``

Economic Analysis for the Section 4 Final Test Rule for High 

Production Volume Chemicals – Second Group of Chemicals

Final Report

—Does not contain TSCA CBI—

Prepared by:

Economic and Policy Analysis Branch

Economics, Exposure and Technology Division

Office of Pollution Prevention and Toxics

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue

Washington, D.C. 20460

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 STATEMENT OF NEED................................................................................................................ 1-1

1.1.1 Inadequate Information ....................................................................................................... 1-2

1.1.2 Externalities......................................................................................................................... 1-2

1.2 ORGANIZATION OF THIS REPORT .............................................................................................. 1-3

CHAPTER 2 – USE, PRODUCTION, AND MARKET INFORMATION .......................... 2-1

2.1 INTRODUCTION............................................................................................................................. 1

2.2 CHEMICAL USE AND MARKET INFORMATION ........................................................................... 2-4

2.3 CHEMICAL-SPECIFIC USE AND MARKET 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 COMPLIANCE COSTS ................................................................................................ 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 Costs .................................................................................................. 3-15

3.1.5 Total Industry Compliance Costs ...................................................................................... 3-16

3.1.6 Non-Monetized Costs......................................................................................................... 3-16

3.2 EPA COSTS ............................................................................................................................. 3-17

3.3 SUMMARY OF TOTAL SOCIAL COSTS ...................................................................................... 3-18

CHAPTER 4 – ECONOMIC IMPACT ANALYSIS .............................................................. 4-1

4.1 IMPACT ON ALL REGULATED COMPANIES................................................................................. 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.............................................................................................................. 4-6
4.2 SMALL ENTITY IMPACT ANALYSIS............................................................................................ 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 POTENTIAL USERS OF CHEMICAL-SPECIFIC INFORMATION ....................................................... 5-1

5.2 POTENTIAL USES OF TOXICOLOGIC INFORMATION GENERATED BY THE FINAL RULE............... 5-2

5.2.1 Consumers/Buyers............................................................................................................... 5-2

5.2.2 Workers................................................................................................................................ 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 SUMMARY................................................................................................................................. 5-7

CHAPTER 6 – OTHER IMPACT ANALYSES...................................................................... 6-7

6.1 UNFUNDED MANDATES STATEMENT ........................................................................................ 6-7

6.2 ENVIRONMENTAL JUSTICE STATEMENT .................................................................................... 6-2

6.3 CHILDREN’S HEALTH STATEMENT............................................................................................ 6-2

6.4 BURDEN HOUR ESTIMATE......................................................................................................... 6-3

6.4.1 Industry Burden ................................................................................................................... 6-3

6.4.2 Government Burden............................................................................................................. 6-4

REFERENCES.........................................................................................................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 industry 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 imported 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 $0.21

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 Category

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) $1.13 $139

Annualized Social Cost (3 years, 7% discount rate) $1.21 $1.50

Notes:

a Total industry compliance cost includes laboratory, administration, and export notification costs.

EPA considered the effect 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 with 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 basic 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 result 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 choices 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. Finally, 

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 manufacture, 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 necessary 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 requires 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 their 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 identified 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 reasons 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 both 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 producers’ 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) routinely 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 used 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

Chemicals Included in the Final Rule

CASRN Common Chemical Name Synonyms

75-07-0 Acetaldehyde Acetic aldehyde; Ethanal; Ethyl aldehyde

78-11-5 Pentaerythritol 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; Benzene1,2,4,5-tetracarboxylic dianhydride; Benzene-1,2:4,5-tetracarboxylic dianhydride; 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-tbutyldiphenylmethane; 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, diphenylBenzophenone; 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 chlorothiophosphate; Diethyl phosphorochloridothioate; Diethyl 

phosphorochloridothionate; Diethyl phosphorochlorothioate; Diethyl phosphorothiochloridate; Diethyl thiophosphoric 

chloride; Diethyl thiophosphoryl chloride; Diethylthiophosphoric acid chloride; O,O-Diethyl chloridophosphorothioate; O,ODiethyl 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,ODiethyl 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

Chemicals 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, sulfate, 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 Alkenes, 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.
2-4

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 production 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 Chemical 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 information (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 used 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 has 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 companies that submitted production data for the 2006 

IUR rule.
2-5

their 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 of 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 annual 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 $1,300,000

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 companies 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 

companies 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. 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. 

7

 The reporting year for the most current data in the 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 to 100 101 to 500 501 to 2,500 2,501 to

10,000

10,001 to

50,000

>50,001

Number of Employees

Number of Companies

Source: Dun & Bradstreet, 2008.

Figure 2-2

Distribution of Potentially Impacted Companies by Annual Sales

0

2

4

6

8

10

12

14

16

18

20

$0 to $100 $101 to $500 $501 to $1000 $1,001 to

$10,000

>$10,001

Annual Sales ($Millions)

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 to 10 10.01 to 50 50.01 to 100 >100

Production Volume (Million lbs)

Number of Chemicals

Source: 2006 IUR data (electronic file).

Chemical Price Information. Published 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 for 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 to 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 

chemical 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 USITC’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 (pentaerythritol).

 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 chemicals 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']difuran1,3,5,7-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.

 

 American 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 specialty 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

Sigma-Aldrich Price (Varies by Quantity (Q))

Q  1kg 500g  Q  100g Q  50g

Stated 

Price

Units

(kg)

Implied 

Price/lba

Scaling 

Factorb

Stated 

Price

Units 

(grams)

Implied 

Price/lba

Scaling 

Factorb

Stated 

Price

Units 

(grams)

Implied 

Price/lba

Scaling 

Factorb

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 $27.10 250 $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.

bThe 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.chemicalmarketreporter.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 prices. 

Table 2-6

Summary of Price Data Collection Effort

Data Source for Price Data

Number of 

Chemicals 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 to $0.50 $0.51 to $1.00 $1.01 to $3.00 >$3.01

Price 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 information 

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 

including 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 chloride 

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 Information 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 used 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 dyes, 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 for 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 December 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 Information 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 cold 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'-methylenebis[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 Information Site; Hazardous Substances Databank.)

Market Information for Methanone, diphenylCAS# 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 2006 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 bacteria, 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 Ethanedioic 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 pastes, 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) >10M-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 Roquette, Food Business Unit Newsletter, Number 

8, June 2000, available at http://www.esters-cationic-anionic-ethersstarches.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 as 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 [CASRN 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 wide 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, artificial 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 Information 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 preliminary.

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-methylCAS# 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 Information

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# 68647-60-9

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 chemical 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) developmental 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. Chemical Name Required Tests1

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

118-82-1 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

66241-11-0 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- A1, A3, A4, A5, C1, E1, E2, F1

68527-02-6 Alkenes, C12-24, chloro A1, A2, A3, A4, A5, B, C1, E2, F2

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 

This 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 manufacturers 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 

9408 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 as 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 routes 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.

It is 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 final 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 National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 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 

799.6784, 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 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 protocols for ready biodegradation, on which cost estimates are based, are the following: OECD 

301A (DOC die-away test), OECD 301B (carbon dioxide evolution 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 toxicity 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 test (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 nOctanol/Water Partition Coefficient (log 10 basis) or log KOW test requirement. One method, among many similar 

methods, for estimating log KOW is described in the article entitled Atom/Fragment Contribution Method for 

Estimating Octanol-Water Partition 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 Mammalian 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 799.9539), 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/Developmental 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). 

Testing 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 $2.14 million under the least cost scenario to approximately $2.79 million 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 due 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 $112,000 under the least 

cost scenario and approximately $147,000 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 ASTM E 324 OECD 102 $1,547

A2 Boiling Point ASTM E 1719 OECD 103 $1,580

A3 Vapor Pressure ASTM 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 Methods 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 (twophase 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 ASTM E 729 OECD 203 $10,910

Acute Toxicity to Daphnia ASTM E 729 OECD 202 (Part 1) $5,419

Acute Toxicity to Plants ASTM E 1218 OECD 201 $9,845

Test Group 1 Sum $16,330

C1 (Test Group 

2)

Chronic Toxicity to Daphnia ASTM E 1193 OECD 202 $35,425

Acute Toxicity to Plants ASTM 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 ASTM E 729 OECD 202 (Part 1) $5,419

Acute Toxicity to Plants ASTM E 1218 OECD 201 $9,845

Test Group 1 Sum $15,264

C2 (Test Group 

2)

Chronic Toxicity to Daphnia ASTM E 1193 OECD 202 $35,425

Acute Toxicity to Plants ASTM E 1218 OECD 201 $9,845

Test Group 2 Sum $45,269

C2 Test Group 1 and 2 Average (Least & Average Cost Scenarios) $30,267

C3 (Test Group 

1)

Acute Toxicity to Fish ASTME 729 OECD 203 $10,910

Acute Toxicity to Plants ASTM E 1218 OECD 201 $9,845

Test Group 1 Sum $20,755

C3 (Test Group 

2)

Chronic Toxicity to Daphnia ASTM E 1193 OECD 202 $35,425

Acute Toxicity to Plants ASTM 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 ASTME 729 OECD 203 $10,910

Acute Toxicity to Daphnia ASTM E 729 OECD 202 (Part 1) $5,419

Test Group 1 Sum $16,330

C4 (Test Group 

2) Chronic Toxicity to Daphnia ASTM 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 ASTM E 729 OECD 202 (Part 1) $5,419

C5 (Test Group 

2) Chronic Toxicity to Daphnia ASTM 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 ASTM E 1218

OECD 201 

(Least & Average 

Cost Scenarios) $9,845

Mammalian 

Toxicity - Acute

D (Method A3) Acute Inhalation Toxicity 799.913 OECD 403 $13,290

or; 

D (Method B3)

Acute Oral Toxicity ASTM E 1163 or 799.9110 OECD 423 $2,431

BALB/c 3T3 Neutral Red 

Uptake Cytotoxicity; or N/A N/A $3,631

BHK Neutral Red Uptake 

Cytotoxicity 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 Cost 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 

Cytogenetics 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 Dose/

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

OECD 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
3-11

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 testing 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-component chemicals or polymers. For example, chemicals are not always stable under 

every test or analysis condition and a chemical could decompose 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 impact 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 tests 

(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

Test 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 nonreporting 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 estimated 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 associated 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 maximum number of studies associated with any of the 

chemicals included in the final rule is eleven13 (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 believed 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 

presented 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 Labor 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 Economic 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 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 (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

Category1 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: 

1Labor 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 identifying 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 testing 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 $503,000 and $651,000 under the least and average cost 

scenarios, 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 sections (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 published 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 estimate 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 particular, 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 (BlakeHedges, 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 notice 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 from $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 highend 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 final rule. Thus, the total cost of export 

notifications triggered by the final rule is $12,141 under the least cost scenario and $25,123 under 

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) $0.90 $1.04

Export Notification Costs (section 5.1.4) $0.01 $0.03

Total Industry Compliance Costs $3.15 $3.90

Average Compliance Cost per Chemical $0.17 $0.21

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 toxicity, 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 mixed. 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 capacity 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 by 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 applications, 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 $38,000.

Table 3-7

Estimated Government Cost for the Final Rule: $2006

Item

Unit Labor

Hours Rate Cost/Item Total Items Total Cost

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 $33,716

Exemption Applications 1 $60.86 $60.86 75 $4,565

Total $38,281

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 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). 
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 focuses 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 $1.13 to $1.21 million using 

a three and seven percent discount rate, respectively. Total annualized social costs under the 

average cost scenario range from $1.39 to $1.50 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) $1.13 $1.39

Annualized Social Cost (3 years, 7% discount rate) $1.21 $1.50

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 

comply 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 chemical (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 below.

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 annualizing 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" of 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 some 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 discount 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 $0.35 million under the least cost scenario and 

$0.43 million under the average cost 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

Annualized Costs Under Least and Average Cost Scenarios: $2006

Category

Cost ($ million) a

Least Cost Scenario Average Cost Scenario

Annualized Laboratory Cost 0.22 0.29

Annualized Methodology Development Cost 0.02 0.02

Annualized Administration Cost 0.10 0.11

Annualized Export Notification Cost 0.001 0.003

Annualized Industry Compliance Costb0.35 0.43

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 testing 

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 costto-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 percent) 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 threshold 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% to 1.0% 1.0% to 3.0% 3.0% to 5.0% 5.0% to 10.0%

Cost-to-Sales Ratio Range

Number 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% to 1.0% 1.0% to 3.0% 3.0% to 5.0% 5.0% to 10.0%

Cost-to-Sales Ratio Range

Number of Chemicals
4-5

Table 4-2

Summary Statistics for Chemical-Specific Cost-to-Sales Ratiosa

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 0.63% .83%

Median Cost-to-Sales Ratio 0.16% 0.16%

Standard Deviation 1.30% 1.80%

Notes:

a Compliance costs were annualized over a 15-year time horizon using a 7 percent discount rate.

Table 4-3

Impact of Final Test Rulea

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 

analysis 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 sale 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 

cost-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 

was 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 conclusion 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, the 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 losses 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 Number 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 Analysisa

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 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 over 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 costs 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 major 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 global 

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 sources. 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 sales 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 of 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 definition” 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 (Mixing-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 number 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 small 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 approximately $0.35 million under the least cost scenario and was approximately 
4-10

$0.43 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 annualized 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 impact 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 analyzed 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-tosales 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 salesbased definition 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 percent 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 figures 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 

Scenario

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%

Maximum Cost-to-Sales Ratio 0.22% 0.22% 0.22% 0.22%

Mean Cost-to-Sales Ratio 0.02% 0.02% 0.22% 0.22%

Median Cost-to-Sales Ratio 0.00% 0.00% 0.22% 0.22%

Standard Deviation 0.05% 0.05% N/A N/A

Notes:

a Compliance costs are annualized over a 15-year time horizon using a 7 percent discount rate.

Table 4-7

Small Business Effects

Impact Measure

Employment Definition Sales Definition

Least Costa Average Costa Least Costb Average Costb

Total Number of Identified Companies 48 48 48 48

Number of Companies 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 small under this definition.

b Companies 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 definition.

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 impact 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 employment 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 basic 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 interests.

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 databases 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, suggests 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 users 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%

Library User 8%

Other 19%

Source: Hudson, Vera. National Library of Medicine. Personal communication with Lynne BlakeHedges, 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 nonsubscribers 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 of 

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 workplace 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 manufactured 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 

chemicals, 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 toxicity 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 of 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 factors 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 externalities 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 disseminated 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 Shareholders

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 competitively 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 Industry 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 assessments 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 authors 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 chemicals 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 identifying 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 results 

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 are 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, 

NIOSH, 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 

chemical 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 and 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 

hazards. 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. Thus, 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 of "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 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, thus, make more informed choices 

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. Finally, 

other regulatory authorities can use this information, in conjunction 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 II 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 (average 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 

$0.43 million per year (average cost scenario).24 Government cost, annualized using similar 

assumptions, is estimated to equal $4,300 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 Income 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).

The 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 different 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 each 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 the 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, compliance 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 assist 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 financial 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 technology 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

Robust 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 and 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 $503,000 ($651,000) 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 (12,698) hours 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 notification 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 12,698

Total Administrative Burden 17,951 20,830

Export Notification Burden 238 475

Total Industry Burden 18,189 21,305

Burden Per Panel (15 panels)11,213 1,420

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.

It is 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 processing 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 

hours 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

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A-1

APPENDIX A – WAGE RATE CALCULATIONS

This appendix describes the derivation of the fully loaded labor rates and inflation factors 

used in calculating costs of labor, materials, and other inputs. All cost estimates are presented in 

2006 dollars.

A.1. Derivation of Loaded Wage Rates26

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 

describes 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 Professional 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 Therefore, 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 assumption was labeled “the benefits multiplication factor” in the EPA Guide, but has 

 

27 Employer Costs for Employee Compensation, Private Manufacturing Industry by Occupation, 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 affect 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 Classification 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, Comparing 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 Policy, 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 Rates1

EPAB Labor 

Category Data Source for Wage Information Date

Wage Fringe 

Benefit

Fringes as 

% wage*

Overhead 

% wage2

Fringe + 

overhead 

factor*

Loaded

Wages*

Inflation 

Factor3 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 WashingtonBaltimore-Northern Virginia, DC-MD-PA-VAWV, 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:

1Wage data are rounded to the closest dollar figure in this table.

2An 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 (EPAB, 2002).

3An inflation factor of “1” means wage data was not escalated to reflect inflation. 

4 BLS, 2006b.

5The 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 

Methodology 

Validation Cost

Total

Administrative

Cost1

Export 

Notification 

Cost

Total

Industry 

Compliance 

Cost2

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 Pentaerythritol 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 Sorbic 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

144-62-7 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- $203,558 $16,500 $82,065 $639 $302,762 $2,880 $305,641

68527-02-6 Alkenes, C12-24, chloro $152,732 $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 $226,000 $897,234 $12,141 $3,148,964 $38,281 $3,187,245

Notes:

1Total administrative cost included both reporting and non-reporting administrative costs.

2Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost.

3Total social cost includes total industry compliance 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

Cost1

Export 

Notification 

Cost

Total

Industry 

Compliance 

Cost2

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 Pentaerythritol 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

149-44-0 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 $264,971 $20,000 $92,578 $1,322 $378,872 $2,575 $381,447

68187-84-8 Castor oil, oxidized $235,767 $16,500 $81,804 $1,322 $335,393 $2,271 $337,664

68479-98-1 Benzenediamine, ar,ar-diethyl-ar-methyl- $273,655 $16,500 $99,589 $1,322 $391,067 $2,880 $393,946

68527-02-6 Alkenes, 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 $226,000 $1,044,823 $25,123 $3,899,886 $38,281 $3,938,167

Notes:

1Total administrative cost included both reporting and non-reporting administrative costs.

2Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost.

3Total social cost includes total industry compliance cost and government cost.
B-4

Table B-3

Annualized Social Costs1

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 Pentaerythritol 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-gluco-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 $100,433 $108,252 $134,853 $145,351

68187-84-8 Castor oil, oxidized $86,367 $93,090 $119,375 $128,667

68479-98-1 Benzenediamine, ar,ar-diethyl-ar-methyl- $108,053 $116,465 $139,272 $150,113

68527-02-6 Alkenes, C12-24, chloro $86,575 $93,314 $93,679 $100,972

68647-60-9 Hydrocarbons, C>4 $113,179 $121,989 $149,388 $161,017

Total $1,126,788 $1,214,505 $1,392,262 $1,500,645

Note:

1Total 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 over 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 Costs1

CASRN CHEMICAL 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 Pentaerythritol 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 $9,776

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.)- $34,436 $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 Benzenediamine, ar,ar-diethyl-ar-methyl- $33,242 $56,178 $42,937 $72,564

68527-02-6 Alkenes, 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 $345,739 $584,300 $428,187 $723,636

Note:

1Total 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 the final rule may have a lifetime that is less 

than fifteen years.