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# Economic Analysis for the Section 4 Final Test Rule for High Production Volume Chemicals – Second Group of Chem icals Final Report

—Does not contain TSCA CBI—

Prepared by: Economic and Policy Analysis Branch Ec onomics, Exposure and Technology Division Office of Pollution Prevention and Toxics U.S. Environmental Protection Agency 1200 Pennsylvania Avenue Washington, D.C. 20460 November 2010

### TABLE OF CONTENTS

EXECUTIVE SUMMARY .............................................................................ES - 1 E .1 INDUSTRY COMPLIANCE AND GOVERNMENT 

### ........................................ ES - 1 E .2 IMPACTS 

### ......... ..............................................................................ES - 2 E .3 Benefits ............................ ...........................................................ES - 2 CHAPTER 1 – INTRODUCTION ................................ ................................ ........................... 1 - 1 1.1 S TATEMENT OF N EED ................................ ................................ ................................ ................ 1 - 1 1.1.1 Inadequate Inf

ormation ................................ ................................ ................................ ....... 1 - 2 1.1.2 Externalities ................................ ................................ ................................ ......................... 1 - 2 1.2 O RGANIZATION OF T HI S REPORT ................................ ................................ .............................. 1 - 3 

### CHAPTER 2 – USE, PRODUCTION, AND MARKET INFORMATION .......................... 2 - 1 2.1 INTRODUCTION ................................ ................................ ................................ ............................. 1 2.2 C HEMICAL U SE AND M ARKET INFORMATION ................................ ................................ ........... 2 - 4 2.3 C HEMICAL - S PECIFIC U SE AND M ARKET INFORMATION ................................ .......................... 2 - 11 2.3.1 Acetaldehyde [CASRN 75 - 07- 0] ................................ ................................ ....................... 2 - 11 2.3.2 Pentaerythritol tetranitrate [CASRN 78 - 11 - 5] ................................ ................................ . 2 - 11 2.3.3 9,10 -

Anthracenedione [CASRN 84 - 65 - 1] ................................ ................................ ......... 2 - 12 2.3.4 1H,3H

-Benzo[1,2 - c:4,5 - c'] difuran - 1,3,5,7- tetrone [CASRN 89 - 32 - 7] ............................. 2 - 12 2.3.5 Sorbic acid [CASRN 110- 44 - 1] ................................ ................................ ......................... 2 - 13 2. 3.6 Phenol, 4,4'

- methylenebis[2,6

- bis91,1 - dimethylethyl-

)] [CASRN 118 - 82 - 1] ................... 2 - 13 2.3.7 Methanone, diphenyl- [CASRN 119 - 61 - 9] ................................ ................................ ....... 2 - 13 2.3.8 Ethanedioic acid [CASRN 144 - 62 - 7] ................................ ................................ ............... 2 - 14 2.3.9 Methanesulfinic acid, hydroxy-, monosodium salt [CASRN 149 - 44 - 0] ............................. 2 - 14 2. 3.10 Phosphorochloridothioic acid, O,O- diethyl ester [CASRN 2524 - 04 - 1] ...................... 2 - 15 2.3.11 1,3,5 - Triazine - 1,3,5(2H,4H,6H) - triethanol [CASRN 4719 - 04 - 4] ................................ . 2 - 15 2.3.12 Sodium erythorbate [CASRN 6381 - 77- 7] ................................ ................................ ..... 2 - 16 2.3.13 D -gluco -Heptonic acid, monosodium salt, (2.xi.) - [CASRN 31138- 65 - 5] .................... 2 - 16 2.3.14 C.I. Leuco Sulphur Black 1 [CASRN 66241 - 11 - 0] ................................ ....................... 2 - 17 2.3.15 Castor oil, sulfated, sodium salt [CASRN 68187- 76 - 8] ................................ ................ 2 - 17 2.3.16 Castor oil, oxidized [CASRN 68187- 84 - 8] ................................ ................................ ... 2 - 17 2.3.17 Benzenediamine, ar,ar- diethyl - ar- methyl- [CASRN 68479- 98 - 1] ................................ 2 - 18 2.3.18 Alkenes, C12 - 24, chloro [CASRN 68527 - 02 - 6] ................................ ............................ 2 - 18 2.3.19 Hydrocarbons, C>4 [CASRN 68647- 60 - 9] ................................ ................................ .. 2 - 19 

### CHAPTER 3 – COSTS ................................ ................................ ................................ .............. 3 - 1 3.1 INDUSTRY C OMPLIANCE C OSTS ................................ ................................ ................................ 3 - 1 3.1.1 Laboratory Testing Costs ................................ ................................ ................................ .... 3 - 1 3.1.2 Analytical Methodology Validation Costs ................................ ................................ ......... 3 - 11 3.1.3 Administrative Costs ................................ ................................ ................................ .......... 3 - 12 3.1.4 Export Notification Cos ts ................................ ................................ ................................ .. 3 - 15 3.1.5 Total Industry Compliance Costs ................................ ................................ ...................... 3 - 16 3.1.6 Non -Monetized Costs ................................ ................................ ................................ ......... 3 - 16 3.2 EPA C OSTS ................................ ................................ ................................ ............................. 3 - 17 3.3 S UMMARY OF T OTAL S OCIAL C OSTS ................................ ................................ ...................... 3 - 18 

### CHAPTER 4 – ECONOMIC IMPACT ANALYSIS ................................ .............................. 4 - 1 4.1 I MPACT ON A LL REG ULATED C OMPAN IE S ................................ ................................ ................. 4 - 1 4.1.1 Calculate Annualized Costs ................................ ................................ ................................ . 4 - 1 4.1.2 Compare Annualized Compliance Costs to Annual Revenues ................................ ............. 4 - 2 4.1.3 Sensitivity Analysis ................................ ................................ ................................ .............. 4 - 64.2 S MALL ENTITY I MPACT A NALYSIS ................................ ................................ ............................ 4 - 8 4.2.1 Identify the Affected Population ................................ ................................ .......................... 4 - 8 4.2.2 Select a Relevant Small Business Definition ................................ ................................ ........ 4 - 9 4.2.3 Identify Small Businesses ................................ ................................ ................................ ..... 4 - 9 4.2.4 Calculate Each Company’s Share of Testing Costs ................................ ............................. 4 - 9 4.2.5 Determine the Size of the Adverse Impact for Small Businesses ................................ ....... 4 - 10 

### CHAPTER 5 – BENEFITS ................................ ................................ ................................ ........ 5 - 1 5.1 P OTENTIAL U SERS OF C HEMICAL - S PECIFIC INFORMATION ................................ ....................... 5 - 1 5.2 P OTENTIAL U SES OF T OXICOLOGIC INFORMATION G ENERATED BY THE F INAL R ULE ............... 5 - 2 5.2.1 Consumers/

Buyers ................................ ................................ ................................ ............... 5 - 2 5.2.2 Wo rkers ................................ ................................ ................................ ................................ 5 - 3 5.2.3 Science and Health Communities ................................ ................................ ........................ 5 - 3 5.2.4 The General Public ................................ ................................ ................................ .............. 5 - 4 5.2.5 Firms and their Shareholders ................................ ................................ .............................. 5 - 4 5.2.6 Government ................................ ................................ ................................ ......................... 5 - 5 5.3 S UMMARY ................................ ................................ ................................ ................................ . 5 - 7 

### CHAPTER 6 – OTHER IMPACT ANALYSES ................................ ................................ ...... 6 - 7 6.1 UNFUNDED M ANDATES S TATEMENT ................................ ................................ ........................ 6 - 7 6.2 ENVIRONMENTAL JUSTICE S TATEMENT ................................ ................................ .................... 6 - 2 6.3 C HILDREN ’ S H EALTH S TATEMENT ................................ ................................ ............................ 6 - 2 6.4 B URDEN H OUR E STIMATE ................................ ................................ ................................ ......... 6 - 3 6.4.1 Industry Burden ................................ ................................ ................................ ................... 6- 3 6.4.2 Government Burden ................................ ................................ ................................ ............. 6- 4 REFERENC ES.........................................................................................................R- 1 APPENDIX A – WAGE RATE CALCULATIONS............................................................A - 1 A.1. DERIVATION OF LOADED WAGE RATES..........................................................A - 1 

### A.1.1. Derivation of Unit Labor Rates for Technical, Managerial, and Clerical Industry Employees.. 

### ........................................................................................................A - 2 A.1.2 Derivation of Unit Labor Rates for EPA Staff 

### .....................................................A - 2 APPENDIX B – COST DETAILS .................................................................................B - 1

### ES - 1 EXECUTIVE SUMMARY In 1998, EPA challenged the chemical indu stry to develop basic toxicity information on thousands of chemicals for which information was not publicly available. To support this effort, EPA is finbalizing a test rule under Section 4 of the Toxic Substances Control Act (TSCA) for 19 chemicals that have annual production and/or importation volumes above 1 million pounds. These chemicals are classified as high production volume (HPV) chemicals. The final rule is motivated by the premise that, at a minimum, basic toxicity information comparable to that generated by the Organization for Economic Cooperation and Development’s (OECD) Screening Information Data Set (SIDS) Tier 1 testing battery should be available for all HPV chemicals. The 19 chemicals included in the rule are manufactured and/or import ed by 48 companies. The analysis assumes that these companies will generate and provide required testing data on their chemicals. Some information is available from existing studies, so the rule only requires that a test be conducted if prior data are unavailable. ES.1 Industry Compliance and Government Costs In complying with the rule, industry will incur costs associated with the laboratory testing, analytical methodology validation, administration, and export notification requirements of the final test rule. Table ES - 1 summarizes these compliance costs under the least and average cost scenarios considered in this analysis. Table ES - 1 Summary of Total Industry Compliance Costs Triggered by the Final Rule: $2006, millions

Compliance Cost Category Cost ($million, unadjusted) Least Cost Scenario Average Cost

Scenario Laboratory Costs $2. 01 $2. 60 Analytical methodology validation $0. 23 $0. 23 Administration Costs $ 0. 90 $1. 04 Export Notification Costs $0.01 $0.03 Total Industry Compliance Costs $3. 15 $ 3.90 Average Compliance Cost per Chemical $0. 17 $0. 2 1 

### The government will also incur costs associated with the final rule, estimated at $0.04 million. Exhibit ES - 2 summarizes the total social costs of the rule, estimated as the sum of government and industry compliance costs. As shown, the estimate of total social costs of the final rule under the average cost scenario is $ 3.90 million. The annualized social costs of the rule under the average cost scenario are estimated at $ 1. 38 million when annualized over three years using a three percent discount rate, and $1. 49 million when annualized over three years using a seven percent discount rate.

### ES - 3 Table ES - 2 Summary of Total Social Costs Triggered by the Final Rule: $2006, millions Cost Categ ory Cost ($2006, millions) Least Cost Scenario Average Cost

Scenario Total Industry Compliance Cost (unadjusted) a $3. 15 $ 3.90 Total Government Cost (unadjusted) $0.04 $0.04 Total Social Cost Triggered by the Final Rule (unadjusted) $ 3.19 $ 3.94 Annualized Social Cost (3 years, 3% discount rate) $1. 1 3 $1 39 Annualized Social Cost (3 years, 7% discount rate) $1. 2 1 $1. 5 0 Notes: a Total industry compliance cost includes laboratory, administration, and export notification costs. 

### EPA considered the eff

ect of the test rule on laboratory capacity; however, the Agency does not think that this will be a significant factor in a company’s ability to comply with the final rule because EPA anticipates that the majority of testing required by the final rule will be conducted through Contract Research Organizations and that firms will form consortia to obtain the testing. In addition, recent market information suggests that there is adequate capacity to allow firms to meet testing requirements. In particular, demand for screening - level testing, such as that required in the final rule, has been less than expected for the HPV Challenge Program, which allows adequate availability of capacity to meet the requirements of this rule. ES.2 Impacts The costs of complying wit h a mandatory test rule can potentially decrease the profitability of affected products. EPA conducted assessments of the impact of the rule on all regulated companies by looking at the relationship between the compliance costs of the rule and individual chemical sales. EPA estimated that two to four chemicals were likely to experience compliance costs that were greater than or equal to one percent of individual sales of the chemical. EPA also evaluated impacts of the final rule on small businesses. Small businesses were defined as those with 1,500 or fewer employees. Using this definition, EPA identified 20 small companies. EPA estimated that no small businesses would experience costs greater than one percent of company sales. ES.3 Benefits The basi c toxicity information developed as a result of this rule will be made publicly available and will increase scientific understanding of the health and environmental effects of the 19 chemicals included in the rule. A wide range of groups is expected to benefit from the availability of this information, including consumers, workers, scientists, industry representatives, government, public health officials, the medical community, and foreign interests. Scientists can use the information developed as a re sult of this rule to further refine the

### ES - 3

understanding of the risks posed by these chemicals. Consumers of the chemicals will have a better understanding of the hazards associated with the chemicals they are using and can therefore make more informed choi ces about the use of the chemical. Companies benefit because they can promote the safe use, manufacture, and disposal of chemicals and meet Responsible Care Initiative® requirements. EPA itself can use the test results to guide future regulations. Final ly, other regulatory authorities can use this information, in conjunction with exposure -related information, to identify and prioritize risks and to target monitoring efforts.

### 1 - 1 CHAPTER 1 – INTRODUCTION Under the Toxic Substances Control Act (TSCA), the U.S. Environmental Protection Agency (EPA) can impose information reporting and other requirements on producers, importers, processors, users, distributors, and disposers of chemicals to ensure the safe management of toxic chemicals. Under TSCA Section 4, EPA is authorized to require by rule that manufacturers and/or processors of chemical substances conduct testing to determine the effect of chemical substances on human health and the environment. In particular, if the Agency finds that: (1)(A)(i) the manufactur e, distribution in commerce, processing, use, or disposal of a chemical substance or mixture, or that any combination of such activities, may present an unreasonable risk of injury to health or the environment, (ii) there are insufficient data and experience upon which the effects of such manufacture, distribution in commerce, processing, use, or disposal of such substance or mixture or of any combination of such activities on health or the environment can reasonably be determined or predicted, and (iii) testing of such substance or mixture with respect to such effects is necessary to develop such data; or (B)(i) a chemical substance or mixture is or will be produced in substantial quantities, and (I) it enters or may reasonably be anticipated to enter the environment in substantial quantities or (II) there is or may be significant or substantial human exposure to such substance or mixture, (ii) there are insufficient data and experience upon which the effects of the manufacture, distribution in commerce , processing, use, or disposal of such substance or mixture or of any combination of such activities on health or the environment can reasonably be determined or predicted, and (iii) testing of such substance or mixture with respect to such effects is ne cessary to develop such data the Administrator shall require that testing be conducted. 

### In 1998, a national effort was announced to expand the availability of information regarding the most widespread chemicals in commerce. To support this effort, EPA promulgated in 2006 its first test rule for 17 high production volume (HPV) chemicals that, under TSCA Section 4, have annual production and/or importation volumes of one million pounds or more. EPA is now finalizing a second test rule for an additional 19 HPV chemicals. The rule require s the development of data similar to that specified under the Organization for Economic Cooperation and Development’s (OECD’s) Screening Information Data Set (SIDS) testing battery. 1.1 Statement of Need Fully functioning competitive markets result in a socially efficient allocation of resources. Thus, efficient allocation of resources will occur if each seller and each buyer has complete information on their own actions and makes decisions based on the full costs of the ir own actions. A market failure exists when the market is unable to efficiently allocate goods and services. Executive Order 12866 requires identification of whether a significant rule addresses a market failure. The major causes of market failure iden tified in the Office of Management and Budget (OMB) guidance (OMB, 2003) on Executive Order 12866 are externality, natural monopoly, market power, and

### 1 - 2

inadequate or asymmetric information. The final test rule is designed to address the issue of inadequate information and to help address certain externalities resulting from the manufacture/use of certain high production chemicals. 1.1.1 Inadequate Information Economic theory supports perfect information among buyers and sellers as a requirement for rational decision making and for the efficient allocation of resources. When buyers or sellers do not have complete information about their choices, rational decision making cannot occur and the market fails. As an example, a producer may not consider substituting a less hazardous chemical for a hazardous chemical if knowledge about either chemical's hazard is unknown or uncertain. More complete information on the hazards associated with the chemical will allow a producer to make better decisions. For many reason s information regarding the hazards associated with a chemical substance may not be widely known. Two of these reasons are:

$ Producers may know this information, but have no incentive to reveal it to their customers. $ This information may be unknown to b oth the producers and their customers. The first of these conditions is known as asymmetric information; that is, consumers and producers do not have the same level of information regarding the hazards posed by a chemical substance. Typically, the produc ers’ level of information regarding a product exceeds the consumers’ level of information. In the second case, chemical hazard information is inadequate (e.g., unknown to both consumers and producers); producers may have little incentive to acquire such information due to the costs associated with its acquisition. Because information is by nature a public good it reduces the incentive for producers to develop information. Information is neither depletable

— one person’s use of information does not diminish the amount remaining for other users

— nor excludable. Once made available, information cannot be easily withheld from others. Thus, where information is provided by one person, others are free to use and benefit from that information without having made a contribution to its development. This reduces the incentive to provide the information, resulting in a failure of the market to efficiently provide the information. In addition, individual consumers are unlikely to be willing to pay the cost of chemical tests to acquire the information if they can use information developed and paid for by others. 1.1.2 Externalities Externalities, another cause of market failure, occur when the actions of one economic entity impose costs (or benefits) on parties that are “external” to the market transaction. Such is the case where manufacturing or other business activities harm human health or the environment. When information is inadequate, external costs cannot be recognized by the business entity and, thus, cannot be incorporated into business decision making. The result can be the overuse or overproduction (as is the case when an externality is negative) of certain harmful products. EPA often intervenes when externalities pose risks to human health and the environment. For example, risks may arise as a result of chemical exposure to the general population from the manufacture, processing, and use of chemicals. As a first step in mitigating externalities, the EPA Office of Pollution Prevention and Toxics (OPPT) rou tinely screens chemicals for the potential risks they may pose. This screening is used to determine if risks from the manufacture,

### 1 - 3

processing, or use of chemicals are of sufficient concern to warrant risk management. Given that EPA’s TSCA Inventory recognizes more than 75,000 chemicals in commerce, chemical risk screening represents a significant effort. Risk is a function of hazard and exposure, and when information on either is lacking, EPA’s ability to effectively identify significant risks arising from externalities is compromised. By providing information, the test regulation will address market failure due to inadequate information by ensuring that basic information about the health and environmental effects of certain HPV chemicals is available to the public. This information can be used by consumers, producers, the public sector, and others to make more informed decisions regarding chemicals. These users may also apply this information towards remedying externalities. 1.2 Organization of This Report This report presents EPA’s economic analysis for this final rule. Regulated chemicals and companies are characterized in Chapter 2. Costs, including laboratory, administrative, export notification, and government costs, are reported in Chapter 3. The economic impact analysis for the final rule is presented in Chapter 4. This chapter also includes a small business impact analysis as mandated by the Regulatory Flexibility Act (RFA), and amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). Chapter 5 addresses the issue of the benefits of the final rule using the “value of information” framework. The benefits analysis was undertaken to address the implicit call for cost -benefit balancing contained in TSCA, as well as the requirements of Executive Order 12866. Several additional impact analyses are presented in Chapter 6. An unfunded mandates statement is required by the Unfunded Mandates Reform Act (UMRA); an environmental justice statement addresses the requirements of Executive Order 12898; a children’s health statement is mandated by Executive Order 13045; and the burden hour analysis responds to the requirements of the Paperwork Reduction Act (PRA). Note that all dollar amounts in this analysis are reported in 2006 dollars. For cost inputs that were estimated prior to 2006, EPA applied the most relevant adjustment factor to ensure that all costs were comparable.

### 2 - 1 CHAPTER 2 – USE, PRODUCTION, AND MARKET INFORMATION 2.1 Introduction This chapter presents use, production and market information for the 19 chemicals included in the final rule. Table 1 provides the Chemical Abstracts Service Registry Number (CASRN) assigned by the Chemical Abstracts Service (CAS) to each of these chemicals, the chemicals’ common names, and other synonyms use d to research information on the chemicals. 1 , 2

1 The CAS is a division of the American Chemical Society, and assigns unique CASRNs to chemical substances. All CASRNs are compiled in the CAS Registry, the largest and most current database of its kind. Each CASRN designates only one chemical substance, and is a link to significant information about the chemical. For more information, see the American Chemical Society’s Chemical Abstracts Service at http://www.cas.org . 2 EPA identified synonyms for each chemical by searching the National Institute of Standards and Technology (NIST) WebBook and the National Institutes of Health ChemIDplus Lite by CAS number.

### 2 - 2 Table 2 - 1 Che mi cals Included in the Final Rule CASRN Common Chemical Name Synonyms 75 - 07 - 0 Acetaldehyde Acetic aldehyde; Ethanal; Ethyl aldehyde 78 - 11 - 5 P entaerythritol tetranitrate 1,3 - Propanediol, 2,2 - bis[(nitrooxy)methyl] - , dinitrate (ester); Neopentanetetrayl nitrate; Nitropenta; Nitropentaerythrite; Nitropentaerythritol; Nitropenton; Pentaerythrityl tetranitrate; PET; PETN; Tetranitropentaerythrite; Tetranitropentaerythritol; Tetrasule; 2,2 - Bis(Hydroxymethyl) - 1,3 -propanediol tetranitrate; Pentaerythritol tetran; 1 - 3 Propanediol,2,2 - bis(nitroxy)methyl - ,dinitrate(ester); 1,3 - Propanediol, 2,2 - bis[(nitrooxy)methyl] - , dinitrate; Pentaerithrityl Tetranitrate; 2,2 - Bis[(nitrooxy)methyl] - 1,3 - propanediol dinitrate (ester) 84 - 65 - 1 9,10 - Anthracenedione 9,10 - Anthraquinone, Anthraquinone; Anthradione; Anthracene, 9,10 - dihydro - 9,10 - dioxo - ; 9,10 - Dioxoanthracene; 9,10 - Anthrachinon; Anthracene - 9,10 - quinone; Anthra - 9,10 - quinone; 9,10 - anthracenequinone; anthracene - 9,10 - dione 89 -32 - 7 1H,3H - Benzo[1,2 - c:4,5 - c']difuran - 1,3,5,7 - tetrone 1,2,4,5 - Benzenetetracarboxylic anhydride; 1,2,4,5 - Benzenetetracarboxylic dianhydride; Pyromellitic dianhydride; Benzene 1,2,4,5 - tetracarboxylic dianhydride; Benzene - 1,2:4,5 - tetracarboxylic di anhydride; Pyromellitic acid anhydride; Pyromellitic acid dianhydride; Pyromellitic anhydride; 1,2,4,5 - Benzenetetracarboxylic 1,2:4,5 - dianhydride 110 - 44 - 1 Sorbic acid 2,4 - Hexadienoic acid, (E,E) - ; Sorbic acid, (E,E) - ; α - trans - γ - trans - Sorbic acid; trans,trans - Sorbic acid; trans,trans - 2,4 - Hexadienoic acid; 1,3 - Pentadiene - 1 - carboxylic acid; 2 - Propenylacrylic acid; 2,4 - Hexadienoic acid; Acetic acid, (2 - butenylidene) - ; Acetic acid, crotylidene - ; Hexadienic acid; Hexadienoic acid 118 - 82 - 1 Phenol, 4,4' - methylenebis[2,6 -bis(1,1 - dimethylethyl) - Phenol, 4,4' - methylenebis[2,6 - di - tert - butyl - ; 4,4' - Methylenebis[2,6 - Di - tert - butylphenol]; 4,4' - Dihydroxy,3,3' - 5,5' - tetra - t butyldiphenylmethane; 4,4' - Methylenebis(2,6 - di - t -butylphenol); 4,4' - Dihydroxy- 3,5,3',5' - tetra - tert - butyldiphenylmethane; Di(4 - hydroxy- 3,5 - di - tert - butylphenyl)methane 119 - 61 - 9 Methanone, diphenyl Benzophenone; α - Oxodiphenylmethane; α - Oxoditane; Benzene, benzoyl - ; Benzoylbenzene; Diphenyl ketone; Diphenylmethanone; Phenyl ketone; Ketone, diphenyl; a - Oxodiphenylmethane; Diphenyl - methanon 144 - 62 - 7 Ethanedioic acid Oxalic acid; Oxiric acid; Ethanedionic acid; Ethane - 1,2 - dioic acid 149 - 44 - 0 Methanesulfinic acid, hydroxy- , monosodium salt Sodium formadehydesulfoxylate, sodium sulfoxylate formaldehyde (anhydrous); Formaldehyde sodium sulfoxylate; Hydroxymethanesulfinic acid sodium salt; Sodium (hydroxymethyl)sulfinate; Sodium hydroxymethanesulphinate

2524 - 04 - 1 Phosphorochloridothioic acid, O,O - diethyl ester Diethoxythiophosphoryl chloride; Diethyl chloroth iophosphate; Diethyl phosphorochloridothioate; Diethyl phosphorochloridothionate; Diethyl phosphorochlorothioate; Diethyl phosphorothiochloridate; Diethyl thiophosphoric chloride; Diethyl thiophosphoryl chloride; Diethylthiophosphoric acid chloride; O,O - Di ethyl chloridophosphorothioate; O,O Diethyl chloridothionophosphate; O,O - Diethyl chlorothionophosphate; O,O - Diethyl chlorothiophosphate; O,O - Diethyl chlorothiophosphonate; O,O - Diethyl phosphorochloridothioate; O,O - Diethyl phosphorochlorothioate; O,O - Diethyl phosphorothiochloridate; O,O - Diethyl phosphorothionochloridate; O,O - Diethyl thionophosphoric acid ester chloride; O,O Diethyl thionophosphoric chloride 4719 - 04 - 4 1,3,5 - Triazine - 1,3,5(2H,4H,6H) - triethanol 1,3,5 - Tris(hydroxy- ethyl)s - hexahydrotriazine; 2, 2',2'' - (Hexahydro - 1,3,5 - triazine - 1,3,5 - triyl)triethanol; Hexahydro - 1,3,5 - tris(hydroxyethyl)triazine; s - Triazine - 1,3,5(2H,4H,6H) - triethanol 6381 - 77 - 7 Sodium erythorbate 2,3 - Didehydro - 3 - O - sodio - D - erythro -hexono - 1,4 - lactone; D - erythro - Hex - 2 - enonic acid, gamma - lactone, monosodium salt 31138 - 65 - 5 D - gluco - Heptonic acid, monosodium salt, (2.xi.) - Sodium glucoheptonate; Monosodium D - glucoheptonate

### 2 - 3 Table 2 - 1 Che mi cals Included in the Final Rule CASRN Common Chemical Name Synonyms 66241 - 11 - 0 C.I. Leuco Sulphur Black 1 C.I. 53185 68187 - 76 - 8 Castor oil, sulfated, sodium salt Castor oil, sulf ate, sodium salt; Castor oil, sulfated sodium salts; Castor oil, sulfated, sodium salt; Sulfated castor oil, sodium salt; Turkey red oil, sodium salt 68187 - 84 - 8 Castor oil, oxidized Castor oil, partially oxidized; Oxidized castor oil 68479 - 98 - 1 Benzenediamine, ar,ar- diethyl - ar - methyl - Diethyltoluenediamine; Diethylmethylbenzenediamine; ar,ar - Diethyl - ar - methylbenzenediamine 68527 - 02 - 6 Al kenes, C12 - 24, chloro Chlorinated olefins (C12 - C24) 68647 - 60 - 9 Hydrocarbons, C>4 N/A Sources: National Institute of Standards and Technology (NIST) WebBook and the National Institutes of Health ChemIDplus Lite.

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2.2 Chemical Use and Market Information Chemical use and market information were collected for the chemicals included in the final rule in order to facilitate analysis of the rule’s potential impact on manufacturers of these substances. For example, chemical use information is useful in determining the markets the chemicals are sold in and the general profitability of those markets. Producer, price, and produc tion volume data are used more specifically to estimate the annual revenue each manufacturer of the chemicals in the final rule generates from those chemicals, and to compare these revenues to the compliance costs for each chemical pursuant to the final rule. The current chapter discusses methods employed to evaluate use and market information for each chemical included in the final rule, and presents a summary of results. Market information presented includes publicly available producer, production, trade, and price information, where these data were available. Chemical - specific use and market information for each chemical included in the final rule are presented in Section 2.2. Chemical Use Information. To find information on chemical uses, EPA relied on readily available sources of information. The review is meant to provide a broad review of uses and is not expected to be a complete, exhaustive review. EPA was able to obtain use information for 16 of the 19 chemicals and was not able to locate use information for the remaining 3 chemicals. Chemical Producer and Production Information. EPA acquired chemical producer and production information from the Toxic Substances Control Act (TSCA) Inventory Update Reporting rule (IUR) 2006. At the time this report was developed, the 2006 IUR data were not yet publicly available. Therefore, the data used for the analysis are considered preliminary. The IUR requires manufacturers and importers of certain chemical substances contained in the TSCA Chemic al Substances Inventory to identify themselves and report current data on their production volumes, plant sites, and other information related to the manufacture of the chemicals. 3 , 4 

### Importantly, the Inventory contains both confidential business informati on (CBI) and non - CBI of producers and production volumes for the chemicals it contains. Production volume ranges used in calculations are considered CBI, however, this section presents those data in a non- CBI format. While this section presents sales and employee data for all companies (CBI and non - CBI) that produce chemicals included in the final rule, specific producer information is presented only from the public, non - CBI IUR data. Overall, EPA identified 46 global ultimate parent companies, based on 2006 IUR reporting, that produce the 19 chemicals included in the final rule. 5 

### This figure may not include all potentially affected entities because, for example, companies that manufactured or imported less than 25,000 pounds of a subject chemical at an individual site in 2006 are not required to comply with IUR reporting, however, EPA believes the figure presents a reasonable estimate for the purpose of analyzing the effects of the final rule. Once producers of each chemical were identified, EPA us ed facility- specific Dun & Bradstreet identification numbers (DUNS numbers) from Dun & Bradstreet’s Duns Market Identifier database (Dun & Bradstreet, 2007) and information about facility location provided in the IUR database to identify facilities and

3 Since 1986, reporting under the IUR ha s taken place at four - year intervals; the data presented in this chapter were from reporting in 2002 and 2006 , and represent the most recent data available. 4 According to the IUR rule, for the 2006 reporting cycle, entities that produced or imported chemicals listed in the TSCA Chemical Inventory with a site - specific production volume of 10,000 pounds or more were required to submit reports of their production or importation volumes to EPA. 5 EPA could not locate the global ultimate parent company for two com panies that submitted production data for the 2006 IUR rule.

### 2 - 5

the ir global ultimate parent companies. 6 

### A search conducted using the Dun and Bradstreet database also provided data on annual sales and number of employees at the parent company level for all facilities determined to be potentially subject to the final rule . EPA was able to collect publicly available information on sales and employment for most of the parent companies using the Dun and Bradstreet database. Annual sales data were available for 45 of the 48 companies and employee data were available for 46 o f the 48 companies identified. 7 

### Table 2 - 2 provides summary statistics of the available data for the 48 companies included in this analysis. As shown in Table 2 - 2, potentially impacted companies vary widely as measured by both number of employees and annu al sales. Table 2 - 2

Employee and Sales Information for Potentially Impacted Companies Included in the Analysis Statistical Measure Number of Employees Annual Sales Number of Companies With Dun and Bradstreet Data Available 46 45 Minimum Value 11 $1,30 0,000 Maximum Value 85,270 $51,715,200,000 Median Value 1,564 $549,300,000 Mean Value 8,651 $5,037,480,338 Standard Deviation 17,070 $11,231,074,823 Source: Dun & Bradstreet, 2008. 

### Figures 2 - 1 and 2 - 2 show the distribution of potentially impacted c ompanies considered in the analysis by number of employees and annual sales, respectively. Approximately 52 percent of the companies for which employee information was available employ 2,500 or fewer employees, and approximately 51 percent of the companie s for which annual sales information was available have annual sales of less than or equal to $1 billion.

6 Dun and Bradstreet is a New York-based company that provides business information through a global commercial database. It assigns DUNS numbers to identify businesses around the world. T hese numbers are required for many US federal government transactions and therefore are widely used and assigned. DUNS numbers are also frequently used in corporate research. Database entries provide legal 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 forty vital statistics about each organization. 7 The reporting year for the most current data in th e Dun and Bradstreet database varied across companies.

### 2 - 6 Figure 2 - 1 Distribution of Potentially Impacted Companies by Number of Employees

0 2 4 6 8 10 12 14

0 t o 100 101 t o 500 501 t o 2,500 2,501 t o 10,000 10,001 t o

50,000 >50,001 Num be r of Emplo ye esNumber of Companies

Source: Dun & Bradstreet, 2008. Figure 2 - 2 Distribution of Po tentially Impacted Companies by Annual Sales

0 2 4 6 8 10 12 14 16 18 20

$0 t o $100 $101 t o $500 $501 t o $1000 $1,001 t o $10,000 >$10,001 An nual Sales ($Mi llio ns)Number of Companies

Source: Dun & Bradstreet, 2008. 

### The distribution of chemicals included in the final rule by production volume range is illustrated in Figure 2 - 3. As shown, approximately 68 percent of the chemicals included in the final rule are produced in volumes of 10 million pounds or less annually.

### 2 - 7 Figure 2 - 3 Distribution of Production Volumes for Chemicals Included in the Final Rule (2006)

0 2 4 6 8 10 12 14

1 t o 10 10.01 t o 50 50.01 t o 100 >1 00 Pro du ctio n Vo lum e (Mi llio n l bs )Number of Chemicals

Source: 2006 IUR data (electronic file) . 

### Chemical Price Information. Publi shed price data were available for 8 chemicals from the Chemical Market Reporter (CMR, 2006) and from the U.S. International Trade Commission’s report entitled Synthetic Organic Chemicals (USITC, 1996); for the remainder of chemicals, EPA derived prices from these and other publications using a number of assumptions. This section first discusses the methodology used to obtain chemical prices from CMR and USITC, and then discusses the methodologies used to derive chemical prices for the remaining chemicals. Based on this chemical price search methodology, EPA has either obtained or derived chemical price data for all 19 chemicals included in the final rule. Table 2 - 4 presents summary statistics of this price information.

Table 2 - 4 Summary Statistics fo r Chemical Prices: $2006 Minimum Price/lb $0.43 Maximum Price/lb $6.75 Mean Price/lb $1.65 Median Price/lb $1.03 Standard Deviation $1.75 

### Price Data Available from CMR and USITC. Using the following sequential methodological steps, EPA was able t o locate price data for twenty-three chemicals in the CMR and USITC sources:

### 2 - 8

 

### CMR : First, EPA searched CMR for price data using common chemical names. Where this method was unsuccessful, EPA searched CMR for price data using synonyms for each common chemi cal name as summarized in Table 2 - 1. EPA acquired price data for five chemicals from CMR.

 

### USITC: If price data were unavailable from CMR, EPA used production volumes and sales of groups of chemicals contained in the Harmonized Tax Schedule (HTS) of the U SITC’s report entitled Synthetic Organic Chemicals. 8 

### EPA divided the sales by the volume for each HTS chemical group to derive an average price per pound, and assigned this price to the chemical in this final rule that would logically belong to that group . EPA acquired price data for two chemicals using this method. EPA -Derived Price Data

 

### Similar Chemical Prices . For one chemical (CASRN 78 - 11 - 5), EPA used CMR data for another chemical that is similar in chemical composition, use, or manufacture (penta erythritol).

 

### Small Quantity Catalog Prices . Online chemical catalogs published by Sigma -Aldrich Company (2006), Spectrum Quality Products (2006), and Fischer Chemical Company (2006) provided small quantity price information for 8 of the remaining chemic als for which data were not available using the sources and methods described above. However, because small quantity catalog prices are often significantly higher than the bulk quantity prices reported in the CMR, EPA adjusted the small quantity catalog prices for these 8 chemicals to approximate bulk quantity prices. To determine the appropriate adjustment factor, 12 chemicals for which price data were available from both CMR (2006) and Sigma -Aldrich (2006) were randomly selected and compared to develop adjustment factors, which are summarized in Table 2 - 5. For example, Sigma - Aldrich (2006) quotes a price of $102.50 for 500 grams of the chemical 1H,3H - Benzo[1,2 - c:4,5 - c' ]difuran 1,3,5,7 -tetrone (CASRN 89 - 32 - 7). Using standard conversion methods (1 kilogram = 2.204 pounds), the implied small quantity price per pound for this chemical is $93 per pound. This small quantity price is then divided by a scaling factor of 996.88 to arrive at an estimated bulk quantity price of $1.25/lb for this chemical .  

### Ame rican Chemistry Council Prices . The American Chemistry Council publishes a Guide to the Business of Chemistry, which contains price information for certain types of chemicals. According to the guide published in 2005 (ACC 2006), a rule of thumb for speci alty chemicals is that the price is greater than $1.00 per pound and a rule of thumb for basic chemicals is that the price is less than $0.50 per pound. To be conservative, EPA uses the price of $0.50 per pound for the remaining three chemicals .

8 Individual chemical prices were not available from the USITC report for the chemical prices derived using the report.

### 2 - 9 Table 2 - 5 Comparison Between Chemical Marketing Reporter (CMR) and Sigma-Aldrich Prices

CAS Number CMR

Price/lb Sigm a-Aldrich Price (Varies by Quantity (Q)) Q  1kg 500g  Q  100g Q  50g Stated Price Units

(kg) Implied

Price/lb a Scaling

Factor b S tated

Price Units

(grams) Implied

Price/lb a Scaling

Factor b Stated

Price Units

(grams) Implied

Price/lb a Scaling

Factor b 108 - 31 - 6 $0.50 $17.70 1 $8.03 16.06 --- --- --- --- $14.00 25 $254.08 508.17 64 - 19 - 7 $0.46 $270.00 10 $12.25 26.92 --- --- --- --- --- --- --- --- 58 - 08 - 2 $7.00 $128.50 1 $58.30 8.33 $21.90 100 $99.36 14.19 $2.30 5 $208.71 29.82 75 - 20 - 7 $0.23 $30.40 2 $6.90 30.38 $23.70 500 $21.51 94.74 $21.50 25 $390.20 1718.94 67 - 48 - 1 $0.54 $79.70 1 $36.16 67.59 $27.10 25 0 $49.18 91.93 $12.80 50 $116.15 217.11 85 - 44 - 9 $0.55 $13.40 1 $6.08 11.05 --- --- --- --- --- --- --- --- 532 - 32 - 1 $0.81 $19.90 1 $9.03 11.15 --- --- --- --- $6.30 25 $114.34 141.16 112 - 57 - 2 $1.70 $54.60 1 $24.77 14.57 $19.90 100 $90 .29 53.11 $13.10 5 $1,188.75 699.26 7446 - 70 - 0 $0.85 $38.60 1 $17.51 20.60 $22.20 100 $100.73 118.50 $20.00 5 $1,814.88 2135.16 1317 - 39 - 1 $1.54 --- --- --- --- --- --- --- --- $70.90 25 $1,286.75 835.55 143 - 07 - 7 $0.29 $34.00 1 $15.43 54.13 --- --- --- --- --- --- --- --- 108 - 31 - 6 $0.50 $17.70 1 $8.03 16.06 --- --- --- --- $14.00 25 $254.08 508.17 7719 - 12 - 2 $0.49 --- --- --- --- $184.50 100 $837.11 --- $59.70 25 $1,083.48 2211.19 7447 - 40 - 7 $0.54 --- --- --- --- $133.50 100 $605.72 --- $48.30 25 $876.59 1623.31 7646 - 69 - 7 $6.15 $184.00 2 $41.74 6.79 $30.20 100 $137.02 --- $22.90 5 $2,078.04 337.89 112 - 27 - 6 $0.70 $22.60 1 $10.25 14.65 --- --- --- --- $20.40 25 $370.24 Average 22.95 74.50 996 .88 Notes: aThe implied price per pound is calculated by dividing $/kg by 2.204 lbs/kg. b The scaling factor is equal to the ratio of the Sigma - Aldrich implied price/lb divided by the CMR price/lb. Sources: Chemical Market Reporter. November, 2006, www. ch emicalmarketreporter.com ; and Sigma - Aldrich Company. November 2006, www.sigmaaldrich.com .

### 2 - 10 Table 2 - 6 presents a summary of the price data collection effort following the methodologies discussed above. Figure 2 - 4 presents the distribution of chemical pri ces. Table 2 - 6 Summary of Price Data Collection Effort Data Source for Price Data Number of Che mi cals Percent Chemical Marketing Reporter (CMR) 6 32% Harmonized Tariff Schedule (HTS) Group Price 2 11% Estimated from Small Quantity Catalog Price 8 42% American Chemistry Council 3 16% Total Number of Regulated Chemicals 19 100% Figure 2 - 4 Distribution of Prices for Chemicals Included in the Final Rule: $2006

0 1 2 3 4 5 6 7 8 9 10

$0 t o $0.50 $0.51 t o $1.00 $1.01 t o $3.00 >$3.01 Pric e Range ($/ lb )Number of Chemicals

### 2 - 11

2.3 Chemical- Specific Use and Market Information This section presents use and market information separately for each of the chemicals included in the final rule. Producer and production volume data are taken from the 2002 IUR (online) because 2006 IUR data were not publicly available at the time this report was prepared. All of the info rmation presented is based on publicly available data. Chemicals are presented in the order listed in Table 1. 2.3.1 Acetaldehyde [CASRN 75 - 07 - 0]

Use Information Acetaldehyde is a chemical intermediate and can be used in the manufacture of many products inc luding pyridines, acetate esters, pentaerythritol, peracetic acid, 1,3 -butylene glycol (1,3 - Butanedoil), and acetic acid. Pyridines are used in the manufacture of chemicals for pesticide synthesis, and pentaerythritol’s end uses are in alkyd resin production and other small volume applications. Peracetic acid is used to manufacture epoxidized oil, caprolactone, aliphatic epoxides and small volume specialty chemicals. Esters of 1,3 -bytylene glycol are used as plasticizers for cellulosics and polyvinyl chl oride resins. The diacetate is a plasticizer for cigarette filter tow. Acetic acid is used primarily in the manufacture of rubber, plastics, acetate fibers, pharmaceuticals, and photographic chemicals. (Hazardous Substances Databank.). Market Inform ation for Acetaldehyde CAS #75 - 07 - 0 Market Information Results for Chemical Source Price/lb ($2006) $0.46 CMR Production Volume Range

(lbs) >100M - 500M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.2 Pentaerythritol tetranitrate [CASRN 78 - 11 - 5]

Use Information Pentaerythritol tetranitrate is u sed in the manufacturing of demolition explosive and blasting caps. (Hazardous Substances Databank, National Library of Medicine Specialized Information Services ChemIDplus Lite) . Market Information for Pentaerythritol tetranitrate CAS# 78 - 11 - 5 Market Information Results for Chemical Source Price/lb ($2006) $1.48 CMR, based on price for Pentaerythritol Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary.

### 2 - 12

2.3.3 9,10 -Anthracenedione [CASRN 84 - 65 - 1]

Use Information 9,10 -Anthracenedione serves as the basis for the production of a large number of acid and base dyes, vat dye s, disperse dyes, and reactive dyes. It is used as an additive in the soda and kraft chemical alkaline pulping processes in the paper pulping industry. It also used as an intermediate in the manufacture of the laxative Danthron, and as a catalyst in isomerization of linseed and other vegetable oils. Other uses include an accelerant in nickel electroplating, and improving adhesion and heat stability of tire cords. Its common commercial uses are as a repellent of geese in terrestrial areas at airports, commercial, industrial, and municipal sites, and at dumpsites, landfills, golf courses, ornamental, and conifer nurseries. (Hazardous Substances Databank, National Library of Medicine Specialized Information Services ChemIDplus Lite) .

Market Information fo r 9,10 -Anthracenedione

CAS# 84 - 65 - 1 Market Information Results for Chemical Source Price/lb ($2006) $2.75 Spectrum w/ Bulk Adjustment Factor Production Volume Range

(lbs) >10M - 50M 2006 IURa aData from the 2006 IUR reporting period were extracted Dece mb er 2007 and are preliminary. 

### 2.3.4 1H,3H - Benzo[1,2 - c:4,5 - c' ]difuran - 1,3,5,7 -tetrone [CASRN 89 - 32 - 7]

Use Information This chemical is used as a curing agent for epoxy resins used in high temperature laminates, molds, coatings, and as a cross - linking agent for epoxy plasticizers in vinyls, alkyd resins. It is also used as an intermediate for pyromellitic acid, and in the manufacture of aromatic polyamides (synthetic fibers manufacture) and plasticizers. ( Hazardous Substances Databank.)

Market Informatio n for 1H,3H - Benzo[1,2 - c:4,5 - c']difuran - 1,3,5,7 - tetrone CAS# 89 - 32 - 7 Market Information Results for Chemical Source Price/lb ($2006) $1.25 Aldrich w/ Bulk Adjustment Factor Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary.

### 2 - 13

2.3.5 Sorbic acid [CASRN 110 - 44 - 1]

Use Information Sorbic acid is a mold and yeast inhibitor, mainly used in foods, animal feeds, tobacco, cosmetics, and pharmaceuticals, as well as in packing materials for these substances and in other products that come in contact with human or animal skin. As a food preservative, sorbic acid is used to reduce the total number of viable bacteria and double the refrigerated shelf life for fresh poultry. This chemical is also used as an intermediate in plasticizers and lubricants, to impregnate polyethylene wrappers for raw farm products, to improve characteristics of drying oils, in alkyd type coatings to improve gloss, and to improve milling characteristics of c old rubber. (Hazardous Substances Databank, National Library of Medicine Specialized Information Services ChemIDplus Lite) .

Market Information for Sorbic acid CAS# 110 - 44 - 1 Market Information Results for Chemical Source Price/lb ($2006) $5.68 CMR Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.6 Phenol, 4,4' - methylenebis[2,6 -bis91,1 - dimethylethyl - )] [CASRN 118 - 82 - 1]

Use Information This chemical is used in metalworking fluids and as a primary antioxidant/stabilizer in plastics. (Scorecard: The Pollution Information Site)

Market Information for Phenol, 4,4' - me thylenebis[2,6 - bis91,1 - dimethylethyl - )] CAS# 118 - 82 - Market Information Results for Chemical Source Price/lb ($2006) $0.72 CMR Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.7 Methanone, diphenyl - [CASRN 119 - 61 - 9]

Use Information This chemical may be found in hair mousse, as a fixative for heavy perfumes, especially when used in soaps. It is used in the manufacture of antihistamines, hypnotics, and insecticides, and in organic

### 2 - 14

synthesis from which derivatives are used as ultraviolet absorbers, flavoring, and as a polymerization inhibitor for styrene. The chemical is also used in industry product finishes excluding pigment dispersions and ink vehicles but including packaging inks, screen printing inks, and sheet - fed inks. (Scorecard: The Pollution Inf ormation Site; Hazardous Substances Databank.) Market Information for Methanone, diphenyl CAS# 119 - 61 - 9 Market Information Results for Chemical Source Price/lb ($2006) $0.74 Aldrich w/ Bulk Adjustment Factor Production Volume Range

(lbs) >1M - 10M 2 006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.8 Ethanedioic acid [CASRN 144 - 62 - 7]

Use Information Ethanedioic acid is used most often in metal and textile treatment, to remove rust (oxide films that form by reaction of metal surface with oxygen) in cooling systems and industrial equipment like boilers. Acid and salts are used as components in antirust metal cleaners and coatings. In the treatment of textiles, it is used to dissolve rust and kill ba cteria, as a flame -proofing and cross - linking agent in cellulose fabrics, as a reducing agent in mordent wool dying, and as an acid dye stabilizing agent in nylon. This chemical is also used as scouring agent for cotton printing, a dye stripper for wool, and in degumming of silk. Ethanedioic acid is used to form insoluble rare earth complexes in hydrochloric solutions during separation and recovery of rare earth elements from ore. Once precipitated, the reoxilates are separated and ignited to form oxides . Finally, ethanedioic acid can be used in bleaching of leather, masonry (marble and tile polishing), to clean aluminum and wood decks, and as a synthetic intermediate for pharmaceuticals. ( Hazardous Substances Databank).

Market Information for Ethane dioic acid

CAS# 144 - 62 - 7 Market Information Results for Chemical Source Price/lb ($2006) $1.22 Fischer w/ Bulk Adjustment Factor Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.9 Methanesulfinic acid, hydroxy - , monosodium salt [CASRN 149 - 44 - 0]

Use Information This chemical is used as a stripping and discharge agent for textiles, and as a bleaching agent

### 2 - 15

for molasses. It is also used in vat color printing past es, in polymerization of ethylenic compounds, and in manufacturing of arsphenamines. ( Hazardous Substances Databank; National Library of Medicine Specialized Information Services ChemIDplus Lite) . Market Information for Methanesulfinic acid, hydroxy - , monosodium salt CAS# 149 - 44 - 0 Market Information Results for Chemical Source Price/lb ($2006) $1.02 Aldrich w/ Bulk Adjustment Factor Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.10 Phosphorochloridothioic acid, O,O - diethyl ester [CASRN 2524 - 04 - 1]

Use Information This chemical is used as an intermediate for pesticides, as an oil and gasoline additive, in flame -retardants, and in flotation agents. ( Hazardous Substances Databank.) Market Information for Phosphorochloridothioic acid, O,O - diethyl ester CAS# 2524 - 04 - 1 Market Information Results for Chemical Source Price/lb ($2006) $1.03 Aldrich w/ Bulk Adjustment Factor Production Volume Range

(lbs) >10M - 50M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and is preliminary. 

### 2.3.11 1,3,5 - Triazine - 1,3,5(2H,4H,6H) -triethanol [CASRN 4719 - 04 - 4]

Use Information This chemical is used in the manufacture of bactericides and biocides. (Hazardous Substances Databank.) Market Information for 1,3,5 - Triazine - 1,3,5(2H,4H,6H) - triethanol CAS# 4719 - 04 - 4 Market Information Results for Chemical Source Price/lb ($2006) $1.74 Aldrich w/ Bulk Adjustment Factor Production Volume Range

(lbs) >10 M - 50M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary.

### 2 - 16

2.3.12 Sodium erythorbate [CASRN 6381 - 77 - 7]

Use Information Sodium erythorbate is used as an antioxidant in food applications for which the vitamin activity of ascorbic acid (Vitamin C) is not required. Specifically, the compound is most frequently used to develop and retain the coloring and taste in meat products. It is also used for seafood products, fruit and vegetable preservation, in beverages, and as a developing agent in photographic applications. (Roquette, “Sodium Erythorbate in photographic applications, available at http://roquette.fr/fr/bibliotheque/Erythorbate.pdf , and Roqu ette, Food Business Unit Newsletter, Number 8, June 2000, available at http://www.esters - cationic - anionic - ethers starches.com/

fr/Qnews/pub/actualites/foodnews08- 2000- 10- 13 - 15 - 25 - 53.PDF , accessed on August 31, 2007) Market Information for Sodium erythorbate CAS# 6381 - 77 - 7 Market Information Results for Chemical Source Price/lb ($2006) $2.55 Spectrum w/ Bulk Adjustment Factor Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.13 D - gluco - Heptonic acid, monosodium salt, (2.xi.) - [CASRN 31138 - 65 - 5]

Use Information This organic salt is used a s a chelating agent in cosmetics, dairy cleaners, bottle cleaners, foodcontact paper and paperboard manufacturing, metal cleaning, kier boiling, caustic boil - off, paint stripping, boiler water additive for food processing, and as an ingredient in aluminum etchant. This chemical is also used as a sequestrant, latex stabilizer and in intravenous pharmaceuticals. (Specialty Chemicals Electronic Source) Market Information for D - gluco - Heptonic acid, monosodium salt, (2.xi.) - CAS# 31138 - 65 - 5 Market Information Results for Chemical Source Price/lb ($2006) $1.61 USITC based on HTS price Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary.

### 2 - 17

2.3.14 C.I. Leuco Sulphur Black 1 [CA SRN 66241 - 11 - 0]

Use Information C.I. Leuco Sulphur Black 1 is used as a fingerprint dye. ( Colour Index International Online, available at http://www.colour- index.org/content/fingerprint.asp?cino=3928, accessed on August 30, 2007 ) Market Information for C.I. Leuco Sulphur Black 1 CAS# 66241 - 11 - 0 Market Information Results for Chemical Source Price/lb ($2006) $6.75 USITC based on HTS price Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.15 Castor oil, sulfated, sodium salt [CASRN 68187 - 76 - 8]

Use Information Castor oil is an inedible, viscous, non -volatile, non - drying oil with a pale yellow color. Castor seed, from which the oil is produced through mechanical pressing and solvent extraction, is toxic to humans and animals due to the ricin, ricinine, and allergens contained in the seeds. Castor oil and its derivatives are used in a wi de variety of industrial applications, including as a raw material for paints, coatings, inks, lubricants, perfume formulations, and adhesives, and interest in the oil continues to grow because it is renewable and biodegradable. Sulphated castor oil is produced through the addition of sulphuric acid to the oil at temperatures of 25 to 30 degrees Celsius. The mixture is then washed and neutralized with a sodium hydroxide solution. Sulfated castor oil is a wetting agent used in dyeing and finishing cotton and linen fabrics. Adding sulphuric acid to castor oil also produced an emulsifier for insecticidal oils. (

D.S. Ogunniyi, “Castor oil: A vital industrial raw material”, Bioresource Technology 97 (2006), pp. 1086

- 1091)

Market Information for Castor oil , sulfated, sodium salt CAS# 68187 - 76 - 8 Market Information Results for Chemical Source Price/lb ($2006) $0.43 CMR Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.16 Castor oil, oxidized [CASRN 68187 - 84 - 8]

### 2 - 18 Use Information Oxidized castor oil is produced by blowing air or oxygen into the oil at temperatures of 80 to 130 degrees Celsius. Oxidized castor oil is used extensively as a plasticizer in lacquers, artifici al leathers, hydraulic fluids, and adhesives. Also see use information presented in 2.1.34 Castor oil, sulfated, sodium salt. ( D.S. Ogunniyi, “Castor oil: A vital industrial raw material”, Bioresource Technology 97 (2006), pp. 1086 - 1091)

Market Inform ation for Castor oil, oxidized CAS# 68187 - 84 - 8 Market Information Results for Chemical Source Price/lb ($2006) $0.43 CMR Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are pre liminary. 

### 2.3.17 Benzenediamine, ar,ar - diethyl - ar - methyl - [CASRN 68479 - 98 - 1]

Use Information No current chemical use information identified .

Market Information for Benzenediamine, ar,ar - diethyl - ar - methyl CAS# 68479 - 98 - 1 Market Information Results for Chemical Source Price/lb ($2006) $0.50 American Chemistry Council Production Volume Range

(lbs) >10M - 50M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.18 Alkenes, C12 - 24, chloro [CASRN 68527 - 02 - 6]

Use I nformation No chemical use information identified .

### 2 - 19 Market Information for Alkenes, C12 - 24, chloro

CAS# 68527 - 02 - 6 Market Information Results for Chemical Source Price/lb ($2006) $0.50 American Chemistry Council Production Volume Range

(lbs) >1M - 10M 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary. 

### 2.3.19 Hydrocarbons, C>4 [CASRN 68647 - 60 - 9]

Use Information No chemical use information identified . Market Information for Hydrocarbons, C>4

CAS# 686 47 - 60 - 9 Market Information Results for Chemical Source Price/lb ($2006) $0.50 American Chemistry Council Production Volume Range

(lbs) >1B 2006 IURa aData from the 2006 IUR reporting period were extracted December 2007 and are preliminary.

### 3 - 1 CHAPTER 3 – COSTS This chapter presents estimates of the compliance and social costs industry (chemical manufacturers and other entities affected by the final rule) and EPA may incur pursuant to requirements included in the final rule, and discusses the method used to measure each. Industry may incur costs related to laboratory testing requirements, analytical methodology validation, administrative activities, and export notification requirements. EPA may incur costs related to reviewing and processing letters of intent, study plans, final reports, and exemption applications submitted by industry. 3.1 Industry Compliance Costs Industry compliance costs include laboratory testing costs, analytical methodology validation costs, administrative costs, and export notification costs. Each of these cost types is described below in greater detail. 3.1.1 Laboratory Testing Costs Tests Required for Chemicals Included in the Final Rule The final rule is motivated by the premise that, at a minimum, basic toxicity information comparable to that generated by OECD’s Screening Information Data Set (SIDS) Tier 1 testing battery should be available for all HPV chemicals included in the rule. The OECD HPV SIDS Program seeks information on the identity of each chemical, its uses, sources and extent of exposure; physical and chemical properties; environmental fate; and certain limited toxicity data for humans and the environment. While SIDS is more comprehensive in data coverage than the requirements of the final rule (e.g., uses, sources and extent of exposure), it is not intended to describe a chemical thoroughly, but rather to provide enough information to support an initial (or screening level) assessment and to assign a priority for further work, if necessary. Included in the OECD HPV SIDS Program is the development of test data, if such data are not already available, related to six health and environmental effect endpoints for international HPV chemicals. 9 

### The test data identified under SIDs have been internationally agreed upon by the 29 member countries of the OECD as providing the minimum data set required to make an informed preliminary judgment about the hazards of a given HPV chemical. EPA’s final required testing follows the SIDS model. In order to determine which testing would be required for each chemical, EPA examined available test data for the chemicals in the final rule. Based upon this review, EPA is only requiring testing for those endpoints where data are unavailable or deemed inadequate. Tests required for each ch emical included in the final rule are summarized in Table 3 - 1. These tests and the methods used to estimate their costs are discussed in the next section on test cost methodology.

9 These six endpoints are: (1) acute toxicity; (2) repeat dose toxicity; (3) devel opmental and reproductive toxicity; (4) genetic toxicity (gene mutations and chromosomal aberrations); (5) ecotoxicity (studies in fish, Daphnia, and algae); and (6) environmental fate (including physical/chemical properties).

### 3 - 2 Table 3 - 1 Test Requirements for Chemicals Included in the Final Rule CAS No. Che mi cal Name Required Tests 1 75 - 0 - 70 Acetaldehyde C2, F2 78 - 11 - 5 Pentaerythritol tetranitrate C4 84 - 65 - 1 9,10 - Anthracenedione C6 89 - 32 - 7 1H,3H - Benzo[1,2 - c:4,5 - c']difuran - 1,3,5,7 - tetrone A3, A4, A5, B, C1, D, E1, F1 110 - 44 - 1 Sorbic acid C6 1 18 - 82 - 1 Phenol, 4,4' - methylenebis[2,6 -bis(1,1 - dimethylethyl) - C1 119 - 61 - 9 Methanone, diphenyl - B, C2 144 - 62 - 7 Ethanedioic acid A1, A2, A3, A5, B, C1, E2 149 - 44 - 0 Methanesulfinic acid, hydroxy- , monosodium salt E1 2524 - 04 - 1 Phosphorochloridothioic acid, O,O - diethyl ester A1, A2, A3, A4, A5, B, C1, E1, E2, F2 4719 - 04 - 4 1,3,5 - Triazine - 1,3,5(2H,4H,6H) - triethanol C6 6381 - 77 - 7 Sodium erythorbate A4, B, C1 31138 - 65 - 5 D - gluco - Heptonic acid, monosodium salt, (2.xi.) - A1, A2, A4, A5, B, C1, D, E1, E2, F1 6624 1 - 11 - 0 C.I. Leuco Sulphur Black 1 A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1 68187 - 76 - 8 Castor oil, sulfated, sodium salt A1, A2, C1, D, E1, E2, F1 68187 - 84 - 8 Castor oil, oxidized A1, A2, B, E1, E2, F1 68479 - 98 - 1 Benzenediamine, ar,ar- diethyl - ar - methyl - A 1, A3, A4, A5, C1, E1, E2, F1 68527 - 02 - 6 Al kenes, C12 - 24, chloro A1, A2, A3, A4, A5, B, C1, E2, F 2 68647 - 60 - 9 Hydrocarbons, C>4 A2, A3, A5, B, C1, D, E1, E2, F1 1 Table 3 - 2 identifies the corresponding tests and protocols

.

### 3 - 3

Test Cost Methodology Thi s section describes the test cost methodology used to estimate test costs for each of the six health and environmental effect endpoints included in the final rule test requirements. As stated in the previous section, the final rule requires that manufactu rers test the chemicals included in the rule according to specific testing protocols and guidelines that yield SIDS information. Although the rule includes a variety of voluntary consensus standard protocols (e.g., ASTM E 729 for acute toxicity or ISO 940 8 for Ready Biodegradation), cost estimates are based on OECD or EPA protocols, which are expected to be representative of the voluntary consensus standards. 10 

### These testing cost estimates generally include direct labor, overhead, other direct costs such a s laboratory supplies, and general and administrative services. Estimating potential testing costs for each chemical pursuant to testing requirements contained in the final rule is difficult because industry may have choices associated with the species and/or route of administration used in a particular test, as well as choices between multiple tests to satisfy a particular endpoint testing requirement. Therefore, if cost data for a specific OECD test protocol were available for multiple species and route s of administration, the average cost for all available species and routes of administration was used as the test cost estimate. In addition, a “least cost” and “average cost” scenario were computed where multiple test protocols are available to satisfy a test requirement. The “least cost” scenario assumes that manufacturers will choose the least costly protocol when choices are available. The “average cost” scenario, on the other hand, assumes that the manufacturer may choose any of the available tests that fulfill the testing requirement, and is therefore calculated as the average of the testing options’ costs. Table 3 - 2 at the end of this section presents costs for each test required in the final rule. Note that in Table 3 - 2, cost estimates presented in bold represent the final cost estimates used in the analysis. Individual estimates of test costs will vary across testing laboratories based upon factors such as labor costs, discounts provided to clients for volume testing, profit margins, and other testing. In some cases, EPA has accommodated this variation by developing multiple estimates for a particular test and using the average of the estimates to represent the cost of the test. Itis important to note that because some of the SIDS test data are already available from existing studies, and because the final rule only requires that a test be conducted on a particular chemical where existing test data are unavailable, total laboratory testing costs associated with each chemical included in the fi nal rule will differ depending on the degree to which testing is required. Category A. Physical/chemical property testing Physical/chemical property testing includes tests to measure the melting point (A1; ASTM E 324), boiling point (A2; ASTM E 1719), vapor pressure (A3; ASTM E 1782), n - Octanol/Water Partition Coefficient (log 10 basis) or log KOW 

### (A4; 40 CFR 799.6755, ASTM E 1147, or 40 CFR 799.6756, 10 Section 12(d) of the Natio nal Technology Transfer and Advancement Act of 1995 (NTTAA), Public La w 104 - 113, section 12(d) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies, such as ASTM International, formerly the American Society for Testing and Materials (ASTM). Another voluntary consensus standard body is the International Organization for Standardization (ISO).

### 3 - 4

depending on the estimated log KOW 

### of the chemical), and water solubility (A5; ASTM E 1148, 40 CFR 799.6 784, 40 CFR 799.6784, or 40 CFR 799.6786, depending on the chemical’s estimated water solubility) of a chemical. 11 

### Table 3 - 2 presents the cost estimates for each individual test. Category B. Environmental fate testing In testing environmental fate, a manufacturer can choose one of the following ready biodegradation tests: ASTM 1720 (sealed vessel CO 2 

### production test), ISO 14593 (CO 2 

### headspace test), ISO 7827 (analysis of DOC), ISO 9408 (determination of oxygen demand in a closed respirometer), ISO 9439 (CO 2 

### evolution test), ISO 10707 (closed bottle test), or ISO 10708 (two -phase closed bottle test). OECD protocols for ready biodegradation, on which cost estimates are based, are the following: OECD 301A (DOC die - away test), OECD 301B (carbon dioxide evo lution test), OECD 301C (modified MITI test (I)), OECD 301D (closed bottle test), OECD 301E (modified OECD screening Test), and OECD 301F (manometric respirometry test). For this test category, the test cost used in the least cost scenario is based on the cheaper of the OECD tests (OECD 301D). The test cost used in the average cost scenario is based on the average of all of the OECD tests, because there are no special conditions requiring a manufacturer to use one or the other. Category C. Aquatic tox icity testing If aquatic toxicity testing is required for a particular chemical, a manufacturer must determine if the test chemical falls into one of two Test Groups, based on the chemical’s Log Octanol - Water Partition Coefficient (log Kow

### ). Test Group 1 consists of chemicals with a log Kow 

### of less than 4.2. Test Group 2 consists of test chemicals with a log Kow 

### greater than or equal to 4.2. Each Test Group has different testing requirements and, therefore, different testing costs. Because EPA does not know which Test Group a chemical will fall within (i.e., the log Kow 

### is unknown), the testing costs of both groups are estimated. For example, the following situations occur under testing categories C1 and C2:

$ C1: Conduct the Acute Toxicity to Fish te st (ASTM E 729), Acute Toxicity to Daphnia test (ASTM E 729), and the Toxicity to Plants test (ASTM E 1218) [Test Group 1] or conduct the Chronic Toxicity to Daphnia test (ASTM E 1193) and the Toxicity to Plants test (ASTM E 1218) [Test Group 2]. In this case, the sum of the acute testing costs is averaged with the chronic test cost to obtain the testing cost estimate for testing categories C1 and C2 under both the least and average cost scenarios.

11 EPA recommends, but does not require, that log KOW be quantitatively estimated prior to initiating the n Octanol/Water Partition Coefficient (log 10 basis) or log KOW test requirement . One method, among many similar methods, for estimating log K OW is described in the article entitled Atom/Fragment Contribution Method for Estimating Octanol- Water Pa rtition Coefficients ) by W.M. Meylan and P.H. Howard in the Journal of Pharmaceutical Sciences . 84(1): 83 - 92. January 1992. In addition, EPA recommends, but does not require, that water solubility be quantitatively estimated prior to initiating the water solubility test requirement. One method, among many similar methods, for estimating water solubility is described in the article entitled Improved Method for Estimating Water Solubility From Octanol/Water Partition Coefficient by W.M. Meylan, P.H. Howard, and R.S. Boethling in Environmental Toxicology and Chemistry . 15(2): 100 - 106. 1996.

### 3 - 5

$ C2: Conduct the Acute Toxicity to Daphnia test (ASTM E 729) and the Toxicity to Plants test (ASTM E 1218) [Test Group 1] or conduct the Chronic Toxicity to Daphnia test (ASTM E 1193) and the Toxicity to Plants test (ASTM E 1218) [Test Group 2]. In this case, the two test costs are averaged to obtain the testing cost estimate for testing category C2 under both the least and average cost scenarios. Category D. Mammalian toxicity testing - acute The acute mammalian toxicity testing requirement is met by implementing one of two methods defined in the final rule (Method A or Method B). The method a manufacturer selects is based on the chemical’s physical state at room temperature. For those test substances that are gases at room temperature, Method A is required; otherwise, Method B is required. Method A requires an Acute Inhalation Toxicity Test in Rats (40 CFR 799.9130). Method B requires an Acute Oral Toxicity Test (ASTM E 1163 or 40 CFR 799.9110(d)(1)(i)(A) and, if the manufacturer chooses to, a Neutral Red Uptake Cytotoxicity Test (BALB/c 3T3 or BHK). The cost of the cytotoxicity test is estimated as the sum of the two cytotoxicity test costs (BALB/c 3T3 plus BHK), which is a conservative estimate that likely overestimates actual cytotoxicity test costs. Because the chemical physical state at room temperature is unknown, a least and average cost scenario are estimated. Under the least cost scenario, the cost of the acute mammalian toxicity testing requirements is assumed to be the cost of the Acute Oral Toxicity Test, which is the cheaper of the two methods. Under the average cost scenario, the cost of the acute mammalian toxicity testing requirements is assumed to be the average of the Method A testing requirement and the sum of the Method B testing requirement and the least expensive cytotoxicity test. The cytotoxicity tests are included in the average cost scenario even though they are optional because they are animal - saving tests that may be preferable to test panels. Category E. Mammalian toxicity testing - genotoxicity For gene mutations (E1), manufacturers are required to conduct the in vitro Bacterial Reverse Mutation test (40 CFR 799.9510). For chromosomal damage (E2), manufacturers can conduct one of three tests: the in vitro Mammalian Chromosome Aberration Test (40 CFR 799.9537), the Mammal ian Bone Marrow Chromosomal Aberration Test (40 CFR 799.9538), or the Mammalian Erythrocyte Micronucleus Test (40 CFR 799.9539). Under the least cost scenario, the cost of chromosomal testing is assumed to be the cost of the least expensive test (40 CFR 7 99.9539), while under the average cost scenario, the cost of chromosomal testing is assumed to be the average of all three test options because the test the manufacturer may conduct is unknown. Category F. Mammalian toxicity testing

– repeated dose/reproduction/developmental For test category F1, a manufacturer can either conduct the Combined Repeated Dose Toxicity Study with the Reproduction/Developmental Toxicity Screening Test (40 CFR 799.9365) or the manufacturer can conduct the Reproduction/Develop mental Toxicity Screening Test (40 CFR 799.9355) and the Repeated Dose 28 - Day Oral Toxicity Study in rodents (40 CFR 799.9305). The testing cost under the least cost scenario is assumed to be the cheaper of these two options (conducting 40 CFR 799.9365). T esting costs under the average cost scenario is assumed to be the higher cost option (conducting both 40

### 3 - 6

CFR 799.9355 and 40 CFR 799.9305). For test category F2, the manufacturer would conduct the individual protocol 40 CFR 799.9355 under both the least and average cost scenarios. Estimated Total Test Costs Because the test costs in Table 3 - 2 were estimated in different years, EPA used the Employment Cost Index (ECI) Historical Listing from the Bureau of Labor Statistics (BLS, 2006), U.S. Department of Labor to convert all test cost estimates to $2006. In order to obtain the total test costs under the final rule, the cost of each test required for each chemical was summed across all required tests, and then the total cost per chemical was summed across all chemicals included in the final rule. Following this method, the total laboratory cost for testing the chemicals included in the final rule is estimated to range from approximately $ 2.1 4 million under the least cost scenario to approximately $ 2. 7 9 mil lion under the average cost scenario. These estimates may overstate the true testing burden because they are based on the assumption that each chemical is tested independently. If more than one chemical is tested at a time, testing costs could be lower d ue to economies of scale. Dividing these totals by the 19 chemicals in the final rule yields an average laboratory test cost per chemical of approximately $ 11 2 ,000 under the least cost scenario and approximately $ 14 7 ,000 under the average cost scenario.

### 3 - 7 Table 3 - 2 EPA Estimates of Laboratory Costs of Final Tests: $2006 Testing Category Test Protocol Name Required Protocol Number(s) Basis for Cost Estimate Cost

Estimate $2006 Physical/Chemical Properties A1 Melting Point AS TM E 324 OECD 102 $1,547

A2 Boiling Point AS TM E 1719 OECD 103 $1,580 A3 Vapor Pressure AS TM E 1782 OECD 104 $9,434 A4 Partition Coefficient Method A: 799.6755; or Method B: ASTM E 1147; or Method C: 799.6756 OECD 107 $3,913 A5 Water Solubility Method A: ASTM E 1148; or M ethods B or C: 799.6784 (shake flask and column elution); or Method D: 799.6786 OECD 105 $6,594 Sum (Least & Average Cost Scenarios) $23,067

Environmental Fate and Pathways B Ready Biodegradation Choice of: ASTM 1720 (sealed vessel CO2 production test), ISO 14593 (CO2 headspace test), ISO 7827 (analysis of DOC), ISO 9408 (determination of oxygen demand in a closed respirometer), ISO 9439 (CO2 evolution test), ISO 10707 (closed bottle test), or ISO 10708 (two phase closed bottle test) OECD 301A $9,952 OECD 301B $8,721 OECD 301C $22,083 OECD 301D $7,223 OECD 301E $9,898 OECD 301F $9,751 301D (Least Cost Scenario) $7,223 Average of All OECD 301 Protocols (Average Cost Scenario) $11,271 Aquatic Toxicity C1 (Test Group 1) Acute Toxicity to Fish AS TM E 729 OECD 203 $10,910

Acute Toxicity to Daphnia AS TM E 729 OECD 202 (Part 1) $5,419 Acute Toxicity to Plants AS TM E 1218 OECD 201 $9,845 Test Group 1 Sum $16,330 C1 (Test Group 2) Chronic Toxicity to Daphnia AS TM E 1193 OE CD 202 $35,425

Acute Toxicity to Plants AS TM E 1218 OECD 201 $9,845 Test Group 2 Sum $45,269

### 3 - 8 Table 3 - 2 EPA Estimates of Laboratory Costs of Final Tests: $2006 Testing Category Test Protocol Name Required Protocol Number(s) Basis for Cost Estimate Cost

Estimate $2006 C1 Test Group 1 and 2 Average (Least & Average Cost Scenarios) $30,799 C2 (Test Group 1) Acute Toxicity to Daphnia AS TM E 729 OECD 202 (Part 1) $5,419

Acute Toxicity to Plants AS TM E 1218 OECD 201 $9,845 Test Group 1 Sum $15,264 C2 (Test Group 2) Chronic Toxicity to Daphnia AS TM E 1193 OECD 202 $35,425

Acute Toxicity to Plants AS TM E 1218 OECD 201 $9,845 Test Group 2 Sum $45,269 C2 Test Gro up 1 and 2 Average (Least & Average Cost Scenarios) $30,267 C3 (Test Group 1) Acute Toxicity to Fish AS TME 729 OECD 203 $10,910

Acute Toxicity to Plants AS TM E 1218 OECD 201 $9,845 Test Group 1 Sum $20,755 C3 (Test Group 2) Chronic Toxicity to D aphnia AS TM E 1193 OECD 202 $35,425

Acute Toxicity to Plants AS TM E 1218 OECD 201 $9,845 Test Group 2 Sum $45,269 C3 Test Group 1 and 2 Average (Least & Average Cost Scenarios) $33,012 C4 (Test Group 1) Acute Toxicity to Fish AS TME 729 OECD 203 $10,910

Acute Toxicity to Daphnia AS TM E 729 OECD 202 (Part 1) $5,419 Test Group 1 Sum $16,330 C4 (Test Group 2) Chronic Toxicity to Daphnia AS TM E 1193 OECD 202 $35,425 C4 Test Group 1 and 2 Average (Least & Average Cost Scenarios) $25,877 C5 (Test Group 1) Acute Toxicity to Daphnia AS TM E 729 OECD 202 (Part 1) $5,419 C5 (Test Group 2) Chronic Toxicity to Daphnia AS TM E 1193 OECD 202 $35,425

### 3 - 9 Table 3 - 2 EPA Estimates of Laboratory Costs of Final Tests: $2006 Testing Category Test Protocol Name Required Protocol Number(s) Basis for Cost Estimate Cost

Estimate $2006 C5 Test Group 1 and 2 Average (Least & Average Cost Scenarios) $20,422 C6 Acute Toxicity to Plants AS TM E 1218 OECD 201 (Least & Average Cost Scenarios) $9,845

Mammalian Toxicity - Acute D (Method A 3 ) Acute Inhalation Toxicity 799.913 OECD 403 $13,290

or; D (Method B 3 ) Acute Oral Toxicity AS TM E 1163 or 799.9110 OECD 423 $2,431

BALB/c 3T 3 Neutral Red Uptake Cytotoxicity; or N/A N/A $3,631 BHK Neutral Red Uptake Cy totoxicity N/A N/A $4,687 Sum of Cytotoxicity Tests $8,317 OECD 423 (Least Cost Scenario) $2,431 Average of 403 and (423 + least expensive Cytotoxicity test (Average Co st Scenario)) $9,676

Mammalian Toxicity - Genotoxicity E1 Bacterial Reverse Mutation 799.951 OECD 471 (Least & Average Cost Scenarios) $7,932

E2 Chromosome Aberration, in

vitro; or 799.9537 OECD 473 $22,378 In Vivo Mammalian Cy togenetics Tests: Bone Marrow Chromosomal Analysis; or 799.9538 N/A $47,025 Erythrocyte Micronucleus (bone marrow), in vivo 799.9539 OECD 474 (Least Cost Scenario) $17,479 Average of 473, 799.9538, and 474 (Average Cost Scenario) $28,960

### 3 - 10 Table 3 - 2 EPA Estimates of Laboratory Costs of Final Tests: $2006 Testing Category Test Protocol Name Required Protocol Number(s) Basis for Cost Estimate Cost

Estimate $2006

Mammalian Toxicity

– Repeated Do se/ Reproduction/ Developmental F1 Repeated Dose Oral Toxicity; and, 799.9305 OECD 407 $60,200 Repro/Devel Toxicity Screening; 799.9355 OECD 421 $124,277 or, Combined Repeated Dose with Repro/Devel Toxicity Screen 799.9365 OECD 422 $125,861 OE CD 422 (Least Cost Scenario) $125,861 Sum of OECD 407 and OECD 421 (Average Cost Scenario) $184,477 F2 Repro/Devel Toxicity

Screening 799.9355 OECD 421 (Least & Average Cost Scenarios ) $59,694

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3.1.2 Analytical Methodology Validation Costs When conducting tests, laboratories perform analytical methodology validation to ensure that proper dose concentrations are used in toxicity studies. An analytical methodology validation approach assumes that an acceptable analytical method is available for a particular chemical and that the method is directly related to the matrix used for the test. When analytical methodologies are not suitable or known, they must be developed or modified. Analytical method validation includes all of the procedures that demonstrate that a particular method used for quantitative measurement of analytes in a given matrix is reliable and reproducible for the intended use. The fundamental parameters for this validation include (1) accuracy, (2) precision, (3) selectivity, (4) sensitivity, (5) reproducibility, and (6) stability. Validation involves documenting, through the use of specific laboratory investigations, that the performance characteristics of the method are suitable and reliable for the intended analytical applications. The acceptability of analytical data corresponds directly to the criteria used to validate the method. Factors that may increase the cost of analytical method development and validation costs include: (1) testing new chemicals that lack any established methodology or historical analytical data to use as a starting point, and (2) testing chemicals that present challenging conditions or possess characteristics that require special or additional procedures during sample preparation and analysis. If previous te sting on a chemical of interest has been conducted by either a laboratory or client, information may be available that can assist with sample preparation and analytical testing. This can help to minimize the costs of method development and validation. Analytical method development and analytical costs can also vary depending on characteristics of the test substance. Characteristics of chemicals that may impact the cost of analytical method development and validation include chemical stability, chemical properties, matrix properties and interactions with the chemical, and whether the chemicals are mixtures or multi - com

ponent chemicals or polymers. For example, chemicals are not always stable under every test or analysis condition and a chemical could de compose or transform into a different chemical under testing condition, which will invalidate the test results. Such chemicals will require additional effort to identify alternate conditions or matrices for testing to eliminate the potential for stability issues to affect the testing results. Certain properties may also affect the costs of analytical method development. Some chemicals may interact with the dosing matrix and require special or even different handling and processing procedures that can imp act the level of methods development efforts. Once analytical methodology validation is completed for a specific chemical, however, it need not be repeated for tests of a similar nature (e.g., tests using the same dosing matrix), provided testing is done at the same laboratory. However, it is possible that analytical methodology validation may be required for both short-term and long -term tests where there are separate requirements for dose concentration ranges (e.g., ppm for acute tests and ppb for chronic tests). For this proposal, EPA has assumed an exposure concentration in the ppb range requiring multi - step preparation, concentration, and clean -up before analysis by gas or high pressure liquid spectroscopy, resulting in an estimated analytical method validation cost ranging from $2,500 to $10,000. For the purpose of this analysis, a cost of $3,500 has been assigned for short -term tests (acute) and a cost of $8,500 has been assigned for tests that are assumed to be long-term t ests (genotoxicity and reproductive/developmental toxicity). Because analytical method validation

### 3 - 12

may not be necessary for all tests when multiple tests are completed on the same chemical, these costs could be overestimated.

Table 3 - 3 Costs for Analytical Methodology Validation Testing Category Test Symbol Cost Estimate $2006 Physical Chemical Properties A no additional costs Environmental Fate and Pathways B no additional costs Aquatic Toxicity C Test Group 1 $3,500 Test Group 2 $8,500 Te st Group 1 and 2 Average $6,000 Mammalian Toxicity - Acute D $3,500 Mammalian Toxicity - Genotoxicity E $3,500 Mammalian Toxicity

– Repeated Dose/ Reproduction/ Developmental F $3,500 

### 3.1.3 Administrative Costs In addition to laboratory costs, entities subject to the final test rule will also incur expenses associated with the administration of the testing program itself. Administrative activities include “reporting activities,” such as preparing letters of intent, study plans, exemption applications, and final reports, and “non -reporting activities,” such as soliciting laboratory bids, selecting laboratories, monitoring tests under progress, developing cost - sharing agreements, and auditing the laboratories for compliance with EPA’s Good Laboratory Practice (GLP) standards. Total administrative costs are calculated as the sum of the costs of reporting and non -reporting activities. This section discusses the methodologies employed to estimate reporting and non reporting costs. Reporting Activities . Reporting activities include preparing letters of intent, study plans, exemption applications, final reports, and robust summaries. Typically, manufacturers form a “task force” or panel through a common trade organization to coordinate testing and reporting required by TSCA Section 4. One panel may often represent groups of chemicals. EPA reviewed the list of chemicals subject to the final test rule, and sorted them into groups of similar chemicals (e.g., organic acids, dyes, sulfurs and oxides, etc.). This sorting results in an estimated 15 chemical groupings. With each grouping sponsored by a panel, an estimated 15 panels will be formed in response to the rule. Reporting costs per panel include costs associated with submitting letters of intent, study plans, final reports, and exemption applications. The analysis assumes that the panels will each submit one letter of intent and one set of study plans for their group of chemicals, resulting in 15 letters of intent and 15 study plans submitted to EPA. In addition, one final report is assumed to

### 3 - 13

be required for each test conducted for each chemical. 12 

### To estimate the total number of final reports, the total number of tests required for each chemical is summed across all chemicals, which results in an e stimated 101 final reports that will be submitted to EPA in response to this rule. EPA also assumes that it will receive five exemption applications per panel, resulting in a total of 75 requests. Finally, respondents may choose to develop and submit robust summaries of the full, final toxicological study reports. The robust summaries should contain technical information to adequately describe the study and results, and should be written such that the information provided is sufficient to allow a technically qualified person to evaluate study results without needing to review an entire study report. Typically, a robust summary would include a description of the test substance, methods, results, conclusions, data quality description, and references asso ciated with the full study. EPA estimates that 8 to 16 hours of technical time are needed to develop and QA/QC a robust summary, depending on the type of study conducted. For this analysis, EPA assumes an average of 12 hours of technical time to prepare a robust summary. Because submission of robust summaries is voluntary, EPA does not expect that many companies will undertake this activity. EPA estimates that 10% of full, final toxicological study reports may include a robust summary. Because the maxi mum number of studies associated with any of the chemicals included in the final rule is eleven 13 

### (which yields an estimated maximum of 1.1 robust summaries for any chemical included in the final rule), EPA assumes that each chemical will have one robust summary. Therefore, EPA assumes that 19 robust summaries will be submitted pursuant to the final rule. This assumption may overestimate the actual number of robust summaries submitted pursuant to the final rule because some of the chemicals have fewer than 10 required tests, and therefore are estimated to have less than one robust summary under the assumption that 10% of the final reports for their required testing will include a robust summary. Estimates are that it takes a respondent 40 hours to prepare a letter of intent and study plan, 73 hours to write a final report, and 2 hours to prepare an exemption application (U.S. Environmental Protection Agency, 2002). These unit labor hours were derived from previous information collection requests and are be lieved to reflect the burdens that will be incurred for the final test rule. Wage rates associated with the predominant skill level (managerial, technical, and clerical) required to complete each of the reporting activities described in this section are p resented in Table 3 - 4. These wage rates have been estimated following the method described in a memo titled, “Wage Rates for Economic Analyses of the Toxics Release Inventory Program,” (Rice, 2002). This method uses average 2006 wages, benefits, and total compensation data extracted from the Employer Costs for Employee Compensation Summary available from the BLS website. Appendix A provides detailed information on the estimation of these wage rates.

12 While some of the chemicals may require longer term aquatic testing based on chemical characteristics, EPA could not be certain of the number. Therefore, EPA did not include an estimate for progress reports. 13 As noted above, one final report is assumed to be required for each test conducted for each chemical. Table 3 - 1 summarizes testing requirements for each chemical included in the final rule.

### 3 - 14 Table 3 - 4 Derivation of Loaded Hourly Rates by Lab or Category Labor Category 2006 Wage Rate 2006 Benefits and Overhead Loading Factor 2006 Loaded Hourly Wage Rate Managerial $39.77 1.64 $65.36 Technical $32.38 1.69 $54.65 Clerical $16.07 1.68 $27.00 Source: Methodology from Wage Rates for Economi c Analyses of the Toxics Release Inventory Program (Rice, 2002 ). Wage rates and benefits extracted from the Employer Costs for Employee Compensation Summary, Bureau of Labor Statistics ( BLS, 2006b ); assumed overhead rate of 17% applied to wage rates base d on assumptions in Wage Rates for Economic Analyses of the Toxics Release Inventory Program (Rice, 2002), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report (EPAB, 2002) . 

### Table 3 - 5 details the respondents’ reporting cost and burden estimates. As shown, the total reporting cost and burden estimates are approximately $ 404 ,000 and 8,351 hours, respectively. Table 3 - 5

Industry Reporting Cost and Burden Estimate for the Final Rule: $2006 Reporting Activity Unit Labor Annual Submissions Total Category 1 Hours Wage Rate Cost Hours Cost Letter of Intent and Study Plan T 40 $54.65 $2,186 15 600 $32,793 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 $54.65 $54.65 $65.36 $27.00 $27.00 $2,186

$328 $392 $540 $27 98

98 98 98 98 3,920

588 588 1,960 98 $ 214,246

$ 32,137 $ 38,432 $ 52,924 $ 2, 646 Robust Summaries T 12 $54.65 $656 19 228 $12, 461 Exemption Applications T 2 $54.65 $109 75 150 $8,198 TOTAL 8, 132 $ 393,837 Notes: 1 Labor categories are as follows: T = Technical; M = Management; C = Clerical.



### Non -Reporting Activities . In addition to reporting activities, manufacturers need to conduct a number of non -reporting activities. In January 2007, EPA conducted a brief study to investigate the types of non-reporting activities manufacturers conduct and the magnitude of associated costs. 14 

### The non -reporting activities identified include soliciting laboratory bids, selecting laboratories, monitoring tests in progress, developing cost - sharing agreements, and auditing the laboratories for compliance with EPA’s Good Laboratory Practice (GLP) standards. These activities, in addition to identi fying manufacturers, arranging meetings, and employing

14 EPA, 2007. Administrative Costs Associated with TSCA Test Rules and Voluntary Chemical Testing; Industry Response to Interview Questions, January 2007.

### 3 - 15

toxicologists who may be hired to provide testing expertise for the testing, are considered to represent the costs of managing the testing consortium. While these costs will vary based on a number of circumstances, the report suggests that managing the testing consortium is equivalent, on average, to 15% of the chemical testing costs, which is the assumption used in this analysis. Based on the study, an additional 10% of the testing cost is estimated to cover the costs of the technical expert that may work for the consortium, including that expert’s study review and site visits to the laboratory. Therefore, total non -reporting administrative costs are assumed to equal an additional 25% of the total te sting costs. Because laboratory-testing costs are estimated as $ 2.01 million under the least cost scenario and $ 2.60 million under the average cost scenario, non -reporting costs are approximately $ 5 03 ,000 and $ 6 51 ,000 under the least and average cost scen arios, respectively. Total Administrative Costs. As stated previously, total administrative costs pursuant to the final rule are estimated as the sum of reporting and non -reporting costs. Thus, total administrative costs are estimated to be approximately $ 897 ,000 under the least cost scenario and $1. 0 million under the average cost scenario. 3.1.4 Export Notification Costs Under Section 12(b) of TSCA, exporters must notify EPA if they export or intend to export a chemical subject to various TSCA section s (40 CFR §707.60 through 75). Therefore, all exporters of chemicals regulated under the final rule must notify EPA about each country to which a chemical included in the final rule is shipped. This is a one -time notification requirement, and the exporter only needs to submit the notice when it is exporting a particular chemical for the first time to a country for which it has not previously submitted a notification. A detailed analysis of the impact of export notifications would require data on the identity and/or number of exporters exporting chemicals included in the final rule and the identity and/or number of countries to which each chemical included in the final rule is exported. While data on aggregate export volumes for various chemicals are publ ished in U.S. Department of Commerce publications, detailed data identifying exporters and destination countries for all the chemicals included in the final rule are not readily available from secondary data sources. For this reason, it is difficult to es timate the number of export notifications that would be triggered by the promulgation of the final rule. Given these data limitations, the costs of export notifications for the final rule are based on data available from EPA’s Export Notifications Tracking System (U.S. Environmental Protection Agency, 2004a). According to these data, EPA received approximately 786 export notifications associated with 30 unique chemicals. Therefore, on average, there were approximately 25 TSCA Section 4 related export notifications per chemical in 2003. This analysis assumes that there will also be 25 export notifications per chemical subject to the final rule. Silagi (1992) estimated that the export notification burden was 1.5 hours per notification letter. In particul ar, the analysis assumed that it takes 1 hour of technical time to write each export notification letter and 0.5 hours of clerical time to print and send out each letter. However, most of the repeat submissions received by EPA are only computer - generated form letters (Blake Hedges, 1999). While it might take one hour of technical time to prepare an initial letter, subsequent submissions would require only 0.5 hours of clerical time to reproduce. Because notification letters are expected from both first time filers and more experienced filers, the present analysis assumes that the export notification burden of the final rule ranges from 0.5 hours to 1.5

### 3 - 16

hours. The current wage rate for a technical person is $54.65 per hour while that for a clerical person is $27.00 per hour (see Table 3 - 4). This translates into a low - end labor cost estimate of $13.50 per notice and a high - end labor cost estimate of $68.16 per notice. In addition, industry incurs approximately $12.06 per notice ($2006) for sending each no tice to EPA via registered mail ($9.50 for registered mail, $2.15 for a return receipt, and $0.41 for postage) (USPS, 2006). Accounting for labor and shipping costs, the total cost of preparing and submitting an export notification is estimated to range f rom $25.56 per notice to $80.22 per notice. For the least cost scenario, the analysis uses the 0.5 hour labor burden and $25.56 cost per notice; for the average cost scenario, the analysis uses 1.0 hour labor burden and the average of the low - end and high end notification cost, which is $52.89. Assuming that 19 chemicals are regulated under the final rule, and that 25 notifications will be submitted for each chemical, it is estimated that a total of 475 notifications will be submitted in response to the f inal rule. Thus, the total cost of export notifications triggered by the final rule is $12,141 under the least cost scenario and $ 25,123 u nder the average cost scenario. 3.1.5 Total Industry Compliance Costs The total compliance cost borne by the regulated industry is summarized in Table 3 - 6. The total industry compliance cost triggered by the final rule is estimated to equal $ 3. 15 million under the least cost assumption and $ 3.90 million under the average cost assumption. These estimates include laboratory, administration, and export notification costs. Laboratory costs may be overestimated due to the economies of scale that could arise if multiple chemicals are tested together. Total compliance costs may also be overestimated to the extent that firms can claim tax deductions for some of these costs. Table 3 - 6

Summary of Total Industry Compliance Costs Triggered by the Final Rule: $2006 Compliance Cost Category Cost ($million, unadjusted) Least Cost Scenario Average Cost

Scenario Laboratory Costs (section 3.1.1) $ 2. 01 $ 2. 60 Analytical methodology validation (section 3.1.2) $ 0.23 $0. 23 Administration Costs (section 3.1.3) $ 0.9 0 $1. 04 Export Notification Costs (section 5.1.4) $0.01 $0.03 Total Industry Compliance Costs $ 3. 15 $ 3.90 Average Compl iance Cost per Chemical $ 0.17 $ 0.2 1 

### 3.1.6 Non - Monetized Costs The final rule requires that manufacturers, importers, and/or processors of chemicals included in the final rule perform screening - level toxicity tests on the chemicals. EPA routinely conducts an assessment of laboratory capacity and applied those findings to this analysis, which allowed EPA to examine the potential for laboratory capacity to become a factor in the economic impact of the rule (U.S. Environmental Protection Agency, 2004b). Pharmaceutical testing demands currently dictate laboratory capacity for the chemical

### 3 - 17

testing industry. For example, one major testing laboratory indicated that its non -pharmaceutical market (e.g., industrial chemicals) accounts for only 6 to 8 percent of its total sales. Therefore, changes in testing demand generated by the pharmaceutical industry are expected to dominate other influences on laboratory testing capacity, such as EPA regulatory activity. EPA anticipates that Contract Research Organizations (CROs) will conduct the majority of testing rather than in -house laboratories. The Agency’s communication with laboratories indicates that there has been a downward trend in testing demand over the last two or three years attributed (at least in part) to consolidations and mergers among major pharmaceutical clients (for example, the merger of Bayer and Aventis). These mergers have had several effects, including consolidation of product lines, with fewer new products translating into fewer required tests, and greater reliance on in -house testing capabilities. The increase in in -house testing at pharmaceutical companies may result in increased testing capacity at CROs. For example, one CRO laboratory, approximately 65,000 square feet in size, reports that it currently performs 200 to 300 acute toxicity studies in a year but could easily double the volume of acute toxicity studies it conducts if sufficient demand existed. However, other fields of testing (biodegradation tests, tests of reproductive toxicit y, and toxicity tests involving inhaled chemicals) are currently operating closer to current laboratory test capacity. EPA’s communication with laboratories also indicates that testing resulting from EPA’s voluntary HPV Challenge Program has not produced the amount of new business for the chemical testing industry that was anticipated when the Challenge Program was originally announced. The testing demand generated by the HPV Challenge Program has been lower than expected because many of the data gaps identified by the initiative have been filled using existing, unpublished research rather than new testing. In addition, manufacturers have used Program guidance concerning the use of Structure Activity Relationships (SAR) and category proposals extensively, which has also reduced the need for new testing. New testing has been proposed for fewer than 10% of the chemicals’ endpoints (U.S. Environmental Protection Agency, 2004b) Overall, the current economic condition of the chemical testing industry is mixe d. Some testing laboratories report slack demand while others (particularly those with a strong base of clients in pharmaceutical research and development) report excellent sales and ongoing facility expansion. The ability of laboratories to expand capac ity depends on several factors, such as equipment, building costs, and test complexity. For example, laboratories that do not conduct inhalation tests may require extensive new equipment in order to do so. However, the screening tests that are required b y the final rule are less complex than inhalation tests, and would likely be easier for laboratories to expand capacity to implement. Given that the amount of testing required by the final rule is not extensive and the tests are not significantly complex, it appears that testing capacity is not a significant factor in meeting the requirements of the final rule. In addition, the less than expected level of demand for screening - level testing resulting from the HPV Challenge Program should allow CROs to meet testing needs as a result of the final rule. 3.2 EPA Costs EPA will also incur costs resulting from the final rule. Once data are collected and submitted by industry, EPA must review and process letters of intent, study plans, final reports, robust summaries, and exemption applications for completeness, adherence to protocols, and findings.

### 3 - 18 EPA assumes that, on average, a Federal GS - 13, Step 1, full -time equivalent (FTE), equivalent to 2,080 hours per year, will conduct its collection procedures under the final rule. The annual 2007 fully loaded salary for a GS - 13, Step 1, FTE is $127,035. This includes a base salary of $79,397 plus 60 percent for overhead and benefits (i.e., $47,638). 15 

### Dividing the fully loaded annual salary by 2,080 (i.e., the number of hours in a work year) yields an hourly wage rate of $60.86 for the FTE. Appendix A provides a detailed description of these calculations. As explained earlier in Section 3.1.2, approximately 15 letters of intent and study plans, 75 exemption applic ations, 98 final reports, and 19 robust summaries are estimated to be filed in response to the final rule. It is estimated that it takes on average three hours to process a letter of intent and study plan, five hours to process a final report, one hour to review a robust summary, and one hour to review each exemption application. Table 3 - 7 presents the estimated total government costs based on these assumptions. As shown, the total government cost for the final rule is estimated to be approximately $ 3 8 ,0 00 . Table 3 - 7 Estimated Government Cost for the Final Rule: $2006 Item Unit Labor Total Items Total Cost Hours Rate Cost/Item Letter of Intent and Study Plans 3 $60.86 $182.58 15 $2,739 Final Reports 5 $60.86 $304.30 98 $ 29,821 Robust Summaries 1 $60.86 $60.86 19 $1,156 Subtotal $ 3 3,716 Exemption Applications 1 $60.86 $60.86 75 $4,565 Total $ 3 8,281 

### 3.3 Summary of Total Social Costs The estimated total social cost of the final rule to both industry and EPA is summarized in Table 3 - 8. The total social costs under the least and average cost scenarios are $3. 19 million and $ 3.94 million, respectively. Industry compliance costs are presented before tax. As with any costs, tax deductions would lower the portion borne by industry, but the amount deducted would still represent a cost to society since the costs borne by the government will increase. Similarly, some costs may be passed on to customers, suppliers, and/or workers in the form of changed prices and wages. However, a detailed analysis of such cost redistribution is beyond the scope of this report. Chemical - specific estimates of laboratory, administration, export notification, and government costs under the least and average cost scenarios can be found in Appendix B of this report. These costs are not expected to occur in a single year, however. They are expected to occur over the several years during which the actual testing occurs and EPA reviews studies. A three - year time period is assumed for this analysis. Thus, total social costs of the rule have been annualized over three years as presented in Table 3 - 8.

15 The unloaded Federal GS - 13 Step 1 salary ($79,397 for 2007), from the Office of Personnel Management salary table for Wa shington - Baltimore -Northern Virginia (OPM, 2007). The 60% fringes - and - overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs) (OPPE, 1992, page 30, footnote 9).

### 3 - 19 The issues involved in selecting the appropriate social discount rate are complex and subject to considerable debate in the economics literature. This literature largely focus es on the appropriate treatment of displaced private investment, often referred to as the private rate of return to capital, and displaced consumption, often referred to as the consumption rate of interest. The literature and EPA’s economic guidance document suggest that the appropriate rate to use for environmental actions is usually the consumption rate of interest. Historical rates of return on relatively risk- free investments, adjusted for taxes and inflation, suggest a consumption rate of interest of two to three percent is appropriate (U.S. EPA, Guidelines for Preparing Economic Analyses , EPA 240 - R - 00 - 003, 2000). A three percent discount rate is used for the primary analysis in this report, following common EPA convention. EPA guidance also recommends following OMB’s basic guidance on discount rates for regulatory and other analyses provided in OMB Circular A - 94, recently updated by Circular A - 4. The OMB suggests using both a three and a seven percent discount rate, in real terms. Therefore, while using a three percent discount rate for the primary analysis, results using a seven percent rate are also presented. As shown, total annualized social costs under the least cost scenario range from $1. 1 3 to $1. 2 1 million using a three and seven percent discount rate, respectively. Total annualized social costs under the average cost scenario range from $1. 39 to $1. 5 0 million using a three and seven percent discount rate, respectively. Detailed social cost estimates are presented in Appendix B, in Tables B - 1 through B - 3. Table 3 - 8 Summary of Total Social Cost Triggered by the Final Rule: $2006 Cost Category Cost ($ million) Least Cost Scenario Average Cost

Scenario Total Industry Compliance Cost (unadjusted) a $3. 15 $ 3.90 Total Government Cost (unadjusted) $0.04 $0.04 Total Social Cost Triggered by the Final Rule (unadjusted) $3. 19 $ 3.94 Annualized Social Cost (3 years, 3% discount rate) $1. 1 3 $1. 39 Annualized Social Cost (3 years, 7% discount rate) $1. 2 1 $1. 5 0 Notes: a Total industry compliance cost includes laboratory, administration, and export notification costs.

### 4 - 1 CHAPTER 4 – ECONOMIC IMPACT ANALYSIS This chapter of the economic analysis assesses the impact of the final High Production Volume (HPV) test rule on the companies that the rule affects. EPA conducted two analyses to provide this information. First, the impact of the rule on all regulated companies is described. Second, the impact of the rule on small businesses is described. The latter assessment also satisfies the requirements of the Regulatory Flexibility Act (RFA) of 1980, as amended by the Small Business Regulatory Enforcement Act (SBREFA) of 1996. 4.1 Impact on All Regulated Companies When a chemical manufacturer/importer faces a mandatory test rule, it must decide whether to co mply with the testing requirement or to discontinue production/importation of the chemical. Once the rule is published, a company would have 30 days to stop production/importation before it becomes responsible for testing. The costs associated with testing requirements increase the cost of manufacturing/importing chemicals for these companies and decrease the overall profitability of the affected products. If profitability falls below acceptable levels, firms may choose to discontinue production of the c hemical (provided this can occur within 30 days of publication of the final rule), to raise prices of products, or to suffer reduced profitability for continued production of the chemical. The profitability of producing and selling a chemical is measured by the flow of costs and revenues associated with the chemical over time. Testing is a short -term effort to develop basic toxicological data. Evaluations of profitability of a chemical product line, however, are not based on one or even a very few years’ results, but rather on the total earnings stream associated (appropriately discounted) with a chemical over time. Thus, losses in one year may be appropriately balanced against revenues in another to assess the net present value of the stream of earnings (revenues less costs) of a chemical. 16 

### The development of a complete net present value analysis of the profitability of a particular chemical with and without testing costs requires specific information on costs and revenues that is difficult to obtain. Therefore, this analysis uses a simplified screening approach for potential economic impacts based on the relationship between testing costs and revenues. This approach uses standard values for the economic life of the chemical and the discount rate for all chemicals considered. An annualized cost of testing is compared with typical annual revenues for the chemical in question to account for differences in the timing of compliance costs and revenues. The major steps used in this analysis are described be low. 4.1.1 Calculate Annualized Costs Annualized costs represent the amount that one would have to pay each year to sum to the same

16 The use of net present value calculations to evaluate the profitability of an investment or a business is discussed in many financial management texts, including R. Brealey and S. Myers (1996), L. Schall and C. Haley (1991), and J. Van Horne and J.M. Wachowicz (1997).

### 4 - 2

amount as the overall cost of the rule when those costs are presented in present value terms. The standard formula for annuali zing a lump sum cost is given by: A = I  [I (1 + i) n 

### / ((1 + i) n 

### - 1)] where A equals the annualized amount, I is the initial lump sum investment cost, i is the discount rate, and n is the useful life of the investment. The initial lump sum costs under the least and average cost scenarios are presented in Chapter 3. Testing costs represent an opportunity cost to the company conducting the testing, as the company is not able to otherwise use or invest the money spent on testing. In order to annualize those costs, they are discounted over an appropriate time period at a discount rate that reflects the opportunity cost of capital. The discount rate reflecting the opportunity cost of capital is estimated to be 7 percent and is consistent with OMB Circular A - 4. This represents the average rate of return on low -yielding capital investments, such as housing, and the returns on high - yielding investments, such as corporate capital. Determining the number of years, n, to use in the annualization formula requires consideration of the "useful life" o f the investment, which is longer than the time in which costs are actually incurred. This is because the analysis of impacts looks at the long -term profitability of the chemical product line, and it is not uncommon for product lines to be profitable is s ome years and operate at a loss during others, with overall profitability in the long -term. For this analysis, the life of the chemical is assumed to be 15 years. The one -time testing costs are thus annualized over a 15 - year period using a 7 percent disc ount rate. Table 4 - 1 summarizes EPA’s estimates of annualized testing costs under both the least and the average cost scenarios. The annualized industry compliance cost is $0. 3 5 million under the least cost scenario and $0. 4 3 million under the average co st scenario. Appendix C presents chemical - specific estimates of annualized costs. Industry compliance costs are likely to be overstated because this analysis does not account for the tax deductibility of these costs. Table 4 - 1 Annualiz ed Costs Under L east and Average Cost Scenarios: $2006 Category Cost ($ million) a Least Cost Scenario Average Cost Scenario Annualized Laboratory Cost 0. 2 2 0. 29 Annualized Methodology Development Cost 0.0 2 0.0 2 Annualized Administration Cost 0. 10 0. 1 1 Annualized Export Notification Cost 0.001 0.003 Annualized Industry Compliance Cost b 0. 3 5 0. 4 3 Notes: a All costs were annualized over a 15 - year time horizon using a 7 percent discount rate. b Industry compliance cost includes laboratory cost, methodology development cost, administration cost, and export notification cost. 

### 4.1.2 Compare Annualized Compliance Costs to Annual Revenues To determine if the annualized compliance costs of testing could potentially result in an adverse economic impact for a given chemical, the annualized compliance costs of testing specific chemicals were

### 4 - 3

compared to the annual revenues for those chemicals. A threshold of one percent was used as a benchmark over which further analysis was conducted to evaluate the potential of test costs to adversely affect the profitability of the affected company. 17 

### To develop an estimate of annual revenue, the price per pound of each chemical was multiplied by its total volume (of production and importation in the United States). The annualized cost of te sting each of these chemicals was then compared to the annual sales revenue the chemical was expected to generate. If a chemical - specific cost -to - sales ratio is less than one percent, the test rule is assumed to have low potential for an adverse economic impact on the affected chemicals. If a chemical - specific cost to - sales ratio is greater than one percent, it is assumed that there is a potential for an adverse impact on a chemical’s profitability. Figures 4 - 1 and 4 - 2 illustrate the distribution, under the least and average cost scenarios respectively, of cost -to - sales ratios for the chemicals for which prices are available. Table 4 - 2 presents summary statistics for chemical - specific cost -to - sales ratios. Table 4 - 3 presents a summary of the results under both the least and the average cost scenarios. Under the least cost scenario, 17 out of the 19 chemicals 89 p ercent) are affected at less than the one percent level. Under the average cost scenario, 15 out of 19 chemicals ( 79 percent) are affected at less than the one percent level. Therefore, the potential for adverse economic impacts due to the final test rule is judged to be low for at least 79 percent of the regulated chemicals. Two chemical ( 10 percent) and four chemicals ( 21 percent) of the 19 chemicals are affected at a level greater than one percent of their sales under the least and average cost scenarios, respectively.

17 EPA uses a one percent thr eshold based on an EPA study entitled “Review of Economic Impact Methodology Applied to TSCA Section 4 Test Rules”. This study found that chemical - specific cost - to - sales ratios for voluntary testing initiatives were less than one percent. While the study did not conclude that a cost - to - sales ratio greater than one percent would lead to adverse financial impacts, EPA uses this estimate as a reasonable threshold to determine whether there is a need to further evaluate impacts on a firm. Charles D’Ruiz and Barrett J. Riordan, “Review of Economic Impact Methodology Applied to TSCA Section 4 Test Rules” Economics & Technology Division, Office of Toxic Substances, U.S. Environmental Protection Agency, September 23, 1998.

### 4 - 4 Figure 4 - 1 Distribution of Chemicals in the Final Rule by Cost- to - Sales Ratio Range: Least Cost Scenario

0 2 4 6 8 10 12 14 16 18

0. 0% t o 1. 0% 1.0% t o 3. 0% 3.0% t o 5. 0% 5. 0% t o 10.0% Cost-to-S al es Ra ti o R

an geNumber of Chemicals

Figure 4 - 2 Distribution of Chemicals in the Final Rule by Cost - to - Sales Ratio Range: Average Cost Scenario

0 2 4 6 8 10 12 14 16

0.0% t o 1.0% 1.0% t o 3.0% 3.0% t o 5.0% 5.0% t o 10.0% Cos t-to-S al es Rati o Rang eNumber of Chemicals

### 4 - 5 Table 4 - 2 Summary Statistics for Chemical- Specific Cost- to - Sales Ratios a Statistical Measure Least Cost Scenario Average Cost Scenario Total Number of Regulated Chemicals 19 19 Number of Chemicals with Production Volume Data 19 19 Number of Chemicals with Price Data 19 19 Mean Cost - to - Sales Ratio 0. 6 3 % .8 3 % Median Cost - to - Sales Ratio 0.16% 0.16% Standard Deviation 1. 30 % 1. 8 0 % Notes: a Complianc e costs were annualized over a 15 - year time horizon using a 7 percent discount rate. Table 4 - 3 Impact of Final Test Rule a Impact Category Least Cost Scenario Average Cost Scenario Total Number of Regulated Chemicals 19 19 Number of Chemicals with Production Volume Data 19 19 Number of Chemicals with Price Data 19 19 Number of Chemicals with Cost - to - Sales Ratio <1 percent 17 15 Number of Chemicals with Cost - to - Sales Ratio  1 percent 2 4 Number of Chemicals with Cost - to - Sales Ratio  3 percent 1 1 Number of Chemicals with Cost - to - Sales Ratio  5 percent 1 1 Notes: a Compliance costs were annualized over a 15 - year time horizon using a 7 percent discount rate.



### As stated, EPA uses a one percent threshold to determine whether to conduct additional an alysis of the impact of test costs on profitability. To further understand potential impacts on companies that produce chemicals with test cost -to - sales ratios greater than one percent (see Figure 4 - 1 and 4 - 2), EPA examined the markets these companies operate in and these companies’ individual revenue data. EPA’s review of the companies with test cost -to - sales ratios greater than one percent for chemicals included under in the HPV rule reveals that these companies produce a wide variety of chemicals for s ale in a number of large markets, including the pharmaceuticals, agrochemicals, cosmetics, nutritional pharmaceuticals, food, coatings, inks and adhesives markets, the textile industry; and the leather and paper industry. In addition, chemicals with a cos t -to - sales ratio greater than one percent are mostly basic chemicals, representing a large market worth roughly $199 billion in 2006. 18 

### Profits for the basic chemical industry typically represent five percent of the total cost structure while profits in the specialty chemical industry have higher profitability. 19 

### However, the chemical industry as a whole tends to exhibit profits 18 In comparison, the specialty chemicals market was worth $116 billion, the agricultural chemical market wa s worth $27 billion, the pharmaceuticals market was worth $160 billion, and the consumer products market was worth $56 billion. American Chemistry Council, Guide to the Business of Chemistry, 2006. 19 American Chemistry Council, Guide to the Business of Chemistry, 2006.

### 4 - 6

that are above the average for all manufacturing industries. Using global parent company revenue data for those companies that produce chemicals whose test cost -to - sales ratio is greater than one percent, EPA concludes that the cost of the testing requirements for chemicals produced by a specific company do not exceed one percent of company revenues for any of the companies. This c onclusion is supported by the analysis presented in Table 4 - 4, which demonstrates that the average impact of each companies’ share of testing costs for all chemicals they produce is less than one percent of that company’s revenues. 20 

### As Table 4 - 4 shows, th e impacts of company - specific testing costs to the respective company range from 0 percent to roughly 0.22 percent of revenues. These data and the market information discussed in the preceding paragraph suggest that even if revenues generated from the tested chemical included in the final rule would not support the cost of its testing, other product lines in the company could. In addition, as discussed in Section 4.1, testing is a short -term effort to develop basic toxicological data while the profitability of a company is based on the total earnings stream associated with a chemical over time and appropriately discounted. For this reason, a company that experiences losses in a product line in one year due to testing requirements may also recoup these los ses through profits earned in future years from the tested chemical or from other product lines. Finally, it may be possible for companies to increase the prices of the chemicals somewhat to recoup testing costs; however, because price elasticity information was not available for the chemicals, it is not possible to estimate the extent to which this could occur. Table 4 - 4 Summary Statistics for Company - Specific Cost- to - Sales Ratios Statistical Measure Least Cost Scenario Average Cost Scenario Total Num

ber of Affected Companies 48 48 Number of Companies with Employment Data 46 46 Number of Companies with Sales Data 45 45 Minimum Cost - to - Sales Ratio 0.00% 0.00% Maximum Cost - to - Sales Ratio 0.22% 0.22% Mean Cost - to - Sales Ratio 0.02% 0.02% Median Cost - to - Sales Ratio 0.00% 0.00% Standard Deviation 0.05% 0.05% 

### 4.1.3 Sensitivity Analysis Many chemicals may have a useful life that differs from the 15 - year assumption used above. Therefore, a sensitivity analysis was conducted to examine the robustness of the results to a change in the annualization assumptions. If total compliance costs are annualized over a shorter horizon of seven years, 79 percent of the chemicals are affected at less than the one percent level under the least cost scenario, and 68 percent of the chemicals are affected at less than the one percent level under the average cost scenario. Table 4 - 5 summarizes the impact of the final rule if costs are annualized over a 7 - year time horizon. A maximum of two and four chemicals are affected at greater than the one percent level if costs are computed under the least and average cost methods, respectively, and annualized over a seven - year period. Using the alternative scenario assumptions shifts two chemicals from the less than one percent level to the greater than one percent level under the least and average cost 20 Information in Table 4 - 5 is presented at the global parent company level.

### 4 - 7

scenarios . .

### 4 - 8 Table 4 - 5 Sensitivity Analysis a Impact Category Least Cost Scenario Average Cost Scenario Total Number of Regulated Chemicals 19 19 Number of Chemicals with Pro duction Volume Data 19 19 Number of Chemicals with Cost - to - Sales Ratio <1 percent 15 13 Number of Chemicals with Cost - to - Sales Ratio > 1 percent 4 7 Number of Chemicals with Cost - to - Sales Ratio > 3 percent 2 2 Notes: a Compliance costs were annualized ov er a 7 - year time horizon using a 7 percent discount rate.



### 4.2 Small Entity Impact Analysis To further interpret the significance of the impact that the rule might have on businesses, an additional analysis examining the relationship between the compliance c osts and company sales was developed. While the profitability of an individual chemical product may potentially be adversely affected by the final rule (see previous section), a company often uses other funds to pay for expenses related to products. Therefore, an additional analysis comparing the costs of compliance to the sales of companies was developed. Those companies that would be most likely to be adversely affected by the rule would be those considered to be small. The analysis primarily focuses on these companies. In addition, the RFA of 1980, as amended by the SBREFA of 1996, requires that special consideration be given to small entities affected by Federal regulations. The final rule is not expected to affect small governments and small organizations, as defined under RFA Section 601. However, some small businesses may be potentially affected by the final rule. Thus, this section provides a screening - level analysis to assess the potential impact of the final rule on small businesses. The ma

jor steps used in the analysis are described below. 4.2.1 Identify the Affected Population For each manufacturer/importer of the chemicals identified in Chapter 2, the ultimate parent company was identified and sales and employment data were obtained for companies for which data are available from Dun & Bradstreet Market Identifier (Dun & Bradstreet, 2007). 21 

### The search identified 46 affected global ultimate parent companies as defined by their

21 Dun and Bradstreet is a New York-based company that provides business information through a globa l commercial database. It assigns DUNS numbers to identify businesses around the world. These numbers are required for many US federal government transactions and therefore are widely used and assigned. DUNS numbers are also frequently used in corporate research. Database entries provide legal 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 forty vital statistics about each organization. While the reporting year varied by company, company sales and employment data were primarily retrieved from the database in December 2007.

### 4 - 9

global DUNS number or the highest parent level found in other sourc es. Sales data could be found for 45 of the companies, while employment data could be found for 46 of the companies. EPA was not able to locate the global ultimate parent company for two companies that submitted production information for the 2006 IUR rule. 4.2.2 Select a Relevant Small Business Definition EPA examined several definitions of “small business.” Under the first, a manufacturer or importer is defined as small under 40 CFR 704.3 if it meets either of the following criteria: (1) Total annual sal es of the company, combined with those of any parent company,

are below $40 million and annual production volume or importation volume at the facility is less than or equal to 100,000 lbs.; or (2) Total annual sales of the company, combined with those o f any parent company,

are below $4 million . This “sales -based definition” also includes a provision that allows adjustment to the total annual sales values for inflation whenever EPA deems it necessary to do so. An alternative “employment -based definitio n” established by the U.S. Small Business Administration (SBA) under 13 CFR 131 was also used to examine the sensitivity of this analysis to choice of the small business definition. The SBA has developed six - digit NAICS industry segment specific size standards based on employment thresholds (SBA, 2004). These size standards range from 500 employees to 1,500 employees for the six - digit NAICS codes that are potentially affected by the final rule. For example, the SBA defines a company in NAICS 325314 (Mixi ng - Only Fertilizer Manufacturing) as small if it has fewer than 500 employees. On the other hand, a company in NAICS 324110 (Petroleum Refineries) is considered to be small if it has fewer than 1,500 employees. To obtain a worst - case estimate of the numb er of small businesses affected by the final rule, EPA chose an employment threshold of 1,500 employees to determine small business status. 4.2.3 Identify Small Businesses Parent company sales data, collected as explained above, were used to identify companies that qualified for the “small business” status, per both the sales -based and the employment -based definitions specified above. Based on the sales criteria, one company (2%) was identified as small. Furthermore, 20 companies (42%) were identified as smal l according to the employment criteria (with 1,500 or fewer employees). 4.2.4 Calculate Each Company’s Share of Testing Costs As explained in Chapter 3, the industry compliance costs (the sum of laboratory costs, analytical methodology development costs, administration costs, and export notification costs) were computed under least and average cost scenarios. These costs were annualized over a 15 - year time horizon using a 7 percent discount rate. The annualized compliance cost for all 19 chemicals was approx imately $0. 3 5 million under the least cost scenario and was approximately

### 4 - 10

$0. 4 3 million under the average cost scenario. 22 

### Note that industry compliance costs may be overestimated to the extent that companies can claim tax deductions for some of these costs. To calculate each company’s share of compliance costs, EPA assumed that the cost of performing chemical - specific testing is borne by companies in proportion to their production and/or importation volume. For example, Company A’s cost share for testing chemical X was computed by first calculating Company A’s fraction of overall chemical X production (the volume of chemical X produced/imported by Company A divided by the total production of chemical X.) This fraction was then multiplied by the total ann ualized test costs for the chemical to obtain Company A’s cost share. The cost share was computed under both the least and average cost scenarios. 4.2.5 Determine the Size of the Adverse Impact for Small Businesses Each small company’s share of testing costs (for all chemicals it manufactures/imports) was then compared to its total sales. Cost -to - sales ratios were computed using the combined cost of testing all chemicals rather than on a chemical -by - chemical basis to get a worst - case estimate of the rule’s im

pact on small businesses. For example, if Company A produced Chemicals X, Y, and Z, then one combined cost -to - sales ratio was computed rather than three chemical - specific ratios. The significance of the impact of the final rule on small businesses was a nalyzed by examining the number of small entities that experienced different levels of costs as a percentage of their sales. Small businesses were placed in the following categories on the basis of cost-to sales ratios: less than one percent, greater than one percent, and greater than three percent. Table 4 - 6 presents summary statistics for company - specific cost -to - sales ratios for small companies. Table 4 - 7 presents a summary of the results using the employment -based, as well as the sales based definiti on of a small business, under both the least and the average cost scenarios. Table 4 - 7 indicates that the number of small businesses affected at the one and three percent levels is identical regardless of the small business definition used. Therefore, the analysis based on employment data correlates quite closely with the one based on sales data for the companies. Of the 20 companies that qualified for small business status per the employment criteria, none had cost -to - sales ratios of greater than 1 perc ent under the least and average cost scenarios. The results are identical if the sales definition is used.

22 Annualized over 15 years using a 7 percent discount rate. Note that these fi gures include only the industry compliance cost and not the cost to the government.

### 4 - 11 Table 4 - 6 Summary Statistics for Company - Specific Cost- to - Sales Ratios for Small Companies

Statistical Measure Employ Def. Least Cost Scenari o Employ Def.

Average Cost Scenario Sales Def.

Least Cost Scenario Sales Def.

Avg. Cost Scenario Total Number of Identified Small Companies 20 20 1 1 Number of Companies with Sales Data 19 19 1 1 Minimum Cost - to - Sales Ratio 0.00% 0.00% 0.22% 0.22% M aximum Cost - to - Sales Ratio 0.22% 0.22% 0.22% 0.22% Mean Cost - to - Sales Ratio 0.0 2 % 0.0 2 % 0.22% 0.22% Median Cost - to - Sales Ratio 0.00% 0.00% 0.22% 0.22% Standard Deviation 0.0 5 % 0.0 5 % N/A N/A Notes: a Com pliance costs are annualized over a 15 - year time horizon using a 7 percent discount rate.

Table 4 - 7 Sm all Business Effects Impact Measure Employment Definition Sales Definition Least Cost a Average Cost a Least Cost b Average Cost b Total Number of Identified Companies 48 48 48 48 Number of Compan ies with Data 46 46 45 45 Number of Small Companies 20 20 1 1 Number of Small Companies with Data 19 19 1 1 Number Impacted at >1 percent 0 0 0 0 Number Impacted at >3 percent 0 0 0 0 Notes: a Companies with fewer than 1,500 employees are considered s mall under this definition. b Com panies with either (1) total annual sales below $40 million and annual production volume or importation volume less than or equal to 100,000 lbs.; or (2) total annual sales below $4 million are considered small under this d efinition. c Total costs were annualized over a 15 - year time horizon using a 7 percent discount rate. 

### 4.2.6 Companies without Data Data on sales and employees are missing for two of the 48 companies. An analysis was done to determine the potential im pact on these companies if they were small. The median sales for small companies with sales data is $ 52 million. If this figure represented the sales for the companies without sales data, the impact would be below 1% of sales. The overall sales of the two companies would need to be less than $600,000 each in order for price impacts to be near or exceed 1% of sales. This value is 50% below the sales of the company with the lowest sales. The same is true for the single company identified as small with em ployment data but lacking sales

### 4 - 12

data. Finally, none of the companies without data manufacture any of the chemicals for which the cost impact of the testing exceeds 1% of the sales of the chemicals.

### 5 - 1 CHAPTER 5 – BENEFITS Benefits derived from a regulation can be interpreted as the value of the advantages that result from implementation of the rule. Regulations under Section 4 of TSCA require the testing of specified chemicals to provide information on the effects of those chemicals on human health and the environment. The final rule is no exception. The final rule targets chemicals for which basic toxicological (hazard) information is unavailable despite their high level of production. The benefits of the testing requirements derive from the development of a bas ic set of hazard information on these chemicals and from its provision to and use by the public, industry, and government. The final rule can be viewed as a necessary correction of the failure of a market to independently provide a socially optimal level of hazard knowledge. 23 

### The information developed as a result of the rule will be made publicly available and will increase scientific understanding of the health and environmental effects of a number of chemicals to which individuals and the environment are exposed. A wide range of groups is expected to benefit from the availability of this information, including consumers, workers, scientists, industry representatives, government organizations, public health officials, the medical community, and foreign i nterests. The toxicological information provided by this rule may also enable users to make betterinformed decisions about where to work and live and what chemicals to use. The use of this information will help address externalities that occur because hazard information is lacking. The current economics literature on the theoretical value of information can be traced to Arrow (1962) who argues that the value of information is inextricably tied to its expected future use. Therefore, to understand the value of toxicity data from the final test rule, and, thus, the benefits of the rule, it is necessary to understand the users and the expected use of the hazard information to be generated. 5.1 Potential Users of Chemical - Specific Information Numerous databas es and sources contain toxicological information. A few examples of these sources include the Hazardous Substances Data Bank (HSDB), Registry of Toxic Effects of Chemical Substances (RTECS), Integrated Risk Information System (IRIS), the Toxic Substances Control Act Test Submissions (TSCATS), and TOXicology information onLINE (TOXLINE). These databases provide a variety of toxicological information in the form of study abstracts, information on effects, and more comprehensive information combining hazard and exposure information to provide risk information (e.g., IRIS). A wide community extensively uses the databases. The National Library of Medicine (NLM) houses TOXLINE, a bibliographic database that includes the toxicological effects of drugs and other chemicals. Users can access TOXLINE through the Internet. NLM estimates that a single month’s access to the database (November, 2003) consisted of 80,962 searches via the Internet (Hudson, 2003). Usage of another database housed by NLM, the HSDB, sugge sts the breadth of users of toxicologic information in 1998 (see

23 See Section 1.1 of this report for a discussion on market failure and the rationale for government regulation in this context.

### 5 - 2

Table 5 - 1) (Hudson, 1998). According to the NLM, however, this information is no longer allowed to be released, though they stated that current HSDB usage is similar to the distribution of u sers found in 1998. Table 5 - 1

Distribution of the Users of the HSDB Database through the National Library of Medicine for October 1998 User Category Percentage of Use Industry 41% Healthcare 8% Foreign 7% Government 10% Education 2% State 5% Lib rary User 8% Other 19% Source: Hudson, Vera. National Library of Medicine. Personal communication with Lynne Blake Hedges, USEPA. November 1998. 

### In addition, the distribution of TSCATS user accounts purchased through the vendor, Chemical Information System (CAS) supports that the users of toxicological data are diverse. In 1998, CAS suggested that 6 percent of account holders were government, 38 percent were the private sector, 4 percent were academic organizations, 40 percent were foreign interests , and 11 percent were nonsubscribers (estimates may not add due to rounding) (Hoffman, 1998). Since then, these data are no longer tracked by CAS. However, they do track the subscribers and non subscribers to whom CAS supplies copies of toxicological studies cited in the TSCATS database. CAS supplies approximately 38 percent of the copies to U.S. industrial entities, 27 percent to U.S. non - industrial entities, 19 percent to non -U.S. governments, 7 percent to US consultants, and 11 percent to international consultants (Earle, 2003). 5.2 Potential Uses of Toxicologic Information Generated by the Final Rule 5.2.1 Consumers/Buyers Economic theory maintains that competitive markets provide goods and services to the extent that the marginal benefit of the good or service to consumers is greater than or equal to the marginal cost of production. Underlying this conclusion are two assumptions: both consumers and producers have perfect information, and the cost of conducting a market transaction is negligible. The need for chemical testing information stems from the fact that, in some cases, neither producers nor consumers have perfect information regarding the hazards associated with certain chemicals. If basic information on chemical hazards were known, consumers may alter the amount they would be willing to pay for the chemical. Therefore, in the absence of complete information, the private market may be misallocating resources to the production of the chemical substance. Thus, one advantage of mandatory testing and dissemination of test results is that consumers can make better choices about products containing chemicals if they are better aware

### 5 - 3

of the potential hazards. Consumers can respond to additional information by changing their purchasing decisions (i.e., increasing or decreasing consumption, as appropriate); by reducing the amount they are willing to pay for the product; or by changing the way they handle, store, use, or dispose of the product. This may move the market toward a more efficient allocation o f resources. Thus, the role of toxicity information in resolving uncertainties can be particularly valuable. 5.2.2 Workers Hazard information can play a role in guiding workers’ employment decisions and work practices. If workers are aware of workplace hazards (e.g., the hazard associated with chemical substances to which they are exposed), they may choose not to work at a particular facility. If they decide to work there, informed workers can make better decisions about what precautions, if any, should be taken to reduce their exposure to that chemical. These precautions may include taking proper care while handling and using certain chemicals or wearing protective clothing. Alternatively, a worker may seek a wage premium to compensate for increased workpl ace risk. Viscusi and O’Connor (1984) conclude that the value of new information to the worker can be measured by the increase in the wage premium (differential) as a greater understanding of workplace risk is gained. Thus, workers can seek a risk premium or take averting actions to protect themselves if information is available about the health effects of the chemicals they come into contact with at work. EPA expects the potential benefits to be large for chemicals on the final rule since they are manuf actured and processed in large volumes. 5.2.3 Science and Health Communities Chemical toxicity information is useful to a variety of scientific and health communities. For example, medical professionals are concerned about the health of patients exposed to ch emicals, poison control centers distribute information on toxicity and treatment associated with poisoning, and scientists use toxicity information to characterize the effects of chemicals and to assess risks of chemical exposure. The literature includes specific examples where toxicity data have been summarized and interpreted. Kapp et al. (1996) summarize the results of TSCA Section 4 test rule studies for Isopropanol. Other examples include Glickman et al. (1995) who report the results of aquatic toxi city studies for Cumene (Isopropyl Benzene), and Bogdanffy et al. (1990) who present results of subchronic inhalation tests for Vinyl Fluoride. In addition, several published studies also rely on information from the RTECs database. RTECS is a database o f toxicological information compiled, maintained, and updated by the National Institute of Occupational Safety and Health (NIOSH). Numerous vendors currently offer access to the database. RTECS currently covers more than 152,000 chemicals and provides data on mutagenic effects, reproductive effects, tumorgenic effects, and acute toxicity effects, for example (NIOSH, 2005). Examples of published scientific literature using this particular database include Ruder et al. (1990) and Jones et al. (1998). The former study uses toxicity data available from the RTECS database to compute national estimates of occupational exposure to animal bladder tumorigens, while the latter study uses toxicological data from the RTECs database to compute relative potency factor s for chemical compounds associated with increased risk of atherosclerosis to humans. The test results generated by the final rule are also expected to be used by scientists to increase the understanding of the health and environmental effects of these chemicals to which people may be exposed in the places where they live, work, study, and play.

### 5 - 4

5.2.4 The General Public In addition to its impact on consumers of chemicals or products, the production or use of a chemical substance may impose external costs on society in the form of increased health risks to the general public and increased risks to the physical environment. If these external costs are known, individuals can take averting actions to protect themselves. However, if the existence of such extern alities is unknown to the public, inefficiencies in the production and consumption of the chemical substance will persist. The final test rule is valuable because the health and environmental data it generates provide a better understanding of the external costs involved in the production and use of chemical substances. Because the information will be made publicly available, the general public is then empowered to help address the market failure through individual actions they may take to protect themselves from exposure to the chemical substance (averting behaviors) or activities designed to pressure firms or governments to reduce the externalities associated with production (e.g., lobbying activities). One can expect that if reliable test data are diss eminated to the public, community and public interest groups can initiate a dialogue with the manufacturers of hazardous chemicals and encourage them to improve their safety measures and assess their environmental management plans. 5.2.5 Firms and their Shareho lders As noted earlier, industry is an important user of chemical hazard information. Such information is used to understand better the handling and safety of chemicals, develop emergency preparedness plans, follow principles of Responsible Care®, and co mpetitively participate in today’s chemical market. The American Chemistry Council’s (ACC) Responsible Care® Initiative includes as guiding principles the following:

$ “ To make health, safety, the environment, and resource conservation critical considerations for all new and existing products and processes;

$ To work with customers, carriers, suppliers, distributors, and contractors to foster the safe use, transport, and disposal of chemicals; and

$ To support education and research on the health, safety, and environmental effects of our products and processes” (American Chemistry Council, 2005). Consideration of these principles supports the need for toxicologic information on chemical products used and manufactured by this industry. The Chemical Industr y Institute of Toxicology (CIIT), a research institute sponsored by ACC, government, and industry, notes that chemical research has helped companies ensure safety in manufacturing, use, and disposal of chemicals (Chemical Industry Institute of Toxicology, 2001, 1998). Thus, companies are more likely to avoid potential liability concerns from inappropriate handling of chemicals. Similar advantages are expected from the information developed as a result of the final rule. Data generated as a result of the final rule are also expected to be sufficient for the Organization for Economic Cooperation and Development’s (OECD) Screening Information Data

### 5 - 5

Set (SIDS) program. Data meeting the requirements of the SIDS program can be used to develop initial assessment s of chemicals that are shared worldwide. Because this information is shared, companies may avoid duplicative efforts to meet the requirements of other countries where they may also manufacture and sell certain chemicals. This could lead to cost savings for companies that operate internationally. Corporate shareholders also benefit from the data developed in the rule. Basic microeconomic theory assumes that the primary objective of any firm, whether privately or publicly held, is to maximize profits. When a firm is incorporated and its shares are traded on the stock market, maximizing a firm’s profits is analogous to maximizing shareholder value. There are a number of ways in which the provision of information regarding the production practices and output of a firm can affect shareholder value. First, production processes and output that result in adverse consequences to human health and the environment may eventually result in substantial liabilities to the firm. Therefore, any new information regarding potential threats to human health or the environment may cause investors to re - evaluate the potential future liabilities (and hence profitability) of a firm. Second, when an investor who prefers providing capital to environmentally benign companies discovers that a firm’s use of toxics is inconsistent with his or her preferences, he or she may move their investment funds toward other more environmentally friendly firms. There is a growing body of empirical literature evaluating the effects of environmental information disclosures on firms and their shareholders. In an effort to estimate the economic cost of hazardous waste mismanagement, Muoghalu and Rogers (1992) modeled the effect of Superfund lawsuit announcements on firms’ stock values. The auth ors estimated that stock values dropped an average of $30.7 million when news of a new Superfund lawsuit was made public. Blacconiere and Patten (1994) examined the effect of the 1984 Union Carbide chemical leak in Bhopal, India, on other chemical firms’ stock prices. They found that firms in which chemical operations made up a larger portion of total revenue experienced greater losses in stock value immediately following the leak. Thus, some evidence suggests that investors respond to new information regarding a firm’s potential environmental liabilities by reassessing the value of the firm’s stock. If test results are disseminated to the public, shareholders can better consider the importance placed on the firm’s manufacture or use of particular chemi cals and may encourage the firm to address shareholder concerns regarding chemical production and use to avoid potential losses in the capital markets. It is clear that, while beneficial to shareholders, this information may also cost the company if share values drop. These costs would offset some of the benefits to shareholders. 5.2.6 Government The information developed in response to the final rule will benefit society by reducing cost and improving the quality of government decision and policy making. EPA itself is a user of TSCA Section 4 test results in three primary ways. First, EPA can use the chemical - specific information acquired through a test rule to help identify hazards of concern and to screen and prioritize regulatory activities, including i dentifying areas where regulatory intervention is not required. Second, EPA can serve its "clients" by providing these test results to other agencies within the Federal government as well as to public agencies at other levels of government. Finally, EPA can use information reporting rules as an alternative to other forms of regulation. Each of these uses is discussed below.

### 5 - 6 Support EPA Regulatory Activities . When developing risk management strategies, EPA must decide whether or not to regulate the use of a chemical substance or mixture to protect society. Basic toxicity data are not available for many chemicals, but exposure controls have no environmental value if these chemicals are not a concern. The lack of data on health and environmental effects can affect sound decision - making by government and others (Wehmeier, 2001). Regulating most certainly involves costs to both EPA (e.g., resources required to develop, promulgate, and enforce a regulation) and to society at large (e.g., foregone benefits derived from the use of the chemical substance, resources diverted from other uses). Although not regulating avoids these costs, society will face a welfare loss if the chemical turns out to harm human health and the environment. Taylor et al (1993) considered the value of test information in supporting decisions about the control of chemicals whose cancer potency is untested or unknown. While not specifically addressing the value of the basic toxicity testing data required by this final rule, their result s suggest there is value to (cancer) testing information, particularly at intermediate levels of anticipated human exposure to a chemical. The authors contend that information (from cancer testing) may be less valuable where very high levels of exposure a re expected because no test can perfectly distinguish carcinogens from noncarcinogens. In the EPA context, the probability that a chemical poses a risk depends on the chemical’s toxicological properties, exposure pathways, dose -response relationships, and other factors. Testing rules help resolve some of these uncertainties. Thus, test information can help EPA decision makers avoid over -regulating a relatively safe chemical and under-regulating a risky chemical. Provide Information to Other Government Agencies . Under TSCA Section 4, EPA has the authority to require firms to conduct tests of specific chemicals to determine the potential risk posed by these substances. However, other governmental agencies, such as the FDA, CPSC, NI OSH, and OSHA, share regulatory authority over chemical substances or products containing them, or, in the case of NIOSH, compile summaries of available information and recommend exposure limits. Therefore, EPA serves as a conduit for chemical hazard information between the c hemical producers and these other agencies. In addition to providing chemical test results to other Federal agencies, EPA may make this information available to other interested parties such as State, local, and tribal government agencies, which can use the data to inform their own decision making. The toxicity data developed as a result of the test rule is also expected to save other countries expense of collecting and interpreting toxicological data. At the United Nations Conference on Environment an d Development (UNCED) in 1992, delegates adopted Agenda 21 of Chapter 19, which discusses chemical safety and includes program areas. One program area is international assessments of chemical risks, part of which includes the assessment of chemical hazard s. The International Forum on Chemical Safety (IFCS) was formed in 1994 and has developed priorities for action in the implementation of Agenda 21. These include recognition of the activities sponsored by the OECD in the area of chemical management and encouragement of the use of the OECD as a means to carry out activities on chemical safety (IFCS, 1998). Data developed as a result of the final rule will be sufficient for the development of initial assessments of chemicals under OECD’s SIDS program. Thu s, other countries will benefit from the development of these data and can use the data without having to independently develop the information. Such information exchange will result in cost savings to other countries and will enable their governments to more effectively manage chemicals for safety as adopted under Agenda 21.

### 6 - 7 Information Provision as an Alternative to Traditional Regulation . Publicly disclosing TSCA Section 4 chemical test results also provides an alternative to traditional regulation. As described above, the provision of chemical pollution and hazard information can be used to, among other things, empower individuals to take actions that they deem appropriate in response to chemical risks. In addition to fulfilling democratic notions o f "right -to - know" information, regulations provide a low - cost avenue for pollution and hazard control when the regulatory resources are scarce due to the large number of substances to be controlled (Tietenberg, 1998). 5.3 Summary Clearly numerous people use toxicological data. It is expected that the same people and organizations that currently use toxicological data will use the data developed as a result of the final test rule. 

### The basic toxicity

information generated by this final rule will also provide a better understanding of the effects related to many chemicals that are produced in high volumes and to which there may

be exposure to humans and/or the environment. Scientists can use this information to further refine the understanding of the risks p osed by these chemicals. Consumers of the chemicals will have a better understanding of the hazards associated with the chemicals they are using and can, thus, make more informed choices about the use of the chemical. Companies benefit because they can p romote the safe use, manufacture, and disposal of chemicals and meet Responsible Care Initiative® requirements. EPA itself can use the test results to guide future regulations. Finally , other regulatory

authorities can use this information, in conjunctio n with exposure - related information to identify

and prioritize risks and to target monitoring efforts. CHAPTER 6 – OTHER IMPACT ANALYSES Several statutes and Executive Orders pertain to the final test rule. This chapter presents statements discussing unfunded mandates, environmental justice, children’s health, and paperwork burden. 6.1 Unfunded Mandates Statement Federal agencies are required to assess the effects of Federal regulations on State, local, or tribal governments, and on the private sector under Title I I of the Unfunded Mandates Reform Act of 1995 (UMRA). In particular, UMRA requires that agencies prepare a written statement to accompany any rulemaking that "includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more (annually adjusted for inflation) in any one year" (Section 202(a)). The written impact statement under Section 202 must include (1) an identification of the statutory authority; (2) an assessment of the benefits and costs of the rule; and (3) a description of the agency’s consultation with State, local, and tribal government officials during the development of the rule. EPA estimates that the final rule will not cost the private or public sectors $100 million or more in any one year. As shown in Chapter 3, the maximum total cost incurred by the private sector in complying with the final rule and associated requirements triggered by the rule is approximately $ 3.90 million (averag e cost scenario). This includes laboratory and administrative costs, as well as the cost of export notifications under the average cost scenario. Assuming a 7 percent discount rate and a 15 -year

### 6 - 2

amortization period, the maximum annualized compliance cost for industry is approximately $0. 4 3 million per year (average cost scenario). 24 

### Government cost, annualized using similar assumptions, is estimated to equal $4, 3 00 per year. Furthermore, because the final rule is focused on manufacturers and importers of chemicals, EPA does not believe that it imposes costs on any non - Federal governmental entity, or on State, local, and tribal governments. Moreover, while it does not impose costs on State, local, and tribal governments, the final rule can be of value to these agencies. As explained in Chapter 5, if EPA makes the test data collected as a result of the final rule publicly available, then other governmental agencies can use the data to inform their own regulations and decision making. Executive Order 12875 , Enhancing the Intergovernmental Partnership (58 FR 58093, Oct. 28, 1993), requires Federal agencies to determine whether certain regulatory actions create unfunded Federal mandates on State, local, or tribal governments. Executive Order 13084, Consultation and Coordination with Indian Tribal Governments (63 FR 27655, May 19, 1998), requires Federal agencies to determine whether certain regulatory actions significantly or uniquely affect the communities of Indian tribal governments. EPA’s determination under UMRA and Executive Orders 12875 and 13084 that no State, local, or tribal governments would be affected by this final rule is based on a search conducted in March 1999 of past submissions to EPA. This search demonstrated that State, local, or tribal governments have never submitted letters of intent to test, exemption applications, or export notifications to EPA. 6.2 Environmental Justice Statement Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low In come Populations, requires each agency to address and identify “....disproportionally high and adverse human health or environmental effects of its programs, policies, and activities on minority and low - income populations....” (59FR 7629; Section 1.1). Th e final rule is directed at 19 chemicals listed on the final rule for which basic toxicity information is currently unavailable even though they are widely used in commerce. All consumers of these chemical products and all workers who come into contact with these chemicals could potentially benefit if data regarding the chemicals’ health and environmental effects were developed. Therefore, it does not appear that the costs and the benefits of the final rule will be disproportionately distributed across di fferent geographic regions or among different categories of individuals. 6.3 Children’s Health Statement Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks, requires that Federal agencies examine the impacts of eac h regulatory action on children for any economically significant regulation (as defined by Executive Order 12866) that the agency has reason to believe may disproportionately affect children. Although th e final rule is not subject to the Executive Order, for the reasons described in the rule, the information obtained by the testing in this rule will be used to inform the Agency’s decision making process regarding chemicals to which children may be disproportionately exposed. This information will 24 As described in Section 4.1.1, complianc e costs are annualized using a seven percent discount rate to reflect the opportunity cost of capital, and over a fifteen - year period to reflect the life of the chemical.

### 6 - 3

also as sist the Agency and others in evaluating these chemical substances for potential health or safety risk concerns, and will serve to further the Agency’s goal of identifying and controlling human and environmental risks as well as provide greater protection and knowledge to the public. 6.4 Burden Hour Estimate The Paperwork Reduction Act mandates that Federal agencies estimate the record keeping and reporting burden of a rule. In this context, the term "burden" is interpreted as the total time, effort, or fin ancial resources expended by people to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed by regulated entities to review instructions and to develop, acquire, install, and use technolo gy and systems to collect, validate, verify, and disclose information. Time taken to adjust existing ways to comply with any previously applicable instructions and requirements and to train personnel to respond to the information collection task is also included. In this section, burden hours for both the industry respondents and the government are estimated. 6.4.1 Industry Burden In this report, total industry burden hours represent the sum of time spent on reporting and on other administrative activities. Industry respondents will spend time on reporting activities associated with TSCA Section 4 test rules: preparing letters of intent and study plans, preparing test results for submission to EPA, recording test results, preparing laboratory reviews, preparing corporate reviews, conducting associated clerical work for final report preparation, conducting record keeping activities, and applying for exemptions. Under this rule, respondents are also asked to submit robust summaries on a voluntary basis. In addition to the reporting burden, respondents will spend additional time on other administrative activities such as soliciting laboratory bids, comparing standard laboratory fee schedules, developing cost - sharing agreements, and preparing for and overseeing the testing program. The procedure for estimating the total industry burden follows. Reporting Burden . As shown in Section 3.1.3 of this report, EPA estimates that approximately 15 panels will submit letters of intent and study plans resulting in 98 final reports. EPA also assumes that it will receive five exemption applications per panel, resulting in a total of 75 requests pursuant to the final rule. Additionally, it is estimated that 10% of final test reports will be accompanied by a robust summary of results. It is estimated that it takes a respondent 40 hours to prepare a letter of intent and study plan, 73 hours to write a final report for a short -term study, 12 hours to prepare a robust summary, and 2 hours to prepare an exemption application. The unit labor hours are derived from the previous information collection requests and are believed to reflect the burden that will be incurred for the final rule. The reporting burden estimates for this rule are detailed in Table 6 - 1. The total reporting burden generated by the rule is estimated to be approximately 8,351 hours. Table 6 - 1 Reporting Burden Estimate for the Final Rule Item Hours Per Item Total Items Total Hours Letter of Intent and Study Plans 40 15 600 Final Reports 73 98 7,154 Robus t Summaries 12 19 228

### 6 - 4

Exemption Requests 2 75 150 Total 8, 132 

### Other Administrative Burden . Respondents also spend time on other administrative activities including development of cost - sharing agreements, organization of a testing program, obtaining an d reviewing bids from laboratories that would conduct the testing, and preparing and submitting samples to the laboratory for testing, and monitoring testing. EPA has calculated the costs and burdens of these activities as 25% of the total laboratory testing costs discussed in Section 3.1.1. Based on this calculation, other administrative costs associated with laboratory testing are estimated to cost approximately $ 5 03 , 000 ($ 6 51 ,0 00 ) under the least (average) cost assumption. These costs are translated into burden estimates using an average labor cost of $51.27 per hour, which is based on a labor mix that is 20 percent managerial, 60 percent technical, and 20 percent clerical. The estimated administrative burden based on this approach is 9,819 ( 1 2,698 ) h ours under the least (average) cost assumption. Estimate Export Notification Burden . As explained in Section 3.1.4, EPA expects 25 export notifications to be filed for each chemical included in the final rule. This analysis assumes that the export noti fication burden ranges from 0.5 hours to 1.5 hours per notice. Thus, this report assumes that export notification requires 0.5 hours per notice under the least cost scenario and one hour per notice under the average cost scenario. Consequently, the export notification burden triggered by the final rule is estimated to equal 238 hours (475 hours) under the least (average) cost scenario. Estimate Total Industry Burden . The total industry burden is the sum of the total administrative burden and the export notification burden. Total industry burden estimates are summarized in Table 6 - 2. The total industry burden is estimated to equal 18,189 hours (23, 439 hours) in the least (average) cost scenario. The average burden per panel is estimated to be 1, 267 ( 1, 496 ) hours in the least (average) cost scenario. 25 Table 6 - 2 Total Industry Burden Hour Estimate for the Final Rule Activity Least Cost Scenario (Hours) Average Cost Scenario (Hours) Reporting Activities 8, 132 8, 132 Other Administrative Activities 9,819 1 2,698 Total Administrative Burden 17,951 20,830 Export Notification Burden 238 475 Total Industry Burden 18,189 21,305 Burden Per Panel (15 panels) 1 1,2 13 1,4 20 Notes 1 The per panel cost assumes that the export notification burden is distributed evenly across all panels. 

### 6.4.2 Government Burden The government will also spend time processing, reviewing, and analyzing the 25 The per panel cost assumes that the export notification burden is distributed evenly across all panels.

### 6 - 5

information that will be collected under the final test rule. As explained in Section 3.2, this work is assumed to be performed by a GS - 12, Step 1, FTE employee. Itis further assumed that 15 letters of intent and study plans, 98 final reports, 19 robust summaries, and 75 exemption requests will be filed in response to this rule. The estimated unit government burden for proce ssing letters of intent and study plans (3 hours), final reports (5 hours), and robust summaries and exemption applications (1 hour each) is derived from the previous information collection requests. Table 6 - 3 presents the estimated government burden hour s based on these assumptions. The total government burden is estimated to equal 629 hours. Table 6 - 3 Estimated Government Burden for the Final Test Rule Item Hours Per Item Total Items Total Hours Letter of Intent and Study Plans 3 15 45 Final Reports 5 98 490 Robust Summaries 1 19 19 Exemption Requests 1 75 75 Total 207 629

### R - 1 REFERENCES American Chemical Society. Chemical Abstracts Service . <http://www.cas.org>. American Chemistry Council. 2006a. Responsible Care Guiding Principles. <http://www.american chemistry.com/rc.nsf/unid/nnar- 4ctqzm?opendocument>. American Chemistry Council. 2006b. Guide t o the Business of Chemistry. Arrow, K. J. 1962. “Economic Welfare and the Allocation of Resources for Invention.” In The Rate and Direction of Inventive Activity: Economic and Social Factors . Princeton, NJ: National Bureau for Economic Research Conferenc e. Blacconiere, W. G., and D. M. Patten. 1994. “Environmental Disclosures, Regulatory Costs, and Changes in Firm Value.” Journal of Accounting and Economics 18:357 - 377. Blake - Hedges, Lynne. 1999. “Treatment of 12(b) Export Notification Unit Costs for Section 4 Test Rule Analyses”, memorandum to EPAB staff. April 1, 1999. Bogdanffy, M. S., C. R. Kee, D. P. Kelly, M. C. Carakostas, and G. P. Sykes. 1990. “Subchronic Inhalation Study with Vinyl Fluoride: Effects on Hepatic Cell Proliferation and Urinary Fluorise Excretion.” Fundamental Applied Toxicology 15(2): 394 - 406. Brealey, R., and S. Meyers. 1996. Principles of Corporate Finance. 5th Edition. Mc - Graw Hill. Bureau of Labor Statistics (BLS). 2006a. Employer Costs for Employee Compensati on: Changes to NAICS and SOC, Table. Series ID CCU120000111000D, CCU120000111000p. Wages and Salaries; Private Goods Producing; Executive, Administrative, and managerial; Professional Specialty and technical occupations; and Administrative support, including clerical workers. <http://www.bls.gov>. Bureau of Labor Statistics (BLS). 2006b. Employment Cost Index. Series ID ECS12002I. Private Indu stry, Total Compensation, Goods -producing industries. 2 nd 

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D’Ruiz, C. and B. J. Riordan. September 23, 1988. Review of Economic Impact Methodology Applied to TSCA Section 4 Test Rules. Prepared under USEPA Contract No. 68 - 02 - 4235. Dun & Bradstreet. 2007. Dun’s Market Identifier Database [computer file]. New York, NY: Di alog Corporation. 

### Earle, B. December 2, 2003. Chemical Information Sy stem. Personal communication with Jason Sacks, Abt Associates. Fischer Chemical Company. 2006. Fischer Chemical Company online catalog. <https:// www.fishersci.com>. Glickman, A. H., H. C. Alexander, R. J. Buccafusco, C. R. Morris, B. O. Francis, D. C. Surprenant, and T. J. Ward. 1995. “An Evaluation of the Aquatic Hazard of Cumene.” Ecotoxicology and Environmental Safety 31(3): 287 - 289. Hoffman, M. A., Chemical Information System. November 12, 1998. Personal communication with Brooks Depro, Research Triangle Institute. Distribution of TSCATS users. Hudson, V., National Library of Medicine. November 1998. Personal communication with Lynne Blake - Hedges, U.S. Environmental Protection Agency. Distribution of HSDB users. Hudson, V., National Library of Medicine. December 2003. Personal communication with Jason Sacks, Abt Associates, Inc. Distribution of HSDB users. International Forum on Chemical Safety. 1998. Resolution on Priorities for Action in Implementing Environmentally Sound Management of Chemicals. Intergovernmental Forum on Chemical Safety. <http://www.who.int/ifes/fs_res2.htm>. Jones, T. D., M. D. Morris, and S. R. Basavaraju. 1998. “Atherosclerotic Ri sks from Chemicals: Part II. A RASH Analysis of In Vitro and In Vivo Bioassay Data to Evaluate 45 Potentially Hazardous Compounds.” Archives of Environmental Contamination and Toxicology 35(1):165 - 177. Kapp, R. W., C. Bevan, T. H. Gardiner, M. I. Banton , T. R. Tyler, and G. A. Wright. 1996. “Isopropanol: Summary of TSCA Test Rule Studies and Relevance to Hazard Identification.” Regulatory Toxicology and Pharmacology 23(3): 183 - 92. Meylan, W.M. and P.H. Howard. 1992. “Atom/Fragment Contribution Metho d for Estimating Octanol - Water Partition Coefficients).” Journal of Pharmaceutical Sciences. 84(1): 83 - 92. Meylan, W.M, Howard, P.H., and R.S. Boethling. 1996. “Improved Method for Estimating Water Solubility From Octanol/Water Partition Coefficient.” Environmental Toxicology and Chemistry. 15(2): 100 - 106.

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Muoghalu, M. and J. E. Rogers. 1992. “The Economic Impact of Superfund’s Litigation on the Value of the Firm: An Empirical Analysis.” Journal of Economics and Finance 16(3): 73 - 87. National Institute of Occupational Safety and Health. 2005. “Registry of Toxic Effects of Chemical Substances (RTECS).” <http://www.cdc.gov/niosh/rtecs.html>. Last updated January 2001. National Institute of Standards and Technology (NIST) WebBook. < http://webbook.nist.gov/chemistry/>. Office of Management and Budget. 2003. Circular A - 4. Washington, DC. <http://www.whitehouse.gov/omb/circulars/a004/a - 4.html>. Office of Personnel Management. 2007. “2007 General Schedule Locality Rates of Pay for Washington - Baltimore, DC - MD -VA - WV.” Effective January 2007. <http://www.opm.gov/oca/03tables/pdf/DCB.pdf>. Ogunniyi, D.S. 2006. “Castor oil: A vital industrial raw material”, Bioresource Technology 97 (2006), pp. 1086 - 1091. Rice, C. June 10, 2002. Wage Rates for Economic Analyses of the Toxics Release Inventory Program. U.S. Environmental Protection Agency. Roquette, “Sodium Erythorbate in photographic applications, available at <http: //roquette.fr/fr/bibliotheque/Erythorbate.pdf >. Roquette, Food Business Unit Newsletter, Number 8, June 2000. < http://www.esters - cationicanionic - ethers -starches.com/fr/Qnews/pub/actualites/foodnews08- 2000- 10- 13 - 15 - 25 - 53.PDF >. Ruder, A. M., L. J. Fine, and D. S. Sundin. 1990. “National Estimates of Occupational Exposure to Animal Bladder Tumorigens.” Journal of Occupational Medicine 32(9): 797 - 805. Schall, L., and C. Haley. 1991. Introduction to Financial Management. 6th Edition. Scorecard: the Pollution Information Site. <www.scorecard.org>. Sigma -Aldrich Company. November, 2006. Sigma - Aldrich online catalog. <www .sigma aldrich.com>. Silagi, W. June 1992. Economic Analysis in Support of the Final Rule Promulgated under TSCA Section 12(b). Washington, DC: U.S. Environmental Protection Agency, Office of Pollution Prevention and Toxics, Regulatory Impacts Branch. Specialty Chemicals Electronic Sourcebook. September, 2003. Compiled by Michael and Irene Ash. Synapse Information Resources, Inc.

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Spectrum Quality Products Inc. November, 2006. Spectrum Online Catalog. <www.spectrumchemical.com>. Taylor, A. C., J. S. Evans and T. E. McKone. 1993. “The Value of Animal Test Information in Environmental Control Decisions.” Risk Analysis 13(4):403 - 412. Tietenberg, T. 1998. “Disclosure Strategies for Pollution Control.” Environmental and Resource Economics 1 1:587 - 602. U.S. Environmental Protection Agency. 1992. Instructions for Preparing Information Collection Requests (ICRs), Office of Policy, Planning and Evaluation (OPPE). U.S. Environmental Protection Agency. 2000. Guidelines for Preparing Economi c Analyses. EPA 240 - R - 00 - 003. U.S. Environmental Protection Agency. EPAB 2002. Revised Economic Analysis for the Amended Inventory Update Rule: Final Report, August 2002. 

### U.S. Environmental Protection Agency . Public website Inventory Update Reporting Rule Data. <

### http://www.epa.gov/oppt/iur/tools/data/index.htm>. U.S. Environmental Protection Agency. 2004a. EPA TSCA Export Notification Tracking System (ENTS), March. U.S. Environmental Protection Agency. 2004b. Analysis of Laboratory Capacity to S upport U.S. EPA Chemical Testing Program Initiatives. Washington, DC: Economics and Policy Analysis Branch. U.S. Environmental Protection Agency. 2006. Inventory Update Rule Chemical ProductionVolume Data - Confidential Business Information. Washington, DC. 2006. U.S. Environmental Protection Agency. 2007. Administrative Costs Associated with TSCA Test Rules and Voluntary Chemical Testing; Industry Response to Interview Questions, January 2007. U.S. International Trade Commission. 1996. Synthe tic Organic Chemicals, United States Production and Sales, 1994. [computer file]. Washington, DC: U.S. International Trade Commission. U.S. National Library of Medicine. 2006. ChemIDplus Lite. < http://chem.sis.nlm.nih.gov/chemidplus/chemidlite.jsp >. U.S. National Library of Medicine. 2006. Hazardous Substances Databank. < http://toxnet.nlm.nih.gov/cgi -bin/sis/htmlgen?HSDB>. U.S. Postal Service. 2006. Mailing and postage rat es. <http://www.usps.com>. U.S. Small Business Administration. 2004. Table of Small Business Standards Matched to North American Industry Classification System Codes. Effective January 28, 2004.

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Van Horne, J. C. and J. M. Wachowicz, Jr. 1997. Fundamentals of Financial Management. 8 th 

### Edition. Prentice - Hall. Viscusi, W. K. and C. J. O’Connor. 1984. “Adaptive Responses to Chemical Labeling: Are Workers Bayesian Decision Makers?” American Economic Review. 74(5): 942 - 956. Wehmeir, Helge. 2001. A s quoted in “CIIT and LRI will Help Close ‘Knowledge Gap’”. Centers for Health Research. <http://www.ciit.org/news_events/news_01/release2001_10_12.htm>. Weinstein, Harriet G and Mark A. Loewenstein. 2004 

### . “ Comparing Current and Former Industry and Occ upation ECEC Series.” U.S. Bureau of Labor Statistics. < http://www.bls.gov/opub/cwc/cm20040823ar01p1.htm>.

### A - 1 APPENDIX A – WAGE RATE CALCULATIONS This appendix describes the derivation of the fully loaded labor rates and inflation factors used in calcul ating costs of labor, materials, and other inputs. All cost estimates are presented in 2006 dollars. A.1. Derivation of Loaded Wage Rates 26 

### The fully loaded unit labor cost for technical, managerial and clerical labor in the regulated industry and for EPA staff is estimated by adding fringe benefits and overhead costs to the hourly wage or annual salary for each category following the method described in Wage Rates for Economic Analysis of the Toxics Release Inventory Program (Rice, 2002). This appendix d escribes the method employed to estimate the fully loaded unit labor costs for each labor category, and presents the results of the analysis. Labor categories used in the analysis correspond to the U.S. Bureau of Labor Statistics’ (BLS) Standard Occupational Classification (SOC) system. In March 2004, BLS began using the North American Industry Classification System (NAICS) instead of the Standard Industrial Classification (SIC) System, and the Standard Occupational Classification (SOC) system instead of the Occupational Classification System (OCS). Table A.1 summarizes the crosswalk between old and new occupational titles, and lists the SOC titles that correspond to the managerial, technical, and clerical labor categories used in this analysis.

26 While hourly labor rates in this analysis may be lower than hourly rates for the same labor categories in earlier economic analyses, EPA does not mean to suggest that actual hourly rates have declined. Rather, the apparent decline is due to three changes in the methodology employed to calculate hourly costs for the same labor categories. These three changes are: (1) the 17 percent overhead loading factor is applied only to wages where previously it was applied to wages - plus - fringe benefits, which reduces calculated overhead; (2) wage rates presented in this economic analysis are based on the most recent data available where previously analyses inflated older data to current dollars; and (3) private industry fringe benefits in the current analysis are based on actual fringe benefits as reported in the most recent BLS data where previously fringe benefits were based on an assumed percent of wages. Table A.1 Detail of Labor Categories Used in the Analysis 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 Profession al specialty and technical Professional and related Clerical Administrative support, including clerical Office and administrative support Source: Employer Costs for Employee Compensation: Changes to NAICS and SOC, Table 2 . ECEC Occupational Comparability between SOC and OCS (BLS, 2006a); and Weinstein, 2004.

### A - 2

A.1.1 Derivation of Unit Labor Rates for Technical, Managerial, and Clerical Industry Employees Wages and fringe benefit data for technical, managerial, and clerical labor are from the Bureau of Labor Statistics (BLS) Employer Costs for Employee Compensation (ECEC) data, for December 2006, for manufacturing industries. 27 

### The cost of fringe benefits such as paid leave and insurance, specific to each labor category, are taken from the same ECEC series (December 2006). Fringe benefits as a percent of wages are calculated separately for each labor category. For example, for December 2006, the average wage rate for professional/technical labor was $32.38 and the average fringe benefit was $16.77. 28 

### T herefore, fringe benefits as a percent of wages were $16.77/$32.38, or approximately 51.8 percent. An additional loading factor of 17 percent is applied to wages to account for overhead. 29 

### This approach is used for consistency with Office of Pollution Prevention and Toxics economic analyses for two major rulemakings: Wage Rates for Economic Analyses of the Toxics Release Inventory Program , June 10, 2002 (Rice, 2002), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report , August 2002 (EPAB, 2002). This overhead loading factor is added to the benefits loading factor, and the total is then applied to the base wage to derive the fully loaded wage. For example, the December 2006 fully loaded wage for professional/technical labor is $32.38 × (1+0.5179 + 0.17) = $54.65. Fully loaded costs for managerial, clerical, and production labor are calculated in a similar manner, as shown in Table A.2. A.1.2 Derivation of Unit Labor Rates for EPA Staff Unit labor rates for EPA staff are calculated based on annual Federal salaries for the Washington - Baltimore area published by the Office of Personnel Management and effective January 2007 (OPM, 2007). The average salary for one Full Time Equivalent (FTE) staff is estimated as the salary for a GS - 13 Step 1 employee, which is $79,397 annually without fringe benefits and overhead costs . In order to derive the fully loaded salary, EPA multiplied the annual salary by an assumed loading factor of 1.6 to reflect Federal fringe benefits and overhead, which results in a fully loaded annual salary of $127,035. The Agency loading factor of 1.6 is from an EPA guide entitled Instructions for Preparing Information Collection Requests (ICRs) (OPPE, 1992, page 30, footnote 9). The 60 percent assumpti on was labeled “the benefits multiplication factor” in the EPA Guide, but has

27 Employer Costs for Employee Compensation, Private Manufacturing Industry by Occupatio n, unpublished BLS data (BLS, 2006a). Past economic analyses used ECEC data for “All Goods Producing” sectors (manufacturing, mining, and construction). However, the manufacturing sector data seems more relevant because the final rule will primarily affe ct the chemical industry.

28 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 Classificatio n System, OCS, to the Standard Occupational Classification system, SOC. In the process, the “Professional specialty and technical” category became the “Professional and related” category. However, the coverage of the old and new occupational groups is approximately the same. See the BLS article, C omparing Current and Former Industry and Occupation ECEC Series ( Weinstein, 2004). 29 The change was used in the 2003 PMN SNUR economic analysis (EPAB, 2003). In some earlier reports, the 17% had been applied to wages - plus - fringe benefits.

### A - 3

been used in many EPA Office of Pollution Prevention and Toxics ICRs to reflect both fringe benefits and overhead for Federal staff. For example, it was used in an August 2000 document supporting ICR No. 1139.06, with the following explanation: “The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication factor used is recommended in EPA's Office of Pol icy, Planning, and Evaluation's Instructions for Preparing Information Collection Requests (ICRs) (June 1, 1992). An EPA internal phone call between Carol Rawie (OPPT/EETD/RIB) and Carl Koch (OPPE/RMD/IMB) on May 3, 1994, indicated that the 1.6 factor included not only benefits but also overhead.” (ICR No.1139.06)

### A - 4 Table A.2 Derivation of Loaded Wage Rates 1 EPAB Labor Category Data Source for Wage Information Date Wage Fringe Benefit Fringes as

% wage* Overhead

% wage 2 Fringe +

overhead factor* Loaded

Wages* Inflation

Factor 3 Loaded Wages (a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)=(a)  (e) (g) (h)=(f)  (g) Managerial BLS ECEC, Private Manufacturing

industries, “Mgt, Business, and Financial” 4 Dec - 06 $39.77 $18.83 47.35% 17% 1.64 $65.36 1 $65.36 Professional/ Technical BLS ECEC, Private Manufacturing

industries , “Professional and related“ 4 Dec - 06 $32.38 $16.77 51.79% 17% 1.69 $54.65 1 $54.65 Clerical BLS ECEC, Private Manufacturing

industries, “Office and Administrative Support” 4 Dec - 06 $16.07 $8.20 51.03% 17% 1.68 $27.00 1 $27.00

EPA staff FTE Annual Federal staff cost: OPM Washington Baltimore -Northern Virginia, DC - MD - PA - VA WV, area, GS - 13 Step 1 pay rates, with 60% overhead. 5 Jan - 07 $ 79,397 (annual) -- [Included in 60% overhead] 60% 1.60 $127,035 (annual) 1 $127,035 (annual) 38.17 (hourly) -- $61.07 (hourly) $60.86 (hourly) Notes: 1 Wage data are rounded to the closest dollar figure in this table. 2 An overhead rate of 17% was used based on assumptions in Wage Rates for Economic Analyses of the Toxics Release Inventory Program (Rice, 2002), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report (EP AB, 2002). 3 An inflation factor of “1” means wage data was not escalated to reflect inflation. 4 BLS, 2006b. 5 The Federal salary is the unloaded Federal GS - 13 Step 1 salary ($79,397 for 2007), from the Office of Personnel Management salary table for Washington - Baltimore -Northern Virginia (OPM, 2007). The 60% fringes - and - overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs) (OPPE, 1992, page 30, footnote 9). Hourly rates are based on annual salary divided by 2080 hours.

### B - 1 APPENDIX B COST DETAILS

### B - 2 Table B - 1 Industry Compliance and Government Costs, Least Cost Scenario

CASRN CHEMICAL NAME Testing Cost Analytical

Metho dology Validation Cost Total

Administrative Cost 1 Export

Notification Cost Total

Industry Compliance Cost 2 Government

Cost Total

Social Cost3 75 - 07 - 0 Acetaldehyde $89,960 $9,500 $31,459 $639 $131,558 $1,054 $132,612 78 - 11 - 5 P entaerythritol tetranitrate $25,877 $6,000 $13,331 $639 $45,847 $750 $46,597 84 - 65 - 1 9,10 - Anthracenedione $9,845 $6,000 $9,323 $639 $25,807 $750 $26,556 89 - 32 - 7 1H,3H - Benzo[1,2 - c:4,5 - c']difuran - 1,3,5,7 - tetrone $194,187 $16,500 $77,900 $639 $289,226 $2,880 $292,106 110 - 44 - 1 So rbic acid $ 9,845 $ 6,000 $ 9,323 $639 $ 25,807 $ 750 $ 26,556 118 - 82 - 1 Phenol, 4,4' - methylenebis[2,6 -bis(1,1 - dimethylethyl) - $30,799 $6,000 $14,562 $639 $52,000 $750 $52,750 119 - 61 - 9 Methanone, diphenyl - $37,489 $6,000 $19,708 $639 $63,836 $1,054 $64,890 14 4 - 62 - 7 Ethanedioic acid $74,656 $9,500 $44,999 $639 $129,794 $2,575 $132,370 149 - 44 - 0 Methanesulfinic acid, hydroxy- , monosodium salt $7,932 $3,500 $8,845 $639 $20,916 $750 $21,665 2524 - 04 - 1 Phosphorochloridothioic acid, O,O - diethyl ester $146,194 $16, 500 $74,670 $639 $238,003 $3,488 $241,491 4719 - 04 - 4 1,3,5 - Triazine - 1,3,5(2H,4H,6H) - triethanol $9,845 $6,000 $9,323 $639 $25,807 $750 $26,556 6381 - 77 - 7 Sodium erythorbate $41,935 $6,000 $22,470 $639 $71,044 $1,358 $72,402 31138 - 65 - 5 D - gluco - Heptonic acid , monosodium salt, (2.xi.) - $205,359 $20,000 $87,640 $639 $313,638 $3,488 $317,126 66241 - 11 - 0 C.I. Leuco Sulphur Black 1 $214,793 $20,000 $95,293 $639 $330,725 $3,793 $334,517 68187 - 76 - 8 Castor oil, sulfated, sodium salt $187,629 $ 20,000 $ 73,242 $639 $ 281,511 $ 2,575 $ 284,086 68187 - 84 - 8 Castor oil, oxidized $ 161,621 $ 16,500 $ 63,267 $639 $ 242,028 $ 2,271 $ 244,299 68479 - 98 - 1 Benzenediamine, ar,ar- diethyl - ar - methyl - $2 03,558 $16,500 $ 82,065 $639 $30 2,762 $ 2,880 $3 05,641 68527 - 02 - 6 Al kenes, C12 - 24, chlo ro $ 1 52,732 $ 15,500 $ 72,831 $639 $241,702 $3,793 $244,886 68647 - 60 - 9 Hydrocarbons, C>4 $209,333 $20,000 $86,982 $639 $316,954 $3,184 $320,138 Total $2, 013,589 $2 26, 000 $ 897,234 $12,141 $3, 148,964 $ 3 8,281 $3, 187,245 Notes: 1 Total administrative cost in cluded both reporting and non - reporting administrative costs. 2 Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost. 3 Total social cost includes total industry compl iance cost and government cost.

### B - 3 Table B - 1 Industry Compliance and Government Costs, Average Cost Scenario

CASRN CHEMICAL NAME Testing Cost Analytical

Methodology Validation Cost Total

Administrative Cost 1 Export

Notification Cost Total

Industry Complia nce Cost 2 Government

Cost Total

Social Cost3 75 - 07 - 0 Acetaldehyde $89,960 $9,500 $31,459 $1,322 $132,242 $1,054 $133,295 78 - 11 - 5 P entaerythritol tetranitrate $25,877 $6,000 $13,331 $1,322 $46,531 $750 $47,280 84 - 65 - 1 9,10 - Anthracenedione $9,845 $6, 000 $9,323 $1,322 $26,490 $750 $27,239 89 - 32 - 7 1H,3H - Benzo[1,2 - c:4,5 - c']difuran - 1,3,5,7 - tetrone $264,096 $16,500 $95,377 $1,322 $377,295 $2,880 $380,175 110 - 44 - 1 Sorbic acid $ 9,845 $ 6,000 $ 9,323 $1,322 $ 26,490 $ 750 $ 27,239 118 - 82 - 1 Phenol, 4,4' - methylenebis[2,6 -bis(1,1 - dimethylethyl) - $30,799 $6,000 $14,562 $1,322 $52,683 $750 $53,433 119 - 61 - 9 Methanone, diphenyl - $41,538 $6,000 $20,720 $1,322 $69,580 $1,054 $70,634 144 - 62 - 7 Ethanedioic acid $ 90,186 $9,500 $48,882 $1,322 $149,890 $2,575 $152,465 14 9 - 44 - 0 Methanesulfinic acid, hydroxy- , monosodium salt $7,932 $3,500 $8,845 $1,322 $21,599 $750 $22,348 2524 - 04 - 1 Phosphorochloridothioic acid, O,O - diethyl ester $161,724 $16,500 $78,553 $1,322 $258,099 $3,488 $261,587 4719 - 04 - 4 1,3,5 - Triazine - 1,3,5(2H, 4H,6H) - triethanol $9,845 $6,000 $9,323 $1,322 $26,490 $750 $27,239 6381 - 77 - 7 Sodium erythorbate $45,983 $6,000 $23,483 $1,322 $76,788 $1,358 $78,146 31138 - 65 - 5 D - gluco - Heptonic acid, monosodium salt, (2.xi.) - $286,749 $20,000 $107,987 $1,322 $416,059 $3 ,488 $419,547 66241 - 11 - 0 C.I. Leuco Sulphur Black 1 $296,183 $20,000 $115,641 $1,322 $433,146 $3,793 $436,939 68187 - 76 - 8 Castor oil, sulfated, sodium salt $2 64,971 $20,000 $ 92,578 $1,322 $ 378,872 $ 2,575 $ 381,447 68187 - 84 - 8 Castor oil, oxidized $ 235,7 67 $ 16,500 $ 81,804 $1,322 $ 335,393 $ 2,271 $ 337,664 68479 - 98 - 1 Benzenediamine, ar,ar- diethyl - ar - methyl - $2 73,655 $16,500 $ 99,589 $1,322 $ 391,067 $ 2,880 $ 393,946 68527 - 02 - 6 Al kenes, C12 - 24, chloro $ 168,262 $ 15,500 $ 76,714 $1,322 $ 261,798 $3, 184 $ 264,982 68647 - 60 - 9 Hydrocarbons, C>4 $290,724 $20,000 $107,329 $1,322 $419,376 $3,184 $422,560 Total $2, 603,941 $2 26 ,000 $1, 044,823 $25,123 $ 3,899,886 $ 3 8,281 $ 3,938,167 Notes: 1 Total administrative cost included both reporting and non - reporting administrative costs. 2 Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost. 3 Total social cost includes total industry compliance cost and government cost.

### B - 4 Table B - 3 Annualiz ed Social Costs 1 CASRN CHEMICAL NAME Least Cost Scenario Average Cost Scenario 3 years, 3% 3 years, 7% 3 years, 3% 3 years, 7% 75 - 07 - 0 Acetaldehyde $46,882 $50,532 $47,124 $50,792 78 - 11 - 5 P entaerythritol tetranitrate $16,473 $17,756 $16,715 $18,016 84 - 65 - 1 9,10 - Anthracenedione $9,388 $10,119 $9,630 $10,380 89 - 32 - 7 1H,3H - Benzo[1,2 - c:4,5 - c']difuran - 1,3,5,7 - tetrone $103,268 $111,307 $134,403 $144,866 110 - 44 - 1 Sorbic acid $ 9,388 $ 10,119 $ 9,630 $ 10,380 118 - 82 - 1 Phenol, 4,4' - methylenebis[2,6 -bis(1,1 - dimethylethyl) - $18,649 $20,100 $18,890 $20,361 119 - 61 - 9 Methanone, diphenyl - $22,941 $24,726 $24,971 $26,915 144 - 62 - 7 Ethanedioic acid $ 46,797 $ 50,440 $ 53,901 $ 58,097 149 - 44 - 0 Methanesulfinic acid, hydroxy- , monosodium salt $7,659 $8,256 $7,901 $8,516 2524 - 04 - 1 Phosphorochloridothioic acid, O,O - diethyl ester $85,375 $92,021 $92,479 $99,678 4719 - 04 - 4 1,3,5 - Triazine - 1,3,5(2H,4H,6H) - triethanol $9,388 $10,119 $9,630 $10,380 6381 - 77 - 7 Sodium erythorbate $25,596 $27,589 $27,627 $29,778 31138 - 65 - 5 D - gluc o - Heptonic acid, monosodium salt, (2.xi.) - $112,114 $120,841 $148,323 $159,869 66241 - 11 - 0 C.I. Leuco Sulphur Black 1 $118,262 $127,468 $154,471 $166,496 68187 - 76 - 8 Castor oil, sulfated, sodium salt $10 0,433 $1 08,252 $ 134,853 $ 145,351 68187 - 84 - 8 Casto r oil, oxidized $ 86,367 $ 93,090 $1 19,375 $1 28,667 68479 - 98 - 1 Benzenediamine, ar,ar- diethyl - ar - methyl - $1 08,053 $116,465 $1 39,272 $1 50,113 68527 - 02 - 6 Al kenes, C12 - 24, chloro $ 86,575 $ 93,314 $ 93,679 $1 00,972 68647 - 60 - 9 Hydrocarbons, C>4 $113,179 $121, 989 $149,388 $161,017 Total $1, 1 26 , 788 $1, 2 14 , 505 $1, 392,262 $1, 5 00,645 Note: 1 Total social cost includes total industry compliance cost and government cost. Total social costs are discounted over three years because these costs are expected to occur ov er the few years during which the actual testing occurs and EPA reviews studies. Discount rates of both three and seven percent are presented following OMB Guidance contained in Circular A - 4

### B - 5 Table B - 4 Annualized Industry Compliance Costs 1 CASRN CHEMIC AL NAME Least Cost Scenario Average Cost Scenario 15 years, 7% 7 years, 7% 15 years, 7% 7 years, 7% 75 - 07 - 0 Acetaldehyde $14,444 $24,411 $14,519 $24,538 78 - 11 - 5 P entaerythritol tetranitrate $5,034 $8,507 $5,109 $8,634 84 - 65 - 1 9,10 - Anthracenedione $2 ,833 $4,788 $2,908 $4,915 89 - 32 - 7 1H,3H - Benzo[1,2 - c:4,5 - c']difuran - 1,3,5,7 - tetrone $31,755 $53,667 $41,425 $70,008 110 - 44 - 1 Sorbic acid $ 2,880 $ 4,788 $ 2,908 $ 4,915 118 - 82 - 1 Phenol, 4,4' - methylenebis[2,6 -bis(1,1 - dimethylethyl) - $5,709 $9,649 $5,784 $9,7 76 119 - 61 - 9 Methanone, diphenyl - $7,009 $11,845 $7,639 $12,911 144 - 62 - 7 Ethanedioic acid $ 14,251 $ 24,084 $ 16,457 $ 27,813 149 - 44 - 0 Methanesulfinic acid, hydroxy- , monosodium salt $2,296 $3,881 $2,371 $4,008 2524 - 04 - 1 Phosphorochloridothioic acid, O,O - diethyl ester $26,131 $44,162 $28,338 $47,891 4719 - 04 - 4 1,3,5 - Triazine - 1,3,5(2H,4H,6H) - triethanol $2,833 $4,788 $2,908 $4,915 6381 - 77 - 7 Sodium erythorbate $7,800 $13,183 $8,431 $14,248 31138 - 65 - 5 D - gluco - Heptonic acid, monosodium salt, (2.xi.) - $34,43 6 $58,196 $45,681 $77,201 66241 - 11 - 0 C.I. Leuco Sulphur Black 1 $36,312 $61,367 $47,557 $80,372 68187 - 76 - 8 Castor oil, sulfated, sodium salt $ 30,908 $ 52,235 $ 41,598 $ 70,301 68187 - 84 - 8 Castor oil, oxidized $ 26,573 $ 44,909 $ 36,824 $ 62,233 68479 - 98 - 1 B enzenediamine, ar,ar- diethyl - ar - methyl - $ 33,242 $ 56,178 $ 42,937 $ 72,564 68527 - 02 - 6 Al kenes, C12 - 24, chloro $ 26,538 $ 44,849 $ 28,744 $ 48,577 68647 - 60 - 9 Hydrocarbons, C>4 $34,800 $58,812 $46,045 $77,816 Total $3 45,739 $ 584,300 $ 4 28,187 $ 723,636 Note: 1 Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost. Total industry compliance costs are annualized at a seven percent discount rate, which reflects the opportunity cost of capital, and over fifteen years, which represents the life of the chemical. Results are also presented using a discounting timeline of seven years to test the sensitivity of results to a shorter chemical lifetime as some chemicals included in th e final rule may have a lifetime that is less than fifteen years.