# Economic Analy**sis of the Proposed Toxics Release**  **Inv entory** **(TRI) Report ing Rule for Facilities Located in** 

**Indian Country**

**DRA FT**  Prepared for: Office of Environmental Information US Environmental Protection Agency



## June **28 , 2011** Abt Associates Inc. 2 3 nd Draft, June 2 8, 2011 

## Table of Contents **Table of Contents ................................**  **................................ ................................**  **................................ ........**  **2 Table of Tables**  **................................ ................................**  **................................ ................................**  **............ 3**  **Chapter 1**
**– Introduction**  **................................ ................................**  **................................ .........................**  **4 Chapter 2** 
**– Estimated Number of Affected Facilities and Forms**  **................................ ......................**  **6 Chapter 3** 
**– Cost Estimates**  **................................ ................................**  **................................ .....................**  **8** 3.1 Introduction ................................ ................................ ................................ ................................ ...... 8 3.2 Methodology ................................ ................................ ................................ ................................ .... 8 3.3 Incremental Burden Estimates ................................ ................................ ................................ ......... 9 3.3.1 Rule Familiarization ................................ ................................ ................................ ........... 9 3.3.2 Compliance Determination ................................ ................................ ............................... 10 3.3.3 Summary ................................ ................................ ................................ ........................... 11 3.4 Unit Cost Estimates ................................ ................................ ................................ ........................ 11 3.5 Total Incremental Facility Costs ................................ ................................ ................................ .... 12 3.6 Total Incremental EPA Costs ................................ ................................ ................................ ......... 13 **Chapter 4**
**– Small Entity Impacts Associated with the Proposed Rule**  **................................ ............**  **14** 4.1 Introduction ................................ ................................ ................................ ................................ .... 14 4.2 Definitions of Small Entities ................................ ................................ ................................ .......... 14 4.3 Methodo logy Overview ................................ ................................ ................................ ................. 15 4.4 Impacts on Small Businesses ................................ ................................ ................................ ......... 17 4.4.1 Census Sectors ................................ ................................ ................................ .................. 17 4.4.2 Utilities ................................ ................................ ................................ .............................. 20 4.5 Impacts on Small Government Jurisdictions ................................ ................................ ................. 22 4.6 Summary ................................ ................................ ................................ ................................ ........ 24 **Chapter 5**
**– Benefits**  **................................ ................................**  **................................ ...............................**  **26 Literature Cited**  **................................ ................................**  **................................ ................................**  **........ 27** Abt Associates Inc. 3 3 nd Draft, June 2 8, 2011 

## Table of Tables Table 2 - 1 : Number of Facilities Reporting to TRI in RY2009 ................................ ................................ .... 6 Table 2 - 2: Number of Facilities Submitting Forms to TRI in Indian Country (RY2008 and RY2009) ...... 6 Table 2 - 3: Tribal Lands Containing Facilities Reporting to TRI in RY2008 and/or RY2009 .................... 7 Table 3 - 1: Estimated Rule Familiarization Burden per Facility Associated with t he Proposed Rule ....... 10 Table 3 - 2: Estimated Compliance Determination Burden per Facility Associated with the Proposed Rule

................................ ................................ ................................ ................................ ..................... 11 Tabl e 3 - 3: Estimated First and Subsequent Year Burden Associated with the Proposed Rule ................. 11 Table 3 - 4: Loaded Hourly Wage Rates by Labor Category ................................ ................................ ...... 12 Table 3 - 5: Estimated Incremental Costs Associated with the Proposed Rule ................................ ........... 12 Table 4 - 1: Categorization of Sectors Affected by Proposed Rule ................................ ............................. 16 Table 4 - 2: Sectors with Information in SUSB ................................ ................................ ........................... 17 Table 4 - 3: Universe of Affected TRI Facilities in Sectors with Data in SUSB ................................ ......... 18 Table 4 - 4: Small Entity Impact for NAICS Sectors in Census Codes ................................ ....................... 20 Table 4 - 5: TRI Utility Universe ................................ ................................ ................................ ................. 21 Table 4 - 6: Small Entity Impact for Utility Sectors ................................ ................................ .................... 22 Table 4 - 7: TRI Government Owned Facility Universe ................................ ................................ .............. 23 Table 4 - 8 : Small Entity Impact for Small Government Jurisdictions ................................ ........................ 24 Table 4 - 9: Small Entity Impact for NAICS Sectors in Census Codes, Utilities and Small Government Ju risdictions ................................ ................................ ................................ ................................ . 25Abt Associates Inc. 4 3 nd Draft, June 2 8, 2011 

## Chapter 1 **– Introduction**  The Emergency Planning and Community Right -to - Know Act (EPCRA), also known as Title III of the Superfund Amendments and Reauthorization Act of 1986 (SARA), created a broad range of emergency response planning and reporting requirements for manufacturers, processors, and users of toxic chemicals in the United States. 42 U.S.C. §§ 11001 - 11050 . Under section 313 of EPCRA, certain facilities are required to submit annual reports to the United States Environmental Protection Agency (EPA) and to States on their release, transfer, and waste management activities of certain toxic chemicals if they are manufactured, processed, or otherwise used above thresholds amounts . In addition, the Pollution Prevention Act (PPA) of 1990 require s these same facilities to report pollution prevention, recycling, and other waste management information for these same chemicals . EPA maintains the data collected under EPCRA section 313 and the PPA in a database known as the Toxics Release Inventory (TRI). 1 Since the program began in 1986, facilities that meet TRI reporting requirements have been required to submit annual TRI reports to EPA and the State in which they are located . O n July 26 , 1990, EPA finalized regulations in the Federal Regi ster (FR) requiring facilities in Indian c ountry to submit annual TRI reports to EPA and the appropriate tribal government (55 FR 30632) . These amendments, however, were inadvertently omitted from the Code of Federal Regulations (CFR) and the relevant provisions were later overwritten by a subsequent final rule, thus resulting in the exclusion of the intended requirement from the CFR. EPA intend s to include these provisions in 40 CFR Section 372.30(a), thus requiring facilities that are located in Indian country to submit their annual TRI reports to the appropriate tribe, rather than to the State in which the facility is geographically located . Given this action , 40 CFR part 372.30(a) needs to be revised for facilities located in Indian C ountry; EPA’s Form R, Form A, and Form R Schedule 1 must therefore be submitted to the official designated by the tribal Chair person or equivalent elected official, as well as to EPA . For the purpose of clarity, EPA also intends to amend the definition of “State” to no longer include Indian country. Form R and Form A will be modified to reflect these changes in reporting requirements . On the first page of Form R and Form A , under the section “WHERE TO SEND COMPLETED FORMS” , the current text “2. APP ROPRIATE STATE OFFICE” will be replaced with “2. APP ROPRIATE STATE OR TRIBAL OFFICE . ” A list of contacts for the appropriate tribal government will be included in the TRI Reporting Forms and Instructions . The proposed rule would also provide t ribes with the opp ortunity to request that EPA require that a specific facility or facilities located within the tribe’s Indian country report to TRI. Additionally, they would be able to petition for the addition of certain chemicals, which would apply to all facilities re leasing the particular substance(s). The statute

– at sections 313(b)(2) and 313(d)

– expressly authorizes the Administrator to apply TRI reporting requirements to particular facilities and to add or delete chemicals to or from the list of chemicals subjec t to TRI reporting. Further, the statute provides 1 The term “EPCRA section 313" properly refers to only the statutory requirements, while the term “TRI” properly refers to the database that s tores the information collected both under EPCRA section 313 and under section 6607 of the PPA. However, the terms have often been used interchangeably by the public to refer to the statute, the regulatory requirements, the reporting fo rm , the database, and/or EPA's program to manage the data. In deference to common usage, the terms EPCRA section 313 and TRI are sometimes used interchangeably in this report w here doing so will make the report simpler and easier to read .Abt Associates Inc. 5 3 nd Draft, June 2 8, 2011

opportunities for governors of States to request that particular facilities within the States be subject to TRI reporting or that specific chemicals be added to or deleted from the TRI reporting list (EPCRA Section 313(b)(2), (e)(2)). EPA believe s that these same opportunities are appropriately available to tribal governments under the statute and propose s to explicitly describe these provisions so that it is apparent that the tribal Chairperson or equivalent elected official may make similar requests to EPA. 2 Ultimately, however, it is EPA that determines whether TRI reporting requirements will apply to a particular facility or whether a specific chemical will be added to, or deleted from, the TRI chemic als list. Under the proposed rule and per the intent of the 1990 regulation, a t ribe's only responsibility will be to receive TRI reports submitted by facilities located within its Indian country . EPA will ask affected tribes (those with facilities located in their Indian country) to identify a point of contact to whom facilities can provide the ir annual report of TRI releases . If no TRI contact is designated, the head representative of the Tribal Council or Tribal Environmental Department would serve as the point of contact for report submission. Although t

ribes are not required to use the toxics release data received from facilities for any particular purpose, TRI data are among the many tools available to help tribes better analyze potential sources o f toxic chemicals, as well as to assess environmental and health conditions on their lands . Tribes currently have and will continue to have access to TRI data across the entire nation, once it is made available to the public . The propos ed rule would simply accelerate the timeframe within which a tribe would receive data from facilities in its Indian country . Under EPA’s considered approach , if the facility is located in the Indian country of a t ribe that becomes a me mber of the internet -based TRI Data Exch ange, then the owner or operator of that facility could meet its dual EPA/tribal reporting requirements by submitting its TRI report to EPA via TRI Made Easy ( TRI ME ) web , a web -based application that allows facilities to submit a paperless report . EPA would then automatically transmit the report to the appropriate tribe via the TRI State Data Exchange . If the facility is located in the Indian country of a tribe that does not become a member of the TRI Data Exchange, or if the facility is allowed to submit to the Tribe via paper form, then the facility would be required to submit a TRI report to EPA (either electronically or via paper) and also separately to the appropriate tribe . The approach described above is the same as for EPA and States when fac ilities are not located in Indian country. The remainder of this report describes the costs to industry, the impacts to potentially affected small entities, and the benefits associated with the proposed rule. In Chapter 2 the number of facilities currently in Indian country is estimated as well as the number of facilities potentially affected by the proposed rule. These estimates are used in Chapter 3 to calculate the costs to current TRI reporters of understanding and complying with the proposed rule . In Chapter 4, the impacts of the proposed rule on “small” entities are examined. Chapter 5 presents a qualitative assessment of the benefits of the proposed rule.

2 Because these same opportunities are already available under existing statutes, no additional burden on Tribal governments or TRI reporters is created from this clarification under the proposed rule.Abt Associates Inc. 6 3 nd Draft, June 2 8, 2011



## Chapter 2 **– Estimated Number of A**  **ffected Facilities**  **and Forms** The proposed rule will create reporting burden for all TRI reporters to familiarize themselves with the clarified language regarding where forms should be submitted. This rule will not change the total number of facilities reporting to TRI nor the number of reports (Form R or Form A) filed. The total number of TRI reporters in RY2009 is presented in Table 2 - 1 .

**Table 2**  **- 1**  **: Number of Facilities Reporting to TRI in**  **RY200 9**  **Facilities Form Rs**  **Form A s**  Total Uniqu e Number of Forms/Facilities 20,797 69,689 8,894 U.S. EPA 2011b. TRI RY2009: NA2009. Accessed via TRI.NET Additionally, a subset of current reporters will need to determine whether or not they are located in Indian country . H erein , “Indian tribe” refers to a tribe that is “Federally -recognized'” by the Secretary of the Interior under 25 CFR 272.2 while “Indian country” refers to lands under the Title 18 U.S.C. 1151 definition of Indian country as: a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights - of - way running through the reservation ; b) all dependent Indian communities within the borders of the United States whether within the origin al or subsequently acquired territory thereof, and whether within or without the limits of a State ; and c) all Indian allotments, the Indian titles to which have not been extinguished, including rights of -way running through the same. As shown in Table 2 - 2 , 51 f acilities located in Indian country submitted a total of 199 forms to TRI in RY2008 or RY2009 . 3 , 4 These facilities will be used as a proxy for estimating the number of facilities performing compliance determin ation (see section 3.3.2 ) .

**Table 2**  **- 2**  **: Number of**  **Facilities Submitting Forms to TRI**  **in**

**Indian Country (**  **RY 2008 and RY** **200 9)**  **Facilities Form Rs**  **Form A s**  Total Uniqu e Number of Forms/Facilities 51 18 8 1 1 U.S. EPA 2011b. TRI RY2008, RY2009: NA2009. Accessed via TRI.NET

3 Note that the two most recent years of TRI reporting are considered when constructing the universe of facilities reporting in Indian country to capture the potential number of facilities currently located in Indian country. For the 44 facilities located in Indian country that reported in RY2009, their RY2009 form count wa s included in Table 2 - 2 . For the seven facilities located in Indian country that did not report in RY2009 but did report in RY2008, their RY2008 form count was included in Ta ble 2 - 2 . 4 Facilities located in Alaska Native Village Statistical Areas will not report to their respective Tribal governments and are thus excluded from this count.Abt Associates Inc. 7 3 nd Draft, June 2 8, 2011

These 51 facilities were located in 20 distinct t ribal lands , listed below in Table 2 - 3 . **Table 2**  **- 3**  **: Tribal Lands Containing Facilities Reporting to TRI in RY2008** 

**and/or RY2009 Reservation**  **State(s)** Coeur d'Alene Reservation Idaho Colorado River Reservation Arizona Fort Hall Reservation Idaho Gila River Reservation Arizona Hopi Reservation Arizona Isabella Reservation Michigan L'Anse Reservation Michigan Mille Lacs Reservation Minnesota Navajo Nation Reservation Arizona, New Mexico Nez Perce Reservation Idaho Oneida Reservation Wi sconsin Rincon Reservation California Puyallup Reservation Wa shington Salt River Reservation Arizona Sandia Pueblo New Mexico Soboba Reservation California Tohono O'odham Reservation Arizona Tulalip Reservation Wa shington Uintah and Ouray Reservation Utah Wi nd River Reservation Wyom ing Yakama Reservation Wa shington U.S. EPA 2011b. TRI RY2008, RY2009: NA2009. Accessed via TRI.NETAbt Associates Inc. 8 3 nd Draft, June 2 8, 2011 

## Chapter 3 **– Cost Estimates**  **3.1 Introduction**  This chapter presents the estimated industry costs associated with the proposed rule , which clarifies where facilities in Indian c ountry should send their TRI forms . Specifically, facilities that are located in Indian c ountry must submit their annual TRI reports to the appropriate trib al government , rather than to the State in which the facility is geographically located . The requirement for the facility to report to EPA remain s the same . Incremental reporting burden and cost will be associated with the need for all facilities to familiarize themselves with the clarified requirements as well as the need for certain facilities to determine whether or not they are located in Indian country. Section 3.2 describes the methodology used to estimate industry costs. Section 3.3 provides estimate s of the incremental burden while Section 3.4 explains how the cost estimates, or unit costs, were developed. Section 3.5 summarizes the total estimated incremental c osts of the proposed rule for the reporting community . Section 3.6 estimates the incremental costs of the proposed rule for EPA. 

### 3.2 **Methodology** Industry burden and costs associated with the proposed rule were calculated using the following four- step procedure: Step 1: Identify and describe the new tasks that facilities will have to perform to comply with

the proposed rule . Step 2: Estimate the typical number of hours of managerial, technical, and clerical labor

nee ded to complete each new task . Based on typical labor rates, calculate the unit cost of each new task for the first year of compliance and for subsequent years. Step 3: Estimate the number of unique facilities that will perform each new task. Step 4: For each new task, multiply the unit cost by the number of unique facilities and then

sum the results to estimate the total incremental industry costs for the first year and subsequent years. The set of compliance activities associated with TRI reporting inc lude: **Compliance Determination:** Facility staff must determine whether the facility meets the criteria for EPCRA section 313 reporting . This activity includes the time required to become familiar with the definitions, exemptions, and threshold requirements under the TRI Program, to review the list of TRI chemicals, and to conduct preliminary threshold determinations to determine if the facility is required to report. **Rule Familiarization:** F acilities must read the reporting package and become familiar with the revised language concerning reporting requirements. **Report Completion:** Facilities must gather data and perform calculations to provide the information required on Reporting Form R or Reporting Form A . This activity includesAbt Associates Inc. 9 3 nd Draft, June 2 8, 2011

the time required to search data sources and the time to complete and review the information. **Recordkeeping and Submission:** Fa cilities must maintain recordkeeping systems and submit their reports to EPA and the S tate or tribe in which the facility is located . This activity includes the time required to transmit or otherwise disclose the information. **Supplier Notification:** Certain suppliers of mixtures or trade name products containing reportable substances must annually notify their customers of the product’s composition, if the custo mer is subject to EPCRA section 313 reporting. This activity includes the time required to inform customers, either by letter or through the materials safety data sheet (MSDS) for the product. T he new tasks associated with the proposed rule are limited to compliance determination (for facilities unsure of their tribal land status) and rule familiarization (for all reporting facilities) . Facilities affected by the proposed rule are already reporting to TRI . Baseline reporting burden already captures the burden to these facilities for form completion, recordkeeping and submission, and supplier notification. The skills required to comply with the EPCRA section 313 reporting requirements (including the requirements associated with section 6607 of the PPA) are expected to vary from facility to facility, depending upon factors such as : the complexity of the facility's processes and activities; the chemicals at the facility; and the type s of use and disposition of TRI chemicals at the facility . Individuals responsible for determining whether their facility is required to report and, if so, completing a Form R or A report (or multiple Form R and/or A reports) will often have an engineering, scientific, or technical background . These functions, however, do not require an engineering or other similar degree . At a minimum, an understanding of the facility’s chemical purchases and production processes are needed . Necessary skills may include the ability to evaluate and interpret records, understand material safety data sh eets, and determine throughput or production volumes. Depending on the facility , estimates may be calculated using: (1) existing data collected under federal, state, or local regulations ; (2) emissions factors ; (3) design data supplied by the equipment manufacturer ; (4) mass balance techniques ; or (5) engineering calculations. Each technique requires varying skills and levels of sophistication to complete. EPA industry- and chemical - specific guidance documents will assist reporters in making the necessary c alculations to comply with the section 313 reporting requirements. In addition to technical labor, requirements involving managerial and clerical staff are also considered when computing costs. 

### 3.3 **Incremental Burden Estimates** In this section, EPA estimates the incremental burden associated with the proposed rule . Since the proposed rule simply clarifies where facilities located in Indian country should send their forms , TRI reporters are only expected to incur burden due to rule familiarization and compliance determination . The following burden estimates are based on considerable experience with the TRI program and engineering judgment. **3.3.1 Rule Familiarization**  Under the proposed rule, EPA expects that the entire TRI reporting community -- 20,797 facilities reporting to TRI in RY200 9 -- may incur rule familiarization burden. The incremental burden estimates associated with rule familiarization consist of time to read and interpret the clarified language outlined in the proposed rule and are based on the following assumptions:Abt Associates Inc. 10 3 nd Draft, June 2 8, 2011

 The first -year technical burden includes ten minutes per facility to read and interpret the clarified language . An additional five minutes per facility will be required to brief management regarding the clarified languag e . Itis assumed that facilities will fully comprehend the clarified language by the subsequent year of reporting; therefore, no rule familiarization burden is required in subsequent years.

 The first -year management burden includes five minutes per facility to be briefed regarding the clarified language . Itis assumed that facilities will fully comprehend the clarified language by the subsequent year of reporting; therefore, no rule familiarization burden is required in subsequent years.
 There is no first - or subsequent -year burden on clerical staff associated with rule familiarization. The incremental burden associated with rule familiarization in the first and subsequent years is presented in Table 3 - 1 . **Table 3**  **- 1**  **: Estimated Rule Familiarization Burden**  **per Facility As**  **sociated with the Proposed**  **Rule Labor Category**  **First Year Burden**  **(minutes) Subsequent Year** 

**Burden (minutes)**  Management 5 0 Technical 15 0 Clerical 0 0 **3.3.2 Compliance Determination**  Under the proposed rule, EPA assumes that most TRI reporters know whether or not they are located in Indian country . A subset of facilities, h owever, will spend time determining whether or not their facility resides on Indian c ountry . While the number of facilities that will have to make this determination is not known, it is expected to be a small subset of TRI report ers . T herefore , the 51 facilities identified as located in Indian country in RY2008 and RY2009 are used as a proxy for the number of facilities expected to perform this compliance determination task .  The first -year technical burden includes ten minutes to identify facility status in Indian country . It is assumed that technical staff will obtain this information by calling EPA to inquire . Itis further assumed that facilities will fully comprehend their status prior to the subsequent -year of reporting; therefore, no compliance determination burden is required in subsequent - years.
 There is no first - or subsequent -year burden on managerial staff associated with compliance determination .  There is no first - or subsequent -year burden on clerical staff associated with compliance determination . The incremental burden associated with compliance determination in the first - and subsequent - years is presented in Table 3 - 2 .Abt Associates Inc. 11 3 nd Draft, June 2 8, 2011 **Table 3**  **- 2**  **: Estimated Compliance Determination**  **Burden per Facility**  **As sociated with the Proposed**  **Rule Labor Catego**  **ry First**  **- Year Burden**  **(minutes) Subsequent**  **- Year** 

**Burden (minutes)** Management 0 0 Technical 10 0 Clerical 0 0 **3.3.3 Summary**  Table 3 - 3 presents total first - and subsequent -year incremental burden estimates associated with the propo sed rule. **Table 3**  **- 3**  **: Estimated First and Subsequent Year Burden A** **ssociated with the Proposed Rule** 
**Ac tivity**  **Number of Facilities**  **Labor Category Total Unit**  **Burden Total** 

**Burden Ma**  **nagerial Technical**  **Cleric al**  **Incremental First -** **Year Burden (hours)** Rule Familiarization 20,797 0.083 0.250 0 0.333 6,925 Compliance Determination 51 0 0.167 0 0.167 9 **Total 6,93**  **4 Incremental Subsequent**  **- Year Burden (hours)**  Rule Familiarization 0 0 0 0 0 0 Compliance Determ ination 0 0 0 0 0 0 **Total 0**  **0** 

### 3.4 **Unit Cost Estimates** This section explains how the cost estimates, or unit costs, were developed for the proposed rule. Each cost estimate is made up of two components: the unit time estimates (i.e., number of labor hours required of each type of personnel to complete a task) and the hourly wage rates for each level of personnel. Labor rates are divided into three categories: managerial, technical, and clerical. These rates reflect the total cost to employ an individual and include in the estimate the cost of salaries, fringe benefits, such as paid leave, health insurance, retirement savings, legally required benefits, and other overhead costs, such as office space, furniture, equipment and computers, supplies and other business expenses . Updated 2010 hourly labor rates, including fringe benefits and overhead, were calculated using current data on salaries and benefits for these three labor categories from information published by the Bureau of Labor Statistics (BLS) (USDO L, 2 010 ) . The general methodology for this calculation was obtained from Wage Rates for Economic Analysis of the Toxics Release Inventory Program (Rice, 2002) . T he managerial, technical, and clerical wage rates are composites of the BLS rates for ‘Wages and Salaries’ and ‘Total Benefits’ by labor category . The sum of ‘Wages and Salaries’ and ‘Total Benefits’ is equal to ‘Total Compensation . ’ The managerial labor rate is defined as the average hourly wages and salaries for the “Management, Business, and Financi al” occupational category . The technical labor rate is defined as the average hourly wages andAbt Associates Inc. 12 3 nd Draft, June 2 8, 2011

salaries for the “Professional and Related” occupational category . The clerical labor rate is defined as the average hourly wages and salaries for the “Office and Administrative Support” occupational category. Based on information provided by the chemical industry and chemical industry trade associations, an additional loading factor of 17 percent is applied to ‘Wages and Salaries’ for general overhead. 5 The sum of ‘Total Compensation’ and ‘Overhead’ is eq ual to ‘Total Loaded Hourly Wage Rate’ . As shown in Table 3 - 4 , the hourly wage rates are $63.99 for managerial personnel, $51.32 for technical personnel, and $25.16 for c lerical personnel, all in 2010 dollars.

**Table 3**  **- 4**  **: Loaded Hourly Wage Rates by Labor Category**  **Wage Ty pe**  **Labor Category Ma**  **nagerial Technical**  **Clerical** Wa ges and Salaries (Dec. 2010) $39.70 $32.75 $15.72 To tal Benefits $17.54 $13.00 $6.77 Overhead $6.75 $5.57 $2.67 **Total Loaded Hourly**

**Rate $63.99**  **$51.32 $25.16**  U.S.DOL (2010)
. Employer Costs for Employee Compensation
– September 2010
. U.S. Department of Labor. Bureau of Labor Statistics. Washington D.C., M arch 9, 2011. 

### 3.5 **Total Incremental Facility**  **Costs** Table 3 - 5 summarize s the total estimated incremental costs of the rule . For the 51 facilities expected to have both compliance determination and rule familiarization burden due to the proposed rule, the total first -year incremental costs are $26.71 per facility . For the remaining 20, 746 facilities in the TRI reporting community expected to have only rule familiarization burden due to the proposed rule, the total first -year incremental costs are $18.14 per facility
. In total for the entire TRI reporting community, the total first -year incremental costs are $377, 695 . There are no subsequent -year costs.

**Table 3**  **- 5**  **: Estimated Incremental Costs A** **ssociated with the Proposed Rule**

**Ac tivity**  **Hours Per Labor Category Total**  **Unit Cost**  **Number of**

**Facilities Total Cost**  **Ma nagerial**  **Technical Clerical**  **$63.99/hr $51.32/hr**  **$25.1 6** **/hr**

**First -** **Year** Rule Familiarization 0.083 0.250 0 $1 8.14 20,797 $377,2 58 Compliance Determination 0 0.167 0 $8.57 51 $437 **An nual Total**  **$377, 695**  **Subsequent -** **Years** Rule Familiarization 0 0 0 $0 0 $0 Compliance Determination 0 0 0 $0 0 $0 **An nual Total**  **$0**

5 Heiden Associates, Final Report: A Study of Industry Compliance Costs Under the Final Comprehensive Assessment Infor

mation Rule , Prepared for the Chemical Manufacturers Association, December 14, 1989.Abt Associates Inc. 13 3 nd Draft, June 2 8, 2011



### 3.6 **Total Incremental EPA**  **Costs** While rule makings often create Agency burden and cost associated with the need to process additional forms or data elements, this rulemaking sim ply clarifies where reports should be sent. Therefore, EPA will not be required to perform additional processing of forms d ue to the proposed rule.Abt Associates Inc. 14 3 nd Draft, June 2 8, 2011



## Chapter 4 **– Small Entity**  **Impacts A**

**ssociated with the Proposed**  **Rule 4.1**  **Introduction** The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. § 601 et. seq. ) requires Federal agencies to assess the effects of regulations on small entities, and, in some instances, to examine alternatives to the regulations that may reduce adverse economic effects on significantly impacted small entities . The RFA requires agencies to prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Since 1980, the RFA has required Federal agencies to assess the economic impacts of their actions on small entities, including busines ses, nonprofit agencies, and governments . Section 604 of the RFA, as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires an agency to perform a regulatory flexibility analysis for a rule unless the Agency certifies under section 605(b) that the regulatory action will not have a significant economic impact on a substantial number of small entities . The RFA does not specifically define “a significant economic impact on a substantial number” of small entities . This chapter summarizes the results of a small entity impact analysis for the proposed rule . Specifically, Section 4.2 provides the definition s of small entities for the group s covered under the proposed rule . Section 4.3 describes the general methodology used to determine if the proposed rule results in significant economic impacts to a substantial number of small entities . In Section s 4.4 and 4.5 this methodology is used to estimate the impacts of the proposed rule on small entities . The results of the small entity analysis are summarized in Section 4.6 . 

### 4.2 **Definitions of Small Entities**  The RFA u ses the definition of “small business” found in the Small Business Act, which authorizes the Small Business Administration (SBA) to define “small business” by regulation . This analysis uses the SBA’s definition of a small business for e ach industry. 6 SBA's small business size standards vary by industry . In establishing size standards, SBA considers a number of economic and market characteristics that may allow a business concern to exercise dominance in an industry . Size standards are ba sed on criteria, such as annual receipts or number of employees that represent a measure of these characteristics . These standards represent the largest size that a for-profit enterprise (together with its affiliates) may be and still qualify as a small business. The SBA small business size standards are expansive, classifying most businesses as “small.” For example, the default SBA size standard for manufacturing industries is 500 employees . According to information compiled for SBA by the Bureau of the Census, 28 2,622 of 28 6,701 manufacturing firms have fewer than 500 employees (USSBA, 2010 ). 7 Therefore , at least 98.6 percent of firms would be classified as small businesses according to the SBA definition . In fact, this percentage is actually higher,

6 SBA's size standards can be found at: http://www.sba.gov/idc/groups/p ublic/documents/sba_homepage/serv_sstd_tablepdf.pdf . 7 USSBA. Office of Advocacy - Statistics

– All Industries by NAICS Codes, 2007: Employer Firms & Employment by Employment Size of Firm by NAICS Codes, 2007. Information from the Small Business Administration on the Internet. http://www.sba.gov/advo/research/us07_n6.pdf Downloaded on April 6, 2011.Abt Associates Inc. 15 3 nd Draft, June 2 8, 2011

sin ce for certain industrial classification codes within manufacturing, the SBA size standard is 750, 1,000, or 1,500 employees. The small business definitions relevant to this proposed rule are:

 Businesses, where the small business definition is based on annual receipts or number of employees;  Utilities, where the small business definition is based on annual electricity generation;  Government jurisdictions, where the small definition is based on population; and,  Small organizations, where the small business definition is based on any not - for -profit enterprise which is independently owned and operated and is not dominant in its field. 8 Collectively, this analysis refers to small businesses, small governmental jurisdictions, and small organizations as small entities. 

### 4.3 **M ethodology Overview**  As mentioned above, the RFA considers whether a rule will have a significant economic impact on a substantial number of small entities . This analysis uses annual cost impact percentages to measure potential impacts on small entities . The cost impact percentage is defined as annual compliance costs resulting from the proposed rule as a percentage of annual revenue or sales . For purposes of determining small entity impacts, comparing annual compliance costs to annual revenue provides a reasonable indication of the magnitude of the regulatory burden relative to a commonly available and objective measure of a company's business volume . Where regulatory costs represent a small fraction of a typical firm's revenue (i.e., less than one percent) , the impacts of the regulation are likely to be minimal . The compliance cost associated with the proposed rule in the first year include s the costs of rule familiarization and compliance determination (see Table 3 - 5 ) . There are no costs in subsequent years. In Chapter 2, it was estimated that all TRI reporters will incur the costs of rule familiarization , $18.14 per facility, and 51 facilities will also incur the costs of compliance determination , $8.57 p er facility . Given the inability to specifically identify which facilities will undertake compliance determination, the c ost impact ratios for all parent entities are conservatively calculated using the higher incremental compliance cost associated with co mpleting both rule familiarization and compliance determination , totaling $26.71 per facility . The proposed rule affects hundreds of industry sectors (i.e., NAICS codes). This small entity analysis considers facilities in all of the industry sectors which reported to TRI in RY2009 . In RY2009 , facilities in a total of 504 industry sectors reported to TRI (U.S. EPA, 2011a). Itshould be noted that industry information is only available at the facility - level; the information reported to TRI does not indicate the NAICS code of the parent company. For this reason, this analysis assumes that the NAICS code reported by each TRI facility in RY2009 is also the NAICS code of its parent. 9 Employment and revenue data (necessary for the small entity analysis) available for each of these sectors varies; but fall into the general categories presented in Table 4 - 1 below . The categories were developed based on the small business definition and data sources used. Sector Category #1 includes all NAICS codes for which employment and revenue data are readily available from the U.S. Census Statistics of U.S Businesses and where the applicable small business threshold is based on either revenue or employment. Sector Category #2 includes uti lities, where the definition of what constitutes a small

8 No small organizations are expected to incur burden as a result of the proposed rule. 9 Note that if the NAICS code of a facility’s parent does not match the NAICS code of the facility, then its associated revenue may not be correctly represented in the analysis.Abt Associates Inc. 16 3 nd Draft, June 2 8, 2011

business is based on the amount of electricity generated, and data from the Energy Information Administration data and annual electricity prices are used to estimate small entity impacts. Category # 3 is government jurisdictions, where the small business threshold is defined in terms of population and data from the U.S. Census of Governments was used to estimate revenue . Agricultural sectors are grouped together in Sector Category #4 and are not considered in this analysis. 10 Finally, Sector Category #5 includes facilities that reported invalid NAICS codes and are not considered in this analysis. 11

**Table 4**  **- 1**  **: Categorization of Sectors A ffected by Proposed Ru**  **le Sector**  **Category #**  **Category Description**  **# Facilities in**  **Category** 1 Sectors covered by U.S. Census data 19,763 2 Utility sectors with small business definitions based on electricity generation 545 3 Government Jurisdictions 483 4 Agricultural sectors not covered by U.S. Census data 5 5 Facilities reporting invalid NAICS codes 1 **Total # of TRI Facilities 20,797**  Source: U.S. EPA (2011). TRI RY2009 : NA2009. Accessed via TRI.NET F or Sector Categories 1 through 3 in Table 4 - 1 , different data sources were used to estimate relevant economic sizes, and then the impacts of the proposed rule on small entities. Although the data sources varied, the general methodology used to estimate the impacts on small entities across all sectors consisted of the following steps: Step 1: Identify the universe of affected TRI facilities. Step 2: Characterize the relationships between facilities and their parents in the affected

universe. Step 3: Estimate annual revenue of parent entities in the affected universe. Step 4: Identify small parent entities based on SBA definitions (see Section 4.2). Step 5: Develop parent entity cost estimates, based on the number of facilities per parent

estimated in Step 2. Step 6: Calculate the parent entity cost impact ratio, defined as the cost as a percentage of

annual revenue, as a measure of regulatory burden. Step 7: Estimate the number and percentage of small parent companies with company - level

impact percentages in each of three categories: (1) less than one percent of annual revenue; (2) between one and three percent of annual revenue; and (3) greater than or equal to three percent of annual revenue.

10 In RY2009, five facilities in two agricultural NAICS codes (112310 Chicken Egg Product ion and 112320 Broilers and Other Meat Type Production) reported to TRI. However, agricultural NAICS codes are not subject to TRI reporting; therefore , they are not included in the small entity analysis. Note that if these facilities were included in the analysis, they would incur impacts of less than one percent of annual revenue. 11 Facilities reporting an invalid NAICS code make up less than 1% of the TRI facility universe.Abt Associates Inc. 17 3 nd Draft, June 2 8, 2011

The specific assumptions and calculations used to estimate impacts for each category of faci lities are described in more detail in the sections that follow. Section s 4.4 considers the impacts of the proposed rule on small businesses in sectors for which information is available from the 2007 U.S. Census Statistics of U.S. Businesses (SUSB) (Section 4.4.1 ) , utility sectors (Section 4.4.2 ) . Potential impacts of the proposed rule on small governmental jurisdictions are considered in Section 4.5. 

### 4.4 **Impacts on Small Businesses 4.4.1**  **Census Sectors** The majority of TRI sectors (474 of 504, or 9 4 percent) have revenue and employment data available from the U.S. Census Statistics of U.S. Businesses (SUSB) (U.S. Census Bureau, 2010c ). The sectors with data available from SUSB are summarized in Table 4 - 2 below. **Table 4**  **- 2**  **: Sectors with Information in SUSB 2**  **- Digit**  **NA ICS**  **NA ICS Description**  **# 6 -**  **Digit NA** **ICS Codes** 21 Mining, Quarrying, and Oil and Gas Extraction 15 31 - 33 Manufacturing 425 42 Wh olesale Trade 9 44 - 45 Retail Trade 2 48 - 49 Transportation and Warehousing 3 51 Information 3 54 Professional, Scientific, and Technical Services 4 56 Admi nistrative and Support and Waste Management and Remediation Services 8 71 Arts, Entertainment, and Recreation 2 81 Other Services (Except Public Administration) 3 **Total Number of TRI Sectors with Information in SUSB 474**  Source: U.S. EPA (2011). TRI RY2009 : NA2009. Accessed via TRI.NET The SUSB provides annual data for U.S. business establishments by geography, industry, and enterprise size, covering all business establishments with paid employees. The data provided annually includes counts of establi shments, firms, employees, and payroll. Data about total receipts are also provided by SUSB every five years. The data available from the SUSB can therefore be used to identify the number of small parent entities affected under the proposed rule, construct annual revenue, and calculate cost impact ratios. A sector’s small business definition is based on either its annual revenue or the number of its employees, depending on the sector. The SUSB provides information tabulated by employment size or revenue size. For those sectors with revenue -based small business definitions, profiles were developed for each revenue size category . For sectors with employment -based small business definitions, profiles were developed for employment size categories. **Identify Univ erse of A**  **ffected TRI Facilities** The NAICS code of each affected TRI facility is known based on its RY2009 submission. Note that if a facility reported multiple primary NAICS codes, the first listed NAICS code is used in this analysis . In some cases, facilities submitted NAICS codes that were invalid at the 6 - digit level, (e.g., 311000). In these cases, the analysis considers the facility at the most applicable NAICS level (e.g., 311). Based on information submitted by TRI filers, 19,763 facilities reported to TRI in RY2009 from the 474 sectorsAbt Associates Inc. 18 3 nd Draft, June 2 8, 2011

with data in SUSB. 12 The distribution of these facilities across NAICS codes is shown at the 2 - digit level in Table 4 - 3 . **Table 4**  **- 3**  **: Universe of Af**  **fected TRI Facilities in Sectors with Data in SUSB 2**  **- Digit**  **NA ICS**  **NA ICS Description**  **# Facilities** 21 Mining, Quarrying, and Oil and Gas Extraction 177 31 - 33 Manufacturing 18,392 42 Wh olesale Trade 929 44 - 45 Retail Trade 15 48 - 49 Transp ortation and W arehousing 8 51 Information 5 54 Professional, Scientific, and Technical Services 3 56 Administrative and Support and Waste Management and Remediation Services 229 71 Arts, Entertainment, and Recreation 1 81 Other Services (Except Public Administration) 4 **Total Number of TRI Facilities in Sectors with Information in SUSB 19,763**  Source: U.S. EPA (2011 a ). TRI RY2009 : NA2009. Accessed via TRI.NET **Characterize Facility -**  **Parent Relationships** Compliance costs and impacts are estimated at the parent entity level, where a parent entity may own one or more facilities. The average number of facilities filing reports to TRI per parent company for the TRI sectors with information in SUSB is estimated by taking the average of the number of RY2009 reporters associated with each parent company with a facility in that sector (Abt Associates, Inc., 2011). Note that it is not possible to distinguish small parents from large parents in the TRI data; rather, a single average of number of facilities per parent is used for each sector. Because these averages contain large parent companies as well as small, they are likely to slightly overestimate the number of facilities per small parent entity. This inclusion of large parent companies in the average facility numbers leads to more conservative estimate s of total compliance costs incurred by small parent companies. **Estimate A nnual Revenue of Parent Entities**  The SUSB data include the total annual receipts (defined as the revenue for goods produced, distributed, or services provided) for each NAICS/revenue or employment size class combination. For each of the 474 TRI sectors with data in SUSB, EPA calculates average revenue per “small” entity using the appropriate employment size or revenue size tabulation. To do this, the total revenue and total number of firms are summed across all “small” revenue or employment size classes for each NAICS code. 13 , 14 The total

12 This count does not include utilities, agricultural facilities, or small governmental jurisdictions, which are considered separately in the sections that follow. 13 In some cases, the employment or revenue tabulations provided in the 2007 Statistics of U.S. Businesses did not match the applicable small business definition. In cases where an employment or revenue class straddled the small business definition for the NAICS code, data for that employment or revenue class was not included in the average revenue per small parent company calculation. This assumption may understate the numbe r of small entities but provides a conservative estimate of average revenue for small entities because it avoids including any entities not classified as small in the analysis, resulting in a lower average annual revenue estimate. 14 Note that the calculati on of average revenue per small parent company includes firms classif ied in employment classes with fewer than ten employees, even though facilities with fewer than ten employees are not required to report to TRI. However, there is no parent company employment threshold for a small entity analysis. Because firm data are us ed as a proxy for parent company data, establishments with less than 10 employees are included in theAbt Associates Inc. 19 3 nd Draft, June 2 8, 2011

revenue of all “small” revenue or employment size classes is then divided by the number of “small” firms in each size class to calculate an average revenue per “small” firm by NAICS code. In some cases, total revenue for a revenue or employment size class was not provided in the SUSB data because doing so would disclose the operations of an individual establishment or firm. In these cases, the total revenue is inter

polated based on the available data. For sectors with revenue -based small business definitions, the midpoint of the revenue size class is multiplied by the number of firms in that size class as an estimate for the total revenue. For sectors with employment -based small business definitions, the following method is used to estimate total revenue for those NAICS/employment size class combinations where revenue was not disclosed: 1. Calculate the average revenue per firm for every NAICS/employment size class combination where data are available. 2. Calculate the percent difference between average revenue in adjacent employment size classes based the on all TRI NAICS codes populated with revenue information in the relevant adjacent employment class sizes. 3. For the NAICS/employment size class combination with no average revenue data, multiply the average revenue of the adjacent employment size class in that NAICS code by the average percent difference between the two adjacent employment size classes across all TRI NAICS codes to estimate the average revenue. 4. Where average revenue is available for both adjacent employment size classes, average the two estimated average revenues to obtain average revenue for the missing NAICS/employment size class combination. Where average revenue is available for only one of the adjacent size classes, use the estimated average revenue based on the size class with data. 5. Multiply the estimated average revenue by the number of firms to e stimate the total revenue for that NAICS/employment size class. 6. In the case where no revenue data was available from SUSB for any employment size class, the facility is considered at the 5 - digit NAICS level rather than the 6 - digit NAICS level. Because the SUSB data reflect 2007 annual revenue, it was necessary to inflate the revenue to current dollars using one of several indices. The Industrial Production Index (IPI) measures the amount of industrial output from certain industries and is used to inflate annual revenue in mining (NAICS 21) and manufacturing (NAICS 31 - 33) sectors to 2010 dollars (U.S. Federal Reserve, 2011). All other sectors (NAICS 42 - 81) are inflated based on the change in Gross Domestic Product (GDP) from 2007 to 2010, which is a measure of overall economic output (BEA, 2011). **Estimate Number of Small Parent Entities** EPA estimates the number of small parent entities in each NAICS code by distributing the total number of TRI facilities in each NAICS code amongst the employment or revenue si ze classes based on the overall distribution of establishments amongst the size classes in the SUSB data. 15 The number of TRI facilities in “small” revenue or employment size classes is then summed and divided by the average number of TRI

estimation of average revenue per small parent company. Inclusion of these data results in a conservative estimate of average parent company revenues. 15 A s with the average revenue calculations, employment or revenue classes straddling the small business definition were not included in counts of small facilities.Abt Associates Inc. 20 3 nd Draft, June 2 8, 2011

facilities per parent in that NAICS code to obtain a count of small parent entities by NAICS code. 16 Using this method, a total of 3,026 small parent entities will be potentially affected by the proposed rule. **Estimate Parent Entity Compliance Costs** Since it was not possib le to predict which facilities would incur compliance determination, all facilities were conservatively estimated to incur both compliance determination and rule familiarization costs for the small entity analysis . Affected parent entities will incur the c ompliance cost once for each TRI facilities it operates. Therefore, the per- facility compliance cost is multiplied by the average number of facilities per parent to calculate the total per parent compliance cost for each NAICS code affected under the propo sed rule. **Estimate Cost Impact Ratios** To calculate the cost impact ratio, the first -year compliance cost of a parent entity was divided by the average revenue per small parent entity for each affected sector . These results are summarized in Table 4 - 4 . Based on this calculation, no small parent is expected to incur an impact equal to or greater than 1 percent of annual revenue. The maximum impact incurred by any small parent is ~0. 1 3 percent , which is incurred by small parent entities in the NAICS sector 213112, Support Activities for Oil and Gas Operations . **Table 4**  **- 4**  **: Small Entity Impact for NA**  **ICS Sectors in Census**

**Codes Facility**  **and Small Parent Entity Count**  All Fac ilities 19,763 Small Parents 3,026 **Small Parent Entity**

**Impact Ratio** Impact < 1% 3,026 1% ≤ Impact < 3% 0 3% ≤ Impact 0 Median Impact 0.00 2 % Max Impact 0.130% **4.4.2 Utilit**  **ies** For six utility sectors, the small business definition is based on electricity generation rather than employment or annual revenue. Therefore, for these sectors, it is necessary to use an alternate method to determine the impacts of the proposed rule on small entities. The six sectors with small business definitions based on electricity generation are:

 221111 Hydroelectric Power Generation  221112 Fossil Fuel Electric Power Generation  221113 Nuclear Power Generation  221119 Other Electric Power Generation  221121 Electric Bulk Power Transmission and Control  221122 Electric Power Distribution

16 Because it was not possible to distinguish small parents from large parents in the TRI data , these estimates are likely to overestimate the number of facilities per small parent entity.Abt Associates Inc. 21 3 nd Draft, June 2 8, 2011

The Energy Information Administration (EIA) maintains monthly and annual data on electricity generation and fuel consumption for U.S. power plants in its EIA - 923 database. EPA uses this information to identify small entities and to construct annual revenue of small parents operating TRI utility facilities. **Characterize the Universe of A ffected TRI Facilities**  In RY2009 , 649 TRI facilities reported a utility NAICS code. However, some facilities reporting to TRI from utility NAICS codes are operated b y municipal, state, or federal governments. As these facilities are operated by governments, the potential impacts on small entities must be considered using the government definition of a small entity. This analysis assumes that 104 utilities are operated by governments, identified based on the reported parent and facility name in RY2009 and are considered in Section 4.5 . The remaining 545 TRI utility facilities were found in the Energy Information Administration (EIA) databas es by querying the Facility Registry System (FRS) for all EPA -regulated facilities with information in EIA databases (based on the Emissions & Generation Resource Integrated Database (eGRID)) and the Clean Air Markets Division Business System (CAMDBS) faci lity linkages) (U.S. EPA, 2011 b ). Any facility not matched to an EIA record based on an FRS linkage was then matched based on facility name and address. All but six TRI utility facilities were matched to information in EIA databases. An additional four fac ilities were matched to an E IA facility but did not have generation data for RY2009 . Itwas assumed that the potential impacts on the ten facilities for which information could not be located would follow the distribution of impacts on the 53 5 facilities f or which EIA records were available. The TRI utility facility universe is summarized in Table 4 - 5 below. **Table 4**  **- 5**  **: TRI Utility Universe Utility**  **Universe # Faciliti**  **es** TRI Utility Facilities 649 TRI Utility Facilities not Operated by Governments 545 TRI Utility Facilities with Information in EIA databases 535 Sources: U.S. EPA (2011 a ). TRI RY2009 : NA2009. Accessed via TRI.NET U.S. Energy Informati on Administration (EIA), U.S. Department of Energy. 2009 b. Form EIA- 923 Database. <http://www.eia.doe.gov/cneaf/el ectricity/page/eia906_920.html> **Characterize Facility -**  **Parent Relationships** Each utility was matched to its parent based on the TRI data for RY2009 (Abt Associates, 2011). The 535 TRI utilities correspond to 184 parent companies. Because the parent company of each utility is known based on the parent company reported to TRI for RY2009 , the actual number of utilities per parent is calculated for each parent entity, as opposed to an average by sector as was done in Section 4.4 . This results in 110 parents operating only one TRI utility, and the largest parent operating 24 TRI utility facilities. **Estimat e A**  **nnual Revenue of Parent Entities** As stated above, the EIA - 923 database provides information about the annual electricity generation of each power plant in the U.S. The EIA also provides information about the average retail price of electricity to ultimate customers by end -use sector, by state, on a monthly basis. Annual electricity generation and price were combined to generate an estimate of annual revenue . Specifically, a nationalAbt Associates Inc. 22 3 nd Draft, June 2 8, 2011

average of 9.51 cents per kilowatt -hour, or $95.10 per megawatt
-hour (D ecember 2010) is multiplied by the total electricity generation per parent to construct annual revenue for each parent entity. **Estimate the Number of Small Parent Entities** Small utilities are defined as those businesses primarily engaged in the generation , transmission, and/or distribution of electric energy for sale with the total electric output for the fiscal year not exceeding 4 million megawatt -hours. Based on this definition, and aggregating the individual facility net generation to the parent level, 123 of the 184 (~ 67 percent) utility parent entities meet the definition of being a small parent entity . **Estimate the Parent Entities Compliance Costs** Since it was not possible to predict which facilities would incur compliance determination, all facilities were conservatively estimated to incur both compliance determination and rule familiarization costs for the small entity analysis. Affected parent entities will incur the compliance cost once for each TRI utility it operates. Therefore, the per- facility compliance cost is multiplied by the number of utilities per parent to calculate the total compliance cost for each parent entity affected under the proposed rule. **Estimate Cost Impact Ratios** The cost impact ratios for small parent entities operating TRI utilities is estimated by dividing the total compliance cost for each parent entity by their annual revenue. These results are summarized in Table 4 - 6 . Based on this calculation, no small parent is expected to incur an impact of equal to or greater than 1 percent of annual revenue. The maximum impact incurred by any small parent is ~0.00 7 percent , which is incurred by a small parent in the NAICS sector 221112 Fossil Fuel Electric Power Generation . **Table 4**  **- 6**  **: Small Entity Impact for Utility Sectors**  **Facility and Small Parent Entity**  **Count** All Facilities 535 Small Parents 123 **Small Parent Entity**

**Impact Ratio** Impact < 1% 123 1% ≤ Impact < 3% 0 3% ≤ Impact 0 Median Impact 0.000% Max Impact 0.00 7 % 

### 4.5 **Impacts on Small Government**  **Jurisdictions** Some TRI facilities are operated by local, state, or federal governments. The potential impacts of the rule on small government parent entities must therefore be estimated. A separate methodology based on information from the U.S. Census of Governments is used. The Census of Governments characterizes the scope and nature of the nation's state and local governments; provides authoritative benchmark figures of public finance and public employment; classifies local government organizations, powers, and activities; and measures federal, state, and local fiscal relationships. Information is available by level of government and category of governmental activity. The sections that follow discuss the method used to calculate the impacts on small local governments operating TRI facilities.Abt Associates Inc. 23 3 nd Draft, June 2 8, 2011

**Identify Universe of A ffected TRI Facilities**  TRI facilities operated by government jurisdictions were identif ied based on the reported parent and facility name in RY2009 . This method identified a total of 48 3 government owned TRI facilities reporting in RY2009 . However, 419 of these facilities are owned by states or the federal government, and do not meet the de finition of a small government jurisdiction as they serve a population of greater than 50,000 people. The remaining 64 government owned TRI facilities are operated by municipalities that could be potentially affected under the proposed rule. The universe o f government owned TRI facilities is summarized in Table 4 - 7 . **Table 4**  **- 7**  **: TRI Government Owned Facility Universe** 

**Utility Universe**  **# Facilities** TRI Facilities Owned by a Government Jurisdiction 483 T RI Facilities Owned by a Municipality 64 Source: U.S. EPA (2011). TRI RY2009 : NA2009. Accessed via TRI.NET In order to use the data available from the Census of Governments to construct municipal revenue and identify small municipalities, it is necess ary to match each affected TRI facility to a local government on the Census list. Each of the TRI facilities owned by a municipality was matched to a city on the Census list of municipalities. **Characterize Facility -**  **Parent Relationships** Compliance costs are estimated at the parent entity level, where a parent entity may own one or more facilities. Therefore, it is necessary to consider municipalities operating multiple TRI facilities. Because the universe of TRI facilities owned by municipalities is based o n a unique list of facilities matched to individual local governments, it is possible to determine the number of TRI facilities operated by each municipality and calculate the number of facilities per parent based on the known number of facilities operated by each municipality. The 64 facilities owned by municipalities correspond to a total of 58 unique municipalities, with the majority operating only one TRI facility. **Estimate A nnual Revenue of Parent Entities**  Because the Census of Governments does not provide revenue data for individual municipalities, it is necessary to develop a method to estimate revenue based on available information. The Government Finance series in the 2002 Census of Governments provides information at the state level regarding the per capita revenue of municipalities by population - size range (U.S. Census Bureau, 2005a; U.S. Census Bureau, 2005b). The 2002 Census of Governments per capita revenues must be inflated to 2010 dollars. The Gross Domestic Product (GDP) inflation index, which is a measure of overall economic output, is used to adjust 2002 revenue to 2010 dollars. Note that this method may overstate current revenue because the GDP is a measure of overall economic output and does not directly correlate to government revenue; however , it is considered the best available index to use in this situation. To estimate the annual revenue for each affected municipality, the adjusted per capita revenue is multiplied by the population of the municipality. Population information was obtained from the U.S. Census 2009 Population Estimates (U.S. Census Bureau, 2010b ).Abt Associates Inc. 24 3 nd Draft, June 2 8, 2011

**Estimate the Number of Small Parent Entities** As discussed in Section 4.5 , "small governmental jurisdictions" are defined as the government of a c ity, county, town, school district or special district with a population of fewer than 50,000 people. Therefore, any local government operating a TRI facility serving a population of 50,000 or fewer is considered “small”, based on the 2009 population of each affected municipality. Based on this method, 36 of the 58 affected municipalities are small. **Estimate Parent Entity Compliance Costs** Since it was not possible to predict which facilities would incur compliance determination, all facilities were conservatively estimated to incur both compliance determination and rule familiarization costs for the small entity analysis. Affected municipalities would incur the compliance cost once for each TRI facilities it operates. Therefore, the per- facility compliance cost is multiplied by the average number of facilities per municipality to calculate the total per parent compliance cost for each NAICS code affected under the proposed rule. **Estimate Cost Impact Ratios** The cost impact ratios for small municipalities are estimated by dividing the total compliance cost for that entity by the annual revenue of the local government. Based on this calculation, no small municipality is expected to incur an impact of equal to or greater than 1 percent of annual revenue under any of the scenarios considered. These results are summarized in Table 4 - 8 . The maximum impact incurred by any municipality is ~ 0. 01 1 percent , which is incurred by small municipalities in the NAICS sector 221112 , Fossil Fuel Electric Power Generation . **Tabl e**  **4 -**  **8 : Small Entity Impact**  **for Small Government**  **Jurisdictions Facility**  **and Small Parent Entity Count**  All Facilities 483 Small Parents 36 **Small Parent Entity**

**Impact Ratio** Impact < 1% 36 1% ≤ Impact < 3% 0 3% ≤ Impact 0 Median Impact 0.000% Max Impact 0.01 1 % 

### 4.6 **Summary** This chapter estimates s mall entity impacts for small businesses in sectors for which information is available from the 2007 U.S. Census Statistics of U.S. Businesses (SUSB) and utility sectors ; as well as for small governmental jurisdictions . Of these sectors, no small parent is expected to incur an impact of greater than 1 percent of annual revenue , as is shown in Table 4 - 9 .Abt Associates Inc. 25 3 nd Draft, June 2 8, 2011 **Table 4**  **- 9**  **: Small Entity Impact for NA**  **ICS Sectors in Census Codes, Utilities and Small**  **Government Jurisdictions Facility**  **and Small Parent Entity Count**  All Facilities 20,7 81 1 Small Parents 3,185 **Small Parent Entity**

**Impact Ratio** Impact < 1% 3,185 1% ≤ Impact < 3% 0 3% ≤ Impact 0 Median Impact 0.00 2 % Max Impact 0.130% 1 This total excludes Sector Categories 4 (Agricultural Sectors) and 5 (Invalid NAICS Code sectors) from Table 4 - 1 and the 10 fac ilities that did not have RY 2009 EIA information from Table 4 - 5 **.**Abt Associates Inc. 26 3 nd Draft, June 2 8, 2011 

## Chapter 5 **– Benefits**  In enacting the Emergency Planning and Community Right -to - Know Act (EPCRA) of 1986 and the Pollution Prevention Act (PPA) of 1990, Co ngress recognized the significant benefits of providing information on the presence, releases and waste management of toxic chemicals. The Toxics Release Inventory (TRI) has proven to be one of the most influential forces in empowering the federal government, state and local governments, industry, environmental groups, and the general public to fully participate in an informed dialogue about the environmental impacts of toxic chemicals in the United States. The TRI database provides several types of information, including quantitative information on toxic chemical releases and other waste management practices. Starting in 1987, the collection of this information enhanced the ability for the public, government, and the regulated community to understand the breadth and magnitude of chemical releases in the United States, and to assess the need to reduce the releases and transfers of toxic chemicals. TRI data enable all interested parties to establish credible hazardous chemical quantity baselines, to set realis tic goals for environmental progress, and to measure progress in meeting these goals over time. As such, the TRI Program has become a yardstick by which environmental progress can be measured by all interested or affected stakeholders. Although EPA has not attempted to quantify the benefits of the proposed rule, the desired outcome of this proposed rule is to further encourage tribal engagement and participation in the TRI program. Tribes would have the opportunity to request that EPA require that a specif ic facility or facilities located within the tribe’s Indian country report to TRI. The tribes would also be able to petition for the addition or deletion of certain chemicals, which apply to all facilities releasing the particular substance(s). These type s of provisions already apply in the context of requests/petitions by governors of States, and since the 1990 amendment, b y increasing the participation and engagement of tribal governments in the TRI program, EPA is helping to increase awareness of toxic releases within these communities, thereby increasing the understanding of potential human health impacts from these hazardous chemicals .Abt Associates Inc. 27 3 nd Draft, June 2 8, 2011



## Literature Cited Abt Associates, Inc (2010). List of Corporate Parents Used to Pre - Populate TRI
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