## ECONOMIC ANALYSIS

For the Addition of 47 Chemical Abstract Service (CAS)-numbered Chemicals Requested to be added to EPA's Preliminary Assessment Information Reporting (PAIR) Rule in the 48 t h 

## , 50 th 

## ,and 51 st 

## Reports of the TSCA Interagency Testing Committee

Economic Policy Analysis Branch Economics, Exposure, and Technology Division Office of Pollution Prevention and Toxics U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460

April 18, 2003

## 1

1.0 OVERVIEW On June 22, 1982, the Environmental Protection Agency (EPA) issued the Preliminary Assessment Information Reporting (PAIR) Rule (47 FR 26992) under Section 8(a) of the Toxic Substances Control Act (TSCA). Under the PAIR rule, which is codified at 40 CFR part 712, manufacturers (defined by the statute to include importers) of specified chemicals are required to submit certain production, importation, use, and exposure data for these chemicals to the Agency. The reported information is be used by EPA and others (e.g., the TSCA Interagency Testing Committee (ITC) which has Members and Liaison Members from 16 Federal agencies) to assess health and environmental risks that may be posed by exposure to the subject chemicals. 47 chemicals were requested to be added to the PAIR rule by the TSCA ITC in its 48 th 

## Report(one chemical), 50 th 

## Report(3 chemicals), and 51 st 

## Report (43 chemicals) to the EPA Administrator (see 66 FR 51276, October 5 2001; 67 FR 49530, July 30 2002; and 68 FR 8976, February 26 2003). These chemicals and their specific Chemical Abstract Service (CAS) Registry numbers, which were provided in the ITC Reports, are presented in Table 1. However reports on only 7 of the 47 chemicals were located in EPA's 1998 Chemical Update System (CUS) utilizing the ITC-supplied CAS numbers, yielding 6 companies producing these chemicals at 7 sites. Because the threshold for reporting to CUS under the Inventory Update Rule is 10,000 lbs., and the threshold for PAIR reporting is 500 kg (1,100 lbs.), and because there is no requirement that inorganic chemicals be reported to CUS (the majority of the vanadium compounds are inorganic), EPA assumed that one manufacturer exists per chemical to account for the possibility that there may be manufacturers producing PAIR-reportable amounts that weren’t captured by CUS. But EPA has no way of ascertaining this, a fact which highlights the need for PAIR reporting on these chemicals. EPA has already published a standardized reporting form for the PAIR rule (EPA Form No. 7710-35). The submitted forms are required to contain the following information:
Section I - Certification This section requires the reporter to verify that all information provided to EPA is complete and accurate. In addition, this section allows the reporter to claim information reported to be TSCA Confidential Business Information (CBI). CBI claims require certification.
Section II - Chemical Identification Chemical name, CAS number, etc.
Section III - Respondent Identification Site name, location, address, technical contact's name and telephone number.

## 2

Section IV

- Preliminary Assessment Information Part A - Plant Site Activities - Quantities imported and/or manufactured, quantities in waste or released to the environment, description of on-site activities, quantities in products. Part B - Chemical Substance Processing by Customers - Customers’ uses and products, market names, customers process categories.
Table 1: Chemicals and CAS Registry Numbers Provided in the 48 th 

## , 50 th 

## , and 51 st 

## ITC Report s CAS NUMBER CHEMICAL NAME EPA CUS reports 29091-20-1 benzenamine, 3_chloro_2,6_dinitro_N,N_dipropyl_4_ (trifluoromethyl) X 68928-76-7 stannane, dimethylbis[(1_oxoneodecyl)oxy] X 3278-89-5 benzene, 1,3,5-tribromo-2-(2-propenyloxy) X 136-35-6 1-triazene, 1,3-diphenyl

X

] X 11115-67-6 Ammonium vanadium oxide 11130-21-5 Vanadium carbide 12007-37-3 Vanadium boride (VB2) 12035-98-2 Vanadium oxide (VO) 12036-21-4 Vanadium oxide (VO2) 12070-10-9 Vanadium carbide (VC) 12083-48-6 Vanadium, dichlorobis (.eta.5-2,4-cyclopentadien-1-yl)- 12166-27-7 Vanadium sulfide (VS) 12439-96-2 Vanadium, oxo[sulfato(2-)-kappa.O]-, pentahydrate [Vanadyl sulfate (VOSO4),

pentahydrate] 12604-58-9 Vanadium alloy, base, V,C,Fe (Ferrovanadium) 13470-26-3 Vanadium bromide (VBr3) 13476-99-8 Vanadium, tris(2,4-pentanedionato-.kappa.O,.kappa.O')-, (OC-6-11)- [Vanadium

tris(acetylacetonate)] X1 “Burden Hour and Cost Estimates for PAIR Section 8(a) Reporting (1994 Update),” internal U.S. EPA memorandum form

Carol Rawie, EETD, to Karen Boswell, CTIB, May 16, 1994. Economic Impact and Small Business Definition Analysis for TSCA Section 8(a) Preliminary Assessment Information Rule , Office of Regulatory Analysis, OTS, U.S. EPA, February 1980. Economic Analysis of the Final Section 8(a) Preliminary Assessment Information Rule , R.A. Horner, RIB, OTS, U.S. EPA, November 12, 1981. 

## 3 13497-94-4 Silver vanadium oxide (AgVO3) 13517-26-5 Sodium vanadium oxide (Na4V2O7) [Sodium pyrovanadate] 13718-26-8 Vanadate (VO31-), sodium [Sodium metavanadate] 13721-39-6 Sodium vanadium oxide (Na3VO4) [Sodium orthovanadate] 13769-43-2 Vanadate (VO31-), potassium [Potassium metavanadate] 13930-88-6 Vanadium, oxo[29H,31H-phthalocyaninato(2-)-

.kappa.N29,.kappa.N30,.kappa.N31,.kappa.N32]-, (SP-5-12)- 14059-33-7 Bismuth vanadium oxide (BiVO4) 19120-62-8 Vanadium, tris(2-methyl-1-propanolato)oxo-, (T-4)- [Isobutyl orthovanadate] 24646-85-3 Vanadium nitride (VN) 27774-13-6 Vanadium, oxo[sulfato(2-)-.kappa.O]- [Vanadyl sulfate] 30486-37-4 Vanadium hydroxide oxide (V(OH)2O) X 39455-80-6 Ammonium sodium vanadium oxide 53801-77-7 Bismuth vanadium oxide 65232-89-5 Vanadium hydroxide oxide phosphate 68130-18-7 Vanadium hydroxide oxide phosphate (V6(OH)3O3(PO4)7) 68815-09-8 Naphthenic acids, vanadium salts 68990-29-4 Balsams, copaiba, sulfurized, vanadium salts 

## Both industry and government incur costs in responding to (industry) and in implementing (government) this reporting rule. The total costs and burden for industry and government are as follows:

INDUSTRY GOVERNMENT $61,537.12 $21,125.06 1330.3 hours 246.75 hours The methodology and the burden and cost details are discussed in the following sections.
2.0 METHODOLOGY AND DATA SOURCES
2.1 Burden Hour Estimates The primary source of burden hour and direct cost estimates in this report are previous economic analyses performed for the PAIR rule 1 

## . All burden hour and cost estimations in this analysis are directly from previous PAIR analyses unless otherwise noted.2 U.S. Environmental Protection Agency, 2002. Wage Rates for Economic Analyses of the Toxics Release Inventory Program.

Cody Rice, Analytical Support Branch, Office of Environmental Information. June 10, 2002. 

## 4 2.2 Wage Rates and Cost Estimation Wage rates including fringe benefits and overhead for three broad categories of labor (managerial, technical, and clerical) were used in this cost analysis. The labor categories and loaded wage rates were developed during previous studies 2 

## . The basis for estimating wage rates for these purposes is the Bureau of Labor Statistics (BLS) wage data for comparable labor categories. The BLS now reports this data on a quarterly basis, allowing near-current wages to be used in this analysis. The December 2002 loaded hourly wage rates used in the analysis are presented in Table 2. Unit burden estimates are converted to unit cost estimates by multiplying the unit burden hours by the appropriate wage rates in Table 2. Wage data used in developing the basic wage rates for this analysis were derived fromDecember 2002 wage information published by the Bureau of Labor Statistics (BLS) for all goodsproducing, private industries. The managerial wage rates are taken from the BLS data for the executive, administrative, and managerial occupational group. The technical wage rates are taken from BLS data for the professional specialty and technical occupational group. The clerical wage rates are taken from the BLS data for the administrative support (including clerical) occupational group. Based on that BLS data, the average hourly wage rates are $33.09 for managerial personnel, $27.00 for technical personnel, and $14.89 for clerical personnel, all in December 2002 dollars. The benefits and overhead loading factors are calculated from the BLS data on the cost of benefits, with 17 percent of the average wage added for overhead. The overhead factor of 17 percent is based on information provided by the chemical industry and chemical industry trade associations. The loaded hourly wage rates are $53.27 for managerial personnel, $43.34 for technical personnel, and $23.96 for clerical personnel, all in 2002 dollars.
TABLE 2: LOADED HOURLY WAGE RATES BY LABOR CATEGORY
Labor Category December 2002

Average Wages December 2002

Benefits and Overhead Loading Factor December 2002 Loaded Hourly Rate Managerial $33.09 1.610 $53.27 Technical $27.00 1.605 $43.34 Clerical $14.89 1.609 $23.96 Sources: U.S. Environmental Protection Agency, 2002. Wage Rates for Economic Analyses of the Toxics Release Inventory Program. Cody Rice, Analytical Support Branch, Office of Environmental Information. June 10, 2002. U.S. Department of Labor, Bureau of Labor Statistics, 2003. Employer Costs for Employee Compensation Historical Listing (Quarterly), 2002. March 18, 2003. 

## 3.0 INDUSTRY BURDEN AND COST ESTIMATES

## 5

Compliance with this reporting rule will require the following activities:

- Form Familiarization;

- Report completion;

- CBI Substantiation;

- Tradename notification, and;

- Report submission. 

## This section estimates the burden and cost of the rule to industry. The unit burden and unit cost of each major activity is discussed below.
3.1 Form Familiarization All plant sites will need to familiarize themselves with EPA's published standard reporting form and reporting requirements. The burden and costs for form familiarization are assumed to be incurred on a unique plant site since many of the same site staff would familiarize themselves with the reporting form regardless of the number of site-specific chemicals to be reported. It is estimated that form familiarization will require about 3 hours of managerial time and 4 hours of technical personnel effort. The per site unit burden and unit cost is 7 hours and $597.92, respectively. There are no other direct costs (ODCs). The specific unit burden and unit costs are summarized as follows.

Site Activity Clerical Technical Managerial ODCs Total Burden 0.00 4.00 3.00

-- 7.00
Cost $0.00 $173.34 $159.82 $0.00 $333.16



## 3.2 Report Completion Report completion requires collecting, analyzing, transcribing, and reviewing the information necessary to fully respond to the requirements of the reporting rule. Report completion accounts for the large majority of the burden of the rule. The estimated average burden for the completion of a single report is 16 hours. The per report cost is estimated to be $723.81. This estimate does not include claims of CBI (Section I), or tradename notification (Section IV, Part B, item 10).

Report Activity Clerical Technical Managerial ODCs Total

Burden 1.25 9.25 5.5

-- 16.00
Cost $29.95 $400.85 $293.01 $0.00 $723.813 These costs include $3.85 in postage (USPS Priority Mail, up to one pound), and $0.20 in photocopying costs (4 pages at

$0.05 per page. 

## 6 3.3 CBI Substantiation In Section I of the standard PAIR form, the reporting firm may make claims of confidentiality for any data element contained in their submission. It is assumed that most of the time required for CBI substantiation involves managerial staff discussion of whether or not to make a CBI claim. Four hours of managerial labor and one-half hour of clerical labor are required for CBI substantiation. The total unit costs is, therefore, estimated to be $225.08 per report . It is assumed that 75% of reports contain CBI claims, so for this analysis 35 CBI reports are estimated.

Report Activity Clerical Technical Managerial ODCs Total

Burden 0.50 0.00 4.00

-- 4.50
Cost $11.98 $0.00 $213.10 $0.00 $225.08



## 3.4 Tradename Notification In Section IV, Part B of the PAIR standard form, some companies may report their customer’s uses as unknown for more than twenty percent of their total volume. These companies must list under item 10 the trade names under which they distribute the chemical. The unit costs per report is $141.16. It is assumed that thirty percent of PAIR reporting sites report these tradenames, so for this analysis 14 tradename sites are estimated.

Report Activity Clerical Technical Managerial ODCs Total Burden 1.00 0.00 2.20

-- 3.20
Cost $23.96 $0.00 $117.20 $0.00 $141.16



## 3.5 Report Submission These costs cover the expense to review, copy, and mail the PAIR form to EPA. Report submission will require 0.5 hours of clerical time and 0.5 hours of managerial time per report. The clerical burden includes the time required to photocopy and mail the report package. The managerial time is for review of the report package before it is submitted to EPA. These burden categories are estimated to cost $38.62 per report; but do not include other direct costs. Other direct costs (photocopying and mailing costs) are estimated to total $4.05 (current dollars) per report 3 

## . Thus, the total report submission costs will be $42.67 per report (i.e., $38.62 + $4.05).

## 7 Report Activity Clerical Technical Managerial ODCs Total Burden 0.50 0.00 0.50 0.00 1.00
Cost $11.98 $0.00 $26.64 $4.05 $42.67



## 3.6 Total Industry Burden and Cost Summary information on total unit burden and unit cost under the reporting rule is presented in Tables 3 and 4. The total industry burden and costs are based on the expected level reporting activity which, in turn, is related to the number of reports and reporting sites. The number of reports and reporting sites depends upon the number of manufacturers and importers and their number of sites for each chemical subjected to the reporting rule. These variables, summarized in Table 5, are applied to the unit burden and cost estimates as shown in Table 6 to generate an estimate of total industry burden and costs. The total industry burden and costs are, respectively, 1330.3 hours and $61,537.12. The unit burden per site/report are 28.3 hours, and the unit costs per site/report are $1,309.30, as shown in Table 6. Table 3: Unit Burden (hours) of PAIR Reporting Activity Clerical Technical Managerial Total PER SITE Form Familiarization 0.00 4.00 3.00 7.00 PER REPORT Report Completion CBI Substantiation\1 Tradename Notification\2 Report submission 1.25 0.50 1.00 0.50 9.25

0.00 0.00 0.00 5.50

4.00 2.20 0.50 16.00

4.50 3.20 1.00 \1 Assumes site claims CBI. Only 75% of sites are estimated to claim CBI. \2 Assumes site reports tradenames. Only 30% of sites are estimated to report tradenames.

## 8

Table 4: Unit Costs (Dec. 2002$) of PAIR Reporting Activity Clerical Technical Managerial ODC Total PER SITE Form Familiarization $0.00 $173.34 $159.82 $0.00 $333.16 PER REPORT Report Completion CBI Substantiation\1 Tradename Notification\2 Report submission $29.95 $11.98 $23.96 $11.98 $400.85

$0.00 $0.00 $0.00 $293.01

$213.10 $117.20 $26.64 $0.00

$0.00 $0.00 $4.05 $723.81

$225.08 $141.16 $42.67 \1 Assumes site claims CBI. Only 75% of sites are estimated to claim CBI. \2 Assumes site reports tradenames. Only 30% of sites are estimated to report tradenames.



## Table 5: Summary of Reporting Requirements Multipliers

UNIT VARIABLE QUANTITY DESCRIPTION / COMMENTS
Number of Chemicals 47 EPA Supplied. Number of Manufacturers/Importers 47 EPA Assumption. Number of Reporting Sites 47 EPA Assumption. Number of Reports 47 Assumes one report per chemical per site. Number of Reports with Tradenames 14 Assumes 30% of reports. Number of Reports with CBI Claims 35 Assumes 75% of reports.


## Table 6: Total Industry Burden and Costs (2002$) of the Reporting Rule Activity Unit Burden Unit Costs Units Total Burden Total Costs
PER SITE Form Familiarization 7.00 hours $333.16 47 sites 329.0 hours $15,658.52
PER REPORT Report Completion CBI Substantiation Tradename Notification Report submission 16.00 hours 4.50 3.20 1.00 $723.81

$225.08 $141.16 $42.67 47 reports

35 14 47 752.0 hours

157.5 44.8 47.0 $34,019.07

$7,877.80 $1,976.24 $2,005.49
TOTAL $1,465.88 \1 1330.3 hours $61,537.12 Unit Burden of this Rule Per Site/Report 1330.3 total hours / 47 total sites/reports = 28.3 hours Unit Cost of this Rule per Site/Report $61,537.12 total cost / 47 total sites/reports = $1,309.30

\1 This figure represents the maximum potential impact for any one firm. 

## 4.0 GOVERNMENT BURDEN AND COST ESTIMATES4 Data processing costs for the 1992 PAIR ICR update was estimated to be approximately $177 per report. Adjusting this number

with the GNP implicit price deflator for 2002(4)/1991(4) (from Survey of Current Business ) yields an adjusted data processing cost of $217.58 per report (i.e., $177 * (111.21 / 90.47) = $217.58).

5 It has been derived from the 1989 PAIR ICR update that industry/public assistance required approximately 1.5 hours per report (or 0.00072 FTEs per report) and data processing/system support personnel required about 3.75 hours per report (or 0.0018 FTEs per report). Other government activities associated with PAIR are not affected (Chemical Nomination, Review and Selection; Rule Development; Rule Evaluation; Compliance Monitoring).

6 The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication factor used is recommended in EPA's Office of Policy, Planning, and Evaluation's I nstructions for Preparing Information Collection Requests (ICRs) (June 1, 1992). The 1.6 factor includes not only benefits but also overhead. An annual pay rate of $57,421 is used and reflects a GS-12 (level 1) salary as of 1/1/03. This GS-12, Step 1, assumption was recommended by EPA. (Internal EPA phone call between Carol Rawie (OPPT/EETD/RIB) and Ron Carlson (OPPT/OPME) on April 25, 1994). Thus, the annual, fully-loaded cost per FTE is $91,874 ( or $57,421 * 1.6). 

## 9 The estimated cost of this reporting rule to the Federal government is provided on an annual basis. The 2002 cost of a full time equivalent employee (FTE) at EPA was provided by the Office of Personnel Management. One FTE is equivalent to 2,080 hours per year. This reporting rule estimates that a total of 47 reports will be submitted. The base cost for data processing was adjusted to reflect this rule's expected number of report submissions 4 

## . Personnel costs associated with industry assistance and data processing activities have been similarly adjusted 5 

## . These adjustments were carried through in this analysis. Table 8 summarizes the Government's activities in developing and administering this reporting rule. The required FTEs per activity are retained from previous PAIR ICRs update except where noted. The cost for data processing per report is $217.58. Therefore, it is estimated that the annual cost to the Federal Government will be $10,226.11 (47 reports * $217.58), plus 0.0176 FTEs. At an estimated $91,873.60 per FTE 6 

## , the total of 0.1186 FTEs will cost EPA $10,898.95 in salaries, bringing the total costs to the Federal government to $21,125.06 (i.e., $10,226.11 + $10,898.95). Table 7: Total Government Burden and Costs (December 2002$) Activity Unit Burden Total Burden Industry/Public Assistance Data Processing / System Support Personnel TOTAL ACTIVITY BURDEN 1.5 hours/report 3.75 hours/report 0.0339 FTE

0.0847 FTE 0.1186 FTE (246.75 hours) Loaded Annual Costs per FTE $91,873.60 TOTAL ACTIVITY COSTS ($91,873.60 * 0.1186 FTE) $10,898.95 Data Processing costs ($217.58 * 47 reports) $10,226.11 TOTAL ANNUAL GOVERNMENT COSTS $21,125.06


## 5.0 REGULATORY FLEXIBILITY ACT

## 10

Under the Regulatory Flexibility Act (RFA) and the Small Business Regulatory Enforcement Fairness Act (SBREFA), EPA is required to consider whether a regulatory action will have a significant adverse impact on small entities. Both the RFA and SBREFA require EPA to determine whether a rulemaking may result in “significant economic impact on a substantial number of small entities,” and if so, to tailor the requirements of the rule to mitigate such impacts, while still maintaining a high level of environmental protection. The small business size standards promulgated by the Small Business Administration (SBA) (61 FR 3280, 3289-3291, January 31, 1996) for chemical manufacturers are based solely on the number of employees, with a base threshold of 1,000 employees for the ultimate corporate parent, under which all businesses are considered small. Of the 47 businesses assumed to be affected by this rule, it is unknown how many meet this definition of small business. To estimate the impact of the rule on a business, the preferred method is the “sales test,” wherein costs for any individual firm are measured as a percent of annual sales. At a maximum cost for any one firm of $1,465.88, the firm’s total sales would have to be less than $150,000 for this rule to have an impact of even 1% of sales. Of the 6 companies identified in CUS as manufacturers of affected chemicals, none meets the SBA definition of small. Thus, EPA has determined that this rule will not impose a significant impact on a substantial number of small entities.