1 October 15 , 2011



# Economic Analysis of the Electronic Reporting Proposed Rule: Community Right

- to

- Know; Toxic Chemical Release Reporting

Office of Environmental Information

U

. S

. Environmental Protection Agency

October 15 , 20112 October 15 , 2011 

## Table of Cont ents

Table of Contents

................................ ................................ ................................ ................................ ........ 2

Table of Tables

................................ ................................ ................................ ................................ ............ 3 Chapter 1

– Introduction

................................ ................................ ................................ ............................ 4 Chapter 2

– Estimated Number Facilities Potentially Affected

................................ .............................. 6

2.1 Estimated Number of Facilities Incurring Rule Familiarization Burden

................................ ......... 6

2.2 Estimated Number of Facilities Incurring Costs to Register to use CDX and Establish an Electronic Signature Agreement (ESA)

................................ ................................ ................................ . 6

2. 3 Estimated Number of Facilities Incurring Costs to Purchase a Computer and Internet Access

...... 7

2.4 Summary of Facilities Potentially Affected under the Proposed Rule

................................ ............ 8 Chapter 3

– Cost Estimates

................................ ................................ ................................ ........................ 9

3.1 Introduction

................................ ................................ ................................ ................................ ...... 9

3.2 Methodology

................................ ................................ ................................ ................................ .... 9

3.3 Step 1: Identify and Describe the Tasks Facilities Will Have to Perform

................................ ...... 9

3.4 Step 2: Unit Burden Estimates

................................ ................................ ................................ ...... 11

3.4.1 Rule Familiarization

................................ ................................ ................................ ......... 12

3.4.2 Form Completion

................................ ................................ ................................ .............. 13

3.4.3 Summary

................................ ................................ ................................ ........................... 14

3.5 Step 3: Unit Labor Cost Estimates

................................ ................................ ................................ 14

3.6 Step 4: Capital Cost Estimates

................................ ................................ ................................ ...... 16

3.7 Step 5: Estimate the Number of Unique Facilities that Will Perform Each Task

......................... 17

3.8 Step 6: Estimate Industry Costs

................................ ................................ ................................ .... 17

3.9 Step 7: Annualize Industry Costs

................................ ................................ ................................ .. 19 Chapter 4

– Small Entity Analysis

................................ ................................ ................................ ........... 20

4.1 Introduction

................................ ................................ ................................ ................................ .... 20

4.2 Definiti ons of Small Entities

................................ ................................ ................................ .......... 20

4.3 Methodology Overview

................................ ................................ ................................ ................. 21

4.4 Impacts on Small Businesses

................................ ................................ ................................ ......... 23

4.4.1 Census Sectors

................................ ................................ ................................ .................. 23

4.4.2 Utilities

................................ ................................ ................................ .............................. 29

4.5 Impacts on Small Government Jurisdictions

................................ ................................ ................. 33

4.6 Summary

................................ ................................ ................................ ................................ ........ 38 Chapter 5

– Benefits

................................ ................................ ................................ ................................ .. 39

Literature Cited

................................ ................................ ................................ ................................ ........ 403 October 15 , 2011 

## Table of Tables

Table 1: Estimated Number of Facilities Expected to Incur Rule Familiarization Burden

......................... 6

Table 2: Estimated N umber of Facilities Expected to Incur Costs to Register to use CDX and Establish an ESA to Submit Forms Using TRI

- MEweb

................................ ................................ ............................... 7 Table 3: Estimated Number of Facilities Expected to Incur Costs to Purc hase a Computer and Internet

Access

................................ ................................ ................................ ................................ ........................... 8 Table 4: Estimated Number of Facilities Potentially Affected under the Proposed Rule

............................ 8

Table 5: Estimated Rule Familiarization Burden Associated with the Proposed Rule

.............................. 13 Table 6: Estimated Unit Burden of Registering with CDX

................................ ................................ ....... 13 Table 7: Estimated Unit Burden of Establishing an ESA

................................ ................................ .......... 14 Table 8: Total Unit Burden Associated with the Proposed Rule (hours)

................................ ................... 14 Table 9: Loaded Hourly Wage Rates by Labor Category (December 2010)

................................ ............. 15 Table 10: Unit Labor Costs Associated with the Proposed Rule (2010 Dollars)

................................ ....... 15 Table 11: Estimated Financial Burden to Obtain Access to a Computer and the Internet

......................... 17 Table 12: Estimated Number of Facilities Potentially Affected under the Propose d Rule

........................ 17 Table 13: Incremental Labor Costs under the Proposed Rule

................................ ................................ .... 18 Table 14: Incremental Capital Costs under the Proposed Rule

................................ ................................ .. 18 Table 15: Total Incremental Costs under the Proposed Rule (2010 Dollars)

................................ ............ 18 Table 16: Annualized Industry Costs (2010 Dollars)

................................ ................................ ................ 19 Table 17: Compliance Costs Incurred under the Proposed Rule

................................ ............................... 21 Table 18: Annualized Compliance Costs (2010 Dollars)

................................ ................................ .......... 22 Table 19: Categorization of Sectors Affected by Proposed Rule

................................ ............................... 23 Table 20: Sectors with Revenue and Employment Information in SUSB

................................ ................. 24

Table 21: Universe of Affected TRI Facilities in Sectors with Data in SUSB

................................ .......... 25 Table 22: Compliance Costs Incurred by TRI Facilities i n Sectors with Data in SUSB

........................... 27 Table 23: Estimated Impacts of Proposed Rule on Small Parent Entities in Census Sectors

.................... 28

Table 24: Compliance Costs Calculations for Five Most Impacted NAICS Codes

................................ ... 29 Table 25: TRI Utility Universe

................................ ................................ ................................ .................. 30 Table 26: Compliance Costs Incurred by TRI Facilities in Utility Sectors

................................ ............... 31 Table 27: Estimated Impacts of Proposed Rule on Small Parent Entities in Utility Sectors

..................... 32 Table 28: Compliance Costs Calculations for Five Most Impacted Small Parent Entities in Utility Sectors

................................ ................................ ................................ ................................ ................................ .... 33 Table 29: TRI Government Owned Facility Universe

................................ ................................ ............... 33 Table 30: Compliance Costs Incurred by TRI Facilities Operated by Small Government Jurisdictions

... 35 Table 31: Estimated Impacts of Proposed Rule on Smal l Government Jurisdictions

................................ 36 Table 32: Compliance Costs Calculations for Five Most Impacted Government Jurisdictions

................ 37

Table 33: Estimated Impacts of Proposed Rule on Small Parent Entities

................................ ................. 384 October 15 , 2011 

## Chapter 1

– Introduction

The Environmental Protection Agency‟s (EPA‟s) Emergency Planning and Community Right

- to

- Know Act (EPCRA), also known as Title III of the Supe rfund Amendments and Reauthorization Act of 1986 (SARA), created a broad range of emergency response planning and reporting requirements for manufacturers, processors, and users of toxic chemicals in the United States. 42 U.S.C. §§ 11001

- 11050.

Under sect ion 313 of EPCRA, certain facilities are required to submit annual reports to the United States EPA and to States on their release, transfer, and waste management activities of certain toxic chemicals if they are manufactured, processed, or otherwise used above threshold amounts. In addition, the Pollution Prevention Act (PPA) of 1990 requires these same facilities to report pollution prevention, recycling, and other waste management information for these same chemicals. EPA maintains the data collected u nder EPCRA section 313 and the PPA in a database known as the Toxics Release Inventory (TRI). 1



### M anufacturing, processing , and otherwise use of a toxic chemical are considered threshold activities that trigger reporting to the TRI program. After a regulate d facility determines that it has performed a threshold activity involving a listed chemical, that facility then calculates quantities of the chemical that are manufactured, processed, or otherwise used at the facility to determine if the threshold quantit y has

been excee ded and reporting is required. Facilities that trigger this threshold quantity must report certain information to EPA by completing the appropriate TRI reporting forms. EPA provides three types of

these reporting forms : Form R, Form A, an d Schedule 1.

Since 1987, the Agency has encouraged the submission of TRI data via non

- paper sources because it is quicker and easier to process non

- paper submissions. Initially, EPA provided year

- specific Automated Form R (AFR) software that allowed a facility to prepare TRI data for a particular Reporting Year (RY) and then submit this information to EPA via a printout or a diskette. The AFR tool was widely used, with reporters‟ usage increasing from 13 percent to 62 percent between 1990 and 1996. Th e Agency improved upon the AFR each year by incorporating new features. In 1998, EPA renamed the AFR software to Automated TRI Reporting Software (ATRS) to reflect the addition of Form A.

After RY 2000, EPA replaced ATRS with TRI

- Made Easy ( TRI

- ME deskto p ), which was a computer desktop application that assisted a facility in the preparation of TRI forms and, for the first time, allowed

a user to submit TRI data via the Internet to a central repository know as EPA‟ s Central Data Exchange (CDX)

.

By RY 200 5, EPA improved upon TRI

- M E desktop by developing a web

- based reporting software application called T

RI

- ME web

. TRI

- MEweb provides a host of tools to assist facilities in providing TRI data, and includes validation features to help facilities report accura te information. Moreover, this application is entirely online, meaning a facility can access the program from a computer connected to the

Internet.

1 The term “EPCRA section 313" properly refers to only the statutory requirements, while the term “TRI” properly

refers to the database that stores the information collected both under EPCRA section 313 and under section 6 607 of the PPA. However, the terms are often used interchangeably by the public to refer to the statute, the regulatory requirements, the reporting form, the database, and/or EPA's program to manage the data. In deference to common usage, the terms EPCRA section 313 and TRI are sometimes used interchangeably in this report where doing so will make the report simpler and easier to read

.5 October 15 , 2011



### Recognizing the numerous benefits that TRI

- MEweb offers, EPA informed facilities it would discontinue

TRI

- ME desktop f

or RY 2008. Accordingly, a steadily increasing percentage of facilities have submitted

TRI data via TRI

- MEweb since its release, with nearly 9 4.6 % of submissions arriving electronically via

TRI

- MEweb for RY 2009. 2



### Due to the longstanding his tory of electronic reporting of TRI data, the benefits TRI

- MEweb provides, along with the prevalence and availability of the Internet, EPA published a notice in the Federal Register on January 14, 2011 to encourage facilities planning to submit via paper t o use TRI

- MEweb instead. The

notice also announced that the Agency was considering a plan to publish a proposed rule to require the electronic reporting of all non

- confidential TRI data.

EPA proposes to require all facilities submitting non

- confidential i nformation to submit TRI data to EPA

via TRI

- MEweb

. This requirement would not alter the information regulated facilities must report.

Rather , this requirement w ould disallow paper submissions of all non

- confidential TRI data. Knowing

that approximately 9 4 % of facilities filed their submissions electronically using TRI

- MEweb in RY 2009, the proposed rule will require that the remaining 6 % of facilities switch to electronic reporting. A one

time rule familiarization burden is anticipated for all TRI reporte rs to read the language associated with

the new requirement. In addition, f acilities currently submitting their forms by paper w ould incur costs associated with establishing an E lectronic S ignature A greement (ESA) with the Agency, registering to use

the Ce ntral Data Exchange (CDX) 3 

### to submit their forms via TRI

- MEweb and, in some cases, purchasing a computer and I nternet access. In order to better understand the potential range of impacts on facilities, this analysis will consider several scenarios under wh ich facilities might be impacted. Any impact created by this rule should be well less than one percent of any affected small business‟s annual revenue.

The remainder of this report describes the estimated costs to industry, the estimated impact to potenti ally affected small entities, as well as the various benefits associated with the proposed rule. Chapter 2 estimates the number of facilities potentially affected by the proposed rule. These estimates are used in Chapter 3 to calculate the costs to industr y for switching to electronic reporting. In Chapter 4, the impacts of the proposed rule on “small” entities are examined. Chapter 5 qualitatively evaluates the benefits of the proposed rule.

2 EPA performed this analysis prior to the release of RY 2010 data. For RY 2010, approximately 97% of

submissions arrived electronically via TRI

- MEweb

. 3 The Central Data exchange is EPA‟s secure Web

- based system which allows facilities filling out forms in TRI

MEweb to securely submit their information to EPA.6 October 15 , 2011



## Chapter 2

– Estimated Number Facilities Potentially Affected

This chapter presents the estimates of the number of TRI facilities that will be impacted under the proposed rule. These estimates are used to calculate the costs to the regulated community and to EPA (see Chapter 3) and to evaluate the impacts on small entities (see Chapter 4). Requiring that facilities report electronically is not expected to change the number of facilities reporting to TRI or the number of forms filed. Rather, the proposed rule will create a one

- time rule familiarization burden for all TRI facilitie s. Additionally, facilities that submitted by paper in RY 2009 will incur costs associated with switching to electronic reporting, which include registering to use TRI

- MEweb and purchasing a computer and I nternet
access. These tasks will be described in mo re detail in Chapter 3.

Section 2.1 estimates the number of facilities that will incur rule familiarization burden under the proposed rule. Section 2.2 estimates the number of facilities with paper filers that will be required to register to use TRI

- MEweb. Section 2.3 estimates the number of these paper filers that currently lack

access to a computer on

- site and will thus be required to purchase a computer and I nternet a ccess. Finally,

t he number of facilities potentially affected under the proposed rule is summarized in Section 2.4

.

2.1 Estimated Number of Facilities Incurring Rule Familiarization Burden

As noted above, the proposed rule can be e xpected to create a one

- time rule familiarization burden for all

TRI facilities. As shown in Table 1 , in RY 2009 , a total of 20,797 facilities reported release data (U.S. EPA, 2011b).

Table 1 : Estimated Nu mber of Facilities Expected to Incur Rule Familiarization Burden

Facilities

Total Number of RY 2009 Submissions 20,797
Source: U.S. EPA (2011). TRI RY 2009: NA2009. Accessed

via TRI.NET



### 2.2 Estimated Number of Facilities Incurring Costs to Register to u se CDX and Establish an Electronic Signature Agreement (ESA)

Facilities that submitted by paper in RY 2009 will also incur costs to register with CDX , the electronic system from which facilities access TRI

- MEweb

, and to establish an ESA, which is necessary in order to certify TRI data to submit to EPA . In RY 2009, a total of 1,214 facilities filed some or all of their forms by paper (U.S. EPA, 2011a). Presumably , a facility that could electronically submit a portion of its RY

2009 filing could have also ele ctronically reported the entire submission. Therefore, it was assumed that the 10 facilities (out of the 1,214) that filed a portion of their RY 2009 forms electronically will not incur the costs of registering to use CDX since it is assumed that they are already registered if they have filed other forms electronically (U.S. EPA, 2011a). Similarly, 6 of the paper filers submitted paper versions of forms filled out using TRI

- MEweb (U.S. EPA, 2011a). As these facilities already have access to TRI

MEweb via CD X, they also will not incur the costs of registering with CDX. 4 

### Finally, because TRI

MEweb does not currently support the reporting of trade secret chemicals, forms for trade secret chemicals will continue to be filed on paper forms

. In RY 2009, 4 facilit ies submitted 7 forms for trade

4 Facilities that submitted paper forms filled out using TRI

- ME web have already incurred the costs of registering with CDX, but it is possible that these facilities may not have submitted an ESA. However, the number of facilities affected is small and the cost of establishing an ESA is not accounted for.7 October 15 , 2011



### secret chemicals (U.S. EPA, 2011a). As shown in Ta ble 2 , 1,196 facilities are expected to incur costs associated with registering to use CDX to submit forms via TRI

- MEweb under the proposed rule.

Ta ble 2 : Estimated Number of Facilities Expected to Incur Costs to Register to use CDX and Establish an ESA to Submit Forms Using TRI

- MEweb

Facilities

Number of Facilities Submitting Paper Forms 1,214

Number of Facilities Submitt ing Both Paper Forms and Electronic Forms 10
Number of Facilities Submitting Paper Versions of Forms Filled Out Using

TRI

- MEweb 6

Number of Facilities Submitting Trade Secret Information 4

Number of Facilities That Will Incur Costs to Register with CDX and
Establish an ESA a 1,196

a Numbers do not sum because some trade secret submissions are captured as facilities that submitted a portion of their filings electronically.
Source: U.S. EPA (2011). TRI RY 2009 National Analysis (NA) Files, accessed April 11, 2011.



### 2.3 Estimated Number of Facilities Incurring Costs to Purchase a Computer and

Internet Access

Facilities lacking access to a computer on

- site will be required to purchase a computer and I nternet access in order to complete their TRI submissions ele ctronically. In estimating the facilities that will potentially incur this cost, three scenarios were considered:

Scenario I

- it was conservatively assumed that all 1,196 paper filers will need to purchase a

computer.

Scenario II

- it was assumed that th ose facilities that listed a public contact email or technical contact email on their paper forms likely have access to a computer. Of the 1,196 paper filers, only 72 did not provide a public or technical contact email. For the remaining 1,124 facilities t hat did provide email addresses, the email domain was compared to the facility name and parent company name. For 940 facilities, the email domain of one or both of the public or technical contact email matched the facility or parent company name. Therefore , in the second scenario, it was assumed that the remaining 112 facilities where the domain of email addresses provided did not match the facility or parent company name, as well as the 72 facilities that did not provide an email address, will incur the co sts of purchasing a computer and I nternet access.

Scenario III

- it was assumed that only the 72 facilities that did not provide an email address will incur the costs of purchasing a computer and I nternet access.

The number of facilities affected in each scenario is shown in Table 3.8 October 15 , 2011 Table 3 : Estimated Number of Facilities Expected to Incur Costs to

Purchase a Computer and Internet Access

Facilities

Scenario I: All Paper Filers 1,196
Scenario II: Paper Filers That Did Not Provide an Email Address and Those Whose Email Address Did Not Match the Facility or Parent Company Name 184

Scenario III: Paper Filers That Did Not Provide an Email Address 72

a Multiple chemicals may be submitted on a Form A. This estimate refers to the number of chemicals for which Form As were submitted, not the number of Form A responses. Source: U.S. EPA (2011). TRI RY 2009 National Analysis (NA) Files, accessed April 11, 2011.



### 2.4 Summary of Facilities Potentially Affected under the Proposed Rule

The number of facilities that are expected to incur costs associated with rule familiarization, registering with CDX and establishing an ESA, and purchasing computer and I nternet access are summarized in

Table 4.

Table 4 : Estimate d Number of Facilities Potentially Affected under the Proposed Rule

Facilities

Rule Familiarization 20,797
Registering with CDX and Establishing an ESA to Use TRI

MEweb to Report TRI Data 1,196

Purchasing a Computer and Internet Access

Scenario I 1, 196

Scenario II 184

Scenario III 729 October 15 , 2011 

## Chapter 3

– Cost Estimates

3.1 Introduction

This chapter presents the estimated industry costs associated with the proposed rule

. Section 3.2 describes the methodology used to estimate industry costs. Section 3.3 identifies the tasks facilities will perform to comply with the proposed rule. Section 3.4 provides estimates of the incremental burden facilities will incur to complete these tasks. The burden estimates are then used in Section 3.5 to develop unit cost

estimates. Secti on 3.6 estimates the capital costs of obtaining a computer and I nternet access. Section 3.7 summarizes the number of facilities performing each task, as was estimated in Chapter 2. These estimates

are used in Section 3.8 to estimate the total incremental c osts of the proposed rule. These costs are

annualized in Section 3.9 , to present estimated costs for the first year as well as subsequent years

.

3.2 Methodology

Industry burden and costs associated with the proposed rule were calculated using the following sev en

step procedure:

Step 1: Identify and describe the tasks that facilities will have to perform to comply with the

EPCRA section 313 requirements.

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

needed to complete each task.

Step 3: Based on typical labor rates, calculate the unit cost of each task for the first year of

compliance and for subsequent years.

Step 4: Estimate the capital costs associated with each task, if applicable.

Step 5: Estimate the number of unique facilities that will perform each task.

Step 6: For each task, multiply the unit cost by the number of unique facilities and then sum

the results for each task to estimate the total industry costs for the first year and subsequent years.

Step 7: Annualize the total incremental industry costs over a five year period.

3.3 Step 1: Identify and Describe the Tasks Facilities Will Have to Perform

Facilities engage in a number of facility

- level and form

- level acti vities to comply with the EPCRA

section 313 reporting requirements. In general, TRI reporting requires the following set of compliance

activities:

Facility

- Level:

Compliance Determination: Facility staff must determine whether the facility meets the criteria for EPCRA section 313 reporting. Thi s activity includes the time required to become familiar with the definitions, exemptions, and threshold requirements under the TRI Program, to review10 October 15 , 2011



### the list of TRI chemicals, and to conduct preliminary threshold determinations to determine if the

facili ty is required to report.

Rule Familiarization: Facilities that are reporting under section 313 for the first time must read the reporting package and become familiar with TRI reporting requirements. Facilities that currently report to TRI must review any new requirements.

Form

- Level:

Form Completion: Facilities must gather data and perform calculations to provide the information required on the form. This activity includes the time required to search data sources and the time to complete and review the information.

Recordkeeping and Submission: Affected facilities must maintain recordkeeping systems and submit their forms to EPA and the state in which the facility is located. This activity includes the time required to transmit or otherwise disclose the information.

The skills required to comply with the section 313 reporting requirements (including the requirements associated with section 6607 of the PPA) are expected to vary from facility to facility, depending upon factors such as: the complexity of the facility's processes and activities; the chemicals at the facility; and the types of use and disposition of TRI chemicals at the facility. Individuals responsible for determining whether their facility is required to report and, if so, completing a For m R (or multiple Form R s ) will often have an engineering, scientific, or technical background. These functions, however, do not require an engineering or other similar degree.

At a minimum, an understanding of the facility‟s chemical purchases and producti on processes are needed. Necessary skills may include the ability to evaluate and interpret records, understand material safety data sheets, and determine throughput or production volumes. Depending on the facility, estimates may be calculated using: (1) e xisting data collected under federal, state, or local regulations; (2) emissions factors; (3) design data supplied by the equipment manufacturer; (4) mass balance techniques; or (5) engineering calculations. Each technique requires varying skills and level s of sophistication to complete. EPA industry

- and chemical

- specific guidance documents will assist reporters in making the necessary calculations to comply with the section 313 reporting requirements. In addition to technical labor, requirements involving managerial and clerical staff are also considered when computing costs.

In addition to the general set of compliance activities associated with TRI reporting, some facilities affected under the proposed rule will also incur the capital costs of obtaining access to a computer and the

I nternet. It is assumed that this activity results in financial burden only; no labor burden is estimated for purchasing a computer and I nternet access.

For this proposed rule, all TRI reporters are expected to incur rule famil iarization costs associated with reading the new requirements. Additionally, paper filers will incur costs to register to use CDX and

establish an ESA and, in some cases, to purchase a computer and I nternet access. Specific tasks associated with the propos ed rule are:

Facility

- level

Compliance Determination: As this rulemaking addresses facilities that are already reporting to TRI, compliance determination has already been made and is not a cost of this rulemaking.11 October 15 , 2011



### Rule Familiarization: All TRI reporters must read the reporting package and become familiar with the requirement that all facilities submitting non

- confidential information must submit TRI

data to EPA electronically

.

Form Completion: In order to submit their forms electronically, facilities currently submitting paper forms must complete the following activities:

Register with CDX: A TRI

- MEweb Certifying Official and a TRI

- MEweb Preparing Official must register with CDX and add the TRI

- MEweb application to CDX.

Establish an Electronic Signa ture Agreement (ESA): The TRI

- MEweb Certifying Official must also access, print, complete, and mail an ESA.

Note that the cost to complete and review information is considered to be part of baseline cost and is not attributed to this rulemaking. In addit ion, while form completion is typically considered

a form

- level activity in baseline burden, this analysis characterizes registering with CDX and establishing an ESA as facility

- level burdens because these two activities are only incurred once per facility

.

F orm
- level

Recordkeeping and Submission: As this rulemaking addresses facilities that are already reporting to TRI, recordkeeping is already covered in baseline reporting burden estimates and is

therefore not considered a cost to be included in this r ulemaking.

Capital Cost

Obtain access to a computer and the Internet: EPA stopped mailing paper forms to facilities in 2007, solely providing the TRI reporting forms online via the TRI Program website. Thus, most facilities that would be affected by this proposed rule likely already have access to a computer and the Internet, because they somehow retrieved a digital copy of the form which they subsequently printed and completed by hand. Regardless, EPA is including in this economic analysis the estimated cost burden associated with obtaining access to a computer and the

Internet. 5



### 3.4 Step 2: Unit Burden Estimates

This section provides the unit burden estimates (per facility) that were developed for each task that facilities are expected to perform under th e proposed rule. Because all of the tasks performed under the proposed rule are facility

- specific, the total burden for a task is calculated by multiplying the unit cost by the number facilities performing the task (see Section 3.8).

Each cost estimate is made up of two components: the unit burden estimates ( i.e. , number of labor hours required of each type of personnel to complete a task); and the hourly wage rates for each associated labor category: managerial, technical, and clerical. The following burd en estimates are based on the

5 For those p aper filers that lack access to a computer, an alternative option was considered in which a facility might choose to hire a consultant to fill out the electronic form rather than purchase a computer and I nternet access. However, even if a facility hired a consultant to fill out the form electronically, someone at the facility would still need access to a computer to certify and submit the facility‟s data. Given that the Certifying Official at the facility

would need a computer and I nternet access regardless of whether an outside consultant is hired to enter the facility‟s data electronically, it was assumed that hiring a consultant is not a feasible option to submit a TRI reporting form and that most facilities would instead opt to purchase a computer and I n ternet access.12 October 15 , 2011



### Premanufacture Notification Electronic Reporting Rule economic analysis and best professional judgment (U.S. EPA, 2008). According to feedback from existing TRI filers, the role of each labor category in the TRI reporting proc ess at the facility level is as follows:

Managerial staff are responsible for reviewing and certifying the accuracy of all TRI submissions and supporting documentation, including calculations, data sources, and assumptions. Managerial staff are briefed b y technical staff once annually regarding TRI submissions and any changes to TRI reporting requirements. All sections of the Form are reviewed by managerial staff at this time.

Technical staff possess the knowledge and familiarity with the TRI program re quired to

understand which operations at the facility must be considered in making threshold

determinations for TRI chemicals. Technical staff gather the required data, make threshold determinations, calculate release and other waste management quantities , and enter the required

data on the TRI form

. Technical staff are also responsible for briefing managerial staff once annually regarding TRI submissions and any changes to TRI reporting requirements

. Clerical staff are responsible for organizing, photoco pying, and cataloging all TRI submissions and supporting documentation in accordance with TRI recordkeeping requirements. 6

3.4.1 Rule Familiarization



### As noted above, completing tasks required for a TRI submission requires both facility

- level and form

level acti vities

. Facility

- level costs apply to the whole facility , regardless of how many Form Rs or As are filed by a particular facility

. Under the proposed rule, the relevant p er facility activity is rule familiarization, which will affect all TRI reporters.

Un der the proposed rule, EPA expects that the entire TRI reporting community

– 20,797 facilities reporting to TRI in RY 2009

-- may incur rule familiarization burden. The incremental burden estimates

associated with rule familiarization consist of time to rea d and interpret language regarding the electronic reporting requirement outlined in the proposed rule and are based on the following assumptions:

The first

- year management bu rden includes five minutes per facility to be briefed regarding the requirement to report electronically. It is assumed that facilities will fully comprehend the electronic reporting requirement by the subsequent year of reporting; therefore, no rule familiarization burden is required in subsequent years.

The first

- year technical burd en includes ten minutes per facility to read and interpret the requirement to report electronically . An additional five minutes will be required to brief management regarding the new requirement. It is assumed that facilities will fully comprehend

the ele ctronic reporting requir e ment by the subsequent year of reporting; therefore, no rule familiarization burden is required in subsequent years.

There is no first

- or subsequent

- year burden on clerical staff associated with rule familiarization.

The unit bu rden associated with rule familiarization in the first and subsequent years is presented in Table

5.

6 No burden is expected to be incurred by the clerical labor category under the proposed rule.13 October 15 , 2011 Table 5 : Estimated Rule Familiarization Burden

Associated with the Proposed Rule

Labor Category 1st Year Burden (minutes) Subsequ ent Year Burden (minutes) Management 5 0

Technical 1 5 0

Clerical 0 0

Total 20 0

3.4.2 Form Completion



### Under the proposed rule, facilities must register with CDX and establish an ESA. Form completion activities will create a burden for the 1,196 facilities that exclusively submitted by paper for RY2009 (see Chapter 2). Note that although form completion activities are typically considered at the form level, the specific form completion activities under this proposed rule need only be undertaken once by the facility

and will apply to all forms.

Registering with CDX



### In order to use TRI

- MEweb to submit TRI data, each TRI facility must designate a Certifying Official who will need to register with CDX. The Certifying Official certifies and submits the TRI data. The Certifying Official may also prepare the TRI data prior to certifying and submitting it, although a facility may, in addition, designate a TRI

- MEweb Preparing Official to prepare the TRI data. For the purposes of this analysis, it is conservatively as sumed that both a Certifying Official and a Preparing Official would need to register with CDX.

To register with CDX, a user will need to select a user name and password, provide contact information,

and identify the facility and their role at the facili ty. Users will also need to select the TRI

- MEweb application from a list and add it to their CDX account. Based on the guidance presented on the CDX FAQ webpage ( https://cdx.epa.gov/ssl/cdx/faq.asp #REG2 ), EPA estimates that TRI facilities will spend 20 minutes of management time for the TRI

- MEweb Certifying Official to register with CDX and 20

minutes of technical time for the TRI

- MEweb Preparing Official to register with CDX. Additionally, as CDX registration is considered to be a one

- time task, t his burden is not incurred in subsequent years. The

unit burden associated with registering with CDX for the first and subsequent years is presented in Table

6.

Table 6 : Estimat ed Unit Burden of Registering
with CDX

Labor Category 1st Year Burden (minutes) Subsequent Year Burden (minutes) Management 20 0

Technical 20 0

Clerical 0 0

Total 40 0

Establishing an ESA



### To submit forms completed in TRI

- MEweb , the Certifying Offici al must establish an ESA. The burden associated with establishing an ESA was estimated in the Premanufacture Notification Electronic Reporting Rule economic analysis (U.S. EPA, 2008) based on best professional judgment. It is assumed

that 11 minutes of man agerial time will be spent by the Certifying Official to access, print, fill out, and14 October 15 , 2011



### mail the electronic signature form to EPA. 7 

### Additionally and similar to CDX registration , it is assumed that the Certifying Official will not need establish an ESA each y ear; therefore, this burden is not incurred in subsequent years. The unit burden associated with establishing an ESA for the first and subsequent years is presented in Table 7.

Table 7 : Estimated Unit Burden of Establishing an
ESA

Labor Category 1st Year Burden (minutes) Subsequent Year Burden (minutes) Management 11 0

Technical 0 0

Clerical 0 0

Total 11 0

3.4.3 Summary



### Table 8 presents total first

- and subsequent

- year incremental unit burden (in hours) that EPA estimates

will be associated with the proposed rule.

Table 8 : Total Unit Burden Associated with the Proposed Rule (hours) 8

Activity Managerial Technical Clerical Total Unit Burden

First Year

Rule Familiarization 0.08 0.25 0.00 0.33

Form Complet ion: CDX Registration 0.33 0.33 0.0 0 0.6 7

Form Completion: E SA establishment 0.18 0.00 0.00 0.18

Total 0. 59 0.58 0.00 1.18 Subsequent Year

Rule Familiarization 0.00 0.00 0.00 0.00

Form Completion: CDX Registration 0.00 0.00 0.00 0.00

Form Completi on: E SA establishment 0.00 0.00 0.00 0.00

Total 0.0 0 0.00 0.00 0.00



### 3.5 Step 3: Unit Labor Cost Estimates

This section explains how unit labor costs were developed for the proposed rule. Each cost estimate is made up of two components: unit time estimates ( i.e. , number of labor hours required of each type of personnel to complete a task), and the hourly wage rates for each level of personnel.

Labor rates are divided into three categories: managerial, technical, and clerical. These rates reflect the

total c ost to employ an individual and include in the estimate the cost of salaries ; fringe benefits, such as paid leave, health insurance, retirement savings, and legally required benefits ; and other overhead costs, such as office space, furniture, equipment and computers, supplies and other business expenses. Updated

2010 hourly labor rates, including fringe benefits and overhead, were calculated using current data on salaries and benefits for these three labor categories from information published by the Burea u of Lab or Statistics (BLS) (USDOL, 20 10 ). The general methodology for this calculation was obtained from Wage Rates for Economic Analysis of the Toxics Release Inventory Program (Rice, 2002). As presented in

Table 9 below , the managerial, technical, and clerical wage rates are composites of the BLS rates for

7 Note that facilities will also incur capital costs associated with mailing the ESA. These costs are very small (the cost of a stamp and an enve lope), and are not included in the cost estimates.

8 For the analysis, figures to the ten thousandths place were used. However for clarity and simplicity, this table only displays the values to the hundredths place.15 October 15 , 2011



### „Wages and Salaries‟ and „Total Benefits‟ by labor category. The sum of „Wages and Salaries‟ and „Total Benefits‟ is equal to „Total Compensation

. ‟ The managerial labor rate is defined as the avera ge hourly wages and salaries for the “Management, Business, and Financial” occupational category. The technical labor rate is defined as the average hourly wages and salaries for the “Professional and Related” occupational category. The clerical labor ra te is defined as the average hourly wages and salaries for the “Office and Administrative Support” occupational category.

Based on information provided by the chemical industry and chemical industry trade associations, an additional loading factor of 17 p ercent is applied to „Wages and Salaries‟ for general overhead. 9 

### The sum of „Total Compensation‟ and „Overhead‟ is equal to „Total Loaded Hourly Wage Rate.‟ The resulting

loaded hourly wage rates are $ 63.99 for managerial personnel, $ 51

. 32 for technical p ersonnel, and $ 25 .1 6

for clerical personnel, all in 2010 dollars , as shown in Table 9.

Table 9 : Loaded Hourly Wage Rates by Labor Category (December 2010)

Wage Type Labor Category Managerial Technical Clerical Wages and Salari es a $39.70 $32.75 $15.72

Total Benefits a $17.54 $13.00 $6.77

Overhead b $6.75 $5.57 $2.67 Total Loaded Hourly Rate $63.99 $51.32 $25.16

a Wages and salaries and total benefits are based on Table 9 of Employer Costs for Employee Compensation.

b Overh ead is calculated using a loading factor of 17%
Source: U.S. Department of Labor, Bureau of Labor Statistics (201 1 ). Employer Costs for Employee Compensatio n, Table 9: Private industry, goods

- producing and service

- providing industries, by occupational gro up

. December 2010.



### Table 10 below presents total first

- and subsequent

- year incremental unit labor costs EPA estimates will be associated with the proposed rule.

Table 10 : Unit Labor Costs Associated with the Proposed Rule (2010 Dollars) 10

Activity Managerial @$63.99/hr Technical

@$51.32/hr Clerical

@$25.16/hr Total Unit

Cost

First Year

Rule Familiarization 0.08 0.25 0.00 $18.16

Form Completion: CDX Registration 0.33 0.33 0.00 $38.4 3

Form Completion: E SA Establishment 0.18 0.00 0.00 $11.73

Total 0.60 0.58 0.00 $6 8

. 32 Subsequent Year

Rule Familiarization 0.00 0.00 0.00 $0.00

Form Completion: CDX Registration 0.00 0.00 0.00 $0.00

Form Completion: E SA Establishment 0.00 0.0 0 0.00 $0.00

Total 0.00 0.00 0.00 $0.00

9 Heiden Associates, Final Report: A St udy of Industry Compliance Costs Under the Final Comprehensive Assessment Information Rule , Prepared for the Chemical Manufacturers Association, December 14, 1989.

10 For the analysis, figures to the ten thousandths place were used. However for clarity and simplicity, this table only displays the values to the hundredths place.16 October 15 , 2011



### 3.6 St ep 4: Capital Cost Estimates

In addition to labor costs, some facilities will also incur the capital cost of purchasing a computer and

I nternet access under the proposed rule. It is unclear how many facilities lack a computer on

- site. For RY2009, TRI lis ts a technical contact email address for all but 78 of the 1,196 facilities that submitted exclusively by paper. Also for RY 2009, EPA has a public contact email address listed for all but 168 of the 1,196 facilities. For 72 of the facilities, EPA lacks both a public and a technical contact email address. Presumably a large portion of the 1,124 facilities that provided a technical or public contact email address for RY 2009 already possess a computer with access to the Internet. Further, EPA stopped

mai ling paper forms to facilities in 2007, solely providing the TRI reporting forms online via the TRI Program website. Thus, as discussed in Chapter 2, EPA expects most facilities that would be affected by this proposed rule already possess access to a comp uter and the Internet because they somehow retrieved a digital copy of the form which they subsequently printed and completed by hand.

As presented in Chapter 2, EPA considered the following three scenarios in order to estimate the range of potential bur den incurred by the TRI reporting community :

Scenario I

- it was conservatively assumed that all 1,196 paper filers will need to purchase a

computer.

Scenario II

- it was assumed that those facilities that listed a public contact email or technical

cont act email on their paper forms likely have access to a computer. Of the 1,196 paper filers, only 72 did not provide a public or technical contact email. For the remaining 1,124 facilities that did provide email addresses, the email domain was compared to t he facility name and parent company name. For 940 facilities, the email domain of one or both of the public or technical contact email matched the facility or parent company name. Therefore, in the second scenario, it

wa s assumed that the remaining 112 fac ilities where the domain of email addresses provided did not match the facility or parent company name, as well as the 72 facilities that did not provide an email address, will incur the costs of purchasing a computer and I nternet access.

Scenario III

- i t was assumed that only the 72 facilities that did not provide an email address will incur the costs of purchasing a computer and I nternet access.

Under each scenario, affected facilities will incur costs associated with purchasing a computer and

I nternet access. Considering commercially

- available computers, a facility could purchase a computer sufficiently powerful to utilize TRI

- MEweb for well under $1,000 (CBS Interactive, 2010; Microsoft, 2011). EPA conservatively estimates that facilities will spend $ 1

, 000 obtain a computer in the first year only. To estimate the cost of obtaining I nternet for one month (in order for facilities to submit their forms) , EPA researched the lowest

- priced options available to small businesses on two service provider

website s. Both providers charged less than $50 a month for I nternet access, which includes the cost of

hardware and assumes self

- installation (AT&T, 2011; Verizon, 2011). Therefore, EPA conservatively

assumes that the burden to secure I nternet for one month is $5 0. This cost will be incurred both in the first year and subsequent years. Table 11 below presents the financial burden EPA estimates will be associated with obtaining access to a computer and the Internet.17 October 15 , 2011 Table 11 : Estimated Fi nancial Burden to Obtain Access to a Computer and the

Internet

Activity 1 st Year

Burden Subsequent

Year

Burden Obtaining a Computer $1,000 $0 Obtaining Internet Access $50 $50

Total $1,050 $50



### 3.7 Step 5: Estimate the Number of Unique Facilities that W ill Perform Each Task

As indicated in Chapter 2, the proposed rule will create a one

- time rule familiarization burden for all TRI facilities. Additionally, facilities that submitted by paper in RY 2009 will incur costs associated with switching to electron ic reporting, which include registering to use CDX to submit forms via TRI

- MEweb, establishing and ESA, and purchasing a computer and I nternet access. The number of facilities that will incur costs associated with rule familiarization, registering with CDX , establishing an ESA, and purchasing computer and I nternet access is summarized in Table 12.

Table 12 : Estimated Number of Facilities Potentially Affected under the Proposed Rule

Facilities

Rule Familiarization 20,797

Registe ring with CDX and Establishing an ESA 1,196

Purchasing a Computer and Internet Access

Scenario I 1,196

Scenario II 184

Scenario III 72



### 3.8 Step 6: Estimate Industry Costs

Total incremental industry costs include the costs of rule familiarization, form completion, and capital

costs. To compute the industry

- wide cost of each compliance activity, the unit cost for each task is multiplied by the relevant number of facilities

. Table 13 summarizes the incremental labor costs and

Table 14 summarizes the incre mental capital costs of the proposed rule in first and subsequent years (p. 18) . Table 15 summarizes the total incremental costs of the proposed rule in the first and subsequent years

under each of the three scenarios considered.18 October 15 , 2011 Table 13 : Incremental Labor Costs under the Proposed Rule 11

Activity Total Unit

Burden (hours) Total Unit

Cost (2010 dollars) Number

of

Facilities Total

Burden (hours) a Total Cost

(2010 dollars) b

First Year

Rule Familiarization 0.33 $18.16 20,797 6,932 $377,674

Form Completion: CDX Registration 0.6 6 $38.4 3 1,196 797 $45,962

Form Completion: ESA

Establishment 0.18 $11.73 1,196 219 $14,029

Total 7

, 949 $437,665 Subsequent Year

Rule Familiarization 0 .0 0 $0.00 20,797 0 $0

Form Completion : CDX Reg istration 0

. 00 $0.00 1,196 0 $0

Form Completion: ESA

Establishment 0 .00 $0.00 1,196 0 $0

Total 0 $0

a Total burden is calculated as total unit burden multiplied by the number of facilities.

b Total cost is calculated as total unit cost multiplied by the number of facilities.

Table 14 : Incremental Capital Costs under

the Proposed Rule

Capital Cost (2010 dollars) Number of

Facilities Total Cost

(2010 dollars)

First Year

Scenario I $1,050 1,196 $1,255,800

Scenario II $1 ,050 184 $193,200

Scenario III $1,050 72 $75,600

Subsequent Year

Scenario I $50 1,196 $59,800

Scenario II $50 184 $9,200

Scenario III $50 72 $3,600

Table 15 : Total Incremental Costs under the Proposed Rule (2010 D ollars)

Labor Costs Capital Costs Total Costs

First Year

Scenario I $ 437, 665 $1,255,800 $1, 693, 465

Scenario II $ 437, 665 $193,200 $ 630, 865

Scenario III $ 437, 665 $75,600 $ 513, 265

Subsequent Year

Scenario I $0 $59,800 $59,800

Scenario II $0 $9,200 $9,200

Scen ario III $0 $3,600 $3,600

11 For the analysis, figures to the ten thousandths place were used. However for clarity and simplicity, this table only displays the values to the hundredths place.19 October 15 , 2011



### 3.9 Step 7: Annualize Industry Costs

The total burden to industry associated with the proposed rule is annualized over a 5

- year time period. The time period of five years was selected based on the typical life of a computer. This analysis uses the depreciation period based on the expected life span of the computer. Since the computer has a five year

life

- span the depreciation period of five years is used in this analysis. The annualized cost captures both

the initial startup costs as well as recurring subsequent year costs. Industry costs are annualized both at a

3% discount rate and a 7% discount rate. 12 

### Table 1 6 present s the annualized industry costs for each

scenario considered. 13

Table 16 : Annualized Indu stry Costs (2010 Dollars)

Scenario I Scenario II Scenario III

Initial Cost $1,693,465 $630,865 $513,265

Recurring Cost $59,800 $9,200 $3,600

Annualized Cost (3% Discount Rate) $352,587 $120,615 $94,943

Annualized Cost (7% Discount Rate) $380,114 $131 ,090 $103,530

12 Pursuant to guid ance issued by the Office of Management and Budget (OMB), federal agencies should take into account when costs and benefits will actually occur. Thus, costs and benefits that will accrue in the future must be discounted to present day dollars. Further, O MB‟s guidance recommends federal agencies use discount rates of 3 and 7 percent to estimate a range of average potential returns on investments. More information is available at http://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a

- 4.pdf

. 13 Please note the annualization method used includes a payment at the start of the first year and then includes the present day cost for each of the fi ve additional years. Thus, a five

- year annualization includes a sixth payment representing the initial cost.20 October 15 , 2011 

## Chapter 4

– Small Entity Analysis

4.1 Introduction

The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. § 601 et. seq. ) requires f ederal agencies to assess the effects of regulations on small entities, and, in some instances, to examine alternatives to the regulations that may reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the rule will n ot have a significant economic impact on a substantial number of

small entities.

Since 1980, the RFA has required f ederal agencies to assess the economic impacts of their actions on small entities, including businesses, nonprofit agencies, and governments. Section 604 of the RFA, as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires an agency to perform a regulatory flexibility analysis for a rule unless the Agency certifies under section 605(b) that the regulatory action will not have a significant economic impact on a substantial number of small entities. The RFA does not specifically define “a significant economic impact on a substantial

number” of small entities.

This chapter summarizes the results of a small entity impact analysis for the proposed rule. Specifically,

Section 4.2 provides the definitions of small entities for the industry groups covered under the proposed

rule. Section 4.3 describes the general methodology used to determine if the proposed r ule results in significant economic impacts to a substantial number of small entities. Section 4. 4 uses this methodology to estimate the impacts of the proposed rule on small businesses, and Section 4.5 uses the methodology to estimate the impacts of the proposed rule on small government jurisdictions. The results of the small entity analysis are summarized in Section 4.6.

4.2 Definitions of Small Entities

The RFA uses the definition of “small business” found in the Small Business Act, which authorizes the

Sma ll Business Administration (SBA) to define “small business” by regulation. This analysis uses the SBA‟s definition of a small business for each industry. 14



### SBA's small business size standards vary by industry. In establishing size standards, SBA considers a number of economic and market characteristics that may allow a business concern to exercise dominance in an industry. Size standards are based on criteria, such as annual receipts or number of employees that represent a measure of these characteristics . These standards represent the largest size that a for

- profit enterprise (together with its affiliates) may be and still qualify as a small business.

The SBA small business size standards are expansive, classifying most businesses as “small.” For

examp le, the default SBA size standard for manufacturing industries is 500 employees. According to information compiled for SBA by the Bureau of the Census, 282,622 of 286,701 manufacturing firms have fewer than 500 employees (USSBA, 2009). 15 

### Therefore , at leas t 98.6 percent of firms would be

14 SBA's size standards can be found at: http://w ww.sba.gov/idc/groups/public/documents/sba_homepage/ serv_sstd_tablepdf.pdf

. 15 USSBA. Office of Advocacy

- Statistics

– All Industries by NAICS Codes, 2006: Employer Firms & Employment by Employment Size of Firm by NAICS Codes, 2006. Information from the S mall Business Administration on the

Internet. Available at http://archive.sba.gov/advo/research/us07_n6.pdf . Downloaded on March 6, 2009.21 October 15 , 2011



### classified as small businesses according to the SBA definition. In fact, this percentage is actually higher, since for certain industrial classification codes within manufacturing, the SBA size standard is 750, 1,000,

or 1 ,500 employees. The small business definitions relevant to this proposed rule are:

Businesses, where the small business definition is based on annual receipts or number of employees;
Utilities, where the small business definition is based on annual electri city generation;

Government jurisdictions, where the small definition is based on population; and, Small organizations, where the small business definition is based on any not

- for

- profit enterprise which is independently owned and operated and is not domi nant in its field. 16



### Collectively, this analysis refers to small businesses, small governmental jurisdictions, and small organizations as small entities.

4.3 Methodology Overview

As mentioned above, the RFA considers whether a rule will have a significant eco nomic impact on a

substantial number of small entities. This analysis uses annual cost impact percentages to measure potential impacts on small entities. The cost impact percentage is defined as annual compliance costs resulting from the proposed rule as a percentage of annual revenue or sales. For the purposes of determining small entity impacts, comparing annual compliance costs to annual revenue provides a reasonable indication of the magnitude of the regulatory burden relative to a commonly available and objective measure of a parent entity‟s income. Where regulatory costs represent a small fraction of a typical parent entity‟s revenue ( i.e. , less than one percent), the impacts of the regulation are likely to be

minimal.

The compliance costs associa ted with the proposed rule in the first year include the costs of rule familiarization, CDX registration, submitting an electronic signature agreement (ESA), and purchasing a computer and I nternet access (see Chapter 3). In subsequent years, the compliance costs associated with the proposed rule are limited to the cost of purchasing I nternet access. The actual compliance costs a facility incurs will vary depending on whether the facility already submits information to TRI via CDX

and TRI

- MEweb and whether t he facility has access to a computer . Table 1 7 presents the compliance

cost s associated with each of the individual components of the total costs incurred under the proposed rule ( e.g. , the cost associated with rule familiarization), and then aggregates th ese costs to calculate the total compliance cost for each type of facility potentially affected under the proposed rule ( e.g. , electronic filers will incur only the cost of rule familiarization).

Table 17 : Compliance Costs Incurred under the Proposed Rule

Components of Compliance Costs First

Year Subsequent

Year

Rule Familiarization $18. 16 $0.00 CDX Registration $3 8.4 3 $0.00

ESA Establishment $11.7 3 $0.00 Purchase Computer and Internet Access $1,050.00 $50.00

Per

- Facility Tota l Compliance Costs First

Year Subsequent

Year Electronic Filer (Rule Familiarization only) $18. 16 $0.00 Paper Filer with Computer and Internet Access (Rule Familiarization, CDX Registration, and ESA Establishment only) $6 8.3 2 $0.00

Paper Filer without C omputer and Internet Access (Rule Familiarization, CDX Registration, E SA Establishment , and Computer and Internet Access) $1, 1 1 8

. 3 2 $50.00

16 No small organizations are expected to incur burden a s a result of the proposed rule.22 October 15 , 2011



### The compliance costs are annualized over a 5

- year time period at a 3% and 7% discount rate, as discussed in Chapter 3. The annualized compliance costs to electronic filers, paper filers with computer access, and paper filers without computer access are shown in Table 18.

Table 18 : Annualized Compliance Costs (2010 Dollars)

Electronic

Filers P aper Filers

with Computer

and Internet

Access Paper Filers

without Computer and

Internet Access

Initial Cost $18.16 $68.32 $1,118.32

Recurring Cost $0.00 $0.00 $50.00

Annualized Cost (3% Discount Rate) $3.25 $12.24 $241.46

Annualized Cost (7% Discount Rate) $3.56 $13.40 $259.46



### The proposed rule affects many industry sectors ( i.e. , NAICS codes) as well as several government jurisdictions. The compliance activities and costs will vary among sectors depending on whether facilities filed electronically o r by paper in RY2009

, and whether those who filed by paper have computer and

I nternet access. This small entity analysis consider s facilities in all of the industry sectors which reported

to TRI in RY 2009

. In RY 2009, facilities in a total of 504 6

- digit NAICS code industry sub

- sectors reported to TRI ( U.S. EPA, 2011a ) . It should be noted that industry information is only available at the facility

- level; the information reported to TRI does not indicate the NAICS code of the parent company.

For this reason , this analysis assumes that the NAICS code reported by each TRI facility in RY 2009 is also the NAICS code of its parent. 17



### Employment and revenue data (necessary for the small entity analysis) available for each of these 6

- digit

NAICS code sectors var y bu t fall into the general categories presented in Table 19 (p. 22) . The categories were developed based on the small business definition in Section 4.2 and data sources used. Sector Category #1 includes all NAICS codes for which employment and revenue data a re readily available from

the U.S. Census ‟ Statistics of U.S Businesses (SUSB) and where the applicable small business threshold is based on either revenue or employment. Sector Category #2 includes utilities, where the definition of

what constitutes a sma ll business is based on the amount of electricity generated, and data from the Energy Information Administration (EIA) data and annual electricity prices are used to estimate small entity impacts. Sector Category # 3 is government jurisdictions, where the s mall business threshold is defined in terms of population and data from the U.S. Census of Governments was used to estimate

revenue. Agricultural sectors are grouped together in Sector Category # 4 and are not considered in this analysis. 18 

### Finally, Sector Category #5 includes facilities that reported invalid NAICS codes and are not considered in this analysis. 19

17 Note that if the NAICS code of a facility‟s parent does not match the NAICS code of the facility, then its associated revenue may not be correctly represented in the analysis.

18 In RY 2009, five facilities in two agricult ural NAICS codes (112310 Chicken Egg Production and 112320 Broilers and Other Meat Type Production) reported to TRI. However, agricultural NAICS codes are not subject to TRI reporting; therefore they are not included in the small entity analysis. Note that if these facilities were included in the analysis, they would incur impacts of less than one percent of annual revenue.

19 Facilities reporting an invalid NAICS code make up less than 1% of the TRI facility universe.23 October 15 , 2011 Table 19 : Categorization of Sectors Affected by Proposed Rule

Sector Category

# Category Description # Facilities

in
Ca tegory

1 Sectors covered by U.S. Census data 19,763

2 Utility sectors with small business definitions based on electricity generation 545

3 Government Jurisdictions 483

4 Agricultural sectors not covered by U.S. Census data 5

5 Facilities reporting in valid NAICS codes 1

Total # of TRI Facilities 20,797 Source: U.S. EPA (2011). TRI RY 2009: NA2009. Accessed via TRI.NET



### For Sector Categories 1 through 3 in Table 19

, 20 

### different data sources were used to estimate relevant economic sizes, and then the impacts of the proposed rule on small entities. Although the data sources varied, the general methodology used to estimate the impacts on small entities across all sectors consisted of the following steps:

Step 1: Identify the universe of affected TRI faci lities.

Step 2: Characterize the relationships between facilities and their parents in the affected

universe.

Step 3 : Identify small parent entities based on SBA definitions (see Section 4.2).

Step 4 : Estimate annual revenue of parent entities in the affec ted universe.

Step 5: Develop parent entity annualized cost estimates, based on the number of facilities per

parent estimated in Step 2.

Step 6: Calculate the parent entity cost impact ratio, defined as the annualized cost as a

percentage of annual revenue , as a measure of regulatory burden.

Step 7: Estimate the number and percentage of small parent companies with company

- level

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

The specific assumptions and calculations used to estimate impacts for each category of facilities are

described in more detail in the sections that follow. Section 4.4 consi ders the impacts of the proposed rule

on small businesses in sectors for which information is available from the 2007 U.S. Census Statistics of

U.S. Busi nesses (SUSB) (Section 4.4.1) and utility sectors (Section 4.4.2)

. Potential impacts of the proposed ru le on small governmental jurisdictions are considered in Section 4.5.

4.4 Impacts on Small Businesses

4.4.1 Census Sectors

20 This analysis excludes Sector Categ ories 4 and 5 because TRI does not cover agricultural sectors and invalid

NAICS codes are outside the boundaries of the SUSB.24 October 15 , 2011



### The majority of affected 6

- Digit NAICS codes (474 of 504) have revenue and employment data available from the SUSB ( U.S. Census Bureau, 2010c ). The sectors with data available from SUSB are summarized

in Table 20

.

Table 20 : Sectors with Revenue and Employment Information in SUSB

2

- Digit
NAICS NAICS Description 6

- Digit NAICS
Codes within

the 2

- Digit
NAICS

21 Mining, Quar rying, and Oil and Gas Extraction 15

31

- 33 Manufacturing 425

42 Wholesale Trade 9

44

- 45 Retail Trade 2

48

- 49 Transportation and Warehousing 3

51 Information 3

54 Professional, Scientific, and Technical Services 4

56 Administrative and Support and Wa ste Management and Remediation Services 8

71 Arts, Entertainment, and Recreation 2

81 Other Services (Except Public Administration) 3

Total Number of TRI Sectors (6

- Digit NAICS Codes) with Information in SUSB 474 Source: U.S. EPA (2011). TRI RY 2009: NA2009. Accessed via TRI.NET



### The SUSB provides annual data for U.S. business establishments by geography, industry, and enterprise size, covering all business establishments with paid employees. The data provided annually includes

counts of establishment s, firms, employees, and payroll. Data about total receipts are also provided by SUSB every five years. The data available from the SUSB can therefore be used to identify the number of small parent entities affected under the proposed rule, construct annua l revenue, and calculate cost impact

ratios.

A 6

- digit NAICS code sector‟s small business definition is based on either its annual revenue or the number of its employees, depending on the sector. The SUSB provides information tabulated by employment size o r revenue size. For those sectors with revenue

- based small business definitions, profiles were developed for each revenue size category. For sectors with employment

- based small business definitions, profiles were developed for employment size categories.

Identify Universe of Affected TRI Facilities



### The NAICS code of each affected TRI facility is known based on its RY 2009 submission. Note that if a facility reported multiple NAICS codes ( e.g. , a facility includes multiple establishments that fall within

d ifferent NAICS codes) , the first listed NAICS code is used in this analysis

. In some cases, facilities

submitted NAICS codes that were invalid at the 6

- digit level, ( e.g. , 311000). In these cases, the analysis considers the facility at the most applicable NAICS level ( e.g. , 311). Based on information submitted by TRI filers, 19,763 facilities reported to TRI in RY 2009 from the 474 6

- digit NAICS codes with data in

SUSB. 21 

### The distribution of these facilities across NAICS codes is shown at the 2

- digit level i n Table 2 1

.

21 This count does not include utilities, agricultural facilities, or small governmental jurisdictions, which are considered separ ately in the sections that follow.25 October 15 , 2011 Table 21 : Universe of Affected TRI Facilities in Sectors with Data in SUSB

2

- Digit
NAICS NAICS Description # Facilities

21 Mining, Quarrying, and Oil and Gas Extraction 177

31

- 33 Manufacturing 18,392

42 Wholesale Trade 929

44

- 45 Retail Trade 15

48

- 49 Transportation and Warehousing 8

51 Information 5

54 Professional, Scientific, and Technical Services 3

56 Administrative and Support and Waste Management and Remediation Services 229

71 Arts, Entertainment, and Recreation 1

81 Other Services (Except Public Administration) 4

Total Number of TRI Facilities in Sectors with Information in SUSB 19,763 Source: U.S. EPA (2011). TRI RY 2009: NA2009. Accessed via TRI.NET

Characterize Facility

- Parent Relationships



### Fo r this analysis, c ompliance costs and impacts are estimated at the parent entity level, where a parent entity may own one or more facilities. The average number of facilities filing reports to TRI per parent company for the TRI sectors with information in SUSB is estimated by taking the average of the number of RY 2009 reporters associated with each parent company with a facility in that sector (Abt Associates,
Inc., 2011 ). Note that it is not possible to distinguish small parents from large parents in the TRI data; rather, a single average of number of facilities per parent is used for each sector. The average number of facilities per parent in each sector is used to calculate the number of parent entities of the facilities presented in Table 2 1 above. Beca use these averages contain large parent companies as well as small, they are likely to overestimate the number of facilities per small parent entity , which will provide a

conservative estimate of the cost to small parent companies by increasing the estimat ed cost.

Estimate Annual Revenue of Parent Entities



### The SUSB data include the total annual receipts (defined as the revenue for goods produced, distributed, or services provided) for each NA ICS/revenue or employment size class combination. For each of the 474 TRI sectors with data in SUSB, EPA calculates average revenue per “small” entity using the appropriate employment size or revenue size tabulation. To do this, the total revenue and total number of firms are summed across all “small” revenue or employme nt size classes for each NAICS code. 22

, 23 

### The total revenue of all “small” revenue or employment size classes is then divided by the number of “small” firms in each size class to calculate an average revenue per “small” firm by 6

- digit NAICS code.

22 In some cases, the employment or revenue tabulations provided in the 2007 Statistics of U.S. Businesses did not match the applicable small business definition. In cases where an employment or revenue class straddled th e small business definition for the NAICS code, data for that employment or revenue class was not included in the average revenue per small parent company calculation. This assumption may understate the number of small entities but provides a conservative estimate of average revenue for small entities because it avoids including any entities not classified as small in the analysis, resulting in a lower average annual revenue estimate.

23 Note that the calculation of average revenue per small parent company i ncludes firms classified in employment classes with fewer than ten employees, even though facilities with fewer than ten employees are not required to report to TRI. However, there is no parent company employment threshold for a small entity analysis. Bec ause firm data are used as a proxy for parent company data, establishments with less than 10 employees are included in the estimation of average revenue per small parent company. Inclusion of these data results in a conservative estimate of average parent company revenues.26 October 15 , 2011



### In some ca ses, total revenue for a revenue size or employment size class was not provided in the SUSB data because doing so would disclose the operations of an individual establishment or firm. In these cases,

the total revenue is interpolated based on the available data. For example, f or 6

- digit NAICS code sectors
with missing revenue information that have revenue

- based small business definitions, the midpoint of the revenue size class is multiplied by the number of firms in that size class as an estimate for the to tal

revenue within that particular size class . For 6

- digit NAICS code sectors with employment

- based small business definitions, the following method is used to estimate total revenue for those NAICS/employment

size class combinations where revenue was not disclosed:

1. Calculate the average revenue per firm for every NAICS/employment size class combination

where data are available.

2. Calculate the percent difference between average revenue in adjacent employment size classes based on all TRI NAICS codes populate d with revenue information in the relevant adjacent employment class sizes.

3. For the NAICS/employment size class combination with no average revenue data, multiply the average revenue of the adjacent employment size class in that NAICS code by the average

p ercent difference between the two adjacent employment size classes across all TRI NAICS codes to estimate the average revenue. 24



### 4. Where average revenue is available for both adjacent employment size classes, average the two estimated average revenues to obta in average revenue for the missing NAICS/employment size class combination. Where average revenue is available for only one of the adjacent size classes, use the estimated average revenue based on the size class with

data.

5. Multiply the estimated average re venue by the number of firms to estimate the total revenue for that NAICS/employment size class. 25



### 6. In the case where no revenue data was available from SUSB for any employment size class, the facility is considered at the 5

- digit or 4

- digit NAICS level rath er than the 6

- digit NAICS

level. 26



### Because the SUSB data reflect 2007 annual revenue, it was necessary to inflate the revenue to current

2010 dollars using one of several indices. The Industrial Production Index (IPI) measures the amount of industrial outp ut from certain industries and is used to inflate annual revenue in mining (NAICS 21) and manufacturing (NAICS 31

- 33) sectors to 2010 dollars (U.S. Federal Reserve, 2011). All other sectors (NAICS 42

- 81) are inflated based on the change in Gross Domestic P roduct (GDP) from 2007 to 2010, which is a measure of overall economic output (BEA, 2011).

Estimate Number of Small Parent Entities



### EPA estimates the number of small parent entities in each NAICS code by distributing the total number of

TRI facilities in e ach NAICS code amongst the employment or revenue size classes based on the overall distribution of establishments amongst the size classes in the SUSB data. 27 

### In order to obtain a count of

24 126 out of 452 6

- digit NAICS codes were missing average revenue data for at least one employment class.

25 Ultimately, 368 out of 3,234 values were interpolated (versus the entire dataset). For the employment sector only,

234 out of 2 ,712 values were interpolated, and for the revenue sectors only 368 out of 3,234 values were interpolated.

26 NAICS codes 541711, 325182, and 312210 fell into this scenario. To assess the potential accuracy of this
method, other 6

- digit NAICS codes, if pr esent, in the parent NAICS codes were also analyzed using this method.

No other 6

- digit NAICS code exists under NAICS code 54171 so no such analysis was conducted for this NAICS code. The average percent difference obtained for the other 6

- digit codes un der NAICS codes 32518 and 3122 were 12% and 73% respectively.

27 As with the average revenue calculations, this analysis did not include in the counts of small facilities any employment or revenue classes that straddled the small business definition.27 October 15 , 2011



### small parent entities by NAICS code, t he number of TRI facilities in “small” revenue or employment size classes is then summed and divided by the average number of TRI facilities per parent in that NAICS

code. 28 

### Using this method, a total of 3,026 small parent entities will be potentially affected by the proposed rule.

Es timate Parent Entity Compliance Costs



### Of the 3,026 small parent entities potentially impacted by the proposed rule, 213 operate TRI facilities that submitted paper forms in RY 2009. Of these 213 small parent entities , 16 operate TRI facilities that

did not report an email address and 28 operate TRI facilities where the email address domain does not match the company name. Under the three scenarios considered in Ch apter 2, the 2,813 small parents operating facilities that filed electronically are assumed to incur the costs of rule familiarization only. Under Scenario I, i n addition to the cost of rule familiarization, the 213 small parent entities operating TRI facilities that filed by paper are assumed to incur the additional costs of CDX registration,

estab lishing an ESA, and purchasing a computer and Internet access. In Scenario II, in addition to rule familiarization, the 44 small parent entities operating TRI facilities that did not report an email address or

whose email address domain does not match the company name are assumed to incur the additional costs of purchasing a computer and Internet access, and the remaining 169 parent entities will incur only the costs of rule familiarization, CDX registration, and establishing an ESA. In Scenario III, only t he 16 small parent entities operating TRI facilities that did not submit an email address are assumed to incur the costs of purchasing computer and Internet access. This cost breakdown is summarized in Table 2 2 below.

Table 22 : Compliance Costs Incurred by TRI Facilities in Sectors with Data in SUSB

Scenario I Scenario II Scenario III Number of small parent entities incurring costs for rule familiarization only 2,813 2,813 2,813

Number of small parent entities incurring cost s for rule familiarization, CDX registration, and establishing an ESA 0 169 197

Number of small parent entities incurring costs for rule familiarization, CDX registration, establishing an ESA, and purchasing a computer and Internet access 213 44 16



### Affe cted parent entities will incur the annualized cost for each TRI facility it operates. Therefore, the annualized per

- facility compliance cost is multiplied by the average number of facilities per parent to calculate the total annualized per parent complian ce cost for each NAICS code affected under the proposed rule. 29 

### This approach is applied for each of the scenarios (I, II, and III) at both a 3% and 7% discount rate, as further discussed in the proceeding chapter.

Estimate Cost Impact Ratios



### To calculate t he cost impact ratio for a parent entity, the annualized compliance cost per parent entity is divided by the average revenue per small parent entity for each affected sector. For each sector, this calculation is conducted separately for each case within ea ch scenario outlined in Table 22 (parents operating facilities incurring rule familiarization costs only, parents operating facilities incurring additional CDX registration and ESA costs, and parents operating facilities incurring additional CDX registrat ion, ESA, and computer and Internet costs). This calculation is performed under the three scenarios and at a 3% and 7% discount rate, as is shown in Table 23

. Based on th e calculation s , no small parent is expected to incur an impact of greater than 1% of annual revenue under any of the scenarios

considered.

28 Becau se it was not possible to distinguish small parents from large parents in the TRI data , these estimates likely overestimate the number of facilities per small parent entity.

29 Note that under each scenario, facilities owned by the parent company may be fi ling using different methods. This analysis assumes the most conservative cost for all facilities operated by each parent.28 October 15 , 2011

Table 23 : Estimated Impacts of Proposed Rule on Small Parent Entities in Census Sectors

Scenario Cost Impact

of

<1% Cost

Impact

Between

1 and 3% Cost

Impact of

>3%

# % # % # %
3% Discount Rate

Scenario I 3,02 6 100 0 0 0 0 # Small parent entities incurring rule familiarization costs 2,813 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 213 100 0 0 0 0

Scenario II 3,02 6 100 0 0 0 0 # Small parent entities incurring rule familiarization costs 2,813 100 0 0 0 0 # Small parent entities incurrin g rule familiarization, CDX registration, and ESA costs 169 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 44 100 0 0 0 0

Scenario III 3,02 6 100 0 0 0 0 # Small parent entities incurring rule familiarization costs 2,813 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 197 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 16 100 0 0 0 0
7 % Discount Rate

Scenario I 3,02 6 100 0 0 0 0 # Small parent entities incurring rule familiarization costs 2,813 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 213 100 0 0 0 0

Scenario II 3,02 6 100 0 0 0 0 # Small parent entities incurring rule familiarization costs 2,813 100 0 0 0 0

# Smal l parent entities incurring rule familiarization, CDX registration, and ESA costs 169 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 44 100 0 0 0 0

Scenario III 3,02 6 100 0 0 0 0 # Small parent entities incurring rule familiarization costs 2,813 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 197 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registrat ion, ESA, and computer and Internet costs 16 100 0 0 0 0



### The maximum impact incurred by any small parent across all of the scenarios is 0. 34 % , which is incurred by small parents of paper filers in the Other Pressed and Blown Glass and Glassware

Manufactu ring industry (NAICS 327212). Impact calculations for the five NAICS codes with the high est impacts are shown in Table 24

.29 October 15 , 2011 Table 24 : Compliance Costs Calculations for Five Most Impacted NAICS Codes

NAICS Unit Cost Average

Numb er of

TRI Facilities per Parent Entity Total

Cost per

Parent Entity Average

Revenue per Small

Parent Entity Cost

Impact

Ratio (%)

3% Discount Rate

327212 Other Pressed and Blown Glass and Glassware Manufacturing $241.46 18 $4,346 $1,356,821 0.3 2 %

314999 All Other Miscellaneous Textile Product

Mills $241.46 17 $4,105 $1,472,375 0.2 8 %

562112 Hazardous Waste Collection $241.46 17 $4,105 $1,539,876 0.2 7 % 327123 Other Structural Clay Product Manufacturing $241.46 30 $7,244 $2,768,168 0.26%

327390 Other Con crete Product Manufacturing $241.46 29 $7,002 $3,138,468 0.22%
7 % Discount Rate

327212 Other Pressed and Blown Glass and Glassware Manufacturing $2 59.46 18 $4,670 $1,356,821 0.3 4 %

314999 All Other Miscellaneous Textile Product

Mills $259.46 17 $4, 411 $1 ,472,375 0.3 0 %

562112 Hazardous Waste Collection $259.46 17 $4, 411 $1,539,876 0.29 % 327123 Other Structural Clay Product Manufacturing $259.46 30 $7, 784 $2,768,168 0.2 8 %

327390 Other Concrete Product Manufacturing $259.46 29 $7, 524 $3,138,468 0.2 4 %

4.4.2 Ut ilities



### For six of the 6

- digit NAICS codes for utilities , the small business definition is based on electricity generation rather than employment or annual revenue. Therefore, for these sectors, it is necessary to use

an alternate method to determine the i mpacts of the proposed rule on small entities. The six 6

- digit

NAICS code sectors with small business definitions based on electricity generation are:

221111 Hydroelectric Power Generation

221112 Fossil Fuel Electric Power Generation

221113 Nuclear Power G eneration

221119 Other Electric Power Generation

221121 Electric Bulk Power Transmission and Control

221122 Electric Power Distribution

The Energy Information Administration (EIA) maintains monthly and annual data on electricity generation and fuel consum ption for U.S. power plants in its EIA

- 923 database. 30 

### EPA uses this information to identify small entities and to construct annual revenue of small parents operating TRI utility facilities that are classified within the sectors discussed above.

Characteri ze the Universe of Affected TRI Facilities



### In RY 2009, 649 TRI facilities reported a utility NAICS code. However, some facilities reporting to TRI from utility NAICS codes are operated by municipal, state, or federal governments. As these facilities are

op erated by governments, the potential impacts on small entities must be considered using the government definition of a small entity. This analysis assumes that 104 utilities are operated by governments, identified based on the reported parent and facility name in RY 2009 (see Section 4.5 )

.

30 Accessible at http://www.eia.gov/cneaf/electricity/page/eia9 06_920.html

.30 October 15 , 2011



### The remaining 545 TRI utility facilities were found in the Energy Information Administration (EIA) databases by querying the Facility Registry System (FRS) for all EPA

- regulated facilities with

information in EIA databas es (based on the Emissions & Generation Resource Integrated Database (eGRID)) and the Clean Air Markets Division Business System (CAMDBS) facility linkages) ( U.S. EPA,

2011c ). Any facility not matched to an EIA record based on an FRS linkage was then match ed based on facility name and address. All but six TRI utility facilities were matched to information in EIA databases. An additional four facilities were matched to an EIA facility but did not have generation data for RY 2009. It was assumed that the pote ntial impacts on the ten facilities for which information could not be located would follow the distribution of impacts on the 53 5 facilities for which EIA records were available. The TRI utility facility universe is summarized in Table 2 5 below.

Table 25 : TRI Utility Universe

Utility Universe #
Facilities TRI Utility Facilities 649 TRI Utility Facilities not Operated by Governments 545 TRI Utility Facilities with Information in EIA databases 535

Sources:
U.S. EPA (2011). TRI RY 2009: NA2009. Accessed via TRI.NET U.S. Energy Information Administration (EIA), U.S. Department of Energy. 2009 b. Form EIA

- 923 Database. <http://www.eia.doe.gov/cneaf/el ectricity/page/eia906_920.html>

Characterize Facility

- Parent Rel ationships



### Each utility was matched to its parent based on the TRI data for RY 2009 (Abt Associates, 2011). The 535 TRI utilities correspond to 184 parent companies. Because the parent company of each utility is

known based on the parent company reported t o TRI for RY 2009 , the actual number of utilities per parent is calculated for each parent entity, as opposed to an average by sector as was done in Section 4.4.1. This results in 110 parents operating only one TRI utility, and the largest parent operating 24 TRI utility facilities.

Estimate Annual Revenue of Parent Entities



### As stated above, the EIA

- 923 database provides information about the annual electricity generation of each power plant in the U.S. The EIA also provides information about the average re tail price of electricity to ultimate customers by end

- use sector, by state, on a monthly basis. Annual electricity generation and price were combined to generate an estimate of annual revenue. Specifically, the national

average price of 9.51 cents per ki lowatt

- hour, or $95.10 per megawatt

- hour from the month of December,
2010, is multiplied by the total electricity generation per parent to construct annual revenue for each parent entity (EIA, 2010)

.

Estimate the Number of Small Parent Entities



### Small utili ties are defined as those businesses which are primarily engaged in the generation, transmission, and/or distribution of electric energy for sale with the total electric output for the fiscal year not exceeding 4 million megawatt

- hours. 31 

### Based on this defi nition, and aggregating the individual facility net generation to the parent level, 123 of the 184 (67%) utility parent entities meet the definition of being a small parent entity.

31 13 C.F.R. § 121.201 (accessible at http://www.sba.gov/sites/default/files/Size_Standards_Table.pdf ).31 October 15 , 2011

Estimate Parent Entity Compliance Costs



### Of the 123 small parent entities o perating TRI utilities potentially impacted by the proposed rule, two operate utilities that submitted exclusively using paper forms in RY 2009. The two facilities in question reported email addresses with domains that match the company name. Therefore, un der scenarios II and III the small utility parents will incur only the costs of rule familiarization, CDX registration, and establishing an ESA. Under scenario I, these facilities will also incur the cost of purchasing computer and

Internet access. The rem aining 121 small parent entities operate utility facilities that already report electronically and will only incur the costs of rule familiarization under all scenarios. The number of

utilities under each scenario is summarized in Table 2 6

.

Table 26 : Compliance Costs Incurred by TRI Facilities in Utility Sectors

Scenario I Scenario II Scenario III Number of small parent entities incurring costs for rule familiarization only 121 121 121

Number of small parent entities incurring costs for rule familiarization, CDX registration, and establishing an ESA 0 2 2

Number of small parent entities incurring costs for rule familiarization, CDX registration, establishing an ESA, and purchasing a computer and Internet access 2 0 0



### Affecte d parent entities will incur the annualized compliance cost once for each TRI utility it operates. Therefore, the annualized per

- facility compliance cost is multiplied by the number of utilities per parent

under each scenario to calculate the total annuali zed compliance cost for each parent entity affected under the proposed rule.

Estimate Cost Impact Ratios



### The cost impact ratios for small parent entities operating TRI utilities is estimated by dividing the total annualized compliance cost for each parent entity by their annual revenue. Based on this calculation, no small parent is expected to incur an impact of greater than 1% of annual revenue under any of the

scenarios considered. These results are summarized in Table 27

.32 October 15 , 2011

Table 27 : Estimated Impacts of Proposed Rule on Small Parent Entities in Utility Sectors

Scenario Cost Impact of

<1% Cost

Impact

Between

1 and

3% Cost Impact

of >3%

# % # % # % 3% Discount Rate

Scenario I
# Small parent entities incurring rule fami liarization costs 121 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 2 1 00 0 0 0 0

Scenario II # Small parent entities incurring rule familiarization costs 121 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 2 100 0 0 0 0 # Small parent entities incurring rule famil iarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a

Scenario III
# Small parent entities incurring rule familiarization costs 121 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration , and ESA costs 2 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a

7 % Discount Rate

Scenario I
# Small parent entities incurring rule familiarization cost s 121 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 2 100 0 0 0 0

Scen ario II
# Small parent entities incurring rule familiarization costs 121 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 2 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a

Scenario III
# Small parent entities incurring rule familiarization costs 121 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 2 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a



### The maximum impact incurred by any small parent entity unde r all of the scenarios is 0 .0009 %

. Impact calculati ons for the five small utility parents with the highest impacts are shown in Table 28

below . Because the impact incurred by any small utility parent is les s than one percent

, there are is no significant impact to small utilities.33 October 15 , 2011 Table 28 : Compliance Costs Calculations for Five Most Impacted Small

Parent Entities in Utility Sectors

Parent Entity Unit Cost Number of TRI Facilities per Parent Entity Total Cost

per Parent Entity Estimated Average

Revenue per Small Parent Entity Cost

Impact Ratio (%)
3% Discount Rate

Parent Entity 1 $3.25 2 $6.50 $803,310 0.0008% Parent Entity 2 $241.4 6 1 $241.4 6 $36,147,225 0.0007% Parent Entity 3 $3.25 1 $3.25 $1,009,201 0.0003% Parent Entity 4 $241.4 6 1 $241.46 $75,435,222 0.0003%

Parent Entity 5 $3.25 1 $3.25 $1,389,601 0.0002%
7 % Discount Rate

Parent Entity 1 $3.56 2 $7.12 $803,310 0.0009% Parent Entity 2 $ 259.46 1 $ 259.46 $36,147,225 0.0007% Parent Entity 3 $3.5 6 1 $3. 5 6 $1,009,201 0.0004% Parent Entity 4 $ 259.46 1 $ 259.46 $75,435 ,222 0.000 3 % Parent Entity 5 $3. 56 1 $3. 56 $1,389,601 0.0003%



### 4.5 Impacts on Small Government Jurisdictions

Some TRI facilities are operated by local, state, or federal governments. The potential impacts of the rule on small government parent entities must therefore be estimated. A separate methodology based on

information from the U.S. Census of Governments is used. The Census of Governments characterizes the

scope and nature of the nation's state and local governments; provides authoritative benchmark fig ures of public finance and public employment; classifies local government organizations, powers, and activities; and measures federal, state, and local fiscal relationships. Information is available by level of government and category of governmental activ ity. The sections that follow discuss the method used to calculate the impacts on small local governments operating TRI facilities.

Identify Universe of Affected TRI Facilities



### TRI facilities operated by government jurisdictions were identified based on th e reported parent and facility name in RY 2009. This method identified a total of 48 3 government owned TRI facilities reporting in RY 2009. However, 419 of these facilities are owned by states or the federal government, and

do not meet the definition of a small government jurisdiction as they serve a population of greater than 50,000 people. The remaining 64 government owned TRI facilities are operated by municipalities that could be potentially affected under the proposed rule. The universe of government owned TRI facilities is

summarized in Table 2 9

.

Table 29 : TRI Government Owned Facility Universe

Utility Universe #
Facilities TRI Facilities Owned by a Government Jurisdiction 483 TRI Facilities Owned by a Municipality 64 Source: U.S. EPA (2011). TRI RY 2009: NA2009. Accessed via TRI.NET34 October 15 , 2011



### In order to use the data available from the Census of Governments to construct municipal revenue and identify small municipalities, it is necessary to match each affected TRI facilit y to a local government on the Census list. Each of the TRI facilities owned by a municipality was matched to a city on the Census list of municipalities.

Characterize Facility

- Parent Relationships



### Compliance costs are estimated at the parent entity level , where a parent entity may own one or more facilities. Therefore, it is necessary to consider municipalities operating multiple TRI facilities. Because the universe of TRI facilities owned by municipalities is based on a unique list of facilities matched to individual local governments, it is possible to determine the number of TRI facilities operated by each municipality and calculate the number of facilities per parent based on the known number of facilities operated by each municipality. The 64 faciliti es owned by municipalities correspond to a total of 58 unique municipalities, with the majority operating only one TRI facility.

Estimate Annual Revenue of Parent Entities



### Because the Census of Governments does not provide revenue data for individual muni cipalities, it is necessary to develop a method to estimate revenue based on available information. The Government Finance series in the 2002 Census of Governments provides information at the state level regarding the per capita revenue of municipalities b y population

- size range ( U.S. Census Bureau, 2005a; U.S. Census Bureau, 2005b).

The 2002 Census of Governments per capita revenues must be inflated to 2010 dollars. The Gross Domestic Product (GDP) inflation index, which is a measure of overall economic ou tput, is used to inflate 2002 revenue to 2010 dollars. Note that this method may overstate current revenue because the GDP is a measure of overall economic output and does not correlate directly to government revenue; however it is

considered the best avai lable index to use in this situation.

To estimate the annual revenue for each affected municipality, the inflated per capita revenue is multiplied by the population of the municipality. Population information was obtained from the U.S. Census 2009 Populati on Estimates (U.S. Census Bureau, 2010b ).

Estimate the Number of Small Parent Entities



### As discussed in Section 4.2 , "small governmental jurisdictions" are defined as the government of a city, county, town, school district or s pecial district with a population of fewer than 50,000 people. Therefore, any local government operating a TRI facility serving a population of 50,000 or fewer is considered to be “small” based on the 2009 population of each affected municipality. Based on this method, 36 of the 58 affected municipalities are classified as “small.”

Estimate Parent Entity Compliance Costs



### Of the 36 small municipalities potentially impacted by the proposed rule, four operate facilities that submitted exclusively using paper forms in RY 2009. The four facilities in question reported email addresses with domains that match the municipality name. Therefore, under scenarios II and III the four small municipalities will incur the costs of rule familiarization, CDX registration, an d establishing an ESA. Under scenario I, these facilities will incur the additional cost of purchasing computer and Internet access. The remaining 32 small municipalities operate TRI facilities that already report electronically and

will incur the costs of rule familiarization only. Table 30 summarizes this information.35 October 15 , 2011 Table 30 : Compliance Costs Incurred by TRI Facilities Operated by Small

Government Jurisdictions

Scenario I Scenario II Scenario III Number of small parent ent ities incurring costs for rule familiarization only 32 32 32

Number of small parent entities incurring costs for rule familiarization, CDX registration, and establishing an ESA 0 4 4

Number of small parent entities incurring costs for rule
familiarizati on, CDX registration, establishing an ESA, and purchasing a computer and Internet access 4 0 0



### Affected parent entities will incur the annualized compliance cost once for each TRI facility it operates. Therefore, the annualized per

- facility compliance c ost was multiplied by the number of facilities operated by each municipality to calculate the total annualized compliance cost for each parent entity affected under the proposed rule. This calculation is performed under the three scenarios and at a 3% and 7%

discount rate.

Estimate Cost Impact Ratios



### The cost impact ratios for small municipalities are estimated by dividing the total annualized compliance cost for that entity by the annual revenue of the local government. Based on this calculation, no small municipality is expected to incur an impact of greater than 1% of annual revenue under any of the

scenarios considered. These results are summarized in Table 31

. Because this impact incurred by any

small municipality is less than one percent, there is lik ely no significant impact to any small m unicipality

.36 October 15 , 2011 Table 31 : Estimated Impacts of Proposed Rule on Small Government Jurisdictions

Scenario Cost Impact of

<1% Cost

Impact

Between

1 and 3% Cost Impact

of >3%

# % # % # %
3% D iscount Rate

Scenario I
# Small parent entities incurring rule familiarization costs 32 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA

costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule f amiliarization, CDX registration, ESA, and computer and Internet costs 4 100 0 0 0 0

Scenario II # Small parent entities incurring rule familiarization costs 32 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA

costs 4 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a

Scenario III
# Small parent entities incurring rule familiarization costs 32 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA

costs 4 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a

7 % Discount Rate

Scena rio I
# Small parent entities incurring rule familiarization costs 32 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA

costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 4 100 0 0 0 0

Scenario II
# Small parent entities incurring rule familiarization costs 32 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA

costs 4 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a

Scenario III
# Small parent entities incurring rule familiarization costs 32 100 0 0 0 0 # Small parent enti ties incurring rule familiarization, CDX registration, and ESA

costs 4 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 0 n/a 0 n/a 0 n/a



### The maximum impact incurred by any small government jurisdiction unde r all of the scenarios is

0 .0040 % . Impact calculations for the five small government jurisdictions with the highest impacts are

shown in Table 32 below. Because the impact incurred by any small government jurisdiction is less th an one percent, there is likely no significant impact to any small government jurisdiction.37 October 15 , 2011 Table 32 : Compliance Costs Calculations for Five Most Impacted

Government Jurisdictions

Parent Entity Unit
Cost Number of

TRI

Facili ties per Parent Entity Total

Cost per

Parent Entity Estimated

Average Revenue per
Small Parent Entity Cost

Impact
Ratio (%)

3% Discount Rate

Government Jurisdiction 1 $241.4 6 1 $241.46 $6,416,142 0.0038%

Government Jurisdiction 2 $241.46 1 $241.46 $17,5 30,565 0.0014%

Government Jurisdiction 3 $3.25 1 $3.25 $249,733 0.0013%

Government Jurisdiction 4 $3.25 1 $3.25 $1,913,987 0.0002%

Government Jurisdiction 5 $3.25 1 $3.25 $4,228,521 0.0001%
7 % Discount Rate

Government Jurisdiction 1 $ 259.46 1 $ 259.46 $6,416,142 0.004 0 %

Government Jurisdiction 2 $ 259.46 1 $2 59.46 $17,530,565 0.0015%

Government Jurisdiction 3 $3.5 6 1 $3.5 6 $249,733 0.0014%

Government Jurisdiction 4 $3. 56 1 $3. 56 $1,913,987 0.0002%

Government Jurisdiction 5 $3. 56 1 $3. 56 $4,228,521 0. 0001%38 October 15 , 2011



### 4.6 Summary

This chapter estimates s mall entity impacts for small businesses in sectors for which information is

available from the 2007 U.S. Census Statistics of U.S. Busi nesses (SUSB) and utility sectors; as well as for small governmental jurisdict ions . Of these sectors, no entities are expected to incur a cost impact of 1% or greater associated with the annualized compliance costs resulting from the proposed rule under any of the scenarios, as is shown in Table 3 3 below.

Table 33 : Estimated Impacts of Proposed Rule on Small Parent Entities

Category of Sector Description Cost Impact

of

<1% Cost

Impact

Between

1 and 3% Cost

Impact
of >3%

# % # % # %
3% Discount Rate

Scenario I
# Small parent entities incurring r ule familiarization costs 2,966 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 219 n/a 0 n/a 0 n/a

Scenario II # Small parent entities incurring rule familiarization costs 2,966 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 175 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 44 100 0 0 0 0

Scenario III
# Small parent entities incurring rule familiarization costs 2,966 100 0 0 0 0 # Small parent entities incurring rule familiarizatio n, CDX registration, and ESA costs 203 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 16 100 0 0 0 0
7 % Discount Rate

Scenario I
# Small parent entities incurring rule fa miliarization costs 2,966 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 0 n/a 0 n/a 0 n/a # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 219 n/a 0 n/a 0 n/a

Scenario II
# Small parent entities incurring rule familiarization costs 2,966 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 175 100 0 0 0 0 # Small parent entities incurr ing rule familiarization, CDX registration, ESA, and computer and Internet costs 44 100 0 0 0 0

Scenario III
# Small parent entities incurring rule familiarization costs 2,966 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, and ESA costs 203 100 0 0 0 0 # Small parent entities incurring rule familiarization, CDX registration, ESA, and computer and Internet costs 16 100 0 0 0 039 October 15 , 2011 

## Chapter 5

– Benefits

In enacting the Emergency Planning and Community Right

- to

- Know Ac t (EPCRA) of 1986 and the Pollution Prevention Act (PPA) of 1990, Congress recognized the significant benefits of providing information on the presence, releases and waste management of toxic chemicals. The Toxics Release Inventory (TRI) has proven to be o ne of the most influential forces in empowering the federal government, state and local governments, industry, environmental groups, and the general public to fully participate in an informed dialogue about the environmental impacts of toxic chemicals in t he United States. The TRI database provides several types of information, including quantitative information on toxic chemical releases and other waste management practices. Starting in 1987, the collection of this information enhanced the ability for the public, government, and the regulated community to understand the breadth and magnitude of chemical releases in the United States, and to assess the need to reduce the releases and transfers of toxic chemicals. TRI data enable all interested parties to est ablish credible hazardous chemical quantity baselines, to set realistic goals for environmental progress, and to measure progress in meeting these goals over time. As such, the TRI Program has become a yardstick by which environmental progress can be measu red by all interested or affected stakeholders.

Although EPA has not attempted to quantify the benefits of the proposed rule, it is expected that electronic reporting of TRI forms will provide numerous benefits to both facilities and EPA. Through the

requ irement for electronic reporting, EPA will save the costs of data entry and processing paper forms

since TRI

- MEweb submissions will already be in electronic form. As was noted in Chapter 3, TRI

- MEweb will pre

- populate forms based on the prior year‟s submis sion, which should expedite the data preparation

process. TRI

- MEweb provides other tools to assist facilities in providing TRI data, such as validation features to help facilities report accurate information. Facilities will also avoid paper and mailing co sts as a result of switching to electronic reporting, and instead be able to submit data securely via the Internet . In RY 2009, nearly 9 4.6 % of forms were submitted electronically via TRI

- MEweb , despite the fact that electronic reporting, though encouraged

, is not currently required, indicating the general usefulness of the tool to reporters. 32 

### By requiring electronic reporting, the benefits associated with using TRI

- MEweb will be extended to all TRI reporters.

32 U.S. EPA (2011 ). TRI National Analysis Files, accessed April 11, 2011.40 October 15 , 2011 

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Database

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- Use Sector, by State, December 2010 and 2009

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. https://cdx.epa.gov/ssl/cdx/faq.asp#REG2 . Updated May 18, 2010, Accessed April 22, 2011.

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