Prepared for:

Analytical Support Branch Environmental Analysis Division Office of Information Analysis and Access Office of Environmental Information US Environmental Protection Agency



## February 9 , 20 12 

# Economic Analysis of the Proposed Rule to A dd ortho

- Nitrotoluene to the EPCRA Section 313 List of Toxic Chemicals

### i 2/9 /2012 

## Table of Contents

Executive Summary

................................ ................................ ............................. iii
ES.1 Introduction

................................ ................................ ................................ ................................ ..... iii ES. 2 Need for Rule

................................ ................................ ................................ ................................ .. iii ES.3 Addition of Chemicals

................................ ................................ ................................ ..................... iii ES.4 Estimated Reporting Activity

................................ ................................ ................................ .......... iii ES.5 Costs of the Proposed Rule

................................ ................................ ................................ .............. iv ES.6 Small Entity Analysis

................................ ................................ ................................ ...................... vi ES.7 Benefits of the Proposed Rule

................................ ................................ ................................ ........ vii Chapter 1

– Background and Overview of Analysis

................................ ............. 1
- 1
1.1 Overview of TRI

................................ ................................ ................................ ............................ 1

- 1 1.2 Chemicals for Addition to TRI

................................ ................................ ................................ ...... 1

- 4 1.3 Organization of This Report

................................ ................................ ................................ .......... 1

- 5 Chapter 2

– Estimates of the Number of Ad ditional Forms and Affected Facilities 2
- 1
2.1 Background

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

- 1 2.2 Methodology

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

- 2 2.3 Estimation of the Number of Forms and Facilities

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

- 7 2.4 Summary of the Total Number of Forms and Facilities under the Proposed Rule

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

- 9 Chapter 3

– Cost Estimates

................................ ................................ ................. 3
- 1
3.1 Introduction

................................ ................................ ................................ ................................ ... 3

- 1 3.2 Industry Burden and Cost Estimates

................................ ................................ ............................. 3

- 1 3.3 EPA Costs

................................ ................................ ................................ ................................ ...... 3

- 7 3.4 Total Costs

................................ ................................ ................................ ................................ ..... 3

- 8 Chapter 4

– Small Entity Ana lysis

................................ ................................ ...... 4
- 1
4.1 Introduction

................................ ................................ ................................ ................................ ... 4

- 1 4.2 Impact on Small Entities

................................ ................................ ................................ ............... 4

- 1 4.3 Definitions of Small Entities

................................ ................................ ................................ ......... 4

- 1 4.4 Methodology Overview

................................ ................................ ................................ ................. 4

- 2 4.5 Summary of Results

................................ ................................ ................................ ...................... 4

- 7 Chapter 5

– Benefits

................................ ................................ ........................... 5
- 1

### ii 2/9 /2012 

## Table of Tables

Table ES

- 1: Total Estimated Number of Forms and Facilities under the Proposed Rul e

........................... iv Table ES

- 2: Industry Reporting Burden

................................ ................................ ................................ ....... v Table ES

- 3: Estimated Number of Submissions and Incremental Agency Cost by Media Type

................................ ................................ ................................ ................................ ........... v Table ES

- 4: Summary of Total Costs of Proposed Rule

................................ ................................ ............. vi Table ES

- 5: Summary of Universe for Small Entity Impact Analyses

................................ ....................... vi Table ES

- 6: Summary of Impacts on Small Parent Entities Affected by the Proposed Rule

.................... vii Table 2

- 1: Estimated 2000 Europe an Consumption of o

- Nitrotoluene

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

- 1 Table 2

- 2: Primary Sectors Manufacturing, Processing, or Otherwise Using o

- Nitrotoluene

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

- 2 Table 2

- 3: RY2010 TRI Reporting for the Potential Proxy Chemicals Across All Industry Sectors

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

- 5 Table 2

- 4: Comparison of the Major Uses of o

- Nitrotoluene to the Potential Proxy Chemicals

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

- 6 Table 2

- 5: Estimated Forms and Facilities from Chemical Manufacturers Under the Proposed Rule

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

- 8 Table 2

- 6: Estimated Fo rms and Facilities from Waste Treatment Under the Proposed Rule

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

- 8 Table 2

- 7: Total Estimated Forms and Facilities Under the Proposed Rule

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

- 9 Table 3

- 1: The Derivation of the Weighted Average Wage Rate (2011$)

................................ ............... 3

- 5 Table 3

- 2: Total Estimated Forms Under the Proposed Rule

................................ ................................ ... 3

- 6 Table 3

- 3: Industry Reporting Burden

................................ ................................ ................................ ...... 3

- 6 Table 3

- 4: Industry Reporting Cost

................................ ................................ ................................ .......... 3

- 7 Table 3

- 5: Agency For ms Processing Cost by Media Type

................................ ................................ ..... 3

- 7 Table 3

- 6: Estimated Number of Submissions and Incremental Agency Cost by Media Type

............... 3

- 8
T able 3

- 7: Summary of Total Costs of Proposed Rule

................................ ................................ .............. 3

- 8 Table 4

- 1: Small Business Size Standards for Industries Affected by the Proposed Rule

........................ 4

- 2 Table 4

- 2: Summary of Universe for Small Entity Impact Analyses for Actual Facilities

....................... 4

- 5 Table 4

- 3: Summary of Impacts on Small Parent Entities Affected by the Proposed Rule ( Actual Facilities)

................................ ................................ ................................ .................. 4

- 5 Table 4

- 4: Summary of Impacts on Small Parent Entities Affected by the Proposed Rule (Modeled Facilities)

................................ ................................ ................................ ............... 4

- 7

### iii 2/9 /2012 

## Executive Summary

ES.1 Introdu ction

Under section 313 of the Emergency Planning and Community Right

- to

- Know Act (EPCRA), and section 6607 of the Pollution Prevention Act (PPA), certain facilities are required to file annual reports to the United States Environmental Protection Agency ( EPA) and to states on their releases, transfers, and other waste management practices for certain toxic chemicals if they are manufactured, processed, or otherwise used above certain threshold amounts. This information is included in a publicly available d atabase known as the Toxic Release Inventory (TRI).
Currently, there are 593 chemicals and 30 chemical categories on the list of chemicals subject to EPCRA section 313 requirements

. 1 EPCRA section 313(d) authorizes EPA to add chemicals to the list of

repo rtable substances. Under this rule, reporting for an additional chemical, ortho

- nitroto l u ene ( also known as 2

- nitrotoluene or o

- nitrotoluene ) would be required

.



### ES.2 Need for Rule

EPA believes that o

- nitrotoluene meets the EPCRA s ection 313(d)(2)(B) criteria for listing because of its carcinogenic properties . Further, EPA believes that facilities currently manufacture, process

, or otherwise use these chemicals above TRI thresholds and therefore would file TRI reports based on the analysis presented in this doc ument

. 

### ES.3 Addition of Chemicals

o

- Nitrotoluene is primarily processed as a reactant to manufacture other chemicals used in the synthesis of dyes ; rubber and agriculture chemicals ; explosives ; and pharmaceuticals (OECD, 1994; Dugal, 2005).

o

- Nitrotoluene has been classified by the National Toxicology Program in their 12 th Report on Carcinogens as “reasonably anticipated to be a human carcinogen.” EPA believes that o

- nitrotoluene meets the EPCRA section 313(d)(2)(B) criteria because it can reasonably be antic ipated to cause cancer in humans as there is sufficient evidence of carcinogenicity from studies in experimental animals a s well as supporting data on mechanisms of carcinogenesis.

Human e xposure to o

- nitrotoluene in the United States is expected to resu lt primarily from dermal contact and inhalation during its production and use. The general population may be exposed to o

- nitrotoluene as a result of its occurrence in the environment from (1) accidental spills of o

- nitrotoluene or chemical mixtures contai ning o

- nitrotoluene, (2) emissions directly into the environment, or (3) breakdown prod

ucts of dinitrotoluenes (DNT) and trinitrotoluenes (TNT).



### ES.4 Estimated Reporting Activity

The number of additional TRI reports expected due to the proposed rule is summar ized in Table ES

- 1.

1 Includes the 1 6 chemicals added to the list of reportable chemicals on November 26, 2010.

### iv 2/9 /2012 Table ES

- 1 : Total Estimated Number of Forms and Facilities under the Proposed Rule

NAICS NAICS Description Forms Facilities

Form R Form A Total Existing Filers First Time Filers Total

325 Chemical Manu facturing 2 1 3 3 0 3

311942 Spice and Extract Manufacturing 1 0 1 1 0 1

325110 Petrochemical Manufacturing 1 1 2 2 0 2

325132 Synthetic Organic Dye and Pigment Manufacturing 1 0 1 1 0 1

325188 All Other Basic Inorganic Chemical Manufacturing 1 0 1 1 0 1

325192 Cyclic Crude and Intermediate Manufacturing 1 0 1 1 0 1

325199 All Other Basic Organic Chemical Manufacturing 3 2 5 5 0 5

325211 Plastics Material and Resin Manufacturing 1 0 1 1 0 1

325411 Medicinal and Botanical Manufacturing 1 0 1 1 0 1

3 25412 Pharmaceutical Preparation Manufacturing 1 1 2 1 1 2

325413 In

- Vitro Diagnostic Substance Manufacturing 1 0 1 1 0 1

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 1 0 1 1 0 1

562211 Hazardous Waste Treatment and Disp osal 1 0 1 1 0 1

562213 Solid Waste Combustors and Incinerators 1 0 1 1 0 1

Total 17 5 22 21 1 22



### ES.5 Costs of the Proposed R ule

The proposed rule would result in associated costs to both industry and EPA. Affected facilities would spend time reporting th e required information to EPA on Form R or Form A. The Agency w ould spend time processing new forms.

ES.5.1 Industry Costs

For this proposed rule, the burden and cost potentially incurred by industry are estimated using the Ratio

Based Burden Methodology (RBBM) which is a simplified formulation of the previously employed burden methodology. 2 Estimating reporting burden using RBBM produces a more stable estimate that reflects overall “average” reporting conditions at affected facilities. According to RBBM, report ing activities can be divided into two groups:

• Form Activities, consisting of rule familiarization, reporter compliance determination, calculations and form completion, and recordkeeping and submission; and

• Non

- Form Activities, consisting of supplier not ification and non

- reporter compliance determination.

Form Activity burden is estimated using the variable Nominal Form R unit burden to represent average burden incurred by filers to file a Form R. The Nominal Form R unit burden is set at 35.70516 hours. 3
Form A burden is c losely linked to that of Form R, and is therefore quantified by the ratio A/R ( set at 0 .615 )

, thus reflecting the burden of a Form A as 61.5 percent of the burden of a Form R. Form Activity Burden can be calculated u sing the Nominal Fo rm R unit burden, t he A/R ratio, and the number of Forms R and Forms A expected to be filed due to the proposed rule. RBBM combines Form Activity Burden with Non

- Form Activity Burden (consisting of supplier notification and non

- reporter compliance determi nation) in order to calculate Steady State Total Burden , which is the ongoing burden estimated to

2 Revising TRI Burden to Ratio

- Based Methodology, TRI Regulatory Development Branch, TRI Program Division, Office of Information Analysis and Access, Office of Environmental Inform ation, January 2011, EPA Docket ID Number EPA

- HQ

- OEI

- 2010

- 0825

. 3 The burden of 35.70516 includes the recent addition of .00516 hours of burden associated with the new Dioxin Reporting Requirements promulgated in May 10, 2007, and account ed for in the 2011 ICR (Docket# EPA

- HQ

- OEI

2010

- 0835.

### v 2/9 /2012 be incurred by filers due to the proposed rule (previously referred to as “Subsequent Year Burden”). To represent the elevated level of effort incurred by bot h filers reporting to TRI for the first

- time and those already reporting to TRI but considering the requirements of the proposed rule for the first time, a First

Time Filer Factor (FTF f ) is computed at 2.1.

The cost s potentially incurred by industry are estimated using the weighted average wage rate, WAWR, representing the average loaded cost for a mix of Managerial, Technical and Clerical labor per hour of TRI reporter burden . The WAWR is calculated using data from Bureau of Labor Statistics’ Employer C osts for Employee Compensation , updated quarterly

. As of December 7, 2011, the WAWR is calculated at $50.56.

Table ES

- 2 presents the total industry cost of the proposed rule in the first year of the rule and in the steady state.

Table ES

- 2 : Industry Reporting Burden

Form s R (#) Form s A (#) Form R Burden (hour s ) Form A Burden (hours) Total Burden (hours) Total Cost (2011$)

First Year 17 5 1,275 231 1,506 $76,143 Steady State 607 110 717 $36,252

ES.5.2 EPA Costs
In general, EPA incurs burden and costs for five categories of activities related to the TRI program: data processing, outreach and training, information dissemination, policy and petitions, and compliance and enforcement. These activities involve both fixed (e.g., r ent for the EPCRA reporting center) and variable costs (activities such as data processing that depend on the number of forms submitted). As a result of the proposed rule, the Agency is only expected to incur variable costs associated with data processing.

Assuming the same distribution of submission media types as that in RY2010, the total form processing burden for EPA associated with Form R and Form A submissions under the proposed rule is estimated at $70. Because of a low percentage of Forms R and For ms A submitted by paper in RY2010 ( 2.73% and 4.73% , respectively, which, when applied, rounds to zero paper forms ) , it is estimated that the universe of submissions for o

- nitrotoluene would be via TR I MEweb only, as presented in Table ES

- 3

.

Table ES

- 3 : Estimated Number of Submissions and Incremental Agency Cost by Media Type

Media Type Form s R (#) Form s A (#) Form Processing ($ /Form ) Processing Cost ($)

TRIMEweb 17 5 $3.19 $70

ES.5.3 Summary of Costs

T he total cost of the proposed rule to industry and EPA is estimated at $ 76,213 in the first year and $ 36,322 in the steady state of the rule. Table ES

- 4 summarizes the total costs to industry and EPA associated with the proposed rule.

### vi 2/9 /2012 Table ES

- 4 : Summa ry of Total Costs of Proposed Rule

Description First Year Steady State Industry Costs $76,143 $36,252
Agency Costs $70 $70

Total Costs $76,213 $36,322



### ES.6 Small E ntity A nalysis

The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. § 601 et. seq. ) requires Federal agencies to assess the effects of regulations on small entities, and in some instances, to examine alternatives to the regulations that may reduce adverse economic effects on significantly impacted small entities. The RFA requires agencie s to prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the rule would not have a significant economic impact on a substantial number of small entities.

This analysis uses estimated annual cost impac t percentages to measure potential impacts on small entities. The cost impact percentage is defined as annual compliance costs resulting from the proposed rule as a percentage of annual revenues or sales. For purposes of determining small entity impacts, comparing annual compliance costs to annual revenues provides a reasonable indication of the magnitude of the regulatory burden relative to a commonly available and objective measure of a company's business volume. Where regulatory costs represent a smal l fraction of a typical firm's revenue, the impacts of the regulation are likely to be minimal.

Cost impact percentages are calculated for the incremental compliance costs incurred during the first year of the rule and in the steady s t ate

. The incremental reporting burden and cost associated with this proposed rule is estimated using the Ratio

- Based Burden Methodology (RBBM), described above.

Twenty

- two facilities are expected to report under the proposed rule. The universe of potentially affected faciliti es was estimated using EPA’s TSCA Inventory Update Reporting (IUR) Database, the Directory of World Chemical Producers (DWCP), other available publications, and existing TRI reporters. The method used to estimate the universe of affected facilities is dis cussed in detail in Chapter 2.

The 22 potentially affected facilities can be divided into the following two groups:

• Actual Facilities

– 20 facilities potentially subject to the proposed rule’s reporting requirements, where the identity of each facility i s known.

• Modeled Facilities

– two facilities, where the identity of the individual facilities is unknown but where it was possible to estimate the total number of potentially subject facilities by NAICS code via the proxy chemical method, as described in Chapter 2.

The estimation of revenue, employment, and impact figures f or these two groups of facilities is performed separately. The universe of affected facilities, parent companies, and affected small parent entities is summarized in Table ES

- 5.

Table ES

- 5 : Summary of Universe for Small Entity Impact Analyses

Number of facilities estimated to experience an impact 22 Number of parent companies 20 Number of small parent entities 6

### vii 2/9 /2012 The estimated impacts on small parent entities under the proposed rule are presented in Table ES

- 6. All six of the affected small parent entities would incur cost impacts of less than 1% in the first year of the rule and in the steady state

.

Table ES

- 6 : Summary of Impacts on Small Parent Entities Affected by the Proposed Rule

Cost Impact Category Affected Small Entities in 1st Year Affected Small Entities in Steady State
# % # %

Less than 1% 6 100% 6 100%

1% to 3% 0 0% 0 0%

Greater than 3% 0 0% 0 0%



### ES.7 Ben efits of the Proposed R ule

The benefits of the proposed rule include improved understanding, awareness, and decision making related to the provision and distribution of information on releases and waste management of o

nitrotoluene. The provision of infor mation can lead to follow

- on activities that create additional costs and benefits. In particular, this information can lead to voluntary initiatives by industry to review production processes, set goals for reductions in emissions, and institute “good neig hbor” policies.

EPA has not attempted to monetize the benefits of the proposed rule due to the lack of quantitative information characterizing the range of users and non

- users of TRI data and the substantial analytical challenges associated with conducting an analysis that accurately predicts behavioral responses to the provision of information. In addition, the potentially large numbers of beneficiaries who are not TRI data users, or who are otherwise unaware of the data (e.g., general public), further lim its EPA’s ability to quantify potential benefits. However, the experience since the first forms were submitted to TRI in 1987 suggests that reporting under EPCRA section 313 has produced real gains in understanding about communities’ exposure to toxic chem icals. In its report entitled: How are the Toxics Release Inventory Data Used?

– Government, Business, Academic, and Citizen Uses, EPA has documented numerous examples of how multiple stakeholders have used TRI data (US EPA, 2003). Moreover, a cursory sea rch on GoogleScholarTM reveals thousands of academic articles referencing the Toxics Release Inventory. Listing o

- nitrotoluene

, and the subsequent use of the reported information, should provide similar gains in understanding of this particular chemical. E PA believes that o

- nitrotoluene meets the statutory toxicity criteria of section 313, and is at least as toxic as some of the chemicals for which Congress initially believed there were net benefits due to reporting (i.e., the initial list of section 313 ch emicals)

.

### viii 2/9 /2012 

## Literature Cited

CDC ( 2009).Centers for Disease Control and Prevention (CDC). N ational Health and Nutrition Examination Survey (NHANES). http://www.cdc.gov/nchs/nhanes.htm

Revising TR I Burden to Ratio

- Based Methodology, TRI Regulatory Development Branch, TRI Program Division, Office of Information Analysis and Access, Office of Environmental Information, January 20011, EPA Docket ID Number EPA

- HQ

- OEI

- 2010

- 0825

.
U.S. CB (2010). Statist ics of U.S. Businesses (SUSB). http://www.census.gov/econ/susb

U.S. EPA. ( 2006 ) U.S. Environmental Protection Agency. Inventory Update Reporting (IUR): Non

Confidential 2006 TSCA Inventory Update Rule (IUR) Records. http://cfpub.epa.gov/iursearch/index.cfm?s=chem

. (accessed Dec 9, 2009).

U.S. EPA (2011a). Supporting Statement for Information Collection Request Number (ICR) 1363.21, OMB Number 2 025

- 0009: TRI Form R and Form A Toxic Chemical Release Reporting. February 2011.

U.S. EPA ( 2003 )

. How are the Toxics Release Inventory Data Used?

– Government, Business, Academic, and Citizen Uses. EPA 260

- R

- 002

- 004. May 2003.

### 1

- 1 2/9 /2012 

## Chapter 1

– Background and Overvie w of Analysis

The Emergency Planning and Community Right

- to

- Know Act (EPCRA), also known as Title III of the Superfund Amendments and Reauthorization Act of 1986 (SARA), created a broad range of emergency response planning and reporting requirements for ma nufacturers, processors, and users of toxic chemicals in the United States. Under section 313 of EPCRA, certain facilities are required to submit annual reports to the United States Environmental Protection Agency (EPA) and to States on their release(s), t ransfer(s), and waste management activities for certain toxic chemicals if they are manufactured, processed, or otherwise used above thresholds amounts. In addition, the Pollution Prevention Act (PPA) of 1990 requires these same facilities to report preven tion, recycling, and other waste management information for these same chemicals. EPA maintains the data collected under EPCRA section 313 and the PPA in a database known as the Toxics Release Inventory (TRI). 4

EPCRA section 313(f)(1) contains default repo rting thresholds for facilities. These reporting thresholds are 25,000 pounds for toxic chemicals that are manufactured (including imported) or processed, and 10,000 pounds for toxic chemicals that are otherwise used. Facilities that meet these reporting t hresholds, as well as other reporting criteria, are required to submit annual reports. Under this rule, reporting would be required for an additional chemical, ortho

- nitrotoluene ( o

- nitrotoluene) about which EPA is concerned as it is reasonably anticipated to cause cancer in humans.

This report analyzes the economic impacts of the proposed rule . To understand the effects of the proposed rule, however, it is first necessary to understand how EPCRA section 313 and TRI currently operate. This chapter provides an overview of TRI followed by a description of the rule and organization of the report.



### 1.1 Overview of TRI

In 1986, Congress passed the Emergency Planning and Community Right

- to

- Know Act (EPCRA). The law was passed in response to the accidental release o f methyl isocyanate gas in Bhopal, India, in December 1984, and to a number of chemical accidents in the United States, including one in Institute, West Virginia. These accidental releases highlighted the lack of information readily available to the publi c about toxic chemicals being manufactured, processed, used, and transported within their communities. EPCRA is based on the premise that the public has the right to know about the use of chemicals, as well as their routine and accidental releases. The b road purposes are to encourage planning for response to accidental chemical releases as well as daily management of routine releases, and to provide the public and government agencies with information about the presence, release, and management of toxic ch emicals.

EPCRA contains four main provisions:

• Planning for chemical emergencies (sections 301

- 303),

• Emergency notification of chemical accidents and releases (section 304),

• Reporting of hazardous chemical inventories (sections 311

- 312), and

• Toxic chemical release reporting (section 313).

4 The term EPCRA section 313 properly refers to only the statutory requirements, while the term TRI properly refers to the database where the information collected under section 313 and under section 6607 of the PPA is s tored. However, the terms have often been used interchangeably by the public to refer to the statute, the regulatory requirements, the reporting form, the database, and EPA's program to manage the data. In deference to common usage, the terms EPCRA section 313 and TRI are sometimes used interchangeably in this report where doing so will make the report simpler and easier to read.

### 1

- 2 2/9 /2012 Because this rule falls under section 313 (and not the other sections of EPCRA), the remainder of this overview deals only with the TRI provisions of section 313.

The first regulations implementing EPCRA section 313 were p romulgated on February 16, 1988 (53 FR 4500), and are codified at 40 CFR part 372. Under these original regulations, owners or operators of regulated facilities must complete the Toxic Chemical Release Inventory Reporting Form R, which includes informatio n on releases to air, water, and land, as well as on

- site waste treatment and transfers of the chemical to off

- site locations.

A facility must report under section 313 if it meets all of the following three criteria:

1. It is in an Industrial Classificatio n code covered by the regulations;

2. It has ten or more full

- time employees (or the hourly equivalent of 20,000 hours); and

3. It manufactures, processes, or otherwise uses any of the listed toxic chemicals or chemical categories above the applicable reporting threshold.
Facilities must submit the forms each calendar year to both EPA and the State in which the facility is located by July 1 of the following year.

A completed Form R must be submitted for each toxic chemical manufactured, processed, or otherwise

us ed over threshold levels at each regulated facility as described in 40 CFR part 372. For most chemicals, threshold levels are set at 25,000 lbs for manufacturing and processing and 10,000 lbs for otherwise use (40 CFR § 372.25). Over 600 toxic chemicals and chemical compound categories are currently on the list of TRI chemicals.

TRI is unique among environmental databases because of the multimedia data it collects, and because it was designed for public access. EPCRA requires that EPA “establish and main tain in a computer database a national toxic chemical inventory based on data submitted to the Administrator” (42 U.S.C. § 11023(j)). EPA maintains the section 313 data in the national TRI database and makes the data available to the public in a variety o f formats, including online search tools and downloadable data files . With its broad dissemination, TRI data is used extensively by the public. Facilities use the data obtained through TRI to better understand their operations, and make better use of pol lution prevention opportunities. Public

- interest groups use the data to inform themselves about the presence of toxic chemicals in the environment, and use that knowledge to engage in a meaningful, productive dialogue with industry and all levels of gover nment. In general, TRI data have proven to be a powerful tool in environmental decision

- making.

1.1.1 Pollution Prevention Act
In 1990, Congress passed the Pollution Prevention Act (PPA), which adopted as national policy an environmental hierarchy that establis hes pollution prevention as the first choice among waste management options (42 U.S.C. §§ 13101

- 13109). For waste that cannot be prevented at the source, recycling is considered the next best option, and treatment or disposal should be considered only af ter source reduction and recycling options have been eliminated. Section 6607 of the PPA requires facilities to also report information on their pollution prevention, recycling, and other waste management activities. This information complements the info rmation reported under EPCRA section 313 by providing information about the waste management activities related to the reported chemicals. The data elements required by the Pollution Prevention Act are included as Section 8 of Form R.

### 1

- 3 2/9 /2012 1.1.2 Changes to the List of Chemicals
When Congress passed EPCRA it provided an initial list of approximately 300 chemicals and chemical categories subject to TRI reporting. The statutory list was derived from chemical lists used in New Jersey and Maryland. Congress also includ ed a provision in EPCRA that allows EPA to amend the list of chemicals subject to TRI reporting. Under section 313(d), EPA has the authority to add a chemical to the list if it determines that the chemical can cause or can be reasonably anticipated to cau se:

• Adverse acute human health effects at concentration levels reasonably likely to exist beyond facility site boundaries as a result of continuous or frequently recurring releases;

• In humans, cancer or teratogenic effects, serious or irreversible reproduc tive dysfunctions, neurological disorders, heritable genetic mutations, or other chronic health effects; or

• A significant adverse effect on the environment. See, 42 U.S.C.§ 11023(d).

EPA has added chemicals to the list through its authority under section 313(d). Most notably, EPA added 286 chemicals and chemical categories to the list of toxic chemicals subject to TRI on November 30, 1994 (59 FR 61432). The majority of these chemicals are pesticides. Many of the remaining chemicals are either regulated or identified as concerns under other environmental statutes such as the Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act.

EPA may delete a chemical from the list if it does not meet any of the above criteria found in 313(d). According to section 313(e) of EPCRA, any person may petition EPA to add or delete a chemical from the list on the basis of whether or not it meets the above criteria (see 42 U.S.C. § 11023(e)). All changes to the list are made through the rulemaking process under the Administrative Procedures Act (APA).

1.1.3 Alternate Threshold
On November 30, 1994, EPA finalized the “TRI Alternate Threshold for Facilities with Low Annual Reportable Amounts” (59 FR 61488). This rule was intended to reduce the compliance burden associat ed with EPCRA section 313. It established a streamlined reporting option for facilities where the annual reportable amount of a listed chemical released or managed does not exceed 500 pounds. 5 Such facilities have the option of applying an alternate manu facture, process, or otherwise use threshold of 1 million pounds to that chemical, instead of the standard thresholds of 10,000 or 25,000 pounds. If a facility does not exceed the 1 million

- pound threshold, then that facility is eligible to submit Form A for that chemical instead of Form R. Form A is a simplified reporting form that includes facility identification information and identifies the chemical or chemical category being reported. The form must be submitted on an annual basis.

1.1.4 Executive Order 12 856
On August 3, 1993, Executive Order 12856, “Federal Compliance with Right

- to

- Know Laws and Pollution Prevention Requirements” was signed by the President (58 FR 41981). The Executive Order requires federal facilities to comply with EPCRA requirements b eginning with the 1994

- reporting year. The Executive Order also asks all federal agencies to set a voluntary goal of 50% reduction from baseline quantities of their releases and transfers by 1999.

1.1.5 Changes to the List of Industries
On May 1, 1997, EPA added facilities in seven industry groups to the list of facilities subject to the reporting requirements of section 313 (62 FR 23833). The first reports from these facilities were required

5 The annual reportable amount is equal to the combined total quantities recycled, combusted for energy recovery, treated, or rel eased. It can be calculated as is the sum of data elements 8.1 through 8.7 on Form R.

### 1

- 4 2/9 /2012 to be submitted in 1999 for reporting year 1998. Prior to this action, reporting was limited to facilities in the manufacturing sector and federal facilities. This action added facilities in the following sectors:

• Metal mining,

• Coal mining,

• Electric utilities,

• Commerci al hazardous waste treatment, storage, and disposal facilities

• Chemicals and allied products

- wholesale,

• Petroleum bulk terminals and plants

- wholesale, and

• Solvent recovery services.

1.1.6 Changes for Certain PBT Chemicals
On October 29, 1999, EPA lowered report ing thresholds to 10 or 100 pounds for certain TRI chemicals (persistent, bioaccumulative and toxic chemicals, or PBT chemicals) that are of concern because of their toxicity and tendency to persist and bioaccumulate (64 FR 58666). EPA also added to TRI c ertain PBT chemicals that were not already listed including a dioxin category with a reporting threshold of 0.1 gram. At this time EPA made other changes to PBT chemical reporting, such as disallowing the use of the de
minimis exemption, range reporting, and Form A reporting for PBT chemicals (40 CFR § 372.28(b)). On January 17, 2001, EPA lowered the reporting threshold for lead and lead compounds to 100 pounds and applied the same limitations as are applied to other PBT chemicals (40 CFR § 372.28).

1.1.7 Toxic Chemical Release Reporting Using North American Industry Classification System (NAICS) Rule
On June 6, 2006, EPA published a final rule requiring facilities reporting to TRI to use North American Industry Classification System (NAICS) codes in place of th e Standard Industry Classification (SIC) codes previously used on TRI reporting forms. This rule required facilities that report to TRI to use 2002 NAICS codes on reporting Form R and the Form A Certification Statement. The 2007 NAICS Revision Final Rule p ublished on June 9, 2008, required facilities to use 2007 NAICS codes on TRI reporting forms.

1.1.8 TRI Dioxin and Dioxin - like Compounds Toxic Equivalency (TEQ) Information Rule - Final R ule
On May 10, 2007, the Toxics Release Inventory Program issued a final ru le expanding reporting requirements for the dioxin and dioxin

- like compounds category. There are seventeen distinct members of this chemical category that are included on the EPCRA section 313 list of toxic chemicals . The final rule requires that, in addit ion to the total grams released for the entire category, facilities must report the quantity for each individual member on a new Form R Schedule 1. EPA will then use the individual mass quantity data to calculate TEQ values that will be made available to t he public along with the mass data. The final rule also removes the requirement to report the single distribution of compounds in the category.



### 1.2 Chemicals for Addition to TRI

1.2.1 Addition of or tho - Nitrotoluene

ortho

- Ni trotoluene (also known as 2

- nitrotolue ne or o

- nitrotoluene) is primarily processed as a reactant to manufacture other chemicals used in the synthesis of dyes ; rubber and agriculture chemicals ; explosives ; and pharmaceuticals (OECD, 1994; Dugal, 2005). o

- Nitrotoluene has been classified by the National Toxicology Program in their 12 th Report on Carcinogens as “reasonably anticipated to be a human carcinogen.” EPA believes that o

- nitrotoluene meets the EPCRA section 313(d)(2)(B) criteria because it

### 1

- 5 2/9 /2012 can reasonably be anticipated to cause cancer i n humans as there is sufficient evidence of carcinogenicity from studies in experimental animals and supporting data on mechanisms of carcinogenesis.

Exposure to o

- nitrotoluene in the United States is expected to result primarily from dermal contact and inhalation exposure during its production and use. The general population may be exposed to

o

- nitrotoluene as a result of its occurrence in the environment from (1) inadvertent spills of o

- nitrotoluene or chemical mixtures containing o

- nitrotoluene, (2) em issions directly into the environment, or (3) breakdown prod ucts of dinitrotoluenes (DNT) and trinitrotoluenes (TNT).



### 1.3 Organization of This Report

This report examines the potential increase in reporting burden that would result from adding o

nitrotolue ne to the list of EPCRA section 313 reportable chemicals due to EPA’s concern for its carcinogenic properties . This report also estimates the costs to industry and EPA associated with the reporting burden and other impacts of the rule. The remainder of thi s report is organized as follows:

Chapter 2 summarizes the expected number of reports and facilities affected by the proposed rule. Chapter 3 presents the m ethodology used to estimate the burden and costs as well as the results of the analysis. Chapter 4 examines the impacts of the proposed rule on small parent entities as required by the Regulatory Flexibility Act of 1980. Chapter 5 evaluates the benefits of the proposed rule

.

### 1

- 6 2/9 /2012 

## Literature Cited

CDC (2009). Centers for Disease Control and Preven tion (CDC). National Health and Nutrition Examination Survey (NHANES). http://www.cdc.gov/nchs/nhanes.htm

Dugal, M. 2005. Nitrobenzene and Nitrotoluenes. Kirk

- Othmer Encyclopedia of Chemical Technology.

EPA. ( 2006 ) . U.S. Environmental Protection Agency. Inventory Update Reporting (IUR): Non

Confidential 2006 TSCA Inventory Update Rule (IUR) Records. http://cfpub.epa.gov/iursearch/index.cfm?s =chem

. (accessed Dec 9, 2009).

Organisation for Economic C o

- operatio n and Development (OECD). 1994. Screening information dataset (SIDS) initial assessment profile on the OECD high production volume chemical 2

- nitrotoluene. Accessed on December 13 th , 201 1. http://webnet.oecd.org/hpv/UI/SIDS_Details.aspx?Key=9698bce4

- 484f

- 4299

- 932e

1c3a53d20c51&idx=0

### 2

- 1 2/9 /2012 

## Chapter 2

– Estimates of the Number of Additional For ms and Affected Facilities

This chapter presents the estimate of the number of additional forms and affected facilities as a result of the proposed addition of o

- nitrotoluene (CAS 88

- 72

- 2) to the list of TRI

- reportable chemicals under the proposed rule.

B ackground information on o

- nitrotoluene is provided in Section 2.1 of this chapter . T he methods and associated assumptions used to estimate reporting for o

- nitrotoluene are presented in Section 2.2. In Section 2.3, the estimated reporting ( forms and facili ties ) resulting from the manufacture

, processing or otherwise using of o

- nitrotoluene is presented for each industry sector

. S ection 2.4 provides a summary of expected rep orting from the potentially affected universe of facilities.



### 2.1 Background

o

- Nitrotolue ne (also known as 2

- nitrotoluene or orth o

- nitrotoluene) is composed of a nitro group bound to toluene in the second (or ortho ) position. Nitrotoluenes are manufactured by nitration of toluene in an aqueous mixture of nitric and sulfuric acids resulting in isomer mixture of approximately 55

- 60% o rtho

nitrotoluene, 35

- 40% p ara

- nitrotoluene and 3

- 4% m eta

- nitrotoluene (Dugal, 2005). Nitrotoluene isomers are then separated by fractional distillation and crystallization (Dugal, 2005).

Th e production volume 6 repor ted under the TSCA Inve ntory Update Rule (IUR) in 2006 for o

nitrotoluene was 10 to < 50 million lb (U.S. EPA, 2006). The U.S. 1993 U.S. production of o

- nitrotoluene was approximately 35 million lb (Dugal, 2005).

o

- Nitrotoluene is primarily processed as a reactant to manufacture other chemicals used in the synthesis of azo dyes, sulfur dyes, rubber chemicals, agriculture chemicals

, explosives and pharmaceuticals (OECD, 1994; Dugal, 2005 )

. Estimated European consumption of o

- nitrotoluene is presented in Table 2

- 1 . A source for data on U.S. consumption of o

- nitrotoluene was not identified.

Table 2

- 1 : Estimated 2000 European Consumption of o - N itrotoluene

Use Consumption (million lb) Percentage of Total Synt hesis of o

- Toluidine 76.9 40.0% Synthesis of 2,4

- Dinitrotoluene 108.4 56.3% Synthesis of Other Chemicals 7.2 3.7%

Total 192.5 100% Source: EURAR (200 8 )

There are few other current uses for o

- nitrotoluene. Minor uses of o

- nitrotoluene include use as a detection agent in plastic explosives (Rouhi, 1995) and use as a solvent in pigment m anufacturing

process es (OECD, 1994). No other commercial or consumer uses for o

- nitrotoluene have been identified.

6 Production volume includes manufactured volume plus imports.

### 2

- 2 2/9 /2012 

### 2.2 Methodology

This section describes the methods used to estimate reporting for o

- nitrotoluene. In Section 2.2.1 , the general approach used to identify the industrial uses of o

- nitrotoluene by industry sector is presented. The methods used to estimate the number of forms and facilit ies are presented in Sections 2.2.2 : Actual Facilities , and 2.2.3 : Proxy Chemical Method . Methods used to estimate numbers of Form s A and Forms
R are presented in Section 2.2.4 . Methods used to estimate existing filers and first time filers are presented in Section 2.2.5

.

2.2.1 General Approach
Due to the widespread use of o

- nitrotoluene , character iz ing all potential reporters in all potential ly affected industries was not feasible . Therefore, this analysis focused on the sectors that capture the majority of the manufactur ing and process ing of o

- nitrotoluene. This method assumed that most reports fo r o

- nitrotoluene would come from these sectors. Although reports may be filed for o

- nitrotoluene by facilities in additional sectors not considered by this analysis, few reports are expected from these other sectors compared to the total number of reports expected under the proposed rule.

The primary sectors manufacturing, processing, or otherwise using o

- nitrotoluene were identified based on information available from:

• TSCA Inventory Update Reporting (IUR , 2006 ),

• Directory of World Chemical Producers (CIS , 2008), and

• Existing TRI reporters (U.S. EPA, 2011).

The primary sectors are listed in Table 2

- 2

.

Table 2

- 2 : Primary Sectors Manufacturing, Processing, or Otherwise Using o - N itrotoluene

Sector NAICS NAI CS Description

Chemical Manufacturers 325 a Chemical Manufacturing

311942 Spice and Extract Manufacturing

325110 Petrochemical Manufacturing

325132 Synthetic Organic Dye and Pigment Manufacturing

325188 All Other Basic Inorganic Chemical Manufactur ing

325192 Cyclic Crude and Intermediate Manufacturing

325199 All Other Basic Organic Chemical Manufacturing

325211 Plastics Material and Resin Manufacturing

325411 Medicinal and Botanical Manufacturing

325412 Pharmaceutical Preparation Manufactu ring

325413 In

- Vitro Diagnostic Substance Manufacturing

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing

Waste Treatment 562211 Hazardous Waste Treatment and Disposal

562213 Solid Waste Combustors and Incinerators

a Any chemical manufacturing facilities where the six

- digit NAICS code could not be determined were classified under NAICS 325: Chemical Manufacturing for this analysis.

For each sector identified, the potential number of forms and facilities was estimated by NAICS code

. When possible, potential reporting was estimated based on actual facilities (described in Section 2.2.2 ). However, for some facilities processing or otherwise using o

- nitrotoluene, due to the limited amount of avai lable information, it was necessary to construct a model to estimate potential reporting . In this case, the p roxy chemical method was used to estimate the number of forms and facilities by using TRI reporting of a proxy chemical in relevant sectors (descri bed in Section 2.2.3 ).

### 2

- 3 2/9 /2012 2.2.2 Actual Facilities
Companies or facilities manufacturing or importing o

- nitrotoluene or chemicals manufactured from o

nitrotoluene may be identified in the open literature. Based on this information, the n umber of facilities manufactur ing o

- nitrotoluene, import ing o

- nitrotoluene, or facilities processing o

- nitrotoluene as a reactant to manufacture other chemicals expected to report o

- nitrotoluene was estimated based on actual companies or facilities identif ied in the TSCA Inventory Update Reporting (IUR ; U.S. EPA, 2006 )

, Directory of World Chemical Producers (CIS, 2008), and other available publications.

In order to determine the NAICS codes for the facilities identified by the above sources, these facilitie s were matched to their TRI Facility IDs by searching existing TRI data for facilities by name, parent

company name , and address and using EPA’s Facility Registry System (FRS) linkage. If a parent company rather than a facility was identified in the litera ture, existing TRI data and company websites were reviewed to determine the most appropriate facility within the corporate structure likely to report to TRI and to identify the appropriate TRI Facility ID. The actual facilities identified were classified u nder the following six

- digit NAICS codes:

• NAICS 311942: Spice and Extract Manufacturing

• NAICS 325110: Petrochemical Manufacturing

• NAICS 325132: Synthetic Organic Dye and Pigment Manufacturing

• NAICS 325188: All Other Basic Inorganic Chemical Manufacturing

• N AICS 325192: Cyclic Crude and Intermediate Manufacturing

• NAICS 325199: All Other Basic Organic Chemical Manufacturing

• NAICS 325211: Plastics Material and Resin Manufacturing

• NAICS 325411: Medicinal and Botanical Manufacturing

• NAICS 325412: Pharmaceutical P reparation Manufacturing

• NAICS 325413: In

- Vitro Diagnostic Substance Manufacturing

• NAICS 325998: All Other Miscellaneous Chemical Product and Preparation Manufacturing

If a facility’s six

- digit NAICS code could not be determined, that facility was classifi ed in the three

- digit NAICS code 325, Chemical Manufacturing, for this analysis.

2.2.3 Proxy Chemical Method
The proxy chemical method was used where insufficient data were available to apply the actual facilities method or the consumption method. Under the prox y chemical method, a TRI

- reportable chemical was identified that has the following characteristics:

• Similar in physical and chemical properties as o

- nitrotoluene,

• Produced or consumed in similar volumes relative to o

- nitrotoluene, and

• Manufactured similarl y and/or used for similar purposes as o

- nitrotoluene across all industry

sectors.

It was then assumed that the number of facilities reporting and forms submitted in RY2010 for the proxy chemical is a good approximation of the number of o

- nitrotoluene facil ities and forms expected under the proposed rule.

The proxy chemical method was used to estimate the number of forms and facilities expected to report the

o

- nitrotoluene in the following NAICS codes:

• NAICS 562211: Hazardous Waste Treatment and Disposal

### 2

- 4 2/9 /2012 • NAICS 562213: Solid Waste Combustors and Incinerators

Facilities in these two NAICS codes provide waste treatment services to multiple industry sectors and as such, their activities are defined by the demands of all industry sectors.

Potential TRI

- reporta ble proxy chemicals were identified through TSCA IUR reporting. In the 2006 IUR,

o

- nitrotoluene is characterized as follows:

• Production volume (aggregated): 10 to < 50 million lb,

• Maximum concentration (at manufacture or import site): > 90%,

• Physical for m(s): liquid,

• Processed in between 1 to 99 sites, and

• No c ommercial or consumer u se information was r eported

. The following ten TRI

- reportable chemicals were identified as having the same physical and production characteristics as o

- nitrotoluene in the 200 6 IUR:

• 1,2

- Butylene oxide (CAS 106

- 88

- 7)

• 3

- Chloro

- 2

- methyl

- 1

- propene (CAS 563

- 47

- 3)

• Chlorobenzene (CAS 108

- 90

- 7)

• 1,2

- Dichlorobenzene (CAS 95

- 50

- 1)

• 2,4

- Dichlorophenol (CAS 120

- 83

- 2)

• Dimethyl sulfate (CAS 77

- 78

- 1)

• Hexachlorocyclopentadiene (CAS 77

- 47

- 4)

• 2

- Me thylpyridine (CAS 109

- 06

- 8)

• Pyridine (CAS 110

- 86

- 1), and

• o

- Toluidine (CAS 95

- 53

- 4).
In order for the potential proxy chemicals to best match the chemical properties of o

- nitrotoluene, the above list of chemicals was restricted to those chemicals containing a benzene ring. Thus, the following four benzene

- based chemicals were considered to be potential proxy chemicals for o

- nitrotoluene for this analysis:

• Chlorobenzene (CAS 108

- 90

- 7)

• 1,2

- Dichlorobenzene (CAS 95

- 50

- 1)

• 2,4

- Dichlorophenol (CAS 120

- 83

- 2), and

• o

- Toluidine (CAS 95

- 53

- 4).
To identify the proxy chemical that best matches the manufacturing and general uses across all industry relative to o

- nitrotoluene, TRI Form R, Part II, Section 3: Activities and Uses of the Toxic Chemical at the Facility (hereinaf ter referred to as ‘Form R Section 3’) data were analyzed for the four potential proxy chemicals. In Form R Section 3, facilities indicate whether the chemical was manufactured (Section 3.1), processed (Section 3.2), and/or otherwise used (Section 3.3) at the facility. Further delineation of each of these activities is indicated, for example, whether a chemical was manufactured onsite (3.1a) or imported (3.2b), whether it was manufactured for on

- site use/processing (3.1c), for sale or distribution in commer ce (3.1d), and whether it was manufactured as a byproduct (3.1e) or impurity (3.1f). RY2010 reporting including Form R Section 3 data for these seven chemicals across industry sectors is summarized in T able 2

- 3

.

### 2

- 5 6/21/2012 T able 2

- 3 : RY2010 TRI Reporting for the Potential Proxy Chemicals Across All Industry Sectors

Chemical Forms Form R a Form A b Form R Section 3.1: Manufacture (number of times activity is indicated) Form R Section 3.2: Process (num ber of times activity is indicated) Form R Section 3.3: Otherwise Use (number of times activity is indicated)

3.1a 3.1b 3.1c 3.1d 3.1e 3.1f 3.2a 3.2b 3.2c 3.2d 3.2e 3.3a 3.3b 3.3c

Chlorobenzene 61 57 4 16 2 5 2 12 3 12 5 0 5 4 13 4 26

1,2

- Dichlorobe nzene 17 16 1 2 1 2 0 0 1 3 1 0 0 1 4 1 9

2,4

- Dichlorophenol 6 5 1 2 0 1 0 1 1 2 0 0 0 0 0 0 2

o

- Toluidine 15 13 2 4 1 2 1 3 0 5 3 0 0 1 0 0 3
Source: U.S. EPA (2011)

a Since a facility may report more than one Section 3 activity on a TRI Form R, the to tal number of Section 3 activities may be greater than the number of Form s R

. b Facilities submitting Form A do not report Section 3 activities.
Activities Listed under Form R, Part II, Section 3
Section 3.1a: Manufacture, produce Section 3.1b: Manufact ure, import Section 3.1c: Manufacture for on

- site use/processing Section 3.1d: Manufacture for sale/distribution Section 3.1e: Manufacture as a byproduct Section 3.1f: Manufacture as an impurity Section 3.2a: Process as a reactant Section 3.2b: Process as a formulation component Section 3.2c: Process as an article component Section 3.2d: Process, repackaging Section 3.2e: Process as an impurity Section 3.3a: Otherwise use as a chemical processing aid Section 3.3b: Otherwise use as a manufacturing aid Sectio n 3.3c: Otherwise use, ancillary

### 2

- 6 2/9 /2012 Using Form R Section 3 data, the manufacture and general uses of o

- nitrotoluene as well as the proxy chemicals across industry sectors are compared in Table 2

- 4

.

Table 2

- 4 : Comparison of the Major Uses of o - Nitrotoluene to the Potential Proxy Chemicals

Use of the Toxic Chemical Form R Relevant

Data o Nitro toluene Chlor o benzene 1,2

- Dichlor o benzene 2,4

- Dichlor o phenol o - Toluidine

Primarily processed as a reactant Secti on 3.2a X X X

Not processed as a formulation or article component Section 3.2b, Section 3.2c X X

a As described in Section 2.1 , most o

- nitrotoluene is processed as a reactant to manufacture other che micals.

b As described in Section 2.1

, no uses for o

- nitrotoluene aside from processing as a reactant and use as a solvent have been identified. Thus, o

- nitrotoluene is not expected to be processed as a fo rmulat ion or article component.

As shown in Table 2

- 4 , of the potential proxy chemicals, 2,4

- dichlorophenol best matches the manufacturing and general use of o

- nitrotoluene across industry sectors. Specifically, both 2,4

- dichloropheno l and o

- nitrotoluene are primarily processed as reactants and are not processed as formulation or article components. Thus, 2,4

- dichlorophenol was identified as the proxy chemical that best matches the general use of o

- nitrotoluene.

2.2.4 Form s A and Form s R

Som e facilities manufacturing, processing or otherwise using o

- nitrotoluene were expected to meet the Alternate Threshold and thus be eligible to file a Form A for o

- nitrotoluene. For example, it is likely that some facilities process relatively low amounts o f o

- nitrotoluene in processes where releases and waste management are limited. Activity, release and waste management data necessary to evaluate Form A applicability could not be estimated due to limited available information. Therefore, other methods usin g proxy chemical data were used to estimate the number of Form s A

.

To estimate the number of Form s A potentially expected from actual facilities, the percentage of the proxy chemical (2,4

- dichlorophenol) 1 forms filed as Form s A in RY2010 in NAICS 325: Chem ical Manufacturing was determined (25%). 2 This percentage was then multiplied by the number of o

nitrotoluene forms expected from actual facilities to estimate the number of Form s A expected from NAICS 325: Chemical Manufacturing.

Using the proxy chemical method for waste treatment, the numbers of Form s A and Forms R for o

nitrotoluene were expected to be equal to the number of Form s A and Form s R for 2,4

- dichlorophenol in RY2010 in the following NAICS codes:

• NAICS 562211: Hazardous Waste Treatment and Disp osal, and

• NAICS 562213: Solid Waste Combustors and Incinerators.

1 2,4

- Dichlorophenol, the proxy chemical identified for waste treatment of o

- nitrotoluene, was applied sin ce it was identified to best reflect the general use of o

- nitrotoluene.

2 In RY2010, a total of four forms (three Forms R and one Form A) were submitted for 2,4

- dichlorophenol in NAICS 325: Chemical Manufacturing. Therefore, Forms A represent 25% of total forms in RY2010 in Chemical Manufacturing. However, the percentage of Forms A for 2,4

- dichlorophenol in Chemical Manufacturing has been relatively consistent over prior reporting years (average of 32% for RY2006

– 2009).

### 2

- 7 2/9 /2012 2.2.5 Existing Filers and First Time Filers
Facilities were classified as either existing filers or first time filers. Existing filers are defined as facilities that reported to TRI at least once during the period RY2006

– 2010. First time filers are defined as facilities that have never reported to TRI or have not reported to TRI since RY2005.

As described in Section 2.2.2, TRI Facility IDs were identified for actual facilities. A facility was ide ntified as an existing filer if the appropriate TRI Facility ID was identified and that facility reported to TRI at least once during the period RY2006

– 2010.

In order to estimate existing versus first time filers for facilities modeled by the consumption or proxy chemical methods, the average annual percentage of new filers for RY200 6 to RY20 10 across all chemicals (3.5%) 3 was multiplied by the number of facilities expected to report o

- nitrotoluene to calculate the expected nu mber of first time filers.



### 2.3 Es timation of the Number of Forms and Facilities

This section presents estimate d reporting for o

- nitrotoluene for each of the sectors in Table 2

- 2

. Specifically, the estimated number of forms and facilities is presented in Section 2.3.1 for chemical manufacturers and in Section 2.3.2 for waste treatment.

2.3.1 Estimation of the Number of Forms and Facilities from Chemical Manufacturers
Estimated reporting for o

- nitrotoluene from che mical manufacturers includes both facilities manufacturing o

- nitrotoluene and facilities processing o

- nitrotoluene to manufacture other chemicals. Using the method described in Section 2.2.2 , a total of three facilities manufac tur ing or import ing o

nitrotoluene and a total of 20 facilities processing o

- nitrotoluene as a reactant to manufacture other chemicals were identified . Because all three facilities manufacturing or importing o

- nitrotoluene also

process o

- nitrotoluene as a reactant to manufacture other chemicals , a total of 20 facilities manufacturing, importing or processing o

- nitrotoluene as a reactant were identified.

All facilities identified as manufacturing o

- nitrotoluene or processing o

- nitrotoluene as a reactant to manufacture other chemicals were expected to meet the TRI reporting requirements for o

- nitrotoluene. Specifically, the average manufacturing and processing volumes were estimated to be at least 0.5 million lb of processing per facility and 3.3 million lb o f manufacturing per facility. 4 Because the estimated average manufacturing and processing volumes were greater than 20 times the reporting thresholds, all facilities identified as manufacturing o

- nitrotoluene or processing o

- nitrotoluene as a reactant to

m anufacture other chemicals were assumed to 1) be manufacturing or processing o

- nitrotoluene above the 25,000 lb reporting thresholds, and 2) be above the employment threshold of 10 or more fulltime employees.

Using the method for estimating Form s A descri bed in Section 2.2.4 , five Form s A were estimated. Because the distribution of For ms A across chemical manufacturers was unknown, Form s A were assumed to be distributed across the relevant NAICS codes in proportion to the numbe r of reporting

3 First time filers: RY2006

- 3.5%, RY2007

- 3.4%, RY2008

- 3.7%, RY2009

– 3.0%, RY2010

- 3.9%

4 Average processing volume per facility was calculated by dividing the lower bound of the reported production volume for o

- nitrotoluene ( 10 million lb; IUR, 2006) by the 20 facilities identified as processing o

- nitrotoluene as a reactant to manufacture other chemicals . Likewise, the average manufacturing per facility was calculated using the 3 facilities identified as manufacturing or importing o

- nitrotoluene

.

### 2

- 8 2/9 /2012 facilities identified in each NAICS code. Of the 20 facilities, one was identified as having not previously reported to TRI and is expected to be a first time filer.

Estimated reporting by chemical manufacturers under the proposed rule by NA ICS code is presented in Table 2

- 5

.

Table 2

- 5 : Estimated Forms and Facilities from Chemical Manufacturers Under the Proposed Rule

NAICS NAICS Description Forms Facilities

Form R Form A Total Existing F ilers First Time Filers Total

325 Chemical Manufacturing 2 1 3 3 0 3

311942 Spice and Extract Manufacturing 1 0 1 1 0 1

325110 Petrochemical Manufacturing 1 1 2 2 0 2

325132 Synthetic Organic Dye and Pigment Manufacturing 1 0 1 1 0 1
325188 All Other Basic Inorganic Chemical Manufacturing 1 0 1 1 0 1

325192 Cyclic Crude and Intermediate Manufacturing 1 0 1 1 0 1

325199 All Other Basic Organic Chemical Manufacturing 3 2 5 5 0 5

325211 Plastics Material and Resin Manufacturing 1 0 1 1 0 1

325411 Medi cinal and Botanical Manufacturing 1 0 1 1 0 1

325412 Pharmaceutical Preparation Manufacturing 1 1 2 1 1 2

325413 In

- Vitro Diagnostic Substance Manufacturing 1 0 1 1 0 1

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 1 0 1 1 0 1

Total 15 5 20 19 1 20

2.3.2 Estimation of the Number of Forms and Facilities from Waste Treatment
Using the proxy chemical method described in Section 2.2.3

, reporting for o

- nitrotoluene under the proposed rule was estimated to equal RY2010 reporting for 2,4

- dichlorotolune in NAICS 562211: Hazardous Waste Treatment and Disposal and NAICS: 562213: Solid Waste Combustors and Incinerators

.
Using the method for estimating first time filers described in Section 2.2.5 , no first time filers are estimated. Estimated reporting under the proposed rule by waste treatment facilities is presented in Table 2

- 6

.

Table 2

- 6 : Estimated Forms and Facilities from Wast e Treatment Under the Proposed Rule

NAICS NAICS Description Forms Facilities

Form R Form A Total Existing Filers First Time Filers Total

562211 Hazardous Waste Treatment and Disposal 1 0 1 1 0 1

562213 Solid Waste Combustors and Incinerators 1 0 1 1 0 1

Total 2 0 2 2 0 2

### 2

- 9 2/9 /2012 

### 2.4 Summary of the Total Number of Forms and Facilities under the Proposed Rule

Total reporting is presented in Table 2

- 7 . From the potentially affected universe of facilities, a total of 22 forms from 22 faci lities across 13 six

- digit NAICS codes 5 are expected to be submitted for o

- nitrotoluene under the proposed rule. Of these 22 forms, 17 are expected to be Form s R and five are expected to be
Form s A . Of the 22 facilities, one is expected to be a first time filer.

Table 2

- 7 : Total Estimated Forms and Facilities Under the Proposed Rule

NAICS NAICS Description Forms Facilities

Form

R Form A Total Existing Filers First Time Filers Total

325 a Chemical Manufacturing 2 1 3 3 0 3

31194 2 Spice and Extract Manufacturing 1 0 1 1 0 1

325110 Petrochemical Manufacturing 1 1 2 2 0 2

325132 Synthetic Organic Dye and Pigment Manufacturing 1 0 1 1 0 1

325188 All Other Basic Inorganic Chemical Manufacturing 1 0 1 1 0 1

325192 Cyclic Crude and Intermediate Manufacturing 1 0 1 1 0 1

325199 All Other Basic Organic Chemical Manufacturing 3 2 5 5 0 5

325211 Plastics Material and Resin Manufacturing 1 0 1 1 0 1

325411 Medicinal and Botanical Manufacturing 1 0 1 1 0 1

325412 Pharmaceutical Prepara tion Manufacturing 1 1 2 1 1 2

325413 In

- Vitro Diagnostic Substance Manufacturing 1 0 1 1 0 1

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 1 0 1 1 0 1

562211 Hazardous Waste Treatment and Disposal 1 0 1 1 0 1

562213 Sol id Waste Combustors and Incinerators 1 0 1 1 0 1

Total 17 5 22 21 1 22

a Any chemical manufacturing facilities where the six

- digit NAICS code could not be determined were classified under NAICS 325: Chemical Manufacturing for this analysis.

5 The th ree facilities where s ix

- digit NAICS code could not be determined were classified in the three

- digit NAICS 325 : Chemical Manufacturing for this analysis.

### 2

- 10 2/9 /2012 

## Literatu re Cited

Chemical Information Services (CIS) . 2008. Directory of World Chemical Producers.

European Union Risk Assessment Report (EURAR) . 2008. European Union R isk A ssessment R eport: CAS:88

- 72

- 2: 2

- Nitrotoluene. 2008. Luxembourg: Office for Official Public ations of the European Communities. Accessed on December 13 th , 2011. http://esis.jrc.ec.europa.eu/doc/existing

chemicals/risk_assessment/R EPORT/2nitrotoluenereport403.pdf

Dugal, M. 2005. Nitrobenzene and Nitrotoluenes. Kirk

- Othmer Encyclopedia of Chemical Technology.

Organisation for Economic C o

- operatio n and Development (OECD). 1994. Screening information dataset (SIDS) initial assessment profile on the OECD high production volume chemical 2

- nitrotoluene. Accessed on December 13 th , 2011. http://webnet.oecd.org/hpv/UI/SIDS_Details. aspx?Key=9698bce4

- 484f

- 4299

- 932e

- 1c3a53d20c51&idx=0

Rouhi, A. M. 1995. Government, industry efforts yield array of tools to combat terrorism. Chemical and Engineering News, 73 (30), pp. 10

– 19

.

U.S. EPA. 2011. TRI RY2010 ( Results ar e based on data extract ed on October 27 th , 2011) . Accessed via Envirofacts, Form R & A Download. http://www.epa.gov/enviro/facts/tri/form_ra_download.html

U.S. EPA . 2006. Inventory Update Reporting (IUR) . Accessed May 2011. http://www.epa.gov/oppt/iur/

### 3

- 1 2/9 /2012 

## Chapter 3

– Cost Estimates

3.1 Introduction

This chapter presents the estimated industry and EPA costs associated with the proposed rule that would add o

- nitrotoluene to th e list of TRI

- reportable chemicals. EPA is concerned about this chemical due its carcinogenic properties

. In S ection 3.2

, the methodology used to estimate industry burden and cost is described . Section 3.3 details the estimated burden and cost to EPA. In Section 3.4, the total burden and

cost of the proposed rule is summarized.



### 3.2 Industry Burden and Cost Estimates

T he burden and cost potentially incurred by industry as a result of the proposed rule are estimated using the Ratio

- Based Burden Methodology (RBB M) which is a simplified formulation of the previously employed burden methodology

. 1 Sections 3.2.1 and 3.2.2 describe the methodology used to estimate industry burden and cost, respectively. Sections 3.2.3 and 3.2.4 present estimates o f total industry burden and cost, respectively.

3.2.1 Estimation of Reporting Burden
The previous method used to estimate reporting burden and cost was based on a system of 96 factors

across four categories of scenarios ( persisten t bio accumulative and toxic (PBT) first year, PBT subsequent year, non

- PB T first year, non

- PBT subsequent year ), with each category’s set of factors yielding a separate subpopulation TRI chemical count. RBBM serves to simplify calculations, establish internal consistency, and sharpen transparency while retaining the components of the previous methodology. The foundation of RBBM is its use of ratio models to maintain relationships between interrelated categories of reporting activities. Reporting activities ca n be divided into two distinct groups: Form Activities, consisting of rule familiarization, reporter compliance determination, calculations and form completion, and recordkeeping and submission; and Non

- Form Activities, consisting of supplier notification and non

- reporter compliance determination. Specifically, the following activities may be undertaken under the proposed rule.

Form Activities

Rule Familiarization: Staff at a facility that is reporting under EPCRA §313 for the first time must read the re porting package and become familiar with the reporting requirements. This activity includes the time needed to review instructions as well as the time needed to train personnel to respond to a collection of information.

Reporter Compliance Determination: Staff a t reporting facilities must make the determination that the facility meets the criteria for EPCRA §313 reporting. This activity includes the time required to become familiar with the definitions, exemptions, and threshold requirements under the TRI Program, to review the list of TRI chemicals, and to conduct preliminary threshold determinations to determine if the facility is required to report.

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

1 Revising TRI Burden to Ratio

- Based Methodology, TRI Regulatory Development Branch, TRI Program Divis ion, Office of Information Analysis and Access, Office of Environmental Information, January 2011, EPA Docket ID Number EPA

- HQ

- OEI

- 2010

- 0825

.

### 3

- 2 2/9 /2012 Recordkeeping and Submission: Facility staff must maintain recordkeeping systems and submit the report to EPA and the state in which the facility is located. This activity includes the time required to transmit or otherwise disclose the information.

Non

- Form Activities Supplier Notification: Certain suppliers of mixtures or trade name products containing reportable substances must annually notify their customers of the product's composition if the customer is subject to EPCRA §313 reporting. This activity includes the time required to inform customers either by letter or through the materials safety data sheet (MSDS) for the product. Under the proposed rule, EPA assumes that the number of facilities that might be required to provide supplier notifications would only be a small fraction of potential supplier notifications in connection with the TRI program overall. Therefore, no additional supplier notification burden is estimated in connection with the proposed rule.

Non

- Reporter Compliance Determination: In any given reporting year, a group of eligible facilities will complete compliance determination but will not file a Form R or Form A. The activity is the same as is presented above under Form Activities; however, given that compliance determination applies to all other facilities in NAICS code

- eligible sectors (with ten or more employees)

— including thos e that ultimately do not report to TRI

— the latter category is accounted for in this separate activity. For this proposed rule, it is assumed that the addition of o

nitrotoluene constitute s a modest change when compared to the total number of chemicals subj ect to the program. Thus, it is assumed that the non

- reporter compliance determination burden is already included in the existing compliance determination burden estimates.

The skills required to comply with the section 313 reporting requirements (inclu ding the requirements associated with section 6607 of the PPA) are expected to vary from facility to facility, depending upon factors such as : the complexity of the facility's processes and activities; the chemicals used at the facility; and the type s of u se and disposition of TRI chemicals at the facility

. Individuals responsible for determining whether their facility is required to report and, if so, completing a Form R and Form A report (or multiple Form R and Form A reports) will often have an engineeri ng, scientific, or technical background . These functions, however, do not require an engineering or other similar degree

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

- and che mical

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

Estimating reporting burden using RBBM produces a burden estimate that reflects overall “average” reporting conditions at reporting facilities. In RBBM, the variable Nominal Form R unit burden is used as a base number for the entire methodolo gy, and reflects the burden incurred by reporters to undertake all

### 3

- 3 2/9 /2012 Form Activities for filing a Form R, thereby preserving the previous methodology’s burden totals. The Nominal Form R unit burden is set at 35.70516 hours. 2

The estimated reporting burden for Form A is closely linked to that of Form R, and is quantified by the ratio A/R ( is set at .615 ) , reflecting the burden of a Form A as 61.5% of the burden of a Form R. This relationship implies that filing a Form A instead of a Form R yields a 38.5% bur den reduction per chemical.

Form Activity Burden can be calculated u sing the Nominal Form R unit burden, t he A/R ratio, and the number of Forms R and Forms A expected to be filed due to the proposed rule. RBBM combines Form Activity Burden with Non

- Form Activity Burden (consisting of supplier notification and non

- reporter compliance determination) in order to calculate Steady State Total Burden , which is the ongoing annual burden estimated to be incurred by filers due to the proposed rule (previously ref erred to as “Subsequent Year Burden”), see Equation 1

.

Equation 1 : Steady State Total Burden Calculation

Steady State Total Burden = Form R Activity Burden + Form A Activity Burden + Non

- Form Activity Burden

Where: Form R Activity Burden = (# Form R) * (Nominal Form R Unit Burden) Form A Activity Burden = (# Form A) * (A/R) * (Nominal Form R Unit Burden)
Non

- Form Activity Burden = Supplier Notification + Non

- Reporter Compliance Det ermination

And: A/R = 0.615 Nominal Form R Unit Burden = 35.70516 hours per Form R

As in the previous methodology, the Steady State Total Burden does not incorporate any first

- time filer impacts because those impacts are present only in the first ye ar of reporting under the proposed rule. First time filer impacts account for the elevated level of effort incurred by both 1) filers reporting to TRI for the first

- time and 2) filers already reporting to TRI

, but considering the requirements of the propos ed rule for the first time. To represent that impact, a First

- Time Filer Factor (FTF f ) is computed at 2.1. FTF f has the following interpretation: “for any comparison of first

- time filer to ongoing filer burden, the elevated startup effort is roughly twice that of normal ongoing burden.” 3 Using FTF f , first year burden is calculated by multiplying the Steady State Total Burden by FTF f , as in Equation 2

.

Equation 2 : First Year Total Burden Calculation

First Year Total Burden = Steady State Total Burden * FTF f

Where: Steady State Total Burden is calculated as in Equation 1

. FTF f = 2.1

2 The burden of 35.70516 includes the recent addition of .00516 hours of burden associated with the new Dioxin Rep orting Requirements promulgated in May 10, 2007, and accounted for in the 201 1 ICR (Docket# EPA

- HQ

- OEI

2010

- 0835

. 3 Revising TRI Burden to Ratio

- Based Methodology, TRI Regulatory Development Branch, TRI Program Division, Office of Information Analysis and Access, Office of Environmental Information, January 2011, EPA Docket ID Number EPA

- HQ

- OEI

- 2010

- 0825

.

### 3

- 4 2/9 /2012 3.2.2 Estimation of Reporting Cost

To estimate reporting cost, RBBM us es the Weighted Average Wage Rate (WAWR) , which is the average loaded cost for a mix of Managerial, Technical, and Clerical labor per hour of TRI reporter burden. The WAWR reflect s the total cost to employ an individual and include s the cost of salaries, fringe benefits (e.g., paid leave ) , health insurance, retirement savings, legally required benefits, and other overhead costs, such as office space, furniture, equipment and computers, supplies and other business expenses.

According to feedback from exi sting TRI filers, the role of each labor category in the TRI reporting process at the facility level is as follows:

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

• Tec hnical staff possess the facility knowledge and familiarity with the TRI program required to understand which processes and activities at the facility should be considered in making threshold determinations for TRI chemicals. Technical staff gather the req uired data, make threshold determinations, calculate release and waste management quantities, and enter the required data on the TRI form, either by hand or electronically using TRI reporting software. Technical staff are also responsible for briefing man agerial staff once annually regarding TRI submissions and any changes to TRI reporting requirements

.

• Clerical staff are responsible for organizing, photocopying, and cataloging all TRI submissions and supporting documentation in accordance with TRI record keeping requirements. Note that as reporting facilities move toward filing TRI reports electronically, clerical time is minimized.

As presented in Table 3

- 1 , t he Managerial, Technical, and Clerical wage rates are composites of th e BLS rates for ‘Wages and Salaries’ and ‘Total Benefits’ by labor category. The sum of ‘Wages and Salaries’ and ‘Total Benefits’ is equal to ‘Total Compensation.’ The M anagerial labor rate is defined as the average hourly wages and salaries for the “Man agement, Business, and Financia l” occupational category. The T echnical labor rate is defined as the average hourly wages and salaries for the “Professional and Related” occupational category. The C lerical labor rate is defined as the average hourly wages and salaries for the “Office and Administrative Support” occupational category.

Based on information provided by the chemical industry and chemical industry trade associations, an additional loading factor of 17 percent is applied to ‘Wages and Salaries’ for general overhead. 4 The sum of ‘Total Compensation’ and ‘Overhead’ is equal to ‘Total Loaded Hourly Wage Rate’. The hourly wage rates are $65. 33 for managerial personnel, $52. 27 for technical personnel, and $25. 73 for clerical personnel, all in 2011 dollars, as presented in Table 3

- 1

.

The WAWR is derived using h ourly labor rates and the relative weight or contribution of each labor category derived using Engineering Studies conducted by Abt Associates. The relative fixed wei ghts

4 Heiden Associates, Final Report: A Study of Industry Compliance Costs Under the Final Comprehensive Assessment Information Rule , Prepared for the Chemic al Manufacturers Association, December 14, 1989.

### 3

- 5 2/9 /2012 assigned are 0.03 for Managerial, 0.89 for Technical, and 0.08 for Clerical. 5 Multiplying each labor category’s by its appropriate weight yields a single weighted average wage rate of $50.56.

Table 3

- 1 : The Derivation of the Weighted Average Wage Rate (2011$)

Wage Type Managerial Technical Clerical Wages and Salaries $40.55 $33.27 $16.00

Total benefits $17.89 $13.34 $7.01

Overhead $6.89 $5.66 $2.72

Total Loaded Rate $65.33 $52.27 $25.73

Labor Bu rden Weights 0.03 0.89 0.08 Weighted Average Wage Rage (WAWR) $50. 56

Bureau of Labor Statistics. Employer Costs for Employee Compensation. Table 9. Released December 7 , 2011.

The Steady State Total Cost incurred by filers in subsequent years of the pr oposed rule , is calculated by multiplying the WAWR by the Steady State Total Burden . Similarly, to calculate First Year Total Cost incurred by filers in the first year of the proposed rule, the First Year Total Burden is multiplied by the WAWR ( see Equation 3 )

.

Equation 3 : Steady State and First Year Cost Calculation

Steady State Total Cost = Steady State Total Burden * WAWR

First Year Total Cost = First Year Total Burden * WAWR

3.2.3 To tal Industry Reporting Burden Estimates

The Steady State Total Burden estimated to be incurred by filers in subsequent years of this proposed rule is calculated by multiplying the estimated number of Forms R by the Nominal Form R Unit Burden

, multiplying t he number of Forms A by the A/R ratio and the Nominal Form R Unit Burden , and summing the two products. Non

- Form Activity burden is negligible and assumed to be zero. 6

The number of Forms R and Forms A estimated to be filed by industry sectors potential ly affected by the proposed rule is presented in Table 3

- 2

. Equation 4 presents the Steady State Total Burden calculation for this proposed rule. First Year Burden is calculated by multip lying the Steady State Total Burden by 2.1, the FTF f factor ( Equation 5 )

.

5 As derived using the Abt Associates Engineering Study ( TRI Reporting Burden Estimates, Memo from Hilary Eustace, David Cooper, Susan Day, Abt Associates to Paul Borst, EPA, July 16, 2004 ) and discussed in the Revising TRI Burden to Ratio

- Based Methodology ( TRI Regulatory Development Branch, TRI Program Division, Office of Information Analysis and Access, Office of Environmental Information, January 2011, EPA Docket ID Number EPA

- HQ

- OEI

- 2010

- 0825).

6 For sup plier notification, it is assumed that the number of facilities that might be required to provide supplier notifications would only be a small fraction of potential supplier notifications in connection with the TRI program overall. For non

- reporter compli ance determination, it is assumed that the addition of o

- Nitrotoluene constitute s a modest change when compared to the total number of chemicals subject to the program.

### 3

- 6 2/9 /2012 Table 3

- 2 : Total Estimated Forms Under the Proposed Rule

NAICS NAICS Description Forms

Form R Form A Total

325 a Chemical Manufacturing 2 1 3

311942 Spice and Extract Manufacturing 1 0 1

325110 Petrochemical Manufacturing 1 1 2

325132 Synthetic Organic Dye and Pigment Manufacturing 1 0 1

325188 All Other Basic Inorganic Chemical Manufac turing 1 0 1

325192 Cyclic Crude and Intermediate Manufacturing 1 0 1

325199 All Other Basic Organic Chemical Manufacturing 3 2 5

325211 Plastics Material and Resin Manufacturing 1 0 1

325411 Medicinal and Botanical Manufacturing 1 0 1

325412 Pharmace utical Preparation Manufacturing 1 1 2

325413 In

- Vitro Diagnostic Substance Manufacturing 1 0 1

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 1 0 1

562211 Hazardous Waste Treatment and Disposal 1 0 1

562213 Solid Waste C ombustors and Incinerators 1 0 1

Total 17 5 22

a Any chemical manufacturing facilities where the six

- digit NAICS code could not be determined were classified under NAICS 325: Chemical Manufacturing for this analysis.

Equation 4 : Steady State Total Burden Incurred by Reporters under the Proposed Rule

717 hours = [(17* 35.70516) + (5*.615*35.70516) + 0]

Equation 5 : First Year Total Burden Incurred by Reporters under the Proposed Rule

1,506 hours = 717 * 2.1

As shown in Table 3

- 3 , industry would incur 1,506 hours of reporting burden in the first year of the rule. In the steady state

, industry reporting burden would equal 717 hours.

Table 3

- 3 : Industry Reporting Burden

Form R (#) Form A (#) Form R Burden (hour s ) Form A Burden (hours) Total Burden (hours)

First Year 17 5 1,275 231 1,506 Steady State 607 110 717

### 3

- 7 2/9 /2012 3.2.4 Total Industry Reporting Cost Estimates

As show n in Equations 6 and 7, the cost s incurred in the first year and steady state of the rule are calculated by multiplying the burden by the WAWR.

Equation 6 : Steady State Total Cost Incurred by Filers under the Proposed Rule

$ 36 ,252 = 717 hours * $50. 56

Equation 7 : First Year Cost Incurred by Filers under the Proposed Rule

$76,143 = 1,506 hours * $50.56

Table 3

- 4 shows that industry would incur a cost of $76,143 in the fi rst year, and $36,252 in the steady

state as a result of the proposed rule.

Table 3

- 4 : Industry Reporting Cost

Form R (#) Form A (#) Total Cost (2011$)

First Year 17 5 $76,143
Steady State $36,252



### 3.3 

## EPA Costs

The burden and cost to EPA to process Form R and Form A reports are based on information characterizing the resources used by the Agency in previous years. For the TRI program in general, EPA incurs burden and costs for five categories of activit ies: data processing, outreach and training, information dissemination, policy and petitions, and compliance and enforcement.

The estimate s of EPA burden and costs are separated into fixed and variable component s

. Activities and expenses that are not affe cted by small changes in the number of report s submitted annually are reported as fixed costs. These activities and expenses include rent for the EPCRA Reporting Center, development costs for data access tools, compliance assistance measures, and other act ivities and expenses listed above. There are no additional fixed costs to the Agency associated with the proposed rule. The incremental burden, or the variable component, is the type of burden that varies depending on the number of forms, particularly conc erning forms processing. Table 3

- 5 presents costs associated with form processing by submission media type. In this analysis, it is conservatively assumed that processing costs for Form R and Form A are the same w ithin each submission media type (paper or TRI

- MEweb).

Table 3

- 5 : Agency Forms Processing Cost by Media Type

Media Type Form Processing Cost Per Form (2011 $ )
Paper $26.32

TRI

- MEweb $3.19
Source: Persona l communication with Juan Parra. TRI Information and Outreach Brach. January 9, 2012. Cost updated to 2011 dollars using the Employer Cost Index.

### 3

- 8 2/9 /2012 As presented in Table 3

- 6 , 1 7 Form s R and 5 Form s A are expected to be filed for o

- nitrotoluene under the proposed rule. The distribution of forms by m edia type is estimated using RY2010 TRI data. 7 Assuming the same distribution of submissi on media types as in RY 20 10 , the total form processing burden for EPA associated with Form s R and Forms A submission s under the proposed rule is estimated to be $ 70. Because such a low percentage of Forms R and Forms A were submitted via a paper submission in RY2010 ( 2.73% and 4.73% , respectively

, which, when applied, rounds to zero paper forms ) , it is estimated that the universe of submissions for o

- nitrotoluene would be via T R IMEweb only, as presented in Table 3

- 6

.

Table 3

- 6 : Estimated Number of Submissions and Incremental Agency Cost by Media Type

Media Type Estimated Number of Forms R Estimated Number of Form s A Form Processing Cost Per Form ($) Processing Cost ($)
TRIMEweb 17 5 $ 3.19 $70



### 3.4 

## Total Costs

T he total cost of the proposed rul e to industry and EPA is estimated at $ 76,213 in the first year of the rule and $ 36,322 in the steady state

. 8 Table 3

- 7 summarizes the total costs to industry and EPA as a result of the proposed rule.

Table 3

- 7 : Summary of Total Costs of Proposed Rule
Description First Year Steady State
Industry Costs $76,143 $36,252
Agency Costs $70 $70

Total Costs $76,213 $36,322

7 In RY2010, 2,007 Forms R were submitted as paper forms and 71,491 Forms R were submi tted via TRI

- MEweb; 447 Forms A were submitted as paper forms and 8,997 Forms A were submitted via TRI

- MEweb.

8 The steady state burden created by the rule would be added to the steady state burden of TRI reporting in general during ICR development.

### 3

- 9 2/9 /2012 

## Literature Cited

Abt Associates Inc. (2 004). Engineering Studies. TRI Reporting Burden Estimates, Memo from Hilary Eustace, David Cooper, Susan Day, Abt Associates to Paul Borst, EPA, July 16, 2004.

Heiden Associates (1989). Final Report: A Study of Industry Compliance Costs Under the Final Co mprehensive Assessment Information Rule , Prepared for the Chemical Manufacturers Association, December 14, 1989.

U.S.DOL (2011). Employer Costs for Employee Compensation

– September 2011. Table 9. U.S. Department of Labor. Bureau of Labor Statistics. Wa shington D.C., December 7 , 2011.

U.S. EPA (2011a). Supporting Statement for Information Collection Request Number (ICR) 1363.21, OMB Number 2025

- 0009: TRI Form R and Form A Toxic Chemical Release Reporting. February 2011.

U.S. EPA (2011b). Revising TRI B urden to Ratio

- Based Methodology (TRI Regulatory Development Branch, TRI Program Division, Office of Information Analysis and Access, Office of Environmental Information, January 2011, EPA Docket ID Number EPA

- HQ

- OEI

- 2010

- 0825

### 4

- 1 2/9 /2012 

## Chapter 4

– Small Entity Analysis

4.1 Introduction

This chapter addresses the potential impacts of the proposed rule on small entities. Specifically, Section 4.2 discusses the Regulatory Flexibility Act and its applicability to small entities under the proposed rule. In Section 4.3, definiti ons of small entities for the industry groups affected by the proposed rule are provided. Section 4.4 describes the general methodology used to determine if the proposed rule results in a significant economic impact to a substantial number of small entiti es. Finally, Section 4.5 summarizes the results for all small entities affected by the proposed rule.



### 4.2 Impact on Small Entities

The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. § 601 et. seq. ) requires Federal agencies to assess the effects of regula tions on small entities, and in some instances, to examine alternatives to the regulations that may reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the rule would not have a significant economic impact on a substantial number of small entities.

Since 1980, the RFA has required Federal agencies to assess the economic impacts of their actions on

sm all entities, including businesses, nonprofit agencies, and governments. Section 604 of the RFA, as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires an agency to perform a regulatory flexibility analysis for a r ule unless the Agency certifies under section 605(b) that the regulatory action would not have a significant economic impact on a substantial number of small entities. The RFA does not specifically define “a significant economic impact on a substantial

nu mber” of small entities.



### 4.3 Definitions of Small Entities

The RFA uses the definition of “small business” found in the Small Business Act, which authorizes the Small Business Administration (SBA) to define “small business” by regulation. This analysis uses the SBA’s definition of a small business for each industry. 1

SBA's small business size definitions vary by industry. In establishing size standards, SBA considers a number of economic and market characteristics that may allow a business of concern t o exercise dominance in an industry. Size standards are based on criteria such as annual receipts or number of employees that represent a measure of these characteristics. These standards represent the largest size that a for

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

The SBA small business size standards are expansive, classifying most businesses as “small.” For example, the default SBA size standard for manufacturing industries is 500 employees. Ac cording to information compiled for SBA by the Bureau of the Census, 277,572 of 281,644 manufacturing firms have fewer than 500 employees (USSBA, 2011). Therefore, at least 98.5 percent of manufacturing firms would be classified as small businesses accord ing to the SBA definition. In fact, this percentage is actually higher, since for certain industrial classification codes within manufacturing, the SBA size standard is 750, 1,000, or 1,500 employees. Table 4

- 1 li sts the small business size standards for the industries affected by the proposed rule.

1 SBA' s size standards can be found at: http://www.sba.gov/content/table

- small

- business

- size

- standards

### 4

- 2 2/9 /2012 Table 4

- 1 : Small Business Size Standards for Industries Affected by the Proposed Rule

NAICS NAICS Description SBA Stand ards

325120 Industrial Gas Manufacturing 1,000 (empls)

325188 All Other Basic Inorganic Chemical Manufacturing 1,000 (empls)

325199 All Other Basic Organic Chemical Manufacturing 1,000 (empls)

325211 Plastics Material and Resin Manufacturing 750 (emp ls)

325320 Pesticide and Other Agricultural Chemical Manufacturing 500 (empls)

325412 Pharmaceutical Preparation Manufacturing 750 (empls)

325414 Biological Product (except Diagnostic) Manufacturing 500 (empls)

325992 Photographic Film, Paper, Plate an d Chemical Manufacturing 500 (empls)

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 500 (empls)

326150 Urethane and Other Foam Product (except Polystyrene) Manufacturing 500 (empls)

424210 Drugs and Druggists’ Sundries Mer chant Wholesalers 100 (empls)

424690 Other Chemical and Allied Products Merchant Wholesalers 100 (empls)

525910 Open

- End Investment Funds 7,000,000 ($)

551112 Offices of Other Holding Companies 7,000,000 ($)

562211 Hazardous Waste Treatment and Disposa l 12,500,000 ($)

562213 Solid Waste Combustors and Incinerators 12,500,000 ($)

The RFA defines “small governmental jurisdictions” as governments of cities, counties, towns, school districts, or special districts with populations of less than 50,000 peop le. No small governmental jurisdictions are expected to incur a burden as a result of the proposed rule.

The RFA defines “small organizations” as any “not

- for

- profit enterprise which is independently owned and operated and is not dominant in its field.” No small organizations are expected to incur a burden as a result of the proposed rule.



### 4.4 Methodology Overview

This analysis uses annual cost impact percentages to measure potential impacts on small parent entities. The cost impact percentage is defined as annual compliance costs resulting from the proposed rule as a percentage of annual revenues or sales. For purposes of determining small parent entity impacts, annual compliance costs are compared to annual revenues to estimate the magnitude of the regulat ory burden relative to a commonly available and objective measure of a company's business volume. Where regulatory costs represent a small fraction of a typical firm's revenue, the impacts of the regulation are likely to be minimal.

Cost impact percentage s are calculated for the incremental compliance costs incurred during the first year of the rule and in the steady state. The incremental reporting cost associated with this proposed rule is estimated using the Ratio

- Based Burden Methodology (RBBM), which is a simplified formulation of the previously employed burden methodology. Estimating reporting burden using RBBM produces a burden estimate that reflects overall “average” reporting conditions at reporting facilities. 2 According to RBBM, in the steady state, the average burden incurred from submitting a Form R equals 35.70516 hours. The burden incurred from submitting a Form A is 61.5% of the burden of a Form R. To reflect the additional reporting burden incurred during the first year of the rule by b oth filers reporting to TRI for the first

- time and those already reporting to TRI but considering the requirements of the proposed rule for the first time,
RBBM assumes that reporting burden is 2.1 that of each f orms’ burden in the steady state. To calcul ate

2 For more details on RBBM see Chapter 3 of this economic analysis, and Revisi ng TRI Burden to Ratio

- Based Methodology, TRI Regulatory Development Branch, TRI Program Division, Office of Information Analysis and Access, Office of Environmental Information, January 20011, EPA Docket ID Number EPA

- HQ

- OEI

- 2010

- 0825

.

### 4

- 3 2/9 /2012 the corresponding cost of th ese burden s , a weighted average wage rate, WAWR, is calculated, representing the average loaded cost for a mix of Managerial, Technical and Clerical labor per hour of TRI reporter burden . The WAWR is calculated with data fr om Bureau of Labor Statistics’ Employer Costs for Employee Compensation , updated quarterly

. As of December 7, 2011, the WAWR is calculated at $50.56. Applying the WAWR to the estimated burden of filing a Form R yields a cost of $3,843 and $1,820 in the fi rst year of the rule and in the steady state, respectively.

T wenty

- two facilities are expected to report under the proposed rule. Th e universe of potentially affected facilities was estimated using EPA’s TSCA Inventory Update Reporting (IUR) Database, the Directory of World Chemical Producers (DWCP), other available publications , and existing TRI reporters . The exact method used to estimat e the universe of affected facilities is discussed in detail in Chapter 2.

The 22 potentially affected facilities ca n be divided into the following two groups:

• Actual Facilities

– 20 facilities potentially subject to the proposed rule’s reporting requirements, where the identity of each facility is known.

• Modeled Facilities

– two facilities, where the identity of the i ndividual facilities is unknown but where it was possible to estimate the total number of potentially subject facilities by NAICS code via the proxy chemical method, as described in Chapter 2.

For these two groups of facilities, although the estimation o f revenues, employment, and impacts are derived separately, the general methodology used to estimate the impacts on small parent entities consists of the following steps:

Step 1: Identify the universe of affected o

- nitrotoluene facilities. 3

Step 2: Charact erize the relationships between facilities and their parent companies in the affected universe.

Step 3: Estimate annual revenue of parent companies 4 in the affected universe.

Step 4: Identify small parent entities based on SBA definitions.

Step 5: Develop small parent entity compliance cost estimates, based on the number of facilities per parent company estimated in Step 2.

Step 6: Calculate the small parent entity cost impact ratio, defined as the compliance costs as a percentage of annual revenue, as a me asure of regulatory burden.

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

- level impact percentages in each of three categories: (1) less than one percent of annual revenue;

3 The term “affect ed facilities” is used in this report to denote facilities that meet the TRI reporting requirements and are expected to submit at least one form for o

- nitrotoluene. A Form R is completed for a single chemical. Facilities may submit more than one Form R i f they manufacture, process, or otherwise use more than one listed TRI chemical. Form A permits multiple chemical reports on the same form if the facility meets alternate threshold requirements. An “affected” company is a company owning at least one “affec ted” facility.

4 For the purposes of this report, “parent company” denotes an ultimate parent company owning an affected facility (regardless of the size of the facility); “small parent entity” denotes a small ultimate parent company (as defined by the Sm all Business Administration threshold) owning an affected facility.

### 4

- 4 2/9 /2012 (2) between one and three percent of annual reve nue; and (3) greater than or equal to three percent of annual revenue.

The following sections describe how revenue and business size data (based on revenue and employment) were used to characterize impacts on small parent entities of actual and modeled fac ilities in affected industries.

4.4.1 Actual Facilities
Of the 22 facilities estimated to be affected by the proposed rule, 20 (91%) are identified as specific facilities currently manufacturing or importing o

- nitroto l u ene. For these facilities, the cost impact percentages are calculated using the compliance costs per facility, the number of facilities per parent company for small parent entities, and the annual revenues for each of the small parent entities.

Identification of Small Entities and Generation of R evenue Data
For each parent company, revenue and employment data was obtained from Dun and Bradstreet’s (D&B) Private Data Portal (Version 2.6.0, accessed on J anuary 2 , 201 2 ). D&B provides a range of data for over 11 million business locations, including data on number of employees, line of business, key financial indicators, business size, and parent/headquarters.

Where D&B data was incomplete or outdated, alternative resources, such as Bloomberg Businessweek (http://investing.businessweek.com), Manta TM, H ooversTM, and individual company website documents were used to identify company size and revenue data. Using this information, it was possible to classify parent companies as small parent entities using the SBA defined thresholds for the affected industri es. The revenue and business size data used in this analysis represent data for global ultimate parent companies that own one or more facilities in the industries affected by the proposed rule. 5 The 20 actual facilities identified as currently manufactur ing or importing o

- nitrotoluene under consideration, were linked to 18 parent companies, 17 of which had revenue and size information available in D&B. Information on the one remaining parent company was found using CorteraTM and MantaTM, two web

based busin ess intelligence resources.

The ultimate parent data obtained from D&B includes available revenue data for all subsidiaries, divisions, and branches of that parent, including those not individually affected under the rule. The number of potentially affec ted facilities per parent company, however, represents the number of facilities owned by that parent company that are expected to perform compliance activities for the proposed rule (not the total number of facilities per parent company). The universe of a ctual facilities and their parents is summarized in Table 4

- 2

.

5 The global ultimate parent is the uppermost parent or headquarters that encompasses all directly related branches, subsidiaries, or parents of a specific business at a specific location. This analysis assumes that a facility, as defined under TRI, is equivalent to a location as defined by D&B. A “facility,” subject to EPCRA section 313 reporting requirements, means all buildings, equipment, structures, and other stationary items that ar e located on a single site or on contiguous or adjacent sites, and which are owned or operated by the same person, that is classified under an SIC code covered by the regulations, has 10 or more employees or the equivalent, and manufactures, processes, or otherwise uses any of the listed toxic chemicals or chemical categories above the specific reporting thresholds. For some industries this may not correspond exactly to the definition of a location by D&B.

### 4

- 5 2/9 /2012 Table 4

- 2 : Summary of Universe for Small Entity Impact Analyses for Actual Facilities

Number of actual facilities estimated to experience an impact 20 Number of parent companies 18
Number of small parent entities 4

Estimating Compliance Cost
To evaluate the potential impact of the proposed rule, this analysis uses the number of facilities per parent company for small parent entities, the number of reports filed per facility, and the annual revenue for each small entity. Of the 18 parent companies identified, 4 (22%) were classified as small parent entities ( Table 4

- 2 ), each owning one affected facility estimated to file one Form R. 6

Estimating Cost Impact Ratios
Cost impact percentages for the first year and the steady state were calculated for each small parent entity by dividing compliance costs (for all affected facilities owned by the parent company) by the parent company’s annual revenue. The estimated impacts on small parent entities owning actual facilities under the proposed rule are presented in Table 4

- 3 b elow. All four of the affected small parent entities have cost impacts of less than 1% in the first year and in the steady state. In the first year, there is a maximum impact of 0.05% and a minimum impact of less than 0.02%. The mean and median impacts f or the first year are estimated to be 0.033% and 0.029%, respectively.

In the steady state, there is a maximum impact of 0.025% and a minimum impact of less than 0.01%. The mean and median impacts in the steady state are estimated to be less than 0.02% a nd 0.014%, respectively.

Table 4

- 3 : Summary of Impacts on Small Parent Entities Affected by the Proposed Rule ( A ctual F acilities)

Cost Impact Category Affected Small Entities in 1st Year Affected Small Entiti es in Steady State
# % # %

Less than 1% 4 100% 4 100%

1% to 3% 0 0% 0 0%

Greater than 3% 0 0% 0 0%
Median Impact 0.029% 0.01 4 %
Maximum Impact 0.05 2 % 0.02 5 %

Note: An “affected entity” is a company that is identified to be a parent of the affected fa cility identified in Chapter 2.

4.4.2 Modeled Facilities
Small entity impacts were modeled for 2 facilities using data from the U.S. Census of Statistics of U.S. Businesses (SUSB) (U.S.CB, 2010).

The SUSB provides annual data for U.S. business establishments by geography, industry, and enterprise size, covering all business establishments with paid employees. The data provided annually includes counts of establishments, firms, employees, and payroll. Data on total receipts are also provided by SUSB

6 The number and types of forms estimated to be su bmitted by actual facilities is derived in Chapter 2. By applying the same methodology, (i.e. multiplying the number of o

- nitrotoluene forms expected from actual facilities by the percentage of proxy chemical 2,4

- dichlorophenol Forms A filed in RY2010 in NAICS 325) it is estimated that all 4 of the small entities identified would submit one Form R per affected facility, due to rounding.

### 4

- 6 2/9 /2012 every five years. The data available from the SUSB can therefore be used to: identify numbers of small parent entities, construct annual revenue, and calculate cost impact ratios.

The two modeled facilities affected by the proposed rule are identified as operating i n the Hazardous Waste Treatment and Disposal sector and the Solid Waste Combustors and Incinerators sector (NAICS# 562211 and 562213, respectively). Both industries have a revenue

- based small business threshold defined at $12.5 million. 7

Characterize Fa cility

- Parent Relationships Compliance costs and impacts are estimated at the parent company level, where a parent company may own one or more facilities. Because only one facility would be affected in each of the two sectors, it was assumed that the affe cted facilities are parent companies with single locations. According to the SUSB distribution of firms, 85 and 86 percent of firms in the Hazardous Waste Treatment and Disposal and the Solid Waste Combustors and Incinerators sectors fall under the $12.5 m illion small business threshold, respectively. 8

Estimate Annual Revenue of Parent Entities The SUSB data include the total annual receipts (defined as the revenue for goods produced, distributed, or services provided) for each NAICS/revenue size class comb ination. Due to the small universe of modeled facilities, it was not possible to meaningfully assign each sector’s single affected facility to an SUSB revenue size class. Consequently, average small parent revenues were calculated for each affected

secto r to represent the revenues of the two affected parent entities. In some cases, total revenue for a revenue size class was not provided in the SUSB data because doing so would disclose the operations of an individual establishment or firm. In these cases, the total revenue is extrapolated by multiplying the midpoint of the revenue size class by the number of firms in that size class. 9 Because the SUSB data reflect 2007 annual revenue, it was necessary to inflate the revenue to current dollars based on the change in Gross Domestic Product (GDP) from 2007 to 2011, which is a measure of overall economic output (BEA, 2011).

Estimate Parent Entity Compliance Costs As detailed in Chapter 2, it is estimated that the two modeled facilities would each file one Form R under the proposed rule. Additionally, it is assumed that the affected facilities are parent companies with single locations. Therefore, the estimated cost incurred by each of the two modeled small parent entities would be $3,843 and $1,820 in the firs t year of the rule and in the steady state, respectively.

Estimate Cost Impact Ratios To calculate the cost impact ratios, the first year and steady state compliance costs are divided by the average revenue per small parent entity for each affected sector . As presented in Table 4

- 4 , no small parent entity is estimated to incur impacts higher than 1 percent under the proposed rule.

7 The $12.5 million small business threshold falls in the middle of the $10,000,000 to $14,999,999 SUSB revenue size cla ss, therefore, to be conservative, parent entities earning revenues up to $14,999,999 are classified as small entities in this analysis.

8 Ibid.

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

### 4

- 7 2/9 /2012 Table 4

- 4 : Summary of Impacts on Small Parent Entities Affected by the Proposed Rule ( M odeled F acilities)

NAICS Description Small Parent Entities (#) Average Revenues

(2011$) First Year Cost Steady State Cost First Year Impacts Steady State Impacts

562211 Hazardous Waste Treatment and Dispo sal 1 $1,880,332 $3,842.56 $1,820.16 0.204% 0.097%

562213 Solid Waste Combustors and Incinerators 1 $1,898,258 $3,842.56 $1,820.16 0.202% 0.096%



### 4.5 

## Summary of Results

The 22 facilities estimated to report under the proposed rule were linked to 20 p arent companies, 6 (30%) of which were categorized as small parent entities. Twenty of the 22 facilities were identified as actual facilities and could be linked to 18 actual parent companies, 4 of which were identified as small parent entities. For these four actual parent companies, small parent entity impacts are estimated to be less than 1% of annual revenue in the first year of the rule and in the steady state.

For the two modeled facilities, it was assumed that the affected facilities are parent co mpanies with single locations. Additionally, it was assumed that the parent companies are small parent entities, with revenues equal to the average revenues across all small parent entities in each NAICS sector. For the two modeled parent companies, sma ll parent entity impacts are estimated to be less than 1% of annual average revenue in the first year of the rule and in the steady state.

### 4

- 8 2/9 /2012 

## Literature Cited

U.S. Bureau of Economic Analysis (BEA), U.S. Department of Commerce. 2011. National Income and
P roducts Accounts Table, Table 1.1.5. Gross Domestic Product. <http://www.bea.gov/index.htm>

U.S. CB (2010). Statistics of U.S. Businesses (SUSB). http://www.census.gov/econ/susb

U.S.DOL (2011). Employer C osts for Employee Compensation

– September 2011. Table 9. U.S. Department of Labor. Bureau of Labor Statistics. Washington D.C., December 7 , 2011.

U.S. EPA (2011a). Supporting Statement for Information Collection Request Number (ICR) 1363.21, OMB Number 2025

- 0009: TRI Form R and Form A Toxic Chemical Release Reporting. February 2011.

U.S. Federal Reserve. 2011. Federal Reserve Statistical Release: Industrial Production and Capacity Utilization. Release Date April, 2011. <http://www.federalreserve.gov/re leases/g17/current/default.htm>

U.S. SBA (2008). Table of Small Business Size Standards Matched to North American Industry Classification System Codes. U.S. Small Business Administration. August 22, 2008. SBA's size standards can be found at: http://www.sba.gov/content/table

- small

- business

- size

standards

U.S. SBA (2011). United States Small Business Administration. Office of Advocacy

– Research and Statistics

– Data on Small B usiness

– All Industries by NAICS Codes, 2008: Employer Firms & Employment by Employment Size of Firm by NAICS Codes, 2008. Information from the Small Business Administration on the Internet. http://www.sba.gov/sites/default/files/files/us_naics6.pdf. Down loaded on August 10, 2011.

### 5

- 1 2/ 9 /2012 

## Chapter 5

– Benefits

In enacting the Emergency Planning and Community Right

- to

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

The information reported to the TRI increases community knowledge and awareness of the quantities of toxic chemicals released to the environm ent, and the potential pathways of exposure to those chemicals. This knowledge then:

• I mproves scientific understanding of the health and environmental risks of toxic chemicals;

• A llows the public to make informed decisions on where to work and live;

• E nhan ces the ability of corporate leaders and purchasers to more accurately gauge a facility’s potential environmental liabilities;

• P rovides reporting facilities with information that can be used to save money as well as reduce emissions; and

• A ssists federal, state, and local authorities in making better decisions on acceptable levels of toxic chemicals in the environment.

The benefits of the proposed rule include improved understanding, awareness, and decision making related to the provision and distribution of information on releases and waste management of o

nitrotoluene. The provision of information can lead to follow

- on activities that create additional costs and benefits. In particular, this information can lead to voluntary initiatives by industry to r eview production processes, set goals for reductions in emissions, and institute “good neighbor” policies. If an individual facility owner or operator perceives that the additional information generated to comply with the section 313 reporting requirements provide them with valuable information about their operations and how they might be modified, then changes can be implemented to reduce releases of TRI chemicals.

Making TRI information available to the public may provide incentives for facilities to red uce TRI chemical releases, and i n some cases it may encourage facilities to reduce releases where such changes would not be in the facility’s best interest if the information about the releases was not in the public domain. Social benefits derived from vol untary follow

- on activities may include decreased costs of waste treatment and disposal, lower probability of accidental releases and lower clean

- up costs in the event of such releases, reduced contamination of natural resources from decreased land disposa l, improved air and water quality, and reduced risks to human health. Such social benefits are partially offset by the social costs to implement the changes, such as installing scrubbers and substituting materials that are less toxic but more expensive. Th e net social benefits of the information provided by the proposed rule and the possible follow

- on activities equal the difference between the total benefits and the total costs of the activities that lead to the reduction in releases.

### 5

- 2 2/ 9 /2012 The potential benefit s of additional TRI reporting can be understood by examining the ways in which different groups of affected stakeholders

— consumers, industry, non

- federal governments and the general public

— use the TRI data. Consumers may use the data to make more informed decisions about the products they buy and to enter into constructive dialogue with the firms in their communities that release

o

- nitrotoluene. Facilities may find opportunities for waste reduction and cost savings through developing reporting data required under the proposed rule. Non

- federal governments may use the data in lieu of, or in support of, their own environmental protection activities. In addition, non

- users of the TRI data benefit from its public provision whenever others use of the data results in improvements in environmental quality.

Some examples of the ways in which various stakeholders have utilized TRI data include:

• Use of the Data by Community and Public Interest Groups: Communities use TRI data to begin dialogues with local facilities a nd to encourage them to reduce their emissions, develop pollution prevention plans, and improve safety measures. Public interest groups use the data to educate the public about toxic chemical emissions and potential risk, and in environmental justice activ ities.

• Use of the Data by Education and Research Institutions: The TRI data are used in many environmental education programs, particularly at the high school and university levels. Students learn about toxic chemical releases, the potential health and env ironmental effects of those releases, pollution prevention activities and opportunities, and the social and political aspects of environmental protection. Some organizations also conduct educational outreach programs using TRI data.

• Use of the Data by the Financial and Business Communities: Investment analysts use TRI data to provide recommendations to clients seeking to make environmentally sound investments. Insurance companies look to TRI data as one indication of potential environmental liabilities. Co nsultants and others use the data to identify business opportunities, such as marketing pollution prevention and control technologies to TRI reporting facilities. Demand for environmental performance information by investors, insurance companies, and the p ublic has led many companies to develop environmental annual reports similar to annual reports on financial performance traditionally prepared for investors.

• Industry Use of TRI Data: TRI data are used by industry for activities such as developing waste

re duction strategies and improving companies’ understanding of their own production processes. Industry also uses TRI submission information to show environmental progress and as a starting point for engaging with communities.

• Government Use of TRI Data: Go vernment organizations such as the media

- specific and core offices at EPA, EPA Regional offices, and other national, state, and local government agencies routinely use the TRI data. TRI data are used to: develop inspection targeting and enforcement tools; analyze and prioritize long

- term trends in waste minimization; identify candidates for the National Primary Drinking Water Regulations; to coordinate environmental data internationally through agreements and organizations such as the Commission for Environ mental Cooperation, and to set priorities and allocate increasingly scarce environmental protection resources to the most pressing problems.

EPA has not attempted to monetize the benefits of the proposed rule due to the lack of quantitative information ch aracterizing the range of users and non

- users of TRI data and the substantial analytical challenges associated with conducting an analysis that accurately predicts behavioral responses to the provision of information. In addition , the potentially large num bers of beneficiaries who are not TRI data users, or who are otherwise unaware of the data (e.g., general public) , further limits EPA’s ability to quantify potential benefits

.

### 5

- 3 2/ 9 /2012 The experience since the first forms were submitted to TRI in 1987 suggests that reporting under EPCRA section 313 has produced real gains in understanding about communities’ exposure to toxic chemicals. In its report entitled: How are the Toxics Release Inventory Data Used?

– Government, Business, Academic, and Citizen Uses, EPA has documented numerous examples of how multiple stakeholders have used TRI data (US EPA, 2003). Moreover, a cursory search on GoogleScholar TM reveals thousands of academic articles referencing the Toxics Release Inventory. Listing o

- nitrotoluene, and the sub sequent use of the reported information, should provide similar gains in understanding of this particular chemical. EPA believes that o

- nitrotoluene meets the statutory toxicity criteria of section 313, and is at least as toxic as some of the chemicals for which Congress initially believed there were net benefits due to reporting.

### 5

- 4 2/ 9 /2012 

## Literature Cited

U.S. EPA (200 3 ). How are the Toxics Release Inventory Data Used?

– Government, Business, Academic, and Citizen Uses

. EPA 260

- R

- 002

- 004

. May

.