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January 27, 2012 Economic Analysis for the TSCA Title VI Implementation Rule 

1 EO 12866_RIN2070-AJ92_Formaldehyde-Imp_NPRM_EA_2012-01-27.docx 

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7 Economic Analysis of the Formaldehyde Standards 

8 for Composite Wood Products Act 

9 Implementing Regulations Proposed Rule 

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12 RIN 2070-AJ92 

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18 EO 12866 REVIEW DRAFT 

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24 Economic and Policy Analysis Branch 

25 Economics, Exposure and Technology Division 

26 Office of Pollution Prevention and Toxics 

27 Office of Chemical Safety and Pollution Prevention 

28 U.S. Environmental Protection Agency 

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30 

31 

32 January 2012 

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38 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 Economic Analysis for the TSCA Title VI Implementation Rule 

39 

40 

41 

42 Acknowledgment

43 

44 EPA acknowledges the analytical and draft preparation support of Abt Associates Inc. of Cambridge, 

45 Massachusetts in the preparation of this report, provided under Contract No. EP-W-08-10. 

46 

47 

48 

49 

50 

Notice 

This document was prepared to provide economic information for the rulemaking 

process, and to meet various administrative and legislative requirements. Due to the 

nature of the information available to EPA, the document contains various 

assumptions that may not reflect the regulatory determinations that an individual firm 

or organization would make were it to apply the rule's requirements to its specific 

circumstances. This is not an official guidance document and should not be relied 

upon to determine applicable regulatory requirements. Persons seeking information 

on specific regulatory requirements should consult 40 CFR Part 767, and the preamble 

for the regulatory action. 

Mention of the names of specific companies, organizations, or entities does not 

constitute an endorsement by EPA. 
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January 27, 2012 i

1 Table of Contents 

2 

3 ES Executive Summary .................................................................................................................... ES-1 

4 1 Problem Definition and the Justification for Regulation ........................................................... 1-1

5 1.1 Problem with Formaldehyde Emissions from Composite Wood Products ..................................... 1-2

6 1.2 Regulatory Background ................................................................................................................... 1-3

7 1.3 Justification for Regulation ............................................................................................................. 1-5

8 1.4 Alternative Regulatory Approaches for Reducing Exposure to Formaldehyde Emissions from 

9 Composite Wood Products .............................................................................................................. 1-7

10 2 Costs ................................................................................................................................................ 2-1

11 2.1 Estimated Number of Affected Entities ........................................................................................... 2-4

12 2.2 Third Party Testing and Certification Costs .................................................................................. 2-34

13 2.3 Estimated Costs for Stock Hardwood Plywood, MDF, and Particleboard Producers ................... 2-65

14 2.4 Estimated Costs for Wood Veneer Laminated Product Producers ................................................ 2-84

15 2.5 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization Costs ..................... 2-102

16 2.6 Total Costs of the Proposed TSCA Title VI Implementation Rule ............................................. 2-141

17 3 Benefits ........................................................................................................................................... 3-1

18 3.1 Estimating the Changes in Exposure by Analytical Option ............................................................ 3-4

19 3.2 Time Frame for the Analysis ........................................................................................................... 3-5

20 3.3 Assessing the Change in Cancer Risk ............................................................................................. 3-7

21 3.4 Estimating the Value of Reductions in Cancer Risk ..................................................................... 3-14

22 3.5 Estimating the Value of Non-cancer Risk Reductions .................................................................. 3-41

23 3.6 Estimated Numbers of Affected Individuals ................................................................................. 3-57

24 3.7 Results of Benefits Assessment ..................................................................................................... 3-62

25 4 Net Benefits .................................................................................................................................... 4-1

26 4.1 Discounting and Time Frame for the Analysis ................................................................................ 4-3

27 4.2 Summary of Net Benefits ................................................................................................................ 4-5

28 5 Small Business Impacts ................................................................................................................. 5-7

29 5.1 Small Business Impacts for Stock Panel Producers ........................................................................ 5-9

30 5.2 Small Business Impacts for Wood Veneer Laminated Product Producers (including firms making 

31 products defined as hardwood plywood ) ...................................................................................... 5-12

32 5.3 Small Business Impacts for Fabricators, Wholesalers, and Retailers ............................................ 5-25

33 5.4 Summary of Small Business Impacts ............................................................................................ 5-31

34 6 Environmental Justice and Other Impacts ................................................................................. 6-1

35 6.1 Environmental Justice ..................................................................................................................... 6-2

36 6.2 Employment Impact Analysis ....................................................................................................... 6-12

37 6.3 Paperwork Burden Analysis .......................................................................................................... 6-18

38 6.4 Unfunded Mandates Reform Act (UMRA) ................................................................................... 6-20

39 6.5 Executive Order 13132 - Federalism ............................................................................................. 6-21

40 6.6 Executive Order 13175 - Tribal Implications ................................................................................ 6-22

41 6.7 Executive Order 13045 - Protection of Children ........................................................................... 6-23

42 6.8 Executive Order 13211 - Energy Effects ....................................................................................... 6-24

43 6.9 National Technology Transfer and Advancement Act .................................................................. 6-25

44 R References ..................................................................................................................................... R-1 

45 46 

47 
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January 27, 2012 ES-1 

48 Executive Summary 

49 

50 This report presents an economic analysis of the U.S. Environmental Protection Agency (EPA)’s 

51 proposed TSCA Title VI Implementation Rule. The Formaldehyde Standards for Composite Wood 

52 Products Act, which created Title VI of the Toxic Substances Control Act (TSCA), established 

53 formaldehyde emission standards for composite wood products (hardwood plywood, medium-density 

54 fiberboard (MDF), and particleboard) sold, supplied, offered for sale or manufactured in the United 

55 States. Under TSCA Title VI, manufacturers of composite wood products must comply with specific 

56 formaldehyde emission standards, and their compliance must be verified by a third-party certifier (TPC). 

57 Congress directed EPA to consider a number of elements for inclusion in implementing the regulations. 

58 These elements include: labeling, chain of custody requirements, sell-through provisions, ultra low59 emitting formaldehyde resins, no-added formaldehyde-based resins, finished goods, third-party testing 

60 and certification, auditing and reporting of TPCs, recordkeeping, enforcement, laminated products, and 

61 exceptions from the requirements of regulations promulgated for products and components containing de 

62 minimis amounts of composite wood products. 

63 

64 The sections of this executive summary below include an overview of the entities subject to 

65 the rule, the analytical options considered in the analysis, and the estimated costs, benefits, net benefits, 

66 and small business, environmental justice, and children’s health impacts of the rule. 

67 

68 Entities Subject to the Rule and their Baseline Status 

69 

70 The TSCA Title VI rule regulates panel producers, fabricators, distributors, and retailers of 

71 composite wood products. Panel producers manufacture composite wood products. Fabricators 

72 incorporate composite wood products into component parts or into finished goods. Wholesalers (referred 

73 to in the rule as distributors) supply composite wood products, component parts, or finished goods to 

74 others. And retailers sell composite wood products directly to consumers. 

75 

76 Due to the similarities between this proposal and the 2008 rule known as the Air Toxics Control 

77 Measure (ATCM) to reduce formaldehyde emissions from composite wood products that was 

78 promulgated by the California Air Resources Board (CARB), the incremental costs and benefits of this 

79 proposal are determined in part by the degree to which firms are already complying with the ATCM. So 

80 the following discussion of the number of entities subject to the TSCA Title VI rule includes an estimate 

81 of baseline compliance with the CARB ATCM. 

82 

83 Stock Panel Producers. Stock panel producers (also referred to as manufacturers) make hardwood 

84 plywood, MDF, or particleboard panels that would be classified as a composite wood products under both 

85 TSCA Title VI and the CARB ATCM. They are referred to as stock panel producers to differentiate them 

86 from custom hardwood plywood producers, which are not considered to be composite wood product 

87 manufacturers under the CARB ATCM. (Custom hardwood plywood producers are a type of wood 

88 veneer laminated product producers, which are considered to be fabricators rather than manufacturers of 

89 composite wood products under the CARB ATCM. Wood veneer laminated product producers are 

90 discussed in the next section.) 

91 

92 As shown in Table ES-1, there are approximately 90 stock panel mills in the U.S. operated by 54 

93 firms. This figure excludes mills and firms that only make products that are statutorily excluded from the 

94 TSCA Title VI rule (and that are also exempted from the CARB ATCM) such as curved plywood, 

95 military specified plywood, structural plywood, and wood-based structural-use panels. 

96 
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January 27, 2012 ES-2 

97 A total of 79 of the 90 U.S. stock panel mills have been certified as meeting the CARB Phase 2 

98 standards for at least one of their composite wood products. (The Phase 2 standards are equivalent to the 

99 emissions standards in the TSCA Title VI rule.) The CARB certified mills are responsible for virtually 

100 all the U.S. production volume of composite wood products. Approximately 99.6% of stock hardwood 

101 plywood produced in the U.S. is certified as meeting the CARB Phase 2 emissions standard, as is 100% 

102 of the MDF and 98% of the particleboard. 

103 

104 There are 16 U.S. stock panel mills making at least one product that is not certified as meeting the 

105 CARB Phase 2 standards. (Some of the 90 stock panel mills make both product lines that are certified 

106 under the CARB ATCM and product lines that are not certified because they are not intended to be sold 

107 in California.) 

108 

109 Wood Veneer Laminated Product Producers. Wood veneer laminated product producers (also referred 

110 to as laminators) make products by gluing a wood or woody grass veneer to the face and/or back of a 

111 purchased particleboard, MDF, or veneer core platform to produce a component part used in the 

construction or assembly of a finished good.1 112 Wood veneer laminated product producers are considered 

113 fabricators rather than hardwood plywood manufacturers under the CARB ATCM. In order to be sold in 

114 California, such products must be made using certified composite wood products as platforms, and they 

115 must comply with the labeling and chain of custody requirements in the CARB ATCM. But these 

116 products are not certified or tested for emissions. 

117 

118 TSCA Title VI includes laminated products in the definition of hardwood plywood, and directs 

119 EPA to conduct a rulemaking process to determine whether to exempt any of these products from the 

120 definition. If EPA does not exempt laminated products from the definition of hardwood plywood, then 

121 laminated products will have to be certified, tested, and meet the TSCA Title VI emissions standards, in 

122 addition to being made with certified platforms. Thus, the TSCA Title VI rulemaking will determine 

123 which wood veneer laminated product manufacturers are considered composite panel producers and 

124 which are considered solely fabricators. 

125 

126 There are 7,000 to 14,000 wood veneer laminated product producers in the U.S. making products 

127 such as custom hardwood plywood and architectural panels, windows, doors, kitchen cabinets, furniture, 

128 architectural woodwork and millwork, engineered wood flooring, and other goods made by affixing 

129 veneer to purchased platforms as part of the production process. 

130 

131 The estimate of 7,000 to 14,000 laminators excludes firms that use veneer to make products that 

132 are exempted from the definition of hardwood plywood because they do not create panels (flat or raised 

133 rectangular pieces of composite wood product) during the production process; the products are made by 

134 affixing veneer to substrates other than particleboard, MDF, or veneer core platforms; or the products are 

135 statutorily exempted by TSCA Title VI (including products used in boats and aircraft, and products not 

136 intended for interior use) or otherwise do not qualify as regulated hardwood plywood (such as curved 

137 plywood, military specified plywood, and structural plywood). 

138 

139 Fabricators. Fabricators use composite wood products to produce component parts or finished goods 

140 such as architectural components, cabinets, and furniture. There are 66,000 to 73,000 firms in the U.S. 

141 that are fabricators but not laminators, because they are using composite wood products to make goods 

 

1

 This analysis calls these products “wood veneer laminated products” to differentiate them from products that the industry 

commonly calls “laminates”, which are products that are laminated with materials other than veneer, such as high pressure 

laminate, thermally fused paper, vinyl film, decorative foil, or polypropylene film. Such products are not considered to be 

hardwood plywood under any of the options in this analysis. Firms making such products are considered fabricators under 

the rule, and are not counted as laminators. 
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January 27, 2012 ES-3 

142 without affixing veneer themselves. These 66,000 to 73,000 firms and the 7,000 to 14,000 laminators 

143 make up the 80,000 firms in the U.S. producing goods from composite wood products. Under the CARB 

144 ATCM, fabricated products sold in California must be made using certified composite wood products, 

145 and fabricators must comply with the ATCM’s labeling and chain of custody requirements. Nationwide, 

146 approximately 32,000 fabricators (including some laminators) are estimated to comply with the labeling 

147 and chain of custody requirements in the CARB ATCM because their products may be sold in California. 

148 

149 Wholesalers and Retailers. Wholesalers and retailers sell composite wood products. Approximately 

150 86,000 wholesalers (including importers) and 759,000 retailers in the U.S. are estimated to sell goods 

151 containing composite wood products. Approximately 32,000 of the wholesalers and 101,000 of the 

152 retailers have at least one facility in California, and thus must comply with the labeling and chain of 

153 custody requirements in the CARB ATCM. 

154 

Table ES-1. Number of Entities in the United States Subject to the Rule 

Type TSCA Universe 1 Baseline Condition (CARB ATCM Universe) 2

Stock panel producers (i.e., 

manufacturers) 

90 mills operated by 54 

firms 

79 mills have been certified by CARB for at least one 

product, but 16 mills make at least one product that is not 

CARB certified. Depending on the product type, 98% to 

100% of U.S. production volume is CARB certified. 

Wood veneer laminated product 

producers (i.e., laminators) 

7,000 to 14,000 firms 3 Wood veneer laminated product producers are considered 

fabricators under the CARB ATCM. Nationally, 32,000 of 

the combined group are subject to CARB ATCM 

requirements. 

Fabricators 66,000 to 73,000 firms 3

Wholesalers 86,000 firms, of which 

24,000 are importers. 

32,000 are subject to CARB ATCM requirements, of 

which 9,000 are importers. 

Retailers 759,000 firms 101,000 are subject to CARB ATCM requirements. 

Total 925,000 firms 

1 The TSCA universe represents the estimated number of firms in the U.S. selling regulated composite wood products. 2 The CARB ATCM universe represents the estimated number of firms handling regulated composite wood products that may be 

sold in California. This represents the baseline for the TSCA Title VI rule. 3 The 7,000 to 14,000 wood veneer laminated product producers and the 66,000 to 73,000 fabricators that are not laminators sum 

to a total of 80,000 firms. 

155 

156 Analytical Options Considered 

157 

158 Table ES-2 presents the analytical options that are considered in this economic analysis. The 

159 analytical options can be grouped into two basic categories. The first category contains analytical options 

160 with emissions standards at the levels required by TSCA Title VI. Within this category there are several 

161 different options for how to regulate wood veneer laminated products. The second category contains 

162 emissions standards other than the levels required by TSCA Title VI. There is one set of options with the 

163 same emissions standards as Phase 1 of the CARB ATCM, and another set of options requiring all 

164 products to meet the NAF emissions standards. This document discusses options with alternative 

165 emissions standards simply for informational purposes. The breadth of the discussion here should not 

166 necessarily imply that EPA has corresponding flexibility in implementing the statute. 

167 

168 Costs 

169 

170 The cost of compliance with the rule includes changes to production process and raw materials 

171 that are needed to meet the emissions standards, as well as the costs of the testing, third-party 

172 certification, labeling, and chain of custody activities required by the rule. The total cost estimates are 

173 presented with low and high end scenarios, reflecting both the range in the estimated number of wood 

174 veneer laminated product producers (7,000 to 14,000 firms) and an assumption that they will certify and 

175 test either one or two different categories of product lines per firm. 
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January 27, 2012 ES-4 

Table ES-2 Analytical Options Considered in the Economic Analysis 

Analytical Option Emissions Standards Notes 

Analytical options with emissions standards at the levels required by TSCA Title VI 

Option SE: Statutory emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.05 ppm 

0.11 ppm 

0.13 ppm 

0.09 ppm 

Same emissions standards as Phase 2 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SI: Statutory emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SP: Statutory emissions 

standards where wood veneer 

laminated products other than 

Custom and Architectural Panel 

products are exempt from the 

definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SN: Statutory emissions 

standards where wood veneer 

laminated products made using NAF 

resins to attach wood veneers to NAF 

platforms are exempt from the 

definition of hardwood plywood

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SC: Statutory emissions 

standards where wood veneer 

laminated products made with wood 

veneers attached to compliant 

platforms using no-added 

formaldehyde (NAF) resins are 

exempt from the definition of 

hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SCR: Proposed Option. 

Statutory emissions standards where 

wood veneer laminated products 

made with wood veneers attached to 

compliant platforms using NAF 

resins are exempt from the definition 

of hardwood plywood. Reduced 

recordkeeping requirements for nonmfgrs. compared to other options. 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood 

Distributors and retailers that are not 

manufacturers under TSCA would only be 

required to keep invoices and bills of lading. 

Other recordkeeping equivalent to CARB 

ATCM. No supplier notification required. 

Analytical options with emissions standards 

other than the levels required by TSCA Title 

VI CARB Phase 1 

levels 

Option CE: CARB 1 emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.08 ppm 

0.21 ppm 

0.21 ppm 

0.18 ppm 

Same emissions standards as Phase 1 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option CI: CARB 1 emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood

Same as above 

Same emissions standards as Phase 1 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

NAF emission levels 

Option NE: NAF emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood: 

90% of samples < 0.04 ppm. 

All samples < 0.05 ppm. 

MDF and particleboard: 

90% of samples < 0.04 ppm. 

All samples < 0.06 ppm 

Requires all composite wood product 

manufacturers to meet NAF emission standards. 

Recordkeeping and supplier notification 

equivalent to CARB ATCM. 

Option NI: NAF emissions 

standards where all wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Requires all composite wood product 

manufacturers to meet NAF emission standards, 

with a different definition of hardwood plywood. 

CARB recordkeeping and supplier notification. 

Note: This document discusses various options with respect to formaldehyde and composite wood products, including emissions standards 

that are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informational 

purposes. The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute. 
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January 27, 2012 ES-5 

176 Table ES-3 summarizes the first year, subsequent year, and annualized costs of the different 

177 analytical option. For the options with emissions requirements that are consistent with TSCA Title VI 

178 (Options SE, SI, SP, SN, SC, and SCR), the first year costs range from $435 million to $1,254 million 

179 and the annualized costs range from $72 million to $293 million per year. The proposed option (Option 

180 SCR) has first year costs of $435 million to $447 million. The annualized costs under Option SCR range 

181 from $72 million to $81 million per year, which is $23 to $32 million less than the next least expensive 

182 option with emissions requirements that are consistent with the statute (Option SE). The annualized costs 

183 under Options SCR are about 35 percent lower compared to Option SC. The primary difference between 

184 the costs under Option SCR (the proposed option) and Option SC is that Option SCR has reduced 

185 recordkeeping requirements for wholesalers and retailers that are not manufacturers under TSCA (i.e., 

186 that do not import, produce, or manufacture composite wood products). 

187 

188 Options CE and CI, the least stringent options in terms of emissions standards (which are 

189 presented for information purposes since they are not consistent with the emissions requirements of the 

190 statute), have estimated annualized costs ranging from $99 to $292 million per year. The estimated costs 

191 under Options CE and CI are similar to the estimated costs under the options with emissions requirements 

192 consistent with the statute, because recordkeeping, labeling, testing and certification are the primary cost 

193 drivers and loosening emissions standards does not affect these costs. 

194 

195 Options NE and NI, the most stringent options in terms of emissions standards (which are also 

196 presented for information purposes since they are not consistent with the emissions requirements of the 

197 statute), have estimated annualized costs ranging from $379 to $573 million. The additional costs 

198 associated with changes to raw materials and production processes account for the difference between the 

199 costs under these options compared to the options with emissions requirements that are consistent with 

200 the statute (SE, SI, SP, SN, SC, and SCR). 

201 

202 Table ES-4 summarizes the total annualized costs using both a 3 percent and a 7 percent discount 

203 rate. The results are similar under both discount rates. 

204 

205 Table ES-5 presents the costs by type of entity for the proposed option (Option SCR). Stock 

206 panel producers represent a small share of total costs, reflecting both the small number of firms and their 

207 high rate of baseline compliance with the CARB ATCM emission levels. Retailers represent the largest 

208 number of firms subject to the rule and the largest share of total first year costs due to rule familiarization. 

209 In subsequent years retailers are only required to keep invoices and bills of lading. These records are 

210 typically kept as a customary business practice, so no subsequent year costs are attributed to retailers. As 

211 a result, retailers represent a small share of annualized costs. Fabricators and laminators make up the 

212 largest share of the total annualized costs. These costs are largely driven by the certification and testing 

213 requirements for laminators that are considered panel producers under the rule, and by the additional 

214 recordkeeping required to comply with the rule’s chain of custody requirements. 

215 

216 Under the proposed option, wood veneer laminated products are regulated as hardwood plywood 

217 unless they are made using no-added formaldehyde (NAF) resins to affix the veneer to compliant and 

218 certified platforms. Of the 7,000 to 14,000 wood veneer laminated product producers in the U.S., 2,700 

219 to 4,000 are assumed to be using formaldehyde-based resins. It is generally less expensive for a laminator 

220 to switch to a NAF resin than to pay for the certification and product testing required for panel producers. 

221 As a result, nearly all laminators using formaldehyde-based resins are likely to switch to NAF resins in 

order to qualify for the exemption from the definition of hardwood plywood.2 222 It is assumed that only 

 2

 Composite wood platforms sold in the U.S. for use in wood veneer laminated products are assumed to be compliant and 

certified once the TSCA Title VI rule is implemented. Laminators using NAF resins to affix veneer to compliant and 

certified platforms will be regulated as fabricators. 
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January 27, 2012 ES-6 

223 about 150 to 300 U.S. laminated product producers will continue using formaldehyde-based resins, and 

224 thus will need to certify and test their products as a result of this proposal. 

225 

226 

Table ES-3: Total Costs by Option (millions 2010$, 3 percent discount rate)

Analytical Option 

First Year Subsequent 

Years Annualized Cost 

Low End 

Scenario

High End 

Scenario

Low End 

Scenario

High End 

Scenario 

Low End 

Scenario 

High End 

Scenario 

Analytical options with emissions standards at the levels required by the 

statute

Option SE: Statutory emissions standards where 

all wood veneer laminated products are exempt 

from the definition of hardwood plywood

$595 $595 $79 $79 $100 $100 

Option SI: Statutory emissions standards where 

all wood veneer laminated products are included 

in the definition of hardwood plywood

$919 $1,254 $177 $258 $194 $293 

Option SP: Statutory emissions standards where 

all laminated products other than Custom 

Plywood and Architectural Panels are exempt 

from the definition of hardwood plywood

$600 $600 $83 $83 $104 $104 

Option SN: Statutory emissions standards where 

all wood veneer laminated products made using 

NAF resins to attach wood veneers to NAF 

platforms are exempt from the definition of 

hardwood plywood.

$654 $689 $136 $168 $143 $185 

Option SC: Statutory emissions standards where 

laminated products made with compliant 

platforms and NAF resins are exempt from the 

definition of hardwood plywood.

$609 $621 $91 $101 $112 $121 

Option SCR: Proposed Option. Statutory 

emissions standards where laminated products 

made with compliant platforms and NAF resins 

are exempt from the definition of hardwood 

plywood. Reduced recordkeeping requirements 

for non-manufacturers compared to other options.

$435 $447 $57 $66 $72 $81 

Analytical options with emissions 

standards other than the levels 

required by the statute 

CARB Phase 1

Option CE: CARB 1 emissions standards where 

all wood veneer laminated products are exempt 

from the definition of hardwood plywood

$593 $593 $78 $78 $99 $99 

Option CI: CARB 1 emissions standards where 

all wood veneer laminated products are included 

in the definition of hardwood plywood

$918 $1,253 $176 $257 $192 $292 

NAF emission levels

Option NE: NAF emissions standards where all 

wood veneer laminated products are exempt from 

the definition of hardwood plywood

$889 $889 $372 $372 $379 $379 

Option NI: NAF emissions standards where all 

wood veneer laminated products are included in 

the definition of hardwood plywood $1,214 $1,549 $471 $552 $473 $573 

Option SCR is the proposed option.

227 
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January 27, 2012 ES-7 

Table ES-4: Total Annualized Costs by Analytical Option (millions, 2010$) 

Analytical Option 3 Percent Discount Rate 7 Percent Discount Rate 

Low End Scenario High End Scenario Low End Scenario High End Scenario

Option SE $100 $100 $112 $112 

Option SI $194 $293 $208 $311 

Option SP $104 $104 $115 $115 

Option SN $143 $185 $154 $195 

Option SC $112 $121 $123 $132 

Option SCR (Proposed Option) $72 $81 $81 $89 

Option CE $99 $99 $111 $111 

Option CI $192 $292 $207 $310 

Option NE $379 $379 $383 $383 

Option NI $473 $573 $480 $582 

Option SCR is the proposed option. 

228 

229 

Table ES-5: Costs for Proposed Option by Type of Entity (millions 2010$, 3 percent discount rate) 1

Analytical Option Entity Type 

First Year Subsequent 

Years Annualized Cost 

Low End 

Scenario

High End 

Scenario

Low End 

Scenario

High End 

Scenario 

Low End 

Scenario 

High End 

Scenario 

Option SCR: Proposed Option. 

Statutory emissions standards 

where laminated products made 

with compliant platforms and NAF 

resins are exempt from the 

definition of hardwood plywood. 

Reduced paperwork requirements 

compared to other options. 

Stock Panel Producers $3 $3 $2 $2 $2 $2 

Fabricators 2 $91 $57 $24 $20 $26 $21 

Retailers $215 $215 $0 $0 $10 $10 

Wholesalers $71 $71 $14 $14 $16 $16 

Laminators 3 $55 $102 $17 $30 $18 $32 

Total $435 $447 $57 $66 $72 $81 

Option SCR is the proposed option. 

1

 Low and high end scenarios reflect the estimated number of laminators and the number of product lines certified per firm, not the 

low and high costs for each category of entities. 

2 To avoid double-counting, this row represents costs to fabricators that are not laminators. Costs under the “Low End Scenario”

reflect the low end of the estimated number of laminators (approximately 7,000 firms), and costs under the “High End Scenario” 

reflect the high end estimate of the number of laminators (approximately 14,000 firms). The estimated number of fabricators that are 

not laminators is inversely proportional to the estimated number of laminators. So in the Low End Scenario there are 73,000 

fabricators that are not laminators, and in the High End Scenario there are 66,000 firms that are not laminators. As a result, the costs 

to fabricators that are not laminators are higher under the “Low End Scenario” then under the “High End Scenario”. 3 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, MDF or 

veneer core platform. This includes both laminators that are considered panel producers under the proposed rule and laminators that 

are considered fabricators under the proposed rule.

230 

231 Benefits 

232 

233 Evidence for health effects associated with formaldehyde exposure is provided by a wide variety 

234 of human clinical, epidemiology, and animal studies. In 2010, EPA released a draft IRIS assessment of 

235 adverse cancer and non-cancer health effects from inhalation of formaldehyde. The draft IRIS assessment 

236 identified seven categories of non-cancer health outcomes: (1) sensory irritation; (2) upper respiratory 

237 tract pathology; (3) pulmonary function effects; (4) asthma and allergic sensitization (atopy); (5) immune 

238 function effects; (6) neurological and behavioral toxicity; and (7) developmental and reproductive 

239 toxicity. At this time, only three of the non-cancer health effect categories were judged to have sufficient 

240 data for quantitative concentration-response modeling in support of the benefits assessment: sensory 

241 irritation, asthma, and female reproductive toxicity. Therefore, this analysis predicts the number of cases 

242 avoided and monetizes the benefits for four health effects: (1) nasopharyngeal cancer for individuals of 

243 all ages, (2) eye irritation for individuals of all ages, (3) asthma in children ages 2 to 17 and 6 to 17, and 
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244 (4) female reproductive toxicity (i.e. reduced fertility) in women ages 20 to 40. Table ES-6 presents the 

245 estimated annual number of cases of each of these health effect avoided due to the different analytical 

246 options. 

247 

248 

Table ES-6: Annual Number of Cases Avoided by Analytical Option and Health Effect 

Analytical 

Option 

Cancer Eye Irritation Asthma Reduced 

Fertility Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 9 21 22,133 170,214 2,469 3,416 1,501 

Option SI 10 24 23,650 191,590 2,799 3,864 1,696 

Option SN 11 25 24,154 198,950 2,915 4,019 1,765 

Option SC 10 24 23,650 191,590 2,799 3,864 1,696 

Option SCR 

(Proposed) 10 24 23,650 191,590 2,799 3,864 1,696 

Option CE 7 16 18,015 130,720 1,899 2,627 1,144 

Option CI 8 19 19,563 148,389 2,166 2,988 1,301 

Option NE 39 92 58,492 626,726 9,554 13,235 6,566 

Option NI 40 97 58,494 645,678 9,968 13,800 6,874 

Option SCR is the proposed option. Benefits were not estimated for Option SP. 

249 

250 The benefit of avoiding a fatal case of cancer was estimated using a value of $8.01 per micro-risk 

251 reduction (i.e., a reduction of 1 in 1 million of the risk of mortality). The value of avoiding a non-fatal 

252 case of cancer was estimated using a cost of illness approach. The estimates vary depending on the stage 

253 of the cancer when it is first diagnosed, the individual’s age at the time of diagnosis, and the individual’s 

254 employment status (since the value of time lost to illness depends on this status), resulting in a value of a 

255 micro-risk reduction that ranges from $0.09 to $0.14. Based on willingness to pay estimates, the analysis 

256 uses $26 as the value of an avoided case of eye irritation, $35,443 to $66,064 for an avoided case of 

257 asthma incidence. The analysis uses $1,969 to $5,336 per case of reduced fertility avoided based on the 

258 cost of fertility treatments for patients who ultimately become pregnant. 

259 

260 Reductions of formaldehyde emissions from composite wood products benefits individuals who 

261 reside, work, or otherwise spend a substantial amount of time where new composite wood products are 

262 introduced to an indoor space. Benefits are calculated using an age-dependent exposure analysis that 

263 includes formaldehyde exposure from homes, daycare, schools, workplace, vehicles, and outdoors. For 

264 each option, there are 3,300 different exposure scenarios derived from 22 different composite wood 

265 product age/source combinations, 5 structure types (detached housing, attached housing, apartments, 

266 manufactured housing, and recreational vehicles, campers, and trailers), 5 climate zones, and 6 individual 

267 age/employment status combinations. Changes in exposure are estimated by changing the two broad 

268 categories where a substantial amount of new composite wood products might be introduced: new home 

269 construction and major renovations that include kitchen remodeling. 

270 

271 Table ES-7 and Table ES-8 present the total benefits by health effect and analytical option using 

272 3 and 7 percent discount rates, respectively. Option SN (which would require laminated products to be 

273 made using NAF resins and platforms in order to be exempt from the definition of hardwood plywood, 

274 and is the most protective option with emissions standards that are consistent with TSCA Title VI) has 

275 benefits that are less than 20 percent larger than the benefits of the least protective option with emissions 

276 standards that are consistent with the TSCA Title VI statute (Option SE, which exempts all laminated 

277 products from the definition of hardwood plywood). 

278 

279 The benefits under the proposed option (Option SCR, which would exempt laminated products 

280 from the definition of hardwood plywood if they are made by using NAF resins to attach veneers to 
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281 compliant platforms) are only slightly lower those of Option SN, the difference being less than 5 percent. 

282 Benefits from options SI and SC are equivalent to those from Option SCR because it is assumed that most 

283 laminators would switch to NAF resins under all of these options. 

284 

285 Analytical options that would require NAF resins (Options NE and NI) would result in benefits 

286 between three and four times larger than under the analytical options with emissions standards consistent 

287 with TSCA Title VI. Analytical options with emissions standards consistent with TSCA Title VI would 

288 result in benefits that are about 15 to 50 percent higher than options that would require less stringent 

289 emissions standards (Options CE and CI). 

290 

291 About 85 percent of the total benefits of the proposed rule are attributable to reductions in asthma 

292 risk and about 14 percent are attributable to reductions in cancer risk. Approximately 2 percent of the 

293 total benefits are attributable to avoiding eye irritation and reduced fertility. 

294 

295 The cancer-related benefits are generally higher for composite wood products that have been 

296 more recently installed, new housing compared to renovated housing, warmer and more humid climate 

297 zones, younger individuals, and individuals who work in the composite wood products industry. 

298 

299 The non-cancer benefits are generally higher for populations exposed to composite wood 

300 products that have been more recently installed, new housing compared to renovated housing, warmer and 

301 more humid climate zones, younger individuals, and individuals who work in the composite wood 

302 products industry. For eye irritation and asthma, the avoided risks for the small number of individuals 

303 living in recreational vehicles or camper/trailers and individuals working in the composite work products 

304 industry were notably higher compared to other exposure groups. 

305 

Table ES-7: Total Annualized Benefits for All Options (millions 2010$, 3 percent discount rate) 

Analytical 

Option 

Cancer Eye Irritation Asthma Reduced 

Fertility 

Total Benefits 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE $17.28 $37.66 $0.53 $4.07 $143.03 $201.84 $1.45 $162.29 $245.02 

Option SI $19.65 $43.04 $0.57 $4.59 $162.45 $228.65 $1.64 $184.31 $277.92 

Option SN $20.48 $44.93 $0.58 $4.76 $169.21 $237.99 $1.71 $191.97 $289.38 

Option SC $19.65 $43.04 $0.57 $4.59 $162.45 $228.65 $1.64 $184.31 $277.92 

Option SCR 

(Proposed) $19.65 $43.04 $0.57 $4.59 $162.45 $228.65 $1.64 $184.31 $277.92 

Option CE $13.21 $28.73 $0.43 $3.12 $109.87 $154.97 $1.10 $124.62 $187.92 

Option CI $15.10 $33.02 $0.47 $3.55 $125.53 $176.60 $1.25 $142.36 $214.42 

Option NE $75.00 $163.07 $1.35 $14.92 $556.08 $785.79 $6.37 $638.80 $970.15 

Option NI $78.54 $171.02 $1.35 $15.37 $580.33 $819.48 $6.66 $666.89 $1,012.53 

Option SCR is the proposed option. Benefits were not estimated for Option SP. 

306 

307 
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Table ES-8: Total Annualized Benefits for All Options (millions 2010$, 7 percent discount 

rate) 

Analytical 

Option 

Cancer Eye Irritation Asthma Reduced 

Fertility 

Total Benefits 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE $7.72 $16.64 $0.50 $3.81 $70.83 $99.17 $1.31 $80.35 $120.93 

Option SI $8.80 $19.12 $0.53 $4.29 $80.59 $112.55 $1.48 $91.41 $137.44 

Option SN $9.18 $19.99 $0.55 $4.46 $83.99 $117.20 $1.54 $95.26 $143.19 

Option SC $8.80 $19.12 $0.53 $4.29 $80.59 $112.55 $1.48 $91.41 $137.44 

Option SCR 

(Proposed) $8.80 $19.12 $0.53 $4.29 $80.59 $112.55 $1.48 $91.41 $137.44 

Option CE $5.89 $12.69 $0.40 $2.92 $54.32 $76.01 $0.99 $61.61 $92.62 

Option CI $6.76 $14.67 $0.44 $3.32 $62.19 $86.81 $1.13 $70.53 $105.93 

Option NE $33.63 $72.16 $1.22 $13.87 $276.73 $388.08 $5.77 $317.36 $479.88 

Option NI $35.24 $75.78 $1.22 $14.30 $288.86 $404.80 $6.04 $331.37 $500.92 

Option SCR is the proposed option. Benefits were not estimated for Option SP. 

308 

309 Net Benefits 

310 

311 Table ES-9 and Table ES-10 present the total annualized net benefits by analytical option and 

312 discount rate. The estimated net benefits under the analytical options that have emissions standards that 

313 are consistent with TSCA Title VI range from negative $109 million to positive $206 million using a 

314 three percent discount rate. Of these analytical options, Option SI is the only option where net benefits 

315 are negative under the lower estimate of net benefits using the three percent discount rate. Option SCR 

316 (the proposed option) is the only option that has emissions standards that are consistent with TSCA Title 

317 VI where both the lower and the higher estimate for net benefits is positive using the 7 percent discount 

318 rate. 

319 

320 There are smaller net benefits (smaller positive and larger negative net benefits) under Options 

321 CE and CI (the analytical options with emissions standards lower than those that are consistent with 

322 TSCA Title VI). Net benefits are lower under these options because the estimated benefits are 

323 substantially lower while the estimated costs are only modestly lower (because the costs are largely 

324 driven by the certification, testing, and chain of custody requirements, which are not affected by the 

325 emissions standards). 

326 

327 Options NE and NI (which have emissions limits that are more stringent than those required by 

328 the statute) have substantially higher costs and benefits than the options with emissions standards that are 

329 consistent with TSCA Title VI. Net benefits are positive under these options using a 3 percent discount 

330 rate, and are positive for the higher estimate of net benefits using a 7 percent discount rate but are 

331 negative for the lower estimate using a 7 percent discount rate. 

332 
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January 27, 2012 ES-11 

Table ES-9: Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 

3 percent discount rate) 

Analytical Option Costs Benefits Net Benefits

Low End 

Estimate 

High End 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE $100 $100 $162 $245 $62 $145 

Option SI $194 $293 $184 $278 ($109) $84 

Option SP $104 $104 Not estimated Not estimated Not estimated Not estimated 

Option SN $143 $185 $192 $289 $7 $146 

Option SC $112 $121 $184 $278 $63 $166 

Option SCR (proposed) $72 $81 $184 $278 $103 $206 

Option CE $99 $99 $125 $188 $25 $89 

Option CI $192 $292 $142 $214 ($150) $22 

Option NE $379 $379 $639 $970 $259 $591 

Option NI $473 $573 $667 $1,013 $94 $540 

 Option SCR is the proposed option. Parentheses indicate negative net benefits. 

Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. 

Higher estimate of net benefits is calculated by subtracting low end cost estimate from higher benefits estimate. 

333 

334 

Table ES-10: Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 

7 percent discount rate) 

Analytical Option 

Costs Benefits Net Benefits 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate

Higher 

 Estimate 

Option SE $112 $112 $80 $121 ($31) $9 

Option SI $208 $311 $91 $137 ($220) ($71) 

Option SP $115 $115 Not estimated Not estimated Not estimated Not estimated 

Option SN $154 $195 $95 $143 ($99) ($11) 

Option SC $123 $132 $91 $137 ($41) $14 

Option SCR (proposed) $81 $89 $91 $137 $2 $57 

Option CE $111 $111 $62 $93 ($49) ($18) 

Option CI $207 $310 $71 $106 ($239) ($101) 

Option NE $383 $383 $317 $480 ($66) $97 

Option NI $480 $582 $331 $501 ($251) $21 

Option SCR is the proposed option. Parentheses indicate negative net benefits. 

Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. 

Higher estimate of net benefits is calculated by subtracting low end cost estimate from higher benefits estimate. 

335 

336 Small Business Impacts 

337 

338 Table ES-11 presents a summary of the small business impacts of the proposed option (Option 

339 SCR). There are 878,798 small firms affected by the rule. As indicated, 851,296 small firms (about 97 

340 percent) are expected to have costs impacts that are less than one percent of their revenues, 23,133 firms 

341 (about 3 percent) are expected to experience impacts at levels between one and three percent of their 

342 revenue, and 4,369 firms (less than 1 percent) are expected to incur costs exceeding three percent of their 

343 revenues. 

344 

345 Note that many of the firms with cost impacts above 1 percent of their revenues are fabricators, 

346 wholesalers, and retailers with annualized costs of less than $250. This implies that their revenues were 

347 below $25,000. These firms account for 92 percent of the firms with cost impacts that are between 1 and 

348 3 percent and 42 percent of the firms with cost impacts that exceed 3 percent. 

349 . 

350 
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January 27, 2012 ES-12 

Table ES-11: Summary of Small Business Impacts 

Firm Type Number of Affected 

Small Firms 

Number of Firms by Cost-Impact 

Ratio 

<1% 1-3% >3% 

Stock Panel Producer 31 25 5 1 

Wood Veneer Laminated Product 7,486 5,532 795 1,159 

Fabricator 72,357 66,360 4,017 1,977 

Wholesale 84,936 80,730 2,975 1,231 

Retail 713,989 698,648 15,341 - 

All Firms 878,798 851,296 23,133 4,369 

351 

352 Environmental Justice Impacts 

353 

354 Table ES-12 presents a summary of the environmental justice impacts of the proposed option 

355 (Option SCR). Minority and low-income groups account for a larger proportion of the total benefits than 

356 their share of the affected population. Minorities represent about 35 percent of the population affected by 

357 the rule and are estimated to accrue about 46 percent of the total benefits. Low-income individuals 

358 compose 12 percent of the total affected population, and are estimated to accrue 18 percent of the total 

359 benefits. 

360 

Table ES-12: Summary of Environmental Justice Impacts 

Population Type Share of Total 

Population 

Share of Total 

Annualized Benefits 

Race and Ethnicity 

Non-Hispanic White 65% 54% 

Non-Hispanic Black 12% 15% 

Non-Hispanic Other 7% 8% 

Hispanic 15% 22% 

Non-Hispanic Native American or Alaskan Indian 0.6% 0.7% 

All Individuals 100% 100% 

Income 

Individuals Living Below Poverty Line 12% 18% 

Individuals Living Above Poverty Line 87% 81% 

All Individuals 100% 100% 

The number of individuals above and below the poverty line does not sum to the total number of 

individuals because poverty status could not be determined for some individuals.

361 

362 Children’s Health Impacts

363 

364 As shown in Table ES-13, children aged two through fifteen represent 19 percent of the 

365 individuals affected by the rule and are estimated to accrue about 75 percent of the proposed rule’s total 

366 benefits. These results are driven by the benefits associated with avoiding asthma incidence. 

367 

Table ES-13: Summary of Benefits for Children (annualized at 3% rate) 

Population Affected 

Population 

Affected 

Annually 

(thousands) 

Population 

Affected as 

Percent of 

Total Affected 

Population 

Total Benefits

Lower Estimate

(millions 2010$)

Total Benefits 

Higher Estimate

(millions 2010$)

Total Benefits 

Lower Estimate 

(% of total 

affected 

population) 

Total Benefits 

Higher Estimate

(% of total 

affected 

population) 

All Individuals 106,057 100.00% $184.31 $277.92 100.00% 100.00% 

Children ages 0-1 4,971 4.69% $0.47 $4.79 0.26% 1.72% 

Children ages 2-15 19,651 18.53% $136.95 $209.99 74.31% 75.56% 

368 
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369 1 Problem Definition and the Justification for Regulation 

370 

371 The purpose of this chapter is to present an overview of the economic justifications for federal 

372 regulations to address the problem of formaldehyde emissions from composite wood products. Section 

373 1.1 characterizes the formaldehyde emissions problem and discusses various sources of exposure. In 

374 Section 1.2, the regulatory background associated with formaldehyde emissions from composite wood 

375 products is presented. Section 1.3 discusses how market failure due to externalities and incomplete 

376 information result in inefficient levels of formaldehyde emissions from composite wood products. 

377 Section 1.4 compares the proposed approach for addressing these market failures with alternative 

378 regulatory approaches. 

379 
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380 1.1 Problem with Formaldehyde Emissions from Composite Wood Products 

381 

382 Formaldehyde is a colorless, flammable gas at room temperature that has a strong odor. It is 

383 found in resins used in the manufacture of composite wood products (i.e., hardwood plywood, 

384 particleboard and medium-density fiberboard). It is also found in household products such as glues, 

385 permanent press fabrics, carpets, antiseptics, medicines, cosmetics, dishwashing liquids, fabric softeners, 

386 shoe care agents, lacquers, plastics and paper product coatings. It is a by-product of combustion and 

387 certain other natural processes. Examples of sources of formaldehyde gas inside homes include cigarette 

388 smoke, unvented, fuel-burning appliances (gas stoves, kerosene space heaters), and composite wood 

389 products made using formaldehyde-based resins (ATSDR 2010). 

390 

391 Formaldehyde is both an irritant and a known human carcinogen (HHS 2011). Depending on 

392 concentration, formaldehyde can cause eye, nose, and throat irritation, even when exposure is of relatively 

393 short duration. In the indoor environment, sensory reactions and various symptoms as a result of mucous 

394 membrane irritation are some potential effects from exposure. There is also evidence that formaldehyde 

395 may be associated with changes in pulmonary function and increased risk of asthma in children (ATSDR 

396 2010). In addition, formaldehyde is a by-product of human metabolism; therefore, endogenous levels are 

397 present in the body. 

398 
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399 1.2 Regulatory Background 

400 

401 In 2007, the California Air Resources Board (CARB) issued an Air Toxics Control Measure 

402 (ATCM) to reduce formaldehyde emissions from hardwood plywood, medium-density fiberboard, and 

403 particleboard products referred to collectively as composite wood products. The CARB ATCM was 

404 approved on April 18, 2008 by the California Office of Administrative Law. The first emission standards 

405 took effect on January 1, 2009. The CARB ATCM requires manufacturers to meet formaldehyde 

406 emission standards for the covered composite wood products that are sold, offered for sale, supplied, or 

407 manufactured for use in California. The CARB ATCM also requires that compliant composite wood 

408 products be used in finished goods sold, offered for sale, supplied or manufactured for sale in California. 

409 The CARB ATCM does not apply to hardwood plywood and particleboard materials when installed in 

410 manufactured homes subject to regulations promulgated by the United States Department of Housing and 

411 Urban Development (HUD). 

412 

413 The CARB ATCM Phase 1 emission standards for hardwood plywood veneer core, particleboard, 

414 and medium-density fiberboard took effect on January 1, 2009. The Phase 1 standard for hardwood 

415 plywood composite core took effect on July 1, 2009. The more stringent Phase 2 standards first took 

416 effect on January 1, 2010 for hardwood plywood veneer core. Phase 2 standards for medium-density 

417 fiberboard and particleboard went into effect on January 1, 2011. The final Phase 2 standards to take 

418 effect under the CARB ATCM are for thin medium density fiberboard on January 1, 2012 and for 

419 hardwood plywood composite core, which begins July 1, 2012. 

420 

421 The CARB ATCM requires manufacturers of the regulated composite wood products to 

422 demonstrate compliance with the emission standards by having their emissions tests and quality control 

423 processes certified by a third party certifier (TPC). TPCs must be approved by CARB and must follow 

424 specified requirements to verify that a manufacturer’s production meets applicable formaldehyde 

425 emission standards and that the manufacturers follow prescribed quality control practices. Once approved 

426 by CARB, manufacturers who use no-added formaldehyde (NAF) resin systems are exempted from 

427 ongoing testing requirements after three months of testing in cooperation with a TPC. Manufacturers who 

428 use ultra low-emitting formaldehyde (ULEF) resin systems may be approved by CARB to reduce the 

429 frequency of ongoing testing or, if they meet more stringent emissions requirements, they may be 

430 exempted from ongoing testing requirements for two years. The exemption based on ULEF resin is 

431 granted after approval by CARB and six months of testing in cooperation with a TPC. Manufacturers 

432 who receive exemptions based on NAF or ULEF resin can reapply every two years for the exemption 

433 from TPC oversight and formaldehyde emissions testing by submitting the chemical formulation of the 

434 resin and the results of at least one primary or secondary method test for each product type (based on a 

435 panel or set of panels randomly selected and tested by a TPC). 

436 

437 Under the CARB ATCM, manufacturers of composite wood products are required to label their 

438 covered products to identify them as meeting either the Phase 1 or Phase 2 emission standards, or as being 

439 made with either NAF or ULEF resins. Manufacturers must also include a statement of compliance on 

440 the bill of lading or invoice for the composite wood product. The CARB ATCM also imposes 

441 recordkeeping requirements on manufacturers to document their compliance with the regulations. Records 

442 must be kept for two years. 

443 

444 The CARB ATCM requires distributors, importers, fabricators, and retailers to purchase and 

445 sell panels and finished goods that comply with the applicable formaldehyde emission standards. They 

446 must take “reasonable precautions,” such as communicating with their suppliers, to ensure that the 

447 products they purchase are in compliance with the applicable emission standards. Like manufacturers, 

448 distributors and importers must also provide a statement of compliance on the composite wood or finished 

449 good product bill of lading or invoice. They must also maintain records documenting compliance for a 
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January 27, 2012 1-4

450 period of two years. Importers and fabricators must label their finished goods as compliant with the 

451 applicable standards. The labeling requirement also applies to distributors if the product is in some way 

452 modified. One example of a modification that would make a distributor subject to the labeling 

453 requirement is if the distributor receives composite wood product panels, cuts them into different shapes 

454 or sizes, and applies edge banding to them. 

455 

456 On March 24, 2008, 25 organizations and approximately 5,000 individuals petitioned EPA 

457 under section 21 of the toxic substances control act (TSCA) to use its authority under section 6 of TSCA 

458 to adopt the CARB ATCM nationally. The petitioners asked EPA to assess and reduce the risks posed by 

459 formaldehyde emitted from hardwood plywood, particleboard, and medium-density fiberboard by 

460 exercising its authority under TSCA section 6 to adopt and apply nationwide the CARB formaldehyde 

461 emissions regulation for these composite wood products. In addition, petitioners requested that EPA 

462 extend this regulation to include composite wood products used in manufactured homes. 

463 

464 On June 27, 2008, EPA issued a Federal Register notice in response to the TSCA section 21 

465 petition (Ref. 11). The notice announced the Agency’s intent to grant in part and deny in part the 

466 petitioners’ request. EPA denied the petitioners’ request to immediately pursue a TSCA section 6 

467 rulemaking, stating that the available information at the time was insufficient to support an evaluation of 

468 whether formaldehyde emitted from hardwood plywood, particleboard, and medium-density fiberboard 

469 presents or will present an unreasonable risk to human health (including cancer and non-cancer endpoints) 

470 under TSCA section 6. As discussed in detail in the Federal Register notice announcing EPA’s response 

471 to the petition, EPA’s evaluation of the data provided by the petitioners revealed significant information 

472 gaps that would have needed to be filled to support an evaluation of whether use of formaldehyde in these 

473 products presents or will present an unreasonable risk under TSCA section 6. However, EPA did agree to 

474 initiate a proceeding to investigate whether and what type of regulatory or other action might be 

475 appropriate to protect against risks posed by formaldehyde emitted from pressed wood products. 

476 

477 Accordingly, on December 3, 2008, EPA issued an Advance Notice of Proposed Rulemaking 

478 (ANPR) that announced EPA’s intention to investigate whether and what regulatory or other action might 

479 be appropriate to protect against risks posed by formaldehyde emitted from the products covered by the 

480 CARB ATCM as well as other pressed wood products. To help inform EPA’s decision on the best ways 

481 to address risks posed by formaldehyde emissions from pressed wood products, the Agency requested 

482 public comments and held six half-day public meetings in Research Triangle Park, NC ; Portland, OR; 

483 Chicago, IL; Dallas, TX; Washington, DC; and New Orleans, LA. EPA received and reviewed 

484 comments submitted during the ANPR comment period, which can be found at regulations.gov under 

485 docket number EPA-HQ-OPPT-2008-0627. 

486 

487 On July 7, 2010, President Obama signed into law the Formaldehyde Standards for Composite 

488 Wood Products Act, or Title VI of TSCA, 15 U.S.C. 2697. The statute establishes formaldehyde 

489 emission standards that are identical to the CARB ATCM Phase 2 standards for hardwood plywood, 

490 medium-density fiberboard, and particleboard sold, supplied, offered for sale, or manufactured in the 

491 United States and directs EPA to issue final implementing regulations by January 1, 2013. (Pursuant to 

492 TSCA section 3(7), the term “manufacture” means import, produce, or manufacture.) TSCA Title VI 

493 does not give EPA the authority to raise or lower the established emission standards and EPA must 

494 promulgate the implementing regulations in a manner that ensures compliance with the standards. 

495 Congress directed EPA to consider a number of elements for inclusion in the implementing regulations, 

496 many of which are aspects of the CARB program. These elements include: labeling, chain of custody 

497 requirements, sell-through provisions, ultra low-emitting formaldehyde resins, no-added formaldehyde498 based resins, finished goods, third-party testing and certification, auditing and reporting of TPCs, 

499 recordkeeping, enforcement, laminated products, and exceptions from the requirements of regulations 

500 promulgated for products and components containing de minimis amounts of composite wood products. 
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501 1.3 Justification for Regulation 

502 

503 Market failure can justify government regulation; the major types of market failures include the 

504 following: 

505 

506  Negative externalities, common property resources, and public goods 

507  Market power 

508  Inadequate or asymmetric information 

509 

510 The occurrence of any of these conditions justifies further inquiry into the need for government 

511 regulation to reduce inefficiencies in the allocation of society’s resources. This section describes why 

512 negative externalities and inadequate information are present in the market for composite wood products. 

513 Understanding the nature of the inefficiencies involved facilitates the design of more effective 

514 regulations. The specific regulatory approach considered here involves an emissions standard verified 

515 through third party testing and certification as well as chain of custody requirements. 

516 

517 Economic efficiency suggests that in the absence of regulation the market for lower emitting 

518 composite wood products would exist so long as the composite wood product purchasers’ willingness-to519 pay for low emission products equals or exceeds the incrementally higher cost of lower emitting products. 

520 If the composite wood product purchasers are aware of the risks associated with formaldehyde emissions 

521 and of the availability and costs of lower emitting products, then arguably they might be able to 

522 accurately trade off risk and cost without the aid of government regulation. However, there are two 

523 arguments for why composite wood product consumers may not trade off risk and cost efficiently: (1) 

524 because externalities exist, and (2) because of inadequate and asymmetric information. 

525 

526 1.3.1 Externalities Associated with Formaldehyde Emissions from Composite Wood 

527 Products 

528 

529 One cause of market failure in the market for low emissions composite wood products stems from 

530 externalities. An efficient outcome is achieved when the marginal willingness-to-pay for a service is 

531 equivalent to the marginal cost of providing that service. In the case of a composite wood product 

532 purchase, the primary beneficiaries of lower emission composite wood products are the individuals who 

533 live or work where the composite wood products will be installed. However, the decision about whether 

534 or not to pay for lower emitting composite wood products may be made by builders, employers, property 

535 owners, or managers who have an insufficient incentive to take the benefits to the occupants into account 

536 when making this decision. Externalities may also exist in cases where the purchase is made by the 

537 occupant of the residence where composite wood products will be installed. While the current occupant 

538 may not be willing to pay more for lower emitting composite wood products, future occupants, visitors, 

539 and children receiving child care on the premises may potentially be harmed by formaldehyde emissions 

540 from composite wood products. 

541 

542 Thus, formaldehyde emissions from composite wood products may constitute an externality. As 

543 such, perfect information would not result in the efficient allocation of lower emitting composite wood 

544 products because it does not correct the problem resulting from that fact that there are individuals who do 

545 not have influence on the purchasing decision, but do face the risks associated with formaldehyde 

546 emissions that result from it. For example, a future occupant of a housing unit for sale may experience an 

547 increased exposure to formaldehyde if a renovation occurs where high emitting composite wood products 

548 are installed before they move in. While a future occupant might be willing to pay to reduce or eliminate 

549 this exposure, they would not be consulted by the current occupant making the decision. As another 
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550 example, children cannot express their willingness-to-pay for risk reduction and rely on their parents’ or 

551 the property owners’ willingness-to-pay. 

552 

553 1.3.2 Inadequate Information 

554 

555 A second cause of market failure associated with the formaldehyde emissions from composite 

556 wood products is due to inadequate information about the emissions levels of composite wood products 

557 and the risks associated with formaldehyde emissions from composite wood products. Full information is 

558 an important prerequisite to the lower emitting composite wood products because the consumer must 

559 know the risks associated with composite wood products with higher formaldehyde emissions in order to 

560 make an informed decision about whether lower emitting composite wood products are worth the extra 

561 cost. Inadequate information can lead to inefficient outcomes. Without knowing the differences in the 

562 relative risks between lower and higher formaldehyde emitting composite wood products, the consumer 

563 will not be able to weigh these differences in risk with the differences in price. 

564 

565 1.3.3 Justification for Regulation at the Federal Level 

566 

567 Many composite wood products are distributed in commerce across state lines. It is more 

568 efficient for companies manufacturing, fabricating, distributing, and retailing composite wood products to 

569 comply with a single standard rather than a patchwork of different state regulations. Under TSCA Title 

570 VI, Congress directed EPA to promulgate regulations to implement national formaldehyde emission 

571 standards. While the TSCA Title VI does not prevent states from developing their own regulations, states 

572 are less likely to promulgate regulations if there is a federal regulation in place. 

573 
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574 1.4 Alternative Regulatory Approaches for Reducing Exposure to 

575 Formaldehyde Emissions from Composite Wood Products 

576 

577 This section examines alternative approaches for addressing the market failures discussed in the 

578 previous section. The proposed rule utilizes a performance standard approach, which is required by 

579 statute. The statute requires that all producers must meet a specific emissions standard but does not 

580 prescribe a specific technology for achieving the emissions standard. The advantage of a performance 

581 standard over a technology standard is that firms have more incentive to develop lower cost technologies 

582 for achieving the standard. 

583 

584 The primary alternative to a performance standard is a market based regulatory approach that 

585 includes a mechanism to force market participants to incorporate the social cost of the formaldehyde 

586 emissions from composite wood products into their private costs. This approach is not allowable under 

587 the statute, and would not be desirable or practical in the case of formaldehyde from composite wood 

588 products. Emissions reductions under a performance standard (such as the proposed rule) generally 

589 achieve a more uniform reduction in emissions across sources compared to the emissions reductions 

590 under a market based approach where higher emissions from some sources can be offset by lower 

591 emissions from other sources. Thus, market based approaches are generally only effective if “hot spots” 

592 are not a concern (Stavins 2001) – i.e., the negative pollution impacts are not localized near the releases. 

593 But “hot spots” are an issue for composite wood products because the products are used inside of homes, 

594 offices, schools, and other buildings. Exposures in individual buildings can be very different from the 

595 average exposures due to the cumulative regional or national emissions from composite wood products. 

596 

597 Another possible alternative regulatory approach is an information provision approach. In the 

598 case of formaldehyde emissions from composite wood products, this type of approach could be a labeling 

599 requirement for composite wood products. Since the purchaser of the composite wood products may not 

600 be the person who will ultimately be exposed to the formaldehyde emissions from the products (i.e., an 

601 externality exists), information provision does not force market participants to incorporate the social cost 

602 of the formaldehyde emissions from composite wood products into their private costs, and therefore is 

603 unlikely to correct the market failure. Furthermore, an effective information provision requirement would 

604 need to include testing, certification, and chain of custody requirements in order for products to be 

605 credibly labeled as lower emission products. Thus, the regulatory cost of a labeling requirement is likely 

606 to be similar to the cost of the proposed rule given that most of the costs of the regulation are attributable 

607 to these activities (see Chapter 2). 
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608 2 Costs 

609 

610 This chapter discusses the potential costs to businesses of complying with the proposed 

611 regulatory requirements under TSCA Title VI, and various other analytical options. The methods for 

612 estimating the number of affected entities and the resulting estimates are presented in section 2.1. The 

613 per-mill testing and certification costs for stock hardwood plywood panel producers (including engineered 

614 wood flooring producers), medium density fiberboard (MDF) producers, and particleboard producers are 

615 presented in section 2.2. Section 2.3 describes the total costs to these producers for changes to raw 

616 materials, production processes, and third party testing and certification. Section 2.4 presents the total 

617 costs to wood veneer laminated product producers for changes to raw materials, production processes, and 

618 third party testing and certification. Section 2.5 presents the costs associated with rule familiarization, 

619 recordkeeping, labeling, supplier notification, and rule familiarization. Finally, 2.6 presents the total costs 

620 of the regulation. 

621 

622 The general approach of this analysis is to: (1) estimate the number of affected entities and the 

623 quantity of affected production; (2) estimate the direct compliance costs on a per entity or per unit of 

624 production basis; and (3) combine the per entity and per production costs with the number of affected 

625 entities and the quantity of affected production, respectively, to calculate the total direct compliance costs. 

626 

627 The potential costs of the proposed TSCA Title VI Implementation Rule are estimated for several 

628 analytical options which are presented in Table 2-1. This document discusses various options with 

629 respect to formaldehyde and composite wood products. In some instances, the statute chose an option and 

630 this document discusses an alternative simply for informational purposes. The breadth of the discussion 

631 here should not imply that EPA necessarily has corresponding flexibility in implementing the statute. 

632 

633 In order to estimate costs that are comparable to the estimated benefits, this analysis estimates the 

634 costs of each analytical option over a 30 year period. This time frame was selected to be as short as 

635 possible while being long enough to capture the important benefit effects of the policy. In general, the 

636 downside of choosing a longer analysis time frame is that uncertainties about both the baseline and policy 

637 scenarios increase with time. For example, the likelihood that alternative technologies for manufacturing 

638 composite wood products might be developed increases over time (which could result in lower 

639 formaldehyde emission rates for products and/or lower costs for reducing formaldehyde emissions). 

640 Similarly, uncertainties about changing demographics, treatments for adverse health effects, and 

641 consumer preferences with respect to composite wood products all increase with time. However, 

642 selecting a time frame that is too short would not capture all of the important effects of the policy 

643 scenarios under consideration. 

644 

645 The present discounted value for the annualized value of the thirty year stream of costs is 

646 estimated using discount rates of 3 and 7 percent. Costs are discounted (for the discount rate r = 3% and r 

647 = 7%) back to the beginning of the 30-year period, as follows: 

648 

ሻ௧݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏܷ݊݀݅ሺ ෍ൌ ݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏ݅ܦ ݐ݁݊ݏ݁ݎܲ 

ሺ1 ൅ rሻ௧

ଷ଴

௧ୀ଴

(1) 

649 

650 

651 
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Table 2-1: Analytical Options Considered in Cost Analysis 

Analytical Option Emissions Standards Notes 

Analytical options with emissions standards at the levels required by TSCA Title VI 

Option SE: Statutory emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.05 ppm 

0.11 ppm 

0.13 ppm 

0.09 ppm 

Same emissions standards as Phase 2 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SI: Statutory emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SP: Statutory emissions 

standards where wood veneer 

laminated products other than 

Custom and Architectural Panel 

products are exempt from the 

definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SN: Statutory emissions 

standards where wood veneer 

laminated products made using NAF 

resins to attach wood veneers to NAF 

platforms are exempt from the 

definition of hardwood plywood

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SC: Statutory emissions 

standards where wood veneer 

laminated products made with wood 

veneers attached to compliant 

platforms using no-added 

formaldehyde (NAF) resins are 

exempt from the definition of 

hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SCR: Proposed Option. 

Statutory emissions standards where 

wood veneer laminated products 

made with wood veneers attached to 

compliant platforms using NAF 

resins are exempt from the definition 

of hardwood plywood. Reduced 

recordkeeping requirements for nonmfgrs. compared to other options. 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood 

Distributors and retailers that are not 

manufacturers under TSCA would only be 

required to keep invoices and bills of lading. 

Other recordkeeping equivalent to CARB ATCM. 

No supplier notification. 

Analytical options with emissions standards 

other than the levels required by TSCA Title 

VI CARB Phase 1 

levels 

Option CE: CARB 1 emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.08 ppm 

0.21 ppm 

0.21 ppm 

0.18 ppm 

Same emissions standards as Phase 1 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option CI: CARB 1 emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood

Same as above 

Same emissions standards as Phase 1 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

NAF emission levels 

Option NE: NAF emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood: 

90% of samples < 0.04 ppm. 

All samples < 0.05 ppm. 

MDF and particleboard: 

90% of samples < 0.04 ppm. 

All samples < 0.06 ppm 

Requires all composite wood product 

manufacturers to meet NAF emission standards. 

Recordkeeping and supplier notification 

equivalent to CARB ATCM. 

Option NI: NAF emissions 

standards where all wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Requires all composite wood product 

manufacturers to meet NAF emission standards, 

with a different definition of hardwood plywood. 

CARB recordkeeping and supplier notification. 

Note: This document discusses various options with respect to formaldehyde and composite wood products, including emissions standards 

that are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informational 

purposes. The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute. 

652 
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653 The present discounted value costs are annualized as follows: 

654 

ሺܣ݊݊ݑ݈ܽ݅ݖ݁݀ ݏݐݏ݋ܥሻ ൌ ሺܲܦܸଷ଴ ௬௘௔௥ ௖௢௦௧ ௦௧௥௘௔௠ሻ כ ݎ כ ሺ1 ൅ ݎሻଷ଴

ሺ1 ൅ ݎሻଷଵ െ 1

(2) 

655 
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656 2.1 Estimated Number of Affected Entities 

657 

658 This section summarizes the number of establishments and firms that will be affected by the 

659 proposed TSCA Title VI Implementation Rule. An establishment is a single physical location at which 

660 business is conducted and a firm is business organization or entity consisting of one domestic 

661 establishment or more under common ownership or control. Both the estimated numbers of 

662 establishments and firms are presented here because some of the cost elements estimated for this analysis 

663 are estimated on a per establishment basis and others are estimated on a per firm basis. 

664 

665 The numbers of affected entities are categorized into the following categories based on the types 

666 of requirements they will face under TSCA Title VI: 

667 

668  Panel producers are defined as the entities that produce composite wood panels (hardwood plywood, 

669 MDF and particleboard) as defined by TSCA Title VI and are subject to emissions standards, third 

670 party testing and certification, chain of custody requirements, and labeling requirements (see section 

671 2.1.1); 

672  Wood veneer laminated product producers produce hardwood plywood by gluing a wood or woody 

673 grass veneer to the face and/or back of a purchased platform to produce a component part used in the 

construction or assembly of a finished good.3 674 Wood veneer laminated product producers are 

675 considered composite wood product fabricators rather than hardwood plywood producers under the 

676 CARB ATCM, and they are not required to meet the ATCM’s emissions standards. TSCA Title VI 

677 includes laminated products in the definition of hardwood plywood, and directs EPA to conduct a 

678 rulemaking process to determine whether to exempt any of these products from the definition. If EPA 

679 does not exempt laminated products from the definition of hardwood plywood, then laminated 

680 products will have to meet TSCA Title VI’s emissions standards (in addition to being made with 

681 certified platforms) (see section 2.1.2); and 

682  Fabricators are entities that use composite wood products to produce other goods (see section 2.1.3); 

683  Wholesalers and Retailers are entities that sell composite wood products. Both types of entities are 

684 subject to chain of custody requirements and wholesalers are potentially subject to labeling 

685 requirements (see section 2.1.4). 

686 

687 2.1.1 Estimated Number of Stock Panel Producers 

688 

689 Table 2-2 presents the total number of stock hardwood plywood, MDF, and particleboard 

establishments (mills) and firms subject to TSCA Title VI’s emissions requirements.4 690 The total number 

691 of MDF and particleboard mills and firms include all those identified for the EPA survey of composite 

692 wood product producers (described in section 2.1.1.1) and are consistent with data in other publically 

693 available sources (see CPA 2011). The search to identify stock hardwood plywood mills (including 

694 engineered wood flooring) mills resulted in the identification of 41 mills. This analysis assumes that all 

695 U.S. hardboard mills use PF or NAF resins and would qualify to be exempted from the TSCA Title VI 

696 emission standards. 

 3

 The laminated products discussed here do not include products that are solely laminated with materials other than 

veneer, such as high pressure laminate, thermally fused paper, vinyl film, decorative foil, or polypropylene film. 4

 Stock hardwood plywood does not include wood veneer laminated products that qualify as hardwood plywood. In 

addition, some hardwood plywood (such as military specified plywood, curved plywood, exterior plywood, etc.) is 

statutorily exempted in TSCA Title VI, and thus is not subject to the emission requirements. 
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January 27, 2012 2-5

697 

Table 2-2: Stock Hardwood Plywood, MDF, and Particleboard 

Firms and Mills Directly Subject to Emission Requirements 

Sector 

Total Number in Industry 

Firms Mills 

Hardwood Plywood 32 41 

MDF 14 22 

Particleboard 16 30 

Total 62 93 

Note that because mills and firms producing two different types of composite 

wood products are expected to incur separate costs for each product type, the 

estimates of 93 mills and 62 firms used to estimate costs are derived by 

counting mills and firms that produce two different types of composite wood 

products twice. There are 90 unique mills and 54 unique firms that produce 

composite wood panels. 

698 

699 2.1.1.1 Respondent Identification for the EPA Pressed Wood Manufacturing Industry Survey 

700 

701 The universe of composite wood product manufacturing mills was developed from a list EPA 

702 developed for a 1998 industry survey conducted for the Plywood and Composite Wood Product (PCWP) 

703 National Emissions Standards for Hazardous Air Pollutants (NESHAP). Through a 1998 information 

704 collection request (ICR), mills potentially affected by the NESHAP were identified. This included 

705 industries in three categories based on their Standard Industrial Classification (SIC) or North American 

706 Industry Classification System (NAICS) classifications: softwood plywood and veneer, reconstituted 

707 wood products, and structural wood members. The ICR surveyed 416 potentially affected mills (EPA 

708 1998), and an additional 15 mills were identified that either did not respond to the survey or have 

709 commenced operation since the date of the survey (EPA 2002). 

710 

711 EPA updated the 1998 mill list to reflect the current universe of mills based on information from 

712 trade journals, company websites, press releases, trade association websites, and other sources to reflect 

713 mill closures, mill openings, mergers and acquisitions, and similar changes that have occurred over the 

714 past decade. A total of 343 U.S. composite wood product manufacturing mills were identified for an 

715 initial survey mailing list – a universe of mills that included hardboard and structural composite wood 

716 product producers not regulated under TSCA Title VI. 

717 

718 In addition to the initial list of composite wood product producers, several approaches were 

719 employed to identify additional composite wood product mills that may have been excluded originally. 

720 These approaches are described below. 

721 

722 A variety of composite wood product lists were identified and searched, and a review was 

723 conducted of the company websites of mills listed in EPA’s Envirofacts aggregated mills database under 

724 the relevant NAICS codes (see Table 2-3). A multisystem facility search was performed in the 

725 Envirofacts database, which queries multiple environmental databases for facility information, for four 

726 NAICS codes, and results were cross-checked against the original OAQPS list. The four NAICS codes 

727 searched were: 

728 

729 o 321211: Hardwood Veneer and Plywood Mfg.;

730 o 321212: Softwood Veneer and Plywood Mfg.;

731 o 321213: Engineered Wood Member (exc. truss) Mfg.; and

732 o 321219: Reconstituted Wood Product Mfg.

733 
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734 The additional facility search resulted in 192 potential new mills operated by companies not on 

735 the initial list, of which 52 were confirmed to be potentially in-scope. Scope was determined in two 

736 phases. First, company websites of these mills were viewed to determine whether the companies 

737 appeared to be within the scope of our survey. After notification letters were sent to all potentially in738 scope respondents, respondent identification calls were placed to this group of mills to further confirm 

739 scope. Because many companies and mills lacked complete or up-to-date websites, not all mills could be 

740 categorized as definitively in or out of scope. Following respondent identification calls, these additional 

741 mills were sent survey packages in two batches later than the original survey distribution. Table 2-3 gives 

742 the full list of sources checked in order to identify additional mills. 

743 

Table 2-3: Composite Wood Product Producer Lists for Mill Identification 

Facility Directories

2009 Big Book. Random Lengths Publications

Oregon Forest Industry Directory

List of Certified Mills: Composite Wood Products Airborne Toxic Control Measure (as of June 

14, 2010)

PanelWorld 2009 Annual Directory & Buyers’ Guide

2009 Big Book. Random Lengths Publications

Wood Product Manufacturing Associations 

The Engineered Wood Association (APA) 

The Composite Panel Association (CPA) – website membership directory 

The American Institute of Timber Construction (AITC) 

The American Hardboard Association (AHA) 

The Wood I-Joist Manufacturers Association (WIJMA) 

The Western Wood Products Association (WWPA) 

The Engineered Wood Products Association (EWPA) 

Harwood Panel and Veneer Association (HPVA) personal communication with EPA 

North American Laminate Flooring Association (NALFA) 

National Wood Flooring Association (NWFA) 

Other Sources

EPA Envirofacts Facility Data

744 

745 2.1.2 Number of Wood Veneer Laminated Product Producers 

746 

747 Wood veneer laminated product producers are considered composite wood product fabricators 

748 rather than hardwood plywood producers under the CARB ATCM, and they are not required to meet the 

749 ATCM’s emissions standards. TSCA Title VI includes laminated products in the definition of hardwood 

750 plywood, and directs EPA to conduct a rulemaking process to determine whether to exempt any of these 

751 products from the definition. If EPA does not exempt laminated products from the definition of 

752 hardwood plywood, then laminated products will have to meet TSCA Title VI’s emissions standards (in 

753 addition to being made with certified platforms). 

754 

755 The number of wood veneer laminated product producers is based on discussions with industry 

756 associations and a series of interviews with hardwood veneer manufacturers and wholesalers. The 

757 information gathered from discussions with industry associations indicated that there are relatively few 

758 wood veneer laminated product producers, with the exception of business and household furniture 

759 manufacturing. To gather more information EPA conducted interviews with veneer manufacturers and 

760 wholesalers in order to learn more about their customers that are wood veneer laminated product 

761 producers. 

762 
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763 The firms that were interviewed were selected from a Hardwood Veneer and Plywood 

Association (HPVA) list5 764 and the companies listed as “Face Veneer Suppliers” at www.veneernet.com. 

765 Based on information gathered from company and third party websites, firms on this list were categorized 

766 into four types: (1) specialized in hardwood veneer manufacture, (2) specialized in hardwood veneer and 

767 plywood manufacture, (3) specialized in hardwood veneer wholesale, and (4) wholesalers of hardwood 

768 veneer and other wood products. Firms on each of these four lists were sorted in random order and phone 

calls were placed until two entities in each category participated in an interview.6 769 One additional set of 

770 calls was placed until one additional entity on the hardwood veneer wholesale list participated in an 

771 interview. This group was selected for the extra interview because the prior interviews indicated that this 

772 group appeared to have more small customers, a group where little information was available. 

773 

774 There was wide disagreement over the number of businesses in the U.S. that are wood veneer 

775 laminated product producers. Three respondents thought this number was less than 1,000; two estimated 

776 that it was between 1,000 and 10,000; and three estimated it was tens of thousands. One respondent did 

777 not provide an estimate. Of those respondents that put the number in the tens of thousands, one suggested 

778 that it was more than 50,000, and another suggested this number was about 100,000. 

779 

780 Based on the interviews, the number of potential wood veneer laminated product producers is 

781 likely to be between 7,000 and 14,000. The respondents that estimated that there were fewer businesses 

782 may not be aware of these smaller operations because they do not cater to these smaller customers. Part 

783 of the reason that some respondents estimated that there were more wood veneer laminated product 

784 producers may be because these respondents were thinking of businesses that would be exempt from the 

785 rule’s requirements (e.g., veneering something to create a product that would not be considered a 

composite panel7 786 , veneering to substrates (such as metal) that do not qualify as composite wood products, 

787 using veneer to make products that are statutorily exempt from the rule (such as boats, autos, products not 

788 intended for interior use, etc.). Nevertheless, publically available data and other information that EPA has 

789 obtained from industry associations is not consistent with more than about 14,000 businesses making 

790 wood veneer laminated products. 

791 

792 The following NAICS have been identified as the primary consumers of hardwood veneer (i.e., 

793 they consume enough veneer such that the value of raw veneer material is reported in Economic Census 

794 data): 

795 

796  321211 Hardwood veneer and plywood manufacturing 

797  321911 Wood window and door manufacturing 

798  337211 Wood office furniture manufacturing 

799  337110 Wood kitchen cabinet and countertop manufacturing 

800  337121 Upholstered household furniture manufacturing 

801  337122 Nonupholstered wood household furniture manufacturing 

802  337127 Institutional furniture manufacturing 

803  337129 Wood television, radio, and sewing machine cabinet manufacturing 

804  337212 Custom architectural woodwork and millwork manufacturing 

805  337215 Showcase, partition, shelving, and locker manufacturing 

 5

 HPVA Veneer Manufacturer/Sales Members. Available at: http://www.hpva.org/sites/default/files/HPVAVeneer.pdf 

(Accessed April 18, 2011) 

6

 Note that one of the respondents on the veneer manufacturer list identified themselves as a re-manufacturer of veneer 

and was categorized as the second veneer manufacturer for the purpose of selecting the sample. A respondent on the 

veneer and plywood manufacturer list identified themselves as a manufacturer of hardwood veneer and other wood 

products and was categorized as the second veneer and plywood manufacturer for the purpose of selecting the sample. 7

 Where a panel means a flat or raised rectangular piece of composite wood product. 
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January 27, 2012 2-8

806 

807 In addition, businesses in the following industries may also do their own veneering (although 

808 many of them – indicated with a “*” – would be statutorily exempt from the TSCA Title VI rule even if 

they do their own veneering8 809 : 

810 

811  321920 Wood container and pallet manufacturing* 

812  336111 Automobile manufacturing* 

813  336411 Aircraft manufacturing* 

814  336611 Ship building and repairing* 

815  336612 Boat building* 

816  321999 All other miscellaneous wood product manufacturing 

817  339920 Sporting and athletic goods manufacturing 

818  339932 Game, toy, and children's vehicle manufacturing 

819  339992 Musical instrument manufacturing 

820  811420 Reupholstery and furniture repair 

821 

822 There are 35,846 employer establishments and 46,704 nonemployer establishments in these 

823 industries. Thus, it is estimated that the total number of establishments, including nonemployers, in these 

824 industries is 82,550. 

825 

826 Assumptions for High End and Low End Estimates of Wood Veneer Laminated Product Producers 

827 

828 Two sets of estimates, a high end estimate and a low end estimate, were made for the number of 

829 entities that make wood veneer laminated products and thus are potentially subject to the TSCA Title VI 

830 rule as hardwood plywood producers. Table 2-4 presents the underlying data, assumptions and resulting 

831 estimates for the high end estimate of the number of wood veneer laminated product producers. These 

832 assumptions are described in more detail below. 

833 

834 Windows and Doors. There are about 1,500 employer establishments and 2,200 nonemployer 

835 establishments in this industry (NAICS 321911). Because no information was available about how many 

836 companies making wood windows or doors affix veneer to platforms themselves (as opposed to buying 

837 veneered components from suppliers), the analysis assumes all producers affix veneer. This assumption 

may overestimate the number of entities potentially subject to the rule as panel producers.9 838 

839 

840 Furniture. There are about 6,300 employer establishments in the furniture industry (NAICS 

841 337211, 337121, 337122, and 337127) and about 5,000 nonemployer establishments. Note that the 

842 Census does not report the number of nonemployer establishments at the 6-digit NAICS level, so the 

843 number of establishments reported here is estimated by applying the proportions of the 6-digit NAICS as 

844 a share of the broader NAICS for employer establishments to the number of nonemployers in the broader 

845 NAICS. 

846 

847 The furniture industry is the only sector where trade associations reported that it is common for 

848 companies to affix veneer to their products. The Business and Institutional Furniture Manufacturing 

 8

 Section 601(a)(3)(i) of TSCA limits the term “hardwood plywood” to panels that are intended for interior use. Section 

601(c)(9) exempts packaging products. And Section 601(c)(10) exempts certain vehicles (other than recreational 

vehicles), rail cars, boats, aerospace craft, and aircraft. 

9

 Note that depending on the process for laminating the hardwood veneer, window manufacturers in particular may not be 

producing what the rule defines as a “panel,” in which case they would only be subject to the requirements for 

fabricators. However, windows containing less than 5% by volume of composite wood product and exterior doors 

containing less than 3% by volume of composite wood product are statutorily exempt from the rule’s requirements. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-9

849 Association (BIFMA) indicated that “many if not most” business and institutional furniture producers 

850 would make products that were made with wood veneer and about 75 percent of those would affix the 

851 veneer themselves (BIFMA 2010). The American Home Furnishing Alliance (AHFA) indicated that 

852 most domestic furniture producers would affix wood veneer themselves, but estimated that there were 

853 about 250 firms that do this (AHFA 2010). To develop a high end estimate for the number of wood 

854 furniture producers that affix veneer and thus make wood veneer laminated products, the analysis 

855 assumed that 50 percent of establishments in these industries manufacture products that contain veneer 

856 and 75 percent of those establishments do the laminating themselves. 

857 

858 Kitchen Cabinets. There are about 9,700 employer establishments and 7,800 nonemployer 

859 establishments in this industry (NAICS 337110). It is worth noting that NAICS 337110, and thus these 

860 establishment counts, includes both cabinet manufacturers (who may laminate hardwood veneer) and 

861 countertop manufacturers (who do not use hardwood veneer). The Cabinet Makers Association, which 

862 generally represents smaller custom cabinet manufacturers, said “very, very few” would do their own 

863 veneering (CMA 2010). The Kitchen Cabinet Manufacturers Association (KCMA), which generally 

864 represents larger stock cabinet manufacturers, said 5 percent or less of cabinet manufacturers would do 

865 their own veneering (KCMA 2010). The Architectural Woodwork Institute (AWI) did not think any of its 

members would do their own veneering.10 866 Thus, the analysis assumes that 5 percent of these 

867 establishments affix veneers and thus make wood veneer laminated products. 

868 

869 Other Products. Because the other manufacturing sectors that may include establishments that 

870 laminate their own hardwood veneers consist of a very diverse group of manufacturers, including 

871 establishments that do not even use composite wood products let alone laminate their own hardwood 

872 veneer, the analysis assumes that 5 percent of these establishments laminate their own hardwood veneers. 

873 

874 High End Estimate. The assumptions about the percentages of establishments in different 

875 industries that are laminating their own hardwood veneer results in a high end estimate that as many as 

876 14,000 establishments might laminate hardwood veneer, as shown in Table 2-4. However, this estimate 

877 conflicts with information provided in the interviews with nine companies that sell hardwood veneer, 

878 described earlier. That information indicated that no more than 30 percent of businesses laminating their 

879 own hardwood veneer are nonemployer operations. However, the estimate of 14,000 businesses that do 

880 their own veneering is based on about 7,000 nonemployer operations (50% of the total). Therefore, the 

881 high end estimate of 14,000 establishments may overestimate the number of wood veneer laminated 

882 product manufacturers. 

883 

884 Low End Estimate. To derive a low end estimate for the number of domestic entities that 

885 laminate hardwood veneer, the analysis extrapolated to the total number of wood veneer laminated 

886 product establishments from the employer establishments by assuming that 30 percent of the total are 

887 nonemployer establishments, based with information provided in the interviews with nine companies that 

888 sell hardwood veneer, described earlier. In addition, it was assumed that 1 percent of manufacturers in 

889 the miscellaneous manufacturing sectors laminate their own veneer as compared to the 5 percent that was 

890 assumed for the upper bound estimate. Other assumptions were the same as for the upper bound estimate. 

891 Table 2-5 presents the underlying data, assumptions and resulting estimates for the lower bound estimate 

892 of domestic entities that laminate hardwood veneer. 

893 

894 

 10 Note that participants in the veneer sales interviews did think this was common for architectural woodwork and 

millwork manufacturers, but there are only about 4,000 entities in this sector. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-10Table 2-4: High End Estimate for Entities that Laminate Hardwood Veneer 

Employer NAICS Nonemployer NAICS

Establishments in 

Affected NAICS Entities Doing Own Veneering Desc

Employers Non- employers Employers Non- employers All Entities 

321211: Hardwood veneer and plywood manufacturing 

321: Wood product manufacturing 

303 456 68 - 68 50 Custom p

engineered w

321911: Wood window and door manufacturing 1,493 2,246 1,493 2,246 3,739 Assume all w

producers do 

321920: Wood container and pallet manufacturing 2,918 4,390 - - - Assume statu321999: All other miscellaneous wood product manufacturing 1,971 2,965 739 1,112 1,851 

Assume 50 ppercent of ththemselves. 

337110: Wood kitchen cabinet and countertop manufacturing 

337: Furniture and related product manufacturing 

9,701 7,769 485 388 873 Assume 5 pe

337211: Wood office furniture manufacturing 457 366 171 137 308 

Assume 50 ppercent of ththemselves. 

337121: Upholstered household furniture manufacturing 1,641 1,314 615 493 1,108 337122 Nonupholstered wood household furniture manufacturing 3,414 2,734 1,280 1,025 2,305 337127: Institutional furniture manufacturing 776 621 291 233 524 337129: Wood television, radio, and sewing machine cabinet manufacturing 265 212 99 80 179 337212: Custom architectural woodwork and millwork manufacturing 2,235 1,790 838 671 1,509 337215: Showcase, partition, shelving, and locker manufacturing 1,375 1,101 516 413 929 336111: Automobile manufacturing 336: 

Transportation equipment manufacturing 

188 98 - - - Assume statu

336411: Aircraft manufacturing 265 138 - - - Assume statu336611: Ship building and repairing 674 350 - - - Assume statu336612: Boat building 1,117 580 - - - Assume statu339920: Sporting and athletic goods manufacturing 339: 

Miscellaneous manufacturing 

1,881 3,925 94 196 290 Assume 5% 

339932: Game, toy, and children's vehicle manufacturing 639 1,333 32 67 99 Assume 5% 339992: Musical instrument manufacturing 600 1,252 30 63 93 Assume 5% 811420: Reupholstery and furniture repair 4,693 22,549 - - - Assume statu

Total 36,606 56,189 6,751 7,124 13,875 

895 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-11Table 2-5: Low End Estimate for Entities that Laminate Hardwood Veneer 

NAICS Nonemployer NAICS

Establishments in 

Affected NAICS Entities Doing Own Veneering Desc

Employers Non- employers Employers Non- employers All Entities 

321211: Hardwood veneer and plywood manufacturing 

321: Wood product manufacturing 

303 456 68 68 50 Custom 

engineered 

321911: Wood window and door manufacturing 1,493 2,246 1,493 640 2,133 Assume all 

producers d

321920: Wood container and pallet manufacturing 2,918 4,390 Assume sta321999: All other miscellaneous wood product manufacturing 1,971 2,965 99 42 141 

Assume 50 percent of tthemselves

337110: Wood kitchen cabinet and countertop manufacturing 

337: Furniture and related product manufacturing 

9,701 7,769 485 208 693 Assume 5 p

veneering. 

337211: Wood office furniture manufacturing 457 366 171 73 244 

Assume 50 percent of tthemselves

337121: Upholstered household furniture manufacturing 1,641 1,314 615 264 879 337122 Nonupholstered wood household furniture manufacturing 3,414 2,734 1280 549 1,829 337127: Institutional furniture manufacturing 776 621 291 125 416 337129: Wood television, radio, and sewing machine cabinet manufacturing 265 212 99 42 141 337212: Custom architectural woodwork and millwork manufacturing 2,235 1,790 112 48 160 337215: Showcase, partition, shelving, and locker manufacturing 1,375 1,101 516 221 737 336111: Automobile manufacturing 336: 

Transportation equipment manufacturing 

188 98 0 - Assume sta

336411: Aircraft manufacturing 265 138 0 - Assume sta336611: Ship building and repairing 674 350 0 - Assume sta336612: Boat building 1,117 580 0 - Assume sta339920: Sporting and athletic goods manufacturing 339: 

Miscellaneous manufacturing 

1,881 3,925 19 8 27 Assume 1% 

339932: Game, toy, and children's vehicle manufacturing 639 1,333 6 3 9 Assume 1% 339992: Musical instrument manufacturing 600 1,252 6 3 9 Assume 1% 811420: Reupholstery and furniture repair 4,693 22,549 - - - Assume exe

Total 36,606 56,189 5,260 2,226 7,486 

896 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-12

897 2.1.3 Estimated Number of Affected Fabricator Establishments 

898 

899 Table 2-6 presents the estimated number of affected fabricator establishments and firms in each 

900 industry. NAICS that reported using composite wood products as raw materials were identified as being 

901 fabricators (U.S. Census Bureau 2009d). Unlike for wholesale and retail entities (see section 2.1.4), it is 

902 assumed that all fabricator entities sell goods containing composite wood products. 

903 

Table 2-6: Number of Affected Fabricator Establishments and Firms, by NAICS 

NAICS NAICS Description 

Employer 

Estab. 

NonEmployer 

Estab. 

Total 

Number of 

Estab. 

Number of 

Firms 

321211 / 

321219 Decorative and custom panel producersa - 85 85 71 

321911 Wood window and door manufacturing 1,493 2,246 3,739 3,582 

321918 Other millwork including flooring manufacturing 2,110 3,175 5,285 5,214 

321991 Manufactured home (mobile home) manufacturing 379 570 949 798 

321992 Prefabricated wood building manufacturing 818 1,231 2,049 1,930 

321999 Other miscellaneous wood product manufacturing 1,971 2,965 4,936 4,822 

336213 Motor home manufacturing 79 41 120 112 

336214 Travel Trailer and Campers manufacturing 862 447 1,309 1,203 

337110 Wood kitchen cabinets and countertop manufacturing 9,701 7,769 17,470 17,360 

337121 Upholstered household furniture manufacturing 1,641 1,314 2,955 2,790 

337122 Nonupholstered wood household furniture manufacturing 3,414 2,734 6,148 6,061 

337124 Metal household furniture manufacturing 329 263 592 579 

337127 Institutional furniture manufacturing 776 621 1,397 1,367 

337129 Wood television, radio, and sewing machine cabinet 

manufacturing 265 212 477 476 

337211 Wood office furniture manufacturing 457 366 823 804 

337212 Custom architectural woodwork and millwork manufacturing 2,235 1,790 4,025 3,991 

337214 Office furniture (non-wood) manufacturing 290 232 522 486 

337215 Showcase, partition, shelving, and locker manufacturing 1,375 1,101 2,476 2,415 

339950 Sign manufacturing 6,406 19,627 26,033 25,917 

Total 34,601 46,789 81,390 79,978 

a. Affected establishment and firm counts for decorative and custom panel producers (NAICS 321211 and 321219) were estimated from the list of 

laminators and coaters in the Composite Panel Association's 2011 Surface and Panel Buyers Guide (CPA 2011). 

Sources: Composite Panel Association 2011, U.S. Census Bureau 2009b, 2010i 

904 

905 As indicated in Table 2-6, an estimated 79,978 fabricator firms comprising 81,390 establishments 

906 will be affected by the proposed TSCA Title VI rule. 

907 

908 2.1.4 Estimated Number of Affected Wholesale and Retail Establishments 

909 

910 This section describes the process used to adjust the number of firms and establishments in 

911 affected retail and wholesale industries to account for the fact that not all entities in these industries sell 

912 composite wood products. This is necessary because not all establishments in affected industries are 

913 expected to sell composite wood products. For example, some retail stores in the Floor Covering Stores 

914 industry (NAICS 442210) might only sell carpet and rugs, and therefore would not be affected by the 

915 TSCA Title VI rule’s requirements. 

916 

917 2.1.4.1 Description of the Data 

918 

919 Data from the 2007 Economic Census’ Product Lines Subject Series were used to estimate the 

920 number of wholesale and retail establishments that sell composite wood products in affected industries 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-13

921 (U.S. Census Bureau 2010j, 2011). Product line data were not available at the firm level; however, ratios 

922 of firms to establishments by NAICS are used to estimate the numbers of affected firms. Census 

923 describes product lines as “major categories of products” (U.S. Census Bureau 2010k) and classifies them 

924 with products and services codes (product line codes), which “represent various types of products carried 

925 or services rendered by an establishment” (U.S. Census Bureau 2010l). The Census datasets provide the 

926 number of establishments selling specified product lines, by product line and NAICS code. For example, 

927 the retail dataset shows that of the 28,834 establishments classified in the furniture stores industry 

928 (NAICS 442110), 9,968 sell the product line “office furniture, including computer-related furniture” (U.S. 

929 Census Bureau 2010j). 

930 

931 Different product line codes are used in the retail and wholesale sectors. In addition, they can 

represent broad or detailed product lines.11 932 Broad product lines offer a more general category of products 

933 and/or services, and are comprised of detailed product lines. For example, the broad product line 

934 “flooring and floor coverings” contains the detailed product lines “hardwood flooring” and “other hard 

935 surface floor coverings and accessories, including tile and sheet goods,” as well as others. These detailed 

936 product lines provide greater insight for making assumptions and increase the accuracy of the 

937 establishment estimates. Detailed product line data, however, are not available for all broad product lines 

938 in the Census datasets. 

939 

940 2.1.4.2 Methodology 

941 

942 The first step for refining the estimates of retailers and wholesalers that sell composite wood 

943 products was to develop a list of the product line codes for the establishments in affected industries. 

944 Based on their descriptions, these unique product line codes were then categorized according to whether 

945 they are expected to contain composite wood products. Because Census does not always provide data at 

946 the detailed product line level, a broad product line was categorized as containing composite wood 

947 products if it contained at least one detailed product line expected to be made with composite wood 

948 products. This process led to the creation of two separate keys – one for retail and one for wholesale – 

949 which were then applied to the corresponding Census data (See Appendix A). 

950 

951 Table 2-7 provides an example of the product lines sold in an affected industry, as well as 

952 whether the product line is broad or detailed, and whether it is expected to contain composite wood 

953 products. 

954 

 11 In the datasets, broad product lines are indicated by a zero in the final digit. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-14

Table 2-7: Example of Affected Establishment Count using Product Line Analysis: Window 

Treatment Store Industry (NAICS 442291) 

Product 

Line Code Meaning of Product Line code Product 

Line Level 

Includes 

Composite Wood 

Products? 

20000 Industry total Total Yes 

20200 Men's wear, including accessories Broad 

20220 Women's, juniors', and misses' wear, including accessories Broad 

20270 Sewing, knitting materials & supplies, needlework goods, etc Broad 

20280 Curtains, draperies, blinds, slipcovers, bed & table coverings Broad 

20281 Curtains & draperies Detailed 

20282 Vertical & horizontal blinds, woven wood blinds, & shades Detailed 

20283 Furniture coverings, including ready-made & custom-made Detailed 

20284 Domestics, incl towels, sheets, blankets, table linens, etc Detailed 

20330 Audio equip, musical instr, radios, stereos, CDs, records, etc Broad 

20340 Furniture, sleep equipment & outdoor/patio furniture Broad Yes 

20360 Flooring & floor coverings Broad Yes 

20361 Soft-surface (textile) floor coverings & accessories Detailed 

20363 Hardwood flooring Detailed Yes 

20364 Other hard-surface floor coverings & accessories Detailed 

20380 Kitchenware & home furnishings Broad Yes 

20381 Cookware & cooking accessories Detailed 

20382 Dinnerware, china, glassware, tableware, giftware Detailed 

20383 Decorative accessories, incl lamps, lampshades, mirrors, etc Detailed Yes 

20384 All other kitchenware & home furnishings Detailed 

20400 Jewelry, incl watches, watch attach, novelty jewelry, etc Broad 

20420 Books Broad 

20460 Toys, hobby goods, & games Broad Yes 

20600 Hardware, tools, & plumbing & electrical supplies Broad 

20620 Lawn, garden, & farm equipment & supplies Broad 

20640 Dimensional lumber & oth bldg/structural materials & supplies Broad Yes 

20670 Paint & sundries Broad 

20690 Wallpaper & other flexible wallcoverings Broad 

20850 All other merchandise Broad 

20863 Art goods, including original pictures & sculptures Detailed 

20877 Souvenirs & novelty items Detailed 

20878 Seasonal decorations Detailed 

20879 Artificial/silk flowers, plants, & trees Detailed 

29810 All other merchandise Broad 

29900 All nonmerchandise receipts Broad 

29904 Labor charges for work performed by this establishment Detailed 

29905 Labor charges for work contracted out to other establishments Detailed 

29908 Parts & materials used in furniture repair or upholstery work Detailed 

29911 Delivery & installation charges Detailed 

29936 Carpet cleaning receipts for work performed by this establishment Detailed 

29972 All other nonmerchandise receipts Detailed 

955 

956 Figure 2-1 presents a description of the process used to estimate the number of establishments 

957 selling composite wood product lines using a hypothetical example. Within affected industries, the 

958 number of establishments selling composite wood product lines was estimated as the minimum of: 

959 

960  The total number of establishments in the industry, or 

961  The cumulative sum of the minimum of: 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-15

962 o the broad product line count, or 

963 o the sum of the affected detailed product line counts 

964 for each affected broad product line. 

965 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-16

966 

Figure 2-1: Hypothetical Example of Method Used to Refine Establishment Counts 

967 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-17

968 As indicated in the hypothetical example in Figure 2-1, the furniture industry sells two broad 

969 product lines containing composite wood products: household furniture and office furniture. There are 

970 14,000 establishments that sell the former line and 15,000 that sell the latter. Within the household 

971 furniture line, two detailed product lines are sold; 8,000 establishments sell “chairs” and 8,000 

972 establishments sell “sofas.” Because the sum of the establishment counts for the detailed product lines 

973 (16,000) is greater than the total number of establishments in the broad product line (14,000), the latter 

974 line count is used. Within the office furniture line, two detailed product lines are sold; 6,000 

975 establishments sell “desks” and 6,000 sell “chairs.” Because the sum of the establishment counts within 

976 the detailed product lines (12,000) is less than the broad product line total (15,000), the former count is 

977 used. The composite wood product lines are summed (26,000) and compared with the industry total. 

978 This value represents the estimated number of establishments in the furniture industry selling composite 

979 wood products. It is used in conjunction with the industry total to determine the proportion of the 

980 affected establishments within the industry, a value which is then applied to firm data to calculate 

981 industry-specific estimates for the number of affected firms. 

982 

983 It is important to note that the estimated number of entities that sell composite wood products is 

984 likely to be overstated after employing this method of estimation. Using the above example, if the data 

985 indicate that 14,000 establishments sell household furniture and 12,000 sell office furniture, it is estimated 

986 that the number of establishments that sell household or office furniture is the sum of these two, or 

987 26,000. Thus, the analysis assumes that there is no overlap because the number of establishments that sell 

988 both household and office furniture is not known; that is, no establishments are assumed to sell both 

989 household and office furniture. 

990 

991 The results are presented here for the six digit NAICS, but the calculations described above were 

992 performed at either the six or seven digit level, depending on which was the most detailed level available 

993 in the Census data. 

994 

995 2.1.4.3 Results 

996 

997 This section summarizes the results of the process used to adjust the firm and establishment 

998 counts to account for the fact that not all entities in the affected wholesale and retail industries sell 

999 composite wood products. Employer establishment and firm counts are presented first, nonemployer data 

1000 second, and finally, summary data. 

1001 

1002 Employer Establishments 

1003 

1004 Table 2-8 presents estimates of the number of affected wholesale employer establishments by 

1005 NAICS. This is estimated from the percentage of affected establishments in each industry, which is 

1006 calculated from Census data on the number of establishments selling product lines that are expected to 

1007 contain composite wood products. The percentage of affected establishments within each industry is also 

1008 used to adjust the firm counts in Table 2-10, since product line data are not collected at the firm level. 

1009 Note that the total establishment counts in Table 2-8 do not include manufacturers’ sales branches and 

1010 offices. Generally, Census categorizes wholesale establishments into one of two types of operation: 1) 

1011 manufacturers' sales branches and offices, which are “primarily maintained by manufacturing, refining, 

1012 and mining companies apart from their plants or mines for marketing their products at wholesale” (U.S. 

1013 Census Bureau 2010e), and 2) merchant wholesalers, except manufacturers' sales branches and offices. 

1014 Manufacturers’ sales branches and offices are excluded from this analysis, since these firms are already 

1015 counted as fabricators. 

1016 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-18

Table 2-8: Number and Percentage of Affected Wholesale Employer Establishments, by Affected 

NAICS 

NAICS NAICS Description 

Establishments, 

except 

Manufacturers' 

Sales Branches 

and Offices 

Affected 

Establishments 

as a Percent of 

Total 

Affected 

Establishments

423210 Furniture merchant wholesalers 6,640 100.00% 6,640 

423220 Home furnishing merchant wholesalers 7,540 47.21% 3,560 

423310 Lumber, plywood, millwork, and wood panel merchant 

wholesalers 8,428 100.00% 8,428 

423320 Brick, stone, and related construction material merchant 

wholesalers 3,383 10.20% 345 

423330 Roofing, siding, and insulation material merchant wholesalers 2,587 78.08% 2,020 

423390 Other construction material merchant wholesalers 3,383 84.92% 2,873 

423410 Photographic equipment and supplies merchant wholesalers 1,019 3.83% 39 

423420 Office equipment merchant wholesalers 4,837 2.69% 130 

423430 Computer and software merchant wholesalers 10,668 1.76% 188 

423440 Other commercial equipment merchant wholesalers 4,352 20.01% 871 

423450 Medical equipment merchant wholesalers 8,282 0.81% 67 

423490 Other professional equipment and supplies merchant 

wholesalers 2,297 3.66% 84 

423510 Metal service centers and other metal merchant wholesalers 10,148 12.22% 1,240 

423610 Elec. equip. and wiring merchant wholesalers 13,277 0.78% 103 

423620 Electric appliance merchant wholesalers 3,110 2.38% 74 

423690 Other electronic parts and equipment merchant wholesalers 13,223 0.82% 109 

423710 Hardware merchant wholesalers 6,828 13.96% 953 

423720 Plumbing equip. merchant wholesalers 6,939 26.52% 1,840 

423730 HVAC equip. merchant wholesalers 5,071 16.55% 839 

423740 Refrigeration equipment and supplies merchant wholesalers 1,265 8.77% 111 

423810 Construction equipment merchant wholesalers 4,694 0.49% 23 

423820 Farm and garden machinery and equipment merchant 

wholesalers 8,320 5.13% 427 

423830 Industrial machinery and equipment merchant wholesalers 29,838 1.60% 476 

423840 Industrial supplies merchant wholesalers 8,361 3.56% 298 

423850 Service establishment equipment and supplies merchant 

wholesalers 4,576 14.16% 648 

423910 Sporting and recreational goods and supplies merchant 

wholesalers 6,192 58.28% 3,609 

423920 Toy and hobby goods and supplies merchant wholesalers 2,497 100.00% 2,497 

423930 Recyclable material merchant wholesalers 7,377 0.08% 6 

423940 Jewelry merchant wholesalers 7,792 0.71% 55 

423990 Other miscellaneous durable goods merchant wholesalers 10,185 20.70% 2,108 

424110 Printing and writing paper merchant wholesalers 1,174 2.47% 29 

424120 Stationery and office supplies merchant wholesalers 5,513 21.75% 1,199 

424130 Industrial and personal service paper merchant wholesalers 4,679 2.78% 130 

424210 Drugs and druggists' sundries merchant wholesalers 8,040 1.57% 126 

424310 Piece goods, notions, and other dry goods merchant 

wholesalers 3,445 4.33% 149 

424320 Men's and boys' clothing and furnishings merchant 

wholesalers 4,204 5.14% 216 

424330 Women's and children's clothing merchant wholesalers 7,650 1.49% 114 

424340 Footwear merchant wholesalers 1,649 3.15% 52 

424410 General line grocery merchant wholesalers 2,547 12.92% 329 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-19

Table 2-8: Number and Percentage of Affected Wholesale Employer Establishments, by Affected 

NAICS 

NAICS NAICS Description 

Establishments, 

except 

Manufacturers' 

Sales Branches 

and Offices 

Affected 

Establishments 

as a Percent of 

Total 

Affected 

Establishments

424420 Packaged frozen food merchant wholesalers 3,282 1.34% 44 

424450 Confectionery merchant wholesalers 1,938 0.41% 8 

424460 Fish and seafood merchant wholesalers 2,012 0.35% 7 

424480 Fresh fruit and vegetable merchant wholesalers 5,074 0.18% 9 

424490 Other grocery and related products merchant wholesalers 10,562 1.81% 191 

424510 Grain and field bean merchant wholesalers 4,851 0.39% 19 

424610 Plastics materials and basic forms and shapes merchant 

wholesaler 3,248 13.73% 446 

424690 Other chemical and allied products merchant wholesalers 8,530 1.08% 92 

424910 Farm supplies merchant wholesalers 7,432 0.98% 73 

424920 Book, periodical, and newspaper merchant wholesalers 2,644 2.38% 63 

424930 Flower, nursery stock, & florists' supplies merchant 

wholesalers 4,213 1.42% 60 

424940 Tobacco and tobacco product merchant wholesalers 1,305 0.46% 6 

424950 Paint, varnish, and supplies merchant wholesalers 1,649 4.73% 78 

424990 Other miscellaneous nondurable goods merchant wholesalers 12,492 6.47% 808 

Total in Affected NAICS 321,242 44,909 

 Sources: U.S. Census Bureau 2010m, 2011

1017 

1018 As indicated in Table 2-8, there are a total of 321,242 wholesale employer establishments not 

1019 including manufacturers’ sales branches and offices. Of this total, an estimated 44,909 establishments 

1020 (approximately 14 percent) sell product lines expected to contain composite wood products. By industry, 

1021 the percent of wholesale establishments selling affected product lines ranges from 0.1 percent (NAICS 

1022 423930) to 100.0 percent (multiple industries). 

1023 

1024 Table 2-9 presents estimates of the number of affected employer establishments in the retail trade 

1025 industries. It also presents the proportions of affected establishments within each industry (i.e., the 

1026 percentage selling product lines expected to contain composite wood products), which are used to adjust 

1027 retail employer firm counts in Table 2-11. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-20

Table 2-9: Number and Percentage of Affected Retail Employer Establishments, by Affected 

NAICS 

NAICS NAICS Description 

Total 

Establishments

Affected 

Establishments 

as a Percent of 

Total 

Affected 

Establishments

441110 New car dealers 24,888 5.77% 1,437 

441210 Recreational vehicle dealers 3,100 100.00% 3,100 

441221 Motorcycle, ATV, and personal watercraft dealers 6,137 13.33% 818 

441229 All other motor vehicle dealers 2,266 10.90% 247 

441320 Tire dealers 20,127 0.16% 32 

442110 Furniture stores 28,834 100.00% 28,834 

442210 Floor covering stores 14,534 87.71% 12,748 

442291 Window treatment stores 2,652 22.55% 598 

442299 All other home furnishings stores 19,124 100.00% 19,124 

443111 Household appliance stores 9,336 24.21% 2,260 

443112 Radio, television, and other electronics stores 29,051 47.83% 13,896 

443120 Computer and software stores 10,428 7.11% 741 

443130 Camera and photographic supplies stores 1,988 0.91% 18 

444110 Home centers 6,953 100.00% 6,953 

444120 Paint and wallpaper stores 7,860 15.70% 1,234 

444130 Hardware stores 16,454 100.00% 16,454 

444190 Other building material dealers 39,551 78.80% 31,166 

444210 Outdoor power equipment stores 4,357 11.59% 505 

444220 Nursery, garden center, and farm supply stores 15,895 62.42% 9,922 

445110 Supermarkets and other grocery (except convenience) stores 64,881 29.48% 19,128 

445120 Convenience stores 25,510 28.96% 7,387 

445210 Meat markets 6,009 1.63% 98 

445220 Fish and seafood markets 2,063 3.34% 69 

445230 Fruit and vegetable markets 2,938 3.81% 112 

445291 Baked goods stores 4,290 0.79% 34 

445292 Confectionery and nut stores 3,404 7.31% 249 

445299 All other specialty food stores 5,504 10.94% 602 

445310 Beer, wine, and liquor stores 31,485 3.33% 1,047 

446110 Pharmacies and drug stores 42,045 74.76% 31,431 

446120 Cosmetics, beauty supplies, and perfume stores 13,584 0.76% 103 

446130 Optical goods stores 13,149 0.07% 9 

446191 Food (health) supplement stores 8,999 2.28% 205 

446199 All other health and personal care stores 10,675 0.16% 17 

447110 Gasoline stations with convenience stores 97,508 4.80% 4,680 

447190 Other gasoline stations 21,248 1.18% 251 

448110 Men's clothing stores 8,321 6.57% 547 

448120 Women's clothing stores 36,220 9.57% 3,467 

448130 Children's and infants' clothing stores 7,102 39.96% 2,838 

448140 Family clothing stores 28,254 74.85% 21,147 

448150 Clothing accessories stores 7,494 3.70% 277 

448190 Other clothing stores 12,034 8.08% 972 

448210 Shoe stores 28,076 10.19% 2,861 

448310 Jewelry stores 27,745 8.93% 2,478 

448320 Luggage and leather goods stores 1,222 14.98% 183 

451110 Sporting goods stores 22,254 72.13% 16,051 

451120 Hobby, toy, and game stores 9,357 100.00% 9,357 

451130 Sewing, needlework, and piece goods stores 5,663 91.95% 5,207 

451140 Musical instrument and supplies stores 4,510 0.31% 14 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-21

Table 2-9: Number and Percentage of Affected Retail Employer Establishments, by Affected 

NAICS 

NAICS NAICS Description 

Total 

Establishments

Affected 

Establishments 

as a Percent of 

Total 

Affected 

Establishments

451211 Book stores 9,955 36.57% 3,641 

451212 News dealers and newsstands 1,523 19.24% 293 

451220 Prerecorded tape, compact disc, and record stores 4,153 56.54% 2,348 

452111 Department stores (except discount department stores) 3,533 100.00% 3,533 

452112 Discount department stores 5,001 100.00% 5,001 

452910 Warehouse clubs and supercenters 4,260 100.00% 4,260 

452990 All other general merchandise stores 33,061 100.00% 33,061 

453110 Florists 19,822 76.57% 15,177 

453210 Office supplies and stationery stores 9,558 94.50% 9,032 

453220 Gift, novelty, and souvenir stores 31,391 68.31% 21,442 

453910 Pet and pet supplies stores 8,782 0.74% 65 

453920 Art dealers 6,677 12.88% 860 

453930 Manufactured (mobile) home dealers 3,878 100.00% 3,878 

453991 Tobacco stores 6,539 6.73% 440 

453998 All other miscellaneous store retailers (except tobacco stores) 17,270 28.99% 5,006 

454111 Electronic shopping 14,185 35.67% 5,060 

454113 Mail-order houses 7,324 33.78% 2,474 

454210 Vending machine operators 5,194 0.79% 41 

454311 Heating oil dealers 4,055 30.92% 1,254 

454312 Liquefied petroleum gas (bottled gas) dealers 5,980 25.23% 1,509 

454390 Other direct selling establishments 22,077 24.80% 5,475 

Total in Affected NAICS 1,039,297 404,758 

 Sources: U.S. Census Bureau 2010j, n 

1028 

1029 As indicated in Table 2-9, an estimated 404,758 of the 1,039,297 establishments in the affected 

1030 retail industries (approximately 39 percent) sell product lines expected to contain composite wood 

1031 products. By industry, the percent of retail establishments selling affected product lines ranges from 0.1 

1032 percent (NAICS 446130) to 100.0 percent (multiple industries). 

1033 

1034 Employer Firms 

1035 

1036 Table 2-10 presents estimates of the number of affected wholesale employer firms. Total firm 

1037 counts were adjusted using corresponding establishment ratios to exclude manufacturers’ sales branches 

1038 and offices and prevent potential double-counting of manufacturing firms that have branch offices 

1039 designated as wholesale establishments. Counts were then multiplied by the corresponding affected 

1040 establishment ratios in Table 2-8 to estimate the number of affected employer firms.
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-22

Table 2-10: Number of Affected Wholesale Employer Firms, by Affected NAICS

NAICS NAICS Description 

Total 

Firms in 

Affected 

NAICS 

Manufacturers' 

Sales Branches 

and Offices 

Ratioa

Number of Firms 

Not Including 

Manufacturer's 

Sales Branches 

and Offices 

Affected 

Entity 

Ratiob

Number 

of 

Affected 

Firms 

A B C = (AxB) D E = (CxD)

423210 Furniture merchant wholesalers 6,172 97.10% 5,993 100.00% 5,993 

423220 Home furnishing merchant wholesalers 6,491 98.48% 6,393 47.21% 3,018 

423310 Lumber, plywood, millwork, and wood panel 

merchant wholesalers 6,475 93.81% 6,074 100.00% 6,074 

423320 Brick, stone, and related construction material 

merchant wholesalers 2,796 82.37% 2,303 10.20% 235 

423330 Roofing, siding, and insulation material 

merchant wholesalers 1,121 92.26% 1,034 78.08% 807 

423390 Other construction material merchant 

wholesalers 2,514 89.81% 2,258 84.92% 1,918 

423410 Photographic equipment and supplies 

merchant wholesalers 886 95.95% 850 3.83% 33 

423420 Office equipment merchant wholesalers 2,895 75.40% 2,183 2.69% 59 

423430 Computer and software merchant wholesalers 8,509 92.40% 7,863 1.76% 139 

423440 Other commercial equipment merchant 

wholesalers 3,962 97.93% 3,880 20.01% 777 

423450 Medical equipment merchant wholesalers 7,197 96.29% 6,930 0.81% 56 

423490 Other professional equipment and supplies 

merchant wholesalers 2,041 96.51% 1,970 3.66% 72 

423510 Metal service centers and other metal 

merchant wholesalers 7,973 93.69% 7,470 12.22% 913 

423610 Elec. equip. and wiring merchant wholesalers 8,622 95.19% 8,207 0.78% 64 

423620 Electric appliance merchant wholesalers 2,576 98.76% 2,544 2.38% 61 

423690 Other electronic parts and equipment 

merchant wholesalers 10,483 94.51% 9,908 0.82% 82 

423710 Hardware merchant wholesalers 5,154 97.74% 5,037 13.96% 703 

423720 Plumbing equip. merchant wholesalers 3,584 98.75% 3,539 26.52% 938 

423730 HVAC equip. merchant wholesalers 2,336 94.33% 2,203 16.55% 364 

423740 Refrigeration equipment and supplies 

merchant wholesalers 758 95.98% 728 8.77% 64 

423810 Construction equipment merchant wholesalers 3,075 95.72% 2,943 0.49% 14 

423820 Farm and garden machinery and equipment 

merchant wholesalers 6,316 98.99% 6,252 5.13% 321 

423830 Industrial machinery and equipment merchant 

wholesalers 24,357 95.09% 23,160 1.60% 369 

423840 Industrial supplies merchant wholesalers 5,808 94.47% 5,487 3.56% 196 

423850 Service establishment equipment and supplies 

merchant wholesalers 3,669 96.97% 3,558 14.16% 504 

423910 Sporting and recreational goods and supplies 

merchant wholesalers 5,661 98.63% 5,583 58.28% 3,254 

423920 Toy and hobby goods and supplies merchant 

wholesalers 2,398 99.72% 2,391 100.00% 2,391 

423930 Recyclable material merchant wholesalers 6,218 100.00% 6,218 0.08% 5 

423940 Jewelry merchant wholesalers 7,570 99.82% 7,556 0.71% 53 

423990 Other miscellaneous durable goods merchant 

wholesalers 9,460 99.17% 9,382 20.70% 1,942 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-23

Table 2-10: Number of Affected Wholesale Employer Firms, by Affected NAICS

NAICS NAICS Description 

Total 

Firms in 

Affected 

NAICS 

Manufacturers' 

Sales Branches 

and Offices 

Ratioa

Number of Firms 

Not Including 

Manufacturer's 

Sales Branches 

and Offices 

Affected 

Entity 

Ratiob

Number 

of 

Affected 

Firms 

A B C = (AxB) D E = (CxD)

424110 Printing and writing paper merchant 

wholesalers 801 90.94% 728 2.47% 18 

424120 Stationery and office supplies merchant 

wholesalers 4,620 94.00% 4,343 21.75% 945 

424130 Industrial and personal service paper merchant 

wholesalers 4,058 94.74% 3,844 2.78% 107 

424210 Drugs and druggists' sundries merchant 

wholesalers 6,261 94.20% 5,898 1.57% 92 

424310 Piece goods, notions, and other dry goods 

merchant wholesalers 3,150 97.54% 3,072 4.33% 133 

424320 Men's and boys' clothing and furnishings 

merchant wholesalers 3,927 98.87% 3,883 5.14% 200 

424330 Women's and children's clothing merchant 

wholesalers 7,237 99.69% 7,214 1.49% 108 

424340 Footwear merchant wholesalers 1,557 99.40% 1,548 3.15% 49 

424410 General line grocery merchant wholesalers 2,208 100.00% 2,208 12.92% 285 

424420 Packaged frozen food merchant wholesalers 2,994 93.72% 2,806 1.34% 38 

424450 Confectionery merchant wholesalers 1,798 88.45% 1,590 0.41% 7 

424460 Fish and seafood merchant wholesalers 1,924 99.51% 1,914 0.35% 7 

424480 Fresh fruit and vegetable merchant 

wholesalers 4,646 100.00% 4,646 0.18% 8 

424490 Other grocery and related products merchant 

wholesalers 9,668 80.82% 7,814 1.81% 141 

424510 Grain and field bean merchant wholesalers 2,469 100.00% 2,469 0.39% 10 

424610 Plastics materials and basic forms and shapes 

merchant wholesaler 2,734 94.97% 2,597 13.73% 357 

424690 Other chemical and allied products merchant 

wholesalers 6,527 84.14% 5,492 1.08% 59 

424910 Farm supplies merchant wholesalers 4,543 96.05% 4,363 0.98% 43 

424920 Book, periodical, and newspaper merchant 

wholesalers 2,049 93.99% 1,926 2.38% 46 

424930 Flower, nursery stock, & florists' supplies 

merchant wholesalers 3,635 99.88% 3,631 1.42% 52 

424940 Tobacco and tobacco product merchant 

wholesalers 1,135 95.26% 1,081 0.46% 5 

424950 Paint, varnish, and supplies merchant 

wholesalers 1,168 80.05% 935 4.73% 44 

424990 Other miscellaneous nondurable goods 

merchant wholesalers 12,118 98.88% 11,982 6.47% 775 

Total in Affected NAICS 258,304 245,881 34,948 a Firm counts were adjusted to prevent potential double-counting of manufacturing firms that have branch offices 

designated as wholesale establishments. The counts were adjusted according to the percentage of wholesale 

establishments that are not manufacturers’ sales branches and offices. 

b Firm counts were also adjusted to exclude firms that do not sell any composite wood products, based on the 

percentage of affected establishments in Table 2-8.

Sources: U.S. Census Bureau 2010c, m, 2011 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-24

1041 As indicated in Table 2-10, there are an estimated 245,881 wholesale employer firms not 

1042 including manufacturers’ sales branches and offices. Of this total, it is estimated that 34,948 firms 

1043 (approximately 14 percent) sell product lines containing composite wood products. 

1044 

1045 Table 2-11 presents estimates of the number of affected retail employer firms. Total firm counts 

1046 were adjusted using the corresponding affected establishment ratios in Table 2-9 to estimate the number 

1047 of affected employer firms. 

1048 

Table 2-11: Number of Affected Retail Employer Firms, by Affected NAICS 

NAICS NAICS Description 

Total 

Firms in 

Affected 

NAICS 

Affected 

Establishment 

Ratio 

Affected Firms 

441110 New car dealers 21,489 5.77% 1,241 

441210 Recreational vehicle dealers 2,749 100.00% 2,749 

441221 Motorcycle, ATV, and personal watercraft dealers 5,763 13.33% 768 

441229 All other motor vehicle dealers 2,154 10.90% 235 

441320 Tire dealers 11,346 0.16% 18 

442110 Furniture stores 19,714 100.00% 19,714 

442210 Floor covering stores 12,965 87.71% 11,372 

442291 Window treatment stores 2,278 22.55% 514 

442299 All other home furnishings stores 11,560 100.00% 11,560 

443111 Household appliance stores 7,805 24.21% 1,889 

443112 Radio, television, and other electronics stores 14,679 47.83% 7,021 

443120 Computer and software stores 5,550 7.11% 394 

443130 Camera and photographic supplies stores 788 0.91% 7 

444110 Home centers 2,664 100.00% 2,664 

444120 Paint and wallpaper stores 2,399 15.70% 377 

444130 Hardware stores 12,152 100.00% 12,152 

444190 Other building material dealers 30,467 78.80% 24,008 

444210 Outdoor power equipment stores 4,146 11.59% 481 

444220 Nursery, garden center, and farm supply stores 12,804 62.42% 7,993 

445110 Supermarkets and other grocery (except convenience) stores 41,885 29.48% 12,348 

445120 Convenience stores 22,168 28.96% 6,419 

445210 Meat markets 5,502 1.63% 90 

445220 Fish and seafood markets 2,022 3.34% 68 

445230 Fruit and vegetable markets 2,851 3.81% 109 

445291 Baked goods stores 3,126 0.79% 25 

445292 Confectionery and nut stores 2,149 7.31% 157 

445299 All other specialty food stores 4,258 10.94% 466 

445310 Beer, wine, and liquor stores 27,421 3.33% 912 

446110 Pharmacies and drug stores 19,067 74.76% 14,254 

446120 Cosmetics, beauty supplies, and perfume stores 6,861 0.76% 52 

446130 Optical goods stores 5,398 0.07% 4 

446191 Food (health) supplement stores 5,123 2.28% 117 

446199 All other health and personal care stores 7,612 0.16% 12 

447110 Gasoline stations with convenience stores 53,375 4.80% 2,562 

447190 Other gasoline stations 15,666 1.18% 185 

448110 Men's clothing stores 4,952 6.57% 326 

448120 Women's clothing stores 13,582 9.57% 1,300 

448130 Children's and infants' clothing stores 2,724 39.96% 1,089 

448140 Family clothing stores 8,299 74.85% 6,211 

448150 Clothing accessories stores 3,618 3.70% 134 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-25

Table 2-11: Number of Affected Retail Employer Firms, by Affected NAICS 

NAICS NAICS Description 

Total 

Firms in 

Affected 

NAICS 

Affected 

Establishment 

Ratio 

Affected Firms 

448190 Other clothing stores 7,952 8.08% 642 

448210 Shoe stores 6,867 10.19% 700 

448310 Jewelry stores 18,692 8.93% 1,669 

448320 Luggage and leather goods stores 637 14.98% 95 

451110 Sporting goods stores 17,556 72.13% 12,663 

451120 Hobby, toy, and game stores 5,748 100.00% 5,748 

451130 Sewing, needlework, and piece goods stores 4,124 91.95% 3,792 

451140 Musical instrument and supplies stores 3,585 0.31% 11 

451211 Book stores 4,643 36.57% 1,698 

451212 News dealers and newsstands 1,306 19.24% 251 

451220 Prerecorded tape, compact disc, and record stores 2,343 56.54% 1,325 

452111 Department stores (except discount department stores) 21 100.00% 21 

452112 Discount department stores 14 100.00% 14 

452910 Warehouse clubs and supercenters 12 100.00% 12 

452990 All other general merchandise stores 8,862 100.00% 8,862 

453110 Florists 19,038 76.57% 14,577 

453210 Office supplies and stationery stores 5,317 94.50% 5,024 

453220 Gift, novelty, and souvenir stores 24,106 68.31% 16,466 

453910 Pet and pet supplies stores 5,914 0.74% 44 

453920 Art dealers 6,403 12.88% 825 

453930 Manufactured (mobile) home dealers 2,774 100.00% 2,774 

453991 Tobacco stores 4,940 6.73% 332 

453998 All other miscellaneous store retailers (except tobacco stores) 14,743 28.99% 4,274 

454111 Electronic shopping 13,888 35.67% 4,954 

454113 Mail-order houses 6,471 33.78% 2,186 

454210 Vending machine operators 4,651 0.79% 37 

454311 Heating oil dealers 3,442 30.92% 1,064 

454312 Liquefied petroleum gas (bottled gas) dealers 2,297 25.23% 580 

454390 Other direct selling establishments 20,370 24.80% 5,052 

Total in Affected NAICS 657,847 247,689 

The affected establishment ratio is based on the percentages in Table 2-9.

Sources: U.S. Census Bureau 2010j, n. 

1049 

1050 As indicated in Table 2-11, an estimated 247,689 of the 657,847 employer firms in the affected 

1051 retail industries (approximately 38 percent) sell product lines containing composite wood products. 

1052 

1053 Nonemployer Establishments 

1054 

1055 Table 2-12 and Table 2-13 present estimates of the number of affected nonemployer 

1056 establishments in the wholesale and retail trade sectors, respectively. As with employers, nonemployer 

1057 counts were calculated by applying the affected establishment ratios calculated in Table 2-8 and Table 2-9 

1058 to the total number of nonemployer establishments. 

1059 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-26

Table 2-12: Number of Affected Wholesale Nonemployer Establishments, by Affected NAICS 

NAICS NAICS Description 

Total 

Nonemployer 

Establishments 

in Affected 

NAICSa 

Affected 

Establishment 

Ratio 

Affected 

Nonemployer 

Establishments

423210 Furniture merchant wholesalers 6,487 100.00% 6,487 

423220 Home furnishing merchant wholesalers 7,366 47.21% 3,478 

423310 Lumber, plywood, millwork, and wood panel merchant 

wholesalers 4,056 100.00% 4,056 

423320 Brick, stone, and related construction material merchant 

wholesalers 1,628 10.20% 166 

423330 Roofing, siding, and insulation material merchant wholesalers 1,245 78.08% 972 

423390 Other construction material merchant wholesalers 1,628 84.92% 1,382 

423410 Photographic equipment and supplies merchant wholesalers 328 3.83% 13 

423420 Office equipment merchant wholesalers 1,555 2.69% 42 

423430 Computer and software merchant wholesalers 3,430 1.76% 61 

423440 Other commercial equipment merchant wholesalers 1,399 20.01% 280 

423450 Medical equipment merchant wholesalers 2,663 0.81% 22 

423490 Other professional equipment and supplies merchant wholesalers 739 3.66% 27 

423510 Metal service centers and other metal merchant wholesalers 3,103 12.22% 379 

423610 Elec. equip. and wiring merchant wholesalers 4,828 0.78% 37 

423620 Electric appliance merchant wholesalers 1,131 2.38% 27 

423690 Other electronic parts and equipment merchant wholesalers 4,809 0.82% 39 

423710 Hardware merchant wholesalers 1,685 13.96% 235 

423720 Plumbing equip. merchant wholesalers 1,713 26.52% 454 

423730 HVAC equip. merchant wholesalers 1,252 16.55% 207 

423740 Refrigeration equipment and supplies merchant wholesalers 312 8.77% 27 

423810 Construction equipment merchant wholesalers 1,530 0.49% 7 

423820 Farm and garden machinery and equipment merchant wholesalers 2,712 5.13% 140 

423830 Industrial machinery and equipment merchant wholesalers 9,728 1.60% 156 

423840 Industrial supplies merchant wholesalers 2,726 3.56% 97 

423850 Service establishment equipment and supplies merchant 

wholesalers 1,492 14.16% 211 

423910 Sporting and recreational goods and supplies merchant 

wholesalers 11,126 58.28% 6,485 

423920 Toy and hobby goods and supplies merchant wholesalers 7,410 100.00% 7,410 

423930 Recyclable material merchant wholesalers 8,691 0.08% 7 

423940 Jewelry merchant wholesalers 22,883 0.71% 162 

423990 Other miscellaneous durable goods merchant wholesalers 57,264 20.70% 11,852 

424110 Printing and writing paper merchant wholesalers 695 2.47% 17 

424120 Stationery and office supplies merchant wholesalers 3,264 21.75% 710 

424130 Industrial and personal service paper merchant wholesalers 2,770 2.78% 77 

424210 Drugs and druggists' sundries merchant wholesalers 2,796 1.57% 44 

424310 Piece goods, notions, and other dry goods merchant wholesalers 4,610 4.33% 199 

424320 Men's and boys' clothing and furnishings merchant wholesalers 5,626 5.14% 289 

424330 Women's and children's clothing merchant wholesalers 10,238 1.49% 153 

424340 Footwear merchant wholesalers 2,207 3.15% 70 

424410 General line grocery merchant wholesalers 2,287 12.92% 295 

424420 Packaged frozen food merchant wholesalers 2,948 1.34% 40 

424450 Confectionery merchant wholesalers 1,741 0.41% 7 

424460 Fish and seafood merchant wholesalers 1,807 0.35% 6 

424480 Fresh fruit and vegetable merchant wholesalers 4,557 0.18% 8 

424490 Other grocery and related products merchant wholesalers 9,486 1.81% 171 

424510 Grain and field bean merchant wholesalers 3,326 0.39% 13 

424610 Plastics materials and basic forms and shapes merchant 

wholesaler 1,010 13.73% 139 

424690 Other chemical and allied products merchant wholesalers 2,651 1.08% 28 

424910 Farm supplies merchant wholesalers 2,473 0.98% 25 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-27

Table 2-12: Number of Affected Wholesale Nonemployer Establishments, by Affected NAICS 

NAICS NAICS Description 

Total 

Nonemployer 

Establishments 

in Affected 

NAICSa 

Affected 

Establishment 

Ratio 

Affected 

Nonemployer 

Establishments

424920 Book, periodical, and newspaper merchant wholesalers 14,119 2.38% 336 

424930 Flower, nursery stock, & florists' supplies merchant wholesalers 7,906 1.42% 113 

424940 Tobacco and tobacco product merchant wholesalers 1,219 0.46% 6 

424950 Paint, varnish, and supplies merchant wholesalers 1,769 4.73% 84 

424990 Other miscellaneous nondurable goods merchant wholesalers 44,263 6.47% 2,864 

Total in Affected NAICS 310,687 50,612 a Some of these nonemployer total number of establishments were estimated based on the proportions observed in the employer 

data because information was not available at the 6 digit level, for each of the NAICS codes. 

The affected establishment ratio is based on the percentage of affected entities in Table 2-8. 

 Sources: U.S. Census Bureau 2010o, 2011

1060 

1061 As indicated in Table 2-12, an estimated 50,612 of the 310,687 nonemployer establishments in 

1062 the affected wholesale trade industries (approximately 16 percent) sell product lines containing composite 

1063 wood products. 

1064 

Table 2-13: Number of Affected Retail Nonemployer Establishments, by Affected NAICS 

NAICS NAICS Description 

Total 

Nonemployer 

Establishments in 

Affected NAICS a

Affected 

Establishment 

Ratio 

Affected 

Nonemployer 

Establishments 

441110 New car dealers 47,324 5.77% 2,732

441210 Recreational vehicle dealers 4,294 100.00% 4,294

441221 Motorcycle, ATV, and personal watercraft dealers 4,171 13.33% 556

441229 All other motor vehicle dealers 22,751 10.90% 2,480

441320 Tire dealers 12,149 0.16% 19

442110 Furniture stores 16,399 100.00% 16,399

442210 Floor covering stores 11,267 87.71% 9,882

442291 Window treatment stores 2,056 22.55% 464

442299 All other home furnishings stores 14,825 100.00% 14,825

443111 Household appliance stores 6,164 24.21% 1,492

443112 Radio, television, and other electronics stores 13,548 47.83% 6,480

443120 Computer and software stores 9,256 7.11% 658

443130 Camera and photographic supplies stores 1,744 0.91% 16

444110 Home centers 2,412 100.00% 2,412

444120 Paint and wallpaper stores 1,945 15.70% 305

444130 Hardware stores 4,931 100.00% 4,931

444190 Other building material dealers 17,959 78.80% 14,152

444210 Outdoor power equipment stores 2,386 11.59% 277

444220 Nursery, garden center, and farm supply stores 8,704 62.42% 5,433

445110 Supermarkets and other grocery (except convenience) stores 32,676 29.48% 9,633

445120 Convenience stores 12,847 28.96% 3,720

445210 Meat markets 3,264 1.63% 53

445220 Fish and seafood markets 2,522 3.34% 84

445230 Fruit and vegetable markets 7,972 3.81% 304

445291 Baked goods stores 10,637 0.79% 84

445292 Confectionery and nut stores 8,440 7.31% 617

445299 All other specialty food stores 13,647 10.94% 1,493

445310 Beer, wine, and liquor stores 12,021 3.33% 400

446110 Pharmacies and drug stores 5,738 74.76% 4,289
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-28

Table 2-13: Number of Affected Retail Nonemployer Establishments, by Affected NAICS 

NAICS NAICS Description 

Total 

Nonemployer 

Establishments in 

Affected NAICS a

Affected 

Establishment 

Ratio 

Affected 

Nonemployer 

Establishments 

446120 Cosmetics, beauty supplies, and perfume stores 82,071 0.76% 622

446130 Optical goods stores 2,758 0.07% 2

446191 Food (health) supplement stores 22,062 2.28% 503

446199 All other health and personal care stores 26,171 0.16% 42

447110 Gasoline stations with convenience stores 7,762 4.80% 373

447190 Other gasoline stations 1,692 1.18% 20

448110 Men's clothing stores 4,131 6.57% 272

448120 Women's clothing stores 16,616 9.57% 1,590

448130 Children's and infants' clothing stores 7,090 39.96% 2,833

448140 Family clothing stores 13,541 74.85% 10,135

448150 Clothing accessories stores 20,002 3.70% 739

448190 Other clothing stores 26,645 8.08% 2,152

448210 Shoe stores 5,018 10.19% 512

448310 Jewelry stores 41,651 8.93% 3,720

448320 Luggage and leather goods stores 2,194 14.98% 329

451110 Sporting goods stores 21,420 72.13% 15,450

451120 Hobby, toy, and game stores 14,625 100.00% 14,625

451130 Sewing, needlework, and piece goods stores 15,910 91.95% 14,629

451140 Musical instrument and supplies stores 6,071 0.31% 19

451211 Book stores 10,189 36.57% 3,727

451212 News dealers and newsstands 11,964 19.24% 2,302

451220 Prerecorded tape, compact disc, and record stores 3,972 56.54% 2,246

452111 Department stores (except discount department stores) 2,541 100.00% 2,541

452112 Discount department stores 3,597 100.00% 3,597

452910 Warehouse clubs and supercenters 3,064 100.00% 3,064

452990 All other general merchandise stores 23,777 100.00% 23,776

453110 Florists 24,122 76.57% 18,469

453210 Office supplies and stationery stores 6,054 94.50% 5,721

453220 Gift, novelty, and souvenir stores 53,729 68.31% 36,700

453910 Pet and pet supplies stores 8,329 0.74% 62

453920 Art dealers 17,447 12.88% 2,247

453930 Manufactured (mobile) home dealers 2,211 100.00% 2,211

453991 Tobacco stores 30,326 6.73% 2,041

453998 All other miscellaneous store retailers (except tobacco stores) 80,095 28.99% 23,217

454111 Electronic shopping 53,677 35.67% 19,148

454113 Mail-order houses 27,714 33.78% 9,362

454210 Vending machine operators 27,595 0.79% 218

454311 Heating oil dealers 1,233 30.92% 381

454312 Liquefied petroleum gas (bottled gas) dealers 1,819 25.23% 459

454390 Other direct selling establishments 696,865 24.80% 172,819

Total in Affected NAICS 1,741,799 511,359 a

 Some of these nonemployer total number of establishments were estimated because information was not available at the 6 digit 

level, for each of the NAICS codes. 

The affected establishment ratio is based on the percentage of affected entities in Table 2-9. 

Sources: U.S. Census Bureau 2010j, o 

1065 

1066 As indicated in Table 2-13, an estimated 511,359 of the 1,741,799 nonemployer establishments in 

1067 the affected retail trade industries (approximately 29 percent) sell product lines containing composite 

1068 wood products. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-29

1069 

1070 Summary 

1071 

1072 As indicated in Table 2-14 and Table 2-15, an estimated 85,560 firms comprising 95,521 

1073 establishments in the wholesale trade sector are estimated to sell composite wood products or goods 

1074 containing composite wood products, while an estimated 759,048 firms comprising 916,117 

1075 establishments in the retail trade sector are estimated to sell such items. 

1076 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-30

1077 

Table 2-14: Total Affected Wholesale Entities, by Affected NAICS 

NAICS NAICS Description 

Affected 

Employers 

Affected 

Nonemp. Total Affected 

Estab. Firms 

Firms = 

Estab. Estab. Firms 

A B C D = A+C E= B+C 

423210 Furniture merchant wholesalers 6,640 5,993 6,487 13,127 12,480 

423220 Home furnishing merchant wholesalers 3,560 3,018 3,478 7,038 6,496 

423310 Lumber, plywood, millwork, and wood panel 

merchant wholesalers 8,428 6,074 4,056 12,484 10,130 

423320 Brick, stone, and related construction material 

merchant wholesalers 345 235 166 511 401 

423330 Roofing, siding, and insulation material merchant 

wholesalers 2,020 807 972 2,992 1,779 

423390 Other construction material merchant wholesalers 2,873 1,918 1,382 4,255 3,300 

423410 Photographic equipment and supplies merchant 

wholesalers 39 33 13 52 46 

423420 Office equipment merchant wholesalers 130 59 42 172 101 

423430 Computer and software merchant wholesalers 188 139 61 249 200 

423440 Other commercial equipment merchant wholesalers 871 777 280 1,151 1,057 

423450 Medical equipment merchant wholesalers 67 56 22 89 78 

423490 Other professional equipment and supplies merchant 

wholesalers 84 72 27 111 99 

423510 Metal service centers and other metal merchant 

wholesalers 1,240 913 379 1,619 1,292 

423610 Elec. equip. and wiring merchant wholesalers 103 64 37 140 101 

423620 Electric appliance merchant wholesalers 74 61 27 101 88 

423690 Other electronic parts and equipment merchant 

wholesalers 109 82 39 148 121 

423710 Hardware merchant wholesalers 953 703 235 1,188 938 

423720 Plumbing equip. merchant wholesalers 1,840 938 454 2,294 1,392 

423730 HVAC equip. merchant wholesalers 839 364 207 1,046 571 

423740 Refrigeration equipment and supplies merchant 

wholesalers 111 64 27 138 91 

423810 Construction equipment merchant wholesalers 23 14 7 30 21 

423820 Farm and garden machinery and equipment merchant 

wholesalers 427 321 140 567 461 

423830 Industrial machinery and equipment merchant 

wholesalers 476 369 156 632 525 

423840 Industrial supplies merchant wholesalers 298 196 97 395 293 

423850 Service establishment equipment and supplies 

merchant wholesalers 648 504 211 859 715 

423910 Sporting and recreational goods and supplies 

merchant wholesalers 3,609 3,254 6,485 10,094 9,739 

423920 Toy and hobby goods and supplies merchant 

wholesalers 2,497 2,391 7,410 9,907 9,801 

423930 Recyclable material merchant wholesalers 6 5 7 13 12 

423940 Jewelry merchant wholesalers 55 53 162 217 215 

423990 Other miscellaneous durable goods merchant 

wholesalers 2,108 1,942 11,852 13,960 13,794 

424110 Printing and writing paper merchant wholesalers 29 18 17 46 35 

424120 Stationery and office supplies merchant wholesalers 1,199 945 710 1,909 1,655 

424130 Industrial and personal service paper merchant 

wholesalers 130 107 77 207 184 

424210 Drugs and druggists' sundries merchant wholesalers 126 92 44 170 136 

424310 Piece goods, notions, and other dry goods merchant 

wholesalers 149 133 199 348 332 

424320 Men's and boys' clothing and furnishings merchant 

wholesalers 216 200 289 505 489 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-31

Table 2-14: Total Affected Wholesale Entities, by Affected NAICS 

NAICS NAICS Description 

Affected 

Employers 

Affected 

Nonemp. Total Affected 

Estab. Firms 

Firms = 

Estab. Estab. Firms 

A B C D = A+C E= B+C 

424330 Women's and children's clothing merchant 

wholesalers 114 108 153 267 261 

424340 Footwear merchant wholesalers 52 49 70 122 119 

424410 General line grocery merchant wholesalers 329 285 295 624 580 

424420 Packaged frozen food merchant wholesalers 44 38 40 84 78 

424450 Confectionery merchant wholesalers 8 7 7 15 14 

424460 Fish and seafood merchant wholesalers 7 7 6 13 13 

424480 Fresh fruit and vegetable merchant wholesalers 9 8 8 17 16 

424490 Other grocery and related products merchant 

wholesalers 191 141 171 362 312 

424510 Grain and field bean merchant wholesalers 19 10 13 32 23 

424610 Plastics materials and basic forms and shapes 

merchant wholesaler 446 357 139 585 496 

424690 Other chemical and allied products merchant 

wholesalers 92 59 28 120 87 

424910 Farm supplies merchant wholesalers 73 43 25 98 68 

424920 Book, periodical, and newspaper merchant 

wholesalers 63 46 336 399 382 

424930 Flower, nursery stock, & florists' supplies merchant 

wholesalers 60 52 113 173 165 

424940 Tobacco and tobacco product merchant wholesalers 6 5 6 12 11 

424950 Paint, varnish, and supplies merchant wholesalers 78 44 84 162 128 

424990 Other miscellaneous nondurable goods merchant 

wholesalers 808 775 2,864 3,672 3,639 

Total in Affected NAICS 44,909 34,948 50,612 95,521 85,560 

 Sources:U.S. Census Bureau 2010c, i, m, 2011 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-32

1078 

Table 2-15: Total Affected Retail Entities, by Affected NAICS 

NAICS NAICS Description 

Affected Employers 

Affected 

Nonemp. Total Affected 

Estab. Firms 

Firms = 

Estab. Estab. Firms 

A B C D = A+C E= B+C 

441110 New car dealers 1,437 1,241 2,732 4,169 3,973 

441210 Recreational vehicle dealers 3,100 2,749 4,294 7,394 7,043 

441221 Motorcycle, ATV, and personal watercraft dealers 818 768 556 1,374 1,324 

441229 All other motor vehicle dealers 247 235 2,480 2,727 2,715 

441320 Tire dealers 32 18 19 51 37 

442110 Furniture stores 28,834 19,714 16,399 45,233 36,113 

442210 Floor covering stores 12,748 11,372 9,882 22,630 21,254 

442291 Window treatment stores 598 514 464 1,062 978 

442299 All other home furnishings stores 19,124 11,560 14,825 33,949 26,385 

443111 Household appliance stores 2,260 1,889 1,492 3,752 3,381 

443112 Radio, television, and other electronics stores 13,896 7,021 6,480 20,376 13,501 

443120 Computer and software stores 741 394 658 1,399 1,052 

443130 Camera and photographic supplies stores 18 7 16 34 23 

444110 Home centers 6,953 2,664 2,412 9,365 5,076 

444120 Paint and wallpaper stores 1,234 377 305 1,539 682 

444130 Hardware stores 16,454 12,152 4,931 21,385 17,083 

444190 Other building material dealers 31,166 24,008 14,152 45,318 38,160 

444210 Outdoor power equipment stores 505 481 277 782 758 

444220 Nursery, garden center, and farm supply stores 9,922 7,993 5,433 15,355 13,426 

445110 Supermarkets and other grocery (except 

convenience) stores 19,128 12,348 9,633 28,761 21,981 

445120 Convenience stores 7,387 6,419 3,720 11,107 10,139 

445210 Meat markets 98 90 53 151 143 

445220 Fish and seafood markets 69 68 84 153 152 

445230 Fruit and vegetable markets 112 109 304 416 413 

445291 Baked goods stores 34 25 84 118 109 

445292 Confectionery and nut stores 249 157 617 866 774 

445299 All other specialty food stores 602 466 1,493 2,095 1,959 

445310 Beer, wine, and liquor stores 1,047 912 400 1,447 1,312 

446110 Pharmacies and drug stores 31,431 14,254 4,289 35,720 18,543 

446120 Cosmetics, beauty supplies, and perfume stores 103 52 622 725 674 

446130 Optical goods stores 9 4 2 11 6 

446191 Food (health) supplement stores 205 117 503 708 620 

446199 All other health and personal care stores 17 12 42 59 54 

447110 Gasoline stations with convenience stores 4,680 2,562 373 5,053 2,935 

447190 Other gasoline stations 251 185 20 271 205 

448110 Men's clothing stores 547 326 272 819 598 

448120 Women's clothing stores 3,467 1,300 1,590 5,057 2,890 

448130 Children's and infants' clothing stores 2,838 1,089 2,833 5,671 3,922 

448140 Family clothing stores 21,147 6,211 10,135 31,282 16,346 

448150 Clothing accessories stores 277 134 739 1,016 873 

448190 Other clothing stores 972 642 2,152 3,124 2,794 

448210 Shoe stores 2,861 700 512 3,373 1,212 

448310 Jewelry stores 2,478 1,669 3,720 6,198 5,389 

448320 Luggage and leather goods stores 183 95 329 512 424 

451110 Sporting goods stores 16,051 12,663 15,450 31,501 28,113 

451120 Hobby, toy, and game stores 9,357 5,748 14,625 23,982 20,373 

451130 Sewing, needlework, and piece goods stores 5,207 3,792 14,629 19,836 18,421 

451140 Musical instrument and supplies stores 14 11 19 33 30 

451211 Book stores 3,641 1,698 3,727 7,368 5,425 

451212 News dealers and newsstands 293 251 2,302 2,595 2,553 

451220 Prerecorded tape, compact disc, and record stores 2,348 1,325 2,246 4,594 3,571 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-33

Table 2-15: Total Affected Retail Entities, by Affected NAICS 

NAICS NAICS Description 

Affected Employers 

Affected 

Nonemp. Total Affected 

Estab. Firms 

Firms = 

Estab. Estab. Firms 

A B C D = A+C E= B+C 

452111 Department stores (except discount department 

stores) 3,533 21 2,541 6,074 2,562 

452112 Discount department stores 5,001 14 3,597 8,598 3,611 

452910 Warehouse clubs and supercenters 4,260 12 3,064 7,324 3,076 

452990 All other general merchandise stores 33,061 8,862 23,776 56,837 32,638 

453110 Florists 15,177 14,577 18,469 33,646 33,046 

453210 Office supplies and stationery stores 9,032 5,024 5,721 14,753 10,745 

453220 Gift, novelty, and souvenir stores 21,442 16,466 36,700 58,142 53,166 

453910 Pet and pet supplies stores 65 44 62 127 106 

453920 Art dealers 860 825 2,247 3,107 3,072 

453930 Manufactured (mobile) home dealers 3,878 2,774 2,211 6,089 4,985 

453991 Tobacco stores 440 332 2,041 2,481 2,373 

453998 All other miscellaneous store retailers (except 

tobacco stores) 5,006 4,274 23,217 28,223 27,491 

454111 Electronic shopping 5,060 4,954 19,148 24,208 24,102 

454113 Mail-order houses 2,474 2,186 9,362 11,836 11,548 

454210 Vending machine operators 41 37 218 259 255 

454311 Heating oil dealers 1,254 1,064 381 1,635 1,445 

454312 Liquefied petroleum gas (bottled gas) dealers 1,509 580 459 1,968 1,039 

454390 Other direct selling establishments 5,475 5,052 172,819 178,294 177,871 

Total in Affected NAICS 404,758 247,689 511,359 916,117 759,048 

 Sources: U.S. Census Bureau 2010i, j, n 

1079 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-34

1080 2.2 Third Party Testing and Certification Costs 

1081 

1082 This analysis presents cost estimates assuming that the costs of complying with certification 

1083 requirements under TSCA Title VI will be the same as complying with the requirements of the CARB Air 

1084 Toxics Control Measure (ATCM) to reduce formaldehyde emissions from composite wood products. It is 

1085 also assumed that mills that are certified by a CARB-approved TPC will not have to generate new testing 

1086 data or incur significant costs to become certified by a TPC under the TSCA Title VI rule. TSCA Title 

1087 VI requires composite panel producers to perform formaldehyde emission testing on their composite 

1088 wood products and attain certification from an accredited third-party certifier (TPC). Producers must 

1089 undergo qualifying tests at a TPC lab, obtain an on-site audit from a TPC, implement quality control 

1090 systems, and train quality control employees in order to receive initial certification. Once a TPC certifies 

1091 a mill’s products, that mill is required to conduct on-going quality control testing, submit monthly reports 

1092 to the TPC, and receive quarterly on-site audits and testing by its TPC to maintain its certified status. 

1093 Mills that manufacture products made with no-added formaldehyde (NAF) resins that meet more stringent 

1094 emissions limits may apply for exemptions from some of the on-going testing requirements. 

1095 

1096 CARB has accredited nine U.S. third-party certifiers to offer formaldehyde certification and 

1097 testing programs. However, about 90 percent of the U.S. mills that have been certified to produce CARB1098 compliant products have the Composite Panel Association (CPA) or the Hardwood Plywood and Veneer 

1099 Association (HPVA) as their TPC. Therefore, this analysis relies on the prices charged by CPA and 

1100 HPVA for TPC services in order to estimate the costs associated with obtaining and maintaining 

1101 certification under TSCA Title VI. 

1102 

1103 2.2.1 Certification Fees 

1104 

1105 CPA and HPVA charge administrative fees to mills for certifying their products. CPA charges a 

1106 quarterly fee of $1,500 regardless of NAF or ULEF status, which is equivalent to $6,000 per year. HPVA 

1107 charges an annual program fee of $4,500 to $5,500 (depending on membership status) to mills that are not 

1108 NAF or ULEF certified. Mills with ULEF or NAF certifications are required to pay the standard annual 

1109 program fee in the first year and an annual fee of $2,700 to $3,700 in all subsequent years. For simplicity, 

1110 this analysis assumes that the annual certification fee for mills without an NAF or ULEF exemption is 

1111 $6,000, and that the fees for mills with a ULEF- or NAF exemption are $6,000 for the initial year, and 

$3,700 in all subsequent years.12 1112 

1113 

Table 2-16: Certification Fees 

Cost Category Certification Type Fee 

Initial Fee All $6,000 

Annual Fee Standard $6,000 

NAF/ULEF $3,700 

1114 

1115 2.2.2 Qualifying Test and Statistical Correlation 

1116 

1117 Under TSCA Title VI, a composite panel producer is required to obtain qualifying tests for each 

1118 product type (e.g., hardwood plywood – veneer core) and production line from the mill for which 

1119 certification is sought. A TPC employee must select and mark the panels to be tested during the initial 

1120 mill audit, with at least one panel being selected for each test. After panel selection has occurred, the mill 

 12 NAF and ULEF certifications apply to product lines, and not necessarily to the entire facility. Mills with multiple 

product lines could have one or more lines certified as NAF or ULEF, and other lines that are not. The NAF and ULEF 

testing costs do not apply to any product lines that are not NAF or ULEF certified. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-35

1121 must ship the marked panels to the TPC for testing at the TPC facility. This testing can be performed 

1122 using the ASTM E-1333-10 test method (which is commonly referred to as a large chamber or large scale 

1123 test, and which is termed the primary test method under the CARB ATCM). Testing can also be 

1124 performed under the TSCA Title VI rule using the ASTM D-6007-02 test method (which is commonly 

1125 referred to as a small chamber test, and which is termed the secondary test method under the CARB 

1126 ATCM), upon a showing of equivalence with ASTM E-1333-10. However this analysis assumes that all 

1127 qualifying testing is performed using the large chamber test method. Results from the five large chamber 

1128 tests must not exceed the emission standards for each product type and production line. 

1129 

1130 In addition to the qualifying testing performed via the large chamber test method, a mill must 

1131 perform on-going quality control testing on the applicable products. Quality control testing is typically 

1132 performed under the CARB ATCM using a small chamber test (ASTM D6007) or desiccator test (ASTM 

1133 D5582), and it is assumed that these will be the most commonly used quality control tests under the 

1134 TSCA Title VI rule. These tests require smaller test samples and can be conducted at the TPC facility, 

1135 contract lab, or on-site at a TPC-approved lab at the composite wood mill. The TPC must develop a 

1136 statistical correlation between the large chamber and small scale test methods using a minimum of five 

1137 data pairs. It is assumed that mills will need to obtain all five data pairs during qualifying testing, though 

1138 it is possible that some mills may be able to use previous test results or data obtained from the resin 

1139 manufacturer. Each large chamber test requires results from one small chamber test or three desiccator 

1140 tests to calculate the correlation. TSCA Title VI requires producers to obtain quality control test results 

1141 for a production lot before product from that lot can be shipped, so it is likely that producers will perform 

1142 quality control testing on-site to minimize the time taken to obtain testing results. This analysis assumes 

1143 that producers not currently performing testing on-site will purchase and operate a small chamber testing 

1144 unit for quality control testing. 

1145 

CPA and HPVA charge between $400 and $48013 1146 , though this analysis assumes that mills will 

1147 incur the higher cost of $480 for each test. Producers that perform quality control testing on-site will 

1148 need to perform a small chamber equivalence test for each large chamber test. It is assumed that each 

1149 equivalence test will take two hours to perform. 

1150 

1151 In addition to the testing fee, mills will also incur costs associated with shipping panels to the 

TPC, lost product, and labor time needed to prepare the panels14 1152 for shipping. Mills are expected to ship 

1153 at least five 4’ x 8’ panels for each product type via a commercial shipping carrier. Panels must be dead1154 stacked (i.e., having no layers between panels), bundled air-tight, wrapped in polyethylene, and protected 

1155 by cover sheets. Based on conversations with CPA and with CARB-certified mills, the total shipping cost 

1156 for the qualifying tests is estimated to be approximately $200 per product line. 

1157 

1158 This analysis estimated the cost of each panel using the average cost per square foot of hardwood 

1159 plywood, $0.49 and particleboard, $0.28 (RISI 2010). Assuming a panel size of 32 sq. ft., each hardwood 

1160 plywood panel will cost the mill $15.68, and each particleboard panel will cost $8.96. The analysis 

1161 assumes that it will take a managerial-level employee half an hour to prepare the panels for shipping. 

1162 Using data published by the U.S. Bureau of Labor Statistics (BLS), EPA estimated the average loaded 

1163 hourly wage for a managerial position within the Veneer, Plywood, and Engineered Wood Products 

Industry to be $71.36.15 1164 Table 2-17 summarizes the initial unit testing costs, including fees, preparation, 

1165 lost product, and shipping. 

 13 This is the rate charged by HPVA’s Reston Lab to non-members for testing panels. This lab charges non-members 

$660 to test doors, $840 to test finished engineered wood flooring, and $480 to test furniture and cabinets. 14 The panels for the qualifying tests are selected during the initial on-site audit. 15 The Occupational Employment Statistics (published by BLS for May, 2009) reports the average hourly wage for all 

management occupations in NAICS 321200 to be $44.46. Employer Costs for Employee Compensation (ECEC) data 

(also published by BLS) for all private industry occupations were used to inflate the wage to $44.88 in 2010 dollars. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-36

1166 

Table 2-17: Qualifying Test Costs 

Cost Category Description Unit Cost 

Number 

of Units 

Cost for 

PB/MDF 

Cost for 

HWPW 

Large Scale Testing Large Chamber $480 5 tests $2,400 $2,400

Small Scale Testing 

at Mill Labor $71.36 10 hours $714 $714 

Shipping Five 4' x 8' panels $200 1 shipment $200 $200 

Labor $71.36 0.5 hours $36 $36 

Lost Product PB/MDF $8.96 5 panels $45 N/A

HWPW $15.68 5 panels N/A $78

Total $3,394 $3,428

Sources: BLS 2010; Communications with CPA and HPVA; RISI 2011.

1167 

1168 2.2.3 Quality Control Procedures 

1169 

1170 Under TSCA Title VI, mills will be required to ensure that all manufactured composite wood 

1171 products meet the formaldehyde emission standards by implementing routine quality control procedures 

1172 and receiving periodic quality control reviews from a third-party certifier. The following sections provide 

1173 details of the requirements and costs associated with receiving on- and off-site audits, developing quality 

1174 control systems, and conducting routine quality control testing. 

1175 

1176 2.2.3.1 Quality Control Audits 

1177 

1178 The TPC is responsible for conducting on-site visits to certified mills. Before the initial 

1179 certification, the TPC is expected to make at least one trip to the mill to inspect the mill’s quality control 

1180 and quality assurance systems and employees. During the initial visit, the TPC will assist the mill in 

1181 setting up quality control systems, including the quality control testing facility, if applicable, and methods 

1182 for selecting samples. After certification has been granted, the TPC is obligated to perform an on-site 

1183 audit at least once quarterly, unless the mill obtains NAF certification. Audits typically do not take more 

1184 than one day of travel and visitation, though if the mill requires a substantial number of modifications or 

1185 is unprepared, the duration of the visit may be longer (HPVA 2011). TPCs may also conduct periodic 

1186 “desk audits,” which are quality control checks performed over the phone in which the mill’s quality 

1187 control testing procedures and data are reviewed. 

1188 

1189 The cost of the audit is borne by the composite panel producer and has two components: audit 

1190 fees and travel costs. Site audit fees can range from $300 to $450 for initial visits and from $400 to $450 

1191 for quarterly visits, depending on the TPC. Travel costs can vary depending on the relative location of the 

1192 mill to the TPC; mills within a close proximity may not incur any travel costs, whereas a mill across the 

1193 country may incur travel costs of up to $2,000 per visit. It is assumed that travel is only necessary for the 

1194 annual audits, as other intermediate audits can be performed by contracting inspectors closer to the mill. 

1195 The fees for the desk audits range from $200 to $250 per audit, and no travel is required. Based on these 

1196 ranges, this analysis assumes that initial site audits will cost a mill $1,950 per visit ($450 fee plus $1,500 

1197 travel), quarterly audits will cost $450 per visit, and desk audits will cost $250 per review. In addition to 

1198 the fees charged by the TPC, mills will also incur labor costs associated with the audit process. This 

1199 analysis assumes that a managerial-level employee will be present for eight hours during the initial on-site 

1200 audit, four hours for every on-site audit thereafter, and one hour for each desk audit. Table 2-18 

1201 summarizes the audit costs described above. 

 ECEC data were also used to estimate that benefits accounted for approximately 29.3 percent of total compensation. 

Assuming a 17 percent rate of overhead on wages (not including benefits), total hourly compensation is estimated to be 

$71.36. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-37

1202 

Table 2-18: Quality Control Audit Costs 

Cost Category Unit Cost Number of Units Travel Cost Total Cost 

TPC Fees 

Initial Audit $450 1 audit $1,500 $1,950 

Annual On-Site Audit $450 1 audit $1,500 $1,950 

Other On-Site Audit $450 1 audit $0 $450 

Desk Audit $250 1 audit $0 $250 

Mill Labor Costs 

Initial Audit $71.36 8 hours N.A. $571 

Annual On-Site Audit $71.36 4 hours N.A. $285 

Other On-Site Audit $71.36 4 hours N.A. $285 

Desk Audit $71.36 1 hour N.A. $71 

Sources: BLS 2010; Communications with CPA and HPVA. 

1203 

1204 2.2.3.2 Quality Control Manual and Personnel 

1205 

1206 Mills are required to implement quality control procedures to ensure that all certified products 

1207 consistently meet the applicable emissions standards. In addition, the rule requires each mill to designate 

1208 a quality control manager and quality control employees, if needed. The quality control manager must 

1209 have adequate training or experience to handle all quality control procedures, including on-site testing and 

1210 shipping samples for TPC testing. All quality control procedures and designated quality control 

1211 personnel must be identified in a quality control manual. Prior to the mill’s initial certification, the TPC 

1212 will assist mills in developing and documenting appropriate quality control procedures. In some cases, 

1213 the mill’s resin supplier will also help to train quality control employees and develop quality control 

1214 procedures. 

1215 

1216 Based on conversations with CPA, HPVA, and composite panel producers, it is assumed that 

1217 training, implementing quality control systems, and developing the quality control manual could take 

1218 between one and five days to complete, depending on the mill’s existing quality control systems. HPVA 

1219 and CPA noted that smaller mills often do not have quality control systems in place and that developing 

1220 these systems can be a time-consuming process. This analysis estimates that a managerial-level employee 

1221 will spend forty hours training, becoming familiarized with the testing and certification requirements, 

1222 writing the quality control manual, and setting up quality control systems and testing procedures. 

1223 

1224 2.2.3.3 Routine Quality Control Testing 

1225 

1226 To maintain certification, a mill must perform routine quality control testing for each certified 

1227 product type and production line. Quality control testing is typically performed using one of the 

1228 correlated small scale test methods described in Section 2.2.1 – a small chamber test (ASTM D6007) or a 

1229 desiccator (ASTM D5582). 

1230 

1231 The frequency of the required quality control testing depends on the product type and, for 

1232 hardwood plywood, the production volume. Hardwood plywood plants producing 100 thousand square 

1233 feet (msf) or less per week are required to test once per 100 msf; plants more than 100 msf but less than 

1234 200 msf per week must test once per week; plants producing more than 200 msf but less than 400 msf per 

1235 week are required to test twice per week; and those producing 400 msf or more per week are required to 

1236 test four times per week. Particleboard and MDF producers must test samples at least once per eight or 

1237 twelve hour shift, but this frequency may be reduced to one test per forty-eight hours if the plant or 

1238 production line has shown consistent operations and low variability of test results. This analysis makes 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-38

1239 the simplifying assumption that all producers will test each production line once daily. This results in a 

1240 conservative estimate of the cost of quality control testing for hardwood plywood producers. 

1241 

1242 Mills have the option of constructing an on-site lab and having it approved by a TPC, or 

1243 contracting with a certified third-party lab to perform their quality control testing. The decision to 

1244 perform on-site testing is dependent on the relative costs of building and running an on-site lab, and the 

1245 fees and shipping costs associated with hiring a third-party lab. According to CPA and HPVA, 

1246 particleboard and MDF mills already have their own on-site labs to test for formaldehyde (because they 

1247 have to test their products on a daily basis under the CARB ATCM), while most smaller hardwood 

1248 plywood mills pay their TPC to conduct their quality control testing (In part because hardwood plywood 

1249 mills often use ULEF or NAF resins to qualify for exemptions from some of the on-going testing 

1250 requirements under the CARB ATCM). However, the CARB ATCM allows mills to ship panels from 

1251 certified product lines before test results are available. By contrast, the proposed TSCA rule requires 

1252 mills to wait until test results indicate that the emissions standards have been met before shipping a lot 

1253 that has been tested. It is uncertain how often mills currently ship product from a lot being tested before 

1254 the test results are available and therefore it is uncertain how mills will choose to comply with this 

1255 requirement. It may be the case that some mills normally maintain a level of inventory where they would 

1256 typically not ship any panels before test results have been determined for that lot, but other mills may ship 

1257 out panels on the same day they are produced. This analysis assumes that all mills that do not already do 

1258 so will opt to set up and operate a quality control testing facility on-site, in order to minimize the time 

1259 spent waiting for test results, and to maximize their flexibility to ship out panels shortly after they have 

1260 been produced (Assuming that mills conduct on-site testing may overstate the costs of this requirement if 

1261 some mills find it more cost effective to hold products in inventory until test results have been determined 

1262 by an outside lab). 

1263 

1264 Panel producers that have not already set up their own quality control testing facilities due to the 

1265 CARB ATCM will incur the cost of setting up a controlled lab environment, purchasing testing 

1266 equipment, and operating the lab on an on-going basis. It is assumed that each mill will incur an initial 

1267 cost of $10,000 to create a lab and purchase small chamber or desiccator testing units. It is assumed that 

1268 the quality control manager will spend two hours each day performing routine quality control testing at a 

1269 loaded wage rate of $71.36 per hour. It is also assumed that one panel will be needed for testing from 

1270 each production line at a cost of $15.68 per hardwood plywood panel and $8.96 per particleboard panel. 

1271 (See Section 2.2.2 for a description of how these costs were estimated.) 

1272 

Table 2-19: Routine Small Scale Testing Costs 

Cost Category Unit Cost Number of Units Time Period Total Cost 

Hardwood Plywood Producers Performing Their Own Daily Small Scale Testing a 

Setup Lab $10,000 1 lab One-Time $10,000 

Lost Product $15.68 1 panel Daily $15.68 

Labor $71.36 2 hours Daily $143 

Particleboard Producers Performing Their Own Daily Small Scale Testing 

Setup Lab $10,000 1 lab One-Time $10,000 

Lost Product $8.96 1 panel Daily $8.96 

Labor $71.36 2 hours Daily $143 

a. It is assumed that hardwood plywood producers that are not CARB certified have a production volume 

that would require testing on weekly basis. The producers could have the products tested at a third-party 

lab, but it is assumed they will choose to perform daily tests at their own small scale lab because of the 

requirement in the TSCA Title VI rule that production lots that have been tested cannot be shipped until the 

test results indicate the emissions standards have been met. 

Sources: BLS, 2010; Communications with CPA and HPVA; RISI, 2010. 

1273 
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January 27, 2012 2-39

1274 2.2.4 NAF and ULEF Certifications 

1275 

1276 Under the proposed option, products made with NAF resins may be eligible for reduced large 

1277 chamber and small scale testing frequencies. The application process for NAF certification includes an 

1278 initial quality control testing period, and quarterly tests to be performed by the TPC. The results from 

1279 these tests must meet the emissions limits for NAF certification specified by TSCA Title VI in order for a 

1280 product line to be exempt from quarterly TPC testing and/or to have reduced testing frequencies. The 

1281 proposed option does not provide for reduced testing frequencies for products made with ULEF resins. 

1282 

1283 2.2.4.1 NAF and ULEF Emissions Standards 

1284 

1285 Product lines certified as using NAF resins may be exempt from some of the quarterly TPC 

1286 testing and routine QC testing. NAF certification can be achieved by performing three months of routine 

1287 quality control testing and one quarterly large or small chamber test at the TPC. Ninety percent of the 

1288 results from routine testing and the result from the quarterly TPC test must be no higher than 0.04 ppm; 

1289 all test results must be no higher than 0.05 ppm for hardwood plywood, and 0.06 ppm for particleboard, 

1290 MDF, and thin MDF. Product lines approved for NAF certification are exempt from routine quality 

1291 control testing and quarterly TPC testing for two years. After two years, the mill may reapply for NAF 

1292 certification based on the results of at least one large or small chamber test. 

1293 

1294 The CARB ATCM also allows for reduced testing frequencies for ULEF products. As the TSCA 

1295 Title VI proposed option does not include reduced testing allowances for ULEF product lines, mills with 

1296 ULEF certification would incur higher testing and certification costs under the proposed rule. The CARB 

1297 ATCM requires a mill to perform quality control testing on the ULEF product type for the first sixth 

1298 months after the initial certification and two quarterly large or small chamber TPC tests. For hardwood 

1299 plywood products to be exempt from additional quarterly TPC testing and routine quality control testing, 

1300 the two initial quarterly TPC tests and ninety percent of the initial quality control tests must have 

1301 emissions no higher than 0.04 parts per million (ppm), and all tests results must be no higher than the cap 

1302 value of 0.05 ppm. A hardwood plywood product line meeting these requirements would be exempt from 

1303 quarterly TPC testing and routine quality control testing for the two year duration of the approval. 

1304 Product lines that do not meet the target value of 0.04 ppm may receive approval for semiannual, rather 

1305 than quarterly, large or small chamber TPC testing if all results are below the cap value of 0.05 ppm. For 

1306 particleboard, MDF, and thin MDF product lines, ninety percent of the results from the quality control 

1307 test results and the results of the two quarterly tests must be no higher than the ULEF-target values listed 

1308 in Table 2-20; all results must be lower than the ULEF-cap values. Particleboard, MDF, and thin MDF 

1309 products that meet the exemption values may be approved for an exemption from the quarterly TPC 

1310 testing and routine quality control testing for two years. Products that meet the quality control testing 

1311 reduction values may be approved for a reduction in TPC testing (semiannually instead of quarterly), and 

1312 in quality control testing frequency (weekly instead of once per eight to twelve hour shift). ULEF 

1313 certifications expire after two years, at which time a mill may reapply by submitting test results from at 

1314 least two large or small chamber tests. 

1315 

1316 Table 2-20 summarizes the TSCA Title VI and CARB ATCM emissions standards for each 

1317 product type and certification type. Table 2-21 presents the amount of testing and the results required to 

1318 apply for each type of NAF/ULEF certification under TSCA Title VI and the CARB ATCM. 

1319 
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January 27, 2012 2-40

Table 2-20: Summary of Emissions Standards by Product Type (parts per million) 

Product Type 

Standard 

Certification 

 NAF 

ULEF 

(Quarterly TPC 

Test 

Exemption)c 

ULEF (QC Testing 

Reduction)c 

Target Valuesa

Hardwood Plywood 0.05 0.04 0.04 0.05 

Particleboard 0.09 0.04 0.04 0.05 

MDF 0.11 0.04 0.04 0.06 

Thin MDF 0.13 0.04 0.04 0.08 

Cap Valuesb

Hardwood Plywood 0.05 0.05 0.05 0.05 

Particleboard 0.09 0.06 0.06 0.08 

MDF 0.11 0.06 0.06 0.09 

Thin MDF 0.13 0.06 0.06 0.11 

a. Ninety percent of routine quality control test results, and all quarterly TPC test results must be no higher than these 

values. 

b. All routine quality control and quarterly TPC test results must be no higher than these values. 

c. As prescribed by the CARB ATCM. The proposed option under TSCA Title VI does not include reduced testing for 

ULEF products. 

1320 

Table 2-21: NAF and ULEF Certification Testing Requirements (Results in ppm) 

 NAF ULEFa 

 Product Type 

Routine Quality 

Control Testing 

Quarterly Large or 

Small Chamber TPC 

Testing 

 Routine Quality 

Control Testing 

Quarterly Large or 

Small Chamber TPC 

Testing 

Testing Requirements 

HWPW Weeklyb for 3 months One test Weeklyb for 6 months Two tests 

PB/MDF/Thin MDF 

Once per 8-12 hour 

shift for 3 months One test 

Once per 8-12 hour 

shift for 6 months Two tests 

Results Needed for TPC and QC Testing Exemption 

HWPW 

90% ≤ 0.04 

100% ≤ 0.05 1 test ≤ 0.04 

90% ≤ 0.04 

100% ≤ 0.05 2 tests ≤ 0.04 

PB/MDF/Thin MDF 

90% ≤ 0.04 

100% ≤ 0.06 1 test ≤ 0.04 

90% ≤ 0.04 

100% ≤ 0.06 2 tests ≤ 0.04 

Results Needed for QC Testing Frequency Reduction 

HWPW N/A N/A 100% ≤ 0.05 2 tests ≤ 0.05 

Particleboard N/A N/A 

90% ≤ 0.05 

100% ≤ 0.08 2 tests ≤ 0.08 

MDF N/A N/A 

90% ≤ 0.06 

100% ≤ 0.09 2 tests ≤ 0.09 

Thin MDF N/A N/A 

90% ≤ 0.08 

100% ≤ 0.11 2 tests ≤ 0.11 

 

a. As prescribed by the CARB ATCM. The proposed option under TSCA Title VI does not include reduced testing for ULEF products.

b. Testing frequency for HWPW depends on production volume. Testing is assumed to be weekly for purposes of this analysis. 

1321 

1322 The CARB ATCM sets a minimum threshold for quality control testing requirements for NAF 

1323 and ULEF products but, based on communications with HPVA and with CARB-certified mills, some 

1324 TPCs may have more stringent requirements. For example, HPVA requires mills to have on-site audits 

1325 and large chamber tests annually for NAF-certified products, and quarterly for ULEF-certified products, 

1326 which is more frequently than the CARB rule requires. This analysis therefore assumes that TPCs test 
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January 27, 2012 2-41

1327 and audit mills with NAF or ULEF-certified product lines more frequently than the CARB ATCM or 

TSCA Title VI requires.16 1328 As noted in Section 2.2.1, it is assumed that mills will pay reduced recurring 

1329 administrative fees to the TPC after achieving ULEF or NAF certification status. Table 2-22 summarizes 

1330 the differences between how TPCs are assumed to implement a standard certification and a certification 

1331 with an NAF or ULEF exemption. 

1332 

Table 2-22: Testing and Certification Frequencies Assumed to be Implemented by TPCs 

Category Standard NAF ULEF

Certification Fee Annual 

Annual (reduced fee after first 

year) 

Annual (reduced fee after first 

year) 

Qualifying Testing One-time One-time One-time 

TPC Audit Quarterly 

Twice initially and annually 

thereafter 

Twice initially and annually 

thereafter 

TPC Audit Travel First audit each year Annual Annual 

Large Chamber TPC 

Testing Quarterly 

Once initially and annually 

thereafter 

Once initially and quarterly 

thereafter 

QC Testing On-going 

First 3 months and exempt 

thereafter 

First 6 months and exempt or 

reduced thereafter 

Desk Audit 

Monthly (excludes 

audit months) 

First 2 months and exempt 

thereafter 

First 4 months and exempt 

thereafter 

1333 

1334 2.2.5 Average Certification and Testing Costs per Mill 

1335 

1336 As described at the beginning of this section, all U.S. hardwood plywood mills that are not CARB 

1337 certified in the baseline are assumed to apply for NAF certification, but particleboard mills are less likely 

1338 to become NAF- certified. However, as some mills may not become NAF-certified in practice, the next 

1339 section presents a range of certification costs. To simplify the analysis, testing and certification costs for 

1340 a “typical” mill were estimated using the unit costs described above. This analysis assumes that a 

1341 hardwood plywood mill will produce two product types (i.e., hardwood plywood with veneer core and 

1342 composite core) and not exceed a production volume of 200 msf per week. The typical particleboard or 

1343 MDF mill is assumed to produce two product types and test once daily for five days each week. 

1344 

1345 Some mills with existing CARB-certified product lines might certify an additional product line 

1346 under TSCA Title VI or change certification types (e.g., without exemptions for NAF). These mills 

1347 would be paying certification fees in the baseline and so would not incur the total cost of fees as a result 

1348 of TSCA Title VI. It is assumed that mills will coordinate audits needed for certifying a new product 

1349 under TSCA Title VI with the audits already being performed for CARB certified products. Note that 

1350 particleboard and MDF mills having ULEF certifications in the baseline are assumed to be exempt from 

1351 routine testing requirements after the first six months under the CARB ATCM. Though some mills may 

1352 only have reduced testing frequencies, this assumption results in a higher incremental cost to mills 

1353 switching from ULEF certifications. 

1354 

1355 This analysis also presents estimated testing and certification costs for wood veneer laminated 

product producers in the event that they are subject to these requirements.17 1356 Wood veneer laminators are 

1357 assumed to have testing and certification costs that are similar to stock hardwood plywood mills. Many 

1358 wood veneer laminated product producers produce panels in small batches according to customer 

 16 While the TSCA Title VI rule does not allow ULEF certifications, the cost is relevant here in order to calculate the 

incremental cost of the TSCA rule for mills that make products with a ULEF certification under the CARB ATCM. 17 A wood veneer laminated product is defined for this analysis as hardwood plywood where the producer glues a wood 

veneer to the face and/or back of a purchased platform to produce a finished product or component part (other than a 

stock hardwood plywood panel). 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-42

1359 specifications, and therefore their production may include more variety in terms of core types and face 

1360 veneers compared to stock panel producers. Nevertheless, the analysis assumes that wood veneer 

1361 laminated product producers can limit the number of product lines requiring certification to no more than 

1362 two – one veneer core product line and one composite core product line. 

1363 

1364 The following tables present the costs to mills for each type of certification scenario. The tables 

1365 are organized by each type of product and type of certification under the CARB ATCM and the TSCA 

1366 Title VI rule as follows. 

1367 

1368  Hardwood Plywood Mills: 

1369  Table 2-23, two uncertified products (i.e., not certified under the CARB ATCM) 

1370 receiving NAF certifications under the TSCA Title VI rule; 

1371  Table 2-24, two uncertified products under the CARB ATCM receiving standard (i.e., 

1372 Phase 2) certifications under the TSCA Title VI rule; 

1373  Table 2-25, two products with standard certifications under the CARB ATCM receiving 

1374 NAF certifications under the TSCA Title VI rule; 

1375  Table 2-26, two products with standard certifications under the CARB ATCM receiving 

1376 standard certifications under the TSCA Title VI rule; 

1377  Table 2-27, two products with ULEF certifications under the CARB ATCM receiving 

1378 standard certifications under the TSCA Title VI rule; 

1379  Table 2-28, one product with ULEF certification under the CARB ATCM receiving NAF 

1380 certification under the TSCA Title VI rule, and a second product with NAF certification 

1381 under the CARB ATCM receiving NAF certification under the TSCA Title VI rule. 

1382  Table 2-29, one product with ULEF certification and one product with NAF certification 

1383 under the CARB ATCM both receiving standard certifications under the TSCA Title VI 

1384 rule; and 

1385  Table 2-30, two products with ULEF certifications under the CARB ATCM rule 

1386 receiving NAF certifications under the TSCA Title VI rule. 

1387  Particleboard and MDF: 

1388  Table 2-31, one uncertified product under the CARB ATCM receiving standard 

1389 certification under the TSCA Title VI rule, and one product with standard certification 

1390 receiving standard certification under the TSCA Title VI rule; 

1391  Table 2-32, two products with ULEF certification under the CARB ATCM receiving 

1392 standard certifications under the TSCA Title VI rule; 

1393  Table 2-33, one product with ULEF certification and a second product with NAF 

1394 certification both receiving standard certifications under the TSCA Title VI rule; 

1395  Table 2-34, one uncertified product and a second product with standard certification both 

1396 receiving NAF certifications under the CARB ATCM; 
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January 27, 2012 2-43

1397  Table 2-35, two products with ULEF certifications under the CARB ATCM receiving 

1398 NAF certifications under the TSCA Title VI rule; 

1399  Table 2-36, two products with standard certifications under the CARB ATCM receiving 

1400 NAF certifications under the TCA Title VI rule; 

1401  Table 2-37, one product with ULEF certification and a second product with NAF 

1402 certification under the CARB ATCM both receiving NAF certification under the TSCA 

1403 Title VI rule; and 

1404  Table 2-38, one product with standard certification and a second product with NAF 

1405 certification under the CARB ATCM both receiving NAF certification under the TSCA 

1406 Title VI rule. 

1407  Wood Veneer Laminated Product Producers: 

1408  Table 2-39, one product not certified under the CARB ATCM receiving standard 

1409 certification under the TSCA Title VI rule; 

1410  Table 2-40, two products not certified under the CARB ATCM receiving standard 

1411 certifications under the TSCA Title VI rule; 

1412  Table 2-41, one product not certified under the CARB ATCM receiving NAF 

1413 certification under the TSCA Title VI rule; and 

1414  Table 2-42, two products not certified under the CARB ATCM receiving NAF 

1415 certifications under the TSCA Title VI rule. 

1416 

1417 The cost estimates presented in the tables represent the actual costs incurred by a mill in the first 

1418 year of a product’s certification and each subsequent year, thereafter. However, mills that have existing 

1419 CARB-certified products will already be incurring some of these costs in the baseline. Therefore, the 

1420 incremental testing and certification costs of complying with TSCA Title VI requirements will be lower 

1421 for these mills. Table 2-43 presents the summary of incremental costs (actual costs minus baseline costs) 

1422 for obtaining certification by product type, number of product lines, and baseline certification status. 

1423 
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January 27, 2012 2-44

1424 

Table 2-23: Annual Testing and Certification Costs for Hardwood Plywood Millsa 

Existing Certification(s): Two Uncertified Products 

New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types Total Cost 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 

Qualifying Test $480 5 tests 2 $4,800 

Equivalence Test $71.36 10 hours 2 $1,427 

Qualifying Test Shipping $200 1 test 2 $400 

TPC Audit $450 2 audits 1 $900 

TPC Audit Travel $1,500 1 audits 1 $1,500 

TPC Testing $480 1 test 2 $960 

TPC Testing Shipping $50 1 shipment 2 $100 

Small Chamber Testing Unit $10,000 1 unit 1 $10,000 

Desk Audit $250 2 audits 1 $500 

Mill Laborb $71.36 185 hours 1 $13,202 

Lost Productc $15.68 71 panels 2 $2,227 

First Year Total $42,015 

Subsequent Years

Re-certification Fee $3,700 1 fee 1 $3,700 

TPC Audit $450 1 audit 1 $450 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 1 test 2 $960 

TPC Testing Shipping $50 1 shipment 2 $100 

Mill Labord $71.36 4.5 hours 1 $321 

Lost Producte $15.68 1 panel 2 $31 

Subsequent Year Total $7,062 

a. NAF certification can be achieved based on testing results from one quarterly TPC test (using large or small 

chamber test) and 3 months (i.e., 13 weeks) of routine quality control testing. Testing frequencies are those required 

by the TPC and may be more frequent than TSCA Title VI requires. 

b. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the 

quality control systems, 4 hours for the second audit, 1 hour per desk audit for 2 months, and 2 hours a day to test 

samples for 13 weeks of quality control testing. 

c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of quality control testing, and 1 panel for the second 

large chamber TPC test. 

d. 4 hours for the on-site audit and 0.5 hours to ship samples. 

e. 1 panel for annual large chamber TPC testing. 

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010. 

1425 
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January 27, 2012 2-45

1426 

Table 2-24: Annual Testing and Certification Costs for Hardwood Plywood Mills 

Existing Certification(s): Two Uncertified Products 

New Certification(s): Two Standard Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types Total Cost 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 

Qualifying Test $480 5 tests 2 $4,800 

Equivalence Test $71.36 10 hours 2 $1,427 

Qualifying Test Shipping $200 1 shipment 2 $400 

TPC Audit $450 4 audits 1 $1,800 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 3 tests 2 $2,880 

TPC Testing Shipping $50 3 shipments 2 $300 

Small Chamber Testing Unit $10,000 1 unit 1 $10,000 

Desk Audit $250 8 audits 1 $2,000 

Mill Labora $71.36 590 hours 1 $42,102 

Lost Productb $15.68 268 panels 2 $8,404 

First Year Total $81,614 

Subsequent Years

Re-certification Fee $6,000 1 fee 1 $6,000 

TPC Audit $450 4 audits 1 $1,800 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 4 tests 2 $3,840 

TPC Testing Shipping $50 4 shipments 2 $400 

Desk Audit $250 8 audits 1 $2,000 

Mill Laborc $71.36 546 hours 1 $38,963 

Lost Productd $15.68 264 panels 2 $8,279 

Subsequent Year Total $62,782 

a. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control 

systems, 4 hours for other quarterly audits, 1 hour per desk audit for the other 8 months, and 2 hours a day to test samples for 

52 weeks of quality control testing.

b. 5 panels for qualifying testing, 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly large 

chamber TPC test.

c. 4 hours for other quarterly audits, 1 hour per desk audit for the other 8 months, and 2 hours a day to test samples for 52 

weeks of quality control testing.

d. 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly large chamber TPC test. 

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-46

1427 

Table 2-25: Annual Testing and Certification Costs for Hardwood Plywood Mills Existing Certification(s): Two Standard Products – New Certification(s): Two Standard Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existi

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 Qualifying Test $480 0 tests 2 $0 $0 Correlation Test $71.36 0 tests 2 $0 $0 Qualifying Test Shipping $200 0 shipment 2 $0 $0 TPC Audit $450 4 audits 1 $1,800 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 test 2 $3,840 $3,840 TPC Testing Shipping $50 4 shipment 2 $400 $400 Weekly QC Testing $154 0 tests 2 $0 $32,032 Weekly QC Testing Shipping $50 0 shipments 2 $0 $5,200 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 $0 Desk Audit $250 8 audits 1 $2,000 $2,000 Mill Labora $71.36 546 hours 1 $38,963 $7,421 Lost Productb $15.68 264 panels 2 $8,279 $1,756 First Year Total $72,782 $61,950 

Subsequent Years 

Re-certification Fee $6,000 1 fee 1 $6,000 $6,000 TPC Audit $450 4 audit 1 $1,800 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 test 2 $3,840 $3,840 TPC Testing Shipping $50 4 shipment 2 $400 $400 Weekly QC Testing $154 0 tests 2 $0 $32,032 Weekly QC Testing Shipping $50 0 shipments 2 $0 $5,200 Desk Audit $250 8 audits 1 $2,000 $2,000 Mill Labora $71.36 546 hours 1 $38,963 $7,421 Lost Productb $15.68 264 panel 2 $8,279 $1,756 Subsequent Year Total $62,782 $61,950 a. 4 hours for other quarterly audits, 1 hour per desk audit for the other 8 months, and 2 hours a day to test samples for 52 weeks of quality control testing.b. 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly large chamber TPC test. Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-47

Table 2-26: Annual Testing and Certification Costs for Hardwood Plywood MillsaExisting Certification(s): Two Standard Products – New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existi

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 Qualifying Test $480 5 tests 2 $4,800 $0 Correlation Test $71.36 10 tests 2 $1,427 $0 Qualifying Test Shipping $200 1 shipment 2 $400 $0 TPC Audit $450 2 audits 1 $900 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Weekly QC Testing $154 0 tests 2 $0 $32,032 Weekly QC Testing Shipping $50 0 shipments 2 $0 $5,200 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 $0 Desk Audit $250 2 audits 1 $500 $2,000 Mill Laborb $71.36 141 hours 1 $10,062 $7,421 Lost Productc $15.68 71 panels 2 $2,227 $1,756 First Year Total $38,876 $61,950 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $6,000 TPC Audit $450 1 audit 1 $450 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Weekly QC Testing $154 0 tests 2 $0 $32,032 Weekly QC Testing Shipping $50 0 shipments 2 $0 $5,200 Desk Audit $250 0 audits 1 $0 $2,000 Mill Labord $71.36 4.5 hours 1 $321 $7,421 Lost Producte $15.68 1 panel 2 $31 $1,756 Subsequent Year Total $7,062 $61,950 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.b. 4 hours for the initial and second audit, 0.5 hours to prepare shipping for the qualifying test and second audit, 1 hour per desk audit for 2 months for NAF products, an

samples for 13 weeks of quality control testing. 

c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.d. 4 hours for the on-site audit and 0.5 hours to ship samples.e. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-48

Table 2-27: Annual Testing and Certification Costs for Hardwood Plywood Mills Existing Certification(s): Two ULEF Products – New Certification(s): Two Standard Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify 

Additional Product 

Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $3,700 Qualifying Test $480 0 tests 2 $0 $0 Correlation Test $71.36 0 tests 2 $0 $0 Qualifying Test Shipping $200 0 shipments 2 $0 $0 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $3,840 TPC Testing Shipping $50 4 shipments 2 $400 $400 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 $0 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,963 $642 Lost Productb $15.68 264 panels 2 $8,279 $125 First Year Total $72,782 $10,658 

Subsequent Years 

Re-certification Fee $6,000 1 fee 1 $6,000 $3,700 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $3,840 TPC Testing Shipping $50 4 shipments 2 $400 $400 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,963 $642 Lost Productb $15.68 264 panels 2 $8,279 $125 Subsequent Year Total $62,782 $10,658 a. 4 hours for other quarterly audits, 0.5 to prepare shipping, 1 hour per desk audit for the other 8 months, and 2 hours a day to test samples for 52 weeks of quality contrb. 1 panel a day for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1428 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-49

1429 

Table 2-28: Annual Testing and Certification Costs for Hardwood Plywood MillsaExisting Certification(s): One ULEF Product and One NAF Product – New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 Qualifying Test $480 5 tests 1 $2,400 $0 Correlation Test $71.36 10 tests 1 $714 $0 Qualifying Test Shipping $200 1 shipment 1 $200 $0 TPC Audit $450 2 audits 1 $900 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 1 $480 $1,920 TPC Testing Shipping $50 1 shipment 1 $50 $200 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 $642 Desk Audit $250 2 audits 1 $500 $0 Mill Laborb $71.36 141 hours 1 $10,062 $642 Lost Productc $15.68 71 panels 1 $1,113 $63 First Year Total $31,619 $9,117 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $3,700 TPC Audit $450 1 audit 1 $450 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 1 $480 $1,920 TPC Testing Shipping $50 1 shipment 1 $50 $200 Mill Labord $71.36 4.5 hours 1 $321 $642 Lost Producte $15.68 1 panel 1 $16 $63 Subsequent Year Total $6,517 $8,475 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine sfrequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.b. 4 hours for the initial and second audit, 0.5 hours to prepare shipping for the qualifying test and second audit, 1 hour per desk audit for 2 months for NAF products, and 

samples for 13 weeks of quality control testing. 

c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.d. 4 hours for the on-site audit and 0.5 hours to ship samples.e. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1430 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-50

1431 

Table 2-29: Annual Testing and Certification Costs for Hardwood Plywood Mills Existing Certification(s): One ULEF Product and One NAF Product – New Certification(s): Two Standard Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $3,700 Qualifying Test $480 0 tests 2 $0 $0 Correlation Test $71.36 0 tests 2 $0 $0 Qualifying Test Shipping $200 0 shipments 2 $0 $0 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $2,400 TPC Testing Shipping $50 4 shipments 2 $400 $250 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 $78 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,963 $642 Lost Productb $15.68 264 panels 2 $8,279 $78 First Year Total $72,782 $9,099 

Subsequent Years 

Re-certification Fee $6,000 1 fees 1 $6,000 $3,700 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $2,400 TPC Testing Shipping $50 4 shipments 2 $400 $250 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,963 $642 Lost Productb $15.68 264 panels 2 $8,279 $78 Subsequent Year Total $62,782 $9,021 a. 4 hours for other quarterly audits, 0.5 to prepare shipping, 1 hour per desk audit for the other 8 months, and 2 hours a day to test samples for 52 weeks of quality contrb. 1 panel a week for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1432 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-51

Table 2-30: Annual Testing and Certification Costs for Hardwood Plywood Millsa Existing Certification(s): Two ULEF Products – New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 Qualifying Test $480 5 tests 2 $4,800 $0 Correlation Test $71.36 10 tests 2 $1,427 $0 Qualifying Test Shipping $200 1 shipment 2 $400 $0 TPC Audit $450 2 audits 1 $900 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 $2,000 Desk Audit $250 2 audits 1 $500 $0 Mill Laborb $71.36 141 hours 1 $10,062 $642 Lost Productc $15.68 71 panels 2 $2,227 $125 First Year Total $36,576 $12,658 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $3,700 TPC Audit $450 1 audit 1 $450 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Mill Labord $71.36 4.5 hours 1 $321 $642 Lost Producte $15.68 1 panel 2 $31 $125 Subsequent Year Total $7,062 $10,658 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine sfrequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.b. 4 hours for the initial and second audit, 0.5 hours to prepare shipping for the qualifying test and second audit, 1 hour per desk audit for 2 months for NAF products, and 

samples for 13 weeks of quality control testing. 

c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.d. 4 hours for the on-site audit and 0.5 hours to ship samples.e. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1433 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-52

1434 

Table 2-31: Annual Testing and Certification Costs for Particleboard/MDF Mills Existing Certification(s): One Uncertified Product and One Standard Product – New Certification(s): Two Standard 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Additional Product 

Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 Qualifying Test $480 5 tests 1 $2,400 $0 Correlation Test $71.36 10 hours 1 $714 $0 Qualifying Test Shipping $200 1 shipments 1 $200 $0 TPC Audit $450 4 audits 1 $1,800 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 3 tests 1 $1,440 $0 TPC Testing Shipping $50 3 shipments 1 $150 $0 Small Chamber Testing Unit $10,000 0 units 1 $0 $0 Desk Audit $250 8 audits 1 $2,000 $2,000 Mill Labora $71.36 546 hours 1 $38,962 $38,962 Lost Productb $8.96 268 panels 1 $2,401 $0 First Year Total $57,567 $50,262 

Subsequent Years 

Re-certification Fee $6,000 1 fee 1 $6,000 $6,000 TPC Audit $450 4 audits 1 $1,800 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 1 $1,920 $0 TPC Testing Shipping $50 4 shipments 1 $200 $0 Desk Audit $250 8 audits 1 $2,000 $2,000 Mill Laborc $71.36 546 hours 1 $38,962 $38,962 Lost Productd $8.96 264 panels 1 $2,365 $0 Subsequent Year Total $54,748 $50,262 a. 4 hours for the initial audit, 0.5 hours to prepare shipping for the TPC tests, 4 hours for 3 quarterly audits, 1 hour per desk audit for 8 months, and 2 hours a day, 5 days small scale testing.b. 5 panels for qualifying testing, 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests.c. 4 hours for 4 quarterly audits, 0.5 hours to prepare shipping for TPC tests,1 hour per desk audit for 8 months, and 2 hours a day, 5 days a week, for 52 weeks of small sd. 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1435 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-53

1436 

Table 2-32: Annual Testing and Certification Costs for Particleboard/MDF Mills Existing Certification(s): Two ULEF Products – New Certification(s): Two Standard Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Additional Product 

Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $3,700 Qualifying Test $480 0 tests 2 $0 $0 Correlation Test $71.36 0 hours 2 $0 $0 Qualifying Test Shipping $200 0 shipments 2 $0 $0 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $3,840 TPC Testing Shipping $50 4 shipments 2 $400 $400 Small Chamber Testing Unit $10,000 0 units 1 $0 $0 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,962 $642 Lost Productb $8.96 264 panels 2 $4,731 $72 First Year Total $59,233 $10,604 

Subsequent Years 

Re-certification Fee $6,000 1 fee 1 $6,000 $3,700 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $3,840 TPC Testing Shipping $50 4 shipments 2 $400 $400 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,962 $642 Lost Productb $8.96 264 panels 2 $4,731 $72 Subsequent Year Total $59,233 $10,604 a. 4 hours for 4 quarterly audits, 0.5 hours to prepare shipping for TPC tests,1 hour per desk audit for 8 months, and 2 hours a day, 5 days a week, for 52 weeks of small s

b. 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1437 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-54

1438 

Table 2-33: Annual Testing and Certification Costs for Particleboard/MDF Mills Existing Certification(s): One NAF Product and One ULEF Product – New Certification(s): Two Standard Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Additional Product 

Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $3,700 Qualifying Test $480 0 tests 2 $0 $0 Correlation Test $71.36 0 hours 2 $0 $0 Qualifying Test Shipping $200 0 shipments 2 $0 $0 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $2,400 TPC Testing Shipping $50 4 shipments 2 $400 $250 Small Chamber Testing Unit $10,000 0 units 1 $0 $0 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,962 $642 Lost Productb $8.96 264 panels 2 $4,731 $45 First Year Total $59,233 $8,987 

Subsequent Years 

Re-certification Fee $6,000 1 fee 1 $6,000 $3,700 TPC Audit $450 4 audits 1 $1,800 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 4 tests 2 $3,840 $2,400 TPC Testing Shipping $50 4 shipments 2 $400 $250 Desk Audit $250 8 audits 1 $2,000 $0 Mill Labora $71.36 546 hours 1 $38,962 $642 Lost Productb $8.96 264 panels 2 $4,731 $45 Subsequent Year Total $59,233 $8,987 a. 4 hours for 4 quarterly audits, 0.5 hours to prepare shipping for TPC tests,1 hour per desk audit for 8 months, and 2 hours a day, 5 days a week, for 52 weeks of small s

b. 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1439 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-55

1440 

Table 2-34: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): One Uncertified Product and One Standard Product – New Certification(s): Two NAF Prod

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Additional Product 

Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 Qualifying Test $480 5 tests 2 $4,800 $0 Correlation Test $71.36 10 hours 2 $1,427 $0 Qualifying Test Shipping $200 1 shipment 2 $400 $0 TPC Audit $450 2 audits 1 $900 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $1,920 TPC Testing Shipping $50 1 shipment 2 $100 $200 Small Chamber Testing Unitb $10,000 0 units 1 $0 $0 Desk Audit $250 2 audits 1 $500 $2,000 Mill Laborc $71.36 141 hours 1 $10,062 $38,962 Lost Productd $8.96 71 panels 2 $1,272 $2,365 First Year Total $27,921 $54,748 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $6,000 TPC Audit $450 1 audit 1 $450 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $1,920 TPC Testing Shipping $50 1 shipment 2 $100 $200 Desk Audit $250 0 audits 1 $0 $2,000 Mill Labore $71.36 4.5 hours 1 $321 $38,962 Lost Productf $8.96 1 panel 2 $18 $2,365 Subsequent Year Total $7,049 $54,748 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine s

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000. c. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hou

months, and 2 hours a day, 5 days a week to test samples for 13 weeks of quality control testing.

d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scale test.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1441 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-56

1442 

Table 2-35: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): Two ULEF Products – New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 Qualifying Test $480 5 tests 2 $4,800 $0 Correlation Test $71.36 10 hours 2 $1,427 $0 Qualifying Test Shipping $200 1 shipments 2 $400 $0 TPC Audit $450 2 audits 1 $900 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Small Chamber Testing Unitb $10,000 0 units 1 $0 $0 Desk Audit $250 2 audits 1 $500 $0 Mill Laborc $71.36 141 hours 1 $10,062 $642 Lost Productd $8.96 71 panels 2 $1,272 $72 First Year Total $25,621 $10,604 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $3,700 TPC Audit $450 1 audit 1 $450 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Desk Audit $250 0 audits 1 $0 $0 Mill Labore $71.36 4.5 hours 1 $321 $642 Lost Productf $8.96 1 panel 2 $18 $72 Subsequent Year Total $7,049 $10,604 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine sfrequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000. c. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hou

months, and 2 hours a day, 5 days a week to test samples for 13 weeks of quality control testing.

d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scale test.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1443 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-57

1444 

Table 2-36: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): Two Standard Products – New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 Qualifying Test $480 5 tests 2 $4,800 $0 Correlation Test $71.36 10 hours 2 $1,427 $0 Qualifying Test Shipping $200 1 shipment 2 $400 $0 TPC Audit $450 2 audits 1 $900 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Small Chamber Testing Unitb $10,000 0 units 1 $0 $0 Desk Audit $250 2 audits 1 $500 $2,000 Mill Laborc $71.36 141 hours 1 $10,062 $38,962 Lost Productd $8.96 71 panels 2 $1,272 $4,731 First Year Total $27,921 $59,233 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $6,000 TPC Audit $450 1 audit 1 $450 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 2 $960 $3,840 TPC Testing Shipping $50 1 shipment 2 $100 $400 Desk Audit $250 0 audits 1 $0 $2,000 Mill Labore $71.36 4.5 hours 1 $321 $38,962 Lost Productf $8.96 1 panel 2 $18 $4,731 Subsequent Year Total $7,049 $59,233 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine s

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000. c. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hou

months, and 2 hours a day, 5 days a week to test samples for 13 weeks of quality control testing.

d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scale test.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1445 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-58

1446 

Table 2-37: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): One NAF Product and One ULEF Product – New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 Qualifying Test $480 5 tests 1 $2,400 $0 Correlation Test $71.36 10 hours 1 $714 $0 Qualifying Test Shipping $200 1 shipment 1 $200 $0 TPC Audit $450 2 audits 1 $900 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 1 $480 $1,920 TPC Testing Shipping $50 1 shipment 1 $50 $200 Small Chamber Testing Unitb $10,000 0 units 1 $0 $0 Desk Audit $250 2 audits 1 $500 $0 Mill Laborc $71.36 141 hours 1 $10,062 $642 Lost Productd $8.96 71 panels 1 $636 $36 First Year Total $21,141 $8,448 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $3,700 TPC Audit $450 1 audit 1 $450 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 1 $480 $1,920 TPC Testing Shipping $50 1 shipment 1 $50 $200 Desk Audit $250 0 audits 1 $0 $0 Mill Labore $71.36 4.5 hours 1 $321 $642 Lost Productf $8.96 1 panel 1 $9 $36 Subsequent Year Total $6,510 $8,448 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine sfrequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000. c. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hou

months, and 2 hours a day, 5 days a week to test samples for 13 weeks of quality control testing.

d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scale test.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1447 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-59

1448 

Table 2-38: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): One NAF Product and One Standard Product – New Certification(s): Two NAF Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types 

Total Cost to Certify

Product Line(s) 

Cost Incurred in 

Baseline for Existin

Certification(s) 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 Qualifying Test $480 5 tests 1 $2,400 $0 Correlation Test $71.36 10 hours 1 $714 $0 Qualifying Test Shipping $200 1 shipment 1 $200 $0 TPC Audit $450 2 audits 1 $900 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 1 $480 $1,920 TPC Testing Shipping $50 1 shipment 1 $50 $200 Small Chamber Testing Unitb $10,000 0 units 1 $0 $0 Desk Audit $250 2 audits 1 $500 $2,000 Mill Laborc $71.36 141 hours 1 $10,062 $38,962 Lost Productd $8.96 71 panels 1 $636 $2,365 First Year Total $23,441 $54,748 

Subsequent Years 

Re-certification Fee $3,700 1 fee 1 $3,700 $6,000 TPC Audit $450 1 audit 1 $450 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 TPC Testing $480 1 test 1 $480 $1,920 TPC Testing Shipping $50 1 shipment 1 $50 $200 Desk Audit $250 0 audits 1 $0 $2,000 Mill Labore $71.36 4.5 hours 1 $321 $38,962 Lost Productf $8.96 1 panel 1 $9 $2,365 Subsequent Year Total $6,510 $54,748 a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine s

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000. c. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hou

months, and 2 hours a day, 5 days a week to test samples for 13 weeks of quality control testing.

d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scale test.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-60

Table 2-39: Annual Testing and Certification Costs for Wood Veneer Laminators 

Existing Certification(s): One Uncertified Product – New Certification(s): One 

Standard Product 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types Total Cost 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 

Qualifying Test $480 5 tests 1 $2,400 

Correlation Test $71.36 10 tests 1 $714 

Qualifying Test Shipping $200 1 shipment 1 $200 

TPC Audit $450 4 audits 1 $1,800 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 3 tests 1 $1,440 

TPC Testing Shipping $50 3 shipments 1 $150 

Small Chamber Testing Unit $10,000 1 unit 1 $10,000 

Desk Audit $250 8 audits 1 $2,000 

Mill Labora $71.36 590 hours 1 $42,102 

Lost Productb $15.68 268 panels 1 $4,202 

First Year Total $72,508 

Subsequent Years

Re-certification Fee $6,000 1 fee 1 $6,000 

TPC Audit $450 4 audits 1 $1,800 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 4 tests 1 $1,920 

TPC Testing Shipping $50 4 shipments 1 $200 

Desk Audit $250 8 audits 1 $2,000 

Mill Laborc $71.36 546 hours 1 $38,963 

Lost Productd $15.68 264 panels 1 $4,140 

Subsequent Year Total $56,522 

a. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control 

systems, 4 hours for other quarterly audits, 1 hour per desk audit for the other 8 months, and 2 hours a day to test samples for 

52 weeks of quality control testing.

b. 5 panels for qualifying testing, 1 panel a day for 52 weeks of small scale testing, and 1 panel for each quarterly large scale 

test.

c. 4 hours for other quarterly audits, 1 hour per desk audit for the other 8 months, and 2 hours a day to select and ship samples 

for 52 weeks of quality control testing.

d. 1 panel a day for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test. 

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1449 
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January 27, 2012 2-61

1450 

Table 2-40: Annual Testing and Certification Costs for Wood Veneer Laminators 

Existing Certification(s): Two Uncertified Products – New Certification(s): Two 

Standard Products 

Cost Category Unit Cost Number of Units 

Repetitions 

for Product 

Types Total Cost 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 

Qualifying Test $480 5 tests 2 $4,800 

Correlation Test $71.36 10 tests 2 $1,427 

Qualifying Test Shipping $200 1 shipment 2 $400 

TPC Audit $450 4 audits 1 $1,800 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 3 tests 2 $2,880 

TPC Testing Shipping $50 3 shipments 2 $300 

Small Chamber Testing Unit $10,000 1 unit 1 $10,000 

Desk Audit $250 8 audits 1 $2,000 

Mill Labora $71.36 590 hours 1 $42,102 

Lost Productb $15.68 268 panels 2 $8,404 

First Year Total $81,614 

Subsequent Years

Re-certification Fee $6,000 1 fee 1 $6,000 

TPC Audit $450 4 audits 1 $1,800 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 4 tests 2 $3,840 

TPC Testing Shipping $50 4 shipments 2 $400 

Desk Audit $250 8 audits 1 $2,000 

Mill Laborc $71.36 546 hours 1 $38,963 

Lost Productd $15.68 264 panels 2 $8,279 

Subsequent Year Total $62,782 

a. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the 

quality control systems, 4 hours for other quarterly audits, 1 hour per desk audit for the other 8 months, and 2 

hours a day to test samples for 52 weeks of quality control testing. 

b. 5 panels for qualifying testing, 1 panel a day for 52 weeks of small scale testing, and 1 panel for each 

quarterly large scale test. 

c. 4 hours for other quarterly audits, 1 hour per desk audit for the other 8 months, and 2 hours a day to select and 

ship samples for 52 weeks of quality control testing. 

d. 1 panel a day for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test. 

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1451 
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January 27, 2012 2-62

1452 

Table 2-41: Annual Testing and Certification Costs for Wood Veneer Laminatorsa 

Existing Certification(s): One Uncertified Product – New Certification(s): One NAF 

Product 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types Total Cost 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 

Qualifying Test $480 5 tests 1 $2,400 

Correlation Test $71.36 10 tests 1 $714 

Qualifying Test Shipping $200 1 shipment 1 $200 

TPC Audit $450 2 audits 1 $900 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 1 test 1 $480 

TPC Testing Shipping $50 1 shipment 1 $50 

Small Chamber Testing Unit $10,000 1 unit 1 $10,000 

Desk Audit $250 2 audits 1 $500 

Mill Laborb $71.36 185 hours 1 $13,202 

Lost Productc $15.68 71 panels 1 $1,113 

First Year Total $37,058 

Subsequent Years

Re-certification Fee $3,700 1 fee 1 $3,700 

TPC Audit $450 1 audit 1 $450 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 1 test 1 $480 

TPC Testing Shipping $50 1 shipment 1 $50 

Mill Labord $71.36 4.5 hours 1 $321 

Lost Producte $15.68 1 panel 1 $16 

Subsequent Year Total $6,517 

a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test 

method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing frequencies are those required by the TPC and 

may be more frequent than TSCA Title VI requires.

b. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control 

systems, 4 hours for the second audit, 1 hour per desk audit for 2 months, and 2 hours a day to test samples for 13 weeks of 

quality control testing.

c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.

d. 4 hours for the on-site audit and 0.5 hours to ship samples.

e. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1453 
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January 27, 2012 2-63

1454 

Table 2-42: Annual Testing and Certification Costs for Wood Veneer Laminatorsa 

Existing Certification(s): Two Uncertified Products – New Certification(s): Two NAF 

Products 

Cost Category Unit Cost Number of Units 

Repetitions for 

Product Types Total Cost 

First Year 

Initial Certification Fee $6,000 1 fee 1 $6,000 

Qualifying Test $480 5 tests 2 $4,800 

Correlation Test $71.36 10 tests 2 $1,427 

Qualifying Test Shipping $200 1 shipment 2 $400 

TPC Audit $450 2 audits 1 $900 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 1 test 2 $960 

TPC Testing Shipping $50 1 shipment 2 $100 

Small Chamber Testing Unit $10,000 1 unit 1 $10,000 

Desk Audit $250 2 audits 1 $500 

Mill Laborb $71.36 185 hours 1 $13,202 

Lost Productc $15.68 71 panels 2 $2,227 

First Year Total $42,015 

Subsequent Years

Re-certification Fee $3,700 1 fee 1 $3,700 

TPC Audit $450 1 audit 1 $450 

TPC Audit Travel $1,500 1 audit 1 $1,500 

TPC Testing $480 1 test 2 $960 

TPC Testing Shipping $50 1 shipment 2 $100 

Mill Labord $71.36 4.5 hours 1 $321 

Lost Producte $15.68 1 panel 2 $31 

Subsequent Year Total $7,062 

a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test 

method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing frequencies are those required by the TPC and 

may be more frequent than TSCA Title VI requires.

b. 8 hours for the initial audit, 0.5 hours to prepare shipping for the qualifying test, 40 hours for developing the quality control 

systems, 4 hours for the second audit, 1 hour per desk audit for 2 months, and 2 hours a day to test samples for 13 weeks of 

quality control testing.

c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.

d. 4 hours for the on-site audit and 0.5 hours to ship samples.

e. 1 panel for annual large scale testing.

Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.

1455 

1456 2.2.5.1 Summary of Estimated Testing and Certification Costs 

1457 

1458 Table 2-43 summarizes the estimated actual and incremental costs incurred by mills for 

1459 complying with the testing and certification requirements of TSCA Title VI. As described above, mills 

1460 with existing CARB-certified product lines will be incurring some testing and certifications costs in the 

1461 baseline. The incremental costs of the rule represent the actual costs minus baseline costs. 

1462 
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January 27, 2012 2-64

Table 2-43: Summary of Annual Testing and Certification Costs by Mill Type 

 First Year Subsequent Years 

Existing 

Certifications Certification Sought Actual Costs 

Incremental 

Costs Actual Costs 

Incremental 

Costs 

Hardwood Plywood Mills and Wood Veneer Laminators 

2 Uncertified Change 2 to NAF $42,015 $42,015 $7,062 $7,062 

2 Uncertified Change 2 to Nonexempt $81,614 $81,614 $62,782 $62,782 

2 Nonexempt Change 2 to NAF $38,876 ($23,074) $7,062 ($54,887)

2 ULEF Change 2 to Nonexempt $72,782 $62,124 $62,782 $52,124 

1 ULEF and 1 NAF Change ULEF to NAF $31,619 $22,501 $6,517 ($1,958)

1 ULEF and 1 NAF Change 2 to Nonexempt $72,782 $63,683 $62,782 $53,761 

2 ULEF Change 2 to NAF $36,576 $23,918 $7,062 ($3,595)

Particleboard and MDF Mills 

2 Uncertified Change 2 to Nonexempt $78,012 $78,012 $59,233 $59,233 

2 Uncertified Change 2 to NAF $41,061 $41,061 $7,049 $7,049 

1 Uncertified and 1 

Nonexempt 

Change Uncertified to 

Nonexempt $57,567 $7,305 $54,748 $4,485 

2 ULEF Change 2 to Nonexempt $59,233 $48,630 $59,233 $48,630 

1 ULEF and 1 NAF Change 2 to Nonexempt $59,233 $50,246 $59,233 $50,246 

1 Uncertified and 1 

Nonexempt Change 2 to NAF $27,921 ($26,827) $7,049 ($47,699)

2 ULEF Change 2 to NAF $25,621 $15,017 $7,049 ($3,555)

2 Nonexempt Change 2 to NAF $27,921 ($31,312) $7,049 ($52,184)

1 ULEF and 1 NAF Change ULEF to NAF $21,142 $12,693 $6,510 ($1,938)

1 Nonexempt and 1 

NAF 

Change Nonexempt to 

NAF $23,442 ($31,306) $6,510 ($48,238)

Wood Veneer Laminated Product Producers 

1 Uncertified Change 1 to Nonexempt $72,508 $72,508 $56,522 $56,522 

2 Uncertified Change 2 to Nonexempt $81,614 $81,614 $62,782 $62,782 

1 Uncertified Change 1 to NAF $37,058 $37,058 $6,517 $6,517 

2 Uncertified Change 2 to NAF $42,015 $42,015 $7,062 $7,062 

1463 

1464 
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January 27, 2012 2-65

1465 2.3 Estimated Costs for Stock Hardwood Plywood, MDF, and Particleboard 

1466 Producers 

1467 

1468 This section presents the potential costs to stock hardwood plywood, medium density fiberboard 

1469 (MDF) and particleboard producers under several analytical options. Section 2.3.1 presents the estimated 

1470 costs to composite wood panel producers for making changes to raw materials. Section 2.3.2 presents the 

1471 estimated costs of testing and third party certification for composite wood panel producers. Finally, the 

1472 total estimated costs for composite wood panel producers are presented in section 2.3.3. 

1473 

1474 2.3.1 Costs of Changes to Raw Materials for Composite Wood Panel Producers 

1475 

1476 This section presents the estimated costs to stock hardwood plywood (section 2.3.1.1), MDF 

1477 (section 2.3.1.2), and particleboard (section 2.3.1.3) producers for making changes to production 

1478 processes and raw materials. 

1479 

1480 2.3.1.1 Stock Hardwood Plywood Producers Production Processes and Raw Materials Costs 

1481 

1482 For stock hardwood plywood producers that are not compliant with the emissions standards in the 

1483 baseline, the costs associated with changing production processes and raw materials are estimated as the 

1484 costs of switching from UF to PVA resin systems and switching from conventional to lower emitting 

1485 cores . Because the emissions standard for hardwood plywood (0.05 ppm) is lower than the standards for 

1486 particleboard (0.09 ppm) and MDF (0.11 to 0.13 ppm), hardwood plywood made with a certified 

1487 particleboard or MDF core could conceivably exceed the emission standard even if a NAF resin such as 

1488 PVA was used to affix the veneer to the core. (Whether this occurs in practice depends on how 

1489 effectively the veneer acts as a barrier to the release of formaldehyde, and how far below the standards the 

1490 actual emissions from the core are.) 

1491 

1492 This analysis uses the term “low emission cores” to mean cores with emissions low enough that 

1493 hardwood plywood made from them meets the applicable emission standard. For the standard 

1494 certification, low emission cores are assumed to include certified veneer core, particleboard and MDF 

1495 cores certified as ULEF under the CARB ATCM, and particleboard and MDF cores certified as NAF. 

1496 For analytical options requiring all products to meet NAF emission levels, low emission cores would 

1497 include particleboard, MDF and veneer cores certified as NAF. 

1498 

1499 Hardwood plywood producers switching from UF to PVA resins and low emission cores would 

1500 not need to make any significant modifications or upgrades to existing equipment or processes because 

1501 PVA resins are generally a “drop-in” technology for mills currently using UF. Thus, the estimated raw 

1502 material costs are only for purchasing the more expensive resins and cores. Note that switching to PVA 

1503 resins is just one possibility for achieving compliance. Some producers may achieve compliance by using 

1504 enhanced urea formaldehyde resins, melamine-urea-formaldehyde (MUF) resins, soy-based resins, or 

1505 other resin systems. However, the cost of switching to PVA resins can provide a reasonable 

1506 approximation for the compliance cost associated with changing raw materials and production processes 

1507 and therefore is the basis for the cost estimates in this analysis. Note also that not all mills will 

1508 necessarily have to switch to NAF or ULEF cores in order to meet the Phase 2 emissions standard for 

1509 hardwood plywood. 

1510 

1511 Number of Hardwood Plywood Mills and Affected Production Volume 

1512 

1513 EPA identified 33 mills (owned by 27 firms) that appear to manufacture stock hardwood plywood 

1514 panels subject to the TSCA Title VI emissions requirements. Based on a review of CARB’s list of 

1515 certified mills, 26 of the 33 hardwood plywood stock panel mills identified by EPA are certified to 
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January 27, 2012 2-66

1516 produce CARB compliant products (2011c). This implies that there are 7 stock plywood mills that are 

1517 not CARB certified and that are expected to incur compliance costs to become certified due to the TSCA 

1518 Title VI regulation. For the purpose of this analysis it is also assumed that all 7 of these mills are three1519 ply mills (which buy cores and finish them with hardwood veneer). 

1520 

1521 In addition to the 33 hardwood plywood mills, EPA identified another 8 mills (owned by 7 firms) 

1522 that manufacture engineered wood flooring. Based on a review of CARB’s list of certified mills, 4 are 

1523 certified to produce CARB compliant products (2011c). 

1524 

1525 According to CARB’s (2011c) list of certified mills, 12 mills (including engineered wood 

1526 flooring mills) are certified to produce NAF hardwood plywood – for the purpose of this analysis these 

1527 mills are assumed to produce NAF product exclusively. Note that additional CARB certified mills might 

1528 have compliance costs if they produce some product lines that are not certified when the TSCA Title VI 

1529 requirements take effect in 2013. EPA is not aware of any mills in this situation, but the compliance costs 

1530 for individual mills producing some CARB certified product and some product not CARB certified would 

1531 be expected to be lower than the costs presented here. 

1532 

1533 According to U.S. ITC (2008), hardwood plywood production in 2006, including engineered 

1534 wood flooring, was estimated to be 1,786 thousand cubic meters, or 2,007 mmsf on a 3/8" basis. 

1535 Engineered wood flooring production was estimated to be 258 mmsf in 2006 and it is estimated that about 

1536 30 percent of engineered wood flooring production is manufactured as a wood veneer laminated product 

1537 (Personal Communication with HPVA 2011) and therefore 77 mmsf of engineered wood flooring 

1538 production is accounted for as wood veneer laminated product instead of hardwood plywood for the 

1539 purpose of this analysis. Thus, excluding the wood veneer laminated product results in an estimated 2006 

1540 domestic production for hardwood plywood of 1,930 million square feet on a 3/8" basis. It is estimated 

1541 that current production levels are about 60 percent of their 2006 levels, or about 1,158 mmsf on a 3/8" 

1542 basis. 

1543 

1544 Table 2-44 presents the estimated production affected by analytical option. These results are 

1545 estimated by combining the production estimates described above and the emissions standards and levels 

1546 reported by mills in EPA’s (2010a) Pressed Wood Manufacturing Industry Survey (PWMIS). EPA 

1547 administered this survey between June and October 2010 to domestic producers of composite wood 

panels. The survey achieved a response from 33 hardwood plywood mills that received the survey.18 1548 The 

1549 survey asked about current emissions levels and about planned levels. Since many composite wood 

1550 product mills were in the midst of modifying their production technology and raw materials to achieve 

1551 compliance with Phase 2 of the CARB ATCM when they completed the questionnaire, using data on their 

1552 emission levels at the time they responded to the survey would not accurately reflect the 2013 baseline. 

1553 Instead, baseline emission levels are estimated using responses to a question in the survey about the 

1554 emissions levels mills planned to achieve within the next three years of when they completed the survey 

1555 (i.e., three years from 2010). These emissions levels were weighted by the production levels the mills 

1556 reported in the survey, in order to estimate the average emission levels by certification standard. The 

1557 survey data were also used to estimate the share of total production volume represented by products 

1558 meeting each of the emissions standards. 

1559 

 18 The number of mills for each product type is limited to those that are subject to TSCA Title VI, and does not include 

mills that only produce products that are exempted or not otherwise covered by TSCA Title VI (such as curved 

plywood, wood packaging, and molded products that do not qualify as panels). The response rate includes mills that 

only responded to a brief phone questionnaire, which collected information about the compliance standards being 

achieved, but not specific emissions levels. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-67

Table 2-44: Hardwood Plywood Production Affected By Analytical Option (mmsf) 

Baseline Emission 

Standard 

Production 

Share 

Production 

Level 

Affected Production 

Options SI, SE, 

SP, SC, and 

SCR 

Options CI and 

CE 

Options NI and 

NE 

None 0.40% 4.6 4.6 4.6 4.6 

CARB 1 - - - - - 

CARB 2 and CARB ULEFa 60.20% 697.1 - - 697.1 

CARB NAF 39.40% 456.3 - - - 

Total 100.00% 1,158.0 4.6 4.6 701.7 

a

 Hardwood plywood mills meeting CARB 2 and CARB ULEF were grouped together in the CARB 2 category. Several 

hardwood plywood mills appeared to be meeting CARB ULEF standards but did not report this in their response. For 

example, they listed certification standard as “CARB 2” but resin type as “ULEF” and/or reported maximum emissions 

that satisfy ULEF requirements. Due to difficulties in distinguishing between CARB 2 and CARB ULEF product lines in 

the survey responses, and the fact that emissions levels appeared similar among mills reporting either CARB 2 or CARB 

ULEF certification standards, these mills were grouped together. 

Option SCR is the proposed option. 

Source:U.S. Environmental Protection Agency 2010a.

1560 

1561 Hardwood Plywood Producer Costs for Changing Raw Materials 

1562 

1563 For cost estimation purposes, it is assumed that mills using urea formaldehyde (UF) resins in the 

baseline will switch to polyvinyl acetate (PVA) resins in order to meet the emissions standards.19 1564 Some 

1565 mills may also have to switch to a low emitting core to meet the emissions standard. The main steps to 

1566 estimating the cost increase resulting from the TSCA Title VI rule for stock hardwood plywood mills 

1567 without baseline CARB certification are presented below: 

1568 

1569 1. Estimate the total production volume from facilities that are expected to continue to use UF resins 

1570 in the absence of a national rule. 

1571 2. Estimate the unit cost of switching from UF to PVA resins. 

1572 3. Estimate unit cost of switching from a CARB certified core to a low emission core. 

1573 4. Estimate the cost of third party certification and compliance testing. 

1574 5. Estimate the average cost per firm by multiplying the unit costs with the typical production 

1575 volume per firm under different scenarios for the raw materials changes that firms may need to 

1576 make to become certified. 

1577 Note that switching to PVA resins is just one possibility for achieving compliance. Some 

1578 producers may achieve compliance by using enhanced urea formaldehyde resins, melamine-urea1579 formaldehyde (MUF) resins, soy-based resins, or other resin systems. However, the cost of switching to 

1580 PVA resins can provide a reasonable approximation for the compliance cost associated with changing raw 

1581 materials and production processes and therefore is the basis for the cost estimates in this analysis. 

1582 

1583 

1584 

 19 Note that switching to a resin system other than PVA may be a lower cost compliance strategy. Using enhanced UF 

resins and soy-based resins are proven compliance strategies that may be less costly for some manufacturers. 
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January 27, 2012 2-68

1585 

1586 Production Volume Switching to PVA Resins 

1587 

1588 As described above, it is estimated that only 0.4 percent of domestic baseline hardwood plywood 

1589 production will not be CARB certified in the absence of the TSCA Title VI rule. For the purpose of this 

1590 analysis it is assumed that about half of the product that is not CARB certified is already being produced 

1591 using PVA resins. It is assumed that these products already meet the CARB Phase 2 emission standards, 

1592 but that the producers have not chosen to incur the costs of CARB’s third-party certification program 

1593 because the products are not sold into California. 

1594 

1595 It is assumed that the other half of the uncertified product is being produced with UF resins, and 

1596 that the product exceeds the CARB Phase 2 emission limits. Thus, 0.2 percent of stock hardwood 

1597 plywood production, or 2,300 msf, is assumed to be subject to costs associated with changing resin 

1598 systems under the statutory option. Under options NI and NE, in addition to the 2,300 msf of uncertified 

1599 production switching resins, the 697,100 msf of production that is currently CARB 2 certified but not 

1600 NAF certified is assumed to need to switch resin systems, for a total of 699,400 msf switching to NAF 

1601 resins. Firms using UF resins in the baseline are assumed to switch to PVA resins to meet the TSCA Title 

1602 VI emissions standards. PVA resins are a common resin choice of smaller mills, and are a no-added 

1603 formaldehyde (NAF) resin. 

1604 

1605 Additional Cost of PVA Resins 

1606 

1607 Hardwood plywood mills switching from UF to PVA resins would not need to make any 

1608 significant modifications or upgrades to existing equipment or processes because PVA resins are 

1609 generally a “drop-in” technology for mills currently using UF. The only costs estimated are for 

1610 purchasing the more expensive resin. 

1611 

1612 The additional cost to hardwood plywood mills for switching from UF to PVA resin depends on 

1613 the glue spread and the total surface area of the finished panels produced. It is assumed that these mills 

1614 apply two glue lines: one to adhere the face panel and the other to adhere the back panel. The weight of 

1615 each glue line is about 30 pounds per thousand square feet (msf) of plywood produced, and PVA resin 

1616 costs about $0.50 per pound more than UF resin. It is assumed that the panels made by these mills 

average 5/8 inches thick.20 1617 Therefore, the extra cost of using PVA can be estimated on a 5/8” basis as 

1618 follows: 

1619 

1620 Additional cost of PVA (5/8” basis) = (30 pounds/msf of glue line) x (2 glue lines) x ($0.5) = $30 

1621 per msf of plywood produced. 

1622 

1623 Since hardwood plywood production volume is tabulated on a 3/8 inches basis, the following conversion 

1624 is needed to estimate the additional cost of PVA: 

1625 

1626 Additional cost of PVA (3/8” basis) = ($30/msf) x (.625”/.375”) = $50/msf of plywood produced. 

1627 

1628 As a result, these small mills converting their production from UF resins to PVA resins would 

1629 incur an additional cost of $50/msf of plywood produced on a 3/8” basis. 

1630 

1631 

 20 Common panel thicknesses range from 3/8 inch to 3/4 inch. A 5/8 inch basis is used to represent the average across all 

mills. 
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January 27, 2012 2-69

1632 

1633 Production Volume Switching to Low Emission Cores 

1634 

1635 Since nearly all domestic core suppliers are manufacturing only CARB certified products, 

1636 virtually the only source of cores that are not CARB certified would be imports. Given this, the baseline 

1637 level of production using cores that are not certified may be near zero. However, in order to meet the 

1638 hardwood plywood emissions standards, some hardwood plywood producers using CARB certified 

1639 particleboard or medium density fiberboard (MDF) cores may need to switch to ultra-low emitting 

1640 formaldehyde (ULEF) or NAF cores. This is because the emissions standards are higher for particleboard 

and MDF than for hardwood plywood.21 1641 In addition, 2 percent of engineered wood flooring producers 

1642 utilize composite cores (Personal Communication with HPVA 2011), and would need to make the switch 

1643 to low emission cores, as well. 

1644 

1645 This analysis estimates the percentage of hardwood plywood and engineered wood flooring 

1646 production that would need to switch to low emission cores in three steps: 

1647 

1648 1. The percentage of hardwood plywood and engineered wood flooring production that use MDF 

1649 and particleboard for cores are estimated from the 2007 U.S. Economic Census (2009d) data on 

the value of raw materials used for production22 1650 

1651 2. These percentages are adjusted to account for the baseline use of NAF or ULEF cores with the 

1652 percentage of domestic MDF and particleboard production that is estimated to be CARB NAF or 

1653 ULEF certified, estimated from EPA’s (2010a) survey of composite wood product producers. 

1654 3. The estimated percentage of cores that must be switched to low emission cores is applied to the 

1655 estimated total production volume. 

1656 

1657 Table 2-45 presents the estimated production that would need to switch to low emission cores by 

1658 analytical option. The resulting estimates and a detailed description of the underlying calculations are 

1659 presented below in Table 2-45. 

 21 The Phase 2 standards are 0.05 ppm for hardwood plywood, 0.09 ppm for particleboard, 0.11 ppm for MDF, and 0.13 

ppm for thin MDF. 

22 The mix of composite wood products consumed was estimated using U.S. Census data on the value of materials 

consumed. Values were converted to volumes using prices of $495, $535, and $335 for hardwood plywood, MDF, and 

particleboard, respectively. The price of hardwood plywood was estimated using the total 2007 export values and 

quantities from U.S. ITC (2011) (HTS codes 441232, 441299, and 441231). The price of MDF and particleboard are 

from Crow’s February 18, 2011 Weekly Panel Prices (RISI 2011b). 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-70

1660 

Table 2-45: Hardwood Plywood Production Switching to Low Emission Cores Analytical Option 

Production 

(mmsf, 

3/8”) 

Production 

Switching to 

Low Emission 

Cores 

Description of Estimated Percentages a, b (%) (mmsf) 

Options SI, SE, SP, SC, and SCR 4.6 32.3% 1.5 

Based on conversations with HPVA (2011), 40% of hardwood plywood stock panels and 2% of engcomposite core. It was estimated that the mix of MDF and particleboard consumed in the HardwooIndustry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. It was also estimated that MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, the percentage stock panels switching to low emission cores (35.48%) is calculated as the sum of the two products 86.1%, and (2) 40%, 59.1%, and 90.5%. Similarly, the percentage of engineered wood flooring swicores (1.77%) is calculated as the sum of the two products of: (1) 2%, 40.9%, and 86.1%, and (2) 2%Since engineered wood flooring represents about 9.4% of hardwood plywood production, the percenswitching to low emission cores overall is 32.3%, calculated as the sum of the two products: (1) 1.735.48% and 90.6%. 

Options CI and CE - - - 

All mills are assumed to be able to meet these emissions standards without any changes to productio

materials. 

Options NI and NE 701.7 72.1% 505.9 

Based on conversations with HPVA (2011), 40% of hardwood plywood stock panels and 2% of eng

composite core. It was estimated that the mix of MDF and particleboard consumed in the Hardwoo

Industry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. Thus, the mix of veneer c

particleboard for stock hardwood plywood panels is about 60.0% hardwood plywood, 16.4% MDF Similarly, the mix of veneer core, MDF and particleboard for engineered wood flooring is about 98.

0.8% MDF and 1.2% particleboard. It was also estimated that 60.6%, 90.7%, and 93.3% of HWPWuse added formaldehyde resins, respectively. Thus, the percentage of hardwood plywood stock pan

cores (73.25%) is calculated as the sum of the three products: (1) 60% and 60.6%, (2) 16.4% and 9093.3%. Likewise, the percentage of engineered wood flooring switching to NAF cores (61.23%) is the three products: (1) 98% and 60.6%, (2) 0.8% and 90.7%, and (3) 1.2% and 93.3%. Since engine

represents about 9.4% of hardwood plywood production, the percentage of production switching to 

72.1%, calculated as the sum of the two products: (1) 61.23% and 9.4% and (2) 73.25% and 90.6%. 

a The mix of composite wood products consumed were estimated using 2007 U.S. Census (2009d) data on the value of materials consumed. Values were converted to vo

$480, $445, and $315 for hardwood plywood, MDF, and particleboard, respectively. The price of hardwood plywood was estimated using the total 2007 export values a

(2011) data (HTS codes 441232, 441299, and 441231). The price of MDF and particleboard utilized are July 2007 prices from RISI’s (2009) MDF and Particleboard Co

b The percentages of composite platforms not made with NAF or ULEF resins was estimated from EPA’s (2010a) survey of composite wood product producers. 

This analysis uses the term “low emission cores” to mean cores with emissions low enough that hardwood plywood made from them meets the applicable emission stand

certification, low emission cores are assumed to include certified veneer core, particleboard and MDF cores certified as ULEF under the CARB ATCM, and particleboar

NAF. For analytical options requiring all products to meet NAF emission levels, low emission cores would include particleboard, MDF and veneer cores certified as NA

Option SCR is the proposed option.

1661 
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January 27, 2012 2-71

1662 Additional Cost of Low Emission Cores 

1663 

1664 The average cost of a Phase 2 certified core is approximately $300/msf, and NAF cores currently 

cost 15 to 20 percent more than Phase 2 platforms.23 1665 So a high end estimate of the additional cost 

1666 associated with purchasing low emission cores is estimated at $45/msf-$60/msf. Although there is 

1667 uncertainty about the extent to which hardwood plywood producers would need to switch to low emitting 

1668 cores in order to meet the emissions standards, this analysis adopts the conservative assumption (in terms 

1669 of being careful not to understate costs) that the cost for switching to low emission cores is $60/msf. 

1670 

1671 Summary of Hardwood Plywood Producer Costs for Changing Raw Materials 

1672 

1673 Table 2-46 presents the estimated costs of changing raw materials for hardwood plywood product 

1674 producers under the various analytical options. Under options CI and CE there are no estimated material 

1675 costs because it is assumed that all mills can achieve CARB 1 emissions requirements with minimal 

1676 production and raw materials changes. The total costs are highest under options NI and NE because a 

1677 larger share of the production would need to switch to NAF cores. Note that the estimated cost of 

1678 switching to either the ULEF or NAF core is the same amount ($60). It is assumed that there would not be 

1679 a large difference between the cost of ULEF and NAF cores. 

1680 

Table 2-46: Estimated Costs of Raw Material Changes for Hardwood Plywood Producers, 

by Analytical Option 

Analytical 

Option 

Production 

Switching to 

PVA (msf) 

Cost of 

Switching to 

PVA 

(2010$/msf) 

Production 

Switching to 

Low Emission 

Cores (msf) 

Cost of 

Switching to 

Low Emission 

Cores 

(2010$/msf) 

Total Annual 

Cost of 

Changing Raw 

Materials 

(thousands 

2010$) 

Options SI, SE, 

SP, SCa 2,300 $50 1,500 $60 $205 

Options CI and 

CE - - - - - 

Option NI and 

NEb

 699,400 $50 505,900 $60 $65,324 a

 For analytical options SI, SE, SP, SC, and SCR the production switching to a PVA resin was calculated as 1/2 of the uncertified 

production because it was assumed that half of the uncertified product is already being produced using PVA resins. b

 For analytical options NI and NE, the production switching to a PVA resin was calculated as the sum of half of the uncertified

production share and the CARB 2 certified production share. 

This analysis uses the term “low emission cores” to mean cores with emissions low enough that hardwood plywood made from them 

meets the applicable emission standard. For the standard certification, low emission cores are assumed to include certified veneer 

core, particleboard and MDF cores certified as ULEF under the CARB ATCM, and particleboard and MDF cores certified as NAF. 

For analytical options requiring all products to meet NAF emission levels, low emission cores would include particleboard, MDF and 

veneer cores certified as NAF. 

Option SCR is the proposed option. 

1681 

1682 2.3.1.2 MDF Producers Production Processes and Raw Materials Costs 

1683 

1684 This section presents the estimated costs to MDF producers that are not compliant with a 

1685 specified emission standard in the baseline for making the changes to production processes and raw 

1686 materials that would be necessary to achieve that standard. First the number of mills and the volume of 

 23 The price and availability of NAF platforms may improve over time as the market adjusts to the CARB rule and TSCA 

Title VI. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-72

1687 production where changes to production processes and raw materials would be necessary are estimated. 

1688 Then the estimated increases in production and raw material costs to MDF producers are presented. 

1689 

1690 Number of MDF Mills and Affected Production Volume 

1691 

1692 The MDF market is still recovering from a significant slump that began in 2008. According to 

1693 RISI (2011a), MDF consumption was 2,350 million square feet (mmsf) in 2010 and is forecast to increase 

1694 1.8 percent in 2011 to 2,390 mmsf and a further 9.7 percent to 2,620 mmsf in 2012. Since the rule is 

1695 scheduled to be implemented in 2013 this analysis uses the RISI (2011a) value for 2012, the final year in 

1696 the forecast, to estimate the affected domestic MDF production. To estimate U.S. production, the 

1697 consumption figure is reduced to account for the 37 percent of domestic consumption that is attributable 

1698 to imports according to RISI’s (2011a) forecast share of MDF consumption from imports for 2011. The 

1699 resulting estimate of U.S. production utilized in this analysis is 1,850 mmsf. 

1700 

1701 Table 2-47presents the estimated production affected for each analytical option. These results are 

1702 estimated by combining the production estimates described above and the emissions standards and levels 

1703 reported by mills in EPA’s (2010a) Pressed Wood Manufacturing Industry Survey (PWMIS). EPA 

1704 administered this survey between June and October 2010 to domestic producers of composite wood 

1705 panels. The survey achieved a response from all 20 MDF mills that received the survey (there are 22 

domestic MDF mills).24 1706 The survey asked about current emissions levels and about planned levels. Since 

1707 many composite wood product mills are in the midst of modifying their production technology and raw 

1708 materials to achieve compliance with Phase 2 of the CARB ATCM, current emission levels would not 

1709 accurately reflect the 2013 baseline emissions levels. Therefore, baseline emission levels are estimated 

1710 using responses to a question in the survey about the emissions levels mills planned to achieve within the 

1711 next three years. These emissions levels were weighted by the production levels the mills reported in the 

1712 survey, in order to estimate the average emission levels by certification standard. The survey data were 

1713 also used to estimate the share of total production volume represented by products meeting each of the 

1714 emissions standards. 

1715 

1716 Note that all mills reported that they planned to manufacture only CARB certified products. 

1717 Thus, their production costs would only be affected under the analytical option where NAF resins were 

1718 required. According to CARB’s list of certified mills, 22 mills are CARB certified, including 7 certified 

1719 to produce NAF MDF. Of the 7 mills that are NAF certified, 2 are also certified to produce CARB 2 

1720 product manufactured using resins with added-formaldehyde. 

1721 

 24 One mill was not included in the sample because it was brand new and a second MDF mill was not identified until after 

the survey was conducted. Both mills are CARB 2 certified. The number of mills for each product type is limited to 

those that are subject to the TSCA Title VI emission standards, and does not include mills that only produce products 

that are exempted or not otherwise covered by TSCA Title VI (such as curved plywood, wood packaging, and molded 

products that do not qualify as panels). The response rate includes mills that only responded to a brief phone 

questionnaire during which information was collected about the compliance standards being achieved, but not the 

specific emissions levels. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-73

Table 2-47: MDF Production Affected By Analytical Option (mmsf) 

Baseline Emission 

Standard 

Production 

Share 

Production 

Level 

Affected Production 

Options SI, 

SE, SP, SC, 

and SCR 

Options CI 

and CE 

Options NI 

and NE 

CARB Phase 2 86.10% 1,593 - - 1,593 

CARB ULEF 4.60% 85 - - 85 

CARB NAF 9.30% 172 - - - 

Total 100% 1,850 - - 1,678 

Option SCR is the proposed option.

Sources: U.S. Environmental Protection Agency 2010a and RISI 2011a

1722 

1723 

1724 Estimated Costs for Changing Production Processes and Raw Materials 

1725 

1726 This analysis assumes that producing NAF MDF is 20 percent more expensive than CARB 2 

MDF, or about $110 per msf.25 1727 

1728 

Table 2-48: Incremental Increase in Production Costs for MDF By Analytical Option 

Baseline Emission 

Standard 

Affected Production (mmsf) Incremental Increase in Production Costs (millions, 

2010$) 

Options SI, 

SE, SP, SC, 

and SCR 

Options 

CI and CE 

Options 

NI and NE

Options SI, SE, 

SP, SC, and 

SCR 

($0/msf) 

Options CI 

and CE 

($0/msf) 

Options NI and NE 

($110/msf) 

CARB Phase 2 - - 1,593 - - $175 

CARB ULEF - - 85 - - $9 

CARB NAF - - - - - - 

Total - - 1,678 - - $185 

Option SCR is the proposed option.

Sources: U.S. Environmental Protection Agency 2010a and RISI 2011a

1729 

1730 2.3.1.3 Costs of Changes to Production Processes and Raw Materials for Particleboard Producers 

1731 

1732 This section presents the estimated costs to particleboard producers that are not compliant with a 

1733 specified emission standard in the baseline for making the changes to production processes and raw 

1734 materials that would be necessary to achieve that standard. First the number of mills and the volume of 

1735 production where changes to production processes and raw materials would be necessary are estimated. 

1736 Then the estimated increases in production and raw material costs to particleboard producers are 

1737 presented. 

1738 

1739 Number of Particleboard Mills and Affected Production Volume 

1740 

1741 The particleboard market is still recovering from a significant slump that began in 2008. 

1742 According to RISI (2011a), particleboard consumption was 2,570 million square feet (mmsf) in 2010 and 

1743 is forecast to increase 3.3 percent in 2011 to 2,650 mmsf and a further 10.3 percent to 2,930 mmsf in 

 25The analysis assumes that NAF MDF is 20 percent more expensive. The MDF price was estimated based on prices of 

about $567 and $523 msf for the West and East United States, respectively, from the RISI (2011) MDF forecast for 

March 2012, the final month included. Twenty percent of the average of these two prices is about $110 msf. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-74

1744 2012. Since the rule is scheduled to be implemented in 2013 this analysis uses the RISI (2011a) estimate 

1745 for 2012 to estimate the affected domestic particleboard production, which is the final year included in 

1746 RISI’s (2011a) forecast. To estimate U.S. production, the consumption figure is reduced to account for 

1747 the 15 percent of domestic consumption that is attributable to imports according to RISI’s (2011a) 

1748 forecast of particleboard consumption from imports for 2011. The resulting estimate of U.S. production 

1749 which is used in this analysis is 2,490 mmsf. 

1750 

1751 Table 2-49 presents the estimated production affected for each analytical option. These results 

1752 are estimated by combining the production estimates described above and the emissions standards and 

1753 levels reported by mills in EPA’s (2010a) Pressed Wood Manufacturing Industry Survey (PWMIS). EPA 

1754 administered this survey between June and October 2010 to domestic producers of composite wood 

1755 panels. The survey achieved a response from all 30 particleboard mills that were identified as operating 

in the U.S.26 1756 The survey asked about current emissions levels and about planned levels. Since many 

1757 composite wood product mills are in the midst of modifying their production technology and raw 

1758 materials to achieve compliance with Phase 2 of the CARB ATCM, current emission levels would not 

1759 accurately reflect the 2013 baseline emissions levels. Therefore, baseline emission levels are estimated 

1760 using responses to a question in the survey about the emissions levels mills planned to achieve within the 

1761 next three years. These emissions levels were weighted by the production levels the mills reported in the 

1762 survey, in order to estimate the average emission levels by certification standard. The survey data were 

1763 also used to estimate the share of total production volume represented by products meeting each of the 

1764 emissions standards. 

1765 

1766 Note that the mills that reported manufacturing product that was not CARB certified also reported 

1767 that they planned to manufacture product that met the CARB 2 emissions requirements. That is, they 

1768 reported that it was not worthwhile for them to pay for testing and third party certification even though 

1769 their products are being manufactured to meet the emissions standards. Thus, their production costs would 

1770 only be affected under the analytical option where NAF resins were required. 

1771 

 26 The number of mills for each product type is limited to those that are subject to the TSCA Title VI emission standards, 

and does not include mills that only produce products that are exempted or not otherwise covered by TSCA Title VI 

(such as curved plywood, wood packaging, and molded products that do not qualify as panels). The response rate 

includes mills that only responded to a brief phone questionnaire during which information was collected about the 

compliance standards being achieved, but not the specific emissions levels. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-75

Table 2-49: Particleboard Production Affected By Analytical Option (mmsf) 

Baseline Emission 

Standard 

Production 

Share 

Production 

Level 

Affected Production 

Options SI, SE, 

SP, SC, and 

SCR 

Options CI and 

CE 

Options NI and 

NE 

None a 0.2% 5 - - 5 

CARB Phase 1b 1.8% 45 45 - 45 

CARB Phase 2 88.5% 2,204 - - 2,204 

CARB ULEF 2.8% 70 - - 70 

CARB NAF 6.7% 167 - - - 

Total 100% 2,490 45 - 2,323 

a Note that mills reporting manufacturing product that was not CARB certified were meeting the CARB 2 emissions 

levels, which explains why production is only affected under Option NAF.

b Some mills producing product currently certified under CARB 1 reported that they would continue this product line 

after the CARB 2 effective date (although it would no longer be certified as CARB 1). 

Option SCR is the proposed option. 

Sources: RISI 2011a, d, U.S. Environmental Protection Agency 2010a

1772 

1773 Industry market reports indicate that panels that are not CARB 2 certified are generally not 

1774 available (RISI 2011), implying that few mills are offering product that is not CARB 2 certified. The 

1775 analysis assumes that between 10 and 25 percent of the 30 U.S. mills, or between 3 and 7 mills, are 

1776 offering product that is not CARB certified and uses the midpoint number of 5 mills for estimating the 

1777 cost impacts 

1778 

1779 According to CARB’s list of certified mills, four mills are certified to produce NAF particleboard 

1780 – two of these mills are certified to produce both CARB 2 and CARB NAF particleboard. 

1781 

1782 Estimated Costs for Changing Production Processes and Raw Materials 

1783 

1784 This analysis estimates the increased costs for changing production processes and raw materials 

1785 to meet the more stringent emissions requirements using RISI’s (2011d) data for industrial particleboard 

1786 prices in the southeast, where RISI reported producers were more successful in passing through the higher 

1787 costs of producing CARB 2 certified particleboard. According to RISI, mills were partially successful in 

1788 passing along the higher costs in the fourth quarter of 2010, and are expected to be more successful in 

1789 passing along these costs in the first quarter of 2011, as almost all particleboard supply will be CARB 2 

1790 certified as of 2011 (RISI 2011b, d). RISI’s (RISI 2011c) historical prices for particleboard indicate that 

1791 particleboard prices in the Southeast increased from about $315/msf to $335/msf between October 1, 

1792 2010 and March 18, 2011, an increase of about $20/msf. RISI attributes this increase primarily to the 

1793 transition to CARB 2, and therefore this analysis will use $20/msf as the estimated increased cost of 

1794 manufacturing CARB 2 particleboard for these mills (RISI 2011b, d). 

1795 

1796 This analysis assumes that producing NAF particleboard has twice the incremental costs of 

1797 producing CARB 2 particleboard, or $20/msf to transition from CARB 2 to CARB NAF and $40/msf to 

1798 switch from production that does not meet CARB 2 emissions standards to CARB NAF production. 

1799 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-76

Table 2-50: Incremental Increase in Production Costs for Particleboard By Analytical 

Option 

Baseline 

Emissions 

Standard 

Affected Production (mmsf) Incremental Increase in Production Costs 

(millions, 2010$) 

Options 

SI, SE, 

SP, SC, 

and SCR 

Options 

CI and 

CE 

Options 

NI and 

NE 

Options SI, 

SE, SP, SC, 

and SCR

($20/msf) 

Options 

CI and 

CE

($0/msf) 

Options NI and NE

($20/msf from CARB 

2; $40/msf from 

CARB 1 or None) 

None a - - 5 - - $0.2 

CARB Phase 1 45 - 45 $0.9 - $1.8 

CARB Phase 2 - - 2,204 - - $44.1 

CARB ULEF - - 70 - - $1.4 

CARB NAF - - - - - - 

Total 45 - 2,323 $0.9 - $47.5 

a Note that mills reporting manufacturing product in the “None” category for emissions standards because they 

were not certifying their production also reported that their emissions were below the Title VI emission 

requirements, and this is why this production is only affected under options NI and NE.

b Some mills producing product currently certified under CARB 1 reported that they would continue this product 

line after the CARB 2 effective date (although it would no longer be certified as CARB 1). 

Option SCR is the proposed option. 

Sources: RISI 2011a, b, U.S. Environmental Protection Agency 2010

1800 

1801 

1802 2.3.1.4 Summary of Production Process and Raw Material Costs for Composite Wood Panel 

1803 Producers 

1804 

1805 Table 2-51 presents a summary of the annualized increase in production process and raw material 

1806 costs for composite wood panel producers by analytical option. 

1807 

Table 2-51: Summary of Incremental Increase in Production Costs for Composite 

Panel Producers 

Product Type 

Incremental Increase in 

Annual Production Costs 

(millions, 2010$) 

30-Year Annualized 

Increase in Production 

Costs (3% discount 

rate, millions 2010$) 

30-Year Annualized 

Increase in Production 

Costs (7% discount rate, 

millions 2010$) 

Options 

SI, SE, 

SP, SC, 

and 

SCR 

Options 

CI and 

CE 

Options 

NI and 

NE 

Options 

SI, SE, 

SP, SC, 

and 

SCR 

Options 

CI and 

CE 

Option

s NI 

and NE

Options 

SI, SE, 

SP, SC, 

and 

SCR 

Options 

CI and 

CE 

Options 

NI and 

NE 

Hardwood Plywood $0.2 - $65.3 $0.2 - $62.2 $0.2 - $60.5 

MDF - - $185.0 - - $176.0 - - $171.2 

Particleboard $0.9 - $47.5 $0.9 - $45.2 $0.8 - $43.9 

Option SCR is the proposed option. 

1808 

1809 

1810 

1811 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-77

1812 2.3.2 Certification and Testing Costs for Composite Wood Panel Producers 

1813 

1814 Table 2-52 presents a summary of the incremental initial, subsequent year, and annualized costs 

1815 associated with testing and certification for the different analytical options under various scenarios for the 

1816 products affected. See section 2.2 for a description of how these costs were estimated. 

1817 

1818 To determine the baseline product certification status all mills were assumed to have two product 

1819 lines, and the baseline certification status of their product lines was determined by their certification status 

1820 according to CARB’s (2011b) list of certified mills and CARB’s (2011a) list of no-added formaldehyde 

1821 (NAF) and ultra low emitting formaldehyde (ULEF) exemptions. For example, if a mill only had a Phase 

1822 2 certification listed, it was assumed that they had two product lines with the standard certification. 

1823 (Standard certification refers to certification where mills are not exempt from any routine testing 

1824 requirements, i.e., not NAF or ULEF certification.) Another example is a mill that is listed as Phase 2 

1825 certified and also listed as having NAF exempt status would be assumed to have one NAF line and one 

1826 standard certification line (NAF certified mills are exempt from some routine testing requirements). The 

1827 exception to this is particleboard, where it is assumed that 5 of the 25 particleboard mills with standard 

1828 certification status also produce a product line that is not certified. Mills that certify their products as 

1829 ULEF under the CARB ATCM are exempt from some routine testing requirements under the CARB 

1830 ATCM. Under the proposed TSCA Title VI rule these ULEF exemptions will not be available so these 

1831 mills will no longer be exempt from some routine testing unless they obtain NAF certification. The 

1832 analysis assumes that mills will seek standard certification for baseline uncertified and baseline ULEF 

1833 product lines – with the exception of mills that have one product line that is ULEF certified and another 

1834 product line that is NAF certified in the baseline. These mills are assumed to seek NAF certification for 

1835 their product line that was ULEF certified in the baseline, so they will have two product lines with NAF 

1836 certification. Note that switching to NAF certification results in an estimated certification and testing cost 

1837 savings because NAF products are not required to be tested as frequently as products with other 

1838 certifications. 

1839 

1840 Under the CARB ATCM mills may ship panels from certified product lines before test results are 

1841 available, but under the proposed rule they would have to wait until test results indicate that the emissions 

1842 standards have been met before shipping a lot that has been tested. MDF and particleboard mills are all 

1843 assumed to conduct daily quality control testing on site, so this requirement is not expected to adversely 

1844 affect these mills. (Once a quarter these mills will also have to store lots for which a sample has been sent 

1845 to a TPC for large chamber testing until the test results indicate that the emissions standards have been 

1846 met for the lot that has been tested.) However, CARB certified hardwood plywood mills are assumed to 

1847 outsource quality control testing to their TPC. It is uncertain how often hardwood plywood mills ship 

1848 product from a lot being tested before the test results are available and therefore it is uncertain how mills 

1849 will choose to comply with this requirement. It may be the case that some mills normally maintain a level 

1850 of inventory where they would typically not ship any panels before test results have been determined for 

1851 that lot, but other mills may ship out panels on the same day they are produced. This analysis estimates 

1852 the costs of this requirement as the incremental cost of installing a lab on site and conducting daily quality 

1853 control testing rather than outsourcing weekly quality control testing to a TPC. (Once a quarter these 

1854 mills will also have to store lots for which a sample has been sent to a TPC for large chamber testing until 

1855 the test results indicate that the emissions standards have been met for the lot that has been tested.) 

1856 Assuming that mills conduct daily on-site testing may overstate the costs of this requirement if some mills 

1857 find it more cost effective to hold products in inventory until test results have been determined by an 

1858 outside lab. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-78

1859 

1860 To be comparable with the benefits estimates, which were estimated for 30 year period, all costs 

1861 were annualized over a 30 year period. The results presented in Table 2-53 are calculated by multiplying 

1862 the number of affected entities by the corresponding cost increase or savings presented in Table 2-52. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-79

1863 

Table 2-52: Per Mill Costs for Certifying and Testing Products, by change in product line certification 2010$) 

Analytical 

Option Product Type Baseline Product Lines (CARB ATCM certification) Post-Rule Product Lines (TSCA Title VI certification) First Year Costs Subseque

Year Cos

SI, SE, SP, 

SC, and 

SCR 

Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. $14,097 $14,0Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. $42,015 $7,0Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. $7,305 $4,4Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. $62,124 $52,1MDF 2 prod. with ULEF cert. 2 prod. with standard cert. $48,630 $48,6Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. $48,630 $48,6Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. $22,501 ($1,95MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. $12,693 ($1,93

CI and CE Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. $81,614 $62,7

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. $7,305 $4,4

NI and NE 

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. $42,015 $7,0

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. ($26,827) ($47,69Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. $23,918 ($3,59MDF 2 prod. with ULEF cert. 2 prod. with NAF cert. $15,017 ($3,55Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. $15,017 ($3,55Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. ($23,074) ($54,88MDF 2 prod. with standard cert. 2 prod. with NAF cert. ($31,312) ($52,18Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. ($31,312) ($52,18Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. $22,501 ($1,95MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. $12,693 ($1,93MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. ($31,306) ($48,23Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. ($31,306) ($48,23

Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exempt from any ongoing testing or NAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exempt from some of the routine te

certification is available under the CARB ATCM and ULEF certified mills are exempt from some of the routine testing requirements under the CARB AOption SCR is the proposed option. 

1864 1865 1866 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-80Table 2-53: Annualized Costs for Certifying and Testing Products, by analytical option and number of affected mill

Analytical 

Option Product Type Baseline Product Lines (CARB ATCM certification) Post-Rule Product Lines (TSCA Title VI certification) Number of Affected Firms Numb

Affected 

SI, SE, SP, 

SC, and 

SCR 

Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. 6 MDF 2 prod. with ULEF cert. 2 prod. with standard cert. 1 Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. 1 Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. 4 MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. 1 

Total 

CI and CE 

Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. 9 1Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 

Total 

NI and NE

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 1Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. 6 MDF 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. 8 1MDF 2 prod. with standard cert. 2 prod. with NAF cert. 8 1Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. 11 2Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 

Total 

Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exempt from any ongoing testing NAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exempt from some of the routine testi

certification is available under the CARB ATCM and ULEF certified mills are exempt from some of the routine testing requirements under the CARB A

Option SCR is the proposed option. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-81

1867 2.3.3 Total Costs for Composite Panel Producers 

1868 

1869 The incremental costs associated with changing production processes and raw materials presented 

1870 in Table 2-46, Table 2-48, and Table 2-50 are combined with the certification and testing costs presented 

1871 in Table 2-52 and Table 2-53 to estimate the total first and subsequent year costs presented in Table 2-54 

1872 and the 30-year annualized costs presented in Table 2-55. Note that the production process and raw 

1873 material costs presented in Table 2-46, Table 2-48, and Table 2-50 are assumed to be equally distributed 

1874 across the mills incurring these costs to calculate the estimates presented in Table 2-54 and Table 2-55. 

1875 

1876 

1877 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-82Table 2-54: Total First and Subsequent Year Costs for Composite Panel Producers, by analytical option and numb(thousands, 2010$) 

Analytical 

Option Product Type Baseline Product Lines (CARB ATCM certification) Post-Rule Product Lines (TSCA Title VI certification) Number of Affected Firms Number 

Affecte

Mills 

SI, SE, SP, 

SC, and 

SCR 

Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. 6 8 MDF 2 prod. with ULEF cert. 2 prod. with standard cert. 1 2 Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. 1 1 Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. 4 5 MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. 1 1 

Total 

CI and CE 

Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. 9 11 Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 

Total 

NI and NE

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 5 Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. 6 8 MDF 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 2 Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. 8 10 MDF 2 prod. with standard cert. 2 prod. with NAF cert. 8 13 Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. 11 20 Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 1 Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 2 

Total 

Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exempt from any ongoing testing or NAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exempt from some of the routine te

certification is available under the CARB ATCM and ULEF certified mills are exempt from some of the routine testing requirements under the CARB AOption SCR is the proposed option. 

1878 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-83Table 2-55: Total Annualized Costs for Composite Panel Producers, by analytical option and number of affected m2010$) 

Analytical 

Option Product Type Baseline Product Lines (CARB ATCM certification) Post-Rule Product Lines (TSCA Title VI certification) Number of Affected Firms Number 

Affecte

Mills 

SI, SE, SP, 

SC, and 

SCR 

Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. 6 8 MDF 2 prod. with ULEF cert. 2 prod. with standard cert. 1 2 Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. 1 1 Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. 4 5 MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with standard cert. 1 1 

Total 

CI and CE 

Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. 9 11 Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 

Total 

NI and NE

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 5 Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. 6 8 MDF 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 2 Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. 8 10 MDF 2 prod. with standard cert. 2 prod. with NAF cert. 8 13 Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. 11 20 Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 1 Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 2 

Total 

Note: Numbers in parentheses represent cost savings. Option SCR is the proposed option. 

1879 1880 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-84

1881 2.4 Estimated Costs for Wood Veneer Laminated Product Producers 

1882 

1883 This section presents the estimated costs to wood veneer laminated product producers under 

1884 several analytical options. For this analysis a wood veneer laminated product is defined as a product 

1885 made by gluing a wood or woody grass veneer to the face and/or back of a purchased platform to produce 

a finished product or component part (other than a stock hardwood plywood panel).27 1886 Wood veneer 

1887 laminated product producers are considered composite wood product fabricators rather than hardwood 

1888 plywood manufacturers under the CARB ATCM, and they are not required to meet the ATCM’s 

1889 emissions standards. 

1890 

1891 TSCA Title VI includes laminated products in the definition of hardwood plywood, and directs 

1892 EPA to conduct a rulemaking process to determine whether to exempt any of these products from the 

1893 definition. If EPA does not exempt laminated products from the definition of hardwood plywood, then 

1894 laminated products will have to meet TSCA Title VI’s emissions standards (in addition to being made 

1895 with certified platforms). 

1896 

1897 The estimated number of companies making wood veneer laminated products was presented 

1898 above in Section 2.1.2. Section 2.3.1 presents the estimated costs to wood veneer laminated product 

1899 producers for making changes to raw materials. Section 2.4.2 presents the estimated costs of testing and 

1900 third party certification for wood veneer laminated product producers. Finally, the total estimated costs 

1901 for wood veneer laminated product producers are presented in section 2.4.3. 

1902 

1903 2.4.1 Costs of Changes to Raw Materials for Wood Veneer Laminated Product 

1904 Producers 

1905 

1906 This section presents the estimated costs to wood veneer laminated product producers for making 

1907 changes to raw materials. These costs are estimated as the costs of switching face resins from UF to PVA 

1908 resin systems and switching from conventional to lower emitting platforms . 

1909 

1910 Because the emissions standard for hardwood plywood (0.05 ppm) is lower than the standards for 

1911 particleboard (0.09 ppm) and MDF (0.11 to 0.13 ppm), wood veneer laminated products included in the 

1912 definition of hardwood plywood could conceivably exceed the emission standard even if a NAF resin 

1913 such as PVA was used to affix the veneer to a certified particleboard or MDF platform. (Whether this 

1914 occurs in practice depends on how effectively the veneer acts as a barrier to the release of formaldehyde, 

1915 and how far below the standards the actual emissions from the platform are.) 

1916 

1917 This analysis uses the term “low emission platforms” to mean platforms with emissions low 

1918 enough that wood veneer laminated products made from them meets the applicable hardwood plywood 

1919 emission standard. For the standard certification, low emission platforms are assumed to include certified 

1920 veneer platforms, particleboard and MDF platforms certified as ULEF under the CARB ATCM, and 

1921 particleboard and MDF platforms certified as NAF. For analytical options requiring wood veneer 

1922 laminated products to meet NAF emission levels, low emission platforms would include particleboard, 

1923 MDF and veneer platforms certified as NAF. 

1924 

1925 

1926 Wood veneer laminated product producers switching from UF to PVA face resins and purchasing 

1927 low emission platforms would not need to make any significant modifications or upgrades to existing 

1928 equipment or processes because PVA resins are generally a “drop-in” technology for plants currently 

 27 The laminated products discussed here do not include products that are solely laminated with materials other than 

veneer, such as high pressure laminate, thermally fused paper, vinyl film, decorative foil, or polypropylene film. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-85

1929 using UF face resins. Thus, the estimated raw material costs are only for purchasing the more expensive 

1930 face resins and platforms. Note that switching to PVA face resins is just one possibility for achieving 

1931 compliance. Some producers may achieve compliance by using enhanced urea formaldehyde resins, 

1932 melamine-urea-formaldehyde (MUF) resins, soy-based resins, or other resin systems. However, the cost 

1933 of switching to PVA resins can provide a reasonable approximation for the compliance cost associated 

1934 with changing raw materials and production processes and therefore is the basis for the cost estimates in 

1935 this analysis. 

1936 

1937 Section 2.4.1.1 presents the estimated production of wood veneer laminated products. This 

1938 information is used to estimate the increase in raw material costs as a result of the proposed rule. Section 

1939 2.4.1.2 presents the estimated raw material costs to wood veneer laminated product producers by 

1940 analytical option. 

1941 

1942 2.4.1.1 Wood Veneer Laminated Product Production Volume 

1943 

1944 This analysis estimates the production volume of wood veneer laminated product producers 

1945 separately for the following primary categories of wood veneer laminated product producers listed below: 

1946 

1947  Custom Panel Producers 

1948  Engineered Wood Flooring Producers 

1949  Composite Wood Product Fabricators 

1950  Cabinet Manufacturers 

1951  Household Furniture Manufacturers 

1952  Office and Institutional Furniture Manufacturers 

1953  Window and Door Manufacturers 

1954  Architectural Woodwork and Millwork Manufacturers 

1955 

1956 Custom Panel Manufacturers 

1957 

1958 Custom panel producers are defined here as producers that make custom hardwood plywood 

1959 panels to order by affixing veneer to purchased platforms. They make hundreds of different combinations 

1960 of platform types (particleboard, MDF, veneer-core), platform characteristics (e.g., moisture resistance, 

1961 fire resistance, density, other mechanical properties, and formaldehyde emissions), platform thickness, 

1962 species of veneer, etc. A firm might use more than a dozen different types of particleboard and MDF 

1963 platforms (not counting differences in thickness, size, density, etc.), and a much larger number of 

1964 different types of veneer-core platforms. The specific characteristics of each order are determined by the 

1965 customer. Custom panel producers might make as little as four or five sheets of a given product, and can 

1966 make dozens or even hundreds of different combinations of platform type, thickness, and veneer species 

1967 in a single day. They often manufacture and ship a product within a few days of receiving an order. 

1968 Custom panel producers are generally small businesses. 

1969 

1970 Consultations with industry members indicate that there are about 50 custom panel producers, 

1971 although estimates ranged from 20 to 100. Industry members estimated that the typical production 

1972 volume for these producers ranges from less than 1 million to 15 million square feet (mmsf) per year, 

1973 with the production of most producers falling near the lower end of this range. Therefore, it is assumed 

1974 that average mill production volume is 2 mmsf on a 5/8” basis, resulting in an estimate that total 

1975 production volume by custom panel producers is 100 mmsf per year on a 5/8” basis. 

1976 

1977 

1978 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-86

1979 Engineered Wood Flooring Producers 

1980 

1981 According to U.S. International Trade Commission (2008), engineered wood flooring production 

1982 was estimated to be 258 mmsf in 2006. Based on conversations with HPVA, it is estimated that 2010 

1983 production levels for the hardwood plywood industry overall are about 60 percent of their 2006 levels, 

1984 which would imply engineered wood flooring production of about 155 mmsf on a 3/8" basis. About 30 

1985 percent of engineered wood flooring production is estimated to be manufactured as a wood veneer 

1986 laminated product (while the other 70 percent of production is manufactured as a product meeting the 

1987 CARB definition of hardwood plywood). Thus, the quantity of engineered wood flooring made as a 

1988 wood veneer laminated product is estimated to be about 47 mmsf on a 3/8” basis, or 28 mmsf if calculated 

1989 on a 5/8” basis. Since it is estimated that there are about 18 domestic engineered wood flooring producers 

1990 making wood veneer laminated products, it follows that the estimated average production volume per 

1991 firm is about 1.6 mmsf per year on a 5/8” basis. 

1992 

1993 Other Wood Veneer Laminated Product Producers 

1994 

1995 The production volume of other wood veneer laminated products (other than other than custom 

1996 panel and engineered wood flooring ) is estimated based on Census data on the quantity of veneer 

1997 consumed in the industry. Figure 2-2 presents the methodology employed for estimating the consumption 

1998 of hardwood veneer by these other wood veneer laminated product manufactures. First, the data on the 

1999 dollar value of total hardwood veneer produced is obtained and the average cost per square foot of 

2000 hardwood veneer is estimated. These data are combined to estimate the total quantity of hardwood veneer 

2001 produced. Next, the quantity of hardwood veneer that is imported is added to the total domestic 

2002 hardwood veneer production, and then the quantity of hardwood veneer that is exported is subtracted. 

2003 This total reflects the estimated domestic consumption of hardwood veneer. Then, the dollar value of 

2004 hardwood veneer consumed by hardwood veneer and plywood producers is combined with the estimated 

2005 average hardwood veneer cost per square foot to generate the estimated consumption of hardwood by 

2006 hardwood veneer and plywood producers. To estimate the quantity of veneer consumed by wood veneer 

2007 laminated product producers, the quantity of hardwood veneer consumed by hardwood veneer and 

2008 plywood producers is subtracted from the quantity of total hardwood veneer consumed domestically. 

2009 Note that this may overstate the quantity of wood veneer laminated product production because veneer is 

2010 also used in the manufacture of items that are not covered by the rule, such as statutorily exempt items, 

2011 hobbyist uses, and furniture repair. 

2012 

2013 The total dollar value of hardwood veneer produced is $1,075,909 thousand according to the 2007 

2014 Economic Census (U.S. Census Bureau 2009c). The corresponding cost per square foot of veneer is 

2015 estimated using U.S. ITC trade data on the value and quantity of veneer exported in 2007. According to 

2016 the U.S. ITC, 972,952,757 square feet of veneer was exported in 2007, with a value of $438,302 

thousand.28 2017 This results in an average veneer cost of $0.45 per square foot. Veneer costs vary widely 

2018 depending on the species, cut or pattern, and quality of the wood. While some laminators may primarily 

2019 use veneer that is priced higher than the estimated average of $0.45 per square foot, other laminators will 

2020 use veneer that is below this average cost. By combining the total dollar value of hardwood veneer 

2021 produced ($1,075,909 thousand) and the average price of hardwood veneer ($0.45), the analysis estimates 

2022 that domestic production of hardwood veneer is 2,390,909 thousand square feet (msf). 

2023 

2024 Data on hardwood veneer imports and exports was obtained from the U.S. ITC Interactive Tariff 

2025 and Trade Dataweb. According to U.S. ITC trade data, the quantity of U.S. hardwood veneer imports for 

2007 was 656,721 msf, while the quantity of U.S. hardwood veneer exports was 986,223 msf.29 2026 The 

 28 Excludes tropical hardwood veneer. 

29 Includes “Tropical Hardwood Veneer.” 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-87

2027 estimated domestic hardwood veneer consumption of 2,061,407 msf is calculated by adding the imports 

2028 and subtracting the exports from the domestic hardwood veneer production. 

2029 

2030 The dollar value of hardwood veneer consumed by hardwood veneer and plywood manufacturers, 

2031 $626,244 thousand, is available from the 2007 Economic Census (U.S. Census Bureau 2009g). The 

2032 corresponding cost per square foot of veneer for hardwood plywood manufacturers is estimated using 

2033 U.S. ITC trade data on the value and quantity of veneer exported in 2007. By combining the total dollar 

2034 value of hardwood veneer consumed by the hardwood veneer and plywood manufacturers ($626,244 

2035 thousand) and the average price of exported hardwood veneer ($0.45), the analysis estimates that 

2036 consumption of hardwood veneer by plywood manufacturers is 1,391,653 msf. Thus, total domestic 

2037 veneer consumption by wood veneer laminated product producers is estimated to be 669,753 msf.
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-88

2038 

Figure 2-2: Estimating Quantity of Harwood Veneer Consumed by Other Wood Veneer Laminated Product Produceengineered wood flooring and custom panel producers) 

2039 

Step 1: Estimate domestic

hardwood veneer production

(2,390,909 msf) 

(Dollar value of hardwood veneer

produced divided by estimated cost per

square foot for hardwood veneer)

$1,075,909/$0.45

Obtain data on the dollar value of

hardwood veneer produced from

2007 Economic Census. Product

code 3212111: Hardwood veneer,

including backed w/ paper/cloth/

etc.

Estimate cost per square foot of

veneer by using U.S. ITC trade

data on the value and quantity of

veneer exported in 2007.

(quantity of hardwood veneer

exported in 2007 divided by the

estimated value of the hardwood

veneer exported in 2007)

Step 2: Estimate domestic 

hardwood veneer consumption

(2,061,407 msf) 

(Total Production [Step 1] + Imports –

Exports)

2,390,909 + 656,721 ‐ 986,223

Step 3: Estimate domestic 

consumption of hardwood veneer 

by hardwood plywood 

manufacturers

(1,391,653 msf)

(Dollar value of hardwood veneer

consumed by hardwood veneer and

plywood manufacturers divided by

estimated cost per square foot for

hardwood veneer)

$626,244/$0.45

Step 4: Estimate d

consumption of hardw

by laminato

(669,753 ms

(Subtract estimated 

consumption of hardwo

hardwood plywood ma

[Step 3] from the estima

hardwood veneer con

[Step2])

2,061,406‐1,391

Obtain data on imports of

hardwood veneer from the 2007

U.S. ITC Interactive Tariff and

Trade Dataweb.

Obtain data on exports of

hardwood veneer from the 2007U.S. ITC Interactive Tariff and

Trade Dataweb.

440890 Veneer sheets and sheets for plywood, etc. whether of not planned, etc., not

over 6 mm (.236 in.) thick, or non‐coniferous wood, nesoi.

440831 Veneer sheets and sheets for plywood and other wood sawn lengthwise,

slicked or peeled, thickness not exceeding 6 mm, dark/light meranti &meranti bakau

440839 Veneer sheets and sheets for plywood and other wood sawn lengthwise,

slicked or peeled, thickness not exceeding 6 mm, other tropical wood, nesoi

440890 Veneer sheets and sheets forplywood, etc. whether of not planned,etc., not over 6 mm (.236 in.) thick, or

non‐coniferous wood, nesoi.

440831 Veneer sheets and sheets forplywood and other wood sawn

lengthwise, slicked or peeled,

thickness not exceeding 6 mm, dark/

light meranti &meranti bakau

Obtain data on the dollar value of

hardwood veneer consumed byhardwood veneer and plywoodmanufacturers from the 2007

Economic Census: Sector 31:

EC0731I3: Manufacturing:

Industry Series: MaterialsConsumed by Kind for the United

States: 2007.

Estimate cost per square foot of

veneer by using U.S. ITC trade

data on the value and quantity of

veneer imported in 2007.

(quantity of hardwood veneerimported in 2007 divided by the

estimated value of the hardwood

veneer imported in 2007)
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-89

2040 To estimate the volume of wood veneer laminated product produced per volume of veneer 

2041 consumed it is assumed that about 30 percent of the veneer is lost during the production process due to 

2042 trimming, etc. It is also assumed that all wood veneer laminated product producers affix both a face and a 

2043 back veneer, so for each square foot of veneer consumed, 0.35 (0.35 = half of 70%) square feet of wood 

2044 veneer laminated product is produced. Note that wood veneer laminated product producers may often 

2045 only affix a face veneer, but the estimated costs of switching adhesives are not affected by this 

2046 assumption since the number of glue lines assumed and the estimated quantity of product manufactured 

are inversely related;30 2047 however, the estimates of platform costs are affected by this assumption. 

2048 

2049 Table 2-56 presents the estimated production of wood veneer laminated products other than 

2050 custom panels and engineered wood flooring, using the estimate of domestic consumption of hardwood 

2051 veneer by laminators. 

2052 

Table 2-56: Production Volume of Other Wood Veneer Laminated Products 

Product Category Estimated Square 

Footage of Hardwood 

Veneer Consumed (msf) 

Surface Area of Wood 

Veneer Laminated 

Product Produced per 

Square Foot of 

Hardwood Veneer 

Consumed 

Estimated Surface Area 

of Wood Veneer 

Laminated Product 

Produced (msf) 

Wood Veneer Laminated 

Product Other than Custom 

Panels and Engineered 

Wood Flooring 

669,754 0.35 234,414 

Sources: U.S. Census Bureau 2009c, U.S. Census Bureau 2009g, U.S. ITC 2011b, U.S. ITC 2011a 

2053 

2054 The estimated production of 307,032 msf from Table 2-56 is disaggregated in Table 2-57 

2055 according to the relative share of the total value of hardwood veneer consumed by employer 

2056 establishments in the various wood veneer laminated product industries. 

 30 For a given quantity of veneer, a manufacturer that affixes only a face veneer produces twice the square footage of 

laminated product as a manufacturer affixing both face and back veneers. But the former incurs half the cost per square 

foot for glue compared to the latter. Thus, both manufacturers have the same cost for glue. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-90

Table 2-57: Production Volume of Other Wood Veneer Laminated Product Producers 

Product Type NAICS Code and 

Description Value of Hardwood 

Veneer Consumed 

(thousands, 2007$) 

Percent of 

Veneer 

Consumed 

Estimated 

Surface Area of 

Wood Veneer 

Laminated 

Product 

Produced (msf) 

Cabinets 

Wood Kitchen Cabinet and 

Countertop Manufacturing 

(337110) 

$95,058 

Wood Television, Radio, 

and Sewing Machine 

Cabinet Manufacturing 

(337129) 

$1,262 

Subtotal – Cabinets $96,320 24% 56,259

Household Furniture 

Upholstered House 

Furniture Manufacturing 

(337121) 

$11,737 

Non-upholstered Wood 

Household Furniture 

Manufacturing (337122) 

$69,525 

Subtotal – Household 

Furniture $81,262 21% 49,227 

Office and Institutional 

Furniture 

Institutional Furniture 

Manufacturing (337127) $24,948 

Wood Office Furniture 

Manufacturing (337211) $37,840 

Showcase, Partition, 

Shelving, and Locker 

Manufacturing (337215) 

$10,626 

Subtotal –Office and 

Institutional Furniture $73,414 19% 44,539

Window and Door 

Producers 

Wood Window and Door 

Manufacturing (321911) $91,989 23% 53,915

Architectural Woodwork 

and Millwork 

Custom Architectural 

Woodwork and Millwork 

Manufacturing (337212) 

$53,149 13% 30,474

 Total $396,134 100% 234,414 

Sources: U.S. Census Bureau 2009c, U.S. Census Bureau 2009g, U.S. ITC 2011b, U.S. ITC 2011a 

2057 

2058 

2059 2.4.1.2 Estimated Raw Materials Costs for Wood Veneer Laminated Product Producers 

2060 

2061 Since wood veneer laminated product producers make higher value-added products compared to 

2062 stock hardwood plywood panels, keeping resin costs low is not as critical to their competitiveness as it is 

2063 for stock panel producers. Many producers of wood veneer laminated products are believed to use PVA, 

2064 which is a NAF resin, as a face adhesive. PVA resin is more expensive than UF resin, but it has a number 

2065 of advantages: PVA is easy to work with, easy to clean up, and the press temperature can be kept low. 

2066 However, some producers still use UF resins. For the purpose of cost estimation, it is assumed that if 

2067 wood veneer laminated products are not excluded from the definition of hardwood plywood, virtually all 

2068 producers using UF resins will switch adhesive technologies in order to meet the emissions standards in 

2069 TSCA Title VI. 

2070 
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January 27, 2012 2-91

2071 The main steps to estimating the change in raw material costs to wood veneer laminated product 

2072 producers under an analytical option where switching to NAF resins is the likely compliance strategy are 

2073 as follows: 

2074 

2075 1. Estimate the total production volume from facilities that are expected to continue to use UF resins 

2076 in the absence of a national rule. 

2077 2. Assuming that mills using UF resins will switch to PVA resins, estimate unit cost of switching 

2078 from UF to PVA resins. 

2079 3. Estimate the production volume that will need to switch to low emission platforms in order to 

2080 achieve the hardwood plywood emission standard. 

2081 4. Estimate unit cost of switching to a low emission platform to achieve the hardwood plywood 

2082 emission standard. 

2083 5. Estimate total cost of switching from UF to PVA resins and low emission platforms by 

2084 multiplying the unit costs with the production volume that is subject to the changes. 

2085 Note that switching to PVA face resins is just one possibility for achieving compliance with the 

2086 Phase 2 emissions standards. Some producers may achieve compliance by using enhanced urea 

2087 formaldehyde resins, melamine-urea-formaldehyde (MUF) resins, soy-based resins, or other resin 

2088 systems. However, the cost of switching to PVA face resins can provide a reasonable approximation for 

2089 the compliance cost associated with changing raw materials and production processes and therefore is the 

2090 basis for the cost estimates in this analysis. 

2091 

2092 Production Volume Switching to PVA resins 

2093 

2094 Table 2-58 presents the estimated quantity of wood veneer laminated products currently 

2095 manufactured using UF resins, based on the estimated production volumes presented in section 2.4.1.1 

2096 and on conversations with industry contacts about the share of products made using UF resins. 

2097 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-92

Table 2-58: Estimating Wood Veneer Laminated Product Production Volume Manufactured 

Using UF Resins 

Product Category 

Estimated 

Surface 

Area of 

Wood 

Veneer 

Laminated 

Product 

Produced 

(msf, 5/8”) 

Estimated 

Percentage of 

Production 

Potentially 

Using 

Formaldehyde

-Added Resins 

Estimated 

Production 

Volume 

Switching to 

NAF Resins 

(msf, 5/8”) 

Comments 

Architectural Panels / 

Custom Panels 100,000 25% 25,000

Some industry contacts thought using 

formaldehyde added resins was not 

common. In order to be conservative in 

terms of being careful not to understate 

costs it is assumed that 25% of production 

uses UF resins. 

Engineered Wood 

Flooring 28,000 25% 7,000

Some industry contacts thought using 

formaldehyde added resins was not 

common. In order to be conservative in 

terms of being careful not to understate 

costs it is assumed that 25% of production 

uses UF resins. 

Cabinets 56,259 45% 25,317 About 45% of cabinet producers use UF 

resins according to KCMA (2010). 

Household Furniture 49,227 45% 22,152

Information on resin use by household 

furniture producers was limited, so it is 

assumed that 45% of them use UF resins, 

similar to cabinet producers. 

Office and Institutional 

Furniture 44,539 5% 2,227

BIFMA (2010) reported UF resins were 

used very little if at all for office and 

institutional furniture. Thus, 5% of 

production is assumed to be produced with 

UF resins. 

Wood Window and 

Door Manufacturing 53,915 45% 24,262

Information on resin use by window and 

door producers was limited, so it is assumed 

that 45% of producers use UF resins, similar 

to cabinet producers. 

Custom architectural 

woodwork and 

millwork manufacturing 

30,474 5% 1,524

Little information was available for 

architectural woodwork and millwork 

producers. Thus, 5% of production is 

assumed to be produced with UF resins, 

similar to office and institutional furniture 

producers. 

Total 362,414 107,482 

2098 

2099 Production Volume Switching to Low Emission Platforms 

2100 

2101 Under options SI, CI, and NI wood veneer laminated product producers would be considered 

2102 hardwood plywood producers, and therefore producers using composite core platforms might need to 

2103 switch to ULEF or NAF composite core platforms in order to meet the emissions standard. Under Option 

2104 SP, this would be the case only for custom panel producers since other wood veneer laminated product 

2105 producers would be considered fabricators under this option. However, under options SI, SP, CI, and NI 

2106 producers using veneer core platforms that meet the CARB 2 emissions standards but are not NAF or 

2107 ULEF platforms are expected to be able to achieve the emissions standards without switching platforms. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-93

2108 Under Option SN, however, wood veneer laminated product producers would also have to use NAF face 

2109 veneer and NAF platforms to be exempt from the definition of hardwood plywood. Under options SC 

2110 and SCR (the proposed option), wood veneer laminated products would be exempted from the emissions 

2111 standards if they were made with NAF face resins and platforms compliant with the TSCA Title VI 

2112 emissions standards. But since all platforms will be compliant with the emissions standards after the Title 

2113 VI rule takes effect, the only estimated incremental costs are for switching to NAF resins. It is assumed 

2114 that under options SN, SC, and SCR most wood veneer laminated product producers that were not already 

2115 doing so would use NAF platforms (Option SN) and/or NAF face resins (options SN, SC, and SCR) in 

2116 order to avoid being categorized as hardwood plywood producers. 

2117 

2118 To summarize, the affected wood veneer laminated product producers are generally expected to: 

2119 

2120  switch to ULEF and NAF composite core platforms under options SI, SP, CI, and NI 

2121  switch to using NAF face resins and NAF platforms under Option SN, and 

2122  make no changes to platforms under options SC and SCR, as TSCA Title VI compliant platforms 

2123 would be needed to qualify for the exemption, but all baseline platforms are assumed to be TSCA 

2124 Title VI compliant. 

2125 

2126 The resulting estimates and a detailed description of the underlying calculations are presented 

2127 below in Table 2-59 (for options SI, SP, CI, NI), and Table 2-60 (for Option SN). 

2128 

2129 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-94

Table 2-59: Wood Veneer Laminated Product Production Switching to Low Emission Platforms: 

Options SI, SP, CI, and NI 

Product 

Category 

Production 

(msf, 5/8”) 

Production 

Switching to Low 

Emission Platforms Description of Estimated Percentages a, b

(%) (msf) 

Architectural 

Panels / 

Custom 

Panels 

100,000 35.5% 35,500 

Based on conversations with HPVA Personal Communication with HPVA 2011), 40% of 

hardwood plywood is composite core, and this is also assumed to be the case for custom 

panels. It was estimated that the mix of MDF and particleboard consumed in the Hardwood 

Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 59.1% 

particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not 

made with NAF or ULEF resins, respectively. Thus, 35.5% is calculated as the sum of the 

two products of: (1) 40%, 40.9%, and 86.1%, and (2) 40%, 59.1%, and 90.5%. 

Engineered 

Wood 

Flooring 

28,000 1.8% 504 

Based on conversations with HPVA (2011), 2% of engineered wood flooring is composite 

core. It was estimated that the mix of MDF and particleboard consumed in the Hardwood 

Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 59.1% 

particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not 

made with NAF or ULEF resins, respectively. Thus, 1.8% is calculated as the sum of the 

two products of: (1) 40.9%, 2%, and 86.1%, and (2) 59.1%, 2%, and 90.5%. 

Cabinets 56,259 66.0% 37,131 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in 

the cabinet industries (NAICS 337110 and 337129) is 26.7% hardwood plywood, 7.5% 

MDF and 65.7% particleboard. It was estimated that 86.1% and 90.5% of MDF and 

particleboard are not made with NAF or ULEF resins, respectively. Thus, 66.0% is 

calculated as the sum of the two products of: (1) 7.5% and 86.1%, and (2) 65.7% and 90.5%.

Household 

Furniture 49,227 57.9% 28,502 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in 

the Household Furniture Manufacturing Industries (NAICS 337121 and 337122) is 34.9% 

hardwood plywood, 23.4% MDF and 41.7% particleboard. It was estimated that 86.1% and 

90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. 

Thus, 57.9% is calculated as the sum of the two products of: (1) 23.4% and 86.1%, and (2) 

41.7% and 90.5%. 

Office and 

Institutional 

Furniture 

44,539 55.6% 24,764 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in 

the Office and Institutional Furniture Manufacturing Industries (NAICS 337127, 337211 

and 337115) is about 37.5% hardwood plywood, 22.2% MDF and 40.3% particleboard. It 

was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or 

ULEF resins, respectively. Thus, 55.6% is calculated as the sum of the two products of: (1) 

22.2% and 86.1%, and (2) 40.3% and 90.5%. 

Wood Window 

and Door 

Manufacturing 53,915 73.3% 39,520 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in 

the Window and Door Manufacturing Industry (NAICS 321911) is 17.5% hardwood 

plywood, 33.1% MDF and 49.5% particleboard. It was estimated that 86.1% and 90.5% of 

MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 73.3% 

is calculated as the sum of the two products of: (1) 33.1% and 86.1%, and (2) 49.5% and 

90.5%. 

Custom 

architectural 

woodwork and 

millwork 

manufacturing 

30,474 59.4% 18,102 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in 

the Architectural Woodwork and Millwork Industry (NAICS 337212) is 33.27% hardwood 

plywood, 22.78% MDF and 43.95% particleboard. It was estimated that 86.1% and 90.5% 

of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 

59.4% is calculated as the sum of the two products of: (1) 22.78% and 86.1%, and (2) 

43.95% and 90.5%. 

Total 362,414 184,023 a The mix of composite wood products consumed were estimated using U.S. Census (2009d) data on the value of materials consumed. Values were 

converted to volumes using prices of $480, $445, and $315 msf for hardwood plywood, MDF, and particleboard, respectively. The price of hardwood 

plywood was estimated using the total 2007 export values and quantities from U.S. ITC (2010) data (HTS codes 441232, 441299, and 441231). The 

price of MDF and particleboard utilized are July 2007 prices from RISI’s (2011) MDF and Particleboard Commentary. b The percentages of composite platforms not made with NAF or ULEF resins was estimated from EPA’s (2010a) survey of composite wood product 

producers. Since the percentage of ULEF production was not distinguished from other CARB 2 certified added-formaldehyde production in EPA’s 

(2010a) survey of composite wood product producers, it was estimated that 37% of CARB 2 certified added-formaldehyde production is ULEF since 7 

of the 19 CARB 2 certified mills that are not NAF exempt are ULEF exempt according to CARB’s lists of certified mills and ULEF and NAF mills. 

This analysis uses the term “low emission platforms” to mean platforms with emissions low enough that wood veneer laminated products made from 

them meets the applicable hardwood plywood emission standard. 

Sources: CARB 2011, U.S. Census 2009d, U.S. EPA 2010a, U.S. ITC 2010, and RISI 2011
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-95

2130 

Table 2-60: Wood Veneer Laminated Product Production Switching to NAF Platforms: Option SN 

Product 

Category 

Production 

(msf, 5/8”) 

Production 

Switching to Low 

Emission Platforms Description of Estimated Percentages a, b

(%) (msf) 

Architectural 

Panels / 

Custom Panels 

100,000 73.3% 73,300 

Based on conversations with HPVA (2011), 60% of hardwood plywood panels are 

veneer core. It was estimated that the mix of MDF and particleboard consumed in the 

Hardwood Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 

59.1% particleboard. Thus, the estimated mix of veneer core, MDF and particleboard 

platforms for custom panels is about 60.0% hardwood plywood, 16.4% MDF and 23.6% 

particleboard. It was also estimated that 60.6%, 90.7%, and 93.3% of HWPW, MDF and 

particleboard are made using resins that are not NAF. Thus, the percentage of custom 

panels switching to NAF platforms (73.3%) is calculated as the sum of the three 

products: (1) 60% and 60.6%, (2) 16.4% and 90.7%, and (3) 23.6% and 93.3%. 

Engineered 

Wood 

Flooring 

28,000 61.2% 17,136 

Based on conversations with HPVA (2011), 2% of engineered wood flooring is 

composite core. It was estimated that the mix of MDF and particleboard consumed in 

the Hardwood Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 

59.1% particleboard. It was estimated that 60.6%, 90.7%, and 93.3% of hardwood 

plywood, MDF and particleboard are not made with NAF resins. Thus, 61.2% is 

calculated as the sum of the three products of: (1) 98% and 60.6%, (2) 2%, 40.9%, and 

90.7%, and (3) 2%, 59.1% and 93.3%. 

Cabinets 56,259 84.4% 47,483 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed 

in the cabinet industries (NAICS 337110 and 337129) is 26.71% hardwood plywood, 

7.55% MDF and 65.74% particleboard. It was estimated that 90.7% and 93.3% of MDF 

and particleboard are not made with NAF resins. Thus, 84.4% is calculated as the sum 

of the three products of: (1) 26.71% and 60.6%, (2) 7.55% and 90.7%, and (3) 65.74% 

and 93.3%. 

Household 

Furniture 49,227 81.3% 40,022 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed 

in the Household Furniture Manufacturing Industries (NAICS 337121 and 337122) is 

34.9% hardwood plywood, 23.4% MDF and 41.7% particleboard. . It was estimated 

that 60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not 

made with NAF resins. Thus, 81.3% is calculated as the sum of the three products of: 

(1) 34.9% and 60.6%, (2) 23.4% and 90.7%, and (3) 41.7% and 93.3%. 

Office and 

Institutional 

Furniture 

44,539 80.4% 35,809 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed 

in the Office and Institutional Furniture Manufacturing Industries (NAICS 337127, 

337211 and 337115) is about 37.5% hardwood plywood, 22.2% MDF and 40.3% 

particleboard. It was estimated that 60.6%, 90.7%, and 93.3% of hardwood plywood, 

MDF and particleboard are not made with NAF resins. Thus, 80.4% is calculated as the 

sum of the three products of: (1) 37.5% and 60.6%, (2) 22.19% and 90.7%, and (3) 

40.28% and 93.3%. 

Wood 

Window and 

Door 

Manufacturing 

53,915 86.7% 46,744 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed 

in the Window and Door Manufacturing Industry (NAICS 321911) is 17.45% hardwood 

plywood, 33.09% MDF and 49.46% particleboard. It was estimated that 60.6%, 90.7%, 

and 93.3% of hardwood plywood, MDF and particleboard are not made with NAF 

resins. Thus, 86.7% is calculated as the sum of the three products of: (1) 17.45% and 

60.6%, (2) 33.09% and 90.7%, and (3) 49.46% and 93.3%. 

Custom 

architectural 

woodwork and 

millwork 

manufacturing 

30,474 81.8% 24,928 

It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed 

in the Architectural Woodwork and Millwork Industry (NAICS 337212) is 33.3% 

hardwood plywood, 22.8% MDF and 44.0% particleboard. It was estimated that 

60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not made 

with NAF resins. Thus, 81.8% is calculated as the sum of the three products of: (1) 

33.3% and 60.6%, (2) 22.78% and 90.7%, and (3) 43.95% and 93.3%. 

Total 362,414 285,422 Total 

a The mix of composite wood products consumed were estimated using U.S. Census (2009d) data on the value of materials consumed. Values were 

converted to volumes using prices of $480, $445, and $315 msf for hardwood plywood, MDF, and particleboard, respectively. The price of 

hardwood plywood was estimated using the total 2007 export values and quantities from U.S. ITC (2010) data (HTS codes 441232, 441299, and 

441231). The price of MDF and particleboard utilized are July 2007 prices from RISI’s (2011) MDF and Particleboard Commentary. b The percentages of composite platforms not made with NAF resins was estimated from EPA’s (2010a) survey of composite wood product 

producers. 

Sources: U.S. Census 2009d, U.S. EPA 2010a, U.S. ITC 2010, and RISI 2011 

2131 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-96

2132 2.4.1.3 Summary of the Costs of Changing Raw Materials for Wood Veneer Laminated Product 

2133 Panel Producers 

2134 

2135 Table 2-61 presents the estimated costs of changing raw materials for wood veneer laminated 

2136 product producers under the various analytical options. No material costs are incurred under options SE, 

2137 CE, and NE since wood veneer laminated product producers are not subject to any emissions 

2138 requirements under these analytical options. The total costs are highest under options SI, CI and NI, 

2139 where all wood veneer laminated product producers would be considered hardwood plywood producers. 

2140 Total costs are lowest under Option SP, where only custom producers would be considered hardwood 

2141 plywood producers. Under Option SN, where wood veneer laminated product producers would need to 

2142 switch to NAF resins and platforms in order to avoid being classified as hardwood plywood producers, 

2143 the estimated cost of changes to raw materials is about $25 million. Under options SC and SCR (the 

2144 proposed option), where wood veneer laminated product producers would need to use NAF face resins 

2145 and Title VI certified platforms in order to avoid being classified as hardwood plywood producers, the 

2146 estimated cost of changes to raw materials is about $4 million. 

2147 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-97

Table 2-61: Estimated Costs of Raw Material Changes for Wood Veneer Laminated Product 

Producers, by Analytical Option 

Firm Type 

Production 

Switching to 

PVA (msf) 

Cost of 

Switching to 

PVA 

(2010$/msf) 

Production 

Switching to 

Low Emission 

Platforms (msf)

Cost of 

Switching to 

Low Emission 

Platforms 

(2010$/msf) 

Total Annual Cost 

of Changing Raw 

Materials 

(thousands 

2010$/msf) 

Options SE, CE, and NE: All Laminated Products are Exempt from Definition of Hardwood Plywood 

No changes in raw materials needed 0 $0 0 $0 $0 

Option SI, CI, and NI: All Laminated Products are Included in Definition of Hardwood Plywood 

Architectural Panels / Custom Panels 25,000 $30 35,500 $60 $2,880 

Engineered Wood Flooring 7,000 $30 504 $60 $240 

Cabinets 25,317 $30 37,131 $60 $2,987 

Household Furniture 22,152 $30 28,502 $60 $2,375 

Office and Institutional Furniture 2,227 $30 24,764 $60 $1,553 

Window and Door Manufacturers 24,262 $30 39,520 $60 $3,099 

Architectural Woodwork and Millwork 1,524 $30 18,102 $60 $1,132 

Total Annual Costs 107,482 $30 184,023 $60 $14,266 

Option SP: Laminated Products are Exempt from Definition Except for Custom Panels 

Architectural Panels / Custom Panels 25,000 $30 35,500 $60 $2,880 

Engineered Wood Flooring - - - - - 

Cabinets - - - - - 

Household Furniture - - - - - 

Office and Institutional Furniture - - - - - 

Window and Door Manufacturers - - - - - 

Architectural Woodwork and Millwork - - - - - 

Total Annual Costs 25,000 $30 35,500 $60 $2,880 

Option SN: Laminated Products Using Added Formaldehyde Resins or Platforms are Included in the Definition of 

Hardwood Plywood 

Architectural Panels / Custom Panels 25,000 $30 73,300 $60 $5,148 

Engineered Wood Flooring 7,000 $30 17,136 $60 $1,238 

Cabinets 25,317 $30 47,483 $60 $3,608 

Household Furniture 22,152 $30 40,022 $60 $3,066 

Office and Institutional Furniture 2,227 $30 35,809 $60 $2,215 

Window and Door Manufacturers 24,262 $30 46,744 $60 $3,533 

Architectural Woodwork and Millwork 1,524 $30 24,928 $60 $1,541 

Total Annual Costs 107,482 $30 285,422 $60 $20,350 

Options SC and SCR: Laminated Products Using Added Formaldehyde Resins and Platforms that are not Certified are 

Included in the Definition of Hardwood Plywood 

Architectural Panels / Custom Panels 25,000 $30 - - $750 

Engineered Wood Flooring 7,000 $30 - - $210 

Cabinets 25,317 $30 - - $760 

Household Furniture 22,152 $30 - - $665 

Office and Institutional Furniture 2,227 $30 - - $67 

Window and Door Manufacturers 24,262 $30 - - $728 

Architectural Woodwork and Millwork 1,524 $30 - - $46 

Total Annual Costs 107,482 $30 - - $3,224 

This analysis uses the term “low emission platforms” to mean platforms with emissions low enough that wood veneer laminated 

products made from them meets the applicable hardwood plywood emission standard. For the standard certification, low emission 

platforms are assumed to include certified veneer platforms, particleboard and MDF platforms certified as ULEF under the CARB 

ATCM, and particleboard and MDF platforms certified as NAF. For analytical options requiring wood veneer laminated products to

meet NAF emission levels, low emission platforms would include particleboard, MDF and veneer platforms certified as NAF. 

Option SCR is the proposed option. 

2148 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-98

2149 2.4.2 Certification and Testing Costs for Wood Veneer Laminated Product Producers 

2150 

2151 Estimated certification and testing costs were presented in Section 2.2 for entities certifying 1 and 

2152 2 NAF products through a TPC, as well as for entities certifying 1 and 2 added formaldehyde products 

2153 through a TPC. As discussed in section 2.3.1, wood veneer laminated product producers would be likely 

2154 to switch to a PVA resin technology if they are considered hardwood plywood producers under the 

2155 proposed rule. Nevertheless, it is possible that some wood veneer laminated product producers may 

2156 prefer to continue using added formaldehyde face resins for process or product reasons. Thus, testing and 

2157 certification costs are estimated under each analytical option assuming that two percent of producers 

2158 continue to use added formaldehyde resins. Table 2-62 presents costs associated with testing and 

2159 certification by the number of product lines that require certification. Since there is some uncertainty 

2160 about the number of product lines that would require a separate certification, this analysis presents the 

2161 total costs for each analytical option for certifying 1 and 2 different product lines. To be comparable with 

2162 the benefits estimates, which were estimated for 30 year period, costs were annualized over a 30 year 

2163 period. 

2164 

Table 2-62: Estimated Wood Veneer Laminated Product Producer First and 

Subsequent Year Costs for Testing and Certifying Products 

Number of Product 

Lines Requiring 

Testing and 

Certification 

First 

Year 

Costs 

Subsequent 

Year Costs 

Costs Annualized Over 

30 Years Using 3 

Percent Discount 

Rate* 

Costs Annualized Over 

30 Years Using 7 

Percent Discount 

Rate* 

1 NAF Product Line $37,058 $6,517 $7,640 $8,159 

2 NAF Product Lines $42,015 $7,062 $8,367 $8,972 

1 Added 

Formaldehyde 

Product Line 

$72,508 $56,522 $54,532 $53,421 

2 Added 

Formaldehyde 

Product Lines 

$81,614 $62,782 $60,622 $59,412 

*Note that annualized costs will tend to be higher for higher discount rates when there are more upfront 

costs and lower for higher discount rates when upfront costs are smaller or future costs are higher. This is 

why annualized costs are higher for NAF certification and lower for added formaldehyde certification for 

the 7 percent discount rate compared to the 3 percent discount rate. 

2165 

2166 Table 2-63 presents the estimated annualized testing and certification costs by analytical option 

2167 under a variety of scenarios for the number of entities affected and the number of product lines that would 

2168 require testing and certification. Under options SE, CE, and NE wood veneer laminated product 

2169 producers would not be required to do any testing. Under options SI, SP, SN, SC, SCR, CI and NI, it is 

2170 assumed that all but two percent of wood veneer laminated product producers would switch to NAF resin 

2171 technology and/or compliant or NAF platforms in order to reduce testing and certification costs (options 

2172 SI, SP, CI, and NI) or eliminate them (options SN, SC, and SCR). 

2173 

2174 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-99

2175 

Table 2-63: Estimated Wood Veneer Laminated Product Producer Annualized Costs for 

Testing and Certification (thousands, 2010$)

Analytical Option 

Total 

Number 

of 

Affected 

Entities 

Products 

Lines 

Requiring 

Testing and 

Certification

Number of Affected Entities with 

Testing and Certification costs by 

Certification Type 

Costs Annualized Over 

30 Years 

(thousands, 2010$) 

3% 

Discount 

Rate 

7% 

Discount 

Rate 

Option SE, CE, and NE: All 

Laminated Products are 

Exempt from Definition of 

Hardwood Plywood 

0 0 

None – wood veneer laminated 

product producers would not be 

required to do any testing

$0 $0 

Option SI, CE, and NE: All 

Wood Veneer Laminated 

Product s are Included in the 

Definition of Hardwood 

Plywood 

Low End 

Estimate: 

7,486 

1 

NAF - 7,336 Entities $56,046 $59,858 

Added Formaldehyde a - 150 Entities $8,180 $8,013 

All - 7,486 Entities $64,226 $67,871 

2 

NAF - 7,336 Entities $61,380 $65,818 

Added Formaldehyde a - 150 Entities $9,093 $8,912 

All - 7,486 Entities $70,473 $74,730 

High End 

Estimate: 

13,875 

1 

NAF - 13,598 Entities $103,887 $110,953 

Added Formaldehyde a - 277 Entities $15,105 $14,798 

All - 13,875 Entities $118,992 $125,750 

2 

NAF - 13,598 Entities $113,774 $122,000 

Added Formaldehyde a - 277 Entities $16,792 $16,457 

All - 13,875 Entities $130,566 $138,457 

Option SP: Wood Veneer 

Laminated Products Other 

Than Custom Panels are 

Exempt from the Definition 

of Hardwood Plywood 

MidRange 

Estimate: 

50 

1 

NAF - 49 Entities $374 $400 

Added Formaldehyde a - 1 Entities $55 $53 

All - 50 Entities $429 $453 

2 

NAF - 49 Entities $410 $440 

Added Formaldehyde a - 1 Entities $61 $59 

All - 50 Entities $471 $499 

Options SN, SC, and SCR: 

Wood Veneer Laminated 

Products are Defined as 

Hardwood Plywood 

Producers if they use (1) 

added formaldehyde resins, 

and (2) platforms with added 

formaldehyde (Option SN 

only) 

Low End 

Estimate: 

7,486 

1 Added Formaldehyde a - 150 Entities $8,180 $8,013 

2 Added Formaldehyde a - 150 Entities $9,093 $8,912 

High End 

Estimate: 

13,875 

1 Added Formaldehyde a - 277 Entities $15,105 $14,798 

2 

Added Formaldehyde a - 277 Entities $16,792 $16,457 a The number of producers using added formaldehyde resins post-rule is assumed to be 2 percent of the total number of 

wood veneer laminated product producers. The estimates of the total number are from Table 2-4 and Table 2-5. 

Option SCR is the proposed option. 

2176 

2177 

2178 2.4.3 Total Annualized Costs for Wood Veneer Laminated Product Producers 

2179 

2180 Table 2-64 presents the total estimated annualized costs by analytical option under a variety of 

2181 scenarios for the number of entities affected and the number of product lines that would require 

2182 certification. Under options SE, CE, and NE wood veneer laminated product producers would not be 

2183 required to do any testing and no incremental material costs are estimated because it is assumed that they 

2184 are already using compliant platforms. Under options SI, SP, SN, SC, SCR, CI, and NI it is assumed that 

2185 all but two percent of wood veneer laminated product producers would switch to NAF resin technology 
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January 27, 2012 2-100

2186 and/or compliant or NAF platforms to reduce testing and certification costs (options SI, SP, CI, and NI) 

2187 or eliminate them (options SN, SC, and SCR). 

2188 

2189 The results presented in Table 2-64 demonstrate that testing and certification costs are 

2190 overwhelmingly the dominant drivers of the costs for wood veneer laminated product producers. Even 

2191 under the scenarios with the fewest estimated numbers of affected entities and product lines, the costs 

2192 under Option SI far exceeds those estimated for options SN SC, and SCR, which only include testing or 

2193 certification costs for two percent of wood veneer laminated product producers. The substantially lower 

2194 costs under options SC and SCR compared to Option SN reflects the potentially high costs of switching 

2195 platforms under option SN. Estimated costs (assuming 2 product lines require testing) are lowest under 

2196 Option SP because far fewer entities are affected under this option compared to the others. 

2197 
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January 27, 2012 2-101

Table 2-64: Estimated Wood Veneer Laminated Product Producer Annualized Costs for Raw 

Materials Changes, testing, and Certification (thousands, 2010$) 

Analytical Option 

Total 

Number of 

Affected 

Entities 

Products 

Requiring 

Testing and 

Certification

Number of Affected Entities with 

Costs by Certification Type 

Costs Annualized 

Over 30 Years 

(thousands, 2010$) 

3% 7% 

Option SE, CE, and NE: All 

Laminated Products Exempt from 

Definition of Hardwood Plywood 

0 0 

None – no costs for changing raw 

materials, testing, or certification are 

estimated 

$0 $0

Option SI, CE, and NE: All Wood 

Veneer Laminated Products are 

Included in the Definition of 

Hardwood Plywood 

Low End 

Estimate: 

7,486 

1 

NAF - 7,336 Entities $69,347 $72,796 

Added Formaldehyde - 150 Entities $8,452 $8,278 

All - 7,486 Entities $77,799 $81,073 

2 

NAF - 7,336 Entities $74,681 $78,756 

Added Formaldehyde - 150 Entities $9,365 $9,176 

All - 7,486 Entities $84,047 $87,932 

High End 

Estimate: 

13,875 

1 

NAF - 13,598 Entities $117,189 $123,891 

Added Formaldehyde - 277 Entities $15,376 $15,061 

All - 13,875 Entities $132,565 $138,952 

2 

NAF - 13,598 Entities $127,076 $134,939 

Added Formaldehyde - 277 Entities $17,063 $16,721 

All - 13,875 Entities $144,139 $151,659 

Option SP: Wood Veneer 

Laminated Product s Other Than 

Custom Panels are Exempt from 

the Definition of Hardwood 

Plywood 

Mid-Range 

Estimate: 

50 

1 

NAF - 49 Entities $3,060 $3,012 

Added Formaldehyde - 1 Entities $109 $107 

All - 50 Entities $3,169 $3,118 

2 

NAF - 49 Entities $3,095 $3,052 

Added Formaldehyde - 1 Entities $115 $113 

All - 50 Entities $3,211 $3,164 

Option SN: Wood Veneer 

Laminated Products are Defined 

as Hardwood Plywood if they use 

(1) added formaldehyde resins, 

and (2) platforms with added 

formaldehyde 

Low End 

Estimate: 

7,486 

1 

NAF - 7,336 Entities $18,974 $18,455 

Added Formaldehyde - 150 Entities $8,568 $8,391 

All - 7,486 Entities $27,542 $26,846 

2 

NAF - 7,336 Entities $18,974 $18,455 

Added Formaldehyde - 150 Entities $9,481 $9,289 

All - 7,486 Entities $28,455 $27,744 

High End 

Estimate: 

13,875 

1 

NAF - 13,598 Entities $18,976 $18,456 

Added Formaldehyde - 277 Entities $15,492 $15,174 

All - 13,875 Entities $34,467 $33,630 

2 

NAF - 13,598 Entities $18,976 $18,456 

Added Formaldehyde - 277 Entities $17,179 $16,833 

All - 13,875 Entities $36,154 $35,290 

Options SC and SCR: Wood 

Veneer Laminated Products are 

Defined as Hardwood Plywood if 

they use added formaldehyde 

resins 

Low End 

Estimate: 

7,486 

1 

NAF - 7,336 Entities $3,006 $2,924 

Added Formaldehyde - 150 Entities $8,241 $8,073 

All - 7,486 Entities $11,247 $10,997 

2 

NAF - 7,336 Entities $3,006 $2,924 

Added Formaldehyde - 150 Entities $9,155 $8,972 

All - 7,486 Entities $12,161 $11,895 

High End 

Estimate: 

13,875 

1 

NAF - 13,598 Entities $3,006 $2,924 

Added Formaldehyde - 277 Entities $15,167 $14,857 

All - 13,875 Entities $18,173 $17,781 

2 

NAF - 13,598 Entities $3,006 $2,924 

Added Formaldehyde - 277 Entities $16,853 $16,517 

All - 13,875 Entities $19,860 $19,441 

Option SCR is the proposed option. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-102

2198 2.5 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization 

2199 Costs 

2200 

2201 Under TSCA Title VI, EPA must promulgate regulations that establish labeling requirements, 

2202 chain of custody requirements, and recordkeeping requirements for industries that use composite wood 

2203 products for raw materials and sell products that contain composite wood. Producers that use composite 

2204 wood products as raw materials (hereafter referred to as fabricators), and wholesalers or distributers 

2205 (including importers) of composite wood products or regulated articles that contain composite wood 

2206 products, and retailers of composite wood products or regulated articles that contain composite wood 

2207 products, will be subject to chain of custody and labeling requirements. This set of firms along with 

2208 producers of hardwood plywood, MDF, and particleboard will also incur costs associated with becoming 

2209 familiar with the rule’s requirements. The purpose of this section is to estimate the incremental costs of 

2210 rule familiarization, recordkeeping, and labeling requirements under the TSCA Title VI rule for all 

2211 producers, fabricators, wholesalers, and retailers that are potentially affected by the proposed rule. 

2212 

2213 Note that the TSCA Title VI rule requires importers of articles that are composite wood products, 

2214 or articles that contain composite wood products, to comply with the TSCA Section 13 import 

2215 certification regulations for “Chemical Substances in Bulk and As Part of Mixtures and Articles,” as 

2216 found at 19 CFR 12.118 through 12.127. Thus, any U.S. importer of composite wood products or articles 

2217 that contain composite wood products would have to certify that all articles in the shipment either comply 

2218 with all applicable rules and orders under TSCA or that all the articles in the shipment are not subject to 

2219 TSCA. The statement must be on or attached to a commercial invoice or entry document belonging to the 

2220 imported shipment. In practice, import certification is fulfilled by checking a box on an invoice or entry 

2221 document. It is assumed that this does not generally impose a significant additional burden or cost on the 

2222 importer. Any potential burden associated with a submitter’s familiarization with this requirement is 

2223 assumed to be included in the more general rule familiarization burden discussed below. 

2224 

2225 Section 2.5.1 describes telephone questionnaires that were developed to better understand the 

2226 potential costs of the labeling and recordkeeping requirements. Per-firm rule familiarization, 

2227 recordkeeping, and labeling costs are presented in Section 2.5.2. Section 2.5.3 presents the estimated 

2228 number of affected entities using information on baseline compliance and the percentage of entities 

2229 incurring costs, estimated from the results of a telephone questionnaire. And finally, total incremental 

2230 recordkeeping, labeling, and rule familiarization costs are presented in Section 2.5.4. 

2231 

2232 2.5.1 Telephone Questionnaire 

2233 

2234 The proposed recordkeeping and labeling requirements under the TSCA Title VI rule are similar 

2235 to the requirements under the California Air Resources Board’s (CARB) Airborne Toxic Control Measure 

2236 (ATCM) to reduce formaldehyde emissions from composite wood products. So firms that manufacture or 

2237 sell composite wood products destined for California markets have experience implementing 

2238 recordkeeping and labeling requirements that are similar to the TSCA Title VI rule. To learn about the 

2239 experiences of the firms who are complying with the CARB ATCM requirements, two questionnaires 

2240 (one for fabricators and one for wholesalers) were administered to fewer than ten respondents per 

2241 questionnaire. These questionnaires asked respondents for descriptions of the changes they made and the 

2242 costs they incurred to implement any changes. 

2243 

2244 Retailers are also subject to the chain of custody and recordkeeping requirements. The California 

2245 Retailers Association indicated that retailers’ customary business practices were generally sufficient to 

2246 meet the chain of custody requirements in the CARB ATCM (California Retailers Association 2011), so 

2247 retailers were not administered a questionnaire. 

2248 
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January 27, 2012 2-103

2249 

2250 2.5.1.1 Questionnaire Administration 

2251 

2252 Nine fabricator firms and seven wholesaler firms were administered telephone questionnaires that 

2253 asked about the changes that were made and the costs that were incurred in order to achieve compliance 

2254 with the CARB recordkeeping and labeling requirements. For fabricators, a diverse group of producers 

2255 was selected for the sample: one decorative panel manufacturer, two stock cabinet manufacturers, two 

2256 custom cabinet manufacturers, two household furniture manufacturers, and two business and institutional 

2257 furniture manufacturers. Most of the fabricators contacted were located in California, and all of them 

2258 were implementing the CARB recordkeeping and labeling requirements. For wholesalers, the sample 

2259 included four composite wood product wholesalers and three household furniture wholesalers, all located 

2260 in California and complying with CARB requirements. 

2261 

2262 For each of these respondent types, a list of the appropriate NAICS industries was found from 

2263 one of the following sources: industry association member lists, the Dun & Bradstreet database, the 

2264 Random Lengths Big Book, or the SalesGenie database. From the industry association lists, industry 

2265 members were assigned random numbers and contacted in ascending order by number. For the D&B 

2266 database, the relevant set of companies were identified by state and NAICS code, assigned random 

2267 numbers, and also contacted in ascending order. For the Random Lengths Big Book and the SalesGenie 

2268 database, first page numbers were selected randomly, and then individual firms were selected randomly 

2269 from that page to contact. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-104

2270 

Table 2-65: Sample of Firms Administered Recordkeeping and Labeling Questionnaire 

Category Firm List Source Number of 

Respondents

Fabricators 

Decorative Panel Manufacturers Composite Panel Association (CPA).2011 Surface & Panel Buyers Guide. 1 

Stock Cabinet Manufacturers in 

California 

Kitchen Cabinet Manufacturers Association (KCMA). 2010. KCMA 

Cabinet Manufacturers Members in California. 

Dun and Bradstreet (D&B). 2011. Companies in California, NAICS 

337110. 

Note: After calls were placed to all KCMA stock cabinet members located 

in CA the Dun and Bradstreet list was utilized. There was one response 

from each list. 

2 

Custom Cabinet Manufacturers in 

California 

SalesGenie. 2010. Companies in California, NAICS 337110. 

Dun and Bradstreet (D&B). 2011. Companies in California, NAICS 

337110. 

Note: After it was determined that a high percentage of respondents on 

the SalesGenie list were not in scope the D&B list was utilized. There 

was one response from each list. 

2 

Household Furniture Manufacturers in 

California 

Dun and Bradstreet (D&B). 2011. Companies in California, NAICS 

337122, 337121. 2 

Business and Institutional Furniture 

Manufacturers 

The Business and Institutional Furniture Manufacturer’s Association 

(BIFMA). 2010. BIFMA Members. 2 

Wholesalers 

Wood Product Wholesalers in California Random Lengths.2009 Big Book: The Buyers and Sellers Directory of the 

Forest Products Industry in California. 4 

Household Furniture Wholesalers in 

California 

Dun and Bradstreet (D&B). 2011. Companies in California, NAICS 4232. 3 

Sources: Composite Panel Association 2011, Dun & Bradstreet 2010, Kitchen Cabinet Manufacturers Association 2010, Random 

Lengths 2009, SalesGenie 2010, The Business and Institutional Furniture Manufacturer’s Association 2010. 

2271 

2272 In order to estimate the average costs of complying with CARB’s recordkeeping and labeling 

2273 requirements, two separate questionnaires were administered to fabricators and wholesalers. First, 

2274 screener questions were administered to ensure that only firms that had made changes to comply with the 

2275 CARB regulations were selected to complete the survey. Then, firms were asked about the specific steps 

2276 they took to comply with CARB’s recordkeeping and/or labeling requirements, and what the labor and 

2277 material costs of those changes were. Figure 2-3 and Figure 2-4 present the phone scripts that were used 

2278 to administer these questionnaires. The responses to the questionnaires are included in Table 2-67 and 

2279 Table 2-68. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-105

Figure 2-3: Fabricator Firm Recordkeeping and Labeling Costs Questionnaire 

Introduction: Hello, this is ________ calling from Abt Associates on behalf of the U.S. 

Environmental Protection Agency. 

This past July Congress passed legislation that requires EPA to develop formaldehyde standards 

for composite wood products that may include recordkeeping and labeling requirements for 

manufacturers who fabricate composite wood products. The U.S. EPA is interested in learning from 

firms that have implemented labeling and recordkeeping procedures to comply with California’s 

formaldehyde rule to help them develop national recordkeeping and labeling requirements. 

 

Screener Questions: 

1a (For Decorative Panel Manufacturers). Are you a manufacturer of decorative panels that uses 

purchased hardwood plywood, medium density fiberboard, or particleboard for a platform? Do 

you manufacture: (1) filled or coated products, (2) high pressure laminates, (3) hot stamp foils, 

(4) low basis weight papers, (5) low pressure decorative laminates, (6) medium and high density 

overlays, or (7) vinyl laminates? (Note that other types of decorative panel manufacturers would 

be accepted as in-scope) 

1b (For Other Fabricators). Is your firm a manufacturer of [stock cabinets/custom cabinets/household 

furniture/business or institutional furniture] made using composite wood products?

2. Have you implemented labeling and recordkeeping procedures that meet the requirements of the 

California formaldehyde rule?

3. Do you follow these procedures for all products using composite wood platforms, including those sold 

outside California where the labeling and recordkeeping procedures would not be required? 

(Note that fabricators with any products that are CARB compliant are considered in-scope)

4. Most of the questions I have are about how much it cost to implement the labeling and recordkeeping 

procedures, are you the best person for me to ask about these costs? 

Questionnaire: 

1. Please describe in detail the changes you implemented in recordkeeping activities for complying with 

CARB’s requirements. Please describe the one time costs you incurred in order to implement 

these changes, either in terms of dollars or hours. Can you also describe the additional recurring 

costs you incur because of the CARB requirements, either in terms of dollars or hours. (If hours 

ask what type of employee)

2. Please describe in detail the changes you implemented to your existing labeling practices, or the new 

labeling practices you introduced, in order to comply with CARB requirements. 

3. What was the initial cost to make changes to the labeling process? 

4. If the CARB requirements increased your per-label costs, what is the additional cost per label?

5. Do you generally label each CARB-certified item you manufacture, or do you label a box or bundle of 

items?

6. Do you have separate CARB-certified inventory and not-CARB-certified inventory? If so, what 

percentage of your inventory is CARB-certified? 

2280 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-106

Figure 2-4: Wholesaler Firm Recordkeeping Costs Questionnaire 

Introduction: Hello, this is ______ calling from Abt Associates on behalf of the U.S. Environmental 

Protection Agency. This past July Congress passed legislation that requires EPA to develop 

formaldehyde standards for composite wood products that may include recordkeeping requirements for 

companies that distribute composite wood products. The U.S. EPA is interested in learning from firms 

that have implemented recordkeeping procedures to comply with California’s formaldehyde rule to help 

them develop national recordkeeping requirements. 

Screener Questions: 

1. Is your firm a wholesaler, distributor, or importer of composite wood products or products that contain 

composite wood? 

2. Background: The California rule requires records showing the date of purchase, the supplier, as well as 

documentation of precautions taken to ensure that products meet emissions standards to be 

maintained for two years. 

3. Do your recordkeeping procedures meet the requirements of the California formaldehyde rule? 

Questionnaire: 

1. Before this rule was implemented, were you already keeping purchasing records for at least two years, 

or was this something new that you had to start doing? 

2. Did you need to modify your existing recordkeeping system for the purpose of complying with the 

California rule?

3. Please describe the one time costs you incurred in order to implement this new system, either in terms 

of dollars or hours. 

4. Does maintaining the new recordkeeping system require more effort or additional costs compared to 

your previous recordkeeping system? (If yes), how much additional effort or cost is required for 

maintaining records under the new system? Please describe either in terms of dollars or hours. 

2281 

2282 2.5.1.2 Questionnaire Responses and Resulting Per-Firm Cost Estimates 

2283 

2284 The responses presented below include qualitative descriptions of recordkeeping and labeling 

2285 practice changes due to CARB Rule requirements. Table 2-66 presents the fully loaded wage rates used 

2286 for estimating labor costs. Table 2-67 and Table 2-68 summarize the responses to the fabricator and 

2287 wholesaler questionnaires, respectively, including descriptions of recordkeeping costs, labeling costs, and 

2288 the costs estimated based on the responses. 

2289 

2290 Since the recordkeeping functions described by responses appeared to be tasks likely be 

2291 performed by support staff, the analysis estimates these labor costs with the fully loaded wage for “office 

2292 and administrative support” staff in private industry ($24.84 for fabricator industries and $25.54 for 

2293 wholesaler industries (U.S. Bureau of Labor Statistics 2010b, c, d, e)). Since the labeling system changes 

2294 described by respondents appeared to be tasks that would require technical labor, the analysis uses the 

2295 fully loaded wage rates for “computer and mathematical science” workers in private industry ($44.27, 

U.S. Bureau of Labor Statistics 2010c, d, e) (See Table 2-66).31 2296 

2297 

 31 May 2009 wages are taken from Occupation Employment Statistics (OES) data and converted into 2010 dollars using 

Employer Cost for Employee Compensation (ECEC) data. To calculate a loaded wage rate, average total benefits for 

all workers (42%) is added to the overhead rate (17%) to calculate an overall wage multiplier of 1.59. 
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January 27, 2012 2-107

Table 2-66: Hourly Wage Rate Estimation for Recordkeeping and Labeling Labor Costs 

Labor Cost 

Elements Industry 

OES Wage Data 

Occupation 

Descriptiona

May 2009 Mean 

Hourly Wagea

2010 Adjusted 

Mean Hourly 

Wageb

2010 Loaded 

Hourly Wage 

(x1.59)c

Fabricators 

Rule 

Familiarization 

NAICS 321000 - 

Wood Product 

Manufacturing 

Management 

Occupations $45.86 $46.29 $73.60 

Supplier 

Notification 

NAICS 321000 - 

Wood Product 

Manufacturing 

Office and 

Administrative 

Support 

Occupations 

$15.47 $15.62 $24.84 Recordkeeping 

Initial Costs 

Recordkeeping 

Recurring Costs 

Labeling Initial 

Costs 

NAICS 321000 - 

Wood Product 

Manufacturing 

Computer and 

Mathematical 

Science 

Occupations 

$27.58 $27.84 $44.27 

Wholesalers 

Rule 

Familiarization 

Sector 42 – 

Wholesale Trade 

Management 

Occupations $58.12 $58.67 $93.29 

Supplier 

Notification 

Sector 42 – 

Wholesale Trade 

Office and 

Administrative 

Support 

Occupations 

$15.91 $16.06 $25.54 Recordkeeping 

Initial Costs 

Recordkeeping 

Recurring Costs 

Retailers 

Rule 

Familiarization 

Sectors 44 and 45 

– Retail Trade 

Management 

Occupations $44.06 $44.47 $70.71 

Supplier 

Notification 

Sectors 44 and 45 

– Retail Trade 

Office and 

Administrative 

Support 

Occupations 

$12.04 $12.15 $19.32 

a Mean wages are estimated using the data from the Bureau of Labor Statistics Occupational Employment Statistics, which are 

available for May 2009. 

b Wages are inflated to 2010$ using Employer Cost for Employee Compensation (ECEC) wage data for all industries and 

occupations. 

c A loading factor of 1.59 is used to add the labor costs associated with benefits and overhead. According to ECEC data benefits

compensation was equal to 42% of wages and salaries data for all industries and occupations. Overhead costs are assumed to be 

equal to 17% of wages (Rice 2002). 

Sources: U.S. Bureau of Labor Statistics 2010a, b, c, d, e 

2298 

2299 As shown in Table 2-67, none of the fabricators reported incurring any initial set-up costs for 

2300 recordkeeping, and only one of the nine reporting incurring recurring costs for recordkeeping as a result 

2301 of the CARB rule. (The remaining fabricators did not incur recordkeeping costs because their existing 

2302 records were sufficient to comply with the CARB requirements.) The one respondent with recurring 

2303 recordkeeping costs reported spending 10 hours per week on recordkeeping for the CARB rule. As 

2304 calculated in Table 2-67, EPA estimates that 10 hours per week is equivalent to a cost of $12,917 per 

2305 year. 

2306 

2307 This analysis assumes that the 11% of fabricators that are not already complying with the CARB 

2308 ATCM (because their products are not sold in California) incur an average cost of $12,917 per year to 

2309 comply with the recordkeeping requirements of the TSCA Title VI rule. (The average cost per firm is 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-108

2310 used in calculating total costs, but as described in Chapter 5, the small entity analysis is based on an 

2311 estimate of recordkeeping costs that varies with firm size.) Because the recordkeeping requirements are 

2312 similar in the CARB rule and the TSCA Title VI rule, no additional recordkeeping costs are estimated for 

2313 fabricators that are already complying with the CARB ATCM. 

2314 

2315 As shown in Table 2-67, several of the respondents indicated that they already had labeling 

2316 systems in place and therefore they did not incur any significant costs associated with CARB’s labeling 

2317 requirements. However, this analysis assumes that these firms did in fact incur small costs associated 

2318 with making small changes to their labels. One of the firms that did report minor labeling costs reported 

2319 that it took “a few hours” to change over to using the new labels. The analysis assumes that “a few 

2320 hours” is 3 hours for the purpose of estimating costs. The analysis also assumes that 67% of firms that 

2321 are not already complying with the CARB ATCM, and all firms that are already complying with the 

2322 CARB ATCM, incur the costs associated with 3 labor hours (where 67% is calculated as 4/6, since 4 of 

2323 the 6 firms that reported labeling their products are assumed to have these costs). Two other firms that 

2324 responded to the questionnaire reported more substantial costs associated with setting up their labeling 

2325 systems and therefore, it is assumed that the remaining 33% of firms that are not already complying with 

2326 the CARB ATCM will incur the average costs reported by these two firms (where 33% is calculated as 

2327 2/6 since 6 firms reported that they labeled their products). 

2328 

2329 As shown in Table 2-68, four of the seven wholesalers reported incurring initial costs to revise 

2330 their recordkeeping systems to comply with the CARB rule. Only two of the four were able to quantify 

2331 the time or cost they spent revising their recordkeeping systems. Based on their responses, the average 

2332 cost of revising recordkeeping systems is estimated at $2,511. Thus, the analysis assumed that 57% of 

2333 wholesalers that are not already complying with the CARB ATCM will incur initial costs that average 

2334 $2,511 for revising recordkeeping systems to comply with the TSCA Title VI rule. The remaining 43% 

2335 of wholesalers that are not already complying with the CARB ATCM and all firms that are already 

2336 complying with the CARB ATCM are assumed to have recordkeeping systems that do not need to be 

2337 modified in order to comply with the TSCA Title VI rule, and thus do not incur significant initial 

2338 recordkeeping costs. Because the recordkeeping requirements are similar in the CARB rule and the 

2339 TSCA Title VI rule, no additional recordkeeping costs are estimated for wholesalers that are already 

2340 complying with the CARB rule. 

2341 

2342 Table 2-68 also indicates that three of the seven wholesalers reported incurring recurring 

2343 recordkeeping costs due to the CARB rule, but only one of them was able to quantify the additional time 

2344 spent on recordkeeping. That respondent reported spending half an hour to an hour per day on CARB2345 related recordkeeping. EPA estimates this is equivalent to a cost of $4,980 per year. Therefore, this 

2346 analysis assumes that 57% of the wholesalers that are not already complying with the CARB ATCM do 

2347 not incur significant recurring costs, as their existing recordkeeping practices are sufficient to comply 

2348 with the TSCA Title VI rule’s requirements. The remaining 43% of wholesalers that are not already 

2349 complying with the CARB ATCM incur a recurring cost for recordkeeping that averages $4,980 per year. 

2350 (As with fabricators, the average cost per firm is used in calculating total costs, but the small entity 

2351 analysis in Chapter 5 is based on an estimate of recordkeeping costs that varies with firm size.) Again, 

2352 because the recordkeeping requirements are similar in the CARB rule and the TSCA Title VI rule, no 

2353 additional recordkeeping costs are estimated for wholesalers that are already complying with the CARB 

2354 ATCM. 

2355 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-109

Table 2-67: Responses and Estimates from Fabricator Recordkeeping and Labeling Questionnaire 

Survey 

ID 

Description by Fabricators of Recordkeeping and Labeling Costs EPA Estimate of 

Recordkeeping Costs 

EPA Estimate of 

Labeling Costs 

Initial Recurring Initial Recurring

Decorative Panel Manufacturers 

1 

Recordkeeping: No implementation cost; already a CPA member so 

upstream information was easy to acquire; keep records of all boards 

purchased that are CARB 2 compliant. 

Labeling: Few hours of labor for implementation (assumed to be 3 hours 

for this analysis); overhead cost minimum; no additional per-label cost; 

labeled by pallet. 

- - 

$132.81 (3 

hours 

multiplied by 

$44.27) 

- 

Stock Cabinet Manufacturers 

2 Recordkeeping: No implementation cost; 10 hours per week of 

recordkeeping maintenance costs; CARB compliance attained through 

KCMA guidance. 

Labeling: Nothing was changed; the firm was unaware of any 

requirements regarding labels. 

 - 

$12,916.80 

(10 hours/wk 

multiplied by 

52 weeks at 

$24.84) 

n.a. n.a. 

3 Recordkeeping: No implementation cost; must send vendor letters and 

keep invoices. 

Labeling: $250 implementation cost for purchasing two new stamps for 

labeling; no additional per-cost labels; every item is labeled. 

- - $250 - 

Custom Cabinet Manufacturers 

4 Recordkeeping: No implementation cost; must keep invoices. 

Labeling: Does not label. - - n.a. n.a. 

5 Recordkeeping: No implementation cost; products are formaldehyde 

free; they must keep track of invoices. 

Labeling: Do not label cabinet products. 

- - n.a. n.a. 

Household Furniture Manufacturers 

6 Recordkeeping: No implementation cost; letters from suppliers are filed.

Labeling: No extra cost; extra information required on each label, but 

they already had the necessary equipment to make the change; each item 

of upholstered furniture is labeled. 

- - No Cost 

Reported - 

7 Recordkeeping: No extra cost; only buys from suppliers that are CARB 

compliant and tracks invoices. 

Labeling: No costs; they were labeling already for other reasons such as 

FSC certification; barcodes on each product which say CARB 2 

compliant. 

- - No Cost 

Reported - 

Business and Institutional Furniture Manufacturers 

8 Recordkeeping: No implementation cost; must keep invoices for Forest 

Stewardship Council, CARB I, and CARB II. 

Labeling: Not a significant cost; made stickers for CARB certification; 

label each finished product. 

- - No Cost 

Reported 

- 

9 Recordkeeping: Unknown exact costs; must keep track of billing, 

modify purchase orders, store certificates from suppliers. 

Labeling: Initial cost of a “couple hundred man hours” (assumed to be 

200 hours for this analysis); internal process of changing drawings on 

labels; worked with BIFMA for labeling changes; no extra per-label 

costs; labels applied by box/container, incorporated with shipping label. 

- - 

(200 hours 

multiplied 

by $44.27)

- 

Firms with More Substantive Costs 

Percent of firms reporting more substantive costs - 11% 2/6 = 33% - 

Average costs for firms with more substantive costs - $12,916.80 $4,552 - 

Firms with Minor Costs

Percent of firms assumed to incur minor costs - - 4/6=67% - 

Average costs for firms reporting minor costs - - $133 - 

Source: Revenue data from Dun & Bradstreet 2010. Wage rates from U.S. Bureau of Labor Statistics 2010c 
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2356 

Table 2-68: Responses and Estimates from Wholesaler Recordkeeping Questionnaire 

Survey 

ID 

Description by Retailers of Recordkeeping and Labeling 

Costs 

EPA Estimate of Recordkeeping Costs 

Initial Recurring 

Wood Product Wholesalers in California 

1 Implementation Cost: No significant cost; did not purchase 

another recordkeeping system. 

Recurring Cost: 0.5 to 1 hour per day; Practices to comply with 

CARB include: query reports to ensure everything is CARB 

specific; adding custom comments on purchase orders; 

paperwork for when they receive product; adding a field for 

vendor name and CARB phase in system. 

- 

$4,980.30 

(0.75 hours per day 

multiplied by 260 days 

multiplied by 

$25.54/hr) 

2 Implementation Cost: $2,000 for a small amount of labor; 

requires putting new line items (“stock-keeping units” or SKUs) 

in computer system. 

Recurring Cost: No additional cost. 

$2,000 - 

3 Implementation Cost: 40 labor hours and $2,000 in programming 

changes; requires changing tags and CARB-specific comment 

lines in already existing inventory tagging system. 

Recurring Cost: No additional cost. 

$3,021.60 

(40 hours multiplied 

by $25.54/hr plus 

$2,000) 

- 

4 Implementation Cost: Unknown; the IT department prints CARB 

information on each invoice and they are in the process of getting 

signed forms from suppliers (at 80% currently). 

Recurring Cost: Unknown. 

Costs incurred, could 

not quantify. 

Costs incurred, could 

not quantify. 

Household Furniture Wholesalers 

5 Implementation Cost: None; they only purchase from CARB-2 

certified firms, a dozen manufacturers; did not have to modify 

recordkeeping system. 

Recurring Cost: None. 

- - 

6 Implementation Cost: None; did not have to modify existing 

recordkeeping system. 

Recurring Cost: None. 

- -

7 Implementation Cost: Unknown 

Recurring Cost: Unknown; when purchasing the firm asks for 

CARB compliance phase II; keeps invoices; suppliers must 

submit compliance forms. 

Costs incurred, could 

not quantify. 

Costs incurred, could 

not quantify. 

Summary of Results 

Percent of firms reporting costs 57% 43% 

Average costs for firms reporting costs $2,510.80 $4,980.30 

Source: Revenue data from Dun & Bradstreet 2010. Wage rates from U.S. Bureau of Labor Statistics 2010b 

2357 

2358 2.5.2 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization Costs per 

2359 Firm 

2360 

2361 This section presents the total costs per fabricator, wholesaler, and retailer firm associated with 

2362 the recordkeeping and labeling requirements for the analytical options considered for the TSCA Title VI 

2363 rule. This analysis includes additional per firm costs to those that were reported in the questionnaire, 

2364 including costs associated with becoming familiar with the rule’s requirements and sending notification 

letters to suppliers.32 2365 Although no fabricator or wholesaler firms quantified any costs associated with 

 32 The CARB ATCM requires all firms that purchase composite wood products to obtain documentation from their 

suppliers that the products are in compliance with the rule. Such supplier notification is included in some of the 

analytical options considered for the TSCA Title VI rule, but it is not required by the proposed option (Option SCR). 

The estimates here for the analytical options including supplier notification reflect the cost for purchasers to submit 

requests for documentation to their suppliers, and the cost for the suppliers to provide the documentation. 
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January 27, 2012 2-111

2366 sending notification letters to suppliers, several noted that this was necessary. Similarly, although no 

2367 respondents reported costs associated with learning about the rule, it will be necessary for each firm to 

2368 become familiar with it in order to determine whether they are subject to it, and if so, what steps will be 

2369 necessary to achieve compliance. It is assumed that the entire group of affected composite panel 

2370 producer, fabricator, wholesaler, and retailer firms will incur costs for both rule familiarization and 

2371 supplier notification. In summary, the following initial costs will be incurred in response to recordkeeping 

2372 and labeling requirements: (1) rule familiarization; (2) supplier notification; (2) labeling system setup; 

2373 and (3) recordkeeping system setup. There will also be recurring costs estimated on an annual basis for 

2374 maintaining records. These costs are described in more detail in the sections below. 

2375 

2376 2.5.2.1 Rule Familiarization and Supplier Notification Costs 

2377 

2378 It is expected that all composite panel producer, fabricator, wood veneer laminated product 

2379 producer, wholesaler, and retailer firms, will need to spend time familiarizing themselves with the 

2380 regulation and either ensuring that their current systems are sufficient for the TSCA Title VI rule’s 

2381 requirements or identifying necessary changes. It is assumed that every firm will require four managerial 

2382 labor hours of initial rule familiarization costs. These per-firm rule familiarization costs are estimated by 

2383 industry in Table 2-69. 

2384 

Table 2-69: Per-Firm Rule Familiarization Costs 

Industry Rule Familiarization 

Labor (hours) 

Managerial Occupations 

Wage Rate 

Rule Familiarization 

Cost Per Firm 

Stock Composite Panel Producers 4.0 $73.60 $294.40 

Fabricators and Laminators 4.0 $73.60 $294.40 

Wholesalers 4.0 $93.29 $373.16 

Retailers 4.0 $70.71 $282.84 

Sources: U.S. Bureau of Labor Statistics 2010a, b, c 

2385 

2386 It is assumed that all affected fabricator, wood veneer laminated product producer, wholesaler, 

2387 and retailer firms will also incur costs for sending notification letters to all of their composite wood 

2388 product suppliers. The composite wood product suppliers will conversely need to respond to all 

2389 downstream firms requesting confirmation of compliance with the TSCA Title VI rule’s requirements. It 

2390 is assumed that each retailer entity will need to send notification letters to a total of 40 suppliers. 

2391 Fabricators and wholesalers are assumed to send notification letters to 20 suppliers. Notification 

2392 responses are estimated by assuming that notification letters from downstream firms are distributed 

2393 equally across the upstream firms. Each upstream firm is assumed to respond to the notification letters it 

2394 receives (see Table 2-70 for the average number of notification and response letters sent by industry). 

2395 

2396 Supplier notification requires both material and labor costs. The material costs for each supplier 

2397 letter include: $0.10 for a printed letter, $0.02 for an envelope, and $0.44 for a stamp for a total of $0.56 

2398 in material costs per supplier letter. In terms of letter production and mailing, it is assumed that this 

2399 activity will require 2 hours of initial labor plus one minute of labor for each supplier notification letter or 

2400 response letter sent. The labor costs are estimated using the industry-specific fully loaded wages for the 

2401 “office and administrative support” occupation (See Table 2-66). Supplier notification cost elements per 

2402 fabricator, wholesaler, retailer, and composite panel producer firms are presented in Table 2-70 below. 

2403 The total per-firm costs is calculated as the sum of (1) material costs and (2) the number of labor hours 

2404 required multiplied by the fully loaded hourly wage. 

2405 
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January 27, 2012 2-112

Table 2-70: Per-Firm Supplier Notification and Response Costs 

Industry 

Notification 

Letters 

Sent Per 

Firm 

Notification 

Letter 

Responses 

Per Firm 

Total 

Letters Per 

Firm 

Estimated 

Labor 

Burden Per 

Firm 

(hours) 

Estimated 

Material 

Cost Per 

Firm ($0.56 

per letter) 

Office and 

Administrative 

Support Wage 

Total PerFirm Cost 

Composite 

Panel 

Producersa

 0 295 295 6.9 $165.20 $24.84 $336.60 

Fabricators 

and 

Laminators 20 282 302 7.0 $169.12 $24.84 $343.00 

Wholesalers 20 277 297 7.0 $166.32 $25.54 $345.10 

Retailers 40 0 40 2.7 $22.40 $19.32 $74.56 

Sources: U.S. Bureau of Labor Statistics 2010b, c, e, United States Postal Service 2011 

2406 

2407 2.5.2.2 Labeling Costs 

2408 

2409 Fabricators must label every finished good they produce, or every box containing finished goods, 

2410 with the fabricator’s name, the date the finished good was produced, and a statement of compliance. 

2411 Because this is similar to the labeling requirement in the CARB ATCM, the average labeling costs for 

2412 fabricators are estimated based on the questionnaire results and presented in Table 2-67 of the previous 

2413 section. Based on the questionnaire results, it is estimated that 33% of fabricators who are not already 

2414 complying with the CARB ATCM (because their products are not sold in California) will incur average 

2415 incremental costs of $4,552 in the first year to change their labels, and all other fabricators will incur an 

2416 average incremental cost of $132.81. Since none of the fabricators that took part in the telephone 

2417 questionnaire reported any recurring costs for labeling, no recurring labeling costs are estimated. 

2418 

2419 It is assumed that 1 percent of wholesalers incur labeling costs, either because they are 

2420 repackaging goods that were originally labeled on the packaging instead of on the individual items, or 

2421 because they are replacing an original label applied by the panel producer or fabricator with a label listing 

2422 a different company name. It is also assumed that these wholesalers incur the same costs as the 

2423 fabricators who are assumed to incur more substantial initial labeling costs (an average of $4,552). 

2424 

2425 It is assumed that panel producers, for whom product labeling is a customary business practice, 

2426 will incur the incremental costs of 6 hours for changing their labels twice. They may need to change their 

2427 labels once before the effective date of the rule (to indicate that the panels were produced before that date 

2428 if they are to be sold after the rule goes into effect) and again after their product lines are certified. The 

2429 first label change may be needed. 

2430 

Table 2-71: Summary of Average Labeling Setup Costs Per-Firm 

Firm Type Average Initial Costs 

Low High 

Panel Producers (excl. laminators defined as hardwood plywood producers) $149.04 

Laminators defined as hardwood plywood producers $4,552.00 

Fabricators (including laminators defined as fabricators) $132.81 $4,552.00 

Wholesalers $4,552.00 - 

Retailers - - 

2431 

2432 

2433 
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January 27, 2012 2-113

2434 2.5.2.3 Recordkeeping Costs 

2435 

2436 Under the CARB ATCM, fabricators, importers, distributors, and wholesalers are required to take 

2437 “reasonable precautions” to ensure that the composite wood products and finished goods they acquire are 

2438 in compliance with the applicable emission standards. This includes instructing each supplier that the 

2439 product supplied must comply with applicable emissions standards, and obtaining written documentation 

2440 stating that. In addition, these firms must keep records showing the date of purchase, the supplier, as well 

2441 as all precautions taken to ensure that the product meets emissions standards. These records must be kept 

2442 for two years. The TSCA Title VI rule requires that records be kept for five years but this is not expected 

2443 to significantly affect the costs to regulated entities, so the cost of the additional recordkeeping has not 

2444 been estimated. 

2445 

2446 The average initial and recurring recordkeeping costs for fabricators and wholesalers are 

2447 estimated based on the questionnaire results and presented above in Table 2-67 and Table 2-68 above. 

2448 Based on the questionnaire results, typical fabricators are not estimated to incur initial costs for 

2449 recordkeeping, because their existing recordkeeping systems are adequate and do not need to be modified 

2450 to comply with the TSCA Title VI requirements. It is estimated that 11% of the fabricators that are not 

2451 currently complying with the CARB ATCM because their products are not sold in California will incur 

2452 additional recurring recordkeeping costs. 

2453 

2454 The single fabricator questionnaire respondent that reported incurring recurring recordkeeping 

2455 costs indicated that their recurring recordkeeping burden associated with the CARB ATCM was about 10 

2456 hours per week, which this analysis estimates to be about $12,917 per year (see Table 2-67). However, 

2457 the burden reported by this fabricator questionnaire respondent seems unlikely to be representative for all 

2458 the fabricator firms that incur a recurring recordkeeping burden. This fabricator questionnaire respondent 

2459 was a firm with employees, but smaller firms, such as nonemployer firms, are likely to need much less 

2460 time than 10 hours per week (about a quarter of a 40 hour work week) to perform the necessary 

2461 recordkeeping activities. Since the recordkeeping requirements entail keeping track of composite wood 

2462 materials purchased and shipments that contain composite wood products, it is expected that the burden 

2463 associated with keeping records will typically increase with the volume of a fabricator’s sales. Thus, to 

2464 estimate the recurring recordkeeping burden for nonemployer fabricators, the analysis assumes that there 

2465 is a fixed-cost component of the recurring recordkeeping costs associated with two hours of labor and a 

2466 variable cost component that is proportional to a firm’s revenue. 

2467 

2468 For fabricator employer firms, the recurring recordkeeping cost is assumed to be comprised of a 

2469 fixed cost component of $49.68 (based on the cost of 2 hours of labor at fabricator firms) and a variable 

2470 cost component of 0.30338 percent of revenue (calculated by subtracting $49.68 from $12,917 and then 

2471 dividing by $4,241,245, the estimated average revenue for affected employer fabricators). The average 

2472 recurring recordkeeping cost for fabricator nonemployer firms is then estimated as the sum of 49.68 and 

2473 0.30338 percent of average nonemployer firm revenues ($42,690). The resulting average fabricator 

2474 nonemployer firm recurring recordkeeping cost is $179.19 per year. 

2475 

2476 Recurring recordkeeping costs are estimated similarly for wholesale firms. It is estimated that 

2477 43% of wholesalers that are not currently complying with the CARB ATCM (because their products are 

2478 not sold in California) will incur additional recurring costs (see Table 2-68). The costs to those 

2479 wholesalers with recurring recordkeeping costs are estimated based on the wholesaler questionnaire. The 

2480 single wholesaler questionnaire respondent that reported incurring recurring recordkeeping costs indicated 

2481 that their recurring recordkeeping burden associated with the CARB ATCM was about forty five minutes 

2482 per day, which this analysis estimates to be about $4,980.30 per year (see Table 2-68). However, the 

2483 burden reported by this wholesaler questionnaire respondent seems unlikely to be representative for all 

2484 the wholesaler firms that incur a recurring recordkeeping burden. This wholesaler questionnaire 
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January 27, 2012 2-114

2485 respondent was a firm with employees, but smaller firms such as nonemployer firms, are likely to need 

2486 much less time than 3.75 hours per week (nearly 10% of a 40 hour work week) to perform the necessary 

2487 recordkeeping activities. Since the recordkeeping requirements entail keeping track of composite wood 

2488 materials purchased and shipments that contain composite wood products, it is expected that the burden 

2489 associated with keeping records will typically increase with the volume of a wholesaler’s sales. Thus, to 

2490 estimate the recurring recordkeeping burden for nonemployer wholesalers, the analysis assumes that there 

2491 is a fixed-cost component of the recurring recordkeeping costs associated with two hours of labor and a 

2492 variable cost component that is proportional to a firm’s revenue. 

2493 

2494 For employer firms, the recurring recordkeeping cost is assumed to be comprised of a fixed cost 

2495 component of $51.08 (based on the cost of 2 hours of labor at wholesaler firms)and a variable cost 

2496 component of 0.05933 percent of revenue (calculated by subtracting $51.08 from $4,980.30 and then 

2497 dividing by $8,308,417, the estimated average revenue for affected employer wholesalers). The average 

2498 recurring recordkeeping cost for nonemployer firms is then estimated as the sum of 51.08 and 0.05933 

2499 percent of average nonemployer revenues ($82,542). The resulting average wholesaler nonemployer 

2500 recurring recordkeeping cost is $100.05 per year. 

2501 

2502 It is estimated that 57% of the wholesalers that are not currently complying with the CARB 

2503 ATCM (because their products are not sold in California) will incur an initial cost of $2,511 to change 

2504 their recordkeeping systems, and that these costs will average $2,511 for both employer and nonemployer 

2505 firms. It is assumed that the remaining wholesalers do not have to upgrade their recordkeeping systems in 

2506 order to complying with the recordkeeping requirements. 

2507 

2508 Panel producers are assumed to incur an average labor burden of one hour per week (equivalent 

2509 to $3,710.72 per year) to maintain the following records for 5 years: 

2510 

2511  Records of quarterly emission testing and quality control testing that identify the 

2512 accredited third-party certifier conducting or overseeing the testing and the laboratory or 

2513 quality control facility actually performing the testing. These records must also include 

2514 the date, the product type tested, the lot or batch number that the tested material 

2515 represents, the test method used, and the test results; 

2516  Production records, including a description of the composite wood product(s), the date of 

2517 manufacture, lot or batch numbers, the amount of resin use by volume and weight, the 

2518 resin trade name, resin manufacturer and supplier contact information, and tracking 

2519 information allowing each product to be traced to a specific lot number or batch 

2520 produced; 

2521  Records demonstrating initial and continued eligibility for the reduced testing provisions 

2522 for products made with no-added formaldehyde-based resins, if applicable; 

2523  Records of changes in production, including changes in resin use, resin composition, and 

2524 changes in the process, such as changes in press time; 

2525  Purchaser information for each composite wood product, if applicable, including the 

2526 name, contact person, address, phone number, e-mail address if available, purchase order 

2527 or invoice number, and amount purchased; 

2528  Transporter information for each composite wood product, if applicable, including name, 

2529 contact person, address, phone number, e-mail address if available, and shipping invoice 

2530 number; 

2531  Information on the disposition of non-complying lots, including product type and amount 

2532 of composite wood products affected, lot or batch numbers, mitigation measures used, 

2533 results of retesting, and final disposition; 

2534  Copies of labels used; 
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January 27, 2012 2-115

2535  Panel producers are required to maintain an up-to-date quality control manual on their 

2536 premises; and 

2537  Panel producers are required to maintain the credentials of their quality control managers 

2538 and quality control employees for as long as employees are serving in a quality control 

2539 capacity. 

2540 

Table 2-72: Summary of Average Recordkeeping Costs Per-Firm 

Firm Type Average Recordkeeping Costs 

Initial Costs Recurring Costs 

Panel Producers (excl. laminators defined as hardwood plywood producers) - $3,710.72 

Laminators defined as hardwood plywood producersa - $16,627.52 

Fabricators (including laminators 

defined as fabricators) 

All firms that comply with CARB 

ATCM in baseline and 89% of firms 

that do not comply with CARB 

ATCM in baselineb

 - - 

11% of employer firms that do not 

comply with CARB ATCM in 

baselineb

 - $12,916.80 

11% of nonemployer firms that do 

not comply with CARB ATCM in 

baselineb

 $179.19 

Wholesalers 

All firms that comply with CARB 

ATCM in baseline and 57% (for 

initial costs) and 43% (for recurring 

costs) of firms that do not comply 

with CARB ATCM in baselineb

 - - 

57% (for initial costs) and 43% (for 

recurring costs) of employer firms 

that do not comply with CARB 

ATCM in baselineb

 $2,510,80 $4,890.30 

57% (for initial costs) and 43% (for 

recurring costs) of nonemployer 

firms that do not comply with 

CARB ATCM in baselineb

 $2,510,80 $100.05 

Retailers - - 

a $16,627.52= 12,916.80 + $3,710.72 

b Firms may not comply with the CARB ATCM in the baseline if they do not sell products in California. 

2541 

2542 

2543 2.5.3 Number of Affected Entities 

2544 

2545 Several industries are already universally following the recordkeeping and labeling requirements 

2546 under the CARB rule, while other industries have not experienced widespread implementation of these 

2547 practices. In general, those industries that tend to distribute their products nationally have implemented 

2548 recordkeeping and labeling systems to comply with CARB, while regional operations generally have not. 

2549 

2550 Discussions with industry experts informed the baseline compliance assumptions for most 

fabricators as well as all furniture wholesalers.33 2551 For the remaining fabricators baseline compliance was 

2552 estimated as the percentage of total U.S. establishments located in California. For retail and wholesale 

 33 Conversations with Industry (Personal Communication with AHFA 2010, Personal Communication with BIFMA 

2010, Personal Communication with KCMA 2010, Personal Communication with NALFA 2010) informed assumptions 

for the following NAICS codes: 321211, 321219, 337110, 337129, 321911, 337121, 337122, 337127, 337211, 337214, 

337215, 336213, 336214, 423210, 423220. 
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January 27, 2012 2-116

2553 firms, baseline compliance was estimated as the percentage of firms with at least one establishment 

2554 located in California. Since all affected composite wood product producers will need to familiarize 

2555 themselves with the rule as well as respond to all supplier notification letters, baseline compliance with 

2556 the CARB regulation does not need to be determined. 

2557 

2558 2.5.3.1 Baseline CARB Compliance of Fabricator and Wood Veneer Laminated Product Industries 

2559 

2560 Many fabricators are already complying with the recordkeeping and labeling requirements of the 

2561 CARB ATCM and therefore would not incur any incremental costs for putting these systems in place to 

2562 comply with the TSCA Title VI rule. The baseline level of CARB compliance for most fabricator and 

2563 wood veneer laminated product industries was determined based on conversations with industry 

associations.34 2564 However, baseline compliance for some fabricator and wood veneer laminated product 

2565 industries was estimated simply as the number of establishments located in California divided by the total 

2566 number of U.S. establishments in each industry. The estimated baseline CARB compliance levels for 

2567 fabricators and wood veneer laminated product producers are presented below in Table 2-73. 

2568 

2569 

Table 2-73: Baseline CARB Compliance of Fabricator and Wood Veneer Laminated Product 

Producer Industries, by Affected NAICS 

NAICS NAICS Definition CA 

Estab. 

Estab. 

Outside 

CA 

Total U.S. 

Estab. 

Baseline 

CARB 

Compliance 

321211 Hardwood Veneer and Plywood Manufacturing - - - 100% 

321219 Reconstituted Wood Product Manufacturing - - - 100% 

337110 Wood Kitchen Cabinet and Countertop Manufacturing - - - 50% 

337129 

Wood Television, Radio, and Sewing Machine 

Cabinet Manufacturing - - - 50% 

321911 Wood Window and Door Manufacturing - - - 100% 

337121 Upholstered House Furniture Manufacturing - - - 100% 

337122 

Non-upholstered Wood Household Furniture 

Manufacturing - - - 100% 

337124 Metal Household Furniture Manufacturing - - - 100% 

337127 Institutional Furniture Manufacturing - - - 100% 

337211 Wood Office Furniture Manufacturing - - - 100% 

337214 Office Furniture (except Wood) Manufacturing - - - 100% 

337215 

Showcase, Partition, Shelving, and Locker 

Manufacturing - - - 100% 

321918 Other Millwork (including Flooring) 194 1,907 2,101 9.23% 

337212 Custom Architectural Woodwork and Millwork 219 2,009 2,228 9.83% 

321999 

All Other Miscellaneous Wood Product 

Manufacturing 154 1,810 1,964 7.84% 

336213 Motor Home Manufacturing - - - 100% 

336214 Travel Trailer and Camper - - - 100% 

321991 Manufactured Home (Mobile Home) Manufacturing 41 335 376 10.90% 

321992 Prefabricated Building Manufacturing 48 763 811 5.92% 

339950 Sign Manufacturing 644 5,739 6,383 10.09% 

Sources: U.S. Census Bureau 2009b, 2010f 

2570 

2571 

 34 Conversations with Industry represented informed assumptions for the following fabricator NAICS codes: 321211, 

321219, 337110, 337129, 321911, 337121, 337122, 337127, 337211, 337214, 337215, 336213, and 336214. 
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January 27, 2012 2-117

2572 2.5.3.2 Baseline CARB Compliance of Retailer and Wholesaler Industries 

2573 

2574 This analysis assumes that retail and wholesale firms with establishments in California are 

2575 complying with the recordkeeping and labeling requirements of the CARB ATCM and therefore would 

2576 not incur any incremental costs for putting these systems in place to comply with the TSCA Title VI 

2577 proposed rule. Because retailers make the large majority of their sales in the same states where they have 

2578 physical locations it is not likely that many retailers without California locations have established chain of 

2579 custody systems to meet the CARB ATCM’s requirements. Wholesalers are more likely than retailers to 

2580 sell products in states where they do not have physical locations. Thus, this assumption may lead to an 

2581 understatement of the level of baseline compliance among wholesalers. Note that two wholesale 

2582 industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers 

2583 (423220) are instead assumed to be fully compliant with the CARB ATCM chain of custody requirements 

in the baseline.35 2584 

2585 

2586 Because data on the number of firms with at least one establishment in California are not 

2587 available, the following steps must be taken to estimate baseline compliance for each affected industry: 

2588 (1) use 2007 Economic Census data to identify the number of affected retail and wholesale firms (U.S. 

2589 Census Bureau 2009a, 2010a, b, d, g); (2) estimate the number of single-unit firms in California; (3) 

2590 estimate the number of multi-unit firms with at least one establishment in California; and (4) estimate 

2591 baseline compliance as the percentage of U.S. firms with at least one establishment in California. 

2592 

2593 Figure 2-5 presents an example to demonstrate how the numbers of single-unit firms located in 

2594 California are estimated. 

2595 

 35 These assumptions are based on two sources: (Personal Communication with AHFA 2010, Personal Communication 

with BIFMA 2010). 
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January 27, 2012 2-118

Figure 2-5: Example Methodology for Estimating the Number of Single-Unit Firms in California 

(NAICS 441210) 

2596 

2597 Table 2-74 and Table 2-75 present the estimated number of single-unit establishments located in 

2598 California for all affected wholesaler and retailer industries. 

2599 

2600 

2601 

Table 2-74: The Number of Single-Unit Wholesaler Establishments in California, by Affected NAICS 

NAICS NAICS Description 

All U.S. 

Estab. in 

Affected 

NAICS 

U.S. 

SingleUnit 

Estab. 

Percent of 

U.S. Estab. 

that are 

Single Unit 

All CA 

Estab. 

CA 

SingleUnit 

Estab. 

423310 

Lumber, plywood, millwork, and wood panel merchant 

wholesalers 

8,984 5,587 62.2% 836 520 

423320 

Brick, stone, and related construction material merchant 

wholesalers 

4,107 2,413 58.8% 447 263 

423330 Roofing, siding, and insulation material merchant wholesalers 2,804 862 30.7% 175 54 

423390 Other construction material merchant wholesalers 3,767 2,122 56.3% 394 222 

423410 Photographic equipment and supplies merchant wholesalers 1,062 767 72.2% 230 166 

423420 Office equipment merchant wholesalers 6,415 2,509 39.1% 676 264 

423430 Computer and software merchant wholesalers 11,545 7,689 66.6% 2,265 1,508 

423440 Other commercial equipment merchant wholesalers 4,444 3,600 81.0% 521 422 

423450 Medical equipment merchant wholesalers 8,601 6,718 78.1% 1,194 933 

423490 Other professional equipment and supplies merchant 2,380 1,804 75.8% 309 234 
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January 27, 2012 2-119

Table 2-74: The Number of Single-Unit Wholesaler Establishments in California, by Affected NAICS 

NAICS NAICS Description 

All U.S. 

Estab. in 

Affected 

NAICS 

U.S. 

SingleUnit 

Estab. 

Percent of 

U.S. Estab. 

that are 

Single Unit 

All CA 

Estab. 

CA 

SingleUnit 

Estab. 

wholesalers 

423510 Metal service centers and other metal merchant wholesalers 10,831 6,867 63.4% 1,273 807 

423610 Elec. equip. and wiring merchant wholesalers 13,948 7,553 54.2% 1,910 1,034 

423620 Electric appliance merchant wholesalers 3,149 2,260 71.8% 685 492 

423690 Other electronic parts and equipment merchant wholesalers 13,991 9,329 66.7% 3,015 2,010 

423710 Hardware merchant wholesalers 6,986 4,581 65.6% 1,082 710 

423720 Plumbing equip. merchant wholesalers 7,027 3,013 42.9% 806 346 

423730 HVAC equip. merchant wholesalers 5,376 1,826 34.0% 387 131 

423740 Refrigeration equipment and supplies merchant wholesalers 1,318 625 47.4% 196 93 

423810 Construction equipment merchant wholesalers 4,904 2,432 49.6% 369 183 

423820 

Farm and garden machinery and equipment merchant 

wholesalers 

8,405 5,395 64.2% 621 399 

423830 Industrial machinery and equipment merchant wholesalers 31,380 21,477 68.4% 3,111 2,129 

423840 Industrial supplies merchant wholesalers 8,850 4,855 54.9% 1,018 558 

423850 

Service establishment equipment and supplies merchant 

wholesalers 

4,719 3,258 69.0% 373 258 

423910 

Sporting and recreational goods and supplies merchant 

wholesalers 

6,278 5,300 84.4% 1,224 1,033 

423920 Toy and hobby goods and supplies merchant wholesalers 2,504 2,262 90.3% 741 669 

423930 Recyclable material merchant wholesalers 7,377 5,697 77.2% 850 656 

423940 Jewelry merchant wholesalers 7,806 7,383 94.6% 1,495 1,414 

423990 Other miscellaneous durable goods merchant wholesalers 10,270 8,877 86.4% 1,723 1,489 

424110 Printing and writing paper merchant wholesalers 1,291 698 54.1% 161 87 

424120 Stationery and office supplies merchant wholesalers 5,865 4,217 71.9% 733 527 

424130 Industrial and personal service paper merchant wholesalers 4,939 3,644 73.8% 727 536 

424210 Drugs and druggists' sundries merchant wholesalers 8,535 5,695 66.7% 1,504 1,004 

424310 Piece goods, notions, and other dry goods merchant wholesalers 3,532 2,906 82.3% 967 796 

424320 Men's and boys' clothing and furnishings merchant wholesalers 4,252 3,634 85.5% 984 841 

424330 Women's and children's clothing merchant wholesalers 7,674 6,823 88.9% 2,357 2,096 

424340 Footwear merchant wholesalers 1,659 1,446 87.2% 525 458 

424410 General line grocery merchant wholesalers 2,547 2,025 79.5% 449 357 

424420 Packaged frozen food merchant wholesalers 3,502 2,702 77.2% 606 468 

424450 Confectionery merchant wholesalers 2,191 1,650 75.3% 282 212 

424460 Fish and seafood merchant wholesalers 2,022 1,806 89.3% 238 213 

424480 Fresh fruit and vegetable merchant wholesalers 5,074 4,323 85.2% 1,102 939 

424490 Other grocery and related products merchant wholesalers 13,068 8,943 68.4% 2,011 1,376 

424510 Grain and field bean merchant wholesalers 4,851 1,801 37.1% 133 49 

424610 

Plastics materials and basic forms and shapes merchant 

wholesaler 

3,420 2,368 69.2% 516 357 

424690 Other chemical and allied products merchant wholesalers 10,138 5,681 56.0% 965 541 

424910 Farm supplies merchant wholesalers 7,738 3,786 48.9% 649 318 

424920 Book, periodical, and newspaper merchant wholesalers 2,813 1,816 64.6% 360 232 

424930 Flower, nursery stock, & florists' supplies merchant wholesalers 4,218 3,320 78.7% 671 528 

424940 Tobacco and tobacco product merchant wholesalers 1,370 1,017 74.2% 94 70 

424950 Paint, varnish, and supplies merchant wholesalers 2,060 924 44.9% 235 105 

424990 Other miscellaneous nondurable goods merchant wholesalers 12,634 11,549 91.4% 2,980 2,724 

Total Wholesalers in Affected NAICS 324,621 219,835 47,175 33,831 

Sources: U.S. Census Bureau 2010a, b

2602 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-120

Table 2-75: The Number of Single-Unit Retailer Establishments in California, by Affected NAICS 

NAICS NAICS Description 

All U.S. 

Estab. in 

Affected 

NAICS

U.S. 

SingleUnit 

Estab. 

Percent of 

U.S. 

Estab. that 

are Single 

Unit 

All CA 

Estab. 

CA 

SingleUnit 

Estab. 

441110 New car dealers 24,888 19,495 78.3% 2,516 1,970

441210 Recreational vehicle dealers 3,100 2,530 81.6% 325 265

441221 Motorcycle, ATV, and personal watercraft dealers 6,137 5,492 89.5% 620 555

441229 All other motor vehicle dealers 2,266 2,042 90.1% 229 206

441320 Tire dealers 20,127 10,445 51.9% 2,034 1,056

442110 Furniture stores 28,834 17,829 61.8% 3,308 2,045

442210 Floor covering stores 14,534 12,186 83.8% 1,471 1,233

442291 Window treatment stores 2,652 2,196 82.8% 358 296

442299 All other home furnishings stores 19,124 10,994 57.5% 2,274 1,307

443111 Household appliance stores 9,336 7,216 77.3% 843 652

443112 Radio, television, and other electronics stores 29,051 13,741 47.3% 3,478 1,645

443120 Computer and software stores 10,428 5,385 51.6% 1,307 675

443130 Camera and photographic supplies stores 1,988 699 35.2% 201 71

444110 Home centers 6,953 2,330 33.5% 585 196

444120 Paint and wallpaper stores 7,860 2,085 26.5% 734 195

444130 Hardware stores 16,454 11,289 68.6% 1,241 851

444190 Other building material dealers 39,551 27,231 68.9% 3,909 2,691

444210 Outdoor power equipment stores 4,357 3,916 89.9% 236 212

444220 Nursery, garden center, and farm supply stores 15,895 11,640 73.2% 1,138 833

445110 Supermarkets and other grocery (except convenience) stores 64,881 39,878 61.5% 7,824 4,809

445120 Convenience stores 25,510 21,529 84.4% 2,578 2,176

445210 Meat markets 6,009 5,339 88.9% 607 540

445220 Fish and seafood markets 2,063 1,954 94.7% 209 198

445230 Fruit and vegetable markets 2,938 2,780 94.6% 297 281

445291 Baked goods stores 4,290 3,001 70.0% 434 303

445292 Confectionery and nut stores 3,404 1,990 58.5% 344 201

445299 All other specialty food stores 5,504 4,057 73.7% 556 410

445310 Beer, wine, and liquor stores 31,485 26,292 83.5% 3,182 2,657

446110 Pharmacies and drug stores 42,045 17,710 42.1% 4,250 1,790

446120 Cosmetics, beauty supplies, and perfume stores 13,584 6,679 49.2% 1,373 675

446130 Optical goods stores 13,149 4,977 37.9% 1,329 503

446191 Food (health) supplement stores 8,999 4,928 54.8% 910 498

446199 All other health and personal care stores 10,675 6,835 64.0% 1,079 691

447110 Gasoline stations with convenience stores 97,508 49,010 50.3% 9,856 4,954

447190 Other gasoline stations 21,248 13,700 64.5% 2,148 1,385

448110 Men's clothing stores 8,321 4,533 54.5% 1,082 589

448120 Women's clothing stores 36,220 12,832 35.4% 4,419 1,566

448130 Children's and infants' clothing stores 7,102 2,611 36.8% 853 314

448140 Family clothing stores 28,254 7,618 27.0% 3,540 954

448150 Clothing accessories stores 7,494 3,488 46.5% 917 427

448190 Other clothing stores 12,034 7,430 61.7% 1,394 861

448210 Shoe stores 28,076 6,147 21.9% 2,838 621

448310 Jewelry stores 27,745 18,015 64.9% 3,269 2,123

448320 Luggage and leather goods stores 1,222 561 45.9% 124 57

451110 Sporting goods stores 22,254 16,485 74.1% 2,510 1,859

451120 Hobby, toy, and game stores 9,357 5,489 58.7% 1,028 603

451130 Sewing, needlework, and piece goods stores 5,663 4,001 70.7% 632 447

451140 Musical instrument and supplies stores 4,510 3,301 73.2% 456 334
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-121

Table 2-75: The Number of Single-Unit Retailer Establishments in California, by Affected NAICS 

NAICS NAICS Description 

All U.S. 

Estab. in 

Affected 

NAICS

U.S. 

SingleUnit 

Estab. 

Percent of 

U.S. 

Estab. that 

are Single 

Unit 

All CA 

Estab. 

CA 

SingleUnit 

Estab. 

451211 Book stores 9,955 4,291 43.1% 1,006 434

451212 News dealers and newsstands 1,523 1,239 81.4% 154 125

451220 Prerecorded tape, compact disc, and record stores 4,153 2,176 52.4% 420 220

452111 Department stores (except discount department stores) 3,533 7 0.2% 437 1

452112 Discount department stores 5,001 4 0.1% 568 0

452910 Warehouse clubs and supercenters 4,260 1 0.0% 185 0

452990 All other general merchandise stores 33,061 8,473 25.6% 1,897 486

453110 Florists 19,822 18,465 93.2% 1,754 1,634

453210 Office supplies and stationery stores 9,558 4,948 51.8% 1,220 632

453220 Gift, novelty, and souvenir stores 31,391 22,652 72.2% 3,295 2,378

453910 Pet and pet supplies stores 8,782 5,643 64.3% 888 570

453920 Art dealers 6,677 6,183 92.6% 880 815

453930 Manufactured (mobile) home dealers 3,878 2,489 64.2% 210 135

453991 Tobacco stores 6,539 4,511 69.0% 661 456

453998 All other miscellaneous store retailers (except tobacco stores) 17,270 13,940 80.7% 1,746 1,409

454111 Electronic shopping 14,185 13,212 93.1% 1,434 1,335

454113 Mail-order houses 7,324 5,956 81.3% 740 602

454210 Vending machine operators 5,194 4,487 86.4% 525 454

454311 Heating oil dealers 4,055 3,078 75.9% 410 311

454312 Liquefied petroleum gas (bottled gas) dealers 5,980 1,845 30.9% 604 186

454390 Other direct selling establishments 22,077 19,545 88.5% 2,282 2,020

Total Retailers in Affected NAICS 994,667 580,145 103,598 60,411

Sources: U.S. Census Bureau 1997, 2010d, g, h 

2603 

2604 The method for estimating the number of multi-unit firms with an establishment located in 

2605 California is demonstrated in Figure 2-6. The average U.S. number of establishments per multi-unit firm 

2606 and the probability of a U.S. establishment not being located in California can be combined to estimate 

2607 the probability that a U.S. firm has at least one establishment located in California. Applying this 

2608 probability to the total number of U.S. multi-unit firms, the number of multi-unit firms with an 

2609 establishment in California is then estimated. 

2610 

2611 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-122

Figure 2-6: Example Methodology for Estimating the Number of Multi-Unit Firms with an 

Establishment in California (NAICS 441210) 

2612 

2613 The estimated numbers of multi-unit firms with at least one California establishment are 

2614 presented for each affected industry in Table 2-76 for wholesaler firms and Table 2-77 for retailer firms. 

2615 

Table 2-76: Number of Multi-Unit Wholesaler Firms with a California Establishment, by 

Affected NAICS 

NAICS NAICS Description 

U.S. 

Number of 

Estab. per 

Multi-Unit 

Firm 

Probability 

an Estab. is 

not in CA 

Probability 

Firm has 

an Estab. 

in CA 

Number 

of CA 

MultiUnit 

Firms 

423310 

Lumber, plywood, millwork, and wood panel merchant 

wholesalers 

3.8 90.7% 31.2% 277

423320 

Brick, stone, and related construction material merchant 

wholesalers 

4.4 89.1% 39.9% 153

423330 Roofing, siding, and insulation material merchant wholesalers 7.5 93.8% 38.3% 99

423390 Other construction material merchant wholesalers 4.2 89.5% 37.1% 145

423410 Photographic equipment and supplies merchant wholesalers 2.5 78.3% 45.4% 54

423420 Office equipment merchant wholesalers 10.1 89.5% 67.6% 261

423430 Computer and software merchant wholesalers 4.7 80.4% 64.2% 526

423440 Other commercial equipment merchant wholesalers 2.3 88.3% 25.2% 91

U.S. Economic Census 

(2010e)

219

U.S. Multi-Unit Firms U.S. Multi-Unit 

Establishments

U.S. Economic Census 

(2010d, e)

3,100 – 2,530 = 570

(U.S. Multi-Unit Establishments) / 

(U.S. Multi-Unit Firms)

570 / 219 = 2.6

Number of Establishments per MultiUnit Firm

U.S. Economic Census 

(2010d)

3,100

All U.S. Establishments

Probability Firm has an Establishment in CA

1 – (Probability an Establishment is not in CA)^ 

(Number of Establishments per Multi-Unit Firm)

1 – (89.5%)^(2.6) = 25%

(US Multi-Unit Firms) * (Probability 

of an Establishment in CA)

219 * 25% = 55

CA Multi-Unit Firms

U.S. Economic Census 

(2010d)

325

All CA Establishments

Probability an Establishment is NOT in CA

1 - (All CA Establishments) / (All U.S. 

Establishments)

1 – 325 / 3,100 = 89.5%
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-123

Table 2-76: Number of Multi-Unit Wholesaler Firms with a California Establishment, by 

Affected NAICS 

NAICS NAICS Description 

U.S. 

Number of 

Estab. per 

Multi-Unit 

Firm 

Probability 

an Estab. is 

not in CA 

Probability 

Firm has 

an Estab. 

in CA 

Number 

of CA 

MultiUnit 

Firms 

423450 Medical equipment merchant wholesalers 3.9 86.1% 44.4% 213

423490 

Other professional equipment and supplies merchant 

wholesalers 

2.4 87.0% 28.7% 68

423510 Metal service centers and other metal merchant wholesalers 3.6 88.2% 36.1% 399

423610 Elec. equip. and wiring merchant wholesalers 6.0 86.3% 58.6% 626

423620 Electric appliance merchant wholesalers 2.8 78.2% 49.8% 158

423690 Other electronic parts and equipment merchant wholesalers 4.0 78.5% 62.5% 721

423710 Hardware merchant wholesalers 4.2 84.5% 50.7% 290

423720 Plumbing equip. merchant wholesalers 7.0 88.5% 57.5% 329

423730 HVAC equip. merchant wholesalers 7.0 92.8% 40.5% 207

423740 Refrigeration equipment and supplies merchant wholesalers 5.2 85.1% 56.8% 76

423810 Construction equipment merchant wholesalers 3.8 92.5% 26.0% 167

423820 

Farm and garden machinery and equipment merchant 

wholesalers 

3.3 92.6% 22.2% 204

423830 Industrial machinery and equipment merchant wholesalers 3.4 90.1% 30.2% 869

423840 Industrial supplies merchant wholesalers 4.2 88.5% 40.1% 382

423850 

Service establishment equipment and supplies merchant 

wholesalers 

3.6 92.1% 25.4% 104

423910 

Sporting and recreational goods and supplies merchant 

wholesalers 

2.7 80.5% 44.4% 160

423920 Toy and hobby goods and supplies merchant wholesalers 1.8 70.4% 46.4% 63

423930 Recyclable material merchant wholesalers 3.2 88.5% 32.6% 170

423940 Jewelry merchant wholesalers 2.3 80.8% 38.2% 71

423990 Other miscellaneous durable goods merchant wholesalers 2.4 83.2% 35.5% 207

424110 Printing and writing paper merchant wholesalers 5.8 87.5% 53.6% 55

424120 Stationery and office supplies merchant wholesalers 4.1 87.5% 42.1% 170

424130 Industrial and personal service paper merchant wholesalers 3.1 85.3% 39.2% 162

424210 Drugs and druggists' sundries merchant wholesalers 5.0 82.4% 62.2% 352

424310 

Piece goods, notions, and other dry goods merchant 

wholesalers 

2.6 72.6% 56.0% 137

424320 Men's and boys' clothing and furnishings merchant wholesalers 2.1 76.9% 42.6% 125

424330 Women's and children's clothing merchant wholesalers 2.1 69.3% 53.0% 219

424340 Footwear merchant wholesalers 1.9 68.4% 51.8% 58

424410 General line grocery merchant wholesalers 2.9 82.4% 42.5% 78

424420 Packaged frozen food merchant wholesalers 2.7 82.7% 40.6% 118

424450 Confectionery merchant wholesalers 3.7 87.1% 39.6% 59

424460 Fish and seafood merchant wholesalers 1.8 88.2% 20.5% 24

424480 Fresh fruit and vegetable merchant wholesalers 2.3 78.3% 43.4% 140

424490 Other grocery and related products merchant wholesalers 5.7 84.6% 61.4% 445

424510 Grain and field bean merchant wholesalers 4.6 97.3% 11.9% 80

424610 

Plastics materials and basic forms and shapes merchant 

wholesaler 

2.9 84.9% 37.5% 137

424690 Other chemical and allied products merchant wholesalers 5.3 90.5% 41.0% 347

424910 Farm supplies merchant wholesalers 5.2 91.6% 36.7% 278

424920 Book, periodical, and newspaper merchant wholesalers 4.3 87.2% 44.3% 103

424930 

Flower, nursery stock, & florists' supplies merchant 

wholesalers 

2.9 84.1% 39.0% 123
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-124

Table 2-76: Number of Multi-Unit Wholesaler Firms with a California Establishment, by 

Affected NAICS 

NAICS NAICS Description 

U.S. 

Number of 

Estab. per 

Multi-Unit 

Firm 

Probability 

an Estab. is 

not in CA 

Probability 

Firm has 

an Estab. 

in CA 

Number 

of CA 

MultiUnit 

Firms 

424940 Tobacco and tobacco product merchant wholesalers 3.0 93.1% 19.2% 23

424950 Paint, varnish, and supplies merchant wholesalers 4.7 88.6% 43.1% 105

424990 Other miscellaneous nondurable goods merchant wholesalers 1.9 76.4% 40.1% 228

Total Wholesalers in Affected NAICS 10,656

Sources: U.S. Census Bureau 2010a, b 

2616 

Table 2-77: Number of Multi-Unit Retailer Firms with a California Establishment, by Affected 

NAICS 

NAICS NAICS Description 

U.S. 

Number of 

Estab. per 

Multi-Unit 

Firm 

Probability 

an Estab. is 

not in CA 

Probability 

Firm has 

an Estab. 

in CA 

Number of

CA MultiUnit 

Firms 

441110 New car dealers 2.7 89.9% 25.0% 499 

441210 Recreational vehicle dealers 2.6 89.5% 25.0% 55 

441221 Motorcycle, ATV, and personal watercraft dealers 2.4 89.9% 22.4% 61 

441229 All other motor vehicle dealers 2.0 89.9% 19.2% 21 

441320 Tire dealers 10.7 89.9% 68.2% 614 

442110 Furniture stores 5.8 88.5% 50.9% 960 

442210 Floor covering stores 3.0 89.9% 27.5% 214 

442291 Window treatment stores 5.6 86.5% 55.4% 45 

442299 All other home furnishings stores 14.4 88.1% 83.8% 474 

443111 Household appliance stores 3.6 91.0% 28.9% 170 

443112 Radio, television, and other electronics stores 16.3 88.0% 87.5% 821 

443120 Computer and software stores 30.6 87.5% 98.3% 162 

443130 Camera and photographic supplies stores 14.5 89.9% 78.6% 70 

444110 Home centers 13.8 91.6% 70.4% 235 

444120 Paint and wallpaper stores 18.4 90.7% 83.5% 262 

444130 Hardware stores 6.0 92.5% 37.5% 323 

444190 Other building material dealers 3.8 90.1% 32.7% 1,059 

444210 Outdoor power equipment stores 1.9 94.6% 10.1% 23 

444220 Nursery, garden center, and farm supply stores 3.7 92.8% 23.8% 277 

445110 Supermarkets and other grocery (except convenience) stores 12.5 87.9% 79.8% 1,602 

445120 Convenience stores 6.2 89.9% 48.5% 310 

445210 Meat markets 4.1 89.9% 35.5% 58 

445220 Fish and seafood markets 1.6 89.9% 15.7% 11 

445230 Fruit and vegetable markets 2.2 89.9% 21.1% 15 

445291 Baked goods stores 10.3 89.9% 66.7% 83 

445292 Confectionery and nut stores 8.9 89.9% 61.2% 97 

445299 All other specialty food stores 7.2 89.9% 53.6% 108 

445310 Beer, wine, and liquor stores 4.6 89.9% 38.7% 437 

446110 Pharmacies and drug stores 17.9 89.9% 85.2% 1,156 

446120 Cosmetics, beauty supplies, and perfume stores 37.9 89.9% 98.2% 179 

446130 Optical goods stores 19.4 89.9% 87.4% 368 

446191 Food (health) supplement stores 20.9 89.9% 89.2% 174 

446199 All other health and personal care stores 4.9 89.9% 40.9% 318 

447110 Gasoline stations with convenience stores 11.1 89.9% 69.4% 3,029 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-125

Table 2-77: Number of Multi-Unit Retailer Firms with a California Establishment, by Affected 

NAICS 

NAICS NAICS Description 

U.S. 

Number of 

Estab. per 

Multi-Unit 

Firm 

Probability 

an Estab. is 

not in CA 

Probability 

Firm has 

an Estab. 

in CA 

Number of

CA MultiUnit 

Firms 

447190 Other gasoline stations 3.8 89.9% 33.6% 660 

448110 Men's clothing stores 9.0 87.0% 71.6% 300 

448120 Women's clothing stores 31.2 87.8% 98.3% 737 

448130 Children's and infants' clothing stores 39.7 88.0% 99.4% 112 

448140 Family clothing stores 30.3 87.5% 98.3% 669 

448150 Clothing accessories stores 30.8 87.8% 98.2% 128 

448190 Other clothing stores 8.8 88.4% 66.2% 346 

448210 Shoe stores 30.5 89.9% 96.1% 692 

448310 Jewelry stores 14.4 88.2% 83.5% 565 

448320 Luggage and leather goods stores 8.7 89.9% 60.4% 46 

451110 Sporting goods stores 5.4 88.7% 47.5% 509 

451120 Hobby, toy, and game stores 14.9 89.0% 82.4% 213 

451130 Sewing, needlework, and piece goods stores 13.5 88.8% 79.8% 98 

451140 Musical instrument and supplies stores 4.3 89.9% 36.5% 104 

451211 Book stores 16.1 89.9% 82.0% 289 

451212 News dealers and newsstands 4.2 89.9% 36.3% 24 

451220 Prerecorded tape, compact disc, and record stores 11.8 89.9% 71.7% 120 

452111 Department stores (except discount department stores) 251.9 87.6% 100.0% 14 

452112 Discount department stores 499.7 88.6% 100.0% 10 

452910 Warehouse clubs and supercenters 387.2 95.7% 100.0% 11 

452990 All other general merchandise stores 63.2 94.3% 97.6% 380 

453110 Florists 2.4 91.2% 19.7% 113 

453210 Office supplies and stationery stores 12.5 87.2% 81.8% 302 

453220 Gift, novelty, and souvenir stores 6.0 89.5% 48.7% 707 

453910 Pet and pet supplies stores 11.6 89.9% 70.9% 192 

453920 Art dealers 2.2 86.8% 27.2% 60 

453930 Manufactured (mobile) home dealers 4.9 94.6% 23.8% 68 

453991 Tobacco stores 4.7 89.9% 39.6% 170 

453998 All other miscellaneous store retailers (except tobacco stores) 4.1 89.9% 35.7% 287 

454111 Electronic shopping 1.4 89.9% 14.2% 96 

454113 Mail-order houses 2.7 89.9% 24.7% 127 

454210 Vending machine operators 4.3 89.9% 36.8% 60 

454311 Heating oil dealers 2.7 89.9% 24.9% 91 

454312 Liquefied petroleum gas (bottled gas) dealers 9.1 89.9% 62.3% 281 

454390 Other direct selling establishments 3.1 89.7% 28.5% 235 

Total Retailers in Affected NAICS 23,107 

Sources: U.S. Census Bureau 1997, 2010d, g, h 

2617 

2618 Baseline CARB compliance is estimated as the sum of single-unit firms in California and multi2619 unit firms with at least one establishment in California (See Figure 2-7). 

2620 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-126

Figure 2-7: Example Methodology for Estimating Baseline CARB Compliance (NAICS 441210) 

2621 

2622 Estimated baseline compliance with the CARB ATCM is presented in Table 2-78 for wholesaler 

2623 industries and Table 2-79 for retailer industries. As described above, firms that are already meeting the 

2624 requirements of the CARB ATCM are not expected to incur additional costs associated with setting up 

2625 chain of custody systems to comply with the TSCA Title VI proposed rule. Estimated baseline CARB 

2626 compliance of these industries varies widely by NAICS, from 5 percent to 92 percent of total U.S. firms. 

2627 

2628 

2629 

Table 2-78: Baseline Compliance of Wholesaler Firms, by Affected NAICS 

NAICS NAICS Description 

CA 

SingleUnit 

Firms 

CA MultiUnit 

Firms 

All CA 

Firms 

All U.S. 

Firms 

Baseline 

Compliance

423210a Furniture merchant wholesalers - - - 6,172 100%

423220a Home furnishing merchant wholesalers - - - 6,491 100%

423310 

Lumber, plywood, millwork, and wood panel merchant 

wholesalers 

520 277 797 6,475 12.3%

423320 

Brick, stone, and related construction material merchant 

wholesalers 

263 153 416 2,796 14.9%

423330 

Roofing, siding, and insulation material merchant 

wholesalers 

54 99 153 1,121 13.7%

423390 Other construction material merchant wholesalers 222 145 367 2,514 14.6%

423410 Photographic equipment and supplies merchant wholesalers 166 54 220 886 24.8%

423420 Office equipment merchant wholesalers 264 261 525 2,895 18.1%
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-127

Table 2-78: Baseline Compliance of Wholesaler Firms, by Affected NAICS 

NAICS NAICS Description 

CA 

SingleUnit 

Firms 

CA MultiUnit 

Firms 

All CA 

Firms 

All U.S. 

Firms 

Baseline 

Compliance

423430 Computer and software merchant wholesalers 1,508 526 2,035 8,509 23.9%

423440 Other commercial equipment merchant wholesalers 422 91 513 3,962 13.0%

423450 Medical equipment merchant wholesalers 933 213 1,145 7,197 15.9%

423490 

Other professional equipment and supplies merchant 

wholesalers 

234 68 302 2,041 14.8%

423510 Metal service centers and other metal merchant wholesalers 807 399 1,207 7,973 15.1%

423610 Elec. equip. and wiring merchant wholesalers 1,034 626 1,660 8,622 19.3%

423620 Electric appliance merchant wholesalers 492 158 649 2,576 25.2%

423690 Other electronic parts and equipment merchant wholesalers 2,010 721 2,731 10,483 26.1%

423710 Hardware merchant wholesalers 710 290 1,000 5,154 19.4%

423720 Plumbing equip. merchant wholesalers 346 329 674 3,584 18.8%

423730 HVAC equip. merchant wholesalers 131 207 338 2,336 14.5%

423740 Refrigeration equipment and supplies merchant wholesalers 93 76 168 758 22.2%

423810 Construction equipment merchant wholesalers 183 167 350 3,075 11.4%

423820 

Farm and garden machinery and equipment merchant 

wholesalers 

399 204 603 6,316 9.5%

423830 Industrial machinery and equipment merchant wholesalers 2,129 869 2,998 24,357 12.3%

423840 Industrial supplies merchant wholesalers 558 382 940 5,808 16.2%

423850 

Service establishment equipment and supplies merchant 

wholesalers 

258 104 362 3,669 9.9%

423910 

Sporting and recreational goods and supplies merchant 

wholesalers 

1,033 160 1,194 5,661 21.1%

423920 Toy and hobby goods and supplies merchant wholesalers 669 63 733 2,398 30.5%

423930 Recyclable material merchant wholesalers 656 170 826 6,218 13.3%

423940 Jewelry merchant wholesalers 1,414 71 1,485 7,570 19.6%

423990 Other miscellaneous durable goods merchant wholesalers 1,489 207 1,696 9,460 17.9%

424110 Printing and writing paper merchant wholesalers 87 55 142 801 17.8%

424120 Stationery and office supplies merchant wholesalers 527 170 697 4,620 15.1%

424130 Industrial and personal service paper merchant wholesalers 536 162 699 4,058 17.2%

424210 Drugs and druggists' sundries merchant wholesalers 1,004 352 1,356 6,261 21.7%

424310 

Piece goods, notions, and other dry goods merchant 

wholesalers 

796 137 932 3,150 29.6%

424320 

Men's and boys' clothing and furnishings merchant 

wholesalers 

841 125 966 3,927 24.6%

424330 Women's and children's clothing merchant wholesalers 2,096 219 2,315 7,237 32.0%

424340 Footwear merchant wholesalers 458 58 515 1,557 33.1%

424410 General line grocery merchant wholesalers 357 78 435 2,208 19.7%

424420 Packaged frozen food merchant wholesalers 468 118 586 2,994 19.6%

424450 Confectionery merchant wholesalers 212 59 271 1,798 15.1%

424460 Fish and seafood merchant wholesalers 213 24 237 1,924 12.3%

424480 Fresh fruit and vegetable merchant wholesalers 939 140 1,079 4,646 23.2%

424490 Other grocery and related products merchant wholesalers 1,376 445 1,821 9,668 18.8%

424510 Grain and field bean merchant wholesalers 49 80 129 2,469 5.2%

424610 

Plastics materials and basic forms and shapes merchant 

wholesaler 

357 137 495 2,734 18.1%

424690 Other chemical and allied products merchant wholesalers 541 347 887 6,527 13.6%

424910 Farm supplies merchant wholesalers 318 278 595 4,543 13.1%

424920 Book, periodical, and newspaper merchant wholesalers 232 103 336 2,049 16.4%

424930 Flower, nursery stock, & florists' supplies merchant 528 123 651 3,635 17.9%
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-128

Table 2-78: Baseline Compliance of Wholesaler Firms, by Affected NAICS 

NAICS NAICS Description 

CA 

SingleUnit 

Firms 

CA MultiUnit 

Firms 

All CA 

Firms 

All U.S. 

Firms 

Baseline 

Compliance

wholesalers 

424940 Tobacco and tobacco product merchant wholesalers 70 23 92 1,135 8.1%

424950 Paint, varnish, and supplies merchant wholesalers 105 105 211 1,168 18.0%

424990 Other miscellaneous nondurable goods merchant wholesalers 2,724 228 2,952 12,118 24.4%

Total Wholesalers in Affected NAICS 33,831 10,656 44,488 258,304 17.2% a Two wholesale industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers (423220) are 

assumed to be fully compliant with the CARB ATCM chain of custody requirements in the baseline, based on conversation with 

industry (Personal Communication with AHFA 2010, Personal Communication with BIFMA 2010). 

Sources: U.S. Census Bureau 2010a, b 

2630 

Table 2-79: Baseline Compliance of Retailer Firms, by Affected NAICS 

NAICS NAICS Description 

CA 

SingleUnit 

Firms 

CA MultiUnit 

Firms 

All CA 

Firms 

All U.S. 

Firms 

Baseline 

Compliance

441110 New car dealers 1,970 499 2,470 21,489 11.5%

441210 Recreational vehicle dealers 265 55 320 2,749 11.6%

441221 Motorcycle, ATV, and personal watercraft dealers 555 61 616 5,763 10.7%

441229 All other motor vehicle dealers 206 21 228 2,154 10.6%

441320 Tire dealers 1,056 614 1,670 11,346 14.7%

442110 Furniture stores 2,045 960 3,005 19,714 15.2%

442210 Floor covering stores 1,233 214 1,448 12,965 11.2%

442291 Window treatment stores 296 45 342 2,278 15.0%

442299 All other home furnishings stores 1,307 474 1,781 11,560 15.4%

443111 Household appliance stores 652 170 822 7,805 10.5%

443112 Radio, television, and other electronics stores 1,645 821 2,466 14,679 16.8%

443120 Computer and software stores 675 162 837 5,550 15.1%

443130 Camera and photographic supplies stores 71 70 141 788 17.8%

444110 Home centers 196 235 431 2,664 16.2%

444120 Paint and wallpaper stores 195 262 457 2,399 19.0%

444130 Hardware stores 851 323 1,175 12,152 9.7%

444190 Other building material dealers 2,691 1,059 3,750 30,467 12.3%

444210 Outdoor power equipment stores 212 23 235 4,146 5.7%

444220 Nursery, garden center, and farm supply stores 833 277 1,110 12,804 8.7%

445110 Supermarkets and other grocery (except convenience) stores 4,809 1,602 6,411 41,885 15.3%

445120 Convenience stores 2,176 310 2,486 22,168 11.2%

445210 Meat markets 540 58 597 5,502 10.9%

445220 Fish and seafood markets 198 11 208 2,022 10.3%

445230 Fruit and vegetable markets 281 15 296 2,851 10.4%

445291 Baked goods stores 303 83 387 3,126 12.4%

445292 Confectionery and nut stores 201 97 299 2,149 13.9%

445299 All other specialty food stores 410 108 518 4,258 12.2%

445310 Beer, wine, and liquor stores 2,657 437 3,095 27,421 11.3%

446110 Pharmacies and drug stores 1,790 1,156 2,946 19,067 15.5%

446120 Cosmetics, beauty supplies, and perfume stores 675 179 854 6,861 12.4%

446130 Optical goods stores 503 368 871 5,398 16.1%

446191 Food (health) supplement stores 498 174 672 5,123 13.1%

446199 All other health and personal care stores 691 318 1,009 7,612 13.3%

447110 Gasoline stations with convenience stores 4,954 3,029 7,983 53,375 15.0%
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-129

Table 2-79: Baseline Compliance of Retailer Firms, by Affected NAICS 

NAICS NAICS Description 

CA 

SingleUnit 

Firms 

CA MultiUnit 

Firms 

All CA 

Firms 

All U.S. 

Firms 

Baseline 

Compliance

447190 Other gasoline stations 1,385 660 2,045 15,666 13.1%

448110 Men's clothing stores 589 300 890 4,952 18.0%

448120 Women's clothing stores 1,566 737 2,303 13,582 17.0%

448130 Children's and infants' clothing stores 314 112 426 2,724 15.6%

448140 Family clothing stores 954 669 1,624 8,299 19.6%

448150 Clothing accessories stores 427 128 554 3,618 15.3%

448190 Other clothing stores 861 346 1,206 7,952 15.2%

448210 Shoe stores 621 692 1,313 6,867 19.1%

448310 Jewelry stores 2,123 565 2,688 18,692 14.4%

448320 Luggage and leather goods stores 57 46 103 637 16.1%

451110 Sporting goods stores 1,859 509 2,368 17,556 13.5%

451120 Hobby, toy, and game stores 603 213 816 5,748 14.2%

451130 Sewing, needlework, and piece goods stores 447 98 545 4,124 13.2%

451140 Musical instrument and supplies stores 334 104 437 3,585 12.2%

451211 Book stores 434 289 722 4,643 15.6%

451212 News dealers and newsstands 125 24 150 1,306 11.5%

451220 Prerecorded tape, compact disc, and record stores 220 120 340 2,343 14.5%

452111 Department stores (except discount department stores) 1 14 15 21 70.8%

452112 Discount department stores 0 10 10 14 74.7%

452910 Warehouse clubs and supercenters 0 11 11 12 92.0%

452990 All other general merchandise stores 486 380 866 8,862 9.8%

453110 Florists 1,634 113 1,747 19,038 9.2%

453210 Office supplies and stationery stores 632 302 934 5,317 17.6%

453220 Gift, novelty, and souvenir stores 2,378 707 3,085 24,106 12.8%

453910 Pet and pet supplies stores 570 192 762 5,914 12.9%

453920 Art dealers 815 60 875 6,403 13.7%

453930 Manufactured (mobile) home dealers 135 68 203 2,774 7.3%

453991 Tobacco stores 456 170 626 4,940 12.7%

453998 

All other miscellaneous store retailers (except tobacco 

stores) 

1,409 287 1,696 14,743 11.5%

454111 Electronic shopping 1,335 96 1,432 13,888 10.3%

454113 Mail-order houses 602 127 729 6,471 11.3%

454210 Vending machine operators 454 60 514 4,651 11.0%

454311 Heating oil dealers 311 91 402 3,442 11.7%

454312 Liquefied petroleum gas (bottled gas) dealers 186 281 468 2,297 20.4%

454390 Other direct selling establishments 2,020 235 2,255 20,370 11.1%

Total Retailers in Affected NAICS 63,985 23,107 87,092 657,847 13.2%

Sources: U.S. Census Bureau 1997, 2010d, g, h 

2631 

2632 

2633 2.5.3.3 Number of Firms Incurring Rule Familiarization, Supplier Notification, Recordkeeping, and 

2634 Labeling Costs 

2635 

2636 All affected entities, regardless of baseline CARB compliance, are expected to incur rule 

2637 familiarization costs and costs associated with supplier notification and response letters. The number of 

2638 firms with incremental costs associated with implementing compliant recordkeeping and labeling systems 

2639 is estimated as the total number of firms in each affected industry in the U.S. that are not already 

2640 compliant with the CARB regulation. Information on the percentages of fabricator and wholesaler firms 

2641 incurring additional costs such as initial recordkeeping costs, recurring recordkeeping costs, or initial 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-130

2642 labeling costs, is taken from summary statistics from the questionnaire results (See Table 2-67 and Table 

2643 2-68). 

2644 

2645 Table 2-80 presents the number of affected manufacturing firms by type. Table 2-81, Table 2-82, 

2646 and Table 2-83 show the estimated levels of baseline compliance with the CARB rule for all fabricator, 

2647 wood veneer laminated product producer, wholesaler, and retailer firms that use or sell composite wood 

2648 products by NAICS code. The estimated numbers of firms that will incur incremental costs, by type of 

2649 cost incurred, are also presented. 

2650 

Table 2-80: Number of Composite Wood Product Producers Incurring Costs 

Sector Number of Affected Firms in 

Industrya

Hardwood Plywood 32 

Medium Density Fiberboard (MDF) 14 

Particleboard 16 

Total 62 a See Table 2-2

Note that because firms producing two different types of composite wood products are expected to incur separate 

costs for each product type, the estimate of 62 firms that is used to estimate costs is derived by counting firms that 

produce two different types of composite wood products twice. There are 54 unique firms that produce composite 

wood panels.

2651 

2652 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-131

Table 2-81: Baseline Compliance and Number of Fabricator and Laminated Product Producer Firms 

Incurring Costs 

NAICS NAICS 

Description 

Number 

of 

Affected 

Firmsa

Baseline 

CARB 

Complianceb

Number of 

Firms 

without 

Baseline 

CARB 

Compliance

Number of Firms 

with Recurring 

Recordkeeping 

Costs 

(the 11% of firms 

without baseline 

compliance)c

Number of 

Firms with 

More 

Substantial 

Initial Labeling 

Costs (the 33% 

of firms without 

baseline 

compliance)c

Number of 

Firms with 

Minor Initial 

Labeling Costs 

(the 67% of 

firms without 

baseline 

compliance and 

all firms with 

baseline 

compliance)c

321211 Decorative Panel 

321219 Manufacturers 71 100% 0 0 0 71 

337110 Cabinet 

Manufacturers 

17,360 50% 8,680 955 2,864 14,496 

337129 476 50% 238 26 79 397 

321911 Window and Door 

Manufacturers 

3,582 100% 0 0 0 3,582 

337121 2,790 100% 0 0 0 2,790 

337122 Household Furniture 

Manufacturers 

6,061 100% 0 0 0 6,061 

337124 579 100% 0 0 0 579 

337127 Institutional and 

Office Furniture 

Manufacturing 

1,367 100% 0 0 0 1,367 

337211 804 100% 0 0 0 804 

337214 486 100% 0 0 0 486 

337215 2,415 100% 0 0 0 2,415 

321918 Custom architectural 

woodwork & 

millwork 

manufacturing and 

other millwork 

manufacturing 

(including flooring) 

5,214 9% 4,745 522 1,566 3,648 

337212 3,991 10% 3,592 395 1,185 2,806 

321999 

4,822 

8%

4,436 488 1,464 3,358 

336213 Motor home, travel 

trailer, and camper 

manufacturing 

112 100% 0 0 0 112 

336214 

1,203 

100%

0 0 0 1,203 

321991 Manufactured Home 

and Prefabricated 

Building 

Manufacturing 

798 11% 710 78 234 564 

321992 

1,930 

6%

1,814 200 599 1,331 

339950 Sign Manufacturing 25,917 10% 23,325 2,566 7,697 18,220 

Total Affected Fabricators 79,978 47,540 5,230 15,688 64,290 a See Table 2-6. 

b See Table 2-73. 

c See Table 2-67. None of the fabricators responding to the questionnaire reported incurring initial recordkeeping costs or 

recurring labeling costs.

2653 

2654 

2655 

2656 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-132

Table 2-82: Baseline Compliance and Number of Wholesaler Firms Incurring Costs 

NAICS NAICS Description 

Number of 

Affected 

Firmsa

Baseline 

CARB 

Complianceb

Number of 

Firms 

without 

Baseline 

CARB 

Compliance

Number of 

Firms with 

Initial 

Labeling 

Costs (1% 

of all firms) 

Number of Firms with 

Recordkeeping Costsc

Initial Costs

(57% of 

firms 

without 

baseline 

compliance)

Recurring 

Costs 

(43% of firms 

without 

baseline 

compliance) 

423210d Furniture merchant wholesalers 12,480 100% 0 125 0 0 

423220d 

Home furnishing merchant 

wholesalers 6,496 100% 0 65 0 0 

423310 Lumber, plywood, millwork, and 

wood panel merchant wholesalers 10,130 12% 8,883 101 5,063 3,820 

423320 Brick, stone, and related 

construction material merchant 

wholesalers 

401 15% 341 

4 

194 147 

423330 Roofing, siding, and insulation 

material merchant wholesalers 1,779 14% 1,536 18 876 660 

423390 Other construction material 

merchant wholesalers 3,300 15% 2,818 33 1,606 1,212 

423410 Photographic equipment and 

supplies merchant wholesalers 46 25% 35 0 20 15 

423420 Office equipment merchant 

wholesalers 101 18% 83 1 47 36 

423430 Computer and software merchant 

wholesalers 200 24% 152 2 87 65 

423440 Other commercial equipment 

merchant wholesalers 1,057 13% 920 11 524 396 

423450 Medical equipment merchant 

wholesalers 78 16% 66 1 38 28 

423490 Other professional equipment and 

supplies merchant wholesalers 99 15% 84 1 48 36 

423510 Metal service centers and other 

metal merchant wholesalers 1,292 15% 1,096 13 625 471 

423610 Elec. equip. and wiring merchant 

wholesalers 101 19% 82 1 47 35 

423620 Electric appliance merchant 

wholesalers 88 25% 66 1 38 28 

423690 Other electronic parts and 

equipment merchant wholesalers 121 26% 89 1 51 38 

423710 Hardware merchant wholesalers 938 19% 756 9 431 325 

423720 Plumbing equip. merchant 

wholesalers 1,392 19% 1,130 14 644 486 

423730 HVAC equip. merchant wholesalers 571 14% 488 6 278 210 

423740 Refrigeration equipment and 

supplies merchant wholesalers 91 22% 71 1 40 31 

423810 Construction equipment merchant 

wholesalers 21 11% 19 0 11 8 

423820 Farm and garden machinery and 

equipment merchant wholesalers 461 10% 417 5 238 179 

423830 Industrial machinery and equipment 

merchant wholesalers 525 12% 460 5 262 198 

423840 Industrial supplies merchant 

wholesalers 293 16% 246 3 140 106 

423850 Service establishment equipment 

and supplies merchant wholesalers 715 10% 644 7 367 277 

423910 Sporting and recreational goods and 

supplies merchant wholesalers 9,739 21% 7,685 97 4,380 3,305 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-133

Table 2-82: Baseline Compliance and Number of Wholesaler Firms Incurring Costs 

NAICS NAICS Description 

Number of 

Affected 

Firmsa

Baseline 

CARB 

Complianceb

Number of 

Firms 

without 

Baseline 

CARB 

Compliance

Number of 

Firms with 

Initial 

Labeling 

Costs (1% 

of all firms) 

Number of Firms with 

Recordkeeping Costsc

Initial Costs

(57% of 

firms 

without 

baseline 

compliance)

Recurring 

Costs 

(43% of firms 

without 

baseline 

compliance) 

423920 Toy and hobby goods and supplies 

merchant wholesalers 9,801 31% 6,807 98 3,880 2,927 

423930 Recyclable material merchant 

wholesalers 12 13% 10 0 6 4 

423940 Jewelry merchant wholesalers 215 20% 173 2 99 74 

423990 Other miscellaneous durable goods 

merchant wholesalers 13,794 18% 11,320 138 6,452 4,868 

424110 Printing and writing paper merchant 

wholesalers 35 18% 29 0 17 12 

424120 Stationery and office supplies 

merchant wholesalers 1,655 15% 1,405 17 801 604 

424130 Industrial and personal service paper 

merchant wholesalers 184 17% 152 2 87 65 

424210 Drugs and druggists' sundries 

merchant wholesalers 136 22% 107 1 61 46 

424310 Piece goods, notions, and other dry 

goods merchant wholesalers 332 30% 234 3 133 101 

424320 Men's and boys' clothing and 

furnishings merchant wholesalers 489 25% 369 5 210 159 

424330 Women's and children's clothing 

merchant wholesalers 261 32% 178 3 101 77 

424340 Footwear merchant wholesalers 119 33% 80 1 46 34 

424410 General line grocery merchant 

wholesalers 580 20% 466 6 266 200 

424420 Packaged frozen food merchant 

wholesalers 78 20% 63 1 36 27 

424450 Confectionery merchant wholesalers 14 15% 12 0 7 5 

424460 Fish and seafood merchant 

wholesalers 13 12% 11 0 6 5 

424480 Fresh fruit and vegetable merchant 

wholesalers 16 23% 12 0 7 5 

424490 Other grocery and related products 

merchant wholesalers 312 19% 253 3 144 109 

424510 Grain and field bean merchant 

wholesalers 23 5% 22 0 13 9 

424610 Plastics materials and basic forms 

and shapes merchant wholesaler 496 18% 406 5 231 175 

424690 Other chemical and allied products 

merchant wholesalers 87 14% 75 1 43 32 

424910 Farm supplies merchant wholesalers 68 13% 59 1 34 25 

424920 Book, periodical, and newspaper 

merchant wholesalers 382 16% 319 4 182 137 

424930 Flower, nursery stock, & florists' 

supplies merchant wholesalers 165 18% 135 2 77 58 

424940 Tobacco and tobacco product 

merchant wholesalers 11 8% 10 0 6 4 

424950 Paint, varnish, and supplies 

merchant wholesalers 128 18% 105 1 60 45 

424990 Other miscellaneous nondurable 

goods merchant wholesalers 3,639 24% 2,752 36 1,569 1,183 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-134

Table 2-82: Baseline Compliance and Number of Wholesaler Firms Incurring Costs 

NAICS NAICS Description 

Number of 

Affected 

Firmsa

Baseline 

CARB 

Complianceb

Number of 

Firms 

without 

Baseline 

CARB 

Compliance

Number of 

Firms with 

Initial 

Labeling 

Costs (1% 

of all firms) 

Number of Firms with 

Recordkeeping Costsc

Initial Costs

(57% of 

firms 

without 

baseline 

compliance)

Recurring 

Costs 

(43% of firms 

without 

baseline 

compliance) 

Total Affected Wholesalers 85,560 53,731 855 30,629 23,102 a See Table 2-14. 

b

 See Table 2-78. 

c

 See Table 2-68. 

d Two wholesale industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers (423220) are 

assumed to be fully compliant with the CARB ATCM chain of custody requirements in the baseline, based on conversation with 

industry (Personal Communication with AHFA 2010, Personal Communication with BIFMA 2010). 

2657 

Table 2-83: Baseline Compliance and Number of Retail Firms Incurring Costs 

NAICS NAICS Description 

Number of 

Affected 

Firmsa

Baseline 

CARB 

Complianceb

Number of 

Firms without 

Baseline CARB 

Compliance 

441110 New car dealers 3,973 11% 3,516 

441210 Used car dealers 7,043 12% 6,223 

441221 Recreational vehicle dealers 1,324 11% 1,183 

441229 Motorcycle, ATV, and personal watercraft dealers 2,715 11% 2,428 

441320 Boat dealers 37 15% 32 

442110 All other motor vehicle dealers 36,113 15% 30,608 

442210 Automotive parts and accessories stores 21,254 11% 18,881 

442291 Tire dealers 978 15% 831 

442299 Furniture stores 26,385 15% 22,319 

443111 Floor covering stores 3,381 11% 3,025 

443112 Window treatment stores 13,501 17% 11,233 

443120 All other home furnishings stores 1,052 15% 893 

443130 Household appliance stores 23 18% 19 

444110 Radio, television, and other electronics stores 5,076 16% 4,255 

444120 Computer and software stores 682 19% 552 

444130 Camera and photographic supplies stores 17,083 10% 15,432 

444190 Home centers 38,160 12% 33,463 

444210 Paint and wallpaper stores 758 6% 715 

444220 Hardware stores 13,426 9% 12,262 

445110 Other building material dealers 21,981 15% 18,617 

445120 Outdoor power equipment stores 10,139 11% 9,002 

445210 Nursery, garden center, and farm supply stores 143 11% 127 

445220 Supermarkets and other grocery (except convenience) 

stores 

152 

10% 

136 

445230 Convenience stores 413 10% 370 

445291 Meat markets 109 12% 96 

445292 Fish and seafood markets 774 14% 666 

445299 Fruit and vegetable markets 1,959 12% 1,721 

445310 Baked goods stores 1,312 11% 1,164 

446110 Confectionery and nut stores 18,543 15% 15,678 

446120 All other specialty food stores 674 12% 590 

446130 Beer, wine, and liquor stores 6 16% 5 

446191 Pharmacies and drug stores 620 13% 539 

446199 Cosmetics, beauty supplies, and perfume stores 54 13% 47 

447110 Optical goods stores 2,935 15% 2,496 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-135

Table 2-83: Baseline Compliance and Number of Retail Firms Incurring Costs 

NAICS NAICS Description 

Number of 

Affected 

Firmsa

Baseline 

CARB 

Complianceb

Number of 

Firms without 

Baseline CARB 

Compliance 

447190 Food (health) supplement stores 205 13% 178 

448110 All other health and personal care stores 598 18% 491 

448120 Gasoline stations with convenience stores 2,890 17% 2,400 

448130 Other gasoline stations 3,922 16% 3,309 

448140 Men's clothing stores 16,346 20% 13,148 

448150 Women's clothing stores 873 15% 739 

448190 Children's and infants' clothing stores 2,794 15% 2,370 

448210 Family clothing stores 1,212 19% 980 

448310 Clothing accessories stores 5,389 14% 4,614 

448320 Other clothing stores 424 16% 356 

451110 Shoe stores 28,113 13% 24,321 

451120 Jewelry stores 20,373 14% 17,479 

451130 Luggage and leather goods stores 18,421 13% 15,988 

451140 Sporting goods stores 30 12% 26 

451211 Hobby, toy, and game stores 5,425 16% 4,581 

451212 Sewing, needlework, and piece goods stores 2,553 11% 2,261 

451220 Musical instrument and supplies stores 3,571 14% 3,053 

452111 Book stores 2,562 71% 748 

452112 News dealers and newsstands 3,611 75% 915 

452910 Prerecorded tape, compact disc, and record stores 3,076 92% 245 

452990 Department stores (except discount department stores) 32,638 10% 29,449 

453110 Discount department stores 33,046 9% 30,014 

453210 Warehouse clubs and supercenters 10,745 18% 8,858 

453220 All other general merchandise stores 53,166 13% 46,362 

453910 Florists 106 13% 92 

453920 Office supplies and stationery stores 3,072 14% 2,652 

453930 Gift, novelty, and souvenir stores 4,985 7% 4,621 

453991 Used merchandise stores 2,373 13% 2,072 

453998 Pet and pet supplies stores 27,491 12% 24,329 

454111 Art dealers 24,102 10% 21,618 

454113 Manufactured (mobile) home dealers 11,548 11% 10,247 

454210 Tobacco stores 255 11% 227 

454311 All other miscellaneous store retailers (except tobacco 

stores) 

1,445 

12% 

1,276 

454312 Electronic shopping 1,039 20% 827 

454390 Mail-order houses 177,871 11% 158,180 

Total Affected Retailers 759,048 658,150 

a See Table 2-15. 

b See Table 2-79. 

2658 

2659 2.5.4 Total Estimated Costs of Rule Familiarization, Notification, and Recordkeeping 

2660 and Labeling Requirements 

2661 

2662 The total costs of the recordkeeping, supplier notification, labeling, and rule familiarization 

2663 requirements are estimated by applying the per-firm costs to the number of affected composite panel 

2664 producer, fabricator, wholesaler, and retailer firms by industry. Table 2-85 summarizes these costs, 

2665 except costs to panel producers, under all the options where these requirements are equivalent to the 

2666 CARB ATCM (all options except for the proposed option, Option SCR). Table 2-86 summarizes these 

2667 costs, except costs to panel producers, under the proposed option (Option SCR). Table 2-87 presents the 

2668 additional recordkeeping costs associated with panel production. These additional costs are incurred by 

2669 stock panel producers and laminated product producers under those analytical options that define these 

2670 producers, or a subset of them, as producing hardwood plywood. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-136

2671 

2672 Under Option SCR, firms that are not manufacturers under TSCA (i.e., wholesalers and retailers 

2673 that do not import composite wood products) are only required to keep bills of lading and invoices. Most 

distributors and retailers are likely to keep these records as part of their customary business practices.36 2674 

2675 Therefore this recordkeeping requirement is not assumed to impose any additional burden on non2676 manufacturers. In addition, Option SCR does not include a requirement for purchasers to send a separate 

2677 letter to their suppliers, whereas all the other options include such a requirement. 

2678 

2679 Under Option SCR, importers are required to keep records identifying the panel producer and the 

2680 date that the composite wood products were manufactured, but their customers do not need to keep these 

2681 records. For example, if an importer sells the goods to a domestic distributor who then sells them to a 

2682 domestic retailer, only the importer would have to keep the additional records. The domestic distributor 

2683 and retailer would only be required to keep invoices and bills of lading. 

2684 

2685 This analysis estimates the number of wholesalers who import composite wood products to be 

2686 proportional to the ratio of the value of imports of composite wood products to the sum of the total import 

2687 and domestic shipment values. As shown in Table 2-84, imports represent 28 percent of the value of 

2688 imports and domestic shipments. Thus, it is estimated that 28 percent of wholesalers are importers of 

2689 composite wood products This results in an estimate that 24,000 of the 86,000 wholesalers import 

2690 composite wood products. The analysis assumes that wholesalers are responsible for all imports and 

2691 retailers do not import products directly without a wholesaler. Since the number of wholesalers that 

2692 import products is estimated using the total customs value of imports (which reflects imports by all 

2693 sectors), to the extent that some products are imported directly by retailers, the number of such retailers 

2694 (and the cost of their recordkeeping) would be reflected in the wholesaler estimate. And to the extent that 

2695 some fabricators import composite wood products directly, the estimated total recordkeeping cost may be 

2696 overstated (since the recordkeeping costs for fabricators are estimated separately). 

2697 

2698 

2699 

 36 For example, the Internal Revenue Service recommends that firms keep invoices in order to document their assets, 

expenses, gross receipts, and purchases (U.S. Internal Revenue Service 2007). 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-137

Table 2-84: Customs Value of Imports and Domestic Value of Shipments, by Affected NAICS 

(millions, 2010$) 

NAICS Description 

Customs 

Value of 

Imports 

Domestic 

Value of 

Shipments 

Sum of 

Imports and 

Domestic 

Shipments 

321211 Hardwood veneer and plywood manufacturing $1,516 $3,327 $4,843 

321219 Reconstituted wood product manufacturing $1,502 $6,721 $8,223 

321911 Wood window and door manufacturing $491 $14,161 $14,653 

321918 Other millwork (including flooring) $770 $7,483 $8,254 

321991 Manufactured home (mobile home) manufacturing $2 $6,086 $6,089 

321992 Prefabricated wood building manufacturing $50 $4,215 $4,265 

321999 All other miscellaneous wood product manufacturing $1,927 $6,058 $7,984 

336213 Motor home manufacturing $117 $5,779 $5,896 

336214 Travel trailer and camper manufacturing $537 $10,641 $11,178 

337110 Wood kitchen cabinet and countertop manufacturing $491 $18,658 $19,149 

337121 Upholstered household furniture manufacturing $2,898 $11,269 $14,166 

337122 Nonupholstered wood household furniture manufacturing - - - 

337124 Metal household furniture manufacturing $2,708 $2,393 $5,101 

337127 Institutional furniture manufacturing $12,133 $5,799 $17,932 

337129 Wood television, radio, and sewing machine cabinet manufacturing $4 $407 $411 

337211 Wood office furniture manufacturing $697 $2,904 $3,601 

337212 Custom architectural woodwork and millwork manufacturing - - - 

337214 Office furniture (except wood) manufacturing $410 $8,978 $9,388 

337215 Showcase, partition, shelving, and locker manufacturing $4,283 $7,873 $12,156 

339920 Sporting and athletic goods manufacturing $6,260 $12,510 $18,770 

339932 Game, toy, and children's vehicle manufacturing $21,428 $2,712 $24,140 

339950 Sign manufacturing $184 $13,003 $13,187 

339992 Musical instrument manufacturing $1,190 $1,796 $2,986 

Total $59,598 $152,772 $212,370 

Ratio of Customs Value of Imports to Sum of Imports and Domestic Shipments 28% 

Sources: U.S. Census Bureau 2010p, U.S. International Trade Commission 2011 

2700 

2701 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-138

Table 2-85: Rule Familiarization, Supplier Notification, Labeling and Recordkeeping Costs 

(excluding panel production recordkeeping costs) for Options SE, SI, SP, SN, SC, CE, CI, 

NE, and NI (2010$) 

Cost Element Number of 

Affected Firmsa

Average Per-Firm Cost 

for Affected Firmsb

Total Costs 

Stock Panel Producers (excludes laminated product producers) 

Rule Familiarization 62 $294.40 $18,253 

Supplier Notification: Materials 62 $165.20 $10,242 

Supplier Notification: Labor 62 $171.40 $10,627 

Labeling System Setup 62 $149.04 $9,240 

Total Initial Costs $48,362 

Total Annualized Cost (3%) $2,348 

Total Annualized Cost (7%) $3,607 

Fabricators and Laminated Product Producers (including wood veneer laminated product producers defined as 

hardwood plywood panel producers) c

Rule Familiarization 79,978 $294.40 $23,545,523 

Supplier Notification: Materials 47,540 $169.12 $8,039,965 

Supplier Notification: Labor 47,540 $173.88 $8,266,255 

Labeling System Setup (low) 64,290 $132.81 $8,538,355 

Labeling System Setup (high) 15,688 $4,552.00 $71,411,776 

Total Initial Costs 15,688 $4,552.00 $119,801,874 

Employer Recurring Recordkeeping 2,176 $12,916.80 $28,106,957 

Nonemployer Recurring Recordkeeping 3,054 $179.19 $547,246 

Total Recurring Recordkeeping $28,106,957 

Total Annualized Cost (3%) $33,078,752 

Total Annualized Cost (7%) $35,451,682 

Wholesalers 

Rule Familiarization 85,560 $373.16 $31,927,570 

Supplier Notification: Materials 53,731 $166.32 $8,936,540 

Supplier Notification: Labor 53,731 $178.78 $9,606,028 

Labeling System Setup 855 $4,552.00 $3,891,960 

Recordkeeping System Setup 30,629 $2,510.80 $76,903,293 

Total Initial Costs $131,265,391 

Employer Recurring Recordkeeping 9,436 4,980.30 $46,994,111 

Nonemployer Recurring Recordkeeping 13,666 100.05 $1,367,283 

Total Recurring Recordkeeping $48,361,394 

Total Annualized Cost (3%) $52,385,774 

Total Annualized Cost (7%) $54,544,088 

Retailers 

Rule Familiarization 759,048 $282.84 $214,689,136 

Supplier Notification: Materials 658,150 $22.40 $14,742,560 

Supplier Notification: Labor 658,150 $52.16 $34,329,104 

Total Initial Costs $263,760,800 

Total Annualized Cost (3%) $12,803,648 

Total Annualized Cost (7%) $19,670,370 

a For estimation of number of affected composite panel producers, fabricators, wholesalers, and retailers incurring each cost type, see 

Table 2-80 through Table 2-83. Note that because firms producing two different types of composite wood products are expected to

incur separate costs for each product type, the estimate of 62 stock panel producer firms that is used to estimate costs is derived by 

counting firms that produce two different types of composite wood products twice. There are 54 unique firms that produce stock

panels. 

b For derivation of rule familiarization and supplier notification per-firm costs, see Table 2-69 and Table 2-70; for derivation of initial 

and recurring per-firm recordkeeping and labeling costs, see Table 2-67 and Table 2-68 c Laminated product producers that are defined as making hardwood plywood may incur additional recordkeeping costs depending on 

the analytical option. These additional costs are presented in Table 2-87. 

2702 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-139

Table 2-86: Rule Familiarization, Supplier Notification, Labeling and Recordkeeping Costs 

(excluding panel production recordkeeping costs) for Option SCR (the proposed option) 

(2010$) 

Cost Element Number of 

Affected Firmsa

Average Per-Firm Cost 

for Affected Firmsb

Total Costs 

Stock Panel Producers (excludes laminated product producers) 

Rule Familiarization 62 $294.40 $18,253 

Supplier Notification: Materialsd - - - 

Supplier Notification: Labord - - - 

Labeling System Setup 62 $149.04 $9,240 

Total Initial Costs $27,493 

Total Annualized Cost (3%) $1,335 

Total Annualized Cost (7%) $2,050 

Fabricators and Laminated Product Producers (including wood veneer laminated product producers defined as 

hardwood plywood panel producers) c

Rule Familiarization 79,978 $294.40 $23,545,523 

Supplier Notification: Materialsd - - - 

Supplier Notification: Labord - - - 

Labeling System Setup (low) 64,290 $132.81 $8,538,355 

Labeling System Setup (high) 15,688 $4,552.00 $71,411,776 

Total Initial Costs 15,688 $4,552.00 $103,495,654 

Employer Recurring Recordkeeping 2,176 $12,916.80 $28,106,957 

Nonemployer Recurring Recordkeeping 3,054 $179.19 $547,246 

Total Recurring Recordkeeping $28,654,203 

Total Annualized Cost (3%) $32,287,205 

Total Annualized Cost (7%) $34,235,620 

Wholesalers 

Rule Familiarization 85,560 $373.16 $31,927,570 

Supplier Notification: Materialsd - - - 

Supplier Notification: Labord - - - 

Labeling System Setup 855 $4,552.00 $3,891,960 

Recordkeeping System Setup 8,576 $2,510.80 $21,532,922 

Total Initial Costs $57,352,452 

Employer Recurring Recordkeeping 9,436 4,980.30 $46,994,111 

Nonemployer Recurring Recordkeeping 13,666 100.05 $1,367,283 

Total Recurring Recordkeeping $13,541,190 

Total Annualized Cost (3%) $15,667,905 

Total Annualized Cost (7%) $16,808,483 

Retailers 

Rule Familiarization 759,048 $282.84 $214,689,136 

Supplier Notification: Materialsd - - - 

Supplier Notification: Labord - - - 

Total Initial Costs $214,689,136 

Total Annualized Cost (3%) $10,421,579 

Total Annualized Cost (7%) $16,010,775 a For estimation of number of affected composite panel producers, fabricators, wholesalers, and retailers incurring each cost type, see 

Table 2-80 through Table 2-83. Note that because firms producing two different types of composite wood products are expected to

incur separate costs for each product type, the estimate of 62 stock panel producer firms that is used to estimate costs is derived by 

counting firms that produce two different types of composite wood products twice. There are 54 unique firms that produce stock

panels. 

b For derivation of rule familiarization and supplier notification per-firm costs, see Table 2-69 and Table 2-70; for derivation of initial 

and recurring per-firm recordkeeping and labeling costs, see Table 2-67 and Table 2-68 c Laminated product producers that are defined as making hardwood plywood may incur additional recordkeeping costs depending on 

the analytical option. These additional costs are presented in Table 2-87. d Supplier notification is not required under the proposed option (Option SCR). 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-140

2703 

2704 

2705 

Table 2-87: Panel Production Recordkeeping Costs (2010$) 

Regulatory Option Number of 

Affected 

Firmsa

Average PerFirm Cost for 

Affected Firmsb

Total Costs Total 

Annualized 

Cost (3%) 

Total 

Annualized 

Cost (7%) 

Stock Panel Producers (excludes laminated product producers) 

All Options 62 $3,711 $230,065 $11,168 $17,157 

Laminated Product Producers (Low Estimate)

Option SE, CE, NE - - - - - 

Option SI, CI, NI 7,486 $3,710.72 $27,778,450 $26,430,010 $25,706,829 

Option SP 50 $3,710.72 $185,536 $176,530 $171,699 

Option SN 7,486 $3,710.72 $27,778,450 $26,430,010 $25,706,829 

Option SC, SCR 150 $3,710.72 $556,608 $529,589 $515,098 

Laminated Product Producers (High Estimate) 

Option SE, CE, NE - - - - - 

Option SI, CI, NI 13,875 $3,710.72 $51,486,240 $48,986,962 $47,646,574 

Option SP 50 $3,710.72 $185,536 $176,530 $171,699 

Option SN 13,875 $3,710.72 $51,486,240 $48,986,962 $47,646,574 

Option SC, SCR 277 $3,710.72 $1,027,869 $977,974 $951,214 

2706 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-141

2707 2.6 Total Costs of the Proposed TSCA Title VI Implementation Rule 

2708 

2709 Table 2-88 presents the total undiscounted first and subsequent year costs and Table 2-89 presents 

2710 the annualized costs of the proposed TSCA Title VI Implementation Rule. The costs are presented by 

2711 analytical option and cost scenario for wood veneer laminated product producers (i.e., a low end estimate 

2712 of 7,486 and a high end estimate of 13,875 for the number of affected wood veneer laminated product 

2713 producers, and assuming 1 or 2 product lines requiring certification for the options where certification is 

2714 applicable). Note that the laminator’s costs presented in Table 2-88 and Table 2-89 include the costs to 

2715 all wood veneer laminated product producers regardless of the requirements under each analytical option 

2716 presented. For example, under Option SE all laminated product producers are defined as fabricators, but 

2717 their costs are still reported separately in the laminator rows of the tables. 

2718 

2719 For the options with emissions requirements that are consistent with TSCA Title VI (Options SE, 

2720 SI, SP, SN, SC, and SCR), the first year costs range from $435 million to $1,254 million and the 

2721 annualized costs range from $72 million to $293 million per year. The proposed option (Option SCR) has 

2722 first year costs of $435 million to $447 million. The annualized costs under Option SCR range from $72 

2723 million to $81 million per year using a 3 percent discount rate, which is $23 to $32 million less than the 

2724 next least expensive option with emissions requirements that are consistent with the statute (Option SE). 

2725 

2726 Options CE and CI, the least stringent options in terms of emissions standards (which are 

2727 presented for information purposes since they are not consistent with the emissions requirements of the 

2728 statute), have estimated annualized costs ranging from $99 to $292 million per year using a 3 percent 

2729 discount rate. The estimated costs under Options CE and CI are similar to the estimated costs under the 

2730 options with emissions requirements consistent with the statute, because recordkeeping, labeling, testing 

2731 and certification are the primary cost drivers and loosening emissions standards does not affect these 

2732 costs. 

2733 

2734 Options NE and NI, the most stringent options in terms of emissions standards (which are also 

2735 presented for information purposes since they are not consistent with the emissions requirements of the 

2736 statute), have estimated annualized costs ranging from $379 to $573 million using a 3 percent discount 

2737 rate. The additional costs associated with changes to raw materials and production processes account for 

2738 the difference between the costs under these options compared to the options with emissions requirements 

2739 that are consistent with the statute (SE, SI, SP, SN, SC, and SCR). 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-142

Table 2-88: Estimated Total First and Subsequent Year Costs (millions, 2010$)1

Analytical Option Entity Type 

First Year Subsequent Years 

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines 

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario 

Low 

End 

Scenario 

High 

End 

Scenario

Option SE: Statutory 

emissions standards where 

all wood veneer laminated 

products are exempt from 

the definition of hardwood 

plywood 

Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $43 $80 $43 $80 $5 $8 $5 $8

Total $595 $595 $595 $595 $79 $79 $79 $79

Option SI: Statutory 

emissions standards where 

all wood veneer laminated 

products are included in the 

definition of hardwood 

plywood 

Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $368 $670 $406 $740 $103 $178 $108 $188

Total $919 $1,184 $957 $1,254 $177 $249 $182 $258

Option SP: Statutory 

emissions standards where 

all laminated products other 

than Custom Plywood and 

Architectural Panels are 

exempt from the definition 

of hardwood plywood 

Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $48 $85 $49 $86 $8 $12 $8 $12

Total $600 $600 $600 $600 $83 $83 $83 $83

Option SN: Statutory 

emissions standards where 

all wood veneer laminated 

products made using NAF 

resins to attach wood 

veneers to NAF platforms 

are exempt from the 

definition of hardwood 

plywood. 

Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $102 $172 $104 $175 $61 $96 $62 $98

Total $654 $687 $655 $689 $136 $167 $137 $168

Option SC: Statutory 

emissions standards where 

laminated products made 

with compliant platforms 

and NAF resins are exempt 

from the definition of 

hardwood plywood.

Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $58 $105 $59 $107 $17 $28 $18 $30

Total $609 $619 $611 $621 $91 $99 $92 $101

Option SCR: Proposed 

Option. Statutory emissions 

standards where laminated 

products made with 

compliant platforms and 

NAF resins are exempt from 

the definition of hardwood 

plywood. 

Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators2 $91 $57 $91 $57 $24 $20 $24 $20

Retailers $215 $215 $215 $215 $0 $0 $0 $0

Wholesalers $71 $71 $71 $71 $14 $14 $14 $14

Laminators3 $55 $100 $57 $102 $17 $28 $18 $30

Total $435 $445 $436 $447 $57 $64 $57 $66

Option CE: CARB 1 

emissions standards where 

all wood veneer laminated 

products are exempt from 

the definition of hardwood 

plywood 

Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $43 $80 $43 $80 $5 $8 $5 $8

Total $593 $593 $593 $593 $78 $78 $78 $78
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-143

Table 2-88: Estimated Total First and Subsequent Year Costs (millions, 2010$)1

Analytical Option Entity Type 

First Year Subsequent Years 

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines 

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario 

Low 

End 

Scenario 

High 

End 

Scenario

Option CI: CARB 1 

emissions standards where 

all wood veneer laminated 

products are included in the 

definition of hardwood 

plywood 

Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $368 $670 $406 $740 $103 $178 $108 $188

Total $918 $1,183 $956 $1,253 $176 $248 $181 $257

Option NE: NAF emissions 

standards where all wood 

veneer laminated products 

are exempt from the 

definition of hardwood 

plywood 

Producers $297 $297 $297 $297 $295 $295 $295 $295

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $43 $80 $43 $80 $5 $8 $5 $8

Total $889 $889 $889 $889 $372 $372 $372 $372

Option NI: NAF emissions 

standards where all wood 

veneer laminated products 

are included in the 

definition of hardwood 

plywood 

Producers $297 $297 $297 $297 $295 $295 $295 $295

Fabricators2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators3 $368 $670 $406 $740 $103 $178 $108 $188

Total $1,214 $1,479 $1,252 $1,549 $471 $542 $476 $552

Option SCR is the proposed option. 

1

 Low and high end scenarios reflect the estimated number of laminators and the number of product lines certified per firm, 

not the low and high costs for each category of entities. 

2 To avoid double-counting, this row represents costs to fabricators that are not laminators. Costs under the “Low End 

Scenario” reflect the low end of the estimated number of laminators (approximately 7,000 firms), and costs under the 

“High End Scenario” reflect the high end estimate of the number of laminators (approximately 14,000 firms). The 

estimated number of fabricators that are not laminators is inversely proportional to the estimated number of laminators. So 

in the Low End Scenario there are 73,000 fabricators that are not laminators, and in the High End Scenario there are 66,000 

firms that are not laminators. As a result, the costs to fabricators that are not laminators are higher under the “Low End 

Scenario” then under the “High End Scenario”. 

3 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, 

MDF or veneer core platform. This includes both laminators that are considered panel producers under the proposed rule 

and laminators that are considered fabricators under the proposed rule. 

2740 

2741 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-144

Table 2-89: Estimated Total Annualized Costs (millions, 2010$)1

Analytical Option Entity Type 

Total Annualized Costs 

(3 Percent) 

Total Annualized Costs 

(7 Percent) 

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines 

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario 

Low 

End 

Scenario 

High 

End 

Scenario

Option SE: Statutory 

emissions standards where 

all wood veneer laminated 

products are exempt from 

the definition of hardwood 

plywood 

Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $6 $11 $6 $11 $7 $13 $7 $13

Total $100 $100 $100 $100 $112 $112 $112 $112

Option SI: Statutory 

emissions standards where 

all wood veneer laminated 

products are included in the 

definition of hardwood 

plywood 

Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $99 $193 $106 $205 $103 $200 $110 $212

Total $194 $282 $200 $293 $208 $298 $215 $311

Option SP: Statutory 

emissions standards where 

all laminated products other 

than Custom Plywood and 

Architectural Panels are 

exempt from the definition 

of hardwood plywood 

Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $10 $15 $10 $15 $10 $16 $10 $16

Total $104 $104 $104 $104 $115 $115 $115 $115

Option SN: Statutory 

emissions standards where 

all wood veneer laminated 

products made using NAF 

resins to attach wood 

veneers to NAF platforms 

are exempt from the 

definition of hardwood 

plywood. 

Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $49 $95 $50 $97 $49 $94 $50 $96

Total $143 $184 $144 $185 $154 $193 $155 $195

Option SC: Statutory 

emissions standards where 

laminated products made 

with compliant platforms 

and NAF resins are exempt 

from the definition of 

hardwood plywood.

Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $18 $31 $19 $32 $19 $32 $19 $33

Total $112 $119 $113 $121 $123 $130 $124 $132

Option SCR: Proposed 

Option. Statutory emissions 

standards where laminated 

products made with 

compliant platforms and 

NAF resins are exempt from 

the definition of hardwood 

plywood. Reduced 

paperwork requirements for 

Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators2 $26 $21 $26 $21 $27 $21 $27 $21

Retailers $10 $10 $10 $10 $16 $16 $16 $16

Wholesalers $16 $16 $16 $16 $17 $17 $17 $17

Laminators3 $18 $30 $19 $32 $18 $31 $19 $33

Total $72 $80 $73 $81 $81 $88 $81 $89

Option CE: CARB 1 

emissions standards where 

all wood veneer laminated 

products are exempt from 

Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 2-145

Table 2-89: Estimated Total Annualized Costs (millions, 2010$)1

Analytical Option Entity Type 

Total Annualized Costs 

(3 Percent) 

Total Annualized Costs 

(7 Percent) 

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines 

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario

Low 

End 

Scenario

High 

End 

Scenario 

Low 

End 

Scenario 

High 

End 

Scenario

the definition of hardwood 

plywood 

Laminators3 $6 $11 $6 $11 $7 $13 $7 $13

Total $99 $99 $99 $99 $111 $111 $111 $111

Option CI: CARB 1 

emissions standards where 

all wood veneer laminated 

products are included in the 

definition of hardwood 

plywood 

Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $99 $193 $106 $205 $103 $200 $110 $212

Total $192 $281 $199 $292 $207 $297 $214 $310

Option NE: NAF emissions 

standards where all wood 

veneer laminated products 

are exempt from the 

definition of hardwood 

plywood 

Producers $281 $281 $281 $281 $274 $274 $274 $274

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $6 $11 $6 $11 $7 $13 $7 $13

Total $379 $379 $379 $379 $383 $383 $383 $383

Option NI: NAF emissions 

standards where all wood 

veneer laminated products 

are included in the 

definition of hardwood 

plywood 

Producers $281 $281 $281 $281 $274 $274 $274 $274

Fabricators2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators3 $99 $193 $106 $205 $103 $200 $110 $212

Total $473 $561 $479 $573 $480 $570 $486 $582

Option SCR is the proposed option. 

1

 Low and high end scenarios reflect the estimated number of laminators and the number of product lines certified per firm, 

not the low and high costs for each category of entities. 

2 To avoid double-counting, this row represents costs to fabricators that are not laminators. Costs under the “Low End 

Scenario” reflect the low end of the estimated number of laminators (approximately 7,000 firms), and costs under the 

“High End Scenario” reflect the high end estimate of the number of laminators (approximately 14,000 firms). The 

estimated number of fabricators that are not laminators is inversely proportional to the estimated number of laminators. So 

in the Low End Scenario there are 73,000 fabricators that are not laminators, and in the High End Scenario there are 66,000 

firms that are not laminators. As a result, the costs to fabricators that are not laminators are higher under the “Low End 

Scenario” then under the “High End Scenario”. 

3 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, 

MDF or veneer core platform. This includes both laminators that are considered panel producers under the proposed rule 

and laminators that are considered fabricators under the proposed rule. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-1 

2742 3 Benefits 

2743 

2744 Evidence for health effects associated with formaldehyde exposure is provided by a wide variety 

2745 of human clinical, epidemiology, and animal studies (U.S. EPA 2010b). As is typical for health effects 

2746 associated with a reactive gas, some of these health effects are commonly found at the portal of entry 

2747 (e.g., sensory irritation). Other reported health effects include effects on the nervous and reproductive 

2748 systems, developmental effects, and immunomodulation. 

2749 

2750 The health effects for which benefits are monetized in this economic analysis include: (1) 

2751 nasopharyngeal cancer for individuals of all ages, (2) eye irritation for individuals of all ages, (3) asthma 

2752 in children ages 6 to 17, and (4) reduced fertility in women ages 20 to 40. 

2753 

2754 The potential benefits of the proposed TSCA Title VI Implementation Rule are estimated for 

2755 several analytical options which are presented in Table 3-1. 

2756 

2757 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-2 

Table 3-1: Analytical Options Considered in the Benefits Analysis 

Analytical Option Emissions Standards Notes 

Analytical options with emissions standards at the levels required by TSCA Title VI 

Option SE: Statutory emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.05 ppm 

0.11 ppm 

0.13 ppm 

0.09 ppm 

Same emissions standards as Phase 2 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SI: Statutory emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SP: Statutory emissions 

standards where wood veneer 

laminated products other than 

Custom and Architectural Panel 

products are exempt from the 

definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SN: Statutory emissions 

standards where wood veneer 

laminated products made using NAF 

resins to attach wood veneers to NAF 

platforms are exempt from the 

definition of hardwood plywood

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SC: Statutory emissions 

standards where wood veneer 

laminated products made with wood 

veneers attached to compliant 

platforms using no-added 

formaldehyde (NAF) resins are 

exempt from the definition of 

hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SCR: Proposed Option. 

Statutory emissions standards where 

wood veneer laminated products 

made with wood veneers attached to 

compliant platforms using NAF 

resins are exempt from the definition 

of hardwood plywood. Reduced 

recordkeeping requirements for nonmfgrs. compared to other options. 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood 

Distributors and retailers that are not 

manufacturers under TSCA would only be 

required to keep invoices and bills of lading. 

Other recordkeeping equivalent to CARB 

ATCM. No supplier notification. 

Analytical options with emissions standards 

other than the levels required by TSCA Title 

VI CARB Phase 1 

levels 

Option CE: CARB 1 emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.08 ppm 

0.21 ppm 

0.21 ppm 

0.18 ppm 

Same emissions standards as Phase 1 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option CI: CARB 1 emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood

Same as above 

Same emissions standards as Phase 1 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

NAF emission levels 

Option NE: NAF emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood: 

90% of samples < 0.04 ppm. 

All samples < 0.05 ppm. 

MDF and particleboard: 

90% of samples < 0.04 ppm. 

All samples < 0.06 ppm 

Requires all composite wood product 

manufacturers to meet NAF emission standards. 

Recordkeeping and supplier notification 

equivalent to CARB ATCM. 

Option NI: NAF emissions 

standards where all wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Requires all composite wood product 

manufacturers to meet NAF emission standards, 

with a different definition of hardwood plywood. 

CARB recordkeeping and supplier notification. 

Note: This document discusses various options with respect to formaldehyde and composite wood products, including emissions standards 

that are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informational 

purposes. The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-3 

2758 Figure 3-1 presents an overview of the benefits assessment approach used in this economic 

2759 analysis. The estimated changes in formaldehyde exposure under each analytical option vary by type of 

2760 housing (structure type, amount of composite wood products, and elapsed time since composite wood 

2761 products were installed), climate zone, and the ages and occupations of the exposed individuals (see 

2762 section 3.1). Changes in risks of the adverse health outcomes associated with these changes in exposure 

2763 are estimated for nasopharyngeal cancer (section 3.3) and non-cancer health effects (section 3.5), 

2764 including sensory irritation, asthma incidence, and reduced fertility. The corresponding estimated values 

2765 of these risk reductions are presented in sections 3.4 and 3.5 for cancer and non-cancer risk reductions, 

2766 respectively. The estimated numbers of individuals experiencing these exposure reductions are presented 

2767 in section 3.6. Finally, section 3.7 presents the results of the benefits assessment. 

2768 

Figure 3-1: Overview of Benefits Assessment Approach 

2769 

CHANGE IN EXPOSURE:

Estimate the changes in 

formaldehyde exposure 

attributable to the regulatory 

options 

VALUE OF RISK 

REDUCTION:

Estimate the value of reductions 

in adverse health risks

INDIVIDUALS AFFECTED:

Estimate number of individuals 

experiencing reductions in 

formaldehyde exposure 

attributable to the regulation

CHANGE IN RISK:

Use concentration-response 

functions to estimate the 

resulting reductions in adverse 

health risks

BENEFITS:

Combine: (1) adverse health risk 

reductions, (2) value of 

reductions in adverse health 

risks, and (3) number of 

individuals experiencing 

reduction in risk to estimate total 

benefits by regulatory option

Note: varies by type of 

housing, climate zone, 

age and occupation of 

individual, policy 

scenario

Note: includes 

nasopharyngeal 

cancer, eye irritation, 

asthma, and reduced 

fertility

Note: total net present 

value and annualized 

value for 30 years 

under the policy 

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

January 27, 2012 3-4 

2770 3.1 Estimating the Changes in Exposure by Analytical Option 

2771 

2772 The potential for benefit from the reduction of formaldehyde emissions from composite wood 

2773 products potentially exists anywhere where individuals reside, work, or otherwise spend a substantial 

2774 amount of time where new composite wood products will be introduced to an indoor space. The exposure 

2775 scenarios included in this benefits analysis include two broad categories where a substantial amount of 

2776 new composite wood products might be introduced to residences: (1) new home construction and (2) 

2777 major renovations that include kitchen remodeling. Table 3-2 includes a brief description of the factors 

2778 that were used in this analysis to define the various exposure scenarios. For each analytical option, there 

2779 are 3,300 different exposure scenarios derived from 22 different composite wood product age/source 

2780 combinations, 5 structure types, 5 climate zones, and 6 individual age/employment status combinations. 

2781 

Table 3-2: Exposure Factor Categories Used to Define Population Groups 

Exposure 

Factor 

Exposure Factor Categories Discussion 

Composite wood 

product source 

and age 

(n = 22) 

1. New housing construction for 11 ages of the housing 

2. Renovated housing for 11 ages of the installed 

composite wood products 

Note: EPA calculated exposures using a 1.5 year 

emissions half life of formaldehyde from composite 

wood products. With this half life, the emission rate 10 

years after new construction would be about 1 % of the 

initial value, and after 11 years the emissions would be 

near zero. 

New housing has a larger volume of newly 

installed composite wood products (and 

therefore a higher formaldehyde loading rate) 

relative to newly renovated housing, so the 

two sources are analyzed separately. The 

analysis considers composite wood products 

that are up to 11 years old. Thus, the analysis 

considers 11 different ages of new homes and 

11 different ages of renovated housing. 

Structure type 

(n = 5) 

1. Single family attached housing 

2. Single family detached housing 

3. Apartment 

4. Manufactured Housing (e.g., mobile homes) 

5. Recreational Vehicles and Camper/Trailers 

The type of structure affects the volume of 

composite wood products in each structure, air 

exchange rates, and interactions with indoor 

sinks. 

Climate zone 

(n = 5) 

1. Zone 1: <2,000 cooling degree days (CDD) and more 

than 7,000 heating degree days (HDD) 

2. Zone 2: <2,000 CDD and 5,500 to 7,000 HDD 

3. Zone 3: <2,000 CDD and 4,000 to 5,499 HDD 

4. Zone 4: <2,000 CDD and <4,000 HDD. 

5. Zone 5: >2,000 CDD and <4,000 HDD 

Note: Number of degree days is over a 30-year period. 

Because exposure modeling results are 

sensitive to indoor temperature and relative 

humidity, variation in these two factors are 

captured in the analysis by considering five 

climate zones separately. 

Age and 

employment 

status 

(n = 6) 

1. Infants: less than age 2 

2. Children: aged 2 through 15 

3. Ages 16+; work full-time outside the composite wood 

products industry 

4. Ages 16+; work in composite wood products 

fabrication 

5. Ages 16+; work part-time outside the composite 

wood products industry 

6. Ages 16+; unemployed or not in the labor force 

Average daily concentrations of formaldehyde 

exposure were estimated to vary according to 

age and employment status because these 

factors affect the formaldehyde exposures 

outside the housing unit and the amount of 

time spent inside and outside the housing unit. 

2782 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-5 

2783 3.2 Time Frame for the Analysis 

2784 

2785 This analysis estimates the benefits of each analytical option for lowering formaldehyde 

2786 emissions from composite wood products over a 30-year period. This time frame was selected to be as 

2787 short as possible while being long enough to capture the important effects of the policy. In general, the 

2788 downside of choosing a longer analysis time frame is that uncertainties about both the baseline and policy 

2789 scenarios increase with time. For example, the likelihood that alternative technologies for manufacturing 

2790 composite wood products might be developed increases over time (which could result in different 

2791 formaldehyde emission rates for products and/or different costs for reducing formaldehyde emissions). 

2792 Similarly, uncertainties about changing demographics, medical treatments for adverse health effects, and 

2793 consumer preferences with respect to composite wood products all increase with time. However, 

2794 selecting a time frame that is too short would not capture all of the important effects of the policy 

2795 scenarios under consideration. 

2796 

2797 The benefits analysis assumes that after eleven years any continuing (and declining) emissions 

2798 from a given composite wood product would contribute negligibly to that product's effect on 

2799 formaldehyde exposure. Thus, composite wood products are assumed to contribute to formaldehyde 

exposure for 11 years.37 2800 Specifically: 

2801 

2802  in the first year only new composite wood products are affected by the policy; 

2803  in the second year new and one-year-old composite wood products are affected by the 

2804 policy; 

2805  in the third year new, one- and two-year-old composite wood products are affected by the 

2806 policy; 

2807  in general, in the nth year, new, one-, two-, three-,..., and (n-1)-year-old composite wood 

2808 products are affected by the policy, for n = 1, 2, ..., 10; and 

2809  in the eleventh and all subsequent years new, one-, two-, three-, four-, five-, six-, seven-, 

2810 eight-, nine-, and ten-year-old composite wood products are affected by the policy. 

2811 

2812 Since the exposure scenarios are defined in part according to the 11 different ages for composite 

wood products, it is not until the 11th 2813 year after the implementation of the rule that benefits are realized 

under every exposure scenario. That is, it is not until the 11th 2814 year after rule implementation that ten-year 

2815 old composite wood products would have been required to be produced in compliance with the emissions 

2816 standards. Thus, the benefits are phased in over a period of eleven years. 

2817 

2818 Similarly, the benefits from a given year of composite wood production will phase-out over time. 

2819 Since the analysis considers the benefits and costs from 30 years of composite wood production, the 

estimated exposures have the following time profile after the 30th 2820 and last year of composite wood 

2821 production considered in the analysis: 

2822 

 in the 31st 2823 year, only one-, two-, three-, four-, five-, six-, seven-, eight-, nine-, and tenyear-old composite wood products are produced before the 31st 2824 year (benefits from new 

2825 composite wood products are produced after year 30 and therefore are not considered in 

2826 the analysis); 

 in the 32nd 2827 year, only two-, three-, four-, five-, six-, seven-, eight-, nine-, and ten-year-old 

composite wood products are produced before the 31st 2828 year (benefits from new and one-

 37 EPA calculated exposures using a 1.5 year emissions half life of formaldehyde from composite wood products With. 

this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11 

years the emissions would be near zero. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-6 

2829 year old composite wood products are produced after year 30 and therefore are not 

2830 considered in the analysis); 

2831  in general, in the nth year after year 30, only n year-old and older composite wood 

2832 products are produced before year 31, for n = 1, 2, ..., 10; and 

 in the 41st 2833 and all subsequent years, all 11 ages of composite wood products that 

potentially contribute to formaldehyde exposure are produced after the 30th 2834 year and 

2835 therefore are not considered in the analysis. 

2836 

2837 Given this phase-in and phase-out, a time period of thirty years of composite wood production 

2838 was selected so that the first ten years of the policy (when the benefits of the policy are being phased in) 

2839 and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of 

2840 the policy are being phased out) do not obscure the steady state benefits that would be experienced from 

2841 the policy. It is necessary to include the phase-in and phase-out of the benefits in order to be consistent 

2842 with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions 

2843 standards. Given that this analysis assumes that after eleven years any continuing (and declining) 

2844 emissions from a given composite wood product would contribute negligibly to that product's effect on 

2845 formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to 

2846 40 years of exposure reductions. The first 10 years are a phase-in period for exposure reductions, the next 

2847 20 years are a steady-state, and the next 10 years are a phase-out period. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-7 

2848 3.3 Assessing the Change in Cancer Risk 

2849 

2850 In 1991, EPA classified formaldehyde as a probable human carcinogen, “based on limited 

2851 evidence in humans, and sufficient evidence in animals,” and derived an inhalation unit risk for assessing 

2852 formaldehyde cancer risk. The inhalation unit risk and supporting documentation is included in EPA’s 

2853 Integrated Risk Information System (IRIS) assessment of formaldehyde (Ref. 5). Formaldehyde is also 

2854 listed under section 112(b)(1) of the Clean Air Act (CAA) as a hazardous air pollutant (HAP). The CAA 

2855 requires EPA to regulate emissions of HAPs from a published list of industrial source categories. The 

2856 EPA has developed lists of major and area source categories that must meet emission standards for HAPs 

2857 and has developed (or is developing) standards for these source categories. The plywood and composite 

2858 wood products (PCWP) National Emission Standards for Hazardous Air Pollutants (NESHAP), codified 

2859 at 40 CFR part 63, subpart DDDD, first issued in 2004, is one of these standards. The PCWP NESHAP 

2860 controls emissions of formaldehyde and other HAPs (primarily acetaldehyde, acrolein, methanol, phenol, 

2861 and proprionaldehyde) from various process units (e.g., blenders, dryers, formers, board coolers, and 

2862 presses) at PCWP facilities. 

2863 

2864 In 2004, the EPA determined that unit risk derived from the Chemical Industry Institute of 

2865 Toxicology (CIIT; CIIT 1999) biologically-based cancer dose-response modeling of formaldehyde2866 induced respiratory cancer (5.5 x 10-9 per micrograms per cubic meter (μg/m3)) better reflected the 

2867 current state of the science than the 1991 IRIS cancer unit risk. In 2004, EPA determined that the CIIT2868 derived inhalation unit risk better reflected the current state of the science than the 1991 IRIS cancer 

2869 inhalation unit risk. The authors of the CIIT modeling (Conolly et al. 2004) presented their risk estimates 

2870 as values more conservative than their maximum likelihood estimates, and as “conservative in the face of 

2871 modeling uncertainties.” Consequently, EPA used the CIIT value in risk assessments supporting 

2872 regulatory actions developed under the authority of the Clean Air Act. For example, in the 2006 

2873 rulemaking that reconsidered the PCWP NESHAP, OAR stated “[i]n the case of formaldehyde, we have 

2874 determined that the cancer potency derived using the approach developed by CIIT, which has been peer 

2875 reviewed by an external review panel sponsored by EPA and the Canadian government, represents an 

2876 appropriate alternative to EPA’s current IRIS URE [unit risk estimate] for formaldehyde. Therefore, this 

2877 potency represents the best available peer-reviewed science at this time.” (Ref. 6, p. 8348). However, 

2878 subsequent research published by the EPA suggests that the CIIT model was not appropriate and was very 

2879 sensitive to unmeasured parameters such that very different estimates, including the 1991 IRIS 

2880 assessment values, were consistent with the available scientific data. Because the CIIT values do not 

2881 reflect the uncertainty in estimates using the data that are available, EPA has decided that those estimates 

2882 do not reflect the broad range of possible risk and that the data are not supportive of interpreting 5.5 X 10-

9 per μg/m3 2883 as providing a health-protective estimate of human risk. Furthermore, the 1991 IRIS 

2884 assessment values are consistent with unit risks estimated by Schlosser et al. (2003) based on Benchmark 

2885 Dose modeling of the best available data at the time. In addition, the CIIT values do not address the 

2886 potential risk of increased leukemias or lymphomas. Thus, in 2010, EPA returned to using the Agency’s 

current value on IRIS, 1.3 X 10-5 per μg/m3 2887 , which was last revised in 1991 as better reflecting the 

2888 current state of the science as to the potential human cancer risk of exposure to formaldehyde (Ref. 7). 

2889 

2890 The inhalation unit risk is defined as the upper-bound excess lifetime cancer risk estimated to 

2891 result from continuous exposure to an agent at a concentration of 1 μg/m3 in air (see 

2892 http://www.epa.gov/iris/help_gloss.htm#i). The change in excess cancer risk can be estimated by 

multiplying the lifetime average daily concentration (LADC) of formaldehyde exposure, in mg/m3 2893 , by the 

inhalation unit risk of 0.013 per mg/m3 2894 and the age-dependent adjustment factor (ADAF) of 10, 3, or 1 for 

2895 individuals aged less than 2, 2-15, or 16 and older, respectively. Note that EPA policy is to apply ADAFs 

2896 when there is a mutagenic mode of action. The 1991 IRIS assessment did not make a formal finding of a 

2897 mutagenic mode of action. However, there is scientific support for a mutagenic mode of action. 

2898 Therefore, EPA believes that application of ADAFs is the preferred approach in this case but is also 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-8 

2899 presenting the calculations without applying ADAFs. The lower estimate of benefits excludes the 

2900 ADAFs and the higher estimate of benefits includes the ADAFs. 

2901 

2902 Since the inhalation unit risk was estimated to be applied to the LADC, the most straightforward 

2903 approach to calculate excess lifetime risk associated with exposure to formaldehyde would be to take the 

2904 average daily concentration (ADC) for various life segments of an individual and construct the overall 

2905 LADC, then multiply the ADCs by the unit risk and ADAF. For example, assume that an individual has 

2906 the following life profile: 

2907 

Age 0 (infant): Lives in a new house 

Age 2 (child): Lives in the same house (now with 2 years of off-gassing) 

Age 16: Moves to a new house 

Age 32: Moves to a new house 

Age 48: Moves to a new house 

Age 64: Moves to a new house 

Age 70: Death 

2908 

2909 The excess lifetime risk could be calculated as: 

2910 

Excess lifetime risk ൌ

1

ܧܮ

ە

ۖ

۔

ۖ

ۓቀܥܦܣ଴ିଵ ൈ ሺ2 ݕ݁ܽݏݎሻ ൈ ൫ܨܣܦܣ௡௔௙௡௜௧൯ቁ

൅൫ܥܦܣଶିଵହ ൈ ሺ14 ݕ݁ܽݏݎሻ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ൯ 

൅൫ܥܦܣଵ଺ିଷଵ ൈ ሺ16 ݕ݁ܽݏݎሻ൯ ൅ ൫ܥܦܣଷଶିସ଻ ൈ ሺ16 ݕ݁ܽݏݎሻ൯

൅൫ܥܦܣସ଼ି଺ଷ ൈ ሺ16 ݕ݁ܽݏݎሻ൯൅൫ܥܦܣ଺ସି଺ଽ ൈ ሺ6 ݕ݁ܽݏݎሻ൯ ۙ

ۖ

ۘ

ۖ

ۗ

ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻ (3) 

2911 

2912 where: 

2913 

ADC0-1 = the ADC from exposure to formaldehyde in a new house for two years. 

ADC2-15 = the ADC from exposures over 14 years from a house that is 2 years old in the first year. 

ADC a-a+16 = the ADC from exposures over 16 years from a house that is new in the first year (for the 16-

31, 32-47, and 48-63 age intervals) 

ADC64-69 = the ADC from exposures over 6 years from a house that is new in the first year (for the 64-69 

age interval) 

ADAFinfant the infant age-dependent adjustment factor of 10 

ADAFchild the child age-dependent adjustment factor of 3 

Unit Risk the inhalation unit risk for cancer of 0.013 per mg/m3

LE= the life expectancy of the individual 

2914 

2915 Note that the unit risk is an estimate of excess lifetime cancer risk associated with an average 

2916 lifetime exposure to one unit of the carcinogen; it gives no information about how this lifetime excess risk 

2917 is distributed across the ages within a lifetime. It also gives no information about whether the distribution 

2918 of annual exposures that result in a given average lifetime exposure matters. Equation (3) implicitly 

2919 assumes that the distribution of exposures throughout a lifetime doesn’t matter – i.e., that all that matters 

2920 is the lifetime average exposure. 

2921 

2922 To calculate the expected number of excess cancer cases resulting from a given excess 

2923 lifetime risk, this excess risk must be multiplied by the relevant population. If pop denotes the size of the 

2924 population that incurs the excess lifetime risk, then the expected number of cancer cases associated with 

2925 exposure to formaldehyde given the scenario described above is: 

2926 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-9 

Number of cancer cases = excess lifetime risk * pop. (4) 

2927 

2928 This calculation could then be done for both the baseline scenario and the policy scenario (in 

2929 which exposures would be lower) to estimate the number of cancer cases avoided as a result of the policy: 

2930 

Number of cancer casesbaseline = excess lifetime riskbaseline * pop 

Number of cancer casespolicy scenario = excess lifetime riskpolicy scenario * pop 

Number of cases avoided due to policy scenario 

= Number of cancer casesbaseline - Number of cancer casespolicy scenario. 

(5) 

2931 

2932 If V denotes the value of an avoided case, then the value of the avoided cases is: 

2933 

Value of avoided cases = V* Number of cases avoided. (6) 

2934 

2935 If the lifetime costs of this action were also added up, the overall net gain or loss that this 

2936 individual would receive from this action could be estimated. If this could be done for all individuals in 

2937 society, the overall net benefits of the policy could be estimated. To do this, it would be necessary to 

2938 assume a life profile for every individual (i.e., how often each individual moves, and the structure type 

2939 and age of housing they live in at each stage of their life, and how recently it has been renovated). 

2940 

2941 Instead, this analysis utilizes an annual approach, which evaluates the expected change in the 

2942 lifetime cancer risk for an individual arising from a single year of reduced formaldehyde exposure. In 

2943 contrast, a lifetime approach would require assuming a lifetime formaldehyde exposure profile for each 

2944 individual and evaluating the expected change in the lifetime cancer risk for an individual arising from a 

2945 lifetime of reduced formaldehyde exposure. The exposure model was designed to produce a LADC 

2946 associated with the same scenario used to calculate the ADC. Thus, it can produce a LADC for any life 

2947 segment for which an ADC can be calculated (e.g., exposure over the course of 11 years to an individual 

2948 who moves into a 2 year old house). Conceptually, this would be equivalent to the lifetime average daily 

2949 concentration if one were exposed to the pollutant for only this life segment and no other time. Another 

2950 interpretation is that it is the contribution to the overall LADC from this life segment. In other words: 

2951 

ሻ൯ݐ ݀݋݅ݎ݁݌ ݅݊ ݁ݎݑݏ݋݌ݔ݁ ݂݋ ݏݎܻ݁ܽሺ ൈ ௧ܥܦܣ൫ ൌ ௧ܥܦܣܮ

 ݕ݈ܽ݅ܦ ܽ݃݁ݎ݁ݒܣ ݅݉݁ݐ݂݅݁ܮ൭ ൌ ሻ݅݉݁ݐ݈݂݅݁ ܽ ݅݊ ݏݎܻ݁ܽሺ

 ݈݂݅݁ ݎ݋݂ ݊݋݅ݐܽݎݐ݊ܿ݁݊݋ܥ

 (7) ൱ ݐ ݐ݁݃݉݁݊ݏ

2952 

2953 Where: 

2954 

௧ܥܦܣܮ ෍ ൌ ܥܦܣܮ

௧ୀ௧௜௠௘ ௣௘௥௜௢ௗ௦

(8) 

 

2955 

2956 Equation (3) combined with equation (7) can be used to calculate the excess cancer risk 

2957 associated with any given life segment. For example, the excess cancer risk associated with the 2-15 year 

2958 old life segment for a child starting in a 2-year old house could be calculated as: 

2959 

ሺݔܧܿ݁ݏݏ ܿܽ݊ܿ݁ݎ ݎ݅ݏ݇ሻ஺௚௘ ଶିଵହ ൌ ܥܦܣܮଶିଵହ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻ (9) 

2960 

2961 Excess cancer risk for segment t consisting of a single year for a single individual can be 

2962 calculated as: 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-10 

2963 

ሺݔܧܿ݁ݏݏ ܿܽ݊ܿ݁ݎ ݎ݅ݏ݇ሻ௧ ൌ ܥܦܣܮ௧ ൈ ൫ܨܣܦܣ௔ ௘௚௔௧ ௧൯ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻ (10) 

 2964 

In equation (10), the LADCt 2965 is determined by the concentration in a home in which the individual 

2966 resides, e.g., a one-year old home for a seventeen-year old individual. 

2967 

2968 The advantage to this approach is that the life profile for each individual is not necessary; it is 

2969 only necessary to know his or her location for that life segment. 

2970 

2971 It is easy to show that, mathematically, the lifetime approach to calculating excess risk and the 

2972 annual approach are equivalent. The annual approach simply estimates the amount that any given year of 

2973 exposure contributes to the overall excess cancer risk from some lifetime average daily concentration. 

2974 Specifically, starting with equation (3) from above: 

2975 

ൌ ݇ݏ݅ݎ ݎܿܽ݊ܿ݁ ݏݏܿ݁ݔܧ

൬ 1൰ܧܮ

ە

ۖ

۔

ۖ

ۓቀܥܦܣ଴ିଵ ൈ ሺ2 ݕ݁ܽݏݎሻ൫ܨܣܦܣ௡௔௙௡௜௧൯ቁ

൅൫ܥܦܣଶିଵହ ൈ ሺ14 ݕ݁ܽݏݎሻ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ൯ 

൅൫ܥܦܣଵ଺ିଷଵ ൈ ሺ16 ݕ݁ܽݏݎሻ൯ ൅ ൫ܥܦܣଷଶିସ଻ ൈ ሺ16 ݕ݁ܽݏݎሻ൯

൅൫ܥܦܣସ଼ି଺ଷ ൈ ሺ16 ݕ݁ܽݏݎሻ൯ ൅ ൫ܥܦܣ଺ସି଺ଽ ൈ ሺ6 ݕ݁ܽݏݎሻ൯ ۙ

ۖ

ۘ

ۖ

ۗ

ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻ

ൌ

ە

ۖ

ۖ

۔

ۖ

ۖ

ۓቀܥܦܣ଴ିଵ ൈ ሺ2 ݕ݁ܽݏݎሻ൫ܨܣܦܣ௡௔௙௡௜௧൯ቁ

ܧܮ ൅ ൫ܥܦܣଶିଵହ ൈ ሺ14 ݕ݁ܽݏݎሻ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ൯ 

ܧܮ

൅ ൫ܥܦܣଵ଺ିଷଵ ൈ ሺ16 ݕ݁ܽݏݎሻ൯

ܧܮ ൅ ൫ܥܦܣଷଶିସ଻ ൈ ሺ16 ݕ݁ܽݏݎሻ൯

൅ ܧܮ

൫ܥܦܣସ଼ି଺ଷ ൈ ሺ16 ݕ݁ܽݏݎሻ൯

ܧܮ ൅ ൫ܥܦܣ଺ସି଺ଽ ൈ ሺ6 ݕ݁ܽݏݎሻ൯

ۙ ܧܮ

ۖ

ۖ

ۘ

ۖ

ۖ

ۗ

ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻ

(11) 

ൌ ቊ ܥܦܣܮ଴ିଵ ൈ ൫ܨܣܦܣ௡௔௙௡௜௧൯ ൅ ܥܦܣܮଶିଵହ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ

൅ܥܦܣܮଵ଺ିଷଵ ൅ ܥܦܣܮଷଶିସ଻ ൅ ܥܦܣܮସ଼ି଺ଷ ൅ ܥܦܣܮ଺ସି଺ଽ ቋ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻ

ൌ ൛ܥܦܣܮ଴ିଵ ൈ ൫ܨܣܦܣ௡௔௙௡௜௧൯ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻൟ ൅ ሼܥܦܣܮଶିଵହ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ

൅ ሼܥܦܣܮଵ଺ିଷଵ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ ൅ ሼܥܦܣܮଷଶିସ଻ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ

൅ ሼܥܦܣܮସ଼ି଺ଷ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ ൅ ሼܥܦܣܮ଺ସି଺ଽ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ

ൌ ൛ܥܦܣܮ ଴ൈ ൫ܨܣܦܣ௡௔௙௡௜௧൯ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻൟ ൅ ൛ܥܦܣܮଵ ൈ ൫ܨܣܦܣ௡௔௙௡௜௧൯ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻൟ

൅ ሼܥܦܣܮଶ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ ൅ ڮ

൅ ሼܥܦܣܮଵହ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ ൅ ሼܥܦܣܮଵ଺ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ ൅ ڮ

൅ ሼܥܦܣܮ଺ଽ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻሽ

(12) 

2976 

2977 where: 

2978 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-11 

ADC0-1 = the ADC from exposure to formaldehyde in a new house for two years. 

ADC2-15 = the ADC from exposures over 14 years from a house that is 2 years old in the first year. 

ADC a-a+16 = the ADC from exposures over 16 years from a house that is new in the first year (for the 16-

31, 32-47, and 48-63 age intervals) 

ADC64-69 = the ADC from exposures over 6 years from a house that is new in the first year (for the 64-69 

age interval) 

ADAFinfant the infant age-dependent adjustment factor of 10 

ADAFchild the child age-dependent adjustment factor of 3 

Unit Risk the inhalation unit risk for cancer of 0.013 per mg/m3

LE= The life expectancy of the individual 

LADC0-1 = ADC0-1 / LE 

LADC2-15 = ADC2-15 / LE 

LADC a-a+16 = ADC a-a+16 / LE 

LADC64-69 = ADC64-69 / LE 

 2979 

2980 The change in excess cancer risk resulting from the policy (relative to baseline) is: 

2981 

ൌ ൛൫ܥܦܣܮ଴

଴ܥܦܣܮ െ௕ 

௣

൯ൈ൫ܨܣܦܣ௡௔௙௡௜௧൯ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻൟ ൅

 ൛൫ܥܦܣܮଵ

௕ െ ܥܦܣܮଵ

௣

൯ൈ൫ܨܣܦܣ௡௔௙௡௜௧൯ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻൟ ൅ڮ൅

 ൛൫ܥܦܣܮ଺ଽ

௕ െ ܥܦܣܮ଺ଽ

௣ ൯ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻൟ

(13) 

2982 

where LADCB

 and LADCP 2983 refer to the baseline and policy scenario LADCs, respectively. To 

2984 evaluate the impact of the policy for a single year (for example, when the individual is 15 years old) the 

2985 change in excess cancer risk for this single year would be simply: 

2986 

ൌ ൛൫ܥܦܣܮଵହ

௕ െܥܦܣܮଵହ

௣ ൯ ൈ ሺܨܣܦܣ௟௜௛௖ௗሻ ൈ ሺܷ݊݅ݐ ܴ݅ݏ݇ሻൟ (14) 

2987 

2988 Thus, the annual excess cancer risk reduction can be calculated for an individual of any age 

2989 associated with one year of the policy. At the population level, the annual approach consists of analyzing 

2990 a population profile of individuals consistent with current demographic data, and placing them in housing 

2991 stock consistent with current real estate data and calculating the benefits accruing from one year of the 

2992 policy, all else constant. 

2993 

2994 Since the policy is analyzed over a period of thirty years, the analysis assumes that the 

2995 demographic profile of the population (e.g., population distribution by age, size, and type of housing) 

2996 does not change over time. Thus, depending on how these demographics actually change over the next 

2997 thirty years, this assumption could result in the introduction of an upward or downward bias into the 

2998 benefits estimate. For example, if the number of people moving into new housing is lower than assumed 

2999 over the next thirty years then the current assumption introduces an upward bias to the benefits estimate. 

3000 Similarly, if the population increases over time, then the current assumption introduces a downward bias 

3001 to the benefits estimate. 

3002 

3003 It is also worth noting that if the analysis were to attempt to account for demographic shifts over 

3004 time, it would also be necessary to estimate how these demographic shifts would affect the demand for 

3005 composite wood products and therefore impact the costs that correspond to the estimated benefits – 

3006 something that would not be possible to model without introducing additional uncertainty. Therefore, 

3007 attempting to relax the simplifying assumption that demographics are constant over the 30-year analysis 

3008 time frame would address one uncertainty while introducing another uncertainty and it is not clear that 

3009 this would reduce the overall uncertainty in the estimate of net benefits. 

3010 

3011 There are a number of advantages to using the annual approach as opposed to the lifetime 

3012 approach. With the annual approach actual demographic data can be used to estimate the number of 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-12 

3013 individuals in each exposure scenario. This way the housing stock used in the simulation will resemble 

3014 the existing housing stock. Recent data from the Census and housing surveys are a reasonable 

3015 approximation of what the distribution will be in the near future. This approach avoids the need to 

3016 estimate a survival function to correctly account for premature deaths (or be concerned with new births). 

3017 Assuming demographics do not change, using a population-weighted annual approach accounts for these 

3018 factors. 

3019 

3020 It is also important to note some caveats associated with the annual approach. As just mentioned, 

3021 some distribution of population and housing stock must be assumed, and it is assumed that the current 

3022 distribution is a good indicator of the future distribution. In other words, the analysis is implicitly 

3023 assuming a steady state, where the present distribution closely approximates the future distribution. 

3024 

3025 3.3.1 Lower Estimate of the Excess Number of Cancer Cases 

3026 

3027 Most individuals in the analysis are more than 0 years old, so applying a unit risk – i.e., an excess 

3028 lifetime risk – to them might overstate their excess risk of the cancer. For example, consider someone 

3029 who is 50 years old in the year of the analysis and has not yet gotten the cancer. Should the entire excess 

3030 lifetime risk (the unit risk) be applied to this individual for the remaining expected years of his life? Or 

3031 should a modified excess risk, conditional on his not having gotten the cancer in his first 49 years, be 

3032 applied? Because the unit risk provides no information about how excess risk is distributed over the 

3033 course of a lifetime, there is no clear answer. 

3034 

3035 To address this uncertainty this analysis therefore includes a lower estimate of the excess number 

3036 of cancer cases that is calculated by multiplying the unit risk by a lowering factor that takes into account 

3037 the age at which an individual experiences the change in exposure and the incidence of the cancer by that 

3038 age. Specifically, the lowering factor is calculated as the percentage of incidence of the cancer that 

3039 occurs within the age range spanning from the age at which the change in exposure is experienced 

3040 through the end of the expected lifetime. For example, 56.6 percent of respiratory tract cancers occur 

3041 between ages 50 and 81 (the life expectancy of a 50 year old). Therefore the lowing factor for an 

3042 individual experiencing a one year change in exposure at age 50 is 0.566. This approach implicitly 

3043 assumes that the excess lifetime risk of the cancer is distributed across the ages within a lifetime in the 

3044 same pattern seen in the age-specific incidences of the cancer in the population. 

3045 

3046 3.3.2 Summary of Approach to Estimate Change in Cancer Risk 

3047 

3048 Equations (15) and (16) present the equations that are used to calculate the lower and higher 

3049 estimates for the change in cancer risk associated with a one year change in the average daily 

3050 concentration of formaldehyde exposure. Note that EPA policy is to apply ADAFs when there is a 

3051 mutagenic mode of action. The 1991 IRIS assessment did not make a formal finding of a mutagenic mode 

3052 of action. However, there is scientific support for a mutagenic mode of action. Therefore, EPA believes 

3053 that application of ADAFs is the preferred approach in this case but is also presenting the calculations 

3054 without applying ADAFs. The lower estimate of benefits excludes the ADAFs and the higher estimate of 

3055 benefits includes the ADAFs. 

3056 

ሺCancer Risk Changeሻ୪୭୵ୣ୰ ୣୱ୲୧୫ୟ୲ୣ ൌ ൫ADCୠ ൯ െ ൫ADC୮ ൯

LE

ൈ ሺUnit Riskሻ ൈ ሺLowering Factorሻ (15) 

3057 

ሺCancer Risk Changeሻ୦୧୥୦ୣ୰ ୣୱ୲୧୫ୟ୲ୣ ൌ ൫ADCୠ ൯ െ ൫ADC୮ ൯

LE ൈ ADAF ൈ ሺUnit Riskሻ (16) 

3058 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-13 

3059 where: 

3060 

ADCb = the baseline average daily concentration of one year of formaldehyde exposure (in 

mg/m3

) 

ADCp

 = the average daily concentration of one year of formaldehyde exposure (in mg/m3) in 

the policy scenario 

LE = the life expectancy of the individual given his current age (i.e., the age to which he is 

expected to live, given his current age) 

ADAF = the age dependent adjustment factor (10 for 0-1 year olds, 3 for 2-15 year olds, 1 

otherwise) 

Lowering Factor = factor calculated as the percentage of incidence of the cancer that occurs within the 

age range spanning from the age at which the change in exposure is experienced 

through the end of the expected lifetime. 

3061 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-14 

3062 3.4 Estimating the Value of Reductions in Cancer Risk 

3063 

3064 In this analysis the number of excess cancer cases are estimated and then they are divided into 

3065 two categories: (1) instances where individuals will ultimately die from the cancer, and (2) instances 

3066 where individuals ultimately die from something other than the cancer. Note that these two categories 

3067 reflect the two possible outcomes for nasopharyngeal cancer, instead of reflecting different types of 

3068 cancers. Hereafter the first outcome is referred to as fatal cancer and the second outcome as nonfatal 

3069 cancer. Each outcome is valued differently – the value of a reduction in the risk of fatal cancer is 

3070 described in section 3.4.1, and the value of a reduction in the risk of non-fatal cancer, described in section 

3071 3.4.2. 

3072 

3073 In order to monetize the value of reduced cancer risk, it is necessary to estimate the time periods 

3074 when these benefits would accrue so that the present value of these benefits can be calculated. The 

3075 method for estimating the timing for when the reduced cancer risks are realized and the method for 

3076 calculating the value of reducing these risks at the time of the exposure is described below in section 

3077 3.4.3. 

3078 

3079 3.4.1 The Value of a Micro Risk Reduction for Fatal Cancer 

3080 

3081 The value of reducing risk for nasopharyngeal cancer is estimated as a weighted average of the 

3082 value of reducing both fatal and nonfatal cancer risks. According to data from the Surveillance, 

3083 Epidemiology, and End Results (SEER) Program of the National Cancer Institute, the 15 year survival 

3084 rate for cancers of the nasopharynx is 42.9 percent (SEER 2010). Thus, the analysis assumes that 57.1 

3085 percent of the reductions in cancer risk are reductions in mortality risk and therefore are valued as such. 

3086 The analysis uses the value of mortality risk (VMR) of $8.01 per micro-risk. A micro risk reduction is a 

3087 reduction of 1/1,000,000 in the risk of mortality. This benefit is assumed to be accrued at the end of the 

3088 year in which a cancer case was avoided and no additional benefits (e.g., from avoiding cancer treatment 

3089 costs) are included in the instances of a mortality risk reduction. 

3090 

3091 3.4.2 The Value of a Micro Risk Reduction for Non-Fatal Cancer 

3092 

3093 As noted above, 42.9 percent of the cancer risk reductions are assumed to be reductions in risk for 

3094 non-fatal cancer. While it is the value of a micro reduction in risk (a risk reduction of 1/1,000,000) of 

3095 non-fatal nasopharyngeal cancer that is of interest, this was estimated by first estimating the expected 

3096 value of a single avoided case of non-fatal nasopharyngeal cancer and then dividing by 1,000,000 to 

obtain the implied value of a micro risk reduction.38 3097 

3098 

3099 Non-fatal cases of nasopharyngeal cancer were valued using a cost-of-illness (COI) approach. 

3100 The value of an avoided case of non-fatal nasopharyngeal cancer was estimated to be the present 

3101 discounted value (pdv) of the stream of expected medical expenditures and opportunity costs associated 

3102 with the illness from the year of diagnosis to a preset age (set at 99 in this analysis), taking into account 

that the individual may die of other causes in each year in the analysis. 39 3103 

3104 

 38 If 1,000,000 people are each willing to pay y for a risk reduction of 1 in 1,000,000, then that risk reduction applied to 

1,000,000 individuals would result in 1 expected case avoided, and the value of that expected avoided case would be the 

sum of the individuals’ WTPs for their risk reductions, or 1,000,000*y. If Y denotes the value of that expected avoided 

case, then Y = 1,000,000*y, so that y = Y/1,000,000. For example, suppose the estimated value of an avoided case of 

non-fatal nasopharyngeal cancer is $140,000. The implied value of a micro risk reduction would be $0.14. 39 This COI approach likely understates the true value of avoiding a case of non-fatal nasopharyngeal cancer because it 

omits the individual’s willingness to pay to avoid the pain and suffering associated with the illness, which may be 

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

January 27, 2012 3-15 

3105 One approach to estimating the costs associated with a chronic illness such as cancer, described in 

3106 EPA’s Cost of Illness Handbook (U.S. EPA 2001), is to divide annual costs into three categories: (1) 

3107 initial costs – costs of diagnosis and initial treatment costs – that occur in the year of diagnosis, (2) 

3108 “maintenance” costs which the cancer patient incurs in each subsequent year prior to death, and (3) 

3109 terminal costs – the costs incurred in the patient’s last year of life. This analysis followed this general 

3110 approach. Because this section is concerned only with non-fatal cases of nasopharyngeal cancer, only the 

3111 first two categories are included. 

3112 

3113 As described more fully below, the stream of annual costs of a cancer will depend on: 

3114 

3115  the stage of the cancer when it is first diagnosed; 

3116  the individual’s employment status (full-time worker, part-time worker, or unemployed 

3117 or retired) each year from the year of diagnosis on (since the value of an hour lost to the 

3118 illness depends on this status, as is explained below); and 

3119  the individual’s age in the year of diagnosis. 

3120 

3121 3.4.2.1 An outline of the approach 

3122 

3123 The analysis estimated the pdv of a case of non-fatal nasopharyngeal cancer, conditional on age at 

3124 diagnosis, using the following steps: 

3125 

3126  Develop a profile of nasopharyngeal cancer – i.e., a description of the stages of the cancer 

3127 and the treatments typically carried out or recommended at each stage, their frequencies, 

3128 durations, and costs. 

3129  Estimate COI conditional on stage at diagnosis and age at diagnosis, a: 

3130 o Estimate the medical costs and opportunity costs in the year of diagnosis, given 

3131 the stage at diagnosis and age at diagnosis. 

3132 o Estimate the “maintenance” medical costs and associated opportunity costs in the 

3133 kth year after diagnosis, k = 1, 2, ..., given the stage at diagnosis and age at 

3134 diagnosis. 

3135 o Given these (conditional) kth year costs, k = 0, 1, 2, ..., and the survival 

3136 probabilities for ages a, a +1, a +2, etc. (i.e., the probability of not dying of some 

3137 other cause each year), estimate the expected total COI in each year, conditional 

3138 on a given stage at diagnosis and age at diagnosis, a. 

3139 o Given a discount rate, d, estimate the present discounted value (pdv) of the 

3140 stream of costs from the age at diagnosis, a, to a preset age (99). 

3141 o Estimate COI conditional only on age at diagnosis: 

3142  Obtain probabilities of diagnosis of nasopharyngeal cancer at each stage of the cancer. 

3143  Using these probabilities, calculate the expected pdv, now conditional only on age at 

3144 diagnosis. 

3145 

3146 The methods at each step are described in detail in the sections below and are shown 

3147 schematically in Figure 3-2. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-16 

3148 

Figure 3-2: Summary of Cost of Illness Method 

3149 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-17 

3150 3.4.2.2 Treatment profile for non-fatal nasopharyngeal cancer 

3151 

3152 The first step in estimating the costs associated with a cancer is to develop a profile of the illness 

3153 – i.e., a description of the medical procedures that are performed as a result of the illness, and the 

3154 recommended frequency and estimated duration of each procedure in the year of diagnosis of the illness 

3155 and in each subsequent year. 

3156 

3157 This section provides an overview of the treatment profile for (non-fatal) nasopharyngeal cancer 

3158 in the United States. According to the American Cancer Society, nasopharyngeal carcinoma includes 

3159 three types of cancer: keratinizing squamous cell carcinoma, non-keratinizing differentiated carcinoma, 

3160 and undifferentiated carcinoma. Most cases in the United States are keratinizing squamous cell 

3161 carcinoma, while other types are more common in other parts of the world (American Cancer Society 

3162 2011c). The risk of nasopharyngeal cancer increases with age; this cancer is rarely found in children 

3163 under the age of 18 years (American Cancer Society 2011c; Lou, et al. 2010). 

3164 

3165 Diagnosis and initial treatments: procedures 

3166 

3167 The year in which the cancer is diagnosed includes diagnosis and initial treatment. Diagnostic 

3168 procedures include: medical history and physical exam, biopsy, imaging tests, and blood tests (American 

3169 Cancer Society 2011c ). Specifically, the type of biopsy is usually an endoscopic biopsy and imaging tests 

3170 include both a CT scan and an MRI (Lo and Lu 2010; Lou, et al. 2010). Since a majority of patients with 

3171 nasopharyngeal cancer have been shown to have an elevated level of an Epstein-Barr virus (EBV) 

3172 antibody, the blood tests to diagnose this cancer involve EBV-specific serology (Lo and Lu 2010). 

3173 

3174 Treatment generally does not vary by type of nasopharyngeal cancer, but differs by stage at which 

3175 the cancer is diagnosed (American Cancer Society 2011c). The analysis assumed that the distribution of 

3176 all nasopharyngeal cancer diagnoses by stage of illness applies to formaldehyde-related nasopharyngeal 

3177 cancer patients as well. Table 3-3 presents a description of each stage, the percent of nasopharyngeal 

3178 cancer cases diagnosed at each stage, and long-term (ten-year) relative survival rates. Relative survival 

3179 rates indicate the proportion of cases diagnosed at each stage who survive for a given number of years 

3180 after diagnosis, adjusting for other causes of death. Most cases of nasopharyngeal cancer are diagnosed at 

3181 Stages III or IV (Piccirillo, et al. 2007). 

3182 

3183 

Table 3-3: Stages of Nasopharyngeal Cancer at Diagnosis 

Stage of Cancer at 

Diagnosis 

Description Cases Diagnosed 

(%) 

Long-Term Relative 

Survival Rate (%) 

Stage I Tumor is confined to the nasopharynx. 15.0 62.6 

Stage II Tumor has spread to tissues of the left or right sides of the upper 

part of the throat, and/or has spread to nearby lymph nodes. 

6.7 51.6 

Stage III Tumor has spread to the sinuses or bones near the nasopharynx, 

or has spread to nearby lymph nodes. 

21.8 46.2 

Stage IV Tumor has grown into the skull and/or cranial nerves, the 

hypopharynx, the eye, or its nearby tissues; has spread to lymph 

nodes that are larger than 6 cm across or are located in the 

shoulder area above the collarbone; and/or has spread to distant 

sites. 

45.3 37.1 

Unknown Information is insufficient to indicate a stage. 11.2 44.6 

Sources: American Cancer Society 2011c; Piccirillo, et al. 2007. 

3184 

3185 Due to difficulties in operating on the nasopharynx and the effectiveness of other types of 

3186 treatment, surgery is not a main treatment option for nasopharyngeal cancer (American Cancer Society 

3187 2011c). Prior to the landmark Intergroup 0099 trial, as published by Al-Sarraf et al. (1998), the primary 
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January 27, 2012 3-18 

3188 treatment option for all patients with nasopharyngeal cancer was radiation therapy. However, the 

3189 Intergroup 0099 trial on Stage III and IV cancers changed the way in which locally advanced stages of 

3190 nasopharyngeal cancer are treated (Cooper 2010). In this trial, radiation therapy was administered 

3191 concurrently with chemotherapy for a total of seven weeks, followed by adjuvant chemotherapy over 

3192 approximately eight weeks, with the doses and treatment schedules presented in Table 3-4 (Al-Sarraf, et 

3193 al. 1998; Cooper 2010). Patients receiving this prescribed course of treatment experienced a statistically 

3194 significant (p=0.005) improvement in overall survival, compared with patients who received radiation 

3195 therapy alone (Al-Sarraf, et al. 1998). 

3196 

3197 

Table 3-4: Dosages of Radiation Therapy and Chemotherapy in the Intergroup 0099 Trial 

Therapy Site/Method Drug Dosage Schedule 

Radiation Primary tumor N/A 70 Gy 1.8-2 Gy per day, Monday through Friday 

Affected lymph nodes 66-70 Gy 

Uninvolved lymph nodes 50 Gy 

Chemotherapy Rapid (15-20 minutes) 

intravenous infusion 

Cisplatin 100 mg/m2 Days 1, 22, and 43 of radiotherapy 

Cisplatin 80 mg/m2 Days 71, 99, and 127 

96-hour infusion 5-fluorouracil 1,000 mg/m2/day Days 71-74, 99-102, and 127-130 

Sources:Al-Sarraf, et al. 1998; Cooper 2010.

One gray (Gy) is the absorption of one joule of energy, in the form of ionizing radiation, divided by one kilogram of matter. 

Radiation sessions take 15 to 30 minutes and are typically given five days a week for one to ten weeks (American Cancer Society 2011a).

3198 

3199 Hence, while radiation therapy is still the primary treatment option for early stage nasopharyngeal 

3200 cancer, chemotherapy combined with radiation therapy (known as “chemoradiation”) is currently the 

3201 recommended treatment for later stages of this cancer (American Cancer Society 2011c). Stage I cancers 

3202 are treated with radiation therapy aimed at the nasopharyngeal tumor and nearby lymph nodes, as a 

3203 preventive measure (American Cancer Society 2011c). Patients diagnosed with Stage II, III, IVA, or IVB 

3204 cancer are included in the group of locally advanced cancers that are treated with chemoradiation and 

3205 adjuvant chemotherapy (American Cancer Society 2011c). In addition, the American Cancer Society 

3206 provides a separate treatment profile for Stage IVC cancer, which is characterized by distant metastasis. 

3207 However, since cancer with distant metastasis usually is not curable (Lin 2010), it was assumed that all 

3208 patients with Stage IV cancers who survive (and are therefore included in the analysis of non-fatal cases) 

3209 receive the treatment profile for Stages IVA and IVB. 

3210 

3211 Given this information on the dosages and schedule from the Intergroup 0099 trial from the 

3212 American Cancer Society, the analysis developed the following profile for initial treatment of non-fatal 

3213 nasopharyngeal cancer: 

3214 

3215  Diagnosis at Stage I: Radiation therapy to the primary tumor and uninvolved lymph 

3216 nodes. 

3217  Diagnosis at Stage II, III or IV: Radiation therapy to the primary tumor and affected 

3218 lymph nodes; concurrent and adjuvant chemotherapy with cisplatin; and adjuvant 

3219 chemotherapy with 5-fluorouracil (5-FU). 

3220 

3221 After treatment, the maintenance phase begins. This phase consists of follow-up treatment, which 

3222 is presented by Tham and Lu (2010) as an evidence-based follow-up schedule and regimen that draws 

3223 from the recommendations of professional organizations (including the National Comprehensive Cancer 

3224 Network and the American Head and Neck Society). The following profile of follow-up treatment for 

3225 nasopharyngeal cancer is recommended for all patients treated with radiation therapy: 

3226 
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January 27, 2012 3-19 

3227  Physical exams to check for signs of cancer recurrence: every one to three months for the 

3228 first year after treatment, every two to four months in the second year, every four to six 

months in years three to five post-treatment, then every six to twelve months thereafter.40 3229 

 Thyroid function screening tests41 3230 (i.e. thyroid-stimulating hormone and free thyroxine 

3231 tests): every six to twelve months. 

3232  MRI of the head and neck: three months after radiation therapy, then annually. 

3233 

3234 A dental evaluation, smoking cessation counseling, and patient support groups may also be 

3235 recommended (Tham and Lu 2010). However, since these treatments are recommended on an individual 

3236 basis and information on the proportion of patients who receive these treatments is not available, they 

3237 were not included in this analysis. 

3238 

3239 Frequencies and durations of treatments 

3240 

3241 To estimate the amount of time lost by an individual diagnosed with nasopharyngeal cancer in 

3242 each year, the analysis first estimated time values for each procedure carried out during each year outlined 

3243 in the treatment profile. The treatment profile outlines the frequency of procedures in the year of 

3244 diagnosis and all subsequent years. Treatment frequency also varies by stage of the illness (i.e., Stages I – 

3245 IV), though some treatments are common to all stages. 

3246 

3247 Three components of lost time were estimated for each treatment procedure: the time taken for 

3248 the procedure, the time spent waiting before and after the procedure, and the travel time to and from the 

3249 facility where the procedure is carried out. Wait and travel times were assumed to be twenty and forty3250 five minutes, respectively. The opportunity costs associated with the time it takes for patients to recover 

3251 from the treatments were excluded from the analysis because data on the duration of recovery times 

3252 associated with these treatments were not readily available. Thus, this omission introduces a downward 

3253 bias to the extent to which recovery time results in lost work time, lost time available for performing 

3254 domestic chores, and lost leisure time. 

3255 

3256 The entire treatment profile, including the diagnostic and recommended treatment procedures, 

3257 and the estimated durations of each, are detailed in Table 3-5 and Table 3-6. Table 3-5 gives the 

3258 breakdown of estimated wait times, travel times (to and from the locations of the treatments), and times 

3259 per visit. Table 3-6 gives the frequency and total time associated with each medical procedure, separately 

3260 for the year of diagnosis and subsequent years. The medical and opportunity costs associated with these 

3261 procedures are described in the subsections below. 

3262 

 40 The estimation of medical costs, uses the midpoint of all ranges for the frequency of each medical procedure or service 

in the treatment profile. 

41 Thyroid function tests are recommended because research indicates a high incidence of hypothyroidism in patients who 

have received radiation therapy to the entire neck (National Cancer Institute 2011b), which is typical in the treatment of 

nasopharyngeal cancer (Lo and Lu 2010). 
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January 27, 2012 3-20 

Table 3-5: Estimated Lost Time (in Minutes) Per Visit Per Treatment Procedure 

Procedure Procedure Time

Wait Timei 

Travel Time 

(Round Trip)j Total Time Per 

Visit 

Diagnosis: All Stages at Diagnosis 

Medical history and physical exama 20 20 45 85

Biopsy (endoscopic or fine needle aspiration) 20 20 45 85

Imaging tests: CT scanb 10 20 45 75

Imaging tests: MRIc 60 20 45 125

Epstein-Barr virus (EBV) specific serology (blood test) 5 0d 0d 5

Treatment: Stage I at Diagnosis 

Radiation therapy sessionse 30 20 45 95

Treatment: Stage II, III, or IV at Diagnosis 

Radiation therapy sessionse 30 20 45 95

Chemotherapy with cisplatinf 20 20 45 85

Chemotherapy with 5-fluorouracilg 3,840 0h 45 3,885

Follow-Up Care: All Stages at Diagnosis 

Physical exama 20 20 45 85

Laboratory tests for thyroid levels 5 0d 0d 5

MRI of the head and neckc 60 0d 0d 60

Note that the initial phase of treatment for all stages-at-diagnosis of nasopharyngeal cancer includes diagnosis and treatment, while the 

maintenance phase consists of follow-up care. 

Notes: 

a. Average time spent with physician was 20.9 minutes in 2005 (Abbo, et al. 2008). 

b. Procedure takes a few minutes (Mayo Clinic 2010a). 

c. Procedure takes less than an hour (Mayo Clinic 2010b). 

d. Assumed to be included in time lost for other procedures. 

e. Session takes 15 to 30 minutes (American Cancer Society 2011a). 

f. Rapid infusion of cisplatin takes 15 to 20 minutes (Cooper 2010). 

g. Chemotherapy with 5-fluorouracil is given as a 96-hour infusion (Al-Sarraf, et al. 1998; Cooper 2010 ), which implies a 4-day 

hospital stay. 

h. No wait time assumed for overnight stay. 

i. Press Ganey Associates, Inc. (2010) reported an average wait time of 21 minutes for internal medicine and 22 minutes for family 

practice in 2009. 

j. Based on Federal Highway Administration (2011) data, the average one-way travel time for medical/dental reasons was 

approximately 23.15 minutes in 2009.

3263 
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January 27, 2012 3-21 

Table 3-6: Estimated Total Lost Time (in Minutes), by Treatment Procedure 

Procedure 

Frequency in 

First Year 

Frequency 

Subsequent 

Years 

Total Time 

(First Year) 

Total Time 

(Subsequent 

Years) 

Diagnosis: All Stages at Diagnosis 

Medical history and physical exam 1 0 85 0 

Biopsy (endoscopic or fine needle aspiration) 1 0 85 0 

Imaging tests: CT scan 1 0 75 0 

Imaging tests: MRI 1 0 125 0 

Epstein-Barr virus (EBV) specific serology (blood test) 1 0 5 0 

Subtotal 375 0

Treatment: Stage I at Diagnosis 

Radiation therapy sessions 35 0 3,325 0 

Subtotal 3,325 0

Treatment: Stage II, III, and IV at Diagnosis 

Radiation therapy sessions 35 0 3,325 0 

Chemotherapy with cisplatin 6 0 510 0 

Chemotherapy with 5-fluorouracil 3 0 11,655 0 

Subtotal 15,490 0

Follow-Up Care: All Stages at Diagnosis 

Physical exam 3 1.7 255 434 

Laboratory tests for thyroid levels 1 1.5 5 8 

MRI of the head and neck 1 1 60 60 

Subtotal 320 501

Note that the initial phase of treatment for all stages-at-diagnosis of nasopharyngeal cancer includes diagnosis and treatment, while the 

maintenance phase consists of follow-up care.

3264 

3265 3.4.2.3 Estimated medical costs in the year of diagnosis and in subsequent years 

3266 

3267 This section describes the calculation of mean medical expenditures for each procedure and 

3268 service in the treatment profile, as well as the estimation of expected medical costs of illness for (non3269 fatal) nasopharyngeal cancer in the year of diagnosis and in subsequent years. For the average cost of 

3270 each procedure, the analysis relied on two data sources provided by the Agency for Healthcare Research 

3271 and Quality (AHRQ): the Medical Expenditure Panel Survey (MEPS) (Agency for Health Care Research 

3272 and Quality 2009) and Healthcare Cost and Utilization Project (HCUP) (Agency for Healthcare Research 

3273 and Quality 2011). Note that mean expenditures from MEPS and HCUP are converted to 2010 dollars 

3274 using the Bureau of Labor Statistics’ Consumer Price Index for medical care. 

3275 

3276 The Household Component of MEPS includes separate data files for types of medical events 

3277 (e.g., office-based medical provider visits, outpatient visits, and hospital inpatient stays), which provide 

3278 information on the expenditures for specific events for a nationally representative sample of families and 

3279 individuals. The data files include variables that indicate the conditions with which a patient has been 

3280 diagnosed and the procedures undergone during a particular medical event. ICD-9-CM (International 

3281 Classification of Diseases, Ninth Revision, Clinical Modification) codes are used to identify specific 

3282 diseases and procedures. In addition, some data files include variables that indicate any services that 

3283 patients received during their visit (e.g., laboratory tests, chemotherapy, and CT scan or MRI). 

3284 

3285 The analysis used the MEPS outpatient visit and office-based provider visit event files for 1996-

3286 2007 for all procedures and services in the treatment profile, except chemotherapy with 5-fluorouracil. 

3287 Since chemotherapy with 5-fluorouracil involves a 96-hour infusion, the analysis assumed that this 

3288 service is provided during an inpatient hospital stay; 2009 data on this specific procedure from HCUPnet, 

3289 the online query system of HCUP, were used to estimate the mean cost of the procedure. 

3290 
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January 27, 2012 3-22 

3291 For each procedure and service for which there are sufficient observations in both the outpatient 

3292 visits and office-based medical provider visits event files, the mean estimates across the two files were 

3293 pooled, following the approach of DerSimonian and Laird (1986). The method for pooling is described in 

3294 detail in Appendix L of the BenMAP user manual (Abt Associates Inc. 2010). It is described briefly here. 

3295 

3296 The first step in pooling is to calculate a pooled estimate under the assumption of a fixed effects 

3297 model – i.e., that the different samples are both from the same population, and the only reason the sample 

3298 means differ is because of sampling error. This pooled estimate is a weighted average of the individual 

3299 sample means, where the weights are the corresponding inverse variances divided by the sum of the 

3300 inverse variances. The next step is to test for homogeneity of the mean expenditures across the two event 

3301 types (outpatient visits and office-based medical provider visits). The test statistic is the weighted sum of 

3302 squares of the differences between each mean estimate and the pooled estimate calculated in the first step, 

3303 where the weights are the inverse variances of the mean estimates. If the test indicates that the mean 

3304 expenditures are homogeneous (i.e., the fixed effects model is correct), then the pooled estimate 

3305 calculated on the first step is used. If the test indicates that the mean expenditures are not homogeneous, a 

3306 random effects model is used. To do this, a between-event type variance is first calculated. The pooled 

3307 estimate based on the random effects model is calculated in almost the same way as under the fixed 

3308 effects model; however, the weights now incorporate both the within-event type variance and the 

3309 between-event type variance. 

3310 

3311 Diagnosis 

3312 

3313 Diagnosis includes medical history and a physical exam, an endoscopic biopsy, a CT scan, an 

3314 MRI, and EBV-specific serology. The analysis assumed that doctor visits for physical examinations 

3315 include medical history. The cost of a physical exam was estimated as the mean expenditure by all 

3316 individuals who had a physical examination only (ICD-9-CM procedure code 89). 

3317 

3318 For the endoscopic biopsy, the analysis first investigated MEPS data on the ICD-9-CM procedure 

3319 code for operations on the pharynx (ICD-9-CM procedure code 29), which includes pharyngeal biopsies. 

3320 However, since there are very few observations for operations on the pharynx, the analysis used the 

3321 procedure codes for operations on the nose and nasal sinuses (ICD-9-CM procedure codes 21 and 22). 

3322 These codes include both surgical and diagnostic procedures, with the diagnostic procedures primarily 

3323 consisting of biopsies. The type of biopsy used to diagnose nasopharyngeal cancer does not involve 

3324 surgery (Lo and Lu 2010), so observations with surgeries were excluded, and the mean expenditures for 

3325 the remaining observations with procedure codes 21 and 22 was calculated. 

3326 

3327 The MEPS event files for outpatient and office-based provider visits include a variable that 

3328 indicates whether a particular medical event included a CT scan or MRI. Since these two services are 

3329 bundled together in the MEPS variable, it was assumed that the cost for a CT scan is equal to the cost for 

3330 an MRI. Due to a lack of data on a CT scan or MRI for patients with head and neck cancers, mean 

3331 expenditures were calculated for MRI or CT scans for patients with a diagnosis of “symptoms involving 

3332 the head and neck” (ICD-9-CM diagnosis code 784). 

3333 

3334 EBV-specific serologic testing is the preferred method to diagnose EBV infections (National 

3335 Center for Infectious Diseases 2006). Therefore, for this service, the analysis calculated the mean 

3336 expenditures for outpatient and office-based visits for which the only service provided was a laboratory 

3337 test and the individual’s only diagnosis is EBV (ICD-9-CM diagnosis code 075). 

3338 

3339 

3340 

3341 
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January 27, 2012 3-23 

3342 Treatment 

3343 

3344 Treatment for all patients includes radiation therapy. Because nasopharyngeal cancer is relatively 

3345 rare in the United States, there are no records for this specific illness in MEPS. Because pairwise t-tests 

3346 found significant differences in mean expenditures for radiation therapy across different cancer types, the 

3347 analysis estimated the mean per-session expenditure for radiation therapy for cancer types that are 

3348 primarily treated with the radiation treatment used for treating nasopharyngeal cancer – external beam 

radiation therapy (EBRT) (American Cancer Society 2011b, c).42 3349 This approach seems reasonable 

3350 because radiation therapy costs depend on the type of radiation therapy and the number of sessions 

3351 (American Cancer Society 2011a). The analysis considered using MEPS data on expenditures for head 

3352 and neck cancers, but there are too few observations in the MEPS database on these diseases. Of the 

3353 observations for radiation therapy for a malignant neoplasm of unspecified parts of the mouth (one of 

3354 only two types of head and neck cancer included in the MEPS office-based visits file), there are only 36 

3355 observations, 35 of which are for one individual’s doctor visits. 

3356 

3357 Treatment for Stages II, III, and IV includes chemotherapy with the drugs cisplatin and 5-

3358 fluorouracil. The cost of chemotherapy depends on a number of factors, including the drugs used and the 

3359 frequency and method of treatment (American Cancer Society 2010). The analysis accounted for variation 

3360 in costs due to frequency by using per-visit expenditures for outpatient or office-based visit costs. For 

3361 cisplatin, the method of treatment is not a factor because this drug is always given intravenously (Medline 

3362 Plus 2009). Due to a lack of data on nasopharyngeal cancer, the analysis estimated chemotherapy costs by 

3363 using expenditures for chemotherapy during outpatient and office-based visits for other cancer types 

treated with the same drug, cisplatin, as listed by the National Cancer Institute (2011a).43 3364 There are no 

3365 significant differences (based on pairwise t-tests) within each MEPS event file in the average 

3366 expenditures for chemotherapy across the cancer types that are treated with cisplatin and have sufficient 

3367 observations (>30). Thus, the analysis assumed that the cost of chemotherapy with cisplatin for 

3368 nasopharyngeal cancer equals the average cost for chemotherapy using this drug for these other cancer 

3369 types. 

3370 

3371 The first approach considered for estimating the cost of adjuvant chemotherapy with 5-

3372 fluorouracil (5-FU) was to compare expenditures in MEPS for chemotherapy during inpatient hospital 

3373 stays across cancer types treated with this drug, as listed by the National Cancer Institute (2011c). 

3374 However, since there are significant differences in average expenditures across cancer types, it cannot be 

3375 assumed that the cost of chemotherapy with 5-fluorouracil for nasopharyngeal cancer is equal to the mean 

3376 expenditures for chemotherapy for these cancers. Instead, the analysis used 2009 data from HCUPnet to 

3377 obtain the mean hospital charge and cost for infusions of cancer chemotherapeutic substances (ICD-9-CM 

3378 procedure code 99.25). The mean cost provided by HCUPnet is intended to reflect the actual costs for 

3379 hospital stays and is estimated using a cost-to-charge ratio (Agency for Healthcare Research and Quality 

2011).44 3380 However, application of these ratios often results in an underestimation of costs for stays where 

3381 a large percentage of charges are for room and board (Agency for Healthcare Research and Quality 2011), 

3382 which seems likely for chemotherapy treatments. In contrast, for a variety of reasons hospital charges 

3383 typically overstate actual medical expenditures, often substantially (Agency for Healthcare Research and 

 42 The cancer types that are treated with EBRT and included in the MEPS data are: malignant neoplasm of unspecified 

parts of the mouth; malignant neoplasm of other and ill-defined parts of lip, oral cavity, and pharynx; esophagus cancer; 

colorectal cancer; laryngeal cancer; lung cancer; basal and squamous cell skin cancer; breast cancer; cervical cancer; 

testicular cancer; bladder cancer; brain cancer; thyroid cancer; and multiple myeloma. 

43 The cancer types that are treated with cisplatin and included in the MEPS data are: malignant neoplasm of other and illdefined parts of lip, oral cavity, and pharynx; lung cancer; cervical cancer; testicular cancer; and bladder cancer. 44 AHRQ calculates cost-to-charge ratios using hospital-specific accounting information from the Centers for Medicare 

and Medicaid Services (Agency for Healthcare Research and Quality 2011). Hospital-specific information is necessary 

because detailed charges are not available in all states. 
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January 27, 2012 3-24 

3384 Quality 2010). Therefore, the analysis adjusted this charge estimate downward using MEPS, which 

3385 provides both charges and expenditures, to calculate the ratio of expenditures to charges for inpatient 

3386 hospital stays for treatment or therapy for all types of cancer. On average, the cost of these procedures is 

3387 63.97 percent of the charge for them. This percentage was applied to the hospital charges from HCUPnet 

3388 to estimate the mean expenditures for a hospital stay for a chemotherapy infusion. 

3389 

3390 Follow-up care 

3391 

3392 Follow-up care consists of a physical exam, laboratory tests for thyroid levels, and an MRI of the 

3393 head and neck. The estimation of average costs of a physical exam and an MRI of the head and neck is 

3394 described above. The thyroid tests that are used to monitor the thyroid levels of individuals with 

3395 hypothyroidism are thyroid stimulation hormone and thyroxine tests (PubMed Health 2010). These are 

3396 also the thyroid function tests recommended for follow-up care of nasopharyngeal cancer. Hence, the 

3397 analysis calculated the average expenditure of outpatient and office-based visits for which the only 

3398 service was a laboratory test and the individual’s only diagnosis is hypothyroidism (ICD-9-CM diagnosis 

3399 code 244). 

3400 

3401 Expected medical costs of nasopharyngeal cancer 

3402 

3403 Using the treatment profile and mean medical expenditures from MEPS and HCUPnet, the 

3404 analysis estimated expected medical costs of hospital inpatient stays and outpatient and office-based visits 

3405 for individuals diagnosed with Stage I nasopharyngeal cancer (Table 3-7) and those diagnosed with Stage 

3406 II, III, or IV I nasopharyngeal cancer (Table 3-8). These expected costs include those incurred during the 

3407 year of diagnosis and in each subsequent year. 

3408 

Table 3-7: Expected Medical Costs for Stage I (Non-Fatal) Nasopharyngeal Cancer (2010$) 

Treatment Phase Event Unit Cost in First Year Unit Cost in Subsequent 

Years 

Outpatient and Office-Based Provider Care 

Initial Diagnosis $2,086 $0 

Treatment: Radiation therapy $14,424 $0 

Maintenance Follow-up care $1,446 $1,337 

Total $17,955 $1,337

3409 

Table 3-8: Expected Medical Costs for Stages II, III, and IV of (Non-Fatal) Nasopharyngeal Cancer 

(2010$) 

Treatment Phase Treatment Type Unit Cost in First Year Unit Cost in Subsequent 

Years 

Inpatient Care 

Initial Treatment: Chemotherapy with 5-fluorouracil $88,184 $0 

Outpatient and Office-Based Provider Care 

Initial Diagnosis $2,086 $0 

Treatment: Radiation therapy $14,424 $0 

Treatment: Chemotherapy with cisplatin $4,095 $0 

Maintenance Follow-up care $1,446 $1,337 

Total $110,234 $1,337

3410 

3411 3.4.2.4 Estimated opportunity costs in the year of diagnosis and in subsequent years 

3412 

3413 In addition to medical costs, cancer patients also incur opportunity costs – i.e., the value of time 

3414 lost to treating the illness. The analysis identified three categories of activity – work, leisure, and 

3415 housekeeping – that an individual could spend time on. 

3416 
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January 27, 2012 3-25 

3417 The expected value of an hour spent at work was calculated as the average total compensation 

3418 (wages plus employment benefits). This analysis values non-work time (both leisure time and time spent 

3419 on non-market activities, such as housekeeping) by assuming that “an individual will engage in such 

3420 unpaid activities only if, at the margin, the value of these activities is greater than the wages that could be 

3421 earned in paid employment. Hence after-tax wages provide a lower bound estimate of the value of non3422 work time. There are two different values for time considered in this analysis – one for time spent at 

3423 work and another for time spent at leisure or housekeeping activities – that were used to estimate the 

3424 opportunity cost associated with nasopharyngeal cancer. 

3425 

3426 Valuing any lost time of children can be difficult. However, based on the National Cancer 

3427 Institute’s Surveillance Epidemiology and End Results (SEER) database (SEER 2010), there are virtually 

3428 no cases of nasopharyngeal cancer among children, so this problem did not arise for this analysis. 

3429 

3430 The analysis assumed that full-time workers work 40 hours a week, for an average of 5.714 hours 

3431 per day (including weekends). It was assumed that everyone spends 8 hours sleeping, so the time spent in 

3432 leisure or housekeeping activities by the average full-time worker is estimated as 24 – 8 – 5.714 = 10.286. 

3433 If vwork denotes the value of an hour of work, and vleisure denotes the value of an hour of leisure or 

3434 housekeeping, then the expected value of a full day lost to nasopharyngeal cancer for a full-time worker is 

3435 . 

full time wor work leisure E (value of a full day ) 5.714 * v 10 .286 * v  ker   (17) 

3436 

3437 The analysis assumed that part-time workers work 20 hours a week, for an average of 2.857 hours 

3438 per day. Under this assumption, the time spent in leisure or housekeeping activities by the average part3439 time worker is 24 – 8 – 2.857 = 13.143. Thus the expected value of a full day lost to nasopharyngeal 

3440 cancer for a part-time worker is 

3441 . 

part time wor work leisure E (value of a full day ) 2.857 * v 13 .143 * v  ker   (18) 

3442 

3443 Finally, someone who is unemployed or retired would spend all 16 non-sleeping hours in 

3444 leisure or housekeeping activities. The expected value of a full day lost to nasopharyngeal cancer for an 

3445 unemployed or retired person, therefore, is 

3446 . 

unemployed retired leisure E (value of a full day ) 16 * v /  (19) 

3447 

3448 The BLS Labor Force Statistics Current Population Survey provides age group-specific 

3449 proportions of the U.S. non-institutionalized population that are (1) employed full time, (2) employed 

3450 part-time, (3) unemployed, and (4) retired. Using these proportions, the analysis constructed age-specific 

expected values of a full day lost to nasopharyngeal cancer. If p (a) 3451 i denotes the probability of being in 

3452 the ith employment status at age a, the expected value of a full day lost to nasopharyngeal cancer for 

3453 someone age a is: 

3454 

( ) ( ) * ( )

4

1

E value of a full day p a E value of a full day i

i

a  i



 (20) 

3455 

3456 where employment status is 

3457 

3458 full-time worker if i=1, 

3459 part-time worker if i=2, 

3460 unemployed if i=3, and 
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January 27, 2012 3-26 

3461 retired if i=4, 

3462 

3463 and the values for i=1, 2, 3, and 4 are given in equations (17) through (19) above. Table 3-9

3464 presents the age ranges provided by BLS for each employment status. 

3465 

Table 3-9: Age Ranges by Employment Status 

Employment Status Age Group 

Full-time / Part-time 

16 – 17 

18 – 19 

20 – 24 

25 - 54 

55 + 

Unemployed / Retired 

16 – 17 

18 – 19 

20 – 24 

25 – 29 

30 – 34 

35 – 39 

40 – 44 

45 – 49 

50 – 64a

65 – 69 

70 – 74 

75 + 

a. Data for ages 55 – 64 were not available. This age range was assumed to 

have the same probabilities as for 50 – 54.

3466 

3467 To estimate the value of work time, average hourly wages were obtained for full-time and part3468 time workers in all occupations from the National Compensation Survey (U.S. Bureau of Labor Statistics 

3469 2011a). Hourly wages were $22.77 for full-time workers and $12.10 for part-time workers in 2010. 

3470 These wages were loaded with benefits obtained from BLS Employer Costs for Employee Compensation 

3471 data. Total benefits were estimated to be $10.05 for full-time workers and $3.35 for part-time workers 

3472 (U.S. Bureau of Labor Statistics 2011b). Therefore, total compensation used to estimate the value of 

3473 work time was $32.82 for a full-time worker and $15.45 for a part-time worker. 

3474 

3475 As noted above, the value of leisure time was estimated as after-tax wages. The analysis 

3476 estimated an average income tax rate by dividing national income from wages and salaries by the total 

3477 value of income taxes at the federal and state levels. According to the Bureau of Economic Analysis 

3478 (BEA) National Economic Accounts, wage and salary disbursements in 2010 were approximately $6.4 

3479 trillion (U.S. Bureau of Economic Analysis 2011a), and the value of federal income taxes withheld 

3480 (minus refunds) and state income taxes was approximately $1.5 trillion (U.S. Bureau of Economic 

3481 Analysis 2011b). The computed average tax rate – about twenty-three percent – was applied to the wages 

3482 for full-time and part-time workers, resulting in estimated after-tax wages of $17.46 and $9.28, 

3483 respectively. 

3484 

3485 Using equations (17), (18), and (19) given above, the expected full-day values for individuals 

3486 having each of the four employment statuses were calculated. These are shown in Table 3-10. 

3487 
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January 27, 2012 3-27 

Table 3-10: Expected Full-Day Values by Employment Status (2010$) 

 Value of Work Value of Leisure 

Employment 

Status 

Work 

Hours / 

Day 

[A] 

Compensation / 

Hour 

[B] 

Work Value / 

Day 

[C] = [A] * [B]

Leisure 

Hours / 

Day 

[D]

After-Tax 

Wages / 

Hour 

[E] 

Leisure Value / 

Day 

[F] = [D] * [E] 

Total Full Day 

Value 

[G] = [C] + [F] 

Full-Time 5.714 $32.82 $187.55 10.286 $17.46 $179.55 $367.10 

Part-Time 2.857 $15.45 $44.14 13.143 $9.28 $121.92 $166.06 

Unemployed 0.000 $0.00 $0.00 16.000 $9.28 $148.42 $148.42 

Not in Labor 

Force 0.000 $0.00 $0.00 16.000 $9.28 $148.42 $148.42 

Source:U.S. Bureau of Economic Analysis 2011a, b; U.S. Bureau of Labor Statistics 2011a, b 

3488 

3489 The probabilities of employment status at each age were then multiplied by the corresponding 

3490 expected full-day values in Table 3-10 (see equation (20)) to estimate the expected full-day value of an 

3491 individual at each age. These values are presented in Table 3-11. 

3492 

Table 3-11: Expected Full-Day Values by Age 

 Probability of Employment Status 

Age Full Time Part Time Unemployed 

Not In Labor 

Force 

Expected Value of 

Full Day 

Expected Value 

Per Hour 

16-17 1.13% 12.23% 5.10% 81.54% $153.04 $9.57 

18-19 8.99% 26.25% 10.74% 54.02% $172.71 $10.79 

20-24 36.41% 23.02% 11.15% 29.43% $232.10 $14.51 

25-29 62.38% 9.90% 8.71% 19.01% $286.58 $17.91 

30-34 64.27% 10.20% 7.55% 17.98% $290.77 $18.17 

35-39 65.43% 10.38% 6.75% 17.44% $293.33 $18.33 

40-44 66.40% 10.53% 6.42% 16.65% $295.47 $18.47 

45-49 65.41% 10.38% 6.66% 17.55% $293.30 $18.33 

50-54 63.26% 10.04% 5.86% 20.85% $288.53 $18.03 

55-64 56.24% 17.06% 5.86% 20.85% $274.41 $17.15 

65-69 23.44% 7.11% 2.20% 67.25% $200.93 $12.56 

70-74 12.99% 3.94% 1.10% 81.96% $177.53 $11.10 

75+ 5.09% 1.54% 0.44% 92.93% $159.82 $9.99 

Source: U.S. Bureau of Economic Analysis 2011a, b; U.S. Bureau of Labor Statistics 2011a, b, c 

3493 

3494 As shown in Table 3-5 above, much of lost time associated with nasopharyngeal cancer consists 

3495 of partial rather than full days lost. Assuming that these lost hours are distributed across the two types of 

3496 activity (work and leisure) in the same proportions that these activities occur in a typical day for 

3497 individuals in each of the three employment status categories, an expected opportunity cost associated 

3498 with a given treatment is estimated as the number of hours lost as a result of the treatment times the 

3499 expected value per hour, shown in the right-most column of Table 3-11. The expected value per hour was 

3500 calculated by dividing the expected value of a full day by 16, since the assumption of 16 waking hours per 

3501 day underlies the expected value of a full day (see equations (17), (18), and (19)). Note that it is possible 

3502 that the assumption that lost hours are distributed across the two types of activity (work and leisure) in the 

3503 same proportions that these activities occur in a typical day may tend to lead toward an underestimate of 

3504 the benefits if full time workers are more likely to schedule treatments during working hours rather than 

3505 leisure hours. It is also worth noting that the opportunity cost estimates do not include work or leisure 

3506 time lost due to the side effects of chemotherapy, because there is wide variation in how individuals react 

3507 to treatments, and information could not be located on the typical or average recovery time from 

3508 chemotherapy. 

3509 

3510 

3511 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-28 

3512 3.4.2.5 Annual expected opportunity cost by age 

3513 

3514 Expected opportunity costs associated with nasopharyngeal cancer were estimated for the year in 

3515 which diagnosis occurs and for all subsequent years by multiplying the estimated number of hours lost in 

3516 the year (lost time is given in minutes in Table 3-6) times the expected value per hour lost, given in Table 

3517 3-11. Since the expected value of a lost hour varies by age, expected opportunity costs also vary by age. 

3518 In addition, since treatments differ by cancer stage at diagnosis, expected opportunity costs also differ by 

3519 stage at diagnosis. Table 3-12 gives age- and stage at diagnosis-specific opportunity costs, separately for 

3520 the year of diagnosis and subsequent years. 

3521 

Table 3-12: Total Expected Value of Time Lost Treating (Non-Fatal) Nasopharyngeal Cancer 

(2010$) 

 First Year Subsequent Years 

Age Stage I Stage II, III, and IV Stage I Stage II, III, and IV

16-17 $640.87 $2,580.20 $33.80 $33.80 

18-19 $723.20 $2,911.70 $38.14 $38.14 

20-24 $971.92 $3,913.07 $51.26 $51.26 

25-29 $1,200.06 $4,831.58 $63.29 $63.29 

30-34 $1,217.61 $4,902.23 $64.21 $64.21 

35-39 $1,228.32 $4,945.37 $64.78 $64.78 

40-44 $1,237.30 $4,981.50 $65.25 $65.25 

45-49 $1,228.19 $4,944.83 $64.77 $64.77 

50-54 $1,208.23 $4,864.46 $63.72 $63.72 

55-64 $1,149.07 $4,626.30 $60.60 $60.60 

65-69 $841.38 $3,387.48 $44.37 $44.37 

70-74 $743.42 $2,993.10 $39.21 $39.21 

75+ $669.24 $2,694.44 $35.29 $35.29 

Sources: 

Wages and Benefits from U.S. Bureau of Labor Statistics 2011a, b, c; Income and Tax information from U.S. Bureau of 

Economic Analysis 2011a, b; Average time with a physician from Abbo, et al. 2008; Time for chemotherapy with 5-fluorouracil 

from Al-Sarraf, et al. 1998; Cooper 2010; Time for rapid infusion of cisplatin from Cooper 2010; Radiation therapy time from 

American Cancer Society 2011a; CT scan time fromMayo Clinic 2010a; MRI time from Mayo Clinic 2010b; Average wait time 

based on Press Ganey Associates Inc. 2010; Average travel time based on Federal Highway Administration 2011.

3522 

3523 Consider the following example: the opportunity cost in the year of diagnosis for someone 

3524 diagnosed at age 60 with Stage III nasopharyngeal cancer would be calculated as follows: 

3525 

3526 Calculate total hours lost in year of diagnosis: 

3527 

3528 • Diagnosis (all stages at diagnosis) = 375 minutes = (375/60) hours = 6.25 hours 

3529 • First-year follow-up care (all stages at diagnosis) = 320 minutes = 320/60 hours = 5.33 hours 

3530 • First-year treatments (for Stages II, II, and IV at diagnosis) = 15,490 mins. = 258.17 hours 

3531 

3532 Therefore, total first-year hours lost = 6.25 + 5.33 + 258.17 = 269.75. 

3533 

3534 The expected value of a lost hour for someone age 60 is $17.15 (see Table 3-11). The estimated 

3535 opportunity cost in the year of diagnosis for someone diagnosed at age 60 with Stage III nasopharyngeal 

3536 cancer would be 

3537 269.75 hours x $17.15 per hour = $4,626. 

3538 

3539 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-29 

3540 3.4.2.6 Total expected cost of non-fatal nasopharyngeal cancer 

3541 

3542 Expected cost in the kth year after diagnosis, conditional on age and stage of cancer at diagnosis 

3543 

3544 If a person is diagnosed with nasopharyngeal cancer at age a and lives throughout the year of 

diagnosis, the total costs associated with the illness that year will be ( ) MC 1  OC a ,1 3545 , where MC1 denotes 

3546 the medical costs in the first year and OCa,1 denotes the opportunity costs in the first year for someone 

3547 diagnosed at age a. While these costs also depend on the stage of the cancer at diagnosis, for ease of 

3548 exposition, that is (temporarily) omitted here. 

3549 

3550 Although the analysis is considering only non-fatal cases of the cancer, people can still die of 

3551 other causes. If the cancer patient dies of other causes partway through the year, he will not incur all of 

( ) MC 1  OC a ,1 3552 . The analysis assumes that deaths from other causes occur uniformly throughout the 

3553 year and thus, on average, the expected cost associated with nasopharyngeal cancer for the first year 

among those who die of some other cause that year is ( ) 2 1 ,1 1 MC  OC a 3554 . 

3555 

3556 Survival probabilities were obtained from the Centers for Disease Control and 

Prevention/National Center for Health Statistics (2010a).45 3557 Since survival probabilities are age-specific, 

3558 age is inserted into the calculations here. 

3559 

3560 Suppose an individual is diagnosed with nasopharyngeal cancer at age a. Let spa denote the 

3561 probability of surviving from age a to age (a+1). Then the expected cost during the year of diagnosis of 

3562 nasopharyngeal cancer for an individual diagnosed at age a is: 

3563 

3564 

(cos ) * ( ) (1 ) * ( ) 2 1 ,1 1 a ,1 a 1 a ,1 a MC OC a E t  sp MC  OC   sp  (21) 

3565 

3566 

3567 Similarly, the expected cost associated with nasopharyngeal cancer for that individual during the 

3568 second year (at age a+1) is: 

3569 

3570 . 

(cos ) * ( ) (1 ) * ( ) 2 2 1, 2 1 a 1, 2  a 1 2  a 1, 2   a 1 MC  OC a  E t sp MC OC sp (22) 

3571 

3572 In general, the expected cost associated with nasopharyngeal cancer during the kth year after 

3573 diagnosis (i.e., in year (k+1) of the cancer) for an individual diagnosed at age a is: 

3574 

(cos ) * ( ) (1 ) * ( ) 2 1 , 1 1 a  k ,k 1  a  k k 1  a  k ,k 1   a  k MC k   OC a  k k  E t sp MC OC sp (23) 

3575 

3576 For example, suppose an individual is diagnosed with Stage III nasopharyngeal cancer at age 

3577 60. The survival probability at age 60 (the probability of surviving from age 60 to age 61) is 0.990718. 

3578 Using the first-year medical cost from Table 3-8 ($110,234) and the first-year opportunity cost for 

3579 someone diagnosed with Stage III nasopharyngeal cancer at age 60 from Table 3-12 ($4,626), the total 

3580 expected cost in the first year is: 

3581 

 45 Having nasopharyngeal cancer may increase the probabilities of dying of other causes. However, because no such 

information was identified, this analysis uses general population survival probabilities. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-30 

(cos ) 0.990718 * ($ 110 ,234 $4,626 ) (1 0.990718 ) * ($ 110 ,234 $4,626 ) 2

1 E t 60 ,1     

= $114,327 

(24) 

3582 

3583 The age-specific expected costs in the first year (the year of diagnosis) and in subsequent years 

3584 for individuals diagnosed with Stage I nasopharyngeal cancer and at Stages II, III, or IV are shown in 

3585 Table 3-13. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-31 

Table 3-13: Annual Cost of (Non-Fatal) Nasopharyngeal Cancer (2010$) 

 Diagnosed in Stage I Diagnosed in Stage II, III, IV 

Age at 

Diagnosis First Year Subsequent Years First Year Subsequent Years

16 $18,591 $1,370 $112,783 $1,370 

17 $18,590 $1,370 $112,777 $1,370 

18 $18,672 $1,374 $113,103 $1,374 

19 $18,671 $1,374 $113,099 $1,374 

20 $18,919 $1,387 $114,095 $1,387 

21 $18,918 $1,387 $114,091 $1,387 

22 $18,917 $1,387 $114,088 $1,387 

23 $18,917 $1,387 $114,087 $1,387 

24 $18,917 $1,387 $114,087 $1,387 

25 $19,146 $1,399 $115,007 $1,399 

26 $19,146 $1,399 $115,007 $1,399 

27 $19,146 $1,399 $115,008 $1,399 

28 $19,146 $1,399 $115,008 $1,399 

29 $19,146 $1,399 $115,007 $1,399 

30 $19,163 $1,400 $115,076 $1,400 

31 $19,163 $1,400 $115,074 $1,400 

32 $19,162 $1,400 $115,072 $1,400 

33 $19,162 $1,400 $115,069 $1,400 

34 $19,161 $1,400 $115,066 $1,400 

35 $19,171 $1,400 $115,106 $1,400 

36 $19,171 $1,400 $115,101 $1,400 

37 $19,170 $1,400 $115,095 $1,400 

38 $19,168 $1,400 $115,088 $1,400 

39 $19,167 $1,400 $115,079 $1,400 

40 $19,174 $1,400 $115,105 $1,400 

41 $19,173 $1,400 $115,096 $1,400 

42 $19,171 $1,400 $115,084 $1,400 

43 $19,169 $1,400 $115,072 $1,400 

44 $19,167 $1,400 $115,059 $1,400 

45 $19,155 $1,399 $115,009 $1,399 

46 $19,153 $1,399 $114,995 $1,399 

47 $19,150 $1,399 $114,980 $1,399 

48 $19,148 $1,399 $114,963 $1,399 

49 $19,145 $1,398 $114,945 $1,398 

50 $19,121 $1,397 $114,845 $1,397 

51 $19,118 $1,397 $114,823 $1,397 

52 $19,114 $1,397 $114,801 $1,397 

53 $19,110 $1,396 $114,778 $1,396 

54 $19,107 $1,396 $114,756 $1,396 

55 $19,044 $1,393 $114,496 $1,393 

56 $19,040 $1,392 $114,472 $1,392 

57 $19,035 $1,392 $114,444 $1,392 

58 $19,030 $1,392 $114,412 $1,392 

59 $19,024 $1,391 $114,374 $1,391 

60 $19,016 $1,391 $114,327 $1,391 

61 $19,007 $1,390 $114,274 $1,390 

62 $18,998 $1,389 $114,218 $1,389 

63 $18,989 $1,389 $114,164 $1,389 

64 $18,980 $1,388 $114,112 $1,388 

65 $18,665 $1,371 $112,826 $1,371 

66 $18,656 $1,371 $112,769 $1,371 

67 $18,645 $1,370 $112,703 $1,370 

68 $18,632 $1,369 $112,625 $1,369 

69 $18,617 $1,368 $112,536 $1,368 

70 $18,503 $1,361 $112,044 $1,361 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-32 

Table 3-13: Annual Cost of (Non-Fatal) Nasopharyngeal Cancer (2010$) 

 Diagnosed in Stage I Diagnosed in Stage II, III, IV 

Age at 

Diagnosis First Year Subsequent Years First Year Subsequent Years

71 $18,484 $1,360 $111,929 $1,360 

72 $18,462 $1,358 $111,796 $1,358 

73 $18,437 $1,356 $111,643 $1,356 

74 $18,409 $1,354 $111,472 $1,354 

75 $18,304 $1,348 $110,987 $1,348 

76 $18,270 $1,346 $110,781 $1,346 

77 $18,233 $1,343 $110,555 $1,343 

78 $18,192 $1,340 $110,305 $1,340 

79 $18,147 $1,337 $110,032 $1,337 

80 $18,097 $1,333 $109,731 $1,333 

81 $18,043 $1,329 $109,401 $1,329 

82 $17,983 $1,325 $109,040 $1,325 

83 $17,918 $1,320 $108,644 $1,320 

84 $17,847 $1,315 $108,212 $1,315 

85 $17,769 $1,309 $107,741 $1,309 

86 $17,684 $1,303 $107,227 $1,303 

87 $17,592 $1,296 $106,669 $1,296 

88 $17,493 $1,288 $106,064 $1,288 

89 $17,385 $1,280 $105,410 $1,280 

90 $17,268 $1,272 $104,703 $1,272 

91 $17,142 $1,263 $103,941 $1,263 

92 $17,008 $1,253 $103,124 $1,253 

93 $16,863 $1,242 $102,249 $1,242 

94 $16,709 $1,231 $101,316 $1,231 

95 $16,546 $1,219 $100,323 $1,219 

3586 

3587 Present discounted value of costs conditional on age at diagnosis 

3588 

3589 Because cancer is a chronic illness, costs are incurred for a number of years. The COI-based 

3590 value of a cancer case is the pdv of the stream of expected costs associated with the illness, from the year 

3591 of diagnosis to the year of death of the patient (or a preset year). Since the analysis is considering only 

3592 non-fatal cases of nasopharyngeal cancer, death would be from some other cause. As shown in Table 

3593 3-13, expected first-year and subsequent-year costs (including medical costs and opportunity costs) were 

3594 calculated for each age at diagnosis, starting at age 16, separately for those diagnosed at Stage I and those 

3595 diagnosed at Stages II, III, or IV. Expected costs take into account the probability of dying of some other 

3596 cause at each age, as explained above. Denoting the discount rate as d, the pdv of a case of 

3597 nasopharyngeal cancer for an individual diagnosed at age a, conditional on a given stage-at-diagnosis, is 

3598 



 

 

M

k

k

a k k

a d

E t

pdv

0

, 1

(1 )

(cos ) (25) 

3599 

where , 1 (cos ) a  k k  3600 E t is given by equation (23) above. The sums of the expected costs were taken 

3601 through age 99. 

3602 

3603 While the dependence of cost on stage of the cancer at diagnosis has been omitted from 

3604 equations (23) and (25), cost does in fact depend on this, as shown in Table 3-13. The final step is to 

3605 calculate an expected pdv, where the expectation is taken over the stage at diagnosis. Using the 

3606 percentages of cases diagnosed at each stage given in Table 3-13 above, and assuming that the cases with 

3607 unknown stage at diagnosis have the same distribution of stages at diagnosis as the cases whose stages are 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-33 

3608 known, 16.89 percent of cases are diagnosed at Stage I and 83.11 percent are diagnosed at Stages II, III, 

3609 or IV. Table 3-14 shows the stage at diagnosis-specific pdvs, and the expected pdv, calculated as a 

3610 weighted average of the two stage at diagnosis-specific pdvs, where the weights are these percentages, 

3611 separately for each age at diagnosis. These pdvs are estimated for a 3 and a 7 percent discount rate. The 

3612 final column of Table 3-14 shows the implied values of a micro risk reduction (a risk reduction of 

3613 1/1,000,000), which is just the expected pdv divided by 1,000,000. 

3614 

3615 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-34 

Table 3-14: Present Discounted Values of Nonfatal Nasopharyngeal Cancer by Age at Diagnosis 

Age at 

Diagnosis 

3 Percent Discount Rate 7 Percent Discount Rate 

PDV for 

Diagnosis 

at Stage I 

PDV for 

Diagnosis at 

Stage II, III, or 

IV 

Expected 

PDV

Implied Value 

of a Micro 

Risk 

Reduction 

PDV for 

Diagnosis at 

Stage I 

PDV for 

Diagnosis at 

Stage II, III, 

or IV 

Expected 

PDV

Implied Value of

a Micro Risk 

Reduction 

16 $60,328 $154,520 $138,609 $0.139 $38,090 $132,282 $116,371 $0.116 

17 $60,207 $154,394 $138,484 $0.138 $60,207 $154,394 $138,484 $0.138 

18 $60,297 $154,728 $138,777 $0.139 $60,297 $154,728 $138,777 $0.139 

19 $60,169 $154,597 $138,646 $0.139 $60,169 $154,597 $138,646 $0.139 

20 $60,681 $155,857 $139,780 $0.140 $60,681 $155,857 $139,780 $0.140 

21 $60,544 $155,717 $139,640 $0.140 $60,544 $155,717 $139,640 $0.140 

22 $60,404 $155,575 $139,499 $0.139 $60,404 $155,575 $139,499 $0.139 

23 $60,262 $155,431 $139,355 $0.139 $60,262 $155,431 $139,355 $0.139 

24 $60,115 $155,285 $139,209 $0.139 $60,115 $155,285 $139,209 $0.139 

25 $60,638 $156,605 $140,394 $0.140 $60,638 $156,605 $140,394 $0.140 

26 $60,481 $156,448 $140,238 $0.140 $60,481 $156,448 $140,238 $0.140 

27 $60,320 $156,287 $140,076 $0.140 $60,320 $156,287 $140,076 $0.140 

28 $60,153 $156,120 $139,909 $0.140 $60,153 $156,120 $139,909 $0.140 

29 $59,980 $155,947 $139,736 $0.140 $59,980 $155,947 $139,736 $0.140 

30 $59,768 $155,693 $139,489 $0.139 $59,768 $155,693 $139,489 $0.139 

31 $59,585 $155,508 $139,305 $0.139 $59,585 $155,508 $139,305 $0.139 

32 $59,396 $155,317 $139,114 $0.139 $59,396 $155,317 $139,114 $0.139 

33 $59,202 $155,121 $138,918 $0.139 $59,202 $155,121 $138,918 $0.139 

34 $59,001 $154,917 $138,715 $0.139 $59,001 $154,917 $138,715 $0.139 

35 $58,774 $154,662 $138,464 $0.138 $58,774 $154,662 $138,464 $0.138 

36 $58,560 $154,444 $138,248 $0.138 $58,560 $154,444 $138,248 $0.138 

37 $58,340 $154,219 $138,023 $0.138 $58,340 $154,219 $138,023 $0.138 

38 $58,112 $153,985 $137,791 $0.138 $58,112 $153,985 $137,791 $0.138 

39 $57,877 $153,743 $137,549 $0.138 $57,877 $153,743 $137,549 $0.138 

40 $57,618 $153,455 $137,266 $0.137 $57,618 $153,455 $137,266 $0.137 

41 $57,368 $153,197 $137,010 $0.137 $57,368 $153,197 $137,010 $0.137 

42 $57,111 $152,930 $136,745 $0.137 $57,111 $152,930 $136,745 $0.137 

43 $56,846 $152,655 $136,471 $0.136 $56,846 $152,655 $136,471 $0.136 

44 $56,572 $152,370 $136,188 $0.136 $56,572 $152,370 $136,188 $0.136 

45 $56,307 $152,115 $135,932 $0.136 $56,307 $152,115 $135,932 $0.136 

46 $56,017 $151,813 $135,631 $0.136 $56,017 $151,813 $135,631 $0.136 

47 $55,718 $151,501 $135,322 $0.135 $55,718 $151,501 $135,322 $0.135 

48 $55,409 $151,179 $135,002 $0.135 $55,409 $151,179 $135,002 $0.135 

49 $55,091 $150,846 $134,671 $0.135 $55,091 $150,846 $134,671 $0.135 

50 $54,799 $150,584 $134,404 $0.134 $54,799 $150,584 $134,404 $0.134 

51 $54,460 $150,227 $134,050 $0.134 $54,460 $150,227 $134,050 $0.134 

52 $54,111 $149,860 $133,686 $0.134 $54,111 $149,860 $133,686 $0.134 

53 $53,752 $149,482 $133,312 $0.133 $53,752 $149,482 $133,312 $0.133 

54 $53,383 $149,094 $132,927 $0.133 $53,383 $149,094 $132,927 $0.133 

55 $51,727 $145,725 $129,847 $0.130 $51,727 $145,725 $129,847 $0.130 

56 $51,344 $145,321 $129,447 $0.129 $51,344 $145,321 $129,447 $0.129 

57 $50,948 $144,903 $129,032 $0.129 $50,948 $144,903 $129,032 $0.129 

58 $50,539 $144,467 $128,601 $0.129 $50,539 $144,467 $128,601 $0.129 

59 $50,115 $144,012 $128,151 $0.128 $50,115 $144,012 $128,151 $0.128 

60 $49,676 $143,535 $127,680 $0.128 $49,676 $143,535 $127,680 $0.128 

61 $49,222 $143,037 $127,190 $0.127 $49,222 $143,037 $127,190 $0.127 

62 $48,755 $142,524 $126,684 $0.127 $48,755 $142,524 $126,684 $0.127 

63 $48,275 $142,000 $126,168 $0.126 $48,275 $142,000 $126,168 $0.126 

64 $47,783 $141,465 $125,640 $0.126 $47,783 $141,465 $125,640 $0.126 

65 $47,833 $142,268 $126,316 $0.126 $47,833 $142,268 $126,316 $0.126 

66 $47,306 $141,693 $125,749 $0.126 $47,306 $141,693 $125,749 $0.126 

67 $46,760 $141,091 $125,157 $0.125 $46,760 $141,091 $125,157 $0.125 

68 $46,194 $140,461 $124,537 $0.125 $46,194 $140,461 $124,537 $0.125 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-35 

Table 3-14: Present Discounted Values of Nonfatal Nasopharyngeal Cancer by Age at Diagnosis 

Age at 

Diagnosis 

3 Percent Discount Rate 7 Percent Discount Rate 

PDV for 

Diagnosis 

at Stage I 

PDV for 

Diagnosis at 

Stage II, III, or 

IV 

Expected 

PDV

Implied Value 

of a Micro 

Risk 

Reduction 

PDV for 

Diagnosis at 

Stage I 

PDV for 

Diagnosis at 

Stage II, III, 

or IV 

Expected 

PDV

Implied Value of

a Micro Risk 

Reduction 

69 $45,608 $139,800 $123,889 $0.124 $45,608 $139,800 $123,889 $0.124 

70 $45,171 $139,531 $123,592 $0.124 $45,171 $139,531 $123,592 $0.124 

71 $44,541 $138,804 $122,881 $0.123 $44,541 $138,804 $122,881 $0.123 

72 $43,888 $138,039 $122,135 $0.122 $43,888 $138,039 $122,135 $0.122 

73 $43,211 $137,234 $121,352 $0.121 $43,211 $137,234 $121,352 $0.121 

74 $42,510 $136,389 $120,531 $0.121 $42,510 $136,389 $120,531 $0.121 

75 $41,904 $135,811 $119,948 $0.120 $41,904 $135,811 $119,948 $0.120 

76 $41,154 $134,887 $119,054 $0.119 $41,154 $134,887 $119,054 $0.119 

77 $40,378 $133,920 $118,119 $0.118 $40,378 $133,920 $118,119 $0.118 

78 $39,577 $132,908 $117,143 $0.117 $39,577 $132,908 $117,143 $0.117 

79 $38,749 $131,848 $116,122 $0.116 $38,749 $131,848 $116,122 $0.116 

80 $37,893 $130,738 $115,055 $0.115 $37,893 $130,738 $115,055 $0.115 

81 $37,009 $129,575 $113,939 $0.114 $37,009 $129,575 $113,939 $0.114 

82 $36,097 $128,357 $112,772 $0.113 $36,097 $128,357 $112,772 $0.113 

83 $35,155 $127,080 $111,552 $0.112 $35,155 $127,080 $111,552 $0.112 

84 $34,183 $125,742 $110,276 $0.110 $34,183 $125,742 $110,276 $0.110 

85 $33,180 $124,341 $108,943 $0.109 $33,180 $124,341 $108,943 $0.109 

86 $32,148 $122,874 $107,549 $0.108 $32,148 $122,874 $107,549 $0.108 

87 $31,084 $121,339 $106,093 $0.106 $31,084 $121,339 $106,093 $0.106 

88 $29,990 $119,732 $104,573 $0.105 $29,990 $119,732 $104,573 $0.105 

89 $28,865 $118,053 $102,988 $0.103 $28,865 $118,053 $102,988 $0.103 

90 $27,710 $116,300 $101,336 $0.101 $27,710 $116,300 $101,336 $0.101 

91 $26,525 $114,472 $99,616 $0.100 $26,525 $114,472 $99,616 $0.100 

92 $25,312 $112,567 $97,828 $0.098 $25,312 $112,567 $97,828 $0.098 

93 $24,072 $110,586 $95,972 $0.096 $24,072 $110,586 $95,972 $0.096 

94 $22,805 $108,529 $94,049 $0.094 $22,805 $108,529 $94,049 $0.094 

95 $21,513 $106,398 $92,059 $0.092 $21,513 $106,398 $92,059 $0.092 

3616 

3617 

3618 3.4.3 Timing of Reduced Cancer Risk and Present Value of Reduced Cancer Risk at the 

3619 Time of the Exposure Reduction 

3620 

3621 The available studies that link formaldehyde exposure to cancer risk do not provide any 

3622 information about the latency periods between exposure and cancer incidence. Therefore, this analysis 

3623 relies on the assumption that the incidence of nasopharyngeal cancer caused by formaldehyde exposure 

3624 has the same distribution as the incidence of nasopharyngeal cancer from any cause. 

3625 

3626 The National Cancer Institutes’ Surveillance Epidemiology and End Results (SEER) 

3627 nasopharyngeal cancer incidence data included the number of cancer diagnoses for ten year age brackets 

3628 that ranged from ages 20 to 79 and also included an age bracket for age 80 and older (Ries, et al. 2007). 

3629 To estimate the timing of avoided cancer for a hypothetical person, it was assumed that the timing of 

3630 cancer diagnosis would follow the distribution between the age of exposure and the individual’s life 

3631 expectancy age. Table 3-15 presents an example of how this calculation is performed for individuals who 

3632 are age 50 at the time they experience a change in formaldehyde exposure that reduces their cancer risk. 

3633 Thus, conditional on avoiding a case of nasopharyngeal cancer because of an exposure reduction that 

3634 occurred at age 50, there is a 40.7 percent chance that the avoided cancer would have occurred between 

3635 ages 50 and 59, a 37.8 percent chance that it would have occurred between ages 60 and 69, a 21.0 percent 

3636 chance that it would have occurred between ages 70 and 79, and a 0.4 percent chance that it would have 

3637 occurred at age 80. Note that although the table presents these percentages for the age brackets for which 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-36 

3638 the incidence data were available, the analysis uses annual incidence rates estimated by assuming the 

3639 incidence rates are uniformly distributed within the age brackets for which they were reported. 

3640 

Table 3-15: Distribution of Timing of Avoided Cancer Risk: Example for a 

Reduction in Exposure Experienced at Age 50 

Age 

(1) 

Cancer Incidence 

Distribution 

(2) 

Timing of Avoided Cancer 

Riska 

(3) 

0-29 4.5% n.a. 

30-39 12.1% n.a. 

40-49 23.4% n.a. 

50-59 23.0% 40.7% 

60-69 21.4% 37.8% 

70-79 11.9% 21.0% 

80 3.7% 0.4% 

81+ n.a. 

Total 100% 100% a Calculated as column (2) divided by 56.6%, where 56.6% is the percentage of cancer 

death incidence between the ages of 50 and 81 (the ages that span from when the change 

in exposure was experienced through the end of the expected lifetime). 

Source: Ries, et al. 2007 

3641 

3642 3.4.3.1 Present Value of Reduced Cancer Risk at the Time of the Exposure Reduction 

3643 

3644 Once the distribution of the timing of the avoided cancer risk is estimated (see section 3.4.3), this 

3645 distribution can be applied to the estimated values of reduced cancer risk at the time the cancer is avoided. 

3646 Using the example presented above in section 3.4.3 an individual with an exposure reduction at age 50 

3647 has a 40.7% chance of realizing the benefit from that reduction between the ages of 50 and 59. This is 

3648 assumed to be uniformly distributed across the 10 years in that age range; therefore, there is a 4.7% 

3649 chance this individual realizes this benefit in each year between the ages 50 and 59. Thus, by multiplying 

3650 the probability that cancer is avoided in a given year by the value of the risk reduction discounted to the 

3651 year when the exposure reduction was experienced, the analysis can estimate the present value of reduced 

3652 cancer risk at the time of the exposure reduction. For an individual with a given age at exposure, this 

3653 calculation can be described with the following formula: 

3654 

௧ሻܥܨܸܰ ൈ ݈ܽݐܽܨ݊݋ܰݎܲ ൅ ܴܯܸ ൈ ݈ܽݐܽܨݎܲሺ ൈ ௧݅݀݁݀݋ݒܣݎܲ ෍ ൌ௔௘ ௧ୀ݊݋݅ݐܿݑܴ݇݁݀ݏܴ݅ݎܽ݊ܿ݁ܥܸܲ

ሺ1 ൅ ݀ሻሺ௧ାଵି௔௘ሻ

௅ா

௧ୀ௔௘

(26) 

3655 

3656 where: 

3657 

PVCancerRiskReductiont=ae is the present value of the reduced cancer risk at the time of the exposure reduction 

for individual age ae at the time of the exposure reduction. 

PRAvoidedt is the probability that reduction in cancer risk is realized in period t. This 

probability is conditional on the age at exposure. 

PrFatal is the probability that a case of nasopharyngeal cancer is fatal, 57.1 percent. 

VMR is the value of a micro mortality risk reduction, $8.01. 

PrNonFatal is the probability that a case of nasopharyngeal cancer is not fatal, 42.9 percent. 

VNFCt is the value of a micro risk reduction for nonfatal cancer diagnosed in period t, or 

1/1,000,000 of the value of an avoided case of nonfatal nasopharyngeal cancer. 

This value is conditional on the age at diagnosis. 

d is the 3 percent or 7 percent discount rate. 

3658 

3659 Table 3-16 presents the present values for micro risk reductions for fatal and nonfatal cancer, both 

3660 separately and combined, by the age at exposure. Note that the combined value for fatal and nonfatal 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-37 

3661 cancer is simply the average of the two separate values weighted according to the probability that cancer 

3662 is fatal, which is 57.1 percent of nasopharyngeal cases (SEER 2010). 

3663 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-38 

Table 3-16: Present Discounted Values for Nasopharyngeal Cancer by Age at 

Exposure 

Age at Exposure 

3 Percent Discount Rate 7 Percent Discount Rate 

PV of 

Micro Risk 

Reduction 

for Fatal 

Cancer 

PV of 

Micro Risk 

Reduction 

for 

Nonfatal 

Cancer 

PV of Micro 

Risk 

Reduction 

for Cancer 

(fatal and 

nonfatal) 

PV of 

Micro Risk 

Reduction 

for Fatal 

Cancer 

PV of Micro 

Risk 

Reduction for 

Nonfatal 

Cancer 

PV of 

Micro Risk 

Reduction 

for Cancer 

(fatal and 

nonfatal) 

0 $1.809 $0.030 $1.01 $0.333 $0.005 $0.19 

1 $1.850 $0.031 $1.04 $0.352 $0.005 $0.20 

2 $1.919 $0.032 $1.08 $0.381 $0.006 $0.21 

3 $1.963 $0.032 $1.10 $0.403 $0.006 $0.23 

4 $2.019 $0.033 $1.13 $0.430 $0.006 $0.24 

5 $2.082 $0.034 $1.17 $0.461 $0.007 $0.26 

6 $2.145 $0.035 $1.20 $0.494 $0.007 $0.28 

7 $2.209 $0.037 $1.24 $0.528 $0.008 $0.30 

8 $2.275 $0.038 $1.27 $0.565 $0.008 $0.32 

9 $2.343 $0.039 $1.31 $0.605 $0.009 $0.34 

10 $2.414 $0.040 $1.35 $0.647 $0.009 $0.36 

11 $2.486 $0.041 $1.39 $0.693 $0.010 $0.39 

12 $2.561 $0.042 $1.43 $0.741 $0.011 $0.41 

13 $2.637 $0.044 $1.48 $0.793 $0.012 $0.44 

14 $2.717 $0.045 $1.52 $0.848 $0.012 $0.47 

15 $2.798 $0.046 $1.57 $0.908 $0.013 $0.51 

16 $2.882 $0.048 $1.62 $0.971 $0.014 $0.54 

17 $2.969 $0.049 $1.66 $1.039 $0.015 $0.58 

18 $3.058 $0.051 $1.71 $1.112 $0.016 $0.62 

19 $3.149 $0.052 $1.76 $1.190 $0.017 $0.67 

20 $3.222 $0.053 $1.81 $1.244 $0.018 $0.70 

21 $3.297 $0.054 $1.85 $1.301 $0.019 $0.73 

22 $3.375 $0.056 $1.89 $1.363 $0.020 $0.76 

23 $3.455 $0.057 $1.94 $1.429 $0.021 $0.80 

24 $3.538 $0.058 $1.98 $1.501 $0.022 $0.84 

25 $3.624 $0.060 $2.03 $1.577 $0.023 $0.88 

26 $3.713 $0.061 $2.08 $1.659 $0.024 $0.93 

27 $3.805 $0.063 $2.13 $1.747 $0.025 $0.98 

28 $3.900 $0.064 $2.19 $1.841 $0.027 $1.03 

29 $3.998 $0.066 $2.24 $1.943 $0.028 $1.09 

30 $4.062 $0.067 $2.28 $2.001 $0.029 $1.12 

31 $4.134 $0.068 $2.32 $2.068 $0.030 $1.16 

32 $4.209 $0.069 $2.36 $2.139 $0.031 $1.20 

33 $4.286 $0.070 $2.40 $2.216 $0.032 $1.24 

34 $4.366 $0.071 $2.45 $2.298 $0.033 $1.29 

35 $4.449 $0.073 $2.49 $2.386 $0.035 $1.33 

36 $4.535 $0.074 $2.54 $2.480 $0.036 $1.39 

37 $4.624 $0.075 $2.59 $2.581 $0.037 $1.44 

38 $4.717 $0.077 $2.64 $2.690 $0.039 $1.51 

39 $4.813 $0.078 $2.70 $2.807 $0.041 $1.57 

40 $4.869 $0.079 $2.73 $2.866 $0.042 $1.60 

41 $4.927 $0.080 $2.76 $2.927 $0.042 $1.64 

42 $4.985 $0.081 $2.79 $2.989 $0.043 $1.67 

43 $5.044 $0.081 $2.83 $3.054 $0.044 $1.71 

44 $5.104 $0.082 $2.86 $3.120 $0.045 $1.75 

45 $5.156 $0.083 $2.89 $3.179 $0.046 $1.78 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-39 

Table 3-16: Present Discounted Values for Nasopharyngeal Cancer by Age at 

Exposure 

Age at Exposure 

3 Percent Discount Rate 7 Percent Discount Rate 

PV of 

Micro Risk 

Reduction 

for Fatal 

Cancer 

PV of 

Micro Risk 

Reduction 

for 

Nonfatal 

Cancer 

PV of Micro 

Risk 

Reduction 

for Cancer 

(fatal and 

nonfatal) 

PV of 

Micro Risk 

Reduction 

for Fatal 

Cancer 

PV of Micro 

Risk 

Reduction for 

Nonfatal 

Cancer 

PV of 

Micro Risk 

Reduction 

for Cancer 

(fatal and 

nonfatal) 

46 $5.217 $0.083 $2.92 $3.249 $0.047 $1.82 

47 $5.279 $0.084 $2.96 $3.320 $0.048 $1.86 

48 $5.341 $0.085 $2.99 $3.394 $0.049 $1.90 

49 $5.404 $0.086 $3.03 $3.469 $0.050 $1.94 

50 $5.469 $0.087 $3.06 $3.549 $0.051 $1.99 

51 $5.535 $0.087 $3.10 $3.631 $0.052 $2.03 

52 $5.601 $0.088 $3.14 $3.715 $0.053 $2.08 

53 $5.668 $0.089 $3.17 $3.801 $0.054 $2.13 

54 $5.735 $0.090 $3.21 $3.889 $0.055 $2.18 

55 $5.790 $0.090 $3.24 $3.964 $0.056 $2.22 

56 $5.857 $0.091 $3.28 $4.054 $0.058 $2.27 

57 $5.923 $0.092 $3.32 $4.146 $0.059 $2.32 

58 $5.989 $0.092 $3.35 $4.237 $0.060 $2.37 

59 $6.054 $0.093 $3.39 $4.328 $0.061 $2.42 

60 $6.111 $0.093 $3.42 $4.413 $0.062 $2.47 

61 $6.182 $0.094 $3.46 $4.519 $0.064 $2.53 

62 $6.252 $0.095 $3.50 $4.625 $0.065 $2.59 

63 $6.321 $0.095 $3.54 $4.730 $0.066 $2.65 

64 $6.388 $0.096 $3.58 $4.832 $0.067 $2.70 

65 $6.430 $0.096 $3.60 $4.900 $0.068 $2.74 

66 $6.486 $0.096 $3.63 $4.988 $0.069 $2.79 

67 $6.535 $0.097 $3.66 $5.061 $0.070 $2.83 

68 $6.571 $0.097 $3.68 $5.112 $0.070 $2.86 

69 $6.589 $0.096 $3.69 $5.126 $0.070 $2.87 

70 $6.647 $0.097 $3.72 $5.227 $0.071 $2.92 

71 $6.736 $0.097 $3.77 $5.377 $0.073 $3.01 

72 $6.824 $0.098 $3.82 $5.531 $0.075 $3.09 

73 $6.912 $0.099 $3.87 $5.687 $0.077 $3.18 

74 $6.999 $0.100 $3.92 $5.845 $0.079 $3.27 

75 $6.978 $0.098 $3.90 $5.823 $0.078 $3.25 

76 $7.039 $0.099 $3.94 $5.936 $0.079 $3.32 

77 $7.078 $0.098 $3.96 $6.009 $0.080 $3.36 

78 $7.066 $0.097 $3.95 $5.983 $0.079 $3.34 

79 $6.900 $0.093 $3.86 $5.650 $0.074 $3.16 

80 $6.803 $0.090 $3.80 $5.480 $0.070 $3.06 

81 $6.900 $0.091 $3.86 $5.650 $0.072 $3.16 

82 $6.999 $0.092 $3.91 $5.828 $0.074 $3.26 

83 $7.100 $0.092 $3.97 $6.014 $0.076 $3.36 

84 $7.203 $0.093 $4.02 $6.208 $0.078 $3.47 

85 $7.100 $0.090 $3.97 $6.014 $0.074 $3.36 

86 $7.100 $0.088 $3.97 $6.014 $0.074 $3.36 

87 $7.100 $0.087 $3.97 $6.014 $0.073 $3.36 

88 $7.100 $0.085 $3.96 $6.014 $0.071 $3.36 

89 $7.100 $0.084 $3.96 $6.014 $0.070 $3.36 

90 $7.203 $0.084 $4.02 $6.208 $0.072 $3.47 

91 $7.308 $0.084 $4.08 $6.410 $0.074 $3.58 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-40 

Table 3-16: Present Discounted Values for Nasopharyngeal Cancer by Age at 

Exposure 

Age at Exposure 

3 Percent Discount Rate 7 Percent Discount Rate 

PV of 

Micro Risk 

Reduction 

for Fatal 

Cancer 

PV of 

Micro Risk 

Reduction 

for 

Nonfatal 

Cancer 

PV of Micro 

Risk 

Reduction 

for Cancer 

(fatal and 

nonfatal) 

PV of 

Micro Risk 

Reduction 

for Fatal 

Cancer 

PV of Micro 

Risk 

Reduction for 

Nonfatal 

Cancer 

PV of 

Micro Risk 

Reduction 

for Cancer 

(fatal and 

nonfatal) 

92 $7.415 $0.085 $4.14 $6.622 $0.075 $3.70 

93 $7.524 $0.085 $4.20 $6.843 $0.077 $3.82 

94 $7.635 $0.085 $4.26 $7.075 $0.079 $3.95 

3664 

3665 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-41 

3666 3.5 Estimating the Value of Non-cancer Risk Reductions 

3667 

3668 This section describes the approach to estimating the benefits associated with avoiding a selected 

3669 suite of non-cancer effects as a result of the proposed TSCA Title VI Implementation Rule. This approach 

3670 is summarized from the EPA draft report titled “Approach to Assessing Non-cancer Health Effects from 

3671 Formaldehyde and Benefits from Reducing Non-cancer Health Effects as a Result of Implementing 

3672 Formaldehyde Emission Limits for Composite Wood Products” (November 2011). EPA’s non-cancer 

3673 approach document (U.S. EPA 2011) evaluated the non-cancer health evidence used in the derivation of 

3674 candidate reference concentrations from the June 2010 draft IRIS Toxicological Review of 

3675 Formaldehyde. While the draft IRIS Toxicological Review of Formaldehyde identified seven categories 

3676 of non-cancer health effects, EPA determined there was sufficient evidence for quantitative 

3677 concentration-response modeling for only three categories of effects. The specific non-cancer endpoints 

3678 selected for the TSCA Title VI benefits assessment were: eye irritation, asthma, and reduced fertility. In 

3679 the non-cancer approach document, EPA derived concentration-response functions for these three 

3680 endpoints and recommended accompanying unit values for use in the benefits assessment based on a 

3681 literature review of the endpoints. The National Academy of Sciences (NAS) peer reviewed the draft IRIS 

3682 Toxicological Review in 2011, and where possible, EPA’s non-cancer approach document followed NAS 

3683 recommendations, such as excluding two studies that NAS recommended should not be advanced in the 

3684 derivation of reference concentrations. 

3685 

3686 All of the non-market benefits are estimated to result from reduced exposure to formaldehyde 

3687 from composite wood products as a result of the proposed rule. The benefits for each avoided endpoint 

3688 are a function of the: (1) concentration-response function (e.g., increase in risk of health endpoint per unit 

3689 increase in formaldehyde concentration), (2) unit values of the avoided illness, (3) impacted population, 

3690 (4) background rate of the health endpoint (if applicable), and (5) estimated change in exposure associated 

3691 with the rule. All of these inputs are described briefly below, and some (e.g., impacted population, change 

3692 in exposure as a result of the rule) are described in more detail in other sections of this document. The 

3693 benefits equations for avoiding cases of eye irritation, asthma, and reduced fertility as a result of the 

3694 proposed rule are provided below. 

3695 

3696 The exposures before (“baseline”) and after the rule (“policy”) have been modeled as described in 

3697 Section 3.1. As necessary, average daily concentrations (ADC) of formaldehyde in air will be converted 

from units of mg/m3

 to ppb or vice versa using this conversion factor: 814 ppb formaldehyde = 1 mg/m3 3698 , 

3699 which corresponds to a temperature of 25°C, a pressure of 1 atm, and a molecular weight for 

3700 formaldehyde of 30.03 g/mol. 

3701 

3702 3.5.1 Eye Irritation 

3703 

3704 Information from two studies reporting sensory irritation in humans from chronic formaldehyde 

3705 inhalation exposures in a residential environment was combined to create the concentration-response 

3706 function for eye irritation. Liu et al. (1991) employed in-home measurements over a seven-day period to 

3707 calculate cumulative exposure based on time spent in the home for over 1,000 mobile home residents, 

3708 including both young children (< 4 years) and the elderly (> 65 years). Liu et al. (1991) reported that 

3709 formaldehyde exposure was a significant predictor of burning eyes in a multivariate logistic regression. 

3710 The prevalence of eye irritation increased with increasing cumulative exposure in a categorical analysis of 

3711 participants in the 20-64 age group for both summer and winter exposure estimates. While not appropriate 

3712 to derive a concentration-response function, this study provided the most specific information on the 

3713 relative timing of inhalation exposures to formaldehyde and the report of sensory irritation: exposures 

3714 were recorded in a two-week period preceding the collection of endpoint data on sensory irritation. 

3715 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-42 

3716 Hanrahan et al. (1984) assessed average exposure in the home (from 30-60 minute air samples) 

3717 and occurrence of adverse health outcomes (by questionnaires), including burning eyes, in a study of 61 

3718 teenage and adult (mean age 48) residents of mobile homes in Wisconsin. Measured formaldehyde 

3719 concentrations ranged from less than 100 ppb to 800 ppb. Hanrahan et al. (1984) provided a graphical 

3720 representation (Figure 1 in the paper) of the best-fitting logistic regression model results to the predicted 

3721 prevalence of burning eyes for formaldehyde exposures from 100 to 800 ppb. 

3722 

3723 This analysis fit a power model to the prevalence odds ratio (p/(1-p)) of burning eyes (estimated 

3724 from Figure 1 of Hanrahan et al. (1984) as a function of average formaldehyde concentration. The 

resulting functional form of the prevalence odds ratio was estimated to be p/(1-p) = Z = 7x10-7Conc2.3743 3725 . 

3726 This can be solved for prevalence (e.g., p/(1-p) = Z; p = Z/(1 + Z)) for use in the benefits equation. Since 

3727 Liu et al. (1991) produced similar results for a two-week period, the analysis adjusted the prevalence to an 

3728 annual basis consisting of 26 two-week periods (e.g., p = 26 * Z/(1 + Z)). While Hanrahan et al. (1984) 

3729 did not administer questionnaires to children explicitly, this analysis assumes that the concentration3730 response function applies to that age group as well. 

3731 

3732 There are additional sources of uncertainty associated with using this concentration-response 

3733 function. It does not account for the possibility that irritant effects may diminish with the time exposed. 

3734 Furthermore, the Hanrahan et al. (1984) data from which this concentration-response function was 

3735 derived included formaldehyde exposures only above 100 ppb. Thus, it may be problematic to apply this 

3736 concentration-response function to estimate the relationship between lower formaldehyde exposures and 

3737 burning eye prevalence. To address this potential problem this analysis includes an estimate of irritation 

3738 benefits where it is assumed that reductions below 40 ppb do not result in any additional reductions in 

3739 burning eye prevalence. 

3740 

3741 The value for willingness to pay (WTP) to avoid eye irritation is based on an estimate from 

3742 Industrial Economics (IEc) (1993). IEc (1993) estimated WTP to avoid a minor respiratory restricted 

3743 activity day using the WTP estimates from Tolley et al. (1986) and Weitzel (1990). This analysis uses the 

3744 IEc (1993) mid-range estimate for eye irritation, which is $26 in 2010$. Note that this willingness to pay 

3745 value is for the symptom of “eye irritation” while the Hanrahan et al. (1984) data used to estimate the 

3746 concentration-response function was for “burning eyes,” a type of “eye irritation.” It is also worth noting 

3747 that the willingness to pay to avoid eye irritation declines with the number of symptom days an individual 

3748 experiences. Thus, applying the WTP to avoid a single day of eye irritation as the WTP per day for 

3749 avoiding multiple days of eye irritation would tend to overstate the WTP for avoiding multiple days of 

3750 eye irritation. However, this potential problem is not a concern in the case of this analysis because the 

3751 expected annual number of eye irritation cases per individual is less than one. 

3752 

3753 By combining the concentration-response information with the unit value and other relevant 

3754 terms, the analysis calculates the higher estimate for the monetized benefits of avoided eye irritation cases 

3755 as: 

3756 

௕ܥܦܫܣ כ ܣ ቆ כ ܻܨ כ ܹܶܲ כ ܱܲܲ ൌ

஻

௕ܥܦܫܣ כ ܣ ൅ 1

௣ܥܦܫܣ כ ܣ െ஻ 

஻

௣ܥܦܫܣ כ ܣ ൅ 1

஻ቇ (27) 

3757 

3758 where: 

3759 POP is the exposed population (includes all ages and housing types); 

3760 WTP is $26 in 2010$ based on the mid-range estimate for eye irritation from IEc (1993); 

3761 FY is a factor of 26 converting two-week incidence of eye irritation, as stated in Liu et al. (1990), to 

3762 an annual basis; 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-43 

3763 AIDCb and AIDCp are the average indoor daily concentrations (AIDC) in units of ppb for the 

3764 baseline and policy scenarios, respectively. These AIDCs include exposures during time spent 

at home, school, work, and in vehicles;46 3765 and 

3766 A and B are the coefficients that define the power function that EPA fit to the prevalence odds ratio 

3767 data for burning eyes in response to average air formaldehyde concentrations in mobile homes 

from Hanrahan et al. (1984). The prevalence odds ratio, p/(1-p), is A*XB 3768 and prevalence is 

therefore (A* XB

)/(1 + A* XB), where A is 7x10-7 3769 , B is 2.3743, and X represents the 

3770 concentration (AIDCb or AIDCp). 

3771 

3772 In addition, the analysis calculates a lower estimate for the monetized benefits of avoided eye 

3773 irritation to address the potential problem of applying a concentration-response function to formaldehyde 

3774 exposure levels that are lower than observed in the study from which the concentration-response function 

3775 was derived. In this lower estimate it is assumed that reducing formaldehyde exposure levels below 40 

3776 ppb do not result in any additional reductions in burning eye prevalence cases. The lower irritation 

3777 benefit is estimated as follows: 

3778 

௕ሻሽ40 ,ሺAIDC ሼmax כ ܣ ቆ כ ܻܨ כ ܹܶܲ כ ܱܲܲ ൌ

஻

1 ൅ ܣ כ ሼmax ሺAIDC, 40ሻሽ௕

஻ െ ܣ כ ሼmax ሺAIDC, 40ሻሽ௣

஻

1 ൅ ܣ כ ሼmax ሺAIDC, 40ሻሽ௣

஻ቇ (28) 

3779 

3780 In this lower estimate, 40 is the minimum formaldehyde exposure level that the health effect 

3781 function is applied to. That is, it is assumed that reducing formaldehyde exposure below 40 ppb does not 

3782 achieve any additional reduction in eye irritation prevalence.

3783 

3784 3.5.2 Asthma in Children 

3785 

3786 The meta-analysis of formaldehyde-associated childhood asthma conducted by McGwin et al. 

3787 (2010) was identified as the most relevant study to developing a concentration-response function for use 

3788 in the benefits assessment. The meta-analysis was based on seven peer-reviewed studies providing 

3789 quantitative information on the association between formaldehyde exposure and asthma in children (mean 

3790 age in the studies ranged from 2 – 14). Most of the studies were cross-sectional or case-control in design, 

3791 collected information on asthma prevalence (either self-reported or doctor diagnosed), and assigned 

formaldehyde exposures (range: 1 to > 87.5 μg/m3 3792 ) from the home or school setting. Of the seven studies 

3793 included in the meta-analysis, six reported increased risks of asthma associated with exposure to 

formaldehyde. The pooled random effects odds ratio (OR) for the seven studies was 1.17 per 10 μg/m3 3794 

3795 formaldehyde (95% CI: 1.01-1.36). (Random effects models are preferred with heterogeneous data as 

3796 they allow for different effects or slopes in the source studies.) 

3797 

3798 McGwin et al. (2010) noted that one of the seven studies (Rumchev, et al. 2002) may have had 

3799 ‘undue influence on the study data’ and recomputed the pooled OR without that study. That study was 

3800 focused on very young children (mean age: 1.9 years; range: 6 months to 3 years), and NAS (2011) noted 

3801 that study participants of such young ages are now thought to be more likely to have lower respiratory 

3802 illnesses with wheezing of an infectious origin rather than asthma. Therefore, this analysis uses the 

3803 McGwin et al. (2010) random effects model excluding Rumchev et al. (2002) as the basis of the 

3804 concentration-response function for use in the benefits assessment. Note that while the mean age for the 

3805 six remaining studies ranges from 8 to 14 years old, the minimum age across the six studies was 6 and the 

3806 maximum was 17 and this is the age range for which benefits are estimated in this analysis. The pooled 

 46 AIDCs are calculated from average daily concentrations. Infants (0-2), children (3-15), full time working adults, 

unemployed/retired adults, and part-time working adults are assumed to spend 11.7%, 14.3%, 4.1%, 13.8%, and 15.8% 

of their time outdoors, where background exposure levels are assumed to be .0037 mg/m3

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

January 27, 2012 3-44 

3807 random effects OR reported by McGwin et al. (2010) after excluding Rumchev et al. (2002) was 1.24 per 

10 μg/m3 3808 increase in formaldehyde concentration (95% CI 1.09 – 1.42). Thus, converting to an OR based 

3809 on parts per billion (assuming conditions of 25°C and 1 atm) results in an OR of 1.027 per ppb increase in 

3810 formaldehyde exposure, with a 95% CI of 1.008-1.047 per ppb. 

3811 

3812 All of the studies included in the McGwin et al. (2010) meta-analysis measured individuals’ 

3813 exposure to formaldehyde at a single point in time; almost all of them related that single formaldehyde 

3814 measurement to asthma prevalence rather than incidence. The most reasonable interpretation of the 

3815 McGwin (2010) meta-analysis concentration-response function for use in the benefits analysis is that (1) 

3816 the formaldehyde exposure measurements reflect typical or average exposure levels of the individuals in 

the study and (2) under reasonable assumptions, prevalence can be considered cumulative incidence.47 3817 

3818 Given this, the McGwin et al. (2010) concentration-response function is interpreted as a long-term 

3819 exposure function relating exposure to a constant level of formaldehyde over the course of childhood to a 

3820 given probability of getting asthma sometime during that childhood. The corresponding health impact 

3821 function relates changes in long-term constant or average exposure to changes in the incidence of asthma 

3822 during childhood. Because the concentration-response function from McGwin et al. (2010) is log-linear 

3823 in form, the health impact function is 

3824 

ൌ ܱܲܲܥ כ ܫ݊ܿܣ ௖כ ቀ1 െ ൫݁ሺ୪୬ሺைோሻൈሺAIDC೛ିAIDC್ሻ

൯ቁ (29) 

3825 where 

3826 

3827  POPC is the exposed population of children 

3828  IncAc is the cumulative baseline incidence rate of asthma among children (for an n-year period). 

3829  OR is the odds ratio derived from the McGwin et al. (2010) meta-analysis of studies associating 

asthma with formaldehyde exposure.48 3830 EPA converted the OR for six of the seven studies from units 

of effect per 10 μg/m3 3831 to effect per ppb formaldehyde (MW = 30.03, T=25°C, P = 1 atm), and 

3832 estimated an OR of 1.027 per ppb increase in formaldehyde exposure, with a 95% CI of 1.008-1.047 

3833 per ppb. 

3834  AIDCp and AIDCb are the average indoor daily concentrations (AIDC) in units of ppb for the policy 

3835 and baseline scenarios, respectively (the difference between these terms will be negative). These 

AIDCs include exposures experienced at home, school, work, and in vehicles.49 3836 

3837 

3838 However, this economic analysis considers one-year changes in formaldehyde exposure – not 

3839 changes that last over the course of childhood. Therefore, it is necessary to transform the health impact 

3840 function so that it can be applied to one-year changes in formaldehyde exposure. If exposure is constant 

3841 over an n-year period, then it is reasonable to assume that the probability of getting formaldehyde-related 

3842 asthma is uniformly distributed throughout that period – i.e., that the probability of getting asthma as a 

3843 result of exposure to formaldehyde in any one of the n years is (1/n) times the probability for the whole n3844 year period. Given this, when the economic analysis applies the health impact function to any given 

3845 annual change in exposure, the change in incidence of asthma is first calculated as if the one-year 

 47 Prevalence can be considered cumulative incidence within a given age bracket if it is assumed that once an individual 

gets asthma the individual continues to have asthma within that given age bracket. 48 Excluding one of the studies (Rumchev, et al. 2002; McGwin et al. (2010) reported an OR from a random effects metaanalysis model of 1.24 per 10 μg/m3

 formaldehyde (95% CI: 1.07-1.45) with a p-value of 0.0026. 49 AIDCs are calculated from average daily concentrations. Infants (0-2), children (3-15), full time working adults, 

unemployed/retired adults, and part-time working adults are assumed to spend 11.7%, 14.3%, 4.1%, 13.8%, and 15.8% 

of their time outdoors, where background exposure levels are assumed to be .0037 mg/m3

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

January 27, 2012 3-45 

3846 exposure changes were occurring over the entire n-year period. This result is then divided by n so it 

3847 reflects the change in asthma incidence from a one year change in formaldehyde exposure. 

3848 

3849 Estimating the baseline incidence rate of asthma is not trivial. First, estimating asthma in very 

3850 young children (under 5 years old) is problematic because doctors may rely on signs and symptoms rather 

3851 than lung function testing (spirometry) in making diagnostic decisions (U.S. HHS 2007). Second, while 

3852 asthma prevalence rates are widely available, asthma incidence rates are not. Estimating incidence from 

3853 prevalence is not straightforward because of the assumptions that must be made. In light of these 

3854 difficulties, the analysis estimates the incidence rates using data on asthma prevalence by age bracket. 

3855 The available data indicate that the asthma prevalence among 0-4 years olds is 7.9 percent and asthma 

3856 prevalence among 5-14 year olds is 16.2 percent (CDC 2009). Although this analysis accounts for the 

3857 probability that individuals with asthma become asymptomatic at some point in their lives, it assumes that 

3858 once a child gets asthma, he or she does not outgrow it before age 17. For example, for ages 0-4, the 

3859 prevalence rate is 7.9 percent. This means that 7.9 percent of individuals ages 0-4 have asthma. Since 

3860 this age range starts at birth, all of these asthma cases must have started within the age range – i.e., in this 

3861 case, prevalence equals cumulative incidence (assuming no migration in or out). For any age range that 

3862 starts at an age greater than 0, however, prevalence does not equal incidence, since some of the prevalent 

3863 cases may have started at an age less than the lower bound of the age range. For example, the 16.2 

3864 percent of individuals with asthma between the ages of 5 and 14 include those individuals whose asthma 

3865 started during ages 0-4. The incidence rate for the age range 5-14 was estimated by subtracting 7.9 

3866 percent from 16.2 percent to estimate that 8.3 percent of individuals in the age range of 5-14 are newly 

3867 diagnosed with asthma. This implies, if these new cases are uniformly distributed over the 10 ages within 

3868 that age range, the per-age (annual) incidence rate for 5 to 14-year olds would be 0.083/10 = 0.0083, or 

3869 0.83%. 

3870 

3871 This analysis calculates a lower estimate and a higher estimate. Both estimates use the same 

3872 basic method; however, the lower estimate includes benefits for ages 6 through 17, whereas the higher 

3873 estimate includes benefits for ages 2 through 17. To calculate the number of avoided asthma cases (and 

3874 thus benefits) for any given age, the analysis first calculates the per capita cumulative risk reduction over 

3875 an n-year period and then divides the results by n to get the age-specific per capita risk reductions. Each 

3876 age-specific per capita risk reduction is then multiplied by the age-specific exposed population to get the 

3877 age-specific number of asthma cases avoided. 

3878 

3879 To facilitate the application of this approach to different ages, the analysis makes the simplifying 

3880 assumption that the annual incidence rate of 0.83%, calculated for children aged 5 – 14, is similarly 

applicable to all ages through age 17.50 3881 Given this assumption, the value of n doesn’t matter because n

3882 cancels out in the calculation. First, the cumulative baseline incidence rate for n-year olds is calculated 

3883 by multiplying the annual baseline incidence rate (0.83%, assumed to be the same for all ages through age 

3884 17) by n, and then the resulting cumulative risk reduction over the n-year period is divided by n to get 

3885 age-specific (annual) per capita risk reductions, for all ages in the range through age n. The calculation of 

3886 the reduction in risk for an individual at a given age (i.e., in a given year) is thus 

3887 

3888 

ൌ ሺܫ݊ܿܣ ௔כ ݊ሻ ቀ1 െ ൫݁ሺ୪୬ሺைோሻൈሺAIDC೛ିAIDC್ሻ

൯ቁ

݊

(30) 

3889 

 50 Given the prevalence rate of 7.9% for ages 0 – 4 from CDC (see Table 3-17 below), this may be a conservative 

assumption (i.e., an assumption that would tend to understate benefits). 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-46 

where a 3890 IncA is the annual baseline asthma incidence rate (0.83%). The corresponding age-specific 

3891 number of avoided asthma cases is, then, 

3892 

3893 

ൌ ܱܲܲܥ כ ሺܫ݊ܿܣ ௔כ ݊ሻ ቀ1 െ ൫݁ሺ୪୬ሺைோሻൈሺAIDC೛ିAIDC್ሻ

൯ቁ

݊

(31)

3894 

3895 where POPC is the exposed population of children of the given age. The lower estimate does this 

3896 calculation for ages 6 through 17; the higher estimate does the calculation for ages 2 through 17. In both 

3897 estimates, the resulting monetized benefit is the sum of the age-specific monetized benefits. 

3898 

3899 EPA has included asthma exacerbation as a health effect in many of its economic analyses, but 

3900 not the incidence of asthma (i.e., the creation of new cases). EPA did value a decrease in asthma 

3901 incidence as a result of reduced ozone exposure in its first prospective study of the benefits and costs of 

3902 the Clean Air Act (EPA 1999). This analysis estimates WTP to avoid asthma by utilizing the methods that 

3903 were developed to estimate the unit value in EPA’s BenMAP (Abt Associates Inc. 2010), which relies 

primarily on two studies that estimated WTP to avoid a case of adult-onset asthma.51 3904 One study, 

3905 Blumenschein and Johannesson (1998), estimated an annual WTP; the other study, O'Conor and 

3906 Blomquist (1997), estimated a monthly WTP, from which an annual estimate was derived. 

3907 

3908 The analysis first estimated the pdv of the stream of annual WTPs to avoid a case of child-onset 

3909 asthma, assuming that once a child gets asthma he has it for the rest of his life (i.e., there are no 

3910 asymptomatic asthmatics). The inputs to the analysis are: 

3911 

3912  A study-specific annual WTP to avoid asthma – $189/month, or $2,268 per year (1996$) in 

3913 Blumenschein and Johannesson (1998); $1,200/year (1990$) in O'Conor and Blomquist (1997). 

3914  A discount rate (the analysis used 3% and 7%). 

3915  Age-specific populations for each age in the age range considered in the analysis: 6 – 17 for the 

3916 lower estimate; 2 – 17 for the higher estimate. Age group-specific population data were obtained 

from the U.S. Census Bureau,52 3917 and it was assumed that the population within an age group is 

3918 uniformly distributed among the ages in that age group. 

3919  Age-specific life expectancies. The analysis obtained life expectancies for selected ages (0, 1, 5, 

10, 15, ...) from the National Vital Statistics Reports, Vol. 59, No. 4, March 16, 2011, Table 6.53 3920 

3921 The analysis linearly interpolated life expectancies for the ages that were not included among 

3922 those obtained. 

3923 

3924 Using these inputs, the analysis calculated the age-specific pdv of the stream of annual WTPs, for each 

3925 age of onset in the age range (6-17 for the lower estimate; 2–17 for the higher estimate) to the age3926 specific life expectancy. If 

3927 

WTPannual 3928 denotes the annual WTP, 

 51 For a description of the two studies on which the WTP to avoid adult-onset asthma is based, see the BenMAP User 

Manual, Appendix J, Section J.2.3. 

52 http://www.census.gov/compendia/statab/cats/population.html

53 http://www.cdc.gov/nchs/data/nvsr/nvsr59/nvsr59_04.pdf
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-47 

3929 a denotes the age at onset of asthma (where a = 6, 7, ..., or 17 for the lower estimate and a = 2, 

3930 3, ..., or 17 for the higher estimate), 

3931 LEa denotes the life expectancy for an individual age a, and 

3932 dr denotes the discount rate, 

3933 

3934 then the present discounted value of the stream of annual WTPs for someone who gets asthma at age a is 

3935 

3936 



 















 

LEa

j

j

annual

a dr

WTP pdv

1

1 (1 ) (32) 

3937 

3938 The analysis then calculated a weighted average pdv, using the percentages of the population in 

3939 the age categories as the weights. This assumes that any child in the age range is equally likely to have 

3940 asthma. Using the lower estimate to illustrate, if 

3941 

j 3942 p denotes the percent of children in the age range [6-17] who are age j, j = 6, ..., 17, and 

pdv[617] 3943 denotes the expected present discounted value of annual WTPs to avoid asthma for a 

3944 randomly selected individual in the age range [6-17], 

3945 

3946 Then 

3947 



 

17

6

[6 17]

j

j j pdv p pdv (33) 

3948 

The calculation of pdv[217] 3949 for the higher estimate is carried out the same way, with the youngest age of 

3950 6 replaced with a youngest age of 2. 

3951 

3952 It is worth noting that the annual (or monthly) WTP estimates from the two studies were for 

3953 adult-onset asthma. There is evidence that parents are willing to pay more to avoid adverse health effects 

3954 in their children than they are to avoid the same adverse health effects in themselves (Dickie and Gerking 

3955 2003, Dickie and Messman 2004, Liu, et al. 2000). Using the WTP estimates from these two studies as 

3956 inputs to the calculation of a unit value for child-onset asthma could thus tend to understate the true value. 

3957 

3958 There is substantial evidence, however, that non-trivial percentages of asthmatics become 

3959 asymptomatic at some point in their lives. The Centers for Disease Control, National Health Interview 

3960 Survey (NHIS) has collected data on asthma in the U.S. for at least a decade, and data are available online 

3961 for the years 2001 through 2009. For each year, the NHIS asked several asthma-related questions. The 

3962 results are presented, separately for each year, in two sets of tables: one set of tables refers to “lifetime 

3963 asthma”; the other set refers to “current asthma.” The CDC website describes the meanings of “lifetime 

asthma” and “current asthma” as follows:54 3964 

3965 

 54 See Centers for Disease Control and Prevention, National Health Interview Survey (NHIS) Data: Asthma – 

Background Information. Available online at: http://www.cdc.gov/asthma/nhis/default.htm#09. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-48 

3966 A positive response to the question: "Has a doctor or other health professional ever told 

3967 you that you had asthma?" determined lifetime asthma. To determine the prevalence of 

3968 asthma episodes or attacks, persons answering "yes" to the lifetime asthma question were 

3969 then asked, "During the past 12 months, have you had an episode of asthma or an asthma 

3970 attack?" Since 2001, current asthma status has also been collected. To determine current 

3971 asthma, persons answering "yes" to the lifetime asthma question were then asked, "Do 

3972 you still have asthma?" 

3973 

3974 The 2009 population and prevalence rate results for the total U.S. population in the current 

3975 asthma and lifetime asthma tables are available online and are shown in Table 3-17 below. 

3976 

3977 The analysis calculated the percent of individuals who said they were diagnosed with asthma and 

3978 also said they still have asthma by dividing the “current asthma population” by the “lifetime asthma 

3979 population,” separately for each age group. The analysis then calculated the percent of asthmatics who 

3980 are asymptomatic by subtracting this from 100%. For example, in the 5-14 age group, 6,534,000 

3981 individuals said they had been diagnosed with asthma; of these, 4,515,000 – or 69.1% -- said they still 

3982 have asthma. That implies that 100% - 69.1% = 30.9% of asthmatics in this age group are asymptomatic. 

3983 

3984 The percentages of individuals who were diagnosed with asthma at some point in their lives but 

3985 considered themselves asymptomatic when they answered the NHIS questions were substantial, ranging 

3986 from about 20% (in the 0-4 age group) to almost 53% (in the 20-24 age group). This suggests that the 

3987 above calculation of the pdv (equation 27) may overstate the value of avoiding a case of asthma, because 

3988 it includes (discounted) annual WTPs out to the life expectancy for the age-of-onset of the asthma. 

3989 

3990 Unfortunately, the NHIS asthma tables do not include the kind of longitudinal information that 

3991 are needed to properly estimate the value of avoiding child-onset asthma, taking into account that some 

3992 proportion of child asthmatics will become asymptomatic later in life. Ideally, it is necessary to know, for 

3993 each age at onset, y, in the age range [6-17], the percentage of asthmatic children who become 

asymptomatic at age x, for all LEy 3994 y  x  . This would require following a cohort of asthmatic children 

3995 over time. Instead, the NHIS data is cross-sectional – i.e., it looks at individuals of different ages at a 

3996 single point in time. Still, because the percentages of respondents in the NHIS who said they are 

3997 asymptomatic are non-trivial, and consistent with what other sources report, it is worthwhile to attempt to 

3998 take these percentages into account in devising an estimate of the value of an avoided case of child-onset 

3999 asthma. 

4000 

4001 The analysis first calculated the weighted average percent asymptomatic for those age groups that 

4002 are (largely) after childhood – age groups (15-19) and older. The weight for the ith group was the 

4003 proportion of all individuals in age groups (15-19) and older who are in the ith group. The weighted 

4004 average percent asymptomatic across these age groups was 41%. The analysis assumed that an asthmatic 

4005 child who becomes asymptomatic is equally likely to do so at any age after childhood. This was 

4006 represented by a set of equally spaced ages, starting with age 17, the midpoint of the first age category 

4007 (15-19) – ages 17, 27, 37, 47, 57, and 67. Since the total proportion of child asthmatics who will become 

4008 asymptomatic at some point after childhood is assumed to be 41%, and each age is assumed to have an 

4009 equal probability of being the age at which the individual becomes asymptomatic, 41%/6 = 6.8% is the 

4010 proportion of child asthmatics who become asymptomatic at each of the 6 representative ages. 

4011 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-49 Table 3-17: Results of the 2009 National Health Interview Survey Questions on Asthma and Implied Percentage of Individuals 

Characteristic Total 

Population 

Children 

(<18) 

Adults 

(18+) 

Ages 0-14 Ages 15-34 

 0 - 4 5 - 14 15 - 34 15 - 19 20 - 24 25 - 

Lifetime asthma population (in 1000s) (Table 1-1 ) 39,930 10,196 29,734 1,668 6,534 12,471 3,124 3,732 5,6Current asthma population (in 1000s) (Table 3-1 ) 24,567 7,111 17,456 1,332 4,515 6,363 1,839 1,758 2,7Percent of asthmatics who still have asthma: 61.5% 69.7% 58.7% 79.9% 69.1% 51.0% 58.9% 47.1% 49.2Percent of asthmatics who are now asymptomatic: 38.5% 30.3% 41.3% 20.1% 30.9% 49.0% 41.1% 52.9% 50.Prevalence (%) Told They Had Asthma Sometime in their Lifetime (Table 2-1) 

13.3 13.8 13.1 7.9 16.2 15.2 15.2 17.8 1

Prevalence (%) who Currently Have Asthma (Table 4-1) 8.2 9.6 7.7 6.3 11.2 7.8 9 8.4 Population (in 1000s) implied by Tables 1-1 and 2-1 : 300,226 73,884 226,977 21,114 40,333 82,046 20,553 20,966 40,3Population (in 1000s) implied by Tables 3-1 and 4-1 : 299,598 74,073 226,701 21,143 40,313 81,577 20,433 20,929 40,6Average implied population: 299,912 73,978 226,839 21,128 40,323 81,811 20,493 20,947 40,5Source: Centers for Disease Control and Prevention 2009 

4012 4013 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-50 

4014 For each of the representative ages (17, 27, 37, 47, 57, and 67), the analysis calculated 

[617] pdv and [217] 4015 pdv given that age-when-asthma-stops, using equations (32) and (33) above and 

replacing LEa 4016 in equation (32) with the representative age, for all values of a. It was assumed that 

4017 asthma starts at the beginning of an age and stops in the middle of an age, so that if a child gets asthma at 

4018 age x and becomes asymptomatic at age y, the number of years the child has asthma is y – x + 0.5. For 

example, to calculate [617] 4019 pdv assuming that all asthmatic children become asymptomatic at age 27, 

4020 equation (32) becomes: 

4021 



 



 















 

27 0.5

1

1 (1 )

a

j

j

annual

a dr

WTP pdv for each a in [6-17]. (34) 

4022 

The analysis then used equation (34) to calculate the resulting value for pdv[617] 4023 . The results are 

4024 shown for the lower estimate in Table 3-18 and Table 3-19, using a 3 percent and a 7 percent discount 

4025 rate, respectively. Results for the higher estimate are shown in Table 3-20 and Table 3-21, using a 3 

4026 percent and a 7 percent discount rate, respectively. 

4027 

Table 3-18: Calculation of Lower Estimate WTP to Avoid Child-Onset Asthma, Assuming 

Some Proportion of Asthmatics Become Asymptomatic, Using a 3 Percent Discount Rate 

Age at Which Asthmatic 

Becomes Asymptomatic, 

x =** 

Percent Who Become 

Asymptomatic at Age 

x 

Weighted Average PDV (in 2010$), Assuming Individuals 

Become Asymptomatic at Age x, Based on:* 

Blumenschein and 

Johannesson (1998) 

O'Conor and Blomquist 

(1997) 

17 6.8% $16,987 $10,789 

27 6.8% $40,334 $25,618 

37 6.8% $57,706 $36,653 

47 6.8% $70,633 $44,863 

57 6.8% $80,251 $50,973 

67 6.8% $87,408 $55,519 

Never becomes 

asymptomatic 59.0% $93,341 $59,287 

Overall Weighted PDV (in 2010$): $79,214 $50,314 

Average of Two Study-Specific PDVs: $64,764 

*Inflated to 2010$ using the CPI-U "all items". 

** The analysis assumes the child gets asthma at the beginning of an age (e.g., at the beginning of age 6) 

and becomes asymptomatic in the middle of an age (e.g., halfway through age 17). Ages included for the 

lower estimate are 6 – 17. 

4028 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-51 

Table 3-19: Calculation of Lower Estimate WTP to Avoid Child-Onset Asthma, Assuming 

Some Proportion of Asthmatics Become Asymptomatic, Using a 7 Percent Discount Rate 

Age at Which Asthmatic 

Becomes Asymptomatic, 

x =** 

Percent Who Become 

Asymptomatic at Age 

x 

Weighted Average PDV (in 2010$), Assuming Individuals 

Become Asymptomatic at Age x, Based on:* 

Blumenschein and 

Johannesson (1998) 

O'Conor and Blomquist 

(1997) 

17 6.8% $15,078 $9,577 

27 6.8% $31,353 $19,914 

37 6.8% $39,626 $25,169 

47 6.8% $43,832 $27,841 

57 6.8% $45,970 $29,199 

67 6.8% $47,057 $29,889 

Never becomes 

asymptomatic 59.0% $47,660 $30,272 

Overall Weighted PDV (in 2010$): $43,352 $27,535 

Average of Two Study-Specific PDVs: $35,443 

*Inflated to 2010$ using the CPI-U "all items". 

** The analysis assumes the child gets asthma at the beginning of an age (e.g., at the beginning of age 6) 

and becomes asymptomatic in the middle of an age (e.g., halfway through age 17). Ages included for the 

lower estimate are 6 – 17. 

4029 

4030 

4031 

Table 3-20: Calculation of Higher Estimate WTP to Avoid Child-Onset Asthma, Assuming 

Some Proportion of Asthmatics Become Asymptomatic, Using a 3 Percent Discount Rate 

Age at Which Asthmatic 

Becomes Asymptomatic, 

x =** 

Percent Who Become 

Asymptomatic at Age 

x 

Weighted Average PDV (in 2010$), Assuming Individuals 

Become Asymptomatic at Age x, Based on:* 

Blumenschein and 

Johannesson (1998) 

O'Conor and Blomquist 

(1997) 

17 6.8% $22,003 $13,976 

27 6.8% $44,066 $27,989 

37 6.8% $60,483 $38,417 

47 6.8% $72,699 $46,176 

57 6.8% $81,789 $51,949 

67 6.8% $88,553 $56,245 

Never becomes 

asymptomatic 59.0% $94,151 $59,801 

Overall Weighted PDV (in 2010$): $80,804 $51,324 

Average of Two Study-Specific PDVs: $66,064 

*Inflated to 2010$ using the CPI-U "all items". 

** The analysis assumes the child gets asthma at the beginning of an age (e.g., at the beginning of age 6) 

and becomes asymptomatic in the middle of an age (e.g., halfway through age 17). Ages included for the 

higher estimate are 2 – 17. 

4032 

4033 
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January 27, 2012 3-52 

4034 

4035 

Table 3-21: Calculation of Higher Estimate WTP to Avoid Child-Onset Asthma, Assuming 

Some Proportion of Asthmatics Become Asymptomatic, Using a 7 Percent Discount Rate 

Age at Which Asthmatic 

Becomes Asymptomatic, 

x =** 

Percent Who Become 

Asymptomatic at Age 

x 

Weighted Average PDV (in 2010$), Assuming Individuals 

Become Asymptomatic at Age x, Based on:* 

Blumenschein and 

Johannesson (1998) 

O'Conor and Blomquist 

(1997) 

17 6.8% $18,745 $11,906 

27 6.8% $33,217 $21,098 

37 6.8% $40,574 $25,771 

47 6.8% $44,314 $28,147 

57 6.8% $46,215 $29,354 

67 6.8% $47,182 $29,968 

Never becomes 

asymptomatic 59.0% $47,717 $30,308 

Overall Weighted PDV (in 2010$): $43,886 $27,875 

Average of Two Study-Specific PDVs: $35,881 

*Inflated to 2010$ using the CPI-U "all items". 

** The analysis assumes the child gets asthma at the beginning of an age (e.g., at the beginning of age 6) 

and becomes asymptomatic in the middle of an age (e.g., halfway through age 17). Ages included for the 

higher estimate are 2 – 17. 

4036 

4037 The actual distribution of ages at which asthmatic children become asymptomatic is not known, 

4038 and the resulting pdv depends on this distribution. In the absence of any further information, the analysis 

4039 assumed this distribution is uniform – i.e., an asthmatic is equally likely to become asymptomatic at any 

4040 age. Selecting evenly spaced ages starting at age 17 was just a convenient way to model this. 

4041 

4042 Combining the WTP to avoid a case with the estimate of the number of avoided cases, the 

4043 analysis estimates the monetized benefits of avoiding the development of asthma for 6-17 year olds, for 

4044 the lower estimate, as: 

4045 

4046 

כ ܹܶܲ ൌ

ܱܲܲܥ כ ܫ݊ܿܣܽ כ ݊ ቀ1 െ ൫݁ሺ୪୬ሺைோሻൈሺAIDC೛ିAIDC್ሻ

൯ቁ

݊

(35)

4047 

4048 where WTP is $64,764 (if a 3 percent discount rate is used) or $35,443 (if a 7 percent discount 

4049 rate is used) and now POPC is the population of exposed children ages 6 – 17. An analogous calculation 

4050 is done for the higher estimate, where WTP is $66,064 (if a 3 percent discount rate is used) or $35,881 (if 

4051 a 7 percent discount rate is used) and POPC is now specific to the age range [2, 17]. 

4052 

4053 3.5.3 Female Fertility 

4054 

4055 Based on a review of the developmental and reproductive toxicity studies in humans and animals 

4056 in the draft IRIS assessment (U.S. EPA 2010b), the Taskinen et al. (1999) retrospective cohort study 

4057 appears to have the best available evidence of female reproductive toxicity for the purpose of deriving a 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-53 

4058 concentration-response relationship for use in the benefits assessment. In Taskinen et al. (1999) subjects 

4059 recruited from a woodworkers’ union and other businesses involving wood processing in Finland were 

4060 linked to a national register of births. Women were included if they were born between 1946 and 1975, 

4061 had a live birth at age 20−40 years during 1985−1995, had worked in the wood processing industry for at 

4062 least 1 month, and had first employment in the wood processing industry beginning at least 6 months 

4063 before the index pregnancy (the first pregnancy that fulfilled the above criteria). While 1,094 women met 

4064 these criteria, the final sample included 602 women due to the response rate from mailed questionnaires 

4065 (64%) and exclusions due primarily to infertility history, unknown time to pregnancy, and contraceptive 

4066 failure. 

4067 

4068 Estimates of mean daily exposure to formaldehyde were based on measurements taken at the 

4069 women’s factories of employment during the early 1990s. Where measurements were unavailable, 

4070 measurements from equivalent industries were used. An exposure index representing a time-weighted 

4071 average exposure (TWA) was established for every person in the study based on the concentration of their 

4072 workplace formaldehyde multiplied by the proportion of the workday exposed to formaldehyde. The 

4073 investigators categorized time-weighted average formaldehyde exposure into categories of low (mean of 

4074 18 ppb), medium (mean of 76 ppb), and high (mean of 219 ppb) exposure. Time-to-pregnancy data were 

4075 analyzed by a discrete proportional hazards regression procedure with a fecundability density ratio (FDR) 

4076 as the outcome. This ratio compared the average incidence densities of pregnancies for exposed women 

4077 with that of the employed, unexposed women. As explained by Taskinen et al. (1999), an FDR 

4078 significantly below unity suggests that conception was delayed. The age-, employment-, smoking-, 

4079 alcohol consumption-, parity-, and menstrual irregularity-adjusted FDR was 0.64 (95% CI: 0.43−0.92) for 

4080 women exposed to high formaldehyde levels compared with the unexposed controls, indicating that there 

4081 was a substantial, and statistically significant, delay in time to conception in this group of women. 

4082 

4083 This analysis relied on Table 5 of Taskinen et al. (1999) to derive its concentration-response 

4084 relationship. That table provided information on time-to-pregnancy (in menstrual cycles) for women in 

4085 low, medium, and high levels of formaldehyde exposure, as well as non-exposed to formaldehyde. The 

4086 fraction of women who took longer than 13 menstrual cycles to conceive was 9.1% for non-exposed, 

4087 10.1% for low, 11.7% for medium, and 20.5% for high levels of formaldehyde exposure. In most women, 

4088 13 menstrual cycles would correspond to approximately 12 months, and infertility is often defined as the 

4089 inability to conceive within 12 months. Thus, these data were used to generate a concentration-response 

4090 function for formaldehyde exposure and infertility in women. 

4091 

4092 First, the average formaldehyde exposure concentrations were adjusted for background exposures 

4093 to formaldehyde estimated from a personal exposure study. Jurvelin et al. (2001) estimated personal 48-

4094 hour exposures to formaldehyde in the summer/fall of 1997 for 15 persons in Helsinki, Finland. Personal 

4095 exposure levels were significantly correlated with indoor residential concentrations. The mean personal 

4096 exposure level was 21.4 ppb. According to EPA’s non-cancer approach document (U.S. EPA 2011), the 

4097 24-hr time-weighted average exposure levels were determined to be 21 ppb for “non-exposed”, 26 ppb for 

4098 low, 43 ppb for medium, and 89 ppb for high levels of formaldehyde exposure. 

4099 

4100 This analysis uses the concentration-response function estimated in EPA’s non-cancer approach 

4101 document (U.S. EPA 2011). This concentration-response function was estimated by fitting a linear 

4102 regression to these formaldehyde concentrations and the corresponding fraction of women who took 

4103 longer than 12 months to conceive, where Risk = alpha + beta*Concentration. Thus, the estimated 

4104 regression equation did not include any confounder variables. Alpha was estimated to be 0.056 (5.6%) 

4105 and beta was estimated to be 0.0016 per ppb. 

4106 

4107 The number of women in the U.S. wishing to become pregnant can be estimated from CDC 

4108 information on pregnancy and contraception use (CDC 2010). In particular, the percentage of women 
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January 27, 2012 3-54 

4109 seeking pregnancy over the course of a year can be estimated as the sum of the percentage who reported 

4110 not using contraception because they were seeking pregnancy and the percentage who are intentionally 

4111 pregnant or postpartum after an intentional pregnancy. The percentages of women who reported not 

4112 using contraception because they were seeking pregnancy were 4.3%, 6.3%, 5.9%, and 5.1% for age 

4113 ranges 20-24, 25-29, 30-34, and 35-39, respectively. The percentages of women who were pregnant or 

4114 postpartum were 10.0%, 7.7%, 8.1%, and 1.9% for age ranges 20-24, 25-29, 30-34, and 35-39, 

4115 respectively. Since half of pregnancies are intended, according to CDC (2010), the percentage of women 

4116 seeking pregnancy over the course of a year was estimated as the percentage of those currently seeking 

4117 pregnancy plus half the percentage who are pregnant or postpartum. These estimates are 9.3%, 10.2%, 

4118 10.0%, and 6.1% for age ranges 20-24, 25-29, 30-34, and 35-39, respectively. 

4119 

4120 Fertility problems are not uncommon during a woman’s reproductive cycle. Garceau et al. (2002) 

4121 claims that one in six couples experience fertility difficulty at some point in time in their reproductive 

4122 lives. The CDC (2005) reports that nearly 12% of women of childbearing age in the United States have 

4123 sought some type of cycle-based fertility service at some point in their reproductive cycles. While 

4124 obtaining some fertility service is common, only 3.8% obtain ovulation drugs, 1.1% undergo artificial 

4125 insemination and 0.3% engage in assisted reproductive technology, primarily in-vitro fertilization (IVF). 

4126 The remainder seek advice, undergo tests, or obtain medical help to prevent miscarriages or surgery for 

4127 blocked tubes. These rates vary by age group as shown in the table from CDC (2005) below. 

4128 

4129 Table 3-22 presents the probabilities of seeking pregnancy and of obtaining cycle-based treatment 

4130 that are used in the analysis. Note that the last three columns, which present the percentages of women 

4131 using a particular fertility treatment given that they have sought some fertility treatment, do not sum to 

4132 one hundred percent. This is because the costs associated with fertility treatments other than the three 

4133 presented in the table were not estimated. Thus, these costs are implicitly assumed to be zero for the 

4134 purpose of this analysis. 

4135 

4136 

Table 3-22: Probability of Seeking Pregnancy and of Obtaining Cycle-Based Fertility Treatment 

in U.S. Women 

Percent Obtaining Treatment 

Percent Obtaining Treatment 

Conditional on Some Fertility 

Treatment Being Sought 

Age 

Group 

Percent 

Seeking 

Pregnancy 

Any 

Fertility 

Service 

Ovulation 

drugs IUI IVF Ovulation drugs IUI IVF 

20-24 9.3% 4.9% 1.0% 0.2% 0.0% 20.41% 4.08% 0.00% 25-29 10.2% 

30-34 10.0% 17.7% 5.3% 1.8% 0.4% 29.94% 10.17% 2.26% 

35-39 6.1% 17.3% 4.6% 1.4% 0.3% 23.96% 7.29% 3.65% 

Source: Percent seeking pregnancy is from CDC 2010b and percent obtaining treatment is from CDC 2005 

4137 

4138 Infertility is generally defined as the inability to become pregnant after trying to become pregnant 

4139 for a year (CDC 2011). Thus, delayed fertility, the health outcome to which this economic analysis 

4140 relates formaldehyde exposure, is effectively the same as infertility given this definition. That said, it is 

4141 important to use WTP values that are appropriate for the specific type of infertility being evaluating – 

4142 infertility cases where a successful pregnancy can be achieved. This economic analysis estimates the 

4143 willingness to pay to avoid delayed fertility using a cost of illness approach, where the cost of illness is 

4144 estimated as the cost of fertility treatments for those patients who ultimately become pregnant. 

4145 
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January 27, 2012 3-55 

4146 Katz (2011) reports estimates of the median fertility treatment costs for women who successfully 

4147 became pregnant, which are likely to closely reflect the actual treatment costs for women with delayed 

4148 fertility who seek treatment for their condition. 

4149 

4150 One fertility treatment option is to take medication to stimulate ovulation in order to improve the 

4151 chances of conceiving. Another option is intrauterine insemination, a process in which the sperm is placed 

4152 in the uterus (intrauterine insemination, or IUI) by artificial means. In vitro fertilization (IVF) is yet 

4153 another option in which human egg cells are fertilized by sperm outside the body and then transferred 

4154 back to the patient's uterus. Katz (2011) estimates the median treatment costs for women who had 

successful outcomes as $925 for medication; $4,124-$8,542 for IUI;55 and $24,010-$38,545 for IVF.56 4155 

4156 This analysis converts the estimates from Katz (2011) to 2010$ and uses the midpoints of the ranges 

4157 estimated by Katz (2011). The resulting estimates are $1,001, $6,848, and $33,831 for medication, IUI, 

4158 and IVF, respectively. 

4159 

4160 There are two sources of potential bias associated with using this cost of illness approach. First, 

4161 since most fertility treatments are paid for out-of-pocket rather than through insurance, patients’ 

4162 willingness to pay for these treatments will be at least as high as the cost of the treatments, for those 

4163 patients that seek the treatments – that is, these patients are willing to pay the going rate for the treatment 

4164 and may be willing to pay more than the going rate. To the extent that they would be willing to pay more 

4165 than the going rate, the cost-of-illness estimates understate their true willingness to pay. On the other 

4166 hand, since some women with fertility problems may not seek treatment, this implies that their 

4167 willingness-to-pay to avoid infertility is lower than the cost of treatment. Thus the cost-of-illness 

4168 estimates will overstate the willingness to pay for these women. Since these two biases go in opposite 

4169 directions, it is not clear whether the end result will be an upward or a downward bias. 

4170 

4171 Combining the concentration-response information with the population estimates, unit value, 

4172 probability of seeking pregnancy, and probability of using a particular cycle-based treatment given that 

4173 one is seeking a fertility service, and assuming that all women seeking pregnancy but having difficulty 

4174 getting pregnant opt for some kind of fertility service, the analysis estimates the monetized benefits of 

4175 increased fecundity in women of childbearing age as: 

4176 

௔ܫܷܫݎܲ ൅ ݐݏ݋ܥݏ݁݀ܯ ൈ௔ ݏ݁݀ܯݎܲሺ ൈ௔ ܵܲݎܲ ൈ ൯௣ܥܦܫܣ െ௕ ܥܦܫܣ൫ ൈ ܣܶܧܤ ൈ௔ ܹܣܤܥܱܲܲ ෍ ൌ

௔

ሻݐݏ݋ܥܨܸܫ ൈ௔ ܨܸܫݎܲ ൅ ݐݏ݋ܥܫܷܫ ൈ

(36) 

 55 $4,124 was the median for IUI with clomiphene citrate and $8,524 was the median for IUI with gonadotropins. 56 $24,010 was the median for IVF without a donor egg and $33,831 was the median with a donor egg. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-56 

4177 

4178 

4179 Where: 

4180  POPCBAWa is the exposed population of childbearing-aged women 

4181  Subscript a denotes an age group (20-24, 25-29, 30-34, or 30-39) 

4182  BETA is the slope derived by EPA by fitting a linear regression to the data in Taskinen et al. 

4183 (1999) relating the risk of not conceiving in a year to average formaldehyde occupational 

4184 exposures (EPA also adjusted these time-weighted concentrations for background exposures of 

4185 formaldehyde). The slope was determined to be 0.0016 increase in risk of not conceiving in one 

4186 year per unit increase in ppb formaldehyde concentration

4187  AIDCp and AIDCb are the average indoor daily concentrations (AIDC) in units of ppb for the 

4188 policy and baseline scenarios, respectively (the difference between these terms will be negative). 

These AIDCs include exposures experienced at home, school, work, and in vehicles.57 4189 

4190  PrSPa is the probability a woman in age group a is seeking to become pregnant, estimated as the 

4191 percentage of women in age group a who are not using contraception because they want to 

4192 become pregnant plus half the women in age group a who are pregnant or are postpartum from 

4193 Table 5 CDC (2010b). Note that only half of the pregnant or postpartum women are included 

4194 because half of pregnancies are unintended according to CDC (2010b). The estimated 

4195 percentages are 9.3%, 10.2%, 10.0%, and 6.1% for age ranges 20-24, 25-29, 30-34, and 35-39, 

4196 respectively. 

4197  PrMedsa is the probability of using fertility drugs (ovulation medication) among women in age 

4198 group a given that they have sought some fertility service, from CDC (2005). It is 20.41%, 

4199 29.94%, and 23.96% for women aged 20-29, 30-34, and 35-39, respectively. 

4200  PrIUIa is the probability of using artificial intrauterine insemination (IUI) among women in age 

4201 group a given that they have sought some fertility service from CDC (2005). It is 4.08%, 10.17%, 

4202 and 7.29% for women aged 20-29, 30-34, and 35-39, respectively. 

4203  PrIVFa is the probability of using in vitro fertilization (IVF) assisted reproductive technology 

4204 among women in age group a given that they have sought some fertility service from CDC 

4205 (2005). It is 0.00%, 2.26%, and 3.65% for women aged 20-29, 30-34, 35-39, respectively 

4206  MedsCost is $1,001in 2010$, the average treatment cost for women with successful outcomes 

4207 after using ovulation drugs reported by Katz (2011) 

4208  IUICost is $6,848 in 2010$, the midpoint of the average IUI treatment cost for women with 

4209 successful outcomes reported by Katz (2011) 

4210  IVFCost is $33,831 in 2010$, the midpoint of the average IVF treatment cost for women with 

4211 successful outcomes reported by Katz (2011) 

4212 

 57 AIDCs are calculated from average daily concentrations. Infants (0-2), children (3-15), full time working adults, 

unemployed/retired adults, and part-time working adults are assumed to spend 11.7%, 14.3%, 4.1%, 13.8%, and 15.8% 

of their time outdoors, where background exposure levels are assumed to be .0037 mg/m3

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

January 27, 2012 3-57 

4213 3.6 Estimated Numbers of Affected Individuals 

4214 

4215 The number of individuals benefitting from the reduction of formaldehyde emissions from 

4216 composite wood products potentially includes anyone who resides, works, or otherwise spends a 

4217 substantial amount of time where new composite wood products are introduced to an indoor space. This 

4218 benefits analysis includes monetized benefits for only two broad categories where a substantial amount of 

4219 new composite wood products might be introduced to residences: (1) new home construction and (2) 

4220 major renovations that include kitchen remodeling. As described in section 3.1, exposures were estimated 

4221 separately for the various categories listed in Table 3-23. Table 3-23 also includes a brief description of 

4222 the data sources and methods that were used to estimate these populations. Additional description of how 

4223 the populations were estimated for renovated housing is provided in section 3.6.1. A summary of the 

4224 estimated number of affected individuals is presented in section 3.6.2. 

4225 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-58 

Table 3-23: Exposure Factor Categories Used to Define Population Groups 

Exposure 

Factor 

Exposure Factor Categories Description 

Composite wood 

product source 

and age 

1. New housing construction for 

11 ages of the housing 

2. Renovated housing for 11 ages 

of the installed composite 

wood products 

The American Community Survey (ACS) reports house age in 

segments, the most recent being 2005 to 2009. One fifth of 

population living in homes constructed between 2005 and 2009 was 

used to estimate the number of people inhabiting new construction 

on an annual basis. The 2009 American Housing Survey (AHS) 

asked respondents about renovation activities in a two year period. 

Half of the kitchen renovation rate in owner-occupied housing, 

stratified by housing type and home vintage, was applied to ACS 

populations to estimate people exposed due to renovation activities in 

owner and renter occupied homes annually. 

Structure type 1. Single family attached 

2. Single family detached 

3. Apartment 

4. Manufactured Housing 

5. Recreational Vehicles and 

Camper/Trailers 

The 2007-2009 ACS reports housing type in a variable that takes the 

following values: Mobile home or trailer; One-family house 

detached; One-family house attached; 2 Apartments; 3-4 Apartments; 

5-9 Apartments; 10-19 Apartments; 20-49 Apartments; 50 or more 

apartments; Boat, RV, van, etc. This variable was recoded to provide 

the five categories in the benefits analysis. 

Climate zone 1. Zone 1: <2,000 cooling degree 

days (CDD) and more than 

7,000 heating degree days 

(HDD) 

2. Zone 2: <2,000 CDD and 

5,500 to 7,000 HDD 

3. Zone 3: <2,000 CDD and 

4,000 to 5,499 HDD 

4. Zone 4: <2,000 CDD and 

<4,000 HDD. 

5. Zone 5: >2,000 CDD and 

<4,000 HDD 

Note: Number of degree days is 

over a 30-year period. 

Each public use micro area (PUMA) in the ACS was assigned a 

climate rating by mapping from NOAA division data to PUMAs 

using NOAA data matching climate divisions to counties. The 

NOAA data used to develop the climate ratings is from NOAA’s 

publication “Climatography Of The United States No. 85: Divisional 

Normals of Temperature, Precipitation, and Heating and Cooling 

Degree Days”. The data is available for between one and ten 

divisions in each state. A climate division is a region within a state 

that is as climatically homogeneous as possible. 

Not all counties were available in the NOAA dataset. Hawaii and 

Alaska were not included, though as Alaska has the same climate 

rating for the entire state, this was not a problem. Hawaii’s counties 

are individual islands, as are the climate regions, which made 

creating that mapping straightforward. Other missing cases include 

independent cities, the District of Columbia, and a few counties in 

New Mexico and Arizona. In these cases, each missing area was 

assigned the same region as adjacent counties in the database. 

For the PUMAs with multiple county matches that had different 

climates, a population-weighted average climate rating was assigned 

. 

Age and 

employment 

status 

1 Infants: less than age 2 

2 Children: aged 2 through 15 

3 Ages 16+; work full-time 

outside the composite wood 

products industry 

4 Ages 16+; work in composite 

wood products fabrication 

5 Ages 16+; work part-time 

outside the composite wood 

products industry 

6 Ages 16+; unemployed or not 

in the labor force 

An individual observation’s age is available in the ACS from ages 0 

to 95, with ages above 95 being counted as 95. For the exposure 

categories 1 and 2, infants and children were defined as ages 0-1 and 

2-15, respectively. Individuals aged 16-95 working 20+ hrs, not at 

home, in any industry categories other than those listed below were 

included in category 3. Individuals that reported employment in the 

industries that manufacture furniture and related products or that 

manufacture prefabricated wood buildings and mobile homes were 

defined as working in composite wood product fabrication (category 

4). Individuals aged 16-95 working 0-20 hrs, not at home, in any 

other industry categories were included in category 5. Individuals 

aged 16-95 who were not working, retired, or not in the labor force 

were counted in category 6. Also counted in category 6 were 

individuals who work from home. 

4226 

4227 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-59 

4228 

4229 3.6.1 Composite Wood Products Installed During Renovation 

4230 

4231 The ACS does not provide any information with respect to renovation for home-owners or 

4232 renters. Thus, it was necessary to use another data source to estimate renovation rates among the 

4233 population, and apply those rates to the ACS population estimates. 

4234 

4235 The National 2009 American Housing Survey (AHS) Dataset was used to determine the average 

4236 frequency of kitchen renovation among homeowners. Kitchen renovation was determined to be the most 

4237 likely source of new composite wood products being introduced in a home. In order to obtain a mean 

4238 value that would be consistent with the ACS data, the variable in the AHS indicating the year the home 

4239 was built was recoded into nine categories so that there were no overlaps between the AHS and ACS 

4240 categories. 

4241 

4242 As noted in a recent Joint Center for Housing Studies’ report (Will 2010), data specific to the 

4243 frequency or expenditures of remodeling and renovation in rental housing are not available. However, 

4244 home renovation data were available for owner-occupied housing in the following categories: single4245 family detached homes, single-family attached homes, manufactured housing, and apartments. Because 

4246 renovation frequency data for renter-occupied housing were not available, the renovation frequency for 

4247 owner-occupied housing was used for both owner- and renter-occupied housing. 

4248 

4249 Table 3-24 presents the average renovation frequency by housing type and year of construction. 

4250 The overall average is 2.7 percent. Homes built in recent years renovate less, on average, than homes 

4251 from previous decades. Since homes built in the last 11 years are accounted for in the new home exposure 

4252 category in this analysis, these homes were assumed not to conduct a renovation. Note that a non-trivial 

4253 percentage of homeowners renovate kitchens in even the newest homes (i.e., homes built in 2009 also 

4254 surveyed in 2009). However, to simplify the analysis separate exposure scenarios were not estimated for 

4255 housing that is both new and recently renovated. Instead, these scenarios were simply treated as new 

4256 homes. This simplifying assumption may result in an underestimate for the formaldehyde exposures 

4257 experienced by individuals living in newer homes that were recently renovated. 

4258 

4259 

Table 3-24: Frequency of Kitchen Renovation by Housing Type and 

Year Built, 2009 AHS 

Year Built 

Single-Family 

Detached 

Homes 

Single-Family 

Attached 

Homes 

Apartments Manufactured 

Housing 

2005 or later - - - - 

2000 to 2004 - - - - 

1990 to 1999 2.8% 2.7% 1.4% 1.1% 

1980 to 1989 3.4% 2.1% 4.0% 2.1% 

1970 to 1979 2.9% 2.6% 3.2% 2.4% 

1960 to 1969 2.3% 2.2% 0.8% 

2.2% 

1950 to 1959 2.8% 3.8% 2.1% 

1940 to 1949 3.0% 2.1% 2.3% 

1939 or earlier 2.8% 3.0% 2.7% 

4260 

4261 

4262 There were two year built categories of manufactured housing where no kitchen renovations were 

4263 reported. Each of these cells has fewer than 20 observations associated with it. Since there was not a 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-60 

4264 statistically significant difference between manufactured housing renovation in 1960-1969 and 1940-

4265 1949, the analysis used the same mean renovation rate for all manufactured housing built prior to 1969. 

4266 The renovation frequencies presented in Table 3-24 were applied to all homes by housing age and 

4267 structure type. Applying the renovation percentages presented in Table 3-24 to the 2007-2009 ACS 

4268 National Dataset results in the population totals and household counts presented in Table 3-25. It should 

4269 be noted that the renovation percentage was applied to the aggregated totals by housing age and structure 

4270 type. 

4271 

Table 3-25: Total Population in Renovated Houses 

Housing Type Population in 

Renovated Homes 

Percent of Total 

Population 

Renovated 

Households 

Percent of Total 

Households 

Single-Family Detached 4,922,274 2.8% 1,768,967 2.8% 

Single-Family Attached 367,710 2.6% 142,962 2.6% 

Apartment 1,344,143 2.5% 634,781 2.5% 

Manufactured Housing 268,559 1.8% 109,549 1.8% 

Total 6,902,686 2.7% 2,656,259 2.7% 

4272 

4273 

4274 3.6.2 Summary of Population Estimates 

4275 

4276 The analysis estimates that there will be about 10 million individuals living in housing units 

4277 where composite wood products have been installed within the past year (i.e., individuals who have 

4278 moved into new home or live in a home where there was a renovation). Since these individuals are 

estimated to be affected by the emissions from these products over a period of 11 years, by the 11th 4279 year it 

4280 is estimated that about 106 million individuals live in housing units where composite wood products have 

4281 been installed within the past 11 years. Table 3-26 and Table 3-27 present a summary of the population 

4282 estimates by the categories that are used to define the different exposure groups. See Table 3-23 and 

4283 section 3.6.1 for a description of how these populations were estimated. The reductions in micro risks of 

4284 adverse health outcomes (see sections 3.3 and 3.5) are applied to these population estimates and 

4285 combined with the values of reducing micro risks for the various adverse health outcomes (see sections 

4286 3.4 and 3.5) to estimate the total value of the reduced risks of adverse health outcomes. 

4287 

4288 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-61 

Table 3-26: Population Estimates by Age of New Construction, Years since Renovation 

and Structure Type 

Age of new construction in 

Years 

Years since renovation Structure Type 

Category Population Category Population Category Population 

0-1 2,738,898 0-1 6,902,685 New Apt 4,755,876 

1-2 2,738,898 1-2 6,902,685 New Man 1,405,598 

2-3 2,738,898 2-3 6,902,685 New RV 52,063 

3-4 2,738,898 3-4 6,902,685 New SF Att 2,235,686 

4-5 2,738,898 4-5 6,902,685 New SF Det 21,678,650 

5-6 2,738,898 5-6 6,902,685 Total New 30,127,874

6-7 2,738,898 6-7 6,902,685 Ren Apt 14,785,584 

7-8 2,738,898 7-8 6,902,685 Ren Man 2,954,145 

8-9 2,738,898 8-9 6,902,685 Ren SF Att 4,044,810 

9-10 2,738,898 9-10 6,902,685 Ren SF Det 54,144,991 

10-11 2,738,898 10-11 6,902,685 Total Renovated 75,929,530

Total New 30,127,874 Total Renovated 75,929,530 All Structures 106,057,404 

Source: U.S. Census Bureau 2009e, f 

Note: See Table 3-23 and section 3.6.1 for a description of how these populations were estimated. Age of new 

construction and years since renovation indicates the number of years since composite wood products were 

introduced to the house. For example, “0-1” for years since renovation indicates that the structure was renovated 

within the past year. Totals may not add due to rounding. 

Abbreviations: 

“New SF Att” is new construction of single-family attached housing (up to 11 years old) 

“New SF Det” is new construction of single-family detached housing (up to 11 years old). 

“New SF Apt” is new construction of multi-family housing (up to 11 years old). 

 “New SF Man” is new construction of manufactured housing (up to 11 years old). 

“New SF CT” is new campers and trailers (up to 11 years old). 

“New SF Att” is renovated single-family attached housing (up to 11 years old) 

“New SF Det” is renovated single-family detached housing (up to 11 years old). 

“New SF Apt” is renovated multi-family housing (up to 11 years old). 

 “New SF Man” is renovated manufactured housing (up to 11 years old). 

Note: Campers and Trailers are assumed to never be renovated. 

4289 

Table 3-27: Population Estimates by Climate Zone, Age of Individual, and 

Occupation 

Climate Zone Occupation of Individual 

Category Population Category Population 

Zone 1 13,177,114 Infants 0-1 3,309,269 

Zone 2 23,906,632 Children 2-15 21,312,289 

Zone 3 20,637,107 Not CWP Industry 55,523,507 

Zone 4 21,214,309 Fabrication 238,487 

Zone 5 27,122,241 Unemployed 19,508,314 

- Part Time 6,165,538 

Total 106,057,404 Total 106,057,404 

Source: U.S. Census Bureau 2009e, f 

Note: See Table 3-23 and section 3.6.1 for a description of how these populations were estimated. Totals 

may not add due to rounding. 

Abbreviations: 

Zone 1: Fewer than 2,000 cooling degree days and more than 7,000 heating degree days over 30 years. 

Zone 2: Fewer than 2,000 cooling degree days and 5,500 to 7,000 heating degree days over 30 years. 

Zone 3: Fewer than 2,000 cooling degree days and 4,000 to 5,499 heating degree days over 30 years. 

Zone 4: Fewer than 2,000 cooling degree days and fewer than 4,000 heating degree days over 30 years. 

Zone 5: 2,000 or more cooling degree days and fewer than 4,000 heating degree days over 30 years. 

4290 

4291 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-62 

4292 3.7 Results of Benefits Assessment 

4293 

4294 This section presents the results of the benefits assessment. Detailed results are presented for the 

4295 analytical options with emissions standards that are consistent with the TSCA Title VI statute. Summary 

4296 results are presented for the additional options that consider alternative formaldehyde emissions 

4297 standards. Section 3.7.1 presents the total benefits attributable to reductions in cancer risk by combining 

4298 the changes in cancer risk (see section 3.3), the value of the reductions in risk (see section 3.4) and the 

4299 number of individuals experiencing reductions in risk (see section 3.6). Section 3.7.2 presents the total 

4300 benefits attributable to reductions in non-cancer adverse health risks by combining the changes in non4301 cancer adverse health risks (see section 3.5), the value of the reductions in risk (see section 3.5) and the 

4302 number of individuals experiencing reductions in risk (see section 3.6). 

4303 

4304 As described in section 3.2, this analysis assumes that after eleven years any continuing (and 

4305 declining) emissions from a given composite wood product would contribute negligibly to that product's 

4306 effect on formaldehyde exposure. Thus, composite wood products are assumed to contribute to 

formaldehyde exposure for 11 years.58 4307 Specifically: 

4308 

4309  in the first year only new composite wood products are affected by the policy; 

4310  in the second year new and one-year-old composite wood products are affected by the 

4311 policy; 

4312  in the third year new, one- and two-year-old composite wood products are affected by the 

4313 policy; 

4314  in general, in the nth year, new, one-, two-, three-,..., and (n-1)-year-old composite wood 

4315 products are affected by the policy, for n = 1, 2, ..., 10; and 

4316  in the eleventh and all subsequent years new, one-, two-, three-, four-, five-, six-, seven-, 

4317 eight-, nine-, and ten-year-old composite wood products are affected by the policy. 

4318 

4319 Since the exposure scenarios are defined in part according to the 11 different ages for composite 

wood products, it is not until the 11th 4320 year after the implementation of the rule that benefits are realized 

under every exposure scenario. That is, it is not until the 11th 4321 year after rule implementation that ten-year 

4322 old composite wood products would have been required to be produced in compliance with the emissions 

4323 standards. Thus, the benefits are phased in over a period of eleven years. 

4324 

4325 Similarly, the benefits from a given year of composite wood production will phase-out over time. 

4326 Since the analysis considers the benefits and costs from 30 years of composite wood production, the 

estimated exposures have the following time profile after the 30th 4327 and last year of composite wood 

4328 production considered in the analysis: 

4329 

 in the 31st 4330 year, only one-, two-, three-, four-, five-, six-, seven-, eight-, nine-, and tenyear-old composite wood products are produced before the 31st 4331 year (benefits from new 

4332 composite wood products are produced after year 30 and therefore are not considered in 

4333 the analysis); 

 in the 32nd 4334 year, only two-, three-, four-, five-, six-, seven-, eight-, nine-, and ten-year-old 

composite wood products are produced before the 31st 4335 year (benefits from new and one4336 year old composite wood products are produced after year 30 and therefore are not 

4337 considered in the analysis); 

 58 EPA calculated exposures using a 1.5 year emissions half life of formaldehyde from composite wood products With. 

this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11 

years the emissions would be near zero. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-63 

4338  in general, in the nth year after year 30, only n year-old and older composite wood 

4339 products are produced before year 31, for n = 1, 2, ..., 10; and 

 in the 41st 4340 and all subsequent years, all 11 ages of composite wood products that 

potentially contribute to formaldehyde exposure are produced after the 30th 4341 year and 

4342 therefore are not considered in the analysis. 

4343 

4344 Given this phase-in and phase-out, a time period of thirty years of composite wood production 

4345 was selected so that the first ten years of the policy (when the benefits of the policy are being phased in) 

4346 and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of 

4347 the policy are being phased out) do not obscure the steady state benefits that would be experienced from 

4348 the policy. It is necessary to include the phase-in and phase-out of the benefits in order to be consistent 

4349 with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions 

4350 standards. Given that this analysis assumes that after eleven years any continuing (and declining) 

4351 emissions from a given composite wood product would contribute negligibly to that product's effect on 

4352 formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to 

4353 40 years of exposure reductions. The first 10 years are a phase-in period for exposure reductions, the next 

4354 20 years are a steady-state, and the next 10 years are a phase-out period. 

4355 

4356 Since the eleventh year is the first steady-state or typical year, undiscounted benefits estimates are 

4357 presented in this section in order to convey the annual benefits from a typical year. In addition, the 

4358 present discounted value for the thirty year stream of benefits and the annualized value for the stream of 

4359 benefits are estimated using discount rates of 3 and 7 percent. Benefits are discounted back to the 

4360 beginning of the 40-year period, as follows: 

4361 

ሻ௧݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏܷ݊݀݅ሺ ෍ൌ ݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏ݅ܦ ݐ݁݊ݏ݁ݎܲ 

ሻ௧݁ݐܽݎ ݐ݊ݑ݋ܿݏ݀݅ ൅ 1ሺ

ସ଴

௧ୀଵ

(37) 

4362 

4363 The benefits for discount rate, d, are annualized over a 30 year period to be consistent with the 

4364 annualized costs using the following formula: 

4365 

ሺܣ݊݊ݑ݈ܽ݅ݖ݁݀ ܤ݁݊. ሻ ൌ ሺܲܦܸସ଴ ௬௘௔௥ ௕௘௡௘௙௜௧௦ ௦௧௥௘௔௠ሻ כ ݀ כ ሺ1 ൅ ݀ሻଷ଴

ሺ1 ൅ ݀ሻଷଵ െ 1 (38) 

4366 

4367 Table 3-28 and Table 3-29 present descriptions of the analytical options and the exposure groups 

4368 with the abbreviations that are used in the results tables below. Table 3-30 summarizes the assumptions 

4369 that differentiate between the lower benefit estimates and the higher benefit estimates. 

4370 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-64 

Table 3-28: Analytical Options Summary 

Analytical 

Option Description 

Option SE Statutory emissions standards where all wood veneer laminated products are exempt from the 

definition of hardwood plywood 

Option SI Statutory emissions standards where all wood veneer laminated products are included in the 

definition of hardwood plywood 

Option SC

Statutory emissions standards where all wood veneer laminated products made with wood veneers 

attached to compliant platforms using NAF resins are exempt from the definition of hardwood 

plywood 

Option SCR

Proposed Option. 

Statutory emissions standards where wood veneer laminated products made with wood veneers 

attached to compliant platforms using NAF resins are exempt from the definition of hardwood 

plywood. Reduced recordkeeping requirements for non-mfgrs. compared to other options. 

Option SN Statutory emissions standards where all wood veneer laminated products made using NAF resins to 

attach wood veneers to NAF platforms are exempt from the definition of hardwood plywood

Option CE CARB 1 emissions standards where all wood veneer laminated products are exempt from the 

definition of hardwood plywood

Option CI CARB 1 emissions standards where all wood veneer laminated products are included in the 

definition of hardwood plywood

Option NE NAF emissions standards where all wood veneer laminated products are exempt from the 

definition of hardwood plywood 

Option NI NAF emissions standards where all wood veneer laminated products are included in the definition 

of hardwood plywood 

4371 

Table 3-29: Exposure Group Descriptions and Abbreviations Used in Results Tables 

Exposure Group Descriptions (and abbreviations) 

Composite Wood Product Source and Age: 

1. New housing construction for 11 ages of the housing (Structure age 0-1 through Structure age 10-11) 

2. Renovated housing for 11 ages of the installed composite wood products (0-1 years post ren. through 10-11 years 

post ren.) 

Structure Type: 

1. New apartment (New Apt) 

2. New manufactured housing (New Man) 

3. New recreational vehicles and camper/trailers (New RV) 

4. New single family attached (New SF Att) 

5. New single family detached (New SF Det) 

6. Renovated apartment (Ren Apt) 

7. Renovated manufactured housing (Ren Man) 

8. Renovated single family attached (Ren SFAtt) 

9. Renovated single family detached (Ren SF Det) 

Climate Zone: 

1. (Zone 1) <2,000 cooling degree days (CDD) and more than 7,000 heating degree days (HDD) 

2. (Zone 2) <2,000 CDD and 5,500 to 7,000 HDD 

3. (Zone 3) <2,000 CDD and 4,000 to 5,499 HDD 

4. (Zone 4) <2,000 CDD and <4,000 HDD. 

5. (Zone 5) >2,000 CDD and <4,000 HDD 

Note: Number of degree days is over a 30 year period. 

Age and Employment Status: 

1. Infants: less than age 2 (Infants 0-1) 

2. Children: aged 2 through 15 (Children 2-15) 

3. Ages 16+; work full-time outside the composite wood products industry (Not CWP Industry) 

4. Ages 16+; work in composite wood products fabrication (Fabricator) 

5. Ages 16+; unemployed or not in the labor force (Retired/Unemployed) 

6. Ages 16+; work part-time outside the composite wood products industry (Part Time) 

4372 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-65 

Table 3-30: Summary of Lower and Higher Benefit Estimate Assumptions 

Health Outcome Lower Estimate Higher Estimate 

Cancer 

Does not apply age-dependent 

adjustment factor (ADAF) to the 

inhalation unit risk.a

 Multiplies the 

inhalation unit risk by a lowering factor. 

Applies age-dependent adjustment factor (ADAF) 

to the inhalation unit risk.a

Irritation 

Does not include benefits for reductions 

in the indoor average daily 

concentration below 40ppb. 

Includes benefits for any reduction in the indoor 

average daily concentration, including reductions 

below 40ppb. 

Asthma 

Includes benefits for 6-17 year olds 

only. The willingness-to-pay (WTP) to 

avoid asthma, which is age-specific, is 

lower for this age group compared to 

the higher estimate. 

Includes benefits for 2-17 year olds only. The 

willingness-to-pay (WTP) to avoid asthma, which 

is age-specific, is higher for this age group 

compared to the lower estimate. 

Fertility 

There is only one fertility estimate presented. 

a

 EPA policy is to apply ADAFs when there is a mutagenic mode of action. The 1991 IRIS assessment did not make a 

formal finding of a mutagenic mode of action. However, there is scientific support for a mutagenic mode of action. 

Therefore, EPA believes application of ADAFs is the preferred approach in this case but is also presenting the 

calculations without applying ADAFs. 

b

 The lowering factor is calculated as the percentage of incidence of the cancer that occurs within the age range 

spanning from the age at which the change in exposure is experienced through the end of the expected lifetime. 

4373 

4374 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-66 

4375 

4376 3.7.1 Total Benefits Attributable to Cancer Risk Reductions 

4377 

4378 The benefits of reducing the risk of nasopharyngeal cancer is estimated as a weighted average of 

4379 the value of reducing fatal and nonfatal cancer risks. As noted above (see section 3.4.1), the fifteen year 

4380 survival rate for cancers of the nasopharynx is 42.9 percent (SEER 2010). Thus, the analysis assumes 

4381 that 57.1 percent of the reductions in cancer risk are reductions in mortality risk and therefore are valued 

4382 as the value of mortality risk (VMR) presented in section 3.4.1. Likewise, the analysis assumes that 42.9 

4383 percent of the cancer risk reductions are reductions in the risk of nonfatal cancer and are valued using a 

4384 cost of illness approach presented in section 3.4.2. The results presented in this section generally include 

4385 the number of individuals experiencing exposure reductions annually as a result of the analytical option 

4386 (see section 3.6), the average individual’s micro risk reduction for cancer (see section 3.3), and the total 

4387 benefits for the reduction in cancer risk. The analysis includes both lower and higher estimates for the 

4388 reduction in cancer risk, where the lower estimate adjusts the cancer risk downward based according to 

4389 the distribution of cancer incidence by age (see section 3.3.1). Note that the value for each micro risk 

4390 reduction for cancer is conditional on the age at the time of the exposure (see Table 3-16). 

4391 

4392 Table 3-31 through Table 3-36 present the annual benefits using a 3 percent discount rate 

4393 associated with reduced cancer risk for a typical year under the analytical options with the statutory 

4394 emissions standards (see Table 3-28 for a description of the analytical options and Table 3-29 for a 

4395 description of the exposure groups). Because the exposure model assumes that the benefits of reduced 

4396 emissions from newly installed composite wood products are accrued over 11 years and the numbers of 

4397 individuals in different exposure groups are assumed to be the same in each year, the annual benefits are 

4398 the same starting in the eleventh year. Thus, the eleventh and subsequent years are defined as typical 

4399 years for the purpose of this analysis. Table 3-37 presents the typical annual benefits, the present 

4400 discounted value of the 40-year stream of benefits, and the annualized benefits associated with reduced 

4401 cancer risk for all analytical options. 

4402 

4403 The results in Table 3-31 through Table 3-36 indicate that the cancer-related benefits are 

4404 generally higher for composite wood products that have been more recently installed, new housing 

4405 compared to renovated housing, warmer and more humid climate zones, younger individuals, and 

4406 individuals who work in the composite wood products industry. 

4407 

4408 The results in Table 3-37 indicate that the most protective option with emissions standards that 

4409 are consistent with the TSCA Title VI statute (Option SN, which would require laminated products to be 

4410 made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood 

4411 plywood) has cancer-related benefits that are less than 20 percent larger than the benefits of the least 

4412 protective option with emissions standards that are consistent with the TSCA Title VI statute (Option SE, 

4413 which exempts all laminated products from the definition of hardwood plywood). The cancer-related 

4414 benefits under Option SC and the proposed option (Option SCR) are only slightly less than those under 

4415 Option SN, the difference being less than 5 percent. Options SC and SCR would both require laminated 

4416 products to be made with NAF resins in order to be exempted from the definition of hardwood plywood. 

4417 Analytical options that would require NAF resin technologies for all composite wood products (Options 

4418 NE and NI) would result in benefits about four times larger than under the proposed analytical option 

4419 with emissions standards consistent with the TSCA Title VI statute, and analytical options that would 

4420 require less stringent emissions standards than the statute (Options CE and CI) would result in benefits 

4421 about 25 percent lower. 

4422 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-67 

Table 3-31: Cancer Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Option SE (3% discount rate) 

Composite Wood 

Source and Age 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 2,739 0.43 1.08 $2.5 $5.3 

Structure age 1-2 2,739 0.28 0.69 $1.6 $3.4 

Structure age 2-3 2,739 0.18 0.45 $1.0 $2.2 

Structure age 3-4 2,739 0.12 0.29 $0.7 $1.5 

Structure age 4-5 2,739 0.08 0.20 $0.5 $1.0 

Structure age 5-6 2,739 0.06 0.13 $0.3 $0.7 

Structure age 6-7 2,739 0.04 0.10 $0.2 $0.5 

Structure age 7-8 2,739 0.03 0.07 $0.2 $0.4 

Structure age 8-9 2,739 0.03 0.06 $0.2 $0.3 

Structure age 9-10 2,739 0.02 0.05 $0.1 $0.3 

Structure age 10-11 2,739 0.02 0.04 $0.1 $0.2 

0-1 years post-ren. 6,903 0.25 0.60 $3.8 $8.5 

1-2 years post-ren. 6,903 0.16 0.39 $2.5 $5.5 

2-3 years post-ren. 6,903 0.11 0.26 $1.6 $3.6 

3-4 years post-ren. 6,903 0.07 0.17 $1.1 $2.4 

4-5 years post-ren. 6,903 0.05 0.12 $0.8 $1.7 

5-6 years post-ren. 6,903 0.04 0.08 $0.6 $1.2 

6-7 years post-ren. 6,903 0.03 0.06 $0.4 $0.9 

7-8 years post-ren. 6,903 0.02 0.05 $0.4 $0.7 

8-9 years post-ren. 6,903 0.02 0.04 $0.3 $0.6 

9-10 years post-ren. 6,903 0.02 0.04 $0.3 $0.5 

10-11 years post-ren. 6,903 0.02 0.03 $0.3 $0.5 

Total 106,057 0.08 0.20 $19.4 $42.1 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4423 

4424 

4425 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-68 

Table 3-32: Cancer Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Options SI, SC, and SCR (Proposed Option, 3% discount rate) 

Composite Wood 

Source and Age 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 2,739 0.48 1.19 $2.7 $5.9 

Structure age 1-2 2,739 0.31 0.76 $1.7 $3.8 

Structure age 2-3 2,739 0.20 0.49 $1.1 $2.4 

Structure age 3-4 2,739 0.13 0.32 $0.7 $1.6 

Structure age 4-5 2,739 0.09 0.21 $0.5 $1.1 

Structure age 5-6 2,739 0.06 0.15 $0.4 $0.7 

Structure age 6-7 2,739 0.04 0.10 $0.3 $0.5 

Structure age 7-8 2,739 0.03 0.08 $0.2 $0.4 

Structure age 8-9 2,739 0.03 0.06 $0.2 $0.3 

Structure age 9-10 2,739 0.02 0.05 $0.1 $0.3 

Structure age 10-11 2,739 0.02 0.04 $0.1 $0.2 

0-1 years post-ren. 6,903 0.30 0.72 $4.5 $10.2 

1-2 years post-ren. 6,903 0.19 0.46 $2.9 $6.6 

2-3 years post-ren. 6,903 0.13 0.30 $1.9 $4.3 

3-4 years post-ren. 6,903 0.08 0.20 $1.3 $2.9 

4-5 years post-ren. 6,903 0.06 0.14 $0.9 $2.0 

5-6 years post-ren. 6,903 0.04 0.10 $0.6 $1.4 

6-7 years post-ren. 6,903 0.03 0.07 $0.5 $1.0 

7-8 years post-ren. 6,903 0.03 0.05 $0.4 $0.8 

8-9 years post-ren. 6,903 0.02 0.04 $0.3 $0.7 

9-10 years post-ren. 6,903 0.02 0.04 $0.3 $0.6 

10-11 years post-ren. 6,903 0.02 0.03 $0.3 $0.5 

Total 106,057 0.10 0.23 $22.0 $48.0 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4426 

4427 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-69 

Table 3-33: Cancer Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Option SN, 3% discount rate 

Composite Wood 

Source and Age 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 2,739 0.49 1.23 $2.8 $6.1 

Structure age 1-2 2,739 0.32 0.78 $1.8 $3.9 

Structure age 2-3 2,739 0.20 0.51 $1.2 $2.5 

Structure age 3-4 2,739 0.13 0.33 $0.8 $1.6 

Structure age 4-5 2,739 0.09 0.22 $0.5 $1.1 

Structure age 5-6 2,739 0.06 0.15 $0.4 $0.8 

Structure age 6-7 2,739 0.05 0.11 $0.3 $0.5 

Structure age 7-8 2,739 0.03 0.08 $0.2 $0.4 

Structure age 8-9 2,739 0.03 0.06 $0.2 $0.3 

Structure age 9-10 2,739 0.02 0.05 $0.1 $0.3 

Structure age 10-11 2,739 0.02 0.04 $0.1 $0.2 

0-1 years post-ren. 6,903 0.31 0.76 $4.7 $10.8 

1-2 years post-ren. 6,903 0.20 0.49 $3.1 $6.9 

2-3 years post-ren. 6,903 0.13 0.32 $2.0 $4.5 

3-4 years post-ren. 6,903 0.09 0.21 $1.4 $3.0 

4-5 years post-ren. 6,903 0.06 0.14 $0.9 $2.0 

5-6 years post-ren. 6,903 0.04 0.10 $0.7 $1.4 

6-7 years post-ren. 6,903 0.03 0.07 $0.5 $1.1 

7-8 years post-ren. 6,903 0.03 0.06 $0.4 $0.8 

8-9 years post-ren. 6,903 0.02 0.05 $0.3 $0.7 

9-10 years post-ren. 6,903 0.02 0.04 $0.3 $0.6 

10-11 years post-ren. 6,903 0.02 0.04 $0.3 $0.5 

Total 106,057 0.10 0.24 $22.9 $50.1 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4428 

4429 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-70 

Table 3-34: Cancer Benefits for Statutory Options by Structure Type, Annual Benefits for 

Typical Year, 3% discount rate 

Structure Type Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

New Apt 4,756 0.17 0.38 $1.7 $3.3 

New Man 1,406 0.14 0.35 $0.4 $0.9 

New RV 52 0.26 0.73 $0.0 $0.1 

New SF Att 2,236 0.11 0.26 $0.5 $1.1 

New SF Det 21,679 0.10 0.26 $4.7 $10.2 

Ren Apt 14,786 0.11 0.26 $3.6 $7.4 

Ren Man 2,954 0.11 0.27 $0.7 $1.6 

Ren SF Att 4,045 0.07 0.17 $0.6 $1.4 

Ren SF Det 54,145 0.06 0.14 $7.1 $16.0 

Total 106,057 0.08 0.20 $19.4 $42.1 

Options SI, SC and SCR (Proposed Option) 

New Apt 4,756 0.19 0.42 $1.9 $3.7 

New Man 1,406 0.16 0.40 $0.5 $1.1 

New RV 52 0.34 0.96 $0.0 $0.1 

New SF Att 2,236 0.12 0.29 $0.6 $1.2 

New SF Det 21,679 0.11 0.28 $5.1 $11.0 

Ren Apt 14,786 0.13 0.30 $4.1 $8.5 

Ren Man 2,954 0.13 0.34 $0.9 $2.0 

Ren SF Att 4,045 0.08 0.19 $0.7 $1.6 

Ren SF Det 54,145 0.07 0.16 $8.2 $18.7 

Total 106,057 0.10 0.23 $22.0 $48.0 

Option SN 

New Apt 4,756 0.20 0.44 $1.9 $3.8 

New Man 1,406 0.17 0.42 $0.5 $1.1 

New RV 52 0.37 1.04 $0.0 $0.1 

New SF Att 2,236 0.12 0.29 $0.6 $1.2 

New SF Det 21,679 0.12 0.29 $5.2 $11.3 

Ren Apt 14,786 0.14 0.31 $4.3 $8.9 

Ren Man 2,954 0.14 0.36 $0.9 $2.2 

Ren SF Att 4,045 0.09 0.20 $0.8 $1.7 

Ren SF Det 54,145 0.07 0.17 $8.6 $19.6 

Total 106,057 0.10 0.24 $22.9 $50.1 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4430 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-71 

Table 3-35: Cancer Benefits for Statutory Options by Climate Zone, Annual Benefits for 

Typical Year, 3% discount rate 

Climate Zone Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

Zone 1 13,177 0.07 0.17 $2.1 $4.5 

Zone 2 23,907 0.07 0.18 $3.9 $8.4 

Zone 3 20,637 0.08 0.18 $3.4 $7.4 

Zone 4 21,214 0.09 0.21 $4.0 $8.6 

Zone 5 27,122 0.10 0.25 $6.0 $13.1 

Total 106,057 0.08 0.20 $19.4 $42.1 

Options SI, SC and SCR (Proposed Option) 

Zone 1 13,177 0.1 0.2 $2.3 $5.1 

Zone 2 23,907 0.08 0.20 $4.4 $9.6 

Zone 3 20,637 0.09 0.20 $3.9 $8.5 

Zone 4 21,214 0.10 0.24 $4.5 $9.8 

Zone 5 27,122 0.12 0.29 $6.8 $15.0 

Total 106,057 0.10 0.23 $22.0 $48.0 

Option SN 

Zone 1 13,177 0.08 0.20 $2.4 $5.3 

Zone 2 23,907 0.09 0.21 $4.6 $10.0 

Zone 3 20,637 0.09 0.21 $4.0 $8.8 

Zone 4 21,214 0.10 0.25 $4.7 $10.2 

Zone 5 27,122 0.12 0.30 $7.1 $15.6 

Total 106,057 0.10 0.24 $22.9 $50.1 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4431 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-72 

Table 3-36: Cancer Benefits for Statutory Options by Age/Employment Status, Annual 

Benefits for Typical Year, 3% discount rate 

Age/Employment 

Status 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

Infants 0-1 3,309 0.12 1.27 $0.4 $4.4 

Children 2-15 21,312 0.11 0.34 $3.1 $9.6 

Not CWP Industry 55,524 0.08 0.12 $12.0 $18.2 

Fabricator 238 0.32 0.48 $0.2 $0.3 

Retired/Unemployed 19,508 0.05 0.13 $2.6 $7.8 

Part Time 6,166 0.08 0.12 $1.1 $1.7 

Total 106,057 0.08 0.20 $19.4 $42.1 

Options SI, SC and SCR (Proposed Option) 

Infants 0-1 3,309 0.14 1.45 $0.5 $5.1 

Children 2-15 21,312 0.12 0.38 $3.5 $10.8 

Not CWP Industry 55,524 0.09 0.13 $13.5 $20.5 

Fabricator 238 0.33 0.50 $0.2 $0.3 

Retired/Unemployed 19,508 0.06 0.15 $3.1 $9.2 

Part Time 6,166 0.09 0.13 $1.3 $2.0 

Total 106,057 0.10 0.23 $22.0 $48.0 

Option SN 

Infants 0-1 3,309 0.14 1.51 $0.5 $5.3 

Children 2-15 21,312 0.13 0.40 $3.6 $11.3 

Not CWP Industry 55,524 0.10 0.14 $14.0 $21.3 

Fabricator 238 0.34 0.50 $0.2 $0.3 

Retired/Unemployed 19,508 0.07 0.16 $3.2 $9.7 

Part Time 6,166 0.10 0.14 $1.3 $2.1 

Total 106,057 0.10 0.24 $22.9 $50.1 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4432 

4433 

Table 3-37: Cancer Benefits for All Options, Present Discounted Value of 40-Year Stream of 

Benefits and Annualized Benefits (millions 2010$, 3% discount rate) 

Analytical Option Annual Benefits in Typical 

Year 

PDV of 40-Year Stream of 

Benefits 

Annualized Benefits 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE $19 $42 $356 $776 $17 $38 

Option SI/SC/SCR (Proposed) $22 $48 $405 $887 $20 $43 

Option SN $23 $50 $422 $926 $20 $45 

Option CE $15 $32 $272 $592 $13 $29 

Option CI $17 $37 $311 $680 $15 $33 

Option NE $84 $182 $1,545 $3,359 $75 $163 

Option NI $88 $190 $1,618 $3,523 $79 $171 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4434 

4435 

4436 3.7.2 Total Benefits Attributable to Non-cancer Health Effect Risk Reductions 

4437 

4438 The benefits of reducing risk for non-cancer health effects are estimated using the methods 

4439 described in section 3.5. The presented results generally include the number of individuals experiencing 

4440 exposure reductions annually as a result of the analytical option (see section 3.6) and the average 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-73 

4441 individual’s micro risk reduction for the non-cancer health effect. A micro risk reduction represents a 

4442 1/1,000,000 reduction in risk. As described in section 3.5, the benefits under a 3 percent discount rate 

4443 from avoiding a case of eye irritation, asthma, and reduced fertility were $26, $35,443-$66,064, and 

4444 $1,969-$5,336 (depending on age), respectively. Thus these values multiplied by 1/1,000,000 correspond 

4445 to the values for a single micro risk reduction. 

4446 

4447 3.7.2.1 Eye Irritation 

4448 

4449 Table 3-38 through Table 3-43 present the annual benefits using a 3 percent discount rate 

4450 associated with reduced eye irritation risk for a typical year under the analytical options with the statutory 

4451 emissions standards (see Table 3-28 for a description of the analytical options and Table 3-29 for a 

4452 description of the exposure groups). Because the exposure model assumes that the benefits of reduced 

4453 emissions from newly installed composite wood products are accrued over 11 years and the numbers of 

4454 individuals in different exposure groups are assumed to be the same in each year, the annual benefits are 

4455 the same starting in the eleventh year. Thus, the eleventh and subsequent years are defined as typical 

4456 years for the purpose of this analysis. Table 3-44 presents the typical annual benefits, the present 

4457 discounted value of the 40-year stream of benefits, and the annualized benefits associated with reduced 

4458 eye irritation risk for all analytical options. 

4459 

4460 The results in Table 3-38 through Table 3-43 indicate that the eye irritation-related benefits are 

4461 generally higher for composite wood products that have been more recently installed, new housing 

4462 compared to renovated housing, warmer and more humid climate zones, and individuals who work in the 

4463 composite wood products industry. 

4464 

4465 The results in Table 3-44 indicate that the most protective option with emissions standards that 

4466 are consistent with the TSCA Title VI statute (Option SN, which would require laminated products to be 

4467 made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood 

4468 plywood) has eye irritation-related benefits that are about 9 to 17 percent larger than the benefits of the 

4469 least protective option with emissions standards that are consistent with the TSCA Title VI statute 

4470 (Option SE, which exempts all laminated products from the definition of hardwood plywood). The eye 

4471 irritation-related benefits under the proposed option (Option SCR, which would require laminated 

4472 products to be made with NAF resins in order to be exempted from the definition of hardwood plywood) 

4473 are only slightly less than those under Option SN, the difference being less than 4 percent. Analytical 

4474 options that would require NAF resin technologies for all composite wood products (Options NE and NI) 

4475 would result in benefits that are about three times larger than under the proposed analytical option with 

4476 emissions standards consistent with the TSCA Title VI statute, and analytical options that would require 

4477 less stringent emissions standards than the statute (Options CE and CI) would result in benefits about 20 

4478 to 25 percent lower. 

4479 

4480 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-74 

Table 3-38: Irritation Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Option SE (3% discount rate) 

Composite Wood 

Source and Age 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 2,739 5,739.76 17,934.82 $0.409 $1.277 

Structure age 1-2 2,739 203.22 7,230.14 $0.014 $0.515 

Structure age 2-3 2,739 60.81 3,136.33 $0.004 $0.223 

Structure age 3-4 2,739 49.65 1,491.51 $0.004 $0.106 

Structure age 4-5 2,739 43.18 787.82 $0.003 $0.056 

Structure age 5-6 2,739 39.33 464.81 $0.003 $0.033 

Structure age 6-7 2,739 37.00 305.69 $0.003 $0.022 

Structure age 7-8 2,739 35.56 222.10 $0.003 $0.016 

Structure age 8-9 2,739 34.67 175.79 $0.002 $0.013 

Structure age 9-10 2,739 34.11 149.07 $0.002 $0.011 

Structure age 10-11 2,739 33.77 133.20 $0.002 $0.009 

0-1 years post-ren. 6,903 112.26 5,728.63 $0.020 $1.028 

1-2 years post-ren. 6,903 86.43 2,596.25 $0.016 $0.466 

2-3 years post-ren. 6,903 71.76 1,297.15 $0.013 $0.233 

3-4 years post-ren. 6,903 63.15 720.53 $0.011 $0.129 

4-5 years post-ren. 6,903 57.98 445.52 $0.010 $0.080 

5-6 years post-ren. 6,903 54.82 305.07 $0.010 $0.055 

6-7 years post-ren. 6,903 52.86 228.99 $0.009 $0.041 

7-8 years post-ren. 6,903 51.65 185.82 $0.009 $0.033 

8-9 years post-ren. 6,903 50.89 160.47 $0.009 $0.029 

9-10 years post-ren. 6,903 50.41 145.21 $0.009 $0.026 

10-11 years post-ren. 6,903 50.11 135.89 $0.009 $0.024 

Total 106,057 208.69 1,604.93 $0.575 $4.426 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4481 

4482 

4483 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-75 

Table 3-39: Irritation Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Options SI, SC, and SCR (Proposed Option, 3% discount rate) 

Composite Wood 

Source and Age 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 2,739 6,217.72 19,737.86 $0.443 $1.406 

Structure age 1-2 2,739 210.18 7,944.66 $0.015 $0.566 

Structure age 2-3 2,739 62.95 3,437.11 $0.004 $0.245 

Structure age 3-4 2,739 50.90 1,627.35 $0.004 $0.116 

Structure age 4-5 2,739 43.93 853.79 $0.003 $0.061 

Structure age 5-6 2,739 39.79 499.08 $0.003 $0.036 

Structure age 6-7 2,739 37.28 324.51 $0.003 $0.023 

Structure age 7-8 2,739 35.74 232.90 $0.003 $0.017 

Structure age 8-9 2,739 34.78 182.18 $0.002 $0.013 

Structure age 9-10 2,739 34.18 152.94 $0.002 $0.011 

Structure age 10-11 2,739 33.81 135.57 $0.002 $0.010 

0-1 years post-ren. 6,903 122.41 6,705.17 $0.022 $1.203 

1-2 years post-ren. 6,903 92.35 3,032.09 $0.017 $0.544 

2-3 years post-ren. 6,903 75.31 1,506.47 $0.014 $0.270 

3-4 years post-ren. 6,903 65.32 828.24 $0.012 $0.149 

4-5 years post-ren. 6,903 59.31 504.27 $0.011 $0.091 

5-6 years post-ren. 6,903 55.65 338.60 $0.010 $0.061 

6-7 years post-ren. 6,903 53.38 248.76 $0.010 $0.045 

7-8 years post-ren. 6,903 51.97 197.75 $0.009 $0.035 

8-9 years post-ren. 6,903 51.09 167.78 $0.009 $0.030 

9-10 years post-ren. 6,903 50.54 149.74 $0.009 $0.027 

10-11 years post-ren. 6,903 50.19 138.71 $0.009 $0.025 

Total 106,057 222.99 1,806.48 $0.615 $4.981 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4484 

4485 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-76 

Table 3-40: Irritation Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Option SN, 3% discount rate 

Composite Wood 

Source and Age 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 2,739 6,376.53 20,360.47 $0.454 $1.450 

Structure age 1-2 2,739 211.50 8,191.74 $0.015 $0.583 

Structure age 2-3 2,739 63.70 3,541.31 $0.005 $0.252 

Structure age 3-4 2,739 51.33 1,674.50 $0.004 $0.119 

Structure age 4-5 2,739 44.20 876.73 $0.003 $0.062 

Structure age 5-6 2,739 39.95 511.01 $0.003 $0.036 

Structure age 6-7 2,739 37.38 331.08 $0.003 $0.024 

Structure age 7-8 2,739 35.80 236.67 $0.003 $0.017 

Structure age 8-9 2,739 34.82 184.41 $0.002 $0.013 

Structure age 9-10 2,739 34.21 154.29 $0.002 $0.011 

Structure age 10-11 2,739 33.83 136.40 $0.002 $0.010 

0-1 years post-ren. 6,903 125.94 7,039.10 $0.023 $1.263 

1-2 years post-ren. 6,903 94.42 3,181.77 $0.017 $0.571 

2-3 years post-ren. 6,903 76.55 1,578.67 $0.014 $0.283 

3-4 years post-ren. 6,903 66.07 865.53 $0.012 $0.155 

4-5 years post-ren. 6,903 59.78 524.67 $0.011 $0.094 

5-6 years post-ren. 6,903 55.94 350.27 $0.010 $0.063 

6-7 years post-ren. 6,903 53.56 255.66 $0.010 $0.046 

7-8 years post-ren. 6,903 52.09 201.92 $0.009 $0.036 

8-9 years post-ren. 6,903 51.16 170.33 $0.009 $0.031 

9-10 years post-ren. 6,903 50.59 151.32 $0.009 $0.027 

10-11 years post-ren. 6,903 50.22 139.69 $0.009 $0.025 

Total 106,057 227.75 1,875.87 $0.628 $5.173 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4486 

4487 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-77 

Table 3-41: Irritation Benefits for Statutory Options by Structure Type, Annual Benefits for 

Typical Year, 3% discount rate 

Structure Type Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

New Apt 4,756 2,051.74 5,159.38 $0.254 $0.638 

New Man 1,406 1,014.86 4,151.36 $0.037 $0.152 

New RV 52 11,928.14 17,386.79 $0.016 $0.024 

New SF Att 2,236 254.44 2,622.20 $0.015 $0.152 

New SF Det 21,679 226.55 2,333.65 $0.128 $1.315 

Ren Apt 14,786 57.48 2,164.15 $0.022 $0.832 

Ren Man 2,954 140.99 1,937.64 $0.011 $0.149 

Ren SF Att 4,045 43.27 1,054.63 $0.005 $0.111 

Ren SF Det 54,145 62.91 747.91 $0.089 $1.053 

Total 106,057 208.69 1,604.93 $0.575 $4.426 

Options SI, SC, and SCR (Proposed Option) 

New Apt 4,756 2,199.43 5,731.54 $0.272 $0.709 

New Man 1,406 1,130.49 4,790.85 $0.041 $0.175 

New RV 52 14,647.20 22,139.03 $0.020 $0.030 

New SF Att 2,236 269.06 2,856.59 $0.016 $0.166 

New SF Det 21,679 240.54 2,522.31 $0.136 $1.422 

Ren Apt 14,786 59.90 2,466.91 $0.023 $0.948 

Ren Man 2,954 151.22 2,386.52 $0.012 $0.183 

Ren SF Att 4,045 44.62 1,203.59 $0.005 $0.127 

Ren SF Det 54,145 64.81 867.77 $0.091 $1.222 

Total 106,057 222.99 1,806.48 $0.615 $4.981 

Option SN 

New Apt 4,756 2,250.38 5,929.20 $0.278 $0.733 

New Man 1,406 1,166.51 5,010.67 $0.043 $0.183 

New RV 52 15,302.17 23,687.63 $0.021 $0.032 

New SF Att 2,236 274.12 2,937.91 $0.016 $0.171 

New SF Det 21,679 245.40 2,587.86 $0.138 $1.459 

Ren Apt 14,786 60.75 2,571.04 $0.023 $0.988 

Ren Man 2,954 154.76 2,537.77 $0.012 $0.195 

Ren SF Att 4,045 45.09 1,254.96 $0.005 $0.132 

Ren SF Det 54,145 65.47 909.00 $0.092 $1.280 

Total 106,057 227.75 1,875.87 $0.628 $5.173 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4488 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-78 

Table 3-42: Irritation Benefits for Statutory Options by Climate Zone, Annual Benefits for 

Typical Year, 3% discount rate 

Climate Zone Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

Zone 1 13,177 93.78 1,169.86 $0.032 $0.401 

Zone 2 23,907 90.38 1,226.80 $0.056 $0.763 

Zone 3 20,637 99.30 1,281.44 $0.053 $0.688 

Zone 4 21,214 175.84 1,658.12 $0.097 $0.915 

Zone 5 27,122 477.73 2,354.12 $0.337 $1.660 

Total 106,057 208.69 1,604.93 $0.575 $4.426 

Options SI, SC, and SCR (Proposed Option) 

Zone 1 13,177 98.5 1,316.1 $0.034 $0.451 

Zone 2 23,907 94.93 1,382.86 $0.059 $0.860 

Zone 3 20,637 104.54 1,445.01 $0.056 $0.775 

Zone 4 21,214 186.56 1,862.55 $0.103 $1.027 

Zone 5 27,122 514.96 2,649.27 $0.363 $1.868 

Total 106,057 222.99 1,806.48 $0.615 $4.981 

Option SN 

Zone 1 13,177 100.16 1,366.58 $0.034 $0.468 

Zone 2 23,907 96.50 1,436.66 $0.060 $0.893 

Zone 3 20,637 106.34 1,501.38 $0.057 $0.806 

Zone 4 21,214 190.00 1,932.95 $0.105 $1.066 

Zone 5 27,122 527.32 2,750.74 $0.372 $1.940 

Total 106,057 227.75 1,875.87 $0.628 $5.173 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4489 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-79 

Table 3-43: Irritation Benefits for Statutory Options by Age/Employment Status, Annual 

Benefits for Typical Year, 3% discount rate 

Age/Employment 

Status 

Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

Infants 0-1 3,309 403.55 2,185.76 $0.035 $0.188 

Children 2-15 21,312 88.42 1,532.89 $0.049 $0.849 

Not CWP Industry 55,524 46.85 1,287.54 $0.068 $1.859 

Fabricator 238 26,845.10 26,845.10 $0.166 $0.166 

Retired/Unemployed 19,508 453.31 2,177.11 $0.230 $1.104 

Part Time 6,166 172.96 1,613.61 $0.028 $0.259 

Total 106,057 208.69 1,604.93 $0.575 $4.426 

Options SI, SC, and SCR (Proposed Option) 

Infants 0-1 3,309 429.17 2,456.66 $0.037 $0.211 

Children 2-15 21,312 95.31 1,714.52 $0.053 $0.950 

Not CWP Industry 55,524 47.49 1,444.11 $0.069 $2.085 

Fabricator 238 27,758.76 27,758.76 $0.172 $0.172 

Retired/Unemployed 19,508 501.70 2,501.58 $0.254 $1.269 

Part Time 6,166 187.18 1,835.40 $0.030 $0.294 

Total 106,057 222.99 1,806.48 $0.615 $4.981 

Option SN 

Infants 0-1 3,309 437.92 2,549.98 $0.038 $0.219 

Children 2-15 21,312 97.65 1,777.13 $0.054 $0.985 

Not CWP Industry 55,524 47.55 1,498.10 $0.069 $2.163 

Fabricator 238 28,077.14 28,077.14 $0.174 $0.174 

Retired/Unemployed 19,508 517.93 2,612.92 $0.263 $1.325 

Part Time 6,166 191.93 1,911.72 $0.031 $0.306 

Total 106,057 227.75 1,875.87 $0.628 $5.173 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4490 

4491 

Table 3-44: Irritation Benefits for All Options, Present Discounted Value of 40-Year Stream of 

Benefits and Annualized Benefits (millions 2010$, 3% discount rate) 

Analytical Option Annual Benefits in Typical 

Year 

PDV of 40-Year Stream of 

Benefits 

Annualized Benefits 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE $0.6 $4.4 $10.9 $83.9 $0.5 $4.1 

Option SI/SC/SCR (Proposed) $0.6 $5.0 $11.7 $94.5 $0.6 $4.6 

Option SN $0.6 $5.2 $11.9 $98.1 $0.6 $4.8 

Option CE $0.5 $3.4 $8.9 $64.3 $0.4 $3.1 

Option CI $0.5 $3.9 $9.7 $73.1 $0.5 $3.5 

Option NE $1.5 $16.3 $27.9 $307.3 $1.4 $14.9 

Option NI $1.5 $16.8 $27.9 $316.6 $1.4 $15.4 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4492 

4493 

4494 3.7.2.2 Asthma 

4495 

4496 Table 3-45 through Table 3-50 present the annual benefits using a 3 percent discount rate 

4497 associated with reduced asthma risk for a typical year under the analytical options with the statutory 

4498 emissions standards (see Table 3-28 for a description of the analytical options and Table 3-29 for a 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-80 

4499 description of the exposure groups). Because the exposure model assumes that the benefits of reduced 

4500 emissions from newly installed composite wood products are accrued over 11 years and the numbers of 

4501 individuals in different exposure groups are assumed to be the same in each year, the annual benefits are 

4502 the same starting in the eleventh year. Thus, the eleventh and subsequent years are defined as typical 

4503 years for the purpose of this analysis. Table 3-51 presents the typical annual benefits, the present 

4504 discounted value of the 40-year stream of benefits, and the annualized benefits associated with reduced 

4505 asthma risk for all analytical options. 

4506 

4507 The results in Table 3-45 through Table 3-50 indicate that the asthma -related benefits are 

4508 generally higher for composite wood products that have been more recently installed, new housing 

4509 compared to renovated housing, warmer and more humid climate zones, and individuals who work in the 

4510 composite wood products industry. 

4511 

4512 The results in Table 3-51 indicate that the most protective option with emissions standards that 

4513 are consistent with the TSCA Title VI statute (Option SN, which would require laminated products to be 

4514 made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood 

4515 plywood) has asthma-related benefits that are less than 20 percent larger than the benefits of the least 

4516 protective option with emissions standards that are consistent with the TSCA Title VI statute (Option SE, 

4517 which exempts all laminated products from the definition of hardwood plywood). The asthma-related 

4518 benefits under the proposed option (Option SCR, which would require laminated products to be made 

4519 with NAF resins in order to be exempted from the definition of hardwood plywood) are only slightly less 

4520 than those under Option SN, the difference being about 4 percent. Analytical options that would require 

4521 NAF resin technologies for all composite wood products (Options NE and NI) would result in benefits 

4522 that are nearly four times larger than under the proposed analytical option with emissions standards 

4523 consistent with the TSCA Title VI statute, and analytical options that would require less stringent 

4524 emissions standards than the statute (Options CE and CI) would result in benefits about 25 percent lower. 

4525 

4526 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-81 

Table 3-45: Asthma Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Option SE (3% discount rate) 

Composite Wood 

Source and Age 

Individuals Affected 

(thousands) 

Average Micro Risk 

Reduction Per Individual 

Annual Benefit (millions, 

2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 492 718 658.11 654.52 $21.0 $31.1 

Structure age 1-2 492 718 429.13 427.00 $13.7 $20.3 

Structure age 2-3 492 718 281.08 279.94 $9.0 $13.3 

Structure age 3-4 492 718 186.28 185.77 $5.9 $8.8 

Structure age 4-5 492 718 125.93 125.84 $4.0 $6.0 

Structure age 5-6 492 718 87.67 87.84 $2.8 $4.2 

Structure age 6-7 492 718 63.46 63.80 $2.0 $3.0 

Structure age 7-8 492 718 48.17 48.62 $1.5 $2.3 

Structure age 8-9 492 718 38.53 39.04 $1.2 $1.9 

Structure age 9-10 492 718 32.44 33.00 $1.0 $1.6 

Structure age 10-11 492 718 28.61 29.19 $0.9 $1.4 

0-1 years post-ren. 1,126 1,488 423.28 426.95 $30.9 $42.0 

1-2 years post-ren. 1,126 1,488 277.27 279.86 $20.2 $27.5 

2-3 years post-ren. 1,126 1,488 183.69 185.58 $13.4 $18.2 

3-4 years post-ren. 1,126 1,488 124.10 125.53 $9.1 $12.3 

4-5 years post-ren. 1,126 1,488 86.30 87.43 $6.3 $8.6 

5-6 years post-ren. 1,126 1,488 62.38 63.33 $4.6 $6.2 

6-7 years post-ren. 1,126 1,488 47.27 48.10 $3.4 $4.7 

7-8 years post-ren. 1,126 1,488 37.74 38.50 $2.8 $3.8 

8-9 years post-ren. 1,126 1,488 31.73 32.44 $2.3 $3.2 

9-10 years post-ren. 1,126 1,488 27.94 28.62 $2.0 $2.8 

10-11 years post-ren. 1,126 1,488 25.55 26.21 $1.9 $2.6 

Total 17,802 24,270 138.69 139.52 $159.9 $225.7 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4527 

4528 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-82 

Table 3-46: Asthma Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Options SI, SC, and SCR (Proposed Option, 3% discount rate) 

Composite Wood 

Source and Age 

Individuals Affected 

(thousands) 

Average Micro Risk 

Reduction Per Individual 

Annual Benefit (millions, 

2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 492 718 720.23 716.05 $23.0 $34.0 

Structure age 1-2 492 718 469.70 467.17 $15.0 $22.2 

Structure age 2-3 492 718 307.23 305.82 $9.8 $14.5 

Structure age 3-4 492 718 202.99 202.31 $6.5 $9.6 

Structure age 4-5 492 718 136.55 136.35 $4.4 $6.5 

Structure age 5-6 492 718 94.40 94.50 $3.0 $4.5 

Structure age 6-7 492 718 67.72 68.01 $2.2 $3.2 

Structure age 7-8 492 718 50.86 51.28 $1.6 $2.4 

Structure age 8-9 492 718 40.22 40.72 $1.3 $1.9 

Structure age 9-10 492 718 33.51 34.06 $1.1 $1.6 

Structure age 10-11 492 718 29.28 29.86 $0.9 $1.4 

0-1 years post-ren. 1,126 1,488 502.45 506.15 $36.6 $49.8 

1-2 years post-ren. 1,126 1,488 328.30 330.92 $23.9 $32.5 

2-3 years post-ren. 1,126 1,488 216.31 218.22 $15.8 $21.5 

3-4 years post-ren. 1,126 1,488 144.84 146.28 $10.6 $14.4 

4-5 years post-ren. 1,126 1,488 99.44 100.58 $7.3 $9.9 

5-6 years post-ren. 1,126 1,488 70.69 71.64 $5.2 $7.0 

6-7 years post-ren. 1,126 1,488 52.52 53.35 $3.8 $5.2 

7-8 years post-ren. 1,126 1,488 41.05 41.81 $3.0 $4.1 

8-9 years post-ren. 1,126 1,488 33.81 34.53 $2.5 $3.4 

9-10 years post-ren. 1,126 1,488 29.25 29.93 $2.1 $2.9 

10-11 years post-ren. 1,126 1,488 26.38 27.04 $1.9 $2.7 

Total 17,802 24,270 157.25 158.05 $181.3 $255.2 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4529 

4530 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-83 

Table 3-47: Asthma Benefits by Composite Wood Source and Age, Annual Benefits for 

Typical Year, Option SN, 3% discount rate 

Composite Wood 

Source and Age 

Individuals Affected 

(thousands) 

Average Micro Risk 

Reduction Per Individual 

Annual Benefit (millions, 

2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Structure age 0-1 492 718 741.80 737.42 $23.6 $35.0 

Structure age 1-2 492 718 483.82 481.15 $15.4 $22.8 

Structure age 2-3 492 718 316.35 314.84 $10.1 $14.9 

Structure age 3-4 492 718 208.82 208.08 $6.7 $9.9 

Structure age 4-5 492 718 140.27 140.02 $4.5 $6.6 

Structure age 5-6 492 718 96.75 96.82 $3.1 $4.6 

Structure age 6-7 492 718 69.20 69.48 $2.2 $3.3 

Structure age 7-8 492 718 51.80 52.21 $1.7 $2.5 

Structure age 8-9 492 718 40.81 41.30 $1.3 $2.0 

Structure age 9-10 492 718 33.89 34.43 $1.1 $1.6 

Structure age 10-11 492 718 29.52 30.09 $0.9 $1.4 

0-1 years post-ren. 1,126 1,488 529.92 533.63 $38.7 $52.5 

1-2 years post-ren. 1,126 1,488 346.07 348.70 $25.2 $34.3 

2-3 years post-ren. 1,126 1,488 227.69 229.60 $16.6 $22.6 

3-4 years post-ren. 1,126 1,488 152.08 153.52 $11.1 $15.1 

4-5 years post-ren. 1,126 1,488 104.03 105.18 $7.6 $10.3 

5-6 years post-ren. 1,126 1,488 73.59 74.55 $5.4 $7.3 

6-7 years post-ren. 1,126 1,488 54.35 55.19 $4.0 $5.4 

7-8 years post-ren. 1,126 1,488 42.21 42.97 $3.1 $4.2 

8-9 years post-ren. 1,126 1,488 34.54 35.26 $2.5 $3.5 

9-10 years post-ren. 1,126 1,488 29.71 30.39 $2.2 $3.0 

10-11 years post-ren. 1,126 1,488 26.67 27.33 $1.9 $2.7 

Total 17,802 24,270 163.72 164.50 $188.8 $265.5 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4531 

4532 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-84 

Table 3-48: Asthma Benefits for Statutory Options by Structure Type, Annual Benefits for 

Typical Year, 3% discount rate 

Structure Type Individuals Affected 

(thousands) 

Average Micro Risk 

Reduction Per Individual 

Annual Benefit (millions, 

2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

New Apt 556 862 266.14 264.79 $9.6 $15.1 

New Man 249 350 237.10 235.72 $3.8 $5.5 

New RV 6 7 574.29 569.84 $0.2 $0.3 

New SF Att 277 417 183.96 183.23 $3.3 $5.0 

New SF Det 4,325 6,266 164.75 163.92 $46.1 $67.9 

Ren Apt 1,867 2,765 188.57 188.12 $22.8 $34.4 

Ren Man 473 646 192.74 192.42 $5.9 $8.2 

Ren SF Att 627 861 122.55 122.06 $5.0 $6.9 

Ren SF Det 9,422 12,096 103.46 103.19 $63.1 $82.5 

Total 17,802 24,270 138.69 138.19 $159.9 $225.7 

Options SI, SC and SCR (Proposed Option) 

New Apt 556 862 295.59 294.01 $10.6 $16.7 

New Man 249 350 273.92 272.21 $4.4 $6.3 

New RV 6 7 738.78 733.05 $0.3 $0.4 

New SF Att 277 417 199.77 198.84 $3.6 $5.5 

New SF Det 4,325 6,266 177.31 176.30 $49.7 $73.0 

Ren Apt 1,867 2,765 215.51 214.88 $26.1 $39.2 

Ren Man 473 646 241.27 240.68 $7.4 $10.3 

Ren SF Att 627 861 139.77 139.05 $5.7 $7.9 

Ren SF Det 9,422 12,096 120.57 120.09 $73.6 $96.0 

Total 17,802 24,270 157.25 156.56 $181.3 $255.2 

Option SN 

New Apt 556 862 305.83 304.17 $11.0 $17.3 

New Man 249 350 286.70 284.88 $4.6 $6.6 

New RV 6 7 794.08 787.93 $0.3 $0.4 

New SF Att 277 417 205.28 204.28 $3.7 $5.6 

New SF Det 4,325 6,266 181.70 180.62 $50.9 $74.8 

Ren Apt 1,867 2,765 224.88 224.18 $27.2 $40.9 

Ren Man 473 646 258.07 257.39 $7.9 $11.0 

Ren SF Att 627 861 145.77 144.98 $5.9 $8.2 

Ren SF Det 9,422 12,096 126.53 125.99 $77.2 $100.7 

Total 17,802 24,270 163.72 162.95 $188.8 $265.5 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4533 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-85 

Table 3-49: Asthma Benefits for Statutory Options by Climate Zone, Annual Benefits for 

Typical Year, 3% discount rate 

Climate Zone Individuals Affected 

(thousands) 

Average Micro Risk 

Reduction Per Individual 

Annual Benefit (millions, 

2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

Zone 1 2,157 2,935 117.81 120.09 $16.5 $23.3 

Zone 2 3,956 5,341 121.47 123.44 $31.1 $43.6 

Zone 3 3,294 4,466 125.35 127.16 $26.7 $37.5 

Zone 4 3,656 4,999 142.67 144.41 $33.8 $47.7 

Zone 5 4,739 6,528 168.76 170.72 $51.8 $73.6 

Total 17,802 24,270 138.69 140.62 $159.9 $225.7 

Options SI, SC and SCR (Proposed Option) 

Zone 1 2,157 2,935 133.7 135.84 $18.7 $26.3 

Zone 2 3,956 5,341 138.07 139.91 $35.4 $49.4 

Zone 3 3,294 4,466 142.44 144.12 $30.4 $42.5 

Zone 4 3,656 4,999 161.55 163.14 $38.3 $53.9 

Zone 5 4,739 6,528 190.97 192.76 $58.6 $83.1 

Total 17,802 24,270 157.25 159.04 $181.3 $255.2 

Option SN 

Zone 1 2,157 2,935 139.22 141.33 $19.4 $27.4 

Zone 2 3,956 5,341 143.86 145.64 $36.9 $51.4 

Zone 3 3,294 4,466 148.40 150.03 $31.7 $44.3 

Zone 4 3,656 4,999 168.12 169.66 $39.8 $56.0 

Zone 5 4,739 6,528 198.69 200.43 $61.0 $86.4 

Total 17,802 24,270 163.72 165.45 $188.8 $265.5 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4534 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-86 

Table 3-50: Asthma Benefits for Statutory Options by Age/Employment Status, Annual 

Benefits for Typical Year, 3% discount rate 

Age/Employment 

Status 

Individuals Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 

2010$) 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE 

Infants 0-1 - - - - - - 

Children 2-15 14,844 21,312 137.84 140.45 $132.5 $197.8 

Not CWP Industry 499 499 129.14 129.14 $4.2 $4.3 

Fabricator 1 1 519.55 519.55 $0.0 $0.0 

Retired/Unemployed 1,712 1,712 154.12 154.12 $17.1 $17.4 

Part Time 745 745 125.95 125.95 $6.1 $6.2 

Total 17,802 24,270 138.69 140.87 $159.9 $225.7 

Options SI, SC and SCR (Proposed Option) 

Infants 0-1 - - - - - - 

Children 2-15 14,844 21,312 155.56 158.28 $149.6 $222.9 

Not CWP Industry 499 499 145.82 145.82 $4.7 $4.8 

Fabricator 1 1 535.19 535.19 $0.0 $0.0 

Retired/Unemployed 1,712 1,712 180.12 180.12 $20.0 $20.4 

Part Time 745 745 145.63 145.63 $7.0 $7.2 

Total 17,802 24,270 157.25 159.53 $181.3 $255.2 

Option SN 

Infants 0-1 - - - - - - 

Children 2-15 14,844 21,312 161.73 164.49 $155.5 $231.6 

Not CWP Industry 499 499 151.64 151.64 $4.9 $5.0 

Fabricator 1 1 540.63 540.63 $0.0 $0.0 

Retired/Unemployed 1,712 1,712 189.16 189.16 $21.0 $21.4 

Part Time 745 745 152.48 152.48 $7.4 $7.5 

Total 17,802 24,270 163.72 166.02 $188.8 $265.5 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4535 

4536 

Table 3-51: Asthma Benefits for All Options, Present Discounted Value of 40-Year Stream of 

Benefits and Annualized Benefits (millions 2010$, 3% discount rate) 

Analytical Option Annual Benefits in Typical 

Year 

PDV of 40-Year Stream of 

Benefits 

Annualized Benefits 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE $160 $226 $2,947 $4,158 $143 $202 

Option SI/SC/SCR (Proposed) $181 $255 $3,347 $4,710 $162 $229 

Option SN $189 $266 $3,486 $4,903 $169 $238 

Option CE $123 $174 $2,263 $3,192 $110 $155 

Option CI $140 $197 $2,586 $3,638 $126 $177 

Option NE $619 $874 $11,455 $16,188 $556 $786 

Option NI $646 $912 $11,955 $16,882 $580 $819 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4537 

4538 3.7.2.3 Infertility 

4539 

4540 Table 3-52 presents the annual benefits using a 3 percent discount rate associated with reduced 

4541 infertility risk for a typical year under the analytical options with the statutory emissions standards (see 

4542 Table 3-28 for a description of the analytical options and Table 3-29 for a description of the exposure 

4543 groups). Because the exposure model assumes that the benefits of reduced emissions from newly 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-87 

4544 installed composite wood products are accrued over 11 years and the numbers of individuals in different 

4545 exposure groups are assumed to be the same in each year, the annual benefits are the same starting in the 

4546 eleventh year. Thus, the eleventh and subsequent years are defined as typical years for the purpose of this 

4547 analysis. Table 3-53 presents the typical annual benefits, the present discounted value of the 40-year 

4548 stream of benefits, and the annualized benefits associated with reduced infertility risk for all analytical 

4549 options. 

4550 

4551 The results in Table 3-52 indicate that the infertility-related benefits are generally higher for 

4552 composite wood products that have been more recently installed, new housing compared to renovated 

4553 housing, warmer and more humid climate zones, and individuals who work in the composite wood 

4554 products industry. 

4555 

4556 The results in Table 3-52 indicate that the most protective option with emissions standards that 

4557 are consistent with the TSCA Title VI statute (Option SN, which would require laminated products to be 

4558 made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood 

4559 plywood) has infertility-related benefits that are less than 20 percent larger than the benefits of the least 

4560 protective option with emissions standards that are consistent with the TSCA Title VI statute (Option SE, 

4561 which exempts all laminated products from the definition of hardwood plywood). The infertility-related 

4562 benefits under the proposed option (Option SCR, which would require laminated products to be made 

4563 with NAF resins in order to be exempted from the definition of hardwood plywood) are only slightly less 

4564 than those under Option SN, the difference being less than 4 percent. Analytical options that would 

4565 require NAF resin technologies for all composite wood products (Options NE and NI) would result in 

4566 benefits that are about four times larger than under the proposed analytical option with emissions 

4567 standards consistent with the TSCA Title VI statute, and analytical options that would require less 

4568 stringent emissions standards than the statute (Options CE and CI) would result in benefits about 25 

4569 percent lower. 

4570 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-88 

Table 3-52: Infertility Benefits for Statutory Options by Exposure Group, Annual Benefits 

for Typical Year, 3% discount rate 

Exposure Group Individuals 

Affected 

(thousands) 

Average Micro Risk Reduction 

Per Individual 

Annual Benefit (millions, 2010$) 

Option 

SE 

Options 

SI/SC/SCR

Option 

SN 

Option 

SE 

Options 

SI/SC/SCR 

Option 

SN 

Composite Wood Product Source and Age 

Structure age 0-1 44 4,970 5,500 5,685 $0.24 $0.27 $0.27 

Structure age 1-2 44 3,203 3,537 3,653 $0.15 $0.17 $0.18 

Structure age 2-3 44 2,089 2,300 2,373 $0.10 $0.11 $0.11 

Structure age 3-4 44 1,388 1,521 1,567 $0.07 $0.07 $0.08 

Structure age 4-5 44 946 1,030 1,059 $0.05 $0.05 $0.05 

Structure age 5-6 44 668 721 739 $0.03 $0.03 $0.04 

Structure age 6-7 44 493 526 537 $0.02 $0.03 $0.03 

Structure age 7-8 44 382 403 410 $0.02 $0.02 $0.02 

Structure age 8-9 44 313 326 330 $0.02 $0.02 $0.02 

Structure age 9-10 44 269 277 280 $0.01 $0.01 $0.01 

Structure age 10-11 44 241 246 248 $0.01 $0.01 $0.01 

0-1 years post-ren. 79 3,387 4,016 4,236 $0.28 $0.34 $0.35 

1-2 years post-ren. 79 2,205 2,601 2,739 $0.18 $0.22 $0.23 

2-3 years post-ren. 79 1,460 1,709 1,796 $0.12 $0.14 $0.15 

3-4 years post-ren. 79 990 1,147 1,202 $0.08 $0.10 $0.10 

4-5 years post-ren. 79 695 793 828 $0.06 $0.07 $0.07 

5-6 years post-ren. 79 508 571 592 $0.04 $0.05 $0.05 

6-7 years post-ren. 79 391 430 444 $0.03 $0.04 $0.04 

7-8 years post-ren. 79 317 342 350 $0.03 $0.03 $0.03 

8-9 years post-ren. 79 270 286 291 $0.02 $0.02 $0.02 

9-10 years post-ren. 79 241 251 254 $0.02 $0.02 $0.02 

10-11 years post-ren. 79 223 229 231 $0.02 $0.02 $0.02 

Structure Type 

New Apt 110 1,838 2,046 2,118 $0.18 $0.20 $0.21 

New Man 19 1,664 1,923 2,014 $0.03 $0.04 $0.04 

New RV 0 4,401 5,827 6,326 $0.00 $0.00 $0.00 

New SF Att 44 1,278 1,391 1,430 $0.06 $0.06 $0.06 

New SF Det 310 1,180 1,275 1,308 $0.45 $0.49 $0.50 

Ren Apt 264 1,318 1,505 1,571 $0.34 $0.38 $0.40 

Ren Man 32 1,375 1,722 1,844 $0.05 $0.06 $0.06 

Ren SF Att 56 906 1,032 1,076 $0.05 $0.06 $0.07 

Ren SF Det 518 778 905 949 $0.46 $0.53 $0.56 

Climate Zone 

Zone 1 161 969 1,094 1,137 $0.16 $0.18 $0.19 

Zone 2 292 993 1,123 1,168 $0.32 $0.36 $0.37 

Zone 3 259 1,007 1,139 1,185 $0.28 $0.32 $0.33 

Zone 4 281 1,134 1,281 1,332 $0.34 $0.39 $0.40 

Zone 5 359 1,325 1,499 1,559 $0.51 $0.58 $0.60 

Age/Employment Status 

Infants 0-1 - - - - - - - 

Children 2-15 - - - - - - - 

NotCWP Industry 1,046 1,075 1,207 1,253 $1.21 $1.36 $1.41 

Fabricator 2 4,087 4,222 4,269 $0.01 $0.01 $0.01 

Retired/Unemployed 169 1,284 1,492 1,564 $0.26 $0.30 $0.32 

Part Time 134 1,115 1,281 1,339 $0.14 $0.16 $0.16 

All Exposure Groups 

Total 1,352 1,110 1,255 1,306 $1.62 $1.83 $1.90 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-89 

4571 

Table 3-53: Infertility Benefits for All Options, Present Discounted Value of 40-Year Stream of 

Benefits and Annualized Benefits (millions 2010$, 3% discount rate) 

Analytical Option Annual Benefits in 

Typical Year 

PDV of 40-Year Stream 

of Benefits 

Annualized Benefits 

Option SE $1.6 $29.8 $1.4 

Option SI/SC/SCR (Proposed) $1.8 $33.8 $1.6 

Option SN $1.9 $35.1 $1.7 

Option CE $1.2 $22.7 $1.1 

Option CI $1.4 $25.8 $1.3 

Option NE $7.1 $131.2 $6.4 

Option NI $7.4 $137.2 $6.7 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4572 

4573 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-90 

4574 3.7.3 Summary of Benefits Assessment Results 

4575 

4576 Table 3-54 and Table 3-55 present the total benefits by health effect and analytical option for 3 

4577 and 7 percent discount rates, respectively. The results indicate that the most protective option with 

4578 emissions standards that are consistent with the TSCA Title VI statute (Option SN, which would require 

4579 laminated products to be made with both NAF resins and NAF platforms in order to be exempted from 

4580 the definition of hardwood plywood) has benefits that are less than 20 percent larger than the benefits of 

4581 the least protective option with emissions standards that are consistent with the TSCA Title VI statute 

4582 (Option SE, which exempts all laminated products from the definition of hardwood plywood). The 

4583 benefits under the proposed option (Option SCR, which would require laminated products to be made 

4584 with NAF resins in order to be exempted from the definition of hardwood plywood) are only slightly 

4585 lower those of Option SN, the difference being less than 5 percent. Analytical options that would require 

4586 all composite wood products to be made with NAF resin technologies (Options NE and NI) would result 

4587 in benefits nearly four times larger than under the analytical options with emissions standards consistent 

4588 with the TSCA Title VI statute and analytical options that would require less stringent emissions 

4589 standards (Options CE and CI) compared to the statute would result in benefits about 25 percent lower. 

4590 

4591 About 84 percent of the total benefits are attributable to reductions in asthma risk and about 12 

4592 percent are attributable to reductions in cancer risk. About 2 and 1 percent of the total benefits are 

4593 attributable to avoiding eye irritation and reduced fertility, respectively. 

4594 

4595 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-91 

Table 3-54: Total Benefits for All Options (millions 2010$, 3% discount rate) 

Analytical Option Cancer Eye 

Irritation Asthma Infertility Total Benefits 

lower higher lower higher lower higher lower higher 

Annual Benefit for Typical Year

Option SE $19.4 $42.1 $0.6 $4.4 $159.9 $225.7 $1.6 $181.4 $273.8 

Option SI/SC/SCR 

(Proposed) $22.0 $48.0 $0.6 $5.0 $181.3 $255.2 $1.8 $205.7 $310.1 

Option SN $22.9 $50.1 $0.6 $5.2 $188.8 $265.5 $1.9 $214.2 $322.7 

Option CE $14.8 $32.1 $0.5 $3.4 $123.0 $173.5 $1.2 $139.5 $210.3 

Option CI $16.9 $36.9 $0.5 $3.9 $140.3 $197.4 $1.4 $159.1 $239.5 

Option NE $83.8 $181.6 $1.5 $16.3 $618.7 $874.4 $7.1 $711.1 $1,079.4 

Option NI $87.6 $190.3 $1.5 $16.8 $645.6 $911.7 $7.4 $742.2 $1,126.2 

PDV of 40-Year Stream of Benefits 

Option SE $356 $776 $11 $84 $2,947 $4,158 $30 $3,343 $5,048 

Option SI/SC/SCR 

(Proposed) $405 $887 $12 $94 $3,347 $4,710 $34 $3,797 $5,725 

Option SN $422 $926 $12 $98 $3,486 $4,903 $35 $3,955 $5,961 

Option CE $272 $592 $9 $64 $2,263 $3,192 $23 $2,567 $3,871 

Option CI $311 $680 $10 $73 $2,586 $3,638 $26 $2,933 $4,417 

Option NE $1,545 $3,359 $28 $307 $11,455 $16,188 $131 $13,160 $19,985 

Option NI $1,618 $3,523 $28 $317 $11,955 $16,882 $137 $13,738 $20,859 

Annualized Benefits 

Option SE $17.3 $37.7 $0.5 $4.1 $143.0 $201.8 $1.4 $162.3 $245.0 

Option SI/SC/SCR 

(Proposed) $19.7 $43.0 $0.6 $4.6 $162.4 $228.7 $1.6 $184.3 $277.9 

Option SN $20.5 $44.9 $0.6 $4.8 $169.2 $238.0 $1.7 $192.0 $289.4 

Option CE $13.2 $28.7 $0.4 $3.1 $109.9 $155.0 $1.1 $124.6 $187.9 

Option CI $15.1 $33.0 $0.5 $3.5 $125.5 $176.6 $1.3 $142.4 $214.4 

Option NE $75.0 $163.1 $1.4 $14.9 $556.1 $785.8 $6.4 $638.8 $970.1 

Option NI $78.5 $171.0 $1.4 $15.4 $580.3 $819.5 $6.7 $666.9 $1,012.5 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4596 

4597 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 3-92 

Table 3-55: Total Benefits for All Options (millions 2010$, 7% discount rate) 

Analytical Option Cancer Eye 

Irritation Asthma Infertility Total Benefits 

lower higher lower higher lower higher lower higher 

Annual Benefit for Typical Year

Option SE $9.6 $20.6 $0.6 $4.4 $87.5 $122.6 $1.6 $99.3 $149.2 

Option SI/SC/SCR 

(Proposed) $10.9 $23.5 $0.6 $5.0 $99.2 $138.6 $1.8 $112.5 $169.0 

Option SN $11.3 $24.6 $0.6 $5.2 $103.3 $144.2 $1.9 $117.2 $175.8 

Option CE $7.3 $15.7 $0.5 $3.4 $67.3 $94.3 $1.2 $76.4 $114.6 

Option CI $8.4 $18.1 $0.5 $3.9 $76.8 $107.2 $1.4 $87.1 $130.6 

Option NE $41.5 $88.6 $1.5 $16.3 $338.6 $474.9 $7.1 $388.8 $586.9 

Option NI $43.5 $93.0 $1.5 $16.8 $353.3 $495.1 $7.4 $405.7 $612.3 

PDV of 40-Year Stream of Benefits 

Option SE $103 $223 $7 $51 $950 $1,330 $18 $1,077 $1,622 

Option SI/SC/SCR 

(Proposed) $118 $256 $7 $58 $1,081 $1,509 $20 $1,226 $1,843 

Option SN $123 $268 $7 $60 $1,126 $1,572 $21 $1,277 $1,920 

Option CE $79 $170 $5 $39 $728 $1,019 $13 $826 $1,242 

Option CI $91 $197 $6 $45 $834 $1,164 $15 $946 $1,420 

Option NE $451 $968 $16 $186 $3,711 $5,204 $77 $4,255 $6,435 

Option NI $473 $1,016 $16 $192 $3,873 $5,428 $81 $4,443 $6,717 

Annualized Benefits 

Option SE $7.7 $16.6 $0.5 $3.8 $70.8 $99.2 $1.3 $80.4 $120.9 

Option SI/SC/SCR 

(Proposed) $8.8 $19.1 $0.5 $4.3 $80.6 $112.5 $1.5 $91.4 $137.4 

Option SN $9.2 $20.0 $0.5 $4.5 $84.0 $117.2 $1.5 $95.3 $143.2 

Option CE $5.9 $12.7 $0.4 $2.9 $54.3 $76.0 $1.0 $61.6 $92.6 

Option CI $6.8 $14.7 $0.4 $3.3 $62.2 $86.8 $1.1 $70.5 $105.9 

Option NE $33.6 $72.2 $1.2 $13.9 $276.7 $388.1 $5.8 $317.4 $479.9 

Option NI $35.2 $75.8 $1.2 $14.3 $288.9 $404.8 $6.0 $331.4 $500.9 

See Table 3-28 for a description of options and Table 3-29 for a description of the exposure group abbreviations. 

4598 

4599 Table 3-56 presents the average annual number of cases avoided by health outcome and option from an 

4600 annual formaldehyde exposure reduction under the policy. 

4601 

Table 3-56: Average Annual Number of Cases Avoided by Health Outcome and Option 

Analytical Option Cancer Eye 

Irritation Asthma Infertility

lower higher lower higher lower higher 

Option SE 9 21 22,133 170,214 2,469 3,416 1,501 

Option SI/SC/SCR (Proposed) 10 24 23,650 191,590 2,799 3,864 1,696 

Option SN 11 25 24,154 198,950 2,915 4,019 1,765 

Option CE 7 16 18,015 130,720 1,899 2,627 1,144 

Option CI 8 19 19,563 148,389 2,166 2,988 1,301 

Option NE 39 92 58,492 626,726 9,554 13,235 6,566 

Option NI 40 97 58,494 645,678 9,968 13,800 6,874 

See Table 3-28 for a description of options 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 4-1 

4602 4 Net Benefits 

4603 

4604 This chapter evaluates the various analytical options under consideration in terms of their net 

4605 benefits (i.e. benefits minus costs). In reviewing the net benefits, it is important to remember that these 

4606 estimates only partially account for the benefits of the rule; some potentially important groups of benefits 

4607 are excluded from monetization. Evidence for health effects associated with formaldehyde exposure is 

4608 provided by a wide variety of human clinical, epidemiology, and animal studies. In 2010, EPA released 

4609 a draft IRIS assessment of adverse cancer and non-cancer health effects from inhalation of formaldehyde. 

4610 The draft IRIS assessment identified seven categories of non-cancer health outcomes: (1) sensory 

4611 irritation; (2) upper respiratory tract pathology; (3) pulmonary function effects; (4) asthma and allergic 

4612 sensitization (atopy); (5) immune function effects; (6) neurological and behavioral toxicity; and (7) 

4613 developmental and reproductive toxicity. At this time, only three of the non-cancer health effect 

4614 categories were judged to have sufficient data for quantitative concentration-response modeling in support 

4615 of the benefits assessment: sensory irritation, asthma, and female reproductive toxicity. Therefore, the 

4616 net benefits estimates includes monetized benefits for four health effects: (1) nasopharyngeal cancer for 

4617 individuals of all ages, (2) eye irritation for individuals of all ages, (3) asthma in children ages 2 to 17 and 

4618 6 to 17, and (4) female reproductive toxicity (i.e. reduced fertility) in women ages 20 to 40. 

4619 

4620 Table 4-1 presents the analytical options that are considered in this economic analysis. The 

4621 analytical options can be grouped into two basic categories. The first category contains analytical options 

4622 with emissions standards at the levels required by TSCA Title VI. Within this category there are several 

4623 different options for how to regulate wood veneer laminated products. The second category contains 

4624 emissions standards other than the levels required by TSCA Title VI. There is one set of options with the 

4625 same emissions standards as Phase 1 of the CARB ATCM, and another set of options requiring all 

4626 products to meet the NAF emissions standards. This document discusses options with alternative 

4627 emissions standards simply for informational purposes. The breadth of the discussion here should not 

4628 necessarily imply that EPA has corresponding flexibility in implementing the statute. 

4629 

4630 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 4-2 

4631 

Table 4-1: Analytical Options Considered in the Economic Analysis 

Analytical Option Emissions Standards Notes 

Analytical options with emissions standards at the levels required by TSCA Title VI 

Option SE: Statutory emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.05 ppm 

0.11 ppm 

0.13 ppm 

0.09 ppm 

Same emissions standards as Phase 2 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SI: Statutory emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SP: Statutory emissions 

standards where wood veneer 

laminated products other than 

Custom and Architectural Panel 

products are exempt from the 

definition of hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SN: Statutory emissions 

standards where wood veneer 

laminated products made using NAF 

resins to attach wood veneers to NAF 

platforms are exempt from the 

definition of hardwood plywood

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SC: Statutory emissions 

standards where wood veneer 

laminated products made with wood 

veneers attached to compliant 

platforms using no-added 

formaldehyde (NAF) resins are 

exempt from the definition of 

hardwood plywood 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option SCR: Proposed Option. 

Statutory emissions standards where 

wood veneer laminated products 

made with wood veneers attached to 

compliant platforms using NAF 

resins are exempt from the definition 

of hardwood plywood. Reduced 

recordkeeping requirements for nonmfgrs. compared to other options. 

Same as above 

Same emissions standards as Phase 2 of the 

CARB ATCM, with a different definition of 

hardwood plywood 

Distributors and retailers that are not 

manufacturers under TSCA would only be 

required to keep invoices and bills of lading. 

Other recordkeeping equivalent to CARB 

ATCM. No supplier notification required. 

Analytical options with emissions standards 

other than the levels required by TSCA Title 

VI CARB Phase 1 

levels 

Option CE: CARB 1 emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood

Hardwood plywood 

MDF 

Thin MDF 

Particleboard 

0.08 ppm 

0.21 ppm 

0.21 ppm 

0.18 ppm 

Same emissions standards as Phase 1 of the 

CARB ATCM. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

Option CI: CARB 1 emissions 

standards where wood veneer 

laminated products are included in 

the definition of hardwood plywood

Same as above 

Same emissions standards as Phase 1 of the 

CARB ATCM, with a different definition of 

hardwood plywood. Recordkeeping and supplier 

notification equivalent to CARB ATCM. 

NAF emission levels 

Option NE: NAF emissions 

standards where wood veneer 

laminated products are exempt from 

the definition of hardwood plywood 

Hardwood plywood: 

90% of samples < 0.04 ppm. 

All samples < 0.05 ppm. 

MDF and particleboard: 

90% of samples < 0.04 ppm. 

All samples < 0.06 ppm 

Requires all composite wood product 

manufacturers to meet NAF emission standards. 

Recordkeeping and supplier notification 

equivalent to CARB ATCM. 

Option NI: NAF emissions 

standards where all wood veneer 

laminated products are included in 

the definition of hardwood plywood 

Same as above 

Requires all composite wood product 

manufacturers to meet NAF emission standards, 

with a different definition of hardwood plywood. 

CARB recordkeeping and supplier notification. 

Note: This document discusses various options with respect to formaldehyde and composite wood products, including emissions standards 

that are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informational 

purposes. The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 4-3 

4632 4.1 Discounting and Time Frame for the Analysis 

4633 

4634 This analysis estimates the costs and benefits of each analytical option for a 30-year period of 

4635 composite wood product production. Thus, the estimates of the costs reflect the annualized costs of 30 

4636 years of composite wood production being subject to the rule’s requirements. Likewise, the benefits 

4637 estimates reflect the annualized benefits associated with the formaldehyde exposure reductions resulting 

4638 from 30 years of composite wood production being subject to the rule’s requirements. Both the costs and 

4639 the benefits are discounted using 3 and 7 percent discount rates, so that costs and benefits incurred in the 

4640 future are expressed in present terms that are comparable. Because the timing of the costs and the 

4641 benefits vary, they are annualized to make their comparison easier. An annualized value is the amount 

4642 one would have to pay at the beginning of each time period so that the sum of all payments in present 

4643 value terms equals the original stream of values. 

4644 

4645 The 30-year time frame was selected to be as short as possible while being long enough to 

4646 capture the important effects of the policy. In general, the downside of choosing a longer analysis time 

4647 frame is that uncertainties about both the baseline and policy scenarios increase with time. For example, 

4648 the likelihood that alternative technologies for manufacturing composite wood products might be 

4649 developed increases over time (which could result in different formaldehyde emission rates for products 

4650 and/or different costs for reducing formaldehyde emissions). Similarly, uncertainties about changing 

4651 demographics, medical treatments for adverse health effects, and consumer preferences with respect to 

4652 composite wood products all increase with time. However, selecting a time frame that is too short would 

4653 not capture all of the important effects of the policy scenarios under consideration. 

4654 

4655 The benefits analysis assumes that after eleven years any continuing (and declining) emissions 

4656 from a given composite wood product would contribute negligibly to that product's effect on 

4657 formaldehyde exposure. Thus, composite wood products are assumed to contribute to formaldehyde 

exposure for 11 years.59 4658 Specifically: 

4659 

4660  in the first year only new composite wood products are affected by the policy; 

4661  in the second year new and one-year-old composite wood products are affected by the 

4662 policy; 

4663  in the third year new, one- and two-year-old composite wood products are affected by the 

4664 policy; 

4665  in general, in the nth year, new, one-, two-, three-,..., and (n-1)-year-old composite wood 

4666 products are affected by the policy, for n = 1, 2, ..., 10; and 

4667  in the eleventh and all subsequent years new, one-, two-, three-, four-, five-, six-, seven-, 

4668 eight-, nine-, and ten-year-old composite wood products are affected by the policy. 

4669 

4670 Since the exposure scenarios are defined in part according to the 11 different ages for composite 

wood products, it is not until the 11th 4671 year after the implementation of the rule that benefits are realized 

under every exposure scenario. That is, it is not until the 11th 4672 year after rule implementation that ten-year 

4673 old composite wood products would have been required to be produced in compliance with the emissions 

4674 standards. Thus, the benefits are phased in over a period of eleven years. 

4675 

4676 Similarly, the benefits from a given year of composite wood production will phase-out over time. 

4677 Since the analysis considers the benefits and costs from 30 years of composite wood production, the 

 59 EPA calculated exposures using a 1.5 year emissions half life of formaldehyde from composite wood products With. 

this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11 

years the emissions would be near zero. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 4-4 

estimated exposures have the following time profile after the 30th 4678 and last year of composite wood 

4679 production considered in the analysis: 

4680 

 in the 31st 4681 year, only one-, two-, three-, four-, five-, six-, seven-, eight-, nine-, and tenyear-old composite wood products are produced before the 31st 4682 year (benefits from new 

4683 composite wood products are produced after year 30 and therefore are not considered in 

4684 the analysis); 

 in the 32nd 4685 year, only two-, three-, four-, five-, six-, seven-, eight-, nine-, and ten-year-old 

composite wood products are produced before the 31st 4686 year (benefits from new and one4687 year old composite wood products are produced after year 30 and therefore are not 

4688 considered in the analysis); 

4689  in general, in the nth year after year 30, only n year-old and older composite wood 

4690 products are produced before year 31, for n = 1, 2, ..., 10; and 

 in the 41st 4691 and all subsequent years, all 11 ages of composite wood products that 

potentially contribute to formaldehyde exposure are produced after the 30th 4692 year and 

4693 therefore are not considered in the analysis. 

4694 

4695 Given this phase-in and phase-out, a time period of thirty years of composite wood production 

4696 was selected so that the first ten years of the policy (when the benefits of the policy are being phased in) 

4697 and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of 

4698 the policy are being phased out) do not obscure the steady state benefits that would be experienced from 

4699 the policy. It is necessary to include the phase-in and phase-out of the benefits in order to be consistent 

4700 with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions 

4701 standards. Given that this analysis assumes that after eleven years any continuing (and declining) 

4702 emissions from a given composite wood product would contribute negligibly to that product's effect on 

4703 formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to 

4704 40 years of exposure reductions. The first 10 years are a phase-in period for exposure reductions, the next 

4705 20 years are a steady-state, and the next 10 years are a phase-out period. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 4-5 

4706 4.2 Summary of Net Benefits 

4707 

4708 Table 4-2 and Table 4-3 present the total annualized net benefits by analytical option and 

4709 discount rate. The estimated net benefits under the analytical options that have emissions standards that 

4710 are consistent with TSCA Title VI range from negative $109 million to positive $206 million using a 

4711 three percent discount rate. Of these analytical options, Option SI is the only option where net benefits 

4712 are negative under the lower estimate of net benefits using the three percent discount rate. Option SCR 

4713 (the proposed option) is the only option that has emissions standards that are consistent with TSCA Title 

4714 VI where both the lower and the higher estimate for net benefits is positive using the 7 percent discount 

4715 rate. 

4716 

4717 There are smaller net benefits (smaller positive and larger negative net benefits) under Options 

4718 CE and CI (the analytical options with emissions standards lower than those that are consistent with 

4719 TSCA Title VI). Net benefits are lower under these options because the estimated benefits are 

4720 substantially lower while the estimated costs are only modestly lower (because the costs are largely 

4721 driven by the certification, testing, and chain of custody requirements, which are not affected by the 

4722 emissions standards). 

4723 

4724 Options NE and NI (which have emissions limits that are more stringent than those required by 

4725 the statute) have substantially higher costs and benefits than the options with emissions standards that are 

4726 consistent with TSCA Title VI. Net benefits are positive under these options using a 3 percent discount 

4727 rate, and are positive for the higher estimate of net benefits using a 7 percent discount rate but are 

4728 negative for the lower estimate using a 7 percent discount rate. 

4729 

Table 4-2: Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 3 

percent discount rate) 

Analytical Option Costs Benefits Net Benefits

Low End 

Estimate 

High End 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Option SE $100 $100 $162 $245 $62 $145 

Option SI $194 $293 $184 $278 ($109) $84 

Option SP $104 $104 Not estimated Not estimated Not estimated Not estimated 

Option SN $143 $185 $192 $289 $7 $146 

Option SC $112 $121 $184 $278 $63 $166 

Option SCR (proposed) $72 $81 $184 $278 $103 $206 

Option CE $99 $99 $125 $188 $25 $89 

Option CI $192 $292 $142 $214 ($150) $22 

Option NE $379 $379 $639 $970 $259 $591 

Option NI $473 $573 $667 $1,013 $94 $540 

 Option SCR is the proposed option. Parentheses indicate negative net benefits. 

Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. 

Higher estimate of net benefits is calculated by subtracting low end cost estimate from higher benefits estimate. 

4730 

4731 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 4-6 

Table 4-3: Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 7 

percent discount rate) 

Analytical Option 

Costs Benefits Net Benefits 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate 

Higher 

Estimate 

Lower 

Estimate

Higher 

 Estimate 

Option SE $112 $112 $80 $121 ($31) $9 

Option SI $208 $311 $91 $137 ($220) ($71) 

Option SP $115 $115 Not estimated Not estimated Not estimated Not estimated 

Option SN $154 $195 $95 $143 ($99) ($11) 

Option SC $123 $132 $91 $137 ($41) $14 

Option SCR (proposed) $81 $89 $91 $137 $2 $57 

Option CE $111 $111 $62 $93 ($49) ($18) 

Option CI $207 $310 $71 $106 ($239) ($101) 

Option NE $383 $383 $317 $480 ($66) $97 

Option NI $480 $582 $331 $501 ($251) $21 

Option SCR is the proposed option. Parentheses indicate negative net benefits. 

Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. 

Higher estimate of net benefits is calculated by subtracting low end cost estimate from higher benefits estimate. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-1 

4732 5 Small Business Impacts 

4733 

4734 This chapter presents the impact of the costs of the proposed TSCA Title VI Implementation Rule 

4735 on the financial condition of small entities. The Regulatory Flexibility Act (RFA) of 1980, amended by 

4736 the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires regulators to 

4737 assess the effects of regulations on small entities including businesses, nonprofit organizations, and 

4738 governments. In some instances, agencies are also required to examine regulatory alternatives that may 

4739 reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to 

4740 prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the 

4741 rule will not have a significant economic impact on a substantial number of small entities. The RFA, 

4742 however, does not specifically define “a significant economic impact on a substantial number” of small 

4743 entities. Sections 603 and 604 of the RFA require that regulatory flexibility analyses identify the types, 

4744 and estimate the numbers, of small entities to which the rule will apply; and describe the rule 

4745 requirements to which small entities will be subject and any regulatory alternatives, including exemptions 

4746 and deferral, which would lessen the rule’s burden on small entities. 

4747 

4748 The proposed rule will affect small businesses, but small non-profit organizations or small 

4749 governments are not expected to be affected by the proposed rule because they are not expected to be 

4750 panel producers, fabricators, wholesalers, or importers. Under the Regulatory Flexibility Act (RFA), a 

4751 “small business” is determined by the U.S. Small Business Administration’s regulations at 13 CFR 

4752 121.201 (which create small business size standards using either a sales or employment threshold, 

4753 depending on the nature of the industry), unless an agency establishes an alternate definition. 

4754 

4755 To fulfill the requirements of the RFA, this analysis addresses two basic questions regarding the 

4756 proposed rule: (1) the number and type of small entities potentially affected, and (2) the extent of the 

4757 rule’s potential economic impact on those entities as measured by the cost-to-revenue ratio. This ratio is a 

4758 good measure of entities’ ability to afford the costs attributable to a regulatory requirement, because 

4759 comparing compliance costs to revenues or expenses provides a reasonable indication of the magnitude of 

4760 the regulatory burden relative to a commonly available measure of economic activity. Where regulatory 

4761 costs represent a small fraction of a typical entity’s revenues or expenses, the financial impacts of the 

4762 regulation on such entities may be considered as not significant. The impact ratios are calculated using 

4763 annualized costs, because these costs are more representative of the continuing costs entities face to 

4764 comply with the rule. 

4765 

4766 The small business impacts are presented separately according to the types of requirements they 

4767 are subject to. The number of small firms in the affected NAICS codes (described in Chapter 2) were 

4768 estimated using Census data and SBA’s small business size standards. Table 5-1 presents a summary of 

4769 the number of small firms affected by the rule. Section 5.1 presents the small business impacts for stock 

4770 panel producers. Section 5.2 presents the small business impacts for wood veneer laminated product 

4771 producers. Section 5.3 presents the small business impacts fabricators, wholesalers, and retailers. 

4772 Finally, section 5.4 presents a summary of the small business impacts. 

4773 

4774 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-2 

Table 5-1: Summary of Affected Number of Firms 

Employer Status Firm Type Number of 

Affected Firms 

Number of Affected 

Small Firms 

Employers 

Stock Panel Producer 54 31 

Wood Veneer Laminated Product 5,260 5,260 

Fabricator 28,014 27,879 

Wholesale 34,948 34,324 

Retail 247,689 202,630 

All Firms 315,965 270,123 

Nonemployers 

Stock Panel Producer - -

Wood Veneer Laminated Product 2,226 2,226 

Fabricator 44,478 44,478 

Wholesale 50,612 50,612 

Retail 511,359 511,359 

All Firms 608,675 608,675 

All Firms 

Stock Panel Producer 54 31 

Wood Veneer Laminated Product 7,486 7,486 

Fabricator 72,492 72,356 

Wholesale 85,560 84,936 

Retail 759,048 713,988 

All Firms 924,640 878,798 

Note that for the cost estimates presented in Chapter 2, stock panel producer firms were assumed to incur 

separate costs per type of composite panel product. As a result, the number of stock panel producer firms 

reported is higher in Chapter 2 compared to the number reported here. For example, a firm that owns a both 

particleboard mill and an MDF mill is counted twice in Chapter 2, but counted only once here. This is why 

the number of panel producer firms is 62 in Chapter 2 and 54 here. 

4775 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-3 

4776 5.1 Small Business Impacts for Stock Panel Producers 

4777 

4778 Table 5-2 presents the number of small stock hardwood plywood, MDF, and particleboard mills 

4779 and firms subject to the TSCA Title VI rule’s requirements for testing and third-party certification. 

4780 (Stock panel producers exclude hardwood plywood producers that are defined as laminated product 

4781 manufacturers under the CARB ATCM. Those firms are discussed in Section 5.2.) The small business 

4782 status of the majority of affected composite panel producing firms was determined using Dun & 

4783 Bradstreet (D&B), an online database containing information on the sales volume, number of employees, 

4784 and primary NAICS of establishments (Dun & Bradstreet 2010). For the remaining firms, the small 

4785 business status was determined using other business information directories, company websites, and 

4786 annual reports. 

4787 

Table 5-2: Stock Panel Producers, by Sector and Small Business Status 

Sector 

Total Number in Industry Number of Small Entities 

Firms Mills Firms Mills 

Stock Hardwood Plywood 32 41 22 22 

Medium Density Fiberboard 14 22 5 5 

Particleboard 16 30 5 7 

Total1 54 90 31 33 

Note: Total does not equal sum of rows because some firms and mills produce more than one product. Note that for the cost 

estimates presented in Chapter 2, firms were assumed to incur separate costs per type of composite panel product. As a result, the 

number of firms reported is higher in Chapter 2 compared to the number reported here. For example, a firm that owns both a 

particleboard mill and an MDF mill is counted twice in Chapter 2, but counted only once here. This is why the number of panel 

producer firms is 62 in Chapter 2 and 54 here. 

Sources: Composite Panel Association 2007, Dun & Bradstreet 2010 

4788 

4789 As indicated in Table 5-2, 31 of the 54 firms (approximately 57 percent of the total) and 33 of the 

4790 90 mills (37 percent) are small. Of these, 22 of the affected small firms (approximately 71 percent) are 

4791 hardwood plywood producers; five are MDF producers, and five are particleboard producers 

4792 (approximately 16 percent each). 

4793 

4794 Table 5-3 summarizes the economic impact to affected small panel producers as a result of the 

4795 TSCA Title VI rule. Firm-specific revenue data from Dun & Bradstreet were available for most small 

4796 firms; where data were not available, revenues were imputed as the average revenue for small firms in the 

4797 corresponding product category. 

4798 

4799 While all affected small firms incur rule familiarization and supplier notification costs due to the 

4800 TSCA Title VI rule, only a fraction will incur costs associated with changing production processes and 

4801 raw materials, or with testing and certification (since most firms already incurred those costs due to the 

4802 CARB ATCM). Per-firm costs for firms with production process, raw materials, and testing and 

4803 certification costs were calculated by dividing the total annualized costs by the number of affected firms. 

4804 

4805 All stock panel mills were assumed to have two product lines, and the baseline certification status 

4806 of their product lines was determined according to CARB’s (2011b) list of certified mills and CARB’s 

4807 (2011a) list of no-added formaldehyde (NAF) and ultra low emitting formaldehyde (ULEF) exemptions. 

4808 For example, if CARB only listed a mill as having Phase 2 (i.e., standard) certification, it was assumed 

4809 that the mill had two product lines with standard certification. As another example, a mill that is listed by 

4810 CARB as Phase 2 certified and also listed as having NAF exempt status would be assumed to have one 

4811 NAF product line and one product line with standard certification. The exception to this is particleboard, 

4812 where it is assumed that 5 of the 25 particleboard mills with standard certification status under the CARB 

4813 ATCM also produce a product line that is not certified under the CARB ATCM. There are only 3 

4814 particleboard mills that are small and have standard certification status under the CARB ATCM. To 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-4 

4815 ensure that cost impacts are not understated, the analysis assumed all 3 small particleboard mills with 

4816 standard certification under the CARB ATCM also have a product line that is uncertified in the baseline. 

4817 

4818 The analysis assumes that most mills making products that are not certified or that have ULEF 

4819 certification under the CARB ATCM will seek standard certification under the TSCA Title VI rule. The 

4820 exception is mills that have a product line that is ULEF certified and a product line that is NAF certified 

4821 under the CARB ATCM. These mills are assumed to convert the ULEF product line to NAF, so that both 

4822 product lines will be NAF certified under TSCA Title VI. 

4823 

4824 As indicated in Table 5-3, 25 small stock panel firms (approximately 81 percent of the total) are 

4825 expected to experience cost impacts that are less than one percent of their revenues, 5 firms 

4826 (approximately 16 percent) are expected to experience impacts at levels between one and three percent of 

4827 their revenue, and 1 firm (approximately 3 percent) is expected to be incur costs exceeding three percent 

4828 of their revenue. Total cost impacts ranged from zero to approximately 5.5 percent of firm revenues. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-5 

Table 5-3: Number of Small Composite Panel Producers, by Product Type, Baseline and Post-Rule Product Lines, 

Product Type Baseline Product Lines (CARB ATCM certification) Post-Rule Product Lines (TSCA Title VI certification) Number of Affected Small Firms Per-Firm Costs (thousands, 2010$) Per-Firm Revenues (thousands, 2010$) Range of Impacts 

Hardwood 

Plywood 

2 product lines without certification 

2 product lines with NAF certification 7 $35 

$2,500; $4,955; $6,200; $7,000; $7,500; 

$12,000; and 

$12,410 

0.3% - 1.4% 

2 product lines with ULEF certification 

2 product lines with standard certification 4 $70 

$2,600; $4,600; 

$12,410; and 

$20,000 

0.4% - 2.7% 

1 prod. with NAF cert.; 1 prod. with ULEF cert. 

2 product lines with NAF certification 1 3 $12,410 - 

2 product lines with standard certification. 

2 product lines with standard certification 7 $16 

$2,300; $3,700; 

$12,410; $12,410; $12,410; 

$24,000; and 

$30,000 

0.047% - 0. 61% 

2 product lines with NAF certification 

2 product lines with NAF certification 2 $3.6 $5,200 and $60,000 0.006% - 0.07% 

Hardwood 

Plywood & 

Particleboard 

2 HWPW prod. without certification; 1 PB prod. without cert., 1 PB prod. with standard certification 

2 HWPW prod. with NAF cert.; 2 PB prod. with standard certification 

1 $332 $6,000 5.5% 

Particleboard 

1 prod without cert.; 1 prod. with standard cert. 

2 prod. with standard certification 2 $296 10,411 and $15,000 2.0% - 2.8% 

2 prod. with NAF cert. 2 prod. with NAF cert. 1 $3.6 $11,053 0.03% 1 prod. with NAF cert.; 1 prod. with standard cert. 

1 prod. with NAF cert.; 1 prod. with standard cert. 1 $3.6 $12,803 0.03% 

MDF 2 product lines with standard certification 2 product lines with standard certification 5 $3.6 

$14,100; $14,867; $14,867; 

$15,000; and 

$15,500 

0.023% - 0.025% 

Total 31 - - 0.0% - 5.5% 

Notes: Numbers in parentheses represent cost savings. HWPW = hardwood plywood. PB = particleboard. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-6 

4829 5.2 Small Business Impacts for Wood Veneer Laminated Product Producers 

4830 (including firms making products defined as hardwood plywood ) 

4831 

4832 The small business impact analysis for wood veneer laminated product producers (including firms 

4833 making products defined as hardwood plywood under the proposed option) follows four basic steps: (1) 

4834 estimate the number of small firms, (2) estimate the cost per firm, (3) estimate the revenue distribution of 

4835 affected firms, and (4) based on the number of affected firms, the per-firm costs, and the revenue 

4836 distribution, estimate the number of firms by cost-revenue ratio. These steps are described in more detail 

4837 below. 

4838 

4839 5.2.1 Number of Small Laminator Firms 

4840 

4841 Due to the uncertainty in the estimated number and characteristics of wood veneer laminated 

4842 product producers, this analysis assumes that all wood veneer laminated product producers are small. To 

4843 ensure that per-firm costs are not understated, the number of small wood veneer laminated product 

4844 producers is estimated as the lower bound of affected firms from presented in Chapter 2 (i.e., 7,486 

4845 firms). As discussed in Chapter 2, the costs to laminators were estimated in part by estimating the 

4846 consumption of veneer by firms in laminator NAICS codes; using that information to estimate the surface 

4847 area of wood veneer laminated products that are produced; and estimating the production process and raw 

4848 materials costs based on that surface area If the small entity analysis were to use the upper bound for the 

4849 estimated number of laminators (i.e., 13,875 firms), the total costs for changes to production processes 

4850 and raw materials would be spread out over nearly twice as many firms. This would reduce the estimated 

4851 impact per firm. Therefore, using the lower bound estimate of affected firms yields a higher estimate of 

4852 the impact per firm. 

4853 

4854 5.2.2 Per-Firm Costs for Laminators 

4855 

4856 Table 5-4 summarizes the per-firm cost components for wood veneer laminated product 

4857 producers. The per-firm costs associated with rule familiarization, supplier notification, labeling system 

4858 setup, and recordkeeping are estimated by annualizing the per-firm costs presented in Table 2-85, Table 

4859 2-86, and Table 2-87 in Chapter 2. All costs except for recurring recordkeeping costs were estimated as 

4860 an average cost applied to all firms. Recurring recordkeeping costs were estimated to include a fixed cost 

4861 component of 2 hours of labor per firm plus a variable cost estimated as a function of revenue. 

4862 

4863 As described in Chapter 2, the recordkeeping and labeling costs were estimated based on the 

4864 responses to a questionnaire administered to nine fabricator firms. The firms that reported recurring 

4865 recordkeeping costs described these costs as data entry costs, which are costs that are likely to increase 

4866 with the volume of a firm’s sales. Based on revenue data from the Dun and Bradstreet database and other 

4867 publically available sources, the two respondents reporting recurring recordkeeping costs appeared to be 

4868 larger firms that likely have revenues that are significantly larger than the average revenue for affected 

4869 firms. Nevertheless, the costs they reported were still assumed to be the average costs incurred by 

4870 affected firms. For fabricators and wood veneer laminated product manufacturers, the per firm recurring 

4871 recordkeeping cost was estimated to be $12,917, which is $12,290 per year when annualized over 30 

4872 years using a three percent discount rate. For the purpose of the small business analysis, the cost impact 

4873 associated with recurring recordkeeping activities is estimated as a fixed cost per firm associated with 2 

4874 hours of labor plus a variable cost in terms of a percentage of firm revenue. This variable cost is 

4875 calculated such that the average annualized recurring recordkeeping costs are $12,290 per firm incurring 

4876 this cost. The variable portion of the recordkeeping cost is estimated to range from 0.1 percent to 0.8 

4877 percent of average revenues, depending on the NAICS code. 

4878 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-7 

4879 The per-firm costs of production process and raw material changes were estimated at the industry 

4880 level as the total annualized cost of the changes divided by the number of wood veneer laminated product 

4881 producers using added-formaldehyde resins in the baseline. In addition, wood veneer laminated product 

4882 manufacturers that are assumed not to switch to NAF resins after rule implementation are estimated to 

4883 incur additional annualized recurring recordkeeping costs of $3,531 per firm (the same as stock panel 

4884 producers). 

4885 

Table 5-4: Annualized Per-Firm Cost Components for Wood Veneer Laminated Product Producers, 

by NAICS 

NAICS Rule 

Familiarization 

Labeling 

Setup 

Production 

Process and Raw 

Material Costs 

Recordkeeping (Products defined 

as fabricated products) Testing and 

Certification 

(products defined 

as hardwood) 

plywood) 

Recordkeeping 

(products 

defined as 

hardwood 

plywood) 

Fixed Costs 

Variable Costs 

(Percent of 

Average 

Revenues) 

321211 

$14.29 $220.97 

$56,470.59 

$47.27 

0.1% 

$60,622 $3,530.59 

337110 $2,025.36 0.6% 

337129 $2,025.36 0.8% 

337121 $545.17 0.2% 

337122 $545.17 0.5% 

337211 $954.43 0.2% 

337127 $954.43 0.2% 

337215 $954.43 0.2% 

321911 $758.19 0.1% 

337212 $2,857.50 0.4% 

321999 $2,857.50 0.4% 

339920 $2,857.50 0.2% 

339932 $2,857.50 0.3% 

339992 $2,857.50 0.4% 

Notes: 

$14.29 is estimated as the initial cost of $294 annualized over 30 years using a 3% discount rate. 

$16.65 is estimated as the initial cost of $169 (material cost) plus $174 (labor cost) annualized over 30 years using a 3% discount rate. 

$220.87 is estimated as the initial cost of $4,552 annualized over 30 years using a 3% discount rate. 

Production process and raw material costs are estimated as the total cost of production for each NAICS divided by the number of laminated 

product producers using added-formaldehyde resins in the baseline. 

Recordkeeping costs for fabricated products are described above in section 5.2.2. 

See Chapter 2 for a description of testing and certification costs. 

$3,530.59 is estimated as the recurring cost of $3,710.72 annualized over 30 years using a 3% discount rate. 

NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Wood 

television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered 

wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 337127: Institutional furniture manufacturing; 337215: 

Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom architectural 

woodwork and millwork manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods 

manufacturing; 339932: Game, toy, and children's vehicle manufacturing; 339992: Musical instrument manufacturing. 

4886 

4887 Costs are calculated separately for four categories of wood veneer laminated product producers, 

4888 depending on the types of costs they are estimated to incur: 

4889 

4890  Laminators that use NAF resins in the baseline. They are estimated to incur costs for rule 

4891 familiarization, supplier notification, and labeling setup. 

4892 

4893  Laminators that use added-formaldehyde resins in the baseline, switch to NAF resins, and are among 

4894 the fabricators that are not estimated to incur recurring recordkeeping costs (i.e., all fabricators that 

4895 make products sold in California and 89 percent of the fabricators making products that are not sold 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-8 

4896 in California). They are estimated to incur costs for rule familiarization, supplier notification, 

4897 labeling setup, and production process and raw material (to switch to NAF resins). 

4898 

4899  Laminators that use added-formaldehyde resins in the baseline, switch to NAF resins, and are among 

4900 the fabricators that are estimated to incur recurring recordkeeping costs (i.e., 11 percent of the 

4901 fabricators making products that are not sold in California). They are estimated to incur costs for rule 

4902 familiarization, supplier notification, labeling setup, production process and raw material (to switch to 

4903 NAF resins), and fabricator recordkeeping. 

4904 

4905  Laminators that continue to use added-formaldehyde resins under the TSCA Title VI rule, so that 

4906 their products are included in the definition of hardwood plywood. (These represent 2 percent of all 

4907 laminators.) They are estimated to incur costs for rule familiarization, supplier notification, labeling 

4908 setup, production process and raw material (to switch to enhanced UF resin systems and low emitting 

4909 platforms), fabricator recordkeeping, testing and certification, and panel producer recordkeeping. 

4910 

4911 In general, the analysis uses a simplifying assumption that firms with the less frequent costs also 

4912 incur the more frequent costs. That is, if 10% of firms incur recordkeeping costs and 5% incur labeling 

4913 costs, the small entity analysis assumes that 5% incur both recordkeeping and labeling costs, and 5% 

4914 incur just recordkeeping costs. The analysis also assumes that all firms with testing and certification costs 

4915 also incur recordkeeping costs due to the TSCA Title VI rule. 

4916 

4917 5.2.3 Revenue Distribution for Affected Laminator Firms 

4918 

4919 Revenue distributions for employer and nonemployer wood veneer laminated product producers 

4920 were estimated at the industry level using data from the 2007 Economic Census and the Census Bureau’s 

4921 2008 Nonemployer Statistics. While employer data were available at the six-digit NAICs level, 

4922 nonemployer data were only available at the three-digit level. As with fabricators, revenues were 

4923 assumed to be uniformly distributed within each revenue bracket, and revenue floors of $20,000 and 

4924 $1,000 were set for employers and nonemployers, respectively. Table 5-5 and Table 5-6 present the 

4925 estimated revenue distributions for employer and nonemployer wood veneer laminated product producers.
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-9 

Table 5-5: Estimated Revenue Distribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thou

Percentile 

NAICS 

321211 

NAICS 

321911 

NAICS 

321999 

NAICS 

337110 

NAICS 

337121 

NAICS 

337122 

NAICS 

337127 

NAICS 

337129 

NAICS 

337211 

NAICS 

337212 

NAICS 

337215 

N

3

1 $50 $27 $23 $23 $25 $22 $27 $22 $27 $27 $50 2 $81 $35 $27 $28 $30 $25 $34 $25 $35 $35 $81 3 $112 $43 $30 $32 $36 $30 $43 $29 $43 $43 $112 4 $136 $51 $34 $37 $42 $33 $51 $31 $51 $51 $136 5 $164 $60 $38 $41 $47 $36 $59 $34 $60 $60 $164 6 $192 $68 $43 $46 $53 $39 $66 $38 $68 $68 $192 7 $216 $76 $47 $50 $60 $43 $74 $41 $76 $76 $216 8 $244 $85 $50 $54 $65 $46 $82 $44 $84 $85 $244 9 $272 $93 $54 $59 $71 $50 $90 $47 $92 $93 $272 

10 $300 $100 $58 $63 $77 $53 $98 $51 $100 $100 $300 11 $324 $124 $62 $68 $82 $56 $116 $53 $116 $124 $324 12 $352 $144 $65 $72 $88 $60 $136 $56 $132 $144 $352 13 $380 $168 $69 $77 $94 $63 $156 $60 $148 $168 $380 14 $404 $188 $73 $81 $99 $66 $176 $63 $168 $188 $404 15 $432 $208 $77 $85 $112 $70 $200 $66 $184 $208 $432 16 $460 $232 $81 $89 $124 $73 $220 $69 $200 $232 $460 17 $484 $252 $85 $94 $136 $77 $240 $72 $216 $252 $484 18 $520 $276 $89 $98 $152 $80 $260 $75 $232 $276 $520 19 $560 $296 $93 $104 $164 $83 $284 $78 $248 $296 $560 20 $600 $320 $97 $116 $176 $87 $304 $81 $264 $320 $600 21 $640 $340 $100 $124 $192 $90 $324 $85 $280 $340 $640 22 $680 $360 $116 $132 $204 $94 $344 $88 $296 $360 $680 23 $720 $384 $128 $144 $216 $97 $364 $91 $316 $384 $720 24 $760 $404 $144 $152 $228 $100 $388 $94 $332 $404 $760 25 $805 $428 $156 $160 $244 $112 $408 $97 $348 $428 $805 26 $845 $448 $172 $168 $256 $124 $428 $100 $364 $448 $845 27 $885 $472 $184 $180 $268 $132 $448 $108 $380 $472 $885 28 $925 $492 $200 $188 $284 $144 $468 $120 $396 $492 $925 29 $965 $520 $212 $196 $296 $156 $492 $128 $412 $520 $965 30 $1,015 $550 $224 $208 $308 $168 $520 $136 $428 $550 $1,015 31 $1,105 $585 $240 $216 $320 $176 $550 $144 $444 $585 $1,105 32 $1,195 $615 $252 $224 $336 $188 $585 $156 $460 $615 $1,195 33 $1,285 $650 $268 $232 $348 $200 $620 $164 $480 $650 $1,285 34 $1,375 $680 $280 $244 $360 $212 $655 $172 $496 $680 $1,375 35 $1,465 $715 $296 $252 $376 $220 $685 $180 $520 $715 $1,465 36 $1,555 $745 $308 $260 $388 $232 $720 $192 $550 $745 $1,555 37 $1,660 $780 $320 $272 $400 $244 $755 $200 $575 $780 $1,660 38 $1,750 $810 $336 $280 $412 $252 $785 $208 $605 $810 $1,750 39 $1,840 $845 $348 $288 $428 $264 $820 $216 $635 $845 $1,840 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-10 

Table 5-5: Estimated Revenue Distribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thou

Percentile 

NAICS 

321211 

NAICS 

321911 

NAICS 

321999 

NAICS 

337110 

NAICS 

337121 

NAICS 

337122 

NAICS 

337127 

NAICS 

337129 

NAICS 

337211 

NAICS 

337212 

NAICS 

337215 

N

3

40 $1,930 $875 $364 $300 $440 $276 $855 $228 $660 $875 $1,930 41 $2,020 $905 $376 $308 $452 $288 $890 $236 $690 $905 $2,020 42 $2,110 $940 $392 $316 $468 $296 $920 $244 $720 $940 $2,110 43 $2,200 $970 $404 $324 $480 $308 $955 $252 $745 $970 $2,200 44 $2,290 $1,000 $420 $336 $492 $320 $990 $264 $775 $1,000 $2,290 45 $2,380 $1,075 $432 $344 $515 $332 $1,060 $272 $805 $1,075 $2,380 46 $2,470 $1,135 $444 $352 $540 $340 $1,135 $280 $830 $1,135 $2,470 47 $2,625 $1,195 $460 $364 $570 $352 $1,225 $288 $860 $1,195 $2,625 48 $2,775 $1,255 $472 $372 $600 $364 $1,300 $300 $890 $1,255 $2,775 49 $2,950 $1,315 $488 $380 $630 $376 $1,390 $308 $915 $1,315 $2,950 50 $3,100 $1,375 $500 $388 $660 $384 $1,480 $316 $945 $1,375 $3,100 51 $3,275 $1,435 $540 $400 $690 $396 $1,555 $324 $975 $1,435 $3,275 52 $3,425 $1,495 $580 $408 $715 $408 $1,645 $336 $1,015 $1,495 $3,425 53 $3,600 $1,555 $620 $416 $745 $420 $1,720 $344 $1,105 $1,555 $3,600 54 $3,775 $1,630 $660 $428 $775 $428 $1,810 $352 $1,195 $1,630 $3,775 55 $3,925 $1,690 $700 $436 $805 $440 $1,885 $360 $1,285 $1,690 $3,925 56 $4,100 $1,750 $740 $444 $835 $452 $1,975 $372 $1,390 $1,750 $4,100 57 $4,250 $1,810 $780 $456 $860 $460 $2,065 $380 $1,480 $1,810 $4,250 58 $4,425 $1,870 $820 $464 $890 $472 $2,140 $388 $1,570 $1,870 $4,425 59 $4,575 $1,930 $860 $472 $920 $484 $2,230 $396 $1,675 $1,930 $4,575 60 $4,750 $1,990 $900 $480 $950 $496 $2,305 $408 $1,765 $1,990 $4,750 61 $4,900 $2,050 $940 $492 $980 $515 $2,395 $416 $1,855 $2,050 $4,900 62 $5,125 $2,110 $975 $500 $1,015 $550 $2,470 $424 $1,960 $2,110 $5,125 63 $5,425 $2,185 $1,045 $535 $1,105 $585 $2,675 $432 $2,050 $2,185 $5,425 64 $5,700 $2,245 $1,135 $565 $1,195 $615 $2,900 $444 $2,140 $2,245 $5,700 65 $6,000 $2,305 $1,240 $600 $1,285 $650 $3,125 $452 $2,230 $2,305 $6,000 66 $6,300 $2,365 $1,345 $630 $1,375 $680 $3,375 $460 $2,335 $2,365 $6,300 67 $6,575 $2,425 $1,435 $665 $1,465 $715 $3,600 $468 $2,425 $2,425 $6,575 68 $6,875 $2,485 $1,540 $700 $1,555 $750 $3,825 $480 $2,550 $2,485 $6,875 69 $7,175 $2,725 $1,630 $730 $1,645 $780 $4,075 $488 $2,775 $2,725 $7,175 70 $7,450 $2,975 $1,735 $765 $1,735 $815 $4,300 $496 $3,000 $2,975 $7,450 71 $8,200 $3,250 $1,825 $795 $1,825 $845 $4,525 $525 $3,225 $3,250 $8,200 72 $9,050 $3,525 $1,930 $830 $1,915 $880 $4,775 $565 $3,450 $3,525 $9,050 73 $9,875 $3,800 $2,035 $865 $2,005 $915 $5,000 $605 $3,675 $3,800 $9,875 74 $10,700 $4,050 $2,125 $895 $2,095 $945 $5,500 $650 $3,900 $4,050 $10,700 75 $11,550 $4,325 $2,230 $930 $2,185 $980 $6,025 $690 $4,125 $4,325 $11,550 76 $12,400 $4,600 $2,320 $960 $2,275 $1,045 $6,525 $730 $4,350 $4,600 $12,400 77 $13,250 $4,875 $2,425 $995 $2,365 $1,165 $7,025 $770 $4,600 $4,875 $13,250 78 $14,050 $5,250 $2,575 $1,090 $2,455 $1,285 $7,575 $815 $4,825 $5,250 $14,050 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-11 

Table 5-5: Estimated Revenue Distribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thou

Percentile 

NAICS 

321211 

NAICS 

321911 

NAICS 

321999 

NAICS 

337110 

NAICS 

337121 

NAICS 

337122 

NAICS 

337127 

NAICS 

337129 

NAICS 

337211 

NAICS 

337212 

NAICS 

337215 

N

3

79 $14,900 $5,750 $2,900 $1,195 $2,675 $1,390 $8,375 $855 $5,100 $5,750 $14,900 80 $16,350 $6,250 $3,200 $1,300 $3,025 $1,510 $9,200 $895 $5,675 $6,250 $16,350 81 $17,800 $6,750 $3,525 $1,405 $3,375 $1,630 $10,000 $940 $6,225 $6,750 $17,800 82 $19,300 $7,250 $3,825 $1,510 $3,725 $1,750 $11,250 $980 $6,800 $7,250 $19,300 83 $21,200 $7,875 $4,150 $1,615 $4,075 $1,870 $12,450 $1,075 $7,350 $7,875 $21,200 84 $23,450 $8,675 $4,450 $1,720 $4,450 $1,990 $13,650 $1,195 $7,900 $8,675 $23,450 85 $26,350 $9,450 $4,775 $1,825 $4,800 $2,110 $14,850 $1,330 $8,425 $9,450 $26,350 86 $30,800 $10,650 $5,200 $1,930 $5,400 $2,215 $16,600 $1,465 $8,975 $10,650 $30,800 87 $35,200 $12,750 $5,875 $2,035 $6,275 $2,335 $18,400 $1,600 $9,500 $12,750 $35,200 88 $38,550 $14,850 $6,575 $2,140 $7,175 $2,455 $20,950 $1,735 $10,150 $14,850 $38,550 89 $43,800 $17,900 $7,250 $2,245 $8,550 $2,825 $27,050 $1,870 $11,950 $17,900 $43,800 90 $51,200 $21,500 $8,150 $2,350 $10,200 $3,350 $31,150 $1,990 $13,750 $21,500 $51,200 $91 $67,400 $26,550 $9,175 $2,455 $12,100 $3,850 $35,800 $2,125 $16,500 $26,550 $67,400 $92 $85,600 $33,550 $10,500 $2,800 $14,000 $4,375 $51,500 $2,260 $21,250 $33,550 $85,600 $93 $100,000 $41,400 $13,150 $3,325 $17,500 $4,900 $63,800 $2,395 $26,200 $41,400 $100,000 $94 $100,000 $63,800 $16,300 $3,850 $22,950 $6,000 $76,100 $2,650 $32,100 $63,800 $100,000 $95 $100,000 $100,000 $21,150 $4,400 $28,650 $7,275 $94,600 $3,325 $48,500 $100,000 $100,000 $96 $100,000 $100,000 $31,500 $4,925 $37,350 $9,550 $100,000 $4,000 $70,700 $100,000 $100,000 $97 $100,000 $100,000 $46,550 $6,500 $61,400 $14,950 $100,000 $4,700 $99,000 $100,000 $100,000 $98 $100,000 $100,000 $97,000 $9,425 $100,000 $24,000 $100,000 $6,900 $100,000 $100,000 $100,000 $199 $100,000 $100,000 $100,000 $20,150 $100,000 $79,700 $100,000 $100,000 $100,000 $100,000 $100,000 $1

100 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $1

Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Wood television, radio, and s

manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered wood household furniture manufacturing; 337211: Wood office furniture 

Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom a

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's vehic

instrument manufacturing. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-12 

Table 5-6: Estimated Revenue Distribution for Nonemployer Wood Veneer 

Laminated Product Producers, by NAICS 

Percentile NAICS 321 NAICS 337 NAICS 339 

1 $1,138 $1,179 $1,098 

2 $1,259 $1,339 $1,219 

3 $1,420 $1,540 $1,380 

4 $1,581 $1,701 $1,500 

5 $1,742 $1,902 $1,621 

6 $1,862 $2,103 $1,742 

7 $2,023 $2,264 $1,902 

8 $2,184 $2,465 $2,023 

9 $2,345 $2,626 $2,144 

10 $2,465 $2,827 $2,264 

11 $2,626 $2,988 $2,425 

12 $2,787 $3,189 $2,546 

13 $2,908 $3,390 $2,667 

14 $3,069 $3,551 $2,787 

15 $3,230 $3,752 $2,948 

16 $3,390 $3,913 $3,069 

17 $3,511 $4,114 $3,189 

18 $3,672 $4,315 $3,310 

19 $3,833 $4,476 $3,471 

20 $3,994 $4,677 $3,591 

21 $4,114 $4,838 $3,712 

22 $4,275 $5,050 $3,833 

23 $4,436 $5,400 $3,953 

24 $4,557 $5,750 $4,114 

25 $4,717 $6,050 $4,235 

26 $4,878 $6,400 $4,356 

27 $5,050 $6,700 $4,476 

28 $5,350 $7,050 $4,637 

29 $5,650 $7,350 $4,758 

30 $5,950 $7,699 $4,878 

31 $6,250 $7,999 $5,050 

32 $6,600 $8,349 $5,300 

33 $6,900 $8,699 $5,600 

34 $7,200 $8,999 $5,900 

35 $7,500 $9,349 $6,200 

36 $7,799 $9,649 $6,450 

37 $8,099 $10,000 $6,750 

38 $8,399 $10,600 $7,050 

39 $8,699 $11,200 $7,350 

40 $8,999 $11,950 $7,599 

41 $9,299 $12,550 $7,899 

42 $9,649 $13,150 $8,199 

43 $9,949 $13,750 $8,499 

44 $10,450 $14,500 $8,799 

45 $11,200 $15,100 $9,049 

46 $11,800 $15,700 $9,349 

47 $12,550 $16,300 $9,649 

48 $13,150 $17,050 $9,949 

49 $13,900 $17,649 $10,450 

50 $14,500 $18,249 $11,200 

51 $15,250 $18,849 $11,950 

52 $15,850 $19,599 $12,550 

53 $16,600 $20,199 $13,300 

54 $17,200 $20,799 $13,900 

55 $17,949 $21,399 $14,650 

56 $18,549 $22,149 $15,250 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-13 

Table 5-6: Estimated Revenue Distribution for Nonemployer Wood Veneer 

Laminated Product Producers, by NAICS 

Percentile NAICS 321 NAICS 337 NAICS 339 

57 $19,299 $22,749 $16,000 

58 $19,899 $23,349 $16,750 

59 $20,499 $23,949 $17,350 

60 $21,249 $24,699 $18,099 

61 $21,849 $25,750 $18,699 

62 $22,599 $27,000 $19,449 

63 $23,199 $28,500 $20,049 

64 $23,949 $30,000 $20,799 

65 $24,549 $31,500 $21,549 

66 $25,750 $33,000 $22,149 

67 $27,500 $34,500 $22,899 

68 $29,250 $35,750 $23,499 

69 $31,000 $37,250 $24,249 

70 $32,750 $38,749 $24,849 

71 $34,500 $40,249 $26,750 

72 $36,250 $41,749 $28,750 

73 $37,999 $43,249 $30,750 

74 $39,749 $44,499 $32,750 

75 $41,499 $45,999 $34,750 

76 $43,249 $47,499 $36,750 

77 $44,999 $48,999 $38,749 

78 $46,749 $51,000 $40,749 

79 $48,499 $55,000 $42,749 

80 $51,000 $59,000 $44,749 

81 $55,500 $63,500 $46,749 

82 $60,500 $67,500 $48,749 

83 $65,000 $71,500 $52,500 

84 $70,000 $75,499 $58,000 

85 $75,000 $79,499 $64,000 

86 $79,499 $83,499 $69,500 

87 $84,499 $87,499 $75,000 

88 $89,499 $91,499 $80,999 

89 $93,999 $95,499 $86,499 

90 $98,999 $99,499 $91,999 

91 $116,500 $118,000 $97,499 

92 $139,000 $139,000 $115,000 

93 $161,500 $158,500 $140,500 

94 $182,499 $179,499 $164,500 

95 $204,999 $198,999 $189,999 

96 $227,499 $219,999 $215,499 

97 $250,000 $239,499 $240,999 

98 $367,500 $320,000 $337,500 

99 $489,999 $459,999 $477,499 

100 $10,000,000 $10,000,000 $10,000,000 

Note: NAICS 321: Wood product manufacturing; 337: Furniture and related product manufacturing; 

339: Miscellaneous manufacturing. 

4926 

4927 5.2.4 Small Business Impact Summary for Wood Veneer Laminated Product Producers 

4928 

4929 Table 5-7 presents a summary of the number of affected small laminated product producers by NAICS 

4930 code, category of costs incurred, and employment status. Table 5-8 and Table 5-9 present the small 

4931 business impacts on employer and nonemployer wood veneer laminated product producers, respectively. 

4932 Table 5-10 summarizes the impacts to all small laminated product producers. 

4933 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-14 

4934 The number of firms by cost-revenue ratio bracket is estimated from the estimated number of 

firms, the per-firm costs, and the revenue distributions presented above in Table 5-5 and Table 5-6.60 4935 For 

4936 example, there are an estimated 165 employer wood veneer laminated product producers in the Wood 

4937 Kitchen Cabinet and Countertop industry (NAICS 337110) that will incur rule familiarization, labeling, 

4938 and raw materials costs ($2,260.62). Thus, employer firms with revenues below $75,354 ($2,260.62 

4939 divided by 3%) have cost-impact ratios above three percent and firms with revenue above $226,062 

4940 ($2,260.62 divided by 1%) have cost-impact ratios below one percent. Finally, firms with revenues 

between $75,354 and $226,062 would have cost-impact ratios between 1 and 3 percent. Since the 12th 4941 

4942 percentile of revenues for NAICS 337110 is below $75,354, 12 percent of these firms (20 firms) have 

cost-impact ratios above three percent. Since the 32nd 4943 percentile of revenues for NAICS 337110 is below 

4944 $226,062, 20 percent (32 minus 12 percent) or 33 of these firms have cost-impact ratios between one and 

4945 three percent. The remaining 68 percent of these firms (112 firms) have a cost-impact ratio below one 

4946 percent. 

4947 

4948 Overall, 5,532 small wood veneer laminated product producers (about 74 percent of the total) are 

4949 expected to have costs impacts that are less than one percent of their revenues, 759 firms (about 11 

4950 percent) are expected to experience impacts at levels between one and three percent of their revenue, and 

4951 1,159 firms (about 15 percent) are expected to incur costs exceeding three percent of their revenues. 

4952 

 60 Nonemployers were assumed to account for 30 percent of all affected wood veneer laminated product manufacturers. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-15 Table 5-7: Number of Wood Veneer Laminated Product Producers with Cost Impacts, by NAICS 

Categories of Costs 

Incurred 

NAICS 

321211 

NAICS 

321911

NAICS 

321999 

NAICS 

337110

NAICS 

337121

NAICS 

337122

NAICS 

337127 

NAICS 

337129

NAICS 

337211

NAICS 

337212

NAIC

33721

All Small Employer Firms With Cost Impacts

Rule fam., label. 51 821 88 267 338 704 259 55 152 100 459 Rule fam., label., raw mat. 10 508 - 165 209 435 - 33 - - Rule fam., label., raw mat., fab. record. 6 134 9 44 55 115 26 9 15 10 46 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

1 30 2 10 13 26 6 2 4 2 11 

Total 68 1,493 99 485 615 1,280 291 99 171 112 516 

All Nonemployer Firms With Cost Impacts

Rule fam., label. - 352 37 114 145 302 111 23 65 43 197 Rule fam., label., raw mat. - 218 - 71 90 187 - 14 - - Rule fam., label., raw mat., fab. record. - 58 4 19 24 49 11 4 7 4 20 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- 13 1 4 5 11 2 1 1 1 4 

Total - 640 42 208 264 549 125 42 73 48 221 

All Small Firms With Cost Impacts

Rule fam., label. 51 1,173 125 381 483 1,006 370 78 217 142 656 Rule fam., label., raw mat. 10 725 - 236 299 622 - 47 - - Rule fam., label., raw mat., fab. record. 6 192 13 62 79 164 38 13 22 15 66 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

1 43 3 14 18 37 8 3 5 3 15 

Total 68 2,133 141 693 879 1,829 416 141 244 160 737  Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Wood television, radio, a

manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered wood household furniture manufacturing; 337211: Wood office furnit

Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custo

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's ve

instrument manufacturing. 

4953 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-16 Table 5-8: Small Business Impacts on Employer Wood Veneer Laminated Product Producers by NAICS 

Categories of Costs 

Incurred 

NAICS 

321211 

NAICS 

321911

NAICS 

321999 

NAICS 

337110

NAICS 

337121

NAICS 

337122

NAICS 

337127 

NAICS 

337129

NAICS 

337211

NAICS 

337212

NAIC

33721

All Small Employer Firms With Cost Impacts <1%

Rule fam., label. 51 821 87 264 338 697 259 54 152 100 459 Rule fam., label., raw mat. 4 462 - 112 188 361 - 20 - - Rule fam., label., raw mat., fab. record. 2 121 6 30 49 94 24 5 14 8 45 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- 6 - - 2 2 1 - 1 - 4 

Total 57 1,410 93 406 577 1,154 284 80 166 108 508 

All Small Employer Firms With Cost Impacts >1% and <3%

Rule fam., label. - - 1 3 - 7 - 1 - - Rule fam., label., raw mat. 2 41 - 33 19 65 - 7 - - Rule fam., label., raw mat., fab. record. 2 12 1 8 6 18 2 2 1 1 1 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- 5 - 1 2 2 1 - 1 - 3 

Total 4 58 2 45 26 93 3 10 2 1 4 

All Small Employer Firms With Cost Impacts >3%

Rule fam., label. - - - - - - - - - - Rule fam., label., raw mat. 4 5 - 20 2 9 - 6 - - Rule fam., label., raw mat., fab. record. 3 1 2 6 1 2 1 2 - 1 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

1 19 2 9 9 22 3 2 2 1 4 

Total 7 25 3 34 12 33 4 9 3 2 4  Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Wood television, radio, a

manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered wood household furniture manufacturing; 337211: Wood office furnit

Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custo

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's ve

instrument manufacturing. 

4954 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-17 Table 5-9: Small Business Impacts on Nonemployer Wood Veneer Laminated Product Producers by NAICS 

Categories of Costs 

Incurred 

NAICS 

321211 

NAICS 

321911

NAICS 

321999 

NAICS 

337110

NAICS 

337121

NAICS 

337122

NAICS 

337127 

NAICS 

337129

NAICS 

337211

NAICS 

337212

NAIC

33721

All Small Nonemployer Firms With Cost Impacts <1% 

Rule fam., label. - 130 14 48 61 127 47 10 27 18 83 Rule fam., label., raw mat. - 22 - 3 14 30 - 1 - - Rule fam., label., raw mat., fab. record. - 6 - 1 4 7 1 - 1 - 2 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- - - - - - - - - - 

Total - 158 14 52 79 164 48 10 28 18 84 

All Small Nonemployer Firms With Cost Impacts >1% and <3% 

Rule fam., label. - 95 10 32 41 85 31 7 18 12 55 Rule fam., label., raw mat. - 44 - 9 21 43 - 2 - - Rule fam., label., raw mat., fab. record. - 11 - 2 5 11 2 - 1 - 4 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- - - - - - - - - - 

Total - 149 10 43 67 139 33 9 19 12 59 

All Small Nonemployer Firms With Cost Impacts >3% 

Rule fam., label. - 127 13 34 44 91 33 7 19 13 59 Rule fam., label., raw mat. - 152 - 59 55 114 - 12 - - Rule fam., label., raw mat., fab. record. - 41 3 16 15 31 8 3 5 4 14 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- 13 1 4 5 11 2 1 1 1 4 

Total - 333 18 113 118 246 44 23 26 18 78  Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Wood television, radio, a

manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered wood household furniture manufacturing; 337211: Wood office furnit

Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custo

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's ve

instrument manufacturing. 

4955 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-18 Table 5-10: Small Business Impacts on All Small Wood Veneer Laminated Product Producers by NAICS 

Categories of Costs 

Incurred 

NAICS 

321211 

NAICS 

321911

NAICS 

321999 

NAICS 

337110

NAICS 

337121

NAICS 

337122

NAICS 

337127 

NAICS 

337129

NAICS 

337211

NAICS 

337212

NAIC

33721

All Small Firms With Cost Impacts <1% 

Rule fam., label. 51 951 101 312 399 824 306 64 179 118 542 Rule fam., label., raw mat. 4 484 - 115 203 391 - 21 - - Rule fam., label., raw mat., fab. record. 2 127 6 30 53 102 25 5 14 8 47 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- 6 - - 2 2 1 - 1 - 4 

Total 57 1,568 107 458 656 1,318 332 90 194 126 592 

All Small Firms With Cost Impacts >1% and <3% 

Rule fam., label. - 95 11 35 41 92 31 7 18 12 55 Rule fam., label., raw mat. 2 84 - 42 40 108 - 9 - - Rule fam., label., raw mat., fab. record. 2 23 2 11 11 30 5 2 3 1 5 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

- 5 - 1 2 2 1 - 1 - 3 

Total 4 208 13 88 93 232 37 18 21 14 63 

All Small Firms With Cost Impacts >3% 

Rule fam., label. - 127 13 34 44 91 33 7 19 13 59 Rule fam., label., raw mat. 4 157 - 79 57 123 - 18 - - Rule fam., label., raw mat., fab. record. 3 42 5 21 15 33 9 5 5 5 14 Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 

1 31 2 13 15 33 6 3 4 2 9 

Total 7 358 21 147 130 279 48 32 28 20 82  Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Wood television, radio, 

manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered wood household furniture manufacturing; 337211: Wood office furnit

Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custo

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's ve

instrument manufacturing. 

4956 4957 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-19 

4958 5.3 Small Business Impacts for Fabricators, Wholesalers, and Retailers 

4959 

4960 The basic steps in the small business impact analysis for fabricators (excluding those fabricators 

4961 that are laminators, which are discussed in Section 5.2), wholesalers, and retailers are as follows: (1) 

4962 estimate the number of small firms, (2) estimate the revenue distribution of affected firms, (3) estimate 

4963 the cost per firm, and (4) based on the number of affected firms, the per-firm costs, and the revenue 

4964 distribution, estimate the number of firms by cost-revenue ratio. These steps are described in more detail 

4965 below. 

4966 

4967 5.3.1 Number of Small Fabricator, Wholesale, and Retail Firms 

4968 

4969 The number of small employer firms in the affected fabricator, wholesaler, and retailer NAICS 

4970 (described in Chapter 2) were estimated using data from the 2007 Economic Census, the Census Bureau’s 

4971 2008 Nonemployer Statistics, and SBA’s small business size standards. For those retail NAICS where 

4972 the Census revenue brackets overlapped the small business revenue threshold, the firms in the overlapped 

4973 bracket were counted as small. All nonemployer firms were assumed to be small. 

4974 

4975 5.3.2 Revenue Distribution for Affected Fabricator, Wholesale, and Retail Firms 

4976 

4977 The 2007 Economic Census has information on the number of employer firms by NAICS code in 

4978 18 revenue brackets. The 2008 Nonemployer Statistics has information on the number of nonemployer 

4979 firms by NAICS code in 12 revenue brackets. Impacts were separately estimated for six industry 

4980 categories: (1) employer fabricators, (2) employer wholesalers, (3) employer retailers, (4) nonemployer 

4981 fabricators, (5) nonemployer wholesalers, and (6) nonemployer retailers. For each industry category, the 

4982 number of affected firms by revenue bracket was estimated by combining the number of affected firms by 

4983 NAICS/employer status and the percentage of firms by revenue bracket within each affected 

4984 NAICS/employer status category. After compiling these data, the overall revenue distributions for each 

4985 percentile from 1 to 100 were calculated by assuming that revenues are uniformly distributed within each 

4986 revenue bracket. The bottom revenue bracket was assigned a revenue floor of $20,000 for employers and 

4987 $1,000 for nonemployers. Note that this analysis likely overestimates the number of affected firms in this 

4988 bottom revenue bracket because Census data includes firms with no revenue, and firms with no revenue 

4989 do not sell composite wood products and therefore are unlikely to incur costs due to the rule. The 

4990 resulting distributions are presented in Table 5-11. 

4991 

4992 

Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers 

Percentile 

Type of Firm 

Employers Nonemployers 

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers 

1 $25,110 $31,072 $25,110 $1,165 $1,206 $1,123

2 $30,220 $41,292 $31,072 $1,329 $1,370 $1,247

3 $34,478 $52,363 $36,182 $1,453 $1,576 $1,370

4 $39,588 $63,435 $42,143 $1,617 $1,782 $1,494

5 $44,698 $73,655 $47,253 $1,782 $1,946 $1,617

6 $49,808 $84,726 $53,215 $1,946 $2,152 $1,741

7 $54,918 $95,798 $58,325 $2,070 $2,358 $1,864

8 $59,176 $105,167 $64,286 $2,234 $2,522 $1,987

9 $64,286 $126,201 $69,396 $2,399 $2,728 $2,111

10 $69,396 $143,027 $75,358 $2,563 $2,934 $2,234
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-20 

Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers 

Percentile 

Type of Firm 

Employers Nonemployers 

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers 

11 $74,506 $159,854 $80,468 $2,687 $3,098 $2,358

12 $79,616 $180,888 $86,430 $2,851 $3,304 $2,481

13 $84,726 $197,714 $91,540 $3,016 $3,510 $2,605

14 $88,985 $214,541 $96,650 $3,181 $3,715 $2,728

15 $94,095 $231,368 $102,611 $3,304 $3,880 $2,851

16 $99,205 $252,401 $109,374 $3,469 $4,086 $2,975

17 $104,315 $269,228 $121,994 $3,633 $4,291 $3,098

18 $113,581 $286,055 $134,614 $3,798 $4,456 $3,222

19 $126,201 $302,881 $143,027 $3,921 $4,662 $3,345

20 $138,821 $323,915 $155,647 $4,086 $4,867 $3,469

21 $151,441 $340,741 $164,061 $4,250 $5,032 $3,592

22 $164,061 $357,568 $176,681 $4,415 $5,371 $3,715

23 $176,681 $378,602 $189,301 $4,538 $5,729 $3,798

24 $189,301 $395,428 $197,714 $4,703 $6,138 $3,921

25 $201,921 $412,255 $210,334 $4,867 $6,496 $4,045

26 $210,334 $429,082 $218,748 $5,032 $6,854 $4,168

27 $222,954 $450,115 $231,368 $5,218 $7,263 $4,291

28 $235,574 $466,942 $243,988 $5,524 $7,621 $4,415

29 $248,194 $483,769 $252,401 $5,831 $8,031 $4,538

30 $260,815 $504,802 $265,021 $6,138 $8,389 $4,662

31 $273,435 $521,629 $277,641 $6,496 $8,747 $4,785

32 $286,055 $552,128 $286,055 $6,803 $9,156 $4,909

33 $298,675 $588,937 $298,675 $7,110 $9,514 $5,032

34 $307,088 $625,745 $307,088 $7,417 $9,923 $5,218

35 $319,708 $662,554 $319,708 $7,724 $10,384 $5,524

36 $332,328 $694,104 $332,328 $8,031 $11,151 $5,831

37 $344,948 $730,912 $340,741 $8,337 $11,919 $6,138

38 $357,568 $767,721 $353,362 $8,644 $12,686 $6,445

39 $370,188 $804,529 $361,775 $8,951 $13,453 $6,752

40 $382,808 $841,338 $374,395 $9,309 $14,220 $7,059

41 $395,428 $878,146 $387,015 $9,616 $15,141 $7,366

42 $408,048 $914,955 $395,428 $9,923 $15,908 $7,673

43 $416,462 $951,763 $408,048 $10,231 $16,676 $7,928

44 $429,082 $983,313 $416,462 $10,844 $17,443 $8,235

45 $441,702 $1,020,122 $429,082 $11,612 $18,210 $8,542

46 $454,322 $1,067,448 $441,702 $12,226 $18,977 $8,849

47 $466,942 $1,146,324 $450,115 $12,993 $19,745 $9,156

48 $479,562 $1,225,199 $462,735 $13,607 $20,512 $9,463

49 $492,182 $1,304,074 $471,149 $14,220 $21,433 $9,769

50 $504,802 $1,382,950 $483,769 $14,988 $22,200 $10,076

51 $517,422 $1,461,825 $496,389 $15,601 $22,967 $10,538

52 $531,095 $1,540,701 $504,802 $16,369 $23,734 $11,305

53 $567,903 $1,619,576 $517,422 $16,983 $24,502 $12,072

54 $604,712 $1,698,452 $531,095 $17,750 $25,269 $12,839
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-21 

Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers 

Percentile 

Type of Firm 

Employers Nonemployers 

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers 

55 $636,262 $1,793,102 $562,645 $18,364 $26,856 $13,607

56 $673,070 $1,871,978 $594,195 $18,977 $28,646 $14,374

57 $709,879 $1,950,853 $620,487 $19,745 $30,436 $15,141

58 $746,687 $2,029,728 $652,037 $20,358 $32,226 $15,908

59 $783,496 $2,108,604 $683,587 $21,126 $34,017 $16,522

60 $815,046 $2,187,479 $709,879 $21,739 $35,807 $17,289

61 $851,855 $2,266,355 $741,429 $22,507 $37,853 $18,057

62 $888,663 $2,345,230 $772,979 $23,121 $39,643 $18,824

63 $925,472 $2,424,106 $799,271 $23,888 $41,434 $19,591

64 $962,280 $2,502,981 $830,821 $24,502 $43,224 $20,358

65 $993,830 $2,581,856 $862,371 $25,115 $45,014 $21,126

66 $1,030,639 $2,734,350 $888,663 $26,344 $46,805 $21,893

67 $1,098,998 $2,944,685 $920,213 $28,134 $48,851 $22,660

68 $1,193,649 $3,128,727 $951,763 $29,925 $50,641 $23,427

69 $1,288,299 $3,339,062 $983,313 $31,459 $53,711 $24,195

70 $1,382,950 $3,549,396 $1,009,605 $33,249 $57,803 $24,962

71 $1,493,375 $3,759,731 $1,041,155 $35,040 $61,895 $25,832

72 $1,588,026 $3,970,065 $1,114,773 $36,830 $65,988 $28,134

73 $1,682,677 $4,180,400 $1,193,649 $38,620 $70,080 $30,436

74 $1,793,102 $4,390,734 $1,288,299 $40,411 $74,172 $32,738

75 $1,887,753 $4,601,069 $1,382,950 $42,201 $77,753 $35,040

76 $1,982,403 $4,811,403 $1,461,825 $43,991 $81,845 $37,597

77 $2,077,054 $5,021,738 $1,556,476 $45,526 $85,937 $39,899

78 $2,187,479 $5,232,073 $1,651,126 $47,316 $90,029 $42,201

79 $2,282,130 $5,652,743 $1,730,002 $49,106 $94,122 $44,503

80 $2,376,780 $6,073,412 $1,824,652 $50,897 $98,214 $46,805

81 $2,487,206 $6,520,373 $1,919,303 $55,246 $102,307 $49,106

82 $2,581,856 $6,941,042 $1,998,178 $60,361 $114,584 $52,177

83 $2,813,225 $7,388,003 $2,092,829 $64,965 $128,395 $58,315

84 $3,155,019 $7,808,672 $2,187,479 $70,080 $140,672 $63,942

85 $3,523,104 $8,544,844 $2,266,355 $75,195 $154,483 $70,080

86 $3,864,898 $9,333,598 $2,361,005 $79,799 $168,294 $76,218

87 $4,232,984 $10,122,353 $2,455,656 $84,914 $180,571 $82,356

88 $4,574,777 $11,200,318 $2,534,531 $89,518 $194,383 $88,495

89 $4,916,571 $12,514,909 $2,629,183 $94,633 $208,194 $94,633

90 $5,310,949 $13,829,500 $2,944,685 $99,237 $220,471 $100,771

91 $6,178,579 $15,144,091 $3,260,186 $111,515 $234,282 $117,653

92 $7,046,209 $17,089,687 $3,601,980 $134,533 $246,559 $140,672

93 $7,913,840 $19,561,119 $3,917,482 $157,552 $276,229 $163,691

94 $9,570,224 $22,505,804 $4,232,984 $180,571 $332,497 $186,710

95 $11,778,738 $26,134,075 $4,548,485 $202,056 $386,208 $209,729

96 $14,723,422 $31,392,440 $4,863,987 $225,074 $442,477 $232,747

97 $19,087,866 $38,543,818 $5,179,489 $248,093 $498,745 $255,767

98 $26,659,913 $49,638,969 $5,847,302 $350,401 $670,110 $365,747
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-22 

Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers 

Percentile 

Type of Firm 

Employers Nonemployers 

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers 

99 $43,591,849 $74,037,784 $6,604,507 $485,957 $879,839 $478,284

100 $105,167,308 $105,167,307 $7,361,712 $2,557,673 $5,115,346 $10,230,695

4993 

4994 5.3.3 Costs per Small Fabricator, Wholesale, and Retail Firm 

4995 

4996 The costs per small firm are estimated by annualizing the costs per firm presented in Chapter 2. 

4997 Except for recurring recordkeeping costs, the impact analysis uses a single average annualized cost per 

4998 firm for each cost element (rule familiarization, labeling and initial recordkeeping). 

4999 

Table 5-12: Per Firm Costs 

Description of Costs Incurred Initial or 

Annual Cost 

Annualized Cost 

(3 Percent) 

Fabricators 

Rule Familiarization $294.40 $14.29 

Initial Labeling (firms with minor costs) $132.81 $6.45 

Initial Labeling (firms with more substantial costs) $4,552.00 $220.97 

Recurring Recordkeeping 49.68 $47.27 

Wholesalers 

Rule Familiarization $373.16 $18.11 

Initial Recordkeeping $2,510.80 $121.88 

Initial Labeling (firms with more substantial costs) $4,552.00 $220.97 

Recurring Recordkeeping 51.08 $48.60 

Retailers 

Rule Familiarization $282.84 $13.73 

5000 

5001 

5002 Recurring recordkeeping costs are assumed to be a function of revenue rather than a fixed cost 

5003 per firm. As described in Chapter 2, the recordkeeping and labeling costs were estimated based on the 

5004 responses to a questionnaire administered to seven wholesale firms and another questionnaire 

5005 administered to nine fabricator firms. Based on revenue data from the Dun and Bradstreet database and 

5006 other publically available sources, the two respondents reporting recurring recordkeeping costs appeared 

5007 to be larger firms that likely have revenues that are significantly larger than the average revenue for 

5008 affected firms. Nevertheless, the costs they reported were still assumed to represent the average costs 

5009 for the fraction of affected firms that will incur additional recordkeeping costs due to the rule. These 

5010 average costs were compared to average industry revenues to calculate the cost impact of recurring 

5011 recordkeeping. (This is equivalent to scaling the recurring recordkeeping costs to the revenues of the 

5012 firm.) The cost impacts of recurring recordkeeping were then added to the cost impacts from the other 

5013 cost elements to calculate the total cost impact. 

5014 

5015 As described in Chapter 2, 11 percent of the fabricators that are not currently complying with the 

5016 CARB ATCM (because their products are not sold in California) are assumed to incur recurring 

5017 recordkeeping costs that were estimated to average $12,917 and $179 per year for employer firms and 

5018 nonemployer firms, respectively. This is $12,290 and $170 per year when annualized over 30 years using 

5019 a three percent discount rate. The analysis assumes that these recordkeeping costs include a fixed cost 

5020 component associated with 2 hours of labor ($47.27 annualized, based on labor rates at fabricator firms) 

5021 and a variable cost component that is estimated as a function of revenue. The variable cost component is 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-23 

5022 estimated to be 0.3 percent of revenue, which is calculated by taking the employer firm variable cost of 

5023 $12,243and dividing by the average employer firm revenue of $4.2 million (Given the revenue 

5024 distribution for fabricators shown in Table 5-11, this is equivalent to a range of recurring recordkeeping 

5025 costs of $120 to $304,002 per year for employer firm fabricators, and a range of $51 to $7,439 per year 

5026 for non-employer firm fabricators.) As shown in Table 5-12, the average annualized cost per firm to 

5027 fabricators for the other rule’s other requirements ranges from $14 to $220. The cost impacts from these 

5028 costs are combined with the cost impacts from recurring recordkeeping to calculate total cost impacts. 

5029 

5030 For wholesalers, 43 percent of the firms that are not currently complying with the CARB ATCM 

5031 (because their products are not sold in California) are assumed to incur recurring recordkeeping costs that 

5032 were estimated to average $4,980 and $100 per year for employer and nonemployer firms, respectively. 

5033 This is $4,739 and $95 per year when annualized over 30 years using a three percent discount rate. The 

5034 analysis assumes that these recordkeeping costs include a fixed cost component associated with 2 hours of 

5035 labor ($48.60 annualized, based on labor rates at wholesaler firms) and a variable cost component that is 

5036 estimated as a function of revenue. The variable cost component is estimated to be 0.06 percent of 

5037 revenue, which is calculated by taking the employer variable cost of $4,690 and dividing by the average 

5038 employer firm revenue of $8.3 million. (Given the revenue distribution for wholesalers shown in Table 

5039 5-11, this is equivalent to a range of recurring recordkeeping costs of $65 to $59,410 per year for 

5040 employer firm wholesalers, and a range of $48 to $2,935 per year for non-employer firm wholesalers.) 

5041 As shown in Table 5-12, the average annualized cost per firm to wholesalers for the other rule’s other 

5042 requirements ranges from $18 to $220 per year. The cost impacts from these costs are combined with the 

5043 cost impacts from recurring recordkeeping to calculate total cost impacts. 

5044 

5045 

5046 5.3.4 Small Business Impact Summary for Fabricators, Wholesalers, and Retailers 

5047 

5048 Table 5-13 presents the small business impacts on fabricators, wholesalers and retailers. Overall, 

5049 about 95 percent of small firms are expected to have cost impacts that are less than one percent of their 

5050 revenue, about 4 percent of small firms are expected to have cost impacts between one and three percent 

5051 of their revenue, and about 1 percent of small firms are expected to have cost impacts that exceed three 

5052 percent of their total revenue. The number of firms by cost-revenue ratio bracket is estimated from the 

5053 estimated number of firms, the per-firm costs shown in Table 5-12, and the revenue distributions 

5054 presented above in Table 5-11. 

5055 

5056 For example, 3,154 fabricator firms with employees are estimated to comply with the CARB 

5057 ATCM because their products may be sold in California. These firms incur the incremental cost of 

5058 $14.29 for rule familiarization with the TSCA Title VI rule, but do not incur incremental costs for the 

5059 rule’s other requirements. Thus, only firms with revenues below $476 ($14.29 divided by 3%) would 

5060 have cost-impact ratios above three percent and firms with revenue below $1,429 ($14.29 divided by 1%) 

5061 would have cost-impact ratios above one percent. Since the 1st percentile for employer fabricators is 

5062 greater than $1,429, it is estimated that all 3,154 of these employer fabricators have cost-impact ratios 

5063 below one percent. It is also estimated that 5,032 fabricators that are nonemployer firms comply with the 

5064 CARB ATCM because their products may be sold in California. Like the compliant firms with 

5065 employees, these nonemployer firms only incur the incremental cost of $14.29 for rule familiarization. 

However, since the 1st percentile for nonemployer fabricators is greater than $476 and the 3rd 5066 percentile 

5067 for revenue is greater than $1,429, it is estimated that 2 percent, or 101 of these firms have cost-impact 

5068 ratios of between one and three percent, while the remaining 4,931 firms have cost-impact ratios of less 

5069 than one percent. 

5070 

5071 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-24 

Table 5-13: Small Business Impacts on Fabricators, Wholesalers, and Retailers 

Description of Costs Incurred Number of 

Small Firms

Average Cost 

Per Firm for 

Small Firmsa

(annualized, 3 

percent) 

Number of Firms with Impacts

<1% 1-3% >3% 

Fabricator Employers 

Rule Fam. 3,154 $14.29 3,154 - - 

Rule Fam. and Labeling (minor cost) 21,570 $20.74 21,570 

Rule Fam. and Labeling (major cost) 1,460 $235.26 1,460 - - 

Rule Fam., Labeling (major cost) and Rec.Rec.a 1,694 $282.53 1,626 68 - 

Total 27,879 

Fabricator Nonemployers 

Rule Fam. 5,032 $14.29 4,931 101 - 

Rule Fam. and Labeling (minor cost) 34,413 $20.74 32,004 2,409 - 

Rule Fam. and Labeling (major cost) 2,329 $235.26 885 629 815 

Rule Fam., Labeling (major cost) and Rec.Rec.a 2,703 $282.53 730 811 1,162 

Total 44,478 

Wholesale Employers 

Rule Fam. 30,884 $18.11 30,884 - - 

Rule Fam., Initial Rec. 845 $140.00 845 - - 

Rule Fam., Initial Rec., Rec.Rec.a 2,252 $188.60 2,252 - - 

Rule Fam., Initial Rec., Rec.Rec.a, Initial Labeling 343 $409.56 329 14 - 

Total 34,325 

Wholesale Nonemployers 

Rule Fam. 45,539 $18.11 43,717 1,822 - 

Rule Fam., Initial Rec. 1,247 $140.00 761 249 237 

Rule Fam., Initial Rec., Rec.Rec.a 3,321 $188.60 1,760 764 797 

Rule Fam., Initial Rec., Rec.Rec.a, Initial Labeling 506 $409.56 182 127 197 

Total 50,613 

Retail Employers 

Rule Fam. 202,630 $13.73 202,630 - - 

Total 202,630 

Retail Nonemployers 

Rule Fam. 511,359 $13.73 496,018 15,341 - 

Total 511,359 

All Fabricators, Wholesale and Retail Firms 

All Costs 871,283 - 845,738 

 

22,335 

 

3,208 a The analysis estimates impacts due to rule familiarization, notification, labeling, and initial recordkeeping using an average cost 

that is treated as a fixed cost per firm, although in reality costs will vary by firm. By contrast, recurring recordkeeping (or “Rec. 

Rec.”) costs are estimated as a fixed cost plus a variable cost that is a function of revenue, since these costs are expected to be larger 

for firms with larger sales volumes. These variable costs are estimated to be 0.3% of fabricator revenues and 0.06% of wholesale 

firm revenues. 

5072 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 5-25 

5073 5.4 Summary of Small Business Impacts 

5074 

5075 Table 5-14 presents a summary of the small business impacts from the proposed TSCA Title VI 

5076 Implementation Rule. As indicated, 851,296 small firms (about 97 percent) are expected to have costs 

5077 impacts that are less than one percent of their revenues, 22,133 firms (about 3 percent) are expected to 

5078 experience impacts at levels between one and three percent of their revenue, and 4,369 firms (less than 1 

5079 percent) are expected to incur costs exceeding three percent of their revenues. 

5080 

5081 Note that many of the firms with cost impacts above 1 percent of their revenues are fabricators, 

5082 wholesalers, and retailers with annualized costs less than $250 (as shown in Table 5-13). All fabricators 

5083 except those with recurring recordkeeping costs and all wholesalers except those with initial labeling 

5084 costs that had impacts above 1% of their revenues had annualized costs that were below $250. Note that 

5085 this implies that their revenues were below $25,000). These firms account for 92 percent of the firms 

5086 with cost impacts that are between 1 and 3 percent and 42 percent of the firms with cost impacts that 

5087 exceed 3 percent. 

5088 

Table 5-14: Summary of Small Business Impacts 

Employer Status Firm Type 

Number of 

Affected Small 

Firms 

Number of Firms by Cost-Impact 

Ratio 

<1% 1-3% >3% 

Employers 

Stock Panel Producer 31 25 5 1 

Wood Veneer Laminated Product 5,260 4,873 249 138 

Fabricator 27,879 27,810 68 - 

Wholesale 34,324 34,310 14 - 

Retail 202,630 202,630 - - 

All Firms 270,123 269,648 336 139 

Nonemployers 

Stock Panel Producer - - - - 

Wood Veneer Laminated Product 2,226 659 545 1,021 

Fabricator 44,478 38,550 3,949 1,977 

Wholesale 50,612 46,420 2,961 1,231 

Retail 511,359 496,018 15,341 - 

All Firms 608,675 581,648 22,797 4,230 

All Firms 

Stock Panel Producer 31 25 5 1 

Wood Veneer Laminated Product 7,486 5,532 795 1,159 

Fabricator 72,357 66,360 4,017 1,977 

Wholesale 84,936 80,730 2,975 1,231 

Retail 713,989 698,648 15,341 - 

All Firms 878,798 851,296 23,133 4,369 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-1 

5089 6 Environmental Justice and Other Impacts 

5090 

5091 In addition to the cost analysis presented in Chapter 2, the small business analysis presented in 

5092 Chapter 5, several other types of impacts are important to consider in evaluating the effects of a 

5093 regulation. This chapter presents the incremental impact of the proposed TSCA Title VI Implementation 

5094 Rule on: 

5095 

5096  Environmental Justice, as required by Executive Order 12898–Environmental Justice; 

5097  Employment impact analysis 

5098  Paperwork burden, as required by the Paper Work Reduction Act; 

5099  State and Local Governments, as required by the Unfunded Mandates Reform Act; 

5100  Federalism, as required by Executive Order 13132–Federalism; 

5101  Tribal governments, as required by Executive Order 13175–Consultation and Coordination 

5102 with Indian Tribal Governments; 

5103  The environmental health risk or safety risk to children due to the regulation, as required by 

5104 Executive Order 13045–Protection of Children From Environmental Health & Safety Risks; 

5105 and 

5106  Whether voluntary consensus standards are used in its regulatory activities. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-2 

5107 6.1 Environmental Justice 

5108 

5109 This proposed rule establishes standards that reduce emissions of formaldehyde from composite 

5110 wood products. Formaldehyde exposure may cause a range of health effects including nasopharyngeal 

5111 cancer, sensory irritation, asthma, and female reproductive toxicity. 

5112 

5113 The Economic Analysis for this rule monetizes the benefits from reducing each of these four 

5114 identified health impacts, and estimates total benefits as the sum of these four categories. Benefits 

5115 valuation is done for formaldehyde exposure in five climate zones from nine different housing types (five 

5116 types of new housing and four types of renovated housing), allowing for off-gassing of up to ten years, as 

5117 well as occupational, school, and outside formaldehyde exposure. The population in these climate zones 

5118 and housing types is broken down into broad age and employment categories to assess exposure. 

5119 

5120 Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy on 

5121 Environmental Justice (EJ). Its main provision directs Federal agencies, to the greatest extent practicable 

5122 and permitted by law, to make EJ part of their mission by identifying and addressing, as appropriate, 

5123 disproportionately high and adverse human health or environmental effects of their programs, policies, 

5124 and activities on minority and low-income populations in the U.S. 

5125 

5126 This Environmental Justice analysis expands on the primary analysis by analyzing the impacts 

5127 specifically for minority and low-income populations. The methodology used in this analysis is a 

5128 disaggregation of impacts, i.e. number of cases avoided, by environmental justice groups, specifically 

5129 minority, tribal, and low-income populations. Disaggregation takes into account the differences in 

5130 housing types, climate zones, and age and employment categories, across environmental justice 

5131 populations. Data are the same as used in the total benefits analysis, presented earlier in this Economic 

5132 Analysis, and are taken from the American Community Survey (information on race and ethnicity, age, 

5133 family composition, and incomes: 2007 – 2009), the American Housing Survey (information on housing 

5134 types, age, and renovations: 2009), and the exposure assessment for this rule. 

5135 

5136 The race and ethnicity categories in the American Communities Survey (ACS) are self-reported 

5137 and not mutually exclusive. In order to avoid double-counting populations, all individuals who identified 

5138 as Hispanic separately were counted as such, regardless of any other reported racial category. For non5139 vacant households in which no race or ethnicity data was reported, the ACS reports the previous 

5140 occupant’s racial category, which was used in this analysis. The ACS survey weights take into account 

5141 other sources of demographic information, in addition to race and ethnicity, making the sample nationally 

5142 representative. The ACS also contains detailed information on housing, including age and type of housing 

5143 (mobile home or trailer, single-family detached, single-family attached, apartment, and RVs). Population 

5144 and housing information were combined to estimate the number of cases avoided by environmental 

5145 justice population. As with the total benefits monetization, the number of cases avoided, by 

5146 environmental justice population, were then multiplied by monetization measures (e.g. willingness to pay, 

5147 or cost of illness) to obtain benefits estimates by environmental justice population. This approach 

5148 incorporates differences in housing types across minority and income groups. 

5149 

5150 Table 6-1 and Table 6-2 present the estimated number of adverse health cases avoided for each 

5151 year the regulation is in place. Table 6-1 presents the number of cases by health effect, option, and 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-3 

5152 minority group and Table 6-2 presents the number of cases by health effect, option, income group. Table 

5153 6-3 and Table 6-4 present the number of cases avoided by option aggregated across all health effects by 

5154 minority and income population, respectively. 

5155 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-4 

5156 

Table 6-1: Number of Cases Avoided by Minority Population (Average Number of Cases Avoided 

Per Year of Regulation) 

Analytical Option Cancer Eye Irritation Asthma Fertility Lower Higher Lower Higher Lower Higher 

All Individuals 

Option SE 9 21 22,133 170,214 2,469 3,416 1,501 

Option SI/SC/SCR 10 24 23,650 191,590 2,799 3,864 1,696 

Option SN 11 25 24,154 198,950 2,915 4,019 1,765 

Option CE 7 16 18,015 130,720 1,899 2,627 1,144 

Option CI 8 19 19,563 148,389 2,166 2,988 1,301 

Option NE 39 92 58,492 626,726 9,554 13,235 6,566 

Option NI 40 97 58,494 645,678 9,968 13,800 6,874 

Non-Hispanic White 

Option SE 5 12 12,511 101,464 1,301 1,783 876 

Option SI/SC/SCR 6 14 13,375 114,319 1,477 2,017 989 

Option SN 6 15 13,657 118,743 1,538 2,098 1,028 

Option CE 4 9 10,219 78,039 1,003 1,373 669 

Option CI 5 11 11,076 88,658 1,145 1,562 759 

Option NE 22 53 35,781 376,411 5,004 6,876 3,817 

Option NI 23 55 35,783 387,742 5,222 7,167 3,993 

Non-Hispanic Black 

Option SE 1 3 3,144 23,118 399 532 212 

Option SI/SC/SCR 1 3 3,367 26,011 451 601 240 

Option SN 1 3 3,443 27,008 469 625 249 

Option CE 1 2 2,542 17,703 306 408 162 

Option CI 1 3 2,778 20,096 348 464 184 

Option NE 5 13 6,738 83,156 1,561 2,079 929 

Option NI 6 13 6,738 85,808 1,629 2,170 974 

All Hispanic 

Option SE 2 4 4,805 31,388 551 789 276 

Option SI/SC/SCR 2 5 5,116 35,314 626 895 314 

Option SN 2 5 5,222 36,666 652 932 327 

Option CE 1 3 3,902 24,102 423 606 210 

Option CI 2 4 4,234 27,352 484 692 240 

Option NE 8 19 12,361 115,160 2,133 3,053 1,213 

Option NI 8 20 12,362 118,593 2,227 3,187 1,272 

Non-Hispanic Native American or Alaskan Indian 

Option SE 0 0 108 942 17 23 10 

Option SI/SC/SCR 0 0 117 1,075 19 26 11 

Option SN 0 0 120 1,121 20 27 12 

Option CE 0 0 87 727 13 17 7 

Option CI 0 0 97 837 15 20 9 

Option NE 0 1 267 3,334 62 84 41 

Option NI 0 1 267 3,450 65 88 43 

Non-Hispanic Other Race 

Option SE 1 2 1,566 13,301 201 289 127 

Option SI/SC/SCR 1 2 1,675 14,870 226 325 143 

Option SN 1 2 1,712 15,412 235 337 149 

Option CE 1 1 1,265 10,149 154 222 97 

Option CI 1 1 1,377 11,446 175 250 109 

Option NE 3 8 3,345 48,665 793 1,142 566 

Option NI 3 8 3,345 50,085 825 1,187 592 

Option SCR is the proposed option. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-5 

5157 

Table 6-2: Number of Cases Avoided by Income Population (Average Number of Cases Avoided 

Per Year of Regulation) 

Analytical Option Cancer Eye Irritation Asthma Fertility Lower Higher Lower Higher Lower Higher 

Number of Cases Avoided in Typical Year 

All Individuals 

Option SE 9 21 22,133 170,214 2,469 3,416 1,501 

Option SI/SC/SCR 10 24 23,650 191,590 2,799 3,864 1,696 

Option SN 11 25 24,154 198,950 2,915 4,019 1,765 

Option CE 7 16 18,015 130,720 1,899 2,627 1,144 

Option CI 8 19 19,563 148,389 2,166 2,988 1,301 

Option NE 39 92 58,492 626,726 9,554 13,235 6,566 

Option NI 40 97 58,494 645,678 9,968 13,800 6,874 

Individuals Living Above Poverty Line 

Option SE 8 18 17,551 142,637 1,997 2,743 1,223 

Option SI/SC/SCR 9 20 18,682 160,241 2,260 3,095 1,378 

Option SN 9 21 19,056 166,305 2,352 3,217 1,433 

Option CE 6 14 14,341 109,557 1,536 2,108 933 

Option CI 7 15 15,517 124,097 1,748 2,392 1,057 

Option NE 33 77 48,806 530,167 7,758 10,677 5,359 

Option NI 34 80 48,808 545,677 8,086 11,117 5,601 

Individuals Living Below Poverty Line

Option SE 1 4 4,551 27,046 442 631 278 

Option SI/SC/SCR 2 4 4,935 30,750 506 721 318 

Option SN 2 4 5,064 32,023 528 752 332 

Option CE 1 3 3,647 20,756 341 486 211 

Option CI 1 3 4,017 23,829 392 558 243 

Option NE 6 15 9,641 94,701 1,683 2,397 1,207 

Option NI 6 16 9,642 98,084 1,766 2,514 1,274 

Option SCR is the proposed option. 

5158 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-6 

Table 6-3: Summary of Number of Cases Avoided by Race and Ethnicity 

Analytical Option 

Population 

Affected 

(thousands) 

Population 

Affected as Percent 

of Total Affected 

Population 

Total Lower 

Estimates of Cases 

Avoided 

Total Higher 

Estimate of Cases 

Avoided 

Percentage of 

Total Cases 

Avoided 

Lower Estimate

Percentage of 

Total Cases 

Avoided 

Higher Estimate 

All Individuals 

Option SE 

106,057 100.0% 

 26,112 175,152 100% 100% 

Option SI/SC/SCR 28,156 197,175 100% 100% 

Option SN 28,844 204,759 100% 100% 

Option CE 21,066 134,508 100% 100% 

Option CI 23,037 152,696 100% 100% 

Option NE 74,650 646,619 100% 100% 

Option NI 75,378 666,449 100% 100% 

Non-Hispanic White 

Option SE 

69,169 65.2% 

 14,693 104,135 56.3% 59.5% 

Option SI/SC/SCR 15,847 117,339 56.3% 59.5% 

Option SN 16,230 121,885 56.3% 59.5% 

Option CE 11,895 80,090 56.5% 59.5% 

Option CI 12,985 90,989 56.4% 59.6% 

Option NE 44,625 387,157 59.8% 59.9% 

Option NI 45,022 398,957 59.7% 59.9% 

Non-Hispanic Black 

Option SE 

12,540 11.8% 

 3,756 23,865 14.4% 13.6% 

Option SI/SC/SCR 4,059 26,855 14.4% 13.6% 

Option SN 4,163 27,885 14.4% 13.6% 

Option CE 3,010 18,275 14.3% 13.6% 

Option CI 3,310 20,746 14.4% 13.6% 

Option NE 9,233 86,177 12.4% 13.3% 

Option NI 9,347 88,966 12.4% 13.3% 

Non-Hispanic Other Race 

Option SE 

7,381 7.0% 

 1,896 13,720 7.3% 7.8% 

Option SI/SC/SCR 2,045 15,340 7.3% 7.8% 

Option SN 2,096 15,900 7.3% 7.8% 

Option CE 1,516 10,468 7.2% 7.8% 

Option CI 1,662 11,807 7.2% 7.7% 

Option NE 4,707 50,381 6.3% 7.8% 

Option NI 4,765 51,873 6.3% 7.8% 

Non-Hispanic Native American or Alaskan Indian 

Option SE 

652 0.6% 

 134 975 0.5% 0.6% 

Option SI/SC/SCR 148 1,112 0.5% 0.6% 

Option SN 152 1,160 0.5% 0.6% 

Option CE 108 752 0.5% 0.6% 

Option CI 120 866 0.5% 0.6% 

Option NE 369 3,459 0.5% 0.5% 

Option NI 375 3,582 0.5% 0.5% 

All Hispanic 

Option SE 

16,318 15.4% 

 5,633 32,458 21.6% 18.5% 

Option SI/SC/SCR 6,057 36,528 21.5% 18.5% 

Option SN 6,203 37,930 21.5% 18.5% 

Option CE 4,537 24,922 21.5% 18.5% 

Option CI 4,960 28,288 21.5% 18.5% 

Option NE 15,715 119,444 21.1% 18.5% 

Option NI 15,869 123,071 21.1% 18.5% 

Option SCR is the proposed option. 

5159 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-7 

Table 6-4: Summary of Number of Cases Avoided by Income 

Analytical Option 

Population 

Affected 

(thousands) 

Population 

Affected as 

Percent of Total 

Affected 

Population 

Total Lower 

Estimates of Cases 

Avoided 

Total Higher 

Estimate of Cases 

Avoided 

Percentage of 

Total Cases 

Avoided 

Lower Estimate 

Percentage of 

Total Cases 

Avoided 

Higher Estimate

All Individuals 

Option SE 

106,057 100.0% 

 26,543 175,572 100% 100% 

Option SI/SC/SCR 28,611 197,670 100% 100% 

Option SN 29,307 205,281 100% 100% 

Option CE 21,440 134,798 100% 100% 

Option CI 23,438 153,049 100% 100% 

Option NE 75,298 648,430 100% 100% 

Option NI 76,026 668,305 100% 100% 

Individuals Living Below Poverty Line 

Option SE 

13,081 12.3% 

5,211 27,891 20.3% 16.0% 

Option SI/SC/SCR 5,683 31,722 20.5% 16.1% 

Option SN 5,843 33,038 20.6% 16.2% 

Option CE 4,156 21,400 20.0% 15.9% 

Option CI 4,599 24,574 20.2% 16.1% 

Option NE 12,108 98,058 16.8% 15.2% 

Option NI 12,229 101,607 16.8% 15.3% 

Individuals Living Above Poverty Line 

Option SE 

92,631 87.3% 

20,459 146,312 79.5% 83.7% 

Option SI/SC/SCR 21,939 164,406 79.3% 83.6% 

Option SN 22,435 170,640 79.2% 83.5% 

Option CE 16,609 112,349 79.8% 83.7% 

Option CI 18,070 127,285 79.5% 83.5% 

Option NE 59,846 545,209 83.0% 84.5% 

Option NI 60,307 561,338 83.0% 84.4% 

Option SCR is the proposed option. 

5160 

5161 

5162 Table 6-5 presents a summary of benefits for minority populations. Benefits estimates are 

5163 presented, for each analytical option, in both totals for each environmental justice population group and 

5164 then as estimates for individuals within that group. As with the total benefits analysis for this rule, a 

5165 range of estimates is presented: from lower to higher. Estimates are reported in 2010 dollars, annualized 

5166 at a 3% rate. Results indicate that disaggregation of total benefits by population groups leads to variation 

5167 in the range of individual benefits, by minority population. The population of all individuals affected by 

5168 the rule shows the same estimates reported in the total benefits analysis; annualized benefits ranging from 

5169 $162 to $289 million for the options with emissions standards that are consistent with the statute, and 

5170 $1.53 to $2.73 per individual. The affected Non-Hispanic White population accounted for 65 percent of 

5171 the total affected population, accrued 54 percent of the total annualized benefits, and experienced average 

5172 annualized benefits ranging from $1.26 to $2.25 per individual. In comparison, benefits for minority 

5173 populations are higher. Minority populations represent about 35 percent of the individuals affected by the 

5174 rule and are estimated to accrue about 46 percent of the proposed rule’s total benefits. The affected Non5175 Hispanic Black population accounted for 12 percent of the total affected population, accrued 15 to 16 

5176 percent of the total annualized benefits, and experienced average annualized benefits ranging from $2.05 

5177 to $3.49 per individual. The affected Hispanic population accounted for 15 percent of the total affected 

5178 population, accrued 22 percent of the total annualized benefits, and experienced average annualized 

5179 benefits ranging from $2.17 to $3.94 per individual. The affected Non-Hispanic Native American or 

5180 Alaskan Indian population accounted for 0.6 percent of the total affected population, accrued 0.7 percent 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-8 

5181 of the total annualized benefits, and experienced average annualized benefits ranging from $1.66 to $2.93 

5182 per individual. 

5183 

5184 Following the Census methodology, low-income families are identified in this analysis as 

5185 having annual incomes below the poverty threshold. The poverty threshold, as determined by the U.S. 

5186 Census Bureau, varies by family size, age, and composition and is adjusted for inflation. 

5187 

5188 Table 6-6 presents a summary of benefits for low-income populations. As with the total benefits 

5189 analysis for this rule, a range of estimates is presented: from lower to higher. Estimates are reported in 

5190 2010 dollars, annualized at a 3% rate. Results indicate that disaggregation of total benefits by population 

5191 groups leads to variation in the range of individual benefits, by income category. The population of all 

5192 individuals affected by the rule shows the same estimates reported in the total benefits analysis; 

5193 annualized benefits ranging from $162 to $289 million for the options with emissions standards that are 

5194 consistent with the statute, and $1.53 to $2.73 per individual. The affected low-income population 

5195 accounted for 12 percent of the total affected population, accrued 18 percent of the total annualized 

5196 benefits, and experienced average annualized benefits ranging from $2.17 to $3.99 per individual. 

5197 

5198 This Environmental Justice analysis shows slightly larger individual benefits for affected 

5199 minority and low-income population groups (see Table 6-7). Minority populations represent 35 percent of 

5200 the individuals affected by the rule and are estimated to accrue 46 percent of the proposed rule’s total 

5201 benefits. Individuals living below the poverty line represent 12 percent of the individuals affected by the 

5202 rule and are estimated to accrue 15 to 16 percent of the proposed rule’s total benefits. Given these 

5203 results, EPA has determined that this proposed rule will not have disproportionally high and adverse 

5204 human health or environmental effects on any population, including any minority or low-income 

5205 population. These proposed standards would reduce emissions of formaldehyde from composite wood 

5206 products for all populations that are exposed, with slightly larger benefits for individuals from minority or 

5207 low-income affected populations. 

5208 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-9 

Table 6-5: Summary of Benefits by Race and Ethnicity (annualized at 3% rate) 

Analytical Option 

Population 

Affected 

(thousands) 

Population 

Affected as Percent 

of Total Affected 

Population 

Total Benefits 

Lower Estimate 

(millions 2010$ or 

percent of total) 

Total Benefits 

Higher Estimate 

(millions 2010$ or 

percent of total) 

Total Benefits per 

Affected Individual 

Lower Estimate 

(in dollars) 

Total Benefits per 

Affected Individual

Higher Estimate 

(in dollars) 

All Individuals 

Option SE 

106,057 100.0% 

$162 $245 $1.53 $2.31 

Option SI/SC/SCR $184 $278 $1.74 $2.62 

Option SN $192 $289 $1.81 $2.73 

Option CE $125 $188 $1.18 $1.77 

Option CI $142 $214 $1.34 $2.02 

Option NE $639 $970 $6.02 $9.15 

Option NI $667 $1,013 $6.29 $9.55 

Non-Hispanic White 

Option SE 

69,169 65.2% 

53.5% 53.7% $1.26 $1.90 

Option SI/SC/SCR 53.6% 53.8% $1.43 $2.16 

Option SN 53.6% 53.8% $1.49 $2.25 

Option CE 53.6% 53.8% $0.97 $1.46 

Option CI 53.7% 53.8% $1.11 $1.67 

Option NE 53.3% 53.6% $4.93 $7.52 

Option NI 53.3% 53.6% $5.14 $7.85 

Non-Hispanic Black 

Option SE 

12,540 11.8% 

15.9% 15.1% $2.05 $2.96 

Option SI/SC/SCR 15.8% 15.1% $2.32 $3.35 

Option SN 15.8% 15.1% $2.42 $3.49 

Option CE 15.8% 15.1% $1.57 $2.26 

Option CI 15.8% 15.1% $1.79 $2.58 

Option NE 16.0% 15.2% $8.14 $11.77 

Option NI 16.0% 15.2% $8.49 $12.29 

Non-Hispanic Other Race 

Option SE 

7,381 7.0% 

8.1% 8.3% $1.78 $2.76 

Option SI/SC/SCR 8.0% 8.3% $2.01 $3.11 

Option SN 8.0% 8.2% $2.09 $3.23 

Option CE 8.1% 8.3% $1.36 $2.11 

Option CI 8.0% 8.2% $1.55 $2.39 

Option NE 8.2% 8.5% $7.14 $11.12 

Option NI 8.2% 8.4% $7.43 $11.57 

Non-Hispanic Native American or Alaskan Indian 

Option SE 

652 0.6% 

0.7% 0.6% $1.66 $2.43 

Option SI/SC/SCR 0.7% 0.7% $1.92 $2.80 

Option SN 0.7% 0.7% $2.01 $2.93 

Option CE 0.7% 0.7% $1.28 $1.88 

Option CI 0.7% 0.7% $1.49 $2.17 

Option NE 0.6% 0.6% $6.29 $9.27 

Option NI 0.6% 0.6% $6.62 $9.74 

All Hispanic 

Option SE 

16,318 15.4% 

21.8% 22.2% $2.17 $3.33 

Option SI/SC/SCR 21.9% 22.2% $2.47 $3.78 

Option SN 21.9% 22.2% $2.57 $3.94 

Option CE 21.8% 22.1% $1.67 $2.55 

Option CI 21.9% 22.2% $1.91 $2.92 

Option NE 21.8% 22.1% $8.53 $13.12 

Option NI 21.8% 22.1% $8.91 $13.71 

Option SCR is the proposed option. 

5209 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-10 

5210 

Table 6-6: Summary of Benefits by Poverty Status (annualized at 3% rate) 

Analytical Option 

Population 

Affected 

(thousands) 

Population 

Affected as 

Percent of Total 

Affected 

Population 

Total Benefits 

Lower Estimate 

(millions 2010$ or 

percent of total) 

Total Benefits 

Higher Estimate 

(millions 2010$ or 

percent of total) 

Total Benefits 

per Affected 

Individual 

Lower Estimate 

(in dollars) 

Total Benefits 

per Affected 

Individual 

Higher Estimate

(in dollars) 

All Individuals 

Option SE 

106,057 100.0% 

$162 $245 $1.53 $2.31 

Option SI/SC/SCR $184 $278 $1.74 $2.62 

Option SN $192 $289 $1.81 $2.73 

Option CE $125 $188 $1.18 $1.77 

Option CI $142 $214 $1.34 $2.02 

Option NE $639 $970 $6.02 $9.15 

Option NI $667 $1,013 $6.29 $9.55 

Individuals Living Below Poverty Line 

Option SE 

13,081 12.3% 

17.5% 17.8% $2.17 $3.33 

Option SI/SC/SCR 17.7% 18.0% $2.49 $3.82 

Option SN 17.7% 18.0% $2.60 $3.99 

Option CE 17.5% 17.8% $1.67 $2.56 

Option CI 17.7% 18.0% $1.93 $2.95 

Option NE 17.2% 17.4% $8.38 $12.90 

Option NI 17.3% 17.5% $8.80 $13.55 

Individuals Living Above Poverty Line 

Option SE 

92,631 87.3% 

81.4% 81.1% $1.43 $2.15 

Option SI/SC/SCR 81.3% 80.9% $1.62 $2.43 

Option SN 81.2% 80.9% $1.68 $2.53 

Option CE 81.4% 81.1% $1.10 $1.64 

Option CI 81.2% 80.9% $1.25 $1.87 

Option NE 81.8% 81.5% $5.64 $8.54 

Option NI 81.7% 81.4% $5.88 $8.90 

Option SCR is the proposed option. 

The number of individuals above and below the poverty line does not sum to the total number of individuals because poverty status could 

not be determined for some individuals. 

5211 

Table 6-7: Summary of Benefits by Race, Ethnicity, and Poverty Status under the Proposed Option 

(annualized at 3% rate) 

Population Affected 

Population 

Affected 

(thousands) 

Population 

Affected as 

Percent of 

Total Affected 

Population 

Total Benefits

Lower 

Estimate 

(millions 

2010$) 

Total Benefits 

Higher Estimate 

(millions 2010$) 

Total Benefits 

Lower Estimate

(% of total 

affected 

population) 

Total Benefits 

Higher Estimate

(% of total 

affected 

population) 

All Individuals 106,057 100% $184 $278 100.0% 100.0% 

Minority Race/Ethnicity 36,888 35% $86 $128 46.4% 46.2% 

Poverty Status 13,081 12% $28 $44 15.4% 15.7% 

5212 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-11 

Table 6-8: Summary of Number of Cases Avoided by Race, Ethnicity, and Poverty Status under the Proposed 

Option (annualized at 3% rate) 

Population Affected Cancer Eye Irritation Asthma Fertility 

Total 

lower higher lower higher lower higher lower higher

Number of Cases Avoided

All Individuals 10 24 23,650 191,590 2,799 3,864 1,696 28,156 197,175

Minority Race/Ethnicity 4 10 10,275 77,271 1,322 1,847 708 12,309 79,836

Poverty Status 2 4 4,935 30,750 506 721 318 5,761 31,793

5213 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-12 

5214 6.2 Employment Impact Analysis 

5215 

5216 While a standalone analysis of employment impacts is not included in a standard cost-benefit 

analysis61 5217 , such an analysis is of particular concern in the current economic climate of sustained levels of 

5218 high unemployment. Executive Order 13563, states, “Our regulatory system must protect public health, 

5219 welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and 

5220 job creation” (emphasis added). For this rule, EPA presents a qualitative assessment of the potential for 

5221 employment impacts in the short and long term for producers, fabricators, distributors, and retailers of 

5222 composite wood products and goods made from them. 

5223 

5224 An environmental regulation can be understood as an increase in demand for a particular output: 

5225 environmental quality. Meeting this new demand can result in increased demand for the various factors 

5226 of production (including labor) available to the economy. However, regulated sectors generally have to 

5227 rely on revenues generated by their other (market) outputs to cover the costs of satisfying society's 

5228 increased demand for environmental quality. This increase in the costs can lead to reduced demand by 

5229 regulated sectors for labor and other factors of production. The net effect of an environmental regulation 

5230 on employment in the regulated sectors and the overall economy is therefore indeterminate. The costs 

5231 imposed on directly regulated sectors may affect their competitive position and put some specific jobs at 

5232 risk. At the same time, environmental regulations may create jobs in other sectors, e.g. in the 

5233 environmental protection sector. Tracing out these opposing effects against the temporal dynamics of 

5234 labor markets is complex and makes deriving estimates of how regulations will impact economy-wide net 

5235 employment a difficult task. 

5236 

5237 Adding to this complexity, effects on employment are also likely to change over time. 

5238 Employment in some sectors will be affected at the time of promulgation or when a regulation becomes 

5239 effective, while others will only be affected farther into the future. When the economy is at full 

5240 employment, an environmental regulation is unlikely to have a considerable impact on long run net 

5241 employment; instead, labor would primarily be reallocated from one productive use to another, e.g. from 

5242 producing electricity or steel to producing pollution abatement equipment. Theory and peer-reviewed 

5243 published empirical evidence support the argument that, in the case of full employment, the net 

5244 employment effects from environmental regulation are likely to be small and transitory even in the 

regulated sector and therefore would have an imperceptible impact on the macro economy.62 5245 

5246 

5247 On the other hand, Schmalansee and Stavins (2011) point out that positive net employment 

5248 effects are possible in the near term, during a period of sustained unemployment, due to the potential 

5249 hiring of previously unemployed workers by the regulated sector to help meet new requirements (e.g., to 

5250 install new equipment) or by the environmental protection sector to produce new abatement capital. On 

5251 the other hand, it is also theoretically possible to have near term negative net employment effects. For 

5252 example, during periods of sustained high unemployment it may take workers displaced by regulations 

5253 longer to find alternative employment. In the longer term, the net effect on employment is more difficult 

5254 to predict and will depend on the way in which the related industries respond to the regulatory 

5255 requirements and whether the labor market remains in sustained disequilibrium or returns to full 

5256 employment. There are also significant methodological challenges in assessing the net employment 

5257 impacts when the economy is not at full employment. For example, the opportunity cost of labor is more 

5258 difficult to assess, labor demand caused by an environmental regulation may have positive external 

5259 effects (the unemployment rate is reduced as workers are hired), and reductions in labor may give rise to 

 61 Except to the extent that labor costs are part of total costs in a benefit cost analysis. 

62 See Berman and Bui 2001, Morgenstern, et al. 2002. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-13 

5260 negative external effects (as higher unemployment rates can be associated with longer durations of 

5261 unemployment). 

5262 

5263 Section 6.2.1 discusses the qualitative assessment of immediate and short term impacts. Section 

5264 6.2.2 describes longer term impacts, focusing primarily on annual, or ongoing, employment impacts in the 

5265 regulated sectors. 

5266 

5267 6.2.1 Immediate and Short Term Employment Impacts 

5268 

5269 There are a number of initial activities that firms may need to perform to comply with this rule, 

5270 depending on the type of firm (panel producer, fabricator, wholesaler, or retailer) and their baseline status. 

5271 In the short term these activities include: 

5272 

5273 Rule Familiarization: Firms will need to read the rule in order to understand the requirements; 

5274 

5275 Testing and Certification: Panel producers will need to perform formaldehyde emission testing on 

5276 their composite wood products and attain certification from an accredited TPC. These entities must 

5277 undergo qualifying tests at a TPC lab, obtain an on-site audit from a TPC, implement quality control 

5278 systems, and train quality control employees in order to receive initial certification; 

5279 

5280 Recordkeeping: Some firms will need to revise their recordkeeping systems in order to comply with 

5281 the chain of custody requirements in the rule; and 

5282 

5283 Labeling: Firms that package or repackage composite wood products or finished goods containing 

5284 composite wood products will need to modify their labels to include their name, the date the finished 

5285 good was produced, and a statement of compliance. 

5286 

5287 Furthermore, some panel producers may need to change their production processes and raw 

5288 materials in order to meet the emission levels required by the rule or to achieve NAF certification. Some 

5289 panel producers may choose to install an on-site lab for quality control testing, so that they can receive 

5290 test results (and thus ship tested lots) quicker than if they hired an off-site lab to perform the testing. And 

5291 some laminators may choose to switch to NAF resins in order to avoid being considered a panel producer 

5292 under the rule. 

5293 

5294 The average first year cost per firm is shown in Table 6-9. There will be a range of actual costs 

5295 incurred, depending on such factors as whether or not the firm is in compliance with the CARB ATCM in 

5296 the baseline; whether or not the firm’s existing recordkeeping systems are sufficient to comply with the 

5297 rule’s chain of custody requirements; the size and complexity of the firm’s operations; and whether or not 

5298 a laminator uses NAF resins and compliant platforms (and thus whether it is considered a platform 

5299 producer or a fabricator under the rule). However, for the sectors with the largest number of firms 

5300 affected by the rule (fabricators, wholesalers, and retailers), the average cost per firm in the first year is 

5301 relatively modest, and is unlikely to create significant employment effects. To the extent that firms in 

5302 these industries have costs that are significantly above average, they will typically be larger firms that 

have additional resources to comply with the rule’s requirements.63 5303 

5304 

5305 Costs per firm are higher for panel producers and laminators. Costs are likely to be the highest 

5306 for stock panel producers that are not CARB certified in the baseline, and for laminators that are 

 63 The average employer firms in the affected fabricator, wholesale, and retail industries have 26, 17, and 32 employees 

per firm, respectively. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-14 

5307 considered panel producers. The average number of employees in employer firms in the affected NAICS 

5308 codes is 38 employees per firm for stock panel producers and 26 employees per firm for laminators. 

5309 However, there are only 11 stock panel producers in the U.S. that are not CARB certified for any of their 

5310 products and another 5 that are CARB certified for some but not all of their products. While the analysis 

5311 assumes that 150 to 277 U.S. laminators will be considered panel producers because they will continue to 

5312 use NAF resins, information is not currently available to indicate the particular industries such firms are 

5313 likely to be in, the specific types of products they make, their firm sizes or production volumes, or other 

5314 characteristics that would provide insights into how their employment might be affected by the rule. 

5315 

Table 6-9: Average First Year Cost per Firm for Affected Firms 

Type of Firm

Total First Year Cost 

($ million) Number of Firms 

Average First Year Cost per 

Firm 

Low End 

Scenario 

High End 

Scenario 

Low End 

Scenario 

High End 

Scenario 

Low End 

Scenario 

High End 

Scenario 

Stock Panel Producers $3 $3 62 62 $48,387 $48,387 

Laminators 1 $55 $102 7,486 13,875 $7,347 $7,351 

Fabricators $91 $57 72,215 65,826 $1,260 $866 

Wholesalers $71 $71 85,560 85,560 $830 $830 

Retailers $215 $215 759,048 759,048 $283 $283 1 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased 

particleboard, MDF or veneer core platform. This includes both laminators that use NAF resins to affix veneer to a 

compliant platform (that are considered to be fabricators under the proposed rule), and laminators that do not use NAF 

resins (that are considered panel producers under the proposed rule). Low and high end scenarios reflect the estimated 

number of laminators and the number of product lines certified per firm, not the low and high costs for each category 

of entities.

5316 

5317 6.2.2 Longer Term Employment Impacts 

5318 

5319 Determining the direction of ongoing employment effects in the regulated industry, in the longer 

5320 term, is challenging due to competing effects. Complying with the new or more stringent regulation 

5321 requires additional inputs, including labor, and may alter the relative proportions of labor and capital used 

5322 by regulated firms in their production processes. Morgenstern, Pizer and Shih (2002) demonstrate that 

5323 environmental regulations can be understood as requiring regulated firms to add a new output 

5324 (environmental quality) to their product mixes. Although legally compelled to satisfy this new demand, 

5325 regulated firms have to finance this additional production with the proceeds of sales of their other 

5326 (market) products. Satisfying this new demand requires additional inputs, including labor, and may alter 

5327 the relative proportions of labor and capital used by regulated firms in their production processes. 

5328 

5329 More specifically, Morgenstern, Pizer, and Shih (2002) decompose the effect of regulation on net 

5330 employment in the regulated sector into the following three subcomponents:

5331 

5332  The Demand Effect: higher production costs from complying with the regulation will raise 

5333 market prices in regulated industries, reducing consumption (and production) of their output, 

5334 thereby reducing demand for labor within the regulated industry. The “extent of this effect 

5335 depends on the cost increase passed on to consumers as well as the demand elasticity of 

5336 industry output” (p. 416). 

5337 

5338  The Cost Effect: Assuming that the capital/labor ratio in the production process is held fixed, 

5339 as “production costs rise, more inputs, including labor, are used to produce the same amount 

5340 of output,” (p. 416). For example, to reduce pollutant emissions while holding output levels 

5341 constant, regulated firms may require additional labor. 

5342 
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January 27, 2012 6-15 

5343  The Factor-Shift Effect: Regulated firms’ production technologies may be more or less labor 

5344 intensive after complying with the regulation (i.e., more or less labor is required relative to 

5345 capital per dollar of output). “Environmental activities may be more labor intensive than 

5346 conventional production,” meaning that “the amount of labor per dollar of output will rise.” 

5347 However, activities may, instead, be less labor intensive because “cleaner operations could 

5348 involve automation and less employment, for example” (p. 416). 

5349 

5350 The demand effect is expected to have an unambiguously negative effect on employment, the cost 

5351 effect to have an unambiguously positive effect on employment, and the factor-shift effect to have an 

5352 ambiguous effect on employment. Without more information with respect to the magnitudes of these 

5353 competing effects, it is not possible to predict the total effect an environmental regulation will have on 

5354 overall employment levels in the regulated sector. However, regulations that impose smaller costs at the 

5355 firm level are less likely to create noticeable net employment impacts (whether positive or negative) than 

5356 regulations with more significant cost impacts. 

5357 

5358 Morgenstern et al. estimated the effects of pollution abatement expenditures on net employment 

5359 in four highly polluting/regulated sectors (pulp and paper, plastics, steel, and petroleum refining). They 

5360 conclude that increased abatement expenditures generally have not caused a significant change in net 

5361 employment in those sectors. More specifically, their results show that, on average across the industries 

5362 studied, each additional $1 million (1987$) spent on pollution abatement results in a (statistically 

5363 insignificant) net increase of 1.5 jobs. While the specific sectors Morgenstern et al. examined are 

5364 different than the sectors considered here, the methodology that Morgenstern et al. developed is still an 

5365 informative way to qualitatively assess the effects of this rulemaking on employment in the regulated 

5366 sector. 

5367 

5368 The activities required for compliance with the rule in the longer term include the following: 

5369 

5370 Testing and Certification: Once certified, a panel producer is required to conduct on-going small 

5371 scale quality control testing, submit reports to the certifying TPC, and receive on-site audits and large 

5372 chamber testing to maintain its certified status; 

5373 

5374 Recordkeeping: Firms that import, produce, or manufacture composite wood products must keep 

5375 records showing the date of purchase of the composite wood product, the supplier, and all precautions 

5376 taken to ensure that the product meets emissions standards; and 

5377 

5378 Labeling: Firms that package or repackage composite wood products or finished goods containing 

5379 composite wood products will need to modify their labels to include their name, the date the finished 

5380 good was produced, and a statement of compliance. 

5381 

5382 Furthermore, panel producers and laminators that changed their raw materials inputs will continue to 

5383 use the alternative materials. 

5384 

5385 The average subsequent year cost per firm is shown in Table 6-10. Costs in subsequent years are 

5386 less than the cost in the first year. There will be a range of actual costs incurred, based on the factors 

5387 described above for the first year costs. As with the first year costs, the average cost per firm for the 

5388 sectors with the largest number of firms affected by the rule (fabricators, wholesalers, and retailers), is 

5389 relatively modest and is unlikely to create significant employment effects for a typical firm. Costs per 

5390 firm are higher for panel producers and laminators, particularly for stock panel producers that are not 

5391 CARB certified in the baseline, and for laminators that are considered panel producers. 

5392 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-16 

Table 6-10: Average Subsequent Year Cost per Firm for Affected Firms 

Type of Firm

Total Subsequent Year 

Cost ($ million per year) Number of Firms 

Average Subsequent Year 

Cost per Firm 

Low End 

Scenario 

High End 

Scenario 

Low End 

Scenario 

High End 

Scenario 

Low End 

Scenario 

High End 

Scenario 

Stock Panel Producers $2 $2 62 62 $32,258 $32,258 

Laminators 1 $17 $30 7,486 13,875 $2,271 $2,162 

Fabricators $24 $20 72,215 65,826 $332 $304 

Wholesalers $14 $14 85,560 85,560 $164 $164 

Retailers - - 759,048 759,048 - -0 1 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased 

particleboard, MDF or veneer core platform. This includes both laminators that use NAF resins to affix veneer to a 

compliant platform (that are considered to be fabricators under the proposed rule), and laminators that do not use NAF 

resins (that are considered panel producers under the proposed rule). Low and high end scenarios reflect the estimated 

number of laminators and the number of product lines certified per firm, not the low and high costs for each category 

of entities.

5393 

5394 There are several reasons that the estimates from Morgenstern et al. cannot reasonably be applied 

5395 in this setting to estimate the employment impacts of this rule. First, the industries regulated by this rule 

5396 are not among the four sectors analyzed by Morgenstern et al, and they are different enough in structure 

5397 that estimates would not be directly comparable to the pulp and paper industry that was included in the 

5398 study. Also, Morgenstern et al. focused on pollution abatement costs rather than the types of certification, 

5399 testing, chain of custody, and labeling required by this rule. Finally, the lack of published, peer-reviewed 

5400 research on employment impacts from environmental regulation on the composite wood industry limits 

5401 the ability to defensibly estimate employment impacts of emission standards for composite wood 

5402 products. 

5403 

5404 The three effects described by Morgenstern, Pizer, and Shih can be described for this rule, but the 

5405 magnitudes cannot be estimated. Affected firms will face higher costs to produce and sell their products, 

5406 as certification, quality control procedures, and/or recordkeeping are required for compliance. Economic 

5407 theory, outlined by Morgenstern et al., suggests that the demand effect will have a negative impact on 

5408 employment in the regulated sector. As firms face higher costs of production, market prices for outputs 

5409 will rise and consumer demand will decline, reducing the quantity produced. But the size of the demand 

5410 effect cannot be quantified in this case because information about cost pass through to consumers is not 

5411 available for the regulated sectors. The cost effect reflects the increase in employment required for firms 

5412 to continue producing the same amount of output as prior to the regulation but without elasticity 

5413 information for the markets affected by the rule, it is not possible to determine how production may 

5414 change. The factor shift effect may be positive if quality control, recordkeeping, and other measures 

5415 required by the rule are more labor-intensive than the firms’ ordinary operations, but the relative labor 

5416 intensity is not known. Because the magnitude of these three effects is not known, the net impact on 

5417 employment cannot be estimated. 

5418 

5419 

5420 6.2.3 Summary of Employment Impacts 

5421 

5422 The theoretical model developed in Morgenstern et al. cannot predict the net employment 

5423 impacts in the regulated sectors due to the competing effects: the demand effect is negative, the cost 

5424 effect is positive, and the factor shift effect is ambiguous. Therefore the overall effect is ambiguous. 

5425 Because information is not available on the magnitude of each component effect, the overall net effect on 

5426 employment cannot be determined. For example if there were two negative effects (assumes the factor5427 shift effect is negative) and one positive effect the positive effect might dominate both negative effects, 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-17 

5428 depending on their magnitudes, so the overall net effect depends on the magnitude of the competing 

5429 effects. 

5430 

5431 Other uncertainties that characterize this analysis include: uncertainties about firms’ adjustments 

5432 of capital and labor in response to the regulation (factor shift effect); uncertainties regarding labor 

5433 intensities of different equipment and choice of resin types to comply with the standards; uncertainties 

5434 about the types of technologies that may be used for quality control programs; uncertainty about how 

5435 relative market shares of domestic production of composite wood products versus imports may change 

5436 over time; and uncertainties about how demand for composite wood products is affected by business 

5437 cycle fluctuations. 

5438 

5439 Given the current level of unemployment, net positive employment effects are possible, 

5440 especially in the near term, due to the potential hiring of idle labor resources by the regulated sector to 

5441 plan for and meet new requirements. In the future, when full employment is expected to return, any 

5442 changes in employment levels in the regulated sector due to this program are expected to be mostly offset 

5443 by employment changes in other sectors. 

5444 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-18 

5445 6.3 Paperwork Burden Analysis 

5446 

5447 This section presents a summary of the burden and associated costs for the respondents associated 

5448 with the recordkeeping and reporting requirements of the proposed TSCA Title VI Implementation Rule. 

5449 The detailed paperwork burden analysis is presented in the information collection request (ICR) 

5450 supporting statement for this proposed rulemaking. It provides the average annual burden and cost 

5451 estimates for the next three years of the program. 

5452 

5453 The paperwork burden and associated costs include the activity types listed below. Note that not 

5454 all entities will incur burden or costs from these activities because they may already be meeting the 

5455 requirements under the CARB ATCM and/or their existing recordkeeping and labeling systems may 

5456 already be sufficient. 

5457 

5458  Rule Familiarization: All respondents will need to read the rule in order to understand 

5459 the requirements; 

5460  Testing and Certification: All composite panel producers will need to perform 

5461 formaldehyde emission testing on their composite wood products and attain certification 

5462 from an accredited TPC. These entities must undergo qualifying tests at a TPC lab, 

5463 obtain an on-site audit from a TPC, implement quality control systems, and train quality 

5464 control employees in order to receive initial certification. Once certified, a mill is 

5465 required to conduct on-going small scale quality control testing, submit monthly reports 

5466 to the certifying TPC, and receive quarterly on-site audits and large chamber testing to 

5467 maintain its certified status. Mills that produce products made with NAF resins that meet 

5468 more stringent emissions limits may apply for exemptions from some of the on-going 

5469 testing requirements; 

5470  Recordkeeping: Firms that import, produce, or manufacture composite wood panels, 

5471 component parts, or finished goods are required to keep records showing the date of 

5472 purchase of the composite wood product, the supplier, and all precautions taken to ensure 

5473 that the product meets emissions standards. Wholesalers and retailers that do not import, 

5474 produce, or manufacture composite wood panels, component parts, or finished goods are 

5475 required to maintain invoices and bills of lading; and 

5476  Labeling: Firms that package or repackage composite wood products or finished goods 

5477 containing composite wood products will need to modify their labels to include their 

5478 name, the date the finished good was produced, and a statement of compliance. 

5479 

5480 Note that the paperwork burden analysis in the ICR treats some baseline burdens and costs 

5481 differently from the cost analysis in Chapter 2 of this economic analysis. Neither analysis includes 

5482 burdens or costs that were already performed to meet the CARB ATCM requirements and will not need to 

5483 be performed again to comply with the TSCA Title VI requirements. For example, both analyses assume 

that mills making product lines that have a standard certification64 5484 or a NAF certification under the CARB 

5485 ATCM will not need to submit new data or resubmit existing data to their existing TPC in order to receive 

5486 the equivalent certification under the TSCA Title VI regulations and therefore burdens and costs are not 

5487 estimated for these activities. 

5488 

 64 The term standard certification is used here to describe a certification other than an ultra-low-emitting formaldehyde 

(ULEF) or NAF certification. The proposed rule does not provide for reduced testing frequencies for products made 

with ULEF resins, so mills that have a ULEF certification under the CARB ATCM will incur additional costs under the 

TSCA Title VI rule. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-19 

5489 The cost analysis in Chapter 2 of this economic analysis calculates the incremental cost of the 

5490 TSCA Title VI rule. The incremental cost excludes the costs associated with activities performed in the 

5491 baseline such as TPC audits at CARB certified panel producers, and recordkeeping at firms that sell 

5492 products in California. The paperwork burden analysis in the ICR calculates the incremental burdens and 

5493 costs of the rule, but it also calculates total burden and costs including activities that are performed to 

5494 comply with the CARB ATCM in the baseline. Furthermore, the cost analysis in Chapter 2 is limited to 

5495 domestic entities, while the ICR considers the burden and cost to both domestic and foreign entities. 

5496 

5497 Table 6-11 presents the summary of the three year average incremental and total cost burden. 

5498 The columns labeled total burden and total cost present the bottom line burden and cost for the ICR. The 

5499 columns labeled incremental burden and incremental cost present the burdens and costs with the baseline 

5500 assumptions that are consistent with the economic analysis in Chapter 2. Note that these burden and cost 

5501 estimates differ slightly from those presented in Chapter 2 because the unit burdens and costs are rounded 

5502 slightly differently for the calculations. This is necessary because a different level of disaggregation is 

5503 needed for the ICR supporting statement. (The ICR supporting statement calculates the costs at the 

5504 activity level, while the cost analysis calculates them at the establishment level.) In addition, costs 

5505 associated with changes to production processes or raw materials are not considered paperwork burden 

5506 and therefore not included in the paperwork burden analysis. See the ICR supporting statement for a 

5507 detailed description of how these calculations were performed. 

5508 

Table 6-11: Summary of Three Year Average Incremental and Total Burden and Costs, by 

Geographic Location ($2010) 

Respondent Type 

Number of 

Respondents 

Incremental Burden

(excludes baseline 

burden) 

Incremental Cost 

(excludes baseline 

cost) 

Total Burden 

(includes baseline 

burden) 

Total Cost 

(includes baseline 

cost) 

Domestic 

Producers 370 193,453 $21,680,292 221,328 $24,683,876

Fabricators 79,701 1,837,729 $62,701,579 2,608,828 $81,855,678

Wholesalers 85,560 841,827 $32,656,187 1,156,087 $40,682,387

Retailers 759,048 1,011,963 $71,555,904 1,011,963 $71,555,904

Total 924,679 3,884,972 $188,593,962 4,998,206 $218,777,845

Foreign 

Producers 1,129 234,293 $25,977,529 $477,692 $53,971,653

Fabricators 31,083 716,285 $24,441,066 1,020,576 $31,999,655

Wholesalers 33,368 1,029,608 $33,513,802 1,467,274 $44,691,791

Retailers - - - - -

Total 65,580 1,980,186 $83,932,397 2,965,542 $130,663,099

Total 

Producers 1,499 427,744 $47,657,678 $699,020 $78,655,528 

Fabricators 110,784 2,554,012 $87,142,555 3,629,402 $113,855,243

Wholesalers 118,928 1,871,434 $66,169,963 2,623,362 $85,374,204

Retailers 759,048 1,011,963 $71,555,904 1,011,963 $71,555,904

Total 990,259 5,865,153 $272,526,100 7,963,747 $349,440,879

5509 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-20 

5510 6.4 Unfunded Mandates Reform Act (UMRA) 

5511 

5512 Title II of the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, establishes requirements 

5513 for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal 

5514 governments, and the private sector. Under section 202 of the UMRA, EPA generally must prepare a 

5515 written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” 

5516 that might result in expenditures by State, local, and Tribal governments, in the aggregate, or by the 

5517 private sector, of $100 million or more (when adjusted annually for inflation) in any one year. The 

5518 proposed rule is not expected to affect state, local, or Tribal governments because the proposed rule 

5519 affects entities that manufacture, import, or sell composite wood products, and government entities are 

5520 not engaged in these activities. 

5521 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-21 

5522 6.5 Executive Order 13132 - Federalism 

5523 

5524 Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), directs federal 

5525 agencies to consider whether a rule has federalism implications (i.e. whether it has substantial direct 

5526 effects on the states, on the relationship between the national government and the states, or on the 

5527 distribution of power and responsibilities among the various levels of government, as specified in 

5528 Executive Order 13132). 

5529 

5530 The proposed rule does not have any direct effects on states or local governments (individually or 

5531 collectively), on the relationship between the national government and the states, or on the distribution of 

5532 power and responsibilities among the various levels of government. No state or local governments are 

5533 expected to engage in the import, manufacture, or sale of composite wood products, and thus state and 

5534 local governments will not incur direct compliance costs as a result of the rule. The rule does not preempt 

5535 state or local law, and the rule is required by statute. 

5536 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-22 

5537 6.6 Executive Order 13175 - Tribal Implications 

5538 

5539 Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments

5540 (59 FR 22951, November 6, 2000), directs federal agencies to consider whether a rule has tribal 

5541 implications (i.e. whether it has substantial direct effects on tribal governments, on the relationship 

5542 between the Federal government and the Indian tribes, or on the distribution of power and responsibilities 

5543 between the Federal government and Indian tribes). No tribal government is expected to engage in the 

5544 import, manufacture, or sale of composite wood products, and thus tribal governments will not incur 

5545 direct compliance costs as a result of the rule. The rule does not change the relationship between the 

5546 Federal government and Indian tribes, or change the distribution of power. 

5547 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-23 

5548 6.7 Executive Order 13045 - Protection of Children 

5549 

5550 Under Executive Order 13045, a regulation must be reviewed if the regulatory action is 

5551 economically significant and concerns an environmental health risk or safety risk that may 

5552 disproportionately affect children. This analysis shows that the per-child benefits from this proposed rule 

5553 are substantially larger than the average benefit per person across individuals of all ages. As shown in 

5554 Table 6-12, children under the age of two represent 5 percent of the individuals affected by the rule and 

5555 are estimated to accrue between 0.3 and 1.7 percent of the proposed rule’s total benefits. Children aged 

5556 two through fifteen represent 19 percent of the individuals affected by the rule and are estimated to accrue 

5557 about 75 percent of the proposed rule’s total benefits. These results are driven by the benefits associated 

5558 with avoiding asthma incidence, which are only estimated for children ages 6 through 17 for the lower 

5559 benefits estimate and for children ages 2 through 17 for the higher benefits estimate. Given these results, 

5560 EPA has determined that this proposed rule will not have disproportionally high and adverse human 

5561 health or environmental effects on children. These proposed standards would reduce emissions of 

5562 formaldehyde from composite wood products for individuals of all ages that are exposed and children are 

5563 likely to accrue higher benefits from the exposure reductions compared to adults. 

5564 

Table 6-12: Summary of Benefits for Children Compared with All Individuals under the Proposed 

Option (annualized at 3% rate) 

Population Affected 

Population 

Affected 

Annually 

(thousands) 

Population 

Affected as 

Percent of 

Total Affected 

Population 

Total Benefits

Lower Estimate

(millions 2010$)

Total Benefits 

Higher Estimate

(millions 2010$)

Total Benefits 

Lower Estimate 

(% of total 

affected 

population) 

Total Benefits 

Higher Estimate

(% of total 

affected 

population) 

All Individuals 106,057 100.00% $184.31 $277.92 100.00% 100.00% 

Children ages 0-1 4,971 4.69% $0.47 $4.79 0.26% 1.72% 

Children ages 2-15 19,651 18.53% $136.95 $209.99 74.31% 75.56% 

5565 

5566 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-24 

5567 6.8 Executive Order 13211 - Energy Effects 

5568 

5569 Executive Order 13211, entitled Actions Concerning Regulations that Significantly Affect Energy 

5570 Supply, Distribution, or Use (66 FR 28355, May 22, 2001), directs federal agencies to identify actions 

5571 that will have a significant adverse energy effect. Adverse effects are defined as: 

5572 

5573  Reductions in crude oil supply in excess of 10,000 barrels per day; 

5574  Reductions in fuel production in excess of 4,000 barrels per day; 

5575  Reductions in coal production in excess of 5 million tons per year; 

5576  Reductions in natural gas production in excess of 25 million mcf per year; 

5577  Reductions in electricity production in excess of 1 billion kilowatt-hours per year or in excess of 

5578 500 megawatts of installed capacity; 

5579  Increases in energy use required by the regulatory action that exceed any of the thresholds above; 

5580  Increases in the cost of energy production in excess of one percent; 

5581  Increases in the cost of energy distribution in excess of one percent; or 

5582  Other similarly adverse outcomes. 

5583 

5584 The regulations under consideration will not significantly reduce energy production nor significantly 

5585 increase energy costs. 

5586 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 6-25 

5587 6.9 National Technology Transfer and Advancement Act 

5588 

5589 Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), 

5590 Public Law No. 104-113 (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its 

5591 regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. 

5592 Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, 

5593 sampling procedures, and business practices) that are developed or adopted by voluntary consensus 

5594 standards bodies. 

5595 

5596 The proposed rule involves numerous technical standards, many of which EPA is directed to use 

5597 by TSCA Title VI. Technical standards identified in the statute include the two quarterly test methods, 

5598 ASTM E-1333-96 and ASTM D-6007-02, a quality control test method, ASTM D-5582-00, and various 

5599 standards that define specific composite wood products, such as ASTM D-5456-06 (Structural Composite 

5600 Lumber Products), ASTM D-5055-05 (Prefabricated Wood I-Joists), ANSI A190.1 (Structural Glued 

5601 Laminated Timber), ANSI/HPVA HP–1–2009 (Hardwood and Decorative Plywood), ANSI A208.2–2 

5602 2009 (Medium Density Fiberboard), ANSI A208.1–2009 (Particleboard), PS-1-07 (Structural Plywood), 

5603 and PS-2-04 (Wood-Based Structural-Use Panels). 

5604 

5605 The proposed rule also incorporates other voluntary consensus standards that EPA has identified, 

5606 including the standards that define hardboard (ANSI A135.4, ANSI A135.5, and ANSI A135.6) and three 

5607 alternative quality control test methods: EN 717-2 (gas analysis), EN 120 (perforator), and JIS A 1460 

5608 (24-hour desiccator).
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 R-1 

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5677 and L. L. Davidson. 2002. Economic implications of assisted reproductive techniques: a 

5678 systematic review. Human Reproduction. 17: 3090-3109. December 1, 2002. 

5679 Hanrahan, L. P., K. A. Dally, H. A. Anderson, M. S. Kanarek and J. Rankin. 1984. Formaldehyde 

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5681 Public Health. 74: 1026-1027. 

5682 Industrial Economics Incorporated (IEc). 1993. Analysis of Visibility Valuation Issues for the 

5683 Section 812 Study, Memorandum to Jim DeMocker, Office of Policy Analysis and Review, 

5684 Office of Air and Radiation, U.S. Environmental Protection Agency, prepared by Jim Neumann, 

5685 Lisa Robinson, and Bob Unsworth. September 30, 1993. 

5686 Jurvelin, J., M. Vartiainen, M. Jantunen and P. Pasanen. 2001. Personal exposure levels and 

5687 microenvironmental concentrations of formaldehyde and acetaldehyde in the Helsinki 

5688 metropolitan area, Finland. Journal of Air and Waste Management. 51: 17-24. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 R-3 

5689 Katz, P., J. Showstack, J. F. Smith, R. D. Nachtigall, S. G. Millstein, H. Wing, M. L. Eisenberg, 

5690 L. A. Pasch, M. S. Croughan and N. Adler. 2011. Costs of infertility treatment: results from an 

5691 18-month prospective cohort study. Fertility and Sterility. 95: 915-921. 

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5700 formaldehyde exposure in mobile homes. Environmental Health Perspectives. 94: 91-94. 

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5703 Springer Berlin Heidelberg: 41-51. 

5704 Lou, P.-J., W.-L. Hsu, Y.-C. Chien and C.-J. Chen. 2010. Screening and Early Diagnosis of 

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5710 Mayo Clinic. 2010b. MRI: what you can expect. Available at: 

5711 http://www.mayoclinic.com/health/mri/MY00227/DSECTION=what-you-can-expect (Accessed 

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5713 McGwin, G., Jr., J. Lienert and J. I. Kennedy, Jr. 2010. Formaldehyde Exposure and Asthma in 

5714 Children: A Systematic Review. Environmental Health Perspectives. 118: 313-317. March 2010. 

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5717 Morgenstern, R. D., W. A. Pizer and J.-S. Shih. 2002. Jobs Versus the Environment: An Industry5718 Level Perspective. Journal of Environmental Economics and Management, Vol. 43, no. 3, pp. 

5719 412-436. 

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5726 http://cancer.gov/cancertopics/pdq/treatment/nasopharyngeal/HealthProfessional. (Accessed June 

5727 27, 2011) 

5728 National Cancer Institute. 2011c. Cancer Drug Information: Fluorouracil. Available at: 

5729 http://www.cancer.gov/cancertopics/druginfo/fluorouracil (Accessed June 27, 2011) 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 R-4 

5730 National Center for Infectious Diseases. 2006. Epstein-Barr Virus and Infectious Mononucleosis. 

5731 Available at: http://www.cdc.gov/ncidod/diseases/ebv.htm (Accessed June 27, 2011) 

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5733 hybrid contingent valuation method. Journal of Health Economics. vol. 16(6). December 1997. 

5734 Personal Communication with AHFA. 2010. Conversation between Bill Perdue (American Home 

5735 Furnishings Alliance) and Abt Associates Inc. November 3, 2010. 

5736 Personal Communication with BIFMA. 2010. Brad Miller's (BIFMA) Written Responses to 

5737 Questions about FSCWPA Impacts on Members. November 23, 2011. 

5738 Personal Communication with California Retailers Association. 2011. Conversation between 

5739 Pamela Williams (California Retailers Association) and Abt Associates Inc. January 20, 2011. 

5740 Personal Communication with HPVA. 2011. Conversation between Kip Howlett (HPVA) and Abt 

5741 Associates Inc. January 4, 2011. 

5742 Personal Communication with KCMA. 2010. Conversation between Richard Titus (Kitchen 

5743 Cabinet Manufacturers Association) and Abt Associates Inc. regarding written questions about 

5744 FSCWPA Impacts. October 28, 2010. 

5745 Personal Communication with NALFA. 2010. Conversation between Dennis Bradway 

5746 (Mannington Floors and North Amnerican Laminate Floor Association) and Abt Associates Inc. 

5747 regarding written questions about FSCWPA Impacts. November 22, 2010. 

5748 Piccirillo, J. F., I. Costas and M. E. Reichman. 2007. Cancers of the Head and Neck. SEER 

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5764 Markets. Particleboard and MDF Commentary. 

5765 RISI. 2011a. Particleboard and MDF Commentary. January 2011. 

5766 RISI. 2011b. Crow's Weekly Market Report. February 18, 2011. 

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5768 2011. 

5769 RISI. 2011d. Crow's Weekly Market Report. March 18, 2011. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 R-5 

5770 Rumchev, K. B., J. T. Spickett, M. K. Bulsarall, M. R. Phillips and S. M. Stick. 2002. Domestic 

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5776 Transport Rule. White paper commissioned by Excelon Corporation. 

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5781 Policies. October 1, 2001. 

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5783 Lindbohm and A. Anttila. 1999. Reduced Fertility Among Female Wood Workers Exposed to 

5784 Formaldehyde. American Journal of Industrial Medicine. 36: 202-221. 

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5786 Cancer. Nasopharyngeal Cancer. J. J. Lu, J. S. Cooper and A. W. M. Lee, Springer Berlin 

5787 Heidelberg: 233-240. 

5788 The Business and Institutional Furniture Manufacturer’s Association. 2010. BIFMA Members on 

5789 the Internet. Available at: http://www.bifma.org/links/index.html (Accessed 

5790 Tolley, G., et. al. 1986. Valuation of Reductions in Human Health Symptoms and Risks: Volumes 

5791 1-4, Final Report to the US Environmental Protection Agency. University of Chicago, Chicago, 

5792 IL. 

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5794 Personal Income and Its Disposition. 

5795 U.S. Bureau of Economic Analysis. 2011b. National Income and Product Accounts Table 3.4U. 

5796 Personal Current Tax Receipts. 

5797 U.S. Bureau of Labor Statistics. 2010a. May 2009 National Industry-Specific Occupational 

5798 Employment and Wage Estimates. Sectors 44 and 45 - Retail Trade. 

5799 U.S. Bureau of Labor Statistics. 2010b. May 2009 National Industry-Specific Occupational 

5800 Employment and Wage Estimates. Sector 42 - Wholesale Trade. 

5801 U.S. Bureau of Labor Statistics. 2010c. May 2009 National Industry-Specific Occupational 

5802 Employment and Wage Estimates. NAICS 321000 - Wood Product Manufacturing. 

5803 U.S. Bureau of Labor Statistics. 2010d. Employer Costs for Employer Compensation. Series ID 

5804 CMU2020000000000P. . 

5805 U.S. Bureau of Labor Statistics. 2010e. Employer Costs for Employer Compensation. Series ID 

5806 CMU2020000000000D. . 

5807 U.S. Bureau of Labor Statistics. 2011a. National Compensation Survey: Occupational Earnings 

5808 in the United States, 2010. Table 2. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 R-6 

5809 U.S. Bureau of Labor Statistics. 2011b. Employer Costs for Employee Compensation, Total 

5810 Benefits, All civilian occupations. Series ID CMU2030000000610D, CMU2030000000610P, 

5811 CMU2030000000620D, CMU2030000000620P. 

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5813 Survey. Quarter 1, 2011. 

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5815 U.S. Census Bureau. 2009a. Sector 42: EC0742I1: Wholesale Trade: Industry Series: 

5816 Preliminary Summary Statistics for the United States: 2007. 

5817 U.S. Census Bureau. 2009b. Sector 31: EC0731I1: Manufacturing: Industry Series: Detailed 

5818 Statistics by Industry for the United States: 2007. 

5819 U.S. Census Bureau. 2009c. Sector 31: EC0731I2: Manufacturing: Industry Series: Products 

5820 Statistics for the United States: 2007. 

5821 U.S. Census Bureau. 2009d. Sector 31: EC0731I3: Manufacturing: Industry Series: Materials 

5822 Consumed by Kind for the United States: 2007. 

5823 U.S. Census Bureau. 2009e. American Housing Survey Microdata. 

5824 U.S. Census Bureau. 2009f. 2007-2009 American Community Survey (ACS) 3-Year Estimates. 

5825 U.S. Census Bureau. 2009g. Sector 31: EC0731I3: Manufacturing: Industry Series: Materials 

5826 Consumed by Kind for the United States: 2007. 

5827 U.S. Census Bureau. 2010a. Sector 42: EC0742SSSZ3: Wholesale Trade: Subject Series - Estab 

5828 & Firm Size: Summary Statistics for Single Units and Multiunit Firms for the United States: 

5829 2007. 

5830 U.S. Census Bureau. 2010b. Sector 42: EC0742A1: Wholesale Trade: Geographic Area Series: 

5831 Summary Statistics for the United States. 

5832 U.S. Census Bureau. 2010c. Sector 42: EC0742SSSZ5: Wholesale Trade: Subject Series - Estab 

5833 & Firm Size: Summary Statistics by Employment Size of Firms for the United States: 2007. 

5834 U.S. Census Bureau. 2010d. Sector 44: EC0744SSSZ3: Retail Trade: Subject Series - Estab & 

5835 Firm Size: Summary Statistics for Single Unit and Multiunit Firms for the United States: 2007. 

5836 U.S. Census Bureau. 2010e. Data Item: Wholesale type of operation.” American FactFinder 

5837 Help. Census Data Information. 

5838 U.S. Census Bureau. 2010f. Sector 31: EC0731A1: Manufacturing: Geographic Area Series: 

5839 Industry Statistics for the States. 

5840 U.S. Census Bureau. 2010g. Sector 44: EC0744A1: Retail Trade: Geographic Area Series: 

5841 Summary Statistics for the United States, States, Metro Areas, Counties, and Places: 2007. 

5842 U.S. Census Bureau. 2010h. Number of Firms, Number of Establishments, Employment, Annual 

5843 Payroll, and Estimated Receipts by Enterprise Employment Size for States, NAICS Sectors: 2007. 

5844 December 15, 2010. 

5845 U.S. Census Bureau. 2010i. Sector 00: NS0800A1: 2008 Nonemployer Statistics: Geographic 

5846 Area Series: Nonemployer Statistics by Legal Form of Organization: 2008 

5847 U.S. Census Bureau. 2010j. Sector 44: EC0744SLLS1: Retail Trade: Subject Series - Product 

5848 Lines: Product Lines Statistics by Kind of Business for the United States and States: 2007. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 R-7 

5849 U.S. Census Bureau. 2010k. Census Data Information. Survey Methodology: 2007 Economic 

5850 Census: Retail Trade: Subject Series: Product Lines. 

5851 U.S. Census Bureau. 2010l. Census Data Information. Sector 44: EC0744SLLS1: Retail Trade: 

5852 Subject Series - Product Lines: Product Lines Statistics by Kind of Business for the United States 

5853 and States: 2007. Data Item: Products and Services Code. 

5854 U.S. Census Bureau. 2010m. Sector 42: EC0742SSSZ2: Wholesale Trade: Subject Series - Estab 

5855 & Firm Size: Summary Statistics by Employment Size of Establishments for the United States: 

5856 2007. 

5857 U.S. Census Bureau. 2010n. Sector 44: EC0744SSSZ4: Retail Trade: Subject Series - Estab & 

5858 Firm Size: Summary Statistics by Sales Size of Firms for the United States: 2007. 

5859 U.S. Census Bureau. 2010o. Sector 00: NS0800A2: 2008 Nonemployer Statistics: Geographic 

5860 Area Series: Nonemployer Statistics for the US, States, Metropolitan Areas, and Counties: 2008. 

5861 U.S. Census Bureau. 2010p. Sector 31: EC0731SG3: Manufacturing: Summary Series: General 

5862 Summary: Industry Statistics for Subsectors and Industries by Employment Size: 2007. 

5863 U.S. Census Bureau. 2011. Sector 42: EC0742SLLS1: Wholesale Trade: Subject Series - Product 

5864 Lines: Product Lines Statistics by Kind of Business for the United States and States: 2007. 

5865 U.S. Department of Health and Human Services (HHS) National Toxicology Program. 2011. 12th 

5866 Report on Carcinogens. June 10, 2011. 

5867 U.S. Department of Health and Human Services (U.S. HHS). 2007. Asthma Education and 

5868 Prevention Program Expert Panel Report 3: Guidelines for the Diagnosis and Management of 

5869 Asthma. National Institutes of Health. National Heart Lung and Blood Institute. NIH Publication 

5870 Number 08-5846. 

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5872 (ICR) for the Development of Plywood and Particleboard Maximum Achievable Control 

5873 Technology (MACT) Standards. 

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5875 to 2010. Washington, DC, U.S. EPA, Office of Air and Radiation, Office of Policy. 

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5882 Agency. 

5883 U.S. Environmental Protection Agency. 2011. Approach to Assessing Non-cancer Health Effects 

5884 from Formaldehyde and Benefits from Reducing Noncancer Health Effects as a Result of 

5885 Implementing Formaldehyde Emission Limits for Composite Wood Products. 

5886 U.S. Internal Revenue Service. 2007. Starting a Business and Keeping Records. Publication 583. 

5887 Revised January 2007. 

5888 U.S. International Trade Commission. 2008. Wood Flooring and Hardwood Plywood: 

5889 Competitive Conditions Affecting the U.S. Industries. 
*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***

January 27, 2012 R-8 

5890 U.S. International Trade Commission. 2011. U.S. Interactive Tariff and Trade Dataweb. 

5891 U.S. International Trade Commission (U.S. ITC). 2011a. HTS - 4408: Veneer Sheets and Sheets 

5892 for Plywood and Other Wood Sawn Lengthwise, Sliced or Peeled, Not More Than 6 mm (.263 in. 

5893 Thick: U.S. Imports for Consumption: Annual Data: 2007. 

5894 U.S. International Trade Commission (U.S. ITC). 2011b. HTS - 4408: Veneer Sheets and Sheets 

5895 for Plywood and Other Wood Sawn Lengthwise, Sliced or Peeled, Not More Than 6 mm (.263 in. 

5896 Thick: U.S. Domestic Exports: Annual Data: 2007. 

5897 United States Postal Service. 2011. First-Class Mail Prices. Available at: 

5898 http://www.usps.com/prices/first-class-mail-prices.htm (Accessed February 23,) 

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5900 Literature, National Economic Research Associates, Inc. Report to the Washington State 

5901 Department of Ecology. 

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5903 Property Owners, Joint Center for Housing Studies, Harvard University. 

5904 

5905