*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule EO12866_RIN2070-AJ44_Formaldehyde-TPCs-NPRM _EA_Redline_Revisions_2012-08-14.docx



### Revised to address Interagency Comm ents received under EO 12866 Review.



## Economic Analysis of the Third-Party Certification Framework for the Formaldehyde Standards for Composite Wood Products Proposed Rule

RIN 2070-AJ44



## EO 12866 REVIEW DRAFT

Economic and Policy Analysis Branch Economics, Exposure and Technology Division

Office of Pollution Prevention and Toxics Office of Chemical Safety and Pollution Prevention U.S. Environmental Protection Agency



## March August 2012*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule 

### Acknowledgment

EPA acknowledges the analytical and draft prepar ation support of Abt Associates Inc. of Cambridge, Massachusetts in the preparation of this report, provided und er Contract No. EP-W08-10.

Notice

This is not an official guidance documen t and should not be relied upon to determine applicable regulatory requirements. This document was prepared to provide economic information for the rulemaking process, and to meet various administrative and legislative requirements. Due to the nature of the information available to EPA, the document contains various assumptions that may not reflect the regulatory

determinations that an indivi dual firm or organization would make were it to apply the rule's requirements to its specific circum stances. Persons seeking information on specific regulatory requirements should consult 40 CFR Part 770, and the preamble for the regulatory action.

Mention of the names of specific companie s, organizations, or entities does not constitute an endorsement by EPA.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule i 

### Table of Contents

Notice

1 Summary of Economic Analysis .........................................................................................1

2 Certification System .......................................................................................................... ...6

2.1 Certification System Framework ...........................................................................................6

2.2 Profile of Third Party Certifie rs and Accreditation Bodies ..................................................10

3 Costs of the TSCA Title VI TPC Rule ..............................................................................16

3.1 Proposed Rule Requirements ...............................................................................................16

3.2 Wage Rates Used in the Analysis ........................................................................................17

3.3 Costs to Accreditation Bodies ..............................................................................................18

3.4 Third-Party Certifier Costs ................................................................................................... 20

3.5 Total Cost to TPCs ............................................................................................................ ...29

3.6 Total Costs of the Rule for U.S. Accreditation Bodies and TPCs .......................................30

4 Impact Analyses ............................................................................................................... ...33

4.1 Paperwork Reduction Act Analysis .....................................................................................33

4.2 Regulatory Flexibilit y Act Analysis .....................................................................................34

4.3 Unfunded Mandates Reform Act (UMRA) ..........................................................................38

4.4 Executive Order 13132 - Federalism ...................................................................................39

4.5 Executive Order 13175 - Tribal Implications ......................................................................39

4.6 Executive Order 13045 - Protection of Children .................................................................39

4.7 Executive Order 13211 - Energy Effects .............................................................................39

4.8 National Technology Transfer and Advancement Act .........................................................40

4.9 Executive Order 12898 – Environmental Justice .................................................................40 Appendix A: Wage Rates Appendix B: Recordkeeping and Reporting Burdens Appendix C: Costs and Bene fits of Electronic Reporting*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 1 

### 1 Summary of Economic Analysis 1

2

3 This report presents an economic analysis of the U.S. Environmental Protection Agency 4 (EPA)’s proposed Third Party Ce rtification rule. The Formal dehyde Standards for Composite 5 Wood Products Act, which created Title VI of the Toxic Substances Control Act (TSCA), 6 established formaldehyde emission standards for composite wood products (hardwood plywood, 7 medium-density fiberboard, and particleboard) sol d, supplied, offered for sale or manufactured in 8 the United States. Under TSCA Tile VI, ma nufacturers of composite wood products must 9 comply with specific formaldehyde emission standa rds, and their compliance must be verified by 10 a third party certifier (TPC). 11

12 Third-party certification invol ves a process by which a produ ct, process or service is 13 reviewed by a reputable and qua lified independent third-party to verify that a set of norms, 14 criteria, claims, practices or standards are be ing met. The standards used in a third-party 15 certification process are typical ly voluntary consensus standards developed by nationally or 16 internationally recognized st andards-producing organizations or industry groups. TPCs are 17 overseen by accreditation bodies (ABs), which pr ovide an impartial verification of the 18 competency of the TPCs. 19

20 The proposed TPC rule establishes a framew ork whereby ABs accredit TPCs so that the 21 TPCs may certify composite wood produc t manufacturers under TSCA Title VI. The proposed 22

rule identifies the roles a nd responsibilities ABs and TPCs, as well as the criteria for 23 participating in the program. Under the propos ed framework, participa ting ABs would accredit 24 TPCs, audit TPCs, maintain records on their accredited TPCs, and report to EPA on TPCs’ 25 activities. TPCs would be responsible for activ ities such as regularly auditing manufacturers, 26 conducting and verifying formaldehyde emissions te sts, and ensuring that manufacturer quality 27 assurance and quality control pro cedures and testing comply with the requirements set forth in 28

the TSCA Title VI rule. 29

30 Under the TSCA Title VI rule, participating a ccredit ing accreditation bodies will need to 31 familiarize themselves with the rule (in the firs t year), submit an application and enter into a 32 recognition agreement with EPA (in the first year and every three years thereafter), and provide 33 notifications and reports and keep records (every year). As shown in Table 1-1, accreditation 34 bodies are expected to incur costs of $1,685 in th e first year, $1,070 in year s with reapplication 35 and recognition agreement resubmissi ons, and $633 in other years. 36

37 Table 1-1: Costs per Accreditation Body

Type of Cost Cost (2010$)
First Year Reapplication Years 1 Non-Reapplication Years
Rule Familiarization $615 $0 $0
Application or Rea pplication Process $88 $88 $0 Prepare Recognition Agreement $349 $349 $0
EPA Notification $57 $57 $57
TPC Notification $12 $12 $12 Recordkeeping $308 $308 $308 Reporting $256 $256 $256 Cost per Accreditation Body $1,685 $1,070 $633*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 2 1 Accreditation bodies are required to r eapply to the program every three years.
38 Eight accreditation bodies in the U.S. are assu med to participate in the TSCA Title VI 39 program. As shown in Table 1-2, total annual co sts to U.S. accreditation bodies are estimated to 40 be $13,480 in the first year, $8,560 in years when accrediting accreditation bodies must reapply 41 to the program, and $5,064 in other years. Annualized costs are estimated at $6, 204 303 to 42 $6, 222 320 per year, depending on the discount rate. 43

44

Table 1-2: Total Costs for U.S. Accreditation Bodies

Type of Cost Cost (2010$)
First Year Reapplication Years 1 Non-Reapplication Years Cost per Accreditation Body $1,685 $1,070 $633
Number of U.S. Accreditation Bodies 8 8 8

Total Costs for U.S. Accreditat ion Bodies $13,480 $8,560 $5,064 Annualized Costs (30 years, 3 percent) $6,303 Annualized Costs (30 years, 7 percent) $6,320

1 Accreditation bodies are required to r eapply to the program every three years.
45 TPCs participating in the TSCA Title VI program will need to conform to several 46 voluntary standards and guides by the Internationa l Organization for Stan dardization (ISO) and 47

International Electrotechnical Commission (IEC). Accreditations can cost TPCs up to $25,000 48 obtain and $5,000 per year to maintain, but most TPCs will already have all the necessary 49

accreditations. TPCs will also have to familiari ze themselves with the rule and submit an 50 application to the TSCA Title VI program (in th e first year); reapply to the program (every 51

two three years); and submit notifications and reports and maintain records (every year). As 52 shown in Table 1-3, TPCs that already have all accreditations in place will incur an estimated 53 cost of $2,090 in the first year, $1,475 in reap plication years, and $983 in non-reapplication 54 years. TPCs that need to obtain an additiona l accreditation will incur an estimated cost of 55 $27,090 in the first year, $6,475 in reapplication y ears and $5,983 in non-rea pplication years. 56

57
Table 1-3: Costs per TPC

Type of Cost Cost (2010$)
First Year Reapplication Years 2 Non-Reapplication

Years

Have

Accred. Need

Accred. Have

Accred. Need

Accred. Have

Accred. Need

Accred.

Accreditation 1 $0 $25,000 $0 $5,000 $0 $5,000
Rule Familiarization $615 $615 $0 $0 $0 $0
Application or Rea pplication Process $492 $492 $492 $492 $0 $0 Manufacturer Notification and Recordkeeping $773 $773 $773 $773 $773 $773 Annual Report and Notifications of Changes $210 $210 $210 $210 $210 $210 Cost per TPC $2,090 $27,090 $1,475 $6,475 $983 $5,983

1 Two-thirds of TPCs are assumed to be accredited for all three standards require d by the rule (ISO/IEC Guide 65, 17020, and 17025) and thus incur no cost for accreditation or reaccreditati on. One-third of TPCs will need to become accredited (and maintain accreditation) for one additional st andard at a cost of $25,000 in the first year and $5,000 per year in subsequent ye ars.

2 TPCs are required to reapply every three years. CARB TPCs are grandfathered in for the first year.
58 Nine TPCs in the U.S. are assumed to participate in the TSCA Title VI program. Six of 59 them are assumed to already have all the nece ssary accreditations, while three are assumed to 60

need to obtain and maintain an additional accre ditation. As shown in Table 1-4, total annual 61 costs to U.S. TPCs are estimated to be $93,810 in the first year, $28,275 per year in reapplication 62*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 3 years, and $23,847 per year in the remaining year s. Total annualized costs are estimated at 63 $27, 917 232 to $28, 76 0 123 per year, depending on the discount rate. 64*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 4 65

Table 1-4: Total Costs for U.S. TPCs

Type of Cost Cost (2010$)
First Year Reapplication Years 2 Non-Reapplication

Years

Have

Accred. Need

Accred. Have

Accred. Need

Accred. Have

Accred. Need

Accred. Cost per TPC $2,090 $27,090 $1,475 $6,475 $983 $5,983
Number of U.S. TPCs 6 3 6 3 6 3 Total Cost by Accreditation Status $12,540 $81,270 $8,850 $19,425 $5,898 $17,949 Total Costs for U.S. TPCs $93,810 $28,275 $23,847 Total Annualized Costs (30 years, 3%) $27,232 Total Annualized Costs (30 years, 7%) $28,123

1 Two-thirds of TPCs are assumed to be accredited for all three standards require d by the rule (ISO/IEC Guide 65, 17020, and 17025) and thus incur no cost for accreditation or reaccreditation. One-third of TPCs will need to become accredited (and main tain accreditation) for one additional standard.

2 TPCs are required to reapply every three years. CARB TPCs are grandfathered in for the first year.
66

Table 1-5 summarizes the estimated costs at tributable to the proposed rule. The 67 estimated total cost is $107,290 in the first year. Total subseq uent year costs range from $28,911 68 to $36,835 depending on whether it is a reapplicati on year for ABs and TPCs. Annualized costs, 69 calculated over a 30-year pe riod at three and seven per cent discount rates, are $ 34,121 33,535 to 70 $34, 983 443

. 71

72 Table 1-5: Summary of Costs to U.S. Accreditation Bodies and TPCs (2010$)

Type of Cost U.S. ABs U.S. TPCs All Affected U.S.

Firms Have Necessary

Accreditation Need Additional

Accreditation Per Firm Costs: Year 1 $1,685 $2,090 $27,090 - Per Firm Costs: Subsequent Years $633 to $1,070 $983 to $1,475 $5,983 to $6,475 -
Number of Affected Firms 8 6 3 17 Total Year 1 Costs $13,480 $12,540 $81,270 $107,290 Total Costs: Subsequent Years $5,064 to $8,56 0 $5,898 to $8,850 $17,949 to $19,425 $28,911 to $36,835
Total Annualized Costs (30-Years, 3 percent discount rate) $6,303 $6,755 $20,477 $33,535

Total Annualized Costs (30-Years, 7 percent discount rate) $6,320 $6,706 $21,416 $34,443

73

The rule will affect an estimated nine small entities in the U.S. – four accreditation bodies 74

and five TPCs. Some of the small entities are ex pected to be businesses, and others to be non75 profit organizations. The rule’s impacts on small entities are analyzed by determining the ratio 76 of costs to revenues for small businesses, and th e ratio of costs to expenses for small non-profit 77 organizations. The cost impacts are then categorized as being under one percent, between one 78 and three percent, and over three percent. 79

80 As shown in Table 1-6, there five small non-pro fits predicted to be affected by the rule, 81 all of which are estimated to have cost impacts of less than one percent of expenses. Four small 82 businesses are predicted to be affected by the ru le; two of them are estimated to have cost 83 impacts of less than one percent of revenues, and two are estimate d to have cost impacts between 84 one percent and three per cent of revenues. No small entities are predicted to have cost impacts 85 over three percent. 86

87*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 5

Table 1-6: Summary of Small Entity Impacts

Entity Type Number of U.S. Entities

that are Small Estimated Number of Small Entities with Impacts

Under One

Percent Between One and

Three Percent Over Three Percent

TPCs Non-profit 2 2 0 0

Business 3 1 2 0

ABs Non-profit 3 3 0 0

Business 1 1 0 0

Combined Non-profit 5 5 0 0

Business 4 2 2 0

Total 9 7 2 0 88

89*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 6 

### 2 Certification System 90

91 2.1 Certification System Framework 92

93 The certification system under the proposed TSCA Title VI TPC rule is based on a 94

framework of international sta ndards organizations and existing voluntary consensus standards, 95 accreditation and inspection oversight organizations, accredit ing accreditation bodies, and third 96 party certifiers, as described below. See Figure 1 for a diagrammatic approach to the 97 relationships between the organizations in the certification system framework. 98

99 The certification system under the TSCA T itle VI TPC rule will be similar, although 100 not identical, to that under th e California Air Resources Board’ s (CARB) Air Toxics Control 101 Measure (ATCM) to reduce formaldehyde emissi ons from composite wood products. Under the 102 CARB ATCM, manufacturers of composite wood products must ha ve their compliance with the 103 emission standards verified by a TPC approved by CARB. The CARB ATCM requires TPCs to: 104 verify that composite wood pr oduct manufacturers are complyi ng with the quality assurance 105 requirements; verify formaldehyde emission test results; work w ith manufacturers to establish 106 quality control limits for each product type and production line; provide independent inspections 107 and audits of manufacturers and records; use laboratories that are certified by an accreditation 108 body that is a signatory to th e International Laboratory Accr editation Cooperation Mutual 109 Recognition Arrangement; and provide an annual re port to CARB. In order to implement the 110 ATCM, CARB directly evaluates and approves TPCs seeking to participate in the program. 111

112 2.1.1 International Standards Organizations 113

114 The International Organiza tion for Standardization, known as ISO, is a non-governmental 115 international standard-setting body comprising repr esentatives from various national standards 116 organizations. The organization promulgates worl dwide proprietary indust rial and commercial 117

standards. The International Electrotechni cal Commission (IEC) is a non-profit, non118 governmental international sta ndards organization that prepar es and publishes International 119 Standards for electrical, electr onic and related technologies. Th e IEC cooperates with the ISO 120 when appropriate. The use of the ISO/IEC pr efix covers publications from ISO/IEC Joint 121 Technical Committee on Information Technology, as well as conformity assessment standards 122 developed by ISO’s committee on conformity assessment (CASCO). 123

124

The ISO/IEC standards relevant to the TSCA Title VI TPC rule include ISO/IEC Guide 125 65, which specifies requirements for bodies opera ting product certificati on systems; ISO/IEC 126 17011, which specifies general requirements fo r accreditation bodies accrediting conformity 127 assessment bodies; ISO/IEC 17020, which specifies requirements for competence of calibration 128 and testing laboratories; and ISO/IEC 17025, wh ich specifies the general requirements for 129 laboratories to demonstrate they are competent to conduct testing and/or calibrations, including 130 sampling. 131

132 2.1.2 Accreditation and Inspection Oversight Organizations 133

134*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 7 Accreditation and inspection ove rsight organizations ensure that their accreditation body 135 members only accredit laboratories that are compet ent to do the work they undertake and are not 136 subject to conflicts of intere st. They also esta blish mutual recogn ition arrangements among 137

accreditation bodies to ensure that the results from accredited laboratories will be accepted 138 anywhere in the world. Examples of accred itation and inspection oversight organizations 139 include the International Accreditation Forum, Inc. (IAF), and the In ternational Laboratory 140 Accreditation Cooperation (ILAC). 141*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 8 Figure 1. TSCA Tile VI Proposed Third-Party Certification Framework 142

143

International Standards 144 Organizations 145

Develop consensus-ba sed international 146
standards for quality management 147
and conformity assessment 148

149

150 Accreditation and Inspection 151 Oversight Organizations 152

Ensure competency of Accrediting Accreditation 153

Bodies and their conformance with 154

international standards: 155

 Ensures AB conformance to 156

ISO/IEC 17011 1 157

 Ensure ABs are qualified to oversee 158

TPC conformance to ISO/IEC Guide 65 159

ISO/IEC17020 and/or ISO/IEC 17025 160

161

162 Accrediting Accreditation Bodies 163

Ensure competency of TPCs; verify 164
accuracy of emission test procedures; 165
monitor quality assura nce programs, audit 166
and inspect TPCs and panel producers: 167

 Management systems conform to 168

ISO/IEC 17011 169

 Ensure TPC conformance to 170
applicable ISO/IEC Guides & Standards 171 172 173 Third Party Certifiers 174

Ensure that panel producers are in 175
compliance with statutory 176
formaldehyde emission standards: 177

 Management systems conform to 178

ISO/IEC Guide 65 179

 Conform to applicable ISO/IEC 180

Guides & Standards for 181
Product & Laboratory Certification 182
and Inspections 183 184 Composite Wood 185

Product Panel Producer 186 187

1 ISO/IEC 17011 – General Requirements for Accreditatio n Bodies Accrediting Conformity Assessment Bodies 188

2 MLA – IAF’s Multilateral Recognition Arrangement requires AB signato ries to demonstrate they are capable of accrediting product certification 189
bodies in conformance with ISO/IEC Guide 65 – General Requirements for Bodies Operating Product Certification Systems and ISO/I EC 17020 – 190
General Criteria for the Operation of Vari ous Types of Bodies Performing Inspection. 191

3 MRA – ILAC’s Mutual Recognition Arrangement requires AB signatori es to demonstrate they are capable of accrediting testing labo ratories in 192

conformance with ISO/IEC 17025 – General Requirements for the Competence of Testing and Calibr ation Laboratories. 193

194 International Organization for Standardization (ISO)

International Electrotechnical Commission (IEC)

International Accreditation Forum, Inc (IAF) or equivalent organization

 Ensures AB conformance to

ISO/IEC 17011 1

 Require member ABs to be a signatory to MLA 2 International Laboratory Accreditation Cooperation (ILAC) or equivalent organization

 Ensures AB conformance to

ISO/IEC 17011 1

 Require member ABs to be a signatory to MRA 3

AB Type #3

Product & Lab Accreditation Body

 Recognition Agreement

with EPA

 Signatory to IAF MLA and ILAC MRA or equivalents

 Ensure TPC conformance to ISO/IEC Guide 65, ISO/IEC

1 70 2 0 & I SO/ IE C 1 70 2 5 AB Type #2 Laboratory Accreditation Body

 Recognition Agreement

with EPA

 Signatory to ILAC MRA or equivalent

 Ensure TPC conformance

to ISO/IEC 17025 AB Type #1

Product Accreditation Body

 Recognition Agreement

with EPA

 Signatory to IAF MLA or equivalent

 Ensure TPC conformance

to ISO/IEC Guide 65 &

ISO/IEC 17020

TPC #2
Accredited by AB #3 (acting as

both Product AB & Lab AB) TPC #1
Accredited by AB #1 (Product AB) & AB #2 (Lab AB)

Panel Producer #4 Certified by TPC #2 Panel Producer #3 Certified by TPC #2 Panel Producer #2 Certified by TPC #1 Panel Producer #1 Certified by TPC #1*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 9 195

2.1.3 Accreditation Bodies 196

197 An accreditation body (AB) is an organization th at provides an impartial verification of 198 the competency of a laboratory or TPC. In the context of formaldehyde and composite wood 199 products, ABs ensure that TPCs can verify the acc uracy of the emission test procedures used by 200 composite wood product manufacturers to conduc t formaldehyde emissions tests; monitor 201 manufacturer quality assurance programs; and pr ovide independent audits and inspections of 202 manufacturers’ mills and testing facilities. Th ere are ABs located throughout the world. ABs in 203 the U.S. that are IAF or ILAC signatories in clude the AIHA Laboratory Accreditation Program 204 (AIHA-LAP), the American Association for La boratory Accreditation (A2LA), the American 205 National Standards Institute (ANSI), Forensic Quality Services (FQS), the International 206 Accreditation Service (IAS), the Laboratory Accreditation Bureau (L-A-B), the National 207 Voluntary Laboratory Accreditation Program (NVLAP), and Perry Johnson Laboratory 208 Accreditation, Inc. (PJLA). 209

210 The proposed TSCA Title VI TPC rule requires ABs to be either a signatory to IAF’s 211 Multilateral Recognition Arrangement (MLA) or the equivalent for inspection and lab 212 competency; ILAC’s Mutual R ecognition Arrangement (MRA) or the equivalent for product 213 certification competency; or both. An AB that is an IAF signatory is responsible for ensuring 214 that the TPC is in conformity with ISO/IEC Guide 65 and ISO/IEC 17020. An AB that is an 215 ILAC signatory is responsible for ensuring that a TPC is in conformity with ISO/IEC 17025. 216

217 Thus, TPCs will need to be accr edited by two ABs unless their AB is a signatory to both 218 ILAC and IAF (or equivalent oversight bodies). In the TSCA Title VI program, a Product AB is 219 an organization that is a signato ry to the IAF MLA or the equiva lent, and that can verify the 220 accuracy of the test procedures and facilities used by manufacturers to conduct tests, monitor 221 manufacturer quality assurance and quality contro l programs, and provide a udits and inspections. 222 A Laboratory AB is an organizati on that is a signatory to the IL AC MRA, or the equivalent, and 223 that is qualified to verify that testing and calibration labor atories can operate a quality 224 management system, are technically competent, and are able to genera te technically valid 225

emissions results. 226

227 2.1.4 Third Party Certifiers 228

229 The third-party certifiers (TPCs) are responsible for ac tivities such as regularly 230 auditing manufacturers, conducting and verifying formaldehyde emissions tests, and ensuring 231 that manufacturer quality assurance and quality control procedures and testing complies with 232 TSCA Title VI TPC rule. Specific requirement s include verifying that composite wood product 233 manufacturers have adequate quality assuranc e controls and are complying with quality 234 assurance and quality cont rol requirements; verifying quality c ontrol test results compared with 235 ASTM E-1333-96 test results by having laboratorie s conduct quarterly test s and evaluate test 236 method equivalence; reviewing applications fr om manufacturers for reduc ed testing; working 237

with manufacturers to establish quality control limits, and, if a pplicable, other limits for each 238 product type and production line; informing manuf acturers of criteria th at will be used to 239 determine if product lots are consistently ex ceeding the applicable quality control limit; 240 inspecting and auditing manufact urers and their records at l east quarterly; using a testing 241*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 10 laboratory or laboratories that comply with ISO/IEC 17025; certifying composite wood product 242 types that comply with requirements under TS CA Title VI; following ISO/IEC Guide 65; 243 following ISO/IEC 17020 in the carrying out of thei r inspections of the manufacturers; providing 244 an approved TPC number (supplied by the accredi ting AB) to the manufacturer for labeling and 245 recordkeeping; and using laborator ies that participate in an annual inter-laboratory comparison or 246 proficiency testing program. 247

248 In the example shown in Figure 1, TPC #1 is accredited by two ABs: AB #1 (which is a 249 signatory to the IAF MLA and acts as the Product AB) and AB #2 (which is a signatory to the 250 ILAC MRA and acts a Laboratory AB). TPC #2 is accredited by a single AB, AB #3, which is a 251 signatory to both the IAF MLA and the ILAC MRA and acts as both a Product AB and a 252 Laboratory AB. 253

254 2.2 Profile of Third Party Certif iers and Accreditation Bodies 255

256 2.2.1 Third Party Certifiers 257

258 CARB has approved nine TPCs located in th e U.S. (although most of these U.S. TPCs 259 provide services internationally) . Two of these TPCs are non-pr ofit organizations, and the rest 260

are businesses. Table 2-1 lists the domestic TPCs approved by CARB, their NAICS code, the 261 type of organization, the sales volume or expend itures and the number of employees for the TPC 262 or its parent organization, the U.S. Small Business Administration’s size threshold for the 263 NAICS code, and the TPC’s small entity status. 264

265 This analysis assumes that 9 U.S. entities will act as TPCs under the TSCA Title VI 266 program, and uses existing CARB TPCs as a pro xy for their size and characteristics, but that 267

does not mean that all of the CARB TPCs will beco me TPCs under Title VI. In reality, some of 268 the CARB TPCs may choose not to participate in the federal program, and/or new entities may 269 apply that are not part of the CARB program. 270

271

Size information was available for four of the nine U.S. TPCs, including the two non272 profits. The size of the TPCs ranges from a non-profit with 10 employees and $1.6 million in 273 expenditures to a business with 2,500 employees in 125 offices with parent company that 274 manages $3.1 billion in assets. 275

276 Under the Regulatory Flexibility Act (RFA), unless an agency establishes an alternate 277 definition, the term “small organization” mean s any not-for-profit en terprise which is 278 independently owned and operated and is not domi nant in its field. The RFA does not provide 279 any guidance on how to judge whether an organizati on is dominant in its field. Non-profit TPCs 280 and accreditation bodies perform the same ac tivities (such as conducting and verifying 281 formaldehyde emissions tests, accrediting, and auditin g) as their for-profit counterparts. In order 282 to interpret the RFA criteria for small organizatio ns and treat all affected entities consistently, 283 this analysis determines the si ze status of non-profits by applying the SBA size thresholds for the 284 NAICS codes the non-profits are classified in. 285

286 Based on the data in Table 2-1, the two U.S. TP Cs that are non-profits are classified as 287 small entities, and two of the businesses are classi fied as large. The size status for five CARB 288*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 11 TPCs could not be determined using the data in Table 2-1, so the small entity analysis in Section 289 4.2 estimates a generic distribution of sizes based on Census data fo r the relevant NAICS codes. 290

291

TPCs come from a diverse set of industries – the six U.S.-based CARB TPCs for which 292

Dun & Bradstreet listed an industr y classification fall into five di fferent NAICS codes. Thus, the 293 firms that are likely to seek TPC accreditation may be very different from each other in terms of 294 size, organization, and financial condition. Tabl e 2-2 presents key industry summary statistics 295 for these NAICS codes. However, the domestic TPCs approved by CARB represent a very small 296 share of the 142,000 firms in these industries. And comparing Table 2-1 and Table 2-2, the 297 CARB TPCs appear to be larger than the average firms in these industries. Thus, these Census 298 statistics may not be representative of current CARB TPCs or potential new TSCA Title VI 299

TPCs. 300

301 Table 2-1: CARB-Approved Third Part y Certifiers Based in the U.S.

Company Name NAICS

code Organization Type Annual Sales

Volume or Expenditures 1

(millions $) Total Employees SBA Size

Threshold: Revenues ($ Millions) or Employees Small Entity

Status

Certification Services International, LLC Unknown Unknown Unknown Unknown Unknown Unknown

Composite Panel

Association North America, Inc. (CPA) 813910 Non-Profit $3.0 14 $7.0 Small

Forestwood Industries, Inc. Unknown Unknown Unknown Unknown Unknown Unknown

Hardwood Plywood

and Veneer Association (HPVA) 813910 Non-Profit $1.6 10 $7.0 Small

NTA Incorporated 541330 Private Company $5.4 80 $4.5 Large

PFS Corporation

541611 Private Company Unknown According to company website,

more than 100

employees $7.0 Unknown

Professional Service Industries, Inc. (PSI), owned by Olympus

Partners Unknown Private Company Unknown, but Olympus Partners

website reports they manage $3.1

billion in assets. Unknown, but PSI website reports they have more

than 2,500 employees in 125

offices Unknown Assumed to be large

because of

reported

assets.

Scientific

Certification Systems (SCS) 541380 Private Company Unknown SCS web site lists 87 employees $12.0 Unknown

TIMBERCO (dba TECO) 561990 Private Company Unknown 31 $7.0 Unknown

1 Annual sales volume is reported for businesses, and annual expenditures are reported for non-profits Sources: California Air Resources Board (CARB) 2011, Dun & Bradstreet 2011, U.S. Small Business Administration 2010 (size standards), and company web sites for data on their sales volume and employees (PSI 2012, PFS 2012, SCS 2012a and SCS 2012b)*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 12 302

303 Table 2-2: Industry Summary Statistics for NAICS Identified for U.S. Third Party Certifiers

NAICS Firms Establishments Revenues ($1000) Number of Employees Average

Revenues per Firm ($1000) Average Employees per Firm 541330 - Engineering services 47,714 58,391 $187,531,866 977,031 $3,930 20
541380 - Testing laboratories 5,288 6,549 $12,386,831 106,618 $2,342 20
541611 - Administrative management consulting services 59,612 61, 583 $67,994,053 351,829 $1,141 6
561990 - All other support services 12, 888 14,539 $20,897,346 195,544 $1,621 15

813910 - Business associations 16,418 17,028 $22,482,137 116,055 $1,369 7 Total 141,920 158,090 311,292,233 1,747,077 $2,193 12
Note that TPCs could potentially be classified in additional NAI CS as well; as a result, this list may not be comprehensive.
Sources: U.S. Census Bureau 2010a; U.S. Census Bureau 2010b; U.S. Census Bu reau 2010c; U.S. Census Bureau 2010d
304 Because Executive Order 12866, the Regulatory Flexibility Act, and the Unfunded 305

Mandates Reform Act are all focused on entities locat ed in the U.S., this analysis estimates costs 306 and small entity impacts based on the expected number of domestic entities. But because the 307 approval requirements for information collecti on requests under the Paperwork Reduction Act is 308 not limited to U.S. entities, the reporting and recor dkeeping burden of the rule is calculated for 309 both foreign and domestic entities. Therefore, the analysis estimates the number of TPCs and 310 ABs in other countries that are expected to participate in th e Title VI program. 311

312 As shown in Table 2-3, there are a total of 27 CARB approved TPCs outside of the U.S., 313 bringing the total number of CARB approved TP Cs to 36. For the purpose of calculating 314 reporting and recordkeeping burden under the Pa perwork Reduction Act in Section 4.1, this 315 analysis assumes that there will be 9 domestic and 27 foreign TPCs under the Title VI program, 316 the same number as under the CARB program. 317

318
Table 2-3: CARB-Approved Third Party Certifiers by Country

Country Where TPC is Located Number of TPCs

Australia 1

Austria 1 Belgium 1

China 5 Czech Republic 1

Denmark 1

France 1 Germany 4 Hong Kong 3

Indonesia 1 Italy 3

New Zealand 1

Poland 1 Spain 1

Sweden 1

Taiwan 1

Sub-total for TPCs outside the U.S. 27

United States 9

Total 36 Source: California Air Resources Board (CARB) 2011 319*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 13 2.2.2 Accreditation Bodies 320

321 There are eight ABs in the U.S. that are cu rrently IAF or ILAC signatories. Table 2-4 322

lists the se the domestic ABs, their NAICS code, the t ype of organization, the sales volume or 323 expenditures and the number of employees for the AB or its parent organization, the U.S. Small 324 Business Administration’s size threshold for the NAICS code, and the AB’s small entity status. 325 It is not known which of these organizations accredit CARB TPCs for one or more of the 326 relevant ISO/IEC standards (Guide 65, 17020, or 17025). 327

328 This analysis assumes that 8 U.S. ABs will participate in the TSCA Title VI program, and 329

uses the characteristics of the ABs in Table 2-4 as proxies to estimate the impacts of the rule. 330 This assumption may overestimate the number of af fected entities, because some ABs that are 331 IAF or ILAC signatories may not choose to participate in the TSCA Title VI program. 1 And it is 332 unlikely that additional bodies will become signatories as a result of the TSCA Title VI TPC 333 rule, because becoming a signatory to IAF, IL AC, or an equivalent organization is a time334 intensive process that may take up to a year to complete (Personal Communication with IAS 335 2011). 336

337

Five of the domestic ABs th at are IAF or ILAC signatori es are non-profit organizations, 338 so this analysis assumes that five similarly sized non-profit ABs will participate in the TSCA 339 Title VI program. Under the Regulatory Flexibil ity Act (RFA), unless an agency establishes an 340 alternate definition, the term “small organization” means any not-for-prof it enterprise which is 341 independently owned and operated and is not domi nant in its field. The RFA does not provide 342 any guidance on how to judge whether an organizati on is dominant in its field. Non-profit TPCs 343 and accreditation bodies perform the same ac tivities (such as conducting and verifying 344 formaldehyde emissions tests, accrediting, and auditin g) as their for-profit counterparts. In order 345 to interpret the RFA criteria for small organizatio ns and treat all affected entities consistently, 346 this analysis determines the si ze status of non-profits by applying the SBA size thresholds for the 347 NAICS codes the non-profits are classified in. Th is results in an estima te that three small non348 profits and one small business will participat e in the TSCA Title VI program as ABs. 349

350

1 For example, Forensic Quality Services does not appear to accredit any labs providing produ ct or environmental testing, and states that its mission is “to provide training, education, quality assurance management and accreditation for providers of forensic science testing se rvices to federal, state and local law enforcement ag encies” (IRS 2010). So FQS seems unlikely to serve as an accreditation body for TPCs testing formaldehyde from composite wood products.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 14 Table 2-4: U.S. Accreditation Bodi es that are IAF or ILAC Signatories

Company Name NAICS

code Organization Type Sales Volume / Expenditures ($ Millions) 1 Total Employees SBA Size

Threshold:

Revenues ($ Millions) or

Employees Small Entity

Status

AIHA Laboratory Accreditation Programs, LLC 2 561990 Non-Profit $14.9 63 $7.0 Large

American Association For Laboratory Accreditation 813920 Non-Profit $10.6 48 $14.0 Small

American National Standards Institute (ANSI) 813910 Non-Profit $31.3 122 $7.0 Large

Forensic Quality Servic es, Inc. 541990 Non-Profit $0.6 4 $7.0 Small

International Accreditation Service (IAS) 813319 Non-Profit $2.5 54 $7.0 Small

Laboratory Accreditation

Bureau 541712 Private Company $0.4 6 500 employees Small

National Voluntary Laboratory Accreditation Program (NVLAP), operated by the

National Institute of Standards and Technology (NIST) - Federal

Government - - - Large

Perry Johnson Laboratory

Accreditation Inc. 3 541618 Private Company $17.0 147 $7.0 Large

Notes: 1. Sales volume da ta are presented for businesses. Expenditu re data are presented for non-profits. 2. Size data for AIHA Laboratory Accredit ation Programs, LLC is based on the size of the parent organization, the American Industrial Hygiene Association (AIHA). 3. Sales volume and employee size data fo r Perry Johnson Laboratory Accreditation Inc. include D&B sales and employee data for "Perry Johnson Laboratory Accreditation" and the American Business Directory sales data for the related companies "Perry Johnson Inc" and "Perry Johnson Registrars". Sources: American Business Directory 2011 (s ales and employee data for Perry Johnson Inc. and Perry Johnson Registrars), Dun & Bradstreet 2011 (business sales volu mes and employee data and NAICS codes for all entities), U.S. Internal Revenue Service 2009, 2010 (non-profit expenditures and employees), U. S. Small Business Administration 2010 (size standards), and company web sites for AIHA and Perry J ohnson for relationships among entities in their family tree (AIHA-LAP LLC 2012, Perry Johnson & Associates 2012).
351 Table 2-5 lists the foreign countries with CARB-approved TPCs, the ILAC or IAF 352 signatory ABs in that country, and their status as signatori es for ISO/IEC Guide 65, 17020, and 353 17025. It is not known which ABs these CARB-appr oved TPCs use. However, every country 354 with a CARB approved TPC also has an AB that is an IAF or ILAC signatory, and most of the 355 ABs are signatories to all three relevant ISO/IE C standards. The exceptions are Australia, New 356 Zealand, and Hong Kong, each of which lacks an AB that is a signatory for ISO/IEC Guide 65. 357 However, there is a joint AB for Australia a nd New Zealand that is a signatory for ISO/IEC 358 Guide 65, and there is an AB in China that is a signatory for ISO/IEC Guide 65. Therefore, each 359 foreign TPC could use a local AB for the TSCA Title VI program. 360

361

There are a total of 17 ABs shown in Table 2- 5 that are IAF or ILAC signatories and are 362 located in foreign countries with CARB-appr oved TPCs. While EPA does not know whether 363

these ABs accredit CARB TPCs or whether some CARB TPCs use ABs located outside their 364 own country, for the purpose of calculating repo rting and recordkeeping burdens under the 365 Paperwork Reduction Act, the analysis in Sectio n 4.1 assumes that there will be 17 foreign ABs 366 that participate in the TSCA Title VI program. 367*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 15 368 Table 2-5: Summary of IAF or ILAC Signatory Accreditation Bodies in Foreign Countries with
CARB TPCs

Country Number of CARB-approved

TPCs in Country Accreditation Body ISO/IEC

Guide 65 ISO/IEC

17020 ISO/IEC

17025

1. Australia 1 National Association of Testing Authorities, Australia (NATA) X X

2. Australia and

New Zealand Joint Accreditation System of Australia and New Zealand (JAS-ANZ) X

3. Austria 1 Bundesministerium fur Wirtschaft, Familie und Jugend (BMWA) X X X

4. Belgium 1 Belgian Accreditation Structure (BELAC) X X X

5. China 5 China National Accreditation Service for Conformity Assessment (CNAS) X X X

6. Czech Republic 1 Czech Accreditation Institute (CAI) X X X

7. Denmark 1 Danish A ccreditation (DANAK) X X X

8. France 1 Comite Francais d’Accreditation (COFRAC) X X X

9. Germany 4 Deutsche Akkreditie rungsstelle GmbH (DakkS) X X X

10. Hong Kong 3 Hong Kong Accreditation Service (HKAS) X X

11. Indonesia 1 National Accreditation Body of Indonesia (KAN) X X X

12. Italy 3 Sistema Italiano di Accreditamento (ACCREDIA) X X X

13. New Zealand 1 International Accreditation New Zealand (IANZ) X X
14. Poland 1 Polish Centre for Accreditation (PCA) X X X

15. Spain 1 Entidad Nacional de Acreditacion (ENAC) X X X

16. Sweden 1 Swedish Board for Accreditation and Conformity Assessment (SWEDAC) X X X

17. Taiwan 1 Taiwan Accred itation Foundation (TAF) X X X

Result: there are a tota l of 17 ABs that are IAF or ILAC signatories in foreign countries with CARB-approved TPCs
Sources: IAF 2011; ILAC 2011; CARB 2011. 369*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 16 

### 3 Costs of the TSCA Title VI TPC Rule 370

371 This section describes the proposed regulat ory requirements for accreditation bodies and 372 TPCs and presents the estimated costs fo r obtaining and mainta ining accreditation. 373

374 3.1 Proposed Rule Requirements 375

376 EPA is proposing to administer the TPC pr ogram by developing recognition agreements 377 with accreditation bodies. The ABs would then pro cess TPC applications and oversee the TPCs. 378

379 3.1.1 Requirements for Accreditation Bodies 380

381 As described in Section 2.1, the proposed rule would require ABs to be either a signatory 382 to the International Laboratory Accredita tion Cooperation (ILAC) Mutual Recognition 383 Arrangement (MRA) or the equivalent for insp ection and lab competen cy, the International 384 Accreditation Forum, Inc. (IAF) Multilateral Recognition Arrangeme nt (MLA) or the equivalent 385 for product certification competency, or bot h. EPA would also require that ABs: 386

387

 Conform with ISO/IEC 17011, which lists the basic criteria for an international 388 accrediting accreditation body who reviews and audits the TPC 2 ; 389

 Submit an application to enter into a recognition ag reement with EPA. The 390 application would include their contact information; documentation of their IAF 391 MLA, ILAC MRA, or equivalent signator y status; and a description of any other 392 qualifications related to performing pr oduct or laboratory accreditation. The 393 recognition agreement would need to be renewed every three years; 394

 Notify EPA in the following instances: loss of signatory status; TPC application; TPC 395 accreditation; TPC compliance failure; organi zation policy or management structure 396 changes that could adversely affect accr editation program; and with checklists and 397 other records documenting compliance with systems audits and on-site assessments; 398

 Notify TPCs if the AB withdraws or is removed from the program; 399

 Maintain records documenting TPC accredita tion applications, and checklists and 400 other records documenting compliance with sy stems audits and on-site assessments. 401 Applications must be retained for a minimum of five three years from the date that the 402

TPC’s accreditati on terminates they were submitted ; and 403

 Provide an annual report to EPA with the number of TPC applications received; the 404 number of TPCs approved and denied; the names and contact information of all 405 accredited TPCs; the number and locations of systems audits and on-site assessments; 406 and the results of accredited TPC prof iciency testing and inter-laboratory 407 comparisons. 408

409 3.1.2 Requirements for TPCS 410

411

2 In order to become an IAF or ILAC signatory, an AB is revi ewed by its peers to ensure th at it is in compliance with ISO/IEC 17011, as well as to verify that it is qualified to ensure TP C compliance with other voluntary consensus standards. Therefore, it is assumed that IAF or ILAC signatories are already in conformance with ISO/IEC 17011, and

would not incur additional costs for conformance as a result of this rule.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 17 The proposed rule would require that TPCs: 412

413

 Conform to ISO/IEC Guide 65 (general requirements for bodies operation product 414 certification systems) and ISO/IEC 17020 (g eneral criteria fo r the operation of 415 various types of bodies performing inspection); 416

 Use a laboratory that conforms to ISO/IEC 17025 (requirements for competence of 417

calibration and testi ng laboratories); and 418

 Be qualified to administer the approved formaldehyde test methods they will be 419 using. 420

421 EPA would also require the following record keeping and reporting activities for TPCs: 422

423

 Submit an application to th e Product accreditation body every two three years with 424 domestic contact information; type of composite wood product(s) intended to be 425 certified; and a description of experi ence with ISO/IEC Guide 65, ISO/IEC 17020, 426 and the product(s) the in tended to be certified; 427

 Submit an applicati on to the Laboratory accreditation body every two three years with 428 domestic contact information; and a desc ription of experience with test method 429 ASTM E-1333-96 and in evaluating corre lation between tests, performing 430 formaldehyde tests on composite wood produc ts, and operating or using laboratories 431 that comply with ISO/IEC 17025; 432

 Maintain records for five three years that document the ce rtified manufacturers and 433 products, including those approve d for reduced testing; the results of inspections, 434 audits, and emissions tests; the laborato ries and tests used; and the methods and 435 results for establishing test method correlations; 436

 Provide an annual report to its accrediting accreditation body or bodies with a list of 437 manufacturers and products certified during the previ ous year; a list of non438 complying products or events; a list of labor atories and tests used by the TPC; and the 439 results of inter-laboratory comparison or pr oficiency tests for laboratories used by the 440 TPC; and 441

 Inform accreditation body or bodies within 30 days of any changes in personnel 442 qualifications, procedures, or la boratories used by the TPC. 443

444 3.2 Wage Rates Used in the Analysis 445

446 The proposed rule involves activities that may require efforts by employees in three labor 447 classifications: managerial, technical, and cleric al. Costs for each activity are calculated by 448 estimating the labor hours required in each labor category and multiplying those burdens by the 449 wage rate for each labor category. This secti on summarizes the estimated wage rate in each 450 labor category. Additional details are provided in Appendix A. 451

452 Loaded wage rates for managerial, techni cal, and clerical pe rsonnel are derived by 453 combining data on wages and fringe benefits wi th estimates of overhead rates, following the 454 methodology described in “Wage Rates for Economic Analysis of the Toxics Release Inventory 455 Program” (EPA, 2002b). Wage data for each labor category are provided by the Employer Costs 456 for Employee Compensation (ECEC) Supplemental Tables available on the BLS website (U.S. 457*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 18 Bureau of Labor Statistics (BLS) 2011). The lo aded wage rate for managerial labor is $66.78; 458 for technical labor, $56.31; and for clerical labor , $25.65. Table 3-1 presents the basic data used 459 to calculate the loaded wage rates for all three categories of labor. 460 Table 3-1: Loaded Industry Wage Rates, 2010$

Labor Category B
ase Wages Fringe

benefits + overhead

factor Loa
ded Wages Managerial $42.42 a 1.57 b ,c $66.78

Professional/

Technical $36.57 a 1.54 b,c $56.31

Clerical $16.72 a 1.53 b ,c $25.65

Notes:

a Base wages are estimated in the EC EC Supplemental Ta bles (U.S. Bureau of La bor Statistics (BLS) 2011).

b Fringe benefits are estimated in the ECEC Supplemental Ta bles (U.S. Bureau of Labor Statistics (BLS) 2011).

c An overhead rate of 17% of base wages is used here, based on methodology an d assumptions in U.S.

Environmental Protection Agency (EPA) 2002a, b. Source:U.S. Bureau of Labor Statistics (BLS) 2011, U.S. Environmental Protection Agency (EPA) 2002a, b.
461
3.3 Costs to Accreditation Bodies 462

463 The proposed TSCA Title VI TPC rule requires accreditation bodies to be signatories to 464 IAF, ILAC or equivalent overs ight bodies. The process ofbecoming a signatory is time465 intensive and may take up to a year to comple te, so it is unlikely that additional bodies will 466 become signatories as a result of the TSCA T itle VI TPC rule (Personal Communication with 467 IAS 2011). Thus, costs are estimated assuming that only existing IAF and ILAC signatories will 468

serve as a ccrediting accreditation bodies for the third-party cert ifiers under this regulation. 469 Therefore, the estimated incremental costs to the accrediting accreditation bodies related to the 470 proposed rule will include: 471

472

1. Rule Familiarization: Reading the rule in order to understand the requirements; 473

2. Application Submission: Submitting an application to enter into a recognition 474 agreement with EPA; 475

3. Prepare Recognition Agreement: If the application is approved, enter into a 476 recognition agreement with EPA; 477

4. EPA Notification: Provide EPA with notifications in the following instances: 478 loss of signatory status; TPC application; TPC accr editation; TPC compliance 479 failure; organization policy or management structure changes that could adversely 480 affect accreditation program; and provide checklists and other records 481 documenting compliance with systems audits and on-site assessments; 482

5. TPC Notification: Provide TPCs with notifications if the AB withdraws or is 483 removed from the program; 484

6. Recordkeeping: Maintain records documenting TPC accreditation applications, 485

and checklists and other records documen ting compliance with systems audits and 486 on-site assessments. Applica tions must be retained for a minimum of five three 487 years from the date that the TPC’s accreditati on terminates they were submitted ; 488

and 489

7. Reporting: Provide an annual report to EPA with the number of TPC 490 applications received; the number of TP Cs approved and denied; the names and 491

contact information of all accredited TPCs ; the number and locations of systems 492*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 19 audits and on-site assessments; and th e results of accredited TPC proficiency 493 testing and inter-laboratory comparisons. 494

495 Accreditation bodies are requi red to renew their recognition agreement with EPA every 496 three years. This analysis assumes that acc reditation bodies incur application submission and 497 recognition agreement preparation costs in the fi rst year and subsequently every three years 498

thereafter. Costs associated with EPA no tification, TPC notificat ion, recordkeeping and 499 reporting are assumed to be incurred annually. Ru le familiarization is a one -time cost incurred in 500 the first year. As a result, accreditation bodies are expected to incur costs of $1,685 in the first 501 year, $1,070 in reapplication years, and $633 in the non-reapplication years, as summarized below in 502 Table 3-2 and described in more detail in Appendix B (see Table B-1 and Table B-3). This analysis 503 assumes that eight organizations in the U.S. will beco me accreditation bodies, resulting in estimated total 504

annualized costs of $6, 204 303 per year at a three per cent discount rate, and $6, 2 22 320 per year at 505 a seven percent discount rate. 506

507

Table 3-2: Costs for Accreditation Bodies

Type of Cost Cost (2010$) 1

First Year Reapplication Years 2 Non-Reapplication Years 3

Rule Familiarization $615 $0 $0
Application or Rea pplication Process 1 $88 $88 $0 Prepare Recognition Agreement $349 $349 $0
EPA Notification $57 $57 $57
TPC Notification $12 $12 $12 Recordkeeping $308 $308 $308 Reporting $256 $256 $256 Cost per Accreditation Body $1,685 $1,070 $633
Number of U.S. Accreditation Bodies 8 8 8

Total Costs for U.S. Accreditat ion Bodies $13,480 $8,560 $5,064
Total Annualized Costs (30 years, 3%) 4 $6,303
Total Annualized Costs (30 years, 7%) 4 $6,320

Notes:

1 See Table B-1 and Table B-3 for detail ed description of these estimates.

2 Under the proposed rule, accreditation bodie s are required to reapply every three years. Reapplication is assumed to occur at the end of years 3, 6, 9, 12, 15, 18, 21, 24, 27, and 30.

3 Non-reapplication years are years 2, 4, 5, 7, 8, 10 , 11, 13, 14, 16, 17, 19, 20, 22, 23, 25, 26, 28, and 29.

4 Costs are annualized over thirty years for 3 and 7 percent discount rates using the following formula: (present discounted value of 30-year stream-of-costs)*(d iscount rate*(1+ discount ra te)30)/((1+ discount rate) 31 -1). Rule familiarization, application costs, and rec ognition agreement costs are assumed to be incurred immediately and therefore are no t
discounted. Other costs are discount ed assuming that they are incurred at the end of each year.
508 EPA is considering requiring accreditation bodi es to submit their notifications and reports 509 to the Agency electronically using the Central Data Exchange (CDX). Appendix C discusses the 510 incremental change in costs if EPA finalizes a mandatory electronic reporting requirement. As 511 shown in section C.1.4, the total annualized savings to U.S. accreditation bodies would be $1,193 512 per year at a 3 percent discount rate, and $1,146 per year at a 7 percent discount rate. 513

514*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 20 3.4 Third-Party Certifier Costs 515

516 Costs that TPCs may incur under the proposed rule can be classi fied into five categories: 517 (1) the cost of rule familiari zation, (2) the cost of applying to the accreditation body in order to 518 participate in the TSCA Title VI program, (3) the cost to obtain and maintain any necessary 519 accreditations that the TPC does not already have, (4) the annual cost of providing notifications 520 to manufacturers and of maintaining records, and (5) the cost of providi ng an annual report and 521

other notifications to the AB or EP A. To the extent that requirements in the TSCA Title VI rule 522 are similar to requirements in the CARB rule, CARB-approved TPCs will incur relatively little 523 additional cost to comply with EPA’s rule. 524

525 Under the proposed rule, TPCs are require d to apply for re-accreditation every two three 526 years. As a result, application a nd accreditation costs are incurred every other third year. The 527

costs associated with notifica tions, maintaining records, and providing an annual report are 528

assumed to be incurred on an annual basis. Rule familiarization is a one-time cost incurred in the 529 first year. Each of these types of costs is disc ussed in more detail in the subsections below. 530

531

3.4.1 TPC Rule Familiarization 532

533

The level of effort associated with ru le familiarization was estimated based on 534 professional judgment, and burden hours were multiplied by the corresponding labor category’s 535 wage rate as derived in Section 3.2 (U.S. Bur eau of Labor Statistics (BLS) 2011) to estimate 536 costs. As shown in Table 3-3 below, the total cost for each firm is estimated to be $615 in the 537 first year. 538

539 Table 3-3: Application Process Burden and Costs for TPCs, by Activity

Activity Clerical

Burden/Cost Technical

Burden/Cost Managerial

Burden/Cost Total

(hours) 1 (2010$) (hours) 1 (2010$) (hours) 1 (2010$) (hours) 1 (2010$)
(a) (b) (c) (d) (e) (f) (g)=(a )+(c)+(e) (h)=(b)+(d)+(f)
Rule Familiarization 0.00 $0.00 5.00 $281.55 5.00 $333.90 10.00 $615

Notes: 1. Burden hours are base d on best professional judgment. 540 3.4.2 TPC Application Process 541

542 The application process for TPCs includes co mpleting a form with standard information 543 about the firm and also describing the firms experi ence with the ISO/IEC standards. The level of 544

effort for these elements were esti mated based on prior economic analyses ( (EPA 2011a), and 545 burden hours were multiplied by the corresponding la bor category’s wage rate as derived in 546 Section 3.2 (U.S. Bureau of Labor Statistics (BLS) 2011) to estimat e costs. As shown in Table 547 3-4 below, the total application cost for each firm is estimated to be $492 in reapplication years 548 and $0 in non-reapplication years. For more information, see Appendix B. 549

550 A TPC must reapply every two three years in order to particip ate in the TSCA Title VI 551 program. TPCs that are approved by CARB will be grandfathered under the TSCA Title VI rule 552 for one year, provided that they are compliant with all other aspects of the TSCA Title VI rule. 553 To simplify the analysis, costs are calculated as though all Title VI TPCs are grandfathered in for 554 one year, even though some of them may not ha ve been approved by CARB. Thus, costs are 555*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 21 calculated assuming that r eapplication occurs every ot her third year starting three years after the 556 rule is promulgated (i.e., in years 3, 5 4 , 7, 9 10 , etc.). 557*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule22Table 3-4: Application Process Burden and Costs for TPCs, by ActivityActivityClerical Burden/Cost Technical Burden/Cost Managerial Burden/Cost Total(hours)(a)(2010$)1(b)(hours)(c)(2010$)1(d)(hours)(e)(2010$)1(f)(hours)(g)=(a)+(c)+(e)(2010$)1(h)=(b)+(d)+(f)Product Accreditation Body Application SubmissionCompany Information (Name, Address,Telephone Number, and Email Address ofPrimary Contact) and Type of Composite WoodProducts Applicant Intends to Certify20 $0.00 0.04 $2.25 0.02 $1.34 0.06 $3.59Description of TPC's Experience or Ability inProduct Certification and Complying withISO/IEC Guide 6530 $0.00 0.83 $46.74 0.51 $34.06 1.34 $80.80Description of TPC's Experience in theComposite Wood Product Industry with theProduct(s) Intended to be Certified30 $0.00 0.83 $46.74 0.51 $34.06 1.34 $80.80Description of TPC's Ability to Inspect andProperly Train and Supervise Inspectors Pursuantto ISO/IEC 1702030 $0.00 0.83 $46.74 0.51 $34.06 1.34 $80.80Laboratory Accreditation Body Application SubmissionCompany Information (Name, Address,Telephone Number, and Email Address ofPrimary Contact; if foreign, name and address ofan agent for service located in the U.S.)20 $0.00 0.04 $2.25 0.02 $1.34 0.06 $3.59Description of TPC's Experience in Performingor Verifying Formaldehyde Testing onComposite Wood Products30 $0.00 0.83 $46.74 0.51 $34.06 1.34 $80.80Description of TPC's Experience Operating orUsing Laboratories that Comply with ISO/IEC1702530 $0.00 0.83 $46.74 0.51 $34.06 1.34 $80.80Description of TPC's Experience with TestMethod ASTM E-1333-96 (2002) and ExperienceEvaluating Correlation between Test Methods30 $0.00 0.83 $46.74 0.51 $34.06 1.34 $80.80TOTAL – REAPPLICATION YEARS 0.00$0.00 5.06 $284.93 3.10 $207.02 8.16 $492TOTAL – NON-REAPPLICATION YEARS 0.00$0.00 0.00 $0.00 0.00 $0.00 0.00 $0Notes: 1. Note that under the proposed rule, TPCs are required to apply for re-accreditation every three years. As a result, reapplication costs are incurred every third year.2. Based on the estimated burden associated withreporting “company information” (EPA 2011a).3. Based on the estimated burden associated with answering substantiation questions when makingplant site confidentiality claims (EPA 2011a).Source: EPA 2011a558*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 23 3.4.3 TPCs Obtaining Accreditation for the Required Standards 559

560 Through a series of telephone interv iews, representatives from six laboratories TPCs that 561 have been approved by CARB for formaldehyde testing provided information about the 562 accreditations they already had, and the costs of receiving and maintaining the accreditation. 563

Several laboratories TPCs also spoke in general terms about the costs of accreditation. The 564

information collected from each lab oratory TPC is included in Table 3-5. 565

566 As indicated in Table 3-5, the cost to TP Cs of obtaining accred itation will depend on 567 whether they have the systems and equipment in place to satisfy the accreditation requirements 568 or whether they will have to establish these. Based on the telephone interviews, the initial cost 569 of obtaining a single accredita tion is about $20,000 to $30,000 for each quality system. This 570 analysis uses the mid-point of the range, $25,000, as the cost estimate. The cost would be about 571 three times that if the firm needed to be newly accredited for all three re levant ISO/IEC standards 572 (Guide 65, 17020, and 17025). Based on discussions with the six TPCs, th e analysis assumes 573

that two-thirds of the CARB-certified TPCs will already have all three accreditations in place 574

and that one-third will need to obtain one additi onal accreditation from an AB. As a result, this 575 analysis assumes that one-third of TPCs w ill incur a cost of $25,000 to obtain one additional 576 accreditation, while two-thirds of TPCs will not incur any additional costs associated with 577 obtaining additional accreditations. 578

579 In addition to obtaining the initial accredita tion, the TPCs will need to maintain and 580 renew their systems and testing certifications. (A typical accreditation last s for two years.) Two 581 of the six TPCs provided information on the cost of maintaining and re newing accreditations. 582 They reported costs that ranged from $5,000 to $15,000 per year associated with maintaining 583 certification, such as paying audit fees to th eir AB. Note that the systems and testing 584 certifications for which the laboratories reporte d costs may cover more than the specific 585 formaldehyde testing. Therefore, these estimate s may overstate costs if the labs would incur 586 these costs even if they were not acting as TPCs under TSCA Title VI. Because the audits 587

include tests other than formal dehyde, this analysis uses $5,0 00 (the low end of the costs 588 reported) as the annual reaccreditat ion cost for TPCs that need an additional accreditation. 589

590 As discussed above, based on discussions with the six TPCs, the analysis assumes that 591

two-thirds of the CARB-certified TPCs will alre ady be maintaining all three of the relevant 592 accreditations (i.e., ISO/IEC Guide 65, 17020, and 17025) and that one-third of TPCs will need 593 to maintain a single additional accreditation in order to participate in the TSCA Title VI 594 program. Thus, one-third of TPCs are assumed to incur an annual cost of $5,000 per year in 595 subsequent years for maintaining one additional accreditation, while two-thirds of TPCs will not 596 incur any additional costs associ ated with maintaining additional accreditations because they 597 were already maintaining all of the nece ssary accreditations in the baseline. 598

599 In interviews with TPCs, three said they had excess capacity for additional testing and 600 two said they could easily add extra capacity either by building a dditional chambers or 601 subcontracting the work to accre dited laboratories. For exampl e, one said that while they 602 currently have 3 small chambers, within two mo nths they could add 25 small chambers that 603 would allow them to do 100 tests per day. In addition, it would be possible to add large chamber 604 capacity within a 3-6 month period. The firms in dicated that if the new equipment added were 605*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 24 similar to what they already had in place, their accrediting accreditation body would allow for 606 desk audit approval (which could be done quickl y, instead of requiring a site visit prior to 607 approval, which would take more time). Therefor e, this analysis assumes there is adequate 608 existing testing capacity, and that no additional costs for adding a dditional testing capacity will 609

be incurred. 610 611

Table 3-5: CARB TPCs Estimates of Previous Accreditation Costs

TPC Estimated Cost of Accreditation Other Information

NSF International 1 About $5,000 for application process and between $5,000 for approval of 10 test processes to $20,000 for approval of 100 test processes. (The tests are grouped in disciplines and priced for each discipline. For this conversation the representative was discussing batteries of tests, for example toys have 10 tests.) Estimated that it would cost about $10,000 every two years to get reaccredited (or $5,000 a year average).

PSI, Inc. $5,000 to $6,000 if laboratory has accreditations, inspections, testing and quality systems in place. Estimated $50,000 to $60,000 to develop th e accreditations, inspections, testing and quality systems if they are not in place.

SCS International Estimated it cost about $9,000 to $15,000 to write manual and complete application. SCS already had the quality system in place. Mentioned that CARB does not require ISO accreditation as long as the laboratory has demonstrated ISO equivalence. Getting ISO accreditation is expensive ($25,000). They do not have a lab but contract the testing portion out to

labs that are ISO 17025 accredited. NTA Incorporated Estimated it cost $10,000 to set up their CARB accredited program. They were already an ISO produc t certification firm.
Forestwood Industries,

Inc For CARB, they needed ISO 17020 and Guide 65 which they did not have. Each cost between $20,000 and $30,000 to get. The application took one day to complete but gathering the information took longer. PFS Corporation PFS is a product testing laboratory and had IAS approval for testing formaldehyde. The cost of a new accreditation is at least $2,550 with $800 for additional fields of testing (formaldehyde could be considered a field) and another $250 for each facility. It costs PFS about $15,000 to get an IAS on-site audit each year although the audit includes more than formaldehyde. The cost for a desk audit to

add an additional small test chamber where existing small chambers have already been approved is $600, but it co sts at least $2,000 for a standard inspection audit.

1 NSF International was approved as a TPC by CARB, but has subsequently withdrawn from the program.
Sources: Personal Communication with Forestwood Industries 2011, Personal Communication with NSF International 2011a, b,

Personal Communication with NTA Inc. 2011, Personal Communication with PFS Co rporation 2011, Personal Communication
with PSI 2011, Personal Communicatio n with SCS International 2011. 612*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 25 3.4.4 Annual Cost of TPCs Notifications Relating to Manufacturers 613

614 Under the proposed rule, TPCs would have to provide its third-part y certifier number to 615 any manufacturer receiving its TSCA Title VI certification services. And should a TPC 616 withdraw from the program or lose its acc reditation, it would be required to notify all 617

manufacturers that receive its TSCA Title VI certification services. 618

619 Upon request, TPCs must provide EPA with a list of the manufactur ers and their product 620 types certified, the results of inspections, audits, and emi ssion tests conducted for each 621 manufacturer and product type, the list of the TPCs laboratories, test methods, and test results, 622 the methods and results for establishing test me thod correlations and equivalence and the list of 623 manufacturers and products approved for reduced testing. As shown in Table 3-6 below, the 624 sum of these costs is approximately $773 per firm per year in all years. For more information, 625 see Appendix B. 626

627

628

629*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule26630Table 3-6: Annual Burden and Cost to TPCs of Notifications Relating to Manufacturers, by ActivityActivityClerical Burden/Cost Technical Burden/Cost Managerial Burden/Cost Total(hours)(a)(2010$)(b)(hours)(c)(2010$)(d)(hours)(e)(2010$)(f)(hours)(g)=(a)+(c)+(e)(2010$)(h)=(b)+(d)+(f)Notifications to EPAThird Party Certifier Number10 $0.00 0.04 $2.25 0.02 $1.34 0.06 $3.59Withdraw from Program or Lose Accreditation10 $0.00 0.01 $0.56 0.005 $0.33 0.015 $0.90Recordkeeping and Reporting to EPAList of Manufacturers and their Product Types(including Resins Used) Certified by TPC20.75 $19.24 1.5 $84.47 0.75 $50.09 3 $153.79Results of Inspections, Audits, and EmissionTests Conducted for Each Manufacturer andProduct Type20.75 $19.24 1.5 $84.47 0.75 $50.09 3 $153.79List of the TPC's Laboratories, Test Methods(including Test Conditions and ConditioningTime), and Test Results20.75 $19.24 1.5 $84.47 0.75 $50.09 3 $153.79Methods and Results for Establishing TestMethod Correlationsand Equivalence20.75 $19.24 1.5 $84.47 0.75 $50.09 3 $153.79List of Manufacturers and Products Approved forReduced Testing20.75 $19.24 1.5 $84.47 0.75 $50.09 3 $153.79TOTAL 3.75 $96.20 7.55 $425.14 3.775 $252.09 15.075 $773Notes: 1. Based on best professional judgment and rule requirements.2. Based on the estimated burden associated with “recordkeeping” (EPA 2011a).Sources: BLS 2011, EPA 2011a631632*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 27 3.4.5 Cost of TPC Annual Reports and Notifications of Changes 633

634 Table 3-7 shows the cost of the required annual report to the accr editation bodies that 635 lists the manufacturers and their pr oducts certified by TPCs during th e previous year, the list of 636 non-complying products or events by manufacturer, the list of laboratories and test methods used 637 by the TPC, and the results of inter-laborator y comparison or profic iency testing for the 638 laboratories used by the TPC. The cost of notifying the accreditation board body of any changes 639 in personnel, procedure, or laboratory changes is also included. The sum of these costs is 640 approximately $210 per firm per year in all ye ars. For more information, see Appendix B. 641*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule28Table 3-7: Annual TPC Burden and Costs for Reporting to Accreditation Body, by ActivityActivityClericalBurden/CostTechnicalBurden/CostManagerialBurden/CostTotal(hours)(a)(2010$)(b)(hours)(c)(2010$)(d)(hours)(e)(2010$)(f)(hours)(g)=(a)+(c)+(e)(2010$)(h)=(b)+(d)+(f)Annual Report to Accreditation BodiesList of Manufacturers and their ProductsCertified by the TPC during the Previous Year(including Resins Used, and the Average andRange of Formaldehyde Emissions byManufacturer, Resin, and Product Type)10.25 $6.41 0.5 $28.16 0.25 $16.70 1 $51.26List of Non-complying Products or Events byManufacturer10.25 $6.41 0.5 $28.16 0.25 $16.70 1 $51.26List of Laboratories and Test Methods Used bythe TPC10.25 $6.41 0.5 $28.16 0.25 $16.70 1 $51.26Results of Inter-Laboratory Comparison orProficiency Testing for the Laboratories Used bythe TPC10.25 $6.41 0.5 $28.16 0.25 $16.70 1 $51.26Accreditation Board NotificationPersonnel Qualification Changes20 $0.00 0.02 $1.13 0.01 $0.67 0.03 $1.79Procedure Changes20 $0.00 0.02 $1.13 0.01 $0.67 0.03 $1.79Laboratory Change20 $0.00 0.02 $1.13 0.01 $0.67 0.03 $1.79TOTAL 1 $25.65 2.06 $116.00 1.03 $68.78 4.09 $210Notes: 1. Estimated as one-third of the burden associated with "recordkeeping" (EPA2011a). Revised estimate based on best professional judgment.2. Based on the estimated burden associated withreporting "company information" (EPA 2011a).Sources: EPA 2011a642643*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 29 3.5 Total Cost to TPCs 644

645 3.5.1 Costs per TPC in the First Year 646

647 Table 3-8 presents the estimated costs for TPCs in the first year. There are different cost 648 estimates for TPCs that already have all of the necessary accred itations, and TPCs that need to 649

obtain an additiona l accreditation. 650

651 Table 3-8: Costs per TPC in the First Year

Type of Cost Cost (2010$) 1

TPCs with All Necessary

Accreditations TPCs Obtaining One

Additional Accreditation
Rule Familiarization $615 $615
Application Process $492 $492 Obtaining Accreditation $0 $25,000 Manufacturer Notification and Recordkeeping $773 $773 Annual Report and Notifications of Changes $210 $210 TOTAL $2,090 $27,090
652

653 3.5.2 Costs per TPC in Subsequent Years 654

655 Table 3-9 presents the estimated costs incu rred in subsequent years by TPCs. Again, 656

there are different cost estimates for TPCs that already have all of the necessary accreditations, 657

and TPCs that need to obtain an additional ac creditation. And costs differ between years when 658 the TPC must reapply to the accreditation body to participate in the TSCA Title VI program 659 (which occurs every two three years) and the alternate years. 660

661 Table 3-9: Costs per TPC in Subsequent-Years

Type of Cost 1 Cost (2010$) 2

TPCs with All Necessary

Accreditations TPCs Obtaining One

Additional Accreditation Reapplication Process $492 $492
Reaccreditation $0 $5,000 Manufacturer Notification and Recordkeeping $773 $773 Annual Report and Notifications of Changes $210 $210 TOTAL – REAPPLICATION YEARS $1,475 $6,475 TOTAL – NON-REAPPLICATION YEARS $983 $5,983
Notes: 1. Under the proposed rule, TPCs are required to apply for re-accreditation ever y three years. As a result, reapplicati on and reaccreditation costs are incurred every third year. 2. Costs may not sum due to rounding.
662

663

3.5.3 Total Cost to U.S. TPCs 664

665

Table 3-10 summarizes the total costs to U. S. firms assumed to become TPCs under the 666 TSCA Title VI program. As indicated, the rule is expected to cost the affected TPCs a total of 667 $93, 817 810 in the first year, $28, 280 275 in reapplication years, and $23, 852 847 in non668 reapplication years. An nualized costs were also calculated, over a 30-year pe riod, at three and 669 seven percent discount rates. 670

671*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 30 Table 3-10: Total Costs to U.S. TPCs (2010$)

Cost Component Cost (2010$)

TPCs with All

Necessary

Accreditation TPCs Obtaining One

Additional

Accreditation Total

Number of Affected Firms 6 3 9 Per Firm Costs: Year 1 $2,090 $27,090 -
Per Firm Costs: Reapplic ation Years $1,475 $6,475 -
Per Firm Costs: Non-reapplication Years $983 $5,983

- Total First Year Costs $12,540 $81,270 $93,810
Total Reapplication Year Costs $8,850 $19,425 $28,275
Total Non-Reapplication Year Costs $5,898 $17,949 $23,847
30-Year Annualized Costs (3 percent discount rate) $6,755 $20,477 $27,232

30-Year Annualized Costs (7 percent discount rate) $6,706 $21,416 $28,123

Note: Costs are annualized over thirty years for 3 and 7 percent discount rates using the following formula: (present discounte d value of 30-year stream-of-costs)* (discount rate*(1+ discount rate) 30 )/((1+ discount rate) 31 -1). Rule familiarization costs are assumed to be incurred immediately and th erefore are not discounted. Other costs are discounted assuming that they are incurred at the end of each year.
672 EPA is considering requiring TPCs to s ubmit their notifications and reports to the 673 Agency electronically using the CDX. Appendix C discusses the incremental change in costs if 674 EPA finalizes a mandatory electr onic reporting requirement. As shown in section C.1.4, the total 675 annualized savings to U.S. TPCs would be $2,85 2 per year at a 3 per cent discount rate, and 676 $2,754 per year at a 7 percent discount rate. 677

678
3.6 Total Costs of the Rule for U.S. Accrediting Accreditation Bodies and TPCs 679

680

This section calculates the total cost for U.S. TPCs and accrediting accreditation bodies as 681

a result of the TSCA Title VI TPC rule. While the costs analysis is limited to domestic entities, 682 the burden analysis in Section 4.1 include s both foreign and domestic entities. 683

684 The different cost components of the rule (initial costs; notif ication, reporting, and 685 recordkeeping costs; TPC reapplication costs; and AB reapplication costs) are incurred at 686

different times and with different frequencies. Figure 2 demonstrates how the different cost 687 components occur over the first nine years, and how they are categorized into five different 688 categories of years, depending on which componen t occurs in that year. These same five 689 categories are used in Table 3-11 and Table 3-12. Table 3-11 presents the per-firm costs for 690 accrediting accreditation bodies and TPCs in each of these categories of years. Table 3-12 691 presents the total costs for the eight U.S. accrediting accreditation bodies and nine U.S. TPCs 692 combined. To estimate total costs, per-firm costs were multiplied by the number of affected 693

firms. Annualized costs were also calculated, over a 30-year pe riod, at three and seven percent 694

discount rates. 695

696*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 31 697 Figure 2. Timing of Cost Components Over the First Nine Years of the Program

Cost Component Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

Initial costs X
Notification, reporting, and recordkeeping X X X X X X X X X

TPC reapplication X X
AB reapplication X X X
All TPCs are assumed to have been approved by CARB and thus grandfathered into the federal program for one year, so TPC reapplication occurs every 3 years starting in Year 4. AB reapplication occurs every 3 years starting in Year 3.

Key Description

Initial Applications for ABs (beginning of Year 1) and TPCs (end of Year 1)

Non-Reapplication Years for ABs, Non-Reapplication Years for TPCs

Non-Reapplication Years for ABs, Reapplication Years for TPCs

Reapplication Years for ABs, No n-Reapplication Years for TPCs

Reapplication Years for ABs, Reapplication Years for TPCs
698

699 Table 3-11: Cost per Year for Accreditation Bodies and Third Party Certifiers (2010$)

Year ABs TPCs
Have Necessary

Accreditation Need Additional

Accreditation Per Firm Costs: Year 1 $1,685 $2,090 $27,090

Per Firm Costs: Years 2, 5, 8, 11, 14, 17, 20, 23, 26, 29 (Non-Reapplication Years for ABs, Non-Reapplication Years for TPCs) $633 $983 $5,983

Per Firm Costs: Years 3, 6, 9, 12, 15, 18, 21, 24, 27, 30 (Reapplication Years for ABs, Non-Reapplication Years for TPCs) $1,070 $983 $5,983

Per Firm Costs: Years 4, 7, 10, 13, 16, 19, 22, 25, 28 (Non-Reapplication Years for ABs, Re-Application Years for TPCs) $633 $1,475 $6,475

700

701

702*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 32 Table 3-12: Total Costs to U.S. Accreditati on Bodies and Third Party Certifiers (2010$)

Year U.S. ABs U.S. TPCs All Affected U.S.

Firms Have Necessary

Accreditation Need Additional

Accreditation

Number of Affected Firms 8 6 3 17

Total Year 1 Costs $13,480 $12,540 $81,270 $107,290

Total Costs in Years 2, 5, 8, 11, 14, 17, 20, 23,26, 29 (Non-Reapplication Years for ABs, NonReapplication Years for TPCs) $5,064 $5,898 $17,949 $28,911

Total Costs in Years 3, 6, 9, 12, 15, 18, 21, 24,27, 30 (Reapplication Years for ABs, NonReapplication Years for TPCs) $8,560 $5,898 $17,949 $32,407

Total Costs in Years 4, 7, 10, 13, 16, 19, 22, 25,28 (Non-Reapplication Years for ABs, ReApplication Years for TPCs) $5,064 $8,850 $19,425 $33,339

30-Year Annualized Costs (3 percent discount rate) $6,303 $6,755 $20,477 $33,535

30-Year Annualized Costs (7 percent discount rate) $6,320 $6,706 $21,416 $34,443

Note: Annualized costs are annualized over th irty years for 3 and 7 percent discount ra tes using the following formula: (presen t discounted value of 30-year stream-of-costs)*(discount rate *(1+ discount rate)30)/((1+ discount rate) 31 -1). Rule familiarization, AB application costs, and AB recognition agreement costs are assumed to be incurred immediat ely and therefore are not discounted. Other costs are discounted assuming that they are incurred at the end of each year. 703

704 EPA is considering requiring accreditation bodies and TPCs to submit their notifications and 705 reports to the Agency electronically using the C DX. Appendix C discusses the incremental change in 706 costs if EPA finalizes a mandatory electronic repor ting requirement. As s hown in section C.1.4, 707 electronic reporting via CDX would reduce the annuali zed costs of the rule to U.S. accreditation bodies 708 and TPCs from $33,535 to $29,490 per year at a 3 percent discount rate, a savings of $4,045 per year. At 709 a 7 percent discount rate, costs are estimated to decrease from $34,443 to $30,542, a savings of $3,900 710 per year. There are additional unquantified improveme nts in efficiency and hi gher data quality due to 711 electronic reporting. 712

713

714

715

716*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 33 

### 4 Impact Analyses 717

718 In addition to the cost analysis presented in Chapter 3, several other types of impacts are 719 important to consider in evalua ting the effects of a regulation. This chapter presents the 720 incremental impact of the proposed TPC Rule on: 721

722

 Paperwork burden, as required by th e Paperwork Reduction Act (PRA); 723

 Financial condition of small entities, as required by the Regulatory Flexibility Act 724 (RFA); 725

 State and Local Governments, as requi red by the Unfunded Mandates Reform Act; 726

 Federalism, as required by Ex ecutive Order 13132–Federalism; 727

 Tribal governments, as required by Executive Order 13175–Consultation and 728 Coordination with Indian Tribal Governments; 729

 The environmental health risk or safety risk to children due to the regulation, as 730 required by Executive Order 13045–Protecti on of Children From Environmental 731 Health & Safety Risks; 732

 Whether voluntary consensus standards are used in its regulatory activities; and 733

 Low income and minority populations, as required by Executive Order 12898. 734

735 4.1 Paperwork Reduction Act Analysis 736

737 This section estimates the burden of reporti ng and recordkeeping for the proposed Third 738 Party Certification rule. It pr esents average annual burden and cost estimates for affected 739 accreditation bodies and third party certifiers over th e first three years of the program. The labor 740 hours and costs per firm are the same as thos e shown in Chapter 3 – the sum of the rule 741 familiarization, application, recordkeeping, and reporting burdens and costs. However, the 742 numbers of firms considered here are greater than in the cost analysis in Chapter 3 because both 743 domestic and foreign firms are included. 744

745 Table 4-1 presents the PRA per-firm labor burdens and costs by the type of affected firm. 746 The total burden and cost are calculated by multiplying the burdens and costs per firm by the 747

number of affected firms. 748

749 EPA is considering requiring accreditation bodi es and TPCs to submit their notifications 750 and reports to the Agency electronically using the CDX. Appendix C discusses the incremental 751 change in burden and costs if EPA finalizes a mandatory electronic reporting requirement. As 752 shown in section C.1.4, electr onic reporting via CDX would re duce the average total burden 753 hours for all 61 domestic and foreign responde nts from 1,421 hours to 1,029 hours per year, a 754 savings of 392 hours per year. 755*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 34 Table 4-1: Total PRA Burdens and Costs (2010$)

Firm Type Number

of Firms Per Firm Burden and Cost Total Burden and Cost

Labor NonLabor

Cost Labor NonLabor

Cost Hours Cost Hours Cost

Year 1 Domestic Accreditation Body 8 29.6042 $1,685 237 $13,480

Foreign Accreditation Body 17 29.6642 $1,688 504 $28,696

Domestic TPC obtaining one additional accreditation 3 37.3250 $2,090 $25,000 112 $6,270 $75,000

Domestic TPC with current accreditations 6 37.3250 $2,090 224 $12,540

Foreign TPC obtaining one additional ac creditation 9 37.3550 $2,092 $25,000 336 $18,828 $225,000

Foreign TPC with current accred itations 18 37.3550 $2,092 672 $37,656

Year 2 Domestic Accreditation Body 8 12.1442 $633 97 $5,064
Foreign Accreditation Body 17 12.2042 $636 207 $10,812

Domestic TPC obtaining one additional accreditation 3 19.1650 $983 $5,000 57 $2,949 $15,000

Domestic TPC with current accreditations 6 19.1650 $983 115 $5,898

Foreign TPC obtaining one additional accreditation 9 19.1950 $985 $5,000 173 $8,865 $45,000

Foreign TPC with current accred itations 18 19.1950 $985 346 $17,730

Year 3 Domestic Accreditation Body 8 19.6042 $1,070 157 $8,560
Foreign Accreditation Body 17 19.6642 $1,073 334 $18,241

Domestic TPC obtaining one additional accreditation 3 19.1650 $983 $5,000 57 $2,949 $15,000

Domestic TPC with current accreditations 6 19.1650 $983 115 $5,898

Foreign TPC obtaining one additional accreditation 9 19.1950 $985 $5,000 173 $8,865 $45,000

Foreign TPC with current accred itations 18 19.1950 $985 346 $17,730

Three Year Average

Domestic Accreditation Body 8 20.4509 $1,129 164 $9,035
Foreign Accreditation Body 17 20.5109 $1,132 349 $19,250

Domestic TPC obtaining one additional accreditation 3 25.2183 $1,352 $11,667 76 $4,056 $35,000

Domestic TPC with current accreditations 6 25.2183 $1,352 151 $8,112

Foreign TPC obtaining one additional ac creditation 9 25.2483 $1,354 $11,667 227 $12,186 $105,000

Foreign TPC with current accred itations 18 25.2483 $1,354 454 $24,372
All Entities 61 23.2945 $1,262 $2,295 1421 $77,010 $140,000

756

757 4.2 Regulatory Flexibility Act Analysis 758

759 This section presents the impact of the cost s of accreditation unde r the proposed TSCA 760

Title VI TPC rule on the financial condition of small entities. The Regulatory Flexibility Act 761 (RFA) of 1980, amended by the Small Busi ness Regulatory Enforcement Fairness Act 762 (SBREFA) of 1996, requires regulator s to assess the effects of regulations on small entities 763 including businesses, no nprofit organizations, and governments. In some instances, agencies are 764 also required to examine regul atory alternatives that may re duce adverse economic effects on 765 significantly impacted small entities. The RFA re quires agencies to prepare an initial and final 766 regulatory flexibility analysis for each rule unless the Agency certifies that the rule will not have 767 a significant economic impact on a substantial nu mber of small entities. The RFA, however, 768 does not specifically define “a significant economic impact on a substantial number” of small 769*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 35 entities. Sections 603 and 604 of the RFA require th at regulatory flexibility analyses identify the 770 types, and estimate the numbers, of small entities to which the rule will a pply; and describe the 771 rule requirements to which small entities will be subject and any re gulatory alternatives, 772 including exemptions and deferral, which would lessen the rule’s burden on small entities. 773

774 The TPC rule will affect small businesses and small non-profit organizations. (No small 775 governments are expected to be affected by the TP C rule.) Under the Regulatory Flexibility Act 776 (RFA), a “small business” is determined by the U.S. Small Business Administration’s 777 regulations at 13 CFR 121.201 (which create small bus iness size standards usi ng either a sales or 778 employment threshold, depending on the nature of the industry), unless an agency establishes an 779 alternate definition. And unless an agency esta blishes an alternate definition, under the RFA the 780 term “small organization” means any not-for-prof it enterprise which is independently owned and 781 operated and is not dominant in its field. Th e RFA does not provide any guidance on how to 782 judge whether an organization is dominant in its field. Non-profit TPCs and accreditation bodies 783 perform the same activities (such as conducting and verifying formaldehyde emissions tests, 784 accrediting, and auditing) as their for-profit counte rparts. In order to in terpret the RFA criteria 785 for small organizations and treat all affected enti ties consistently, this analysis determines the 786 size status of non-profits by applying the SB A size thresholds for the NAICS codes the non787 profits are classified in. 788

789 To fulfill the requirements of the RFA, this analysis addresses two basic questions 790 regarding the proposed rule: (1) th e number and type of small en tities potentially affected, and 791 (2) the extent of the rule’s potential economic impact on those entities as measured by the cost792

to-revenue ratio for businesses and the cost-to-e xpenses ratio for small non-profit organizations. 3 793 This ratio is a good measure of enti ties’ ability to afford the cost s attributable to a regulatory 794 requirement, because comparing compliance costs to revenues or expenses provides a reasonable 795 indication of the magnitude of the regulatory bur den relative to a commonly available measure of 796 economic activity. Where regulatory costs repres ent a small fraction of a typical entity’s 797 revenues or expenses, the financial impacts of the regulation on such entities may be considered 798 as not significant. The impact ratios are calcul ated using annualized co sts, because these costs 799 are more representative of the continuing co sts entities face to co mply with the rule. 800

801 4.2.1 Small Entity Impacts for Accreditation Bodies 802

803 As described in Section 2.2.1, five of the ei ght U.S. accreditation bodies that are IAF or 804 ILAC signatories are non-profit organizations, wh ile two are businesses, and one is a federal 805 government agency. Using the size standard thresholds from the U.S. Small Business 806 Administration, three of the non-profits and one of the businesses are classified as “small”. Per807 firm costs were calculated as the quotient of the 30-year annualized costs and the number of 808 affected firms presented in Table 3-2 (i.e., $6, 204 303 ÷ 8), which results in an annualized cost 809 estimate of $ 775 788 per entity per year. Estimated co st impacts ranged from 0.01 percent to 810

0. 1 5 14 percent of expenditures for the three small non-profits, and were 0.21 percent of sales for 811 the small business. As a result, no small accredit ation bodies are expected to be significantly 812 impacted by the rule. 813

3 Expenses and revenues were close to each other for the non-profit ABs and TPCs that were analyzed, so either measurement of impacts woul d provide similar results.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 36 814
815 Table 4-2: Small Entity Impacts for U.S. ABs

Type Annualized Costs Per Entity (3% discount rate) Estimated Number of Small Entities with Impacts

Under One

Percent Between One

and Three

Percent Over Three

Percent

Non-profits $788 3 0 0

Business $788 1 0 0

Total 4 0 0

816

817 4.2.2 Small Entity Impacts for Third-Party Certifiers 818

819 The cost of the rule to TPCs depends on whet her the TPC already has all of the necessary 820

accreditations. A TPC with all of the accreditations in place is es timated to incur an annualized 821 cost of $1, 202 126 per year for the required applications , reporting, and recordkeeping, while a 822

TPC that needs to obtain an addi tional accreditation is estimated to incur an annualized cost of 823 $6, 902 826 per year. 4 824

825

Data were available to make size determin ations for four of the nine U.S. TPCs 826 participating in the CARB program. Using the data in Table 2-1 and the size standard thresholds 827 from the U.S. Small Business Administration, two of these four TPCs are large businesses, and 828 two are small non-profit organizations. The sma ll non-profits are assumed to have all of their 829 accreditations currently in place, and thus incur a cost of $1, 202 126 per year due to the rule, as 830 shown in Table 4-3. Based on the expenditure data in Table 2-1, both of the small non-profit 831 TPCs have cost impacts of less than 0.1%. 832

833
Table 4-3: Impacts to Small N on-Profit TPCs in the U.S.

Type Annualized Costs Per Entity (3% discount rate) Estimated Number of Small Entities with Impacts

Under One

Percent Between One

and Three

Percent Over Three

Percent

Non-profits $1,126 2 0 0

834 Size information was not located for the remaining five U.S. TPCs. This analysis 835 assumes that 50 percent of the remaining five TPCs are small businesses, which rounds up to 836

three additional firms. Based on the information in Section 3.4.3, the analysis also assumes that 837

two of the three will already have al l their accreditations in place a nd that one will need to obtain 838

an additional accreditation. As a result, the two TPCs with accred itations in place will incur an 839 estimated annualized cost of $1, 20 2 126 and the TPC that needs to obtain an additional 840

accreditation will incur an esti mated annualized cost of $6, 902 826

. 841

842

Data from the 2007 Economic Census data (U.S. Census Bureau 2007) was used to 843 estimate impacts on the three TPCs that are assume d to be small businesses. The Census data 844 provided the number of firms in different revenue brackets (less than $100,000 per year, 845

4 Based on the information in Table 3-10, $6,755 ÷ 6 = $1,126 pe r year for TPCs that have al l accreditations in place, and $20,477 ÷ 3 = $6,826 per year for TPCs th at need an additional accreditation.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 37 $100,000 to $499,999, $500,000 to $999,999, etc.) for the affected NAICS codes (541330, 846 541380, 541611, and 561990). Revenue thresholds were then back-calculated such that 847 annualized compliance costs created a one or three percent impact . For example, revenue would 848 have to be less than $ 1 2 0 ,200 112,600 in order for a firm with all of its accreditations to have at 849 least a one percent impact, and less than $ 40,067 37,533 in order to have an impact of at least 850 three percent. 5 851

852 The next step was to interpolate the numb er of firms below each of these revenue 853 thresholds, assuming that firms are evenly distri buted within a revenue br acket. For example, 854

out of 125 123 ,359 firms in these NAICS codes, the Census reported that 32,987 firms had 855 revenues of less than $100,000, and 49,013 firm s had revenues between $100,000 and $499,999. 856 Therefore, as shown in Table 4-4, an estimated 34, 967 222 firms have revenues below 857 $ 120,200 112,600

. 6 858

859 In this example, these 34, 967 222 firms represent 28% of the firms in these NAICS codes. 860

7 Multiplying the two small business TPCs with all necessary accreditations by 28%, and 861 rounding to the nearest whole number, yields the re sult that one of these firms is estimated to 862 have impacts over the one percent level. Perfor ming a similar calculation for the three percent 863 impact level yields the result that neither of the two small business TPCs with all their 864 accreditations are predicted to have an impact ove r the three percent leve l. So the second TPC 865

with all of its accreditat ion has an impact of less than one percent (not shown in Table 4-4). 866 Repeating these calculations for the small busin ess TPC that needs an additional accreditation 867 yields the result that it is estimated to have a co st impact between one perc ent and three percent. 868

869 Table 4-4: : Impacts to Small Business TPCs in the U.S.

Firm Type Annualized

Costs Per Firm (3%

discount

rate) Associated Revenue

Thresholds Number of Firms

Below Threshold 1 Percent of Firms

Below Threshold 2 Estimated Number

of Small TPCs with

Impacts Over 3

1% Impact 3% Impact 1% Impact 3% Impact 1% Impact 3% Impact 1% Impact 3% Impact

Firms with all

necessary accreditations (n = 2) $1,126 $112,600 $37,533 34,222 12,381 28% 10% 1 0

Firms that need

to obtain one

additional

accreditation (n = 1) $6,826 $682,600 $227,533 84,700 45,489 69% 37% 1 0 Notes: 1. The analysis assumes that firms are distributed evenly within a revenue bracket. 2. The percentage of firms below the thre shold is calculated by dividi ng the number of firms below the threshold by 123,359 (th e total number of firms in NAICS codes 541,330, 541380, 541611, and 561990. 3. The analysis assumes that two of the three small business TPCs will already have accreditations in place and that one will n eed

to obtain additional accreditation.
870

5 For a firm with all of its certifications, compliance co st of $1,126 ÷ 1% impact = $112,600 in revenues, and $1,126 ÷ 3% impact = $37,533 in revenues.

6 32,987 firms under $100,000 + (($112,600 - $100,000) ÷ $499 ,999) x 49,013 firms between $100,000 and $499,999 =

34,222 firms under $112,600.

7 34,222 firms under $112,600 is 28% of the 123,359 total firms.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 38 As described in Section 2.2.1, the CARB TPCs appear to be larger than the average firms in 871 these industries, so Census statistics may underestimate the revenues and overestimate the 872 impacts on TPCs (which represent just 0.006 pe rcent of the firms in these NAICS codes). 873

874 Table 4-5 summarizes the annualized per-firm co sts, and the number of affected number 875 of TPCs with impacts exceeding th e one and three percent levels. Costs are estimated to exceed 876 the one percent level for two small businesses. However, given that these firms have the 877 incentive to seek accreditation only if they can pass through their costs to the firms they are 878 certifying, they are not expected to experience a negative economic impact s as a result of this 879 proposed rule. 880

881 Table 4-5: Small Entity Impacts for U.S. TPCs

Certification Status Annualized Costs Per Entity (3% discount rate) Small Entity Type Estimated Number of Small Entities with Impacts

Under One

Percent Between One

and Three

Percent Over Three

Percent

TPCs with current AB

certification $1,126 Non-profit 2 0 0

Business 1 1 0

TPCs that need to obtain

new AB certification $6,826 Non-profit 0 0 0

Business 0 1 0

Combined Non-profit 2 0 0

Business 1 2 0

Total 3 2 0 882

883 4.2.3 Summary of Small Entity Impacts to ABs and TPCs 884

885 As shown in Table 4-6, there are a total of 9 small entities in the U.S. assumed to be 886 directly affected by the Title VI TPC rule. Five of these are non-pr ofits, all of which are 887 estimated to have cost impacts of less than one percent of expend itures. Four are businesses, two 888 of which are estimated to have cost impacts of less than one percent of revenues, and two of 889 which are estimated to have cost impacts betwee n one percent and three pe rcent of revenues. 890

891 Table 4-6: Summary of Small Entity Impacts to ABs and TPCs

Entity Type Number of U.S. Entities

that are Small Estimated Number of Small Entities with Impacts

Under One

Percent Between One and

Three Percent Over Three Percent

TPCs Non-profit 2 2 0 0

Business 3 1 2 0

ABs Non-profit 3 3 0 0

Business 1 1 0 0

Combined Non-profit 5 5 0 0

Business 4 2 2 0

Total 9 7 2 0 892 4.3 Unfunded Mandates Reform Act (UMRA) 893

894

Title II of the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, establishes 895 requirements for Federal agencies to assess the eff ects of their regulatory actions on State, local, 896 and Tribal governments, and the private sector . Under section 202 of the UMRA, EPA generally 897*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 39 must prepare a written statement, including a cost-benef it analysis, for proposed and final rules 898 with “Federal mandates” that might result in expenditures by State, local, and Tribal 899 governments, in the aggregate, or by the privat e sector, of $100 million or more (when adjusted 900 annually for inflation) in any one year. 901

902 The cost of the proposed TPC rule is well below $100 million per year in any one year. 903 The rule is not expected to affect State, local, and Tribal governments. 904

905
4.4 Executive Order 13132 - Federalism 906

907 Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), directs 908 federal agencies to consider whether a rule ha s federalism implications (i.e. whether it has 909

substantial direct effects on th e states, on the relationship betw een the national government and 910 the states, or on the distribution of power a nd responsibilities among th e various levels of 911 government, as specified in Executive Order 13132). 912

913

The TPC rule does not have a substantial dir ect effects on states or local governments 914 (individually or collectively), on the relationship between the national government and the states, 915 or on the distribution of power and responsibilities among the vari ous levels of government. No 916 state or local governments are ex pected to become TPCs or accrediting accreditation bodies, and 917 thus state and local governments w ill not incur direct compliance cost s as a result of the rule. The 918 rule does not preempt state or local law, and the rule is required by statute. 919

920 4.5 Executive Order 13175 - Tribal Implications 921

922 Executive Order 13175, entitled Consultation and Coordination with Indian Tribal 923

Governments (59 FR 22951, November 6, 2000), directs fede ral agencies to consider whether a 924 rule has tribal implicatio ns (i.e. whether it has substantial di rect effects on tribal governments, on 925 the relationship between the Federal government a nd the Indian tribes, or on the distribution of 926 power and responsibilities between the Federal government and Indian tribes). No tribal 927 government is expected to become a TPC or an accrediting accreditation body, and thus tribal 928 governments will not incur direct compliance costs as a result of the rule. The rule does not 929 change the relationship between the Federal gov ernment and Indian tribes, or change the 930 distribution of power. 931

932
4.6 Executive Order 13045 - Protection of Children 933

934 Under Executive Order 13045, a regulation must be reviewed if the re gulatory action is 935 economically significant and concer ns an environmental health ri sk or safety risk that may 936 disproportionately affect child ren. The proposed TPC rule is not economically significant 937 because it will not have an annual impact on the economy of $100 million or more. 938

939 4.7 Executive Order 13211 - Energy Effects 940

Executive Order 13211, entitled Actions Con cerning Regulations that Significantly 941 Affect Energy Supply, Distribution, or Us e (66 FR 28355, May 22, 2001), directs federal 942*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 40 agencies to identify actions that will have a si gnificant adverse energy effect. Adverse effects 943

are defined as: 944

945

 Reductions in crude oil supply in excess of 10,000 barrels per day; 946

 Reductions in fuel production in excess of 4,000 barrels per day; 947

 Reductions in coal production in ex cess of 5 million tons per year; 948

 Reductions in natural gas production in excess of 25 million mcf per year; 949

 Reductions in electricity produc tion in excess of 1 billion kilowatt-hours per year or in 950 excess of 500 megawatts of installed capacity; 951

 Increases in energy use required by the re gulatory action that exceed any of the 952 thresholds above; 953

 Increases in the cost of energy pr oduction in excess of one percent; 954

 Increases in the cost of energy distri bution in excess of one percent; or 955

 Other similarly adverse outcomes. 956

957 The regulations under consideration will not significantly reduce energy production nor 958 significantly increase energy costs. 959

960 4.8 National Technology Transfer and Advancement Act 961

962 Section 12(d) of the Na tional Technology Transfer and Advancement Act of 1995 963 (“NTTAA”), Public Law No. 104-113 (15 U.S. C. 272 note) directs EPA to use voluntary 964 consensus standards in its regul atory activities unless to do so would be inconsistent with 965 applicable law or otherwise impractical. Volunt ary consensus standards are technical standards 966 (e.g., materials specifications, test methods, samp ling procedures, business practices, etc.) that 967 are developed or adopted by voluntary consensu s standards bodies. NTTAA directs EPA to 968 provide Congress, through OMB, explanations when the Agency decides not to use available and 969 applicable voluntary consensus standards. 970

971 This proposed rulemaking involves techni cal standards, and EPA proposes to use 972 voluntary consensus standards. The proposed framew ork of this third party certification program 973 is based on the ability of ABs to review TP Cs for their conformity to ISO/IEC Guide 65, 974 ISO/IEC 17025, and ISO/IEC 17020. Both Product ABs and Laboratory ABs must maintain 975 their conformity to ISO/IEC 17011 and ISO/IEC Guide 65. 976

977
4.9 Executive Order 12898 – Environmental Justice 978

979 Under Executive Order 12898, when promul gating a regulation, EPA investigates 980 whether there are disproportionate ly high and adverse human health or environmental effects on 981 minority and low-income populations. Since this proposed rulemaking addresses the process for 982 accreditation bodies and TPCs, this proposed rule does result in any adverse human health or 983

environmental effects. 984

985

986

987*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 41 

### References 988

AIHA-LAP LLC. 2012. About AIHA Laboratory Accreditation Programs. Available at: 989 http://www.aihaaccreditedlabs.org/abou t/pages/default.aspx (Accessed April 27, 990 2012) 991

American Business Directory. 2011. 2011 Amer ican Business Information: Perry 992 Johnson Inc. and Perry Johnson Registrars. 993

California Air Resources Board (CARB). 2011. List of CARB Approved Third Party 994

Certifiers. 995

Dun & Bradstreet. 2011. Company Reports. Proprietary Database. 996

International Accreditation Forum (IAF). 2011. Signatories to the IAF MLA for ISO 997 9001, ISO 14001, Product, 31 May 2011. 998

International Laboratory A ccreditation Cooperation (ILAC ). 2011. Signatories to the 999 ILAC Mutual Recognition Arra ngement, Updated 16 May 2011. 1000

Perry Johnson & Associates. 2012. Contact us - Perry Johnson & Associates, Inc. 1001 Available at: www.pjats.com/cont act-us/ (Accessed April 27, 2012) 1002

Personal Communication with Forestwood I ndustries. 2011. Conversation between Gary 1003 Poserina (Forestwood Industries, Inc.) and Abt Associates Inc. . March 2, 2011. 1004

Personal Communication with IAS. 2011. C onversation between Patrick McCullen 1005 (International Accr editation Service) and Abt A ssociates Inc. June 22, 2011. 1006

Personal Communication with NSF International. 2011a. C onversation between Kerri 1007 Levanseler (NSF International) a nd Abt Associates Inc. March 2, 2011. 1008

Personal Communication with NSF International. 2011b. Conversation between Craig 1009 Moore (NSF International) and Ab t Associates Inc. March 11, 2011. 1010

Personal Communication with NTA Inc. 2011. Conversation between Dale Arter (NTA 1011 Inc.) and Abt Associates Inc. March 2, 2011. 1012

Personal Communication with PFS Corporati on. 2011. Conversation between James Van 1013 Schoyck and Ron Reindl (PFS Corporati on, Inc.) and Abt Associates Inc. 1014 February 25, 2011. 1015

Personal Communication with PSI. 2011. Conversation between Randy Webb 1016 (Professional Service Industries, Inc.) a nd Abt Associates Inc. February 14, 2011. 1017

Personal Communication with SCS International. 2011. Conve rsation between Michael 1018 Wolfe (SCS International) and Abt Associates Inc. February 28, 2011. 1019

PFS Corporation. 2012. History - PF S Corporation. Available at: 1020 www.pfscorporation.com/history.php (Accessed April 27, 2012) 1021

Professional Service Industries Inc. ( PSI). 2012. Welcome to PSI. Available at: 1022 www.psiusa.com (Accessed April 27, 2012) 1023*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 42 Scientific Certification Syst ems (SCS). 2012a. Staff Roster - Scientific Certification 1024 Systems. Available at: www.scscertified.com/scs_staff.php (Accessed April 27, 1025 2012) 1026

Scientific Certification Systems (SCS). 2012b. Management Roster - Scientific 1027 Certification Systems. Available a t: www.scscertified.com/scs_management.php 1028 (Accessed April 27, 2012) 1029

U.S. Bureau of Labor Statistics (BLS). 2011. Employer Costs for Employee 1030 Compensation: Supplementary Tables: Hi storical Data: December 2006 - March 1031

2011. 1032

U.S. Census Bureau. 2010a. Sector 54: EC 0754SSSZ4: Professional, Scientific, and 1033 Technical Services: Subject Series - Estab & Firm Size: Receipts/Revenue Size of 1034

Firms for the United States: 2007. 1035

U.S. Census Bureau. 2010b. Sector 56: EC 0756SSSZ4: Administrative and Support and 1036 Waste Management and Remediation Serv ices: Subject Series - Establishment 1037 and Firm Size: Receipts Size of Firms for the United States: 2007. 1038

U.S. Census Bureau. 2010c. Sector 81: EC 0781SSSZ4: Other Services (Except Public 1039 Administration): Subject Series - Estab & Firm Size: Receipts/Revenue Size of 1040

Firms for the United States: 2007. 1041

U.S. Census Bureau. 2010d. Sector 31: EC 0731I1: Manufacturing: Industry Series: 1042 Detailed Statistics by Industr y for the United States: 2007. 1043

U.S. Environmental Protection Agency (EPA). 2002a. Economic Analysis for the 1044 Amended Inventory Update Rule: Final Report (EPA-HQ-OPPT-2002-0054- 1045 0260). August 2002. 1046

U.S. Environmental Protection Agency (EPA). 2002b. Wage Rates for Economic 1047 Analysis of the Toxics Release Inventory Program. June 10, 2002. 1048

U.S. Environmental Protection Agency (EPA). 2009. Economic Analysis of the 1049

Premanufacture Notification Electronic Re porting Final Rule. U. S. E. P. A. 1050 Office of Pollution Prevention and Toxics. July 13, 2009. 1051

U.S. Environmental Protection Agency (EPA). 2011a. Supporting Statement for a 1052 Request for OMB Review under the Pape rwork Reduction Act: the Final Rule 1053 Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data 1054 Base, Production and Site Reports. 1055

U.S. Environmental Protection Agency (EPA). 2011b. Supporting Statement for EPA 1056 Information Collection Request Numb er 2002.05, “Cross-Me dia Electronic 1057 Reporting Rule” Office of Environmenta l Information, U.S. Environmental 1058 Protection Agency. June 22, 2011. 1059

U.S. Internal Revenue Service. 2009. Form 990: Return of Organization Exempt from 1060 Income Tax for Nonprofit ABs and TPCs. 1061

U.S. Internal Revenue Service. 2010. Form 990: Return of Organization Exempt from 1062 Income Tax for Nonprofit ABs and TPCs. 1063*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic An alysis for the TSCA Title VI Proposed Rule 43 U.S. Small Business Administration. 2010. Table of Small Business Size Standards 1064

Matched to North American Industr y Classification System Codes. 1065

Weinstein, H. G. and M. A. Loewenstein. 2004. Comparing Current and Former Industry 1066 and Occupation ECEC Series. August 25, 2004. 1067

1068

1069*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule A- 1 Appendix A– Wage Rate Calculations 1070

This appendix describes the derivation of the fully loaded wage rates and inflation factors 1071 used in calculating costs of labor , materials, and other inputs. All cost estimates are presented in 1072 fourth quarter, calendar year 2010 dollars, representing the most recent full year of data 1073

available. 1074

1075 The fully loaded unit labor cost for managerial, professional/t echnical, and clerical labor 1076 in the regulated industry and for EPA staff is estimated by adding fringe benefits and overhead 1077 costs to the hourly wage or annual salary for each category following the method described in 1078 Wage Rates for Economic Analysis of th e Toxics Release Inventory Program (EPA 2002b

, 1079 2002b). ). This appendix describes th e method employed to estimate the fully loaded unit labor 1080 costs for each labor category and presents the results of the analysis. 1081

1082 Labor categories used in the an alysis correspond to the U.S. Bureau of Labor Statistics 1083 (BLS) Standard Occupational Classification (SOC ) system. In March 2004, BLS began using the 1084 North American Industry Classification System (NAICS) instead of the Standard Industrial 1085 Classification (SIC) System, and the Standard Oc cupational Classification (SOC) system instead 1086 of the Occupational Classification System (O CS). Exhibit A-1 summarizes the crosswalk 1087 between old and new occupational titles, and lists the SOC titles that correspond to the 1088 managerial, professional/technica l, and clerical labor categories used in this analysis ( Weinstein 1089

and Loewenstein 2004 (Weinstein and Loewenstein, 2004). ). 1090

1091

Exhibit A-1: Detail of Labor Ca tegories Used in the Analysis

Labor Category Used in the Analysis BLS Old Title (O CS) BLS New Title (SOC)

Managerial Executive, administrative, and managerial Management, busine ss, and financial

Professional/Technical Professi onal specialty and technical Professional and related

Clerical Administrative support, including

clerical Office and administrative support

Source: Weinstein and Loewenstein 2004 1092 Wages and fringe benefit data for managerial , professional/technical , and clerical labor 1093 are from the BLS Employer Costs for Employee Compensation (ECEC) historical data for 1094 December 2006 – March 2011 (BLS 2011 , 2011). ). 8 1095

1096 The costs of fringe benefits such as paid leave and insurance, sp ecific to each labor 1097 category, are taken from the same BLS report (BLS 2011 , 2011). ). Fringe benefits as a 1098 percentage of wages are calculated separate ly for each labor category. For example, for 1099 December 2010, the average wage rate for pr ofessional/ technical labor was $36.57, and the 1100 average fringe benefit was $13.52. 9 Therefore, fringe benefits as a percentage of wages were 1101 $13.52/$36.57, or approximately 37 pe rcent (see Exhibit A-2). 1102

8 Past economic analyses used ECEC data series specific to white-collar workers in the manufacturing sector. However,

those data sets were discontinued in March 2007, and these historical data we re the best alternative. In a phone conversation (February 11, 2009), a BLS employee co uld not identify a better data set to use.

9 Past economic analyses have used the term “technical” labor. Here the category is called “profession al/technical” labor,

to make clear how it relates to BLS categories. In 2004, BLS changed from the Occupa tional Classification System,*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule A- 2 1103 An additional loading factor of 17 percent is applied to wages to account for overhead. 1104 This approach is used for consistency with O ffice of Pollution Preventi on and Toxics (OPPT) 1105 economic analyses for two major rulemakings: Wage Rates for Economic Analyses of the Toxics 1106 Release Inventory Program , June 2002 (EPA 2002b , 2002b), ), and the Revised Economic 1107 Analysis for the Amended Inven tory Update Rule: Final Report , August 2002 (EPA 2002a

, 1108 2002a). ). This overhead loading factor is added to th e benefits loading factor, and the total is 1109 then applied to the base wage to derive the fully loaded wage. For example, the December 2010 1110 fully loaded wage for professional/tec hnical labor is $36.97 × (1+ 0.37 + 0.17) = $56.31. 1111

1112 Fully loaded costs for managerial and clerical labor are calculated in a similar manner, as 1113

shown in Exhibit A-2. 1114

1115
Exhibit A-2: Derivation of Loaded Industry Wage Rates

Labor Category Data Source for Wage

Information Date Wage Fringe

Benefit Fringes as % wage Overhead as % wage a Fringe +

overhead factor Loaded Wages

(a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)= (a)*(e)

Clerical BLS ECEC , Private

Professional and Business Services Industries, “Office and Administrative Support” 2 Dec-10 $16.72 $6.09 36.42% 17% 1.53 $25.65

Professional/

Technical BLS ECEC , Private

Professional and Business Services Industries,

“Professional and related“ 2 Dec-10 $36.57 $13.52 36.97% 17% 1.54 $56.31

Managerial BLS ECEC , Private

Professional and Business Services Industries, “Mgt, Business, and Financial” 2 Dec-10 $42.42 $17.15 40.43% 17% 1.57 $66.78

Notes:

a An overhead rate of 17% is used based on assumptions in EPA (2002a) and EPA (2002b).

b Data for this occupational series found in BLS (2011).

OCS, to the Standard Occupational Classification system, SOC. In the process, the “Professional specialty and technical” category became the “Professional and related” category. However, the coverage of the old and new occupational groups is approximately the same. See the BLS article, “Compa ring Current and Former Industry and Occupation ECEC Series” (Weinstein and Loewenstein, 2004).*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule B-1 Appendix B – Recordkeeping and Reporting Burdens 1116

Table B-1 and Table B-2 present the estimat ed per-activity recor dkeeping and reporting 1117 burdens for accreditation bodies and third party certi fiers, respectively. Ta ble B-3 and Table B-4 1118 present the estimated annual frequency of the r ecordkeeping and reporting activity as well as the 1119 associated clerical, technical, and managerial cost . Total costs are calculated as the sum of the 1120

component costs. 1121*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-21122Table B-1: Recordkeeping and Reporting Burdenfor Accreditation Bodies, by ActivityActivity1Per Activity Burden HoursNumber ofAnnualActivities(d)Clerical Technical ManagerialTotal Burden(hours)(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}1. Rule Familiarization 0.00 5.00 5.00 1.00 10.00002. Application SubmissionCompany Information (Name, Address, Telephone Number, and Email Address ofPrimary Contact)20.00 0.04 0.021.000.0600Documentation of IAF MLA, ILAC MRA, or Equivalent Signatory Status20.00 0.04 0.02 1.00 0.0600Description of Any Other QualificationsRelated to Experience in PerformingAccreditation of Conformity Assessment Bodies or Third Party Certifiers30.00 0.83 0.511.001.34003. Recognition Agreement41.00 1.00 4.00 1.00 6.00004. EPA NotificationLoss of Status as a Signatory to theIAF MLA, ILAC MRA, or EquivalentOrganization50.00 0.08 0.04 0.05 0.0060Third Party Certifier Applications50.00 0.08 0.04 3.00 0.3600Third Party Certifier Accreditation50.00 0.08 0.04 3.00 0.3600Third Party Certifier Compliance Failure50.00 0.08 0.04 0.33 0.0396Third Party Certifier Accreditation Suspension or Revocation (Product ABs) /Accredited Laboratory Compliance Failure (Laboratory ABs)50.00 0.08 0.04 0.33 0.0396Change to Organizational Policy or Management Structure that Could AdverselyAffect Accreditation Program50.00 0.08 0.04 0.20 0.0240Checklists and Other Records Documenting Compliance with the Requirements forSystems Audits and On-site Assessment of Third Party Certifiers50.00 0.08 0.04 1.00 0.1200Change in Name or Address of Domestic Agent (Foreign Entities Only)50.00 0.08 0.04 0.50 0.06005. Third Party Certifier NotificationUnique Tracking Number20.00 0.04 0.02 3.00 0.1800Withdraw from or be Removed from Program20.00 0.04 0.02 0.25 0.01506. RecordkeepingAccreditation Applications60.75 1.50 0.75 1.00 3.0000Checklists and Other Records Documenting Compliance with the Requirements forSystems Audits and On-site Assessment of Third Party Certifiers60.75 1.50 0.75 1.00 3.00007. Annual Report to EPANumber of Third Party Certifier Applications Received70.25 0.50 0.25 1.00 1.0000Number of Third Party CertifierApplications Approved and Denied70.25 0.50 0.25 1.00 1.0000The Names and Contact Information ofAll Accredited Third Party Certifiers70.25 0.50 0.25 1.00 1.0000Number and Locations of Systems Audits and On-site Assessments70.25 0.50 0.25 1.00 1.0000Results of Accredited Third Party Certifier Laboratory Proficiency Testing or Interlaboratory Comparisons70.25 0.50 0.25 1.00 1.0000*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-3Table B-1: Recordkeeping and Reporting Burdenfor Accreditation Bodies, by ActivityActivity1Per Activity Burden HoursNumber ofAnnualActivities(d)Clerical Technical ManagerialTotal Burden(hours)(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}Domestic Total in First Year 29.6042Foreign Total in First Year 29.6642Domestic Total in Year 2(Non-Reapplication Year) 12.1442Foreign Total in Year 2 (Non-Reapplication Year) 12.2042Domestic Total in Year 3 (Reapplication Year) 19.6042Foreign Total in Year 3 (Reapplication Year) 19.6642Notes: 1. Under the proposed rule, accreditation bodies are required to submit an application to renew their recognition agreement every three years. As a result,this analysis assumes that accreditationbodies incur application submission and recognition agreement preparation costs in the first yearand subsequently every threeyears thereafter.2. Based on the estimated burden associated withreporting "company information" (EPA 2011a).3. Based on the estimated burden associatedwith answering substantiation questionswhen making plant siteconfidentiality claims (EPA 2011a).4. Based on conversationswith accreditation bodies.5. Based on the estimated burden associated with reporting "company information" (EPA 2011a). Values have been doubled based onbest professional judgment.6. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show theproduction volume, plant site, and site-limited status of each reported substance.7. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a). Estimatebased on best professional judgment.Sources: (1) U.S. Bureau of LaborStatistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: HistoricalData: December 2006 - March 2011, and (2)U.S. Environmental Protection Agency. 2011a.Supporting Statement for a Request for OMBReview under the Paperwork Reduction Act: the Final Rule Addendum to PartialUpdate of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.11231124*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-4Table B-2: Recordkeeping and Reporting Burden for Third Party Certifiers, by ActivityPer Activity Burden Hours Number ofAnnualActivities(d)Total Burden(hours)(e) =(d)*{(a)+(b)+(c)}Activity1Clerical Technical Managerial(a) (b) (c)1. Rule Familiarization 0.00 5.00 5.00 1.00 10.002. Product Accreditation Body Application SubmissionCompany Information (Name, Address,Telephone Number, and Email Addressof Primary Contact) and Type of Composite Wood Products Applicant Intendsto Certify20.00 0.04 0.02 1.00 0.06Description of TPC's Experience or Ability in Product Certification andComplying with ISO/IEC Guide 6530.00 0.83 0.51 1.00 1.34Description of TPC's Experience inthe Composite Wood Product Industry withthe Product(s) Intended to be Certified30.00 0.83 0.51 1.00 1.34Description of TPC's Ability to Inspect and Properly Train and SuperviseInspectors Pursuant to ISO/IEC 1702030.00 0.83 0.51 1.00 1.343. Laboratory Accreditation Body Application SubmissionCompany Information (Name, Address,Telephone Number, and Email Addressof Primary Contact; if foreign, name and address of an agent for service locatedin the U.S.)20.00 0.04 0.02 1.00 0.06Description of TPC's Experience inPerforming or Verifying FormaldehydeTesting on Composite Wood Products30.00 0.83 0.51 1.00 1.34Description of TPC's Experience Operating or Using Laboratories that Complywith ISO/IEC 1702530.00 0.83 0.51 1.00 1.34Description of TPC's Experience with Test Method ASTM E-1333-96 (2002)and Experience Evaluating Correlation between Test Methods30.00 0.83 0.51 1.00 1.344. Manufacturer NotificationThird Party Certifier Number2 0.00 0.04 0.02 1.00 0.06Withdraw from Program or Lose Accreditation2 0.00 0.04 0.02 0.25 0.0155. RecordkeepingList of Manufacturers and their Product Types (including Resins Used) Certifiedby TPC40.75 1.50 0.75 1.00 3.00Results of Inspections, Audits, and Emission Tests Conducted for EachManufacturer and Product Type40.75 1.50 0.75 1.00 3.00List of the TPC's Laboratories, TestMethods (including Test Conditions andConditioning Time), and Test Results40.75 1.50 0.75 1.00 3.00Methods and Results for Establishing Test Method Correlations andEquivalence40.75 1.50 0.75 1.00 3.00List of Manufacturers and Products Approved for Reduced Testing40.75 1.50 0.75 1.00 3.006. Annual Report to Accreditation BodiesList of Manufacturers and their Products Certified by the TPC during thePrevious Year (including Resins Used, and the Average and Range ofFormaldehyde Emissions by Manufacturer, Resin, and Product Type)50.25 0.50 0.25 1.00 1.00*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-5Table B-2: Recordkeeping and Reporting Burden for Third Party Certifiers, by ActivityPer Activity Burden Hours Number ofAnnualActivities(d)Total Burden(hours)(e) =(d)*{(a)+(b)+(c)}Activity1Clerical Technical Managerial(a) (b) (c)List of Noncomplying Productsor Events by Manufacturer50.25 0.50 0.25 1.00 1.00List of Laboratories and Test Methods Used by the TPC50.25 0.50 0.25 1.00 1.00Results of Inter-Laboratory Comparison or Proficiency Testing for theLaboratories Used by the TPC40.25 0.50 0.25 1.00 1.007. Accreditation Board NotificationPersonnel Qualification Changes20.00 0.04 0.02 0.50 0.03Procedure Changes20.00 0.04 0.02 0.50 0.03Laboratory Changes20.00 0.04 0.02 0.50 0.038. EPA NotificationChange in Name or Address of Domestic Agent (Foreign TPCs Only)20.00 0.04 0.02 0.50 0.03Domestic Total in First Year 37.325Foreign Total in First Year 37.355Domestic Total in Non-Reapplication Year 19.165Foreign Total in Non-Reapplications Year 19.195Domestic Total in Reapplication Year 27.325Foreign Total in Reapplications Year 27.355Notes: 1.Under the proposed rule, TPCs are required to apply for re-accreditation every three years. Asa result, application and accreditation costs are incurred every other year.2. Based on the estimated burden associated withreporting "company information" (EPA 2011a).3. Based on the estimated burden associatedwith answering substantiation questionswhen making plant siteconfidentiality claims (EPA 2011a).4. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show theproduction volume, plant site, and site-limited status of each reported substance.5. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a). Estimatebased on best professional judgment.Sources: (1) U.S. Bureau of LaborStatistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: HistoricalData: December 2006 - March 2011,and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final RuleAddendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.1125*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-6Table B-3: Recordkeeping and Reporting Labor Costs for Accreditation Bodies, by Activity (2010$)ActivityEstimated AnnualFrequency1Clerical Cost2TechnicalCost2Managerial Cost2Total Cost1. Rule Familiarization 1 $0.00 $281.55 $333.90 $6152. Application SubmissionCompany Information (Name, Address, Telephone Number, and EmailAddress of Primary Contact)31 $0.00 $2.25 $1.34 $3.59Documentation of IAF MLA, ILACMRA, or Equivalent SignatoryStatus31 $0.00 $2.25 $1.34 $3.59Description of Any Other Qualifications Related to Experience inPerforming Accreditation of Conformity Assessment Bodies or ThirdParty Certifiers41 $0.00 $46.74 $34.06 $80.80Application Submission Subtotal $883. Recognition Agreement51 $25.65 $56.31 $267.12 $3494. EPA NotificationLoss of Status as a Signatory to the IAF MLA, ILAC MRA, orEquivalent Organization60.05 $0.00 $0.23 $0.13 $0.36Third Party Certifier Application63 $0.00 $13.51 $8.01 $21.53Third Party Certifier Accreditation63 $0.00 $13.51 $8.01 $21.53Third Party Certifier Compliance Failure60.33 $0.00 $1.49 $0.88 $2.37Third Party Certifier Accreditation Suspension or Revocation (ProductABs) / Accredited Laboratory Compliance Failure (Laboratory ABs)60.33 $0.00 $1.49 $0.88 $2.37Change to Organizational Policy orManagement Structure that CouldAdversely Affect Accreditation Program60.2 $0.00 $0.90 $0.53 $1.44Checklists and Other Records Documenting Compliance with theRequirements for Systems Audits andOn-site Assessment of Third PartyCertifiers61 $0.00 $4.50 $2.67 $7.18Change in Name or Address of Domestic Agent (Foreign Entities Only)60.5 $0.00 $2.25 $1.34 $3.59EPA Notification Subtotal (Domestic) $57EPA Notification Subtotal (Foreign) $605. Third Party Certifier NotificationUnique Tracking Number33 $0.00 $6.76 $4.01 $10.76Withdraw from or be Removed from Program30.25 $0.00 $0.56 $0.33 $0.90TPC Notification Subtotal $126. RecordkeepingAccreditation Applications71 $19.24 $84.47 $50.09 $153.79Checklists and Other Records Documenting Compliance with theRequirements for Systems Audits andOn-site Assessment of Third PartyCertifiers71 $19.24 $84.47 $50.09 $153.79Recordkeeping Subtotal $3087. Annual Report to EPANumber of Third Party Certifier Applications Received81 $6.41 $28.16 $16.70 $51.26*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-7Table B-3: Recordkeeping and Reporting Labor Costs for Accreditation Bodies, by Activity (2010$)ActivityEstimated AnnualFrequency1Clerical Cost2TechnicalCost2Managerial Cost2Total CostNumber of Third Party CertifierApplications Approved and Denied81 $6.41 $28.16 $16.70 $51.26The Names and Contact Information of All Accredited Third PartyCertifiers81 $6.41 $28.16 $16.70 $51.26Number and Locations of Systems Audits and On-site Assessments81 $6.41 $28.16 $16.70 $51.26Results of Accredited Third Party Certifier Laboratory ProficiencyTesting or Inter-laboratory Comparisons81 $6.41 $28.16 $16.70 $51.26Annual Report Subtotal $256Domestic Total in First Year$1,685Foreign Total in First Year$1,688Domestic Total in Year 2(Non-Reapplication Year) $633Foreign Total in Year 2 (Non-Reapplication Year) $636Domestic Total in Year 3(Reapplication Year) $1,070Foreign Total in Year 3 (Reapplication Year) $1,073Notes: 1. Based on best professional judgment and rule requirements. Under the proposed rule, accreditation bodies are requiredto submit an application to renewtheir recognition agreement every threeyears. As a result, this analysis assumes that accreditation bodies incur application submission and recognition agreement preparation costs in the first year and subsequently every three years thereafter.2. Based on Employer Costs for Employee Compensation wage and benefit data for private professional and business services industries (BLS 2011a). Clerical costs are estimated using data from the"office and administrative support" occupational group; technical costs are estimated using datafrom the "professional and related" occupational group; and managerial costs are estimated using datafrom the "management, business, and financial" occupational group.3. Based on the estimated burden associated withreporting "company information" (EPA 2011a).4. Based on the estimated burden associatedwith answering substantiation questionswhen making plant siteconfidentiality claims (EPA 2011a).5. Based on conversationswith accreditation bodies.6. Based on the estimated burden associated with reporting "company information" (EPA 2011a). Values have been doubled based onbest professional judgment.7. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show the production volume, plant site, and site-limited status ofeach reported substance.8. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a). Estimatebased on best professional judgment.Sources: (1) U.S. Bureau of LaborStatistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: HistoricalData: December 2006 - March 2011, and (2)U.S. Environmental Protection Agency. 2011a.Supporting Statement for a Request for OMBReview under the Paperwork Reduction Act: the Final Rule Addendum to PartialUpdate of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.11261127*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-8Table B-4: Recordkeeping and Reporting Labor Costsfor Third Party Certifiers, by Activity (2010$)ActivityEstimated AnnualFrequency1Clerical Cost2Technical Cost2Managerial Cost2Total Cost1. Rule Familiarization 1.00 $0.00 $281.55 $333.90 $6152. Product Accreditation Body Application SubmissionCompany Information (Name, Address, Telephone Number, andEmail Address of Primary Contact;if foreign, name and addressof an agent for service located in the U.S.) and Type ofComposite Wood Products Applicant Intends to Certify31.00 $0.00 $2.25 $1.34 $3.59Description of TPC's Experience or Ability in ProductCertification and Complying with ISO/IEC Guide 6541.00 $0.00 $46.74 $34.06 $80.80Description of TPC's Experience in theComposite WoodProduct Industry with the Product(s) Intended to be Certified41.00 $0.00 $46.74 $34.06 $80.80Description of TPC's Ability to Inspect and Properly Train andSupervise Inspectors Pursuant to ISO/IEC 1702041.00 $0.00 $46.74 $34.06 $80.80Product Accreditation Subtotal $2463. Laboratory Accreditation Body Application SubmissionCompany Information (Name, Address, Telephone Number, andEmail Address of Primary Contact;if foreign, name and addressof an agent for service located in the U.S.)31.00 $0.00 $2.25 $1.34 $3.59Description of TPC's Experiencein Performing or VerifyingFormaldehyde Testing on Composite Wood Products41.00 $0.00 $46.74 $34.06 $80.80Description of TPC's Experience Operating or UsingLaboratories that Comply with ISO/IEC 1702541.00 $0.00 $46.74 $34.06 $80.80Description of TPC's Experiencewith Test Method ASTM E1333-96 (2002) and Experience Evaluating Correlation betweenTest Methods41.00 $0.00 $46.74 $34.06 $80.80Laboratory Accreditation Subtotal $2464. Manufacturer NotificationThird Party Certifier Number31.00 $0.00 $2.25 $1.34 $3.59Withdraw from Program or Lose Accreditation30.25 $0.00 $0.56 $0.33 $0.90Manufacturer Notification Subtotal $45. RecordkeepingList of Manufacturers and theirProduct Types (including ResinsUsed) Certified by TPC51.00 $19.24 $84.47 $50.09 $153.79Results of Inspections, Audits, and Emission Tests Conductedfor Each Manufacturer and Product Type51.00 $19.24 $84.47 $50.09 $153.79List of the TPC's Laboratories,Test Methods (including TestConditions and Conditioning Time), and Test Results51.00 $19.24 $84.47 $50.09 $153.79Methods and Results for Establishing Test Method Correlationsand Equivalence51.00 $19.24 $84.47 $50.09 $153.79List of Manufacturers and Products Approved for ReducedTesting51.00 $19.24 $84.47 $50.09 $153.79*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule B-9Table B-4: Recordkeeping and Reporting Labor Costsfor Third Party Certifiers, by Activity (2010$)ActivityEstimated AnnualFrequency1Clerical Cost2Technical Cost2Managerial Cost2Total CostRecordkeeping Subtotal $7696. Annual Report to Accreditation BodiesList of Manufacturers and their Products Certified by the TPCduring the Previous Year (including Resins Used, and theAverage and Range of Formaldehyde Emissions byManufacturer, Resin, and Product Type)61.00 $6.41 $28.16 $16.70 $51.26List of Noncomplying Productsor Events by Manufacturer61.00 $6.41 $28.16 $16.70 $51.26List of Laboratories and Test Methods Used by the TPC61.00 $6.41 $28.16 $16.70 $51.26Results of Inter-Laboratory Comparison or Proficiency Testingfor the Laboratories Used by the TPC61.00 $6.41 $28.16 $16.70 $51.26Annual Report to AB Subtotal $2057. Accreditation Board NotificationPersonnel Qualification Changes30.50 $0.00 $1.13 $0.67 $1.79Procedure Changes30.50 $0.00 $1.13 $0.67 $1.79Laboratory Changes30.50 $0.00 $1.13 $0.67 $1.79Accreditation Board Notification Subtotal $58. EPA NotificationChange in Name or Address of Domestic Agent (ForeignTPCs Only)30.50 $0.00 $1.13 $0.67 $2Domestic Total in First Year$2,090Foreign Total in First Year$2,092Domestic Total in Non-Reapplication Year $983Foreign Total in Non-Reapplications Year $985Domestic Total in Reapplication Year $1,475Foreign Total in Reapplications Year $1,477Notes: 1. Based on best professional judgment and rule requirements. Under the proposedrule, TPCs are required to apply for re-accreditation every three years. As a result, application andaccreditation costs are incurred every third year. 2. Based on Employer Costs for Employee Compensation wage and benefit datafor private professional and business services industries (BLS2011a). Clerical costs are estimated using data from the "office and administrative support" occupational group; technical costs are estimated using data fromthe "professional and related"occupational group; and managerial costs are estimated using data from the "management, business, and financial" occupational group. 3. Based on the estimatedburden associated with reporting"company information" (EPA 2011a). 4. Based on the estimated burden associated withanswering substantiation questions when making plant site confidentiality claims (EPA 2011a).5. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show the production volume, plant site, and site-limited statusof each reported substance. 6. Estimated asone-third of the burden associated with"recordkeeping" (EPA 2011a). Estimate basedon best professional judgment.Sources: (1) U.S. Bureau of LaborStatistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: HistoricalData: December 2006 - March 2011, and(2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request forOMB Review under the Paperwork Reduction Act: the Final Rule Addendum toPartial Update of the TSCA Section 8(b) TSCAInventory Data Base, Production and Site Reports.11281129*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule C-1 1130 Appendix C – Costs and Benefi ts of Electronic Reporting 1131

1132 EPA is considering requiring mandatory electronic reporting requirement for 1133 accreditation bodies and TPCs (both referred to he re as respondents). If EPA adopts this 1134 requirement for the TPC rule, respondents would submit their notifications and reports to EPA 1135 using the Central Data Exchange (CDX). The co sts and benefits to respondents and to EPA are 1136

described below. 1137

1138
C.1 Costs and Benefits of Electronic Reporting to Accreditation Bodies and TPCs 1139

1140 All respondents incur costs in the first year to comp lete a subscriber agreement and 1141 register with CDX. Some respondents will incur CDX costs in subsequent years due to 1142 employee turnover or compromised electronic signatures. These costs are offset by reductions in 1143 reporting and recordkeeping cost s due to electronic reporting. 1144

1145 CDX users are assigned to one of two roles in the CDX system, an Authorizing Official 1146 or a Support Registrant. 1147

1148 Authorized Official (AO) : The AO is the person legally responsible for the submission. The 1149 AO is typically a senior official for the respondent. The AO is the only user who can start a new 1150 form, or reopen a completed form to begin the am endment process, and is the only user who can 1151 electronically sign and submit a form. AOs can also assign Support Registrants to edit and 1152 complete forms on his or her behalf. AOs must submit a subscriber agreement to EPA, and 1153 register with CDX. 1154

1155 Support Registrants : A Support Registrant is a pe rson designated by an AO to submit 1156 supporting documents on his or her behalf. Suppor t Registrants can edit a submission that is 1157 created by the AO. Support Registrants are onl y allowed to edit submissions that the AO has 1158 granted him or her access. Support Registrants do not have any access rights to create or submit 1159 a form. Once the AO creates a form, they will provide the Support Registrant with a passphrase 1160 to access the submission and complete all sections of the form. Once the Support Registrant has 1161 finished completing the form, the AO will access the submission, review it, and submit it. 1162 Support Registrants must register with CDX, but do not need to submit a subscriber agreement to 1163

EPA. 1164

1165 This analysis uses a simplifying assumption that an average of fi ve employees at each 1166 respondent will register with CDX: one manage r (who will serve as AO) four technical staff 1167 members (who will serve as Support Registrants). 1168

1169
C.1.1 First Year Costs for Accreditation Bodies and TPCs 1170

1171 Respondents will incur electronic reporting cost s in the first year to submit a subscriber 1172 agreement, register with CDX, and contact EPA’s CDX Help Desk. 1173

1174*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule C-2 Subscriber Agreement . An AO must complete a subscriber agreement in order to establish 1175 their identity and their relation to the entity for which they will submit electronic documents, as 1176 well as to document a unique correlation with the device that will be used to create their 1177 electronic signature. Users can co mply with the subscriber agr eement provisions in CDX either 1178 by submitting a paper subscriber agreement with a wet-ink signature, or by submitting an 1179 electronic signature agreement. 1180

1181

• Paper subscriber agreement. Preparing, submitting, and fili ng a paper subscriber agreement 1182 is estimated to require an average of 20 minutes of time per registrant (EPA 2011b ), which is 1183 assumed to be managerial time. 1184

1185

• Electronic signature agreement. Preparing, submitting, and filing an electronic signature 1186 agreement is estimated to require an average of 15 minutes of time per registrant (EPA 1187

2011b ), which is assumed to be managerial time. 1188

1189 CDX Registration . CDX users will need to register with CDX, which involves selecting a user 1190 name and password, providing contact inform ation, and identifying the facility and the 1191 registrant’s role at the facility. This is estimat ed to take an average of 10 minutes per user (EPA 1192

2011b ). This results in an estimate that each re spondent will spend 10 minutes of managerial 1193

time and 40 minutes of technical ti me to register with CDX. 1194

1195 Help Desk . CDX users are assumed to spend an av erage of 4 minutes contacting EPA’s CDX 1196 Help Desk for technical support (EPA 2011b ), which results in an estimate of 4 minutes of 1197 managerial time and 16 minutes of technical time per respondent. 1198

1199

Problem Resolution

. Three percent of respondents each year are assumed to spend an average 1200 of one hour of technical time working with EPA’s CDX Help Desk to resolve problems 1201 involving their registrations or agreements (EPA 2011b ). 1202

1203 C.1.2 Subsequent Year Costs for Accreditation Bodies and TPCs 1204

1205 In subsequent years, respondents may incu r electronic reporting costs due to employee 1206 turnover and compromised electronic signatures. 1207

1208 Employee Turnover . It is assumed that each year 10 pe rcent of CDX users will be replaced by 1209 new employees, who will have to comply with th e subscriber agreement and/or CDX registration 1210 requirements (EPA 2011b ). Thus, in subsequent years 10 percent of AOs will spend 15 to 20 1211 minutes of managerial time to complete a subscr iber agreement. In addition, 10 percent of all 1212 users (both managerial and techni cal) will spend 10 minutes to re gister with CDX and 4 minutes 1213 contacting EPA’s CDX Help Desk. 1214

1215 Report Compromised Signature

. Each year 1 percent of re spondents are assumed to report a 1216 compromised or surrendered electronic signat ure, which requires the submittal of a new 1217 subscriber agreement (EPA 2011b ). This will entail 15 to 20 minutes of managerial time to 1218 prepare, submit, and file a new agreement, and 4 minutes of managerial time to contact EPA’s 1219 CDX Help Desk. 1220*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule C-3 1221 C.1.3 Savings for Accreditation Bodies and TPCs 1222

1223 Electronic reporting is assumed to reduce the recordkeeping burden by 50 percent, and to 1224 eliminate the use of clerical time for reporting and recordkeeping(EPA 2009 ). For ABs, this is 1225 estimated to result in average savings of 3.75 hou rs of clerical time in the first year and 2.75 1226 hours in subsequent years, as well as 1 hour of technical time and 0.5 hours of managerial time in 1227 all years. For TPCs, this is estimated to resu lt in average savings of 4.75 hours of clerical time, 1228 2.5 hours of technical time, and 1.25 hour s of managerial time per year. 1229

1230 Electronic reporting also has the fo llowing benefits for respondents: 1231

1232

• The number of forms that need to be resubm itted because they are incomplete or invalid 1233 should be greatly reduced because forms cannot be submitted via CDX if any required fields 1234 are incomplete, or if the submission fails internal validation checks; 1235

1236

• All of the respondent’s relevant staff will be able to access the CDX fo rms easily and directly 1237 input their information, so the system will fac ilitate easier internal review by the respondent 1238 prior to submission; 1239

1240

• Filling out a form similar to one previously s ubmitted will be faster w ith electronic reporting, 1241 as the respondent will already ha ve an electronic copy of the earl ier form to edit rather than 1242 having to fill out a new form; and 1243

1244

• All routine correspondence with the Agency (including submissi on of supporting documents) 1245 will be via CDX, which saves time and deliver y costs and reduces delays in EPA’s review. 1246

1247

EPA has not estimated the value of th ese additional savings to respondents. 1248

1249 C.1.4 Changes in Costs to Accreditat ion Bodies and TPCs due to Electronic 1250 Reporting 1251

1252 As shown in Table C-1, accreditation bodies would accrue savings of $99 to $177 per 1253 year (depending on whether it is th e initial year, reapplication year , or non-reapplication year). 1254 TPCs would accrue savings of $259 to $337 per year (depending on whether it is the initial year, 1255 a reapplication year, or non-reap plication year), as shown in Ta ble C-2. The total savings for 1256 U.S. accreditation bodies would be $1,193 per ye ar using a 3 percent discount rate and $1,146 1257 per year using a 7 percent discount rate, as shown in Table C-3. As shown in Table C-4, the total 1258 savings for U.S. TPCs would be $2,852 per year using a 3 percent discount rate and $2,754 per 1259 year using a 7 percent discount rate. 1260

1261 As shown in Table C-5, electronic reporti ng via CDX would reduce the annualized costs 1262

of the rule to U.S. accreditation bodies and respondents from $33,535 to $29,490 per year using a 1263 3 percent discount rate, a savings of $4,045 per year . Using a 7 percent discount rate, costs are 1264 estimated to decrease from $34,443 to $30,542, a savings of $3,900 per year. There are 1265*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule C-4 additional unquantified improvements in efficien cy and higher data quality due to electronic 1266 reporting. 1267

1268 As shown in Table C-6, electronic reporti ng via CDX would redu ce the average total 1269 burden hours for all 61 domestic and foreign respondents from 1,421 hours to 1,029 hours per 1270 year, a savings of 392 hours per year. 1271

1272

1273*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule C-51274Table C-1: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Accreditation BodyActivityPer Activity Burden HoursNumberofAnnualActivities(d)Total Burden(hours)Total CostClerical Technical ManagerialClerical($25.65/hr)Technical($56.31/hr)Managerial($66.78/hr)Total(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}(f) (g) (h) (i)1. CDX Electronic Reporting (First Year)Electronic Subscriber Agreements(domestic firms)- - 0.250 1.00 0.250 - - $16.70 $16.70Paper Subscriber Agreements(foreign firms)- - 0.330 1.00 0.330 - - $22.04 $22.04CDX Registration - 0.670 0.170 1.00 0.840 - $37.73 $11.35 $49.08Help Desk - 0.270 0.0701.00 0.340 - $15.20 $4.67 $19.88Problem Resolution - 1.000 - 0.03 0.030 - $1.69 - $1.69Subtotal (domestic)1.460 $87.00Subtotal (foreign)1.540 $93.002. CDX Electronic Reporting (Subsequent Years)Electronic Subscriber Agreements(domestic firms)- - 0.250 0.10 0.025 - - $1.67 $1.67Paper Subscriber Agreements(foreign firms)- - 0.330 0.10 0.033 - - $2.20 $2.20CDX Registration - 0.670 0.170 0.10 0.084 - $3.77 $1.14 $4.91Help Desk - 0.270 0.0700.10 0.034 - $1.52 $0.47 $1.99Report Compromised Signature0.400 0.01 0.004 - - $0.27 $0.27Subtotal (domestic)0.147 $9.00Subtotal (foreign)0.155 $9.003. Recognition Agreement (1.000)- - 1.000 (1.000) $(25.65) - - ($26.00)4. RecordkeepingAccreditation Applications (0.750) (0.500)(0.250) 1.000 (1.500) ($19.24) ($28.16) ($16.70) ($64.09)Checklists and Other RecordsDocumenting Compliance with theRequirements for Systems Auditsand On-site Assessment of ThirdParty Certifiers(0.750) (0.500) (0.250) 1.000 (1.500) ($19.24) ($28.16) ($16.70) ($64.09)Subtotal(3.000) ($128.00)5. Annual Report to EPANumber of Third Party CertifierApplications Received(0.250) - - 1.000 (0.250) $(6.41) - - $(6.41)Number of Third Party CertifierApplications Approved and Denied(0.250) - - 1.000 (0.250) $(6.41) - - $(6.41)*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule C-6Table C-1: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Accreditation BodyActivityPer Activity Burden HoursNumberofAnnualActivities(d)Total Burden(hours)Total CostClerical Technical ManagerialClerical($25.65/hr)Technical($56.31/hr)Managerial($66.78/hr)Total(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}(f) (g) (h) (i)The Names and ContactInformation of All Accredited ThirdParty Certifiers(0.250) - - 1.000 (0.250) $(6.41) - - $(6.41)Number and Locations of SystemsAudits and On-site Assessments(0.250) - - 1.000 (0.250) $(6.41) - - $(6.41)Results of Accredited Third PartyCertifier Laboratory ProficiencyTesting or Inter-laboratoryComparisons(0.250) - - 1.000 (0.250) $(6.41) - - $(6.41)Subtotal(1.250) $(32.00)Domestic Total in First Year (3.790) ($99.00)Foreign Total in First Year (3.710) ($93.00)Domestic Total in Non-ReapplicationYear(4.103) ($151.00)Foreign Total in Non-ReapplicationsYear(4.095) ($151.00)Domestic Total in ReapplicationYear(5.103) ($177.00)Foreign Total in Reapplications Year (5.095) ($177.00)*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule C-7Table C-1: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Accreditation BodyActivityPer Activity Burden HoursNumberofAnnualActivities(d)Total Burden(hours)Total CostClerical Technical ManagerialClerical($25.65/hr)Technical($56.31/hr)Managerial($66.78/hr)Total(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}(f) (g) (h) (i)Notes:1.CDX Electronic Reporting (first year):Electronic signature agreement. Preparing,submitting, and filing an electronic signature agreement is estimated to require anaverage of 15 minutes of time per respondent,which is assumed to be managerial time (EPA 2011b).Paper subscriber agreement. Preparing, submitting, and filing apaper subscriber agreement is estimated to require an averageof 20 minutes of time per respondent, which isassumed to be managerial time (EPA 2011b).CDX Registration. CDX users will need to register with CDX,which involves selecting a username and password, providing contact information, and identifying thefacility and the registrant’s role at thefacility. This is estimated to take anaverage of 10 minutes per user (EPA 2011b).This results in an estimate that each respondent willspend 10 minutes of managerial time and 40 minutesof technical time to register with CDX.Help Desk. CDX users are assumed to spend an average of 4 minutes contacting EPA’s CDX Help Desk for technical support (EPA 2011b), which results in an estimate of 4minutes of managerial time and 16 minutesof technical time per respondent.Problem Resolution. Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA’s CDX Help Desk to resolveproblems involving their registrations or agreements (EPA 2011b).2.CDX Electronic Reporting (subsequent years):Employee Turnover. It is assumed that each year 10 percent ofCDX users will be replaced by new employees, who will have to comply with the subscriber agreementand/or CDX registration requirements (EPA 2011b). Thus, in subsequent years 10 percent of CDXusers will spend 15 to 20 minutes of managerial time to complete asubscriber agreement. In addition, 10 percent of all CDX users (both managerial andtechnical) will spend 10 minutes to register with CDX and 4 minutes contacting EPA’sCDX Help Desk.Report Compromised Signature. Each year 1 percent of respondents are assumed to report a compromised or surrendered electronicsignature, which requires the submittalof a new subscriber agreement (EPA 2011b). This will entail 15 to20 minutes (20 assumed here) of managerial time to prepare,submit, and file a new agreement, and 4minutes of time to contact EPA’s CDX Help Desk.3.Recognition AgreementElectronic reporting is assumed to eliminate the useof clerical time for the recognition agreement.4.RecordkeepingElectronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).5.Annual Report to EPAElectronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).Sources: (1) U.S. Bureau of LaborStatistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: HistoricalData: December 2006 - March 2011,and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final RuleAddendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.1275*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule C-8Table C-2: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Third Party CertifierActivityPer Activity Burden HoursNumberof AnnualActivities(d)Total Burden(hours)Total CostClerical TechnicalManagerialClerical($25.65/hr)Technical($56.31/hr)Managerial($66.78/hr)Total(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}(f) (g) (h) (i)1. CDX Electronic Reporting (First Year)Electronic SubscriberAgreements (domestic firms)- - 0.250 1.00 0.250 - - $16.70 $16.70Paper Subscriber Agreements(foreign firms)- - 0.330 1.00 0.330 - - $22.04 $22.04CDX Registration - 0.670 0.1701.00 0.840 - $37.73 $11.35 $49.08Help Desk - 0.270 0.070 1.000.340 - $15.20 $4.67 $19.88Problem Resolution - 1.000 -0.03 0.030 - $1.69 $1.69Subtotal (domestic)1.460 $87.00Subtotal (foreign)1.540 $93.002. CDX Electronic Reporting (Subsequent Years)Electronic SubscriberAgreements (domestic firms)- - 0.250 0.10 0.025 $0.00 $0.00 $1.67 $1.67Paper Subscriber Agreements(foreign firms)- - 0.330 0.10 0.033 $0.00 $0.00 $2.20 $2.20CDX Registration - 0.670 0.170 0.10 0.084 $0.00 $3.77 $1.14 $4.91Help Desk - 0.270 0.070 0.100.034 $0.00 $1.52 $0.47 $1.99Report Compromised Signature - - 0.4000.01 0.004 $0.00 $0.00 $0.27 $0.27Subtotal (domestic)0.147 $9.00Subtotal (foreign)0.155 $9.003. Manufacturer Notification and RecordkeepingList of Manufacturers and theirProduct Types (includingResins Used) Certified by TPC(0.750) (0.5) (0.25) 1.00 (1.500)($19.24) ($28.16) ($16.70) ($64.09)Results of Inspections, Audits,and Emission Tests Conductedfor Each Manufacturer andProduct Type(0.750) (0.5) (0.25) 1.00 (1.500)($19.24) ($28.16) ($16.70) ($64.09)List of the TPC's Laboratories,Test Methods (including TestConditions and ConditioningTime), and Test Results(0.750) (0.5) (0.25) 1.00 (1.500)($19.24) ($28.16) ($16.70) ($64.09)Methods and Results forEstablishing Test MethodCorrelations and Equivalence(0.750) (0.5) (0.25) 1.00 (1.500)($19.24) ($28.16) ($16.70) ($64.09)*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA Title VI Proposed Rule C-9Table C-2: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Third Party CertifierActivityPer Activity Burden HoursNumberof AnnualActivities(d)Total Burden(hours)Total CostClerical TechnicalManagerialClerical($25.65/hr)Technical($56.31/hr)Managerial($66.78/hr)Total(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}(f) (g) (h) (i)List of Manufacturers andProducts Approved for ReducedTesting(0.750) (0.5) (0.25) 1.00 (1.500)($19.24) ($28.16) ($16.70) ($64.09)Subtotal(7.500) $(320.00)4. Annual Report and Notificationsof ChangesList of Manufacturers and theirProducts Certified by the TPCduring the Previous Year(including Resins Used, and theAverage and Range ofFormaldehyde Emissions byManufacturer, Resin, andProduct Type)(0.250) - - 1.00 (0.250) ($6.41) - - ($6.41)List of Noncomplying Productsor Events by Manufacturer(0.250) - - 1.00 (0.250) ($6.41) - - ($6.41)List of Laboratories and TestMethods Used by the TPC(0.250) - - 1.00 (0.250) ($6.41) - - ($6.41)Results of Inter-LaboratoryComparison or ProficiencyTesting for the LaboratoriesUsed by the TPC(0.250) - - 1.00 (0.250) ($6.41) - - ($6.41)Subtotal(1.00) $(26.00)Domestic Total in First Year (7.040) ($259.00)Foreign Total in First Year (6.960) ($253.00)Domestic Total in NonReapplication Year(8.353) ($337.00)Foreign Total in NonReapplications Year(8.345) ($337.00)Domestic Total in ReapplicationYear(8.353) ($337.00)Foreign Total in ReapplicationsYear(8.345) ($337.00)*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA TitleVI Proposed Rule C-10Table C-2: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Third Party CertifierActivityPer Activity Burden HoursNumberof AnnualActivities(d)Total Burden(hours)Total CostClerical TechnicalManagerialClerical($25.65/hr)Technical($56.31/hr)Managerial($66.78/hr)Total(a) (b) (c)(e) =(d)*{(a)+(b)+(c)}(f) (g) (h) (i)Notes:1.CDX Electronic Reporting (first year):Electronic signature agreement. Preparing,submitting, and filing an electronic signature agreement is estimated to require anaverage of 15 minutes of time per user, whichis assumed to be managerial time (EPA 2011b).Paper subscriber agreement. Preparing, submitting, and filing apaper subscriber agreement is estimated to require an averageof 20 minutes of time per user, which isassumed to be managerial time (EPA 2011b).CDX Registration. CDX users will need to register with CDX,which involves selecting a username and password, providing contact information, and identifying thefacility and the registrant’s role at the facility. This is estimated to take an average of 10 minutes per registrant (EPA 2011b). This results inan estimate that eachrespondent will spend 10 minutes of managerial time and 40minutes of technical time to register with CDX.Help Desk. CDX users are assumed to spend an average of 4 minutes contacting EPA’s CDX Help Desk for technical support (EPA 2011b), which results in an estimate of4 minutes of managerial time and 16 minutes of technical time per respondent.Problem Resolution. Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA’s CDX Help Desk toresolve problems involving their registrations or agreements (EPA 2011b).2.CDX Electronic Reporting (subsequent years):Employee Turnover. It is assumed that each year 10 percent ofCDX users will be replaced by new employees, who will have to comply with the subscriber agreementand/or CDX registration requirements (EPA 2011b). Thus, in subsequent years 10 percent of CDXusers will spend 15 to 20 minutes of managerial time to complete asubscriber agreement. In addition, 10 percent of all registrants will spend 10 minutesto register with CDX and 4 minutes contacting EPA’s CDX Help Desk. Papersubscriber agreement. Preparing, submitting, and filing a paper subscriber agreementis estimated to require an average of 20minutes of time per registrant (EPA 2011b).This results in an estimate of 20 minutes of managerialtime per respondent submitting a paper subscriber agreement.Report Compromised Signature. Each year 1 percent of respondents are assumed to report a compromised or surrendered electronicsignature, which requires the submittalof a new subscriber agreement (EPA 2011b). This will entail 15 to20 minutes (20 assumed here) of managerial time to prepare,submit, and file a new agreement, and 4minutes of time to contact EPA’s CDX Help Desk.Problem Resolution. Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA’s CDX Help Desk toresolve problems involving their registrations or agreements (EPA 2011b).3.RecordkeepingElectronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).4.Annual Report to Recordkeeping BodiesElectronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).Sources: (1) U.S. Bureau of LaborStatistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: HistoricalData: December 2006 - March2011, and (2) U.S. Environmental Protection Agency. 2011a.Supporting Statement for a Requestfor OMB Review under the Paperwork Reduction Act: the Final RuleAddendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.1276*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA TitleVI Proposed Rule C-11Table C-3: U.S. Accreditation Body Cost Summary With Electronic Reporting RequirementsType of CostCost (2010$)First Year Reapplication Years1Non-Reapplication YearsCosts without CDX RequirementsRule Familiarization $615 $0 $0Application or Reapplication Process$88 $88 $0Prepare Recognition Agreement $349 $349 $0EPA Notification $57 $57 $57TPC Notification $12 $12 $12Recordkeeping $308 $308 $308Reporting $256 $256 $256Cost per Accreditation Body $1,685 $1,070 $633Number of Accreditation Bodies 8 8 8Total Costs for U.S. Accreditation Bodies $13,480 $8,560 $5,064Annualized Costs (30 years, 3 percent)$6,303Annualized Costs (30 years, 7 percent)$6,320Incremental Costs for CDX RequirementsCDX Registration $87 $9 $9Prepare Recognition Agreement ($26) ($26)Recordkeeping ($128) ($128) ($128)Reporting ($32) ($32) ($32)Cost per Accreditation Body ($99) ($177) ($151)Number of Accreditation Bodies 8 8 8Total Costs for U.S. Accreditation Bodies ($792) ($1,416) ($1,208)Annualized Costs (30 years, 3 percent)($1,193)Annualized Costs (30 years, 7 percent)($1,146)Total Costs, Including Incremental Costs for CDX RequirementsRule Familiarization $615 $0 $0CDX Registration $87 $9 $9Application or Reapplication Process$88 $88 $0Prepare Recognition Agreement $323 $323 $0EPA Notification $57 $57 $57TPC Notification $12 $12 $12Recordkeeping $180 $180 $180Reporting $224 $224 $224Cost per Accreditation Body $1,586 $893 $482Number of Accreditation Bodies 8 8 8Total Costs for U.S. Accreditation Bodies $12,688 $7,144 $3,856Annualized Costs (30 years, 3 percent) $5,102Annualized Costs (30 years, 7 percent) $5,1671277*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA TitleVI Proposed Rule C-12Table C-4: U.S. TPC Cost Summary With Electronic Reporting RequirementsType of CostCost (2010$)First Year Reapplication Years1Non-Reapplication YearsHaveAccred.NeedAccred.Have Accred. Need Accred. Have Accred. Need Accred.Costs without Electronic Reporting RequirementsAccreditation $0 $25,000 $0 $5,000 $0 $5,000Rule Familiarization $615 $615 $0 $0 $0 $0Application or Reapplication Process$492 $492 $492 $492 $0 $0Manufacturer Notification and Recordkeeping $773 $773 $773 $773 $773 $773Annual Report and Notifications of Changes $210 $210 $210 $210 $210 $210Cost per TPC $2,090 $27,090 $1,475 $6,475 $983 $5,983Number of TPCs 6 3 6 3 6 3Total Costs for U.S. TPCs $12,540$81,270 $8,850 $19,425 $5,898 $17,949Annualized Costs (30 years, 3 percent) $27,232Annualized Costs (30 years, 7 percent) $28,123Incremental Costs for Electronic Reporting RequirementsCDX Electronic Reporting $87 $87 $9 $9 $9 $9Manufacturer Notification and Recordkeeping ($320) ($320) ($320) ($320) ($320) ($320)Annual Report and Notifications of Changes ($26) ($26) ($26) ($26) ($26) ($26)Cost per TPC ($259) ($259) ($337) ($337) ($337) ($337)Number of TPCs6 3 6 3 6 3Total Costs for U.S. TPCs ($1,554) ($777) ($2,022) ($1,011) ($2,022) ($1,011)Annualized Costs (30 years, 3 percent) ($2,852)Annualized Costs (30 years, 7 percent) ($2,754)Total Costs, Including Incremental Costs for Electronic Reporting RequirementsAccreditation $0 $25,000 $0 $5,000 $0 $5,000Rule Familiarization $615 $615 $0 $0 $0 $0CDX Electronic Reporting $87 $87 $9 $9 $9 $9Application or Reapplication Process$492 $492 $492 $492 $0 $0Manufacturer Notification and Recordkeeping $453 $453 $453 $453 $453 $453Annual Report and Notifications of Changes $184 $184 $184 $184 $184 $184Cost per TPC $1,831 $26,831 $1,138 $6,138 $646 $5,646Number of TPCs6 3 6 3 6 3Total Costs for U.S. TPCs $10,986$80,493 $6,828 $18,414 $3,876 $16,938Annualized Costs (30 years, 3 percent) $24,380Annualized Costs (30 years, 7 percent) $25,3681278127912801281*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA TitleVI Proposed Rule C-13Table C-5: Cost Summary for U.S. Accreditation Bodies and TPCs With Electronic Reporting RequirementsType of CostCost (2010$)First Year Reapplication Years1Non-Reapplication YearsCosts without CDX RequirementsAccreditation Bodies $13,480 $8,560 $5,064Third Party Certifiers$93,810 $28,275 $23,847Total Costs $107,290 $36,835 $28,911Annualized Costs (30 years, 3 percent) $33,535Annualized Costs (30 years, 7 percent) $34,443Incremental Costs for CDX RequirementsAccreditation Bodies ($792) ($1,416) ($1,208)Third Party Certifiers($2,331) ($3,033) ($3,033)Total Costs ($3,123) ($4,449) ($4,241)Annualized Costs (30 years, 3 percent) ($4,045)Annualized Costs (30 years, 7 percent) ($3,900)Total Costs, Including Incremental Costs for CDX RequirementsAccreditation Bodies $12,688 $7,144 $3,856Third Party Certifiers$91,479 $25,242 $20,814Total Costs $104,167 $32,386 $24,670Annualized Costs (30 years, 3 percent) $29,490Annualized Costs (30 years, 7 percent) $30,542128212831284*** EO 12866 Review Draft – Deliberative – Do NotQuote, Cite, or Release During the Review***August 14, 2012 Economic Analysis for the TSCA TitleVI Proposed Rule C-1412851286Table C-6: Total Bottom Line Burden and Costs (Domestic and Foreign)Year 1 Year 2 Year 3 AverageCosts without Electronic Reporting RequirementsNumber of Respondents and Responses61 61 61 61Total Burden Hours 2,085.64995.38 1,181.88 1,421Total Cost $417,470 $111,318 $122,243 $217,010Incremental Burden and Costs for Electronic Reporting RequirementsNumber of Respondents and Responses 61 61 61 61Total Burden Hours (344.67) (402.93) (427.93) (392)Total Cost ($11,535) ($15,907) ($16,557) ($14,666)Total Burden and Costs, Including Incremental Burden and Costs for Electronic Reporting RequirementsNumber of Respondents and Responses 61 61 61 61Total Burden Hours 1,740.97 592.44 753.94 1,029Total Cost $405,935 $95,411 $105,686 $202,3441287128812891290*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During the Review***

August 14, 2012 Economic Anal ysis for the TSCA Title VI Proposed Rule C-15 C.2 Costs and Benefits of Electronic Reporting to EPA 1291

1292 A portion of the cost that EPA incurs to opera te the CDX system can be attributed to the 1293 TSCA Title VI program. These costs are described below. 1294

1295

CDX O&M – The cost of CDX operations and main tenance for TSCA Title VI electronic 1296 reporting is estimated to be approximately $3,000 per year. 1297

1298 CDX Application Support O&M – The cost of application s upport operations and maintenance 1299 (for Help Desk support, resolv ing technical problems, software maintenance and upgrades, etc.) 1300

for TSCA Title VI electronic reporting is estimated to be approximately $25,000 per year. 1301

1302 CDX Software Licensing Costs – EPA’s cost of software licensing attributable to TSCA Title 1303 VI is estimated to be approximately $6,000 per year. 1304

1305

CDX CBI LAN O&M – The cost attributable of opera tions and maintenance of EPA’s 1306 confidential business administration (CBI) local ar ea network (LAN) attributable to TSCA Title 1307 VI is estimated to be approximately $15,000 per year. 1308

1309

EPA staff – Managing the CDX system related to the TSCA Title VI program is estimated to 1310 require approximately 0.1 FTE per year of EP A staff. Based on the 2010 Washington/Baltimore 1311 area annual salary rate for a GS-13, Step 5 em ployee ($100,904) and a loading factor of 1.6 for 1312 overhead and fringe benefits, the cost of the EPA staff needed to manage the CDX program 1313

attributable to the TSCA Title VI is estimated to be $16,145 per year. 1314

1315 Overall, EPA’s cost for operating the CDX system that can be attributed to the TSCA Title VI 1316 program is estimated at $65,145 per year. 1317

1318 The use of electronic reporti ng and CDX also has benefits fo r EPA. It is expected to 1319 improve efficiency and lead to higher quality da ta being available more quickly to EPA. EPA 1320 typically keys or scans in the data from pa per submissions, which can result in errors. 1321 Consequently, EPA must perf orm quality assurance checks on extracted and scanned 1322

information. When data is submitted electronica lly, the time required fo r EPA staff to review 1323 and process the information is reduced because ma nual data entry or processing is eliminated. 1324 Electronic reporting also improves data quality because it facilitates data correction and 1325 validation by highlighting fields with omitted or inconsistent data prior to submission. EPA has 1326

not estimated the value of these efficien cies and improvements in data quality. 1327

1328

1329 1330