*** EO 12866 Review Draft – Deliberative – Do Not Cite, Quote or Release During the Review ***

Unfunded Mandates Reform Act Statement

Lead; Amendment to the Opt-out and Recordkeeping Prov isions in the Renovation, Repair, and Painting Program; Final Rule [Docket ID No.: EPA–HQ–OPPT–2005-0049]

U.S. Environmental Protection Agency, Office of Pollution Prevention and Toxics February 2010

Pursuant to the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4 (“UMRA”), EPA has determined that the rule being promulgated, “L ead; Amendment to the Opt-out and Recordkeeping Provision in the Renovation, Repair, and Painting Progr am,” contains a Federal mandate that may result in expenditures of $100 million or more by the private sector in any one year, but is not expected to result in expenditures of this magnitude by State, local, and Tribal governments in the aggregate. EPA has prepared this statement in accordance with section 202(a) of UMRA.

(1) Authorizing Legislation. These training, certification and accreditation requirements, State, Territorial and Tribal authorization provisions, a nd work practice standards are being promulgated under the authority of TSCA §§ 402(c)(3), 404, and 407, 15 U.S.C. §§ 2682(c)(3), 2684, 2686, and 2687, as amended by Title X of the Housing and Community Development Act of 1992, Public Law 102-550 (also known as the Residential Lead-Based Paint Hazard Reduction Act of 1992).

(2) Benefit-Cost Analysis. EPA has prepared an economic analysis to evaluate, among other things, the benefits and costs of this rule as well as various regulatory options. See “Economic Analysis for the TSCA Lead Renovation, Repair, and Painting Pr ogram Opt-Out and Recordkeeping Final Rule for Target Housing and Child-Occupied Facilities.” This document is available in the public docket for this

rule.

The costs of the rule include training, certificati on, work practice, and recordkeeping costs. The total cost of the rule could be as high as $500 million in the first year and $300 million per year thereafter. Thus, the cost of the rule to the private sector and State, local, and Tribal governments in the aggregate exceeds the inflation-adjusted UMRA thr eshold of $100 million in any one year.

Governments may incur costs as a result of the rule if they operate schools, daycare centers, or other child-occupied facilities, or if they operate public housing. If these governments perform their own renovations in these facilities, they may incur very sm all additional costs to provi de parents or guardians of students in COFs and residents of public housin g with copies of the records documenting compliance with the RRP training and work practice requirements. The average annualized cost for this disclosure is estimated to be $9 per school district, and the total a nnualized cost for all governments that operate public schools is estimated to be less then $60,000 per year. Estimates are not available on the cost of the required disclosure in public housing owned by State, local, and Tribal governments, but the cost is not expected to be substantial.

The rule’s benefits include the prevention of th e numerous adverse health effects attributable to lead exposure. Exposure to lead impairs a ch ild’s neuropsychological development (most commonly measured as reduced IQ), and has b een associated with other neurotoxic and renal effects in children.

Health effects in adults include cardiovascular effect s such as hypertension, coronary heart disease, and stroke, as well as neurotoxic, renal, reproductive, developmental, genotoxic, carcinogenic, and immune system effects, and effects on other organ systems.



### Page 1 of 3*** EO 12866 Review Draft – Deliberative – Do Not Cite, Quote or Release During the Review ***

(A) Federal Financial Assistance. EPA has not identified any sources of federal financial assistance (e.g., grants or loans) that are available from either EPA or other federal agencies to defray State, local, or Tribal expenditures under this rule.

(B) Federal Resources. EPA has not identified any federal resources available to carry out the intergovernmental manda te contained in this rule.

(3) Costs and Budgetary Impacts.

(A) Future Compliance Costs. Total compliance costs for the rule are estimated to be up to $500 million in the first year and $300 million per year using either a 3% or a 7% discount

rate.

(B) Disproportionate Budgetary Effects. While costs may vary somewhat between sectors subject to the rule, the distribution of costs follows the distribution of regulated renovation, repair, and painting events. It can be e xpected that costs will vary from state to state, depending on the number of affected buildings and regulated renovation events, and the number of accredited training providers, certified renovati on, repair and painting firms, and trained

renovators and workers. EPA believes that the most relevant measure of the budgetary effect of this rule is the cost of performing a renovati on, repair, or painting event following the work practices required by the rule. EPA expects that co st to vary somewhat from event to event, but does not expect any particular industry to face exceptionally high costs on a per-event basis. EPA has no evidence to suggest that the rule will have disproportionate budgetary impacts on any particular regions, governments, types of communities, or segments of the private industry sectors affected by the rule.

(4) Effect on National Economy. Guidance issued by the Office of Management and Budget indicates that the economic impact of a regulation on the national economy becomes measurable only if the economic impact of the regulation reaches 0.25 pe rcent to 0.5 percent of Gross Domestic Product (GDP). See Memorandum from Sally Katzen, “Guida nce for Implementing Title II of [UMRA],” March 31, 1995. Given the current GDP, this is equivalent to a cost of $34 billion to $67 billion. Therefore, EPA has concluded that this rule is highly unlik ely to have any measurable effect on the national

economy.

(5) Prior consultation with affected State, local, and Tribal governments. Under section 204 of UMRA, EPA must provide a process for prior consultation with State, local, and Tribal governments affected by significant Federal intergovernmental mandates.

There is not a requirement for States or Tribes to administer the program. States and Tribes will be able to apply for and receive authorization to administer these requirements, but will be under no obligation to do so. In the absence of a State or Tribal authorization, EPA will administer these requirements.

Nonetheless, EPA has sought input from State, local and Tribal government representatives throughout the development of this rulemaking. EP A’s experience in administ ering the existing leadbased paint activities program under TSCA § 402(a) suggests that these governments will play a critical role in the successful implementation of a nationa l program to reduce exposures to lead-based paint

hazards associated with renovation activities. Conse quently, the Agency has met with State, local, and Tribal government officials on numerous occasions to discuss renovation issues.



### Page 2 of 3*** EO 12866 Review Draft – Deliberative – Do Not Cite, Quote or Release During the Review ***

EPA began the consultation process required by TSCA section 402(c)(3) with two public meetings on December 7, 1998 and on March 8, 1999. Participants included representatives from States. Topics discussed included applicability, accreditation of training providers, certification of individuals, and work practice standards (setup, occupant protection, clean-up, clearance, and restricted practices).

EPA also held a two day meeting with its Stat e partners to discuss lead-based paint program issues. Most of the time on the agenda for this meeting, held in September 2000, was devoted to discussing how the existing abatement regulations might be modified to apply to renovation and remodeling projects.

In May 2003, EPA hosted a series of conferen ce calls to discuss additional issues related to renovation and remodeling. Two calls were held with State and local government agency representatives as well as a State legislator.

EPA has co-sponsored several national lead c onferences, at which the Agency met with representatives of State and Tribal governments to discuss renovation issues, among other issues. Examples include:

• June 2000 EPA 4th National Lead Conference - Washington, DC. • December 2000 National Lead Grantee Conference (HUD/CDC/EPA) - Atlanta, GA. • May 2001 EPA 5th National Lead Conference - New Orleans, LA. • June 2003 EPA 6th National Lead Conference - San Antonio, TX. • June 2004 National Lead and Healthy Hom es Grantee Conference (HUD/CDC/EPA) - Orlando,

FL.

(6) Small Government Agency Plan. This rule does not contain a significant Federal intergovernmental mandate as described by section 203 of UMRA. EPA has also determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. Based on the definition of “small government jurisdic tion” in RFA section 601, no State governments can

be considered small. Small Territorial or Tribal governments could apply for authorization to administer and enforce this program, which would entail costs, but these small jurisdictions are under no obligation

to do so.

EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. EPA generally measures a significant impact under UMRA as being expenditures, in the aggregate, of more than 1% of small government revenues in any one year. For governments that operate child-occupied facilities su ch as schools and daycare centers, the rule is expected to result in typical small government impacts under 0.0001% of revenues

Thus, EPA has determined that the rule does not significantly affect small governments. Nor does the rule uniquely affect small governments, as the rule is not targeted at small governments, does not primarily affect small governments, and does not impose a different burden on small governments than on other entities that operate target housing or child-occupied facilities.



### Page 3 of 3