4,001*0.06)+(205*0.50)]. The cost for a portable pump and hose for removing collected liquid materials and/or

rainfall are included with the secondary containment costs. Repair cracks: Assumes 100 percent of structures in regulated states are in compliance because of state requirements to seal all cracks/gaps/seams, but assumes only 10 percent of structures in non-regulated states are in compliance. An estimated 185 structur es (205*0.90) are not in compliance. Monthly inspection/recordkeeping: See footnote under “Stationary Bulk Liquid Containment: Agricultural pesticide refillers” for analytical method used to derive percentage compliance rates. Overall, the number of facilities that will require monthly inspection under the rule is estimated at 1,445 facilities [(4001*0.325)+(205*0.70)].

b SECONDARY CONTAINMENT, AGRICULTURAL COMMERCIAL APPLICATORS : Number of facilities with existing secondary containment structures for bulk liquid containers 189 Number of facilities in regulated states 189 (100%) Independent (for-hire) aerial applicators 144 (76% of 189) Independent (for-hire) ground applicators 45 (24% of 189) STATIONARY BULK LIQUID CONTAINMENT: Seal floor drain or discharge outlet: An estimated 96 percent of secondary containment structures in regulated states are in compliance with these facilities. Thus, 8 structures are not in compliance and must retrofit (189*0.04). It is assumed that these 8 must retrofit by sealing floor drains or discharge outlets. Seal all cracks: Because all regulated states have a requirement to seal all cracks, and because all independent applicator structures are assumed to be located in regulate d states, no structure is affe cted by this requirement. Monthly inspection/recordkeeping: Weekly or monthly inspections of containment structures are currently required within 11 of the 19 states with containment regulations. Weighted against the number of liquid bulk facilities in these regulated states, an estimated 67% of all facilities in regulated states are in compliance. The number of facilities that will require monthly inspection under the rule is estimated at 62 facilities (189*0.33). CONTAINMENT PADS, AGRICULTURAL COMMERCIAL APPLICATORS:

Estimated number of facilities with existing containment pads 175 Number of facilities in regulated states 175 (100%) Independent (for-hire) aerial applicators 134 (77% of 177) Independent (for-hire) ground applicators 42 (23% of 177) Seal drain: About 96 percent of containment pads in regulated states meet the standard for no drains. Because all independent applicator containment pads are assumed to be located in regulated states, only 7 (175*0.04) are estimated as out of compliance with this requirement. Add berm: The estimated level of compliance with the requirement to have a minimum capacity of 750 gallon, achieved by a sump or a berm, is 94 percent. Thus, 11 structures (175*0.06) are esti mated as out of compliance. Repair new cracks: Because all applicators are assumed to be located in regulated states, all are expected to be in compliance. Monthly inspection/recordkeeping: See footnote under ‘Stationary Bulk Liquid Containment: Independent Applicators’ for analytical method used to derive perc entage compliance rates. The number of facilities that will require monthly inspection under the rule is estimated at 57 facilities (175*0.33).7/13/2006 DRAFT Containment EA, page 179 

### Appendix H. Representative Facilit y Costs of Compliance with Secondary Containment Regulations

Table H.1. Capital Costs of Compliance wi th Secondary Containment Regulations for Small-Small, Medium-Small, Large-Small and La rge Agricultural Refilling Representative Facility to Install NEW Secondary Containm ent of Outdoor Bulk Liquid Pesticides, 2005$ a

$/Facility

Capital Cost $/Unit Small-Small Representative Facility Medium-Small Representative Facility Large-Small and Large Represent. Facility

OUTDOOR SECONDARY CONTAINMENT, BULK LIQUIDS

Concrete pad

Berm b
Portable pump and hose Rinsate/precp. storage tank c Sump

Roof Pipes and fixtures

Contractor’s fees Contingency

TOTAL, Year 3 d 5.48/sq ft

13.74-21.97/ft

548/each

589-2356/each

959-3013/each 4.79/sq ft

2% of direct costs

30% of direct costs

5% of direct

costs+fees 1,096

850

548

589

959

0

81 1,212

263

5,600 2,739

850

548 1,653 1,644

0

149 2,230

483

10,300 6,163 1,096

548 2,356 3,013

0

264 3,953

856

18,250

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” based adjustment factor of 1.37 (U.S. Department of Labor, 2005).

b The cost of the berm for all sizes of facilities will ra nge from $13.74 to $21.97 per foot, depending on the wall height. The higher the wall, the higher the unit cost.

c Unit costs for an outdoor rinsate/precip itation storage tank are estimated at $589 (small), $1,653 (medium) to $2,356 (large).

d All totals have been rounded to the nearest $10. It is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the be ginning of year 4. Capital costs are expected to occur at the end of year 3.7/13/2006 DRAFT Containment EA, page 180 Table H.2. Operating and Management (Annua l) and Intermittent Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Facility to Install NEW Secondary Containment of Outdoor Bulk Liquid Pesticides, 2005$ a

$/Facility

O&M or Intermittent Cost $/Unit Small-Small Representative Facility Medium-Small Representative Facility Large-Small and Large Represent. Facility

OUTDOOR SECONDARY CONTAINMENT, BULK LIQUIDS

Operating and management (O&M) costs

Spill cleanup Rinsate/precipitation pumpingRinsate/precipitation offsite b
Monthly inspection/ recordkeeping c 28/hr

28/hr

62-151/trip

28/hr 668

39

372

77 950

116

373

103 1,361

218 1,056

128

Total O&M, Years 4-20 d 1,160 1,540 2,760

Intermittent (every 5 years) costs

Repair cracks/gaps/seams

Contractor’s fees + contingency 2.84/ft

20% intermittent

costs 41

8 96

19 109

22

Total intermittent, Years 8,13, and 18 d 50 120 130

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” based adjustment factor of 1.37. (U.S. Department of Labor, 2005).

b Assumes off-site hauling costs of $62 per trip for a small-small and medium-small facilities and $151 per trip for a large-small facility.

c Assumes monthly inspection takes 14 minutes per month in a small-small facility, 18 minutes per month in a medium-small facility, and 23 minutes per month in a large-small and large facility.

d Totals have been rounded to nearest $10 in 1992$ and infl ated to 2005$ using CPI-U “All Items” therefore the totals may not add due to rounding and inflation. It is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the beginnin g of year 4. Intermittent costs expected to occur every 5 years incurred in years 8, 13 , and 18 of the 20-year period of analysis. If, on average, secondary containment structures have a useful life of 20 years, intermittent co sts beyond year 20 will be associated with a replacement

structure.7/13/2006 DRAFT Containment EA, page 181 Table H.3. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Facilities to Install NEW Secondary Containment of Indoor Bulk Liquid Pesticides, 2005$ a

$/Facility

Capital Cost $/Unit Small-Small Representative Facility Medium-Small Representative Facility Large-Small and Large Represent. Facility

INDOOR SECONDARY CONTAINMENT, BULK LIQUIDS

Concrete pad b

Berm c Rinsate/precipitation tank d
Portable pump and hose Pipes and fixtures

Contractor’s fees Contingency

TOTAL, Year 3 e ---- 9.53/ft - 17.82/ft 342-1,301/each

411/each

2% of direct costs

25% of direct costs

5% of direct

costs+fees --- 876

342

411

33

407

102

2,170 --- 876

589

411

38

469

117

2,500 --- 1,124 1,301

411

57

709

177

3,780

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005)

b No costs are incurred for a concrete pad because it is as sumed that all existing indoor tanks are already installed

over a concrete floor.

c The cost of the berm for all sizes of facilities will range from $9.53 to $17.82 per foot, depending on the berm height (smaller units have to have a higher berm to contain the required volume). The higher the berm, the higher the unit cost. For this analysis, the following berm costs were assumed across facilities: $17.82/ft (small-small); $9.53/ft to $17.82/ft (medium-small); $9.53/ft (large-small, large).

d Unit costs for an indoor rinsate/precip itation storage tank are estimated at $342 (small-small), $589 (medium-small) to $1,301 (large-small, large).

e Totals have been rounded to nearest $10 in 1992$ and infl ated to 2005$ using CPI-U “All Items” therefore the totals may not add due to rounding and inflation. It is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the beginnin g of year 4. Capital costs are expected to occur at the end of year 3.7/13/2006 DRAFT Containment EA, page 182 Table H.4. Operating and Management and Intermittent Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Faciliti es to Install NEW Secondary Containment of Indoor Bulk Liquid Pesticides, 2005$ a

$/Facility

O&M or Intermittent Cost $/Unit Small-Small Representative Facility Medium-Small Representative Facility Large-Small and Large Represent. Facility

INDOOR SECONDARY CONTAINMENT, BULK LIQUIDS

Operating and management (O&M) costs

Spill cleanup Monthly inspection/ recordkeeping b 28/hr

28/hr 668

77 950

103 1,361

128

Total O&M, Years 4-20 a 740 1,050 1,490

Intermittent (every 5 years) costs

Repair cracks/gaps/seams

Contractor’s fees + contingency 2.84/ft

20% intermittent

costs 41

8 96

19 110

22

Total intermittent, Years 8, 13, and 18 a 50 120 130

a All totals have been rounded to the nearest $10. The cost analysis is conducted for a 20-year period, beginning with the year the regulations become effective. Pesticide bulk storage facilities without secondary containment structures must have them built by the compliance date, which is at th e end of the third year after the effective date of the regulations. Thus, it is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the beginning of year 4. Inte rmittent costs are expected to occur every 5 years after completion of the structure, i.e., in years 8, 13 and 18 of the 20-year period of analysis.

b Costs inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005).7/13/2006 DRAFT Containment EA, page 183 Table H.5. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Representative Facility to Install NEW Secondary Containment of Stationary Dry Bulk Storage, 2005$ a

Capital Costs Storage of Dry Bulk Pesticide ($/Facility)

Unit Cost One Dry Bulk

Container

SECONDARY CONTAINMENT, BULK SOLIDS:

Additional concrete pad (floor) b

6-inch berm

Grout Rinsate/precipitation tank c

Reinforcement bars

Contractor’s fees

Contingency

TOTAL, Year 3 d 5.48/ft

13.74/ft

1.24/ft

589/each

3.02/ft

30% of direct

costs
5% of direct

costs + fees 1,096 1,630

151

589

370 1,150

249

5,230

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005).

b Assumes that there is a concrete pad under every stationary dry bulk container, and that the pad is extended outwards as necessary.

c A medium-sized rinsate/precipitation storage tank is assumed.

d All totals have been rounded to the nearest $10. It is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the be ginning of year 4. Capital costs are expected to occur at the end of year 3.7/13/2006 DRAFT Containment EA, page 184 Table H.6. Operating and Management (Annua l) and Intermittent Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultural Refilling Representative Faciliti es to Install NEW Secondary Containment of Stationary Dry Bulk Pesticide Storage, 2005$ a

Storage of Dry Bulk Pesticide ($/Facility)
O&M or Intermittent Costs $/Unit One Dry Bulk Container

SECONDARY CONTAINMENT,

BULK SOLIDS:

Operating and management (O&M) costs

Spill cleanup Rinsate/precipitation pumping b
Monthly inspection/recordkeeping 28/hr

28/hr

28/hr 668

103

77

Total O&M, Years 4-20 850

Intermittent (every 5 years)

costs

Repair cracks/gaps/seams Contractor’s fees and contingency 2.84/ft

20% of

intermittent costs 82

16

Total intermittent, Years 8, 13 and 18 c 100

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005).

b All collected rinsate/precipitation is assumed stored in mi nibulks or a storage container until it can be used as makeup water.

c All totals have been rounded to the nearest $10. The cost analysis is conducted for a 20-year period, beginning with the year the regulations become effective. Pesticide bulk storage facilities without secondary containment structures must have them built by the compliance date, which is at th e end of the third year after the effective date of the regulations. Thus, it is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the beginning of year 4. Inte rmittent costs are expected to occur every 5 years after completion of the structure, i.e., in years 8, 13 and 18 of the 20-year period of analysis.7/13/2006 DRAFT Containment EA, page 185 Table H.7. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Representative Facility to Install NEW Outdoor Containment Units and Pads, 2005$ (Scenarios 1 & 2) a

All Affected Facilitie s, Outdoor Storage b ($/Facility)

Capital Cost $/Unit Small Pad (15’ x 30’) Medium Pad (25’ x 50’) Large Pad (60’ x 50’)

OUTDOOR CONTAINMENT PADS

Scenario 1: Facilities requiring both secondary containment and a containment pad for compliance

Concrete pad

Berm

Sump Rinsate/precipitation storage tank c,d

Contractor’s fees Contingency 5.48/sq ft 2.74/ft, forms 1.78/sq ft, concrete 1.24/ft, grout

274-411 each 589-2,356/each

30% of direct costs

5% of direct

costs+fees 2,876

548

274

589

1,286

279 8,902

822

411 1,657

3,538

767 20,955 1,233

411 2,356

7,486 1,622

Total, Scenario 1, Year 3 e 5,850 16,100 34,060

Scenario 2: Facilities requiring only a containment pad for compliance

Concrete pad

Berm

Sump Rinsate/precipitation storage tank c,d
Portable pump and hose

Contractor’s fees Contingency 5.48/sq ft 2.74/ft, forms 1.78/sq ft, concrete 1.24/ft, grout

274-410 each 589-2,356/each

548/each

30% of direct costs

5% of direct

costs+fees 2,876

548

274

589

548 1,450

314 9,972

822

411 1,657

548 4,023

872 20,955 1,233

411 2,356

548 7,651 1,658

Total, Scenario 2, Year 3 e 6,600 18,310 34,810

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005).

b All agricultural refiller outdoor facilities needing a contai nment pad will incur costs for either the small or the medium pad, whichever is appropriate. All commercial aeri al applicators will incur costs for the large pad. The size of the representative facility, i.e., small, medium or large, does not affect the cost of the pad. Rather, the operational activities associated with a given facility determine whether a small, medium, or large pad is needed.

c Costs for a portable pump and hose are not included under this scenario to avoid double-counting. It is assumed the same pump can be used for both secondary containment structures and containment pads, and costs for the pump are included in the capital cost tables for se condary containment structures. For th is reason, costs under Scenario 1 are

less than that estimated for Scenario 2.

d This analysis assumes that rinsate/precipitation storage ta nk size (volume) will vary by containment pad size, i.e., small pads will require smaller storage tanks ($589), medi um pads will require medium tanks ($1,657), and large pads will require larger tanks ($2,356). The costs may appl y to single, large tanks as shown, or to multiple smaller

tanks.

e All totals have been rounded to the nearest $10. It is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the be ginning of year 4. Capital costs are expected to occur at the end of year 3.7/13/2006 DRAFT Containment EA, page 186 Table H.8. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Representative Facility to Install NEW Containment Pads, 2005$ a

$/Facility

Capital Cost $/Unit Small Pad (15’ x 30’) Medium Pad (25’ x 50’) Large Pad (60’ x 50’)

INDOOR CONTAINMENT PADS

Scenario 1: Use existing con crete floor as base for new pad

Berm

Rinsate storage tank b
Concrete ramp

Contractor’s fees Contingency 3.38/sq ft, rough
up concrete 2.74/ft, forms 2.53-419/sq ft,

concrete 1.24/ft, grout 3.02/ft, #4 reinforcing bars

342-1,301/each 1.26/sq ft, rough
up concrete 0.71/sq ft, bonding
agent 268/cu yd,

concrete
30% of direct costs

5% of direct

costs+fees 4,000

342

685

1,508

327 12,174

589

959

4,117

892 28,899

1,301 6,848

11,114

2,408

Total, Scenario 1, Year 3 c 6,860 18,730 50,5707/13/2006 DRAFT Containment EA, page 187 Table H.8. Capital Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, Large-Small and Large Agricultur al Refilling Representative Facility to Install NEW Containment Pads, 2005$ a (Continued)

$/Facility

Capital Cost $/Unit Small Pad (15’ x 30’) Medium Pad (25’ x 50’) Large Pad (60’ x 50’)

Scenario 2: Demolish existing concrete floor; construct sloped pad

New concrete, allow for sloping

Demolish and dispose existing concrete

Concrete pad

Sump (includes coating) Rinsate storage tank b

Contractor’s fees

Contingency 1.26/sq ft, rough
up concrete 0.71/sq ft, bonding
agent 268/cu yd,

concrete 342/ea.,

mob/demob equipment 5.66/sq ft,

demolition 4.10/cu yd, loading 54.24/ton, transport and dispose 5.48/sq ft

411/each

342-1301/each 2/

30% of direct

costs, excluding transport and disposal

5% of direct

costs+fees 5,684

411

342 1,931

418 16,558

411

589 5,267

1,141 37,732

411 1,301 11,833

2,564

Total, Scenario 2, Year 3 c 8,790 23,970 53,840

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” based adjustment factor of 1.37. (U.S. Department of Labor, 2005).

b This analysis assumes that rinsate/precipitation storage ta nk size (volume) will vary by containment pad size, i.e., small pads will require smaller storage tanks ($342), medium pads will require medium tanks ($589), and large pads will require larger tanks ($1301). The costs may apply to si ngle, large tanks as shown, or to multiple smaller tanks.

c All totals have been rounded to the nearest $10. It is assumed that secondary containment structures are completed by the end of year three, with the facility in compliance at the beginning of year four. Capital costs are expected to occur at the end of year three.7/13/2006 DRAFT Containment EA, page 188 Table H.9. Operating and Management (Annua l) and Intermittent Costs of Compliance with Containment Regulation for Small-Sm all, Medium-Small, Large-Small and Large Agricultural Refilling Representative Facility to Install NEW Containment Pad Regulations for Indoor and Outdoor Storage Facilities, 2005$ a

$/Facility

O&M or Intermittent Cost $/Unit Small Pad (15’ x 30’) Medium Pad (25’ x 50’) Large Pad (60’ x 50’)

OUTDOOR CONTAINMENT PADS

Operating and management (O&M) costs

Spill cleanup Rinsate/precipitation pumpingRinsate/precipitation offsite Monthly inspection/recordkeeping 28/hr

28/hr

150.1/trip

28/hr 668

154

265

103 1,027

154

905

128 1,361

591

3,017

128

Total O&M, Years 4–20 1,190 2,210 5,100

Intermittent (every 5 years) costs b

Repair cracks/gaps/seams

Contractor’s fees and contingency 2.84/ft

20% of

intermittent costs 34

7 41

8 55

11

Total Intermittent, Years 8, 13, and 18 40 50 70

INDOOR CONTAINMENT PADS

Operating and management (O&M) costs

Spill cleanup Monthly inspection/recordkeeping 28/hr

28/hr 668

77 1,027

77 1,361

128

Total O&M, Years 4–20 740 1,100 1,490

Intermittent (every 5 years) costs b

Repair cracks/gaps/seams

Contractor’s fees and contingency 2.74/ft

20% of

intermittent costs 34

7 41

8 55

11

Total Intermittent, Years 8, 13, and 18 40 50 70

a Costs inflated from 1992 to 2005 using the CPI-U “All Items”. (U.S. Department of Labor, 2005).

b Given that new structures must be in place within 3 years of the effective date of the re gulations (by the end of year 3), intermittent repairs are assumed to be needed in years 8, 13, and 18 of the 20-year period of analysis. All totals have been rounded to the nearest $10.7/13/2006 DRAFT Containment EA, page 189 Table H.10. Capital, O&M, and Intermitte nt Costs of Compliance with Containment Regulations for Small-Small, Medium-Small, and Large-Small Commercial Aerial and Ground Applicator Facility to Install NEW Outdoor Secondary Containment Structures, 2005$ a,b

All Affected Facilities ($)

Representative Aerial Applicator Facility Size Total Bulk Storage Capacity (Gal.) Capital costs for secondary

containment c O&M costs for secondary

containment c Intermittent costs for secondary

containment c

Commercial Aerial Applicators d

Small-Small 1,500 5600 1160 50

Medium-Small 4,000 10300 1550 120

Large-Small 10,000 18250 2790 130

Commercial Ground Applicators e

Small-Small na na na na

Medium-Small na na na na

Large-Small 10,000 10,300 1550 120

a Costs inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005).

b Independent commercial (for-hire) aerial and ground applicat ors. All bulk storage faci lities are assumed outdoors, and no facilities are expected to store bulk quantities of dry pesticides (i.e., no known containers with a capacity greater than 2 metric tons).

c The cost analysis is conducted for a 20-year period, beginning with the year the regulations become effective. Pesticide bulk storage facilities withou t secondary containment structures must have them built by the compliance date, which is at the end of the third year after the eff ective date of the regulations. Thus, it is assumed that secondary containment structures are completed by the end of year 3, with the facility in compliance at the beginning of year 4. Capital costs therefore are incurred at the end of year 3 and oper ating and maintenance costs are incurred in years 4-20. Intermittent costs are expected to occur ever y 5 years after completion of the structure (i.e., in years 8, 13, and 18 of the 20-year period of analysis).

d For lack of better information, small-small, medium-sma ll, and large-small representative aerial applicator facilities are assumed to have the same secondary containment co sts as the small-small, medium-small, and large-small representative agricultural refillers. See Tables H.1 and H.2.

e It is assumed that only large-small commercial ground applicator businesses will be affected by the rule. For lack of better information, large ground applicators are assumed to incur the same level of costs as medium-sized agricultural

refillers. See Tables H.1 and H.2.7/13/2006 DRAFT Containment EA, page 190Table H.11. Capital, Initial, O&M andIntermittent Costs of Compliance with Containment Regulations by RepresentativeFacility Size for Agricultural Refillers and Commercial Aerial and Ground Applicators toRetrofit EXISTING SecondaryContainment Structures, 2005$aAgricultural refillers (refillingestablishments)Commercial (for-hire)applicatorsCosts of complianceby facility size (in $)Costs of complianceby facility size (in $)Critical standards retrofitting cost element forexisting secondary containment structuresType of costbUnit cost ($/unit)Number ofFacilitiesAffectedcSmallSmallMedium-SmallLargeSmall,LargeNumberofFacilitiesAffectedSmallSmallMedium-SmallLarge-SmallSecondary containment forstationary bulk liquid containersf1. Seal floor drain/discharge outletInitial (Year 3)Labor 54.78/hr 55 55 55 55 55 55Grout 11.41/cu ft 11 11 11 11 11 11Portable pump and hose 548/each548 548 548548 548 548Contractor's fees 15% of direct costs 92 92 92 92 92 92Contingency5% of direct costsand fees35 35 35 35 35 35Totald333 740 740 740 8 740 740 7402. Repair all cracks/gaps/seamsInitial andintermittent(Years 3, 8, 13,and 18)Rout crack(s); clean, grout & tamper 2.84/ft 34 93 113 34 93 113Contractor's fees 15% of direct costs 5 14 17 5 14 17Contingency5% of direct costsand fees 2 5 7 2 5 7Totald295 40 110 140 0 40 110 1403. Monthly inspection/records of inspection andmaintenanceeO&M(Years 4-20) 28/hr1,602 30 30 30 62 30 30 307/13/2006 DRAFT Containment EA, page 191Table H.11. Capital, Initial, O&M andIntermittent Costs of Compliance with Containment Regulations by RepresentativeFacility Size for Agricultural Refillers and Commercial Aerial and Ground Applicators toRetrofit EXISTING SecondaryContainment Structures, 2005$a(Continued)Agricultural refillers (refillingestablishments)Commercial (for-hire)applicatorsCosts of complianceby facility size (in $)Costs of complianceby facility size (in $)Critical standards retrofitting cost element forexisting secondary containment structuresType of costbUnit cost ($/unit)Number ofFacilitiesAffectedcSmallSmallMedium-SmallLargeSmall,LargeNumberofFacilitiesAffectedSmallSmallMedium-SmallLarge-SmallSecondary containment forstationary dry bulk containersf1. Repair all cracks/gaps/seams (one container)Initial andintermittent(Years 3, 8, 13,and 18)Rout crack(s); clean, grout & tamper 2.84/ft ---- 83 83 ---- ---- ----Contractor's fees 15% of direct costs ---- 13 13 ---- ---- ----Contingency5% of direct costsand fees---- 5 5 ---- ---- ----Totald15 ---- 100 100 0 ---- ---- ----2. Monthly inspection/records of inspection andmaintenanceeO&M(Years 4-20) 24/hr70----30 30 0---- ---- ----aCosts inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005).bInitial costs will be incurred during Year 3 in order to be incompliance with the critical standards by the beginning of Year4 (the first year the critical standards areeffective for existing facilities). O&M costswill be incurred each year of the Year 4-Year 20 period in this analysis. Intermittent costs are incurred once every 5 years.cSee Table G.4dAll totals have been rounded to the nearest $10.eAssumes one hour for monthly inspection and recordkeeping. Rounded up to nearest $10.fOnly Medium-Small, Large-Small and Large agriculturalrefillers are assumed to have bulk dry containers.7/13/2006 Containment EA, page 192 Table H.12. Capital, Initial, O&M and Intermittent Costs of Compliance with Containment Regulations by Rep resentative Facility Size fo r Agricultural Refillers and Commercial Aerial and Ground Applicators to Retrofit EXISTING Containment Pads, 2005$ f

Estimated

Number of

Facilities

Affected Cost by Size of Containment Pad ($) c Critical Standards Retrofitting Cost

Element For

Containment Pads Agchem

refillers

a Indep. Apps a Type of Cost b Unit Cost ($/Unit) Small

Pad (15'x30') Medium

Pad (25'x50') Large

Pad (60'x50')

1. Seal drain 263 7 Initial (Year 3) d

Labor 54.78/hr 55 55 55

Grout 11.41/cu ft 11 11 11

Contractor's fees 15% direct costs 10 10 10

Contingency 5% of direct costs

and fees 4 4 4

Total 80 80 80
2. Add sump 343 11 Capital (Year 3) d

Cut concrete for sump 4.95/ft 70 79 79 Demolish concrete - sump

area 5.66/sq ft 68 90 90
Sump construction: Excavation 5.14/cu yd 5 9 10 Gravel 15.28/cu yd 14 16 18 Reinforced concrete 268/cu yd 128 163 193 Steel edge (frame) 11.58/ft 70 93 93 Grate 6.76/sq ft 15 28 28

Additional berm: Rough concrete/bond
agent 4.10/sq ft 352 582 885

Concrete forms 2.74/ft 235 389 592

Reinforcement bars 3.02/ft 663 Concrete forms 1.78-3.02/sq ft 153 254 653

Grout 1.24/ft 103 177 264
Contractor's fees 30% direct costs 364 564 1,070

Contingency 5% of direct costs

and fees 79 122 232
Total 1,660 2,560 4,870
3. Repair cracks/gaps/seams 185 0 Rout crack(s); clean, grout 2.84/ft 29 48 56

Contractor's fees Initial and intermittent (Years 3, 8, 13 and 18) d 15% direct costs 4 7 8

Contingency 5% of direct costs

and fees 2 3 3

Total 30 60 70
4. Monthly inspection/ Records of inspection

and maintenance e
1445 57 O&M (Years 4-20) d 28/hr 30 30 307/13/2006 Containment EA, page 193 Table H.12. Capital, Initial, O&M and Interm ittent Costs of Compliance with Containment Regulations by Representative Facility Size fo r Agricultural Refillers and Commercial Aerial and Ground Applicators to Retrofit EXISTING Containment Pads, 2005$ f (Continued)

a See Table 3.2.

b Initial costs will be incurred during Year 3 in order for cont ainment pads to be in compliance with the critical standards by the beginning of Year 4 (the first year the full standard s are effective for existing fac ilities). Capital costs will also be incurred in Year 3 to allow for complian ce by Year 4. Intermittent costs will o ccur every 5 years. O&M costs will occur each year of the full standards period.

c Existing containment pads vary widely in size. For purposes of analysis, three general sizes are assumed. The two pads sized 15'x30' and 25'x50' are representative of pads used by agricultural refillers (refilling es tablishments). The pad sized 60'x50' is appropriate for aerial applicators.

d The cost analysis is conducted for a 20-year period, beginnin g with the year the regulations become effective. Pesticide bulk storage facilities with existing secondary containment structures must have them brought into compliance by the compliance date, which is at the end of the third year after the effective date of the regulations. Thus, it is assumed that existing containment structures are modified by the end of Year 3, with the facility in compliance at the beginning of Year 4. Capital costs therefore are incurred at the end of year 3 and operating and main tenance costs are incu rred in years 4-20. Intermittent costs are expected to occur every 5 years after modifi cation of the structure, i.e., in Years 8, 13 and 18 of the 20-year period of analysis.

e Assumes one hour a year to walk to containment pad and back, conduct a visual inspection, and make necessary entries in log.

f Costs inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005). All totals are rounded up to the nearest $10.7/13/2006 Containment EA, page 194Table H.13. Capital, Initial, O&M andIntermittent Costs of Compliance with Containment Regulations by RepresentativeFacility Size for Agricultural Refillersand Commercial Aerial and Ground Applicators to Retrofit EXISTING Liquid BulkContainers, 2005$ePotential Number of FacilitiesAffectedaIncremental Costs of Complianceby Capacity ofAffected BulkContainers ($)bFull Standards Retrofitting Cost Elementfor Bulk Containers in Existing SecondaryContainment StructuresAgchemrefillersCommercialapplicatorsType ofcostUnit Cost ($/Unit)SmallSmallMedium-SmallLarge-Small LargeBulk Liquid Containers, Plastic1. Anchor containers174 2Initial(Year 3)dMove container, labor for drilling in anchors,alter plumbing 479/container 479 479 479 479Contractor's fees 15% direct costs 72 72 72 72Contingency5% of direct costsand fees 28 28 28 28Totalb580 580 580 5802. Monthly inspection/records of inspectionand maintenance3,725 38O&M(Years 4-20)d28/hr30 30 30 30Bulk Liquid Containers, Steel1. Anchor containers194 2Initial(Year 3)dMove tank, labor for drilling in anchors, alterplumbing 479/container 479 479 479 479Contractor's fees 15% direct costs 72 72 72 72Contingency5% of direct costsand fees 28 28 28 28Totalb580 580 580 5802. Monthly inspection/records ofinspection and maintenancec401 4O&M(Years 4-20)d28/hr30 30 30 30aSee Table 3.2. The number of containers is based on the assumption of the number of containers, by type, and the assumption on the percentage of containers incompliance with specific aspects of the regulation in the proposed RIA (EPA, 1993a).bAll totals have been rounded to the nearest $10.cCosts included in this line item allow 5 minutes per containerper month to visually inspect the container and make necessaryentries in a log. Facilities withmore than one bulk container will incur multiples of this cost. Rounded to nearest $10.7/13/2006 Containment EA, page 195Table H.13. Capital, Initial, O&M andIntermittent Costs of Compliance with Containment Regulations by RepresentativeFacility Size for Agricultural Refillersand Commercial Aerial and Ground Applicators to Retrofit EXISTING Liquid BulkContainers, 2005$edThe cost analysis is conducted for a 20-year period, beginningwith the year the regulations become effective. Pesticide bulkstorage facilities with existingsecondary containment structures must have them brought into compliance by the compliance date, which is at the end of the third year after the effective date ofthe regulations. Thus, it is assumed that existing containment structures are modified by the end of Year 3, with the facility in compliance atthe beginning ofYear 4. Capital costs therefore are incurred at the end of year 3 and operating and maintenance costs are incurred in years 4-20. Intermittent costs are expectedto occur every 5 years after modification ofthe structure, i.e., in Years 8, 13 and 18 of the 20-year period of analysis.eCosts inflated from 1992 to 2005 using the CPI-U “All Items” (U.S. Department of Labor, 2005).7/13/2006 Containment EA, page 196 

### Appendix I. Facility Annualized Co sts as a Share of Annual Revenue

Table I.1. Total Facility Annualized Costs as a Share of Annual Revenue to Install New Secondary Containment Units and Containm ent Pads, Agricultural Refillers and Commercial Applicators (2005$), 3% Discount Rate

Impacted

facilities a Facility-Level

Annualized Costs ($/facility) Annual CostRevenue Ratio (%)

AGRICULTURAL REFILLER b

Outdoor Liquid Bulk Storage (A) Both secondary containment and pad

Small c 321 2,680 0.14 Small-Small 270 2,544 0.34 Medium-Small 46 3,133 0.05 Large-Small 5 5,983 0.03 Large 3 5,983 0.003 (B) Containment pad only Small 238 1,358 0.07 Small-Small 200 1,335 0.18 Medium-Small 34 1,335 0.02 Large-Small 4 2,838 0.01 Large 2 2,838 0.002 Outdoor Dry Bulk Storage (A) Both secondary containment and pad Small 23 4,858 0.05

Small-Small 0 n/a n a Medium-Small 17 4,483 0.07 Large-Small 6 5,983 0.03 Large 6 5,983 0.003 Indoor Liquid Bulk Storage (A) Both secondary containment and pad Small 138 1,780 0.10 Small-Small 116 1,715 0.23 Medium-Small 20 1,988 0.03 Large-Small 2 3,405 0.02 Large 1 3,405 0.002 (B) Containment pad only Small 102 1,130 0.06 Small-Small 86 1,112 0.15 Medium-Small 15 1,112 0.02 Large-Small 2 2,303 0.01 Large 1 2,303 0.001

Nonbulk Activities (A) Containment pad only Small 561 1,335 0.18 Small-Small 561 1,335 0.18

Medium-Small n/a na n a Large-Small n/a na n a Large n/a na n a7/13/2006 Containment EA, page 197 Table I.1. Total Facility Annualized Costs as a Share of Annual Revenue to Install New Secondary Containment Units and Containm ent Pads, Agricultural Refillers and Commercial Applicators (2005$), 3% Discount Rate (Continued)

Impacted

facilities Facility-Level

Annualized Costs ($/facility) Annual CostRevenue Ratio (%)

COMMERCIAL APPLICATORS d

Outdoor Liquid Bulk Storage (A) Both secondary containment and pad Small 16 7,743 2.72 Small-Small 6 7,307 7.77 Medium-Small 9 7,903 2.11 Large-Small e 1 (5) 9,375 (4,567) 1.25 (0.61) (B) Containment pad only Small 10 6,098 1.25

Small-Small n/a na n a Medium-Small 7 6,098 1.63 Large-Small e 3 (3) 6,106 (2,840) 0.81 (0.38)

a Impacted facilities taken from Table G.4.

b Small facility ($1.8 million annual revenue); small- small representative facility ($800,000 annual revenue); medium-small representative facility ($6.7 million annual revenue); large-small representative facility ($22.7 million annual revenue); large representative facility ( $191.6 million annual revenue). See Table 3.3.

c The small size category is comprised of small-small, medium-small, and large-small facilities. Total impacted

facilities are the sum of the facilities in each size sub-category. Th e facility-level annualized cost for small facilities is the average of costs for each size su b-category, weighted by the number of facilities in each size sub-category.

The revenue used to calculate the small annual cost--reve nue ratio is the average of facility revenue for each size sub-category, again weighted by the numb er of facilities in each size sub-category.

d Small facility ($280,000 annual revenue); small-small representative facility ($100,580 annual revenue); mediumsmall representative facility ($401,250 annual revenue) ; large-small representative facility ($802,500 annual revenue). See Table 3.5.

e Impact estimates for large ground operators shown in parentheses. The financial profile of a large-small ground applicator is assumed to be similar to that of a medium-small aerial applicator.7/13/2006 Containment EA, page 198 Table I.2. Total Facility Annualized Costs as a Share of Annual Revenue to Install New Secondary Containment Units and Containm ent Pads, Agricultural Refillers and Commercial Applicators (2005$), 7% Discount Rate

Impacted facilities a Facility-Level

Annualized Costs Annual CostRevenue Ratio ($/facility) (%)

AGRICULTURAL REFILLER b

Outdoor Liquid Bulk Storage (A) Both secondary containment and pad

Small c 321 2,628 0.14 Small-Small 270 2,487 0.33 Medium-Small 46 3,101 0.05 Large-Small 5 5,988 0.03 Large 3 5,988 0.003 (B) Containment pad only
Small 238 1,340 0.07 Small-Small 200 1,316 0.18 Medium-Small 34 1,316 0.02 Large-Small 4 2,878 0.01 Large 2 2,878 0.002 Outdoor Dry Bulk Storage (A) Both secondary containment and pad
Small 23 4,826 0.05

Small-Small n/a n/a n/ a Medium-Small 17 4,439 0.07 Large-Small 6 5,988 0.03 Large 6 5,988 0.003 Indoor Liquid Bulk Storage (A) Both secondary containment and pad Small 138 1,763 0.10 Small-Small 116 1,701 0.23 Medium-Small 20 1,951 0.03 Large-Small 2 3,462 0.02 Large 1 3,462 0.002 (B) Containment pad only
Small 102 1,178 0.06 Small-Small 86 1,158 0.15 Medium-Small 15 1,158 0.02 Large-Small 2 2,505 0.01 Large 1 2,505 0.001

Nonbulk Activities (A) Containment pad only
Small 561 1,316 0.18 Small-Small 561 1,316 0.18

Medium-Small n/a na n a Large-Small n/a na n a Large n/a na n a7/13/2006 Containment EA, page 199 Table I.2. Total Facility Annualized Costs as a Share of Annual Revenue to Install New Secondary Containment Units and Containm ent Pads, Agricultural Refillers and Commercial Applicators (2005$), 7% Discount Rate (Continued)

Impacted facilities Facility-Level

Annualized Costs Annual CostRevenue Ratio ($/facility) (%)

COMMERCIAL APPLICATORS d

Outdoor Liquid Bulk Storage (A) Both secondary containment and pad Small 16 7,717 2.72 Small-Small 6 7,271 7.73
Medium-Small 9 7,884 2.10
Large-Small e 1 (5) 9,358 (4,557) 1.25 (0.61) (B) Containment pad only Small 10 6,100 1.25

Small-Small n/a na n a Medium-Small 7 6,100 1.63
Large-Small e 3 (3) 6,107 (2,880) 0.81 (0.38)

a Impacted facilities taken from Table G.4.

b Small facility ($1.8 million annual revenue); small- small representative facility ($800,000 annual revenue); medium-small representative facility ($6.7 million annual revenue); large-small representative facility ($22.7 million annual revenue); large representative facility ( $191.6 million annual revenue). See Table 3.3.

c The Small size category is comprised of small-small, medium-small, and large-small facilities. Total impacted

facilities are the sum of the facilities in each size sub-category. Th e facility-level annualized cost for small facilities is the average of costs for each size su b-category, weighted by the number of facilities in each size sub-category.

The revenue used to calculate the small annual cost-revenue ratio is the average of facility revenue for each size subcategory, again weighted by the number of facilities in each size sub-category.

d Small facility ($280,000 annual revenue); small-small representative facility ($100,580 annual revenue); mediumsmall representative facility ($401,250 annual revenue) ; large-small representative facility ($802,500 annual revenue). See Table 3.5.

e Impact estimates for large ground operators shown in parentheses. The financial profile of a large-small ground applicator is assumed to be similar to that of a medium-small aerial applicator.7/13/2006 Containment EA, page 200 Table I.3. Total Facility Annualized Costs as a Share of Annual Revenue to Retrofit Existing Secondary Containment Units and Co ntainment Pads, Agricultural Refillers and Commercial Applicators (2005$), 3% Discount Rate

Impacted facilities by Cost Type: a

Capital Initial O&M Intermittent Maximum Facility-Level

Annualized

Costs ($/facility) b Annual

CostRevenue Ratio (%)

AGRICULTURAL REFILLER c

Bulk Liquid Storage

Small d 0 330 1588 292 74 0.004

Small-Small 0 277 1335 246 73 0.010

Medium-Small 0 47 228 42 83 0.001 Large-Small 0 5 24 4 87 0.000 Large 0 3 15 3 87 0.000 Bulk Dry Storage

Small 0 0 66 14 37 0.000

Small-Small n/a n/a n/a n/a n/a n/a

Medium-Small 0 0 60 13 n/a 0.001 Large-Small 0 0 6 1 37 0.0002 Large 0 0 4 1 37 0.00002

Containment Pads

Small 339 260 1432 183 142 0.008

Small-Small 285 219 1204 154 132 0.018

Medium-Small 49 37 206 26 189 0.003 Large-Small 5 4 22 3 329 0.002 Large 3 2 13 2 329 0.0002 Bulk Liquid Container

Small 0 365 4089 0 58 0.003

Small-Small 0 307 3439 0 58 0.008

Medium-Small 0 53 588 0 58 0.001 Large-Small 0 6 62 0 58 0.0003 Large 0 4 38 0 58 0.00003
Aggregate Facility Impacts e

Small 279 0.015

Small-Small 263 0.035

Medium-Small 367 0.006 Large-Small 510 0.002 Large 510 0.0003

COMMERCIAL APPLICATORS f

Bulk Liquid Storage

Small 0 8 62 0 79 0.03

Small-Small 0 3 24 0 73 0.08

Medium-Small 0 4 35 0 83 0.02 Large-Small 0 0 3 0 87 0.017/13/2006 Containment EA, page 201 Table I.3. Total Facility Annualized Costs as a Share of Annual Revenue to Retrofit Existing Secondary Containment Units and Co ntainment Pads, Agricultural Refillers and Commercial Applicators (2005$), 3% Discount Rate (Continued)

Impacted facilities by Cost Type:

Capital Initial O&M Intermittent Maximum Facility-Level

Annualized

Costs ($/facility) Annual

CostRevenue Ratio (%)

Containment Pads

Small 11 7 57 0 174 0.06

Small-Small 4 3 22 0 132 0.14

Medium-Small 6 4 32 0 189 0.05 Large-Small 1 0 3 0 329 0.04 Bulk Liquid Container

Small 0 4 42 0 58 0.02

Small-Small 0 2 17 0 58 0.06

Medium-Small 0 2 24 0 58 0.02 Large-Small 0 0 2 0 58 0.01 Aggregate Facility Impacts

Small 311 0.11

Small-Small 263 0.28

Medium-Small 330 0.09 Large-Small 473 0.06

a Impacted facilities taken from Table G.4. Facilities may only be subject to portions of a particular standard for existing containment structures, therefor e we present the number of facilities su bject to each type of cost facilities will incur to come into compliance with a standard. For example, 4% of facilities in regulated states and 50% of facilities in unregulated states are expected to add a berm . These facilities will have to incur the initial costs while others will not. Note that a particular facility may be c ounted more than once in each of the four compliance cost categories (capital, initial, O&M, and intermittent).

b We present the maximum compliance cost any facility in a particular si ze category may face (the sum, if applicable, of capital, initial, O&M, and intermittent costs) . This is an overestimate of costs the average facility will face when coming into compliance with a standard, sin ce many facilities will only incur costs associated with portions of a standard.

c Small facility ($1.8 million annual revenue); Small- Small representative facility ($800,000 annual revenue); Medium-Small representative facility ($6.7 million annual revenue); Large-Small representative facility ($22.7 million annual revenue); Large representative facility ($191.6 million annual revenue). See Table 3.3.

d The Small size category is comprised of Small-Small, Medium-Small, and Large-Small facilities. Total impacted

facilities are the sum of the facilities in each size sub-category. The facility-level annualized cost for Small facilities is the average of costs for each size sub-category, weighted by the industry-wide percentage of facilities in each size sub-category. The revenue used to calculate the Small annu al cost-revenue ratio is the average of facility revenue for each size sub-category, agai n weighted by the industry-wide percenta ge of facilities in each size sub-category.

e Due to the way we estimate the number of facilities that are subject to the existing containment standards (see Table G.4), we are unable to estimate the extent to whic h each impacted facility will incur multiple compliance costs (capital, initial, O&M, and intermittent) associated with a pa rticular standard. We theref ore do not present the total number of aggregated facilities impacted by th e standards for existing containment structures.

f Small facility ($280,000 annual revenue); Small-Sm all representative facility ($100,580 annual revenue); Medium-Small representative facility ($401,250 annual re venue); Large-Small representative facility ($802,500 annual revenue). See Table 3.5.7/13/2006 Containment EA, page 202 Table I.4. Total Facility Annualized Costs as a Share of Annual Revenue to Retrofit Existing Secondary Containment Units and Co ntainment Pads, Agricultural Refillers and Commercial Applicators (2005$), 7% Discount Rate

Impacted facilities by Cost Type: a

Capital Initial O&M Intermittent Maximum Facility-Level

Annualized Costs ($/facility) b Annual CostRevenue Ratio (%)

AGRICULTURAL REFILLER c
Bulk Liquid Storage

Small d 0 330 1,588 292 80 0.004 Small-Small 0 277 1,335 246 79 0.011

Medium-Small 0 47 228 42 87 0.001 Large-Small 0 5 24 4 90 0.000 Large 0 3 15 3 90 0.000 Bulk Dry Storage

Small 0 0 66 14 32 0.000

Small-Small n/a n/a n/a n/a n/a n/ a Medium-Small 0 0 60 13 32 0.001 Large-Small 0 0 6 1 32 0.0002 Large 0 0 4 1 32 0.00002

Containment Pads Small 339 260 1,432 183 162 0.009 Small-Small 285 219 1,204 154 150 0.020

Medium-Small 49 37 206 26 218 0.003 Large-Small 5 4 22 3 386 0.002 Large 3 2 13 2 386 0.0002 Bulk Liquid Container Small 0 365 4,089 0 62 0.003 Small-Small 0 307 3,439 0 63 0.008

Medium-Small 0 53 588 0 63 0.001 Large-Small 0 6 62 0 63 0.0003 Large 0 3 38 0 63 0.00004 Aggregate Facility Impacts e

Small 309 0.017

Small-Small 292 0.039

Medium-Small 400 0.006 Large-Small 571 0.003 Large 571 0.0003

COMMERCIAL APPLICATORS f

Bulk Liquid Storage

Small 0 8 62 0 84 0.03

Small-Small 0 3 24 0 79 0.08

Medium-Small 0 4 35 0 87 0.02 Large-Small 0 0 3 0 90 0.01

Containment Pads

Small 11 7 57 0 200 0.07

Small-Small 4 3 22 0 150 0.16

Medium-Small 6 4 32 0 218 0.06 Large-Small 1 0 3 0 386 0.057/13/2006 Containment EA, page 203 Table I.4. Total Facility Annualized Costs as a Share of Annual Revenue to Retrofit Existing Secondary Containment Units and Co ntainment Pads, Agricultural Refillers and Commercial Applicators (2005$), 7% Discount Rate (Continued)

Impacted facilities by Cost Type:

Capital Initial O&M Intermittent Maximum Facility-Level

Annualized Costs ($/facility) Annual CostRevenue Ratio (%)

Bulk Liquid Container

Small 0 4 42 0 63 0.02

Small-Small 0 2 17 0 63 0.07

Medium-Small 0 2 24 0 63 0.02 Large-Small 0 0 2 0 63 0.01 Aggregate Facility Impacts

Small 347 0.12

Small-Small 292 0.31

Medium-Small 368 0.10 Large-Small 539 0.07

a Impacted facilities taken from Table G.4. Facilities may only be subject to portions of a particular standard for existing containment structures, therefor e we present the number of facilities su bject to each type of cost facilities will incur to come into compliance with a standard. For example, 4% of facilities in regulated states and 50% of facilities in unregulated states are expected to add a berm . These facilities will have to incur the initial costs while others will not. Note that a particular facility may be c ounted more than once in each of the four compliance cost categories (capital, initial, O&M, and intermittent).

b We present the maximum compliance cost any facility in a particular si ze category may face (the sum, if applicable, of capital, initial, O&M, and intermittent costs) . This is an overestimate of costs the average facility will face when coming into compliance with a standard, sin ce many facilities will only incur costs associated with portions of a standard.

c Small facility ($1.8 million annual revenue); Small- Small representative facility ($800,000 annual revenue); Medium-Small representative facility ($6.7 million annual revenue); Large-Small representative facility ($22.7 million annual revenue); Large representative facility ($191.6 million annual revenue). See Table 3.3.

d The Small size category is comprised of Small-Small, Medium-Small, and Large-Small facilities. Total impacted

facilities are the sum of the facilities in each size sub-category. The facility-level annualized cost for Small facilities is the average of costs for each size sub-category, weighted by the industry-wide percentage of facilities in each size sub-category. The revenue used to calculate the Small annu al cost-revenue ratio is the average of facility revenue for each size sub-category, agai n weighted by the industry-wide percenta ge of facilities in each size sub-category.

e Due to the way we estimate the number of facilities that are subject to the existing containment standards (see Table G.4), we are unable to estimate the extent to whic h each impacted facility will incur multiple compliance costs (capital, initial, O&M, and intermittent) associated with a pa rticular standard. We theref ore do not present the total number of aggregated facilities impacted by th e standards for existing containment structures.

f Small facility ($280,000 annual revenue); Small-Sm all representative facility ($100,580 annual revenue); Medium-Small representative facility ($401,250 annual revenue); Large-Small representative facility ($802,500 annual revenue). See Table 3.5.