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Final Regulatory Flexibility Analysis for Lead; Amendment to the Opt-out and Recordkeeping 

Provisions in the Renovation, Repair, and Painting Program; Final Rule 

[Docket Id No.: EPA–HQ–OPPT–2005-0049]

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

April 2010 

 Pursuant to section 604 of the Regulatory Flexibility Act (RFA) (5 U.S.C. § 601 et seq.), EPA has 

prepared this final regulatory flexibility analysis for the “Amendment to the Opt-out and Recordkeeping 

Provisions in the Renovation, Repair, and Painting Program” final rule. 

This rule addresses lead-based paint hazards created by renovation, repair, and painting activities 

that disturb lead-based paint in target housing and child-occupied facilities. “Target housing” is defined 

in TSCA § 401 as any housing constructed before 1978, except housing for the elderly or persons with 

disabilities (unless any child under age 6 resides or is expected to reside in such housing) or any 0-

bedroom dwelling. Under this rule, a child-occupied facility is a building, or a portion of a building, 

constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two 

different days within any week (Sunday through Saturday period), provided that each day’s visit lasts at 

least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at 

least 60 hours. Child-occupied facilities may be located in public or commercial buildings or in target 

housing. 

1. Need For the Rule

In the Federal Register issue of April 22, 2008, under the authority of sections 402(c)(3), 404, 

406, and 407 of the Toxic Substances Control Act (TSCA), EPA issued its final renovation, repair, and 

painting (RRP) program rule. The final RRP rule, codified in 40 CFR part 745, subparts E, L, and Q, 

addresses lead-based paint hazards created by renovation, repair, and painting activities that disturb 

painted surfaces in target housing and child-occupied facilities. The final RRP rule establishes 

requirements for training renovators, other renovation workers, and dust sampling technicians; for 

certifying renovators, dust sampling technicians, and renovation firms; for accrediting providers of 

renovation and dust sampling technician training; for renovation work practices; and for recordkeeping. 

In this rulemaking, EPA is further revising the TSCA § 402(c)(3) regulatory scheme to cover 

renovations in all target housing and child-occupied facilities. After further consideration of the opt-out 

provision, EPA believes it is in the best interest of the public to remove the provision. The Agency 

believes that the opt-out provision is not sufficiently protective for children under age 6 and pregnant 

women, because it does not provide protection from improperly-performed renovations for visiting 

children and pregnant women; for children and pregnant women who move into a newly-purchased house 

that was recently renovated under the opt-out provision; and for children and pregnant women who live 

adjacent to a home where the exterior is being renovated under the opt-out provision. In addition, while 

the RRP rule focused mainly on protecting young children and pregnant women from lead hazards, 

exposure can result in adverse health effects for older children and adults as well. Removing the opt-out 

provision will protect older children and adult occupants of target housing where no child under 6 or 

pregnant woman resides, as well as residents of adjacent properties. Finally, EPA believes that 

implementing the regulations without the opt-out provision promotes, to a greater extent, the statutory 

directive to promulgate regulations covering renovation activities in target housing. 

EPA has determined that providing owners and occupants of renovated buildings with copies of 

the records documenting the renovation firm’s compliance with the rule’s training and work practice 

requirements will serve to reinforce information on both the potential hazards of renovations and on the 

RRP rule’s requirements. It will also enable building owners and occupants to better understand what the 

renovation firm did to comply with the rule and how the rule’s provisions affected their specific 

renovation. Educating the owners and occupants in this way is likely to improve their ability to assist the 

EPA in monitoring compliance with the RRP rule. These improvements in education and monitoring will 
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improve compliance with the rule, which will ultimately protect children and adults from exposure to lead 

hazards due to renovation activities. 

The Agency concludes that the requirements of the rule achieve the goal of minimizing exposure 

to lead-based paint hazards created during renovation, remodeling and painting activities, taking into 

account reliability, effectiveness, and safety. 

2. Legal basis and objectives for the rule. 

TSCA § 402(c)(2) directs EPA to study the extent to which persons engaged in renovation, repair, 

and painting activities are exposed to lead or create lead-based paint hazards regularly or occasionally. 

After concluding this study, TSCA § 402(c)(3) further directs EPA to revise its lead-based paint activities 

regulations under TSCA § 402(a) to apply to renovation or remodeling activities that create lead-based 

paint hazards. Because EPA’s study found that activities commonly performed during renovation and 

remodeling create lead-based paint hazards, EPA issued the final RRP rule in 2008. In issuing the final 

RRP rule, EPA revised the TSCA § 402(a) regulatory scheme to apply to individuals and firms engaged 

in renovation, repair, and painting activities. In this rulemaking, EPA is revising the TSCA § 402(c)(3) 

rule to cover renovations in all target housing and child-occupied facilities. In so doing, EPA has also 

taken into consideration the environmental, economic, and social impact of the rule as provided in TSCA 

§ 2(c). A central objective of the rule is to minimize exposure to lead-based paint hazards created during 

renovation, repair, and painting activities in all target housing and other buildings frequented by children 

under age 6. 

3. Description and Number of Small Entities to Which the Rule Will Apply

 Small entities potentially affected by the rule may include, but are not limited to, entities in the 

following industries: 

 • Building construction (NAICS 236), e.g., single family housing construction, multi-family 

housing construction, residential remodelers. 

 • Specialty trade contractors (NAICS 238), e.g., plumbing, heating, and air-conditioning 

contractors, painting and wall covering contractors, electrical contractors, finish carpentry 

contractors, drywall and insulation contractors, siding contractors, tile and terrazzo contractors, 

glass and glazing contractors. 

 • Real estate (NAICS 531), e.g., lessors of residential buildings and dwellings, residential property 

managers. 

 • Child day care services (NAICS 624410). 

 • Elementary and secondary schools (NAICS 611110), e.g., elementary schools with kindergarten 

classrooms. 

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities 

likely to be affected by this action. Other types of entities could also be affected. 

 In determining the number of small businesses affected by the rule, the Agency applied U.S. 

Economic Census data to the SBA’s definition of small business. However, applying the U.S. Economic 

Census data requires either under or overestimating the number of small businesses affected by the rule. 

For example, for many construction establishments, the SBA defines small businesses as having revenues 

of less than $14 million. With respect to those establishments, the U.S. Economic Census data groups all 

establishments with revenues of $10 million or more into one revenue bracket. On the one hand, using 

data for the entire industry would overestimate the number of small businesses affected by the rule and 

would defeat the purpose of estimating impacts on small business. It would also underestimate the rule’s 
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impact on small businesses because the impacts would be calculated using the revenues of large 

businesses in addition to small businesses. On the other hand, applying the closest, albeit lower, revenue 

bracket would underestimate the number of small businesses affected by the rule while at the same time 

overestimating the impacts. Similar issues arose in estimating the fraction of property owners and 

managers that are small businesses. EPA has concluded that a substantial number of small businesses 

will be affected by the rule. Consequently, EPA has chosen to be more conservative in estimating the 

cost impacts of the rule by using the closest, albeit lower, revenue bracket for which Census data is 

available. For other sectors (nonprofits operating daycare centers or private schools), EPA assumed that 

all affected firms are small, which may overestimate the number of small entities affected by the rule. 

 The vast majority of entities in the industries affected by this rule are small. EPA estimates that 

the renovation, repair, and painting program will affect an average of over 289,000 small entities per year. 

Of the 289,000 small entities estimated to incur costs due to the rule, almost 101,000 small residential 

contractors are assumed to seek certification as a result of the removal of the opt-out provision; therefore, 

they would incur training, certification, work practice, and recordkeeping costs. The remaining nearly 

189,000 small entities (working in buildings that were not eligible for the opt-out) are only expected to 

incur costs due to the additional recordkeeping provisions in the rule. 

4. Potential economic impacts on small entities. 

EPA evaluated two factors in its analysis of the rule’s requirements on small entities, the number 

of firms that would experience the impact, and the size of the impact. Average annual compliance costs as 

a percentage of average annual revenues were used to assess the potential average impacts of the rule on 

small businesses and small governments. This ratio is a good measure of entities’ ability to afford the 

costs attributable to a regulatory requirement, because comparing compliance costs to revenues provides a 

reasonable indication of the magnitude of the regulatory burden relative to a commonly available measure 

of economic activity. Where regulatory costs represent a small fraction of a typical entity’s revenues, the 

financial impacts of the regulation on such entities may be considered as not significant. For non-profit 

organizations, impacts were measured by comparing rule costs to annual expenditures. When expenditure 

data were not available, however, revenue information was used as a proxy for expenditures. It is 

appropriate to calculate the impact ratios using annualized costs, because these costs are more 

representative of the continuing costs entities face to comply with the rule. 

The average cost to a typical small renovation contractor of removing the opt-out provision and 

adding the new recordkeeping requirements could be as much as $1,100 to $6,400, depending on the 

industry sector. This represents 0.8 percent to 1.7 percent of revenues depending on the industry sector. 

Overall, as many as 101,000 small businesses could be affected by the removal of the opt-out provision, 

with average impacts of up to 1.10 percent of revenues. 

The rule’s new recordkeeping requirement has an average cost of $1 to $280 for entities not 

affected by removal of the opt-out provision. This results in incremental cost impacts ranging from 

0.0001 percent to 0.08 percent of revenues. An estimated 189,000 small entities could be affected solely 

by the additional recordkeeping requirement, including 165,000 small businesses with average impacts of 

0.03 percent of revenues, 17,000 small non-profits with average impacts of 0.0005 percent, and 6,000 

small governments with average impacts of 0.0001 percent. 

Combining the firms affected by the removal of the opt-out provision with those only affected by 

the new recordkeeping requirement, a total of 289,000 small entities could be affected by the rule, 

including 266,000 small businesses with average impacts of 0.4 percent, 17,000 small non-profits with 

average impacts of 0.0005 percent, and 6,000 small governments with average impacts of 0.0001 percent. 

Some of the small entities subject to the rule have employees while others are non-employers. 

The non-employers typically perform fewer jobs than firms with employees, and thus have lower work 

practice compliance costs. However, they also have lower average revenues than entities with employees, 

so their impacts (measured as costs divided by revenues) can be higher. Impact estimates for non-
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employers should be interpreted with caution, as some non-employers may have issues related to 

understatement of income, which would tend to exaggerate the average impact ratio for this class of small 

entities. 

There are an estimated 75,000 non-employer renovation contractors that could be affected by the 

removal of the opt-out provision. The average cost to such contractors is estimated to be $1,193 apiece. 

This represents 1.3% to 4.7% of reported revenues, depending on the industry sector. This rule’s new 

recordkeeping requirement is estimated to affect approximately 96,000 additional non-employer 

renovation contractors not affected by removal of the opt-out provision. The costs to such contractors are 

estimated to be $42 apiece. This represents 0.05% to 0.17% of revenues, depending on the industry 

sector. 

 To the extent that renovators and firms working in housing eligible for the opt-out provision will 

already have become trained and certified because they also work in regulated facilities ineligible for the 

opt-out provision, or to the extent that eligible homeowners would decline to opt out, the average impacts 

of this action will be lower than estimated. 

5. Relevant Federal rules. 

The requirements in this rulemaking will fit within an existing framework of other Federal 

regulations that address lead-based paint. Notably, the Pre-Renovation Education Rule, 40 CFR 745.85, 

requires renovators to distribute a lead hazard information pamphlet to owners and occupants before 

conducting a renovation in target housing and child-occupied facilities. The rule’s requirement that 

renovators provide owners and occupants with records documenting compliance with the program’s 

training and work practice requirements complements the existing pre-renovation education requirements. 

6. Projected Compliance Requirements, Classes of Small Entities Subject to the Compliance 

Requirements, and Professional Skills Needed to Comply

A. Projected Compliance Requirements

The rule would eliminate the opt-out provision that currently allows the owner of a residence he 

or she occupies to opt-out of the requirements of the RRP rule as long as no child under age 6 or pregnant 

women resides in the home and the home is not a child-occupied facility. The rule would also require 

renovation firms to provide a copy of the records demonstrating compliance with the training and work 

practice requirements of the RRP rule to the owner and, if different, the occupant of the building being 

renovated or the operator of the child-occupied facility. 

B. Classes of Small Entities Subject to the Compliance Requirements

 Small entities include small businesses, small organizations, and small governmental 

jurisdictions. The small entities that are potentially directly regulated by this rule include: small 

businesses (including contractors and property owners and managers); small nonprofits (certain daycare 

centers and private schools); and small governments (school districts). 
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C. Professional Skills Needed to Comply

Under the lead renovation, repair, and painting program requirements, renovators and dust 

sampling technicians working in target housing and child-occupied facilities have to take a course to learn 

the proper techniques for accomplishing the containment, cleaning, cleaning verification, and dust 

sampling tasks they will perform during renovations. These courses are intended to provide them with 

the information they would need to comply with the rule based on the skills they already have. 

Renovators then provide on-the-job training in work practices to any other renovation workers used on a 

particular renovation. Entities are required to apply for certification to perform renovations; this process 

does not require any special skills other than the ability to complete the application. They also need to 

document their training and the work practices used during renovations, which does not require any 

special skills. 

7. Minimization of Economic Impacts on Small Entities Consistent with Statutory Objectives, 

and Consideration of Alternatives

A. Small Business Advocacy Review Panel 

EPA has been concerned with potential small entity impacts since the earliest stages of planning 

for the RRP program under § 402(c)(3) of TSCA. EPA conducted outreach to small entities and, pursuant 

to § 609 of the RFA, convened a Small Business Advocacy Review Panel in 1999 to obtain advice and 

recommendations of representatives of the regulated small entities. Pursuant to the RFA, EPA used the 

report of the Panel that was convened for the closely related RRP rule promulgated in April 2008. EPA 

identified eight key elements of a potential renovation and remodeling regulation for the Panel’s 

consideration. These elements were: applicability and scope; firm certification; individual training and 

certification; accreditation of training courses; work practice standards; prohibited practices; exterior 

clearance; and interior clearance. 

Details on the Panel and its recommendations are provided in the Panel Report, which is included 

in the docket for this rulemaking. Information on how EPA implemented the Panel’s recommendations in 

the development of the RRP program is available in Unit VIII.C. of the preamble to the 2006 Proposal 

(71 FR 1588, January 10, 2006) and in Unit V.C. of the preamble to the 2008 Final Rule (73 FR 21692, 

April 22, 2008), which are also included in the docket for the rulemaking. This rule is closely related to 

the RRP rule and the conclusions made in 2008 regarding the Panel’s recommendations are applicable to 

this final rule. Although this final rule expands the number of renovation firms that must comply with the 

RRP requirements, it does not change the elements identified by the Panel. For example, this rule does 

not change the work practice or certification requirements of the RRP rule. EPA believes that 

reconvening the Panel would be procedurally duplicative and is unnecessary given that the issues here 

were within the scope of those considered by the Panel. 

 EPA has made a concerted effort to keep the costs and burdens associated with the RRP program 

as low as possible, while still providing adequate protection against lead-based paint hazards created by 

renovation activities. EPA believes that given the highly-variable nature of the regulated community, the 

lead-safe work practices required by this rule should be simple to understand and easy to use. EPA is 

very aware that this regulation will apply to a whole range of individuals from day laborers to property 

maintenance staff to master craftsmen performing a whole range of activities from simple drywall repair 

to window replacement to complete kitchen and bath renovations to building additions and everything in 

between. Lead-safe work practices that are easy and practical to use are more likely to be followed by all 

of the persons who perform renovations, and, therefore, more likely to be reliable and effective in 

minimizing exposure to lead-based paint hazards created by renovation activities. In addition to the 

statutory factors of reliability, safety, and effectiveness, these considerations included the compliance 

costs to be imposed by the rule, both in general and particularly on small entities, and the benefits to be 

obtained. 

B. Alternatives considered 
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EPA considered several significant alternatives to the rule that could affect the economic impacts 

of the rule on small entities. These alternatives would have applied to both small and large entities, but 

given the number of small entities in the affected industries, these alternatives would primarily affect 

small entities. Following is a brief description of significant alternatives that would have minimized the 

impacts of the rule on small entities, including EPA’s reasons for rejecting them. 

 i. Delayed effective date. EPA considered an option that would delay the removal of the opt-out 

provision by 6 months, and another option that would delay the date by 12 months. These options would 

make the RRP program more complex to implement and might lead to confusion by renovators and 

homeowners. These options would also lead to increased exposures during the delay period, including 

exposures to children under the age of 6 and pregnant women. Therefore, EPA believes that these options 

are not consistent with the stated objectives of the rule. 

 ii. Staged approach. EPA considered a staged approach that would initially remove the opt-out 

provision in pre-1960 housing, and then remove it in housing built between 1960 and 1978 a year later. 

This would make the RRP program more complex to implement and might lead to confusion by 

renovators and homeowners. It would also increase exposures during the first year of the rule from 

renovations in houses built between 1960 and 1978, including exposures to children under the age of 6 

and pregnant women. EPA does not believe that the reduced burden of a staged approach outweighs the 

implementation complexity and additional exposures that it would create. Therefore, EPA believes that 

this option is not consistent with the stated objectives of the rule. 

 iii. Alternate work practices. EPA also considered different options for the work practice 

requirements in housing that was previously eligible for the opt-out provision. Specifically, EPA 

considered options: with the containment requirements specified in 40 CFR 745.85, but without any 

cleaning or cleaning verification work practices; with the cleaning and cleaning verification requirements 

specified in 40 CFR 745.85, but without any containment work practices; with the cleaning requirements 

specified in 40 CFR 745.85, but without any containment or cleaning verification work practices; with the 

containment, cleaning, and cleaning verification requirements specified in 40 CFR 745.85, but without 

the prohibitions or restrictions on paint removal practices specified in 40 CFR 745.85(a)(3) (i.e., openflame burning or torching, the use of machines that remove paint through high-speed operation without 

HEPA exhaust control, and heat guns operating in excess of 1100 degrees Fahrenheit); with only the work 

practices specified in 40 CFR 745.85 that apply to exterior renovations; with only the restriction or 

prohibition on certain work practices specified at 40 CFR 745.85(a)(3); and without any of the work 

practice requirements specified in 40 CFR 745.85, but with dust wipe testing performed after the 

renovation. 

EPA’s study on the Characterization of Dust Lead Levels after Renovation, Repair, and Painting 

Activities (the “Dust Study”), indicated that renovation, repair, and paint preparation activities produce 

large quantities of lead dust that create dust-lead hazards. The Dust Study showed that the largest 

decreases in dust levels were observed in the experiments where the rule’s practices of containment, 

specialized cleaning, and cleaning verification were all used. And the Dust Study indicated that if the 

prohibited and restricted practices are avoided, the suite of work practices as a whole are effective at 

addressing the lead-paint dust that is generated during renovation activities. However, excluding any 

single component of the suite of work practices or allowing the prohibited practices to be used led to 

instances where dust-lead hazards remained. Thus, EPA has concluded that the alternative work practice 

options are not effective at minimizing exposure to lead-based paint hazards created during renovation 

activities. Therefore, EPA believes that these options are not consistent with the stated objectives of the 

rule. 

iv. Conclusion 

 EPA is concerned that these alternatives to the rule can create confusion among both contractors 

and consumers and could potentially result in non-compliance by renovation firms. EPA believes that 
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simplifying the applicability of the work practices will enhance the effectiveness and reliability of the 

rule. 

EPA is concerned that the alternatives with a delayed or staged effective date would lead to 

increased exposures during the delay period, including exposures to children under the age of 6 and 

pregnant women. 

Based on the data available to EPA (e.g., the Dust Study), the Agency cannot now conclude that 

the alternatives to the rule with alternate work practices are safe, reliable or effective because none of 

these would sufficiently minimize exposure to lead-based paint hazards. In sum, when the RRP work 

practices are not used, residents and visitors are exposed to the lead hazards created by the renovation, 

and therefore these approaches would not protect older children, women of childbearing age, or other 

adults currently residing in the home and can result in exposure to children under the age of 6 and 

pregnant women to lead-based paint hazards. 

8. Summary of Significant Issues Raised by the Public Comments in Response to the Initial 

Regulatory Flexibility Analysis, a Summary of the Assessment of the Agency of Such Issues, 

and a Statement of Any Changes Made in the Proposed Rule as a Result of Such Comments 

There were no public comments specifically on the Initial Regulatory Flexibility Analysis. 

However, there were public comments that addressed the Agency’s compliance with the Regulatory 

Flexibility Act, or which addressed issues that indirectly affect the Initial Regulatory Flexibility Analysis. 

The Agency’s assessment of these issues is summarized below. EPA did not make any changes to the 

proposed rule as a result of these comments. 

Several commenters assert that EPA has failed to comply with the Regulatory Flexibility Act 

(RFA). They assert that EPA did not conduct a Small Business Advocacy Review (SBAR) panel prior to 

issuing this proposed rulemaking. EPA disagrees with these comments. Contrary to the assertions of 

these commenters, the Agency has fully complied with the requirements of the RFA. 

The RFA states that agencies “may consider a series of closely related rules as one rule for the 

purposes of [an IRFA]” in order to avoid “duplicative action.” 5 U.S.C. § 605(c) (emphasis added). This 

rule is closely related to the 2008 RRP rule. Indeed, this rule addresses some of the very provisions in the 

Code of Federal Regulations finalized in the 2008 RRP rule. Accordingly, EPA was not required to 

complete an IRFA or FRFA for this rule. Nonetheless, EPA exercised its discretion to complete an Initial 

Regulatory Flexibility Analysis (IRFA) on this proposal, as well as a Final Regulatory Flexibility 

Analysis (FRFA) on the final rule. These robust analyses contained in the IRFA and FRFA consider the 

potential impacts of the rule on affected small entities. 

Moreover, EPA did convene and conduct a SBAR panel (RRP Panel) in connection with the 

proposal to regulate renovation and remodeling activities in target housing. EPA relied upon the RRP 

Panel to inform its decisions on the 2008 RRP rule. The RRP Panel is equally applicable to this closely 

related amendment to the RRP rule, pursuant to which EPA has reconsidered some of same applicability 

and scope issues. The RRP Panel discussed all major aspects of the proposal to regulate renovation and 

remodeling activities, including issues related to the applicability of the rule. As a part of the panel 

process, EPA “collect[ed] advice and recommendations” from several Small Entity Representatives 

(SERs) on the proposal to regulate renovation and remodeling activities. 5 U.S.C. § 609(b). In response 

to the comments from the SERs, EPA issued a report. See Report of the Small Business Advocacy Review 

Panel on The Lead-base Painting; Certification and Training; Renovation and Remodeling Requirements

(March 3, 2000). The RRP Panel report expressly addressed applicability of the rule. Thus, the primary 

issue considered in this rulemaking is wholly within the scope of the issues EPA considered as part of the 

2008 RRP rule and were within the scope of the issues considered by the RRP Panel. EPA believes that 

reconvening the RRP Panel would be procedurally duplicative and is unnecessary given that the issues 

here were within the scope of those considered by the RRP Panel. 
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One commenter believes that EPA should consider three of its upcoming rulemakings together so 

the public can better assess the cumulative impacts of the rules. The commenter states that by separating 

the actions into three rules, EPA is avoiding the accumulation of economic impacts. The Agency 

disagrees with this comment. There are many different factors that impact the timing of the rulemaking 

process. For example, EPA has agreed to undertake a number of related rulemakings over the next few 

years. Developing the record for some will take longer than for others. That is not a reason, however, to 

delay action on this rule. Moreover, the public had or will have the opportunity to comment on all of 

EPA’s rules regarding renovations that the commenter mentions. The Agency is planning to develop an 

economic assessment of each rule that will help commenters understand the impacts of the rules. 

Therefore, EPA believes that commenters will be able to understand the cumulative impact of these rules. 

 Numerous public commenters believed that EPA underestimated the costs of compliance with the 

RRP rule. This indirectly affects the Initial Regulatory Flexibility Analysis, since the compliance cost is 

used in estimating the potential impact on small entities. EPA disagrees that it underestimated the cost of 

compliance with the rule, and the Agency’s explanations are spelled out at length in the response to 

comments document which is in the docket for this rulemaking. Therefore, EPA has not changed its costs 

estimates for this rule, or its estimates of small entity impacts. 

9. Small Entity Compliance Guide 

 As required by § 212 of SBREFA, EPA issued a Small Entity Compliance Guide in December 

2008 to help small entities comply with the 2008 RRP rule. The Guide is available at: 

http://www.epa.gov/lead/pubs/sbcomplianceguide.pdf or from the National Lead Information Center by 

calling 1(800) 424-LEAD [5323]. EPA will revise the Guide, as necessary, to reflect this rulemaking 

activity.