*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



## October 28, 2010

EO12866_PBDE Test Rule _NPRM_EA_10-28-2010.doc

—Does not contain TSCA CBI—

Prepared by:

Economic and Policy Analysis Branch Economics, Exposure and Technology Division Office of Pollution Prevention and Toxics

U.S. Environmental Protection Agency 1200 Pennsylvania Avenue

Washington, D.C. 20460 

# Economic Analysis for the Proposed Section 4 Test Rule for c-Pentabromodiphenyl Ether, c-Octabromodiphenyl Ether, and c-Decabromodiphenyl Ether*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### ii 1 

## Contributors 2 3 The EPA analyst responsible for this report was Timoth y Lehman. Analytical and draft preparation support 

### 4 was provided by Abt Associates Inc. under EPA Contract No. EP-W-08-0100. 

### 5 6 7*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### iii 

## Contents 8

Chapter 1 – Introduction ...................................................................................................... ...................................1-7 

### 9 1.1 Statutory Author ity ....................................................................................................... ................................1-7 

### 10 1.2 Regulatory and Prog rammatic B ackgro und .................................................................................... .............1-7 

### 11 1.3 Summary of Anal ytic Approach .............................................................................................. .....................1-8 

### 12 1.4 Organization of This Report ............................................................................................... ..........................1-8 

### 13
Chapter 2 - Affected Entities ................................................................................................. ..................................2-1 

### 14 2.1 Chemicals Subject to the Proposed Rule .................................................................................... ..................2-1 

### 15 2.2 Uses of PBDEs ............................................................................................................. ................................2-1 

### 16 2.3 Regulated Community ....................................................................................................... ...........................2-2 

### 17
Chapter 3 –Tests Required by the Propos ed Rule ................................................................................ .................3-1 

### 18 3.1 Intro ducti on .............................................................................................................. ....................................3-1 

### 19 3.2 Description of Tests Requ ired by the Proposed Rule ........................................................................ ...........3-1 

### 20 3.3 Specific Test Requirements for each Chemical in th e Proposed Rule ......................................................... .3-2 

### 21
Chapter 4 Industry Compliance Costs ........................................................................................... .........................4-1 

### 22 4.1 Intro ducti on .............................................................................................................. ....................................4-1 

### 23 4.2 Unit Costs ................................................................................................................ .....................................4-1 

### 24 4.3 Total Industry Compliance Costs ........................................................................................... ......................4-6 

### 25
Chapter 5 – Agency Costs ...................................................................................................... ..................................5-1 

### 26 5.1 Intro ducti on .............................................................................................................. ....................................5-1 

### 27
5.2 EPA Costs ................................................................................................................. ...................................5-1 

### 28
Chapter 6 - So cial Costs ...................................................................................................... .....................................6-1 

### 29 6.1 Total Soci al Costs ........................................................................................................ .................................6-1 

### 30 6.2 Chemical Level Costs ...................................................................................................... .............................6-1 

### 31 6.3 Annuali zed Costs .......................................................................................................... ................................6-1 

### 32
Chapter 7 – Small Entity Impact Analysis ...................................................................................... .......................7-2 

### 33 7.1 Identify the Aff ected Popu lation .......................................................................................... ........................7-2 

### 34 7.2 Select a Relevant Sm all Business Definition ............................................................................... ................7-2 

### 35 7.3 Identifying Sm all Busi nesses .............................................................................................. .........................7-3 

### 36
7.4 Cost-to-Sa les Ra tio ....................................................................................................... ................................7-3 

### 37
Chapter 8 – Benefits .......................................................................................................... .......................................8-1 

### 38 8.1 Use Va lues ................................................................................................................ ...................................8-1 

### 39 8.2 Non-Use Values ............................................................................................................ ...............................8-2 

### 40 8.3 Potential Users of Information Generated by the Proposed Rule ............................................................. ....8-2 

### 41
Chapter 9 – Other Impact Analyses ............................................................................................. ...........................9-6 

### 42 9.1 Paperwork Reduction Act ................................................................................................... .........................9-2 

### 43 9.2 Unfunded Mandat es Reform Act............................................................................................... ...................9-3 

### 44 9.3 Executive Order 13132 – Fe deralism ........................................................................................ ...................9-3 

### 45 9.4 Executive Order 13175 – Cons ultation and Coordination with In dian Tribal Governments........................9-4 

### 46 9.5 Executive Order 1304 5 - Children’ s Health ................................................................................. ................9-4 

### 47 9.6 Executive Order 13211 – Energy Supply, Distribu tion, or Use ............................................................... ....9-4 

### 48 9.7 National Technology Transf er and Advanc ement Act .......................................................................... .......9-4 

### 49 9.8 Executive Order 12898 – Environmenta l Jus tice ............................................................................. ............9-5 

### 50 9.9 Executive Order 1263 0 – Property Rights ................................................................................... .................9-5 

### 51 9.10 Executive Order 12988- Civil Justi ce Reform .............................................................................. ...............9-5 

### 52
Chapter 10 – Re ferences ....................................................................................................... ................................. 10-5 

### 53
Appendix A Wage Rate Ca lculatio ns ........................................................................................................ ...... A-5 

### 54
Appendix B Costs ......................................................................................................................... .................... B-4 

### 55 56*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### iv 

## Exhibits 57
58 Exhibit 2-1 : Chemicals Included in the Proposed Test Rule .................................................................... 2-1 

### 59 Exhibit 2-2 : U.S. Manufacturers and Importers of DecaBDE in 2006 ..................................................... 2-4 

### 60 Exhibit 2-3: NAICS Codes for decaBDE Importers ................................................................................ .. 2-4 

### 61 Exhibit 3-1: Tests Required under the Proposed Test Rule ...................................................................... . 3-1 

### 62 Exhibit 3-2: Test Requirements for Chemic als Included in the Proposed Rule ......................................... 3-2 

### 63 Exhibit 4-1: EPA Estimates of Laboratory Costs of Proposed Tests (2009$) ........................................... 4-1 

### 64 Exhibit 4-2: Total Laboratory Test Costs per Chemical ......................................................................... ... 4-3 

### 65 Exhibit 4-3: Costs for Analytical Me thodology Validation, per Test ........................................................ 4-4 

### 66 Exhibit 4-4: Derivation of Loaded H ourly Rates by Labor Category ........................................................ 4-5 

### 67 Exhibit 4-5: Industry Reporting Cost and Burden Estimate for the Proposed Rule (2009$) ..................... 4-5 

### 68 Exhibit 4-6: Summary of Total Industry Compliance Co sts Triggered by the Proposed Rule (2009$) .... 4-6 

### 69 Exhibit 5-1: Estimated Government Cost s for the Proposed Rule (2009$) ............................................... 5-1 

### 70 Exhibit 6-1: Summary of Total Social Costs Triggered by the Proposed Rule (2009$) ............................ 6-1 

### 71 Exhibit 6-2: Summary of Total Social Co sts by Chemical (2009$, unadjusted) ....................................... 6-1 

### 72 Exhibit 6-3: Annualized Costs Under Low- and High-C ost Scenarios (Total for All Chemicals) ($2009) 6- 

### 73 2 

### 74 Exhibit 7-1: Employee and Sales Information for Potentially Impacted Companies Included in the 

### 75 Analysis ...................................................................................................................... ......................... 7-2 

### 76 Exhibit 9-1: Reporting Burden Estim ate for the Proposed Rule ................................................................ 9 -2 

### 77 Exhibit 9-2: Total Industry Burden Hour Estimate for the Proposed Rule ................................................ 9-3 

### 78 Exhibit 9-3: Estimated Government Burd en for the Proposed Test Rule .................................................. 9-3 

### 79 Exhibit A-1: Detail of Labor Cate gories Used in the Analysis ................................................................. A-2 

### 80 Exhibit A-2: Derivation of Loaded Wage Rates .................................................................................. ..... A-4 

### 81 Exhibit B-1: Industry Compliance and Government Costs, Low-Cost Scenario ...................................... B-4 

### 82 Exhibit B-2: Industry Compliance and Government Costs, High-Cost Scenario ..................................... B-2 

### 83 Exhibit B-3: Annualized Social Costs .......................................................................................... ............ B-2 

### 84 Exhibit B-4: Annualized Industry Compliance Costs ............................................................................. .. B-3 

### 85 86*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### v 

## Executive Summary 87 88 The United States Environmental Protection Agency (EPA) is proposing a chemical test rule under 

### 89 section 4(a)(1)(A) of the Toxic Substances Control Act (TSCA) that applies to three commercial mixtures 

### 90 of polybrominated diphenyl ethers (PBDEs): c-pentrabromodiphenyl ether (c-pentaBDE), c

### 91 octabromodiphenyl ether (c-octaBDE), and c-decabro modiphenyl ether (c-decaBDE), and would require 

### 92 manufacturers, importers and processors to conduct testing on these mixtures,as described below. This 

### 93 report estimates the costs and benefits of the proposed test rule. 

### 94 95 C-pentaBDE and c-octaBDE are no longer manufactured in or imported into the United States, and there 

### 96 is no evidence to indicate their manufacture in an y other countries, suggesting no domestic import of 

### 97 articles containing the chemicals. In addition, as a result of negotiations with EPA, the major U.S. 

### 98 manufacturers and importer of c-decaBDE have agreed to phase out its manufacture, import, and sale for 

### 99 all uses, except military and transportation uses, by December 31, 2012, and to phase out all uses by 

### 100 December 31, 2013 (U.S. EPA, 2010b). 

### 101 102 If there is any ongoing manufacture, import, or processing of these mixtures for any use, including in 

### 103 articles, after December 31, 2012 (December 31, 2013 for military and transportation uses of c-decaBDE) 

### 104 (the dates specified in the proposed rule 1 ), the mixture(s) will be subject to the test rule. The test rule 

### 105 would require companies that engage in these activities to perform testing in order to obtain data on the 

### 106 aquatic toxicity, mammalian toxicity, and chemical fa te of the subject mixtures . If the manufacture, 

### 107 import, and processing of these,mixtures has ceased by December 31, 2012 (December 31, 2013 for 

### 108 military and transportation uses of c-decaBDE), any future manufacturing, import, or processing of the 

### 109 mixture will instead be subject to a Significant New Use Rule (SNUR), which is being proposed 

### 110 concurrently with the test rule. 

### 111 112 C-PBDEs have been used as flame retardants in a vari ety of applications, including flexible polyurethane 

### 113 foam for mattresses, furniture, and automotive applica tions (c-pentaBDE); acryl onitrile-butadiene-styrene 

### 114 (ABS) plastic for electronics applications (c-oct aBDE); and high-impact polystyrene (HIPS)-based 

### 115 products such as textiles, electronic equipment, and building and construction materials (c-decaBDE). 

### 116 The EPA is proposing a test rule because EPA has de termined that the manufacture, import, processing, 

### 117 and use of the subject PBDE mixtures may present an unreasonable risk of injury to health or the 

### 118 environment. Neurobehavioral effects are a criti cal endpoint of concern, and c-decaBDE exhibits 

### 119 “suggestive evidence of carcinogenic potential.” EPA h as also made preliminary findings that there is 

### 120 insufficient data to determine the health and envir onmental effects of the manufacture, processing, and 

### 121 use of the subject mixtures. 

### 122 123 The proposed test rule specifies fourteen test methods covering health effects testing, ecotoxicity testing, 

### 124 and chemical fate testing. For one of these tests, EPA is proposing the use of a guideline that the agency 

### 125 has developed to test for photolytic degradation. This report estimates various costs associated with the 

### 126 proposed test rule, discusses benefits of the rule qualitatively, and presents several additional impact 

### 127 analyses. The average compliance cost per chemical is $3.23 million under the low-cost scenario and 

### 128 $5.03 million under the high-cost scenario. These costs include laboratory testing costs, analytical 

### 129 method validation costs, and administrative costs. The analysis does not consider export notification 

### 130 costs, because pentaBDE and octaBDE are alread y subject to a SNUR, and the economic analysis 

### 131 prepared for the SNUR amendment proposal includes an analysis of the export notification costs of c- 

### 132

1 According to the proposed rule preamble, EPA believes that a reasonable date by which all activities with c-pentaBDE, coctaBDE, and c-decaBDE can cease, including the activities of processors, is December 31, 2012 (December 31, 2013 for military and transportation uses of c-deca BDE).*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 1-6 decaBDE. The total government costs for the proposed rule are estimated to be approximately $12,538. 

### 133 The total estimated social costs of the proposed rule are the sum of the industry and EPA costs. 

### 134

This report also includes a small entity impact analysis to estimate the per-company cost incurred through 

### 135 the proposed rule. Such an analysis is particularly relevant for small businesses. This analysis determines 

### 136 that the proposed rule will not affect any co mpanies identified as small under the Small Business 

### 137 Administration’s definitions. 

### 138

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



### 1-7 

## Chapter 1 – Introduction 140 This report assesses the costs and benefits expected to result from EPA’s proposed test rule for 

### 141 commercial pentabromodiphenyl ether (c-pentaBDE), commercial octabromodiphenyl ether (c-octaBDE), 

### 142 and commercial decabromodiphenyl ether (c-decaBDE) . The proposed rule would require anyone who 

### 143 manufactures, imports, or processes c-pentaBDE, c-octaBDE, or c-decaBDE, including in articles, after 

### 144 December 31, 2012 (December 31, 2013 for military and transportation uses of c-deca BDE) to conduct 

### 145 testing to obtain data on health effects, environmen tal effects, and chemical fate. This chapter provides 

### 146 background information on EPA’s statutory authority fo r requiring this testing, regulatory background, a 

### 147 brief summary of the methodology used in the anal ysis, and a description of the organization of the 

### 148 remainder of this report. 

### 149 1.1 Statutory Authority 150
Under the Toxic Substances Control Act (TSCA), th e U.S. EPA can impose information reporting and 

### 151 other requirements on producers, importers, processors, users, distributors, and disposers of chemical 

### 152 substances or mixtures to ensure the safe management of toxic chemical substances or mixtures. Under 

### 153 TSCA Section 4, EPA is authorized to require by rule that manufacturers and/or processors of chemical 

### 154 substances or mixtures conduct testing to determine the effect of chemical substances or mixtures on 

### 155 human health and the environment. In particular, th e Administrator requires that testing be conducted if 

### 156 the Agency finds that: 

### 157
(A) (i) the manufacture, distribution in commerce, processing, use, or disposal of a chemical substance or 

### 158 mixture, or any combination of such activities, may pres ent an unreasonable risk of injury to health or the 

### 159 environment, 

### 160

(ii) there are insufficient data an d experience upon which the effects of such manufacture, distribution in 

### 161 commerce, processing, use, or dis posal of such substance or mixtur e or of any combination of such 

### 162 activities on health or the environment can reasonably be determined or predicted, and 

### 163
(iii) testing of such substance or mixture with respect to such effects is necessary to develop such data; or 

### 164
(B) (i) a chemical substance or mixture is or will be pr oduced in substantial quantities, and (I) it enters or may 

### 165 reasonably be anticipated to enter the environment in substantial quantities or (II) there is or may be 

### 166 significant or substantial human exposure to such substance or mixture, 

### 167

(ii) there are insufficient data an d experience upon which the effects of the manufacture, distribution in 

### 168 commerce, processing, use, or dis posal of such substance or mixtur e or of any combination of such 

### 169 activities on health or the environment can reasonably be determined or predicted, and 

### 170
iii) testing of such substance or mixture with respect to such effects is necessary to develop such data. 

### 171 1.2 Regulatory and Programmatic Background 172

In 2004, domestic manufacture of c-pentaBDE and c-octaBDE ceased when the Great Lakes Chemical 

### 173 Corporation (now Chemtura) voluntarily phased out its production of these commercial mixtures (U.S. 

### 174 EPA, 2009a). EPA promulgated a TSCA Section 5 Significant New Use Rule (SNUR) in 2006 (71 FR 

### 175 34015, June 13, 2006) to require a ny person intending to manufacture or import any one or more of six 

### 176 polybrominated diphenyl ethers (PBDEs), including pentaBDE and octaBDE, to notify EPA at least 90 

### 177 days prior to commencement of these activities. EPA is currently proposing amendments to this SNUR in 

### 178 order to 1) subject processors of all six PBDEs to the SNUR, 2) subject manufacturers, importers, and 

### 179 processors of decaBDE to the SNUR, and 3) rescind an article exemption from the 2006 SNUR, and 

### 180*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 1-8 therefore subject the manufacturing, import, and processing of articles containing the PBDEs after 

### 181 December 31, 2012 (December 31, 2013 for military and transportation uses of deca BDE) to the SNUR. 2 

### 182
EPA included pentaBDE, octaBDE, and decaBDE in the Voluntary Children’s Chemical Evaluation 

### 183 Program (VCCEP) in 2000. This program develope d industry-sponsored screening level risk assessments 

### 184 for these c-pentaBDE, c-octaBDE, and c-decaBDE to ev aluate the risks of potential exposure to PBDEs 

### 185 in children and prospective parents. With the ma nufacture of c-pentaBDE and c-octaBDE ceasing in 

### 186 2004, industry ended sponsorship of pentaBDE and oc taBDE in this program in 2005 (U.S. EPA, 2010a). 

### 187 In May 2008, because of a lack of adequate data submission, EPA decided to terminate decaBDE’s 

### 188 sponsorship in VCCEP and proposed the development of a test rule, while allowing companies to submit 

### 189 a proposal to pursue an enforceable consent agreement (ECA) to develop the required data. In September 

### 190 2008, the Brominated Flame Retardants Industry Panel (BRFIP) agreed to submit additional data, based 

### 191 on which EPA agreed to temporarily suspend its plans to develop a test rule for decaBDE and work with 

### 192 the BRFIP to develop an ECA (U.S. EPA, 2009b). 

### 193
The U.S. manufacture and import of c-pentaBDE and c-octaBDE was phased out in 2004, and there is no 

### 194 evidence of any global production, and so no reason to suggest any import of articles containing the 

### 195 chemicals (see Section 2.3.1). EPA understands th at the major U.S. manufacturers and importer of c

### 196 decaBDE intend to phase out production, importation, and sales of c-decaBDE by the end of 2012, and 

### 197 phase out all uses by the end of 2013 (U.S. EPA, 2009a). EPA is proposing a test rule in order to predict 

### 198 the health effects, environmental effects, and chem ical fate of c-pentaBDE, c-octaBDE, and c-decaBDE 

### 199 in the event that their production, import, and use does not cease. 

### 200 1.3 Summary of Analytic Approach 201
This analysis seeks to quantify, to the extent possible, the costs to society of the proposed test rule, if 

### 202 finalized, by identifying the costs to industry associated with performi ng the required tests and the costs 

### 203 to EPA of administering the rule. Costs to industry include the costs incurred by the laboratory testing of 

### 204 the three commercial mixtures, as well as analytical methodology validation costs, administrative costs, 

### 205 and costs to comply with the export notification require ment in the rule. Agency costs include reviewing 

### 206 and processing the data received as a result of the rule. Data sources for this analysis include test costs 

### 207 estimated by laboratories and burden estimates deri ved from information collection requests for similar 

### 208 regulations. Because the specific tests required for each mixture may be different, costs are presented for 

### 209 each individual mixture and aggregated to show the cost of the rule as a whole. 

### 210
This report also presents a small entity impact analysis that assesses the effect of the proposed rule, if 

### 211 finalized, on small entities. The methodology includes reviewing the list of chemical manufacturers and 

### 212 importers to identify small businesses (using a sales-b ased and a revenue-based definition) with parent

### 213 company data from Dun & Bradstreet. For each small en tity, a ratio was calculated to compare the cost 

### 214 of the rule with the company’s annual revenue. 

### 215
Additionally, this report qualitatively discusses the bene fits of the proposed action, based on the value of 

### 216 the information it will provide. The benefits analysis was undertaken to address the implicit call for cost

### 217 benefit balancing contained in TSCA, as well as the requirements of Executive Order 12866. 

### 218 1.4 Organization of This Report 219
This report presents EPA’s economic analysis for this proposed rule. Regulated mixtures and companies 

### 220 are characterized in Chapter 2. Chapter 3 explains the tests that are required by this testing rule. Costs to 

### 221 industry, including laboratory and administrative, are reported in Chapter 4. Agency costs are shown in 

### 222 Chapter 5. Total social costs (industry plus agency) are presented in Chapter 6. The small entity impact 

### 223

2 There is no evidence to indicate the manufacture of a ppreciable quantities of c-pentaBDE or c-octaBDE anywhere in the world, suggesting there is any domestic import of ar ticles containing the chemical s (see Section 2.3.1 for more details).*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 1-9 analysis for the proposed rule, as mandated by the Re gulatory Flexibility Act (RFA), and amended by the 

### 224 Small Business Regulatory Enforcement Fairness Act (S BREFA), is presented in Chapter 7. Chapter 8 

### 225 qualitatively addresses the benefits of the proposed rule , if finalized. Several additional impact analyses 

### 226 are presented in Chapter 9. Cited references are listed in Chapter 10. 

### 227
Note that all dollar amounts in this analysis are re ported in 2009 dollars. For cost inputs that were 

### 228 estimated prior to 2009, EPA applied the most relevant adjustment factor to ensure that all costs were 

### 229 comparable. 

### 230*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 2-1 

## Chapter 2 - Affected Entities 231

232 2.1 Chemical Mixtures Subject to the Proposed Rule 233
This chapter presents information a bout the production and use of the three chemical mixtures included in 

### 234 the proposed rule: c-pentaBDE, c-octaBDE, and c-decaB DE. To be included in this proposed rule, EPA 

### 235 has made preliminary findings for these chemical mixtures under TSCA section 4(a)(1)(A) that: 

### 236

• their manufacture, distribution in commerce, pro cessing, use, or disposal may cause an 

### 237 unreasonable risk of injury to health or the environment; 

### 238

• existing data are insufficient to determine or pred ict their health and environmental effects; and 

### 239

• testing is necessary to develop such data. 

### 240
Exhibit 2-1 provides the common mixture names of th e three mixtures included in the proposed rule and 

### 241 the predominant PBDE congener components (and their Chemical Abstracts Service Registry Number 

### 242 (CASRN) assigned by the Chemical Abstracts Service (CAS)) of each mixture 

### 243

Exhibit 2-1 : Mixtures Included in the Proposed Test Rule 

### 244

Common Mixture Name Predominant Congeners in Mixture and CASRNs

Commercial Pentabromodiphenyl Ether (c-PentaBDE) tetrabromodiphenyl ether (CASRN 40088–47–9; Benzene, 1,1 ′ -oxybis-, tetrabromo deriv.), pentabromodiphenyl ether (CASRN 32534-81-9; Benzene, 1,1’-oxybis-, pentabromo deriv.), and hexabromodiphenyl ether (CASRN 36483–60–0; Benzene, 1,1 ′ -oxybis-, hexabromo deriv.)
Commercial Octabromodiphenyl Ether (c-OctaBDE) heptabromodiphenyl ether (CASRN 68928–80–3; Benzene, 1,1 ′ -oxybis-, heptabromo deriv.), octabromodiphenyl ether (CAS No. 32536 -52-0; Benzene, 1,1’-oxybis-, octabromo deriv.), and nonabromodiphenyl ether (CASRN 63936–56–1; Benzene, pentabromo (tetrabromophenoxy)-)
Commercial Decabromodiphenyl Ether (c-DecaBDE) component with the highest percent composit ion is decabromodiphenyl ether (CASRN 1163- 19-5; Benzene, 1,1’-oxybis[2,3,4,5,6-pentabromo-), aka BDE-209



### 245 2.2 Uses of PBDEs 246
Historically, PBDEs have been added to materials to reduce the risk of fires and to increase escape time 

### 247 when a fire occurs. They have b een widely used in textiles, plas tics, and polyurethane foam. PBDE

### 248 treated articles have been used in the home, in bus iness settings, and in the transportation sector. Articles 

### 249 that have often been treated with PBDEs include car pets, upholstery fabric, cushions, and plastics used as 

### 250 components in electrical appliances and equipment (U.S. EPA, 2009a). 

### 251
The following sections describe the specific known uses of each of the three mixtures, including articles 

### 252 that may contain the mixtures, and the potentially affected industry sectors. 

### 253

2.2.1 Uses of c-PentaBDE 

### 254
C-pentaBDE is one of the major brominated flame retardants. Because there has been no new 

### 255 manufacture of c-pentaBDE in the United States since 2004, no import since 2006, and there is no 

### 256 evidence of the import of any articles containing c-pent aBDE, it is expected that there are no current uses 

### 257 of the mixture (or articles containing the mixture) domestically (U.S. EPA, 2009a). 

### 258
Historically, c-pentaBDE was used primarily as an additive flame retardant in flexible polyurethane 

### 259 foams (95 percent of c-pentaBDE’s historical cons umption in the United States) (ERG, 2002). A minor 

### 260 amount was consumed in rigid foams (ERG, 2002). Articles treated with c-pentaBDE were most 

### 261 commonly used in the upholstery and furniture market s, though treated articles were also used in other 

### 262 applications including automotive seat cushions and padding, mattress foam padding, furniture foam 

### 263*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 2-2 padding, and pillows (ERG, 2002). A 2002 study estimated that 80 percent of c-pentaBDE was used in 

### 264 foam for furniture and mattresses, while the rema ining amount was used in automotive applications 

### 265 (ERG, 2002). Minor amounts were also used in textiles. 

### 266

2.2.2 Uses of c-OctaBDE 

### 267

C-octaBDE is a brominated flame retardant that has applications in the plastics industry. Because there 

### 268 has been no new manufacture of c-octaBDE in th e United States since 2004 no import since 2006, and 

### 269 there is no evidence of the import of any articles contai ning c-octaBDE, it is expected that there are also 

### 270 no current uses of the mixture (or articles containing the mixture) domestically (U.S. EPA, 2009a). 

### 271
Historically, c-octaBDE was used in acrylonitrile-b utadiene-styrene (ABS) plastic, which was used as 

### 272 casing for certain electric and electronic devices that ar e used in both offices and home. For example, in 

### 273 Switzerland, 70 percent of c-octaBDE was used in electronic goods, 40 percent was used in TVs, 20 

### 274 percent in cars and 10 percent in building materi als (Alvarez, 2008). Similar information was not 

### 275 available for the United States. One industry contact thought c-octaBDE was mostly used in ABS plastics 

### 276 for automotive applications because c-octaBDE gives the plastic a good quality finish that lends itself to 

### 277 high quality paint work (Dawson, 2009). Finished pr oducts typically contained five to 30 percent c

### 278 octaBDE by weight (Alvarez, 2008). 

### 279

2.2.3 Uses of c-DecaBDE 

### 280
While uses of c-pentaBDE and c-octaBDE have been restricted in the United States and phased out 

### 281 internationally, c-decaBDE is still widely used. C- decaBDE is considered the most effective of the 

### 282 brominated flame retardants. Because relatively small quantities are required for outstanding flame 

### 283 retardant properties, c-decaBDE has minimal influen ce on the physical and mechanical properties of the 

### 284 flame-retarded product (Abt Associates, 2009). 

### 285
C-decaBDE’s main use is in high-impact polystyrene (HIPS), and has a variety of applications, including 

### 286 textiles, electronic equipment, and building and constr uction materials. According to 2006 reporting year 

### 287 submissions under the Inventory Update Reporting (IUR ) rule, c-decaBDE is used as a flame retardant by 

### 288 the following industry sectors: Adhesive Manufactur ing; Automobile and Light Duty Motor Vehicle 

### 289 Manufacturing; Computer and Peripheral Equipmen t Manufacturing; Major Appliance Manufacturing; 

### 290 Textile and Fabric Finishing Mills ; and Wiring Device Manufacturing. IUR product categories include 

### 291 adhesives and sealants, electrical and electronic products , p aints and coatings, rubber and plastic products 

### 292 (U.S. EPA, 2009c). 

### 293 2.3 Regulated Community 294
Entities potentially affected by the proposed test rule include those that manufacture, import, or process c

### 295 pentaBDE, c-octaBDE, or c-decaBDE, including in articles. 

### 296
However, EPA notes that the proposed test rule addr essed by this economic analysis is being proposed 

### 297 concurrently with an amendment to an existing S NUR (see 74 FR 34015, June 13, 2006). If manufacture, 

### 298 import, and processing of pentaBDE, octaBDE, and decaBDE, including in articles has ceased by 

### 299 December 31, 2012 (December 31, 2013 for military and transportation uses of decaBDE), the SNUR will 

### 300 apply and no company may enter or reenter the market without submitting a SNUN to EPA for the 

### 301 chemical. If any company manufactures, imports, or processes any of the three mixtures for any use, 

### 302 including in articles, after December 31, 2012 (Dece mber 31, 2013 for military and transportation uses of 

### 303 c-decaBDE), the mixture(s) will be subject to the test rule, and the costs and benefits described in this 

### 304 analysis would apply. 

### 305
The following sections describe the manufacturers, im porters, or processors of the subject mixtures and 

### 306 articles. 

### 307
2.3.1 Manufacturers and Importers of c-PentaBDE and c-OctaBDE 

### 308*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 2-3 C-pentaBDE and c-octaBDE are no longer produced or imported into the United States. The sole 

### 309 domestic producer, Great Lakes Chemical (now Chem tura) voluntarily phased out the production of these 

### 310 mixtures in 2004. There are no other known U.S. manufacturers of these mixtures (U.S. EPA, 2009a). In 

### 311 2006, EPA issued a SNUR requiring anyone who inte nds to manufacture or import pentaBDE or 

### 312 octaBDE to notify the Agency at least 90 days in adva nce in order to provide EPA with the opportunity to 

### 313 evaluate the intended use and, if necessary, to prohi bit or limit the activity before it occurs. The SNUR 

### 314 did not cover the processing or the manufacture, import, or processing of articles treated with these 

### 315 chemicals. However, there is no evidence to suggest that appreciable quantities of pentaBDE 3 or 

### 316 octaBDE 4 are manufactured anywhere in the world. As a result, the Agency does not believe that any 

### 317 articles containing pentaBDE or octaBDE ar e being imported into the United States. 

### 318
If a company manufactures or imports the mixtures (or articles containing them) after December 31, 2012 

### 319 (the date specified in the proposed rule 5 ), the company would be subject to the test rule. Given the fact 

### 320 that there are currently no known manufacturers or importers of the mixtures (or articles containing 

### 321 them), we assume that no companies will be enga ged in these activities after December 31, 2012. We 

### 322 therefore do not consider any manufacturers or importer s of c-pentaBDE and c-octaBDE in this test rule 

### 323 economic analysis. 6 

### 324
2.3.2 Manufacturers and Importers of c-DecaBDE 

### 325
EPA acquired chemical manufacturer and importer information for c-decaBDE from submissions 

### 326 required by the TSCA IUR Revisions rule (70 FR 75059, December 19, 2005). According to the publicly 

### 327 available 2006 IUR data, c-decaBDE was manufactured or imported by four companies in the United 

### 328 States (U.S. EPA, 2009c). This figure may not incl ude all potentially affected entities because, for 

### 329 example, companies that manufactured or imported less than 25,000 pounds of a subject mixture at an 

### 330 individual site in 2006 are not required to comply wi th IUR reporting. Further, the data are from 2006 

### 331 and may not be current. Therefore, EPA investigated other sources to obtain manufacturer information. 

### 332
The Directory of World Chemical Producers is a pr oprietary database containing over 18,000 worldwide 

### 333 producers of more than 150,000 chemicals, used to search for producers of chemicals and bulk 

### 334 pharmaceuticals. EPA used the dir ectory to identify any U. S. producers of c-decaBDE subject to the 

### 335 proposed test rule that were not already identified b ased on IUR reporting. This resulted in one additional 

### 336 company producing one or more of the subject mixt ures (DWCP, 2009). Another importer of c-decaBDE 

### 337 was identified through its involvement in EPA’s D ecaBDE Phase-Out Initiative (U.S. EPA, 2010b). The 

### 338 list of identified manufacturers and importers of c-deca BDE is presented in Exhibit 2-2 below; this list 

### 339 likely overestimates the expected number of c-d ecaBDE manufacturers after December 31, 2012, because 

### 340

3 A few Chinese manufacturers list pentaBDE as one of the chem icals they can produce, but any production of pentaBDE is probably on a to-order basis and not produced on a large scal e (Buzcek, 2009). Several industry contacts agreed that if pentaBDE is being produced anywhere, it would likely be in China (Dawson, 2009; Buzcek, 2009; Ca mpbell, 2009). One industry contact thought some pentaBDE might also be produced in India (Campbell, 2009).
4 The production of octaBDE was recently phased out in the EU, No rway, Switzerland, Canada and the United States, and there is no information indi cating that octaBDE is being produced in developing countries (Alvarex, 2008). In addition, none of the major global manufacturers produce octaBDE (Campbell, 2009; Dawson, 2009; Buzcek, 2009). However, if it produced anywhere in the world, it might be in China (Dawson, 2009).
5 According to the proposed rule preambl e, EPA believes that a reasonable date by which all activities with pentaBDE, octaBDE, and decaBDE can cease, including the activities of processors, is Decemb er 31, 2012 (December 31, 2013 for the military and transportation uses of decaBDE). . 6 If the Agency is incorrect in this assumption, and foreign companies manufacture c-pentaBDE and c-octaBDE,, companies that import articl es treated with the mixtures would be subject to this test rule. Given the known uses of the mixture, if articles treated with c-pentaBDE were being imported into the United States, they would likely fall under the following NAICS codes: 337121 (upholstered office furniture); 337910 (m attresses); and 337214 (non-wood office furniture) (PFA, 2006). However, given the broad range of products and lack of certainty over whether im ported goods do contain the mixtures, we are unable to identify the importers of thes e articles that could be affected by this test rule.*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 2-4 the principal manufacturers and importer of c-decaBDE have committed to phase out the manufacture, 

### 341 import and sales of c-decaBDE starting in 2010. 

### 342
Ordinary production, import and sales of c-decaBDE would cease no later than December 31, 2012. 

### 343 Certain uses such as transportation uses or military a pplications may require an additional year to phase 

### 344 out. In any case, the companies would cease sales fo r these uses no later than December 31, 2013. EPA 

### 345 intends to encourage other importers of c-decaBDE to join this effort; however, the commitment under 

### 346 discussion would not affect articles made with c-decaBDE (U.S. EPA, 2009a). 

### 347

Exhibit 2-2 : U.S. Manufacturers and Importers of c-DecaBDE in 2006 

### 348

Company City State Company Type Data Source
Albemarle Corporation Magnolia AR Manufacturer IUR, U.S. EPA, 2009c Chemtura Corporation El Dorado AR [Data claimed as CBI] Sojitz Corporation of America New York NY Importer The Goodyear Tire & Rubber Company Marysville OH Importer Tiarco Chemicals Dalton GA Manufacturer DWCP, 2009
ICL Industrial Products Tel Aviv-Jaffa Israel Importer U.S. EPA, 2010b 

### 349
According to the Directory of World Chemical Pr oducers, c-decaBDE is produced in seven countries 

### 350 outside of the United States. Imported articles that may be treated with c-decaBDE fall under the NAICS 

### 351 codes listed in Exhibit 2-3: 

### 352

Exhibit 2-3: NAICS Codes for c-decaBDE Importers 

### 353

NAICS Code Designation 313210 Broadwoven fabrics 314121 Curtain draperies 337121 Upholstered office furniture 337214 Office furniture (without wood) 337910 Mattresses 334111 Electronic computers 334220 Radio and television broadcasting and wireless communications equipment 334310 Audio and video equipment 335931 Current-carrying wiring devices 335929 Communication and energy wire 

### 354
Given the broad range of products and lack of cer tainty over whether imported goods do contain thec

### 355 decaBDE, we are unable to identify the specific importers of these articles that could be affected by this 

### 356 test rule. 

### 357

2.3.3 Chemical Processors 

### 358
According to the proposed rule, pr ocessors of the three subject mixtures are assigned “Tier 2” status, 

### 359 meaning they are “persons not init ially required to comply.” Therefore, while they would legally be 

### 360 subject to the proposed test rule, processors of a s ubject mixture would be required to comply with the 

### 361 requirements of the rule only if they are directed to do so by EPA in a future Federal Register notice. 

### 362 Because the proposed rule requires only that the requi red test results be obtained once for each mixture, 

### 363 EPA would only require processors to test if no manuf acturer has submitted a notice of its intent to 

### 364 conduct testing, or if a problem occurs with the initia tion, conduct, or completion of the required testing 

### 365 or the submission of the required data to EPA. Because there are three identified manufacturers of the 

### 366 subject mixture c-decaBDE and several importers, th e Agency assumes that for c-decaBDE at least one 

### 367 such person will submit a letter of in tent to conduct the required testi ng and that person will conduct such 

### 368*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 2-5 testing and will submit the test data to EPA if c- decaBDE is still being manufactured or imported after 

### 369 December 31, 2012 (December 31, 2013 for military and transportation uses of c-deca BDE). Because 

### 370 processors would not need to comply with the propos ed rule initially, this economic analysis does not 

### 371 address processors. Furthermore, we assume that th ere are no processors of c-pentaBDE or c-octaBDE in 

### 372 the United States, because the mixtures are not manuf actured or imported into the United States (other 

### 373 than processing of articles containing one or more of the mixtures as impurities). 

### 374*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 3-1 

## Chapter 3 –Tests Required by the Proposed Rule 375

376 3.1 Introduction 377
EPA is concerned about the potential exposure to c- PBDEs, and their reported health and ecological 

### 378 effects. Based on the evidence of the human and e nvironmental hazards of c-pentaBDE, c-octaBDE, and 

### 379 c-decaBDE, and the potential for human and environm ental exposure to these mixtures, EPA believes that 

### 380 testing c-pentaBDE, c-octaBDE, and c-decaBDE is ne cessary to develop data to be able to reasonably 

### 381 determine and predict the effects of the manufactur e, distribution in commerce, and processing of these 

### 382 mixtures on the environment, because current data is insufficient to do so. 

### 383
Data collected and/or developed under a final ru le based on this proposal, when combined with 

### 384 information about exposure and uses, will allow the Ag ency and others to bette r assess the potential risk 

### 385 to health and the environment from these mixtures. EPA intends to make the information collected under 

### 386 the final rule available to the public, other Federal agencies, and any other interested parties. As 

### 387 appropriate, this information will be used to ensure a scientifically sound basis for risk 

### 388 assessment/management actions. This effort will serve to further the Agency’s goal of identifying and 

### 389 controlling human and environmental risks as well as providing greater protection and knowledge to the 

### 390 public. 

### 391 3.2 Description of Tests Required by the Proposed Rule 392
EPA has specified fourteen test methods that provide data on the ecotoxicity (aquatic toxicity), 

### 393 mammalian toxicity, and chemical fate of the mixt ures subject to the proposed rule. For one of these 

### 394 tests, EPA is proposing the use of a guideline that the agency developed (to test for photolytic 

### 395 degradation). Exhibit 3-1 provides a description of the tests that would be required for mixtures under the 

### 396 proposed rule. 

### 397

Exhibit 3-1: Tests Required under the Proposed Test Rule 

### 398

Protocol Name Protocol Number(s) Description Test Code (used in

this analysis) CATEGORY A: ECOTOXICITY / AQUATIC TOXICITY
Sediment toxicity to invertebrates ASTM E 1706-05e1 and ASTM E 1391- 03 Evaluate the toxicity to freshw ater invertebrates of the test mixture when associated with whole sediments A1

Soil toxicity and bioaccumulation ASTM E 1676-04 and ASTM E 1391- 03 Evaluate the adverse effects on earthworms ( Eisenia fetida) and potworms (E nchytraeus albidu ) of the test mixture when associated with soils A2

Sediment toxicity to polychaetous annelids ASTM E 1611-00 and ASTM E 1391- 03 Evaluate the toxicity to polychaetous annelids of the test mixture when associated with sediment A3

Soil toxicity to nematodes ASTM E 2172-01, ASTM E 1676-04 and ASTM E 1391- 03 Evaluate the adverse effects on nematodes ( Caenorhabditis elegans ) of the test mixture when associated with soils A4

Sediment toxicity to estuarine or marine organisms ASTM E 1367-03, and ASTM E 1391- 03 Evaluate the toxicity to estuarine or marine organisms of the test mixture when associated with whole sediments A5*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 3-2 Protocol Name Protocol Number(s) Description Test Code (used in

this analysis) CATEGORY B: MAMMALIAN TOXICITY
Prenatal developmental toxicity in rabbits 40 CFR 799.9370 Provide general information concerning the effects of exposure to the test mixture on the pregnant test animal and on the developing organism B1

Two-generation reproductive toxicity with satellite group for body burden determinations 40 CFR 799.9380 Provide general information concerning the effects of exposure to the test mixture on the integrity and performance of the male and female reproductive systems, and on the growth and development of offspring B2

Immunotoxicity 40 CFR 799.9780 Provide information on suppression of the immune system which might occur as a result of repeated exposure to the test mixture B3

Neurotoxicity screening battery, acute and subchronic 40 CFR 799.9620 Provide information on gross functional deficits, level of activity, and histopathological changes in the central and peripheral nervous systems of the test animals as a result of acute and subchronic expo sure to the test mixture B4

Developmental neurotoxicity 40 CFR 799.9630 Develop data on the potential functional and morphological hazards to the nervous system which may arise in the offspring from exposure of the mother to the test mixture during pregnancy and lactation B5

Chronic toxicity/Carcinogenicity 40 CFR 799.9430 Identify the majority of chronic and carcinogenetic effects and determine dose-response relationships in a mammalian species following prolonged and repeated exposure to the test mixture B6

CATEGORY C: CHEMICAL FATE Anaerobic aquatic metabolism 799.XXXX(i)(2) (modified 835.4400) Assess transformation of test mixture in anaerobic aquatic sediment systems C1

Biodegradation in Anaerobic Digester Sludge 799.XXXX(i)(3) (modified 835.3280) Simulate digester sludge and assess primary and ultimate biodegradability of test mixture discharged to wastewater C2

Photolytic degradation in the indoor environment 799.XXXX(i)(4) Assess potential sources of test mixture in indoor environment C3

Source : U.S. EPA, 2010c 

### 399 3.3 Specific Test Requirements for each Mixture in the Proposed Rule 400

EPA has determined that neurobehavioral effects are a critical endpoint of concern for PBDEs, and that 

### 401 for c-decaBDE, there is “suggestive evidence of carcinoge nic potential.” EPA has also made preliminary 

### 402 findings that there is insufficient data to determin e the effects on health and the environment of the 

### 403 manufacture, processing, and use of the subject mixtures. Tests required for each mixture included in the 

### 404 proposed rule are summarized in Exhibit 3-2. 

### 405

Exhibit 3-2: Test Requirements for Mixtures Included in the Proposed Rule 

### 406

Mixture Name Required Tests (See Test Codes in Exhibit 3-1) c-Pentabromodiphenyl Ether (c-PentaBDE) A1, A2, A3, A4, A5, B1 , B2, B3, B4, B5, B6
c-Octabromodiphenyl Ether (c-OctaBDE) A1, A2, A3, A4, A5, B1 , B2, B3, B4, B5, B6*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 3-3 Mixture Name Required Tests (See Test Codes in Exhibit 3-1) c-Decabromodiphenyl Ether (c-DecaBDE) A1, A2, A3, A4, A5, B1, B2, B3, B4, B5, C1, C2, C3*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 4-1 

## Chapter 4 Industry Compliance Costs 407

408 4.1 Introduction 409
This chapter presents estimates of the costs that i ndustry (entities who manufacture, import, or process c

### 410 pentaBDE, c-octaBDE, or c-decaBDE, including in articles, after December 31, 2012 (December 31, 

### 411 2013 for military and transportation uses of c-deca BD E)) may incur due to the requirements included in 

### 412 the proposed rule, and discusses the method used to measure each. Industry may incur costs related to 

### 413 laboratory testing requirements (Section 4.2.1), an alytical methodology validation (Section 4.2.2), 

### 414 administrative activities (Section 4.2.3), and export notification requirements (Section 4.2.4). Total 

### 415 industry compliance costs are summarized in Section 4.3. 

### 416
4.2 Unit Costs 417
The following sections describe, on a pe r-unit basis, the types of costs th at would be incurred by industry 

### 418 to comply with the proposed test rule. 

### 419
4.2.1 Laboratory Testing Costs 

### 420

Individual Test Cost Estimates 

### 421
EPA obtained test cost estimates by contacting nine or fewer laboratories known to perform each test and 

### 422 requesting pricing information, or, when such direct estimates were not available, by obtaining a best 

### 423 professional estimate from industry experts. Although the rule requires that testing be conducted in 

### 424 accordance with the specified manda tory and enforceable requirements in the ASTM or §799 guidelines 

### 425 (see Section 3.2), the cost estimates used in this analysis may also be based on OECD or other EPA 

### 426 protocols, which are representative of the desired testing endpoint (as summarized in Exhibit 4-1). 

### 427 Testing cost estimates generally include direct la bor, overhead, other direct costs such as laboratory 

### 428 supplies, and general and administrative services. 

### 429
Estimating the potential testing costs for each mixture pursuant to requirements contained in the proposed 

### 430 rule is complicated in that industry may have choi ces associated with the doses, durations, species and/or 

### 431 route of administration used in a particular test; or preliminary results during a protocol may require 

### 432 additional steps or repetitions. Therefore, to obtain cons istent costing results, all laboratories contacted for 

### 433 pricing information were provided with a study outli ne for the test specifying any variables that may 

### 434 affect the cost of the test. The most standard prot ocols were used. Furthermore, laboratories were asked 

### 435 to provide a range of cost estimates with a low-co st estimate and a high-cost estimate for each test. 

### 436 Individual estimates of test costs will vary across testing laboratories based upon factors such as labor 

### 437 costs, profit margins, and other concerns. The “low-cost” estimate used in this analysis is the average of 

### 438 all of the low-cost estimates received for the test, and the “high-cost” estimate is the average of all of the 

### 439 high-cost estimates received. 

### 440
Exhibit 4-1 presents the protocols required by the rule , the basis for the cost estimate, and final cost 

### 441 estimates used in the analysis. 

### 442

Exhibit 4-1: EPA Estimates of Laboratory Costs of Proposed Tests (2009$) 

### 443

Test Code Protocol Name Required Protocol Number(s) Basis for Cost Estimate 1,2 Source Cost Estimate 2009$ 1

Low High

A1 Sediment toxicity to invertebrates ASTM E 1706-05e1 and ASTM E 1391-03 1 nine or fewer laboratories Abt, 2010b $26,060 $45,733

A2 Soil toxicity and bioaccumulation ASTM E 1676-04 and ASTM E 1391-03 1 best professional estimation Abt, 2010c $23,100 $53,850

A3 Sediment toxicity to polychaetous annelids ASTM E 1611-00 and ASTM E 1391-03 1 nine or fewer laboratories Abt, 2010b $14,742 $30,577*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 4-2 Test Code Protocol Name Required Protocol Number(s) Basis for Cost Estimate Source Cost Estimate 2009$ 1

Low High

A4 Soil toxicity to nematodes ASTM E 2172-01 2

, ASTM 1676-04 and ASTM E 1391-03 1 nine or fewer laboratories Abt, 2010b $10,767 $30,425

A5 Sediment toxicity to estuarine or marine organisms ASTM E 1367-03, and ASTM E 1391-03 1 nine or fewer laboratories Abt, 2010b $26,500 $41,581

B1 Prenatal developmental toxicity in rabbits 40 CFR 799.9370 nine or fewer laboratories, using 40 CFR 870.3700 Abt, 2010a $122,547 $210,760

B2 Two-generation reproductive toxicity with satellite group for body burden determinations 40 CFR 799.9380 nine or fewer laboratories, using 40 CFR 870.3800 Abt, 2010a $270,213 $516,400

B3 Immunotoxicity 40 CFR 799.9780 nine or fewer laboratories, using 40 CFR 870.7800 Abt, 2010a $61,221 $63,608

B4 Neurotoxicity screening battery, acute and subchronic 40 CFR 799.9620 nine or fewer laboratories, using 40 CFR 870.6200 Abt, 2010a $336,418 $407,999

B5 Developmental neurotoxicity 40 CFR 799.9630 nine or fewer laboratories, using 40 CFR 870.6300 Abt, 2010a $702,500 $702,500

B6 Chronic toxicity/Carcinogenicity 40 CFR 799.9430 nine or fewer laboratories Abt, 2010b $1,260,850 $2,564,000

C1 Anaerobic aquatic metabolism 799.XXXX(i)(2) (modified 835.4400) nine or fewer laboratories, using 40 CFR 835.4400 Abt, 2010a $72,663 $141,786

C2 Biodegradation in Anaerobic Digester Sludge 799.XXXX(i)(3) (modified 835.3280) nine or fewer laboratories Abt, 2010b $82,750 $151,100

C3 Photolytic degradation in the indoor environment 799.XXXX(i)(4) 2 nine or fewer laboratories Abt, 2010b $100,000 $150,000

Notes:
1 The basis for the cost estimate for ASTM E 1391-03 is the best professional estimate of an industry expert.
2 The basis for the cost estimate for ASTM E 2172-01 and 799.XXXX(i )(4) is a single laboratory; it is uncertain of how represent ative the estimate is for the whole industry. 

### 444
Total Test Costs per Mixture 

### 445
The proposed rule requires only that the required t est results be obtained once for each mixture; each 

### 446 entity is not required to do the tests separately. Therefore, in order to obtain the total test costs under the 

### 447 proposed rule, EPA assumes that a required test will be performed only once per mixture. The costs of the 

### 448 tests required for each mixture were summed for all mixtures, and then the total cost per mixture was 

### 449 summed across all the mixtures included in the pro posed rule. Exhibit 4-2 shows the laboratory tes t costs 

### 450 for each mixture.. ach 

### 451*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 4-3 chemical under the proposed rule. 

### 452

Exhibit 4-2: Total Laboratory Test Costs per Mixture 

### 453

Mixture Name Laboratory Testing Cost (Test Requirements as listed in Exhibit 3-2)

Low-Cost Scenario High-Cost Scenario 1 c-PentaBDE $2,854, 919 $4,667,433 2 c-OctaBDE $2,854,919 $4,667,433 3 c- DecaBDE $1,849,482 $2,546,319

Total $7,559,319 $11,881,186 

### 454
As shown in Exhibit 4-2, the total laboratory cost for t esting the mixtures included in the proposed rule is 

### 455 estimated to range from approximately $7.56 million under the low-cost scenario to approximately $11.9 

### 456 million under the high-cost scenario. These estimates ma y overstate the true testing burden because they 

### 457 are based on the assumption that each mixture is tested independently. If more than one mixture is tested 

### 458 at a time (for example, if all three mixtures were to be tested at the same laboratory at the same time), 

### 459 testing costs could be lower due to economies of scale (for example, the test’s quality control procedures 

### 460 can be performed by batch, making the per-mixture cost lower). 

### 461
4.2.2 Analytical Method Validation Costs 

### 462
When conducting tests, laboratories perform analytical method validation to ensure that proper dose 

### 463 concentrations are used in toxicity studies. An analytical method validation approach assumes that an 

### 464 acceptable analytical method is available for a particular chemical or mixture and that the method is 

### 465 directly related to the matrix used for the test. Wh en analytical methods are not suitable or known, they 

### 466 must be developed or modified. 

### 467
Analytical method validation includes all of the proce dures that demonstrate that a particular method used 

### 468 for quantitative measurement of analytes in a given ma trix is reliable and repr oducible for the intended 

### 469 use. The fundamental parameters for this valida tion include (1) accuracy, (2) precision, (3) selectivity, 

### 470 (4) sensitivity, (5) reproducibility, and (6) stability. Validation involves documenting, through the use of 

### 471 specific laboratory investigations, that the perform ance characteristics of th e method are suitable and 

### 472 reliable for the intended analytical applications. Th e acceptability of analytical data corresponds directly 

### 473 to the criteria used to validate the method. 

### 474
Factors that may increase the cost of analytical method development and validation costs include 

### 475 (1) testing new chemicals or mixtures that lack any established method or historical analytical data to use 

### 476 as a starting point, and (2) testing chemicals or mixtures that present challenging conditions or possess 

### 477 characteristics that require special or additional pr ocedures during sample preparation and analysis. If 

### 478 previous testing on a chemical or mixture of interest has been conducted by either a laboratory or client, 

### 479 information may be available that can assist with sample preparation and analytical testing. This can help 

### 480 to minimize the costs of method development and validation. 

### 481
Analytical method development and analytical costs can also vary depending on characteristics of the test 

### 482 substance or mixture. Characteristics of chemicals or mixtures that may impact the cost of analytical 

### 483 method development and validation in clude mixture stability, mixture properties, and matrix properties 

### 484 and interactions with the mixture. For example, mixtures are not always stable under every test or 

### 485 analysis condition, and a mixture could decompose or transform into a different mixture or chemicals 

### 486 under testing conditions, which will invalidate the test results. Such mixtures will require additional 

### 487 effort to identify alternate conditi ons or matrices for testing to elimin ate the potential for stability issues to 

### 488 affect the testing results. Certain properties may also affect the costs of analytical method development. 

### 489*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 4-4 Some mixtures may interact with the dosing matrix and require special or even different handling and 

### 490 processing procedures that can impact the level of method development efforts. 

### 491
Once analytical methodology validation is completed for a specific mixture, however, it need not be 

### 492 repeated for tests of a similar nature (e.g., tests usi ng the same dosing matrix), provided testing is done at 

### 493 the same laboratory. Therefore, the cost of anal ytical methodology validation is counted only once per 

### 494 testing category, for each mixture. 

### 495
For this proposed rule, EPA follows the methodology outlined in EPA’s Economic Analysis for the 

### 496 Proposed Section 4 Test Rule for High Production Volume Chemicals (U.S. EPA, 2009d) and estimates 

### 497 analytical methodology validation cost as listed in Exhibit 4-3 for aquatic toxicity tests. For mammalian 

### 498 toxicity and chemical fate tests required under th is testing rule, laboratories recommended specific 

### 499 alternate analytical validation costs (Abt Associates, 2010a). These costs are also shown in Exhibit 4-3. 

### 500

Exhibit 4-3: Costs for Analytical Methodology Validation, per Test 

### 501

Testing Category Test Symbol Cost Estimate 2009$ Aquatic Toxicity A $6,000 Mammalian Toxicity B $17,500

Chemical Fate C $22, 500

Source: U.S. EPA, 2009d; Abt Associates, 2010a. 

### 502

4.2.3 Administrative Costs 

### 503
In addition to laboratory costs, entities subject to the proposed test rule will also incur expenses associated 

### 504 with the administration of the testing program itself. Administrative activities include “reporting 

### 505 activities,” such as preparing letters of intent, study plans, and final reports, and “non-reporting 

### 506 activities,” such as soliciting laboratory bids, selecting laboratories, monitoring tests under progress, 

### 507 developing cost-sharing agreemen ts, and auditing the laboratories for compliance with EPA’s Good 

### 508 Laboratory Practice (GLP) standards. Total administra tive costs are calculated as the sum of the costs of 

### 509 reporting and non-reporting activities. This section di scusses the methods and data employed to estimate 

### 510 reporting and non-reporting costs. 

### 511
Reporting costs include costs associated with submitting letters of intent, study plans, final reports, and 

### 512 exemption applications. The analysis assumes that one letter of intent and one set of study plans will be 

### 513 submitted for each mixture, resulting in 3 letters of intent and 3 study plans submitted to EPA. In 

### 514 addition, one final report is assumed to be required for each test conducted for each mixture. To estimate 

### 515 the total number of final reports, the total number of tests required for each mixture is summed across all 

### 516 mixtures, which results in an estimated 35 final repor ts that will be submitted to EPA in response to this 

### 517 rule. 

### 518
Finally, respondents may choose to develop and subm it robust summaries of the full, final toxicological 

### 519 study reports. The robust summaries should contain t echnical information to adequately describe the 

### 520 study and results, and should be written such that th e information provided is sufficient to allow a 

### 521 technically qualified person to evaluate study results without needing to review an entire study report. 

### 522 Typically, a robust summary would include a descrip tion of the test substance, methods, results, 

### 523 conclusions, data quality d escription, and references associated wi th the full study. Based on professional 

### 524 judgment, EPA estimates that 8 to 16 hours of technical time are needed to develop and review a robust 

### 525 summary, depending on the type of study conducted. Therefore, for this analysis, EPA assumes an 

### 526 average of 12 hours of technical time to prepare a robust summary. Because submission of robust 

### 527 summaries is voluntary, EPA does not expect that many companies will undertake this activity. EPA 

### 528 estimates that 10 percent of full, final toxicologi cal study reports may include a robust summary. 

### 529 Therefore, EPA expects approximately 3.5 robust summaries. 

### 530*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 4-5 EPA estimates that it takes a respondent 40 hours to pr epare a letter of intent and study plan, and 73 hours 

### 531 to write a final report. These unit labor hours were derived from previous information collection requests 

### 532 and are believed to reflect the burdens that will be incurred for the proposed test rule (U.S. EPA, 2002b). 

### 533
Wage rates associated with the predominant skill leve l (managerial, technical, and clerical) required to 

### 534 complete each of the reporting activities described in this section are presented in Exhibit 4-4. These 

### 535 wage rates have been estimated following the method described in a memorandum titled, “Wage Rates for 

### 536 Economic Analyses of the Toxics Release Inventory Program” (U.S. EPA, 2002a). This method uses 

### 537 average December 2009 wages, benefits, and total co mpensation data extracted from the Employer Costs 

### 538 for Employee Compensation Summary available from th e BLS Web site. Appendix A provides detailed 

### 539 information on the estimation of these wage rates. 

### 540

Exhibit 4-4: Derivation of Loaded Hourly Rates by Labor Category 

### 541

Labor Category 2009 Wage Rate 2009 Benefits and Overhead Loading Factor 2009 Loaded Hourly Wage Rate Managerial $42.36 1.61 $68.24 Technical $35.96 1.65 $59.49 Clerical $17.21 1.64 $28.31
Source: Methodology from “Wage Rates for Economic A nalyses of the Toxics Release Inventory Program” (U.S. EPA, 2002a). Wage rates and benefits extracted from the Employer Costs for Employee Compensation Summary, Bureau of Labor Statistics (BLS, 2010); assumed ov erhead rate of 17% applied to wage rates based on assumptions in U.S. EPA, 2002a and U.S. EPA 2002b. 

### 542 Exhibit 4-5 details the respondents’ reporting cost and burden estimates. As shown, the total reporting 

### 543 cost and burden estimates are approximately $140,555 and 2,717 hours, respectively. 

### 544

Exhibit 4-5: Industry Reporting Cost and Burden Estimate for the Proposed Rule (2009$) 

### 545

Reporting Activity Unit Labo r Annual Items Submitted Total
Category 1 Hours/ Item Wage Rate Cost/ Item Hours Cost

Letter of Intent and Study Plan T 40 $59.49 $2,380 3 120 $7,139
Final Report Record & Prepare Test for Submission Laboratory Review Corporate Review Type & Print Results Record Keeping T

T M C C 40

6 6 20 1 $59.49

$59.49 $68.24 $28.31 $28.31 $2,380

$357 $409 $566 $28 35

35 35 35 35 1,400

210 210 700 35 $83,286

$12,493 $14,330 $19,817

$991 Robust Summaries T 12 $59.49 $714 3.5 42 $2,499 TOTAL 2,717 $140,555

1 Labor categories are as follows: T = Tec hnical; M = Managerial; C = Clerical. 

### 546 Non-Reporting Activities. In addition to reporting activities, manuf acturers need to conduct a number of 

### 547 non-reporting activities. In January 2007, EPA conduc ted a brief study to investigate the types of non

### 548 reporting activities manufacturers conduct and the ma gnitude of associated costs (U.S. EPA, 2007). The 

### 549 non-reporting activities identified include soliciting la boratory bids, selecting laboratories, monitoring 

### 550 tests in progress, developing cost-sharing agreements , and auditing the laboratories for compliance with 

### 551 EPA’s GLP standards. These activities, in addition to identifying manufacturers, arranging meetings, and 

### 552 employing toxicologists who may be hired to provide t esting expertise for the testing, are considered to 

### 553 represent the costs of managing the testing activities. While these costs will vary based on a number of 

### 554 circumstances, the report suggests that managing the testing activities is equivalent, on average, to 15 

### 555 percent of the chemical testing costs, which is the assumption used in this analysis. Based on the study, 

### 556 an additional 10 percent of the testing costs are esti mated to cover the costs of the technical expert, 

### 557*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 4-6 including that expert’s study review and site visits to the laborator y. Therefore, total non-reporting 

### 558 administrative costs are assumed to equal an additiona l 25 percent of the total testing costs. Because 

### 559 laboratory-testing costs are estimated as $7.56 m illion under the low-cost scenario and $11.9 million 

### 560 under the high-cost scenario, non-reporting costs ar e approximately $1.89 million and $2.97 under the 

### 561 low- and high-cost scenarios, respectively. 

### 562

Total Administrative Costs. As stated previously, total administ rative costs pursuant to the proposed 

### 563 rule are estimated as the sum of reporting and non-repo rting costs. Thus, total administrative costs are 

### 564 estimated to be $2.03 million under the low-cost scenario and $3.11 million under the high-cost scenario. 

### 565
4.2.4 Export Notification Costs 

### 566
TSCA Section 12(b) export notification requirement s apply to manufacturers who intend to export a 

### 567 chemical or mixture subject to various TSCA sections (40 CFR §707.60 through 75), including test rules 

### 568 promulgated under TSCA Section 4 such as this proposed rule. Under the Section 12(b) requirements, all 

### 569 exporters of regulated chemicals or mixtures must no tify EPA about each country to which a chemical or 

### 570 mixture rule is shipped. 

### 571
However, as mentioned earlier in this report, two of th e mixtures that are subject to the proposed test rule, 

### 572 c-pentaBDE and c-octaBDE, are already subject to a SNUR (71 FR 34015, June 13, 2006) and the 

### 573 associated export notification costs. EPA is concu rrently proposing a modification to that SNUR that 

### 574 would also regulate c-decaBDE. The economic anal ysis prepared for the SNUR amendment proposal 

### 575 (also found in the docket for this rulemaking) alr eady takes into account the Section 12(b) TSCA export 

### 576 notification requirements. Therefore, export notification costs are not included in this analysis. 

### 577

4.3 Total Industry Compliance Costs 578
The total compliance costs borne by the regulated industry are summarized in Exhibit 4-6. These costs 

### 579 would only be incurred by entities who manufacture, import, or process c-pentaBDE, c-octaBDE, or c

### 580 decaBDE, including in articles, after Decemb er 31, 2012 (December 31, 2013 for military and 

### 581 transportation uses of c-deca BDE). The total i ndustry compliance costs potentially triggered by the 

### 582 proposed rule are estimated to equal $9.68 million under the low-cost assumption and $15.1 million under 

### 583 the high-cost assumption. These estimates include la boratory, method validatio n, administrative, and 

### 584 export notification costs. Laboratory costs may be overestimated due to the economies of scale that could 

### 585 arise if multiple mixtures are tested together or mu ltiple tests are conducted on the same mixture. Total 

### 586 compliance costs may also be overestimated to the exte nt that firms can claim tax deductions for some of 

### 587 these costs. 

### 588

Exhibit 4-6: Summary of Total Industry Compliance Costs Triggered by the Proposed Rule (2009$) 

### 589

Compliance Cost Category Cost ($ million, unadjusted) Low-Cost Scenario High-Cost Scenario Laboratory costs (Secti on 4.2.1) $7.56 $11.9 Analytical methodology validation costs (Section 4.2.2) $0.09 $0.09 Administrative costs (Sec tion 4.2.3) $2.03 $3.11 Total industry compliance co sts (Section 4.3) $9.68 $15.1 Average compliance cost per mixture $3.23 $5.03*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 5-1 

## Chapter 5 – Agency Costs 590

5.1 Introduction 591
EPA would also incur costs resulting from the proposed rule, if there is anyone who manufactures, 

### 592 imports, or processes c-pentaBDE, c-octaBDE, or c-decaBDE, including in articles, after December 31, 

### 593 2012 (December 31, 2013 for military and transportation uses of c-deca BDE). If data are collected and 

### 594 submitted by industry, EPA must review and process le tters of intent, study plans, final reports, robust 

### 595 summaries, and exemption applications for comple teness, adherence to protocols, and findings. 

### 596
5.2 EPA Costs 597
EPA assumes that, on average, a Federal GS-13, Step 1, full-time equivalent (FTE), equivalent to 2,080 

### 598 hours per year, would conduct its collection proce dures under the proposed rule. The annual 2009 fully 

### 599 loaded salary for a GS-13, Step 1, FTE is $139,083. This includes a base salary of $86,927 plus 60 

### 600 percent for overhead and benefits (i.e., $52,146). 7 Dividing the fully loaded annual salary by 2,080 (i.e., 

### 601 the number of hours in a work year) yields an hourly wage rate of $66.87 for the FTE. 

### 602
As explained earlier in Section 4.2.3, approximately 3 letters of intent and stud y plans, 35 final reports, 

### 603 and 3.5 robust summaries are estimated to be filed in response to the proposed rule. Based on best 

### 604 professional judgment, it is estimated that it takes on average 3 hours to process a letter of intent and 

### 605 study plan, 5 hours to process a final report, 1 hour to review a robust summary, and 1 hour to review 

### 606 each exemption application. Exhibit 5-1 presents the estimated total government costs based on these 

### 607 assumptions. As shown, the total government cost s for the proposed rule are estimated to be 

### 608 approximately $12,538. 

### 609

Exhibit 5-1: Estimated Government Costs for the Proposed Rule (2009$) 

### 610

Item Unit Labo r Total Hours Rate Cost/Item Items Hours Cost Letter of Intent and Study Pl ans 3 $66.87 $200.60 3 9 $602 Final Reports 5 $66.87 $334.33 35 175 $11,702 Robust Summaries 1 $66.87 $66.87 3.5 3.5 $234 TOTAL 187.5 $12,538 

### 611

7 The unloaded Federal GS-13 Step 1 salary ($86,927, effe ctive January 2009), from the Offi ce of Personnel Management salary table for Washington-Baltimore-Nort hern Virginia (OPM, 2009). The 60 percen t fringes-and-overhead rate is from an EPA/OPPE guide (U.S. EPA, 1992).*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 6-1 

## Chapter 6 - Social Costs 612

6.1 Total Social Costs 613

The estimated total social costs of the proposed rule are the sum of industry and EPA costs (Exhibit 6-1). 

### 614 The total social costs under the low- and high-cost scenarios are $9.70 million and $15.1 million, 

### 615 respectively. Industry compliance costs are presented before tax. As with any costs, tax deductions 

### 616 would lower the portion borne by industry, but the am ount deducted would still represent a cost to society 

### 617 because the costs borne by the government will increase. Similarly, some costs may be passed on to 

### 618 customers, suppliers, and/or workers in the form of changed prices and wages. However, a detailed 

### 619 analysis of such cost redistribution is beyond the scope of this report. 

### 620
These costs would only be incurred if there are en tities who manufacture, import, or process c-pentaBDE, 

### 621 c-octaBDE and c-decaBDE, including in articles, after December 31, 2012 (December 31, 2013 for 

### 622 military and transportation uses of c-deca BDE). 

### 623

Exhibit 6-1: Summary of Total Social Costs Triggered by the Proposed Rule (2009$) 

### 624

Cost Category Cost ($ million) Low-Cost Scenario High-Cost Scenario
Total industry compliance costs (unadjusted) a $9,682,703 $15,085,037 Total government costs ( unadjusted) $12,538 $12,538 Total social costs triggered by the proposed rule (unadjusted) $9,695,240 $15,097,574

a Total industry compliance costs include laboratory, analyt ical methodology validation, administration, and export notification costs. 

### 625
6.2 Mixture Level Costs 626
The estimated total social costs per mixture are prese nted in the table below. The average (mean) total 

### 627 social cost per mixture is $3.23 million under the lo w-cost scenario and $5.03 million under the high-cost 

### 628 scenario. 

### 629
These costs would only be incurred if there are entiti es that manufacture, import, or process any of the 

### 630 mixtures , including in articles, after December 31, 2012 (December 31, 2013 for military and 

### 631 transportation uses of c-deca BDE). 

### 632

Exhibit 6-2: Summary of Total Social Costs by Mixture (2009$, unadjusted) 

### 633

Mixture Name Total Social Costs per Chemical Low-Cost Scenario High-Cost Scenario 1 Pentabromodiphenyl Ether (P entaBDE) $3,640, 410 $5,906,054 2 Octabromodiphenyl Ether (O ctaBDE) $3,640,410 $5,906,054 3 Decabromodiphenyl Ether (D ecaBDE) $2,414,420 $3,285,467 Total $9,695,240 $15,097,574 Average $3,231,747 $5,032,525 

### 634 Mixture-specific estimates of laboratory, analytical methodology validation, administration, export 

### 635 notification, and government costs under the low- a nd high-cost scenarios can be found in Appendix B of 

### 636 this report. 

### 637
6.3 Annualized Costs 638

Costs associated with this test rule if there are entities who manufacture, import, or process any of the 

### 639 mixtures, including in articles, after Decembe r 31, 2012 (December 31, 2013 for military and 

### 640 transportation uses of c-deca BDE), are expected to occur over the several years during which the actual 

### 641*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 7-2 testing occurs and EPA reviews studies. A three-y ear time period is assumed for this analysis. Thus, 

### 642 total social costs of the rule have been annualized over three years. 

### 643
The issues involved in selecting the appropriate so cial discount rate are complex and subject to 

### 644 considerable debate in the economics literature. This literature largely fo cuses on the appropriate 

### 645 treatment of displaced private investment, often referre d to as the private rate of return to capital, and 

### 646 displaced consumption, often referred to as the consum ption rate of interest. The literature and EPA’s 

### 647 economic guidance document suggest that the appropriate rate to use for environmental actions is usually 

### 648 the consumption rate of interest. Historical rates of return on relatively risk-free investments, adjusted for 

### 649 taxes and inflation, suggest that a consumption rate of interest of 2 to 3 percent is appropriate (U.S. EPA, 

### 650 2000). A three percent discount rate is used for the primary analysis in this report, following common 

### 651 EPA convention. EPA guidance also recommends fo llowing OMB’s basic guidance on discount rates for 

### 652 regulatory and other analyses provided in OMB Ci rcular A-4 (OMB, 2003). The OMB suggests using 

### 653 both a 3 and a 7 percent discount rate, in real terms. Therefore, results are pres ented for the 3 percent and 

### 654 7 percent discount rates. 

### 655
The standard formula for annualizing a lump sum cost is given by: 

### 656

A = I Χ [I(1 + i) n / ((1 + i) n - 1)] 

### 657
where A equals the annualized amount, I is the initial lump sum investment cost (equal to the one-time 

### 658 cost to comply with the rule), i is the discount rate, and n is the useful life of the investment (equal to the 

### 659 financial life of the affected company). 

### 660
The initial lump sum costs to comply with the pro posed rule under the low- and high-cost scenarios are 

### 661 presented in Exhibit 6-3. 

### 662

As shown, total annualized social costs under the low-cost scenario range from $3.42 to $3.69 million 

### 663 using a 3 percent and a 7 percent discount rate, respect ively. Total annualized social costs under the high

### 664 cost scenario range from $5.34 to $5.75 million us ing a 3 percent and a 7 percent discount rate, 

### 665 respectively. 

### 666

Exhibit 6-3: Annualized Costs Under Low- and High- Cost Scenarios (Total for All Mixtures) ($2009) 

### 667

Category Cost ($ million) 1
Low-Cost Scenario High-Cost Scenario 3% Discount Rate 7% Discount Rate 3% Discount Rate 7% Discount Rate Annualized Industry Compliance Costs $3, 423,129 $3,689,610 $5, 333,018 $5,748,178 Annualized Government Cost s $4,432 $4,777 $4,432 $4,777 TOTAL ANNUALIZED SOCIAL COSTS $3,427,562 $3,694,387 $5,337,451 $5,752,956
Notes:
1 All costs were annualized over a 3-year time horizon. 

## Chapter 7 – Small Entity Impact Analysis 668

669 This chapter assesses the impact of the proposed test rule on the manufacturers of mixtures subject to the 

### 670 rule. In Chapter 4 the total industry costs were pr esented, and in this chapter EPA estimates the per

### 671 company cost incurred if this proposed rule is finalized. Such an analysis is particularly relevant for small 

### 672 businesses, as defined by the U.S. Small Business Ad ministration (SBA). This analysis satisfies the 

### 673 requirements of the Regulatory Fl exibility Act (RFA) of 1980, as amended by the Small Business 

### 674 Regulatory Enforcement Act (SBREFA) of 1996. 

### 675*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 7-2 7.1 Identify the A ffected Population 676
As described in Chapter 2, there are no known manufac turers, importers, or processors of c-pentaBDE or 

### 677 c-octaBDE, so this analysis focuses on manufactur ers and importers of c-decaBDE only. For each 

### 678 manufacturer/importer identified in section 2.3.2, EPA identified the ultimate parent company and 

### 679 obtained sales and employment data, and six-digit North American Industry Classification System 

### 680 (NAICS) codes, using the Dun & Bradstreet Market Identifier (Dun & Bradstreet, 2010). 8 

### 681
The search identified six affected global ultimate pa rent companies as defined by their global DUNS 

### 682 number or the highest parent level found in other so urces. Sales and employment data could be found for 

### 683 all six of the global ultimate parent companies. E xhibit 7-1 provides summary statistics of the available 

### 684 data for the companies. As shown in Exhibit 7- 1, potentially impacted companies vary widely as 

### 685 measured by both number of em ployees and annual sales. 

### 686

Exhibit 7-1: Employee and Sales Information for Potentially Impacted Companies Included in the 

### 687 Analysis 

### 688

Statistical Measure Number of Employees Annual Sales ($)

Minimum Value 450 1,400,000 Maximum Value 74,700 56,311,383,800 Median Value 7,692 9,421,000,000 Mean Value 18,698 15,947,979,767 Standard Deviation 28, 082 21,281,072,246 Source: Dun & Bradstreet, 2010. 

### 689
7.2 Select a Relevant Sm all Business Definition 690

The RFA relies on the definition of “small business” f ound in the Small Business Act, which authorizes 

### 691 the Small Business Administration to develop de finitions for “small business” based upon a sales or 

### 692 employment level. The Small Business Administrati on provides a table of size standards in the Small 

### 693 Business Size Regulations, 13 CFR 121.201. These de finitions for small business are provided for the 

### 694 six-digit NAICS codes, based on employment thresholds or annual sales volume (U.S. SBA, 2008). 

### 695 Throughout the remainder of this report, this de finition is referred to as the “SBA definition.” 

### 696
For the NAICS codes corresponding with the global parent ultimate companies identified in section 7.2 

### 697 (Dun & Bradstreet, 2010) these size standards range from 100 employees to 1,000 employees, or 

### 698 $7,000,000 in revenue (U.S. SBA, 2008). 

### 699
For this analysis, EPA also considered an alterna tive definition based upon the TSCA definition for the 

### 700 sensitivity analysis. Under this definition, a manuf acturer or importer is defined as small, as under 40 

### 701 CFR 704.3, if it meets either of the following criteria: 

### 702
(1) Total annual sales of the company, combined w ith those of any parent company, are below 

### 703 $40 million and annual production volum e or importation volume at the facility is less than or equal 

### 704 to 100,000 lbs.; or 

### 705

8 Dun and Bradstreet is a New York-based company th at provides business information through a global commercial database. It assigns DUNS numbers to iden tify businesses around the world. These numbers are required for many U.S. federal government transactions and therefore are widely used and assigned. DUNS numbers are also frequently used in corporate research. Database entries provide lega l and trade names, physical and mailing addresses, geographical descriptions, product and industry descriptors, sales and number of employees for three years and associated growth rates, as well as up to 40 vital statistics about each organization. While the reporting year varied by co mpany, company sales and employment data were primarily retrieved from the database in April 2010.*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 7-3 (2) Total annual sales of the company, combined w ith those of any parent company, are below 

### 706 $4 million



### . 707 7.3 Identifying Small Businesses 708
Parent company sales data, collected as explained in s ection 7.1, were used to identify companies that 

### 709 qualified for “small business” status, per both the em ployment-based and the sales-based definitions 

### 710 specified above. Based on the employment criteria, one company was identified as small under the TSCA 

### 711 definitions. No companies were consid ered small under the SBA definition. 

### 712
7.4 Cost-to-Sales Ratio 713
As explained in Chapter 4, the industry compliance costs (the sum of laboratory costs, method 

### 714 development costs, administration costs, and export notification costs) were computed under low- and 

### 715 high-cost scenarios. For this small entity analysis , the costs were annualized over a 15-year time horizon 

### 716 using a 7 percent discount rate. The total annuali zed compliance costs for decaBDE was approximately 

### 717 $264,582 under the low-cost scenario and appr oximately $360,218 under the high-cost scenario. 9 To 

### 718 determine the size of the adverse impact of the rule , these compliance costs were then compared to each 

### 719 company’s total sales. 

### 720
The cost-to-sales ratios under either scenario are gr eater than 3 percent for the one small business 

### 721 identified (under the TSCA definition of small busin ess). With the company’s approximate annual sales 

### 722 of $1.40 million, the cost-to-sales ratios are 18.9 percen t and 25.7 percent, under the low- and high-cost 

### 723 scenarios, respectively. However, the actual costs borne by this small business may not be so extreme, for 

### 724 the following reasons: 

### 725

• The costs would only be incurred if the compan y manufactures, imports, or processes c-decaBDE 

### 726 after December 31, 2012 (December 31, 2013 fo r military and transportation uses of c-deca 

### 727 BDE); given that most companies have agreed to phase out these activities before that date, it 

### 728 seems unlikely that the proposed rule will apply. 

### 729

• It is unlikely that, if manufacture, import, or processing continues, one company would bear the 

### 730 entire cost of testing for the mixture. In other economic analyses for Section 4 test rules (see for 

### 731 example, U.S. EPA, 2009d), EPA assumes that the cost of performing mixture-specific testing is 

### 732 borne by companies in proportion to their production and/or importation volume, and each 

### 733 company’s share of compliance costs are calcula ted. However, because production volumes are 

### 734 not available for c-decaBDE manufacturers, we were not able to estimate the proportion of the 

### 735 small business’ costs. Given the relatively lo w sales volume, we would assume that the company 

### 736 manufactures a relatively low percentage of the mi xture. In fact, the small business accounts for 

### 737 approximately 1.46 x 10 -4 of the total sales for all the identified manufacturers/importers. 

### 738

• Given the company’s small size, it may be that the manufacture of the mixture is for research and 

### 739 development purposes only, in which case the comp any would be in Tier 2 and would not be 

### 740 required to respond initially to the final rule, but would be responsible for cost reimbursement to 

### 741 the company that actually does the testing.. 

### 742

9 Note that these figures include only the industry compliance cost and not the cost to the government.*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 8-1 

## Chapter 8 – Benefits 743
The proposed rule targets c-pentaBDE, c-octaBDE, and c-decaBDE, for which certain toxicological 

### 744 (hazard) and chemical fate information is unavailabl e and requires testing of these chemicals to provide 

### 745 information on their effects on human health and th e environment. The benefits of the testing 

### 746 requirement will result from the development of hazard information on these mixtures and the use of this 

### 747 information by the public, industry, and government. The information developed because of the proposed 

### 748 rule will be made publicly available and is expected to yield benefits resulting from the direct use of the 

### 749 information (use value). In addition, there may be non-use benefits because of the value that society 

### 750 places on just knowing that the test data exist, regard less of whether they everuse the information (non

### 751 use value). This chapter discusses the use value of the proposed rule qualitatively. The non-use values 

### 752 are only discussed briefly; due to the scientific natu re of the information that would result from the 

### 753 proposed rule, if finalized, non-use benefits are not likely to comprise a large percentage of the total 

### 754 benefits. 

### 755

8.1 Use Values 756
The proposed rule will increase the publicly available data about a mixture(s)’s risks and consequently is 

### 757 likely to result in (a) a reduction in the costs of risk-based decisions about the mixture(s), ,and (b) an 

### 758 improvement in the expected outcome of the decisions (U.S. EPA, 2006). 

### 759
Reduced cost of risk-based decision making. By making new information about toxic mixtures available 

### 760 to the public (including EPA and other government agencies), this proposed rule can serve to replace 

### 761 other information-gathering, management, and dissemin ation activities related to the regulated mixtures. 

### 762 Once the data are publicly available, information users and decision makers will avoid the time and 

### 763 resource costs required to individually perform these ac tivities. In effect, the proposed rule increases the 

### 764 efficiency (and strength) of the decision-making process. 

### 765
Improved outcome of decisions. Information-based policies contribute to better decisions by redirecting 

### 766 resources toward their most highly valued uses. W ith incomplete information regarding toxicchemicals 

### 767 and mixtures, public and private decision makers are not able to adequately assess the benefits and costs 

### 768 of actions that involve these chemicals and mixtures. For example, EPA decisions regarding whether, 

### 769 when, and how to target chemicals and mixtures for further risk assessment can be misdirected if basic 

### 770 risk-screening information is unavailabl e or inadequate. With more info rmation, EPA can better direct its 

### 771 limited resources toward high-priority risks. It is al so likely that once detailed toxicological and chemical 

### 772 fate information is available on these mixtures, pr oducers and users of these mixtures will adjust the 

### 773 volume of production and use to minimize adverse effect s. Improved information can therefore help lead 

### 774 to more socially optimal reductions in risks to humans and the environment. 

### 775
This chapter discusses the use benefits of the test rule qualitatively. Quantification of the benefits of the 

### 776 proposed rule would require more specific informatio n about each user’s use patterns and preferences, 

### 777 and the changes in these that would result from the additional information made available under the 

### 778 proposed rule. These data are not readily available; to collect such data would be cost-prohibitive. For 

### 779 example, one approach would be to conduct a national willingness-to-p ay (WTP) survey of the general 

### 780 public to determine the value that the public places on the availability of the information resulting from 

### 781 the test rule. However, such a survey (or one for similar information) has not been conducted. 

### 782
Furthermore, the exact nature and scope of the bene fits resulting from this proposed rule would depend on 

### 783 the outcome of the tests that would be performed; to th e extent that the test results did indicate a potential 

### 784 health or environmental risk from a chemical, the bene fits related to understandi ng and avoiding this risk 

### 785 would be greater. 

### 786*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 8-2 8.2 Non-Use Values 787
The value that society places on the information resu lting from this proposed rule may go beyond what 

### 788 people experience through the use of the data. Specifically, members of society may experience a “non

### 789 use” value associated with just knowin g that the test data exist regard less of whether they ever use the 

### 790 information. Non-use values have also been re ferred to as “existence” or “intrinsic” values and 

### 791 encompass a variety of motivations. For example, i ndividuals may place a value on the availability of the 

### 792 test data for others to use in the current time pe riod (vicarious consumption), or place value on preserving 

### 793 or ensuring the availability of the data (or the decisi ons or policies that result from the information) for 

### 794 the benefit of family and others in the future (be quest value). However, a quantitative discussion of these 

### 795 benefits is not provided here, as m easuring non-use values can be extremely difficult for several reasons. 

### 796 First, there is no market equivalent to accurately reflect these values. Second, non-use values are not 

### 797 associated with easily observable behaviors. Third, non-use values may be held by both users and non

### 798 users of a resource, and non-users may be less familiar with particular services provided by the resources 

### 799 in question. 

### 800

8.3 Potential Users of Information Generated by the Proposed Rule 801
As discussed above, a wide range of groups are e xpected to benefit from the availability of this 

### 802 information, including consumers, workers, scientists, industry representatives, government 

### 803 organizations, public health officials, the medical co mmunity, and foreign interests. By incorporating 

### 804 new hazard data on these mixtures into their deci sion-making processes, users will achieve benefits 

### 805 resulting from improved decision-making pro cesses, and ultimately risk reduction. 

### 806
The data would be made available to the public, an d may be incorporated into numerous databases and 

### 807 sources that contain toxicological information. A few examples of these sources include the Hazardous 

### 808 Substances Data Bank (HSDB), Registry of Toxic Effects of Chemical Substances (RTECS), Integrated 

### 809 Risk Information System (IRIS), the Toxic Substances Control Act Test Submissions (TSCATS), and 

### 810 Toxicology Information Online (TOXLINE). These databases provide a variety of toxicological 

### 811 information in the form of study abstracts, inform ation on effects, and more comprehensive information 

### 812 combining hazard and exposure information to provide risk information (e.g., IRIS). The U.S. National 

### 813 Library of Medicine (NLM) houses TOXLINE, a bibli ographic database that includes the toxicological 

### 814 effects of drugs and other chemicals. Users can access TOXLINE through the Internet. NLM estimates 

### 815 that a single month’s access to the database (February 2009) consisted of 72,552 searches via the Internet 

### 816 (U.S. NLM, 2009b). 

### 817
The distribution of TSCATS user accounts purchased through a past vendor, Oxford Molecular Group 

### 818 (OMG), 10 indicates that the users of toxicological data are diverse. In 1998, a representative of OMG 

### 819 suggested that 6 percent of account holders were government, 38 percent were the private sector, 4 

### 820 percent were academic organizations, 40 percent were foreign interests, and 11 percent were 

### 821 nonsubscribers (estimates may not add due to rounding) (CIS, 1998). The current vendor, National 

### 822 Information Services Corp. (NISC), does not track this information. However, it does track the 

### 823 subscribers and non-subscribers to whom NISC s upplies copies of toxicological studies cited in the 

### 824 TSCATS database. NISC supplies approximately 38 pe rcent of the copies to U.S. industrial entities, 27 

### 825 percent to U.S. non-industrial entities, 19 percent to non- U.S. governments, 7 percent to U.S. consultants, 

### 826 and 11 percent to internationa l consultants (CIS, 2003). 

### 827
Clearly, there is a wide variety of users of toxicological data. It is expected that there will be similar uses 

### 828 for the data generated as a result of this proposed test rule, and that some of these data may be 

### 829 incorporated into these databases. Users of, and the be nefits they derive from, toxicological information 

### 830 are discussed in more detail below. 

### 831

10 Oxford Molecular Group’s Chemical Information System, which housed TSCATS, was acqui red by National Information Services Corp. (NISC) in 2000.*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 8-3 8.3.1 Consumers/Buyers 

### 832
Economic theory maintains that competitive markets provide goods and services to the extent that the 

### 833 marginal benefit of the good or service to consumers is more than or equal to the marginal cost of 

### 834 production. Underlying this conclusion are two assu mptions: that both consumers and producers have 

### 835 perfect information, and that the cost of conducting a market transaction is negligible. The need for 

### 836 chemical and mixture testing information stems from the fact that, in some cases, neither producers nor 

### 837 consumers have perfect information regarding th e hazards associated with certain chemicals and 

### 838 mixtures. If basic information on chemical and mi xture hazards were known, consumers might alter the 

### 839 amount they would be willing to pay for the chemical or mixture. Therefore, in the absence of complete 

### 840 information, the private market may be misallocati ng resources to the production of the chemical or 

### 841 mixture. 

### 842
Thus, one advantage of mandatory testing and dissemina tion of test results is that consumers can make 

### 843 better choices about products containing chemicals or mixtures if they are better aware of the potential 

### 844 hazards. Consumers can respond to additional inform ation by changing their purchasing decisions (i.e., 

### 845 increasing or decreasing consumption, as appropriate); by reducing the amount they are willing to pay for 

### 846 the product; or by changing the way they handle, store, use, or dispose of the product. This may move the 

### 847 market toward a more efficient allocation of resources. Thus, the role of toxicity information in resolving 

### 848 uncertainties can be particularly valuable. 

### 849

8.3.2 Workers 

### 850
Hazard information can play a role in guiding workers’ employment decisions and work practices. If 

### 851 workers are aware of workplace hazards (e.g., the haza rd associated with chemicals or mixtures to which 

### 852 they are exposed), they may choose not to work at a pa rticular facility. If they decide to work there, 

### 853 informed workers can make better decisions about the precautions, if any, they should take to reduce their 

### 854 exposure to that chemical or mixture. These precautions may include taking proper care while handling 

### 855 and using certain chemicals and mixtures or wearing protective clothing. Alternatively, a worker may 

### 856 seek a wage premium to compensate for increased workplace risk. Viscusi and O’Connor (1984) 

### 857 conclude that the value of new information to th e worker can be measured by the increase in the wage 

### 858 premium (differential) as a greater understanding of wo rkplace risk is gained. Thus, workers can seek a 

### 859 risk premium or take averting actions to protect them selves if information is available about the health 

### 860 effects of the chemicals and mixtures they come into contact with at work. EPA expects the potential 

### 861 benefits to workers to be large for mixtures include d in the proposed rule since they are manufactured 

### 862 and processed in large volumes. 

### 863

8.3.3 Science and Health Communities 

### 864
Chemical and mixture toxicity information is useful to a variety of scientific and health communities. For 

### 865 example, medical professionals are concerned about the health of patients exposed to chemicals and 

### 866 mixtures, poison control centers distribute information on toxicity and treatment associated with 

### 867 poisoning, and scientists use toxicity information to characterize the effects of chemicals and mixtures 

### 868 and to assess risks of chemical or mixture exposure. The literature includes specific examples where 

### 869 toxicity data have been summarized and interprete d: Kapp et al. (1996) summarize the results of TSCA 

### 870 Section 4 test rule studies for isopropanol, Glickman et al. (1995) report the results of aquatic toxicity 

### 871 studies for cumene (isopropyl benzene), and Bogdanf fy et al. (1990) present results of subchronic 

### 872 inhalation tests for vinyl fluoride. 

### 873
In addition, several published studies also rely on information from the RTECS database. RTECS is a 

### 874 database of toxicological information compiled, main tained, and updated by the National Institute of 

### 875 Occupational Safety and Health (NIOSH). Nume rous vendors currently offer access to the database. 

### 876 RTECS currently covers more than 152,000 chem icals and provides data on mutagenic effects, 

### 877 reproductive effects, tumorgenic effects, and acute toxicity effects, for example (NIOSH, 2005). 

### 878 Examples of published scientific literature using this pa rticular database include Ruder et al. (1990) and 

### 879*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 8-4 Jones et al. (1998). The former study uses toxicity data available from the RTECS database to compute 

### 880 national estimates of occupational exposure to animal bladder tumo rigens, while the latter study uses 

### 881 toxicological data from the RTECs database to compute relative potency factors for chemical compounds 

### 882 associated with increased risk of atherosclerosis to humans. 

### 883
The test results generated by the proposed rule are al so expected to be used by scientists to increase the 

### 884 understanding of the health and environmental effect s of these mixtures to which people may be exposed 

### 885 in the places where they live, work, study, and play. 

### 886

8.3.4 The General Public 

### 887
In addition to its impact on consumers of chemicals or products, the production or use of a chemical or 

### 888 mixture may impose external costs on society in the form of increased health risks to the general public 

### 889 and increased risks to the physical environment. If these external costs are known, individuals can take 

### 890 averting actions to protect themselves. However, if the adverse impacts are unknown to the public, 

### 891 inefficiencies in the production and consumpti on of the chemical or mixture will persist. 

### 892
The proposed test rule is valuable because the hea lth and environmental data it would generate would 

### 893 provide a better understanding of the external costs involved in the production and use of the mixtures. 

### 894 Because the information will be made publicly ava ilable, members of the general public will then be 

### 895 empowered to help address the market failure thr ough individual actions they may take to protect 

### 896 themselves from exposure to the mixtures (averting be haviors) or activities designed to pressure firms or 

### 897 governments to reduce the extern alities associated with production (e.g., lobbying activities). 

### 898
One can expect that if reliable test data are dissemi nated to the public, community and public, interest 

### 899 groups can initiate a dialogue with the manufacturers of hazardous chemicals and mixtures and encourage 

### 900 them to improve their safety measures and assess their environmental management plans. 

### 901

8.3.5 Firms and their Shareholders 

### 902
As noted earlier, industry is an important user of chemical hazard information. Toxicological, human 

### 903 health, and chemical fate information is used to better develop the handling and safety procedures for 

### 904 chemicals and mixtures, develop emergency prepare dness plans, follow principles of the Responsible 

### 905 Care® Initiative of the American Chemistry Counc il (ACC), and competitively participate in today’s 

### 906 chemical market. Toxicity data help to screen th e chemicals and mixtures for which such precautions are 

### 907 most important. 

### 908
The ACC’s Responsible Care® Initiative incl udes as guiding principles the following: 

### 909

• “To design and develop products that can be manufactu red, transported, used and disposed of or 

### 910 recycled safely”; 

### 911

• “To work with customers, carriers, suppliers, distri butors, and contractors to foster the safe and secure 

### 912 use, transport, and disposal of chemicals and prov ide hazard and risk information that can be accessed 

### 913 and applied in their ope rations and products;” 

### 914

• “To promote pollution prevention, minimization of waste and conservation of energy and other 

### 915 critical resources at every stage of the life cycle of our products”; and 

### 916

• “To support education and research on the health, safet y, and environmental effects of our products 

### 917 and processes” (ACC, 2010). 

### 918
Consideration of these principles supports the need fo r toxicological information on chemical products 

### 919 used and manufactured by this industry. The Ch emical Industry Institute of Toxicology (CIIT), a 

### 920 research institute sponsored by ACC, government, and industry, notes that chemical research has helped 

### 921 companies ensure safety in manufacturing, use, and disposal of chemicals (CIIT, 1998 and CIIT, 2001). 

### 922 Thus, companies are more likely to avoid potential liability concerns from inappropriate handling of 

### 923*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 8-5 chemicals. Similar advantages are expected from th e information developed as a result of the proposed 

### 924 rule. 

### 925
Corporate shareholders also benefit from the data de veloped in the rule. Basic microeconomic theory 

### 926 assumes that the primary objective of any firm, whether privately or publicly held, is to maximize profits. 

### 927 When a firm is incorporated and its shares are traded on the stock market, maximizing a firm’s profits is 

### 928 analogous to maximizing shareholder value. There are a number of ways in which the provision of 

### 929 information regarding the production pr actices and output of a firm can a ffect shareholder value. First, 

### 930 production processes and output that result in adverse consequences to human health and the environment 

### 931 may eventually result in substantia l liabilities to the firm. Therefore, any new information regarding 

### 932 potential threats to human health or the environm ent may cause investors to re-evaluate the potential 

### 933 future liabilities (and hence profitability) of a firm. Second, when an investor who prefers providing 

### 934 capital to environmentally benign companies discovers that a firm’s use of toxics is inconsistent with his 

### 935 or her preferences, he or she may move investment funds toward other, more environmentally friendly 

### 936 firms. 

### 937
There is a growing body of empirical literature ev aluating the effects of environmental information 

### 938 disclosures on firms and their shareholders. In an e ffort to estimate the economic cost of hazardous waste 

### 939 mismanagement, Muoghalu and Roge rs (1992) modeled the effect of Superfund lawsuit announcements 

### 940 on firms’ stock values. The authors estimated th at stock values dropped an average of $30.7 million 

### 941 when news of a new Superfund lawsuit was made pub lic. Blacconiere and Patten (1994) examined the 

### 942 effect of the 1984 Union Carbide chemical leak in Bhopal, India, on other chemical firms’ stock prices. 

### 943 They found that firms in which chemical operations made up a larger portion of total revenue experienced 

### 944 greater losses in stock value immediately following the leak. 

### 945
Thus, some evidence suggests that investors respond to new information regarding a firm’s potential 

### 946 environmental liabilities by reassessing the value of the fi rm’s stock. If test results are disseminated to 

### 947 the public, shareholders can better consider the im portance placed on the firm’s manufacture or use of 

### 948 particular chemicals or mixtures and may encourage the firm to address shareholder concerns regarding 

### 949 chemical production and use to avoid potential losses in the capital markets. It is clear that, while 

### 950 beneficial to shareholders, this information may also cost the company if share values drop. These costs 

### 951 would offset some of the benefits to shareholders. 

### 952

8.3.6 Government 

### 953
The information developed in response to the propo sed rule will benefit society by reducing costs and 

### 954 improving the quality of government decision and policy making. EPA itself is a user of TSCA Section 4 

### 955 test results in three primary ways. First, EPA can use the chemical-specific or mixture-specific 

### 956 information acquired through a test rule to help iden tify hazards of concern and to screen and prioritize 

### 957 regulatory activities, including identifying areas where regulatory intervention is not required. Second, 

### 958 EPA can serve its “clients” by providing these test re sults to other agencies within the federal government 

### 959 as well as to public agencies at other levels of gove rnment. Finally, EPA can use information-reporting 

### 960 rules as an alternative to other forms of regula tion. Each of these uses is discussed below. 

### 961
Support EPA Regulatory Activities . When developing risk management strategies, EPA must decide 

### 962 whether or not to regulate the use of a chemical substa nce or mixture to protect society. Basic toxicity 

### 963 data are not available for many chemicals and mixt ures, but exposure controls have no environmental 

### 964 value if these chemicals or mixtures are not a concern. The lack of data on health and environmental 

### 965 effects can affect sound decision making by government and others (Wehmeier, 2001). Regulating most 

### 966 certainly involves costs to both EPA (e.g., resources required to develop, pr omulgate, and enforce a 

### 967 regulation) and to society at large (e.g., foregone benef its derived from the use of the chemical or mixture, 

### 968 resources diverted from other uses). Although not regulating avoids these costs, society will face a 

### 969 welfare loss if the chemical or mixture turns out to harm human health and the environment. 

### 970*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 9-6 Taylor et al. (1993) considered the value of test in formation in supporting decisions about the control of 

### 971 chemicals whose cancer potency is untested or unkno wn. While not specifically addressing the value of 

### 972 the basic toxicity testing data required by this proposed rule, their results suggest there is value to (cancer) 

### 973 testing information, particularly at intermediate leve ls of anticipated human exposure to a chemical. The 

### 974 authors contend that information (from cancer testing) may be less valuable where very high levels of 

### 975 exposure are expected because no test can perfec tly distinguish carcinogens from non-carcinogens. 

### 976
In the EPA context, the probability that a chemical or mixture poses a risk depends on the chemical’s or 

### 977 mixture’s toxicological properties, exposure pathways , dose-response relationships, and other factors. 

### 978 Testing rules help resolve some of these uncertainti es. Thus, test information can help EPA decision 

### 979 makers avoid over-regulating a relatively safe chemical or mixture and under-regulating a risky chemical 

### 980 or mixture. 

### 981
Provide Information to Ot her Government Agencies . Under TSCA Section 4, EPA has the authority to 

### 982 require firms to conduct tests of specific chemicals and mixtures to determine the potential risk posed by 

### 983 these substances. However, other governmental ag encies, such as the Food and Drug Administration, 

### 984 Consumer Product Safety Commission, NIOSH, and Occupational Safety and Health Administration, 

### 985 share regulatory authority over chemical substances, mixtures, or products containing them, or, in the case 

### 986 of NIOSH, compile summaries of available informat ion and recommend exposure limits. Therefore, EPA 

### 987 serves as a conduit for chemical hazard informati on between the chemical producers and these other 

### 988 agencies. In addition to providing test results on chemical and mixtures to other federal agencies, EPA 

### 989 may make this information available to other interested parties such as state, local, and tribal government 

### 990 agencies, which can use the data to inform their own decision making. 

### 991
Information Provision as an Alt ernative to Traditional Regulation . Publicly disclosing TSCA Section 4 

### 992 chemical test results also provides an alternative to traditional regulation. As described above, the 

### 993 provision of chemical pollution and hazard informa tion can be used to, among other things, empower 

### 994 individuals to take actions that they deem appropria te in response to chemical risks. In addition to 

### 995 fulfilling democratic notions of “right-to-know” inform ation, regulations provide a low-cost avenue for 

### 996 pollution and hazard control when regulatory resources are scarce due to the large number of substances 

### 997 to be controlled (Tietenberg, 1998). 

### 998
8.3.7 Foreign Interests 

### 999
The toxicity data developed as a result of the test rule are also expected to save other countries the 

### 1000 expense of collecting and interpreting toxicologi cal data. At the United Nations Conference on 

### 1001 Environment and Development in 1992, delegates adopted Agenda 21 of Chapter 19, which discusses 

### 1002 chemical safety and includes program areas. One program area is international assessments of chemical 

### 1003 risks, part of which includes the assessment of chem ical hazards. The International Forum on Chemical 

### 1004 Safety (IFCS) was formed in 1994 and has develope d priorities for action in the implementation of 

### 1005 Agenda 21. These include recognition of the activiti es sponsored by OECD in the area of chemical 

### 1006 management and encouragement of the use of OECD as a means to carry out activities on chemical safety 

### 1007 (IFCS, 1998). Other countries will benefit from the development of these data and can use the data 

### 1008 without having to independently develop the informati on. Such information exchange will result in cost 

### 1009 savings to other countries and will enable their govern ments to more effectively manage chemicals and 

### 1010 mixtures for safety as pledged under Agenda 21. 

### 1011 

## Chapter 9 – Other Impact Analyses 1012
Several statutes and executive orders (EOs) pertain to the proposed test rule. This chapter presents 

### 1013 statements discussing unfunded mandates, environmen tal justice, children’s health, and paperwork 

### 1014 burden, among others. 

### 1015*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 9-2 9.1 Paperwork Reduction Act 1016
The Paperwork Reduction Act mandate s that federal agencies estimate the recordkeeping and reporting 

### 1017 burden of a proposed rule. In this context, the term “burden” is interpreted as the total time, effort, or 

### 1018 financial resources expended by people to generate, ma intain, retain, disclose, or provide information to 

### 1019 or for a federal agency. This includes the time needed by regulated entities to review instructions and to 

### 1020 develop, acquire, install, and use technology and systems to collect, validate, verify, and disclose 

### 1021 information. Time taken to adjust existing ways to comply with any previously applicable instructions 

### 1022 and requirements and to train personnel to respond to the information collection task is also included. In 

### 1023 this section, burden hours for both the industr y respondents and the government are estimated. 

### 1024
9.1.1 Industry Burden 

### 1025
In this report, total industry burden hours represen t the sum of time spent on reporting and on other 

### 1026 administrative activities. Industry respondents w ill spend time on reporting activities associated with 

### 1027 TSCA Section 4 test rules: preparing letters of intent and study plans, preparing test results for submission 

### 1028 to EPA, recording test results, preparing laborator y reviews, preparing corporate reviews, conducting 

### 1029 associated clerical work for final report preparation, conducting recordkeeping activities, and applying for 

### 1030 exemptions. Under this proposed rule, respondents are also asked to submit robust summaries on a 

### 1031 voluntary basis. In addition to the reporting burd en, respondents will spend a dditional time on other, non

### 1032 reporting administrative activities such soliciting labora tory bids, selecting laboratories, monitoring tests 

### 1033 under progress, developing cost-sharing agreements, and auditing the laboratories for compliance with 

### 1034 EPA’s Good Laboratory Practice (GLP) standards. Th e procedure for estimating the total industry burden 

### 1035 is described below. 

### 1036
Estimate the Reporting Burden. As shown in Section 4.2.3 of this report, EPA estimates that the 

### 1037 regulated community will submit three letters of inte nt and study plans, resulting in 34 final reports. 

### 1038 Additionally, it is estimated that 10 percent of fina l test reports will be accompanied by a robust summary 

### 1039 of results. EPA estimated that it takes a respondent 40 hours to prepare a letter of intent and study plan, 

### 1040 73 hours to write a final report for a short-term study, 12 hours to prepare a robust summary, and 2 hours 

### 1041 to prepare an exemption application. The unit la bor hours are derived from the previous information 

### 1042 collection requests and are believed to reflect the burde n that will be incurred for the proposed rule (U.S. 

### 1043 EPA, 2002b). The reporting burden estimates for this rule are detailed in Exhibit 9-1. The total reporting 

### 1044 burden generated by the rule is estimat ed to be approximately 2,717 hours. 

### 1045
Exhibit 9-1: Reporting Burden Estimate for the Proposed Rule 

### 1046
Item Hours per Item Total Items Total Hours Letter of Intent and Study Plans 40 3 120 Final Reports 73 35 2,555 Robust Summaries 12 3.5 42 TOTAL 2,717 Source: U.S. EPA, 2002b. 

### 1047

Estimate the Other Administrative Burden. Respondents also spend time on other administrative 

### 1048 activities including soliciting laboratory bids, selec ting laboratories, monitoring tests under progress, 

### 1049 developing cost-sharing agreemen ts, and auditing the laboratories for compliance with EPA’s Good 

### 1050 Laboratory Practice (GLP) standards. EPA has calcu lated the costs and burdens of these activities as 25 

### 1051 percent of the total laboratory testing costs. B ased on this calculation, other administrative costs 

### 1052 associated with laboratory testing are estimated to amount to $1.89 million and $2.97 million under the 

### 1053 low- and high-cost scenarios, respectively. These co sts are translated into burden estimates using an 

### 1054 average labor cost of $55.01 per hour, which is based on a labor mix that is 20 percent managerial, 60 

### 1055 percent technical, and 20 percent clerical. The es timated other administrative burden based on this 

### 1056 approach is 34,357 (54,000) hours unde r the low (high)-cost assumption. 

### 1057*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 9-3 Estimate the Total Industry Burden. The total industry burden is the sum of the total administrative 

### 1058 burden and the export notification burden. Total i ndustry burden estimates are summarized in Exhibit 

### 1059 9-2. The total industry burden is estimated to equal 37,074 hours (56,717 hours) in the low (high)-cost 

### 1060 scenario. The average burden per chemical is estimated to be 12,358 (18,906) hours in the low (high)- 

### 1061 cost scenario. 11 

### 1062
Exhibit 9-2: Total Industry Burden Hour Estimate for the Proposed Rule 

### 1063

Activity Low-Cost Scenario (Hours) High-Cost Scenario (Hours) Reporting Activities 2,717 2,717 Other Administrative Activities 34,357 54,000 Total Industry Burden 37,074 56,717 Average Burden Per Chemical (3 chemicals) 12,358 18,906 

### 1064

9.1.2 Government Burden 

### 1065
The government will also spend time processing, review ing, and analyzing the information that will be 

### 1066 collected under the proposed test rule. As explained in Section 5.2 of Chapter 5, this work is assumed to 

### 1067 be performed by a GS-13, Step 1, FTE employee. 

### 1068

It is further assumed that three letters of intent and study plans, 35 final reports, and 3.5 robust 

### 1069 summaries, will be filed in response to this rule . The estimated unit government burden for processing 

### 1070 letters of intent and study plans (3 hours), final reports (5 hours), and robust summaries and exemption 

### 1071 applications (1 hour each) is derived from the prev ious information collection requests. Exhibit 9-3 

### 1072 presents the estimated government burden hours b ased on these assumptions. The total government 

### 1073 burden is estimated to equal 187.5 hours. 

### 1074
Exhibit 9-3: Estimated Government Burden for the Proposed Test Rule 

### 1075
Item Hours per Item Total Items Total Hours Letter of Intent and Study Plans 3 3 9 Final Reports 5 35 175 Robust Summaries 1 3.5 3.5 TOTAL 187.5 

### 1076

9.2 Unfunded Mandates Reform Act 1077

Pursuant to Title II of the Unfunded Mandates Re form Act of 1995 (UMRA) , Public Law 104–4, EPA 

### 1078 has determined that the proposed rule does not cont ain a Federal mandate that may result in expenditures 

### 1079 of $100 million or more for State, local, and tribal gove rnments, in the aggregate, or the private sector in 

### 1080 any 1 year. It is estimated that the total aggregate costs of this proposed rule to the private sector would 

### 1081 be $15.1 million (high-cost scenario). The total annua lized costs of this proposed rule to the private 

### 1082 sector are estimated to be $5.34 and $5.75 million us ing a 3 percent and 7 percent discount rate over 3 

### 1083 years (high-cost scenario). In addition, since EPA does not have any information to indicate that any 

### 1084 State, local, or tribal government manufactures or pro cesses the mixtures covered by this action such that 

### 1085 the final rule would apply directly to State, local, or tribal governments, EPA has determined that this 

### 1086 proposed rule would not significantly or uniquely affect small governments. Accordingly, this proposed 

### 1087 rule is not subject to the requirements of sections 202, 203, 204, and 205 of UMRA. 

### 1088

9.3 Executive Order 13132 – Federalism 1089

Under Executive Order 13132, “Federalism” (64 FR 43255, August 10, 1999), EPA has determined that 

### 1090 the proposed rule does not have “federalism implic ations” because it will not have substantial direct 

### 1091

11 The per-panel cost assumes that the export notification burden is distributed evenly across all panels.*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 9-4 effects on the states, on the relationship between the national government and the states, or on the 

### 1092 distribution of power and responsibilities among the va rious levels of government, as specified in the 

### 1093 Executive Order. The proposed ru le establishes testing and recordk eeping requirements that apply to 

### 1094 manufacturers (including importers) and processors of certain chemicals. Because EPA has no 

### 1095 information to indicate that any state or local gove rnment manufactures or processes the mixtures covered 

### 1096 by this action, the proposed rule does not apply dir ectly to states and localities and will not affect state 

### 1097 and local governments. Thus, EO 13132 does not apply to the proposed rule. 

### 1098
9.4 Executive Order 13175 – Consultation an d Coordination with Indian Tribal 1099 Governments 1100

Under Executive Order 13175, “Consultation and C oordination with Indian Tribal Governments” (65 FR 

### 1101 67249, November 9, 2000), EPA has determined that th e proposed rule does not have tribal implications 

### 1102 because it will not have any effect on tribal gove rnments, on the relationship between the Federal 

### 1103 Government and the Indian tribes, or on the distribut ion of power and responsibilities between the Federal 

### 1104 Government and Indian tribes, as specified in the Ex ecutive Order. As indicated previously, EPA has no 

### 1105 information to indicate that any tribal government manufactures or processes the mixtures covered by this 

### 1106 action. Thus, Executive Order 13175 does not apply to this proposed rule. 

### 1107
9.5 Executive Order 13045 - Children’s Health 1108
This proposed rule is not subject to Executive Order 13045, “Protection of Children from Environmental 

### 1109 Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it does not establish an 

### 1110 environmental standard intended to mitigate health or safety risks, will not have an annual effect on the 

### 1111 economy of $100 million or more, nor does it otherwise have a disproportionate effect on children. The 

### 1112 proposed test rule would establish testing and recordkeeping requirements that apply to manufacturers 

### 1113 (including importers) and processors of certain mixt ures , and would result in the development of data 

### 1114 about those mixtures that can subsequently be used to assist the Agency and others in determining 

### 1115 whether the mixtures in the proposed test rule present potential risks, allowing the Agency and others to 

### 1116 take appropriate action to investigate and mitigate those risks. 

### 1117 9.6 Executive Order 13211 – Energy Supply, Distribution, or Use 1118
This proposed rule is not subject to Executive Order 13211, “Actions Concerning Regulations That 

### 1119 Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), because it is 

### 1120 unlikely to have any significant adverse effect on the supply, distribution, or use of energy. 

### 1121 9.7 National Technology Transfer and Advancement Act 1122
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 

### 1123 104–113 (15 U.S.C. 272 note), directs EPA to use voluntary consensus standards in its regulatory 

### 1124 activities unless to do so would be inconsistent with a pplicable law or otherwise impractical. Voluntary 

### 1125 consensus standards are technical standards (e.g ., materials specifications, test methods, sampling 

### 1126 procedures, and business practices) that are devel oped or adopted by voluntary consensus standards 

### 1127 bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency 

### 1128 decides not to use available and app licable voluntary consensus standards. 

### 1129
This proposed rule involves technical standards beca use it proposes to require the use of particular test 

### 1130 methods. If the Agency makes findings under TSCA sec tion 4(a), EPA is required by TSCA section 4(b) 

### 1131 to include specific standards or test methods that ar e to be used for the development of the data required 

### 1132 in the test rules issued under TSCA sect ion 4. For some of the testing that would be required by this rule, 

### 1133 EPA is proposing the use of voluntary consensus sta ndards issued by ASTM and ISO that evaluate the 

### 1134 same type of toxicity as the TSCA 799 test guidelines and OECD test guidelines, where applicable. 

### 1135 Copies of the ASTM standards referenced in th e proposed regulatory text at § 799.XXXX(h)(2)(i) 

### 1136 through (v) have been placed in the docket for this proposed rule. Interested parties may obtain copies of 

### 1137*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 10-5 the ASTM standards from the American Society for Testing and Materials, 100 Bar Harbor Dr., West 

### 1138 Conshohocken, PA 19428–2959. In the final rule, EPA intends to seek approval from the Director of the 

### 1139 Federal Register for the incorporation by reference of the A STM standards used in the final rule in 

### 1140 accordance with 5 U.S.C. 552(a) and 1 CFR part 51. 

### 1141
EPA is not aware of any potentially applicable vol untary consensus standards which evaluate prenatal 

### 1142 developmental toxicity, two-ge neration reproductive toxicity, developmental neurotoxicity, 

### 1143 immunotoxicity, or chronic toxicity/carcinogenicity , or screen for neurotoxicity which could be 

### 1144 considered in lieu of the TSCA 799 test guidelines, 40 CFR 799.9370, 799.9380, 799.9630, 799.9780, 

### 1145 799.9430, and 799.9620, resp ectively, upon which the test standards in the proposed rule are based. 

### 1146
EPA is also not aware of any potentially appli cable voluntary consensus standards which evaluate 

### 1147 anaerobic aquatic metabolism, biodegradation in anaer obic digester sludge, or photolytic degradation in 

### 1148 the indoor environment. As a result, EPA is proposing the use of three guidelines which are published in 

### 1149 full in the proposed regulatory text at § 799.XXXX (h)(3) (ii) through (iv). 

### 1150
The Agency invites comment on the potential use of vo luntary consensus standard s in the proposed test 

### 1151 rule, and, specifically, invites the public to identify potentially applicable con sensus standard(s) and to 

### 1152 explain why such standard(s) should be used here. 

### 1153

9.8 Executive Order 12898 – Environmental Justice 1154

Executive Order 12898, “Federal Actions to Address E nvironmental Justice in Minority Populations and 

### 1155 Low Income Populations” (59 FR 7629, February 16, 1994), requires each agency to address and identify 

### 1156 “disproportionally high and adverse human health or e nvironmental effects of its programs, policies, and 

### 1157 activities on minority and low-income populations.” 

### 1158
The proposed rule does not have an adverse impact on the environmental and health conditions in low

### 1159 income and minority communities that require special consideration by the Agency under EO 12898. The 

### 1160 Agency believes that the information collected under th is proposed rule, if finalized, will assist EPA and 

### 1161 others in determining the potential hazards and risks associated with the mixtures covered by the rule. 

### 1162 Although not directly impacting envi ronmental justice-related concerns, this information will enable the 

### 1163 Agency to better protect human health and the environment, including in low-income and minority 

### 1164 communities. 

### 1165 9.9 Executive Order 12630 – Property Rights 1166
EPA has complied with Executive Order 12630, “Government Actions and Interference with 

### 1167 Constitutionally Protected Property Rights (Takings)” (53 FR 8859, March 15, 1988), by examining the 

### 1168 takings implications of this proposed rule in accordance with the “Attorney General’s Supplemental 

### 1169 Guidelines for the Evaluation of Risk and Avoida nce of Unanticipated Takings” issued under the 

### 1170 Executive Order. 

### 1171

1172
9.10 Executive Order 12988- Civil Justice Reform 1173
In issuing the proposed rule, EPA has taken the necessary steps to eliminate drafting errors and 

### 1174 ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as 

### 1175 required by section 3 of Executive Order 12988, entitled Civil Justice Reform (61 FR 4729, February 7, 

### 1176 1996). 

### 1177


## Chapter 10 – References 1178
1179*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 10-2 71 FR 34015, Certain Polybrominated Diphenylethers; Significant New Use Rule , Federal Register, 

### 1180 Volume 71, June 13, 2006. Availa ble in docket EPA-HQ-OPPT-2004-0085 at 

### 1181

< http://www.regulations.gov >

. 

### 1182

Abt Associates Inc., 2009. Pentabromodiphe nyl Ether, Octabromodiphenyl Ether and 

### 1183 Decabromodiphenyl Ether Market Profile. October 20, 2009. 

### 1184

Abt Associates Inc., 2010a. Data Requirement Test Co st Estimates for Part 158 Spreadsheet Deliverable. 

### 1185 (Cost estimations performed for EPA’s Offi ce of Pesticide Programs). April 6, 2010. 

### 1186

Abt Associates Inc., 2010b. Test Co sts Deliverable for PBDEs Test Rule Proposal. (Cost estimations 

### 1187 performed for EPA’s OPPT). June 2, 1010. 

### 1188

ACC, 2010. American Chemistry Council, Responsible Care® Guiding Principles. 2010. 

### 1189 <http://www.americanchemistry.com/s_rct oolkit/sec.asp?CID=1787&DID=7265> (Accessed 7 

### 1190 May 2010). 

### 1191

Alvarez, Jacqueline. Draft Risk Management Ev aluation for Commercial Octabromodiphenyl Ether. 

### 1192 Stockholm Convention on Persistent Organic Pollutants. April, 2008. 

### 1193

Blacconiere and Pattern, 1994. Blacconiere, W. G., and D. M. Patten. “Environmental Disclosures, 

### 1194 Regulatory Costs, and Changes in Firm Value.” Journal of Accounting and Economics 1994 

### 1195 18:357-377. 

### 1196

Bogdanffy et al, 1990. Bogdanffy, M. S., C. R. Kee, D. P. Kelly, M. C. Carakostas, and G. P. Sykes. 

### 1197 “Subchronic Inhalation Study with Vinyl Fluorid e: Effects on Hepatic Cell Proliferation and 

### 1198 Urinary Fluorise Excretion.” Fundamental Applied Toxicology 1990 15(2): 394-406. 

### 1199

BLS, 2006. U.S. Bureau of Labor Statistics (BLS). Employer Costs for Employee Compensation: 

### 1200 Changes to NAICS and SOC, Table 2 . ECEC Occupational Comparability between SOC and 

### 1201 OCS. 2006. 

### 1202

BLS, 2010. U.S. Bureau of Labor Statistics (BLS). Employer Costs for Employee Compensation 

### 1203 Supplemental Tables Historical Data December 2006 – December 2009. Supplemental Table 2, 

### 1204 Private manufacturing industry workers, by occupational group. Wages and Salaries: 

### 1205 Management, Business and Financial Occupati ons; Professional and Rela ted Occupations; and 

### 1206 Office and Administrative Support Occupations . <http://www.bls.gov/ncs/ect/sp/ecsuphst.pdf>. 

### 1207 March 12, 2009. (Accessed 16 April, 2009). 

### 1208

CIIT, 1998. Chemical Industry Institute of Toxicology. Business Impact from CIIT. 1998 

### 1209 <www.ciit.org/busimp/busimp.html>. 

### 1210

CIIT,2001.Chemical Industry Institute of Toxicology . “2001 Annual Report. CIIT Centers for Health 

### 1211 Research. 25 Years of Excellence in Science.” 2001. 

### 1212 <http://www.ciit.org/about/pdfs/ 2001CIITAnnualReport.pdf>. 

### 1213

CIS, 1998. Chemical Information System., “Distr ibution of TSCATS users”., November 12, 1998. 

### 1214 Personal communication between Hoffman, M. A, CIS and Brooks Depro, Research Triangle 

### 1215 Institute. November 12, 1998. 

### 1216*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 10-3 CIS, 2003. Chemical Information System. Persona l communication between Earle, B, CIS and Jason 

### 1217 Sacks, Abt Associates. December 2, 2003. 

### 1218

Dawson, Ray. Albemarle. Personal communication w ith Brian Segal of Abt Associates via telephone. 

### 1219 August 17, 2009. 

### 1220

Directory of World Chemical Producers (DWCP). 2009. 

### 1221

Dun & Bradstreet. 2010. Dun’s Market Identifier Database [computer file]. New York, NY: Dialog 

### 1222 Corporation. 

### 1223

ERG, 2002. Market Analysis for the use of Pol ybrominated Diphenyl Etheres (PBDEs) as Flame 

### 1224 Retardants – Focusing on Pentabromodiphe nyl Ether (pentaBDE). October 3, 2002. 

### 1225

Glickman et al, 1995. Glickman, A. H., H. C. Alexande r, R. J. Buccafusco, C. R. Morris, B. O. Francis, 

### 1226 D. C. Surprenant, and T. J. Ward. “An Ev aluation of the Aquatic Hazard of Cumene”. 

### 1227 Ecotoxicology and Environmental Safety 1995 31(3): 287-289. 

### 1228

Hoffman, et al, 2003. Hoffman, D. J., B.A. Rattner, G. A. Burton Jr. Handbook of Ecotoxicology , 2nd Ed; 

### 1229 CRC Press., 2003 

### 1230

IFCS, 1998. International Forum on Chemical Sa fety. “Resolution on Priorities for Action in 

### 1231 Implementing Environmentally Sound Management of Chemicals. Intergovernmental Forum on 

### 1232 Chemical Safety”. 1998. <http://www.who.int/ifes/fs_res2.htm>. 

### 1233

Jones, et al, 1998. Jones T. D., M. D. Morris, a nd S. R. Basavaraju. “Atherosclerotic Risks from 

### 1234 Chemicals: Part II. A RASH Analysis of In Vitro and In Vivo Bioassay Data to Evaluate 45 

### 1235 Potentially Hazardous Compounds.” Archives of Environmental Contamination and Toxicology 

### 1236 1998 35(1):165-177. 

### 1237

Kapp, et al. 1996. Kapp R. W., C. Bevan, T. H. Gardiner, M. I. Banton, T. R. Tyler, and G. A. Wright. 

### 1238 “Isopropanol: Summary of TSCA Test Rule Studies and Relevance to Hazard Identification.” 

### 1239 Regulatory Toxicology and Pharmacology 1996. 23(3): 183-92. 

### 1240

Muoghalu and Rogers, 1992, Muoghalu, M. and J. E. Rogers. “The Economic Impact of Superfund’s 

### 1241 Litigation on the Value of the Firm: An Empirical Analysis.” Journal of Economics and Finance 

### 1242 1992 16(3): 73-87. 

### 1243

NIOSH, 2005. National Institute for Occupational Safety and Health. “Registry of Toxic Effects of 

### 1244 Chemical Substances (RTECS).” 2005. <http://www.cdc.gov/niosh/rtecs.html> 

### 1245

NIST, 2009. National Institute of Sta ndards and Technology. WebBook. 2009. 

### 1246 <http://webbook.nist.gov/chemistry /> (Accessed October 2009). 

### 1247

OMB, 2003. US Office of Management and Budge t. “Circular A-4. Washington, DC”. 2003. 

### 1248 <http://www.whitehouse.gov/omb/circulars/a004/a-4.html> 

### 1249*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 10-4 OPM, 2009. Office of Personnel Management. 2009 General Schedule Locality Pay Table for 

### 1250 Washington-Baltimore, DC-MD-VA-WV. Effective January 2009. < 

### 1251

< http://www.opm.gov/oca/09tables/pdf/DCB.pdf > 

### 1252

PFA, 2006. Polyurethane Foam Association. Le tter US EPA Re: Docket Number OPPT-2004-0085; 

### 1253 Proposed Significant New Use Rule. Polyurethane Foam Association. March 10, 2006. 

### 1254

Ruder et al, 1990. Ruder, A. M., L. J. Fine, and D. S. Sundin. “National Estimates of Occupational 

### 1255 Exposure to Animal Bladder Tumorigens.” Journal of Occupational Medicine 1990 32(9): 797- 

### 1256 805. 

### 1257

Taylor, et al, 1993. Taylor A. C., J. S. Evans and T. E. McKone. “The Value of Animal Test Information 

### 1258 in Environmental Control Decisions.” 1993. Risk Analysis 13(4):403-412. 

### 1259

Tietenberg, 1998. Tietenberg, T. “Disclosure Strategies for Pollution Control.” Environmental and 

### 1260
Resource Economics 1998 11:587-602. 

### 1261

U.S. EPA, 2006. TCNC Dossier-Alternative to Solvents. Preventing Exposures to Polybrominated 

### 1262 Diphenyl Ethers (PBDEs). 

### 1263

U.S. EPA, 1992. U.S. Environmental Protection Agency, Office of Policy, Planning and Evaluation 

### 1264 (OPPE) Instructions for Preparing Information Collection Requests (ICRs.) , 1992. 

### 1265

U.S. EPA, 2000. U.S. Environmental Protection Agency Guidelines for Preparing Economic Analyses

. 

### 1266 EPA 240-R-00-003. 2000. 

### 1267

U.S. EPA, 2002a.U.S. Environmental Protection Agency (U.S. EPA), Office of Pollution Prevention and 

### 1268 Toxics, Economic and Policy Analysis Branch. Revised Economic Analysis for the Amended 

### 1269 Inventory Update Rule: Final Report. 2002. 

### 1270

U.S. EPA, 2002b. U.S. Environmental Protection Agency (U.S. EPA), Office of Pollution Prevention and 

### 1271 Toxics, Economic and Policy Analysis Branch. Wage Rates for Economic Analyses of the Toxics 

### 1272 Release Inventory Program . 2002. 

### 1273

U.S. EPA, 2003. U.S. Environmental Protection Agency, Office of Pollution Prevention and Toxics, 

### 1274 Economic and Policy Analysis Branch. Economic Analysis of Expedited Significant New Use 

### 1275 Rules for 65 Chemical Substances. 2003. EPA-HQ-OPPTS-2002-0078. 

### 1276

U.S. EPA, 2006. U.S. Environmental Protection Agency Office of Pollution Prevention and Toxics, 

### 1277 Economic and Policy Analysis Branch. Economic Assessment for the Proposed ATSDR Test Rule 

### 1278 for Four Chemicals. 2006. 

### 1279

U.S. EPA, 2007.U.S. Environmental Protection Agency (U.S. EPA). Administrative Costs Associated 

### 1280 with TSCA Test Rules and Voluntary Chemical Testing; Industry Response to Interview 

### 1281 Questions, January 2007. 2007. 

### 1282

U.S. EPA 2009a. U.S. Environmental Protection Agency, Office of Pollution Prevention and Toxics, 

### 1283 Polybrominated Diphenyl Ethers (PBDEs) Action Plan . 30 December 2008. 

### 1284*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### 10-5 < http://www.epa.gov/oppt/existingchemi cals/pubs/pbdes_ap_2009_1230_final.pdf > (Accessed 

### 1285 27 April 2010). 

### 1286

U.S. EPA, 2009b. Voluntary Children’s Chemical Ev aluation Program (VCCEP). Site last updated on 

### 1287 May 6, 2009. < http://www.epa.gov/oppt/vccep/index.html > (Accessed 20 October 2009). 

### 1288

U.S. EPA, 2009c. Non-confidential 2006 IUR Company/Chemical Records. 

### 1289

< http://www.epa.gov/iur/index.htm > (Accessed October 15, 2009). 

### 1290

U.S. EPA, 2009d. U.S. Environmental Protection Agency, Office of Pollution Prevention and Toxics. 

### 1291 Economic Analysis for the Proposed Section 4 Test Rule for High Production Volume Chemicals. 

### 1292 December 16, 2009. Found in th e docket at EPA-HQ-OPPT-2009-0112-0015. 

### 1293

U.S. EPA, 2010a. U.S. Environmental Protection Agency (U.S. EPA). Office of Pollution Prevention and 

### 1294 Toxics. VCCEP Pilot Chemicals, Sponsors, and their Status. 2010. 

### 1295

< http://www.epa.gov/oppt/vccep/pubs/chemmain.html > (Accessed May 2010). 

### 1296

U.S. EPA, 2010b. U.S. Environmental Protection Agency (U.S. EPA). Office of Pollution Prevention 

### 1297 and Toxics. DecaBDE Phase-Out Initiative. 2010. 

### 1298

< http://www.epa.gov/oppt/existingchemicals/pubs/actionplans/deccadbe.html > (Accessed May 

### 1299 2010). 

### 1300

U.S. EPA, 2010c. Office of Pollution Prevention and Toxics. Significant New Use Rule and Test Rule for 

### 1301 Certain Polybrominated Diphenyl Ethers. Draft version, May 14, 2010. 

### 1302

U.S. NLM, 2009a. U.S. National Library of Medicine. ChemID plus Lite. 2009. 

### 1303 <http://chem.sis.nlm.nih.gov/chemidplus/c hemidlite.jsp> (Accessed October 2009). 

### 1304

U.S. NLM, 2009b. U.S. National Library of Medi cine. Personal communication P. Thomas, National 

### 1305 Library of Medicine and Adam Smolinksy, Abt Associates, Inc. Re: TOXLINE queries. March 

### 1306 2009. 

### 1307

U.S. SBA, U.S. Small Business Administration (U.S. SBA). 2008. Table of Small Business Standards 

### 1308 Matched to North American Industry Classificati on System Codes. Effective August 22, 2008. 

### 1309

< http://www.sba.gov/idc/groups/public/documen ts/sba_homepage/serv_sstd_tablexls.xls > 

### 1310 (Accessed May 2010). 

### 1311

Viscusi and O’Conner, 1984. Viscusi, W. K. and C. J. O’Connor. “Adaptive Responses to Chemical 

### 1312 Labeling: Are Workers Bayesian Decision Makers?” American Economic Review. 1984. 74(5): 

### 1313 942-956. 

### 1314

Wehmeier, 2001. Whmeier Helge. As quoted in “CIIT and LRI will Help Close ‘Knowledge Gap’”. 

### 1315 Centers for Health Research. 2001. 

### 1316 <http://www.ciit.org/news_event s/news_01/release2001_10_12.htm>. 

### 1317

Weinstein, et al, 2004. Weinstein Harriet G and Ma rk A. Loewenstein. 2004. “Comparing Current and 

### 1318 Former Industry and Occupation ECEC Seri es.” U.S. Bureau of Labor Statistics. 

### 1319 <http://www.bls.gov/opub/cwc/cm20040823ar01p1.htm>. 

### 1320 

## Appendix A – Wage Rate Calculations 1321*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### A-2 This appendix describes the derivation of the fully lo aded labor rates and inflation factors used in 

### 1322 calculating costs of labor, materials, and other inputs. All cost estimates are presented in 2009 dollars. 

### 1323

A.1 Derivation of Loaded Wage Rates 

### 1324

The fully loaded unit labor cost for managerial, prof essional/technical, and clerical labor in the regulated 

### 1325 industry and for EPA staff is estimated by adding fringe benefits and overhead costs to the hourly wage or 

### 1326 annual salary for each category following the method described in Wage Rates for Economic Analysis of 

### 1327 the Toxics Release Inventory Program (U.S. EPA, 2002b). This appendix describes the method 

### 1328 employed to estimate the fully load ed unit labor costs for each labor category, and presents the results of 

### 1329 the analysis. 

### 1330

Labor categories used in the analysis correspond to th e U.S. Bureau of Labor Statistics (BLS) Standard 

### 1331 Occupational Classification (SOC) system. In Ma rch 2004, BLS began using the North American 

### 1332 Industry Classification System (NAICS) instead of th e Standard Industrial Classification (SIC) System, 

### 1333 and the Standard Occupational Classification (SOC) system instead of the Occupational Classification 

### 1334 System (OCS). Exhibit A-1 summarizes the crosswal k between old and new occ upational titles, and lists 

### 1335 the SOC titles that correspond to the managerial, professional/technical, and clerical labor categories used 

### 1336 in this analysis. 

### 1337

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

### 1338 Labor Category Used in the Analysis BLS Old Title (OCS) BLS New Title (SOC)

Managerial Executive, administrative, and managerial Management, business, and financial Professional/Technical Professional specia lty and technical Professional and related

Clerical Administrative support, including clerical Office and administrative support

Sources: BLS, 2006, Table 2 and Weinstein, 2004 

### 1339

A.1.1 Derivation of Unit Labor Rates for Ma nagerial, Professional/Technical, and Clerical 

### 1340 Industry Employees 

### 1341
Wages and fringe benefit data for managerial, prof essional/technical, and clerical labor are from the BLS 

### 1342 Employer Costs for Employee Compensation (ECEC) historical data, for December 2009 (BLS, 2010, 

### 1343 Table 2). 12 

### 1344

The costs of fringe benefits such as paid leave and insurance, specific to each labor category, are taken 

### 1345 from the same BLS report (BLS, 2010). Fringe bene fits as a percentage of wages are calculated 

### 1346 separately for each labor category. For example, for December 2009, the average wage rate for 

### 1347 professional/technical labor was $35.96, a nd the average fringe benefit was $17.42. 13 Therefore, fringe 

### 1348 benefits as a percentage of wag es were $17.42/$35.96, or approximate ly 48 percent (see Exhibit A-2). 

### 1349

12 Past economic analyses used ECEC data series speci fic to white-collar workers in the manufacturing sector. However, those data sets were discontinued in March 2007, and these historical data were the best alternative. In a phone conversation (February 11, 2009), a BLS employee could not identify a better data set to use.

13 Past economic analyses have used the term “technical ” labor. Here the category is called “professional/technical” labor, to make clear how it relates to BLS categories. In 2004, BLS changed from the Occupational Classification System, OCS, to the Standard Occupational Classifica tion system, SOC. In the pr ocess, the “Professional specialty and technical” categor y became the “Professional and re lated” category. Howe ver, the coverage of the old and new occupational groups is approximately the same. See the BLS article, “Compa ring Current and Former Industry and Occupation ECEC Series” (Weinstein, 2004).*** EO 12866 Review Draft – Do Not Cite, Quote or Release During Review ***



### A-3 An additional loading factor of 17 percent is applied to wages to account for overhead. 14 This approach is 

### 1350 used for consistency with Office of Pollution Prev ention and Toxics (OPPT) economic analyses for two 

### 1351 major rulemakings: Wage Rates for Economic Analyses of the Toxics Release Inventory Program , June 

### 1352 10, 2002 (U.S. EPA, 2002b), and the Revised Economic Analysis for the Amended Inventory Update 

### 1353 Rule: Final Report , August 2002 (U.S. EPA, 2002a). This ove rhead loading factor is added to the 

### 1354 benefits loading factor, and the total is then applied to the base wage to derive the fully loaded wage. For 

### 1355 example, the December 2009 fully loaded wage fo r professional/technical labor is $35.96 × (1+ 0.484 + 

### 1356 0.17) = $59.49. 

### 1357

Fully loaded costs for managerial and clerical la bor are calculated in a similar manner, as shown in 

### 1358 Exhibit A-2. 

### 1359

A.1.2 Derivation of Unit Labor Rates for EPA Staff 

### 1360

Unit labor rates for EPA staff are calculated b ased on annual federal salaries for the Washington

### 1361 Baltimore area published by the Office of Personne l Management (OPM) and effective January 2009 

### 1362 (OPM, 2009). The average salary for one full-time equi valent (FTE) staff member is estimated as the 

### 1363 salary for a GS-13 Step 1 employee, which is $86,927 annually without fringe benefits and overhead 

### 1364 costs. In order to derive the fully loaded salar y, EPA multiplied the annual salary by an assumed loading 

### 1365 factor of 1.6 to reflect federal fringe benefits and overhead, which results in a fully loaded annual salary 

### 1366 of $139,083. 

### 1367

The Agency loading factor of 1.6 is from an EPA guide entitled Instructions for Preparing Information 

### 1368 Collection Requests (ICRs) (U.S. EPA, 1992, page 30, footnote 9). The 60 percent assumption was 

### 1369 labeled “the benefits multiplication factor” in the EPA guide, but has been used in many EPA Office of 

### 1370 Pollution Prevention and Toxics ICRs to reflect both fri nge benefits and overhead for federal staff. For 

### 1371 example, it was used in an August 2000 document supporting ICR No. 1139.06, with the following 

### 1372 explanation: 

### 1373

The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits 

### 1374 multiplication factor). The multiplication factor used is recommended in EPA’s Office of Policy, 

### 1375 Planning, and Evaluation’s Instructions for Preparing Information Collection Requests (ICRs) 

### 1376 (June 1, 1992). An EP A internal phone call between Carol Rawie (OPPT/EETD/RIB) and Carl 

### 1377 Koch (OPPE/RMD/IMB) on May 3, 1994, indicated that the 1.6 factor included not only benefits 

### 1378 but also overhead. 

### 1379

14 The change was used in the 2003 PMN SNUR economic analys is (U.S. EPA, 2003). In some earlier reports, the 17 percent had been applied to wage s-plus-fringe benefits.***EO 12866 Review Draft – Do NotCite, Quote or Release During Review***B-4Exhibit A-2: Derivation of Loaded Wage Rates1380Labor CategoryData Source for Wage InformationDateWageFringeBenefitFringes as %wageOverheadas % wage1Fringe +overheadfactorLoaded Wages(a)(b)(c)=(b)/(a)(d)(e)=(c)+(d)+1(f)=(a) * (e)ManagerialBLSECEC, Private Manufacturing industries,“Management, business, and financialoccupations”2Dec-09 $42.36 $18.68 44.10% 17% 1.61 $68.24Professional/TechnicalBLSECEC, Private Manufacturing industries,“Professional and related occupations“2Dec-09 $35.96 $17.42 48.44% 17% 1.65 $59.49ClericalBLSECEC, Private Manufacturing industries,“Office and administrative support occupations”2Dec-09 $17.21 $8.17 47.47% 17% 1.64 $28.31EPA staff FTEAnnual federal staffcost: OPM WashingtonBaltimore-Northern Virginia, DC-MD-PA-VA-WV,area, GS-13 Step 1 pay rates, with 60%overhead.3Jan-09$86,927(annual)--[Included in60%overhead]60% 1.60$139,083(annual)$41.79(hourly)--$66.87(hourly)Notes:1An overhead rate of 17% was used based on assumptions in U.S. EPA, 2002a and U.S. EPA, 2002b.2BLS (2010, Supplemental Table 2).3The federal salary is the unloaded federal GS-13 Step 1salary ($86,927 for 2009), from the OPM salary table forWashington-Baltimore-Northern Virginia(OPM, 2009). The 60% fringesand-overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs)(U.S. EPA, 1992b, page 30, footnote 9). Hourly rates are based on annual salarydivided by 2,080 hours.1381Appendix B – Costs1382Exhibit B-1: Industry Compliance and Government Costs, Low-Cost Scenario1383Mixture NameTesting CostAnalyticalMethodologyValidationCostTotalAdministrativeCost1Total IndustryComplianceCost2GovernmentCostTotal SocialCost31Pentabromodiphenyl Ether(PentaBDE)$2,854,919 $23,500 $758,040 $3,636,458 $3,952 $3,640,4102Octabromodiphenyl Ether(OctaBDE)$2,854,919 $23,500 $758,040 $3,636,458 $3,952 $3,640,4103Decabromodiphenyl Ether(DecaBDE)$1,849,482 $46,000 $514,304 $2,409,786 $4,634 $2,414,420TOTAL$7,559,319 $93,000 $2,030,384$9,682,703 $12,538 $9,695,2401Total administrative cost includes both reporting and non-reporting administrative costs.1384***EO 12866 Review Draft – Do NotCite, Quote or Release During Review***B-22Total industry compliance cost includes testing cost, analytical methodology validationcost, administrative cost, and export notification cost.13853Total social cost includes total industry compliance cost and government cost.13861387Exhibit B-2: Industry Compliance and Government Costs, High-Cost Scenario1388Mixture NameTesting CostAnalyticalMethodologyValidationCostTotalAdministrativeCost1Total IndustryComplianceCost2GovernmentCostTotal SocialCost31Pentabromodiphenyl Ether(PentaBDE)$4,667,433 $23,500 $1,211,169$5,902,102 $3,952 $5,906,0542Octabromodiphenyl Ether(OctaBDE)$4,667,433 $23,500 $1,211,169$5,902,102 $3,952 $5,906,0543Decabromodiphenyl Ether(DecaBDE)$2,546,319 $46,000 $688,514 $3,280,833 $4,634 $3,285,467TOTAL$11,881,186 $93,000 $3,110,851$15,085,037 $12,538 $15,097,5741Total administrative cost includes both reporting and non-reporting administrative costs.13892Total industry compliance cost includes testing cost, analytical methodology validationcost, administrative cost, and export notification cost.13903Total social cost includes total industry compliance cost and government cost.13911392Exhibit B-3: Annualized Social Costs11393Mixture NameLow-Cost ScenarioHigh-Cost Scenario3 years, 3%3 years, 7%3 years, 3%3 years, 7%1Pentabromodiphenyl Ether(PentaBDE)$1,286,996 $1,387,184$2,087,969 $2,250,5122Octabromodiphenyl Ether(OctaBDE)$1,286,996 $1,387,184$2,087,969 $2,250,5123Decabromodiphenyl Ether(DecaBDE)$853,571 $920,019 $1,161,512 $1,251,933TOTAL$3,427,562 $3,694,387$5,337,451 $5,752,9561Total social cost includes total industry compliance cost and government cost. Total social costs are discounted over three years because these costs are1394expected to occur over the few years during which the actualtesting occurs and EPA reviewsstudies. Discount rates of both3 and 7 percent are presented1395following OMB Guidance contained in Circular A-4 (OMB, 2003).1396***EO 12866 Review Draft – Do NotCite, Quote or Release During Review***B-31397Exhibit B-4: Annualized Industry Compliance Costs11398Mixture NameLow-Cost ScenarioHigh-Cost Scenario15 years, 7%7 years, 7%15 years, 7%7 years, 7%1Pentabromodiphenyl Ether(PentaBDE)$399,264 $674,757 $648,019 $1,095,1542Octabromodiphenyl Ether(OctaBDE)$399,264 $674,757 $648,019 $1,095,1543Decabromodiphenyl Ether(DecaBDE)$264,582 $447,144 $360,218 $608,769TOTAL$1,063,109 $1,796,657$1,656,256 $2,799,0771Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost. Total industry1399compliance costs are annualized at a 7 percent discount rate, which reflects the opportunitycost of capital, and over 15 years, which represents the life of the1400chemical. Results are also presented using a discounting timeline of 7 years to test the sensitivity of results to a shorter chemical lifetime, as some chemicals1401included in the proposed rule may have a lifetime that is less than 15 years. Industry compliance costs are used in the analysis of impacts of the rule on1402companies and the discount period differs from that used to calculate social costs.1403