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May 1, 2013 Economic Analysis for the TSCA Title VI Implementation Rule 

### EO 12866_RIN2070-AJ92_Formaldehyde- Imp_NPRM_EA_2013-05-03_MARKUP.docx 1

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# Economic Analysis of the Formaldehyde Standards 7 

# for Composite Wood Products Act 8 

# Implementing Regulations Proposed Rule 9

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# RIN 2070-AJ92 12

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# EO 12866 REVIEW DRAFT 18

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## Economic and Policy Analysis Branch 24 

## Economics, Exposure and Technology Division 25



## Office of Pollution Prevention and Toxics 26 

## Office of Chemical Safety and Pollution Prevention 27 

## U.S. Environmental Protection Agency 28

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# January 201 2 32 

# May 2013 33

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May 1, 2013 Economic Analysis for the TSCA Title VI Implementation Rule 

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# Acknowledgment 43

44 EPA acknowledges the analytical and draft preparation support of Abt Associates Inc. of Cambridge, 45 Massachusetts in the preparation of this re port, provided under Contract No. EP-W-08-10. 46

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# Notice

This document was prepared to provide economic information for the rulemaking process, and to meet various administrative and legislative requirements. Due to the

nature of the information available to EPA, the document contains various assumptions that may not reflect the regulatory determinations that an individual firm or organization would make were it to apply the rule's requirements to its specific circumstances. This is not an official guidance document and should not be relied upon to determine applicable regulatory requirements. Persons seeking information on specific regulatory requirements should consult 40 CFR Part 770, and the preamble for the regulatory action.

Mention of the names of specific companie s, organizations, or entities does not constitute an endorsement by EPA.

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# Table of Contents 1

2
ES Executive Summary .......................................................................................................... .......... ES-1 3

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

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

1.2 Regulatory Background ......................................................................................................... ............. 3 6

1.3 Justification for Regulation .................................................................................................. .............. 5 7

1.4 Alternative Regulatory Approaches for Reduci ng Exposure to Formaldehyde Emissions from 8 Composite Wood Products ....................................................................................................... .......... 7 9

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

2.1 Estimated Number of Affected Entities ......................................................................................... ..... 8 11

2.2 Third Party Testing and Certification Costs ................................................................................... .. 38 12

2.3 Estimated Costs for Stock Hardwood Plywood, MDF, and Particleboard Producers ...................... 74 13

2.4 Estimated Costs for Wood Veneer Laminated Product Producers ................................................... 95 14

2.5 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization Costs ........................ 113 15

2.6 Total Costs of the Proposed TSCA Title VI Implementation Rule ................................................ 160 16

2.7 Summary of Costs by Entity Type and Activity fo r Options SI, SE, SCR, SEUR, and SCUR ..... 166 17

3 Benefits ...................................................................................................................... ........................ 1 18

3.1 Estimating the Changes in Exposure by Analytical Option ............................................................... 8 19

3.2 Time Frame for the Analysis ................................................................................................... ........... 9 20

3.3 Assessing the Change in Cancer Risk ........................................................................................... ... 11 21

3.4 Estimating the Value of Reductions in Cancer Risk ........................................................................ 18 22

3.5 Estimating the Value of Non-cancer Risk Reductions ..................................................................... 45 23

3.6 Estimated Numbers of Affected Individuals .................................................................................... 63 24

3.7 Results of Benefits Assessment ................................................................................................ ........ 68 25

4 Net Benefits .................................................................................................................. ..................... 1 26

4.1 Discounting and Time Frame for the Analysis ................................................................................... 5 27

4.2 Summary of Net Benefits ....................................................................................................... ............ 7 28

5 Small Business Impacts ........................................................................................................ ............ 1 29

5.1 Small Business Impacts for Stock Panel Producers ........................................................................... 3 30

5.2 Small Business Impacts for Wood Veneer Lamina ted Product Producers (including firms making 31 products defined as hardwood plywood ) ........................................................................................ ... 6 32

5.3 Small Business Impacts for Fabricators, Wholesalers, and Retailers ............................................... 19 33

5.4 Summary of Small Business Impacts ............................................................................................. .. 25 34

6 Environmental Justice and Other Impacts .................................................................................... 1 35

6.1 Environmental Justice ......................................................................................................... ............... 2 36

6.2 Employment Impact Analysis .................................................................................................... ...... 16 37

6.3 Paperwork Burden Analysis ..................................................................................................... ........ 22 38

6.4 Unfunded Mandates Reform Act (UMRA) ...................................................................................... 25 39

6.5 Executive Order 13132 - Federalism ............................................................................................ .... 26 40

6.6 Executive Order 13175 - Tribal Implications ................................................................................... 27 41

6.7 Executive Order 13045 - Protection of Children .............................................................................. 2 8 42

6.8 Executive Order 13211 - Energy Effects ........................................................................................ .. 29 43

6.9 National Technology Transfer and Advancement Act ..................................................................... 30 44

R References .................................................................................................................. ................... R-1 45 A Appendix A: Product Lines Assumed to Include Composite Wood Products ....................... A-1 46

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# Executive Summary 50

51 This report presents an economic analysis of the U.S. Environmental Protection Agency (EPA)’s 52 proposed TSCA Title VI Implementation Rule. The Formaldehyde Standards for Composite Wood 53 Products Act, which created Title VI of the Toxic Substances Control Act (TSCA), established 54 formaldehyde emission standards for composite wood products (hardwood plywood, medium-density 55 fiberboard (MDF), and particleboard) sold, supplied, offered for sale or manufactured in the United 56 States. Under TSCA Title VI, manufacturers of co mposite wood products must comply with specific 57 formaldehyde emission standards, and their compliance must be verified by a third-party certifier (TPC). 58 Congress directed EPA to consider a number of elemen ts for inclusion in implementing the regulations. 59 These elements include: labeling, chain of cust ody requirements, sell-through provisions, ultra low60 emitting formaldehyde resins, no-added formaldehyde -based resins, finished goods, third-party testing 61 and certification, auditing and reporting of TPCs, r ecordkeeping, enforcement, laminated products, and 62 exceptions from the requirements of regulations prom ulgated for products and components containing de 63 minimis amounts of composite wood products. 64

65 The sections of this executive summary below include an overview of the entities subject to 66 the rule, the analytical options considered in the analysis, and the estimated costs, benefits, net benefits, 67 and small business, environmental justice, and children’s health impacts of the rule. 68

69 

## Entities Subject to the Rule and their Baseline Status 70

71 The TSCA Title VI rule regulates panel producer s, fabricators, distribu tors, and retailers of 72 composite wood products. Panel producers manufa cture composite wood products. Fabricators 73 incorporate composite wood products into component parts or into finished goods. Wholesalers (referred 74 to in the rule as distributors) supply composite wood products, component parts, or finished goods to 75 others. And retailers sell composite wood products directly to consumers. 76

77 Due to the similarities between this proposal and the 2008 rule known as the Air Toxics Control 78 Measure (ATCM) to reduce formaldehyde emissions from composite wood products that was 79 promulgated by the California Air Resources Board (C ARB), the incremental costs and benefits of this 80 proposal are determined in part by the degree to which firms are already complying with the ATCM. So 81 the following discussion of the number of entities subject to the TSCA Title VI rule includes an estimate 82 of baseline compliance with the CARB ATCM. 83

84

Stock Panel Producers . Stock panel producers (also referred to as manufacturers) make hardwood 85 plywood, MDF, or particleboard pane ls that would be classified as a composite wood products under both 86 TSCA Title VI and the CARB ATCM. They are referre d to as stock panel producers to differentiate them 87 from custom hardwood plywood producers, which ar e not considered to be composite wood product 88 manufacturers under the CARB ATCM. (Custom hardwood plywood producers are a type of wood 89 veneer laminated product producers, which are considered to be fabricators rather than manufacturers of 90 composite wood products under the CARB ATCM. Wood veneer laminated product producers are 91 discussed in the next section.) 92

93

As shown in Table ES

- 1 Table ES

- 1,

, there are approximately 90 stock panel mills in the U.S. 94 operated by 54 firms. This figure excludes mills and firms that only make products that are statutorily 95 excluded from the TSCA Title VI rule (and that are also exempted from the CARB ATCM) such as 96 curved plywood, military specified plywood, structur al plywood, and wood-based structural-use panels. 97

98

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### A total of 79 of the 90 U.S. stock panel mills have been certified as meeting the CARB Phase 2 99 standards for at least one of their composite wood pr oducts. (The Phase 2 standards are equivalent to the 100 emissions standards in the TSCA Title VI rule.) The CARB certified mills are responsible for virtually 101 all the U.S. production volume of composite wood pr oducts. Approximately 99.6% of stock hardwood 102 plywood produced in the U.S. is certified as meet ing the CARB Phase 2 emissions standard, as is 100% 103 of the MDF and 98% of the particleboard. 104

105 There are 16 U.S. stock panel mills making at least one product that is not certified as meeting the 106 CARB Phase 2 standards. (Some of the 90 stock panel mills make both product lines that are certified 107 under the CARB ATCM and product lines that are not certified because they are not intended to be sold 108 in California.) 109

110

Wood Veneer Laminated Product Producers. Wood veneer laminated product producers (also referred 111 to as laminators) make products by gluing a wood or woody grass veneer to the face and/or back of a 112 purchased particleboard, MDF, or veneer core plat form to produce a component part used in the 113 construction or assembly of a finished good. 1 

### Wood veneer laminated product producers are considered 114 fabricators rather than hardwood plywood manufacturers under the CARB ATCM. In order to be sold in 115 California, such products must be made using certifie d composite wood products as platforms, and they 116 must comply with the labeling and chain of custody requirements in the CARB ATCM. But these 117 products are not certified or tested for emissions. 118

119 TSCA Title VI includes laminated products in the definition of hardwood plywood, and directs 120 EPA to conduct a rulemaking process to determine whether to exempt any of these products from the 121 definition. If EPA does not exempt laminated products from the definition of hardwood plywood, then 122 laminated products will have to be certified, tested, and meet the TSCA Title VI emissions standards, in 123 addition to being made with certified platforms. Thus, the TSCA Title VI rulemaking will determine 124 which wood veneer laminated product manufacturers are considered composite panel producers and 125 which are considered solely fabricators. 126

127 There are 7,000 to 14,000 wood veneer laminated product producers in the U.S. making products 128 such as custom hardwood plywood and architectural panels, windows, doors, kitchen cabinets, furniture, 129 architectural woodwork and millwork, engineered wood flooring, and other goods made by affixing 130 veneer to purchased platforms as part of the production process. 131

132 The estimate of 7,000 to 14,000 laminators excludes firms that use veneer to make products that 133 are exempted from the definition of hardwood plywood because they do not create panels (flat or raised 134 rectangular pieces of composite wood product) during the pr oduction process; the products are made by 135 affixing veneer to substrates other than particleboard, MDF, or veneer core platforms; or the products are 136 statutorily exempted by TSCA Title VI (including pr oducts used in boats and aircraft, and products not 137 intended for interior use) or otherwise do not quali fy as regulated hardwood plywood (such as curved 138 plywood, military specified plywood, and structural plywood). 139

140

Fabricators. Fabricators use composite wood products to produce component parts or finished goods 141 such as architectural components, cabinets, and furniture. There are 66,000 to 73,000 firms in the U.S. 142 that are fabricators but not laminators, because they are using composite wood products to make goods 143

1 This analysis calls these products “wood veneer laminated products” to differentiate them from products that the industry commonly calls “laminates”, which are products that are lamina ted with materials other than veneer, such as high pressure laminate, thermally fused paper, vinyl film, decorative foil, or polypropylene film. Such products are not considered to be hardwood plywood under any of the options in this analysis. Firms making such products are considered fabricators under the rule, and are not counted as laminators.

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### without affixing veneer themselves. These 66,000 to 73,000 firms and the 7,000 to 14,000 laminators 144 make up the 80,000 firms in the U.S. producing goods from composite wood products. Under the CARB 145 ATCM, fabricated products sold in California must be made using certified composite wood products, 146 and fabricators must comply with the ATCM’s labeli ng and chain of custody requirements. Nationwide, 147 approximately 32,000 fabricators (including some laminators) are estimated to comply with the labeling 148 and chain of custody requirements in the CARB ATCM b ecause their products may be sold in California. 149

150

Wholesalers and Retailers . Wholesalers and retailers sell composite wood products. Approximately 151 86,000 wholesalers (including import ers) and 759,000 retailers in the U.S. are estimated to sell goods 152 containing composite wood products. Approximately 32,000 of the wholesalers and 101,000 of the 153 retailers have at least one facility in California, and thus must comply with the labeling and chain of 154 custody requirements in the CARB ATCM. 155

156

157
Table ES

- 1

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

Type TSCA Universe 1 Baseline Condition (CARB ATCM Universe) 2
Stock panel producers (i.e., manufacturers) 90 mills operated by 54

firms 79 mills have been certified by CARB for at least one product, but 16 mills make at least one product that is not CARB certified. Depending on the product type, 98% to 100% of U.S. production volume is CARB certified. Wood veneer laminated product producers (i.e., laminators) 7,000 to 14,000 firms 3 Wood veneer laminated product producers are considered fabricators under the CARB ATCM. Nationally, 32,000 of the combined group are subject to CARB ATCM requirements. Fabricators 66,000 to 73,000 firms 3

Wholesalers 86,000 firms, of which 24,000 are importers. 32,000 are subject to CARB ATCM requirements, of which 9,000 are importers. Retailers 759,000 firms 101,000 are subject to CARB ATCM requirements. Total 925,000 firms

1 The TSCA universe represents the estimated number of firms in the U.S. selling regulated composite wood products.

2 The CARB ATCM universe represents the estimated number of firms handling regulated composite wood products that may be sold in California. This represents the baseline for the TSCA Title VI rule.

3 The 7,000 to 14,000 wood veneer laminated product producers and the 66,000 to 73,000 fabricators that are not laminators sum to a total of 80,000 firms.


### 158 

## Analytical Options Considered 159

160

Table ES- 2 Table ES

- 2 presents the analytical options that are considered in this economic 161 analysis. The analytical options can be grouped into two basic categories. The first category contains 162 analytical options with emissions standards at the levels required by TSCA Title VI. Within this category 163 there are several different options for how to regulate wood veneer laminated products. The second 164 category contains emissions standards other than the le vels required by TSCA Title VI. There is one set 165 of options with the same emissions standards as Ph ase 1 of the CARB ATCM, and another set of options 166 requiring all products to meet the NAF emissions standards. This document discusses options with 167 alternative emissions standards simply for informational purposes. The breadth of the discussion here 168 should not necessarily imply that EPA has corres ponding flexibility in implementing the statute. 169

170

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### Table ES- 2 : Analytical Options Considered in the Economic Analysis

Analytical Option a Notes aAnalytical options with emissions standards at the levels required by TSCA Title VIb Option SE: S tatutory emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification. No

ULEF certification.

Option SI: S tatutory emissions standards where wood veneer laminated products are i ncluded in the definition of hardwood plywood All laminators must have products tested and certified by a

TPC. No ULEF certification.

Option SP: S tatutory emissions standards where wood veneer laminated products other than Custom and

Architectural P anel products are exempt from the definition of hardwood plywood Only laminators making Custom or Architectural panels must have products tested and certified by a TPC. Laminators making other products do not need TPC testing

or certification. No ULEF certification. Option SN: S tatutory emissions standards where wood veneer laminated products made using NAF resins to

attach wood veneers to N AF platforms are exempt from the definition of hardwood plywood Laminators using NAF resins to attach wood veneers to NAF platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing

or certification. No ULEF certification.
Option SC: S tatutory emissions standards where wood veneer laminated products made with wood veneers

attached to c ompliant platforms using no-added formaldehyde (NAF) resins are exempt from the definition of hardwood plywood Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification. No ULEF certification.

Option SCR: S tatutory emissions standards where wood veneer laminated products made with wood

veneers attached to c ompliant platforms using NAF resins are exempt from the definition of hardwood plywood. R educed recordkeeping requirements for nonmanufacturers compared to other options. Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification. No ULEF certification.

Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required.
Option SEUR: S tatutory emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood. U LEF certification

allowed. c R educed recordkeeping requirements for nonmanufacturers. Laminators do not need TPC testing or certification. ULEF

certification allowed. Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required.

Option SFCC: S tatutory emissions standards with regulatory provisions that are f ully c onsistent with

C ARB ATCM. Tested lots may be shipped before test results are available. Laminators do not need TPC testing or certification. ULEF certification allowed. Panel producers and fabricators must label products.

Option SCUR: Proposed Option.

S tatutory emissions standards where wood veneer laminated products made with wood veneers attached to

c ompliant platforms using NAF resins are exempt from the definition of hardwood plywood. U LEF certification

allowed. c R educed recordkeeping requirements for nonmanufacturers. Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Other laminators must have products tested and certified by a TPC. ULEF certification allowed.

Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required.Analytical options withemissions standards otherthan the levels required byTSCA Title VICARBPhase 1levelsd Option CE: C ARB 1 emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification.

Option CI: C ARB 1 emissions standards where wood veneer laminated products are i ncluded in the definition of hardwood plywood Laminators must have products tested and certified by a

TPC.NAFemissionlevelse Option NE: N AF emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification.

Option NI: N AF emissions standards where all wood veneer laminated products are i ncluded in the definition of hardwood plywood Laminators must have products tested and certified by a

TPC.

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

are different from those set in TSCA Title VI. This document discusses alternative emi ssions standards simply for informational purposes. The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the stat ute.

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### Table ES- 2 : Analytical Options Considered in the Economic Analysis

a Panel producers must have products tested and certified by a TPC under all options. Recordkeeping and supplier notification r equirements

are equivalent to the CARB ATCM unless noted otherwise.

b Emission levels for TSCA Title VI standa rd certification (and CARB Phase 2): Hard wood plywood = 0.05 ppm; MDF = 0.11 ppm; Thi n MDF = 0.13 ppm; Particleboard = 0.09 ppm.

c Emission levels for ULEF certification with reduced quality control testing : Hardwood plywood: 90% of samples < 0.05 ppm and all

samples < 0.05 ppm; MDF: 90% of samples < 0.06 ppm and all sample s < 0.09 ppm; thin MDF: 90% of samples < 0.08 ppm and all sam ples < 0.11 ppm; Particleboard: 90% of samples < 0.05 ppm and all samples < 0.08 ppm. Emission levels for ULEF certification with quarterly TPC test exemption : Hardwood plywood: 90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; thin MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; Particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm.

d Emission levels for CARB Phase 1: Hardwood plywood = 0.08 pp m; MDF = 0.21 ppm; Thin MDF = 0.21 ppm; Particleboard = 0.18 ppm.

e Emission levels for NAF certification: Hardwood plywood: 90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF and

particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm.


### 171

172

Table ES- 3 presents a summary of the different requirements under each analytical option. 173

174

175

Table ES- 3 : Regulatory Requirements of the Analytical Options Considered in the Economic Analysis

Regulatory Requirements Analytical Options Considered in the Economic Analysis

SE SI SP SN SC SCR SEUR SFCC SCUR CE CI NE NI Emission standards at levels required by

TSCA Title VI 

###         

Emissions standards at CARB Phase 1

levels 

###  

Emission standards at NAF levels 

###  

No wood veneer laminated products are defined as hardwood plywood 

###     

All wood veneer laminated products are defined as hardwood plywood 

###   

Certain wood veneer laminated products are defined as hardwood plywood 

###     

Recordkeeping and supplier notification

consistent with CARB ATCM 

###          

Reduced recordkeeping for nonmanufacturers. No supplier

notification. 

###   

ULEF certification allowed 

###   

ULEF certification not allowed 

###          

Tested lots must be held until results are available. Wholesalers that repackage must label products. 

###            

Tested lots may be shipped before results are available. Only panel producers and fabricators must label products. 

### 

Option SCUR is the proposed option.



### 176 

## Costs 177

178 The cost of compliance with the rule includes changes to production process and raw materials 179 that are needed to meet the emissions standards, as well as the costs of the testing, third-party 180 certification, labeling, and chain of custody activities required by the rule. A summary of the activities 181 associated with the incremental costs that firms are estimated to incur under the proposed option is 182 presented in Table ES- 4

. 183

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### 184

Table ES- 4 : Activities with Incremental Costs Estimated Unde r Option SCUR (the proposed option) by Sector and Type

Activity Panel Manufacturers Fabricators Wholesalers

Retailers Laminators Other Fabricators

CARB compliant Not CARB compliant Use Added

Formaldeh yde Resins Use

NAF

resins CARB compliant Not CARB compliant Importers Not
Importers

Become Familiar

with TSCA rule Yes Yes Yes Yes Yes Yes Yes Yes Yes

Make Changes to

Raw Materials Yes a Yes b

On-Site Daily Quality Control testing Yes c Yes c Yes c

Have Products

Tested and Certified by a TPC Yes Yes d

Set Up Systems to Keep Additional

Records Yes Yes e

Keep Additional

Records Yes Yes Yes Yes f Yes f Yes e

Set Up to Label

Products as TSCA Compliant Yes Yes Yes Yes Yes Yes Yes g Yes g

a Some uncertified panel manufacturers will need to change their raw materials in order to meet the emissions standards.

b Most laminated product producers currently using add-formaldehyde resins will switch to NAF resins in order to avoid being de fined as panel manufacturers.

Some of the remaining laminated product producers that continue using added-formaldehyde resins will need to change their raw m aterials in order to meet the

emissions standards.

c The proposed rule includes a requirement that tested lots must be held until test results indicate that the emission standard has been met. The analysis assumes

that some hardwood plywood producers required to perform quality control testing (including laminators using added-formaldehyde resins) will respond by conducting daily on-site quality control testing so that they can ship panels the same day that they are produced, instead of h olding tested lots in inventory while waiting for the quality control testing to be performed by an off-site lab. Panel producers with an existing ULEF or NAF certi fication will already be exempted from quality control testing, and particleboard and MDF manufacturers are assumed to be conducting daily on-site quality contro l testing to comply with the

CARB ATCM.

d Laminators that use added-formaldehyde resin will need to have their products tested and certified by a TPC.

e Wholesalers that import composite wood products are defined as manufacturers under TSCA and are subject to the same recordkee ping requirements as manufacturers. Some of those importers that are not compliant with the CARB ATCM will incur costs to set up recordkeeping syst ems and ongoing costs to keep these additional records.

f Some fabricators that are not compliant with the CARB ATCM will incur ongoing costs to keep additional records.

g. Wholesalers that repackage goods or replace an original label will incur set up costs to label the goods as TSCA compliant.


### 185

Table ES

- 5 summarizes the first year, subsequent year, and annualized costs of the different 186 analytical option. The total cost estimates are presented with low and high end scenarios, reflecting both 187 the range in the estimated number of wood veneer la minated product producers (7,000 to 14,000 firms) 188 and an assumption that they will certify and test either one or two different categories of product lines per 189

firm. 190

191

192

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### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

ScenarioAnalytical options with emissions standardsat the levels required by TSCA Title VI

Option SE: Statutory emissions standards where all wood veneer laminated products are exempt from the definition of hardwood plywood Hardwo

od plywoo

d MDF

Thin

MDF 

### Particl

eboar

d $595 0.05

ppm 0.11

ppm 0.13

ppm 

### 0.09

ppm $

595 

### Same

emissi

ons
standa

rds as

Ph ase
2 of

the

CAR

B

ATC

M

. Recor dkeep

ing

and suppli

er
notific

ation equiv

alent

to

CAR

B

ATC

M. $79 $79 $100 $100

Option SI: Statutory emissions standards where all wood veneer laminated products are included in the definition of hardwood plywood 

### Same

as
ab ove
$919 

### Same

emiss

ions

stand

ards

as
Phase

2 of

the

CAR

B

ATC
M,

with a $177 $258 $204 $293 Merged Cells Inserted Cells

Formatted Table

Inserted Cells

Inserted Cells

Inserted Cells

Inserted Cells

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### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario 

### differ

ent

defini

tion

of

hard

wood plyw

ood

. Recor dkeep

ing

and suppli

er
notifi

cation equiv

alent

to

CAR

B

ATC

M. $1,

254 Merged Cells Inserted Cells

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### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario

Option SP: Statutory emissions standards where


### wood veneer all laminated products other than

Custom Plywood and Architectural 

### Panel products Panels are exempt from the definition of
hardwood plywood 

### Same

as
above

$600 

### Same

emiss

ions

stand

ards

as
Phase

2 of

the

CAR

B

ATC
M,

with a

differ

ent

defini

tion

of

hard

wood plyw

ood

. Recor dkeep

ing

and suppli

er
notifi

cation equiv

alent

to

CAR

B

ATC

M. $60

0 $82 $82 $104 $104

Option SN: Statutory emissions standards where all wood veneer laminated products made using NAF resins to attach wood veneers to NAF platforms are 

### Same

as Same

emiss $108 $118 $128 $137 Merged Cells Inserted Cells

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

May 1, 2013 ES-10 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario exempt from the definition of hardwood plywood

. 

### above

$626 

### ions

stand

ards

as
Phase

2 of

the

CAR

B

ATC
M,

with a

differ

ent

defini

tion

of

hard

wood plyw

ood

. Recor dkeep

ing

and suppli

er
notifi

cation equiv

alent

to

CAR

B

ATC

M. $63

9
Option SC: Statutory emissions standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. $609 $621 $91 $101 $112 $121

Option SC SCR : S tatutory emissions standards where wood veneer laminated products made with wood Same

as Same

emissi $56 $66 $72 $81 Merged Cells Inserted Cells

Inserted Cells

Inserted Cells

Inserted Cells

Inserted Cells

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

May 1, 2013 ES-11 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario

veneers attached to c ompliant platforms using no

added formaldehyde ( NAF ) resins are exempt from the definition of hardwood plywood

. R educed recordkeeping requirements for non-manufacturers compared to other options. above $435 ons standar

ds as

Phase

2 of

the

CARB

ATCM , with a

differe

nt
definiti

on of

hardwo

od plywoo

d

. Record keepin

g and supplie

r notific

ation equival

ent to
CARB

ATCM

. $447
Option SEUR: S tatutory emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood. U LEF certification

allowed. c R educed recordkeeping requirements for

non-manufacturers. $420 $420 $44 $44 $60 $60

Option SFCC: S tatutory emissions standards with regulatory provisions that are f ully c onsistent with

C ARB ATCM. $594 $594 $78 $78 $100 $100

Option SC R SCUR : Proposed Option.

S tatutory emissions standards where wood veneer laminated products made with wood veneers attached

to c ompliant platforms using NAF resins are exempt from the definition of hardwood plywood. U LEF

certification allowed. c R educed recordkeeping requirements for non- mfgrs. compared to other options. manufacturers. 

### Same

as
above

$434 Same

emissi

o ns standar

ds as

Phase

2 of

the

CARB

ATCM , with a

differe

nt
definiti

on of

hardwo

od $56 $65 $72 $81 Merged Cells Inserted Cells

Inserted Cells

Inserted Cells

Inserted Cells

Inserted Cells

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

May 1, 2013 ES-12 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario plywoo

d



### D istri

butor

s and

retail

ers
that

are

not

manu
factur

ers
under

TSC

A

woul

d only

be requir

ed to keep

invoi

ces
and

bills

of

ladin

g

. Other

recor dkeep

ing equiv

alent

to

CAR

B

ATC

M. Merged Cells Inserted Cells

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

May 1, 2013 ES-13 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario


### No suppli

er
notifi

cation requir

ed. $44

7 Merged Cells Inserted Cells

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

May 1, 2013 ES-14 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

ScenarioAnalytical options with emissions standards other than the levels required byTSCA Title VIthe statuteCARB Phase 1levels Option CE: CARB 1 emissions standards where all wood veneer laminated products are exempt from the definition of hardwood plywood Hardwo

od plywoo

d MDF

Thin

MDF 

### Particl

eboar

d $593 0.08

ppm 0.21

ppm 0.21

ppm 

### 0.18

ppm $

593 

### Same

emissi

ons
standa

rds as

Phase

1 of

the

CAR

B

ATC

M

. Recor dkeep

ing

and suppli

er
notific

ation

eq uiv

alent

to

CAR

B

ATC

M. $78 $78 $99 $99

Option CI: CARB 1 emissions standards where all wood veneer laminated products are included in the definition of hardwood plywood 

### Same

as
above

$918 

### Same

emiss

ions

stand

ards

as
Phase

1 of

the

CAR

B

ATC
M,

with a $176 $257 $203 $292 Merged Cells Inserted Cells

Formatted Table

Inserted Cells

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

May 1, 2013 ES-15 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario 

### d iffer

ent

defini

tion

of

hard

wood plyw

ood

. Recor dkeep

ing

and suppli

er
notifi

cation equiv

alent

to

CAR

B

ATC

M. $1,

253 Merged Cells Inserted Cells

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

May 1, 2013 ES-16 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

ScenarioNAF emission levels

Option NE: NAF emissions standards where all wood veneer laminated products are exempt from the definition of hardwood plywood Hardwo

od plywoo

d : 90% of samples

< 0.04

ppm. All samples

< 0.05

ppm. MDF

and particle

board : 90% of samples

< 0.04

ppm.



### All sampl

es <

0.06

ppm $8

89 

### Requi

res all

comp
osite

wood produ

ct

manu
factur

ers to

meet

NAF

emiss

ion

st and

ards

. Recor dkeep

ing

and suppli

er
notifi

cation equiv

alent

to

CAR

B

ATC

M. $88

9 $372 $372 $379 $379

Option NI: NAF emissions standards where all wood veneer laminated products are included in the definition of hardwood plywood 

### Same

as
above

$1,214 

### R equi

res all

comp
osite

wood produ

ct

manu
factur $471 $552 $484 $573 Merged Cells Inserted Cells

Split Cells

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

May 1, 2013 ES-17 

### Table ES

- 5

- 2 : Total Costs by Analytical Options Considered in the Economic Analysis (millions 2010$)

Analytical Option Emissions

Standards First

Year Notes Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario



### ers to

meet

NAF

emiss

ion

stand
ards,

with a

differ

ent

defini

tion

of

hard

wood plyw

ood

. CAR

B

recor dkeep

ing

and suppli

er
notifi

cation

. $1,54

9



### Note : This document discusses various options w ith respect to formaldehyde and composite wood products, including emissions standards that are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informational purposes. The breadth of the discuss ion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute. Option SCUR is the
proposed option.



### 193

Table ES

- 3 summarizes the first year, subsequent year, and annualized costs of the different 194 analytical option. For the options with emissions requirements that are consistent with TSCA Title VI 195 (Options SE, SI, SP, SN, SC, SCR, SEUR, SFCC, and SCR SCUR ), the first year costs range from 196 $ 435 420 million to $1,254 million and the annualized costs range from $ 72 60 million to $293 million per 197 year. The proposed option (Option SC R SCUR ) has first year costs of $ 435 434 million to $447 million. 198 The annualized costs under Option SC R SCUR range from $72 million to $81 million per year, which is 199 $ 23 to $ 32 12 million less to $21 million more than the next least expensive option with emissions 200 Merged Cells Inserted Cells

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

May 1, 2013 ES-18 

### requirements that are consistent with the statute (Option SE SEUR ). The annualized costs under Options 201

SCR SCUR are about 35 19 to 28 percent lower compared to Option SC SFCC . The primary difference 202 between the costs under Option SCR SCUR (the proposed option) and Option SC SFCC (the option fully 203 consistent with CARB) is that Option SCR has a result of reduced recordkeeping requirements for 204

wholesalers and retailers that are not manufacturers under TSCA (i.e., that do not import, produce, or 205

manufacture of composite wood products ). (where manufacturing is defined under TSCA to include 206 importing). These reduced recordkeeping costs are slightly offset by: (1) exempting only those wood 207 veneer laminated product producers that make laminated products with wood veneers attached to 208 compliant platforms using NAF resins under SCUR co mpared to exempting all wood veneer laminated 209 product producers under SFCC, and (2) requiring mills to wait until test results i ndicate that the emissions 210 standards have been met before shipping a lot that has been tested under option SCUR compared to 211 allowing the shipping of tested lots before test re sults are available under option SFCC. Option SEUR 212 differs from the proposed option (SCUR) by extendi ng the wood veneer laminated products exemption to 213 all wood veneer laminated product producers, not just those that produce laminated products by affixing a 214 veneer to a compliant platform using NAF resins. 215

216 Options CE and CI, the least stringent options in terms of emissions standards (which are 217 presented for information purposes since they are not consistent with the emissions requirements of the 218 statute), have estimated annualized costs ranging from $99 to $292 million per year. The estimated costs 219 under Options CE and CI are similar to the estimate d costs under the options with emissions requirements 220 consistent with the statute, because recordkeeping, labeling, testing and certification are the primary cost 221 drivers and loosening emissions standards does not affect these costs. 222

223 Options NE and NI, the most stringent options in terms of emissions standards (which are also 224 presented for information purposes since they are not consistent with the emissions requirements of the 225 statute), have estimated annualized costs ranging from $379 to $573 million. The additional costs 226 associated with changes to raw materials and production processes account for the difference between the 227 costs under these options compared to the options w ith emissions requirements that are consistent with 228 the statute (SE, SI, SP, SN, SC, SCR, SEUR, SFCC, and SCR SCUR ). 229

230

Table ES

- 6 Table ES

- 4 summarizes the total annualized costs using both a 3 percent and a 7 231 percent discount rate. The results are similar under both discount rates. 232

233

Table ES

- 7 Table ES

- 5 presents the costs by type of entity for the proposed option (Option 234

SC R SCUR ). Stock panel producers represent a small share of total costs, reflecting both the small 235 number of firms and their high rate of baseline compliance with the CARB ATCM emission levels. 236 Retailers represent the largest number of firms subject to the rule and the largest share of total first year 237

costs due to rule familiarization. In subsequent years retailers are only required to keep invoices and bills 238 of lading. (Rule familiarization represents the time spent becoming familiar with the requirements of the 239 rule.) In addition to taking reasonable precautions to ensure that they are purchasing composite wood 240 products that comply with the emissions standards and the other requirements of the rule, retailers are 241 subject to recordkeeping provisi ons that require them to keep invoices and bills of lading. These records 242 are typically kept as a customary business practice, so no subsequent year costs are attributed to retailers. 243 As a result, retailers represent a small share of annualized costs. Fabricators and laminators make up the 244 largest share of the total annualized costs. These costs are largely driven by the certification and testing 245 requirements for laminators that are considered pa nel producers under the rule, and by the additional 246 recordkeeping required to comply with the rule’s chain of custody requirements. 247 Under the proposed option, wood veneer laminate d products are regulated as hardwood plywood 248 unless they are made using no-added formaldehyde ( NAF) resins to affix the veneer to compliant and 249 certified platforms. Of the 7,000 to 14,000 wood veneer laminated product producers in the U.S., 2,700 250 to 4,000 are assumed to be using formaldehyde-based resins. It is generally less expensive for a laminator 251

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

May 1, 2013 ES-19 

### to switch to a NAF resin than to pay for the certific ation and product testing requi red for panel producers. 252 As a result, nearly all laminators using formaldehyde-based resins are likely to switch to NAF resins in 253 order to qualify for the exemption from the definition of hardwood plywood. 2 

### It is assumed that only 254 about 150 to 300 U.S. laminated product producers will continue using formaldehyde-based resins, and 255 thus will need to certify and test their products as a result of this proposal. 256

257

2 Composite wood platforms sold in the U.S. for use in wood veneer laminated products are assumed to be compliant and certified once the TSCA Title VI rule is implemented. Laminators using NAF resins to affix veneer to compliant and certified platforms will be regulated as fabricators.

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

May 1, 2013 ES-20 

### Table ES

- 6

- 3: : Total Annualized Costs by Analytical Option (millions

, 2010 $, 3
percent d iscount rate) $)

Analytical Option First Year 3 Percent Discount

Rate Subsequent Years 7 Percent

Discount Rate Annualized

Cost

Low

End

Scenari

o High

End

Scenari

o Low End Scenario High

End

Scenari

o Low End

Scenario High

End

ScenarioAnalytical options withemissions standards at the levels required by the statute Option SE: Statutory emissions

standards where all wood veneer laminated products are exempt from the definition of hardwood plywood $595 $595 $79 $79 $100 $100

Option SI: Statutory emissio ns
standards where all wood veneer laminated products are included in the definition of hardwood plywood $919 $1,2

54 $177 $258 $194 $293

Option SP: Statutory emissions

standards where all laminated products other than Custom Plywood and Architectur al Panels

are exempt from the definition of hardwood plywood $600 $600 $83 $83 $104 $104

Option SN: Statutory emissions

standards where all wood veneer

laminated products made using

NAF resins to attach wood veneers to NAF platforms are exempt from

the definition of hardwood plywood. $654 $689 $136 $168 $143 $185

Option SC: Statutory emissions

standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. $609 $621 $91 $ 101 $112 $121

Option SC R : Proposed Option. Statutory emissions standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood.

Reduced recordkeeping

r equirements for non

- manufacturer s compared to other options

. $435 $447 $57 $66 $72 $81Analytical options with emissionsstandards other than the levelsrequired by the statuteCARB Phase 1 Option CE: CARB 1 emissions

standards where all wood veneer laminated products are exempt from the definition of hardwood plywood $593 $593 $78 $78 $99 $99

Option CI: CARB 1 emissions

standards where all wood veneer laminated products are included in the definition of hardwood plywood $918 $1,2

53 $176 $257 $192 $292NAFemission Option NE: NAF emissions

standards where all wood veneer laminated products are exempt

from the definition of hardwood plywood $889 $889 $372 $372 $379 $379 Formatted Table

Deleted Cells

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

May 1, 2013 ES-21 

### Table ES

- 6

- 3: : Total Annualized Costs by Analytical Option (millions

, 2010 $, 3
percent d iscount rate) $)

Analytical Option First Year 3 Percent Discount

Rate Subsequent Years 7 Percent

Discount Rate Annualized

Cost

Low

End

Scenari

o High

End

Scenari

o Low End Scenario High

End

Scenari

o Low End

Scenario High

End

Scenario

Option NI: NAF emissions

standards where all wood veneer laminated products are included in the definition of hardwood plywood $1,21

4 $1,5

49 $471 $552 $473 $573

Option SC R is the proposed option.



### 258

Table ES

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

Analytical Option 3 Percent Discount Rate 7 Percent Discount Rate

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

Option SE $100 $100 $112 $112
Option SI $ 194 204 $293 $ 208 218 $311 Option SP $104 $104 $115 $115
Option SN $ 143 128 $ 185 137 $ 154 139 $ 195 148
Option SC $112 $121 $123 $132
Option SCR $72 $81 $80 $89
Option SEUR $60 $60 $68 $68
Option SFCC $100 $100 $111 $111
Option SC R SCUR (Proposed Option) $72 $81 $ 81 80 $89

Option CE $99 $99 $111 $111
Option CI $ 192 203 $292 $ 207 217 $310 Option NE $379 $379 $383 $383
Option NI $ 473 484 $573 $ 480 490 $582
Option SC R SCUR is the proposed option.



### 259

Table ES

- 7

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

Analytical Option Entity Type First Year Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Option SC R : Proposed Option. Statutory emissions standards

where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. Reduced paperwork requirements compared to other options. Option

SCUR: Proposed Option. Stock Panel Producers $ 3 2 $ 3 2 $ 2 1 $ 2 1 $ 2 1 $ 2 1

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

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

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

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

Total $ 435 43

4 $447 $ 57 56 $ 66 65 $72 $81

Option SC R is the proposed option.

1 Low and high end scenarios reflect the estimated number of laminators and the number of product lines certified per firm, not the low and high costs for each category of entities.

2 To avoid double-counting, this row represents costs to fabricator s that are not laminators. Costs under the “Low End Scenario” reflect the low end of the estimated number of laminators (appr oximately 7,000 firms), and costs under the “High End Scenario” reflect the high end estimate of the number of laminators (appr oximately 14,000 firms). The estimated number of fabricators th at are not laminators is inversely proportional to the estimated number of laminators. So in the Low End Scenario there are 73,000 Formatted Table

Deleted Cells

Formatted Table

Formatted Table

Formatted Table

Formatted Table

Formatted Table

Formatted Table

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

May 1, 2013 ES-22 

### Table ES

- 7

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

Analytical Option Entity Type First Year Subsequent

Years Annualized Cost (3% discount rate)

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario fabricators that are not laminators, and in the High End Scenario there are 66,000 firms that are not laminators. As a result, the costs to fabricators that are not laminators are higher under the “Low End Scenario” then under the “High End Scenario”.

3 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, MDF or veneer core platform. This includes both laminators that are considered panel producers under the proposed rule and laminators that are considered fabricators under the proposed rule.


### 260

Table ES- 8 summarizes the cost of the proposed rule by entity type, baseline status under CARB, 261 and activity. 262 Formatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 ES-23Table ES-8: Cost Estimates for Proposed Rule by Type of Entity, Baseline Status, and Activity, Incremental to the CARB ATCMType ofEntityBaseline Status under CARBATCMNumber of Mills,Firms, orProductionVolume (msf†)Activities with Incremental CostsEstimatedNumber of Mills, Firms,or Production VolumeIncurring CostsTotal Cost (million 2010$)First YearSubsequentYearsPanelmanufacturersAll panel manufacturers62 millsBecome familiar with TSCA rule62$0.02- - -On-site daily quality control testing21$0.2$0.02Set-up to label products as TSCA compliant62$0.009- - -Keep additional records62$0.2$0.2Manufacture products notcertified under CARB ATCM16 millsHave products tested and certified by a TPC16$0.4$0.0949,600 msfChanges to raw materials47,300 msf$1.1$1.1Wood veneerlaminatedproductmanufacturersAll laminators7,486 to 13,875 firmsBecome familiar with the TSCA rule7,486 to 13,875$2.2 to $4.1- - -Set-up to label products as TSCA compliant7,486 to 13,875$34.1 to $63.2- - -Laminators defined as hardwoodplywood producers under TSCA150 to 277 firmsHave products tested and certified by a TPC150 to 277$9.3 to $19.6$8.4 to $17.2On-site daily quality control testing150 to 277$1.6 to $3.0$0.1 to $0.2Keep additional records150 to 277$1.4 to $2.5$1.4 to $2.57,248 msfChanges to raw materials2,149 msf$0.06$0.06Laminators defined as fabricatorsunder TSCA7,336 to 13,598 firmsand 355,164 msfChanges to raw materials105,317 msf$3.2$3.2Laminators defined asfabricators; not compliant withCARB ATCM requirements forfabricators7,336 to 13,598 firmsKeep additional records674 to 1249$3.7 to $6.8$3.7 to $6.8Fabricatorsthat are notlaminatorsAll fabricators that are notlaminators66,103 to 72,492 firmsBecome familiar with the TSCA rule66,103 to 72,492$19.5 to $21.3- - -Set-up to label products as TSCA compliant66,103 to 72,492$16.8 to $45.9- - -Fabricators not compliant withCARB ATCM requirements33,665 to 40,054 firmsKeep additional records3,703 to 4,406$20.3 to $24.1$20.3 to $24.1WholesalersAll wholesalers85,560 firmsBecome familiar with the TSCA rule85,560$31.9- - -If repackaging or replacing an original label,set-up to label products as TSCA compliant855$3.9- - -Wholesalers that import and arenot compliant with CARB ATCM15,045 firmsSet up systems to keep additional records8,576$21.5- - -Keep additional records6,649$13.5$13.5RetailersAll retailers759,048 firmsBecome familiar with the TSCA rule759,048$214.7- - -Total$434 to $447$56 to $65†Production volume is reported in thousands of square feet (msf) of production

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

May 1, 2013 ES-24 

## Benefits 263

264

Evidence for health effects associated with form aldehyde exposure is provided by a wide variety 265 of human clinical, epidemiology, and animal studies. In 2010, EPA released a draft IRIS assessment of 266 adverse cancer and non-cancer health effects from inhalation of formaldehyde. The draft IRIS assessment 267 identified seven categories of potential non-cancer health outcomes: (1 ) sensory irritation; (2) upper 268 respiratory tract pathology; (3) pulmonary function effe cts; (4) asthma and allergic sensitization (atopy); 269 (5) immune function effects; (6) neurological an d behavioral toxicity; and (7) developmental and 270 reproductive toxicity. This analysis focuses on four potential effects: nasopharyngeal cancer, eye 271 irritation, respiratory related effe cts, and reduced female fertility. 272

273 Nasopharyngeal Cancer . Formaldehyde is classified as a known human carcinogen by the National 274 Toxicology Program, based on evidence in humans and animals. This analysis uses the EPA’s 1991 IRIS 275 Inhalation Unit Risk factor of 1.3×10-5 cancer cases per μ g/m3 of formaldehyde. 276

277 Eye Irritation . Formaldehyde-induced eye, nose, and throat irritation has been well documented in a wide 278 range of epidemiologic and other human studies. Common effects of chemically induced sensory 279 irritation include lacrimation, burning of the eyes and nose, rhinitis, burning of the throat, and cough. Eye 280 irritation is the most sensitive of reported effects in human studies. 281

282 Respiratory Related Effects . Formaldehyde exposure is associated with a range of respiratory related 283 effects. Effects from repeated e xposure in humans include irritation of the upper respiratory tract, 284 decrements in pulmonary function, and nasal epithelial lesions such as metaplasia and loss of cilia. 285 Animal studies suggest that formaldehyde may also cause airway inflammation. 286

287 Reduced Fertility . Epidemiologic studies suggest an association between occupational exposure to 288 formaldehyde and adverse reproductive outcomes in women, including reduced fertility. 289

290 At this time, sensory irritation is the only three of the non-cancer health effect categories were 291 judged to have sufficient data for qu antitative concentration-response modeling in support of the benefits 292

assessment : sensory irritation, asthma, and female reproductive toxicity.

. Therefore, this analysis 293 predicts the number of cases avoided and monetizes the benefits for four two health effects: (1) 294 nasopharyngeal cancer for individuals of all ages, (2) and eye irritation for individuals of all ages , (3) 295 asthma in children ages 2 to 17 and 6 to 17, and (4) female reproductive toxicity (i.e. reduced fertility) in 296 women ages 20 to 40. Table ES

- 6

. Table ES

- 9 presents the estimated annual number of cases of each of 297 these health effect avoided due to the different analytical options. 298

299

There is not sufficient information at this time on the relationship between formaldehye exposure 300 and reduced fertility to include a valuation estimate in the overall benefits analysis. The analysis also 301 includes a qualitative discussion of respiratory related effects related to formaldehyde exposure. 302 Although uncertainty remains regarding how best to quantify the effect of formaldehyde exposure on 303 fertility and respiratory outcomes, reducing these effects is an important non-monetized impact that 304

contributes to the overall benefits of the rule. 305

306

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

May 1, 2013 ES-25 

### Table ES

- 9

- 6: : Annual Number of Cases Avoided in a Typical Year by A nalytical Option and Health Effect

Analytical Option Cancer Eye Irritation Asthma Reduced Fertilit y

Lower Estimate Higher Estimate Lower Estimate Higher Estimate Lower

E stimate Higher

Estimate Option SE 9 21 22,133 170,214 2,469 3,416
Option SI 10 24 23,650 191,590 2,799 3,864
Option SN 11 25 24,154 198,950 2,915 4,019
Option SC 10 24 23,650 191,590 2,799 3,864 Option SCR 10 24 23,650
Option SEUR 9 21 22,133
Option SFCC 9 21 22,133
Option SC R

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

Option CE 7 16 18,015 130,720 1,899 2,627
Option CI 8 19 19,563 148,389 2,166 2,988
Option NE 39 92 58,492 626,726 9,554 13,235 Option NI 40 97 58,494 645,678 9,968 13,800
Option SC R SCUR is the proposed option. Benefits were not estimated for Option SP.


### 307 The benefit of avoiding a fatal case of cancer wa s estimated using a value of $8.01 per micro-risk 308 reduction (i.e., a reduction of 1 in 1 million of the ri sk of mortality). The value of avoiding a non-fatal 309 case of cancer was estimated using a cost of illness approach. The estimates vary depending on the stage 310 of the cancer when it is first diagnosed, the individual’s age at the time of diagnosis, and the individual’s 311 employment status (since the value of time lost to illn ess depends on this status), resulting in a value of a 312 micro-risk reduction that ranges from $0.09 to $0.14. Based on willingness to pay estimates, the analysis 313 uses $26 as the value of an avoided case of eye irritation , $35,443 to $66,064 for an avoided case of 314

asthma incidence . The analysis uses $1,969 to $5,336 per case of reduced fertility avoided based on the 315

cost of fer tility treatments for patients who ultimately become pregnant

. 316

317 Reductions of formaldehyde emissions from composite wood products benefits individuals who 318 reside, work, or otherwise spend a substantial amo unt of time where new composite wood products are 319 introduced to an indoor space. Benefits are calcula ted using an age-dependent exposure analysis that 320 includes formaldehyde exposure from homes, daycare, schools, workplace, vehicles, and outdoors. For 321 each option, there are 3,300 different exposure scenarios derived from 22 different composite wood 322 product age/source combinations, 5 structure types (detached housing, attached housing, apartments, 323 manufactured housing, and recreational vehicles, camper s, and trailers), 5 climate zones, and 6 individual 324 age/employment status combinations. Changes in exposure are estimated by changing the two broad 325 categories where a substantial amount of new composite wood products might be introduced: new home 326 construction and major renovations that include kitchen remodeling. 327

328

Table ES

- 10 Table ES

- 7 and Table ES

- 11 Table ES

- 8 present the total quantified benefits by 329 health effect and analytical option using 3 and 7 percent discount rates, respectively. The results indicate 330 that the most protective option with emissions standards that are consistent with the TSCA Title VI 331 statute ( Option SN (

, which would require laminated products to be made using with both NAF resins and 332

NAF platforms in order to be exempt exempted from the definition of hardwood plywood , and is the most 333 protective option with emissions standards that are consistent with TSCA Title VI ) has quantified benefits 334 that are less than 20 percent larger than the quantified benefits of the least protective option with 335 emissions standards that are consistent with the TSCA Title VI statute (Option SE, which exempts all 336 laminated products from the definition of hardwood plywood). The quantified benefits under the 337 proposed option (Option SCUR, which would require lami nated products to be made with NAF resins in 338 order to be exempted from the definition of hardwood plywood) are only slightly lower those of Option 339 SN, the difference being less than 5 percent. Analytical options that would require all composite wood 340 Formatted Table

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### products to be made with NAF resi n technologies (Options NE and NI) would result in quantified benefits 341 nearly four times larger than under the analytical options with emissions standards consistent with the 342 TSCA Title VI statute and analytical options that would require less stringent emissions standards 343 (Options CE and CI) compared to the statute would re sult in quantified benefits about 25 percent lower. 344

Most of the total monetized benefits are attributable to reductions in cancer risk 345

346 The benefits under the proposed option (Option SC R , which would exempt laminated products 347 from the definition of hardwood plywood if they are made by using NAF resins to attach veneers to 348 compliant platforms) are only s lightly lower those of Option S N, the difference being less than 5 percent. 349 Benefits from options SI and SC are equivalent to t hose from Option SCR because it is assumed that most 350 laminators would switch to NAF resins under all of these options. 351

352 Analytical options that would require N AF resins (Options NE and NI) would result in benefits 353 between three and four times larger than under the analytical options with emissions standards consistent 354 with TSCA Title VI. Analytical options with emissions standards consistent with TSCA Title VI would 355 result in benefits that are about 15 to 50 percent higher than options that would require less stringent 356 emissions standards (Options CE and CI). 357

358 About 85 percent of the total benefits of the proposed rule are attributable to reductions in asthma 359

ri sk and about 14 percent are attributable to reductio ns in cancer risk. Approximately 2 percent of the 360 total benefits are attributable to avoiding eye irritation and reduced fertility. 361

362 The cancer-related benefits are generally higher for composite wood products that have been 363 more recently installed, new housing compared to renovated housing, warmer and more humid climate 364 zones, younger individuals, and individuals who work in the composite wood products industry. 365

366

The non

- cancer eye irritation benefits are generally higher for populations exposed to composite 367 wood products that have been more recently inst alled, new housing compared to renovated housing, 368 warmer and more humid climate zones, younger individuals, and individuals who work in the composite 369 wood products industry. For eye irritation and asthma Also , the avoided risks for eye irritation for the 370 small number of individuals living in recreational vehicles or camper/tr ailers and individuals working in 371 the composite work products industry were notably higher compared to other exposure groups. 372

373 There are additional unquantified benefits due to respiratory and other avoided health effects . 374 The health benefits from avoided cases respiratory related and other health are potentially important non375 monetized impacts that contribute to the overall benefits of this rule, so they are represented in Table ES

376

10 and Table ES

- 11 using the letter “B”. 377

378

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### Table ES

- 10

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

Analytical

Option Cancer Eye Irritation Asthma Red

uced

Ferti

lit y Total Benefits

Lower

Estimate Higher Estimate Lower Estimate Higher Estimate Lower Estimate Higher Estimate Lower

Estima

te Option SE $17 .28 $ 37.66 38 $0. 53 5 $4. 07 1 $ 143.03 18

+B $ 201.84 42

+B $1.45 $162.29

Option SI $ 19.65 20 $43 .04 $0. 57 6 $4. 59 6 $ 162.45 20

+B $ 228.65 48+B $1.64 $184.31

Option SN $20 .48 $ 44.93 45 $0. 58 6 $4. 76 8 $ 169. 21 +B $ 237.99 50+B $1.71 $191.97
Option SC $ 19.65 20 $43 .04 $0. 57 6 $4. 59 6 $ 162.45 20+B $ 228.65 48+B $1.64 $184.31
Option SCR $20 $43 $0.6 $4.6 $20+B
Option SEUR $17 $38 $0.5 $4.1 $18+B
Option SFCC $17 $38 $0.5 $4.1 $18+B
Option

SC R SCUR (Proposed) $ 19.65 20 $43 .04 $0. 57 6 $4. 59 6 $ 162.45 20+B $ 228.65 48+B $1.64 $184.31

Option CE $13 .21 $ 28.73 29 $0. 43 4 $3. 12 1 $ 109.87 14+B $ 154.97 32+B $ 1.10 $124.62
Option CI $15 .10 $33 .02 $0. 47 5 $3. 55 5 $ 125.53 16+B $ 176.60 37+B $1.25 $142.36
Option NE $75 .00 $163 .07 $1. 35 4 $14. 92 9 $ 556.08 76+B $ 785.79 178+

B $6.37 $638.80

Option NI $ 78.54 79 $171 .02 $1. 35 4 $15. 37 4 $ 580.33 80+B $ 819.48 186+

B $6.66 $666.89

Option SC R SCUR is the proposed option. Benefits were not estimated for Option SP. “B” represents the unquantified health benefits.


### 379

380

Table ES

- 11

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

Analytical

Option Cancer Eye Irritation Asthma Reduc

ed

Fertili

t y Total Benefits

Lower

Estimate Higher Estimate Lower Estimate Higher Estimate Lower Estimate Higher Estimate Lowe

r Est im

ate Option SE $ 7.72 8 $ 16.64 17 $0. 50 5 $3. 81 8 $ 70.83 8 +B $ 99.17 20 +B $1.31 $80.35
Option SI $ 8.80 9 $19 .12 $0. 53 5 $4. 29 3 $ 80.59 9+B $ 112.55 23+B $1.48 $91.41
Option SN $9 $20 $0.5 $4.5 $10+B
Option SN SC $9 .18 $19 .99 $0. 55 5 $4. 46 3 $ 83.99 9+B $ 117.20 23+B $1.54 $95.26
Option

SC SCR $ 8.80 9 $19 .12 $0. 53 5 $4. 29 3 $ 80.59 9+B $ 112.55 23+B $1.48 $91.41

Option SEUR $8 $17 $0.5 $3.8 $8+B
Option SFCC $8 $17 $0.5 $3.8 $8+B
Option

SC R SCUR (Proposed) $ 8.80 9 $19 .12 $0. 53 5 $4. 29 3 $ 80.59 9+B $ 112.55 23+B $1.48 $91.41

Option CE $ 5.89 6 $ 12.69 13 $0. 40 4 $2. 92 9 $ 54.32 6+B $ 76.01 16+B $0.99 $61.61
Option CI $ 6.76 7 $ 14.67 15 $0. 44 4 $3. 32 3 $ 62.19 7+B $ 86.81 18+B $1.13 $70.53
Option NE $ 33.63 34 $72 .16 $1. 22 2 $13. 87 9 $ 276.73 35+B $ 388.08 86+B $5.77 $317.36
Option NI $35 .24 $ 75.78 76 $1. 22 2 $14. 30 3 $ 288.86 36+B $ 404.80 90+B $6.04 $331.37
Option SC R SCUR is the proposed option. Benefits were not estimated for Option SP. “B” represents the unquantified health benefits.


### 381

382 Formatted Table Deleted Cells

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## Net Benefits 383

384

Table ES

- 12 Table ES

- 9 and Table ES

- 13 Table ES

- 10 present the total annualized net benefits by 385 analytical option and discount rate. The estimated quantified net benefits under the analytical options that 386 have emissions standards that are consistent with TSCA Title VI range from negative $ 109 18 million to 387 positive $ 206 negative $273 million using a three percent discount rate

. and negative $48 million to 388 negative $546 million using a seven percent discount rate. Of these analytical options, Option SI is the 389 only option where net difference between quantified benefits are negative under the lower estimate of 390

net and costs is smallest under Option SEUR. The next smallest difference between quantified benefits 391 using the three percent discount rate. Option SC R (the and costs is under the proposed option ) is the only 392 option (Option SCUR). Of the analytical options that ha s have emissions standards that are consistent 393

with TSCA Title VI where both the lower and the higher estimate for net , the largest difference between 394 quantified benefits and costs is positive using the 7 percent discount rate. under Option SI (which 395 includes laminated products in the definition of hardwood plywood). 396

397

There are smaller net benefits (smaller positive and larger negative quantified net benefits ) under 398 Options CE and CI (the analytical options with emissions standards lower than those that are consistent 399

with TSCA Title VI ). Net benefits are lower under these options because the estimated benefits are 400 substantially lower while the estimated costs are only mod estly lower (because the costs are largely 401 driven by the certification, testing, and chain of custody requirements, which are not affected by the 402 emissions standards). 403

404 ) compared to the proposed option (Option SCUR). The difference between quantified benefits 405 and costs is largest under Options NE and NI (which have emission s limits that are more stringent than 406 those required by the statute ) have substantially higher costs and benefits than the options with emissions 407

standards that are consistent with TS CA Title VI. Net benefits are po sitive under these options using a 3 408 percent discount rate, and are positive for the higher estimate of net benefits using a 7 percent discount 409 rate but are negative for the lower es timate using a 7 percent discount rate. ). 410

411 There are additional unquantified benefits for al l of the options from respiratory and other 412

avoided health effects. While the benefits from these avoided health effects have not been quantified, the 413 effects could be substantial and so are represented in Table ES

- 12 and Table ES

- 13 using the letter “B”. 414

415 The proposed rule (Option SCUR) has quantified ne t benefits of -$24 million to -$60 million per 416 year using a 3 percent discount rate, and -$57 million to -$79 million per year using a 7 percent discount 417 rate. Costs for the proposed rule exceed quantified benefits by a larger margin than for Option SEUR, 418 which exempts all laminated products from the defin ition of hardwood plywood. However, both the 419 relative ranking of the options and the fact that quantified net benefits are negative for all the options 420 might change if additional health benefits could be quantified. 421

422

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### 423

424

Table ES

- 12

- 9: : Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 3 percent discount rate)

Analytical Option 

### Costs Benefits Net Benefits



### Low End

Estimate High End

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

Option SE $100 $100 $ 

### 162 18 +B $ 

### 245 42+ B 

### $62 ($82) +B 

### $145 ($58) +B

Option SI $ 

### 194 204 $293 $ 

### 184 20 + B $ 

### 278 48+ B ($ 

### 109) 273)

+B 

### $84 ($157) +B

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

Option SN $ 

### 143 128 $ 

### 185 137 $ 

### 192 21+ B $ 

### 289 50+ B 

### $7 ($116) +B 

### $146 ($79) +B

Option SC $112 $121 $ 

### 184 20+ B $ 

### 278 48+ B 

### $63 ($101) +B 

### $166 ($64) +B
Option SCR $72 $81 $20+ B $48+ B ($61) +B ($24) +B
Option SEUR $60 $60 $18+ B $42+ B ($42) +B ($18) +B
Option SFCC $100 $100 $18+ B $42+ B ($82) +B ($58) +B
Option SC R SCUR (proposed) $72 $81 $ 184 20+ B $ 278 48+ B $103 ($60) +B $206 ($24) +B

Option CE $99 $99 $ 

### 125 14+B $ 

### 188 32+ B 

### $25 ($86) +B 

### $89 ($67) +B
Option CI $ 

### 192 203 $292 $ 

### 142 16+ B $ 

### 214 37+ B ($ 

### 150) 277)

+B 

### $22 ($167) +B

Option NE $379 $379 $ 

### 639 76+ B $ 

### 970 178+ B 

### $259 ($303)

+B 

### $591 ($201) +B

Option NI $ 

### 473 484 $573 $ 

### 667 80+ B $ 

### 1,013 186+ B 

### $94 ($493) +B 

### $540 ($297) +B
Option SC R SCUR is the proposed option. Parentheses indicate negative net benefits. Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. Higher estimate of net benefits is calculated by subtract ing low end cost estimate from higher benefits estimate. “B” represents the unquantified health benefits.


### 425

426 Formatted Table

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### Table ES

- 13

- 10: : Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 7 percent discount rate)

Analytical Option Costs Benefits Net Benefits

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate
Option SE $112 $112 $ 

### 80 8+ B $ 

### 121 20+ B ($ 

### 31) 103) +B 

### $9 ($91) +B

Option SI $ 

### 208 218 $311 $ 

### 91 9+ B $ 

### 137 23+ B ($ 

### 220) 302)

+B ($ 

### 71) 195) +B

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

Option SN $ 

### 154 139 $ 

### 195 148 $ 

### 95 10+ B $ 

### 143 24+ B ($ 

### 99) 138) +B ($ 

### 11) 114) +B

Option SC $123 $132 $ 

### 91 9+ B $ 

### 137 23+ B ($ 

### 41) 123) +B 

### $14 ($100) +B
Option SCR $80 $89 $9+ B $23+ B ($80) +B ($57) +B
Option SEUR $68 $68 $8+ B $20 + B ($60) +B ($48) +B
Option SFCC $111 $111 $8+B $20+ B ($103) +B ($91) +B
Option SC R SCUR (proposed) $ 81 80 $89 $ 91 9+ B $ 137 23+ B $2 ($79) +B $ ($ 57 ) +B

Option CE $111 $111 $ 

### 62 6+ B $ 

### 93 16+ B ($ 

### 49) 104) +B ($ 

### 18) 95) +B
Option CI $ 

### 207 217 $310 $ 

### 71 7+ B $ 

### 106 18+ B ($ 

### 239) 303)

+B ($ 

### 101) 199) +B

Option NE $383 $383 $ 

### 317 35+ B $ 

### 480 86+ B ($ 

### 66) 348) +B 

### $97 ($297) +B
Option NI $ 

### 480 490 $582 $ 

### 331 36+ B $ 

### 501 90+ B ($ 

### 251) 546)

+B 

### $21 ($400) +B

Option SC R SCUR is the proposed option. Parentheses indicate negative net benefits. Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. Higher estimate of net benefits is calculated by subtract ing low end cost estimate from higher benefits estimate. “B” represents the unquantified health benefits.


### 427 

## Small Business Impacts 428

429

Table ES

- 14 Table ES

- 11 presents a summary of the small business impacts of the proposed 430 option (Option SC R SCUR ). There are 878,798 small firms affected by the rule. As indicated, 431 851, 296 298 small firms (about 97 percent) are expected to have costs impacts that are less than one 432 percent of their revenues, 23, 133 131 firms (about 3 percent) are expected to experience impacts at levels 433 between one and three percent of their revenue, and 4,369 firms (less than 1 percent) are expected to incur 434 costs exceeding three percent of their revenues. 435

436 Note that many of the firms with cost impacts above 1 percent of their revenues are fabricators, 437 wholesalers, and retailers with annualized costs of less than $250. This implies that their revenues were 438 below $25,000. These firms account for 92 percent of the firms with cost impacts that are between 1 and 439 3 percent and 42 percent of the firms with cost impacts that exceed 3 percent. 440

. 441

442 Formatted Table

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### Table ES

- 14

- 11: : Summary of Small Business Impacts

Firm Type Number of Affected

Small Firms Number of Firms by Cost-Impact

Ratio

<1% 1-3% >3%

Stock Panel Producer 31 25 27 5 3 1

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

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

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

Retail 713,989 698,648 15,341 -

All Firms 878,798 851, 296 298 23, 133 131 4,369



### 443 

## Environmental Justice Impacts 444

445

Table ES

- 15 Table ES

- 12 presents a summary of the environmental justice impacts of the 446 proposed option (Option SC R SCUR ). Minority and low-income groups account for a larger proportion of 447 the total benefits than their share of the affected popul ation. Minorities represent about 35 percent of the 448 population affected by the rule and are estimated to accrue about 46 39 percent of the total quantified 449 benefits. Low-income individuals compose 12 percent of the total affected population, and are estimated 450

to accrue 18 14 percent of the total quantified benefits. 451

452

Table ES

- 15

- 12: : Summary of Environmental Justice Impacts

Population Type Share of Total Population Share of Total

Annualized Quant

ified Benefits
Race and Ethnicity Non-Hispanic White 65% 54 61 %
Non-Hispanic Black 12% 15 13 %
Non-Hispanic Other 7% 8%
Hispanic 15% 22 18 %
Non-Hispanic Native American or Alaskan Indian 0.6% 0. 7 6 %

All Individuals 100% 100%

Income Individuals Living Below Poverty Line 12% 18 14 %
Individuals Living Above Poverty Line 87% 81 85 %

All Individuals 100% 100% The number of individuals above and below the poverty line does not sum to the total number of individuals because poverty status could not be determined for some individuals.


### 453 

## Children’s Health Impacts 454

455

As shown in Table ES

- 16 Table ES

- 13,

, children aged two zero through fifteen one represent 19 3 456 percent of the individuals affected by the rule and are estimated to accrue about 75 2 to 10 percent of the 457 proposed rule’s total quantified benefits for avoided cases of nasopharyngeal cancer and eye irritation. 458 Children aged two through fifteen represent 20 percen t of the individuals affected by the rule and are 459 estimated to accrue 16 to 22 percent of the proposed rule’s total quantified benefits. These results are 460 driven by the benefits associated with avoiding asthma incidence cancer risk

. 461

462

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### Table ES

- 16

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

Population Affected Population

Affected Annually
(thousands) Population

Affected as

Percent of

Total Affected

Population Total Quantified

Benefits

Lower Estimate (millions 2010$) Total Quantified

Benefits Higher Estimate (millions 2010$) Total Quantified

Benefits

Lower Estimate

(% of total

affected

p o p ulation) Total Quantified

Benefits Higher Estimate

(% of total

affected

p o p ulation) All Individuals 106,057 100.00% $ 184.31 20.22 $ 277.92 47.63 100.00% 100.00%
Children ages 0-1 4,971 3,309 4.69 3.12 % $0.47 $4.79 0.26 2.35 % 1.72 10.06 %
Children ages 2-15 19,651 21,3

12 18.53 20.10

% $ 136.95 3.16 $ 209.99 10.57 74.31 15.63 % 75.56 22.19 %



### 463

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# 1 Problem Definition and the Justification for Regulation 464

465 The purpose of this chapter is to present an overview of the economic justifications for federal 466 regulations to address the problem of formaldehyde emissions from composite wood products. Section 467 1.1 characterizes the formaldehyde emissions proble m and discusses various sources of exposure. In 468 Section 1.2, the regulatory background associated with formaldehyde emissions from composite wood 469 products is presented. Section 1.3 discusses how market failure due to externalities and incomplete 470

information result in inefficient levels of fo rmaldehyde emissions from composite wood products. 471 Section 1.4 compares the proposed approach for addressing these market failures with alternative 472 regulatory approaches. 473

474

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## 1.1 Problem with Formaldehyde Emissions from Composite Wood Products 475

476 Formaldehyde is a colorless, flammable gas at room temperature that has a strong odor. It is 477 found in resins used in the manufacture of composite wood products ( i.e. , hardwood plywood, 478 particleboard and medium-density fiberboard). It is also found in household products such as glues, 479 permanent press fabrics, carpets, an tiseptics, medicines, cosmetics, dishwashing liquids, fabric softeners, 480 shoe care agents, lacquers, plastics and paper product coatings. It is a by-product of combustion and 481 certain other natural processes. Examples of source s of formaldehyde gas inside homes include cigarette 482 smoke, unvented, fuel-burning appliances (gas stoves, kerosene space heaters), and composite wood 483 products made using formaldehyde-based resins (ATSDR 2010). 484

485 Formaldehyde is both an irritant and a know n human carcinogen (HHS 2011). Depending on 486 concentration, formaldehyde can cause eye, nose, and throat irritation, even when exposure is of relatively 487 short duration. In the indoor environment, sensory reactions and various symptoms as a result of mucous 488 membrane irritation are some potential effects from exposure. There is also evidence that formaldehyde 489 may be associated with changes in pulmonary function and increased risk of asthma in children (ATSDR 490 ). In addition, formaldehyde is a by-product of human metabolism; therefore, endogenous levels are 491 present in the body. 492

493

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## 1.2 Regulatory Background 494

495 In 2007, the California Air Resources Board (C ARB) issued an Air Toxics Control Measure 496 (ATCM) to reduce formaldehyde emissions from hardwood plywood, medium-density fiberboard, and 497 particleboard products referred to collectively as composite wo od products. The CARB ATCM was 498 approved on April 18, 2008 by the California Office of Administrative Law. The first emission standards 499 took effect on January 1, 2009. The CARB ATCM requires manufacturers to meet formaldehyde 500 emission standards for the covered composite wood pr oducts that are sold, offered for sale, supplied, or 501 manufactured for use in California. The CARB ATCM also requires that compliant composite wood 502 products be used in finished goods sold, offered for sa le, supplied or manufactured for sale in California. 503 The CARB ATCM does not apply to hardwood plywoo d and particleboard materials when installed in 504 manufactured homes subject to regulations promulgated by the United States Department of Housing and 505 Urban Development (HUD). 506

507

The CARB ATCM Phase 1 emission standards for ha rdwood plywood veneer core, particleboard, 508 and medium-density fiberboard took effect on Janu ary 1, 2009. The Phase 1 standard for hardwood 509 plywood composite core took effect on July 1, 2009. The more stringent Phase 2 standards first took 510 effect on January 1, 2010 for hardwood plywood vene er core. Phase 2 standards for medium-density 511 fiberboard and particleboard went into effect on Ja nuary 1, 2011. The final Phase 2 standards to take 512

effect under the CARB ATCM are for thin medium density fiberboard on January 1, 2012 and for 513 hardwood plywood composite core, which begins July 1, 2012. 514

515 The CARB ATCM requires manufacturers of the regulated composite wood products to 516 demonstrate compliance with the emission standards by having their emissions tests and quality control 517 processes certified by a third party certifier (TPC). TPCs must be approved by CARB and must follow 518 specified requirements to verify that a manufacturer’s production meets applicable formaldehyde 519

emission standards and that the manufacturers follo w prescribed quality control practices. Once approved 520 by CARB, manufacturers who use no-added formaldehyde (NAF) resin systems are exempted from 521 ongoing testing requirements after three months of te sting in cooperation with a TPC. Manufacturers who 522 use ultra low-emitting formaldehyde (ULEF) resin systems may be approved by CARB to reduce the 523 frequency of ongoing testing or, if they meet mo re stringent emissions requirements, they may be 524 exempted from ongoing testing requirements for two years. The exemption based on ULEF resin is 525 granted after approval by CARB and six months of testing in cooperation with a TPC. Manufacturers 526 who receive exemptions based on NAF or ULEF resin can reapply every two years for the exemption 527 from TPC oversight and formaldehyde emissions testi ng by submitting the chemical formulation of the 528 resin and the results of at least one primary or seconda ry method test for each product type (based on a 529 panel or set of panels randomly selected and tested by a TPC). 530

531 Under the CARB ATCM, manufacturers of composite wood products are required to label their 532 covered products to identify them as meeting either the Phase 1 or Phase 2 emission standards, or as being 533

made with either NAF or ULEF resins. Manufactur ers must also include a statement of compliance on 534 the bill of lading or invoice for the composite wood product. The CARB ATCM also imposes 535 recordkeeping requirements on manufacturers to document their compliance with the regulations. Records 536 must be kept for two years. 537

538 The CARB ATCM requires distributors, importe rs, fabricators, and retailers to purchase and 539 sell panels and finished goods that comply with the applicable formaldehyde emission standards. They 540 must take “reasonable precautions,” such as communicating with their suppliers, to ensure that the 541 products they purchase are in compliance with the applicable emission standards. Like manufacturers, 542 distributors and importers must also provide a statem ent of compliance on the composite wood or finished 543 good product bill of lading or invoice. They must also maintain records documenting compliance for a 544

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May 1, 2013 1-4 

### period of two years. Importers and fabricators must label their finished goods as compliant with the 545 applicable standards. The labeling requirement also a pplies to distributors if the product is in some way 546 modified. One example of a modification that would make a distributor subject to the labeling 547 requirement is if the distributor receives composite w ood product panels, cuts them into different shapes 548 or sizes, and applies edge banding to them. 549

550 On March 24, 2008, 25 organizations and appr oximately 5,000 individuals petitioned EPA 551 under section 21 of the toxic substances control act (T SCA) to use its authority under section 6 of TSCA 552 to adopt the CARB ATCM nationally. The petitioners asked EPA to assess and reduce the risks posed by 553 formaldehyde emitted from hardwood plywood, pa rticleboard, and medium-density fiberboard by 554 exercising its authority under TSCA section 6 to ad opt and apply nationwide the CARB formaldehyde 555 emissions regulation for these composite wood products. In addition, petitioners requested that EPA 556 extend this regulation to include composite wo od products used in manufactured homes. 557

558 On June 27, 2008, EPA issued a Federal Regist er notice in response to the TSCA section 21 559 petition (Ref. 11). The notice ann ounced the Agency’s intent to grant in part and deny in part the 560 petitioners’ request. EPA denied the petitioners’ request to immediately pursue a TSCA section 6 561 rulemaking, stating that the available information at the time was insufficient to support an evaluation of 562 whether formaldehyde emitted from hardwood plywood, particleboard, and medium-density fiberboard 563 presents or will present an unreasonable risk to hu man health (including cancer and non-cancer endpoints) 564 under TSCA section 6. As discussed in detail in the Federal Register notice announcing EPA’s response 565 to the petition, EPA’s evaluation of the data provided by the petitioners revealed significant information 566 gaps that would have needed to be filled to suppor t an evaluation of whether use of formaldehyde in these 567 products presents or will present an unreasonable risk under TSCA section 6. However, EPA did agree to 568 initiate a proceeding to investigate whether and what type of regulatory or other action might be 569 appropriate to protect against risks posed by formaldehyde emitted from pressed wood products. 570

571 Accordingly, on December 3, 2008, EPA issued an Advance Notice of Proposed Rulemaking 572 (ANPR) that announced EPA’s intention to investigate whether and what regulatory or other action might 573 be appropriate to protect against risks posed by fo rmaldehyde emitted from the products covered by the 574 CARB ATCM as well as other pressed wood products. To help inform EPA’s decision on the best ways 575 to address risks posed by formaldehyde emissions from pressed wood products, the Agency requested 576 public comments and held six half-day public meeti ngs in Research Triangle Park, NC ; Portland, OR; 577 Chicago, IL; Dallas, TX; Washington, DC; and New Orleans, LA. EPA received and reviewed 578 comments submitted during the ANPR comment period, which can be found at regulations.gov under 579 docket number EPA-HQ-OPPT-2008-0627. 580

581 On July 7, 2010, President Obama signed into law the Formaldehyde Standards for Composite 582 Wood Products Act, or Title VI of TSCA, 15 U.S. C. 2697. The statute establishes formaldehyde 583 emission standards that are identical to the CARB ATCM Phase 2 standards for hardwood plywood, 584 medium-density fiberboard, and particleboard sold, supplied, offered for sale, or manufactured in the 585 United States and directs EPA to issue final implemen ting regulations by January 1, 2013. (Pursuant to 586 TSCA section 3(7), the term “manufacture” means import, produce, or manufacture.) TSCA Title VI 587 does not give EPA the authority to raise or lower the established emission standards and EPA must 588 promulgate the implementing regulations in a manner that ensures compliance with the standards. 589 Congress directed EPA to consider a number of elem ents for inclusion in the implementing regulations, 590 many of which are aspects of the CARB program. These elements include: labeling, chain of custody 591 requirements, sell-through provisions, ultra low-emitting formaldehyde resins, no-added formaldehyde592 based resins, finished goods, third-party testing an d certification, auditing and reporting of TPCs, 593 recordkeeping, enforcement, laminated products, and exceptions from the requirements of regulations 594 promulgated for products and components containing de minimis amounts of composite wood products. 595

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## 1.3 Justification for Regulation 596

597 Market failure can justify government regulation; the major types of market failures include the 598 following: 599

600

 Negative externalities, common property resources, and public goods 601

 Market power 602

 Inadequate or asymmetric information 603

604 The occurrence of any of these conditions justifies further inquiry into the need for government 605 regulation to reduce inefficiencies in the allocation of society’s resources. This section describes why 606 negative externalities and inadequate information ar e present in the market for composite wood products. 607 Understanding the nature of the inefficiencies involved facilitates the design of more effective 608 regulations. The specific regulatory approach consider ed here involves an emissions standard verified 609 through third party testing and certification as well as chain of custody requirements. 610

611 Economic efficiency suggests that in the absence of regulation the market for lower emitting 612 composite wood products would exist so long as the composite wood product purchasers’ willingness-to613 pay for low emission products equals or exceeds the incrementally higher cost of lower emitting products. 614 If the composite wood product purchasers are aware of the risks associated with formaldehyde emissions 615 and of the availability and costs of lower emitting products, then arguably they might be able to 616 accurately trade off risk and cost without the aid of government regulation. However, there are two 617 arguments for why composite wood product consumers may not trade off risk and cost efficiently: (1) 618 because externalities exist, and (2) because of inadequate and asymmetric information. 619

620

1.3.1 Externalities Associated with For maldehyde Emissions from Composite Wood 621
Products 622

623 One cause of market failure in the market for low emissions composite wood products stems from 624 externalities. An efficient outcome is achieved when the marginal willingness-to-pay for a service is 625 equivalent to the marginal cost of providing that service. In the case of a composite wood product 626 purchase, the primary beneficiaries of lower emissi on composite wood products are the individuals who 627 live or work where the composite wood products will be installed. However, the decision about whether 628 or not to pay for lower emitting composite wood pro ducts may be made by builders, employers, property 629 owners, or managers who have an insufficient incentive to take the benefits to the occupants into account 630 when making this decision. Externalities may also exist in cases where the purchase is made by the 631 occupant of the residence where composite wood produc ts will be installed. While the current occupant 632 may not be willing to pay more for lower emitting co mposite wood products, future occupants, visitors, 633 and children receiving child care on the premises may potentially be harmed by formaldehyde emissions 634 from composite wood products. 635

636 Thus, formaldehyde emissions from composite wood products may constitute an externality. As 637 such, perfect information would not result in the ef ficient allocation of lower emitting composite wood 638 products because it does not correct the problem resulti ng from that fact that there are individuals who do 639 not have influence on the purchasing decision, but do face the risks associated with formaldehyde 640 emissions that result from it. For example, a future occupant of a housing unit for sale may experience an 641 increased exposure to formaldehyde if a renovation occurs where high emitting composite wood products 642 are installed before they move in. While a future oc cupant might be willing to pay to reduce or eliminate 643 this exposure, they would not be consulted by the current occupant making the decision. As another 644

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### example, children cannot express their willingness-to-pay for risk reduction and rely on their parents’ or 645 the property owners’ willingness-to-pay. 646

647 1.3.2 Inadequate Information 648

649 A second cause of market failure associated with the formaldehyde emissions from composite 650 wood products is due to inadequate information about the emissions levels of composite wood products 651 and the risks associated with formaldehyde emissions from composite wood products. Full information is 652 an important prerequisite to the lower emitting composite wood products because the consumer must 653 know the risks associated with composite wood products with higher formaldehyde emissions in order to 654 make an informed decision about whether lower emitting composite wood products are worth the extra 655 cost. Inadequate information can lead to inefficient outcomes. Without knowing the differences in the 656 relative risks between lower and higher formaldehyde emitting composite wood products, the consumer 657 will not be able to weigh these differences in risk with the differences in price. 658

659 1.3.3 Justification for Regulation at the Federal Level 660

661 Many composite wood products are distributed in commerce across state lines. It is more 662 efficient for companies manufacturin g, fabricating, distri buting, and retailing composite wood products to 663 comply with a single standard rather than a patchwor k of different state regulations. Under TSCA Title 664 VI, Congress directed EPA to promulgate regulations to implement national formaldehyde emission 665 standards. While the TSCA Title VI does not prevent states from developing their own regulations, states 666 are less likely to promulgate regulations if there is a federal regulation in place. 667

668

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## 1.4 Alternative Regulatory Appro aches for Reducing Exposure to 669 

## Formaldehyde Emissions from Composite Wood Products 670

671 This section examines alternative approaches for addressing the market failures discussed in the 672 previous section. The proposed rule utilizes a pe rformance standard approach, which is required by 673 statute. The statute requires that all producers mu st meet a specific emissions standard but does not 674 prescribe a specific technology for achieving the emissions standard. The advantage of a performance 675 standard over a technology standard is that firms have more incentive to develop lower cost technologies 676 for achieving the standard. 677

678 The primary alternative to a performance standard is a market based regulatory approach that 679 includes a mechanism to force market participants to incorporate the social cost of the formaldehyde 680 emissions from composite wood products into their priv ate costs. This approach is not allowable under 681 the statute, and would not be desira ble or practical in the case of formaldehyde from composite wood 682 products. Emissions reductions under a performance standard (such as the proposed rule) generally 683 achieve a more uniform reduction in emissions across sources compared to the emissions reductions 684 under a market based approach where higher emissions from some sources can be offset by lower 685 emissions from other sources. Thus, market based approaches are generally only effective if “hot spots” 686 are not a concern (Stavins 2001) – i.e., the negative pollution impacts are not localized near the releases. 687 But “hot spots” are an issue for composite wood prod ucts because the products are used inside of homes, 688 offices, schools, and other buildings. Exposures in individual buildings can be very different from the 689 average exposures due to the cumulative regional or national emissions from composite wood products. 690

691 Another possible alternative regulatory approach is an information provision approach. In the 692 case of formaldehyde emissions from composite wood pr oducts, this type of approach could be a labeling 693 requirement for composite wood products. Since the purchaser of the composite wood products may not 694 be the person who will ultimately be exposed to the fo rmaldehyde emissions from the products (i.e., an 695 externality exists), information provision does not force market participants to incorporate the social cost 696 of the formaldehyde emissions from composite wood products into their private costs, and therefore is 697 unlikely to correct the market failure. Furthermore, an effective information provision requirement would 698 need to include testing, certification, and chain of custody requirements in order for products to be 699 credibly labeled as lower emission products. Thus, the regulatory cost of a labeling requirement is likely 700 to be similar to the cost of the proposed rule given th at most of the costs of the regulation are attributable 701 to these activities (see Chapter 2). 702

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# 2 Costs 703

704 This chapter discusses the potential costs to businesses of complying with the proposed 705 regulatory requirements under TSCA Title VI, and various other analytical options. The methods for 706 estimating the number of affected entities and the resulting estimates are presented in section 2.1. The 707 per-mill testing and certification costs for stock ha rdwood plywood panel producers (including engineered 708 wood flooring producers), medium density fiberboard (MDF) producers, and particleboard producers are 709 presented in section 2.2. Section 2.3 describes th e total costs to these producers for changes to raw 710 materials, production processes, and third party testin g and certification. Section 2.4 presents the total 711 costs to wood veneer laminated product producers for changes to raw materials, production processes, and 712 third party testing and certification. Section 2.5 presents the costs associated with rule familiarization, 713 recordkeeping, labeling, supplier notificat ion, and rule familiarization. Finally, section 2.6 presents the 714 total costs of the regulation. 715

716 The general approach of this analysis is to: (1) estimate the number of affected entities and the 717 quantity of affected production; (2) estimate the direct compliance costs on a per entity or per unit of 718 production basis; and (3) combine the per entity and per production costs with the number of affected 719 entities and the quantity of affected production, respecti vely, to calculate the total direct compliance costs. 720

721 The potential costs of the proposed TSCA Title VI Implementation Rule are estimated for several 722 analytical options which are presented in Table 2

- 1. 723

724 This document discusses various options with respect to formaldehyde and composite wood 725 products. In some instances, the statute chose an option and this document discusses an alternative 726 simply for informational purposes. The breadth of the discussion here should not imply that EPA 727 necessarily has corresponding flexib ility in implementing the statute. 728

729

730

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### Table 2

- 1 : Analytical Options Considered in Cost Analysis

Analytical Option a Notes aAnalytical options with emissions standards at the levels required by TSCA Title VIb Option SE: S tatutory emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification. No

ULEF certification.

Option SI: S tatutory emissions standards where wood veneer laminated products are i ncluded in the definition of hardwood plywood All laminators must have products tested and certified by a

TPC. No ULEF certification.

Option SP: S tatutory emissions standards where wood veneer laminated products other than Custom and

Architectural P anel products are exempt from the definition of hardwood plywood Only laminators making Custom or Architectural panels must have products tested and certified by a TPC. Laminators making other products do not need TPC testing

or certification. No ULEF certification. Option SN: S tatutory emissions standards where wood veneer laminated products made using NAF resins to

attach wood veneers to N AF platforms are exempt from the definition of hardwood plywood Laminators using NAF resins to attach wood veneers to NAF platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing

or certification. No ULEF certification.
Option SC: S tatutory emissions standards where wood veneer laminated products made with wood veneers

attached to c ompliant platforms using no-added formaldehyde (NAF) resins are exempt from the definition of hardwood plywood Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification. No ULEF certification.

Option SCR: S tatutory emissions standards where wood veneer laminated products made with wood

veneers attached to c ompliant platforms using NAF resins are exempt from the definition of hardwood plywood. R educed recordkeeping requirements for nonmanufacturers compared to other options. Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification. No ULEF certification.

Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required.
Option SEUR: S tatutory emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood. U LEF certification

allowed. c R educed recordkeeping requirements for nonmanufacturers. Laminators do not need TPC testing or certification. ULEF

certification allowed. Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required.

Option SFCC: S tatutory emissions standards with regulatory provisions that are f ully c onsistent with

C ARB ATCM. Tested lots may be shipped before test results are available. Laminators do not need TPC testing or certification. ULEF certification allowed. Panel producers and fabricators must label products.

Option SCUR: Proposed Option.

S tatutory emissions standards where wood veneer laminated products made with wood veneers attached to

c ompliant platforms using NAF resins are exempt from the definition of hardwood plywood. U LEF certification

allowed. c R educed recordkeeping requirements for nonmanufacturers. Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Other laminators must have products tested and certified by a TPC. ULEF certification allowed.

Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required.Analytical options withemissions standards otherthan the levels required byTSCA Title VICARBPhase 1levelsd Option CE: C ARB 1 emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification.

Option CI: C ARB 1 emissions standards where wood veneer laminated products are i ncluded in the definition of hardwood plywood Laminators must have products tested and certified by a

TPC.NAFemissionlevelse Option NE: N AF emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification.

Option NI: N AF emissions standards where all wood veneer laminated products are i ncluded in the definition of hardwood plywood Laminators must have products tested and certified by a

TPC.

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

are different from those set in TSCA Title VI. This document discusses alternative emi ssions standards simply for informational purposes. The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the stat ute.

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### Table 2

- 1 : Analytical Options Considered in Cost Analysis

a Panel producers must have products tested and certified by a TPC under all options. Recordkeeping and supplier notification r equirements

are equivalent to the CARB ATCM unless noted otherwise.

b Emission levels for TSCA Title VI standa rd certification (and CARB Phase 2): Hard wood plywood = 0.05 ppm; MDF = 0.11 ppm; Thi n MDF = 0.13 ppm; Particleboard = 0.09 ppm.

c Emission levels for ULEF certification with reduced quality control testing : Hardwood plywood: 90% of samples < 0.05 ppm and all

samples < 0.05 ppm; MDF: 90% of samples < 0.06 ppm and all sample s < 0.09 ppm; thin MDF: 90% of samples < 0.08 ppm and all sam ples < 0.11 ppm; Particleboard: 90% of samples < 0.05 ppm and all samples < 0.08 ppm. Emission levels for ULEF certification with quarterly TPC test exemption : Hardwood plywood: 90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; thin MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; Particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm.

d Emission levels for CARB Phase 1: Hardwood plywood = 0.08 pp m; MDF = 0.21 ppm; Thin MDF = 0.21 ppm; Particleboard = 0.18 ppm.

e Emission levels for NAF certification: Hardwood plywood: 90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF and

particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm.


### 731

Table 2

- 2 presents a summary of the different requirements under each analytical option. A 732 summary of the activities associated with the incremental costs that firms are estimated to incur under the 733 proposed option is presented in Table 2

- 3

. 734

735

Table 2

- 2 : Regulatory Requirements of the Analytical Options Considered in the Economic Analysis

Regulatory Requirements Analytical Options Considered in the Economic Analysis

SE SI SP SN SC SCR SEUR SFCC SCUR CE CI NE NI Emission standards at levels required by

TSCA Title VI 

###         

Emissions standards at CARB Phase 1

levels 

###  

Emission standards at NAF levels 

###  

No wood veneer laminated products are defined as hardwood plywood 

###     

All wood veneer laminated products are defined as hardwood plywood 

###   

Certain wood veneer laminated products are defined as hardwood plywood 

###     

Recordkeeping and supplier notification

consistent with CARB ATCM 

###          

Reduced recordkeeping for nonmanufacturers. No supplier notification. 

###   

ULEF certification allowed 

###   

ULEF certification not allowed 

###          

Tested lots must be held until results are available. Wholesalers that repackage must label products. 

###            

Tested lots may be shipped before results are available. Only panel producers and fabricators must label products. 

### 

Option SCUR is the proposed option.



### 736

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### Table 2

- 3 : Activities with Incremental Costs Estimated Under Option SCUR (the proposed option) by Sector and Type

Activity Panel Manufacturers Fabricators Wholesalers

Retailers Laminators Other Fabricators

CARB compliant Not CARB compliant Use Added

Formaldeh yde Resins Use

NAF

resins CARB compliant Not CARB compliant Importers Not
Importers

Become Familiar

with TSCA rule Yes Yes Yes Yes Yes Yes Yes Yes Yes

Make Changes to

Raw Materials Yes a Yes b

On-Site Daily Quality Control testing Yes c Yes c Yes c

Have Products

Tested and Certified by a TPC Yes Yes d

Set Up Systems to Keep Additional

Records Yes Yes e

Keep Additional

Records Yes Yes Yes Yes f Yes f Yes e

Set Up to Label

Products as TSCA Compliant Yes Yes Yes Yes Yes Yes Yes g Yes g

a Some uncertified panel manufacturers will need to change their raw materials in order to meet the emissions standards.

b Most laminated product producers currently using add-formaldehyde resins will switch to NAF resins in order to avoid being de fined as panel manufacturers.

Some of the remaining laminated product producers that continue using added-formaldehyde resins will need to change their raw m aterials in order to meet the

emissions standards.

c The proposed rule includes a requirement that tested lots must be held until test results indicate that the emission standard has been met. The analysis assumes

that some hardwood plywood producers required to perform quality control testing (including laminators using added-formaldehyde resins) will respond by conducting daily on-site quality control testing so that they can ship panels the same day that they are produced, instead of h olding tested lots in inventory while waiting for the quality control testing to be performed by an off-site lab. Panel producers with an existing ULEF or NAF certi fication will already be exempted from quality control testing, and particleboard and MDF manufacturers are assumed to be conducting daily on-site quality contro l testing to comply with the

CARB ATCM.

d Laminators that use added-formaldehyde resin will need to have their products tested and certified by a TPC.

e Wholesalers that import composite wood products are defined as manufacturers under TSCA and are subject to the same recordkee ping requirements as manufacturers. Some of those importers that are not compliant with the CARB ATCM will incur costs to set up recordkeeping syst ems and ongoing costs to keep these additional records.

f Some fabricators that are not compliant with the CARB ATCM will incur ongoing costs to keep additional records.

g. Wholesalers that repackage goods or replace an original label will incur set up costs to label the goods as TSCA compliant.


### 737 In order to estimate costs that are comparable to the estimated benefits, this analysis estimates the 738 costs of each analytical option over a 30 year period. This time frame was selected to be as short as 739 possible while being long enough to capture the important benefit effects of the policy. In general, the 740 downside of choosing a longer analysis time frame is that uncertainties about both the baseline and policy 741 scenarios increase with time. For example, the likelihood that alternative technologies for manufacturing 742 composite wood products might be developed increa ses over time (which could result in lower 743 formaldehyde emission rates for products and/or lower costs for reducing formaldehyde emissions). 744 Similarly, uncertainties about changing demographics, treatments for adverse health effects, and 745 consumer preferences with respect to composite wo od products all increase with time. However, 746 selecting a time frame that is too short would not capture all of the important effects of the policy 747

scenarios under consideration. 748

749 The present discounted value for the annualized value of the thirty year stream of costs is 750 estimated using discount rates of 3 and 7 percent. Co sts are discounted (for the discount rate r = 3% and r 751 = 7%) back to the beginning of the 30-year period, as follows: 752

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### 753 

## ෍ൌ ݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏ݅ܦ ݐ݁݊ݏ݁ݎܲ ሻ݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏܷ݊݀݅ሺ ௧ 

## ሺ1 ൅ rሻ ௧ ଷ଴

௧ୀ଴ (1)



### 754

755

756

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### Table 2

- 1 : Analytical Options Considered in Cost Analysis

Analyt ical Option Emissions Standards NotesAnalytical options with emissions standards at the levels required by TSCA Title VI Option SE: Statutory emissions

standards where wood veneer laminated products are exempt from the definition of hardwood plywood Ha rdwood plywood

MDF

Thin MDF

Particleboard 0.05 ppm 0.11 ppm 0.13 ppm 0.09 ppm Same emissions standards as Phase 2 of the

CARB ATCM . Recordkeeping and supplier

notification equivalent to CARB ATCM.

Option SI: Statutory emissions

standards where wood v eneer laminated products are included in the definition of hardwood plywood Same as above Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier

notification equivalent to CARB ATC M. Option SP: Statutory emissions

standards where wood veneer laminated products other than

Custom and Architectural Panel products are exempt from the definition of hardwood plywood Same as above Same emissions standards as Phase 2 of the CARB ATCM, wi th a different definition of hardwood plywood . Recordkeeping and supplier

notification equivalent to CARB ATCM.

Option SN: Statutory emissions

standards where wood veneer

laminated products made using NAF

resins to attach wood veneers to NAF platforms are exempt from the definition of hardwood plywood Same as above Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier

notification equivalent to CARB ATCM.

Option SC: Statutory emissions

standards where wood veneer laminated products made with wood veneers attached to compliant platforms using no

- added formaldehyde (NAF) resins are exempt from the definition of hardwood plywood Same as above Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier

notification equivalent to CARB ATCM.

Option SC R : Proposed Option. Statutory emissions standards where

wood veneer laminated products

made with wood venee rs attached to compliant platfor ms using NAF resins are exempt from the definition of hardwood plywood . Reduced recordkeeping requirements for non

mfgrs. compared to other options. Same as above Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood

D istributors and retailers that are not
manufacturers under TSCA would only be required to keep invoices and bills of lading

. Other recordkeeping equivalent to CARB ATCM. No supplier notification.Analytical options with emissions standardsother than the levels required by TSCA TitleVICARB Phase 1levels Option CE: CARB 1 emissions

standards where wood veneer laminated products are exempt from the definition of hardwood plywood Hardwood plywood

MDF

Thin MDF

Particleboard 0.08 ppm 0.21 ppm 0.21 ppm 0.18 ppm Same emissions standards as Phase 1 of the

CARB ATCM . Recordkeeping and supplier

notification equivalent to CARB ATCM.

Option CI: CARB 1 emissions

standards where wood veneer laminated products are included in the definition of hardwood plywood Same as above Same emissions standards as Phase 1 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier

notification equivalent to CARB ATCM.NAF emission levels Opt ion NE: NAF emissions

standards where wood veneer laminated products are exempt from the definition of hardwood plywood Hardwood plywood : 90% of samples < 0.04 ppm. All samples < 0.05 ppm. MDF and particleboard : 90% of samples < 0.04 ppm. All samples < 0.06 ppm Requires all composite wood product

manufacturers to meet NAF emission standards

. Recordkeeping and supplier notification equivalent to CARB ATCM.

Option NI: NAF emissions

standards where all wood veneer laminated products are included in

t he definition of hardwood plywood Same as above Requires all composite wood product manufacturers to meet NAF emission standards, with a different definition of hardwood plywood

. CARB recordkeeping and supplier notification

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

that are different from those set in TSCA Title VI. This docume nt discusses alternative emissions standards simply for inform ational purposes. The brea dth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute.



### 757

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### The present discounted value co sts are annualized as follows: 758

759



## ሺ ܣ ݊݊ݑ݈ܽ݅ݖ݁݀ ݏݐݏ݋ܥሻ ൌ ሺܲܦܸ ଷ଴ ௬௘௔௥ ௖௢௦௧ ௦௧௥௘௔௠ 

## ሻ כ ݎ כ ሺ1 ൅ ݎሻ ଷ଴



## ሺ1 ൅ ݎሻ ଷଵ 

## െ 1 (2)



### 760

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## 2.1 Estimated Number of Affected Entities 761

762 This section summarizes the number of establishments and firms that will be affected by the 763 proposed TSCA Title VI Implementation Rule. An es tablishment is a single physical location at which 764

business is conducted and a firm is business or ganization or entity consisting of one domestic 765 establishment or more under common ownership or control. Both the estimated numbers of 766 establishments and firms are presented here because some of the cost elements estimated for this analysis 767 are estimated on a per establishment basis and others are estimated on a per firm basis. 768

769 The numbers of affected entities are categorized into the following categories based on the types 770 of requirements they will face under TSCA Title VI: 771

772

 Panel producers are defined as the entities that produce composite wood panels (hardwood plywood, 773 MDF and particleboard) as defined by TSCA Title VI and are subject to emissions standards, third 774 party testing and certification, chain of custody re quirements, and labeling requirements (see section 775 2.1.1); 776

 Wood veneer laminated product producers produce hardwood plywood by gluing a wood or woody 777 grass veneer to the face and/or back of a purchased platform to produce a component part used in the 778 construction or assembly of a finished good. 3 

### Wood veneer laminated product producers are 779 considered composite wood product fabricators rather than hardwood plywood producers under the 780 CARB ATCM, and they are not required to meet the ATCM’s emissions standards. TSCA Title VI 781 includes laminated products in the definition of hardwood plywood, and directs EPA to conduct a 782 rulemaking process to determine wh ether to exempt any of these products from the definition. If EPA 783 does not exempt laminated products from the definition of hardwood plywood, then laminated 784 products will have to meet TSCA Title VI’s em issions standards (in addition to being made with 785 certified platforms) (see section 2.1.2); and 786

 Fabricators are entities that use composite wood pro ducts to produce other goods (see section 2.1.3); 787

 Wholesalers and Retailers are entities that sell composite wood products. Both types of entities are 788 subject to chain of custody requirements and w holesalers are potentially subject to labeling 789 requirements (see section 2.1.4). 790

791
2.1.1 Estimated Number of Stock Panel Producers 792

793 Table 2-4 presents the total number of stoc k hardwood plywood, MDF, and particleboard 794 establishments (mills) and firms subject to TSCA Title VI’s emissions requirements. 4 

### The total number 795 of MDF and particleboard mills and firms include a ll those identified for the EPA survey of composite 796 wood product producers (described in section 2.1.1.1) and are consistent with data in other publically 797 available sources (see CPA 2007 2011). ). The search to identify stock hardwood plywood mills 798 (including engineered wood flooring) mills resulted in the identification of 41 mills. This analysis 799

assumes that all U.S. hardboard mills use PF or NA F resins and would qualify to be exempted from the 800

TSCA Title VI emission standards. 801

3 The laminated products discussed here do not include product s that are solely laminated with materials other than veneer, such as high pressure laminate, thermally fused pape r, vinyl film, decorative foil , or polypropylene film.

4 Stock hardwood plywood does not include wood veneer la minated products that qualify as hardwood plywood. In

addition, some hardwood plywood (such as military specifie d plywood, curved plywood, exterior plywood, etc.) is statutorily exempted in TSCA Title VI, and thus is not subject to the emission requirements.

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### 802 Table 2-4: Stock Hardwood Plywood, MDF, and Particleboard Firms and Mills Directly Subject to Emission Requirements

Sector Total Number in Industry

Firms Mills Hardwood Plywood 32 41

MDF 14 22

Particleboard 16 30

Total 62 93 Note that because mills and firms producing two different types of composite wood products are expected to incur separate costs for each product type, the estimates of 93 mills and 62 firms used to estimate costs are derived by counting mills and firms that produce two different types of composite wood products twice. There are 90 unique mills and 54 unique firms that produce composite wood panels.


### 803 2.1.1.1 Respondent Identification for the EPA Pressed Wood Manufacturing Industry Survey 

### 804

805 The universe of composite wood product manufac turing mills was developed from a list EPA 806 developed for a 1998 industry survey conducted for the Plywood and Composite Wood Product (PCWP) 807 National Emissions Standards for Hazardous Air Pollutants (NESHAP). Through a 1998 information 808 collection request (ICR), mills potentially affected by the NESHAP were identified. This included 809 industries in three categories based on their Standard Industrial Classification (SIC) or North American 810 Industry Classification System (NAICS) classifica tions: softwood plywood and veneer, reconstituted 811 wood products, and structural wood members. The ICR surveyed 416 potentially affected mills (EPA 812 1998), and an additional 15 mills were identified that either did not respond to the survey or have 813 commenced operation since the date of the survey (EPA ).

. 814

815 EPA updated the 1998 mill list to reflect the current universe of mills based on information from 816 trade journals, company websites, press releases, trade association websites, and other sources to reflect 817 mill closures, mill openings, mergers and acquisitions, and similar changes that have occurred over the 818 past decade. A total of 343 U.S. composite wood product manufacturing mills were identified for an 819 initial survey mailing list – a unive rse of mills that included hardboard and structural composite wood 820 product producers not regulated under TSCA Title VI. 821

822 In addition to the initial list of composite wood product producers, several approaches were 823 employed to identify additional composite wood product mills that may have been excluded originally. 824 These approaches are described below. 825

826 A variety of composite wood product lists were identified and searched, and a review was 827 conducted of the company websites of mills listed in EPA’s Envirofacts aggregated mills database under 828 the relevant NAICS codes (see Table 2-5). A multisystem facility search was performed in the 829 Envirofacts database, which queries multiple environmen tal databases for facility information, for four 830 NAICS codes, and results were cross-checked against the original OAQPS list. The four NAICS codes 831

searched were: 832

833

o 321211: Hardwood Veneer and Plywood Mfg.; 834

o 321212: Softwood Veneer and Plywood Mfg.; 835

o 321213: Engineered Wood Member (exc. truss) Mfg.; and 836

o 321219: Reconstituted Wood Product Mfg. 837

838

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### The additional facility search resulted in 192 potential new mills operated by companies not on 839 the initial list, of which 52 were confirmed to be potentially in-scope. Scope was determined in two 840 phases. First, company websites of these mills were viewed to determine whether the companies 841 appeared to be within the scope of our the survey. After notification letters were sent to all potentially in842 scope respondents, respondent identification calls were placed to this group of mills to further confirm 843 scope. Because many companies and mills lacked complete or up-to-date websites, not all mills could be 844 categorized as definitively in or out of scope. Fo llowing respondent identificat ion calls, these additional 845 mills were sent survey packages in two batches later than the original survey distribution. Table 2-5 gives 846 the full list of sources checked in order to identify additional mills. 847

848 Table 2-5: Composite Wood Product Producer Lists for Mill Identification

Facility Directories 

### 2009 Big Book. Random Lengths Publications
Oregon Forest Industry Directory

California Air Resources Board List of Certified Mills: Composite Wood Products Airborne Toxic Control Measure (as of June 14, 2010)
PanelWorld 2009 Annual Directory & Buyers’ Guide
2009 Big Book. Random Lengths Publications

Wood Product Manufacturing Associations 

### The Engineered Wood Association (APA)
The Composite Panel Association (CPA) – website membership directory
The American Institute of Timber Construction (AITC)
The American Hardboard Association (AHA)
The Wood I-Joist Manufacturers Association (WIJMA)
The Western Wood Products Association (WWPA)
The Engineered Wood Products Association (EWPA)
Harwood Panel and Veneer Association (HPVA) personal communication with EPA
North American Laminate Flooring Association (NALFA)
National Wood Flooring Association (NWFA)

Other Sources 

### EPA Envirofacts Facility Data



### 849
2.1.2 Number of Wood Veneer Laminated Product Producers 850

851 Wood veneer laminated product producers are considered composite wood product fabricators 852 rather than hardwood plywood producers under the CARB ATCM, and they are not required to meet the 853

ATCM’s emissions standards. TSCA Title VI includes laminated products in the definition of hardwood 854 plywood, and directs EPA to conduct a rulemaking pr ocess to determine whether to exempt any of these 855 products from the definition. If EPA does not ex empt laminated products from the definition of 856 hardwood plywood, then laminated products will have to meet TSCA Title VI’s emissions standards (in 857 addition to being made with certified platforms). 858

859 The number of wood veneer laminated product producers is based on discussions with industry 860

associations and a series of interviews with ha rdwood veneer manufacturers and wholesalers. The 861 information gathered from discussions with industry as sociations indicated that there are relatively few 862 wood veneer laminated product producers, with the exception of business and household furniture 863 manufacturing. To gather more information EPA c onducted interviews with veneer manufacturers and 864

wholesalers in order to learn more about their cu stomers that are wood veneer laminated product 865 producers. 866

867

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### The firms that were interviewed were sele cted from a Hardwood Veneer and Plywood 868 Association (HPVA) list 5 

### and the companies listed as “Face Veneer Suppliers” at www.veneernet.com. 869 Based on information gathered from company and third party websites, firms on this list were categorized 870 into four types: (1) specialized in hardwood veneer manufacture, (2) specialized in hardwood veneer and 871 plywood manufacture, (3) specialized in hardwood ve neer wholesale, and (4) wholesalers of hardwood 872 veneer and other wood products. Firms on each of these four lists were sorted in random order and phone 873 calls were placed until two entities in each category participated in an interview. 6 

### One additional set of 874 calls was placed until one additional entity on the hardwood veneer wholesale list participated in an 875 interview. This group was selected for the extra interview because the prior interviews indicated that this 876 group appeared to have more small customers, a group where little information was available. 877

878 There was wide disagreement over the number of businesses in the U.S. that are wood veneer 879 laminated product producers. Three respondents thought this number was less than 1,000; two estimated 880 that it was between 1,000 and 10,000; and three estimate d it was tens of thousands. One respondent did 881 not provide an estimate. Of those respondents that put the number in the tens of thousands, one suggested 882 that it was more than 50,000, and another s uggested this number was about 100,000. 883

884 Based on the interviews, the number of potential wood veneer laminated product producers is 885 likely to be between 7,000 and 14,000. The responde nts that estimated that there were fewer businesses 886 may not be aware of these smaller operations because they do not cater to these smaller customers. Part 887 of the reason that some respondents estimated that there were more wood veneer laminated product 888 producers may be because these respondents were thinking of businesses that would be exempt from the 889 rule’s requirements (e.g., veneering something to create a product that would not be considered a 890 composite panel 7 

### , veneering to substrates (such as metal) that do not qualify as composite wood products, 891 using veneer to make products that are statutorily exempt from the rule (such as boats, autos, products not 892 intended for interior use, etc.). Nevertheless, publical ly available data and other information that EPA has 893 obtained from industry associations is not consiste nt with more than about 14,000 businesses making 894 wood veneer laminated products. 895

896 The following NAICS have been identified as th e primary consumers of hardwood veneer (i.e., 897 they consume enough veneer such that the value of raw veneer material is reported in Economic Census 898 data): 899

900

 321211 Hardwood veneer and plywood manufacturing 901

 321911 Wood window and door manufacturing 902

 337211 Wood office furniture manufacturing 903

 337110 Wood kitchen cabinet and countertop manufacturing 904

 337121 Upholstered household furniture manufacturing 905

 337122 Nonupholstered wood household furniture manufacturing 906

 337127 Institutional furniture manufacturing 907

 337129 Wood television, radio, and sewing machine cabinet manufacturing 908

 337212 Custom architectural woodwork and millwork manufacturing 909

 337215 Showcase, partition, shelving, and locker manufacturing 910

5 HPVA Veneer Manufacturer/Sales Members. Available a t: http://www.hpva.org/sites/default/files/HPVAVeneer.pdf (Accessed April 18, 2011)

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

and was categorized as the second veneer manufacturer for the purpose of selecting the sample. A respondent on the veneer and plywood manufacturer list identified themselves as a manufacturer of hardwood veneer and other wood products and was categorized as the second veneer and plyw ood manufacturer for the purpose of selecting the sample.

7 Where a panel means a flat or raised piece of composite wood product.

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### 911 In addition, businesses in the following industries may also do their own veneering (although 912 many of them – indicated with a “*” – would be statutorily exempt from the TSCA Title VI rule even if 913 they do their own veneering 8 

### : 914

915

 321920 Wood container and pallet manufacturing* 916

 336111 Automobile manufacturing* 917

 336411 Aircraft manufacturing* 918

 336611 Ship building and repairing* 919

 336612 Boat building* 920

 321999 All other miscellaneous wood product manufacturing 921

 339920 Sporting and athletic goods manufacturing 922

 339932 Game, toy, and children's vehicle manufacturing 923

 339992 Musical instrument manufacturing 924

 811420 Reupholstery and furniture repair 925

926 There are 35,846 employer establishments and 46,704 nonemployer establishments in these 927 industries. Thus, it is estimated that the total number of establishments, including nonemployers, in these 928 industries is 82,550. 929

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

### 931

932 Two sets of estimates, a high end estimate and a low end estimate, were made for the number of 933 entities that make wood veneer laminated products an d thus are potentially subject to the TSCA Title VI 934 rule as hardwood plywood producers. Table 2-6 presents the underlying data, assumptions and resulting 935 estimates for the high end estimate of the number of wood veneer laminated product producers. These 936 assumptions are described in more detail below. 937

938

Windows and Doors . There are about 1,500 employer es tablishments and 2,200 nonemployer 939 establishments in this industry (NAICS 321911). Because no information was available about how many 940 companies making wood windows or doors affix veneer to platforms themselves (as opposed to buying 941 veneered components from suppliers), the analysis assumes all producers affix veneer. This assumption 942 may overestimate the number of entities potentially subject to the rule as panel producers. 9 

### 943

944

Furniture . There are about 6,300 employer establishments in the furniture industry (NAICS 945 337211, 337121, 337122, and 337127) and about 5,000 nonemployer establishments. Note that the 946 Census does not report the number of nonemployer es tablishments at the 6-digit NAICS level, so the 947 number of establishments reported here is estimated by applying the proportions of the 6-digit NAICS as 948 a share of the broader NAICS for employer establishmen ts to the number of nonemployers in the broader 949

NAICS. 950

951 The furniture industry is the only sector where trade associations reported that it is common for 952 companies to affix veneer to their products. The Business and Institutional Furniture Manufacturing 953

8 Section 601(a)(3)(i) of TSCA limits the term “hardwood plywood” to panels that are intended for interior use. Section 601(c)(9) exempts packaging products. And Section 601(c)(10) exempts certain vehicles (other than recreational vehicles), rail cars, boats, aerospace craft, and aircraft.

9 Note that depending on the process for laminating the hard wood veneer, window manufacturers in particular may not be producing what the rule defines as a “panel,” in which case they would only be subject to the requirements for fabricators. However, windows contai ning less than 5% by volume of composite wood product and exterior doors containing less than 3% by volume of composite wood product are statutorily exempt from the rule’s requirements.

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### Association (BIFMA) indicated that “many if not mo st” business and institutional furniture producers 954 would make products that were made with wood veneer and about 75 percent of those would affix the 955

veneer themselves ( Personal Communication with BIFMA 2010 (BIFMA 2010). ). The American Home 956 Furnishing Alliance (AHFA) indicated that most domestic furnitur e producers would affix wood veneer 957 themselves, but estimated that there were about 250 firms that do this ( Personal Communication with 958

AHFA 2010 (AHFA 2010). ). To develop a high end estimate for the number of wood furniture producers 959

that affix veneer and thus make wood veneer lamina ted products, the analysis assumed that 50 percent of 960 establishments in these industries manufacture products that contain veneer and 75 percent of those 961 establishments do the laminating themselves. 962

963

Kitchen Cabinets . There are about 9,700 employer establishments and 7,800 nonemployer 964 establishments in this industry (NAICS 337110). It is worth noting that NAICS 337110, and thus these 965 establishment counts, includes both cabinet manufacturers (who may laminate hardwood veneer) and 966 countertop manufacturers (who do not use hardwood ve neer). The Cabinet Makers Association, which 967 generally represents smaller custom cabinet manufacturers, said “very, very few” would do their own 968 veneering (CMA 2010). The Kitchen Cabinet Ma nufacturers Association (KCMA), which generally 969 represents larger stock cabinet manufacturers, said 5 percent or less of cabinet manufacturers would do 970 their own veneering (KCMA 2010). The Architectural Woodwork Institute (AWI) did not think any of its 971 members would do their own veneering. 10 

### Thus, the analysis assumes that 5 percent of these 972 establishments affix veneers and thus make wood veneer laminated products. 973

974

Other Products . Because the other manufacturing sectors that may include establishments that 975 laminate their own hardwood veneers consist of a very diverse group of manufacturers, including 976 establishments that do not even use composite wood products let alone laminate their own hardwood 977 veneer, the analysis assumes that 5 percent of these establishments laminate their own hardwood veneers. 978

979 High End Estimate . The assumptions about the percenta ges of establishments in different 980 industries that are laminating their own hardwood veneer results in a high end estimate that as many as 981 14,000 establishments might laminate hardwood veneer , as shown in Table 2-6. However, this estimate 982 conflicts with information provided in the intervie ws with nine companies that sell hardwood veneer, 983 described earlier. That information indicated that no more than 30 percent of businesses laminating their 984 own hardwood veneer are nonemployer operations. Ho wever, the estimate of 14,000 businesses that do 985 their own veneering is based on about 7,000 nonemployer operations (50% of the total). Therefore, the 986 high end estimate of 14,000 establishments may ov erestimate the number of wood veneer laminated 987 product manufacturers. 988

989

Low End Estimate . To derive a low end estimate for the number of domestic entities that 990 laminate hardwood veneer, the analysis extrapolated to the total number of wood veneer laminated 991 product establishments from the employer establishments by assuming that 30 percent of the total are 992 nonemployer establishments, based with information prov ided in the interviews with nine companies that 993 sell hardwood veneer, described earlier. In additi on, it was assumed that 1 percent of manufacturers in 994 the miscellaneous manufacturing sectors laminate their own veneer as compared to the 5 percent that was 995 assumed for the upper bound estimate. Other assumptions were the same as for the upper bound estimate. 996 Table 2-7 presents the underlying data, assumptions and resulting estimates for the lower bound estimate 997

of domestic entities that laminate hardwood veneer. 998

999

1000

10 Note that participants in the veneer sales interviews did think this was common for architectural woodwork and millwork manufacturers, but there are only about 4,000 entities in this sector.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-14Table 2-6: High End Estimate for Entities that Laminate Hardwood VeneerEmployer NAICSNonemployerNAICSEstablishments inAffected NAICSEntities Doing Own VeneeringDescription of AssumptionsEmployersNon-employersEmployersNon-employersAllEntities321211: Hardwood veneer and plywoodmanufacturing321: Woodproductmanufacturing303 456 68 - 6850 Custom panel producers and 18engineered wood flooring producers.321911: Wood window and door manufacturing 1,493 2,246 1,493 2,246 3,739Assume all wood window and doorproducers do their own veneering.321920: Wood container and pallet manufacturing 2,918 4,390 - - - Assume statutorily exempt.321999: All other miscellaneous wood productmanufacturing1,971 2,965 739 1,112 1,851Assume 50 percent use veneer and 75percent of those laminate the veneerthemselves.337110: Wood kitchen cabinet and countertopmanufacturing337: Furnitureand relatedproductmanufacturing9,701 7,769 485 388 873 Assume 5 percent do their own veneering.337211: Wood office furniture manufacturing 457 366 171 137 308Assume 50 percent use veneer and 75percent of those laminate the veneerthemselves.337121: Upholstered household furnituremanufacturing1,641 1,314 615 493 1,108337122 Nonupholstered wood household furnituremanufacturing3,414 2,734 1,280 1,025 2,305337127: Institutional furniture manufacturing 776 621 291 233 524337129: Wood television, radio, and sewing machinecabinet manufacturing265 212 99 80 179337212: Custom architectural woodwork andmillwork manufacturing2,235 1,790 838 671 1,509337215: Showcase, partition, shelving, and lockermanufacturing1,375 1,101 516 413 929336111: Automobile manufacturing336:Transportationequipmentmanufacturing188 98 - - - Assume statutorily exempt.336411: Aircraft manufacturing 265 138 - - - Assume statutorily exempt.336611: Ship building and repairing 674 350 - - - Assume statutorily exempt.336612: Boat building 1,117 580 - - - Assume statutorily exempt.339920: Sporting and athletic goods manufacturing339:Miscellaneousmanufacturing1,881 3,925 94 196 290 Assume 5% do their own veneering.339932: Game, toy, and children's vehiclemanufacturing639 1,333 32 67 99Assume 5% do their own veneering.339992: Musical instrument manufacturing 600 1,252 30 63 93 Assume 5% do their own veneering.811420: Reupholstery and furniture repair4,69322,549 - - - Assume statutorily exempt.Total36,606 56,189 6,751 7,124 13,8751001*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-15Table 2-7: Low End Estimate for Entities that Laminate Hardwood VeneerNAICSNonemployerNAICSEstablishments inAffected NAICSEntities Doing Own VeneeringDescription of AssumptionsEmployersNon-employersEmployersNon-employersAllEntities321211: Hardwood veneer and plywoodmanufacturing321: Woodproductmanufacturing303 456 686850 Custom panel producers and 18engineered wood flooring producers.321911: Wood window and door manufacturing 1,493 2,246 1,493 640 2,133Assume all wood window and doorproducers do their own veneering.321920: Wood container and pallet manufacturing 2,918 4,390 Assume statutorily exempt.321999: All other miscellaneous wood productmanufacturing1,971 2,965 99 42 141Assume 50 percent use veneer and 75percent of those laminate the veneerthemselves.337110: Wood kitchen cabinet and countertopmanufacturing337: Furnitureand relatedproductmanufacturing9,701 7,769 485 208 693Assume 5 percent do their ownveneering.337211: Wood office furniture manufacturing 457 366 171 73 244Assume 50 percent use veneer and 75percent of those laminate the veneerthemselves.337121: Upholstered household furnituremanufacturing1,641 1,314 615 264 879337122 Nonupholstered wood household furnituremanufacturing3,414 2,734 1280 549 1,829337127: Institutional furniture manufacturing 776 621 291 125 416337129: Wood television, radio, and sewing machinecabinet manufacturing265 212 99 42 141337212: Custom architectural woodwork andmillwork manufacturing2,235 1,790 112 48 160337215: Showcase, partition, shelving, and lockermanufacturing1,375 1,101 516 221 737336111: Automobile manufacturing336:Transportationequipmentmanufacturing188 98 0 - Assume statutorily exempt.336411: Aircraft manufacturing 265 138 0 - Assume statutorily exempt.336611: Ship building and repairing 674 350 0 - Assume statutorily exempt.336612: Boat building 1,117 580 0 - Assume statutorily exempt.339920: Sporting and athletic goods manufacturing339:Miscellaneousmanufacturing1,881 3,925 19 8 27 Assume 1% do their own veneering.339932: Game, toy, and children's vehiclemanufacturing639 1,333 6 3 9Assume 1% do their own veneering.339992: Musical instrument manufacturing 600 1,252 6 3 9 Assume 1% do their own veneering.811420: Reupholstery and furniture repair4,693 22,549- - -Assume exempt.Total36,606 56,189 5,260 2,226 7,4861002

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### 2.1.3 Estimated Number of Affected Fabricator Establishments 1003

1004 Table 2-8 presents the estimated number of affected fabricator establishments and firms in each 1005 industry. NAICS that reported using composite wood products as raw materials were identified as being 1006 fabricators (U.S. Census Bureau 2009e). Unlike for whol esale and retail entities (see section 2.1.4), it is 1007 assumed that all fabricator entities sell goods containing composite wood products. 1008

1009 Table 2-8: Number of Affected Fabricator Establishments and Firms, by NAICS

NAICS NAICS Description Employer

Estab. NonEmployer

Estab. Total

Number of

Estab. Number of

Firms

321211 /

321219 Decorative and custom panel producers a

- 85 85 85 71

321911 Wood window and door manufacturing 1,493 2,246 3,739 3,582
321918 Other millwork including flooring manufacturing 2,110 3,175 5,285 5,214
321991 Manufactured home (mobile home) manufacturing 379 570 949 798
321992 Prefabricated wood building manufacturing 818 1,231 2,049 1,930
321999 Other miscellaneous wood product manufacturing 1,971 2,965 4,936 4,822
336213 Motor home manufacturing 79 41 120 112
336214 Travel Trailer and Campers manufacturing 862 447 1,309 1,203
337110 Wood kitchen cabinets and countertop manufacturing 9,701 7,769 17,470 17,360
337121 Upholstered household furniture manufacturing 1,641 1,314 2,955 2,790
337122 Nonupholstered wood household furniture manufacturing 3,414 2,734 6,148 6,061
337124 Metal household furniture manufacturing 329 263 592 579
337127 Institutional furniture manufacturing 776 621 1,397 1,367

337129 Wood television, radio, and sewing machine cabinet manufacturing 265 212 477 476

337211 Wood office furniture manufacturing 457 366 823 804
337212 Custom architectural woodwork and millwork manufacturing 2,235 1,790 4,025 3,991
337214 Office furniture (non-wood) manufacturing 290 232 522 486
337215 Showcase, partition, shelving, and locker manufacturing 1,375 1,101 2,476 2,415
339950 Sign manufacturing 6,406 19,627 26,033 25,917
Total 34, 601 686 46, 789 704 81,390 79,978
a. Affected establishment and firm counts for decorative and custom panel producers (NAICS 321211 and 321219) were estimated fr om the list of laminators and coaters in the Composite Panel Association's 2011 Surface and Panel Buyers Guide (CPA 2011 2010 ). Sources: Composite Panel Association 2010, U.S. Census Bureau 2009e, 2010k, l



### 1010 As indicated in Table 2-8, an estimated 79,978 fabricator firms comprising 81,390 establishments 1011 will be affected by the proposed TSCA Title VI rule. 1012

1013
2.1.4 Estimated Number of Affected Wholesale and Retail Establishments 1014

1015 This section describes the process used to adjust the number of firms and establishments in 1016

affected retail and wholesale industries to account for the fact that not all entities in these industries sell 1017 composite wood products. This is necessary because not all establishments in affected industries are 1018 expected to sell composite wood products. For example, some retail stores in the Floor Covering Stores 1019 industry (NAICS 442210) might only sell carpet and rugs, and therefore would not be affected by the 1020 TSCA Title VI rule’s requirements. 1021

1022 2.1.4.1 Description of the Data 

### 1023

1024 Data from the 2007 Economic Census’ Product Lines Subject Series were used to estimate the 1025

number of wholesale and retail establishments that se ll composite wood products in affected industries 1026 Field Code Changed

Field Code Changed

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### (U.S. Census Bureau 2010j, 2011). Product line data we re not available at the firm level; however, ratios 1027 of firms to establishments by NAICS are used to estimate the numbers of affected firms. Census 1028 describes product lines as “major categories of produc ts” (U.S. Census Bureau 2010i) and classifies them 1029 with products and services codes (product line codes), which “represent various types of products carried 1030 or services rendered by an establishment” (U.S. Census Bureau 2010m). The Census datasets provide the 1031 number of establishments selling specified product lines, by product line and NAICS code. For example, 1032 the retail dataset shows that of the 28,834 establishments classified in the furniture stores industry 1033 (NAICS 442110), 9,968 sell the product line “office fu rniture, including computer-related furniture” (U.S. 1034 Census Bureau 2010j). 1035

1036 Different product line codes are used in the retail and wholesale sectors. In addition, they can 1037 represent broad or detailed product lines. 11 

### Broad product lines offer a more general category of products 1038 and/or services, and are comprised of detailed pr oduct lines. For example, the broad product line 1039 “flooring and floor coverings” contains the detailed product lines “hardwood flooring” and “other hard 1040 surface floor coverings and accessories, including tile and sheet goods,” as well as others. These detailed 1041 product lines provide greater insight for making assumptions and increase the accuracy of the 1042 establishment estimates. Detailed product line data, however, are not available for all broad product lines 1043

in the Census datasets. 1044

1045 2.1.4.2 Methodology 

### 1046

1047 The first step for refining the estimates of retailers and wholesalers that sell composite wood 1048 products was to develop a list of the product line codes for the establishments in affected industries. 1049 Based on their descriptions, these unique product line codes were then categorized according to whether 1050 they are expected to contain composite wood products. Because Census does not always provide data at 1051 the detailed product line level, a broad product line was categorized as containing composite wood 1052 products if it contained at least one detailed produc t line expected to be made with composite wood 1053 products. This process led to the creation of two se parate keys – one for retail and one for wholesale – 1054 which were then applied to the corresponding Census data (See Appendix A). 1055

1056 Table 2-9 provides an example of the product lines sold in an affected industry, as well as 1057 whether the product line is broad or detailed, and whether it is expected to contain composite wood 1058 products. 1059

1060

11 In the datasets, broad product lines are indicated by a zero in the final digit.

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May 1, 2013 2-18 

### Table 2-9: Example of Affected Establishment Count using Product Line Analysis: Window Treatment Store Industry (NAICS 442291)

Product

Line Code Meaning of Product Line code Product

Line Level Includes May

Include Composite

Wood Products? 20000 Industry total Total Yes
20200 Men's wear, including accessories Broad
20220 Women's, juniors', and misses' wear, including accessories Broad
20270 Sewing, knitting materials & supplies, needlework goods, etc Broad
20280 Curtains, draperies, blinds, slipcovers, bed & table coverings Broad
20281 Curtains & draperies Detailed
20282 Vertical & horizontal blinds, w oven wood blinds, & shades Detailed
20283 Furniture coverings, including ready-made & custom-made Detailed
20284 Domestics, incl towels, sheets, bl ankets, table linens, etc Detailed

20330 Audio equip, musical instr, radi os, stereos, CDs, records, etc Broad
20340 Furniture, sleep equipment & outdoor/patio furniture Broad Yes
20360 Flooring & floor coverings Broad Yes
20361 Soft-surface (textile) floor coverings & accessories Detailed
20363 Hardwood flooring Detailed Yes
20364 Other hard-surface floor coverings & accessories Detailed
20380 Kitchenware & home furnishings Broad Yes
20381 Cookware & cooking accessories Detailed
20382 Dinnerware, china, glassware, tableware, giftware Detailed
20383 Decorative accessories, incl lamps, lampshades, mirrors, etc Detailed Yes
20384 All other kitchenware & home furnishings Detailed
20400 Jewelry, incl watches, watch at tach, novelty jewelry, etc Broad

20420 Books Broad
20460 Toys, hobby goods, & games Broad Yes
20600 Hardware, tools, & plumbing & electrical supplies Broad
20620 Lawn, garden, & farm equipment & supplies Broad
20640 Dimensional lumber & oth bldg/stru ctural materials & supplies Broad Yes

20670 Paint & sundries Broad
20690 Wallpaper & other flexible wallcoverings Broad

20850 All other merchandise Broad
20863 Art goods, including original pictures & sculptures Detailed
20877 Souvenirs & novelty items Detailed

20878 Seasonal decorations Detailed
20879 Artificial/silk flowers, plants, & trees Detailed

29810 All other merchandise Broad
29900 All nonmerchandise receipts Broad
29904 Labor charges for work performed by this establishment Detailed
29905 Labor charges for work contracted out to other establishments Detailed
29908 Parts & materials used in furniture repair or upholstery work Detailed
29911 Delivery & installation charges Detailed
29936 Carpet cleaning receipts for work perf ormed by this establishment Detailed
29972 All other nonmerchandise receipts Detailed



### 1061 Figure 2-1 presents a description of the process used to estimate the number of establishments 1062 selling composite wood product lines using a hypothe tical example. Within affected industries, the 1063 number of establishments selling composite wood product lines was estimated as the minimum of: 1064

1065

 The total number of establishments in the industry, or 1066

 The cumulative sum of the minimum of: 1067

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

May 1, 2013 2-19 

### o the broad product line count, or 1068

o the sum of the affected detailed product line counts 1069 for each affected broad product line. 1070

1071*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-201072Figure 2-1: Hypothetical Example of Method Used to Refine Establishment Counts1073

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May 1, 2013 2-21 

### As indicated in the hypothetical example in Figure 2-1, the furniture industry sells two broad 1074 product lines containing composite wood products: hous ehold furniture and office furniture. There are 1075 14,000 establishments that sell the former line a nd 15,000 that sell the latter. Within the household 1076 furniture line, two detailed product lines are so ld; 8,000 establishments sell “chairs” and 8,000 1077 establishments sell “sofas.” Because the sum of the establishment counts for the detailed product lines 1078 (16,000) is greater than the total number of establis hments in the broad produc t line (14,000), the latter 1079

line count is used. Within the office furniture line, two detailed product lines are sold; 6,000 1080 establishments sell “desks” and 6,000 sell “chairs.” Because the sum of the establishment counts within 1081 the detailed product lines (12,000) is less than the broad product line total (15,000), the former count is 1082 used. The composite wood product lines are summed (26,000) and compared with the industry total. 1083 This value represents the estimated number of establishments in the furniture industry selling composite 1084 wood products. It is used in conjunction with the industry total to determine the proportion of the 1085 affected establishments within the industry, a value which is then applied to firm data to calculate 1086 industry-specific estimates for the number of affected firms. 1087

1088 It is important to note that the estimated number of entities that sell composite wood products is 1089 likely to be overstated after employing this method of estimation. Using the above example, if the data 1090 indicate that 14,000 establishments sell household furn iture and 12,000 sell office furniture, it is estimated 1091 that the number of establishments that sell household or office furniture is the sum of these two, or 1092 26,000. Thus, the analysis assumes that there is no overlap because the number of establishments that sell 1093 both household and office furniture is not known; that is, no establishments are assumed to sell both 1094

household and office furniture. 1095

1096 The results are presented here for the six digit NAICS, but the calculations described above were 1097 performed at either the six or seven digit level, de pending on which was the most detailed level available 1098

in the Census data. 1099

1100

2.1.4.3 Results 

### 1101

1102 This section summarizes the results of the pro cess used to adjust the firm and establishment 1103

counts to account for the fact that not all entities in the affected wholesale and retail industries sell 1104 composite wood products. Employer establishment and firm counts are presented first, nonemployer data 1105 second, and finally, summary data. 1106

1107 Employer Establishments 

### 1108

1109 Table 2-10 presents estimates of the number of affected wholesale employer establishments by 1110 NAICS. This is estimated from the percentage of affected establishments in each industry, which is 1111

calculated from Census data on the number of estab lishments selling product lines that are expected to 1112 contain composite wood products. The percentage of affected establishments within each industry is also 1113 used to adjust the firm counts in Table 2-12, since product line data are not collected at the firm level. 1114

Note that the total establishment counts in Table 2-10 do not include manufacturers’ sales branches and 1115 offices. Generally, Census categorizes wholesale esta blishments into one of two types of operation: 1) 1116 manufacturers' sales branches and offices, which are “primarily maintained by manufacturing, refining, 1117 and mining companies apart from their plants or mines for marketing their products at wholesale” (U.S. 1118 Census Bureau 2010c), and 2) merchant wholesalers, except manufacturers' sales branches and offices. 1119 Manufacturers’ sales branches and offices are excluded from this analysis, since these firms are already 1120

counted as fabricators. 1121

1122

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

May 1, 2013 2-22 

### Table 2-10: Number and Percentage of Affected Wholesale Employer Establishments, by Affected

NAICS

NAICS NAICS Description Establishments,
except
Manufacturers'

Sales Branches

and Offices Affected

Establishments

as a Percent of

Total Affected

Establishments 423210 Furniture merchant wholesalers 6,640 100.00% 6,640 423220 Home furnishing merchant wholesalers 7,540 47.21% 3,560

423310 Lumber, plywood, millwork, and wood panel merchant

wholesalers 8,428 100.00% 8,428

423320 Brick, stone, and related construction material merchant

wholesalers 3,383 10.20% 345

423330 Roofing, siding, and insulation material merchant wholesalers 2,587 78.08% 2,020 423390 Other construction material merchant wholesalers 3,383 84.92% 2,873 423410 Photographic equipment and supplies merchant wholesalers 1,019 3.83% 39 423420 Office equipment merchant wholesalers 4,837 2.69% 130 423430 Computer and software merchant wholesalers 10,668 1.76% 188 423440 Other commercial equipment merchant wholesalers 4,352 20.01% 871 423450 Medical equipment merchant wholesalers 8,282 0.81% 67

423490 Other professional equipment and supplies merchant

wholesalers 2,297 3.66% 84

423510 Metal service centers and other metal merchant wholesalers 10,148 12.22% 1,240 423610 Elec. equip. and wiring merchant wholesalers 13,277 0.78% 103 423620 Electric appliance merchant wholesalers 3,110 2.38% 74 423690 Other electronic parts and equipmen t merchant wholesalers 13,223 0.82% 109 423710 Hardware merchant wholesalers 6,828 13.96% 953 423720 Plumbing equip. merchant wholesalers 6,939 26.52% 1,840 423730 HVAC equip. merchant wholesalers 5,071 16.55% 839 423740 Refrigeration equipment and supplies merchant wholesalers 1,265 8.77% 111 423810 Construction equipment merchant wholesalers 4,694 0.49% 23

423820 Farm and garden machinery and equipment merchant

wholesalers 8,320 5.13% 427

423830 Industrial machinery and equipment merchant wholesalers 29,838 1.60% 476 423840 Industrial supplies merchant wholesalers 8,361 3.56% 298

423850 Service establishment equipment and supplies merchant

wholesalers 4,576 14.16% 648

423910 Sporting and recreational goods and supplies merchant

wholesalers 6,192 58.28% 3,609

423920 Toy and hobby goods and supplies merchant wholesalers 2,497 100.00% 2,497 423930 Recyclable material merchant wholesalers 7,377 0.08% 6 423940 Jewelry merchant wholesalers 7,792 0.71% 55 423990 Other miscellaneous durable goods merc hant wholesalers 10,185 20.70% 2,108 424110 Printing and writing paper merchant wholesalers 1,174 2.47% 29 424120 Stationery and office supplies merchant wholesalers 5,513 21.75% 1,199 424130 Industrial and personal service paper merchant wholesalers 4,679 2.78% 130 424210 Drugs and druggists' sundries merchant wholesalers 8,040 1.57% 126

424310 Piece goods, notions, and other dry goods merchant

wholesalers 3,445 4.33% 149

424320 Men's and boys' clothing and furnishings merchant

wholesalers 4,204 5.14% 216

424330 Women's and children's clothing merchant wholesalers 7,650 1.49% 114 424340 Footwear merchant wholesalers 1,649 3.15% 52 424410 General line grocery merchant wholesalers 2,547 12.92% 329 424420 Packaged frozen food merchant wholesalers 3,282 1.34% 44 424450 Confectionery merchant wholesalers 1,938 0.41% 8 424460 Fish and seafood merchant wholesalers 2,012 0.35% 7 424480 Fresh fruit and vegetable merchant wholesalers 5,074 0.18% 9 424490 Other grocery and related products merchant wholesalers 10,562 1.81% 191

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

May 1, 2013 2-23 

### Table 2-10: Number and Percentage of Affected Wholesale Employer Establishments, by Affected

NAICS

NAICS NAICS Description Establishments,
except
Manufacturers'

Sales Branches

and Offices Affected

Establishments

as a Percent of

Total Affected

Establishments

424510 Grain and field bean mercha nt wholesalers 4,851 0.39% 19

424610 Plastics materials and basic forms and shapes merchant

wholesaler 3,248 13.73% 446

424690 Other chemical and allied products merchant wholesalers 8,530 1.08% 92
424910 Farm supplies merchant wholesalers 7,432 0.98% 73
424920 Book, periodical, and newspaper merchant wholesalers 2,644 2.38% 63

424930 Flower, nursery stock, & florists' supplies merchant

wholesalers 4,213 1.42% 60

424940 Tobacco and tobacco product merchant wholesalers 1,305 0.46% 6

424950 Paint, varnish, and supplies merchant wholesalers 1,649 4.73% 78 424990 Other miscellaneous nondurable goods merchant wholesalers 12,492 6.47% 808
Total in Affected NAICS 321,242 44,909
Sources: U.S. Census Bureau 2010h, 2011



### 1123 As indicated in Table 2-10, there are a total of 321,242 wholesale employer establishments not 1124 including manufacturers’ sales branches and offices. Of this total, an estimated 44,909 establishments 1125 (approximately 14 percent) sell product lines expect ed to contain composite wood products. By industry, 1126 the percent of wholesale establishments selling affected product lines ranges from 0.1 percent (NAICS 1127 423930) to 100.0 percent (multiple industries). 1128

1129 Table 2-11 presents estimates of the number of affected employer establishments in the retail trade 1130 industries. It also presents the proportions of affected establishments within each industry (i.e., the 1131 percentage selling product lines exp ected to contain composite wood products), which are used to adjust 1132 retail employer firm counts in Table 2-13. 1133

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

May 1, 2013 2-24 

### Table 2-11: Number and Percentage of Affected Retail Employer Establishments, by Affected

NAICS

NAICS NAICS Description Total

Establishments Affected

Establishments

as a Percent of

Total Affected

Establishments 441110 New car dealers 24,888 5.77% 1,437 441210 Recreational vehicle dealers 3,100 100.00% 3,100 441221 Motorcycle, ATV, and personal watercraft dealers 6,137 13.33% 818 441229 All other motor vehicle dealers 2,266 10.90% 247 441320 Tire dealers 20,127 0.16% 32 442110 Furniture stores 28,834 100.00% 28,834 442210 Floor covering stores 14,534 87.71% 12,748 442291 Window treatment stores 2,652 22.55% 598 442299 All other home furnishings stores 19,124 100.00% 19,124 443111 Household appliance stores 9,336 24.21% 2,260 443112 Radio, television, and other electronics stores 29,051 47.83% 13,896 443120 Computer and software stores 10,428 7.11% 741 443130 Camera and photographic supplies stores 1,988 0.91% 18
444110 Home centers 6,953 100.00% 6,953 444120 Paint and wallpaper stores 7,860 15.70% 1,234 444130 Hardware stores 16,454 100.00% 16,454 444190 Other building material dealers 39,551 78.80% 31,166 444210 Outdoor power equipment stores 4,357 11.59% 505 444220 Nursery, garden center, and farm supply stores 15,895 62.42% 9,922 445110 Supermarkets and other grocery (except convenience) stores 64,881 29.48% 19,128 445120 Convenience stores 25,510 28.96% 7,387 445210 Meat markets 6,009 1.63% 98 445220 Fish and seafood markets 2,063 3.34% 69 445230 Fruit and vegetable markets 2,938 3.81% 112 445291 Baked goods stores 4,290 0.79% 34 445292 Confectionery and nut stores 3,404 7.31% 249 445299 All other specialty food stores 5,504 10.94% 602 445310 Beer, wine, and liquor stores 31,485 3.33% 1,047 446110 Pharmacies and drug stores 42,045 74.76% 31,431 446120 Cosmetics, beauty supplies, and perfume stores 13,584 0.76% 103 446130 Optical goods stores 13,149 0.07% 9 446191 Food (health) supplement stores 8,999 2.28% 205 446199 All other health and personal care stores 10,675 0.16% 17 447110 Gasoline stations with convenience stores 97,508 4.80% 4,680
447190 Other gasoline stations 21,248 1.18% 251
448110 Men's clothing stores 8,321 6.57% 547 448120 Women's clothing stores 36,220 9.57% 3,467 448130 Children's and infants' clothing stores 7,102 39.96% 2,838 448140 Family clothing stores 28,254 74.85% 21,147 448150 Clothing accessories stores 7,494 3.70% 277 448190 Other clothing stores 12,034 8.08% 972 448210 Shoe stores 28,076 10.19% 2,861 448310 Jewelry stores 27,745 8.93% 2,478 448320 Luggage and leather goods stores 1,222 14.98% 183 451110 Sporting goods stores 22,254 72.13% 16,051 451120 Hobby, toy, and game stores 9,357 100.00% 9,357 451130 Sewing, needlework, and piece goods stores 5,663 91.95% 5,207 451140 Musical instrument and supplies stores 4,510 0.31% 14 451211 Book stores 9,955 36.57% 3,641 451212 News dealers and newsstands 1,523 19.24% 293 451220 Prerecorded tape, compact disc, and record stores 4,153 56.54% 2,348 452111 Department stores (except discount department stores) 3,533 100.00% 3,533 452112 Discount department stores 5,001 100.00% 5,001

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

May 1, 2013 2-25 

### Table 2-11: Number and Percentage of Affected Retail Employer Establishments, by Affected

NAICS

NAICS NAICS Description Total

Establishments Affected

Establishments

as a Percent of

Total Affected

Establishments 452910 Warehouse clubs and supercenters 4,260 100.00% 4,260 452990 All other general merchandise stores 33,061 100.00% 33,061 453110 Florists 19,822 76.57% 15,177 453210 Office supplies and stationery stores 9,558 94.50% 9,032 453220 Gift, novelty, and souvenir stores 31,391 68.31% 21,442 453910 Pet and pet supplies stores 8,782 0.74% 65 453920 Art dealers 6,677 12.88% 860 453930 Manufactured (mobile) home dealers 3,878 100.00% 3,878 453991 Tobacco stores 6,539 6.73% 440 453998 All other miscellaneous store retailers (except tobacco stores) 17,270 28.99% 5,006 454111 Electronic shopping 14,185 35.67% 5,060 454113 Mail-order houses 7,324 33.78% 2,474 454210 Vending machine operators 5,194 0.79% 41 454311 Heating oil dealers 4,055 30.92% 1,254 454312 Liquefied petroleum gas (bottled gas) dealers 5,980 25.23% 1,509 454390 Other direct selling establishments 22,077 24.80% 5,475
Total in Affected NAICS 1,039,297 404,758 Sources: U.S. Census Bureau 2010g, j



### 1134 As indicated in Table 2-11, an estimated 404,758 of the 1,039,297 establishments in the affected 1135 retail industries (approximately 39 percent) sell product lines expected to contain composite wood 1136 products. By industry, the percent of retail establis hments selling affected product lines ranges from 0.1 1137 percent (NAICS 446130) to 100. 0 percent (multiple industries). 1138

1139 Employer Firms 

### 1140

1141 Table 2-12 presents estimates of the number of affected wholesale employer firms. Total firm 1142 counts were adjusted using corresponding establishment ratios to exclude manufacturers’ sales branches 1143 and offices and prevent potential double-counting of manufacturing firms that have branch offices 1144 designated as wholesale establishments. Counts were then multiplied by the corresponding affected 1145 establishment ratios in Table 2-10 to estimate the number of affected employer firms. 1146

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

May 1, 2013 2-26 

### Table 2-12: Number of Affected Wholesale Employer Firms, by Affected NAICS

NAICS NAICS Descri p tion Total

Firms in

Affected

NAICS Manufacturers'

Sales Branches

and Offices

Ratio a Number of Firms Not Including

Manufacturer's

Sales Branches

and Offices Affected Entity

Ratio b Number

of

Affected

Firms

A B C = (AxB) D E = (CxD) 423210 Furniture merchant wholesalers 6,172 97.10% 5,993 100.00% 5,993
423220 Home furnishing merchant wholesalers 6,491 98.48% 6,393 47.21% 3,018

423310 Lumber, plywood, millwork, and wood panel

merchant wholesalers 6,475 93.81% 6,074 100.00% 6,074

423320 Brick, stone, and related construction material

merchant wholesalers 2,796 82.37% 2,303 10.20% 235

423330 Roofing, siding, and insulation material

merchant wholesalers 1,121 92.26% 1,034 78.08% 807

423390 Other construction material merchant

wholesalers 2,514 89.81% 2,258 84.92% 1,918

423410 Photographic equipment and supplies

merchant wholesalers 886 95.95% 850 3.83% 33

423420 Office equipment merchant wholesalers 2,895 75.40% 2,183 2.69% 59

423430 Computer and software merchant wholesalers 8,509 92.40% 7,863 1.76% 139

423440 Other commercial equipment merchant

wholesalers 3,962 97.93% 3,880 20.01% 777

423450 Medical equipment merchant wholesalers 7,197 96.29% 6,930 0.81% 56

423490 Other professional equipment and supplies

merchant wholesalers 2,041 96.51% 1,970 3.66% 72

423510 Metal service centers and other metal

merchant wholesalers 7,973 93.69% 7,470 12.22% 913

423610 Elec. equip. and wiring merchant wholesalers 8,622 95.19% 8,207 0.78% 64

423620 Electric appliance merchant wholesalers 2,576 98.76% 2,544 2.38% 61

423690 Other electronic parts and equipment

merchant wholesalers 10,483 94.51% 9,908 0.82% 82

423710 Hardware merchant wholesalers 5,154 97.74% 5,037 13.96% 703

423720 Plumbing equip. merchant wholesalers 3,584 98.75% 3,539 26.52% 938

423730 HVAC equip. merchant wholesalers 2,336 94.33% 2,203 16.55% 364

423740 Refrigeration equipment and supplies

merchant wholesalers 758 95.98% 728 8.77% 64

423810 Construction equipment merchant wholesalers 3,075 95.72% 2,943 0.49% 14

423820 Farm and garden machinery and equipment

merchant wholesalers 6,316 98.99% 6,252 5.13% 321

423830 Industrial machinery and equipment merchant

wholesalers 24,357 95.09% 23,160 1.60% 369

423840 Industrial supplies merchant wholesalers 5,808 94.47% 5,487 3.56% 196

423850 Service establishment equipment and supplies

merchant wholesalers 3,669 96.97% 3,558 14.16% 504

423910 Sporting and recreational goods and supplies

merchant wholesalers 5,661 98.63% 5,583 58.28% 3,254

423920 Toy and hobby goods and supplies merchant

wholesalers 2,398 99.72% 2,391 100.00% 2,391

423930 Recyclable material merchant wholesalers 6,218 100.00% 6,218 0.08% 5

423940 Jewelry merchant wholesalers 7,570 99.82% 7,556 0.71% 53

423990 Other miscellaneous durable goods merchant

wholesalers 9,460 99.17% 9,382 20.70% 1,942

424110 Printing and writing paper merchant 801 90.94% 728 2.47% 18

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

May 1, 2013 2-27 

### Table 2-12: Number of Affected Wholesale Employer Firms, by Affected NAICS

NAICS NAICS Descri p tion Total

Firms in

Affected

NAICS Manufacturers'

Sales Branches

and Offices

Ratio a Number of Firms Not Including

Manufacturer's

Sales Branches

and Offices Affected Entity

Ratio b Number

of

Affected

Firms

A B C = (AxB) D E = (CxD)

wholesalers

424120 Stationery and office supplies merchant

wholesalers 4,620 94.00% 4,343 21.75% 945

424130 Industrial and personal service paper merchant

wholesalers 4,058 94.74% 3,844 2.78% 107

424210 Drugs and druggists' sundries merchant

wholesalers 6,261 94.20% 5,898 1.57% 92

424310 Piece goods, notions, and other dry goods

merchant wholesalers 3,150 97.54% 3,072 4.33% 133

424320 Men's and boys' clothing and furnishings

merchant wholesalers 3,927 98.87% 3,883 5.14% 200

424330 Women's and children's clothing merchant

wholesalers 7,237 99.69% 7,214 1.49% 108

424340 Footwear merchant wholesalers 1,557 99.40% 1,548 3.15% 49

424410 General line grocery merchant wholesalers 2,208 100.00% 2,208 12.92% 285

424420 Packaged frozen food merchant wholesalers 2,994 93.72% 2,806 1.34% 38

424450 Confectionery merchant wholesalers 1,798 88.45% 1,590 0.41% 7

424460 Fish and seafood merchant wholesalers 1,924 99.51% 1,914 0.35% 7

424480 Fresh fruit and vegetable merchant

wholesalers 4,646 100.00% 4,646 0.18% 8

424490 Other grocery and related products merchant

wholesalers 9,668 80.82% 7,814 1.81% 141

424510 Grain and field bean merchant wholesalers 2,469 100.00% 2,469 0.39% 10

424610 Plastics materials and basic forms and shapes

merchant wholesaler 2,734 94.97% 2,597 13.73% 357

424690 Other chemical and allied products merchant

wholesalers 6,527 84.14% 5,492 1.08% 59

424910 Farm supplies merchant wholesalers 4,543 96.05% 4,363 0.98% 43

424920 Book, periodical, and newspaper merchant

wholesalers 2,049 93.99% 1,926 2.38% 46

424930 Flower, nursery stock, & florists' supplies

merchant wholesalers 3,635 99.88% 3,631 1.42% 52

424940 Tobacco and tobacco product merchant

wholesalers 1,135 95.26% 1,081 0.46% 5

424950 Paint, varnish, and supplies merchant

wholesalers 1,168 80.05% 935 4.73% 44

424990 Other miscellaneous nondurable goods

merchant wholesalers 12,118 98.88% 11,982 6.47% 775

Total in Affected NAICS 258,304 245,881 34,948

a 

### Firm counts were adjusted to prevent potential double-c ounting of manufacturing firms that have branch offices designated as wholesale establishments. The counts we re adjusted according to th e percentage of wholesale

establishments that are not manufact urers’ sales branches and offices.

b 

### Firm counts were also adjusted to exclude firms that do not sell any composite wood products, based on the percentage of affected establishments in Table 2-10.
Sources: U.S. Census Bureau 2010f, h, 2011

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

May 1, 2013 2-28 

### As indicated in Table 2-12, there are an es timated 245,881 wholesale employer firms not 1147 including manufacturers’ sales branches and offices. Of this total, it is estimated that 34,948 firms 1148 (approximately 14 percent) sell produc t lines containing composite wood products. 1149

1150 Table 2-13 presents estimates of the number of affected retail employer firms. Total firm counts 1151 were adjusted using the corresponding affected esta blishment ratios in Table 2-11 to estimate the number 1152 of affected employer firms. 1153

1154
Table 2-13: Number of Affected Retail Employer Firms, by Affected NAICS

NAICS NAICS Description Total

Firms in

Affected

NAICS Affected

Establishment

Ratio Affected Firms

441110 New car dealers 21,489 5.77% 1,241
441210 Recreational vehicle dealers 2,749 100.00% 2,749
441221 Motorcycle, ATV, and personal watercraft dealers 5,763 13.33% 768
441229 All other motor vehicle dealers 2,154 10.90% 235
441320 Tire dealers 11,346 0.16% 18
442110 Furniture stores 19,714 100.00% 19,714
442210 Floor covering stores 12,965 87.71% 11,372
442291 Window treatment stores 2,278 22.55% 514
442299 All other home furnishings stores 11,560 100.00% 11,560
443111 Household appliance stores 7,805 24.21% 1,889
443112 Radio, television, and other elect ronics stores 14,679 47.83% 7,021
443120 Computer and software stores 5,550 7.11% 394
443130 Camera and photographic supplies stores 788 0.91% 7

444110 Home centers 2,664 100.00% 2,664
444120 Paint and wallpaper stores 2,399 15.70% 377
444130 Hardware stores 12,152 100.00% 12,152
444190 Other building material dealers 30,467 78.80% 24,008
444210 Outdoor power equipment stores 4,146 11.59% 481
444220 Nursery, garden center, and farm supply stores 12,804 62.42% 7,993
445110 Supermarkets and other grocery (except convenience) stores 41,885 29.48% 12,348
445120 Convenience stores 22,168 28.96% 6,419
445210 Meat markets 5,502 1.63% 90
445220 Fish and seafood markets 2,022 3.34% 68
445230 Fruit and vegetable markets 2,851 3.81% 109
445291 Baked goods stores 3,126 0.79% 25
445292 Confectionery and nut stores 2,149 7.31% 157
445299 All other specialty food stores 4,258 10.94% 466
445310 Beer, wine, and liquor stores 27,421 3.33% 912
446110 Pharmacies and drug stores 19,067 74.76% 14,254
446120 Cosmetics, beauty supplies, and perfume stores 6,861 0.76% 52
446130 Optical goods stores 5,398 0.07% 4
446191 Food (health) supplement stores 5,123 2.28% 117
446199 All other health and personal care stores 7,612 0.16% 12
447110 Gasoline stations with convenience stores 53,375 4.80% 2,562
447190 Other gasoline stations 15,666 1.18% 185
448110 Men's clothing stores 4,952 6.57% 326
448120 Women's clothing stores 13,582 9.57% 1,300
448130 Children's and infants' clothing stores 2,724 39.96% 1,089
448140 Family clothing stores 8,299 74.85% 6,211
448150 Clothing accessories stores 3,618 3.70% 134

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

May 1, 2013 2-29 

### Table 2-13: Number of Affected Retail Employer Firms, by Affected NAICS

NAICS NAICS Description Total

Firms in

Affected

NAICS Affected

Establishment

Ratio Affected Firms

448190 Other clothing stores 7,952 8.08% 642
448210 Shoe stores 6,867 10.19% 700
448310 Jewelry stores 18,692 8.93% 1,669
448320 Luggage and leather goods stores 637 14.98% 95
451110 Sporting goods stores 17,556 72.13% 12,663
451120 Hobby, toy, and game stores 5,748 100.00% 5,748
451130 Sewing, needlework, and piece goods stores 4,124 91.95% 3,792
451140 Musical instrument and supplies stores 3,585 0.31% 11
451211 Book stores 4,643 36.57% 1,698
451212 News dealers and newsstands 1,306 19.24% 251
451220 Prerecorded tape, compact disc, and record stores 2,343 56.54% 1,325
452111 Department stores (except discount department stores) 21 100.00% 21
452112 Discount department stores 14 100.00% 14
452910 Warehouse clubs and supercenters 12 100.00% 12
452990 All other general merchandise stores 8,862 100.00% 8,862
453110 Florists 19,038 76.57% 14,577
453210 Office supplies and stationery stores 5,317 94.50% 5,024
453220 Gift, novelty, and souvenir stores 24,106 68.31% 16,466
453910 Pet and pet supplies stores 5,914 0.74% 44
453920 Art dealers 6,403 12.88% 825
453930 Manufactured (mobile) home dealers 2,774 100.00% 2,774
453991 Tobacco stores 4,940 6.73% 332
453998 All other miscellaneous store retailers (except tobacco stores) 14,743 28.99% 4,274
454111 Electronic shopping 13,888 35.67% 4,954
454113 Mail-order houses 6,471 33.78% 2,186
454210 Vending machine operators 4,651 0.79% 37
454311 Heating oil dealers 3,442 30.92% 1,064
454312 Liquefied petroleum gas (bottled gas) dealers 2,297 25.23% 580
454390 Other direct selling establishments 20,370 24.80% 5,052

Total in Affected NAICS 657,847 247,689 The affected establishment ratio is based on the percentages in Table 2-11.
Sources: U.S. Census Bureau 2010g, j.



### 1155 As indicated in Table 2-13, an estimated 247,689 of the 657,847 employer firms in the affected 1156 retail industries (approximately 38 percent) sell product lines containing composite wood products. 1157

1158 Nonemployer Establishments 

### 1159

1160 Table 2-14 and Table 2-15 present estimates of the number of affected nonemployer 1161 establishments in the wholesale and retail trade sectors, respectively. As with employers, nonemployer 1162 counts were calculated by applying the affected establishment ratios calculated in Table 2-10 and Table 1163 2-11 to the total number of nonemployer establishments. 1164

1165

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May 1, 2013 2-30 

### Table 2-14: Number of Affected Wholesale Nonemployer Establishments, by Affected NAICS

NAICS NAICS Description Total Nonemployer

Establishments

in Affected

NAICS a Affected

Establishment

Ratio Affected Nonemployer

Establishments

423210 Furniture merchant wholesalers 6,487 100.00% 6,487 423220 Home furnishing merchant wholesalers 7,366 47.21% 3,478

423310 Lumber, plywood, millwork, and wood panel merchant

wholesalers 4,056 100.00% 4,056

423320 Brick, stone, and related construction material merchant

wholesalers 1,628 10.20% 166

423330 Roofing, siding, and insulation materi al merchant wholesalers 1,245 78.08% 972

423390 Other construction material mercha nt wholesalers 1,628 84.92% 1,382 423410 Photographic equipment and supplies merchant wholesalers 328 3.83% 13 423420 Office equipment merchant wholesalers 1,555 2.69% 42 423430 Computer and software merchant wholesalers 3,430 1.76% 61 423440 Other commercial equipment merchant wholesalers 1,399 20.01% 280 423450 Medical equipment merchant wholesalers 2,663 0.81% 22 423490 Other professional equipment and s upplies merchant wholesalers 739 3.66% 27 423510 Metal service centers and other metal merchant wholesalers 3,103 12.22% 379 423610 Elec. equip. and wiring merchant wholesalers 4,828 0.78% 37 423620 Electric appliance merchant wholesalers 1,131 2.38% 27 423690 Other electronic parts and equipment merchant wholesalers 4,809 0.82% 39 423710 Hardware merchant wholesalers 1,685 13.96% 235 423720 Plumbing equip. merchant wholesalers 1,713 26.52% 454 423730 HVAC equip. merchant wholesalers 1,252 16.55% 207 423740 Refrigeration equipment and supplies merchant wholesalers 312 8.77% 27 423810 Construction equipment merchant wholesalers 1,530 0.49% 7 423820 Farm and garden machinery and equipment merchant wholesalers 2,712 5.13% 140 423830 Industrial machinery and equipment merchant wholesalers 9,728 1.60% 156 423840 Industrial supplies merchant wholesalers 2,726 3.56% 97

423850 Service establishment equipment and supplies merchant

wholesalers 1,492 14.16% 211

423910 Sporting and recreational goods and supplies merchant

wholesalers 11,126 58.28% 6,485

423920 Toy and hobby goods and supplies merchant wholesalers 7,410 100.00% 7,410 423930 Recyclable material merchant wholesalers 8,691 0.08% 7 423940 Jewelry merchant wholesalers 22,883 0.71% 162 423990 Other miscellaneous durable goods merchant wholesalers 57,264 20.70% 11,852 424110 Printing and writing paper merchant wholesalers 695 2.47% 17 424120 Stationery and office supplies me rchant wholesalers 3,264 21.75% 710 424130 Industrial and personal service paper merchant wholesalers 2,770 2.78% 77 424210 Drugs and druggists' sundries merchant wholesalers 2,796 1.57% 44 424310 Piece goods, notions, and other dry goods merchant wholesalers 4,610 4.33% 199 424320 Men's and boys' clothing and furnishings merchant wholesalers 5,626 5.14% 289 424330 Women's and children's clothing merchant wholesalers 10,238 1.49% 153 424340 Footwear merchant wholesalers 2,207 3.15% 70 424410 General line grocery merchant wholesalers 2,287 12.92% 295 424420 Packaged frozen food merchant wholesalers 2,948 1.34% 40 424450 Confectionery merchant wholesalers 1,741 0.41% 7 424460 Fish and seafood merchant wholesalers 1,807 0.35% 6 424480 Fresh fruit and vegetable merchant wholesalers 4,557 0.18% 8 424490 Other grocery and related products merchant wholesalers 9,486 1.81% 171 424510 Grain and field bean merchant wholesalers 3,326 0.39% 13

424610 Plastics materials and basic forms and shapes merchant

wholesaler 1,010 13.73% 139

424690 Other chemical and allied products merchant wholesalers 2,651 1.08% 28 424910 Farm supplies merchant wholesalers 2,473 0.98% 25

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

May 1, 2013 2-31 

### Table 2-14: Number of Affected Wholesale Nonemployer Establishments, by Affected NAICS

NAICS NAICS Description Total Nonemployer

Establishments

in Affected

NAICS a Affected

Establishment

Ratio Affected Nonemployer

Establishments

424920 Book, periodical, and newspaper merchant wholesalers 14,119 2.38% 336 424930 Flower, nursery stock, & florists' supplies merchant wholesalers 7,906 1.42% 113 424940 Tobacco and tobacco product merchant wholesalers 1,219 0.46% 6 424950 Paint, varnish, and supplies merchant wholesalers 1,769 4.73% 84 424990 Other miscellaneous nondurable goods merchant wholesalers 44,263 6.47% 2,864 Total in Affected NAICS 310,687 50,612

a Some of these nonemployer total number of establishments were estimated based on the proportions observed in the employer data because information was not available at the 6 digit level, for each of the NAICS codes. The affected establishment ratio is based on the percentage of affected entities in Table 2-10.
Sources: U.S. Census Bureau 2010d, 2011


### 1166 As indicated in Table 2-14, an estimated 50,612 of the 310,687 nonemployer establishments in 1167 the affected wholesale trade industries (approximatel y 16 percent) sell product lines containing composite 1168 wood products. 1169

1170 Table 2-15: Number of Affected Retail Nonemployer Establishments, by Affected NAICS

NAICS NAICS Description Total Nonemployer

Establishments in

Affected NAICS a Affected

Establishment

Ratio Affected Nonemployer

Establishments

441110 New car dealers 47,324 5.77% 2,732 441210 Recreational vehicle dealers 4,294 100.00% 4,294 441221 Motorcycle, ATV, and personal watercraft dealers 4,171 13.33% 556 441229 All other motor vehicle dealers 22,751 10.90% 2,480 441320 Tire dealers 12,149 0.16% 19 442110 Furniture stores 16,399 100.00% 16,399 442210 Floor covering stores 11,267 87.71% 9,882 442291 Window treatment stores 2,056 22.55% 464 442299 All other home furnishings stores 14,825 100.00% 14,825 443111 Household appliance stores 6,164 24.21% 1,492 443112 Radio, television, and other electronics stores 13,548 47.83% 6,480 443120 Computer and software stores 9,256 7.11% 658 443130 Camera and photographic supplies stores 1,744 0.91% 16
444110 Home centers 2,412 100.00% 2,412 444120 Paint and wallpaper stores 1,945 15.70% 305 444130 Hardware stores 4,931 100.00% 4,931 444190 Other building material dealers 17,959 78.80% 14,152 444210 Outdoor power equipment stores 2,386 11.59% 277 444220 Nursery, garden center, and farm supply stores 8,704 62.42% 5,433 445110 Supermarkets and other grocery (except convenience) stores 32,676 29.48% 9,633 445120 Convenience stores 12,847 28.96% 3,720 445210 Meat markets 3,264 1.63% 53 445220 Fish and seafood markets 2,522 3.34% 84 445230 Fruit and vegetable markets 7,972 3.81% 304 445291 Baked goods stores 10,637 0.79% 84 445292 Confectionery and nut stores 8,440 7.31% 617 445299 All other specialty food stores 13,647 10.94% 1,493 445310 Beer, wine, and liquor stores 12,021 3.33% 400 446110 Pharmacies and drug stores 5,738 74.76% 4,289 446120 Cosmetics, beauty supplies, and perfume stores 82,071 0.76% 622 446130 Optical goods stores 2,758 0.07% 2 446191 Food (health) supplement stores 22,062 2.28% 503

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

May 1, 2013 2-32 

### Table 2-15: Number of Affected Retail Nonemployer Establishments, by Affected NAICS

NAICS NAICS Description Total Nonemployer

Establishments in

Affected NAICS a Affected

Establishment

Ratio Affected Nonemployer

Establishments

446199 All other health and personal care stores 26,171 0.16% 42 447110 Gasoline stations with convenience stores 7,762 4.80% 373 447190 Other gasoline stations 1,692 1.18% 20 448110 Men's clothing stores 4,131 6.57% 272 448120 Women's clothing stores 16,616 9.57% 1,590 448130 Children's and infants' clothing stores 7,090 39.96% 2,833 448140 Family clothing stores 13,541 74.85% 10,135 448150 Clothing accessories stores 20,002 3.70% 739 448190 Other clothing stores 26,645 8.08% 2,152 448210 Shoe stores 5,018 10.19% 512 448310 Jewelry stores 41,651 8.93% 3,720 448320 Luggage and leather goods stores 2,194 14.98% 329 451110 Sporting goods stores 21,420 72.13% 15,450 451120 Hobby, toy, and game stores 14,625 100.00% 14,625 451130 Sewing, needlework, and piece goods stores 15,910 91.95% 14,629 451140 Musical instrument and supplies stores 6,071 0.31% 19 451211 Book stores 10,189 36.57% 3,727 451212 News dealers and newsstands 11,964 19.24% 2,302 451220 Prerecorded tape, compact disc, and record stores 3,972 56.54% 2,246 452111 Department stores (except discount department stores) 2,541 100.00% 2,541 452112 Discount department stores 3,597 100.00% 3,597 452910 Warehouse clubs and supercenters 3,064 100.00% 3,064 452990 All other general merchandise stores 23,777 100.00% 23,776 453110 Florists 24,122 76.57% 18,469 453210 Office supplies and stationery stores 6,054 94.50% 5,721 453220 Gift, novelty, and souvenir stores 53,729 68.31% 36,700 453910 Pet and pet supplies stores 8,329 0.74% 62 453920 Art dealers 17,447 12.88% 2,247 453930 Manufactured (mobile) home dealers 2,211 100.00% 2,211 453991 Tobacco stores 30,326 6.73% 2,041 453998 All other miscellaneous store retailers (except tobacco stores) 80,095 28.99% 23,217 454111 Electronic shopping 53,677 35.67% 19,148 454113 Mail-order houses 27,714 33.78% 9,362 454210 Vending machine operators 27,595 0.79% 218 454311 Heating oil dealers 1,233 30.92% 381 454312 Liquefied petroleum gas (bottled gas) dealers 1,819 25.23% 459 454390 Other direct selling establishments 696,865 24.80% 172,819 Total in Affected NAICS 1,741,799 511,359

a Some of these nonemployer total number of establishments were estimated because information was not available at the 6 digit level, for each of the NAICS codes. The affected establishment ratio is based on the percentage of affected entities in Table 2-11. Sources: U.S. Census Bureau 2010d, j


### 1171 As indicated in Table 2-15, an estimated 511,359 of the 1,741,799 nonemployer establishments in 1172 the affected retail trade industries (approximately 29 percent) sell product lines containing composite 1173 wood products. 1174

1175 Summary 

### 1176

1177 As indicated in Table 2-16 and Table 2-17, an estimated 85,560 firms comprising 95,521 1178 establishments in the wholesale trade sector are estimated to sell composite wood products or goods 1179

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May 1, 2013 2-33 

### containing composite wood products, while an estimated 759,048 firms comprising 916,117 1180

establishments in the retail trade sector are estimated to sell such items. 1181

1182

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May 1, 2013 2-34 

### 1183 Table 2-16: Total Affected Wholesale Entities, by Affected NAICS

NAICS NAICS Description Affected Employers Affected Nonemp. Total Affected

Estab. Firms Firms =

Estab. Estab. Firms

A B C D = A+C E= B+C 423210 Furniture merchant wholesalers 6,640 5,993 6,487 13,127 12,480 423220 Home furnishing merchant wholesalers 3,560 3,018 3,478 7,038 6,496

423310 Lumber, plywood, millwork, and wood panel

merchant wholesalers 8,428 6,074 4,056 12,484 10,130

423320 Brick, stone, and related construction material

merchant wholesalers 345 235 166 511 401

423330 Roofing, siding, and insulation material merchant

wholesalers 2,020 807 972 2,992 1,779

423390 Other construction material merchant wholesalers 2,873 1,918 1,382 4,255 3,300

423410 Photographic equipment and supplies merchant

wholesalers 39 33 13 52 46

423420 Office equipment merchant wholesalers 130 59 42 172 101 423430 Computer and software merchant wholesalers 188 139 61 249 200 423440 Other commercial equipment merchant wholesalers 871 777 280 1,151 1,057 423450 Medical equipment merchant wholesalers 67 56 22 89 78

423490 Other professional equipment and supplies merchant

wholesalers 84 72 27 111 99

423510 Metal service centers and other metal merchant

wholesalers 1,240 913 379 1,619 1,292

423610 Elec. equip. and wiring merchant wholesalers 103 64 37 140 101 423620 Electric appliance merchant wholesalers 74 61 27 101 88

423690 Other electronic parts and equipment merchant

wholesalers 109 82 39 148 121

423710 Hardware merchant wholesalers 953 703 235 1,188 938 423720 Plumbing equip. merchant wholesalers 1,840 938 454 2,294 1,392 423730 HVAC equip. merchant wholesalers 839 364 207 1,046 571

423740 Refrigeration equipment and supplies merchant

wholesalers 111 64 27 138 91

423810 Construction equipment merchant wholesalers 23 14 7 30 21

423820 Farm and garden machinery and equipment merchant

wholesalers 427 321 140 567 461

423830 Industrial machinery and equipment merchant

wholesalers 476 369 156 632 525

423840 Industrial supplies merchant wholesalers 298 196 97 395 293

423850 Service establishment equipment and supplies

merchant wholesalers 648 504 211 859 715

423910 Sporting and recreational goods and supplies

merchant wholesalers 3,609 3,254 6,485 10,094 9,739

423920 Toy and hobby goods and supplies merchant

wholesalers 2,497 2,391 7,410 9,907 9,801

423930 Recyclable material merchant wholesalers 6 5 7 13 12 423940 Jewelry merchant wholesalers 55 53 162 217 215

423990 Other miscellaneous durable goods merchant

wholesalers 2,108 1,942 11,852 13,960 13,794

424110 Printing and writing paper merchant wholesalers 29 18 17 46 35 424120 Stationery and office supplies mercha nt wholesalers 1,199 945 710 1,909 1,655

424130 Industrial and personal service paper merchant

wholesalers 130 107 77 207 184

424210 Drugs and druggists' sundries merchant wholesalers 126 92 44 170 136

424310 Piece goods, notions, and other dry goods merchant

wholesalers 149 133 199 348 332

424320 Men's and boys' clothing and furnishings merchant

wholesalers 216 200 289 505 489

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

May 1, 2013 2-35 

### Table 2-16: Total Affected Wholesale Entities, by Affected NAICS

NAICS NAICS Description Affected Employers Affected Nonemp. Total Affected

Estab. Firms Firms =

Estab. Estab. Firms

A B C D = A+C E= B+C

424330 Women's and children's clothing merchant

wholesalers 114 108 153 267 261

424340 Footwear merchant wholesalers 52 49 70 122 119 424410 General line grocery merchant wholesalers 329 285 295 624 580 424420 Packaged frozen food merchant wholesalers 44 38 40 84 78 424450 Confectionery merchant wholesalers 8 7 7 15 14

424460 Fish and seafood merchant wholesalers 7 7 6 13 13 424480 Fresh fruit and vegetable merchant wholesalers 9 8 8 17 16

424490 Other grocery and related products merchant

wholesalers 191 141 171 362 312

424510 Grain and field bean merchant wholesalers 19 10 13 32 23

424610 Plastics materials and basic forms and shapes

merchant wholesaler 446 357 139 585 496

424690 Other chemical and allied products merchant

wholesalers 92 59 28 120 87

424910 Farm supplies merchant wholesalers 73 43 25 98 68

424920 Book, periodical, and newspaper merchant

wholesalers 63 46 336 399 382

424930 Flower, nursery stock, & florists' supplies merchant

wholesalers 60 52 113 173 165

424940 Tobacco and tobacco product merchant wholesalers 6 5 6 12 11 424950 Paint, varnish, and supplies merchant wholesalers 78 44 84 162 128

424990 Other miscellaneous nondurable goods merchant

wholesalers 808 775 2,864 3,672 3,639

Total in Affected NAICS 44,909 34,948 50,612 95,521 85,560 Sources:U.S. Census Bureau 2010f, h, l, 2011

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

May 1, 2013 2-36 

### 1184
Table 2-17: Total Affected Retail Entities, by Affected NAICS

NAICS NAICS Descri p tion Affected Em p lo y ers Affected

Nonem p

. Total Affected

Estab. Firms Firms =

Estab. Estab. Firms

A B C D = A+C E= B+C 441110 New car dealers 1,437 1,241 2,732 4,169 3,973 441210 Recreational vehicle dealers 3,100 2,749 4,294 7,394 7,043 441221 Motorcycle, ATV, and personal watercraft dealers 818 768 556 1,374 1,324 441229 All other motor vehicle dealers 247 235 2,480 2,727 2,715

441320 Tire dealers 32 18 19 51 37 442110 Furniture stores 28,834 19,714 16,399 45,233 36,113 442210 Floor covering stores 12,748 11,372 9,882 22,630 21,254 442291 Window treatment stores 598 514 464 1,062 978 442299 All other home furnishings stores 19,124 11,560 14,825 33,949 26,385 443111 Household appliance stores 2,260 1,889 1,492 3,752 3,381 443112 Radio, television, and other electronics stores 13,896 7,021 6,480 20,376 13,501 443120 Computer and software stores 741 394 658 1,399 1,052 443130 Camera and photographic supplies stores 18 7 16 34 23
444110 Home centers 6,953 2,664 2,412 9,365 5,076 444120 Paint and wallpaper stores 1,234 377 305 1,539 682 444130 Hardware stores 16,454 12,152 4,931 21,385 17,083 444190 Other building material dealers 31,166 24,008 14,152 45,318 38,160 444210 Outdoor power equipment stores 505 481 277 782 758 444220 Nursery, garden center, and farm supply stores 9,922 7,993 5,433 15,355 13,426

445110 Supermarkets and other grocery (except convenience) stores 19,128 12,348 9,633 28,761 21,981

445120 Convenience stores 7,387 6,419 3,720 11,107 10,139

445210 Meat markets 98 90 53 151 143

445220 Fish and seafood markets 69 68 84 153 152 445230 Fruit and vegetable markets 112 109 304 416 413 445291 Baked goods stores 34 25 84 118 109 445292 Confectionery and nut stores 249 157 617 866 774 445299 All other specialty food stores 602 466 1,493 2,095 1,959 445310 Beer, wine, and liquor stores 1,047 912 400 1,447 1,312 446110 Pharmacies and drug stores 31,431 14,254 4,289 35,720 18,543 446120 Cosmetics, beauty supplies, and perfume stores 103 52 622 725 674 446130 Optical goods stores 9 4 2 11 6 446191 Food (health) supplement stores 205 117 503 708 620 446199 All other health and personal care stores 17 12 42 59 54 447110 Gasoline stations with convenience stores 4,680 2,562 373 5,053 2,935 447190 Other gasoline stations 251 185 20 271 205 448110 Men's clothing stores 547 326 272 819 598 448120 Women's clothing stores 3,467 1,300 1,590 5,057 2,890 448130 Children's and infants' clothing stores 2,838 1,089 2,833 5,671 3,922 448140 Family clothing stores 21,147 6,211 10,135 31,282 16,346 448150 Clothing accessories stores 277 134 739 1,016 873 448190 Other clothing stores 972 642 2,152 3,124 2,794 448210 Shoe stores 2,861 700 512 3,373 1,212 448310 Jewelry stores 2,478 1,669 3,720 6,198 5,389 448320 Luggage and leather goods stores 183 95 329 512 424 451110 Sporting goods stores 16,051 12,663 15,450 31,501 28,113 451120 Hobby, toy, and game stores 9,357 5,748 14,625 23,982 20,373 451130 Sewing, needlework, and piece goods stores 5,207 3,792 14,629 19,836 18,421 451140 Musical instrument and supplies stores 14 11 19 33 30 451211 Book stores 3,641 1,698 3,727 7,368 5,425 451212 News dealers and newsstands 293 251 2,302 2,595 2,553 451220 Prerecorded tape, compact disc, and record stores 2,348 1,325 2,246 4,594 3,571

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

May 1, 2013 2-37 

### Table 2-17: Total Affected Retail Entities, by Affected NAICS

NAICS NAICS Description Affected Em p lo y ers Affected

Nonem p

. Total Affected

Estab. Firms Firms =

Estab. Estab. Firms

A B C D = A+C E= B+C

452111 Department stores (except discount department stores) 3,533 21 2,541 6,074 2,562

452112 Discount department stores 5,001 14 3,597 8,598 3,611 452910 Warehouse clubs and supercenters 4,260 12 3,064 7,324 3,076 452990 All other general merchandise stores 33,061 8,862 23,776 56,837 32,638 453110 Florists 15,177 14,577 18,469 33,646 33,046 453210 Office supplies and stationery stores 9,032 5,024 5,721 14,753 10,745 453220 Gift, novelty, and souvenir stores 21,442 16,466 36,700 58,142 53,166 453910 Pet and pet supplies stores 65 44 62 127 106 453920 Art dealers 860 825 2,247 3,107 3,072 453930 Manufactured (mobile) home dealers 3,878 2,774 2,211 6,089 4,985 453991 Tobacco stores 440 332 2,041 2,481 2,373

453998 All other miscellaneous store retailers (except tobacco stores) 5,006 4,274 23,217 28,223 27,491

454111 Electronic shopping 5,060 4,954 19,148 24,208 24,102 454113 Mail-order houses 2,474 2,186 9,362 11,836 11,548 454210 Vending machine operators 41 37 218 259 255 454311 Heating oil dealers 1,254 1,064 381 1,635 1,445 454312 Liquefied petroleum gas (bottled gas) dealers 1,509 580 459 1,968 1,039 454390 Other direct selling establishments 5,475 5,052 172,819 178,294 177,871 Total in Affected NAICS 404,758 247,689 511,359 916,117 759,048 Sources: U.S. Census Bureau 2010g, j, l


### 1185

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## 2.2 Third Party Testing and Certification Costs 1186

1187 This analysis presents cost estimates assuming that the costs of complying with certification 1188 requirements under TSCA Title VI will be the same as complying with the requirements of the CARB Air 1189 Toxics Control Measure (ATCM) to reduce formaldehyde emissions from composite wood products. It is 1190 also assumed that mills that are certified by a CARB-approved TPC will not have to generate new testing 1191 data or incur significant costs to become certified by a TPC under the TSCA Title VI rule. TSCA Title 1192 VI requires composite panel producers to perform formaldehyde emission testing on their composite 1193 wood products and attain certification from an accredite d third-party certifier (TPC). Producers must 1194 undergo qualifying tests at a TPC lab, obtain an on-site audit from a TPC, implement quality control 1195 systems, and train quality control employees in order to receive initial certification. Once a TPC certifies 1196 a mill’s products, that mill is required to conduct on-going quality control testing, submit monthly reports 1197 to the TPC, and receive quarterly on-site audits and testing by its TPC to maintain its certified status. 1198 Mills that manufacture products made with no-added fo rmaldehyde (NAF) resins that meet more stringent 1199 emissions limits may apply for exemptions from some of the on-going testing requirements. 1200

1201 CARB has accredited nine U.S. third-party certifiers to offer formaldehyde certification and 1202 testing programs. However, about 90 percent of the U.S. mills that have been certified to produce CARB1203 compliant products have the Composite Panel Associ ation (CPA) or the Hardwood Plywood and Veneer 1204 Association (HPVA) as their TPC. Therefore, this analysis relies on the prices charged by CPA and 1205

HPVA ( Personal Communication with CPA 2011 and Personal Communication with HPVA 2011b ) for 1206 TPC services in order to estimate the costs associated with obtaining and maintaining certification under 1207

TSCA Title VI. 1208

1209
2.2.1 Certification Fees 1210

1211 CPA and HPVA charge administrative fees to mi lls for certifying their products. CPA charges a 1212 quarterly fee of $1,500 regardless of NAF or ULEF st atus, which is equivalent to $6,000 per year. HPVA 1213 charges an annual program fee of $4,500 to $5,500 (d epending on membership status) to mills that are not 1214

NAF or ULEF certified. Mills with ULEF or NAF ce rtifications are required to pay the standard annual 1215 program fee in the first year and an annual fee of $2,700 to $3,700 in all subsequent years. For simplicity, 1216 this analysis assumes that the annual certification fee for mills without an NAF or ULEF exemption is 1217 $6,000, and that the fees for mills with a ULEF- or NAF exemption are $6,000 for the initial year, and 1218 $3,700 in all subsequent years. 12 

### 1219

1220

Table 2-18: Certification Fees

Cost Category Certification Type Fee

Initial Fee All $6,000

Annual Fee Standard $6,000
NAF/ULEF $3,700



### 1221 2.2.2 Qualifying Test and Statistical Correlation 1222

1223 Under TSCA Title VI, a composite panel producer is required to obtain qualifying tests for each 1224 product type (e.g., hardwood plywood – veneer core) and production line from the mill for which 1225 certification is sought. A TPC employee must select and mark the panels to be tested during the initial 1226

12 NAF and ULEF certifications apply to product lines, and not necessarily to the entire facility. Mills with multiple product lines could have one or more lines certified as NAF or ULEF, and other lines that are not. The NAF and ULEF testing costs do not apply to any product lines that are not NAF or ULEF certified.

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### mill audit, with at least one panel being selected for each test. After panel selection has occurred, the mill 1227 must ship the marked panels to the TPC for testing at the TPC facility. This testing can be performed 1228 using the ASTM E-1333-10 test method (which is commonly referred to as a large chamber or large scale 1229 test, and which is termed the primary test method under the CARB ATCM). Testing can also be 1230 performed under the TSCA Title VI rule using the ASTM D-6007-02 test method (which is commonly 1231 referred to as a small chamber test, and which is termed the secondary test method under the CARB 1232 ATCM), upon a showing of equivalence with ASTM E-1333-10. However this analysis assumes that all 1233 qualifying testing is performed using the large chamber test method. Results from the five large chamber 1234 tests must not exceed the emission standards for each product type and production line. 1235

1236 In addition to the qualifying testing performed via the large chamber test method, a mill must 1237 perform on-going quality control testing on the applicab le products. Quality control testing is typically 1238 performed under the CARB ATCM using a small chamber test (ASTM D6007) or desiccator test (ASTM 1239 D5582), and it is assumed that these will be the most commonly used quality control tests under the 1240 TSCA Title VI rule. These tests require smaller te st samples and can be conducted at the TPC facility, 1241 contract lab, or on-site at a TPC-approved lab at the composite wood mill. The TPC must develop a 1242 statistical correlation between the large chamber and small scale test methods using a minimum of five 1243 data pairs. It is assumed that mills will need to obt ain all five data pairs during qualifying testing, though 1244 it is possible that some mills may be able to use previous test results or data obtained from the resin 1245 manufacturer. Each large chamber test requires results from one small chamber test or three desiccator 1246 tests to calculate the correlation. TSCA Title VI requires producers to obtain quality control test results 1247 for a production lot before product from that lot can be shipped, so it is likely that producers will perform 1248 quality control testing on-site to minimize the time taken to obtain testing results. This analysis assumes 1249 that producers not currently performing testing on-sit e will purchase and operate a small chamber testing 1250 unit for quality control testing. 1251

1252 CPA and HPVA charge between $400 and $480 13 

### , though this analysis assumes that mills will 1253 incur the higher cost of $480 for each test. Prod ucers that perform quality control testing on-site will 1254 need to perform a small chamber equivalence test for each large chamber test. It is assumed that each 1255 equivalence test will take two hours to perform. 1256

1257 In addition to the testing fee, mills will also incur costs associated with shipping panels to the 1258 TPC, lost product, and labor time needed to prepare the panels 14 

### for shipping. Mills are expected to ship 1259 at least five 4’ x 8’ panels for each product type vi a a commercial shipping carrier. Panels must be dead1260 stacked (i.e., having no layers between panels), bundl ed air-tight, wrapped in polyethylene, and protected 1261 by cover sheets. Based on conversations with CPA and with CARB-certified mills, the total shipping cost 1262 for the qualifying tests is estimated to be approximately $200 per product line. 1263

1264 This analysis estimated the cost of each panel using the average cost per square foot of hardwood 1265 plywood, $0.49 and particleboard, $0.28 ( RISI 2011c (RISI 2010). ). Assuming a panel size of 32 sq. ft., 1266 each hardwood plywood panel will cost the mill $15. 68, and each particleboard panel will cost $8.96. 1267 The analysis assumes that it will take a managerial-level employee half an hour to prepare the panels for 1268 shipping. Using data published by the U.S. Bureau of Labor Statistics (BLS), EPA estimated the average 1269 loaded hourly wage for a managerial position within the Veneer, Plywood, and Engineered Wood 1270 Products Industry to be $71.36. 15 

### Table 2-19 summarizes the initial unit testing costs, including fees, 1271 preparation, lost product, and shipping. 1272

13 This is the rate charged by HPVA’s Reston Lab to non-members for testing panels. This lab charges non-members $660 to test doors, $840 to test finished engineered wood flooring, and $480 to test furniture and cabinets.

14 The panels for the qualifying tests are selected during the initial on-site audit.

15 The Occupational Employment Statistics (published by BLS for May, 2009) reportsU.S. Bureau of Labor Statistics

2010b the average hourly wage for all management occupations in NAICS 321200 to be $44.46. Employer Costs for

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### 1273 Table 2-19: Qualifying Test Costs

Cost Category Description Unit Cost Number

of Units Cost for

PB/MDF Cost for

HWPW
Large Scale Testing Large Chamber $480 

### 5 tests $2,400 $2,400
Small Scale Testing

at Mill Labor 

### $71.36 10 hours $714 $714

Shipping Five 4' x 8' panels $200 

### 1 shipment $200 $200

Labor $71.36 

### 0.5 hours $36 $36

Lost Product PB/MDF 

### $8.96 5 panels $45 N/A

HWPW 

### $15.68 5 panels N/A $78

Total 

### $3,394 $3,428
Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011, Personal

Communication with HPVA 2011b

, RISI 2011c BLS 2010; Communications with CPA and HPVA; RISI 2011.

. 

### 1274 2.2.3 Quality Control Procedures 1275

1276 Under TSCA Title VI, mills will be required to ensure that all manufactured composite wood 1277 products meet the formaldehyde emission standards by implementing routine quality control procedures 1278 and receiving periodic quality control reviews from a th ird-party certifier. The following sections provide 1279 details of the requirements and costs associated with receiving on- and off-site audits, developing quality 1280 control systems, and conducting routine quality control testing. 1281

1282 2.2.3.1 Quality Control Audits 

### 1283

1284 The TPC is responsible for conducting on-site vis its to certified mills. Before the initial 1285 certification, the TPC is expected to make at least one trip to the mill to inspect the mill’s quality control 1286 and quality assurance systems and employees. During the initial visit, the TPC will assist the mill in 1287 setting up quality control systems, including the quality control testing facility, if applicable, and methods 1288 for selecting samples. After certification has been gr anted, the TPC is obligated to perform an on-site 1289 audit at least once quarterly, unless the mill obtains NAF certification. Audits typically do not take more 1290 than one day of travel and visitation , though if the mill requires a substantial number of modifications or 1291 is unprepared, the duration of the visit may be longer ( Personal Communication with HPVA 1292

2011b (HPVA 2011). ). TPCs may also conduct periodic “desk audits,” which are quality control checks 1293 performed over the phone in which the mill’s quality control testing procedures and data are reviewed. 1294

1295 The cost of the audit is borne by the composite panel producer and has two components: audit 1296 fees and travel costs. Site audit fees can range fro m $300 to $450 for initial visits and from $400 to $450 1297 for quarterly visits, depending on the TPC. Travel costs can vary depending on the relative location of the 1298 mill to the TPC; mills within a close proximity may not incur any travel costs, whereas a mill across the 1299 country may incur travel costs of up to $2,000 per visit. It is assumed that travel is only necessary for the 1300 annual audits, as other intermediate audits can be performed by contracting inspectors closer to the mill. 1301 The fees for the desk audits range from $200 to $250 per audit, and no travel is required. Based on these 1302 ranges, this analysis assumes that initial site audits will cost a mill $1,950 per visit ($450 fee plus $1,500 1303 travel), quarterly audits will cost $450 per visit, and desk audits will cost $250 per review. In addition to 1304 the fees charged by the TPC, mills will also incur labor costs associated with the audit process. This 1305 analysis assumes that a managerial-level employee will be present for eight hours during the initial on-site 1306

Employee Compensation (ECEC) data (also published by BLS) for all private industry occupations were used to inflate the wage to $44.88 in 2010 dollars. ECEC data were also used to estimate that benefits accounted for approximately 29.3 percent of total compensation. Assuming a 17 percent ra te of overhead on wages (not including benefits), total hourly compensation is estimated to be $71.36.

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### audit, four hours for every on-site audit thereafter, and one hour for each desk audit. Table 2-20 1307

summarizes the audit costs described above. 1308

1309 Table 2-20: Quality Control Audit Costs

Cost Category Unit Cost Number of Units Travel Cost Total Cost

TPC Fees

Initial Audit $450 

### 1 audit $1,500 $1,950

Annual On-Site Audit $450 

### 1 audit $1,500 $1,950

Other On-Site Audit $450 

### 1 audit $0 $450

Desk Audit $250 

### 1 audit $0 $250

Mill Labor Costs

Initial Audit $71.36 

### 8 hours N.A. $571

Annual On-Site Audit $71.36 

### 4 hours N.A. $285

Other On-Site Audit $71.36 

### 4 hours N.A. $285

Desk Audit $71.36 

### 1 hour N.A. $71
Sources: U.S. Bureau of Labor Statistics 2010b BLS 2010; Communications with CPA and HPVA.

, Personal Communication with CPA 2011, Personal Communication with HPVA 2011b


### 1310 2.2.3.2 Quality Control Manual and Personnel 

### 1311

1312 Mills are required to implement quality control procedures to ensure that all certified products 1313 consistently meet the applicable emissions standards. In addition, the rule requires each mill to designate 1314 a quality control manager and quality control employee s, if needed. The quality control manager must 1315 have adequate training or experience to handle all qua lity control procedures, including on-site testing and 1316 shipping samples for TPC testing. All quality control procedures and designated quality control 1317 personnel must be identified in a quality control manual. Prior to the mill’s initi al certification, the TPC 1318 will assist mills in developing and documenting approp riate quality control procedures. In some cases, 1319 the mill’s resin supplier will also help to train quality control employees and develop quality control 1320 procedures. 1321

1322 Based on conversations with CPA, HPVA, and composite panel producers, it is assumed that 1323 training, implementing quality control systems, an d developing the quality control manual could take 1324 between one and five days to complete, depending on the mill’s existing quality control systems. HPVA 1325 and CPA noted that smaller mills often do not have quality control systems in place and that developing 1326 these systems can be a time-consuming process. This analysis estimates that a managerial-level employee 1327 will spend forty hours training, becoming familiarized with the testing and certification requirements, 1328 writing the quality control manual, and setting up quality control systems and testing procedures. 1329

1330 2.2.3.3 Routine Quality Control Testing 

### 1331

1332 To maintain certification, a mill must perform routine quality control testing for each certified 1333 product type and production line. Quality control testing is typically performed using one of the 1334 correlated small scale test methods described in Section 2.2.1 – a small chamber test (ASTM D6007) or a 1335 desiccator (ASTM D5582). 1336

1337 The frequency of the required quality control testing depends on the product type and, for 1338 hardwood plywood, the production volume. Hardwood plywood plants producing 100 thousand square 1339 feet (msf) or less per week are required to test once pe r 100 msf; plants more than 100 msf but less than 1340 200 msf per week must test once per week; plants producing more than 200 msf but less than 400 msf per 1341 week are required to test twice per week; and those producing 400 msf or more per week are required to 1342 test four times per week. Particleboard and MDF producers must test samples at least once per eight or 1343

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### twelve hour shift, but this frequency may be reduced to one test per forty-eight hours if the plant or 1344 production line has shown consistent operations and low variability of test results. This analysis makes 1345 the simplifying assumption that all producers will test each production line once daily. This results in a 1346 conservative estimate of the cost of quality control testing for hardwood plywood producers. 1347

1348 Mills have the option of constructing an on-site lab and having it approved by a TPC, or 1349 contracting with a certified third-party lab to perform their quality control testing. The decision to 1350 perform on-site testing is dependent on the relative co sts of building and running an on-site lab, and the 1351 fees and shipping costs associated with hiring a third-party lab. According to CPA and HPVA, 1352 particleboard and MDF mills already have their own on-site labs to test for formaldehyde (because they 1353 have to test their products on a daily basis under the CARB ATCM), while most smaller hardwood 1354 plywood mills pay their TPC to conduct their quality control testing (In part because hardwood plywood 1355 mills often use ULEF or NAF resins to qualify fo r exemptions from some of the on-going testing 1356 requirements under the CARB ATCM). However, the CARB ATCM allows mills to ship panels from 1357 certified product lines before test results are availabl e. By contrast, the proposed TSCA rule requires 1358 mills to wait until test results indicate that the emissions standards have been met before shipping a lot 1359

that has been tested. It is uncertain how often mills currently ship product from a lot being tested before 1360 the test results are available and therefore it is uncertain how mills will choose to comply with this 1361 requirement. It may be the case that some mills nor mally maintain a level of inventory where they would 1362 typically not ship any panels before test results have been determined for that lot, but other mills may ship 1363 out panels on the same day they are produced. This anal ysis assumes that all mills that do not already do 1364 so will opt to set up and operate a quality control testing facility on-site, in order to minimize the time 1365 spent waiting for test results, and to maximize their flexibility to ship out panels shortly after they have 1366 been produced (Assuming that mills conduct on-site tes ting may overstate the costs of this requirement if 1367 some mills find it more cost effective to hold products in inventory until test results have been determined 1368 by an outside lab). 1369

1370 Panel producers that have not already set up thei r own quality control testing facilities due to the 1371 CARB ATCM will incur the cost of setting up a controlled lab environment, purchasing testing 1372 equipment, and operating the lab on an on-going basis. It is assumed that each mill will incur an initial 1373 cost of $10,000 to create a lab and purchase small chambe r or desiccator testing units. It is assumed that 1374 the quality control manager will spend two hours each day performing routine quality control testing at a 1375 loaded wage rate of $71.36 per hour. It is also assumed that one panel will be needed for testing from 1376 each production line at a cost of $15.68 per hardwood plywood panel and $8.96 per particleboard panel. 1377 (See Section 2.2.2 for a description of how these costs were estimated.) 1378

1379

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### Table 2-21: Routine Small Scale Testing Costs

Cost Category Unit Cost Number of Units Time Period Total Cost
Hardwood Plywood Producers with Weekly Small Scale Testing Performed by TPCs

Routine Test Fee $154 a 

### 2 tests Weekly $308
Shipping $50 

### 1 test Weekly $50

Lost Product $15.68 

### 1 panel Weekly $15.68

Labor $71.36 

### 1.5 hours Weekly $107
Hardwood Plywood Producers Performing Their Own Daily Small Scale Testing a

Setup Lab $10,000 

### 1 lab One-Time $10,000

Lost Product $15.68 

### 1 panel Daily $15.68

Labor $71.36 

### 2 hours Daily $143
Particleboard Producers Performing Their Own Daily Small Scale Testing
Setup Lab $10,000 

### 1 lab One-Time $10,000

Lost Product $8.96 

### 1 panel Daily $8.96

Labor $71.36 

### 2 hours Daily $143

a. It is assumed that hardwood plywood producers that are not CARB certified have a production volume that would require testing on weekly basis. The producers could have the products tested at a third-party lab, but it is assumed they will choose to perform daily tests at their own small scale lab because of the requirement in the TSCA Title VI rule that production lots that have been tested cannot be shipped until the

test results indicate the emissions standards have been met.

Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011,

P ersonal Communication with HPVA 2011b

, RISI 2011c BLS, 2010; Communi cations with CPA and HPVA; RISI, 2010.

. 

### 1380
2.2.4 NAF and ULEF Certifications 1381

1382 Under the proposed option, products made with NAF and ULEF resins may be eligible for 1383 reduced large chamber and small scale testing frequencies. The application process for NAF and ULEF 1384 certification includes an initial quality control testi ng period, and quarterly tests to be performed by the 1385

TPC. The results from these tests must meet the emissions limits for NAF and ULEF certification 1386 specified by TSCA Title VI in order for a product line to be exempt from quarterly TPC testing and/or to 1387 have reduced testing frequencies. The proposed option does not provide for reduced testing frequencies 1388 for products made with ULEF resins. 1389

1390

2.2.4.1 NAF and ULEF Emissions Standards 

### 1391

1392 Product lines certified as using NAF and ULEF resins may be exempt from some of the quarterly 1393 TPC testing and routine QC testing. NAF certificat ion can be achieved by performing three months of 1394 routine quality control testing and one quarterly large or small chamber test at the TPC. Ninety percent of 1395 the results from routine testing and the result from th e quarterly TPC test must be no higher than 0.04 1396 ppm; all test results must be no higher than 0.05 ppm for hardwood plywood, and 0.06 ppm for 1397 particleboard, MDF, and thin MDF. Product line s approved for NAF certification are exempt from 1398 routine quality control testing and quarterly TPC testing for two years. After two years, the mill may 1399 reapply for NAF certification based on the result s of at least one large or small chamber test. 1400

1401

The CARB ATCM proposed option also allows for reduced testing frequencies for ULEF 1402 products. As Under the TSCA Title VI proposed option does not include reduced testing allowances for 1403 ULEF product lines , mills with seeking ULEF certification would incu r higher testing and certification 1404 costs under the proposed rule. The CARB ATCM requires a mill are required to perform quality control 1405 testing on the ULEF product type for the first sixth mont hs after the initial certification and two quarterly 1406 large or small chamber TPC tests. For hardwood plywood products to be exempt from additional 1407

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### quarterly TPC testing and routine quality control testing, the two initial quarterly TPC tests and ninety 1408 percent of the initial quality control tests must have emissions no higher than 0.04 parts per million 1409 (ppm), and all tests results must be no higher than the cap value of 0.05 ppm. A hardwood plywood 1410 product line meeting these requirements would be ex empt from quarterly TPC testing and routine quality 1411 control testing for the two year duration of the approval. Product lines that do not meet the target value of 1412 0.04 ppm may receive approval for semi annual, rather than quarterly, large or small chamber TPC testing 1413 if all results are below the cap value of 0.05 ppm. If ninety percent of the quality control tests have 1414 emissions no higher than 0.05 ppm and all tests results are no higher than the cap value of 0.05 ppm, 1415 hardwood plywood products may be approved for a reduction in TPC testing (semiannually instead of 1416 quarterly), and in quality control testing frequency (weekly 16 

### ). ULEF certifications expire after two years, 1417 at which time a mill may reapply by submitting test results from at least two large or small chamber tests. 1418

1419 For particleboard, MDF, and thin MDF product lines, ninety percent of the results from the 1420 quality control test results and the results of the two quarterly tests must be no higher than the ULEF1421 target values listed in Table 2-22; all results must be lower than the ULEF-cap values. Particleboard, 1422 MDF, and thin MDF products that meet the exemption values may be approved for an exemption from 1423 the quarterly TPC testing and routine quality control testing for two years. Products that meet the quality 1424 control testing reduction values may be approved for a reduction in TPC testing (semiannually instead of 1425 quarterly), and in quality control testing frequency (wee kly instead of once per eight to twelve hour shift). 1426 ULEF certifications expire after two years, at whic h time a mill may reapply by submitting test results 1427 from at least two large or small chamber tests. 1428

1429

Table 2-22 summarizes the TSCA Title VI and CARB ATCM emissions standards for each 1430 product type and certification type. Table 2-23 presents the amount of testing and the results required to 1431 apply for each type of NAF/ULEF certification under TSCA Title VI and the CARB ATCM

. 1432

1433 Table 2-22: Summary of Emissions Standards by Product Type (parts per million)

Product Type Standard

Certification

NAF ULEF (Quarterly TPC

Test Exemption) c ULEF (QC Testing
Reduction) c

Target Values a

Hardwood Plywood 0.05 0.04 0.04 0.05

Particleboard 0.09 0.04 0.04 0.05

MDF 0.11 0.04 0.04 0.06

Thin MDF 0.13 0.04 0.04 0.08

Cap Values b

Hardwood Plywood 0.05 0.05 0.05 0.05

Particleboard 0.09 0.06 0.06 0.08

MDF 0.11 0.06 0.06 0.09

Thin MDF 0.13 0.06 0.06 0.11

a. Ninety percent of routine quality control test results, and all quarterly TPC test results must be no higher than these

values. b. All routine quality control and quarterly TPC test results must be no higher than these values. c. As prescribed by the CARB ATCM. The proposed option under TSCA Title VI does not include reduced testing for ULEF products.


### 1434

16 Hardwood plywood products that qualify for less frequent testing because their production volume is less than 100,000 square feet per week may continue to perform quality control testing at that frequency.

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### Table 2-23: NAF and ULEF Certification Testing Requirements ( Test Results in ppm)

NAF ULEF a ULEF

Product Type Routine Quality Control Testing Quarterly Large or

Small Chamber TPC Testing Routine Quality Control Testing Quarterly Large or

Small Chamber TPC Testing

Testing Requirements

HWPW Weekly b Weekly a for 3

months One test Weekly b Weekly a for 6

months Two tests

PB/MDF/Thin MDF Once per 8-12 hour

shift for 3 months One test Once per 8-12 hour

shift for 6 months Two tests

Test Results Needed for TPC and QC Testing Exemption

HWPW 90% ≤ 0.04

100% ≤ 0.05 1 test ≤ 0.04 90% ≤ 0.04

100% ≤ 0.05 2 tests ≤ 0.04

PB/MDF/Thin MDF 90% ≤ 0.04

100% ≤ 0.06 1 test ≤ 0.04 90% ≤ 0.04

100% ≤ 0.06 2 tests ≤ 0.04

Test Results Needed for QC Testing Frequency Reduction

HWPW N/A N/A 100% ≤ 0.05 2 tests ≤ 0.05

Particleboard N/A N/A 90% ≤ 0.05

100% ≤ 0.08 2 tests ≤ 0.08

MDF N/A N/A 90% ≤ 0.06

100% ≤ 0.09 2 tests ≤ 0.09

Thin MDF N/A N/A 90% ≤ 0.08

100% ≤ 0.11 2 tests ≤ 0.11

a. As prescribed by the CARB ATCM. The proposed option under TSCA Title VI does not include reduced testing for ULEF products.

b. a. Testing frequency for HWPW depends on production volume. Testing is assumed to be weekly for purposes of this analysis.


### 1435

The CARB ATCM sets a minimum threshold for quality control testing requirements for NAF 1436 and ULEF products but, based on communications w ith HPVA and with CARB-certified mills, some 1437 TPCs may have more stringent requirements. For example, HPVA requires mills to have on-site audits 1438 and large chamber tests annually for NAF-certified products, and quarterly for ULEF-certified products, 1439 which is more frequently than the CARB rule requires. This analysis therefore assumes that TPCs test 1440 and audit mills with NAF or ULEF-certified product lines more frequently than the CARB ATCM or 1441 TSCA Title VI requires. As noted in Section 2.2.1, it is assumed that mills will pay reduced recurring 1442 administrative fees to the TPC after achieving ULEF or NAF certification status. Table 2-24 summarizes 1443 the differences between how TPCs are assumed to implement a standard certification and a certification 1444 with an NAF or ULEF exemption. 1445

1446

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### Table 2-24: Testing and Certification Frequencies Assumed to be Implemented by TPCs

Category Standard NAF ULEF

Certification Fee Annual Annual (reduced fee after first year) Annual (reduced fee after first year)

Qualifying Testing One-time One-time One-time

TPC Audit Quarterly Twice initially and annually

thereafter Twice initially and annually

thereafter

TPC Audit Travel First audit each year Annual Annual
Large Chamber TPC Testing Quarterly Once initially and annually

thereafter Once initially and quarterly

thereafter

QC Testing On-going First 3 months and exempt

thereafter First 6 months and exempt or

reduced thereafter

Desk Audit Monthly (excludes audit months) First 2 months and exempt

thereafter First 4 months and exempt

thereafter



### 1447 2.2.5 Average Certification and Testing Costs per Mill 1448

1449 As described at the beginning of this section, all U.S. hardwood plywood mills that are not CARB 1450 certified in the baseline are assumed to apply for NAF certification, but particleboard mills are less likely 1451 to become NAF- certified. However, as some mills may not become NAF-certified in practice, the next 1452 section presents a range of certification costs. To si mplify the analysis, testing and certification costs for 1453 a “typical” mill were estimated using the unit costs described above. This analysis assumes that a 1454 hardwood plywood mill will produce two product types (i.e., hardwood plywood with veneer core and 1455 composite core) and not exceed a production volume of 200 msf per week. The typical particleboard or 1456 MDF mill is assumed to produce tw o product types and test once daily for five days each week. 1457

1458 Some mills with existing CARB-certified product lines might certify an additional product line 1459

under TSCA Title VI or change certification types (e.g., without exemptions for NAF).

. These mills 1460 would be paying certification fees in the baseline and so would not incur the total cost of fees as a result 1461

of TSCA Title VI. It is assumed that mills will co ordinate audits needed for certifying a new product 1462 under TSCA Title VI with the audits already being performed for CARB certified products. Note that 1463 particleboard and MDF mills having ULEF certifications in the baseline are assumed to be exempt have 1464 the exemption from routine testing requirements after the first six months under the CARB ATCM. 1465 Though some mills may only have reduced testing frequencies , this assumption results in a higher 1466

incremental cost to rather than the exemption, most mills switching from ULEF certifications under the 1467 CARB ATCM have sought the exemption instead of the reduced testing

. 1468

1469 The CARB ATCM allows mills to ship panels from certified product lines before test results are 1470 available. By contrast, the proposed TSCA rule requ ires mills to wait until test results indicate that the 1471 emissions standards have been met before shipping a lo t that has been tested. Panel producers that have 1472 not already set up their own quality control testing fa cilities due to the CARB ATCM will incur the cost 1473 of setting up a controlled lab environment, purchasing testing equipment, and operating the lab on an on1474 going basis. It is assumed that each mill will incur an initial cost of $10,000 to create a lab and purchase 1475 small chamber or desiccator testing units. It is assumed that the quality control manager will spend two 1476 hours each day performing routine quality control testing at a loaded wage rate of $71.36 per hour. It is 1477 also assumed that one panel will be needed for testi ng from each production line at a cost of $15.68 per 1478 hardwood plywood panel and $8.96 per pa rticleboard panel. (See Section 2.2.2 for a description of how 1479 these costs were estimated.) 1480

1481

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### This analysis also presents estimated testing and certification costs for wood veneer laminated 1482 product producers in the event that they are subject to these requirements. 17 

### Wood veneer laminators are 1483 assumed to have testing and certification costs that ar e similar to stock hardwood plywood mills. Many 1484 wood veneer laminated product producers produce panels in small batches according to customer 1485 specifications, and therefore their production may include more variety in terms of core types and face 1486 veneers compared to stock panel producers. Nevertheless, the analysis assumes that wood veneer 1487 laminated product producers can limit the number of product lines requiring certification to no more than 1488 two – one veneer core product line and one composite core product line. 1489

1490 The following tables present the costs to mills for each type of certification scenario. The tables 1491 are organized by each type of product and type of certification under the CARB ATCM and the TSCA 1492

Title VI rule as follows. 1493

1494

 Hardwood Plywood Mills: 1495

 Table 2-25, two uncertified products (i .e., not certified under the CARB ATCM) 1496 receiving NAF certifications under the TSCA Title VI rule; 1497

 Table 2-26 , two uncertified products (i.e., not certified under the CARB ATCM) 1498 receiving NAF certifications under Option SFCC; 1499

 Table 2

- 27, two uncertified products under the CARB ATCM receiving standard (i.e., 1500 Phase 2) certifications under the TSCA Title VI rule; 1501

 Table 2-28 , two uncertified products under the CARB ATCM receiving standard (i.e., 1502 Phase 2) certifications under Option SFCC; 1503

 Table 2

- 29, two products with standard certifica tions under the CARB ATCM receiving 1504
NAF certifications under the TSCA Title VI rule; 1505

 Table 2-30, two products with standard certif ications under the CARB ATCM receiving 1506
standard certifications under the TSCA Title VI rule; 1507

 Table 2

- 31, two products with UL EF certifications under the CARB ATCM receiving 1508

standard certifications under the TSCA Title VI rule options that eliminate the ULEF 1509 testing exemptions and reductions ; 1510

 Table 2-32, one product with ULEF certific ation under the CARB ATCM receiving NAF 1511

certification under the TSCA Title VI rule options that require NAF certification , and a 1512 second product with NAF certificati on under the CARB AT CM receiving NAF 1513

certification under the TSCA Title VI rule. options that require NAF certification; and 1514

 Table 2-33 , one product with ULEF certification a nd one product with NAF certification 1515 under the CARB ATCM both receiving standa rd certifications under the TSCA Title VI 1516
rule; and 1517

 , two products with ULEF certifications under the CARB ATCM rule receiving NAF 1518

certifications under the TSCA Title VI rule options that require NAF certification

. 1519

17 A wood veneer laminated product is defined for this analysis as hardwood plywood where the producer glues a wood veneer to the face and/or back of a purchased platform to produce a finished product or component part (other than a stock hardwood plywood panel).

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###  Particleboard and MDF: 1520

 Table 2-34, one uncertified product un der the CARB ATCM receiving standard 1521
certification under the TSCA Title VI rule, and one product with standard certification 1522 receiving standard certification under the TSCA Title VI rule; 1523

 Table 2-35, two products with ULEF cer tification under the CARB ATCM receiving 1524

standard certifications under the TSCA Title VI rule; 1525

 , one product with options that eliminate the ULEF certification testing exemptions and a 1526 second product with NAF certification both re ceiving standard certifications under the 1527

TSCA Title VI rule reductions ; 1528

 Table 2-36, one uncertified product and a sec ond product with standard certification both 1529 receiving NAF certifications under the CARB ATCM options that require NAF 1530

certification ; 1531

 Table 2-37, two products with ULEF certifications under the CARB ATCM receiving 1532

NAF certifications under the TSCA Title VI rule options that require NAF certification ; 1533

 Table 2-38, two products with standard cert ifications under the CARB ATCM receiving 1534

NAF certifications under the TCA Title VI rule options that require NAF certification ; 1535

 Table 2-39, one product with ULEF certif ication and a second product with NAF 1536

certification under the CARB ATCM bo th receiving NAF certification under the TSCA 1537

Title VI rule options that require NAF certification ; and 1538

 Table 2-40, one product with standard cer tification and a second product with NAF 1539

certification under the CARB ATCM both receiving NAF certification under the TSCA 1540

Title VI rule options that require NAF certification

. 1541

 Wood Veneer Laminated Product Producers: 1542

 Table 2-41, one product not certified unde r the CARB ATCM receiving standard 1543
certification under the TSCA Title VI rule; 1544

 Table 2-42, two products not certified un der the CARB ATCM receiving standard 1545
certifications under the TSCA Title VI rule; 1546

 Table 2-43, one product not certified under the CARB ATCM receiving NAF 1547
certification under the TSCA Title VI rule; and 1548

 Table 2-44, two products not certifie d under the CARB ATCM receiving NAF 1549

certifications under the TSCA Title VI rule. 1550

1551 The cost estimates presented in the tables represent the actual costs incurred by a mill in the first 1552 year of a product’s certification and each subsequent ye ar, thereafter. However, mills that have existing 1553 CARB-certified products will already be incurring some of these costs in the baseline. Therefore, the 1554 incremental testing and certification costs of complying with TSCA Title VI requirements will be lower 1555 for these mills. Table 2-45 presents the summary of incremental costs (actual costs minus baseline costs) 1556 for obtaining certification by product type, number of product lines, and baseline certification status. 1557

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### 1558

1559 Table 2-25: Annual Testing and Certif ication Costs for Hardwood Plywood Mills a


### Existing Certification(s): Two Uncertified Products New Certification(s): Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for Product Types Total Cost

First Year
Initial Certification Fee $6,000 1 fee 1 $6,000 Qualifying Test $480 5 tests 2 $4,800 Equivalence Test $71.36 10 hours 2 $1,427 Qualifying Test Shipping $200 1 test 2 $400
TPC Audit $450 2 audits 1 $900 TPC Audit Travel $1,500 1 audits 1 $1,500 TPC Testing $480 1 test 2 $960 TPC Testing Shipping $50 1 shipment 2 $100 Small Chamber Testing Unit $10,000 1 unit 1 $10,000
Desk Audit $250 2 audits 1 $500

Mill Labor b $71.36 185 hours 1 $13,202

Lost Product c $15.68 71 panels 2 $2,227 

### First Year Total $42,015

Subsequent Years
Re-certification Fee $3,700 1 fee 1 $3,700
TPC Audit $450 1 audit 1 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 1 test 2 $960 TPC Testing Shipping $50 1 shipment 2 $100

Mill Labor d $71.36 4.5 hours 1 $321

Lost Product e $15.68 1 panel 2 $31 

### Subsequent Year Total $7,062

a. a. Under options other than SFCC, hardwood plywood mills are assumed to perform their own daily testing to avoid having to wait for weekly test results to be completed before shipping tested lots. Under Option SFCC panels can be shipped before test results are available and therefore hardwood plywood mills are assumed to have the TPC perform the quality control testing on a weekly basis under option SFCC. NAF certification can be achieved based on testing results from one quarterly TPC test (using large or small chamber test) and 3 months (i.e., 13 weeks) of routine quality control testing. Testing frequencies are those r equired by the TPC and may be more frequent than TSCA Title VI requires.
b. 8 hours for the initial audit, 4 hours for a TPC routine audit, 0.5 hours each to prepare shipping for the qualifying test

, and the
subsequent TPC test (1 hour total), 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hour per

desk audit for 2 months, audits (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing

. (130 hours total). c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of quality control testing, and 1 panel for the second large cha mber

TPC test. d. 4 hours for the on-site audit and 0.5 hours to ship samples. e. 1 panel for annual large chamber TPC testing.
Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011, Personal

Communication with HPVA 2011b

, RISI 2011c Sources: BLS, 2010; Communications with CPA and HPVA, 2011;

R IS I, 2010.

. 

### 1560 1561

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### 1562 Table 2-26: Annual Testing and Certif ication Costs for Hardwood Plywood Mills under Option SFCC a


### Existing Certification(s): Two Uncertified Products New Certification(s): Two Standard NAF Products

Cost Category Unit Cost Number of Units Repetitions for
Product Types Total Cost

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000

Qualifying Test $480 5 tests 2 $4,800

Equivalence Test $154.00 10 hours 2 $3,080

Qualifying Test Shipping $200 1 test 2 $400

TPC Audit $450 2 audits 1 $900

TPC Audit Travel $1,500 1 audits 1 $1,500

TPC Testing $480 1 test 2 $960

TPC Testing Shipping $50 1 shipment 2 $100
Weekly QC Testing (at TPC) $154 26 Tests 2 $8,008
Weekly QC Testing Shipping $50 13 shipments 2 $1,300

Desk Audit $250 2 audits 1 $500

Mill Labor b $71.36 74.5 hours 1 $5,316

Lost Product c $15.68 19 panels 2 $596



### First Year Total $33,460

Subsequent Years

Re-certification Fee $3,700 1 fee 1 $3,700

TPC Audit $450 1 audit 1 $450

TPC Audit Travel $1,500 1 audit 1 $1,500
TPC Testing $480 1 test 2 $960
TPC Testing Shipping $50 1 shipment 2 $100

Mill Labor d $71.36 4.5 hours 1 $321

Lost Product e $15.68 1 panel 2 $31 

### Subsequent Year Total $7,062

a. Under Option SFCC panels can be shipped before test results are available. Therefore, hardwood plywood mills are assumed to have the TPC perform the quality control testing on a weekly basis. Under the other options, hardwood plywood mills are assumed to perform their own daily testing to avoid having to wait for weekly test results to be completed before shipping test ed lots. NAF certification can be achieved based on testing results from one quarterly TPC test (using large or small chamber tes t) and 3 months (i.e., 13 weeks) of routine quality control testing. Testing frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires. b. 8 hours for the initial audit, 4 hours for a TPC routine audit, 0.5 hours each to prepare shipping for the qualifying test a nd the subsequent TPC test (1 hour total), 40 hours for developing the quality control systems, 1 hour per desk audit for 2 audits (2 hours total), and 1.5 hours a week for 13 weeks of quality control testing (74.5 hours total). c. 5 panels for qualifying testing, 1 panel a week for 13 weeks of quality control testing, and 1 panel for the second large ch amber

TPC test. d. 4 hours for the on-site audit and 0.5 hours to ship samples. e. 1 panel for annual large chamber TPC testing. Sources: U.S. Bureau of Labor Statistics 2010b, Personal Communication with CPA 2011, Personal Communication with HPVA 2011b, RISI 2011c. 

### 1563 1564 Formatted Table

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### 1565

Table 2

- 27 : Annual Testing and Ce rtification Costs for Hardwood Plywood Mills a


### Existing Certification(s): Two Uncertified Products New Certification(s): Two Standard Products

Cost Category Unit Cost Number of Units Repetitions for Product Types Total Cost

First Year
Initial Certification Fee $6,000 1 fee 1 $6,000 Qualifying Test $480 5 tests 2 $4,800 Equivalence Test $71.36 10 hours 2 $1,427 Qualifying Test Shipping $200 1 shipment 2 $400 TPC Audit $450 4 audits 1 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 3 tests 2 $2,880 TPC Testing Shipping $50 3 shipments 2 $300 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 Desk Audit $250 8 audits 1 $2,000

Mill Labor a Labor b $71.36 590 hours 1 $42,102

Lost Product b Product c $15.68 268 panels 2 $8,404

First Year Total $81,614 

### Subsequent Years
Re-certification Fee $6,000 1 fee 1 $6,000 TPC Audit $450 4 audits 1 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 4 tests 2 $3,840 TPC Testing Shipping $50 4 shipments 2 $400 Desk Audit $250 8 audits 1 $2,000

Mill Labor c Labor d $71.36 546 hours 1 $38,963

Lost Product d Product e $15.68 264 panels 2 $8,279 Subsequent Year Total $62,782

a a. Under options other than SFCC, hardwood plywood mills are assumed to perform their own daily testing to avoid having to wait for weekly test results to be completed before shipping tested lots. Under Option SFCC panels can be shipped before test results are available and therefore hardwood plywood mills are assumed to have the TPC perform the quality control testing on a weekly basis under option SFCC.

b . 8 hours for the initial audit, 4 hours each for 3 routine TPC audits (12 hours total), 0.5 hours each to prepare shipping for the qualifying test

, and the 3 other TPC tests (2 hours total), 40 hours for developing the quality control systems, 4 hours for other quarterly audits, 1 hour per monthly desk audit for the other 8 months

, (8 hours total), and 2 hours a day to test samples for 52 weeks of quality control testing

. (520 hours total).

b c . 5 panels for qualifying testing, 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly large

chamber TPC test

. (excluding the first quarter in year 1).

c d . 4 hours each for other quarterly routine TPC audits

, (16 hours total), 0.5 hours each to prepare for shipping the quarterly TPC tests (2 hours total), 1 hour per desk audit for the other 8 months

, (8 hours total), and 2 hours a day to test samples for 52 weeks of quality control testing

. (520 hours total).

d e . 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly large chamber TPC test. Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011, Personal

Communication with HPVA 2011b

, RISI 2011c BLS, 2010; Communications with CPA and HPVA, 2011; RISI,

2010.

. 

### 1566 1567

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### 1568 Table 2-28: Annual Testing and Certif ication Costs for Hardwood Plywood Mills Under Option SFCC a


### Existing Certification(s): Two Standard Uncertified Products

– New Certification(s): Two Standard Products

Cost Category Unit Cost Number of Units Repetitions for
Product Types Total Cost

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000

Qualifying Test $480 5 tests 2 $4,800

Equivalence Test $154 10 hours 2 $3,080

Qualifying Test Shipping $200 1 shipment 2 $400

TPC Audit $450 4 audits 1 $1,800

TPC Audit Travel $1,500 1 audit 1 $1,500

TPC Testing $480 3 tests 2 $2,880

TPC Testing Shipping $50 3 shipments 2 $300
Weekly QC Testing (at TPC) $154 104 tests 2 $32,032
Weekly QC Testing Shipping $50 52 shipments 2 $5,200

Desk Audit $250 8 audits 1 $2,000

Mill Labor $71.36 148 hours 1 $10,561

Lost Product c $15.68 60 panels 2 $1,882

First Year Total $72,435 

### Subsequent Years

Re-certification Fee $6,000 1 fee 1 $6,000

TPC Audit $450 4 audits 1 $1,800

TPC Audit Travel $1,500 1 audit 1 $1,500

TPC Testing $480 4 tests 2 $3,840

TPC Testing Shipping $50 4 shipments 2 $400
Weekly QC Testing (at TPC) $154 104 tests 2 $32,032
Weekly QC Testing Shipping $50 52 shipments 2 $5,200

Desk Audit $250 8 audits 1 $2,000

Mill Labor d $71.36 104 hours 1 $7,421

Lost Product e $15.68 56 panels 2 $1,756
Subsequent Year Total $61,950 Formatted Table

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### 1569 Cost Category Unit

Cost Number

of Units Repetitio n
s for

Product
Types Total

Cost to Certify

Product
Line(s) a. Under Option SFCC panels can be shipped before test results are available. Therefore, hardwood plywood mills are assumed to have the TPC perform the quality control testing on a weekly basis. Under the other options, hardwood plywood mills are assumed to perform their own daily testing to avoid having to wait for weekly test results to be completed before shipping tested lots. b. 8 hours for the initial audit, 4 hours each for 3 routine TPC audits (12 hours total), 0.5 hours each to prepare shipping for the qualifying test and the 3 other TPC tests (2 hours total), 40 hours for developing the quality control systems, 1 hour per monthly desk audit for 8 months (8 hours total), and 1.5 hours a week to for quality control testing (78 hours total). c. 5 panels for qualifying testing, 1 panel a week for 52 weeks of quality control testing, and 1 panel for each quarterly large chamber TPC test (excluding the first quarter in year 1). d. 4 hours each for quarterly routine TPC audits (16 hours total), 0.5 hours each to prepare for shipping the quarterly TPC tests (2 hours total), 1 hour per desk audit for 8 months (8 hours total), and 1.5 hours a week to for quality control testing (78 hours total). e. 1 panel a week for 52 weeks of quality control testing, and 1 panel for each quarterly large chamber TPC test.
Sources: U.S. Bureau of Labor

Statistics 2010b

, Personal Communication with CPA 2011,

P ersonal Communication with HPVA

2011b

, RISI 2011c Cost Incurred in

Baseline for Existing Certification(s)

. 

### Increment

al Cost to

Certify

Product
Line(s) Deleted Cells

Formatted Table

Deleted Cells Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***January 27, 2012 2-541570Table2-29: Annual Testing and Certification Costs for Hardwood Plywood MillsExisting Certification(s): Two Standard Products – New Certification(s): Two Standard ProductsaCost CategoryUnit CostNumber of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertifyProduct Line(s)First YearInitial Certification Fee $6,000 1 fee 1 $6,000 $6,000 $0Qualifying Test $480 0 tests 2 $0 $0 $0Correlation Test $71.36 0 tests 2 $0 $0 $0Qualifying Test Shipping $200 0 shipment 2 $0 $0 $0TPC Audit $450 4 audits 1 $1,800 $1,800 $0TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0TPC Testing $480 4 test 2 $3,840 $3,840 $0TPC Testing Shipping $50 4 shipment 2 $400 $400 $0Weekly QC Testing $154 0 tests 2 $0 $32,032 ($32,032)Weekly QC Testing Shipping $50 0 shipments 2 $0 $5,200 ($5,200)Small Chamber Testing Unit $10,000 1 unit 1 $10,000 $0 $10,000Desk Audit $250 8 audits 1 $2,000 $2,000 $0MillLaboraLaborb$71.36546 hours1$38,963$7,421$31,541LostProductbProductc$15.68264 panels2$8,279$1,756$6,523First Year Total$72,782 $61,950 $10,832Subsequent YearsRe-certification Fee $6,000 1 fee 1 $6,000 $6,000 $0TPC Audit $450 4 audit 1 $1,800 $1,800 $0TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0TPC Testing $480 4 test 2 $3,840 $3,840 $0TPC Testing Shipping $50 4 shipment 2 $400 $400 $0Weekly QC Testing $154 0 tests 2 $0 $32,032 ($32,032)Weekly QC Testing Shipping $50 0 shipments 2 $0 $5,200 ($5,200)Desk Audit $250 8 audits 1 $2,000 $2,000 $0MillLaboraLaborb$71.36546 hours1$38,963$7,421$31,541LostProductbProductc$15.68264 panel2$8,279$1,756$6,523Subsequent Year Total$62,782 $61,950 $832a.These estimates apply to the options thatrequire mills to hold tested lots until theresults are available (all options otherthan Option SFCC). Mills without a small chamber unit are assumed tocomply with this requirement by purchasing test chambers andconducting daily on-site QC testing, resulting in the incrementalcosts presented here. There are no incremental costs for thiscertification under Option SFCC.b.4 hourseachforotherquarterlyroutine TPCaudits,(16 hours total), 0.5 hours each to prepare forshipping the quarterly TPC tests (2 hours total),1 hour per desk audit forthe other8 months,(8hours total),and 2 hours a day to test samples for 52 weeks of quality control testing.(520 hours total).bc. 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly large chamber TPC test.Sources: U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cBLS, 2010; Communicationswith CPA and HPVA,2011; RISI, 2010..Formatted TableFormatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***January 27, 2012 2-55Table 2-30: Annual Testing and Certification Costs for Hardwood Plywood MillsaExisting Certification(s): Two Standard Products – New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertifyProduct Line(s)First YearInitial Certification Fee$6,0001 fee1$6,000$6,000$0Qualifying Test $480 5 tests 2 $4,800$0 $4,800Correlation Test $71.36 10 tests 2 $1,427$0 $1,427Qualifying Test Shipping $200 1 shipment 2 $400$0 $400TPC Audit $450 2 audits 1 $900$1,800 ($900)TPC Audit Travel $1,500 1 audit 1 $1,500$1,500 $0TPC Testing $480 1 test 2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment 2 $100$400 ($300)Weekly QC Testing $154 0 tests 2 $0$32,032 ($32,032)Weekly QC TestingShipping $50 0 shipments 2 $0$5,200 ($5,200)Small Chamber TestingUnit $10,000 1 unit 1 $10,000 $0 $10,000Desk Audit $250 2 audits 1 $500$2,000 ($1,500)Mill Laborb$71.36 141 hours 1 $10,062$7,421 $2,640Lost Productc$15.68 71 panels 2 $2,227$1,756 $470First Year Total$38,876 $61,950 ($23,074)Subsequent YearsRe-certification Fee $3,700 1 fee 1 $3,700$6,000 ($2,300)TPC Audit $450 1 audit 1 $450$1,800 ($1,350)TPC Audit Travel $1,500 1 audit 1 $1,500$1,500 $0TPC Testing $480 1 test 2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment 2 $100$400 ($300)Weekly QC Testing $154 0 tests 2 $0 $32,032 ($32,032)Weekly QC TestingShipping $50 0 shipments 2 $0 $5,200 ($5,200)Desk Audit $250 0 audits 1 $0 $2,000 ($2,000)Mill Labord$71.36 4.5 hours 1 $321$7,421 ($7,100)Lost Producte$15.68 1 panel 2 $31$1,756 ($1,725)Subsequent Year Total$7,062 $61,950 ($54,887)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. 4 hours for the initial and second audit, 0.5 hours to prepare shipping for the qualifying test and second audit, 1 hour per desk audit for 2 months for NAF products, and2hours adaytotestsamples for 13 weeks of quality control testing.c. 5 panels for qualifying testing, 1 panel adayfor 13 weeks of small scale testing, and 1 panel for the second large scale test.d. 4 hours for the on-site audit and 0.5 hours to ship samples.e. 1 panel for annual large scale testing.Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.Formatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***January 27, 2012 2-56Table2-27: Annual Testing and Certification Costs for Hardwood Plywood MillsExisting Certification(s): Two ULEF Products–New Certification(s): Two Standard ProductsCost CategoryUnit CostNumber of UnitsRepetitions forProduct TypesTotal Cost to CertifyAdditional ProductLine(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify AdditionalProduct Line(s)1571a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. 4 hours each for the initial audit and second routine TPC audit (8 hours total), 0.5 hours each to prepare shipping for thequalifying test and second audit (1 hour total), 1 hour per desk audit for 2months for NAF products (2 hours total), and 2 hours a day to testsamples for 13 weeks of quality control testing (130 hours total).c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.d. 4 hours for the on-site audit and 0.5 hours to ship samples.e. 1 panel for annual large scale testing.Sources: U.S. Bureau of Labor Statistics 2010b, Personal Communication with CPA 2011, Personal Communication with HPVA 2011b, RISI 2011c.1572*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***January 27, 2012 2-57Table2-31: Annual Testing and Certification Costs for Hardwood Plywood MillsExisting Certification(s): Two ULEF Products –New Certification(s): Two Standard ProductsCost CategoryUnit CostNumber of UnitsRepetitions forProduct TypesTotal Cost to CertifyAdditional ProductLine(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify AdditionalProduct Line(s)First YearInitial Certification Fee $6,000 1 fee 1 $6,000$3,700 $2,300Qualifying Test $480 0 tests 2 $0$0 $0Correlation Test $71.36 0 tests 2 $0$0 $0Qualifying Test Shipping $200 0 shipments 2 $0$0 $0TPC Audit $450 4 audits 1 $1,800$450 $1,350TPC Audit Travel $1,500 1 audit 1 $1,500$1,500 $0TPC Testing $480 4 tests 2 $3,840$3,840 $0TPC Testing Shipping $50 4 shipments 2 $400$400 $0Small Chamber TestingUnit $10,000 1 unit 1 $10,000 $0 $10,000Desk Audit $250 8 audits 1 $2,000$0 $2,000Mill Labora$71.36 546 hours 1 $38,963$642 $38,320Lost Productb$15.68 264 panels 2 $8,279$125 $8,154First Year Total$72,782 $10,658 $62,124Subsequent YearsRe-certification Fee $6,000 1 fee 1 $6,000$3,700 $2,300TPC Audit $450 4 audits 1 $1,800$450 $1,350TPC Audit Travel $1,500 1 audit 1 $1,500$1,500 $0TPC Testing $480 4 tests 2 $3,840$3,840 $0TPC Testing Shipping $50 4 shipments 2 $400$400 $0Desk Audit $250 8 audits 1 $2,000 $0 $2,000Mill Labora$71.36 546 hours 1 $38,963$642 $38,320Lost Productb$15.68 264 panels 2 $8,279$125 $8,154Subsequent Year Total$62,782 $10,658 $52,124a. 4 hourseachforotherquarterlyroutine TPCaudits,(16 hours total),0.5hours eachto prepareforshipping,the quarterly TPC tests (2 hours total),1 hour per desk audit forthe other8 months,(8hours total),and 2 hours a day to test samples for 52 weeks of quality control testing.(520 hours total).b. 1 panel a day for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1573*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***January 27, 2012 2-581574Table 2-32: Annual Testing and Certification Costs for Hardwood Plywood MillsaExisting Certification(s): One ULEF Product and One NAF Product – New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify Product Line(s)First YearInitial Certification Fee $3,700 1 fee 1 $3,700$3,700 $0Qualifying Test $480 5 tests 1 $2,400$0 $2,400Correlation Test $71.36 10 tests 1 $714$0 $714Qualifying Test Shipping $200 1 shipment 1 $200$0 $200TPC Audit $450 2 audits 1 $900$450 $450TPC Audit Travel $1,500 1 audit 1 $1,500$1,500 $0TPC Testing$4801 test12$480960$1,9202,400($1,440)TPC Testing Shipping$501 shipment12$50100$200250($150)Small Chamber TestingUnit $10,0001 unit1$10,000$6420$9,35810,000Desk Audit $250 2 audits 1 $500$0 $500Mill Laborb$71.36 141 hours 1 $10,062$642 $9,420Lost Productc$15.6871 panels1$1,113$6378$1,051035First Year Total$31,61932,149$9,117021$22,50123,128Subsequent YearsRe-certification Fee$3,7001 fee1$3,700$3,700$0TPC Audit$4501 audit1$450$450$0TPC Audit Travel$1,5001 audit1$1,500$1,500$0TPC Testing$4801 test12$480960$1,9202,400($1,440)TPC Testing Shipping$501 shipment12$50100$200250($150)Mill Labord$71.364.5 hours1$321$642($321)Lost Producte$15.681 panel1$16$6378($4763)Subsequent Year Total$6,5177,047$8,4759,021($1,958974)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. 4 hourseachfor the initialauditand secondroutine TPCaudit,(8 hours total),0.5 hourseachto prepare shipping for the qualifying test and second audit,(1 hour total),1 hour per desk audit for 2months for NAF products,(2 hours total),and 2 hours a day to test samples for 13 weeks of quality control testing.(130 hours total).c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.d. 4 hours for the on-site audit and 0.5 hours to ship samples.e. 1 panel for annual large scale testing.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1575Formatted TableFormatted TableFormatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***January 27, 2012 2-59Table 2-33: Annual Testing and Certification Costs for Hardwood PlywoodMillsMillsaExisting Certification(s):OneTwoULEFProduct and One NAF ProductProducts– New Certification(s): TwoStandardNAFProductsCost CategoryUnit CostNumber of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify Product Line(s)First YearInitial Certification Fee$6,0001 fee1$6,000$3,700$2,300Qualifying Test$4800 tests2$0$0$0Correlation Test$71.360 tests2$0$0$0Qualifying Test Shipping$2000 shipments2$0$0$0TPC Audit$4504 audits1$1,800$450$1,350TPC Audit Travel$1,5001 audit1$1,500$1,500$0TPC Testing$4804 tests2$3,840$2,400$1,440TPC Testing Shipping$504 shipments2$400$250$150Small Chamber TestingUnit$10,0001 unit1$10,000$78$9,922Desk Audit$2508 audits1$2,000$0$2,000Mill Labora$71.36546 hours1$38,963$642$38,320Lost Productb$15.68264 panels2$8,279$78$8,201First Year Total$72,782$9,099$63,683Subsequent YearsRe-certification Fee$6,0001 fees1$6,000$3,700$2,300TPC Audit$4504 audits1$1,800$450$1,350TPC Audit Travel$1,5001 audit1$1,500$1,500$0TPC Testing$4804 tests2$3,840$2,400$1,440TPC Testing Shipping$504 shipments2$400$250$150Desk Audit$2508 audits1$2,000$0$2,000Mill Labora$71.36546 hours1$38,963$642$38,320Lost Productb$15.68264 panels2$8,279$78$8,201Subsequent Year Total$62,782$9,021$53,761a. 4 hours for other quarterly audits, 0.5 to prepare shipping, 1 hour per desk audit for the other 8 months, and2hours adaytotestsamples for 52 weeks of quality control testing.b. 1 panel a week for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test.Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.1576*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-60Table2-30: Annual Testing and Certification Costs for Hardwood Plywood MillsaExisting Certification(s): Two ULEF Products–New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify Product Line(s)First YearInitial Certification Fee $3,700 1 fee 1 $3,700$3,700 $0Qualifying Test $480 5 tests 2 $4,800$0 $4,800Correlation Test $71.36 10 tests 2 $1,427$0 $1,427Qualifying Test Shipping $200 1 shipment 2 $400$0 $400TPC Audit $450 2 audits 1 $900$450 $450TPC Audit Travel $1,500 1 audit 1 $1,500$1,500 $0TPC Testing $480 1 test 2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment 2 $100$400 ($300)Small Chamber TestingUnit $10,000 1 unit 1 $10,000$2,0000$810,000Desk Audit $250 2 audits 1 $500$0 $500Mill Laborb$71.36 141 hours 1 $10,062$642 $9,420Lost Productc$15.68 71 panels 2 $2,227$125 $2,101First Year Total$36,576 $1210,658$2325,918Subsequent YearsRe-certification Fee $3,700 1 fee 1 $3,700$3,700 $0TPC Audit $450 1 audit 1 $450$450 $0TPC Audit Travel $1,500 1 audit 1 $1,500$1,500 $0TPC Testing $480 1 test 2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment 2 $100$400 ($300)Mill Labord$71.36 4.5 hours 1 $321$642 ($321)Lost Producte$15.68 1 panel 2 $31$125 ($94)Subsequent Year Total$7,062 $10,658 ($3,595)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. 4 hourseachfor the initialauditand secondroutine TPCaudit,(8 hours total),0.5 hourseachto prepare shipping for the qualifying test and second audit,(1 hour total),1 hour per desk audit for 2months for NAF products,(2 hours total),and 2 hours a day to test samples for 13 weeks of quality control testing.(130 hours total).c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale test.d. 4 hours for the on-site audit and 0.5 hours to ship samples.e. 1 panel for annual large scale testing.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1577*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-611578Table 2-34: Annual Testing and Certification Costs for Particleboard/MDF MillsExisting Certification(s): One Uncertified Product and One Standard Product – New Certification(s): Two Standard ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyAdditional ProductLine(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify AdditionalProduct Line(s)First YearInitial Certification Fee $6,000 1 fee1 $6,000$6,000 $0Qualifying Test $480 5 tests1 $2,400$0 $2,400Correlation Test $71.36 10 hours1 $714$0 $714Qualifying Test Shipping $200 1 shipments1 $200$0 $200TPC Audit $450 4 audits1 $1,800$1,800 $0TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing$4803 tests1$1,440$01,920$1,440($480)TPC Testing Shipping$503 shipments1$150$0200$150($50)Small Chamber TestingUnit $10,000 0 units1 $0$0 $0Desk Audit $250 8 audits1 $2,000$2,000 $0Mill Labora$71.36546 hours1$38,962963$38,962963$0Lost Productb$8.96268532panels1 $2,4014,767$02,365$2,401First Year Total$57,56759,933$50,26254,748$7,3055,185Subsequent YearsRe-certification Fee $6,000 1 fee1 $6,000 $6,000 $0TPC Audit $450 4 audits1 $1,800 $1,800 $0TPC Audit Travel $1,500 1 audit1 $1,500 $1,500 $0TPC Testing $480 4 tests12$1,9203,840$01,920$1,920TPC Testing Shipping $50 4 shipments12$200400$0200$200Desk Audit $250 8 audits1 $2,000$2,000 $0Mill Laborc$71.36 546 hours1 $38,962963$38,962963$0Lost Productd$8.96 264 panels12$2,3654,731$02,365$2,365Subsequent Year Total$54,74859,233$50,26254,748$4,485a. 4 hourseachforthe initial audit,quarterly routine TPC audits (16 hours total),0.5 hourseachto prepareforshippingforthequarterlyTPC tests, 4(2hoursfor 3 quarterly audits,total),1 hour perdesk audit for 8 months,(8 hours total),and 2 hours a day, 5 days a week,to test samplesfor 52 weeks ofsmall scalequality controltesting.(520 hours total).b.b. For each product line,5 panels for qualifying testing, 1 panel each day, 5 days a weekfor small scale testing, and 1 panel for the quarterly largescale tests.Note that the 532 panels includes 268for the newly certified product line and 264 for the existing certified product line.c. 4 hourseachfor 4 quarterly audits,(16 hours total),0.5 hours to prepareshippingforquarterlyTPC tests,(2 hours total),1 hour per desk audit for 8 months,(8 hours total),and 2 hours a day, 5days a week, for 52 weeks of small scale testing.(520 hours total).d. 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1579Formatted TableFormatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-621580Table 2-35: Annual Testing and Certification Costs for Particleboard/MDF MillsExisting Certification(s): Two ULEF Products – New Certification(s): Two Standard ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyAdditional ProductLine(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify AdditionalProduct Line(s)First YearInitial Certification Fee $6,000 1 fee 1 $6,000 $3,700 $2,300Qualifying Test $480 0 tests 2 $0 $0 $0Correlation Test $71.36 0 hours 2 $0 $0 $0Qualifying Test Shipping $200 0 shipments 2 $0 $0 $0TPC Audit $450 4 audits 1 $1,800 $450 $1,350TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0TPC Testing $480 4 tests 2 $3,840 $3,840 $0TPC Testing Shipping $50 4 shipments 2 $400 $400 $0Small Chamber TestingUnit $10,000 0 units 1 $0 $0 $0Desk Audit $250 8 audits 1 $2,000 $0 $2,000Mill Labora$71.36 546 hours 1 $38,962963$642 $38,320Lost Productb$8.96264 panels2$4,731$72$4,659First Year Total$59,233$10,604$48,629Subsequent YearsRe-certification Fee$6,0001 fee1$6,000$3,700$2,300TPC Audit$4504 audits1$1,800$450$1,350TPC Audit Travel$1,5001 audit1$1,500$1,500$0TPC Testing$4804 tests2$3,840$3,840$0TPC Testing Shipping$504 shipments2$400$400$0Desk Audit$2508 audits1$2,000$0$2,000Mill Labora$71.36546 hours1$38,962$642$38,320Lost Productb$8.96 264 panels 2 $4,731 $72 $4,659SubsequentFirstYear Total$59,233 $10,604 $48,629630a. 4 hours for 4 quarterly audits, 0.5 hours to prepare shipping for TPC tests,1 hour per desk audit for 8 months, and 2 hours a day, 5 days a week, for 52 weeks of small scale testing.b. 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests.Sources: BLS, 2010; Communications with CPA and HPVA, 2011; RISI, 2010.Subsequent Years1581Formatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-631582Table2-33: Annual Testing and Certification Costs for Particleboard/MDF MillsExisting Certification(s): One NAF Product and One ULEF Product–New Certification(s): Two Standard ProductsCost CategoryUnit CostNumber of UnitsRepetitions forProduct TypesTotal Cost to CertifyAdditional ProductLine(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify AdditionalProduct Line(s)First YearInitial Certification Fee$6,0001 fee1$6,000$3,700$2,300Qualifying Test$4800 tests2$0$0$0Correlation Test$71.360 hours2$0$0$0Qualifying Test Shipping$2000 shipments2$0$0$0TPC Audit$4504 audits1$1,800$450$1,350TPC Audit Travel$1,5001 audit1$1,500$1,500$0TPC Testing$4804 tests2$3,840$2,400$1,440TPC Testing Shipping$504 shipments2$400$250$150Small Chamber TestingUnit$10,0000 units1$0$0$0Desk Audit$2508 audits1$2,000$0$2,000Mill Labora$71.36546 hours1$38,962$642$38,320Lost Productb$8.96264 panels2$4,731$45$4,686First Year Total$59,233$8,987$50,246Subsequent YearsRe-certification Fee $6,000 1 fee1 $6,000 $3,700 $2,300TPC Audit $450 4 audits1 $1,800 $450 $1,350TPC Audit Travel $1,500 1 audit1 $1,500 $1,500 $0TPC Testing $480 4 tests2 $3,840 $2,4003,840$1,4400TPC Testing Shipping $50 4 shipments2 $400 $250400$1500Desk Audit $250 8 audits1 $2,000 $0 $2,000Mill Labora$71.36 546 hours1 $38,962963$642 $38,320Lost Productb$8.96 264 panels2 $4,731 $4572$4,686659Subsequent Year Total$59,233 $8,98710,604$50,24648,630a. 4 hourseachfor4quarterlyroutine TPCaudits,(16 hours total),0.5 hourseachto prepareforshippingforthe quarterlyTPC tests,(2 hours total),1 hour per desk audit for 8 months,(8 hours total),and 2 hours a day, 5 days a week,to test samplesfor 52 weeks ofsmall scalequality controltesting.(520 hours total).b. 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1583*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-641584Table 2-36: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): One Uncertified Product and One Standard Product – New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyAdditional ProductLine(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify AdditionalProduct Line(s)First YearInitial Certification Fee $6,000 1 fee1 $6,000 $6,000 $0Qualifying Test $480 5 tests2 $4,800 $0 $4,800Correlation Test $71.36 10 hours2 $1,427 $0 $1,427Qualifying Test Shipping $200 1 shipment2 $400 $0 $400TPC Audit $450 2 audits1 $900 $1,800 ($900)TPC Audit Travel $1,500 1 audit1 $1,500 $1,500 $0TPC Testing $480 1 test2 $960 $1,920 ($960)TPC Testing Shipping $50 1 shipment2 $100 $200 ($100)Small Chamber TestingUnitb$10,000 0 units1 $0 $0 $0Desk Audit $250 2 audits1 $500 $2,000 ($1,500)Mill Laborc$71.36 141 hours1 $10,062 $38,962963($28,900901)Lost Productd$8.96 71 panels2 $1,272 $2,365 ($1,093)First Year Total$27,921 $54,748 ($26,826827)Subsequent YearsRe-certification Fee $3,700 1 fee1 $3,700 $6,000 ($2,300)TPC Audit $450 1 audit1 $450 $1,800 ($1,350)TPC Audit Travel $1,500 1 audit1 $1,500 $1,500 $0TPC Testing $480 1 test2 $960 $1,920 ($960)TPC Testing Shipping $50 1 shipment2 $100 $200 ($100)Desk Audit $250 0 audits1 $0 $2,000 ($2,000)Mill Labore$71.36 4.5 hours1 $321 $38,962963($38,641)Lost Productf$8.96 1 panel2 $18 $2,365 ($2,348)Subsequent Year Total$7,049 $54,748 ($47,699)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000.c.84hourseachfor the initial audit,and second routine TPC audit (8 hours total),0.5 hourseachto prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4hours for theandsecond audit,(1 hour total),1 hour per desk audit for 2 months,for NAF products (2 hours total),and 2 hours a day, 5 days a weekto test samples for 13 weeks of quality controltesting.(130 hours total).d. 5 panels for qualifying testing, 5 panels a week for 13 weeksof small scale testing, and 1 panel for the second large scaletest.e. 4 hours for theannualon-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1585*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-651586Table 2-37: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): Two ULEF Products – New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify Product Line(s)First YearInitial Certification Fee $3,700 1 fee1 $3,700$3,700 $0Qualifying Test $480 5 tests2 $4,800$0 $4,800Correlation Test $71.36 10 hours2 $1,427$0 $1,427Qualifying Test Shipping $200 1 shipments2 $400$0 $400TPC Audit $450 2 audits1 $900$450 $450TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment2 $100$400 ($300)Small Chamber TestingUnitb$10,000 0 units1 $0$0 $0Desk Audit $250 2 audits1 $500$0 $500Mill Laborc$71.36 141 hours1 $10,062$642 $9,419420Lost Productd$8.96 71 panels2 $1,272$72 $1,201First Year Total$25,621 $10,604 $15,017Subsequent YearsRe-certification Fee $3,700 1 fee1 $3,700$3,700 $0TPC Audit $450 1 audit1 $450$450 $0TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment2 $100$400 ($300)Desk Audit $250 0 audits1 $0 $0 $0Mill Labore$71.36 4.5 hours1 $321 $642 ($321)Lost Productf$8.96 1 panel2 $18 $72 ($54)Subsequent Year Total$7,049 $10,604 ($3,555)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000.c.84hourseachfor the initial audit,and second routine TPC audit (8 hours total),0.5 hourseachto prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4hours for theandsecond audit,(1 hour total),1 hour per desk audit for 2 months,for NAF products (2 hours total),and 2 hours a day, 5 days a weekto test samples for 13 weeks of quality controltesting.(130 hours total).d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scaletest.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1587*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-661588Table 2-38: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): Two Standard Products – New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify Product Line(s)First YearInitial Certification Fee $6,000 1 fee1 $6,000$6,000 $0Qualifying Test $480 5 tests2 $4,800$0 $4,800Correlation Test $71.36 10 hours2 $1,427$0 $1,427Qualifying Test Shipping $200 1 shipment2 $400$0 $400TPC Audit $450 2 audits1 $900$1,800 ($900)TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment2 $100$400 ($300)Small Chamber TestingUnitb$10,000 0 units1 $0$0 $0Desk Audit $250 2 audits1 $500$2,000 ($1,500)Mill Laborc$71.36 141 hours1 $10,062$38,962963($28,900901)Lost Productd$8.96 71 panels2 $1,272$4,731 ($3,459)First Year Total$27,921 $59,233 ($31,312)Subsequent YearsRe-certification Fee $3,700 1 fee1 $3,700$6,000 ($2,300)TPC Audit $450 1 audit1 $450$1,800 ($1,350)TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test2 $960$3,840 ($2,880)TPC Testing Shipping $50 1 shipment2 $100$400 ($300)Desk Audit $250 0 audits1 $0 $2,000 ($2,000)Mill Labore$71.36 4.5 hours1 $321 $38,962963($38,641)Lost Productf$8.96 1 panel2 $18 $4,731 ($4,713)Subsequent Year Total$7,049 $59,233 ($52,184)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000.c.84hourseachfor the initial audit,and second routine TPC audit (8 hours total),0.5 hourseachto prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4hours for theandsecond audit,(1 hour total),1 hour per desk audit for 2 months,for NAF products (2 hours total),and 2 hours a day, 5 days a weekto test samples for 13 weeks of quality controltesting.(130 hours total).d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scaletest.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..1589*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-671590Table 2-39: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): One NAF Product and One ULEF Product – New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify Product Line(s)First YearInitial Certification Fee $3,700 1 fee1 $3,700$3,700 $0Qualifying Test $480 5 tests1 $2,400$0 $2,400Correlation Test $71.36 10 hours1 $714$0 $714Qualifying Test Shipping $200 1 shipment1 $200$0 $200TPC Audit $450 2 audits1 $900$450 $450TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test12$480960$1,9202,400($1,440)TPC Testing Shipping $50 1 shipment12$50100$200250($150)Small Chamber TestingUnitb$10,000 0 units1 $0$0 $0Desk Audit $250 2 audits1 $500$0 $500Mill Laborc$71.36 141 hours1 $10,062$642 $9,419420Lost Productd$8.96 71 panels12$6361,272$3645$6001,228First Year Total$21,14122,308$8,448987$12,69313,321Subsequent YearsRe-certification Fee $3,700 1 fee1 $3,700$3,700 $0TPC Audit $450 1 audit1 $450$450 $0TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test12$480960$1,9202,400($1,440)TPC Testing Shipping $50 1 shipment12$50100$200250($150)Desk Audit $250 0 audits1 $0 $0 $0Mill Labore$71.36 4.5 hours1 $321 $642 ($321)Lost Productf$8.96 1 panel12$918$3645($27)Subsequent Year Total$6,5107,049$8,448987($1,938)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000.c.84hourseachfor the initial audit,and second routine TPC audit (8 hours total),0.5 hourseachto prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4hours for theandsecond audit,(1 hour total),1 hour per desk audit for 2 months,for NAF products (2 hours total),and 2 hours a day, 5 days a weekto test samples for 13 weeks of quality controltesting.(130 hours total).d. 5 panels for qualifying testing, 5 panels a week for 13 weeksof small scale testing, and 1 panel for the second large scaletest.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications withCPA and HPVA, 2011; RISI, 2010..1591*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 20132-681592Table 2-40: Annual Testing and Certification Costs for Particleboard/MDF MillsaExisting Certification(s): One NAF Product and One StandardProduct – New Certification(s): Two NAF ProductsCost Category Unit Cost Number of UnitsRepetitions forProduct TypesTotal Cost to CertifyProduct Line(s)Cost Incurred inBaseline for ExistingCertification(s)Incremental Cost toCertify Product Line(s)First YearInitial Certification Fee $6,000 1 fee1 $6,000$6,000 $0Qualifying Test $480 5 tests1 $2,400$0 $2,400Correlation Test $71.36 10 hours1 $714$0 $714Qualifying Test Shipping $200 1 shipment1 $200$0 $200TPC Audit $450 2 audits1 $900$1,800 ($900)TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test12$480960$1,9202,400($1,440)TPC Testing Shipping $50 1 shipment12$50100$200250($150)Small Chamber TestingUnitb$10,000 0 units1 $0$0 $0Desk Audit $250 2 audits1 $500$2,000 ($1,500)Mill Laborc$71.36 141 hours1 $10,062$38,962963($28,900901)Lost Productd$8.96 71 panels1 $636645$2,365374($1,729)First Year Total$23,441980$54,74855,287($31,306)Subsequent YearsRe-certification Fee $3,700 1 fee1 $3,700$6,000 ($2,300)TPC Audit $450 1 audit1 $450$1,800 ($1,350)TPC Audit Travel $1,500 1 audit1 $1,500$1,500 $0TPC Testing $480 1 test12$480960$1,9202,400($1,440)TPC Testing Shipping $50 1 shipment12$50100$200250($150)Desk Audit $250 0 audits1 $0 $2,000 ($2,000)Mill Labore$71.36 4.5 hours1 $321 $38,962963($38,641)Lost Productf$8.96 1 panel12$918$2,365374($2,356)Subsequent Year Total$6,5107,049$54,74855,287($48,237238)a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testingfrequencies are those required by the TPC and maybe more frequent than TSCA Title VI requires.b. Purchasing and setting up a small chamber test has a one-time cost of approximately $10,000.c.84hourseachfor the initial audit,and second routine TPC audit (8 hours total),0.5 hourseachto prepare shipping for the qualifying test, 40 hours for developing the quality control systems, 4hours for theandsecond audit,(1 hour total),1 hour per desk audit for 2 months,for NAF products (2 hours total),and 2 hours a day, 5 days a weekto test samples for 13 weeks of quality controltesting.(130 hours total).d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale testing, and 1 panel for the second large scaletest.e. 4 hours for the on-site audit and 0.5 hours to ship samples.f. 1 panel for annual large scale testing.Sources:U.S. Bureau of Labor Statistics 2010b,Personal Communication with CPA 2011, Personal Communication with HPVA 2011b,RISI 2011cSources: BLS, 2010;Communications with CPA and HPVA, 2011; RISI, 2010..

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### Table 2-41: Annual Testing and Certification Costs for Wood Veneer Laminators Existing Certification(s) : One Uncertified Product – New Certification(s) : One

Standard Product

Cost Category Unit Cost Number of Units Repetitions for Product Types Total Cost

First Year
Initial Certification Fee $6,000 1 fee 1 $6,000 Qualifying Test $480 5 tests 1 $2,400
Correlation Test $71.36 10 tests 1 $714 Qualifying Test Shipping $200 1 shipment 1 $200 TPC Audit $450 4 audits 1 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 3 tests 1 $1,440 TPC Testing Shipping $50 3 shipments 1 $150 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 Desk Audit $250 8 audits 1 $2,000

Mill Labor a $71.36 590 hours 1 $42,102

Lost Product b $15.68 268 panels 1 $4,202

First Year Total $72,508 

### Subsequent Years
Re-certification Fee $6,000 1 fee 1 $6,000 TPC Audit $450 4 audits 1 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 4 tests 1 $1,920 TPC Testing Shipping $50 4 shipments 1 $200 Desk Audit $250 8 audits 1 $2,000

Mill Labor c $71.36 546 hours 1 $38,963

Lost Product d $15.68 264 panels 1 $4,140 Subsequent Year Total $56,522

a. 8 hours for the initial audit, 4 hours each for 3 routine TPC audits (12 hours total), 0.5 hours each to prepare shipping for the qualifying test

, and the 3 other TPC tests (2 hours total), 40 hours for developing the quality control systems, 4 hours for other
quart erly audits, 1 hour per monthly desk audit for the other 8 months

, (8 hours total), and 2 hours a day to test samples for 52 weeks of quality control testing

. (520 hours total). b. 5 panels for qualifying testing, 1 panel a day for 52 weeks of small scale quality control testing, and 1 panel for each quarterly large scale chamber TPC test

. (excluding the first quarter in year 1).

c. 4 hours each for other quarterly routine TPC audits (16 hours total), 0.5 hours each to prepare for shipping the quarterly

audits

, TPC tests (2 hours total), 1 hour per desk audit for the other 8 months

, (8 hours total), and 2 hours a day to select and ship test samples for 52 weeks of quality control testing

. (520 hours total). d. 1 panel a day for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test. Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011, Personal

Communication with HPVA 2011b

, RISI 2011c BLS, 2010; Communications with CPA and HPVA, 2011; RISI,

2010.

. 

### 1593

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### 1594 Table 2-42: Annual Testing and Certification Costs for Wood Veneer Laminators Existing Certification(s) : Two Uncertified Products – New Certification(s) : Two

Standard Products

Cost Category Unit Cost Number of Units Repetitions

for Product

Types Total Cost

First Year
Initial Certification Fee $6,000 1 fee 1 $6,000 Qualifying Test $480 5 tests 2 $4,800 Correlation Test $71.36 10 tests 2 $1,427 Qualifying Test Shipping $200 1 shipment 2 $400 TPC Audit $450 4 audits 1 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 3 tests 2 $2,880 TPC Testing Shipping $50 3 shipments 2 $300 Small Chamber Testing Unit $10,000 1 unit 1 $10,000 Desk Audit $250 8 audits 1 $2,000

Mill Labor a $71.36 590 hours 1 $42,102

Lost Product b $15.68 268 panels 2 $8,404

First Year Total $81,614 

### Subsequent Years
Re-certification Fee $6,000 1 fee 1 $6,000 TPC Audit $450 4 audits 1 $1,800 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 4 tests 2 $3,840 TPC Testing Shipping $50 4 shipments 2 $400 Desk Audit $250 8 audits 1 $2,000

Mill Labor c $71.36 546 hours 1 $38,963

Lost Product d $15.68 264 panels 2 $8,279

Subse q uent Year Total $62,782

a. 8 hours for the initial audit, 4 hours each for 3 routine TPC audits (12 hours total), 0.5 hours each to prepare shipping for the qualifying test

, and the 3 other TPC tests (2 hours total), 40 hours for developing the quality control systems, 4 hours for other quarterly audits, 1 hour per monthly desk audit for the other 8 months

, (8 hours total), and 2 hours a day to test samples for 52 weeks of quality control testing

. (520 hours total).
b. 5 panels for qualifying testing, 1 panel a day for 52 weeks of small scale quality control testing, and 1 panel for each quarterly large scale chamber TPC test

. (excluding the first quarter in year 1).

c. 4 hours each for other quarterly routine TPC audits (16 hours total), 0.5 hours each to prepare for shipping the quarterly audits, TPC tests (2 hours total), 1 hour per desk audit for the other 8 months

, (8 hours total), and 2 hours a day to select and ship test samples for 52 weeks of quality control testing

. (520 hours total). d. 1 panel a day for 52 weeks of small scale testing, and 1 panel for each quarterly large scale test. Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011, Personal

Communication with HPVA 2011b

, RISI 2011c BLS, 2010; Communications with CPA and HPVA, 2011; RISI,

2010.

. 

### 1595

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### 1596 Table 2-43: Annual Testing and Certification Costs for Wood Veneer Laminators a


### Existing Certification(s) : One Uncertified Product – New Certification(s) : One NAF

Product

Cost Category Unit Cost Number of Units Repetitions for Product Types Total Cost

First Year
Initial Certification Fee $6,000 1 fee 1 $6,000 Qualifying Test $480 5 tests 1 $2,400
Correlation Test $71.36 10 tests 1 $714 Qualifying Test Shipping $200 1 shipment 1 $200
TPC Audit $450 2 audits 1 $900 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 1 test 1 $480 TPC Testing Shipping $50 1 shipment 1 $50 Small Chamber Testing Unit $10,000 1 unit 1 $10,000
Desk Audit $250 2 audits 1 $500

Mill Labor b $71.36 185 hours 1 $13,202

Lost Product c $15.68 71 panels 1 $1,113

First Year Total $37,058 

### Subsequent Years
Re-certification Fee $3,700 1 fee 1 $3,700
TPC Audit $450 1 audit 1 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 1 test 1 $480 TPC Testing Shipping $50 1 shipment 1 $50

Mill Labor d $71.36 4.5 hours 1 $321

Lost Product e $15.68 1 panel 1 $16 Subsequent Year Total $6,517
a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale te sting. Testing frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires. b. 8 hours for the initial audit, 4 hours for a TPC routine audit, 0.5 hours each to prepare shipping for the qualifying test

, and the subsequent TPC test (1 hour total), 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hour per desk audit for 2 months, audits (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing

. (130 hours total). c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale t est. d. 4 hours for the on-site audit and 0.5 hours to ship samples. e. 1 panel for annual large scale testing.
Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011, Personal

Communication with HPVA 2011b

, RISI 2011c Sources: BLS, 2010; Communications w ith CPA and HPVA,
2011; RISI, 2010.

. 

### 1597

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### 1598 Table 2-44: Annual Testing and Certification Costs for Wood Veneer Laminators a


### Existing Certification(s) : Two Uncertified Products – New Certification(s) : Two NAF

Products

Cost Category Unit Cost Number of Units Repetitions for Product Types Total Cost

First Year
Initial Certification Fee $6,000 1 fee 1 $6,000 Qualifying Test $480 5 tests 2 $4,800 Correlation Test $71.36 10 tests 2 $1,427 Qualifying Test Shipping $200 1 shipment 2 $400
TPC Audit $450 2 audits 1 $900 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 1 test 2 $960 TPC Testing Shipping $50 1 shipment 2 $100 Small Chamber Testing Unit $10,000 1 unit 1 $10,000
Desk Audit $250 2 audits 1 $500

Mill Labor b $71.36 185 hours 1 $13,202

Lost Product c $15.68 71 panels 2 $2,227

First Year Total $42,015 

### Subsequent Years
Re-certification Fee $3,700 1 fee 1 $3,700
TPC Audit $450 1 audit 1 $450 TPC Audit Travel $1,500 1 audit 1 $1,500 TPC Testing $480 1 test 2 $960 TPC Testing Shipping $50 1 shipment 2 $100

Mill Labor d $71.36 4.5 hours 1 $321

Lost Product e $15.68 1 panel 2 $31 Subsequent Year Total $7,062
a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale te sting. Testing frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires. b. 8 hours for the initial audit, 4 hours for a TPC routine audit, 0.5 hours each to prepare shipping for the qualifying test

, and the subsequent TPC test (1 hour total), 40 hours for developing the quality control systems, 4 hours for the second audit, 1 hour per desk audit for 2 months, audits (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing

. (130 hours total). c. 5 panels for qualifying testing, 1 panel a day for 13 weeks of small scale testing, and 1 panel for the second large scale t est. d. 4 hours for the on-site audit and 0.5 hours to ship samples. e. 1 panel for annual large scale testing.
Sources: U.S. Bureau of Labor Statistics 2010b

, Personal Communication with CPA 2011, Personal

Communication with HPVA 2011b

, RISI 2011c Sources: BLS, 2010; Communications with CPA and HPVA,
2011; RISI, 2010.

. 

### 1599 2.2.5.1 Summary of Estimated Testing and Certification Costs 

### 1600

1601 Table 2-45 summarizes the estimated actual and incremental costs incurred by mills for 1602 complying with the testing and cer tification requirements of TSCA Ti tle VI. As described above, mills 1603 with existing CARB-certified product lines will be incurring some testing and certifications costs in the 1604 baseline. The incremental costs of the rule represent the actual costs minus baseline costs. 1605

1606

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### Table 2-45: Summary of Annual Testing and Certification Costs by Mill Type

First Year Subsequent Years
Existing Certifications Certification Sought Actual

Costs Incremental

Costs Actual Costs Incremental

Costs
Hardwood Plywood Mills a nd Wood Veneer Laminators

2 Uncertified Change 2 to NAF a $42,015 $42,015 $7,062 $7,062

2 Uncertified Change 2 to NAF (SFCC) b $33,460 $33,460 $7,062 $7,062

2 Uncertified Change 2 to Nonexempt Standard

a $81,614 $81,614 $62,782 $62,782

2 Uncertified Change 2 to Standard (SFCC) b $72,435 $72,435 $61,950 $61,950

2 Standard Maintain 2 Standard c $72,782 $10,832 $62,782 $832

2

N onexemp t Standard Change 2 to NAF NAF d $38,876 ($23,074) $7,062 ($54,887)

2 ULEF Change 2 to

N onexempt Standard e $72,782 $62,124 $62,782 $52,124

1 ULEF and 1 NAF Change ULEF to NAF d,e $ 31,619 32,14

9 $ 22,501 23,128 $ 6,517 7,047 ($1, 958 974 )

1 ULEF and 1 NAF Change 2 to Nonexempt $72,782 $63,683 $62,782 $53,761

2 ULEF Change 2 to NAF NAF d $36,576 $ 23 25 ,918 $7,062 ($3,595)



### Particleboard and MDF Mills

2 Uncertified Change 2 to Nonexempt $78,01 2 $78,012 $59,233 $59,233

2 Uncertified Change 2 to NAF $41,061 $41,061 $7,049 $7,049

1 Uncertified and 1

N onexemp t Standard Change Uncertified to

N onexempt Standard $ 57,567 59,93

3 $ 7,305 5,185 $ 54,748 59,233 $4,485

2 ULEF Change 2 to

N onexempt Standard e $59,233 $48,630 $59,233 $48,630

1 ULEF and 1 NAF Change 2 to Nonexempt $59,233 $50,246 $59,233 $50,246

1 Uncertified and 1

N onexemp t Standard Change 2 to NAF NAF d $27,921 ($26,827) $7,049 ($47,699)

2 ULEF Change 2 to NAF NAF d $25,621 $15,017 $7,049 ($3,555)

2

N onexemp t Standard Change 2 to NAF NAF d $27,921 ($31,312) $7,049 ($52,184)

1 ULEF and 1 NAF Change ULEF to NAF d,e $ 21,142 22,30

8 $ 12,693 13,321 $ 6,510 7,049 ($1,938)

1

N onexemp t Standard

and 1 NAF Change Nonexempt Standard to

N AF NAF d $23, 442 980 ($31,306) $ 6,510 7,049 ($48,238)



### Wood Veneer Laminated Product Producers

1 Uncertified Change 1 to Nonexempt Standard

a $72,508 $72,508 $56,522 $56,522

2 Uncertified Change 2 to Nonexempt Standard

a $81,614 $81,614 $62,782 $62,782

1 Uncertified Change 1 to NAF a $37,058 $37,058 $6,517 $6,517

2 Uncertified Change 2 to NAF a $42,015 $42,015 $7,062 $7,062 Standard product certification is for Phase 2 emissions standards. a. These estimates apply to the options that require mills to hold tested lots until the results are available (all options oth er than Option SFCC). Mills without a small chamber unit are assumed to comply with this requirement by purchasing test chambers and conducti ng daily on-site QC testing, resulting in the incremental costs presented here. b. Under Option SFCC panels can be shipped before test results are available. Therefore, hardwood plywood mills are assumed to have the TPC perform the quality control testing on a weekly basis. Under the other options, hardwood plywood mills are assumed to perf orm their own daily testing to avoid having to wait for weekly test results to be completed before shipping tested lots. c. There are no incremental costs for this certification Option SFCC. d. Applies to options where NAF emissions standards are required e. Applies to options that do not allow ULEF exemption


### 1607

1608 Formatted Table

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## 2.3 Estimated Costs for Stock Hardwood Plywood, MDF, and Particleboard 1609


## Producers 1610

1611 This section presents the potential costs to stoc k hardwood plywood, medium density fiberboard 1612 (MDF) and particleboard producers under several analytical options. Section 2.3.1 presents the estimated 1613 costs to composite wood panel producers for making cha nges to raw materials. Section 2.3.2 presents the 1614 estimated costs of testing and third party certificati on for composite wood panel producers. Finally, the 1615 total estimated costs for composite wood panel producers are presented in section 2.3.3. 1616

1617 2.3.1 Costs of Changes to Raw Material s for Composite Wood Panel Producers 1618

1619 This section presents the estimated costs to stock hardwood plywood (section 2.3.1.1), MDF 1620 (section 2.3.1.2), and particleboard (section 2. 3.1.3) producers for making changes to production 1621 processes and raw materials. 1622

1623 2.3.1.1 Stock Hardwood Plywood Producers Production Processes and Raw Materials Costs 

### 1624

1625 For stock hardwood plywood producers that are not compliant with the emissions standards in the 1626 baseline, the costs associated with changing productio n processes and raw materials are estimated as the 1627 costs of switching from UF to PVA resin systems and switching from conventional to lower emitting 1628 cores. Because the emissions standard for hardwood plywood (0.05 ppm) is lower than the standards for 1629 particleboard (0.09 ppm) and MDF (0.11 to 0.13 ppm), hardwood plywood made with a certified 1630 particleboard or MDF core could conceivably exceed the emission standard even if a NAF resin such as 1631 PVA was used to affix the veneer to the core. (Whether this occurs in practice depends on how 1632 effectively the veneer acts as a barrier to the release of formaldehyde, and how far below the standards the 1633 actual emissions from the core are.) 1634

1635 This analysis uses the term “ low emission cores ” to mean cores with emissions low enough that 1636 hardwood plywood made from them meets the applicable emission standard. For the standard 1637 certification, low emission cores are assumed to in clude certified veneer co re, particleboard and MDF 1638 cores certified as ULEF under the CARB ATCM, and particleboard and MDF core s certified as NAF. 1639 For analytical options requiring all products to meet NAF emission levels, low emission cores would 1640 include particleboard, MDF and vene er cores certified as NAF. 1641

1642 Hardwood plywood producers switching from UF to PVA resins and low emission cores would 1643 not need to make any significant modifications or upgrades to existing equipment or processes because 1644 PVA resins are generally a “drop-in” technology for mills currently using UF. Thus, the estimated raw 1645 material costs are only for purchasing the more expensive resins and cores. Note that switching to PVA 1646 resins is just one possibility for achieving compliance. Some producers may achieve compliance by using 1647 enhanced urea formaldehyde resins, melamine-urea-formaldehyde (MUF) resins, soy-based resins, or 1648 other resin systems. However, the cost of sw itching to PVA resins can provide a reasonable 1649 approximation for the compliance cost associated w ith changing raw materials and production processes 1650 and therefore is the basis for the cost estimates in this analysis. Note also that not all mills will 1651 necessarily have to switch to NAF or ULEF cores in order to meet the Phase 2 emissions standard for 1652 hardwood plywood. 1653

1654 Number of Hardwood Plywood Mills and Affected Production Volume 

### 1655

1656 EPA identified 33 mills (owned by 27 firms) that appear to manufacture stock hardwood plywood 1657 panels subject to the TSCA Title VI emissions requi rements. Based on a review of CARB’s list of 1658 certified mills, 26 of the 33 hardwood plywood st ock panel mills identified by EPA are certified to 1659

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### produce CARB compliant products (2011b). This implies that there are 7 stock plywood mills that are 1660 not CARB certified and that are expected to incur compliance costs to become certified due to the TSCA 1661 Title VI regulation. For the purpose of this analysis it is also assumed that all 7 of these mills are three1662 ply mills (which buy cores and finish them with hardwood veneer). 1663

1664 In addition to the 33 hardwood plywood mills, EPA identified another 8 mills (owned by 7 firms) 1665 that manufacture engineered wood flooring. Based on a review of CARB’s list of certified mills, 4 are 1666 certified to produce CARB compliant products ( 2011c 2011b ). 1667

1668 According to CARB’s (2011b ) ) list of certified mills, 12 mills (including engineered wood 1669 flooring mills) are certified to produce NAF hardwood plywood – for the purpose of this analysis these 1670 mills are assumed to produce NAF product exclusively. Note that additional CARB certified mills might 1671 have compliance costs if they produce some product lines that are not certified when the TSCA Title VI 1672 requirements take effect in 2013. EPA is not aware of any mills in this situation, but the compliance costs 1673 for individual mills producing some CARB certified product and some product not CARB certified would 1674 be expected to be lower than the costs presented here. 1675

1676 According to U.S. ITC (2008), hardwood plyw ood production in 2006, including engineered 1677 wood flooring, was estimated to be 1,786 thousand cubic meters, or 2,007 mmsf on a 3/8" basis. 1678 Engineered wood flooring production was estimated to be 258 mmsf in 2006 and it is estimated that about 1679 30 percent of engineered wood fl ooring production is manufactured as a wood veneer laminated product 1680 (Personal Communication with HPVA 2011a) and ther efore 77 mmsf of engineered wood flooring 1681 production is accounted for as wood veneer lamina ted product instead of hardwood plywood for the 1682 purpose of this analysis. Thus, excluding the wood veneer laminated product results in an estimated 2006 1683 domestic production for hardwood plywood of 1,930 mill ion square feet on a 3/8" basis. It is estimated 1684 that current production levels are about 60 percent of their 2006 levels, or about 1,158 mmsf on a 3/8" 1685

basis. 1686

1687 Table 2-46 presents the estimated production affected by analytical option. These results are 1688 estimated by combining the production estimates described above and the emissions standards and levels 1689 reported by mills in EPA’s (2010a) Pressed Wood Manufacturing Industry Survey (PWMIS). EPA 1690 administered this survey between June and October 2010 to domestic producers of composite wood 1691 panels. The survey achieved a response from 33 hardwood plywood mills that received the survey. 18 

### The 1692 survey asked about current emissions levels and about planned levels. Since many composite wood 1693 product mills were in the midst of modifying thei r production technology and raw materials to achieve 1694 compliance with Phase 2 of the CARB ATCM when they completed the questionnaire, using data on their 1695 emission levels at the time they responded to the survey would not accurately reflect the 2013 baseline. 1696 Instead, baseline emission levels are estimated using responses to a question in the survey about the 1697 emissions levels mills planned to achieve within the next three years of when they completed the survey 1698 (i.e., three years from 2010). These emissions levels were weighted by the production levels the mills 1699 reported in the survey, in order to estimate the average emission levels by certification standard. The 1700 survey data were also used to estimate the share of total production volume represented by products 1701 meeting each of the emissions standards. 1702

1703

18 The number of mills for each product type is limited to th ose that are subject to TSCA Title VI, and does not include mills that only produce products that are exempted or not otherwise covered by TSCA Title VI (such as curved plywood, wood packaging, and molded products that do not qualify as panels). The response rate includes mills that only responded to a brief phone questionnaire, which coll ected information about the compliance standards being achieved, but not specific emissions levels. Field Code Changed

Field Code Changed

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### Table 2-46: Hardwood Plywood Production Affected By Analytical Option (mmsf)

Baseline Emission

Standard Production

Share Production

Level Affected Production
Options SI, SE,
SP, SC, SCR,
SEUR, SFCC,

and SCR SCUR Options CI and

CE Options NI and

NE

None 0.40% 

### 4.6 4.6 4.6 4.6

CARB 1 -



### - - - -

CARB 2 and CARB ULEF a 60.20% 

### 697.1 - - 697.1

CARB NAF 39.40% 

### 456.3

- - -

Total 100.00% 

### 1,158.0 4.6 4.6 701.7

a Hardwood plywood mills meeting CARB 2 and CARB ULEF we re grouped together in the CARB 2 category. Several hardwood plywood mills appeared to be meeting CARB ULEF st andards but did not report this in their response. For example, they listed certification standard as “CARB 2” bu t resin type as “ULEF” and/or reported maximum emissions that satisfy ULEF requirements. Due to difficulties in dist inguishing between CARB 2 and CARB ULEF product lines in the survey responses, and the fact that emissions levels a ppeared similar among mills reporting either CARB 2 or CARB ULEF certification standards, these mills were grouped together.

Option SCR SCUR is the proposed option.

Source:U.S. Environmental Protection Agency 2010a.



### 1704 Hardwood Plywood Producer Costs for Changing Raw Materials 

### 1705

1706 For cost estimation purposes, it is assumed that mills using urea formaldehyde (UF) resins in the 1707 baseline will switch to polyvinyl acetate (PVA) resins in order to meet the emissions standards. 19 

### Some 1708 mills may also have to switch to a low emitting core to meet the emissions standard. The main steps to 1709 estimating the cost increase resulting from the TSCA Title VI rule for stock hardwood plywood mills 1710

without baseline CA RB certification are presented below: 1711

1712

1. Estimate the total production volume from facilities that are expected to continue to use UF resins 1713

in the absence of a national rule. 1714

2. Estimate the unit cost of switching from UF to PVA resins. 1715

3. Estimate unit cost of switching from a CARB certified core to a low emission core. 1716

4. Estimate the cost of third party certification and compliance testing. 1717

5. Estimate the average cost per firm by multiplying the unit costs with the typical production 1718 volume per firm under different scenarios for the raw materials changes that firms may need to 1719

make to become certified. 1720

Note that switching to PVA resins is just on e possibility for achieving compliance. Some 1721 producers may achieve compliance by using enhanced urea formaldehyde resins, melamine-urea1722 formaldehyde (MUF) resins, soy-based resins, or other resin systems. However, the cost of switching to 1723 PVA resins can provide a reasonable approximation for the compliance cost associated with changing raw 1724 materials and production processes and therefore is the basis for the cost estimates in this analysis. 1725

1726

1727

19 Note that switching to a resin system other than PVA may be a lower cost compliance strategy. Using enhanced UF resins and soy-based resins are proven compliance strate gies that may be less costly for some manufacturers.

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### Production Volume Switching to PVA Resins 1728

1729 As described above, it is estimated that only 0.4 percent of domestic baseline hardwood plywood 1730 production will not be CARB certified in the absence of the TSCA Title VI rule. For the purpose of this 1731 analysis it is assumed that about half of the product that is not CARB certified is already being produced 1732 using PVA resins. It is assumed that these products already meet the CARB Phase 2 emission standards, 1733 but that the producers have not chosen to incur th e costs of CARB’s third-pa rty certification program 1734 because the products are not sold into California. 1735

1736

It is assumed that the other half of the uncertif ied product is being produced with UF resins, and 1737 that the product exceeds the CARB Phase 2 emission limits. Thus, 0.2 percent of stock hardwood 1738 plywood production, or 2,300 msf, is assumed to be subject to costs associated with changing resin 1739 systems under the statutory option. Under options NI a nd NE, in addition to the 2,300 msf of uncertified 1740 production switching resins, the 697,100 ms f of production that is currently CARB 2 or ULEF certified 1741

but not NAF certified is assumed to need to switch resin systems, for a total of 699,400 msf switching to 1742 NAF resins. Firms using UF resins in the baseline are assumed to switch to PVA resins to meet the 1743

TSCA Title VI emissions standards. PVA resins are a common resin choice of smaller mills, and are a 1744 no-added formaldehyde (NAF) resin. 1745

1746 Additional Cost of PVA Resins 1747

1748 Hardwood plywood mills switching from UF to PVA resins would not need to make any 1749 significant modifications or upgrades to existing equipment or processes because PVA resins are 1750 generally a “drop-in” technology for mills currently using UF. The only costs estimated are for 1751 purchasing the more expensive resin. 1752

1753 The additional cost to hardwood plywood mills for switching from UF to PVA resin depends on 1754 the glue spread and the total surface area of the finished panels produced. It is assumed that these mills 1755 apply two glue lines: one to adhere the face panel and the other to adhere the back panel. The weight of 1756 each glue line is about 30 pounds per thousand square feet (msf) of plywood produced, and PVA resin 1757 costs about $0.50 per pound more than UF resin ( Personal Communication with Evergreen Engineering 1758

2009

. ). It is assumed that the panels made by these mills average 5/8 inches thick. 20 

### Therefore, the extra 1759 cost of using PVA can be estimated on a 5/8” basis as follows: 1760

1761 Additional cost of PVA (5/8” basis) = (30 pounds/msf of glue line) x (2 glue lines) x ($0.5) = $30 1762 per msf of plywood produced. 1763

1764 Since hardwood plywood production volume is tabulated on a 3/8 inches basis, the following conversion 1765

is needed to estimate the additional cost of PVA: 1766

1767 Additional cost of PVA (3/8” basis) = ($30/msf) x (.625”/.375”) = $50/msf of plywood produced. 1768

1769 As a result, these small mills converting their production from UF resins to PVA resins would 1770 incur an additional cost of $50/msf of plywood produced on a 3/8” basis. 1771

1772

1773

1774

20 Common panel thicknesses range from 3/8 inch to 3/4 inch. A 5/8 inch basis is used to represent the average across all

mills.

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### Production Volume Switching to Low Emission Cores 1775

1776 Since nearly all domestic core suppliers are manufacturing only CARB certified products, 1777 virtually the only source of cores that are not CARB certified would be imports. Given this, the baseline 1778 level of production using cores that are not certified may be near zero. However, in order to meet the 1779 hardwood plywood emissions standards, some ha rdwood plywood producers using CARB certified 1780 particleboard or medium density fiberboard (MDF ) cores may need to switch to ultra-low emitting 1781 formaldehyde (ULEF) or NAF cores. This is because the emissions standards are higher for particleboard 1782 and MDF than for hardwood plywood. 21 

### In addition, 2 percent of engineered wood flooring producers 1783 utilize composite cores (Personal Communication with HPVA 2011a), and would need to make the 1784 switch to low emission cores, as well. 1785

1786 This analysis estimates the percentage of hardwood plywood and engineered wood flooring 1787 production that would need to switch to low emission cores in three steps: 1788

1789

1. The percentage of hardwood plywood and engineered wood flooring production that use MDF 1790 and particleboard for cores are estimated from the 2007 U.S. Economic Census (U.S. Census 1791 Bureau 2009e) data on the value of raw materials used for production 22 

### 1792

2. These percentages are adjusted to account for th e baseline use of NAF or ULEF cores with the 1793 percentage of domestic MDF and particleboard production that is estimated to be CARB NAF or 1794 ULEF certified, estimated from EPA’s (2010a) survey of composite wood product producers. 1795

3. The estimated percentage of cores that must be switched to low emission cores is applied to the 1796 estimated total production volume. 1797

1798 Table 2-47 presents the estimated production that would need to switch to low emission cores by 1799 analytical option. The resulting es timates and a detailed description of the underlying calculations are 1800 presented below in Table 2-47. 1801

21 The Phase 2 standards are 0.05 ppm for hardwood plywood, 0.09 ppm for particleboard, 0.11 ppm for MDF, and 0.13 ppm for thin MDF.

22 The mix of composite wood products consumed was estimated using U.S. Census data on the value of materials

consumed. Values were converted to volumes using prices of $495, $535, and $335 per msf for hardwood plywood, MDF, and particleboard, respectively. The price of hardwood plywood was estimated using the total 2007 export values and quantities from U.S. ITC (2011) (HTS codes 441232, 441299, and 441231). The price of MDF and particleboard are from Crow’s February 18, 2011 Weekly Panel Prices (RISI 2011b).*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-791802Table 2-47: Hardwood Plywood Production Switching to Low Emission CoresAnalyticalOptionProduction(mmsf,3/8”)ProductionSwitching toLow EmissionCoresDescription of Estimated Percentagesa, b(%) (mmsf)Options SI,SE, SP, SC,SCR,SEUR,SFCC,andSCRSCUR4.632.3%1.5Based on conversations with HPVA (2011a), 40% of hardwood plywood stock panels and 2% of engineered wood flooringare composite core. It was estimated that the mix of MDF and particleboard consumed in the Hardwood Veneer and PlywoodIndustry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. It was also estimated that 86.1% and 90.5% ofMDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, the percentage of hardwood plywoodstock panels switching to low emission cores (35.48%) is calculated as the sum of the two products of: (1) 40%, 40.9%, and86.1%, and (2) 40%, 59.1%, and 90.5%. Similarly, the percentage of engineered wood flooring switching to low emissioncores (1.77%) is calculated as the sum of the two products of: (1) 2%, 40.9%, and 86.1%, and (2) 2%, 59.1%, and 90.5%.Since engineered wood flooring represents about 9.4% of hardwood plywood production, the percentage of productionswitching to low emission cores overall is 32.3%, calculated as the sum of the two products: (1) 1.77% and 9.4% and (2)35.48% and 90.6%.Options CIand CE - - -All mills are assumed to be able to meet these emissions standards without any changes to production processes or rawmaterials.Options NIand NE 701.7 72.1% 505.9Based on conversations with HPVA (2011a), 40% of hardwood plywood stock panels and 2% of engineered wood flooringare composite core. It was estimated that the mix of MDF and particleboard consumed in the Hardwood Veneer and PlywoodIndustry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. Thus, the mix of veneer core, MDF andparticleboard for stock hardwood plywood panels is about 60.0% hardwood plywood, 16.4% MDF and 23.6% particleboard.Similarly, the mix of veneer core, MDF and particleboard for engineered wood flooring is about 98.0% hardwood plywood,0.8% MDF and 1.2% particleboard. It was also estimated that 60.6%, 90.7%, and 93.3% of HWPW, MDF and particleboarduse added formaldehyde resins, respectively. Thus, the percentage of hardwood plywood stock panels switching to NAFcores (73.25%) is calculated as the sum of the three products: (1) 60% and 60.6%, (2) 16.4% and 90.7%, and (3) 23.6% and93.3%. Likewise, the percentage of engineered wood flooring switching to NAF cores (61.23%) is calculated as the sum ofthe three products: (1) 98% and 60.6%, (2) 0.8% and 90.7%, and (3) 1.2% and 93.3%. Since engineered wood flooringrepresents about 9.4% of hardwood plywood production, the percentage of production switching to NAF cores overall is72.1%, calculated as the sum of the two products: (1) 61.23% and 9.4% and (2) 73.25% and 90.6%.aThe mix of composite wood products consumed were estimated using 2007 U.S. Census(2009e)data on the value of materials consumed. Values were converted to volumes using 2007$ prices of$480, $445, and $315 for hardwood plywood, MDF, and particleboard, respectively. The price of hardwood plywood was estimated using the total 2007 export values and quantities from U.S. ITC(2011)data (HTS codes 441232, 441299, and 441231). The price of MDF and particleboard utilized are July 2007 prices from RISI’s(2009)MDF and Particleboard Commentary.bThe percentages of composite platforms not made with NAF or ULEFresins was estimated from EPA’s (2010a) survey of composite wood product producers.This analysis uses the term “low emission cores” to mean cores with emissions low enough that hardwood plywood made from them meets the applicable emission standard. For thestandardcertification, low emission cores are assumed to include certified veneer core, particleboard and MDF cores certified as ULEF under the CARB ATCM, and particleboard and MDF cores certified asNAF. For analytical options requiring all products to meet NAFemission levels, low emission cores would include particleboard, MDF and veneer cores certified as NAF.OptionSCRSCURis the proposed option.1803

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### Additional Cost of Low Emission Cores 1804

1805 The average cost of a Phase 2 certified core is approximately $300/msf, and NAF cores currently 1806 cost 15 to 20 percent more than Phase 2 platforms. 23 

### So a high end estimate of the additional cost 1807 associated with purchasing low emission cores is estimated at $45/msf-$60/msf. Although there is 1808 uncertainty about the extent to which hardwood plywood producers would need to switch to low emitting 1809 cores in order to meet the emissions standards, this analysis adopts the conservative assumption (in terms 1810 of being careful not to understate costs) that the cost for switching to low emission cores is $60/msf. 1811

1812 Summary of Hardwood Plywood Producer Costs for Changing Raw Materials 1813

1814 Table 2-48 presents the estimated costs of changing raw materials for hardwood plywood product 1815 producers under the various analytical options. Under options CI and CE there are no estimated material 1816 costs because it is assumed that all mills can achieve CARB 1 emissions requirements with minimal 1817 production and raw materials changes. The total costs are highest under options NI and NE because a 1818 larger share of the production woul d need to switch to NAF cores. Note that the estimated cost of 1819 switching to either the ULEF or NAF core is the same amount ($60). It is assumed that there would not be 1820 a large difference between the cost of ULEF and NAF cores. 1821

1822 Table 2-48: Estimated Costs of Raw Material Changes for Hardwood Plywood Producers, by Analytical Option

Analytical

Option Production Switching to
PVA (msf) Cost of Switching to

PVA (2010$/msf) Production Switching to

Low Emission

Cores (msf) Cost of Switching to

Low Emission

Cores (2010$/msf) Total Annual

Cost of Changing Raw

Materials
(thousands

2010$)
Options SI, SE,
SP, SC a SC, SCR,
SEUR, SFCC,

and SCUR a 2,300 $50 1,500 $60 $205
Options CI and

CE - - - - -
Option NI and

NE b 699,400 $50 505,900 $60 $65,324

a For analytical options SI, SE, SP, SC, SCR, SEUR, SFCC, and SCR SCUR the production switching to a PVA resin was calculated as 1/2 of the uncertified production because it was assumed that half of the uncertified product is already being produced using P VA

resins.

b For analytical options NI and NE, the production switching to a PVA resin was calculated as the sum of half of the uncertified production share and the CARB 2 certified production share. This analysis uses the term “ low emission cores ” to mean cores with emissions low enough that hardwood plywood made from them meets the applicable emission standard. For the standard certification, low emission cores are assumed to include certified ve neer core, particleboard and MDF cores certified as ULEF under the CARB ATCM, and particleboard and MDF cores certified as NAF. For analytical options requiring all products to meet NAF emission levels, low emission cores would include particleboard, MDF and

veneer cores certified as NAF.

Option SCR SCUR is the proposed option.


### 1823
2.3.1.2 MDF Producers Production Processes and Raw Materials Costs 

### 1824

1825 This section presents the estimated costs to MDF producers that are not compliant with a 1826 specified emission standard in the baseline for making the changes to production processes and raw 1827

23 The price and availability of NAF platforms may improve ove r time as the market adjusts to the CARB rule and TSCA

Title VI.

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### materials that would be necessary to achieve that standard. First the number of mills and the volume of 1828 production where changes to production processes and raw materials would be necessary are estimated. 1829 Then the estimated increases in production and raw material costs to MDF producers are presented. 1830

1831

Number of MDF Mills and Affected Production Volume 

### 1832

1833 The MDF market is still recovering from a significant slump that began in 2008. According to 1834 RISI (2011d), MDF consumption was 2,350 million square feet (mmsf) in 2010 and is forecast to increase 1835 1.8 percent in 2011 to 2,390 mmsf and a further 9.7 percent to 2,620 mmsf in 2012. Since the rule is 1836 scheduled to be implemented in 2013 this analysis us es the RISI (2011d) value for 2012, the final year in 1837 the forecast, to estimate the affected domestic MDF production. To estimate U.S. production, the 1838 consumption figure is reduced to account for the 37 percent of domestic consumption that is attributable 1839 to imports according to RISI’s (2011d) forecast share of MDF consumption from imports for 2011. The 1840 resulting estimate of U.S. production utilized in this analysis is 1,850 mmsf. 1841

1842 Table 2-49 presents the estimated production affected for each analytical option. These results 1843 are estimated by combining the production estimates described above and the emissions standards and 1844 levels reported by mills in EPA’s (2010a) Pressed Wood Manufacturing Industry Survey (PWMIS). EPA 1845 administered this survey between June and October 2010 to domestic producers of composite wood 1846 panels. The survey achieved a response from all 20 MDF mills that received the survey (there are 22 1847 domestic MDF mills). 24 

### The survey asked about current emissions levels and about planned levels. Since 1848 many composite wood product mills are were in the midst of modifying their production technology and 1849 raw materials to achieve compliance with Phase 2 of the CARB ATCM , current when they completed the 1850 questionnaire, using data on their emission levels at the time they responded to the survey would not 1851 accurately reflect the 2013 baseline emissions levels. Therefore . Instead , baseline emission levels are 1852 estimated using responses to a question in the survey about the emissions levels mills planned to achieve 1853 within the next three years

. of when they completed the survey (i.e., three years from 2010). These 1854 emissions levels were weighted by the production levels the mills reported in the survey, in order to 1855 estimate the average emission levels by certification standard. The survey data were also used to estimate 1856 the share of total production volume represented by products meeting each of the emissions standards. 1857

1858 Note that all mills reported that they planne d to manufacture only CARB certified products. 1859 Thus, their production costs would only be affected under the analytical option where NAF resins were 1860 required. According to CARB’s list of certified mills, 22 mills are CARB certified, including 7 certified 1861 to produce NAF MDF. Of the 7 mills that are NAF certified, 2 are also certified to produce CARB 2 1862 product manufactured using resins with added-formaldehyde. 1863

1864

24 One mill was not included in the sample because it was brand new and a second MDF mill was not identified until after the survey was conducted. Both mills are CARB 2 certified. The number of mills for each product type is limited to those that are subject to the TSCA Title VI emission standards, and does not include mills that only produce products that are exempted or not otherwise covered by TSCA Title VI (such as curved plywood, wood packaging, and molded products that do not qualify as panels). The response rate includes mills that only responded to a brief phone questionnaire during which information was collected about the compliance standards being achieved, but not the specific emissions levels.

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### Table 2-49: MDF Production Affected By Analytical Option (mmsf)

Baseline Emission

Standard Production

Share Production

Level Affected Production 

### Options SI,
SE, SP, SC,
SCR, SEUR,
SFCC, and

SCR SCUR Options CI

and CE Options NI

and NE

CARB Phase 2 86.10% 

### 1,593 - - 1,593

CARB ULEF 4.60% 

### 85 - - 85

CARB NAF 9.30% 

### 172

- - -

Total 100% 

### 1,850

- - 1,678

Option SCR SCUR is the proposed option.
Sources: U.S. Environmental Protection Agency 2010a and RISI 2011d



### 1865

1866 Estimated Costs for Changing Production Processes and Raw Materials 

### 1867

1868 This analysis assumes that producing NAF MDF is 20 percent more expensive than CARB 2 1869 MDF, or about $110 per msf. 25 

### 1870

1871 Table 2-50: Incremental Increase in Production Costs for MDF By Analytical Option

Baseline Emission

Standard Affected Production (mmsf) Incremental Increase in Production Costs (millions, 2010$)
Options SI,
SE, SP, SC,

SCR,
SEUR,
SFCC, and

S CR SCUR Options

CI and CE Options

NI and NE Options SI, SE,
SP, SC, SCR,
SEUR, SFCC,

and SCR

SCUR ($0/msf) Options CI

and CE ($0/msf) Options NI and NE ($110/msf)

CARB Phase 2 

### - - 1,593 - - $175

CARB ULEF 

### - - 85 - - $9

CARB NAF



### - - - - - -

Total



### - - 1,678
- - $185

Option SCR SCUR is the proposed option.
Sources: U.S. Environmental Protection Agency 2010a and RISI 2011d



### 1872

1873 2.3.1.3 Costs of Changes to Production Processes and Raw Materials for Particleboard Producers 

### 1874

1875 This section presents the estimated costs to particleboard producers that are not compliant with a 1876 specified emission standard in the baseline for making the changes to production processes and raw 1877 materials that would be necessary to achieve that standard. First the number of mills and the volume of 1878 production where changes to production processes and raw materials would be necessary are estimated. 1879 Then the estimated increases in production and raw material costs to particleboard producers are 1880 presented. 1881

1882

1883

25 The analysis assumes that NAF MDF is 20 percent more expe nsive. The MDF price was estimated based on prices of about $567 and $523 msf for the West and East United States, respectively, from the RISI (2011) MDF forecast for March 2012, the final month included. Twenty percent of the average of these two prices is about $110 msf.

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### Number of Particleboard Mills and Affected Production Volume 

### 1884

1885 The particleboard market is still recovering from a significant slump that began in 2008. 1886 According to RISI (2011d), particleboard consumption was 2,570 million square feet (mmsf) in 2010 and 1887 is forecast to increase 3.3 percent in 2011 to 2,650 mmsf and a further 10.3 percent to 2,930 mmsf in 1888 2012. Since the rule is scheduled to be implemented in 2013 this analysis uses the RISI (2011d) estimate 1889 for 2012 to estimate the affected domestic particleboard production, which is the final year included in 1890 RISI’s (2011d) forecast. To estimate U.S. production, the consumption figure is reduced to account for 1891 the 15 percent of domestic consumption that is a ttributable to imports according to RISI’s (2011d) 1892 forecast of particleboard consumption from imports for 2011. The resulting estimate of U.S. production 1893 which is used in this analysis is 2,490 mmsf. 1894

1895 Table 2-51 presents the estimated production affected for each analytical option. These results 1896 are estimated by combining the production estimates described above and the emissions standards and 1897 levels reported by mills in EPA’s (2010a) Pressed Wood Manufacturing Industry Survey (PWMIS). EPA 1898 administered this survey between June and October 2010 to domestic producers of composite wood 1899 panels. The survey achieved a response from all 30 pa rticleboard mills that were identified as operating 1900

in the U.S. 26 

### The survey asked about current emissions le vels and about planned levels. Since many 1901 composite wood product mills are were in the midst of modifying their production technology and raw 1902 materials to achieve compliance with Phase 2 of the CARB ATCM , current when they completed the 1903 questionnaire, using data on their emission levels at the time they responded to the survey would not 1904 accurately reflect the 2013 baseline emissions levels. Therefore . Instead , baseline emission levels are 1905 estimated using responses to a question in the survey about the emissions levels mills planned to achieve 1906 within the next three years

. of when they completed the survey (i.e., three years from 2010). These 1907 emissions levels were weighted by the production levels the mills reported in the survey, in order to 1908 estimate the average emission levels by certification standard. The survey data were also used to estimate 1909 the share of total production volume represented by products meeting each of the emissions standards. 1910

1911 Note that the mills that reported manufacturing product that was not CARB certified also reported 1912 that they planned to manufacture product that met the CARB 2 emissions requirements. That is, they 1913 reported that it was not worthwhile for them to pay for testing and third party certification even though 1914 their products are being manufactured to meet the em issions standards. Thus, their production costs would 1915 only be affected under the analytical option where NAF resins were required. 1916

1917

26 The number of mills for each product type is limited to thos e that are subject to the TSCA Title VI emission standards, and does not include mills that only produce products that are exempted or not otherwise covered by TSCA Title VI (such as curved plywood, wood packaging, and molded produc ts that do not qualify as panels). The response rate includes mills that only responded to a brief phone questionnaire during which information was collected about the compliance standards being achieved, but not the specific emissions levels.

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### Table 2-51: Particleboard Production Affected By Analytical Option (mmsf)

Baseline Emission

Standard Production

Share Production

Level Affected Production

Options SI, SE,
SP, SC, SCR,
SEUR, SFCC,

and S CR SCUR Options CI and

CE Options NI and

NE

None a 0.2% 

### 5 - - 5

CARB Phase 1 b 1.8% 

### 45 45 - 45

CARB Phase 2 88.5% 

### 2,204 - - 2,204

CARB ULEF 2.8% 

### 70 - - 70

CARB NAF 6.7% 

### 167

- - -

Total 100% 

### 2,490 45

- 2, 323 324

a Note that mills reporting manufacturing product that wa s not CARB certified were meeting the CARB 2 emissions levels, which explains why production is only affected under Option NAF.

b Some mills producing product currently certified under CARB 1 reported that they would continue this product line
after the CARB 2 effective date (although it would no longer be certified as CARB 1). Option SCR SCUR is the proposed option.

Sources: RISI 2011a, d, U.S. Environmental Protection Agency 2010a



### 1918 Industry market reports indicate that panels th at are not CARB 2 certified are generally not 1919 available (RISI 2011), implying that few mills are offering product that is not CARB 2 certified. The 1920 analysis assumes that between 10 and 25 percent of the 30 U.S. mills, or between 3 and 7 mills, are 1921 offering product that is not CARB certified and uses the midpoint number of 5 mills for estimating the 1922 cost impacts 1923

1924 According to CARB’s list of certified mills, four mills are certified to produce NAF particleboard 1925 – two of these mills are certified to produce both CARB 2 and CARB NAF particleboard. 1926

1927 Estimated Costs for Changing Production Processes and Raw Materials 

### 1928

1929 This analysis estimates the increased costs for changing production processes and raw materials 1930 to meet the more stringent emissions requirements usin g RISI’s (2011a) data for industrial particleboard 1931 prices in the southeast, where RISI reported producers were more successful in passing through the higher 1932 costs of producing CARB 2 certified particleboard. According to RISI, mills were partially successful in 1933 passing along the higher costs in the fourth quarter of 2010, and are were expected to be more successful 1934 in passing along these costs in the first quarter of 2011, as almost all particleboard supply will would be 1935 CARB 2 certified as of 2011 (RISI 2011a, b). RISI’s (RISI 2011c) historical prices for particleboard 1936 indicate that particleboard prices in the Southeast increased from about $315/msf to $335/msf between 1937 October 1, 2010 and March 18, 2011, an increase of about $20/msf. RISI attributes this increase 1938 primarily to the transition to CARB 2, and therefor e this analysis will use $20/msf as the estimated 1939 increased cost of manufacturing CARB 2 particleboard for these mills (RISI 2011a, b). 1940

1941 This analysis assumes that producing NAF particleboard has twice the incremental costs of 1942 producing CARB 2 particleboard, or $20/msf to tran sition from CARB 2 to CARB NAF and $40/msf to 1943 switch from production that does not meet CARB 2 emissions standards to CARB NAF production. 1944

1945

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### Table 2-52: Incremental Increase in Production Costs for Particleboard By Analytical Option

Baseline

Emissions

Standard Affected Production (mmsf) Incremental Increase in Production Costs (millions, 2010$)

Options SI,
SE, SP, SC,
SCR, SEUR,
SFCC, and

SCR SCUR Options CI

and CE Options NI

and NE Options SI,
SE, SP, SC,
SCR, SEUR,
SFCC, and

SCR

SCUR 

### ($20/msf) Options CI

and CE 

### ($0/msf) Options NI

and NE 

### ($20/msf

from CARB 2; $40/msf

from CARB
1 or None)

None a - - 5 - - $0.2

CARB Phase 1 45 - 45 $0.9 - $1.8

CARB Phase 2 - - 2,204 - - $44.1

CARB ULEF - - 70 - - $1.4

CARB NAF

- - - - - -

Total 45 - 2, 323 324 $0.9

- $47.5

a Note that mills reporting manufacturing product in the “None ” category for emissions standards because they were not certifying their production also reported th at their emissions were below the Title VI emission requirements, and this is why t his production is only affected under options NI and NE.

b Some mills producing product currently certified under CARB 1 reported that they would continue this product line after the CARB 2 effective date (although it would no longer be certified as CARB 1). Option SCR SCUR is the proposed option.

Sources: RISI 2011a, b, U.S. Environmental Protection Agency 2010



### 1946

1947 2.3.1.4 Summary of Production Process and Raw Material Costs for Composite Wood Panel 

### 1948

Producers 

### 1949

1950 Table 2-53 presents a summary of the annualized increase in production process and raw material 1951 costs for composite wood panel producers by analytical option. 1952

1953 Table 2-53: Summary of Incremental Increase in Production Costs for Composite Panel

Producers

Product Type Incremental Increase in

Annual Production Costs (millions, 2010$) 30-Year Annualized Increase
in Production Costs (3% discount rate, millions 2010$) 30-Year Annualized Increase
in Production Costs (7% discount rate, millions 2010$)

Options
SI, SE, SP,
SC, SCR,
SEUR,
SFCC,

and

SCR SCU

R Options

CI and CE Options

NI and NE Options
SI, SE, SP,
SC, SCR,
SEUR,
SFCC,

and

SCR SCU

R Options

CI and CE Options

NI and NE Options
SI, SE, SP,
SC, SCR,
SEUR,
SFCC,

and

SCR SCU

R Options

CI and CE Options

NI and NE

Hardwood Plywood $0.2

- $65.3 $0.2

- $62.2 $0.2

- $60.5

MDF

- - $185.0

- - $176.0

- - $171.2

Particleboard $0.9 - $47.5 $0.9 - $45.2 $0.8 - $43.9

Option SCR SCUR is the proposed option.



### 1954 Formatted Table

Formatted Table

Formatted Table

Formatted Table

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### 1955

1956 2.3.2 Certification and Testing Costs for Composite Wood Panel Producers 1957

1958 Table 2-54 presents a summary of the incremental initial, subsequent year, and annualized costs 1959 associated with testing and certification for the different analytical options under various scenarios for the 1960 products affected. See section 2.2 for a description of how these costs were estimated. 1961

1962 To determine the baseline product certification st atus all mills were assumed to have two product 1963 lines, and the baseline certification status of their prod uct lines was determined by their certification status 1964 according to CARB’s (2011b) list of certified mills and CARB’s (2011c) list of no-added formaldehyde 1965 (NAF) and ultra low emitting formaldehyde (ULEF) exemptions. For example, if a mill only had a Phase 1966 2 certification listed, it was assumed that they had two product lines with the standard certification. 1967 (Standard certification refers to certification where mills are not exempt from any routine testing 1968 requirements, i.e., not NAF or ULEF certification.) Another example is a mill that is listed as Phase 2 1969 certified and also listed as having NAF exempt status would be assumed to have one NAF line and one 1970 standard certification line (NAF ce rtified mills are exempt from some routine testing requirements). The 1971 exception to this is particleboard, where it is assume d that 5 of the 25 particleboard mills with standard 1972 certification status also produce a pr oduct line that is not certified. Mills that certify their products as 1973 ULEF under the CARB ATCM are exempt from some routine testing requirements under the CARB 1974 ATCM. Under the proposed TSCA Title VI rule thes e ULEF exemptions will not be available so these 1975 mills will no longer be exempt from some routine testing unless they obtain NAF certification. The 1976 analysis assumes that mills will seek standard certification for baseline uncertified and baseline ULEF 1977 product lines – with the exception of mills that have one product line that is ULEF certified and another 1978 product line that is NAF certified in the baseline. These mills are assumed to seek NAF certification for 1979 their product line that was ULEF certified in the base line, so they will have two product lines with NAF 1980 certification. Note that switching to NAF certification results in an estimated certification and testing cost 1981 savings because NAF products are not required to be tested as frequently as products with other 1982

certifications. 1983

1984 Under the CARB ATCM mills may ship panels from certified product lines before test results are 1985 available, but under the proposed rule they would have to wait until test results i ndicate that the emissions 1986 standards have been met before shipping a lot that has been tested. MDF and particleboard mills are all 1987 assumed to conduct daily quality control testing on site, so this requirement is not expected to adversely 1988 affect these mills. (Once a quarter these mills will also have to store lots for which a sample has been sent 1989 to a TPC for large chamber testing until the test results indicate that the emissions standards have been 1990 met for the lot that has been tested.) However, CARB certified hardwood plywood mills are assumed to 1991 outsource quality control testing to their TPC. It is uncertain how often hardwood plywood mills ship 1992 product from a lot being tested before the test results are available and therefore it is uncertain how mills 1993 will choose to comply with this requirement. It may be the case that some mills normally maintain a level 1994 of inventory where they would typically not ship any pa nels before test results have been determined for 1995 that lot, but other mills may ship out panels on the same day they are produced. This analysis estimates 1996 the costs of this requirement as the incremental cost of installing a lab on site and conducting daily quality 1997 control testing rather than outsourcing weekly quality control testing to a TPC. (Once a quarter these 1998 mills will also have to store lots for which a sample has been sent to a TPC for large chamber testing until 1999 the test results indicate that the emissions standards have been met for the lot that has been tested.) 2000 Assuming that mills conduct daily on-site testing may ov erstate the costs of this requirement if some mills 2001

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### find it more cost effective to hold products in inventory until test results have been determined by an 2002

outside lab. 2003

2004 To be comparable with the benefits estimates, which were estimated for 30 year period, all costs 2005 were annualized over a 30 year period. The results presented in Table 2-55 are calculated by multiplying 2006 the number of affected entities by the corresponding co st increase or savings presented in Table 2-54. 2007*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-882008Table 2-54: Per Mill Costs for Certifying and Testing Products, by change in product line certification 2010$)AnalyticalOptionProduct TypeBaseline Product Lines(CARB ATCM certification)Post-Rule Product Lines(TSCA Title VIcertification)First YearCostsSubsequentYear Costs30-Year AnnualizedCosts (Annualizedover 30 Years Using3 Percent DiscountRate3 Percent7 PercentSI, SE, SP,SC, andSCRHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.$14,09710,832$14,097832$13,4131,263$13,0461,467Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.$42,015$7,062$8,367$8,972Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.$7,3055,185$4,485$4,401301$4,347200Hardwood Plywood2 prod. with ULEF cert.2 prod. with standard cert.$62,124$52,124$50,065$48,934MDF2 prod. with ULEF cert.2 prod. with standard cert.$48,630$48,630$46,269$45,003Particleboard2 prod. with ULEF cert.2 prod. with standard cert.$48,630$48,630$46,269$45,003Hardwood Plywood1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.$22,50123,128($1,958974)($710695)($10777)MDF1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.$12,69313,321($1,938)($1,154125)($774730)SFCCHardwood Plywood2 prod. without cert.2 prod. with NAF cert.$33,460$7,062$7,964$8,376Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.$5,185$4,485$4,301$4,200SEUR,SFCC, andSCURHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.$10,832$832$1,263$1,467Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.$42,015$7,062$8,367$8,972Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.$5,185$4,485$4,301$4,200CI and CEHardwood Plywood2 prod. without cert.2 prod. with standard cert.$81,614$62,782$60,622$59,412Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.$7,3055,185$4,485$4,401301$4,347200NI and NEHardwood Plywood2 prod. without cert.2 prod. with NAF cert.$42,015$7,062$8,367$8,972Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with NAF cert.($26,827)($47,699)($44,400)($42,687)Formatted TableFormatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-89Hardwood Plywood2 prod. with ULEF cert.2 prod. with NAF cert.$2325,918($3,595)($2,124030)($1,409270)MDF2 prod. with ULEF cert.2 prod. with NAF cert.$15,017($3,555)($2,507)($1,995)Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. $15,017 ($3,555) ($2,507) ($1,995)Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. ($23,074) ($54,887) ($50,723) ($48,577)MDF 2 prod. with standard cert. 2 prod. with NAF cert. ($31,312) ($52,184) ($48,668) ($46,838)Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. ($31,312) ($52,184) ($48,668) ($46,838)Hardwood Plywood1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. with NAF cert.$22,50123,128($1,958974)($710695)($10777)MDF1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. with NAF cert.$12,69313,321($1,938)($1,154125)($774730)MDF1 prod. with standard cert.; 1 prod. with NAF cert.2 prod. with NAF cert.($31,306)($48,238)($45,098)($43,460)Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. ($31,306) ($48,238) ($45,098) ($43,460)Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exemptfrom any ongoing testing requirements (i.e., not ULEFor NAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exemptfrom some of the routine testing requirements. ULEFcertification is available under the CARB ATCM and ULEFcertified millsare exempthave reductions or exemptionsfrom some of the routine testing requirementsunder theCARB ATCM.OptionSCRSCURis the proposed option.20092010Table 2-55: Annualized Costs for Certifying and Testing Products, by analytical option and number of affected mills (thousands,2010$)AnalyticalOptionProduct TypeBaseline Product Lines(CARB ATCM certification)Post-Rule Product Lines(TSCA Title VIcertification)Number ofAffectedFirmsNumber ofAffectedMills30-Year Annualized Costs(Annualized over 30 Years Using3Percent Discount Rate3 Percent7 PercentSI, SE, SP,SC, andSCRHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.810$13413$13015Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$92$99Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$22$2221Hardwood Plywood2 prod. with ULEF cert.2 prod. with standard cert.68$401$391MDF2 prod. with ULEF cert.2 prod. with standard cert.12$93$90Particleboard2 prod. with ULEF cert.2 prod. with standard cert.11$46$45Hardwood Plywood1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.45($43)($10)MDF1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.11($1)($1)Total$783661$776660SFCCHardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$88$92Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$22$21Total$109$113SEUR,SFCC, andSCURHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.810$13$15Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$92$99Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$22$21Formatted TableFormatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-902011Total$126$134CI and CEHardwood Plywood2 prod. without cert.2 prod. with standard cert.911$667$654Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$22$2221Total$689688$675NI and NEHardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $92 $99Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 5 ($222) ($213)Hardwood Plywood2 prod. with ULEF cert.2 prod. with NAF cert.68($1716)($1110)MDF2 prod. with ULEF cert.2 prod. with NAF cert.12($5)($4)Particleboard2 prod. with ULEF cert.2 prod. with NAF cert.11($3)($2)Hardwood Plywood2 prod. with standard cert.2 prod. with NAF cert.810($507)($486)MDF 2 prod. with standard cert. 2 prod. with NAF cert. 8 13 ($633) ($609)Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. 11 20 ($973) ($937)Hardwood Plywood1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. with NAF cert.45($43)($10)MDF1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. with NAF cert.11($1)($1)MDF1 prod. with standard cert.; 1 prod. with NAF cert.2 prod. with NAF cert.11($45)($43)Particleboard1 prod. with standard cert.; 1 prod. with NAF cert.2 prod. with NAF cert.12($90)($87)Total($2,408407)($2,295294)Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exemptfrom any ongoing testing requirements (i.e., not ULEF orNAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exempt from some of the routine testing requirements.ULEFcertification is available under the CARB ATCM andULEF certified millsare exempthave reductions or exemptionsfrom some of the routine testing requirementsunder the CARBATCM.OptionSCRSCURis the proposed option.Formatted Table

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### 2.3.3 Total Costs for Composite Panel Producers 2012

2013 The incremental costs associated with changing production processes and raw materials presented 2014 in Table 2-48, Table 2-50, and Table 2-52 are combined with the certification and testing costs presented 2015

in Table 2-54 and Table 2-55 to estimate the total fi rst and subsequent year costs presented in Table 2-56 2016 and the 30-year annualized costs presented in Table 2-57. Note that the production process and raw 2017 material costs presented in Table 2-48, Table 2-50, a nd Table 2-52 are assumed to be equally distributed 2018 across the mills incurring these costs to calculate the estimates presented in Table 2-56 and Table 2-57. 2019

2020

2021

2022*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-92Table 2-56: Total First and Subsequent Year Costs for CompositePanel Producers, by analytical option and number of affected mills(thousands, 2010$)AnalyticalOptionProduct TypeBaseline Product Lines(CARB ATCM certification)Post-Rule Product Lines(TSCA Title VI certification)Number ofAffectedFirmsNumber ofAffectedMillsTotal CostsFirst YearSubsequentYearsSI, SE, SP,SC, andSCRHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.810$141108$1418Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$667$283Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$937926$922Hardwood Plywood2 prod. with ULEF cert.2 prod. with standard cert.68$497$417MDF2 prod. with ULEF cert.2 prod. with standard cert.12$97$97Particleboard2 prod. with ULEF cert.2 prod. with standard cert.11$49$49Hardwood Plywood1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.45$113116($10)MDF1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.11$13($2)Total$2,513473$1,897765SFCCHardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$573$283Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$926$922Total$1,499$1,205SEUR,SFCC, andSCURHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.810$108$8Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$667$283Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$926$922Total$1,701$1,213CI and CEHardwood Plywood 2 prod. without cert. 2 prod. with standard cert.9 11 $898 $691Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert.3 5 $3726$22Total$934924$713NI and NEHardwood Plywood 2 prod. without cert. 2 prod. with NAF cert.9 11 $21,596 $21,212Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert.3 5 $8,344 $8,240Formatted TableFormatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-93Table 2-56: Total First and Subsequent Year Costs for CompositePanel Producers, by analytical option and number of affected mills(thousands, 2010$)AnalyticalOptionProduct TypeBaseline Product Lines(CARB ATCM certification)Post-Rule Product Lines(TSCA Title VI certification)Number ofAffectedFirmsNumber ofAffectedMillsTotal CostsFirst YearSubsequentYearsHardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert.6 8 $15,562578$15,342MDF 2 prod. with ULEF cert. 2 prod. with NAF cert.1 2 $21,795 $21,758Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert.1 1 $1,711 $1,692Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert.8 10 $18,982 $18,664MDF 2 prod. with standard cert. 2 prod. with NAF cert.8 13 $141,064 $140,792Particleboard 2 prod. with standard cert. 2 prod. with NAF cert.11 20 $33,288 $32,871Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert.4 5 $9,719722$9,597MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert.1 1 $10,895896$10,880MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert.1 1 $10,851 $10,834Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert.1 2 $3,329 $3,295Total$297,136155$295,176Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exemptfrom any ongoing testing requirements (i.e., not ULEFor NAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exemptfrom some of the routine testing requirements.ULEFcertification is available under the CARB ATCM andULEF certified millsare exempthave reductions or exemptionsfrom some of the routine testing requirementsunder theCARB ATCM.OptionSCRSCURis the proposed option.2023Formatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-94Table 2-57: Total Annualized Costs for Composite Panel Producers, by analytical option and number of affected mills (thousands,2010$)AnalyticalOptionProduct TypeBaseline Product Lines(CARB ATCM certification)Post-Rule Product Lines(TSCA Title VI certification)Number ofAffectedFirmsNumber ofAffectedMills30-Year AnnualizedCosts (Annualized over30 Years Using3 PercentDiscount Rate3 Percent 7 PercentSI, SE, SP,SC, andSCRHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.810$13413$13015Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$287$288Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$878$855854Hardwood Plywood2 prod. with ULEF cert.2 prod. with standard cert.68$401$391MDF2 prod. with ULEF cert.2 prod. with standard cert.12$93$90Particleboard2 prod. with ULEF cert.2 prod. with standard cert.11$46$45Hardwood Plywood1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.45($43)($10)MDF1 prod. with NAF cert.; 1 prod. with ULEF cert.2 prod. withstandardNAFcert.11($1)($1)Total$1,834712$1,799682SFCCHardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$283$282Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$878$854Total$1,160$1,136SEUR,SFCC, andSCURHardwood Plywood2 prod. with standard cert.2 prod. with standard cert.810$13$15Hardwood Plywood2 prod. without cert.2 prod. with NAF cert.911$287$288Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$878$854Total$1,178$1,157CI and CEHardwood Plywood2 prod. without cert.2 prod. with standard cert.911$667$654Particleboard1 prod. without cert.; 1 prod. with standard cert.2 prod. with standard cert.35$22$2221Total$689688$675NI and NEHardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $20,200 $19,657Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 5 $7,845 $7,633Hardwood Plywood2 prod. with ULEF cert.2 prod. with NAF cert.68$14,607608$14,213214MDF2 prod. with ULEF cert.2 prod. with NAF cert.12$20,703$20,138Particleboard2 prod. with ULEF cert.2 prod. with NAF cert.11$1,611$1,567Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. 8 10 $17,773 $17,294MDF 2 prod. with standard cert. 2 prod. with NAF cert. 8 13 $133,971 $130,311Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. 11 20 $31,295 $30,448Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 $9,137 $8,890MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 $10,353 $10,070MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 1 $10,309 $10,027Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 2 $3,137 $3,052Total$280,940941$273,300301Note: Numbers in parentheses represent cost savings.OptionSCRSCURis the proposed option.Formatted TableFormatted Table

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## 2.4 Estimated Costs for Wood Veneer Laminated Product Producers 2024

2025 This section presents the estimated costs to wood veneer laminated product producers under 2026 several analytical options. For this analysis a w ood veneer laminated product is defined as a product 2027 made by gluing a wood or woody grass veneer to the face and/or back of a purchased platform to produce 2028 a finished product or component part (other than a stock hardwood plywood panel). 27 

### Wood veneer 2029 laminated product producers are considered composite wood product fabricators rather than hardwood 2030 plywood manufacturers under the CARB ATCM, and they are not required to meet the ATCM’s 2031

emissions standards. 2032

2033 TSCA Title VI includes laminated products in the definition of hardwood plywood, and directs 2034 EPA to conduct a rulemaking process to determine whether to exempt any of these products from the 2035 definition. If EPA does not exempt laminated products from the definition of hardwood plywood, then 2036 laminated products will have to meet TSCA Title VI ’s emissions standards (in addition to being made 2037 with certified platforms). 2038

2039 The estimated number of companies making wo od veneer laminated products was presented 2040 above in Section 2.1.2. Section 2.3.1 presents the estimated costs to wood veneer laminated product 2041 producers for making changes to raw materials. Secti on 2.4.2 presents the estimated costs of testing and 2042 third party certification for wood veneer laminated product producers. Finally, the total estimated costs 2043 for wood veneer laminated product producers are presented in section 2.4.3. 2044

2045 2.4.1 Costs of Changes to Raw Materi als for Wood Veneer Laminated Product 2046
Producers 2047

2048 This section presents the estimated costs to wood veneer laminated product producers for making 2049 changes to raw materials. These costs are estimated as the costs of switching face resins from UF to PVA 2050 resin systems and switching from conventi onal to lower emitting platforms. 2051

2052 Because the emissions standard for hardwood plywood (0.05 ppm) is lower than the standards for 2053 particleboard (0.09 ppm) and MDF (0.11 to 0.13 ppm), wood veneer laminated products included in the 2054 definition of hardwood plywood could conceivably exceed the emission standard even if a NAF resin 2055 such as PVA was used to affix the veneer to a certified particleboard or MDF platform. (Whether this 2056 occurs in practice depends on how effectively the vene er acts as a barrier to the release of formaldehyde, 2057 and how far below the standards the actual emissions from the platform are.) 2058

2059 This analysis uses the term “ low emission platforms ” to mean platforms with emissions low 2060 enough that wood veneer laminated products made from them meets the applicable hardwood plywood 2061 emission standard. For the standard certification, low emission platforms are assumed to include certified 2062 veneer platforms, particleboard and MDF platform s certified as ULEF under the CARB ATCM, and 2063 particleboard and MDF platforms certified as NAF. For analytical options requiring wood veneer 2064 laminated products to meet NAF emission levels, low emission platforms would include particleboard, 2065 MDF and veneer platforms certified as NAF. 2066

2067 Wood veneer laminated product producers switching from UF to PVA face resins and purchasing 2068 low emission platforms would not need to make any significant modifications or upgrades to existing 2069 equipment or processes because PVA resins are generally a “drop-in” technology for plants currently 2070 using UF face resins. Thus, the estimated raw material costs are only for purchasing the more expensive 2071

27 The laminated products discussed here do not include produc ts that are solely laminated with materials other than veneer, such as high pressure laminate, thermally fused pape r, vinyl film, decorative foil, or polypropylene film.

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### face resins and platforms. Note that switching to P VA face resins is just one possibility for achieving 2072 compliance. Some producers may achieve compliance by using enhanced urea formaldehyde resins, 2073 melamine-urea-formaldehyde (MUF) resins, soy-based resi ns, or other resin systems. However, the cost 2074 of switching to PVA resins can provide a reasonable approximation for the compliance cost associated 2075 with changing raw materials and production processes and therefore is the basis for the cost estimates in 2076 this analysis. 2077

2078 Section 2.4.1.1 presents the estimated producti on of wood veneer laminated products. This 2079

information is used to estimate the increase in raw mate rial costs as a result of the proposed rule. Section 2080 2.4.1.2 presents the estimated raw material co sts to wood veneer laminated product producers by 2081 analytical option. 2082

2083

2.4.1.1 Wood Veneer Laminated Product Production Volume 

### 2084

2085 This analysis estimates the production volume of wood veneer laminated product producers 2086 separately for the following primary categories of wood veneer laminated product producers listed below: 2087

2088

 Custom Panel Producers 2089

 Engineered Wood Flooring Producers 2090

 Composite Wood Product Fabricators 2091

 Cabinet Manufacturers 2092

 Household Furniture Manufacturers 2093

 Office and Institutional Furniture Manufacturers 2094

 Window and Door Manufacturers 2095

 Architectural Woodwork and Millwork Manufacturers 2096

2097

Custom Panel Manufacturers 

### 2098

2099 Custom panel producers are defined here as producers that make custom hardwood plywood 2100 panels to order by affixing veneer to purchased platforms. They make hundreds of different combinations 2101 of platform types (particleboard, MDF, veneer-core), platform characteristics (e.g., moisture resistance, 2102 fire resistance, density, other mechanical properties, and formaldehyde emissions), platform thickness, 2103 species of veneer, etc. A firm might use more than a dozen different types of particleboard and MDF 2104 platforms (not counting differences in thickness, size, density, etc.), and a much larger number of 2105 different types of veneer-core platforms. The specific characteristics of each order are determined by the 2106 customer. Custom panel producers might make as little as four or five sheets of a given product, and can 2107

make dozens or even hundreds of different combinati ons of platform type, thickness, and veneer species 2108 in a single day. They often manufacture and ship a product within a few days of receiving an order. 2109 Custom panel producers are generally small businesses. 2110

2111 Consultations with industry members indicate that there are about 50 custom panel producers, 2112 although estimates ranged from 20 to 100. Industr y members estimated that the typical production 2113 volume for these producers ranges from less than 1 million to 15 million square feet (mmsf) per year, 2114 with the production of most producers falling near the lower end of this range. Therefore, it is assumed 2115 that average mill production volume is 2 mmsf on a 5/8” basis, resulting in an estimate that total 2116 production volume by custom panel producers is 100 mmsf per year on a 5/8” basis. 2117

2118

2119

2120

2121

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### Engineered Wood Flooring Producers 

### 2122

2123 According to U.S. International Trade Commissi on (2008), engineered wood flooring production 2124 was estimated to be 258 mmsf in 2006. Based on conversations with HPVA, it is estimated that 2010 2125 production levels for the hardwood plywood industry overall are were about 60 percent of their 2006 2126 levels, which would imply engineered wood flooring production of about 155 mmsf on a 3/8" basis. 2127 About 30 percent of engineered wood flooring pr oduction is estimated to be manufactured as a wood 2128 veneer laminated product (while the other 70 percent of production is manufactured as a product meeting 2129 the CARB definition of hardwood plywood). Thus, the quantity of engineered wood flooring made as a 2130 wood veneer laminated product is estimated to be about 47 mmsf on a 3/8” basis, or 28 mmsf if calculated 2131 on a 5/8” basis. Since it is estimated that there are about 18 domestic engineered wood flooring producers 2132 making wood veneer laminated products, it follows that the estimated average production volume per 2133 firm is about 1.6 mmsf per year on a 5/8” basis. 2134

2135

Other Wood Veneer Laminated Product Producers 

### 2136

2137 The production volume of other wood veneer laminated products (other than other than custom 2138 panel and engineered wood flooring) is estimated ba sed on Census data on the quantity of veneer 2139 consumed in the industry. Figure 2-2 presents the methodology employed for estimating the consumption 2140 of hardwood veneer by these other wood veneer la minated product manufactures. First, the data on the 2141 dollar value of total hardwood veneer produced is obtained and the average cost per square foot of 2142 hardwood veneer is estimated. These data are combined to estimate the total quantity of hardwood veneer 2143 produced. Next, the quantity of hardwood veneer that is imported is added to the total domestic 2144 hardwood veneer production, and then the quantity of hardwood veneer that is exported is subtracted. 2145 This total reflects the estimated domestic consumption of hardwood veneer. Then, the dollar value of 2146 hardwood veneer consumed by hardwood veneer and plywood producers is combined with the estimated 2147 average hardwood veneer cost per square foot to generate the estimated consumption of hardwood veneer 2148 by hardwood veneer and plywood producers. To estimate the quantity of veneer consumed by wood 2149 veneer laminated product producers, the quantity of hardwood veneer consumed by hardwood veneer and 2150 plywood producers is subtracted from the quantity of total hardwood veneer consumed domestically. 2151 Note that this may overstate the quantity of wood veneer laminated product production because veneer is 2152

also used in the manufacture of items that are not co vered by the rule, such as statutorily exempt items, 2153 hobbyist uses, and furniture repair. 2154

2155 The total dollar value of hardwood veneer produ ced is $1,075,909 thousand according to the 2007 2156 Economic Census (U.S. Census Bureau 2009b). The co rresponding cost per square foot of veneer is 2157 estimated using U.S. ITC trade data on the value and quantity of veneer exported in 2007. According to 2158 the U.S. ITC, 972,952,757 square feet of veneer was exported in 2007, with a value of $438,302 2159

thousand. 28 

### This results in an average veneer cost of $0.45 per square foot. Veneer costs vary widely 2160 depending on the species, cut or pattern, and quality of the wood. While some laminators may primarily 2161 use veneer that is priced higher than the estimated average of $0.45 per square foot, other laminators will 2162 use veneer that is below this average cost. By combining the total dollar value of hardwood veneer 2163 produced ($1,075,909 thousand) and the average price of hardwood veneer ($0.45), the analysis estimates 2164 that domestic production of hardwood veneer is 2,390,909 thousand square feet (msf). 2165

2166 Data on hardwood veneer imports and exports was obtained from the U.S. ITC Interactive Tariff 2167 and Trade Dataweb. According to U.S. ITC trade data , the quantity of U.S. hardwood veneer imports for 2168 2007 was 656,721 msf, while the quantity of U. S. hardwood veneer exports was 986,223 msf. 29 

### The 2169

28 Excludes tropical hardwood veneer.

29 Includes “Tropical Hardwood Veneer.”

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### estimated domestic hardwood veneer consumption of 2,061,407 msf is calculated by adding the imports 2170 and subtracting the exports from the domestic hardwood veneer production. 2171

2172 The dollar value of hardwood veneer consumed by hardwood veneer and plywood manufacturers, 2173 $626,244 thousand, is available from the 2007 Ec onomic Census (U.S. Census Bureau 2009e). The 2174 corresponding cost per square foot of veneer for hardwood plywood manufacturers is estimated using 2175 U.S. ITC trade data on the value and quantity of veneer exported in 2007. By combining the total dollar 2176 value of hardwood veneer consumed by the hardwood veneer and plywood manufacturers ($626,244 2177 thousand) and the average price of exported hardwood veneer ($0.45), the analysis estimates that 2178 consumption of hardwood veneer by plywood manufacturers is 1,391,653 msf. Thus, total domestic 2179 veneer consumption by wood veneer laminated product producers is estimated to be 669,753 msf. 2180*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-992181Figure 2-2: Estimating Quantity of Harwood Veneer Consumed by Other Wood VeneerLaminated Product Producers (excludingengineered wood flooring and custom panel producers)2182Step1:Estimatedomestichardwoodveneerproduction(2,390,909 msf)(Dollarvalueofhardwoodveneerproduceddividedbyestimatedcostpersquarefootforhardwoodveneer)$1,075,909/$0.45Obtaindataonthedollarvalueofhardwoodveneerproducedfrom2007EconomicCensus.Productcode3212111:Hardwoodveneer,includingbackedw/paper/cloth/etc.EstimatecostpersquarefootofveneerbyusingU.S.ITCtradedataonthevalueandquantityofveneerexportedin2007.(quantityofhardwoodveneerexportedin2007dividedbytheestimatedvalueofthehardwoodveneerexportedin2007)Step 2: Estimate domestichardwood veneer consumption(2,061,407 msf)(TotalProduction[Step1]+Imports–Exports)2,390,909+656,721‐986,223Step 3: Estimate domesticconsumption of hardwood veneerby hardwood plywoodmanufacturers(1,391,653 msf)(Dollarvalueofhardwoodveneerconsumedbyhardwoodveneerandplywoodmanufacturersdividedbyestimatedcostpersquarefootforhardwoodveneer)$626,244/$0.45Step 4: Estimate domesticconsumption of hardwood veneerby laminators.(669,753 msf)(Subtractestimateddomesticconsumptionofhardwoodveneerbyhardwoodplywoodmanufacturers[Step3]fromtheestimateddomestichardwoodveneerconsumption[Step2])2,061,406‐1,391,653Obtaindataonimportsofhardwoodveneerfromthe2007U.S.ITCInteractiveTariffandTradeDataweb.Obtaindataonexportsofhardwoodveneerfromthe2007U.S.ITCInteractiveTariffandTradeDataweb.440890Veneersheetsandsheetsforplywood,etc.whetherofnotplanned,etc.,notover6mm(.236in.)thick,ornon‐coniferouswood,nesoi.440831Veneersheetsandsheetsforplywoodandotherwoodsawnlengthwise,slickedorpeeled,thicknessnotexceeding6mm,dark/lightmeranti&merantibakau440839Veneersheetsandsheetsforplywoodandotherwoodsawnlengthwise,slickedorpeeled,thicknessnotexceeding6mm,othertropicalwood,nesoi440890Veneersheetsandsheetsforplywood,etc.whetherofnotplanned,etc.,notover6mm(.236in.)thick,ornon‐coniferouswood,nesoi.440831Veneersheetsandsheetsforplywoodandotherwoodsawnlengthwise,slickedorpeeled,thicknessnotexceeding6mm,dark/lightmeranti&merantibakauObtaindataonthedollarvalueofhardwoodveneerconsumed byhardwoodveneerandplywoodmanufacturersfromthe2007EconomicCensus:Sector31:EC0731I3:Manufacturing:IndustrySeries:MaterialsConsumedbyKindfortheUnitedStates:2007.EstimatecostpersquarefootofveneerbyusingU.S.ITCtradedataonthevalueandquantityofveneerimportedin2007.(quantityofhardwoodveneerimportedin2007dividedbytheestimatedvalueofthehardwoodveneerimportedin2007)

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### To estimate the volume of wood veneer laminated product produced per volume of veneer 2183 consumed it is assumed that about 30 percent of the veneer is lost during the production process due to 2184 trimming, etc. It is also assumed that all wood veneer laminated product producers affix both a face and a 2185 back veneer, so for each square foot of veneer cons umed, 0.35 (0.35 = half of 70%) square feet of wood 2186 veneer laminated product is produced. Note that wood veneer laminated product producers may often 2187 only affix a face veneer, but the estimated costs of switching adhesives are not affected by this 2188 assumption since the number of glue lines assume d and the estimated quantity of product manufactured 2189 are inversely related; 30 

### however, the estimates of platform costs are affected by this assumption. 2190

2191 Table 2-58 presents the estimated production of wood veneer laminated products other than 2192 custom panels and engineered wood flooring, using the estimate of domestic consumption of hardwood 2193 veneer by laminators. 2194

2195

Table 2-58: Production Volume of Other Wood Veneer Laminated Products

Product Category Estimated Square Footage of Hardwood
Veneer Consumed (msf) Surface Area of Wood

Veneer Laminated
Product Produced per Square Foot of

Hardwood Veneer

Consumed Estimated Surface Area

of Wood Veneer

Laminated Product

Produced (msf)

Wood Veneer Laminated

Product Other than Custom Panels and Engineered Wood Flooring 669,754 0.35 234,414

Sources: U.S. Census Bureau 2009b, U.S. Census Bureau 2009e, U.S. ITC 2011a, U.S. ITC 2011b



### 2196 The estimated production of 307,032 234,414 msf from Table 2-58 is disaggregated in Table 2-59 2197 according to the relative share of the total value of hardwood veneer consumed by employer 2198 establishments in the various wood veneer laminated product industries. 2199

2200

2201

2202

2203

2204

2205

2206

2207

2208

2209

2210

30 For a given quantity of veneer, a manufacturer that affixes only a face veneer produces twice the square footage of laminated product as a manufacturer affixing both face and back veneers. But the former incurs half the cost per square foot for glue compared to the latter. Thus, both manufacturers have the same cost for glue.

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### Table 2-59: Production Volume of Other Wood Veneer Laminated Product Producers

Product Type NAICS Code and Description Value of Hardwood

Veneer Consumed (thousands, 2007$) Percent of

Veneer

Consumed Estimated

Surface Area of

Wood Veneer

Laminated

Product
Produced (msf)

Cabinets Wood Kitchen Cabinet and Countertop Manufacturing (337110) $95,058

Wood Television, Radio, and Sewing Machine Cabinet Manufacturing (337129) $1,262

Subtotal – Cabinets $96,320 24% 56,259

Household Furniture Upholstered House Furniture Manufacturing (337121) $11,737

Non-upholstered Wood

Household Furniture Manufacturing (337122) $69,525

Subtotal – Household

Furniture $81,262 21% 49,227

Office and Institutional

Furniture Institutional Furniture Manufacturing (337127) $24,948

Wood Office Furniture Manufacturing (337211) $37,840

Showcase, Partition, Shelving, and Locker Manufacturing (337215) $10,626

Subtotal –Office and

Institutional Furniture $73,414 19% 44,539

Window and Door

Producers Wood Window and Door Manufacturing ( 321911) $91,989 23% 53,915

Architectural Woodwork

and Millwork Custom Architectural

Woodwork and Millwork Manufacturing (337212) $53,149 13% 30,474

Total $396,134 100% 234,414

Sources: U.S. Census Bureau 2009b, U.S. Census Bureau 2009e, U.S. ITC 2011a, U.S. ITC 2011b



### 2211

2212

2.4.1.2 Estimated Raw Materials Costs for Wood Veneer Laminated Product Producers 

### 2213

2214 Since wood veneer laminated product producers make higher value-added products compared to 2215 stock hardwood plywood panels, keeping resin costs low is not as critical to their competitiveness as it is 2216 for stock panel producers. Many producers of wood veneer laminated products are believed to use PVA, 2217 which is a NAF resin, as a face adhesive. PVA resin is more expensive than UF resin, but it has a number 2218 of advantages: PVA is easy to work with, easy to clean up, and the press temperature can be kept low. 2219 However, some producers still use UF resins. For the purpose of cost estimation, it is assumed that if 2220 wood veneer laminated products are not excluded from the definition of hardwood plywood, virtually all 2221 producers using UF resins will switch adhesive technologies in order to meet the emissions standards in 2222

TSCA Title VI. 2223

2224

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### The main steps to estimating the change in raw material costs to wood veneer laminated product 2225 producers under an analytical option where switching to NAF resins is the likely compliance strategy are 2226

as follows: 2227

2228

1. Estimate the total production volume from facilities that are expected to continue to use UF resins 2229

in the absence of a national rule. 2230

2. Assuming that mills using UF resins will switch to PVA resins, estimate unit cost of switching 2231

from UF to PVA resins. 2232

3. Estimate the production volume that will need to switch to low emission platforms in order to 2233 achieve the hardwood plywood emission standard. 2234

4. Estimate unit cost of switching to a low emission platform to achieve the hardwood plywood 2235

emission standard. 2236

5. Estimate total cost of switching from UF to PVA resins and low emission platforms by 2237 multiplying the unit costs with the production volume that is subject to the changes. 2238

Note that switching to PVA face resins is just one possibility for achieving compliance with the 2239 Phase 2 emissions standards. Some producers may achieve compliance by using enhanced urea 2240 formaldehyde resins, melamine-urea-formaldehyde (MUF) resins, soy-based resins, or other resin 2241 systems. However, the cost of switching to PVA face resins can provide a reasonable approximation for 2242 the compliance cost associated with changing raw materials and production processes and therefore is the 2243 basis for the cost estimates in this analysis. 2244

2245 Production Volume Switching to PVA resins 

### 2246

2247 Table 2-60 presents the estimated quantity of wood veneer laminated products currently 2248 manufactured using UF resins, based on the estimat ed production volumes presented in section 2.4.1.1 2249 and on conversations with industry contacts about the share of products made using UF resins. 2250

2251

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### Table 2-60: Estimating Wood Veneer Laminated Product Production Volume Manufactured Using UF Formaldehyde-Added Resins

Product Category Estimated

Surface

Area of

Wood

Veneer

Laminated

Product

Produced
(msf, 5/8”) Estimated Percentage of

Production Potentially

Using
Formaldehyde

-Added Resins Estimated

Production

Volume Switching to

NAF made

with
Formaldehyde

-Added Resins

(msf, 5/8”) Comments

Architectural Panels /

Custom Panels 100,000 25% 25,000 Some industry contacts thought using formaldehyde added resins was not

common. In order to be conservative in terms of being careful not to understate costs it is assumed that 25% of production

uses UF formaldehyde-added resins.

Engineered Wood Flooring 28,000 25% 7,000 Some industry contacts thought using formaldehyde added resins was not

common. In order to be conservative in terms of being careful not to understate costs it is assumed that 25% of production

uses UF formaldehyde-added resins.

Cabinets 56,259 45% 25,317 About 45% of cabinet producers use

UF formaldehyde-added resins according to KCMA (2010).

Household Furniture 49,227 45% 22,152 Information on resin use by household furniture producers was limited, so it is

assumed that 45% of them use

UF formaldehyde-added resins, similar to cabinet producers.

Office and Institutional

Furniture 44,539 5% 2,227 BIFMA (2010) reported UF formaldehydeadded resins were used very little if at all
for office and institutional furniture. Thus, 5% of production is assumed to be produced with UF formaldehyde-added

resins.

Wood Window and Door Manufacturing 53,915 45% 24,262 Information on resin use by window and door producers was limited, so it is assumed that 45% of producers use

UF formaldehyde-added resins, similar to cabinet producers.

Custom architectural

woodwork and millwork manufacturing 30,474 5% 1,524 Little information was available for

architectural woodwork and millwork producers. Thus, 5% of production is assumed to be produced with

UF formaldehyde-added resins, similar to office and institutional furniture producers.
Total 362,414 107,482



### 2252 Production Volume Switching to Low Emission Platforms 

### 2253

2254 Under options SI, CI, and NI wood veneer laminated product producers would be considered 2255 hardwood plywood producers, and therefore producers using composite core platforms might need to 2256 switch to ULEF or NAF composite core platforms in order to meet the emissions standard. Under Option 2257 Formatted Table

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### SP, this would be the case only for custom panel producers since other wood veneer laminated product 2258 producers would be considered fabricators under this option. However, under options SI, SP, CI, and NI 2259 producers using veneer core platforms that meet the CARB 2 emissions standards but are not NAF or 2260 ULEF platforms are expected to be able to achieve the emissions standards without switching platforms. 2261 Under Option SN, however, wood veneer laminated pr oduct producers would also have to use NAF face 2262 veneer and NAF platforms to be exempt from the de finition of hardwood plywood. Under options SC

, 2263 SCR, and SCR SCUR (the proposed option), wood veneer laminated products would be exempted from 2264 the emissions standards if they were made with NAF face resins and platforms compliant with the TSCA 2265 Title VI emissions standards. But since all platforms will be compliant with the emissions standards after 2266 the Title VI rule takes effect, the only estimated incremental costs are for switching to NAF resins. It is 2267 assumed that under options SN, SC, SCR, and SCR SCUR most wood veneer laminated product producers 2268 that were not already doing so would use NAF platfo rms (Option SN) and/or NAF face resins (options 2269 SN, SC, SCR, and SCR SCUR ) in order to avoid being categorized as hardwood plywood producers. 2270

2271 To summarize, the affected wood veneer laminated product producers are generally expected to: 2272

2273

 switch to ULEF and NAF composite core platforms under options SI, SP, CI, and NI 2274

 switch to using NAF face resins and NAF platforms under Option SN, and 2275

 make no changes to platforms under options SC , SCR, and SCR SCUR , as TSCA Title VI compliant 2276 platforms would be needed to qualify for the exemption, but all baseline platforms are assumed to be 2277 TSCA Title VI compliant. 2278

2279 The resulting estimates and a detailed description of the underlying calculations are presented 2280 below in Table 2-61 (for options SI, SP, CI, NI), and Table 2-62 (for Option SN). 2281

2282

2283

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### Table 2-61: Wood Veneer Laminated Product Pro duction Switching to Low Emission Platforms: Options SI, SP, CI, and NI

Product Category Production
(msf, 5/8”) Production Switching to Low

Emission Platforms Description of Estimated Percentages a, b

(%) (msf)

Architectural

Panels /

Custom

Panels 100,000 35.5% 35,500 Based on conversations with HPVA Personal Communication with HPVA 2011a), 40% of hardwood plywood is composite core, and this is also assumed to be the case for custom panels. It was estimated that the mix of MDF and particleboard consumed in the Hardwood Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 35.5% is calculated as the sum of the two products of: (1) 40%, 40.9%, and 86. 1%, and (2) 40%, 59.1%, and 90.5%.

Engineered

Wood Flooring 28,000 1.8% 504 Based on conversations with HPVA (2011a), 2% of engineered wood flooring is composite core. It was estimated that the mix of MDF and particleboard consumed in the Hardwood Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 1.8% is calculated as the sum of the two products of: (1) 40.9%, 2%, and 86.1%, and (2) 59.1%, 2%, and 90.5%.

Cabinets 56,259 66.0% 37,131 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the cabinet industries (NAICS 337110 and 337129) is 26.7% hardwood plywood, 7.5% MDF and 65.7% particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 66.0% is calculated as the sum of the two products of: (1) 7.5% and 86.1%, and (2) 65.7% and 90.5%.

Household

Furniture 49,227 57.9% 28,502 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Household Furniture Manufacturing Industries (NAICS 337121 and 337122) is 34.9% hardwood plywood, 23.4% MDF and 41.7% particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 57.9% is calculated as the sum of the two products of: (1) 23.4% and 86.1%, and (2)

41.7% and 90.5%.

Office and

Institutional

Furniture 44,539 55.6% 24,764 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Office and Institutional Furniture Manufacturing Industries (NAICS 337127, 337211 and 337115) is about 37.5% hardwood plywood, 22.2% MDF and 40.3% particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus , 55.6% is calculated as the sum of the two products of: (1) 22.2% and 86.1%, and (2) 40.3% and 90.5%.

Wood Window

and Door Manufacturing 53,915 73.3% 39,520 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Window and Door Manufacturing Industry (NAICS 321911) is 17.5% hardwood plywood, 33.1% MDF and 49.5% particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 73.3% is calculated as the sum of the two products of: (1) 33.1% and 86.1%, and (2) 49.5% and

90.5%.

Custom

architectural

woodwork and

millwork manufacturing 30,474 59.4% 18,102 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Architectural Woodwork and Millwork Industry (NAICS 337212) is 33.27% hardwood plywood, 22.78% MDF and 43.95% particleboard. It was estimated that 86.1% and 90.5% of MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, 59.4% is calculated as the sum of the two products of: (1) 22.78% and 86.1%, and (2)

43.95% and 90.5%.

Total 362,414 184,023

a The mix of composite wood products consumed were estimated using U.S. Census (2009e) data on the value of materials consumed. Values were converted to volumes using prices of $480, $445, and $315 msf for hardwood plywood, MDF, and particleboard, respectively. The price of hardwood plywood was estimated using the total 2007 export values and quantities from U.S. ITC (2010) data (HTS codes 441232, 441299, an d 441231). The price of MDF and particleboard utilized are July 2007 prices from RISI’s (2011a) MDF and Particleboard Commentary.

b The percentages of composite platforms not made with NAF or ULEF resins was estimated from EPA’s (2010a) survey of composite wo od product producers. Since the percentage of ULEF production was not dist inguished from other CARB 2 certified added-formaldehyde product ion in EPA’s (2010a) survey of composite wood product producers, it was estimated that 37% of CARB 2 certified added-formaldehyde production is ULEF since 7 of the 19 CARB 2 certified mills that are not NAF exempt are U LEF exempt according to CARB’s lists of certified mills and ULEF and NAF mills. This analysis uses the term “ low emission platforms ” to mean platforms with emissions low enough that wood veneer laminated products made from them meets the applicable hardwood plywood emission standard.

Sources: California Air Resources Board 2011b CAR B 2011,

, U.S. Census 2009e, U.S. EPA 2010a, U.S. ITC 2010, and RISI 2011a

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### 2284 Table 2-62: Wood Veneer Laminated Product Production Switching to NAF Platforms: Option SN

Product Category Production
(msf, 5/8”) Production Switching to Low

Emission Platforms Description of Estimated Percentages a, b

(%) (msf)

Architectural

Panels /

Custom Panels 100,000 73.3% 73,300 Based on conversations with HPVA (2011a), 60% of hardwood plywood panels are veneer core. It was estimated that the mix of MDF and particleboard consumed in the Hardwood Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. Thus, the estimated mix of veneer core, MDF and particleboard platforms for custom panels is about 60.0% hardwood plywood, 16.4% MDF and 23.6% particleboard. It was also estimated that 60.6%, 90.7%, and 93.3% of HWPW, MDF and particleboard are made using resins that are not NAF. Thus, the percentage of custom panels switching to NAF platforms (73.3%) is calculated as the sum of the three products: (1) 60% and 60.6%, (2) 16.4% and 90.7%, and (3) 23.6% and 93.3%.

Engineered

Wood Flooring 28,000 61.2% 17,136 Based on conversations with HPVA (2011a), 2% of engineered wood flooring is composite core. It was estimated that the mix of MDF and particleboard consumed in the Hardwood Veneer and Plywood Industry (NAICS 321211) is about 40.9% MDF and 59.1% particleboard. It was estimated that 60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not made with NAF resins. Thus, 61.2% is calculated as the sum of the three products of: (1) 98% and 60.6%, (2) 2%, 40.9%, and 90.7%, and (3) 2%, 59.1% and 93.3%.

Cabinets 56,259 84.4% 47,483 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the cabinet industries (NAICS 337110 and 337129) is 26.71% hardwood plywood, 7.55% MDF and 65.74% particleboard. It was estimated that 90.7% and 93.3% of MDF and particleboard are not made with NAF resins. Thus, 84.4% is calculated as the sum of the three products of: (1) 26.71% and 60.6%, (2) 7.55% and 90.7%, and (3) 65.74%

and 93.3%.

Household

Furniture 49,227 81.3% 40,022 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Household Furniture Manufacturing Industries (NAICS 337121 and 337122) is 34.9% hardwood plywood, 23.4% MDF and 41.7% particleboard. . It was estimated
that 60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not made with NAF resins. Thus, 81.3% is calculated as the sum of the three products of: (1) 34.9% and 60.6%, (2) 23.4% and 90.7%, and (3) 41.7% and 93.3%.

Office and

Institutional

Furniture 44,539 80.4% 35,809 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Office and Institutional Furniture Manufacturing Industries (NAICS 337127, 337211 and 337115) is about 37.5% hardwood plywood, 22.2% MDF and 40.3% particleboard. It was estimated that 60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not made with NAF resins. Thus, 80.4% is calculated as the sum of the three products of: (1) 37.5% and 60.6%, (2) 22.19% and 90.7%, and (3)

40.28% and 93.3%.

Wood

Window and

Door Manufacturing 53,915 86.7% 46,744 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Window and Door Manufacturing Industry (NAICS 321911) is 17.45% hardwood plywood, 33.09% MDF and 49.46% particleboar d. It was estimated that 60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not made with NAF
resins. Thus, 86.7% is calculated as the sum of the three products of: (1) 17.45% and 60.6%, (2) 33.09% and 90.7%, and (3) 49.46% and 93.3%.

Custom

architectural

woodwork and

millwork manufacturing 30,474 81.8% 24,928 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed in the Architectural Woodwork and Millwork Industry (NAICS 337212) is 33.3% hardwood plywood, 22.8% MDF and 44.0% particleboard. It was estimated that 60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not made with NAF resins. Thus, 81.8% is calculated as the sum of the three products of: (1) 33.3% and 60.6%, (2) 22.78% and 90.7%, and (3) 43.95% and 93.3%.

Total 362,414 285,422 Total

a The mix of composite wood products consum ed were estimated using U.S. Census ( 2009e) data on the value of materials consumed. Values were converted to volumes using prices of $480, $445, and $315 msf for hardwood plywood, MDF, and particleboard, respectively. The price of hardwood plywood was estimated using the total 2007 export values and quantities from U.S. ITC ( 2010) data (HTS codes 441232, 441299, and 441231). The price of MDF and particleboard utilized are July 2007 prices from RISI’s ( 2011a) MDF and Particleboard Commentary.

b The percentages of composite platforms not made with NAF resins was estimated from EPA’s ( 2010a) survey of composite wood product producers.

Sources: U.S. Census 2009e, U.S. EPA 2010a, U.S. ITC 2010, and RISI 2011a


### 2285

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### 2.4.1.3 Summary of the Costs of Changing Raw Materials for Wood Veneer Laminated Product 

### 2286

Panel Producers 

### 2287

2288 Table 2-63 presents the estimated costs of changing raw materials for wood veneer laminated 2289 product producers under the various analytical options. No material costs are incurred under options SE, 2290 SEUR, SFCC, CE, and NE since wood veneer laminated product producers are not subject to any 2291 emissions requirements under these analytical options. The total costs are highest under options SI, CI 2292 and NI, where all wood veneer laminated product producers would be considered hardwood plywood 2293 producers. Total costs are lowest under Option SP , where only custom producers would be considered 2294 hardwood plywood producers. Under Option SN, where wood veneer laminated product producers would 2295 need to switch to NAF resins and platforms in orde r to avoid being classified as hardwood plywood 2296 producers, the estimated cost of changes to raw materials is about $ 25 20 million per year . Under options 2297

SC , SCR, and SC R SCUR (the proposed option), where wood veneer laminated product producers would 2298

need to use NAF face resins and Title VI certifie d platforms in order to avoid being classified as 2299 hardwood plywood producers, the estimated cost of changes to raw materials is about $ 4 3 million per 2300

year

. 2301

2302

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### Table 2-63: Estimated Costs of Raw Material Changes for Wood Veneer Laminated Product Producers, by Analytical Option

Firm Type Production Switching to
PVA (msf) Cost of Switching to

PVA (2010$/msf) Production Switching to

Low Emission
Platforms (msf) Cost of Switching to

Low Emission

Platforms (2010$/msf) Total Annual Cost of Changing Raw

Materials
(thousands 2010$/msf)

Options SE, SEUR, SFCC, CE, and NE: All Laminated Products are Exem pt from Definition of Hardwood Plywood No changes in raw materials needed 0 $0 0 $0 $0
Option SI, CI, and NI: All Laminated Products are Included in Definition of Hardwood Plywood

Architectural Panels / Custom Panels 25,000 $30 35,500 $60 $2,880
Engineered Wood Flooring 7,000 $30 504 $60 $240

Cabinets 25,317 $30 37,131 $60 $2,987

Household Furniture 22,152 $30 28,502 $60 $2,375

Office and Institutional Furniture 2,227 $30 24,764 $60 $1,553

Window and Door Manufacturers 24,262 $30 39,520 $60 $3,099

Architectural Woodwork and Millwork 1,524 $30 18,102 $60 $1,132

Total Annual Costs 107,482 $30 184,023 $60 $14,266 Option SP: Laminated Products are Exempt from Definition Except for Custom Panels

Architectural Panels / Custom Panels 25,000 $30 35,500 $60 $2,880
Engineered Wood Flooring - - - - -

Cabinets - - - - -

Household Furniture - - - - -

Office and Institutional Furniture - - - - -

Window and Door Manufacturers - - - - -

Architectural Woodwork and Millwork - - - - - Total Annual Costs 25,000 $30 35,500 $60 $2,880 Option SN: Laminated Products Using Added Formaldehyde Resins or Platforms are Included in the Definition of
Hardwood Plywood

Architectural Panels / Custom Panels 25,000 $30 73,300 $60 $5,148
Engineered Wood Flooring 7,000 $30 17,136 $60 $1,238

Cabinets 25,317 $30 47,483 $60 $3,608

Household Furniture 22,152 $30 40,022 $60 $3,066

Office and Institutional Furniture 2,227 $30 35,809 $60 $2,215

Window and Door Manufacturers 24,262 $30 46,744 $60 $3,533
Architectural Woodwork and Millwork 1,524 $30 24,928 $60 $1,541
Total Annual Costs 107,482 $30 285,422 $60 $20,350

Options SC , SCR, and SCR SCUR : Laminated Products Using Added Formaldehyde Resins and Platforms that are not Certified are Included in the Definition of Hardwood Plywood

Architectural Panels / Custom Panels 25,000 $30

- - $750
Engineered Wood Flooring 7,000 $30

- - $210

Cabinets 25,317 $30

- - $760

Household Furniture 22,152 $30

- - $665

Office and Institutional Furniture 2,227 $30

- - $67

Window and Door Manufacturers 24,262 $30

- - $728

Architectural Woodwork and Millwork 1,524 $30

- - $46

Total Annual Costs 107,482 $30

- - $3,224 This analysis uses the term “ low emission platforms ” to mean platforms with emissions low enough that wood veneer laminated products made from them meets the applicable hardwood plywood em ission standard. For the standa rd certification, low emission platforms are assumed to include certified veneer platforms, particleboard and MDF platforms certified as ULEF under the CARB ATCM, and particleboard and MDF platforms certified as NAF. For analytical options requiring wood veneer laminated products to meet NAF emission levels, low emission platforms would include particleboard, MDF and veneer platforms certified as NAF.

Option SCR SCUR is the proposed option.



### 2303

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### 2.4.2 Certification and Testing Costs fo r Wood Veneer Laminated Product Producers 2304

2305 Estimated certification and testing costs were presented in Section 2.2 for entities certifying 1 and 2306 2 NAF products through a TPC, as well as for entiti es certifying 1 and 2 added formaldehyde products 2307 through a TPC. As discussed in section 2.3.1, wood veneer laminated product producers would be likely 2308 to switch to a PVA resin technology if they are considered hardwood plywood producers under the 2309 proposed rule. Nevertheless, it is possible that some wood veneer laminated product producers may 2310 prefer to continue using added formaldehyde face resins for process or product reasons. Thus, testing and 2311 certification costs are estimated under each analytical option assuming that two percent of producers 2312 continue to use added formaldehyde resins. Table 2-64 presents costs associated with testing and 2313 certification by the number of product lines that require certification. Since there is some uncertainty 2314 about the number of product lines that would require a separate certification, this analysis presents the 2315 total costs for each analytical option for certifying 1 and 2 different product lines. To be comparable with 2316 the benefits estimates, which were estimated for 30 year period, costs were annualized over a 30 year 2317 period. 2318

2319

Table 2-64: Estimated Wood Veneer Laminated Product Producer First and Subsequent Year Costs for Testing and Certifying Products

Number of Product

Lines Requiring

Testing and

Certification First

Year

Costs Subsequent

Year Costs Costs Annualized Over 30 Years Using 3

Percent Discount

Rate* Costs Annualized Over 30 Years Using 7

Percent Discount

Rate*

1 NAF Product Line $37,058 $6,517 $7,640 $8,159

2 NAF Product Lines $42,015 $7,062 $8,367 $8,972

1 Added Formaldehyde

Product Line $72,508 $56,522 $54,532 $53,421

2 Added Formaldehyde

Product Lines $81,614 $62,782 $60,622 $59,412

*Note that annualized costs will tend to be higher for higher discount rates when there are more upfront costs and lower for higher discount rates when upfront costs are smaller or future costs are higher. This is why annualized costs are higher for NAF certificati on and lower for added formaldehyde certification for the 7 percent discount rate compared to the 3 percent discount rate.


### 2320 Table 2-65 presents the estimated annualized testing and certification costs by analytical option 2321 under a variety of scenarios for the number of entities affected and the number of product lines that would 2322 require testing and certification. Under options SE, CE , SEUR, SFCC , and NE wood veneer laminated 2323 product producers would not be required to do any testing. Under options SI, SP, SN, SC, SCR , SCUR

, 2324 CI and NI, it is assumed that all but two perc ent of wood veneer laminated product producers would 2325 switch to NAF resin technology and/or compliant or NAF platforms in order to reduce testing and 2326 certification costs (options SI, SP, CI, and NI) or eliminate them (options SN, SC, SCR, and SCR SCUR ). 2327

2328

2329

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### 2330

Table 2-65: Estimated Wood Veneer Lamina ted Product Producer Annualized Costs for Testing and Certification (thousands, 2010$)

Analytical Option Total

Number

of

Affected

Entities Products

Lines Requiring Testing and

Certification Number of Affected Entities with Testing and Certification costs by Certification Type Costs Annualized Over

30 Years (thousands, 2010$)

3%

Discount

Rate 7%

Discount

Rate Option SE, SEUR, SFCC,
CE, and NE: All Laminated Products are Exempt from

Definition of Hardwood Plywood 0 0 None – wood veneer laminated product producers would not be required to do any testing $0 $0

Option SI, CE, and NE: All

Wood Veneer Laminated

Product s are Included in the

Definition of Hardwood Plywood Low End

Estimate:

7,486 1 NAF - 7,336 Entities $56,046 $59,858
Added Formaldehyde a - 150 Entities $8,180 $8,013 All - 7,486 Entities $64,226 $67,871

2 NAF - 7,336 Entities $61,380 $65,818
Added Formaldehyde a - 150 Entities $9,093 $8,912 All - 7,486 Entities $70,473 $74,730

High End

Estimate:

13,875 1 NAF - 13,598 Entities $103,887 $110,953
Added Formaldehyde a - 277 Entities $15,105 $14,798 All - 13,875 Entities $118,992 $125,750

2 NAF - 13,598 Entities $113,774 $122,000
Added Formaldehyde a - 277 Entities $16,792 $16,457 All - 13,875 Entities $130,566 $138,457

Option SP: Wood Veneer

Laminated Products Other

Than Custom Panels are Exempt from the Definition of Hardwood Plywood MidRange

Estimate:

50 1 NAF - 49 Entities $374 $400
Added Formaldehyde a - 1 Entities $55 $53
All - 50 Entities $429 $453

2 NAF - 49 Entities $410 $440
Added Formaldehyde a - 1 Entities $61 $59
All - 50 Entities $471 $499
Options SN, SC, SCR, and

SCR SCUR : Wood Veneer

Laminated Products are

Defined as Hardwood Plywood Producers if they use (1) added formaldehyde resins, and (2) platforms with added formaldehyde (Option SN only) Low End

Estimate:

7,486 1 Added Formaldehyde a - 150 Entities $8,180 $8,013

2 Added Formaldehyde a - 150 Entities $9,093 $8,912

High End

Estimate:

13,875 1 Added Formaldehyde a - 277 Entities $15,105 $14,798

2

Added Formaldehyde a - 277 Entities $16,792 $16,457

a The number of producers using added formaldehyde resins post-rule is assumed to be 2 percent of the total number of wood veneer laminated product producers. The estimates of the total number are from Table 2-6 and Table 2-7. Option SCR SCUR is the proposed option.


### 2331
2.4.3 Total Annualized Co sts for Wood Veneer Laminated Product Producers 2332

2333 Table 2-66 presents the total estimated annualized costs by analytical option under a variety of 2334 scenarios for the number of entities affected and the number of product lines that would require 2335 certification. Under options SE, CE , SEUR, SFCC , and NE wood veneer laminated product producers 2336 would not be required to do any testing and no incremental material costs are estimated because it is 2337 assumed that they are already using compliant platforms. Under options SI, SP, SN, SC, SCR , SCUR , CI, 2338 and NI it is assumed that all but two percent of wo od veneer laminated product producers would switch to 2339

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### NAF resin technology and/or compliant or NAF plat forms to reduce testing and certification costs 2340 (options SI, SP, CI, and NI) or eliminate them (options SN, SC, SCR, and SCR SCUR ). 2341

2342 The results presented in Table 2-66 demonstr ate that testing and certification costs are 2343 overwhelmingly the dominant drivers of the costs for wood veneer laminated product producers. Even 2344

under the scenarios with the fewest estimated number s of affected entities and product lines, the costs 2345 under Option SI far exceeds those estimated for options SN SC, SCR, and SCR SCUR , which only include 2346 testing or certification costs for two percent of wood veneer laminated product producers. The 2347 substantially lower costs under options SC , SCR, and SCR SCUR compared to Option SN reflects the 2348 potentially high costs of switching platforms under option SN. Estimated costs (assuming 2 product lines 2349 require testing) are lowest under Option SP because far fewer entities are affected under this option 2350 compared to the others. 2351

2352

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### Table 2-66: Estimated Wood Veneer Laminated Product Producer Annualized Costs for Raw Materials Changes, Testing, and Certification (thousands, 2010$)

Analytical Option Total Number

of Affected

Entities Products Requiring Testing and

Certification Number of Affected Entities with Costs by Certification Type Costs Annualized

Over 30 Years (thousands, 2010$)

3% 7% Option SE, SEUR, SFCC, CE, and NE: All Laminated Products Exempt from Definition of Hardwood Plywood 0 0 None – no costs for changing raw materials, testing, or certification

are estimated $0 $0

Option SI, CE, and NE: All Wood Veneer

Laminated Products are Included in the Definition of Hardwood Plywood Low End

Estimate:

7,486 1 NAF - 7,336 Entities $69,347 $72,796 Added Formaldehyde - 150 Entities $8,452 $8,278 All - 7,486 Entities $77,799 $81,073

2 NAF - 7,336 Entities $74,681 $78,756 Added Formaldehyde - 150 Entities $9,365 $9,176 All - 7,486 Entities $84,047 $87,932

High End

Estimate:

13,875 1 NAF - 13,598 Entities $117,189 $123,891 Added Formaldehyde - 277 Entities $15,376 $15,061 All - 13,875 Entities $132,565 $138,952

2 NAF - 13,598 Entities $127,076 $134,939 Added Formaldehyde - 277 Entities $17,063 $16,721 All - 13,875 Entities $144,139 $151,659

Option SP: Wood Veneer Laminated Product s Other Than Custom Panels are Exempt from the Definition of Hardwood Plywood Mid-Range

Estimate:

50 1 NAF - 49 Entities $3,060 $3,012 Added Formaldehyde - 1 Entities $109 $107 All - 50 Entities $3,169 $3,118

2 NAF - 49 Entities $3,095 $3,052 Added Formaldehyde - 1 Entities $115 $113 All - 50 Entities $3,211 $3,164

Option SN: Wood Veneer Laminated Products are Defined as Hardwood Plywood if they use (1) added formaldehyde resins, and (2) platforms with added formaldehyde Low End

Estimate:

7,486 1 NAF - 7,336 Entities $18,974 $18,455

Added Formaldehyde - 150 Entities $8,568 $8,391

All - 7,486 Entities $27,542 $26,846

2 NAF - 7,336 Entities $18,974 $18,455

Added Formaldehyde - 150 Entities $9,481 $9,289

All - 7,486 Entities $28,455 $27,744

High End

Estimate:

13,875 1 NAF - 13,598 Entities $18,976 $18,456 Added Formaldehyde - 277 Entities $15,492 $15,174 All - 13,875 Entities $34,467 $33,630

2 NAF - 13,598 Entities $18,976 $18,456 Added Formaldehyde - 277 Entities $17,179 $16,833 All - 13,875 Entities $36,154 $35,290

Options SC , SCR, and SCR SCUR : Wood

Veneer Laminated Products are Defined as Hardwood Plywood if they use added formaldehyde resins Low End

Estimate:

7,486 1 NAF - 7,336 Entities $3,006 $2,924
Added Formaldehyde - 150 Entities $8,241 $8,073

All - 7,486 Entities $11,247 $10,997

2 NAF - 7,336 Entities $3,006 $2,924
Added Formaldehyde - 150 Entities $9,155 $8,972

All - 7,486 Entities $12,161 $11,895

High End

Estimate:

13,875 1 NAF - 13,598 Entities $3,006 $2,924

Added Formaldehyde - 277 Entities $15,167 $14,857

All - 13,875 Entities $18,173 $17,781

2 NAF - 13,598 Entities $3,006 $2,924

Added Formaldehyde - 277 Entities $16,853 $16,517

All - 13,875 Entities $19,860 $19,441
Option SCR SCUR is the proposed option. Formatted Table

Formatted Table

Formatted Table

Formatted Table

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## 2.5 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization 2353 

## Costs 2354

2355 Under TSCA Title VI, EPA must promulgate regulations that establish labeling requirements, 2356 chain of custody requirements, and recordkeeping re quirements for industries that use composite wood 2357 products for raw materials and sell products that contain composite wood. Producers that use composite 2358 wood products as raw materials (hereafter referred to as fabricators), and wholesalers or distributers 2359 (including importers) of composite wood products or regulated articles that contain composite wood 2360 products, and retailers of composite wood products or regulated articles that contain composite wood 2361 products, will be subject to chain of custody and la beling requirements. This set of firms along with 2362 producers of hardwood plywood, MDF, and particlebo ard will also incur costs associated with becoming 2363 familiar with the rule’s requirements. The purpose of this section is to estimate the incremental costs of 2364 rule familiarization, recordkeeping, and labeling re quirements under the TSCA Title VI rule for all 2365 producers, fabricators, wholesalers, and retailers that are potentially affected by the proposed rule. 2366

2367 Note that the TSCA Title VI rule requires importers of articles that are composite wood products, 2368 or articles that contain composite wood products, to comply with the TSCA Section 13 import 2369 certification regulations for “Chemical Substances in Bulk and As Part of Mixtures and Articles,” as 2370 found at 19 CFR 12.118 through 12.127. Thus, any U. S. importer of composite wood products or articles 2371 that contain composite wood products would have to certi fy that all articles in the shipment either comply 2372 with all applicable rules and orders under TSCA or that all the articles in the shipment are not subject to 2373 TSCA. The statement must be on or attached to a commercial invoice or entry document belonging to the 2374 imported shipment. In practice, import certification is fulfilled by checking a box on an invoice or entry 2375 document. It is assumed that this does not generall y impose a significant additional burden or cost on the 2376 importer. Any potential burden associated with a su bmitter’s familiarization with this requirement is 2377 assumed to be included in the more general rule familiarization burden discussed below. 2378

2379 Section 2.5.1 describes telephone questionnaires that were developed to better understand the 2380 potential costs of the labeling and recordkeepi ng requirements. Per-firm rule familiarization, 2381 recordkeeping, and labeling costs are presented in Section 2.5.2. Section 2.5.3 presents the estimated 2382 number of affected entities using information on baseline compliance and the percentage of entities 2383 incurring costs, estimated from the results of a te lephone questionnaire. And finally, total incremental 2384 recordkeeping, labeling, and rule familiarization costs are presented in Section 2.5.4. 2385

2386 2.5.1 Telephone Questionnaire 2387

2388 The proposed recordkeeping and labeling requirements under the TSCA Title VI rule are similar 2389 to the requirements under the California Air Resour ces Board’s (CARB) Airborne Toxic Control Measure 2390 (ATCM) to reduce formaldehyde emissions from comp osite wood products. So firms that manufacture or 2391 sell composite wood products destined for Calif ornia markets have experience implementing 2392 recordkeeping and labeling requirements that are sim ilar to the TSCA Title VI rule. To learn about the 2393 experiences of the firms who are complying with the CARB ATCM requirements, two questionnaires 2394 (one for fabricators and one for wholesalers) were administered to fewer than ten respondents per 2395 questionnaire. These questionnaires asked respondents fo r descriptions of the changes they made and the 2396 costs they incurred to implement any changes. 2397

2398 Retailers are also subject to the chain of custod y and recordkeeping requirements. The California 2399 Retailers Association indicated that retailers’ customary business practices were generally sufficient to 2400 meet the chain of custody requirements in the CA RB ATCM (Califor nia Retailers Association 2011), so 2401 retailers were not administered a questionnaire. 2402

2403

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### 2404
2.5.1.1 Questionnaire Administration 

### 2405

2406

Nine fabricator firms and seven wholesaler firms were administered telephone questionnaires that 2407 asked about the changes that were made and the costs that were incurred in order to achieve compliance 2408 with the CARB recordkeeping and labeling requirement s. For fabricators, a diverse group of producers 2409 was selected for the sample: one decorative panel manufacturer, two stock cabinet manufacturers, two 2410 custom cabinet manufacturers, two household furniture manufacturers, and two business and institutional 2411 furniture manufacturers. Most of the fabricators contacted were located in California, and all of them 2412 were implementing the CARB recordkeeping and labe ling requirements. For wholesalers, the sample 2413 included four composite wood product wholesalers an d three household furniture wholesalers, all located 2414 in California and complying with CARB requirements. 2415

2416 For each of these respondent types, a list of the appropriate NAICS industries was found from 2417 one of the following sources: industry association member lists, the Dun & Bradstreet database, the 2418 Random Lengths Big Book, or the SalesGenie database. From the industry association lists, industry 2419 members were assigned random numbers and contacted in ascending order by number. For the D&B 2420 database, the relevant set of companies were identified by state and NAICS code, assigned random 2421 numbers, and also contacted in ascending order. For the Random Lengths Big Book and the SalesGenie 2422 database, first page numbers were selected randomly, and then individual firms were selected randomly 2423 from that page to contact. 2424

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### 2425 Table 2-67: Sample of Firms Administered Recordkeeping and Labeling Questionnaire

Category Firm List Source Number of
Respondents

Fabricators Decorative Panel Manufacturers Composite Panel Associ ation (CPA).2011 Surface & Panel Buyers Guide. 1

Stock Cabinet Manufacturers in

California Kitchen Cabinet Manufacturers Association (KCMA). 2010. KCMA

Cabinet Manufacturers Members in California.

Dun and Bradstreet (D&B). 2011. Companies in California, NAICS

337110.

Note: After calls were placed to all KCMA stock cabinet members located

in CA the Dun and Bradstreet list was utilized. There was one response

from each list. 2

Custom Cabinet Manufacturers in

California SalesGenie. 2010. Companies in California, NAICS 337110.

Dun and Bradstreet (D&B). 2011. Companies in California, NAICS

337110.

Note: After it was determined that a high percentage of respondents on the SalesGenie list were not in scope the D&B list was utilized. There was one response from each list. 2

Household Furniture Manufacturers in

California Dun and Bradstreet (D&B). 2011. Companies in California, NAICS
337122, 337121. 2

Business and Institutional Furniture

Manufacturers The Business and Institutional Furniture Manufacturer’s Association (BIFMA). 2010. BIFMA Members. 2

Wholesalers Wood Product Wholesalers in California Random Lengths.2009 Big Book: The Buyers and Sellers Directory of the Forest Products Industry in California. 4

Household Furniture Wholesalers in

California Dun and Bradstreet (D&B). 2011. Companies in California, NAICS 4232. 3

Sources: Business and Institutional Furniture Manufacturer’s Association 2010, Composite Panel Association 2010, Dun & Bradstreet 2010, Kitchen Cabinet Manufacturers Asso ciation 2010, Random Lengths 2009, SalesGenie 2010.


### 2426 In order to estimate the average costs of complying with CARB’s recordkeeping and labeling 2427 requirements, two separate questionnaires were administered to fabricators and wholesalers. First, 2428 screener questions were administered to ensure that only firms that had made changes to comply with the 2429 CARB regulations were selected to complete the survey . Then, firms were asked about the specific steps 2430 they took to comply with CARB’s recordkeeping an d/or labeling requirements, and what the labor and 2431 material costs of those changes were. Figure 2-3 and Figure 2-4 present the phone scripts that were used 2432 to administer these questionnaires. The responses to the questionnaires are included in Table 2-69 and 2433

Table 2-70. 2434

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### Figure 2-3: Fabricator Firm Recordkeeping and Labeling Costs Questionnaire



### Introduction: Hello, this is ________ calling fr om Abt Associates on behalf of the U.S. Environmental Protection Agency.

This past July Congress passed legislation that requires EPA to develop formaldehyde standards for composite wood products that may include recordkeeping and labeling requirements for manufacturers who fabricate composite wood products. The U.S. EPA is interested in learning from firms that have implemented labeling and recordkeeping procedures to comply with California’s formaldehyde rule to help them develop national recordkeeping and labeling requirements.

Screener Questions: 1a (For Decorative Panel Manufacturers). Are you a manufacturer of decorative panels that uses purchased hardwood plywood, medium density fiberboard, or particleboard for a platform? Do you manufacture: (1) filled or coated products, (2) high pressure laminates, (3) hot stamp foils, (4) low basis weight papers, (5) low pressure deco rative laminates, (6) medium and high density overlays, or (7) vinyl laminates? (Note that othe r types of decorative panel manufacturers would be accepted as in-scope) 1b (For Other Fabricators). Is your firm a manufacturer of [stock cabinets/custom cabinets/household

furniture/business or institutional furnit ure] made using composite wood products? 2. Have you implemented labeling and recordkeepin g procedures that meet the requirements of the California formaldehyde rule? 3. Do you follow these procedures for all products using composite wood platforms, including those sold outside California where the labeling and reco rdkeeping procedures would not be required? (Note that fabricators with any products that are CARB compliant are considered in-scope) 4. Most of the questions I have are about how much it cost to implement the labeling and recordkeeping procedures, are you the best person for me to ask about these costs?

Questionnaire: 1. Please describe in detail the changes you implem ented in recordkeeping activities for complying with CARB’s requirements. Please describe the one time costs you incurred in order to implement these changes, either in terms of dollars or hours . Can you also describe the additional recurring costs you incur because of the CARB requirements, either in terms of dollars or hours. (If hours ask what type of employee) 2. Please describe in detail the changes you implemented to your existing labeling practices, or the new labeling practices you introduced, in orde r to comply with CARB requirements. 3. What was the initial cost to make changes to the labeling process? 4. If the CARB requirements increased your per-labe l costs, what is the additional cost per label? 5. Do you generally label each CARB-certified item you manufacture, or do you label a box or bundle of

items? 6. Do you have separate CARB-certified inventor y and not-CARB-certified inventory? If so, what percentage of your inventory is CARB-certified?

2435

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### Figure 2-4: Wholesaler Firm Recordkeeping Costs Questionnaire



### Introduction: Hello, this is ______ calling from Abt As sociates on behalf of the U.S. Environmental Protection Agency. This past July Congress pa ssed legislation that requires EPA to develop formaldehyde standards for composite wood products that may include recordkeeping requirements for companies that distribute composite wood products. The U.S. EPA is interested in learning from firms that have implemented recordkeeping procedures to co mply with California’s formaldehyde rule to help them develop national recordkeeping requirements.

Screener Questions: 1. Is your firm a wholesaler, dist ributor, or importer of composite wood products or products that contain composite wood? 2. Background: The California rule requires records showing the date of purchase, the supplier, as well as documentation of precautions taken to ensure that products meet emissions standards to be maintained for two years. 3. Do your recordkeeping procedures meet the requirements of the California formaldehyde rule?

Questionnaire: 1. Before this rule was implemented, were you already keeping purchasing records for at least two years, or was this something new that you had to start doing? 2. Did you need to modify your existing recordkeeping system for the purpose of complying with the

California rule? 3. Please describe the one time costs you incurred in order to implement this new system, either in terms

of dollars or hours. 4. Does maintaining the new recordkeeping system re quire more effort or additional costs compared to your previous recordkeeping system? (If yes), how much additional effort or cost is required for maintaining records under the new system? Please de scribe either in terms of dollars or hours.

2436 2.5.1.2 Questionnaire Responses and Resulting Per-Firm Cost Estimates 

### 2437

2438 The responses presented below include qualitative descriptions of recordkeeping and labeling 2439 practice changes due to CARB Rule requirements. Table 2-68 presents the fully loaded wage rates used 2440 for estimating labor costs. Table 2-69 and Table 2-70 summarize the responses to the fabricator and 2441 wholesaler questionnaires, respectively, including descri ptions of recordkeeping costs, labeling costs, and 2442 the costs estimated based on the responses. 2443

2444 Since the recordkeeping functions described by responses appeared to be tasks likely be 2445 performed by support staff, the analysis estimates these labor costs with the fully loaded wage for “office 2446 and administrative support” staff in private industry ($24.84 for fabricator industries and $25.54 for 2447 wholesaler industries (U.S. Bureau of Labor Statistics 2010a, b, d, e)). Since the labeling system changes 2448 described by respondents appeared to be tasks that would require technical labor, the analysis uses the 2449 fully loaded wage rates for “computer and mathematical science” workers in private industry ($44.27, 2450 U.S. Bureau of Labor Statistics 2010a, b, e) (See Table 2-68). 31 

### 2451

2452

31 May 2009 wages are taken from Occupation Employment Sta tistics (OES) data and converted into 2010 dollars using Employer Cost for Employee Compensation (ECEC) data. To calculate a loaded wage rate, average total benefits for all workers (42%) is added to the overhead rate (17%) to calculate an overall wage multiplier of 1.59.

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### Table 2-68: Hourly Wage Rate Estimation for Recordkeeping and Labeling Labor Costs

Labor Cost

Elements Industry OES Wage Data Occupation Description a May 2009 Mean
Hourly Wage a 2010 Adjusted
Mean Hourly
Wage b 2010 Loaded
Hourly Wage

(x1.59) c

Fabricators

Rule

Familiarization NAICS 321000 -

Wood Product Manufacturing Management Occupations $45.86 $46.29 $73.60

Supplier

Notification NAICS 321000 -

Wood Product Manufacturing Office and

Administrative
Support Occupations $15.47 $15.62 $24.84 Recordkeeping

Initial Costs
Recordkeeping Recurring Costs

Labeling Initial

Costs NAICS 321000 -

Wood Product Manufacturing Computer and

Mathematical

Science Occupations $27.58 $27.84 $44.27

Wholesalers

Rule

Familiarization Sector 42 –

Wholesale Trade Management Occupations $58.12 $58.67 $93.29

Supplier

Notification

Sector 42 –

Wholesale Trade Office and

Administrative
Support Occupations $15.91 $16.06 $25.54 Recordkeeping

Initial Costs
Recordkeeping Recurring Costs

Retailers

Rule

Familiarization Sectors 44 and 45

– Retail Trade Management Occupations $44.06 $44.47 $70.71

Supplier

Notification Sectors 44 and 45

– Retail Trade Office and

Administrative
Support Occupations $12.04 $12.15 $19.32

a Mean wages are estimated using the data from the Bureau of Labor Statistics Occupational Employment Statistics, which are available for May 2009.

b Wages are inflated to 2010$ using Employer Cost for Employee Compensation (ECEC) wage data for all industries and occupations.

c A loading factor of 1.59 is used to add the labor costs associat ed with benefits and overhead. According to ECEC data benefits compensation was equal to 42% of wages and salaries data for al l industries and occupations. Overhead costs are assumed to be equal to 17% of wages (Rice 2002).
Sources: U.S. Bureau of Labor Statistics 2010a, b, c, d, e



### 2453 As shown in Table 2-69, none of the fabricators reported incurring any initial set-up costs for 2454 recordkeeping, and only one of the nine reporting in curring recurring costs for recordkeeping as a result 2455 of the CARB rule. (The remaining fabricators did not incur recordkeeping costs because their existing 2456 records were sufficient to comply with the CARB requirements.) The one respondent with recurring 2457 recordkeeping costs reported spending 10 hours per week on recordkeeping for the CARB rule. As 2458 calculated in Table 2-69, EPA estimates that 10 hours per week is equivalent to a cost of $12,917 per 2459

year. 2460

2461 This analysis assumes that the 11% of fabricators that are not already complying with the CARB 2462 ATCM (because their products are not sold in California) incur an average cost of $12,917 per year to 2463 comply with the recordkeeping requirements of the TSCA Title VI rule. (The average cost per firm is 2464

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### used in calculating total costs, but as described in Chapter 5, the small entity analysis is based on an 2465 estimate of recordkeeping costs that varies with firm size.) Because the recordkeeping requirements are 2466 similar in the CARB rule and the TSCA Title VI rule, no additional recordkeeping costs are estimated for 2467 fabricators that are already complying with the CARB ATCM. 2468

2469 As shown in Table 2-69, several of the responde nts indicated that they already had labeling 2470 systems in place and therefore they did not incur any significant costs associated with CARB’s labeling 2471 requirements. However, this analysis assumes that these firms did in fact incur small costs associated 2472 with making small changes to their labels. One of the firms that did report minor labeling costs reported 2473 that it took “a few hours” to change over to using the new labels. The analysis assumes that “a few 2474 hours” is 3 hours for the purpose of estimating costs. The analysis also assumes that 67% of firms that 2475 are not already complying with the CARB ATCM, and all firms that are already complying with the 2476 CARB ATCM, incur the costs associated with 3 labor ho urs (where 67% is calculated as 4/6, since 4 of 2477 the 6 firms that reported labeling their products are as sumed to have these costs). Two other firms that 2478 responded to the questionnaire reported more substantia l costs associated with setting up their labeling 2479 systems and therefore, it is assumed that the remaining 33% of firms that are not already complying with 2480 the CARB ATCM will incur the average costs reported by these two firms (where 33% is calculated as 2481 2/6 since 6 firms reported that they labeled their products). 2482

2483 As shown in Table 2-70, four of the seven wholes alers reported incurring initial costs to revise 2484 their recordkeeping systems to comply with the CARB rule. Only two of the four were able to quantify 2485 the time or cost they spent revising their recordkeeping systems. Based on their responses, the average 2486 cost of revising recordkeeping systems is estimated at $2,511. Thus, the analysis assumed that 57% of 2487 wholesalers that are not already complying with the CARB ATCM will incur initial costs that average 2488 $2,511 for revising recordkeeping systems to comply with the TSCA Title VI rule. The remaining 43% 2489 of wholesalers that are not already complying with the CARB ATCM and all firms that are already 2490 complying with the CARB ATCM are assumed to have recordkeeping systems that do not need to be 2491 modified in order to comply with the TSCA Title VI rule, and thus do not incur significant initial 2492 recordkeeping costs. Because the recordkeeping requirements are similar in the CARB rule and the 2493 TSCA Title VI rule, no additional recordkeeping costs are estimated for wholesalers that are already 2494 complying with the CARB rule. 2495

2496 Table 2-70 also indicates that three of the seven wholesalers reported incurring recurring 2497 recordkeeping costs due to the CARB rule, but only one of them was able to quantify the additional time 2498 spent on recordkeeping. That respondent reported spending half an hour to an hour per day on CARB2499 related recordkeeping. EPA estimates this is equivalent to a cost of $4,980 per year. Therefore, this 2500 analysis assumes that 57% of the wholesalers that are not already complying with the CARB ATCM do 2501 not incur significant recurring costs, as their existing recordkeeping practices are sufficient to comply 2502 with the TSCA Title VI rule’s requirements. The remaining 43% of wholesalers that are not already 2503 complying with the CARB ATCM incur a recurring cost for recordkeeping that averages $4,980 per year. 2504 (As with fabricators, the average cost per firm is used in calculating total costs, but the small entity 2505 analysis in Chapter 5 is based on an estimate of recordkeeping costs that varies with firm size.) Again, 2506 because the recordkeeping requirements are similar in the CARB rule and the TSCA Title VI rule, no 2507 additional recordkeeping costs are estimated for wholesalers that are already complying with the CARB 2508

ATCM. 2509

2510

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### Table 2-69: Responses and Estimates from Fabricator Recordkeeping and Labeling Questionnaire

Survey

ID Description by Fabricators of Recordkeeping and Labeling Costs EPA Estimate of Recordkeeping Costs EPA Estimate of Labeling Costs
Initial Recurring Initial Recurring

Decorative Panel Manufacturers

1 Recordkeeping: No implementation cost; already a CPA member so upstream information was easy to acquire; keep records of all boards purchased that are CARB 2 compliant. Labeling: Few hours of labor for implementation ( assumed to be 3 hours f or this analysis ); overhead cost minimum; no additional per-label cost; labeled by pallet. - - $132.81 (3

hours multiplied by

$44.27) -

Stock Cabinet Manufacturers 2 Recordkeeping: No implementation cost; 10 hours per week of recordkeeping maintenance costs; CARB compliance attained through KCMA guidance. Labeling: Nothing was changed; the firm was unaware of any requirements regarding labels. - $12,916.80 (10 hours/wk multiplied by

52 weeks at

$24.84) n.a. n.a.

3 Recordkeeping: No implementation cost; must send vendor letters and keep invoices. Labeling: $250 implementation cost for purchasing two new stamps for labeling; no additional per

- cost labels per-label ; every item is labeled. - - $250
-

Custom Cabinet Manufacturers 4 Recordkeeping: No implementation cost; must keep invoices. Labeling: Does not label. - - n.a. n.a.

5 Recordkeeping: No implementation cost; products are formaldehyde free; they must keep track of invoices. Labeling: Do not label cabinet products. - - n.a. n.a.

Household Furniture Manufacturers 6 Recordkeeping: No implementation cost; letters from suppliers are filed. Labeling: No extra cost; extra information required on each label, but they already had the necessary equipment to make the change; each item of upholstered furniture is labeled. - - No Cost Reported -

7 Recordkeeping: No extra cost; only buys from suppliers that are CARB compliant and tracks invoices. Labeling: No costs; they were labeling already for other reasons such as FSC certification; barcodes on each product which say CARB 2 compliant. - - No Cost Reported -

Business and Institutional Furniture Manufacturers 8 Recordkeeping: No implementation cost; must keep invoices for Forest Stewardship Council, CARB I, and CARB II. Labeling: Not a significant cost; made stickers for CARB certification; label each finished product. - - No Cost Reported -

9 Recordkeeping: Unknown exact costs; must keep track of billing, modify purchase orders, store certificates from suppliers. Labeling: Initial cost of a “couple hundred man hours” ( assumed to be 200 hours for this analysis ); internal process of changing drawings on
labels; worked with BIFMA fo r labeling changes; no extra cost per-label

costs ; labels applied by box/container, incorporated with shipping label. - - (200 hours multiplied by $44.27) -

Firms with More Substantive Costs
Percent of firms reporting more substantive costs - 11% 2/6 = 33% - Average costs for firms with more substantive costs - $12,916.80 $4,552
- Firms with Minor Costs

Percent of firms assumed to incur minor costs
- - 4/6=67% - Average costs for firms reporting minor costs
- - $133
- Source: Revenue data from Dun & Bradstreet 2010. Wage rates from U.S. Bureau of Labor Statistics 2010b

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### 2511 Table 2-70: Responses and Estimates from Wholesaler Recordkeeping Questionnaire

Survey

ID Description by Retailers of Recordkeeping and Labeling

Costs EPA Estimate of Recordkeeping Costs
Initial Recurring

Wood Product Wholesalers in California 1 Implementation Cost: No significant cost; did not purchase another recordkeeping system. Recurring Cost: 0.5 to 1 hour per day; Practices to comply with CARB include: query reports to ensure everything is CARB specific; adding custom comments on purchase orders; paperwork for when they receive product; adding a field for vendor name and CARB phase in system. - $4,980.30 (0.75 hours per day multiplied by 260 days multiplied by

$25.54/hr)

2 Implementation Cost: $2,000 for a small amount of labor; requires putting new line items (“ stock-keeping units” or SKUs) in computer system. Recurring Cost: No additional cost. $2,000 -

3 Implementation Cost: 40 labor hours and $2,000 in programming changes; requires changing tags and CARB-specific comment lines in already existing inventory tagging system. Recurring Cost: No additional cost. $3,021.60 (40 hours multiplied by $25.54/hr plus $2,000) -

4 Implementation Cost: Unknown; the IT department prints CARB information on each invoice and they are in the process of getting signed forms from suppliers (at 80% currently). Recurring Cost: Unknown. Costs incurred, could not quantify. Costs incurred, could not quantify.

Household Furniture Wholesalers 5 Implementation Cost: None; they only purchase from CARB-2 certified firms, a dozen manufacturers; did not have to modify recordkeeping system. Recurring Cost: None. - -

6 Implementation Cost: None; did not have to modify existing recordkeeping system. Recurring Cost: None. - -

7 Implementation Cost: Unknown Recurring Cost: Unknown; when purchasing the firm asks for CARB compliance phase II; keeps invoices; suppliers must submit compliance forms. Costs incurred, could not quantify. Costs incurred, could not quantify.

Summary of Results
Percent of firms reporting costs 57% 43%
Average costs for firms reporting costs $2,510.80 $4,980.30
Source: Revenue data from Dun & Bradstreet 2010. Wage rates from U.S. Bureau of Labor Statistics 2010d



### 2512 2.5.2 Recordkeeping, Labeling, Supplier Notifi cation, and Rule Familiarization Costs per 2513
Firm 2514

2515 This section presents the total costs per fabricator, wholesaler, and retailer firm associated with 2516 the recordkeeping and labeling requirements for the an alytical options considered for the TSCA Title VI 2517 rule. This analysis includes additional per firm costs to those that were reported in the questionnaire, 2518 including costs associated with becoming familiar with the rule’s requirements and sending notification 2519 letters to suppliers. 32 

### Although no fabricator or wholesaler firms quantified any costs associated with 2520

32 The CARB ATCM requires all firms that purchase com posite wood products to obtain documentation from their suppliers that the products are in compliance with the rule. Such supplier notification is included in some of the analytical options considered for the TSCA Title VI rule, but it is not required by the proposed option (Option SCUR). The estimates here for the analytical options including suppl ier notification reflect the cost for purchasers to submit requests for documentation to their suppliers, and the cost for the suppliers to provide the documentation.

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### sending notification letters to suppliers, several noted that this was necessary. Similarly, although no 2521 respondents reported costs associated with learning about the rule, it will be necessary for each firm to 2522 become familiar with it in order to determine whether they are subject to it, and if so, what steps will be 2523 necessary to achieve compliance. It is assumed that the entire group of affected composite panel 2524 producer, fabricator, wholesaler, and retailer firms will incur costs for both rule familiarization and 2525 supplier notification. In summary, the following initial costs will be incurred in response to recordkeeping 2526 and labeling requirements: (1) rule familiarization; (2) supplier notification; (2) labeling system setup; 2527 and (3) recordkeeping system setup. There will also be recurring costs estimated on an annual basis for 2528 maintaining records. These costs are described in more detail in the sections below. 2529

2530 2.5.2.1 Rule Familiarization and Supplier Notification Costs 

### 2531

2532 It is expected that all composite panel producer, fabricator, wood veneer laminated product 2533 producer, wholesaler, and retailer firms, will need to spend time familiarizing themselves with the 2534 regulation and either ensuring that their current systems are sufficient for the TSCA Title VI rule’s 2535 requirements or identifying necessary changes. It is assumed that every firm will require four managerial 2536 labor hours of initial rule familiarization costs. These per-firm rule familiarization costs are estimated by 2537 industry in Table 2-71. 2538

2539

Table 2-71: Per-Firm Rule Familiarization Costs

Industry Rule Familiarization
Labor (hours) Managerial Occupations
Wage Rate Rule Familiarization

Cost Per Firm
Stock Composite Panel Producers 4.0 $73.60 $294.40

Fabricators and Laminators 4.0 $73.60 $294.40

Wholesalers 4.0 $93.29 $373.16

Retailers 4.0 $70.71 $282.84
Sources: U.S. Bureau of Labor Statistics 2010b, c, d



### 2540

It is assumed that all affected fabricator, wood veneer la minated product producer, wholesaler, 2541

and retailer firms that are not compliant with the CARB ATCM in the baseline will also incur costs for 2542 sending notification letters to all of their composite wood product suppliers. The composite wood 2543 product suppliers will conversely need to respond to all downstream firms requesting confirmation of 2544 compliance with the TSCA Title VI rule’s requirements. Those firms that already comply with the 2545 CARB ATCM in the baseline are assumed to already be maintaining supplier agreements that can be used 2546 to meet the TSCA Title VI rule’s supplier notification requirements without incurring additional costs. It 2547 is assumed that each retailer entity will need to send notification letters to a total of 40 suppliers. 2548

Fabricators and wholesalers are assumed to send notif ication letters to 20 suppliers. Notification 2549 responses are estimated by assuming that notification letters from downstream firms are distributed 2550 equally across the upstream firms. Each upstream firm is assumed to respond to the notification letters it 2551 receives (see Table 2-72 for the average number of notification and response letters sent by industry). 2552

2553 Supplier notification requires both material and la bor costs. The material costs for each supplier 2554 letter include: $0.10 for a printed letter, $0.02 for an envelope, and $0.44 for a stamp for a total of $0.56 2555 in material costs per supplier letter. In terms of le tter production and mailing, it is assumed that this 2556 activity will require 2 hours of initial labor plus one mi nute of labor for each supplier notification letter or 2557 response letter sent. The labor costs are estimated using the industry-specific fully loaded wages for the 2558 “office and administrative support” occupation (See Table 2-68). Supplier notification cost elements per 2559 fabricator, wholesaler, retailer, an d composite panel producer firms are presented in Table 2-72 below. 2560 The total per-firm costs is calculated as the sum of (1) material costs and (2) the number of labor hours 2561 required multiplied by the fully loaded hourly wage. 2562

2563

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### Table 2-72: Per-Firm Supplier Notification and Response Costs

Industry Notification

Letters

Sent Per

Firm Notification

Letter
Responses

Per Firm Total

Letters Per

Firm Estimated

Labor

Burden Per

Firm
(hours) Estimated

Material

Cost Per Firm ($0.56
per letter) Office and

Administrative Support Wage Total PerFirm Cost

Composite

Panel

Producers a 0 295 295 6.9 $165.20 $24.84 $336.60

Fabricators

and
Laminators 20 282 302 7.0 $169.12 $24.84 $343.00

Wholesalers 20 277 297 7.0 $166.32 $25.54 $345.10

Retailers 40 0 40 2.7 $22.40 $19.32 $74.56
Sources: U.S. Bureau of Labor Statistics 2010a, b, d, United States Postal Service 2011



### 2564 2.5.2.2 Labeling Costs 

### 2565

2566 Fabricators must label every finished good they produce, or every box containing finished goods, 2567 with the fabricator’s name, the date the finished good was produced, and a statement of compliance. 2568 Because this is similar to the labeling requirement in the CARB ATCM, the average labeling costs for 2569 fabricators are estimated based on the questionnaire results and presented in Table 2-69 of the previous 2570 section. Based on the questionnaire results, it is estimated that 33% of fabricators who are not already 2571 complying with the CARB ATCM (because their products are not sold in California) will incur average 2572 incremental costs of $4,552 in the first year to change their labels, and all other fabricators will incur an 2573 average incremental cost of $132.81. Since none of the fabricators that took part in the telephone 2574 questionnaire reported any recurring costs for labeling, no recurring labeling costs are estimated. 2575

2576 It is assumed that 1 percent of wholesalers incur labeling costs, either because they are 2577 repackaging goods that were originally labeled on th e packaging instead of on the individual items, or 2578 because they are replacing an original label applied by the panel producer or fabricator with a label listing 2579 a different company name. It is also assumed that these wholesalers incur the same costs as the 2580

fabricators who are assumed to incur more substantial initial labeling costs (an average of $4,552). 2581

2582 It is assumed that panel producers, for whom product labeling is a customary business practice, 2583 will incur the incremental costs of 6 hours for changing their labels twice. They may need to change their 2584 labels once before the effective date of the rule (to indicate that the panels were produced before that date 2585 if they are to be sold after the rule goes into effect) and again after their product lines are certified. The 2586 first label change may be needed. 2587

2588 Table 2-73: Summary of Average Labeling Setup Costs Per-Firm

Firm Type Average Initial Costs 

### Low High
Panel Producers (excl. laminators defined as hardwood plywood producers) $149.04

Laminators defined as hardwood plywood producers $4,552.00
Fabricators ( including excluding laminators defined as fabricators) $132.81 $4,552.00

Wholesalers $4,552.00

- Retailers - -



### 2589

2590 Formatted Table

Deleted Cells

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### 2591

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### 2.5.2.3 Recordkeeping Costs 

### 2592

2593 Under the CARB ATCM, fabricators, importers, dist ributors, and wholesalers are required to take 2594 “reasonable precautions” to ensure that the composite wood products and finished goods they acquire are 2595 in compliance with the applicable emission standards. This includes instructing each supplier that the 2596 product supplied must comply with applicable emissi ons standards, and obtaining written documentation 2597 stating that. In addition, these firms must keep records showing the date of purchase, the supplier, as well 2598 as all precautions taken to ensure that the product meets emissions standards. These records must be kept 2599 for two years. The TSCA Title VI rule requires that records be kept for five three years but this is not 2600 expected to significantly affect the costs to regulated entities, so the cost of the additional recordkeeping 2601

has not been estimated. 2602

2603 The average initial and recurring recordkeeping costs for fabricators and wholesalers are 2604 estimated based on the questionnaire results and presented above in Table 2-69 and Table 2-70 above. 2605 Based on the questionnaire results, typical fabricators are not estimated to incur initial costs for 2606 recordkeeping, because their existing recordkeeping systems are adequate and do not need to be modified 2607 to comply with the TSCA Title VI requirements. It is estimated that 11% of the fabricators that are not 2608 currently complying with the CARB ATCM because their products are not sold in California will incur 2609 additional recurring recordkeeping costs. 2610

2611 The single fabricator questionna ire respondent that reported incurring recurring recordkeeping 2612 costs indicated that their recurring recordkeeping burden associated with the CARB ATCM was about 10 2613 hours per week, which this analysis estimates to be about $12,917 per year (see Table 2-69). However, 2614 the burden reported by this fabricator questionnaire respondent seems unlikely to be representative for all 2615 the fabricator firms that incur a recurring recordkeep ing burden. This fabricat or questionnaire respondent 2616 was a firm with employees, but smaller firms, such as nonemployer firms, are likely to need much less 2617 time than 10 hours per week (about a quarter of a 40 hour work week) to perform the necessary 2618 recordkeeping activities. Since the recordkeeping requirements entail keeping track of composite wood 2619 materials purchased and shipments that contain compos ite wood products, it is expected that the burden 2620 associated with keeping records will typically increase with the volume of a fabricator’s sales. Thus, to 2621 estimate the recurring recordkeeping burden for nonemplo yer fabricators, the analysis assumes that there 2622 is a fixed-cost component of the recurring recordkeeping costs associated with two hours of labor and a 2623 variable cost component that is proportional to a firm’s revenue. 2624

2625 For fabricator employer firms, the recurring recordkeeping cost is assumed to be comprised of a 2626 fixed cost component of $49.68 (based on the cost of 2 hours of labor at fabricator firms) and a variable 2627 cost component of 0.30338 percent of revenue (calcu lated by subtracting $49.68 from $12,917 and then 2628 dividing by $4,241,245, the estimated average revenue for affected employer fabricators). The average 2629 recurring recordkeeping cost for fabricator nonemployer firms is then estimated as the sum of 49.68 and 2630 0.30338 percent of average nonemployer firm revenue s ($42,690). The resulting average fabricator 2631 nonemployer firm recurring recordkeeping cost is $179.19 per year. 2632

2633 Recurring recordkeeping costs are estimated similarly for wholesale firms. It is estimated that 2634 43% of wholesalers that are not currently complying with the CARB ATCM (because their products are 2635 not sold in California) will incur additional recurri ng costs (see Table 2-70). The costs to those 2636 wholesalers with recurring recordkeeping costs are estimated based on the wholesaler questionnaire. The 2637 single wholesaler questionnaire res pondent that reported incurring recu rring recordkeeping costs indicated 2638 that their recurring recordkeeping burden associated with the CARB ATCM was about forty five minutes 2639 per day, which this analysis estimates to be about $4,980.30 per year (see Table 2-70). However, the 2640 burden reported by this wholesaler questionnaire respondent seems unlikely to be representative for all 2641 the wholesaler firms that incur a recurring recordkeeping burden. This wholesaler questionnaire 2642

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### respondent was a firm with employees, but smaller firms such as nonemployer firms, are likely to need 2643 much less time than 3.75 hours per week (nearly 10% of a 40 hour work week) to perform the necessary 2644 recordkeeping activities. Since the recordkeeping requirements entail keeping track of composite wood 2645 materials purchased and shipments that contain compos ite wood products, it is expected that the burden 2646 associated with keeping records will typically increase with the volume of a wholesaler’s sales. Thus, to 2647 estimate the recurring recordkeeping burden for nonemployer wholesalers, the analysis assumes that there 2648 is a fixed-cost component of the recurring recordkeeping costs associated with two hours of labor and a 2649 variable cost component that is proportional to a firm’s revenue. 2650

2651 For employer firms, the recurring recordkeeping cost is assumed to be comprised of a fixed cost 2652 component of $51.08 (based on the cost of 2 hours of labor at wholesaler firms) and a variable cost 2653 component of 0.05933 percent of revenue (calculated by subtracting $51.08 from $4,980.30 and then 2654 dividing by $8,308,417, the estimated average revenue for affected employer wholesalers). The average 2655 recurring recordkeeping cost for nonemployer firms is then estimated as the sum of 51.08 and 0.05933 2656 percent of average nonemployer revenues ($82,542). The resulting average wholesaler nonemployer 2657 recurring recordkeeping cost is $100.05 per year. 2658

2659 It is estimated that 57% of the wholesalers that are not currently complying with the CARB 2660 ATCM (because their products are not sold in California ) will incur an initial cost of $2,511 to change 2661 their recordkeeping systems, and that these costs will average $2,511 for both employer and nonemployer 2662 firms. It is assumed that the remaining wholesalers do not have to upgrade their recordkeeping systems in 2663 order to complying with the recordkeeping requirements. 2664

2665 Panel producers are assumed to incur an average labor burden of one hour per week (equivalent 2666 to $3,710.72 per year) to maintain the following records for 5 3 years: 2667

2668

 Records of quarterly emission testing a nd quality control testing that identify the 2669 accredited third-party certifier conducting or overseeing the testing and the laboratory or 2670 quality control facility actually performing the testing. These records must also include 2671 the date, the product type tested, the lot or batch number that the tested material 2672 represents, the test method used, and the test results; 2673

 Production records, including a description of the composite wood product(s), the date of 2674 manufacture, lot or batch numbers, the amount of resin use by volume and weight, the 2675 resin trade name, resin manufacturer and su pplier contact information, and tracking 2676 information allowing each product to be traced to a specific lot number or batch 2677 produced; 2678

 Records demonstrating initial and continued eligibility for the reduced testing provisions 2679 for products made with no-added formaldehyde-based resins, if applicable; 2680

 Records of changes in production, including changes in resin use, resin composition, and 2681 changes in the process, such as changes in press time; 2682

 Purchaser information for each composite wood product, if applicable, including the 2683 name, contact person, address, phone number, e- mail address if available, purchase order 2684 or invoice number, and amount purchased; 2685

 Transporter information for each composite w ood product, if applicable, including name, 2686 contact person, address, phone number, e-mail address if available, and shipping invoice 2687 number; 2688

 Information on the disposition of non-complying lots, including product type and amount 2689 of composite wood products affected, lot or batch numbers, mitigation measures used, 2690 results of retesting, and final disposition; 2691

 Copies of labels used; 2692

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###  Panel producers are required to maintain an up-to-date quality control manual on their 2693 premises; and 2694

 Panel producers are required to maintain the credentials of their quality control managers 2695 and quality control employees for as long as employees are serving in a quality control 2696 capacity. 2697

2698 Table 2-74: Summary of Average Recordkeeping Costs Per-Firm

Firm Type Average Recordkeeping Costs 

### Initial Costs Recurring Costs
Panel Producers (excl. laminators defined as hardwood plywood producers) - $3,710.72

Laminators defined as hardwood plywood producers a producers - Employer firms a

- $16,627.52
Nonemployer firms b

- $3,889.91

Fabricators (including laminators defined as fabricators) All firms that comply with CARB

ATCM in baseline and 89% of firms that do not comply with CARB

ATCM in baseline b baseline c

- - 11% of employer firms that do not comply with CARB ATCM in

baseline b baseline c - $12,916.80
11% of nonemployer firms that do not comply with CARB ATCM in

baseline b baseline c

- $179.19

Wholesalers All firms that comply with CARB ATCM in baseline and 57% (for initial costs) and 43% (for recurring costs) of firms that do not comply

with CARB ATCM in

baseline b baseline c

- - 57% (for initial costs) and 43% (for recurring costs) of employer firms that do not comply with CARB

ATCM in baseline b baseline c $2,510

, . 80 $4, 890 980 .30
57% (for initial costs) and 43% (for recurring costs) of nonemployer firms that do not comply with

CARB ATCM in baseline b baseline c $2,510

, . 80 $100.05

Retailers - -

a $16,627.52= 12,916.80 (employer firm fabricator recordkeeping cost) + $3,710.72 (panel producer recordkeeping cost)

b b $3,889.91= 179.19 (nonemployer firm fabricator recordkeeping cost) + $3,710.72 (panel producer recordkeeping cost)

c Firms may not comply with the CARB ATCM in the baseline if they do not sell products in California.


### 2699

2700
2.5.3 Number of Affected Entities 2701

2702 Several industries are already universally following the recordkeeping and labeling requirements 2703 under the CARB rule, while other industries have no t experienced widespread implementation of these 2704 practices. In general, those industries that tend to distribute their products nationally have implemented 2705 recordkeeping and labeling systems to comply with CARB, while regional operations generally have not. 2706

2707 Merged Cells

Formatted Table

Inserted Cells

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### Discussions with industry experts informed th e baseline compliance assumptions for most 2708

fabricators as well as all furniture wholesalers. 33 

### For the remaining fabricators baseline compliance was 2709 estimated as the percentage of total U.S. establishm ents located in California. For retail and wholesale 2710 firms, baseline compliance was estimated as the percentage of firms with at least one establishment 2711 located in California. Since all affected composite wood product producers will need to familiarize 2712 themselves with the rule as well as respond to all s upplier notification letters, baseline compliance with 2713 the CARB regulation does not need to be determined. 2714

2715 2.5.3.1 Baseline CARB Compliance of Percentages for Fabricator and Wood Veneer Laminated 

### 2716

Product Industries 

### 2717

2718 Many fabricators are already complying with the recordkeeping and labeling requirements of the 2719 CARB ATCM and therefore would not incur any incremental costs for putting these systems in place to 2720 comply with the TSCA Title VI rule. The baseline level of CARB compliance for most fabricator and 2721 wood veneer laminated product industries was determined based on conversations with industry 2722

associations. 34 

### However, baseline compliance for some fabricator and wood veneer laminated product 2723 industries was estimated simply as the number of employer establishments located in California divided 2724 by the total number of U.S. employer establishments in each industry. The estimated baseline CARB 2725 compliance levels for fabricators and wood veneer laminated product producers are presented below in 2726

Table 2-75. 2727

2728

2729

2730

33 Conversations with Industry (Personal Communicati on with AHFA 2010, Personal Communication with BIFMA 2010, Personal Communication with KCMA 2010, Personal Communication with NALFA 2010) informed assumptions for the following NAICS codes: 321211, 321219, 337110, 337129, 321911, 337121, 337122, 337127, 337211, 337214, 337215, 336213, 336214, 423210, 423220.

34 Conversations with Industry represented informed assump tions for the following fabricator NAICS codes: 321211,

321219, 337110, 337129, 321911, 337121, 337122, 337127, 337211, 337214, 337215, 336213, and 336214.

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### Table 2-75 : : Percentage o f Baseline CARB Compliance of Fabr icator and Wood Veneer Laminated Product Producer Industries, by Affected NAICS

NAIC

S NAICS Definition CA

Estab. Estab.

Outsi

de CA Total

U.S.

Estab. Baseline

CARB Complian

ce Basis for Estimate or Assumption

3212

11 Hardwood Veneer and Plywood Manufacturing - - - 100% (Personal Communication with HPVA 2011a)

32121

9 Reconstituted Wood Product Manufa cturing

- - - 100%

3371

10 Wood Kitchen Cabinet and Countertop Manufacturing - - - 50% (Personal Communication with KCMA 2010)

3371

29 Wood Television, Radio, and Sewing Machine Cabinet Manufacturing - - - 50% Assumed to be similar to kitchen cabinet and countertop manufacturing.

3219

11 Wood Window and Door Manufacturing - - - 100% Assumed to be 100%.

3371

21 Upholstered House Furniture Manufacturing - - - 100% (Personal Communication with AHFA 2010)

3371

22 Non-upholstered Wood

Household Furniture Manufacturing - - - 100% (Personal Communication with AHFA 2010)

3371

24 Metal Household Furniture Manufacturing - - - 100% Personal Communication with AHFA

2010

3371

27 Institutional Furniture Manufacturing - - - 100% (Personal Communication with BIFMA 2010)

3372

11 Wood Office Furniture Manufacturing - - - 100% (Personal Communication with BIFMA 2010)

3372

14 Office Furniture (except Wood) Manufacturing - - - 100% (Personal Communication with BIFMA 2010)

3372

15 Showcase, Partition, Shelving, and Locker Manufacturing - - - 100% Assumed to be similar to furniture manufacturing.

3219

18 Other Millwork (including Flooring) 194 1,907 2,101 9.23% % of Estab. in CA (U.S. Census Bureau 2010a)

3372

12 Custom Architectural Woodwork

and Millwork 219 2,009 2,228 9.83% % of Estab. in CA (U.S. Census Bureau 2010a)

3219

99 All Other Miscellaneous Wood Product Manufacturing 154 1,810 1,964 7.84% % of Estab. in CA (U.S. Census Bureau 2010a)

3362

13 Motor Home Manufacturing

- - - 100% Assumed to be 100%.

3362

14 Travel Trailer and Camper

- - - 100% Assumed to be 100%.

3219

91 Manufactured Home (Mobile Home) Manufacturing 41 335 376 10.90% % of Estab. in CA (U.S. Census Bureau 2010a)

3219

92 Prefabricated Building Manufacturing 48 763 811 5.92% % of Estab. in CA (U.S. Census Bureau 2010a)

3399

50 Sign Manufacturing 644 5,739 6,383 10.09% % of Estab. in CA (U.S. Census Bureau 2010a)

Sources: U.S. Census Bureau 2009b

, 2010f



### 2731 Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

Inserted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Inserted Cells

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### 2.5.3.2 Baseline CARB Compliance of Retailer and Wholesaler Industries 

### 2732

2733 This analysis assumes that retail and wholesale firms with establishments in California are 2734 complying with the recordkeeping and labeling requ irements of the CARB ATCM and therefore would 2735 not incur any incremental costs for putting these systems in place to comply with the TSCA Title VI 2736 proposed rule. Because retailers make the large majority of their sales in the same states where they have 2737 physical locations it is not likely that many retailers without California locations have established chain of 2738 custody systems to meet the CARB ATCM’s requirements. Wholesalers are more likely than retailers to 2739 sell products in states where they do not have physica l locations. Thus, this assumption may lead to an 2740 understatement of the level of baseline compliance among wholesalers. Note that two wholesale 2741 industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers 2742 (423220) are instead assumed to be fully compliant with the CARB ATCM chain of custody requirements 2743

in the baseline. 35 

### 2744

2745

Because data on the number of firms with at least one establishment in California are not 2746 available, the following steps must be taken to estimate baseline compliance for each affected industry: 2747 (1) use 2007 Economic Census data to identify the numb er of affected retail and wholesale firms (U.S. 2748 Census Bureau 2009a, 2010b, d, o, p); (2) estimate th e number of single-unit firms in California; (3) 2749 estimate the number of multi-unit firms with at least one establishment in California; and (4) estimate 2750 baseline compliance as the percentage of U.S. firms with at least one establishment in California. 2751

2752 Figure 2-5 presents an example to demonstrate how the numbers of single-unit firms located in 2753

California are estimated. 2754

2755

35 These assumptions are based on two sources: (Personal Communication with AHFA 2010, Personal Communication with BIFMA 2010).

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### Figure 2-5: Example Methodology for Estimating the Number of Single-Unit Firms in California (NAICS 441210)



### and present the estimated number of single

- unit establishments located in California for all 2756

affected wholesaler and retailer industries. 2757

2758

2759

2760

Table 2

- 74 : The Number of Single

- Unit Wholesaler Establishments in California, by Affected NAICS

NAICS NAICS Des cription All U.S.

Estab. in

Affected

NAICS U.S. Single

Unit

Estab. Percent of

U.S. Estab.

that are Single Unit All CA

Estab. CA Single

Unit

Estab.

423310 Lumber, plywood, millwork, and wood panel merchant

wholesalers 8,984 5,587 62.2% 836 520

423320 Bri ck, stone, and related construction material merchant

wholesalers 4,107 2,413 58.8% 447 263

423330 Roofing, siding, and insulation material merchant wholesalers 2,804 862 30.7% 175 54

423390 Other construction material merchant wholesalers 3,767 2,122 56 .3% 394 222

423410 Photographic equipment and supplies merchant wholesalers 1,062 767 72.2% 230 166

423420 Office equipment merchant wholesalers 6,415 2,509 39.1% 676 264

423430 Computer and software merchant wholesalers 11,545 7,689 66.6% 2,265 1,508

423440 Other commercial equipment merchant wholesalers 4,444 3,600 81.0% 521 422

423450 Medical equipment merchant wholesalers 8,601 6,718 78.1% 1,194 933

423490 Other professional equipm ent and supplies merchant

wholesalers 2,380 1,804 75.8% 309 234

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### Table 2

- 74 : The Number of Single

- Unit Wholesaler Establishments in California, by Affected NAICS

NAICS NAICS Des cription All U.S.

Estab. in

Affected

NAICS U.S. Single

Unit

Estab. Percent of

U.S. Estab.

that are Single Unit All CA

Estab. CA Single

Unit

Estab.

42 3510 Metal service centers and other metal merchant wholesalers 10,831 6,867 63.4% 1,273 807

423610 Elec. equip. and wiring merchant wholesalers 13,948 7,553 54.2% 1,910 1,034

423620 Electric appliance merchant wholesalers 3,149 2,260 71.8% 685 492

4236 90 Other electronic parts and equipment merchant wholesalers 13,991 9,329 66.7% 3,015 2,010

423710 Hardware merchant wholesalers 6,986 4,581 65.6% 1,082 710

423720 Plumbing equip. merchant wholesalers 7,027 3,013 42.9% 806 346

423730 HVAC equip. merchan t wholesalers 5,376 1,826 34.0% 387 131

423740 Refrigeration equipment and supplies merchant wholesalers 1,318 625 47.4% 196 93

423810 Construction equipment merchant wholesalers 4,904 2,432 49.6% 369 183

423820 Farm and garden machinery and equipment m erchant

wholesalers 8,405 5,395 64.2% 621 399

423830 Industrial machinery and equipment merchant wholesalers 31,380 21,477 68.4% 3,111 2,129

423840 Industrial supplies merchant wholesalers 8,850 4,855 54.9% 1,018 558

423850 Service establishment equipme nt and supplies merchant

wholesalers 4,719 3,258 69.0% 373 258

423910 Sporting and recreational goods and supplies merchant

wholesalers 6,278 5,300 84.4% 1,224 1,033

423920 Toy and hobby goods and supplies merchant wholesalers 2,504 2,262 90.3% 741 669

423930 Recyclable material merchant wholesalers 7,377 5,697 77.2% 850 656

423940 Jewelry merchant wholesalers 7,806 7,383 94.6% 1,495 1,414

423990 Other miscellaneous durable goods merchant wholesalers 10,270 8,877 86.4% 1,723 1,489

424110 Printing and writing paper merchant wholesalers 1,291 698 54.1% 161 87

424120 Stationery and office supplies merchant wholesalers 5,865 4,217 71.9% 733 527

424130 Industrial and personal service paper merchant wholesalers 4,939 3,644 73.8% 727 536

424210 Drugs and d ruggists' sundries merchant wholesalers 8,535 5,695 66.7% 1,504 1,004

424310 Piece goods, notions, and other dry goods merchant wholesalers 3,532 2,906 82.3% 967 796

424320 Men's and boys' clothing and furnishings merchant wholesalers 4,252 3,634 85.5% 9 84 841

424330 Women's and children's clothing merchant wholesalers 7,674 6,823 88.9% 2,357 2,096

424340 Footwear merchant wholesalers 1,659 1,446 87.2% 525 458

424410 General line grocery merchant wholesalers 2,547 2,025 79.5% 449 357

424420 Packaged f rozen food merchant wholesalers 3,502 2,702 77.2% 606 468

424450 Confectionery merchant wholesalers 2,191 1,650 75.3% 282 212

424460 Fish and seafood merchant wholesalers 2,022 1,806 89.3% 238 213

424480 Fresh fruit and vegetable merchant wholesalers 5, 074 4,323 85.2% 1,102 939

424490 Other grocery and related products merchant wholesalers 13,068 8,943 68.4% 2,011 1,376

424510 Grain and field bean merchant wholesalers 4,851 1,801 37.1% 133 49

424610 Plastics materials and basic forms and shapes mercha nt

wholesaler 3,420 2,368 69.2% 516 357

424690 Other chemical and allied pr oducts merchant wholesalers 10,138 5,681 56.0% 965 541

424910 Farm supplies merchant wholesalers 7,738 3,786 48.9% 649 318

424920 Book, periodical, and newspaper merchant wholesa lers 2,813 1,816 64.6% 360 232

424930 Flower, nursery stock, & florists' supplies merchant wholesalers 4,218 3,320 78.7% 671 528

424940 Tobacco and tobacco product merchant wholesalers 1,370 1,017 74.2% 94 70

424950 Paint, varnish, and supplies merchant wholesalers 2,060 924 44.9% 235 105

424990 Other miscellaneous nondurable goods merchant wholesalers 12,634 11,549 91.4% 2,980 2,724

Total Wholesalers in Affected NAICS 324,621 219,835 47,175 33,831

Sources: U.S. Cens us Bureau 2010a

, b



### 2761

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### Table 2

- 75 : The Number of Single

- Unit Retailer Establishments in California, by Affected NAICS

NAICS NAICS Description All U.S.

Estab. in

Affected

NAICS U.S. Single

Unit

Estab. Percent of

U.S.

Estab. that are Single

Unit All CA

Estab. CA Single

Unit

Estab.

441110 New car dealers 24,888 19,495 78.3% 2,516 1,970

441210 Recreational vehicle dealers 3,100 2,530 81.6% 325 265

441221 Motorcycle, ATV, and personal watercraft dealers 6,137 5,492 89.5% 620 555

441229 All other motor vehicle dealers 2,266 2,042 90.1% 229 206

441320 Tire dealers 20,127 10,445 51.9% 2,034 1,056

442110 Furniture stores 28,834 17,829 61.8% 3,308 2,04 5

442210 Floor covering stores 14,534 12,186 83.8% 1,471 1,233

442291 Window treatment stores 2,652 2,196 82.8% 358 296

442299 All other home furnishings stores 19,124 10,994 57.5% 2,274 1,307

443111 Household appliance stores 9,336 7,216 77.3% 843 652

443112 Radio, television, and other electronics stores 29,051 13,741 47.3% 3,478 1,645

443120 Computer and software stores 10,428 5,385 51.6% 1,307 675

443130 Camera and photographic supplies stores 1,988 699 35.2% 201 71

444110 Home centers 6,953 2,3 30 33.5% 585 196

444120 Paint and wallpaper stores 7,860 2,085 26.5% 734 195

444130 Hardware stores 16,454 11,289 68.6% 1,241 851

444190 Other building material dealers 39,551 27,231 68.9% 3,909 2,691

444210 Outdoor power equipment stores 4,357 3,916 8 9.9% 236 212

444220 Nursery, garden center, and farm supply stores 15,895 11,640 73.2% 1,138 833

445110 Supermarkets and other grocery (except convenience) stores 64,881 39,878 61.5% 7,824 4,809

445120 Convenience stores 25,510 21,529 84.4% 2,578 2,176

445210 Meat markets 6,009 5,339 88.9% 607 540

445220 Fish and seafood markets 2,063 1,954 94.7% 209 198

445230 Fruit and vegetable markets 2,938 2,780 94.6% 297 281

445291 Baked goods stores 4,290 3,001 70.0% 434 303

445292 Confectionery and nut store s 3,404 1,990 58.5% 344 201

445299 All other specialty food stores 5,504 4,057 73.7% 556 410

445310 Beer, wine, and liquor stores 31,485 26,292 83.5% 3,182 2,657

446110 Pharmacies and drug stores 42,045 17,710 42.1% 4,250 1,790

446120 Cosmetics, beauty supplies, and perfume stores 13,584 6,679 49.2% 1,373 675

446130 Optical goods stores 13,149 4,977 37.9% 1,329 503

446191 Food (health) supplement stores 8,999 4,928 54.8% 910 498

446199 All other health and personal care stores 10,675 6,835 64.0% 1,07 9 691

447110 Gasoline stations with convenience stores 97,508 49,010 50.3% 9,856 4,954

447190 Other gasoline stations 21,248 13,700 64.5% 2,148 1,385

448110 Men's clothing stores 8,321 4,533 54.5% 1,082 589

448120 Women's clothing stores 36,220 12,832 35.4% 4,419 1,566

448130 Children's and infants' clothing stores 7,102 2,611 36.8% 853 314

448140 Family clothing stores 28,254 7,618 27.0% 3,540 954

448150 Clothing accessories stores 7,494 3,488 46.5% 917 427

448190 Other clothing stores 12,034 7,430 61.7% 1,394 861

448210 Shoe stores 28,076 6,147 21.9% 2,838 621

448310 Jewelry stores 27,745 18,015 64.9% 3,269 2,123

448320 Luggage and leather goods stores 1,222 561 45.9% 124 57

451110 Sporting goods stores 22,254 16,485 74.1% 2,510 1,859

451120 H obby, toy, and game stores 9,357 5,489 58.7% 1,028 603

451130 Sewing, needlework, and piece goods stores 5,663 4,001 70.7% 632 447

451140 Musical instrument and supplies stores 4,510 3,301 73.2% 456 334

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

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### Table 2

- 75 : The Number of Single

- Unit Retailer Establishments in California, by Affected NAICS

NAICS NAICS Description All U.S.

Estab. in

Affected

NAICS U.S. Single

Unit

Estab. Percent of

U.S.

Estab. that are Single

Unit All CA

Estab. CA Single

Unit

Estab.

451211 Book stores 9,955 4,291 43.1% 1,006 434

45 1212 News dealers and newsstands 1,523 1,239 81.4% 154 125

451220 Prerecorded tape, compact disc, and record stores 4,153 2,176 52.4% 420 220

452111 Department stores (except discount department stores) 3,533 7 0.2% 437 1

452112 Discount department stor es 5,001 4 0.1% 568 0

452910 Warehouse clubs and supercenters 4,260 1 0.0% 185 0

452990 All other general merchandise stores 33,061 8,473 25.6% 1,897 486

453110 Florists 19,822 18,465 93.2% 1,754 1,634

453210 Office supplies and stationery stores 9,558 4,948 51.8% 1,220 632

453220 Gift, novelty, and souvenir stores 31,391 22,652 72.2% 3,295 2,378

453910 Pet and pet supplies stores 8,782 5,643 64.3% 888 570

453920 Art dealers 6,677 6,183 92.6% 880 815

453930 Manufactured (mobile) home dealers 3,878 2 ,489 64.2% 210 135

453991 Tobacco stores 6,539 4,511 69.0% 661 456

453998 All other miscellaneous store retailers (except tobacco stores) 17,270 13,940 80.7% 1,746 1,409

454111 Electronic shopping 14,185 13,212 93.1% 1,434 1,335

454113 Mail

- order house s 7,324 5,956 81.3% 740 602

454210 Vending machine operators 5,194 4,487 86.4% 525 454

454311 Heating oil dealers 4,055 3,078 75.9% 410 311

454312 Liquefied petroleum gas (bottled gas) dealers 5,980 1,845 30.9% 604 186

454390 Other direct selling estab lishments 22,077 19,545 88.5% 2,282 2,020

Total Retailers in Affected NAICS 994,667 580,145 103,598 60,411

Sources: U.S. Census Bureau 1997

, 2010d

, g
, h



### 2762 The method for estimating the number of multi-unit firms with an establishment located in 2763 California is demonstrated in Figure 2-6. The aver age U.S. number of establishments per multi-unit firm 2764 and the probability of a U.S. establishment not being located in California can be combined to estimate 2765 the probability that a U.S. firm has at least one establishment located in California. Applying this 2766 probability to the total number of U.S. multi-unit firms, the number of multi-unit firms with an 2767

establishment in California is then estimated. 2768

2769

2770

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

May 1, 2013 2-135 

### Figure 2-6: Example Methodology for Estimating the Number of Multi-Unit Firms with an Establishment in California (NAICS 441210)



### 2771

The estimated numbers of multi

- unit firms with at least one C alifornia establishment are 2772 presented for each affected industry in for wholesaler firms and for retailer firms. 2773

2774

Table 2

- 76 : Number of Multi

- Unit Wholesaler Firms with a California Establishment, by

Af fected NAICS

NAICS NAICS Description U.S.

Number of
Estab. per

Multi

- Unit

Firm Probability

an Estab. is

not in CA Probability

Firm has

an Estab.

in CA Number

of CA

Multi

Unit

Firms

423310 Lumber, plywood, millwork, and wood panel merchant

wholesalers 3.8 90.7% 31.2% 277

423320 Brick, stone, and related construction material merchant

wholesalers 4.4 89.1% 39.9% 153

423330 Roofing, siding, and insulation material merchant wholesalers 7.5 93.8% 38.3% 99

423390 Other construction material merchant wholesal ers 4.2 89.5% 37.1% 145

423410 Photographic equipment and supplies merchant wholesalers 2.5 78.3% 45.4% 54

423420 Office equipment merchant wholesalers 10.1 89.5% 67.6% 261

423430 Computer and software merchant wholesalers 4.7 80.4% 64.2% 526

423440 Ot her commercial equipment merchant wholesalers 2.3 88.3% 25.2% 91 U.S. Economic Census (2010e)

219 U.S. Multi-Unit Firms U.S. Multi-Unit

Establishments

U.S. Economic Census (2010d, e)

3,100 – 2,530 = 570

(U.S. Multi-Unit Establishments) / (U.S. Multi-Unit Firms)

570 / 219 = 2.6Number of Establishments per MultiUnit Firm U.S. Economic Census (2010d)

3,100 All U.S. Establishments

Probability Firm has an Establishment in CA

1 – (Probability an Establishment is not in CA)^ (Number of Establishments per Multi-Unit Firm)

1 – (89.5%)^(2.6) = 25%

(US Multi-Unit Firms) * (Probability of an Establishment in CA)

219 * 25% = 55 CA Multi-Unit Firms U.S. Economic Census (2010d)

325 All CA Establishments

Probability an Establishment is NOT in CA

1 - (All CA Establishments) / (All U.S. Establishments)
1 – 325 / 3,100 = 89.5%

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

May 1, 2013 2-136 

### Table 2

- 76 : Number of Multi

- Unit Wholesaler Firms with a California Establishment, by

Af fected NAICS

NAICS NAICS Description U.S.

Number of
Estab. per

Multi

- Unit

Firm Probability

an Estab. is

not in CA Probability

Firm has

an Estab.

in CA Number

of CA

Multi

Unit

Firms

423450 Medical equipment merchant wholesalers 3.9 86.1% 44.4% 213

423490 Other professional equipment and supplies merchant

wholesalers 2.4 87.0% 28.7% 68

423510 Metal service centers and other metal merchant wholesalers 3.6 88.2% 36.1% 399

423610 Elec. equip. and wiring merchant wholesalers 6.0 86.3% 58.6% 626

423620 Electric appliance merchant wholesalers 2.8 78.2% 49.8% 158

423690 Other electronic parts and equipment merchant wholesal ers 4.0 78.5% 62.5% 721

423710 Hardware merchant wholesalers 4.2 84.5% 50.7% 290

423720 Plumbing equip. merchant wholesalers 7.0 88.5% 57.5% 329

423730 HVAC equip. merchant wholesalers 7.0 92.8% 40.5% 207

423740 Refrigeration equipment and supplies mer chant wholesalers 5.2 85.1% 56.8% 76

423810 Construction equipment merchant wholesalers 3.8 92.5% 26.0% 167

423820 Farm and garden machinery and equipment merchant

wholesalers 3.3 92.6% 22.2% 204

423830 Industrial machinery and equipment merchant wholes alers 3.4 90.1% 30.2% 869

423840 Industrial supplies merchant wholesalers 4.2 88.5% 40.1% 382

423850 Service establishment equipment and supplies merchant

wholesalers 3.6 92.1% 25.4% 104

423910 Sporting and recreational goods and supplies merchant

whole salers 2.7 80.5% 44.4% 160

423920 Toy and hobby goods and supplies merchant wholesalers 1.8 70.4% 46.4% 63

423930 Recyclable material merchant wholesalers 3.2 88.5% 32.6% 170

423940 Jewelry merchant wholesalers 2.3 80.8% 38.2% 71

423990 Other miscellan eous durable goods merchant wholesalers 2.4 83.2% 35.5% 207

424110 Printing and writing paper merchant wholesalers 5.8 87.5% 53.6% 55

424120 Stationery and office suppl ies merchant wholesalers 4.1 87.5% 42.1% 170

424130 Industrial and personal service p aper merchant wholesalers 3.1 85.3% 39.2% 162

424210 Drugs and druggists' sundries merchant wholesalers 5.0 82.4% 62.2% 352

424310 Piece goods, notions, and other dry goods merchant

wholesalers 2.6 72.6% 56.0% 137

424320 Men's and boys' clothing and fur nishings merchant wholesalers 2.1 76.9% 42.6% 125

424330 Women's and children's clothing merchant wholesalers 2.1 69.3% 53.0% 219

424340 Footwear merchant wholesalers 1.9 68.4% 51.8% 58

424410 General line grocery merchant wholesalers 2.9 82.4% 42.5% 78

424420 Packaged frozen food merchant wholesalers 2.7 82.7% 40.6% 118

424450 Confectionery merchant wholesalers 3.7 87.1% 39.6% 59

424460 Fish and seafood merchant wholesalers 1.8 88.2% 20.5% 24

424480 Fresh fruit and vegetable merchant wholesalers 2.3 78.3% 43.4% 140

424490 Other grocery and related products merchant wholesalers 5.7 84.6% 61.4% 445

424510 Grain and field bean merchant wholesalers 4.6 97.3% 11.9% 80

424610 Plastics materials and basic forms and shapes merchant

wholesaler 2.9 84.9% 37 .5% 137

424690 Other chemical and allied products merchant wholesalers 5.3 90.5% 41.0% 347

424910 Farm supplies merchant wholesalers 5.2 91.6% 36.7% 278

424920 Book, periodical, and newspaper merchant wholesalers 4.3 87.2% 44.3% 103

424930 Flower, nurs ery stock, & florists' supplies merchant

wholesalers 2.9 84.1% 39.0% 123

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

May 1, 2013 2-137 

### Table 2

- 76 : Number of Multi

- Unit Wholesaler Firms with a California Establishment, by

Af fected NAICS

NAICS NAICS Description U.S.

Number of
Estab. per

Multi

- Unit

Firm Probability

an Estab. is

not in CA Probability

Firm has

an Estab.

in CA Number

of CA

Multi

Unit

Firms

424940 Tobacco and tobacco product merchant wholesalers 3.0 93.1% 19.2% 23

424950 Paint, varnish, and supplies merchant wholesalers 4.7 88.6% 43.1% 105

424990 Other miscellaneous n ondurable goods merchant wholesalers 1.9 76.4% 40.1% 228

Total Wholesalers in Affected NAICS 10,656

Sources: U.S. Census Bureau 2010a

, b



### 2775

Table 2

- 77 : Number of Multi

- Unit Retailer Firms with a California Establishment, by Affected

NAICS

NAICS NAICS Description U.S.

Number of
Estab. per

Multi

- Unit

Firm Probability

an Estab. is

not in CA Probability

Firm has

a n Estab.

in CA Number o f

CA Multi

Unit

Firms

441110 New car dealers 2.7 89.9% 25.0% 499

441210 Recreational vehicle dealers 2.6 89.5% 25.0% 55

441221 Motorcycle, ATV, and personal watercraft dealers 2.4 89.9% 22.4% 61

441229 All other motor vehicle dea lers 2.0 89.9% 19.2% 21

441320 Tire dealers 10.7 89.9% 68.2% 614

442110 Furniture stores 5.8 88.5% 50.9% 960

442210 Floor covering stores 3.0 89.9% 27.5% 214

442291 Window treatment stores 5.6 86.5% 55.4% 45

442299 All other home furnishings stores 14 .4 88.1% 83.8% 474

443111 Household appliance stores 3.6 91.0% 28.9% 170

443112 Radio, television, and other electronics stores 16.3 88.0% 87.5% 821

443120 Computer and software stores 30.6 87.5% 98.3% 162

443130 Camera and photographic supplies stores 14.5 89.9% 78.6% 70

444110 Home centers 13.8 91.6% 70.4% 235

444120 Paint and wallpaper stores 18.4 90.7% 83.5% 262

444130 Hardware stores 6.0 92.5% 37.5% 323

444190 Other building material dealers 3.8 90.1% 32.7% 1,059

444210 Outdoor power equipment stores 1.9 94.6% 10.1% 23

444220 Nursery, garden center, and farm supply stores 3.7 92.8% 23.8% 277

445110 Supermarkets and other grocery (except convenience) stores 12.5 87.9% 79.8% 1,602

445120 Convenience stores 6.2 89.9% 48.5% 310

445210 Meat mark ets 4.1 89.9% 35.5% 58

445220 Fish and seafood markets 1.6 89.9% 15.7% 11

445230 Fruit and vegetable markets 2.2 89.9% 21.1% 15

445291 Baked goods stores 10.3 89.9% 66.7% 83

445292 Confectionery and nut stores 8.9 89.9% 61.2% 97

445299 All other speci alty food stores 7.2 89.9% 53.6% 108

445310 Beer, wine, and liquor stores 4.6 89.9% 38.7% 437

446110 Pharmacies and drug stores 17.9 89.9% 85.2% 1,156

446120 Cosmetics, beauty supplies, and perfume stores 37.9 89.9% 98.2% 179

446130 Optical goods store s 19.4 89.9% 87.4% 368

446191 Food (health) supplement stores 20.9 89.9% 89.2% 174

446199 All other health and personal care stores 4.9 89.9% 40.9% 318

447110 Gasoline stations with convenience stores 11.1 89.9% 69.4% 3,029

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

May 1, 2013 2-138 

### Table 2

- 77 : Number of Multi

- Unit Retailer Firms with a California Establishment, by Affected

NAICS

NAICS NAICS Description U.S.

Number of
Estab. per

Multi

- Unit

Firm Probability

an Estab. is

not in CA Probability

Firm has

a n Estab.

in CA Number o f

CA Multi

Unit

Firms

447190 Other gasoline statio ns 3.8 89.9% 33.6% 660

448110 Men's clothing stores 9.0 87.0% 71.6% 300

448120 Women's clothing stores 31.2 87.8% 98.3% 737

448130 Children's and infants' clothing stores 39.7 88.0% 99.4% 112

448140 Family clothing stores 30.3 87.5% 98.3% 669

448150 C lothing accessories stores 30.8 87.8% 98.2% 128

448190 Other clothing stores 8.8 88.4% 66.2% 346

448210 Shoe stores 30.5 89.9% 96.1% 692

448310 Jewelry stores 14.4 88.2% 83.5% 565

448320 Luggage and leather goods stores 8.7 89.9% 60.4% 46

451110 Sport ing goods stores 5.4 88.7% 47.5% 509

451120 Hobby, toy, and game stores 14.9 89.0% 82.4% 213

451130 Sewing, needlework, and piece goods stores 13.5 88.8% 79.8% 98

451140 Musical instrument and supplies stores 4.3 89.9% 36.5% 104

451211 Book stores 16.1 89.9% 82.0% 289

451212 News dealers and newsstands 4.2 89.9% 36.3% 24

451220 Prerecorded tape, compact disc, and record stores 11.8 89.9% 71.7% 120

452111 Department stores (except discount department stores) 251.9 87.6% 100.0% 14

452112 Discount depa rtment stores 499.7 88.6% 100.0% 10

452910 Warehouse clubs and supercenters 387.2 95.7% 100.0% 11

452990 All other general merchandise stores 63.2 94.3% 97.6% 380

453110 Florists 2.4 91.2% 19.7% 113

453210 Office supplies and stationery stores 12.5 87. 2% 81.8% 302

453220 Gift, novelty, and souvenir stores 6.0 89.5% 48.7% 707

453910 Pet and pet supplies stores 11.6 89.9% 70.9% 192

453920 Art dealers 2.2 86.8% 27.2% 60

453930 Manufactured (mobile) home dealers 4.9 94.6% 23.8% 68

453991 Tobacco stores 4.7 89.9% 39.6% 170

453998 All other miscellaneous store retailers (except tobacco stores) 4.1 89.9% 35.7% 287

454111 Electronic shopping 1.4 89.9% 14.2% 96

454113 Mail

- order houses 2.7 89.9% 24.7% 127

454210 Vending machine operators 4.3 89.9% 36.8% 60

454311 Heating oil dealers 2.7 89.9% 24.9% 91

454312 Liquefied petroleum gas (bottled gas) dealers 9.1 89.9% 62.3% 281

454390 Other direct selling establishments 3.1 89.7% 28.5% 235

Total Retailers in Affected NAICS 23,107

Sources: U.S. Census Bureau 1997

, 2010d

, g
, h



### 2776 Baseline CARB compliance is estimated as the sum of single-unit firms in California and multi2777 unit firms with at least one establishment in California (See Figure 2-7). 2778

2779

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

May 1, 2013 2-139 

### Figure 2-7: Example Methodology for Estimating Baseline CARB Compliance (NAICS 441210)



### 2780 Estimated baseline compliance with the CARB AT CM is presented in Table 2-76 for wholesaler 2781

industries and Table 2-77 for retailer industries. As described above, firms that are already meeting the 2782 requirements of the CARB ATCM are not expected to incur additional costs associated with setting up 2783 chain of custody systems to comply with the TSCA Title VI proposed rule. Estimated baseline CARB 2784 compliance of these industries varies widely by NAICS, from 5 percent to 92 percent of total U.S. firms. 2785

2786 Table 2-76: Baseline Compliance of Wholesaler Firms, by Affected NAICS

NAIC

S NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

423210

a 42321

0 b Furniture merchant wholesalers -



### - - 6,17

2 100%

423220

a 42322

0 b Home furnishing merchant wholesalers - - - 6,49

1 100%

423310 Lumber, plywood, millwork, and wood panel merchant wholesalers 520 277 797 6,47

5 12.3%

423320 Brick, stone, and related construction material merchant wholesalers 263 153 416 2,79

6 14.9%

423330 Roofing, siding, and insulation material merchant wholesalers 54 99 153 1,12 13.7% Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

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

May 1, 2013 2-140 

### Table 2-76: Baseline Compliance of Wholesaler Firms, by Affected NAICS

NAIC

S NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

1

423390 Other construction material merchant wholesalers 222 145 367 2,51

4 14.6%

423410 Photographic equipment and supplies merchant wholesalers 166 54 220 886 24.8%

423420 Office equipment merchant wholesalers 264 261 525 2,89

5 18.1%

423430 Computer and software merchant wholesalers 1,508 526 2,035 8,50

9 23.9%

423440 Other commercial equipment merchant wholesalers 422 91 513 3 ,96

2 13.0%

423450 Medical equipment merchant wholesalers 933 213 1,145 7,19

7 15.9%

423490 Other professional equipment and supplies merchant wholesalers 234 68 302 2,04

1 14.8%

423510 Metal service centers and othe r metal merchant wholesalers 807 399 1,2 07 7,97

3 15.1%

423610 Elec. equip. and wiring merchant wholesalers 1,034 626 1,660 8,62

2 19.3%

423620 Electric appliance merchant wholesalers 492 158 649 2,57

6 25.2%

423690 Other electronic parts and eq uipment merchant wholesalers 2,010 721 2,731 10,4

83 26.1%

423710 Hardware merchant wholesalers 710 290 1,000 5,15

4 19.4%

423720 Plumbing equip. merchant wholesalers 346 329 674 3,58

4 18.8%

423730 HVAC equip. merchant wholesalers 131 207 338 2,33

6 14.5%

423740 Refrigeration equipment and s upplies merchant wholesalers 93 76 168 758 22.2%

423810 Construction equipment merchant wholesalers 183 167 350 3,07

5 11.4%

423820 Farm and garden machinery and equipment merchant wholesalers 399 204 603 6,31

6 9.5%

423830 Industrial machinery and equipment merchant wholesalers 2,129 869 2,998 24,3

57 12.3%

423840 Industrial supplies merchant wholesalers 558 382 940 5,80

8 16.2%

423850 Service establishment equipment and supplies merchant wholesalers 258 104 362 3,66

9 9.9%

423910 Sporting and recreational goods and supplies merchant wholesalers 1,033 160 1,194 5,66

1 21.1%

423920 Toy and hobby goods and supplies merchant wholesalers 669 63 733 2,39

8 30.5%

423930 Recyclable material merchant wholesalers 656 170 826 6,21

8 13.3%

423940 Jewelry merchant wholesalers 1,414 71 1,485 7,57

0 19.6%

423990 Other miscellaneous durable goods merchant wholesalers 1,489 207 1,696 9,46 17.9% Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

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

May 1, 2013 2-141 

### Table 2-76: Baseline Compliance of Wholesaler Firms, by Affected NAICS

NAIC

S NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

0

424110 Printing and writing paper merchant wholesalers 87 55 142 801 17.8%

424120 Stationery and office supplies merchant wholesalers 527 170 697 4,62

0 15.1%

424130 Industrial and personal service paper merchant wholesalers 536 162 699 4,05

8 17.2%

424210 Drugs and druggists' sundries merchant wholesalers 1,004 352 1,356 6,26

1 21.7%

424310 Piece goods, notions, and other dry goods merchant wholesalers 796 137 932 3,15

0 29.6%

424320 Men's and boys' clothing and furnishings merchant wholesalers 841 125 966 3,92

7 24.6%

424330 Women's and children's clothing merchant wholesalers 2,096 219 2,315 7,23

7 32.0%

424340 Footwear merchant wholesalers 4 58 58 515 1,55

7 33.1%

424410 General line grocery merchant wholesalers 357 78 435 2,20

8 19.7%

424420 Packaged frozen food merchant wholesalers 468 118 586 2,99

4 19.6%

424450 Confectionery merchant wholesalers 212 59 271 1,79

8 15.1%

424460 Fish and seafood merchant wholesalers 213 24 237 1,92

4 12.3%

424480 Fresh fruit and vegetable merchant wholesalers 939 140 1,079 4,64

6 23.2%

424490 Other grocery and related products merchant wholesalers 1,376 445 1,821 9,66

8 18.8%

424510 Grain and field bean merchant wholesalers 49 80 129 2,46

9 5.2%

424610 Plastics materials and basic forms and shapes merchant wholesaler 357 137 495 2,73

4 18.1%

424690 Other chemical and allied products merchant wholesalers 541 347 887 6,52

7 13.6%

424910 Farm supplies merchant wholesalers 318 278 595 4,54

3 13.1%

424920 Book, periodical, and newspaper merchant wholesalers 232 103 336 2,04

9 16.4%

424930 Flower, nursery stock, & florists' supplies merchant wholesalers 528 123 651 3,63

5 17.9%

424940 Tobacco and tobacco product merchant wholesalers 70 23 92 1,13

5 8.1%

424950 Paint, varnish, and supplies merchant wholesalers 105 105 211 1,16

8 18.0%

424990 Other miscellaneous nondurable goods merchant wholesalers 2,724 228 2,952 12,1

18 24.4% Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

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

May 1, 2013 2-142 

### Table 2-76: Baseline Compliance of Wholesaler Firms, by Affected NAICS

NAIC

S NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

Total Wholesalers in Affected NAICS 33,831 10,656 44,488 258,3

04 17.2%

a See Figure 2-5

, Figure 2-6 , and Figure 2-7 a for a description of how baseline compliance was estimated.

b Two wholesale industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers (423220) are assumed to be fully compliant with the CARB ATCM chain of cu stody requirements in the baseline, based on conversation with industry (Personal Communication with AHFA 2010, Personal Communication with BIFMA 2010)

. Sources: U.S. Census Bureau 2010d, o



### 2787 Table 2-77: Baseline Compliance of Retailer Firms, by Affected NAICS

NAICS NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

441110 New car dealers 1,970 499 2,470 21,4

89 11.5%

441210 Recreational vehicle dealers 265 55 320 2,74

9 11.6%

441221 Motorcycle, ATV, and personal watercraft dealers 555 61 616 5,76

3 10.7%

441229 All other motor vehicle dealers 206 21 228 2,15

4 10.6%

441320 Tire dealers 1,056 614 1,670 11,3

46 14.7%

442110 Furniture stores 2,045 960 3,005 19,7

14 15.2%

442210 Floor covering stores 1,233 214 1,448 12,9

65 11.2%

442291 Window treatment stores 296 45 342 2,27

8 15.0%

442299 All other home furnishings stores 1,307 474 1,781 11,5

60 15.4%

443111 Household appliance stores 652 170 822 7,80

5 10.5%

443112 Radio, television, and ot her electronics stores 1,645 821 2,466 14,6

79 16.8%

443120 Computer and software stores 675 162 837 5,55

0 15.1%

443130 Camera and photographic supplies stores 71 70 141 788 17.8%

444110 Home centers 196 235 431 2,66

4 16.2%

444120 Paint and wallpaper stores 195 262 457 2,39

9 19.0%

444130 Hardware stores 851 323 1,175 12,1

52 9.7%

444190 Other building material dealers 2,691 1,059 3,750 30,4

67 12.3% Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Formatted Table

Formatted Table Deleted Cells

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

May 1, 2013 2-143 

### Table 2-77: Baseline Compliance of Retailer Firms, by Affected NAICS

NAICS NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

444210 Outdoor power equipment stores 212 23 235 4,14

6 5.7%

444220 Nursery, garden center, and farm supply stores 833 277 1,110 12,8

04 8.7%

445110 Supermarkets and other grocery (except convenience) stores 4,809 1,602 6,411 41,8

85 15.3%

445120 Convenience stores 2,176 310 2,486 22,1

68 11.2%

445210 Meat markets 540 58 597 5,50

2 10.9%

445220 Fish and seafood markets 198 11 208 2,02

2 10.3%

445230 Fruit and vegetable markets 281 15 296 2,85

1 10.4%

445291 Baked goods stores 303 83 387 3,12

6 12.4%

445292 Confectionery and nut stores 201 97 299 2,14

9 13.9%

445299 All other specialty food stores 410 108 518 4,25

8 12.2%

445310 Beer, wine, and liquor stores 2,657 437 3,095 27,4

21 11.3%

446110 Pharmacies and drug stores 1,790 1,156 2,946 19,0

67 15.5%

446120 Cosmetics, beauty supplies, and perfume stores 675 179 854 6,86

1 12.4%

446130 Optical goods stores 503 368 871 5,39

8 16.1%

446191 Food (health) supplement stores 498 174 672 5,12

3 13.1%

446199 All other health and personal care stores 691 318 1,009 7, 61

2 13.3%

447110 Gasoline stations with convenience stores 4,954 3,029 7,983 53,3

75 15.0%

447190 Other gasoline stations 1,385 660 2,045 15,6

66 13.1%

448110 Men's clothing stores 589 300 890 4,95

2 18.0%

448120 Women's clothing stores 1,566 737 2,303 13 ,5

82 17.0%

448130 Children's and infants' clothing stores 314 112 426 2,72

4 15.6%

448140 Family clothing stores 954 669 1,624 8,29

9 19.6%

448150 Clothing accessories stores 427 128 554 3,61

8 15.3%

448190 Other clothing stores 861 346 1,206 7,95

2 15.2% Formatted Table Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

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

May 1, 2013 2-144 

### Table 2-77: Baseline Compliance of Retailer Firms, by Affected NAICS

NAICS NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

448210 Shoe stores 621 692 1,313 6,86

7 19.1%

448310 Jewelry stores 2,123 565 2,688 18,6

92 14.4%

448320 Luggage and leather goods stores 57 46 103 637 16.1%

451110 Sporting goods stores 1,859 509 2,368 17,5

56 13.5%

451120 Hobby, toy, and game stores 60 3 213 816 5,74

8 14.2%

451130 Sewing, needlework, and piece goods stores 447 98 545 4,12

4 13.2%

451140 Musical instrument and supplies stores 334 104 437 3,58

5 12.2%

451211 Book stores 434 289 722 4,64

3 15.6%

451212 News dealers and newsstands 125 24 15 0 1,30

6 11.5%

451220 Prerecorded tape, compact disc, and record stores 220 120 340 2,34

3 14.5%

452111 Department stores (except discount department stores) 1 14 15 21 70.8%

452112 Discount department stores 0 10 10 14 74.7%

452910 Warehouse clubs and supercenters 0 11 11 12 92.0%

452990 All other general merchandise stores 486 380 866 8,86

2 9.8%

453110 Florists 1,634 113 1,747 19,0

38 9.2%

453210 Office supplies and stationery stores 632 302 934 5,31

7 17.6%

453220 Gift, novelty, and souvenir stores 2 ,378 707 3,085 24,1

06 12.8%

453910 Pet and pet supplies stores 570 192 762 5,91

4 12.9%

453920 Art dealers 815 60 875 6,40

3 13.7%

453930 Manufactured (mobile) home dealers 135 68 203 2,77

4 7.3%

453991 Tobacco stores 456 170 626 4,94

0 12.7%

453998 All other miscellaneous store retailers (except tobacco stores) 1,409 287 1,696 14,7

43 11.5%

454111 Electronic shopping 1,335 96 1,432 13,8

88 10.3%

454113 Mail-order houses 602 127 729 6,47

1 11.3%

454210 Vending machine operators 454 60 514 4,65

1 11.0%

454311 Heating oil dealers 311 91 402 3,44

2 11.7% Formatted Table Deleted Cells

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### Table 2-77: Baseline Compliance of Retailer Firms, by Affected NAICS

NAICS NAICS Description CA Singl

e

Unit

Firm

s CA

Multi

Unit

Firms All

CA

Firm

s All

U.S.

Fir

ms Baseline Compliance Co

mpliance a

454312 Liquefied petroleum gas (bottled gas) dealers 186 281 468 2,29

7 20.4%

454390 Other direct selling establishments 2,020 235 2,255 20,3

70 11.1%

Total Retailers in Affected NAICS 63,985 23,107 87,092 657 ,8

47 13.2%

a See Figure 2-5

, Figure 2-6 , and Figure 2-7 for a description of how baseline compliance was estimated. Sources: U.S. Census Bureau 1997, 2010b, e, p



### 2788

2789 2.5.3.3 Number of Firms Incurring Rule Familiariza tion, Supplier Notification, Recordkeeping, and 

### 2790 Labeling Costs 

### 2791

2792 All affected entities, regardless of baseline CARB compliance, are expected to incur rule 2793 familiarization costs and costs associated with supplie r notification and response letters. The number of 2794 firms with incremental costs associated with implementing compliant recordkeeping and labeling systems 2795 is estimated as the total number of firms in each affected industry in the U.S. that are not already 2796 compliant with the CARB regulation. Information on the percentages of fabricator and wholesaler firms 2797 incurring additional costs such as initial recordkeepi ng costs, recurring recordkeeping costs, or initial 2798 labeling costs, is taken from summary statistics from the questionnaire results (See Table 2-69 and Table 2799 2-70). 2800

2801 Table 2-78 presents the number of affected manufacturing firms by type. Table 2-79, Table 2-80, 2802 and Table 2-81 show the estimated levels of baseline compliance with the CARB rule for all fabricator, 2803 wood veneer laminated product producer, wholesaler, an d retailer firms that use or sell composite wood 2804 products by NAICS code. The estimated numbers of firms that will incur incremental costs, by type of 2805 cost incurred, are also presented. Table 2

- 82 summarizes the number of firms selling composite wood 2806 products regulated under the TSCA Title VI Rule an d the number of firms that are baseline compliant 2807 with the CARB ATCM (i.e., firms selling composite wood products that may ultimately be sold in 2808 California). 2809

2810 Table 2-78: Number of Composite Wood Product Producers Incurring Costs

Sector Number of Affected Firms in
Industry a
Hardwood Plywood 32
Medium Density Fiberboard (MDF) 14

Particleboard 16

Total 62

a See Table 2-4 Note that because firms producing two different types of composite wood products are expected to incur separate costs for each product type, the estimate of 62 firms that is used to estimate costs is derived by counting firms that produce two different types of composite wood products tw ice. There are 54 unique firms that produce composite wood panels.


### 2811 Formatted Table Deleted Cells

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Formatted Table*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-1462812Table 2-79: Baseline Compliance and Number of Fabricator and Laminated Product Producer Firms Incurring CostsNAICSNAICS DescriptionNumber ofFirms inAffectedNAICSNumber ofAffectedFirmsaBaselineCARBCompliancebNumber ofAffectedFirmswithout BaselineCARB ComplianceNumber of Firms withRecurringRecordkeeping Costs(the 11% of firmswithout baselinecompliance)cNumber of Firmswith MoreSubstantial InitialLabeling Costs (the33% of firmswithout baselinecompliance)cNumber of Firmswith Minor InitialLabeling Costs (the67% of firmswithout baselinecompliance and allfirms with baselinecompliance)c321211Decorative PanelManufacturers7171100%00071321219337110Cabinet Manufacturers17,36017,36050%8,6809552,86414,49633712947647650%2382679397321911Window and DoorManufacturers3,5823,582100%0003,5823371212,7902,790100%0002,790337122Household FurnitureManufacturers6,0616,061100%0006,061337124579579100%000579337127Institutional and OfficeFurniture Manufacturing1,3671,367100%0001,367337211804804100%000804337214486486100%0004863372152,4152,415100%0002,415321918Custom architecturalwoodwork & millworkmanufacturing and othermillwork manufacturing(including flooring)5,2145,2149%4,7455221,5663,6483372123,9913,99110%3,5923951,1852,8063219994,8224,8228%4,4364881,4643,358336213Motor home, travel trailer,and camper manufacturing112112100%0001123362141,2031,203100%0001,203321991Manufactured Home andPrefabricated BuildingManufacturing79879811%710782345643219921,9301,9306%1,8142005991,331339950Sign Manufacturing25,91725,91710%23,3252,5667,69718,220Total Affected Fabricators79,97879,97847,5405,23015,68864,290aAffected firms are those that sell composite wood products.See Table 2-8.bSee Table 2-75.cSee Table 2-69. None of the fabricators responding to the questionnaire reported incurring initial recordkeeping costs or recurring labeling costs.2813Formatted TableInserted CellsInserted CellsInserted CellsInserted Cells*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-147Table 2-80: Baseline Compliance and Number of Wholesaler Firms IncurringDifferent Types ofCostsNAICSNAICS DescriptionNumberof FirmsinAffectedNAICSNumber ofAffectedFirmsaBaselineCARBCompliancebNumber ofAffectedFirmswithoutBaselineCARBComplianceNumber ofFirms withInitialLabelingCosts (1%of all firms)Number of Firms withIncrementalRecordkeeping CostscOptions withRecordkeepingRequirements Consistentwith the CARB ATCM(SE, SI, SP, SN, SC, SFCC,CE, CI, NE, NI)Options with ReducedRecordkeeping Requirements(SCR, SEUR, SCUR)Initial Costs(57% offirmswithoutbaselinecompliance)RecurringCosts(43% offirmswithoutbaselinecompliance)Initial Costs(57% ofthe28% offirmswithoutbaselinecompliancethatare importers)RecurringCosts(43% ofthe28% offirmswithoutbaselinecompliancethat areimporters)423210dFurniture merchant wholesalers12,48012,480100%01250000423220dHome furnishing merchantwholesalers13,7596,496100%0650000423310Lumber, plywood, millwork, andwood panel merchant wholesalers10,13010,13012%8,8831015,0633,8201,4181,070423320Brick, stone, and relatedconstruction material merchantwholesalers3,93140115%34141941475441423330Roofing, siding, and insulationmaterial merchant wholesalers2,2791,77914%1,53618876660245185423390Other construction materialmerchant wholesalers3,8863,30015%2,818331,6061,212450339423410Photographic equipment andsupplies merchant wholesalers1,1784625%350201564423420Office equipment merchantwholesalers3,73810118%83147361310423430Computer and software merchantwholesalers11,29320024%152287652418423440Other commercial equipmentmerchant wholesalers5,2791,05713%92011524396147111423450Medical equipment merchantwholesalers9,5937816%6613828118423490Other professional equipment andsupplies merchant wholesalers2,7099915%84148361310423510Metal service centers and othermetal merchant wholesalers10,5731,29215%1,09613625471175132Formatted TableInserted CellsInserted CellsInserted CellsInserted CellsInserted CellsInserted CellsInserted CellsInserted CellsInserted Cells*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-148Table 2-80: Baseline Compliance and Number of Wholesaler Firms IncurringDifferent Types ofCostsNAICSNAICS DescriptionNumberof FirmsinAffectedNAICSNumber ofAffectedFirmsaBaselineCARBCompliancebNumber ofAffectedFirmswithoutBaselineCARBComplianceNumber ofFirms withInitialLabelingCosts (1%of all firms)Number of Firms withIncrementalRecordkeeping CostscOptions withRecordkeepingRequirements Consistentwith the CARB ATCM(SE, SI, SP, SN, SC, SFCC,CE, CI, NE, NI)Options with ReducedRecordkeeping Requirements(SCR, SEUR, SCUR)Initial Costs(57% offirmswithoutbaselinecompliance)RecurringCosts(43% offirmswithoutbaselinecompliance)Initial Costs(57% ofthe28% offirmswithoutbaselinecompliancethatare importers)RecurringCosts(43% ofthe28% offirmswithoutbaselinecompliancethat areimporters)423610Elec. equip. and wiring merchantwholesalers13,03510119%82147351310423620Electric appliance merchantwholesalers3,6758825%6613828118423690Other electronic parts andequipment merchant wholesalers14,71712126%89151381411423710Hardware merchant wholesalers6,72293819%756943132512191423720Plumbing equip. merchantwholesalers5,2521,39219%1,13014644486180136423730HVAC equip. merchant wholesalers3,45557114%48862782107859423740Refrigeration equipment andsupplies merchant wholesalers1,0409122%7114031119423810Construction equipment merchantwholesalers4,4732111%19011832423820Farm and garden machinery andequipment merchant wholesalers8,96446110%41752381796750423830Industrial machinery and equipmentmerchant wholesalers32,88852512%46052621987355423840Industrial supplies merchantwholesalers8,21329316%24631401063930423850Service establishment equipmentand supplies merchant wholesalers5,05071510%644736727710378423910Sporting and recreational goods andsupplies merchant wholesalers16,7099,73921%7,685974,3803,3051,226925423920Toy and hobby goods and suppliesmerchant wholesalers9,8019,80131%6,807983,8802,9271,086820Formatted TableInserted CellsInserted CellsInserted CellsInserted Cells*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-149Table 2-80: Baseline Compliance and Number of Wholesaler Firms IncurringDifferent Types ofCostsNAICSNAICS DescriptionNumberof FirmsinAffectedNAICSNumber ofAffectedFirmsaBaselineCARBCompliancebNumber ofAffectedFirmswithoutBaselineCARBComplianceNumber ofFirms withInitialLabelingCosts (1%of all firms)Number of Firms withIncrementalRecordkeeping CostscOptions withRecordkeepingRequirements Consistentwith the CARB ATCM(SE, SI, SP, SN, SC, SFCC,CE, CI, NE, NI)Options with ReducedRecordkeeping Requirements(SCR, SEUR, SCUR)Initial Costs(57% offirmswithoutbaselinecompliance)RecurringCosts(43% offirmswithoutbaselinecompliance)Initial Costs(57% ofthe28% offirmswithoutbaselinecompliancethatare importers)RecurringCosts(43% ofthe28% offirmswithoutbaselinecompliancethat areimporters)423930Recyclable material merchantwholesalers14,9091213%1006421423940Jewelry merchant wholesalers30,43921520%173299742821423990Other miscellaneous durable goodsmerchant wholesalers66,64613,79418%11,3201386,4524,8681,8071,363424110Printing and writing paper merchantwholesalers1,4233518%290171253424120Stationery and office suppliesmerchant wholesalers7,6071,65515%1,40517801604224169424130Industrial and personal service papermerchant wholesalers6,61418417%152287652418424210Drugs and druggists' sundriesmerchant wholesalers8,69413622%107161461713424310Piece goods, notions, and other drygoods merchant wholesalers7,68233230%23431331013728424320Men's and boys' clothing andfurnishings merchant wholesalers9,50948925%36952101595945424330Women's and children's clothingmerchant wholesalers17,45226132%1783101772822424340Footwear merchant wholesalers3,75511933%80146341310424410General line grocery merchantwholesalers4,49558020%46662662007456424420Packaged frozen food merchantwholesalers5,7547820%6313627108424450Confectionery merchant wholesalers3,3311415%1207521424460Fish and seafood merchant3,7211312%1106521Formatted TableInserted CellsInserted CellsInserted CellsInserted Cells*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-150Table 2-80: Baseline Compliance and Number of Wholesaler Firms IncurringDifferent Types ofCostsNAICSNAICS DescriptionNumberof FirmsinAffectedNAICSNumber ofAffectedFirmsaBaselineCARBCompliancebNumber ofAffectedFirmswithoutBaselineCARBComplianceNumber ofFirms withInitialLabelingCosts (1%of all firms)Number of Firms withIncrementalRecordkeeping CostscOptions withRecordkeepingRequirements Consistentwith the CARB ATCM(SE, SI, SP, SN, SC, SFCC,CE, CI, NE, NI)Options with ReducedRecordkeeping Requirements(SCR, SEUR, SCUR)Initial Costs(57% offirmswithoutbaselinecompliance)RecurringCosts(43% offirmswithoutbaselinecompliance)Initial Costs(57% ofthe28% offirmswithoutbaselinecompliancethatare importers)RecurringCosts(43% ofthe28% offirmswithoutbaselinecompliancethat areimporters)wholesalers424480Fresh fruit and vegetable merchantwholesalers9,2031623%1207521424490Other grocery and related productsmerchant wholesalers17,30031219%25331441094031424510Grain and field bean merchantwholesalers5,795235%22013943424610Plastics materials and basic formsand shapes merchant wholesaler3,60749618%40652311756549424690Other chemical and allied productsmerchant wholesalers8,1438714%7514332129424910Farm supplies merchant wholesalers6,8366813%5913425107424920Book, periodical, and newspapermerchant wholesalers16,04538216%31941821375138424930Flower, nursery stock, & florists'supplies merchant wholesalers11,53716518%135277582216424940Tobacco and tobacco productmerchant wholesalers2,300118%1006421424950Paint, varnish, and suppliesmerchant wholesalers2,70412818%105160451713424990Other miscellaneous nondurablegoods merchant wholesalers56,2453,63924%2,752361,5691,183439331Total Affected Wholesalers556,56885,56053,73185530,62923,1028,5766,469aAffected firms are those that sell composite wood products.See Table 2-16..bSee Table 2-76..cSee Table 2-70.Formatted TableInserted CellsInserted CellsInserted Cells*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-151Table 2-80: Baseline Compliance and Number of Wholesaler Firms IncurringDifferent Types ofCostsNAICSNAICS DescriptionNumberof FirmsinAffectedNAICSNumber ofAffectedFirmsaBaselineCARBCompliancebNumber ofAffectedFirmswithoutBaselineCARBComplianceNumber ofFirms withInitialLabelingCosts (1%of all firms)Number of Firms withIncrementalRecordkeeping CostscOptions withRecordkeepingRequirements Consistentwith the CARB ATCM(SE, SI, SP, SN, SC, SFCC,CE, CI, NE, NI)Options with ReducedRecordkeeping Requirements(SCR, SEUR, SCUR)Initial Costs(57% offirmswithoutbaselinecompliance)RecurringCosts(43% offirmswithoutbaselinecompliance)Initial Costs(57% ofthe28% offirmswithoutbaselinecompliancethatare importers)RecurringCosts(43% ofthe28% offirmswithoutbaselinecompliancethat areimporters)dTwo wholesale industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers (423220) are assumedto be fully compliant with the CARB ATCMchain of custody requirements in the baseline, based on conversation with industry (Personal Communication with AHFA 2010, Personal Communication with BIFMA 2010).Formatted TableInserted CellsInserted CellsInserted Cells

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

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### 2814 Table 2-81: Baseline Compliance and Number of Retail Firms Incurring Costs

NAICS NAICS Description Number

of Firms

in

Affected

NAICS Number

of

Affected

Firms a Baseline

CARB Compliance b Number of

Affected

Firms

without

Baseline

CARB Compliance

441110 New car dealers 68,813 3,973 11% 3,516

441210 Used car Recreational vehicle dealers 7,043 7,043 12% 6,223

441221 Recreational vehicle Motorcycle, ATV, and personal

watercraft dealers 9,934 1,324

11% 1,183

441229 Motorcycle, ATV, and personal watercraft All other

motor vehicle dealers 24,905 2,715

11% 2,428

441320 Boat Tire dealers 23,495 37 15% 32

442110 All other motor vehicle dealers Furniture stores 36,113 36,113 15% 30,608

442210 Automotive parts and accessories Floor covering stores 24,232 21,254 11% 18,881

442291 Tire dealers Window treatment stores 4,334 978 15% 831

442299 Furniture All other home furnishings stores 26,385 26,385 15% 22,319

443111 Floor covering Household appliance stores 13,969 3,381 11% 3,025

443112 Window treatment Radio, television, and other

electronics stores 28,227 13,501

17% 11,233

443120 All other home furnishings Computer and software

stores 14,806 1,052

15% 893

443130 Household appliance Camera and photographic supplies

stores 2,532 23

18% 19

444110 Radio, television, and other electronics stores Home

centers 5,076 5,076

16% 4,255

444120 Computer Paint and software wallpaper stores 4,344 682 19% 552

444130 Camera and photographic supplies Hardware stores 17,083 17,083 10% 15,432

444190 Home centers Other building material dealers 48,426 38,160 12% 33,463

444210 Paint and wallpaper Outdoor power equipment stores 6,532 758 6% 715

444220 Hardware Nursery, garden center, and farm supply

stores 21,508 13,426

9% 12,262

445110 Other building material dealers Supermarkets and other grocery (except convenience) stores 74,561 21,981 15% 18,617

445120 Outdoor power equipment Convenience stores 35,015 10,139 11% 9,002

445210 Nursery, garden center, and farm supply stores Meat

markets 8,766 143

11% 127

445220 Supermarkets and other grocery (except convenience)

stores Fish and seafood markets 4,544 152

10% 136

445230 Convenience store s Fruit and vegetable markets 10,823 413 10% 370

445291 Meat markets Baked goods stores 13,763 109 12% 96

445292 Fish Confectionery and seafood markets nut stores 10,589 774 14% 666

445299 Fruit and vegetable markets All other specialty food

stores 17,905 1,959

12% 1,721

445310 Baked goods Beer, wine, and liquor stores 39,442 1,312 11% 1,164

446110 Confectionery Pharmacies and nut drug stores 24,805 18,543 15% 15,678

446120 All other specialty food Cosmetics, beauty supplies, and perfume stores 88,932 674

12% 590

446130 Beer, wine, and liquor Optical goods stores 8,156 6 16% 5

446191 Pharmacies and drug Food (health) supplement stores 27,185 620 13% 539

446199 Cosmetics, beauty supplies, All other health and perfume personal care stores 33,783 54

13% 47

447110 Optical goods Gasoline stations with convenience stores 61,137 2,935 15% 2,496

447190 Food (health) supplement stores Other gasoline stations 17,358 205 13% 178 Formatted Table

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### Table 2-81: Baseline Compliance and Number of Retail Firms Incurring Costs

NAICS NAICS Description Number

of Firms

in

Affected

NAICS Number

of

Affected

Firms a Baseline

CARB Compliance b Number of

Affected

Firms

without

Baseline

CARB Compliance

448110 All other health and personal care Men's clothing stores 9,083 598 18% 491

448120 Gasoli ne stations with convenience Women's clothing

stores 30,198 2,890

17% 2,400

448130 Other gasoline stations Children's and infants' clothing

stores 9,814 3,922

16% 3,309

448140 Men's Family clothing stores 21,840 16,346 20% 13,148

448150 Women's clothing Clothing accessories stores 23,620 873 15% 739

448190 Children's and infants' Other clothing stores 34,597 2,794 15% 2,370

448210 Family clothing Shoe stores 11,885 1,212 19% 980

448310 Clothing accessories Jewelry stores 60,343 5,389 14% 4,614

448320 Other clothing Luggage and leather goods stores 2,831 424 16% 356

451110 Shoe Sporting goods stores 38,976 28,113 13% 24,321

451120 Jewelry Hobby, toy, and game stores 20,373 20,373 14% 17,479

451130 Luggage Sewing, needlework, and leather piece goods

stores 20,034 18,421

13% 15,988

451140 Sporting goods Musical instrument and supplies stores 9,656 30 12% 26

451211 Hobby, toy, and game Book stores 14,832 5,425 16% 4,581

451212 Sewing, needlework, and piece goods stores News

dealers and newsstands 13,270 2,553

11% 2,261

451220 Musical instrument Prerecorded tape, compact disc, and supplies record stores 6,315 3,571

14% 3,053

452111 Book Department stores (except discount department stores) 2,562 2,562

71% 748

452112 News dealers and newsstands Discount department

stores 3,611 3,611

75% 915

452910 Prerecorded tape, compact disc, and record

stores Warehouse clubs and supercenters 3,076 3,076

92% 245

452990 Department All other general merchandise stores (except discount department stores) 32,639 32,638

10% 29,449

453110 Discount department stores Florists 43,160 33,046 9% 30,014

453210 Warehouse clubs Office supplies and
supercenters stationery stores 11,371 10,745

18% 8,858

453220 All other general merchandise Gift, novelty, and

souvenir stores 77,835 53,166

13% 46,362

453910 Florists Pet and pet supplies stores 14,243 106 13% 92

453920 Office supplies and stationery stores Art dealers 23,850 3,072 14% 2,652

453930 Gift, novelty, and souvenir stores Manufactured (mobile) home dealers 4,985 4,985

7% 4,621

453991 Used merch andise Tobacco stores 35,266 2,373 13% 2,072

453998 Pet and pet supplies stores All other miscellaneous store retailers (except tobacco stores) 94,838 27,491 12% 24,329

454111 Art dealers Electronic shopping 67,565 24,102 10% 21,618

454113 Manufactured (mo bile) home dealers Mail-order houses 34,185 11,548 11% 10,247

454210 Tobacco stores Vending machine operators 32,246 255 11% 227

454311 All other miscellaneous store retailers (except tobacco stores) Heating oil dealers 4,675 1,445

12% 1,276

454312 Electro nic shopping Liquefied petroleum gas (bottled gas) dealers 4,116 1,039

20% 827

454390 Mail

- order houses Other direct selling establishments 717,235 177,871 11% 158,180 Formatted Table

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### Table 2-81: Baseline Compliance and Number of Retail Firms Incurring Costs

NAICS NAICS Description Number

of Firms

in

Affected

NAICS Number

of

Affected

Firms a Baseline

CARB Compliance b Number of

Affected

Firms

without

Baseline

CARB Compliance

Total Affected Retailers 2,399,646 759,048 658,150

a Affected firms are those that sell composite wood products. See Table 2-17.

b See Table 2-77.


### 2815

Table 2

- 82 : Summary of Number of TSCA Title VI and Baseline CARB ATCM Compliant Firms

Firm Type TSCA Title VI Universe a Baseline CARB ATCM Compliant b Not Baseline CARB ATCM Compliant b

Stock panel producers (i.e., manufacturers) 90 c 74 c 16 c
Wood veneer laminated product producers a 7,486 - 13,875 0 7,486 - 13,875

Fabricators d 72,492 - 66,103 32,438 40,054 -33,665

Wholesalers 85,560 31,829 53,731

Retailers 759,048 100,898 658,150

Total 924,676 165,239 759,437 a. The TSCA Title VI universe represents the estimated nu mber of firms in the U.S. selling regulated composite wood products. b. The CARB ATCM baseline compliant firms is the estimated number of firms handling regulated composite wood products that may be sold in California. c. Table numbers indicate the number of mills for stock panel producers d. The lower estimate for wood veneer laminated product manuf actures corresponds to the higher estimate for fabricators, and the higher estimate for wood veneer laminated produc t manufactures corresponds to the lower estimate for

fabricators.


### 2816
2.5.4 Total Estimated Costs of Rule Famili arization, Notification, and Recordkeeping 2817 and Labeling Requirements 2818

2819 The total costs of the recordkeeping, supplier notification, labeling, and rule familiarization 2820 requirements are estimated by applying the per-firm costs to the number of affected composite panel 2821 producer, fabricator, wholesaler, and retailer firms by industry. Table 2-84 summarizes these costs, 2822 except costs to panel producers, under all the options where these requirements are equivalent to the 2823 CARB ATCM (all options except for the proposed option, Option SCR , SEUR, and SCUR ). Table 2-85 2824 summarizes these costs, except costs to panel producers, under the proposed option ( Option options SCR

, 2825 SEUR, and SCUR (the proposed option ). Table 2-86 presents the additional recordkeeping costs 2826 associated with panel production. These additional costs are incurred by stock panel producers and 2827 laminated product producers under those analytical optio ns that define these producers, or a subset of 2828 them, as producing hardwood plywood. 2829

2830

Under Option options SCR , SEUR, and SCUR , firms that are not manufacturers under TSCA (i.e., 2831 wholesalers and retailers that do not import composit e wood products) are only required to keep bills of 2832 lading and invoices. Most distributors and retailers ar e likely to keep these records as part of their 2833 customary business practices. 36 

### Therefore this recordkeeping requirement is not assumed to impose any 2834 additional burden on non-manufacturers. In addition, Option options SCR does , SEUR, and SCUR do not 2835 include a requirement for purchasers to send a separate letter to their suppliers, whereas all the other 2836 options include such a requirement. 2837

36 For example, the Internal Revenue Service recommends that firms keep invoices in order to document their assets, expenses, gross receipts, and purchases (U.S. Internal Revenue Service 2007). Formatted Table

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### 2838

Under Option options SCR , SEUR, and SCUR , importers are required to keep records identifying 2839 the panel producer and the date that the composite wo od products were manufactured, but their customers 2840 do not need to keep these records. For example, if an importer sells the goods to a domestic distributor 2841 who then sells them to a domestic retailer, only the importer would have to keep the additional records. 2842 The domestic distributor and retailer would only be re quired to keep invoices and bills of lading. 2843

2844 This analysis estimates the number of wholesalers who import composite wood products to be 2845 proportional to the ratio of the value of imports of composite wood products to the sum of the total import 2846 and domestic shipment values. As shown in Table 2-83, imports represent 28 percent of the value of 2847 imports and domestic shipments. Thus, it is estimat ed that 28 percent of wholesalers are importers of 2848 composite wood products

. This results in an estimate that 24,000 of the 86,000 wholesalers import 2849 composite wood products. The analysis assumes that wholesalers are responsible for all imports and 2850 retailers do not import products directly without a wholesaler. Since the number of wholesalers that 2851 import products is estimated using the total custom s value of imports (which reflects imports by all 2852 sectors), to the extent that some products are imported directly by retailers, the number of such retailers 2853 (and the cost of their recordkeeping) would be reflected in the wholesaler estimate. And to the extent that 2854 some fabricators import composite wood products directly, the estimated total recordkeeping cost may be 2855 overstated (since the recordkeeping costs for fabricators are estimated separately). 2856

2857

2858

2859

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### Table 2-83: Customs Value of Imports and Domestic Value of Shipments, by A ffected NAICS (millions, 2010$)

NAICS Description Customs

Value of
Imports Domestic

Value of Shipments Sum of
Imports and

Domestic Shipments
321211 Hardwood veneer and plywood manufacturing $1,516 $3,327 $4,843 321219 Reconstituted wood product manufacturing $1,502 $6,721 $8,223 321911 Wood window and door manufacturing $491 $14,161 $14,653
321918 Other millwork (including flooring) $770 $7,483 $8,254 321991 Manufactured home (mobile home) manufacturing $2 $6,086 $6,089 321992 Prefabricated wood building manufacturing $50 $4,215 $4,265 321999 All other miscellaneous wood product manufacturing $1,927 $6,058 $7,984 336213 Motor home manufacturing $117 $5,779 $5,896 336214 Travel trailer and camper manufacturing $537 $10,641 $11,178 337110 Wood kitchen cabinet and countertop manufacturing $491 $18,658 $19,149 337121 Upholstered household furniture manufacturing $2,898 $11,269 $14,166
337122 Nonupholstered wood household furniture manufacturing - - - 337124 Metal household furniture manufacturing $2,708 $2,393 $5,101 337127 Institutional furniture manufacturing $12,133 $5,799 $17,932 337129 Wood television, radio, and sewing machine cabinet manufacturing $4 $407 $411 337211 Wood office furniture manufacturing $697 $2,904 $3,601
337212 Custom architectural woodwork and millwork manufacturing - - - 337214 Office furniture (except wood) manufacturing $410 $8,978 $9,388 337215 Showcase, partition, shelving, and locker manufacturing $4,283 $7,873 $12,156 339920 Sporting and athletic goods manufacturing $6,260 $12,510 $18,770 339932 Game, toy, and children's vehicle manufacturing $21,428 $2,712 $24,140 339950 Sign manufacturing $184 $13,003 $13,187 339992 Musical instrument manufacturing $1,190 $1,796 $2,986

Total $59,598 $152,772 $212,370 

### Ratio of Customs Value of Imports to Sum of Imports and Domestic Shipments 28%

Sources: U.S. Census Bureau 2010k, U.S. International Trade Commission 2011



### 2860

2861

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### Table 2-84: Rule Familiarization, Supplier Notification, Labeling and Recordkeeping Costs (excluding panel production recordkeeping costs) for Options SE, SI, SP, SN, SC, SFCC, CE, CI, NE, and NI (2010$)

Cost Element Number of

Affected Firms a Average Per-Firm Cost

for Affected Firms b Total Costs

Stock Panel Producers (excludes laminated product producers)

Rule Familiarization 62 $294.40 $18,253
Supplier Notification: Materials 62 $165.20 $10,242
Supplier Notification: Labor 62 $171.40 $10,627
Labeling System Setup 62 $149.04 $9,240

Total Initial Costs $48,362 Total Annualized Cost (3%) $2,348 Total Annualized Cost (7%) $3,607
Fabricators and Laminated Product Producers (including wood veneer laminated product producers defined as hardwood plywood panel producers) c
Rule Familiarization 79,978 $294.40 $23,545,523 Supplier Notification: Materials 47,540 $169.12 $8,039,965 Supplier Notification: Labor 47,540 $173.88 $8,266,255
Labeling System Setup (low cost ) 64,290 $132.81 $8,538,355
Labeling System Setup (high cost ) 15,688 $4,552.00 $71,411,776

Total Initial Costs 15,688 $4,552.00 $119,801,874
Employer Recurring Recordkeeping 2,176 $12,916.80 $28,106,957 Nonemployer Recurring Recordkeeping 3,054 $179.19 $547,246
Total Recurring Recordkeeping $28, 106,957 654,203
Total Annualized Cost (3%) $33,078,752 Total Annualized Cost (7%) $35,451,682

Wholesalers

Rule Familiarization 85,560 $373.16 $31,927,570
Supplier Notification: Materials 53,731 $166.32 $8,936,540
Supplier Notification: Labor 53,731 $178.78 $9,606,028 Labeling System Setup 855 $4,552.00 $3,891,960
Recordkeeping System Setup 30,629 $2,510.80 $76,903,293

Total Initial Costs $131,265,391
Employer Recurring Recordkeeping 9,436 4,980.30 $46,994,111
Nonemployer Recurring Recordkeeping 13,666 100.05 $1,367,283 Total Recurring Recordkeeping $48,361,394 Total Annualized Cost (3%) $52,385,774 Total Annualized Cost (7%) $54,544,088

Retailers

Rule Familiarization 759,048 $282.84 $214,689,136
Supplier Notification: Materials 658,150 $22.40 $14,742,560
Supplier Notification: Labor 658,150 $52.16 $34,329,104

Total Initial Costs $263,760,800 Total Annualized Cost (3%) $12,803,648 Total Annualized Cost (7%) $19,670,370

a For estimation of number of affected composite panel producers, fabricators, wholesalers, and retailers incurring each cost typ e, see Table 2-78 through Table 2-81. Note that because firms producing tw o different types of composite wood products are expected to incur separate costs for each product type, the estimate of 62 stock panel producer firms that is used to estimate costs is der ived by counting firms that produce two different types of composite wood products twice. There are 54 unique firms that produce stock panels.

b For derivation of rule familiarization and supplier notification per-firm costs, see Table 2-71 and Table 2-72; for derivation of initial and recurring per-firm recordkeeping and labeling costs, see Table 2-69 and Table 2-70

c Laminated product producers that are defined as making hardwood plywood may incur additional recordkeeping costs depending on the analytical option. These additional costs are presented in Table 2-86.


### 2862

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### Table 2-85: Rule Familiarization, Supplier Notification, Labeling and Recordkeeping Costs (excluding panel production recordkeeping costs shown in Table 2-86 ) ) for Option SEUR,

SCR , and SCUR (the proposed option) (2010$)

Cost Element Number of

Affected Firms a Average Per-Firm Cost

for Affected Firms b Total Costs

Stock Panel Producers (excludes laminated product producers)

Rule Familiarization 62 $294.40 $18,253
Supplier Notification: Materials d

- - - Supplier Notification: Labor d

- - - Labeling System Setup 62 $149.04 $9,240

Total Initial Costs $27,493

Total Annualized Cost (3%) $1,335

Total Annualized Cost (7%) $2,050
Fabricators and Laminated Product Producers (including wood veneer laminated product producers defined as hardwood plywood panel producers) c

Rule Familiarization 79,978 $294.40 $23,545,523
Supplier Notification: Materials d

- - - Supplier Notification: Labor d

- - - Labeling System Setup (low costs ) 64,290 $132.81 $8,538,355
Labeling System Setup (high costs ) 15,688 $4,552.00 $71,411,776

Total Initial Costs 15,688 $4,552.00 $103,495,654
Employer Recurring Recordkeeping 2,176 $12,916.80 $28,106,957
Nonemployer Recurring Recordkeeping 3,054 $179.19 $547,246
Total Recurring Recordkeeping $28,654,203

Total Annualized Cost (3%) $32,287,205

Total Annualized Cost (7%) $34,235,620

Wholesalers

Rule Familiarization 85,560 $373.16 $31,927,570
Supplier Notification: Materials d

- - - Supplier Notification: Labor d

- - - Labeling System Setup 855 $4,552.00 $3,891,960
Recordkeeping System Setup 8,576 $2,510.80 $21,532,922

Total Initial Costs $57,352,452
Employer Recurring Recordkeeping 9,436 2,642 $ 4,980.30 $ 46,994,111 13,158,351
Nonemployer Recurring Recordkeeping 13,666 3,826 $ 100.05 $ 1,367,283 382,839
Total Recurring Recordkeeping $13,541,190

Total Annualized Cost (3%) $15,667,905

Total Annualized Cost (7%) $16,808,483

Retailers

Rule Familiarization 759,048 $282.84 $214,689,136
Supplier Notification: Materials d

- - - Supplier Notification: Labor d

- - - Total Initial Costs $214,689,136

Total Annualized Cost (3%) $10,421,579

Total Annualized Cost (7%) $16,010,775

a For estimation of number of affected composite panel producers, fabricators, wholesalers, and retailers incurring each cost typ e, see Table 2-78 through Table 2-81. Note that because firms producing tw o different types of composite wood products are expected to incur separate costs for each product type, the estimate of 62 stock panel producer firms that is used to estimate costs is der ived by counting firms that produce two different types of composite wood products twice. There are 54 unique firms that produce stock panels.

b For derivation of rule familiarization and supplier notification per-firm costs, see Table 2-71

, Table 2-72

, and Table 2-73; for derivation of initial and recurring per-firm recordkeeping and labeling costs, see Table 2-69

, Table 2-70

, and Table 2-74

,

c Laminated product producers that are defined as making hardwood plywood may incur additional recordkeeping costs depending on the analytical option. These additional costs are presented in Table 2-86.

d Supplier notification is not required under options SCR, SEUR, and SCUR ( the proposed option (Option SCR ).

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### 2863

2864

2865 Table 2-86: Panel Production Recordkeeping Costs (2010$)

Regulatory Option Number of

Affected

Firms a Average PerFirm Cost for

Affected Firms b Total Costs Total

Annualized
Cost (3%) Total

Annualized
Cost (7%) 

### Stock Panel Producers (excludes laminated product producers)
All Options 62 $3, 711 710.72 $230,065 $ 11,168 218,897 $ 17,157 212,908 

### Laminated Product Producers (Low Estimate)
Option SE, SEUR,
SFCC, CE, NE - - - - -

Option SI, CI, NI 7,486 $3,710.72 $27,778,450 $26,430,010 $25,706,829 Option SP 50 $3,710.72 $185,536 $176,530 $171,699 Option SN 7,486 $3,710.72 $27,778,450 $26,430,010 $25,706,829
Option SC, SCR

, SCUR 150 $3,710.72 $556,608 $529,589 $515,098



### Laminated Product Producers (High Estimate)
Option SE, SFCC,
SEUR, CE, NE - - - - -

Option SI, CI, NI 13,875 $3,710.72 $51,486,240 $48,986,962 $47,646,574 Option SP 50 $3,710.72 $185,536 $176,530 $171,699 Option SN 13,875 $3,710.72 $51,486,240 $48,986,962 $47,646,574
Option SC, SCR

, SCUR 277 $3,710.72 $1,027,869 $977,974 $951,214



### 2866

2867 Formatted Table

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## 2.6 Total Costs of the Proposed TSCA Title VI Implementation Rule 2868

2869 Table 2-87 presents the total undiscounted first and subsequent year costs and Table 2-88 presents 2870 the annualized costs of the proposed TSCA Title VI Implementation Rule. The costs are presented by 2871 analytical option and cost scenario for wood veneer laminated product producers (i.e., a low end estimate 2872 of 7,486 and a high end estimate of 13,875 for the number of affected wood veneer laminated product 2873 producers, and assuming 1 or 2 product lines requiring certification for the options where certification is 2874 applicable). Note that the laminator’s costs presented in Table 2-87 and Table 2-88 include the costs to 2875 all wood veneer laminated product producers regardle ss of the requirements under each analytical option 2876 presented. For example, under Option SE SEUR all laminated product producers are defined as 2877 fabricators, but their costs are still reported separately in the laminator rows of the tables. 2878

2879 For the options with emissions requirements that ar e consistent with TSCA Title VI (Options SE, 2880 SI, SP, SN, SC, SCR, SEUR, SFCC, and SCR SCUR ), the first year costs range from $ 435 420 million to 2881 $1,254 million and the annualized costs range from $ 72 60 million to $ 293 311 million per year. The 2882 proposed option (Option SC R SCUR ) has first year costs of $ 435 434 million to $447 million. The 2883 annualized costs under Option SC R SCUR range from $72 million to $81 million per year using a 3 2884 percent discount rate, which is $ 23 12 to $ 32 21 million less more than the next least expensive option with 2885 emissions requirements that are cons istent with the statute (Option SE SEUR ). 2886

2887 Options CE and CI, the least stringent options in terms of emissions standards (which are 2888 presented for information purposes since they are not consistent with the emissions requirements of the 2889 statute), have estimated annualized costs ranging fro m $99 to $292 million per year using a 3 percent 2890 discount rate. The estimated costs under Options CE and CI are similar to the estimated costs under the 2891 options with emissions requirements consistent with the statute, because recordkeeping, labeling, testing 2892 and certification are the primary cost drivers and loosening emissions standards does not affect these 2893

costs. 2894

2895 Options NE and NI, the most stringent options in terms of emissions standards (which are also 2896 presented for information purposes since they are not consistent with the emissions requirements of the 2897 statute), have estimated annualized costs ranging fro m $379 to $573 million using a 3 percent discount 2898 rate. The additional costs associated with changes to raw materials and production processes account for 2899 the difference between the costs under these options co mpared to the options with emissions requirements 2900 that are consistent with the statute (SE, SI, SP, SN, SC, SCR, and SCR SCUR ). 2901

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### Table 2-87: Estimated Total First and Subsequent Year Costs (millions, 2010$) 1

Analytical Option Entity Type First Year Subsequent Years

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines

Low End

Scenario High

End

Scenario Low End

Scenario High

End

Scenario Low End

Scenario High

End

Scenario Low End

Scenario High

End

Scenario

Option SE: Statutory emissions

standards where all wood veneer laminated products are exempt

from the definition of hardwood plywood Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $43 $80 $43 $80 $5 $8 $5 $8

Total $595 $595 $595 $595 $79 $79 $79 $79

Option SI: Statutory emissions

standards where all wood veneer laminated products are included in

the definition of hardwood plywood Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $368 $670 $406 $740 $103 $178 $108 $188

Total $919 $1,184 $957 $1,254 $177 $249 $182 $258

Option SP: Statutory emissions

standards where all laminated products other than Custom Plywood and Architectural Panels are exempt from the definition of hardwood plywood Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $48 $85 $49 $86 $8 $12 $8 $12

Total $600 $600 $600 $600 $ 83 82 $ 83 82 $ 83 82 $ 83 82
Option SN: Statutory emissions

standards where all wood veneer laminated products made using

NAF resins to attach wood veneers to NAF platforms are exempt from the definition of hardwood plywood. Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $ 102 75 $ 172 122 $ 104 77 $ 175 124 $ 61 34 $ 96 45 $ 62 35 $ 98 47

Total $ 654 626 $ 687 636 $ 655 628 $ 689 639 $ 136 108 $ 167 116 $ 137 109 $ 168 118

Option SC: Statutory emissions

standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $58 $105 $59 $107 $17 $28 $18 $30

Total $609 $619 $611 $621 $91 $99 $92 $101
Option SCR: Proposed Option. Statutory emissions standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. Reduced Recordkeeping. Producers $3 $3 $3 $3 $2 $2 $2 $2

Fabricators 2 $91 $57 $91 $57 $24 $20 $24 $20

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

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

Laminators 3 $55 $100 $57 $102 $17 $28 $18 $30

Total $435 $445 $436 $447 $ 57 56 $64 $57 $66

Option SEUR: Statutory

emissions standards where all wood veneer laminated products are exempt from the definition of hardwood plywood. ULEF Exemption. Reduced Recordkeeping. Producers $2 $2 $2 $2 $1 $1 $1 $1

Fabricators 2 $91 $57 $91 $57 $24 $20 $24 $20

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

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

Laminators 3 $41 $76 $41 $76 $5 $8 $5 $8

Total $420 $420 $420 $420 $44 $44 $44 $44

Option CE: CARB 1 SFCC: Statutory emissions standards

where all wood veneer laminated products are exempt from the Producers $ 1 2 $ 1 2 $ 1 2 $ 1 2 $1 $1 $1 $1

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48 Formatted Table

Formatted Table

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### Table 2-87: Estimated Total First and Subsequent Year Costs (millions, 2010$) 1

Analytical Option Entity Type First Year Subsequent Years

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines

Low End

Scenario High

End

Scenario Low End

Scenario High

End

Scenario Low End

Scenario High

End

Scenario Low End

Scenario High

End

Scenario definition of hardwood plywood

. ULEF Exemption. CARB Recordkeeping. Laminators 3 $43 $80 $43 $80 $5 $8 $5 $8

Total $594 $594 $594 $594 $78 $78 $78 $78

Option SCUR: Proposed Option. Statutory emissions standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. ULEF Exemption. Reduced Recordkeeping Producers $2 $2 $2 $2 $1 $1 $1 $1

Fabricators 2 $91 $57 $91 $57 $24 $20 $24 $20

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

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

Laminators 3 $55 $100 $57 $102 $17 $28 $18 $30

Total $434 $444 $436 $447 $56 $64 $57 $65

Option CE: CARB 1 emissions

standards where all wood veneer laminated products are exempt

from the definition of hardwood plywood Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $43 $80 $43 $80 $5 $8 $5 $8

Total $593 $593 $593 $593 $78 $78 $78 $78

Option CI: CARB 1 emissions

standards where all wood veneer laminated products are included in

the definition of hardwood plywood Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $368 $670 $406 $740 $103 $178 $108 $188

Total $918 $1,183 $956 $1,253 $176 $248 $181 $257

Option NE: NAF emissions

standards where all wood veneer laminated products are exempt

from the definition of hardwood plywood Producers $297 $297 $297 $297 $295 $295 $295 $295

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $43 $80 $43 $80 $5 $8 $5 $8

Total $889 $889 $889 $889 $372 $372 $372 $372

Option NI: NAF emissions

standards where all wood veneer laminated products are included in

the definition of hardwood plywood Producers $297 $297 $297 $297 $295 $295 $295 $295

Fabricators 2 $105 $68 $105 $68 $24 $20 $24 $20

Retailers $264 $264 $264 $264 $0 $0 $0 $0

Wholesalers $180 $180 $180 $180 $48 $48 $48 $48

Laminators 3 $368 $670 $406 $740 $103 $178 $108 $188

Total $1,214 $1,479 $1,252 $1,549 $471 $542 $476 $552
Option S CR SCUR is the proposed option.

1 Low and high end scenarios reflect the estimated number of lami nators and the number of product lines certified per firm, not the low and high costs for each category of entities.

2 To avoid double-counting, this row represents costs to fabricator s that are not laminators. Costs under the “Low End Scenario” reflect the low end of the estimated number of laminators (appr oximately 7,000 firms), and costs under the “High End Scenario” reflect the high end estimate of the number of laminators (appr oximately 14,000 firms). The estimated number of fabricators th at are not laminators is inversely proportiona l to the estimated number of laminators. So in the Low End Scenario there are 73,00 0 fabricators that are not laminators, and in the High End Scenario there are 66,000 firms that are not laminators. As a result, the costs to fabricators that are not laminators are higher under th e “Low End Scenario” then under the “High End Scenario”.

3 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, MDF or veneer core platform. This includes both laminators that ar e considered panel producers under the proposed rule and laminators that are considered fabricators under the proposed rule.



### 2902 Formatted Table

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### Table 2-88: Estimated Total Annualized Costs (millions, 2010$) 1

Analytical Option Entity Type Total Annualized Costs
(3 Percent) Total Annualized Costs
(7 Percent)

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines

Low

End

Scenario High

End

Scenario Low

End

Scenario High

End

Scenario Low

End

Scenario High

End

Scenario Low

End

Scenario High

End

Scenario

Option SE: Statutory emissions

standards where all wood veneer laminated products are exempt

from the definition of hardwood plywood Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $6 $11 $6 $11 $7 $13 $7 $13

Total $100 $100 $100 $100 $112 $112 $112 $112

Option SI: Statutory emissions

standards where all wood veneer laminated products are included in the definition of hardwood plywood Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $ 99 110 $193 $ 106 117 $205 $ 10 3 114 $200 $ 110 121 $212

Total $ 194 204 $282 $ 200 211 $293 $ 208 218 $298 $ 215 225 $311

Option SP: Statutory emissions

standards where all laminated products other than Custom Plywood and Architectural Panels are exempt from the definition of hardwood plywood Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $10 $15 $10 $15 $10 $16 $10 $16

Total $104 $104 $104 $104 $115 $115 $115 $115
Option SN: Statutory emissions

standards where all wood veneer laminated products made using

NAF resins to attach wood veneers to NAF platforms are exempt from

the definition of hardwood plywood. Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $ 49 34 $ 95 47 $ 50 35 $ 97 49 $ 49 34 $ 94 48 $ 50 35 $ 96 49

Total $ 143 128 $ 184 136 $ 144 129 $ 185 137 $ 154 139 $ 193 146 $ 155 140 $ 195 148

Option SC: Statutory emissions standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $18 $31 $19 $32 $19 $32 $19 $33

Total $112 $119 $113 $121 $123 $130 $124 $132
Option SCR: Proposed Option. Statutory emissions standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood.

Reduced paperwork requirements

for Recordkeeping. Producers $2 $2 $2 $2 $2 $2 $2 $2

Fabricators 2 $26 $21 $26 $21 $27 $21 $27 $21

Retailers $10 $10 $10 $10 $16 $16 $16 $16

Wholesalers $16 $16 $16 $16 $17 $17 $17 $17

Laminators 3 $18 $30 $19 $32 $18 $31 $19 $33

Total $72 $ 80 79 $73 $81 $ 81 80 $88 $81 $89

Option SEUR: Statutory emissions

standards where all wood veneer laminated products are exempt from the definition of hardwood plywood. ULEF Exemption. Reduced Recordkeeping. Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators 2 $26 $21 $26 $21 $27 $21 $27 $21

Retailers $10 $10 $10 $10 $16 $16 $16 $16

Wholesalers $16 $16 $16 $16 $17 $17 $17 $17

Laminators 3 $6 $11 $6 $11 $7 $13 $7 $13

Total $60 $60 $60 $60 $68 $68 $68 $68

Option CE: CARB 1 SFCC: Statutory emissions standards Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22 Formatted Table

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### Table 2-88: Estimated Total Annualized Costs (millions, 2010$) 1

Analytical Option Entity Type Total Annualized Costs
(3 Percent) Total Annualized Costs
(7 Percent)

1 Product Lines 2 Product Lines 1 Product Lines 2 Product Lines

Low

End

Scenario High

End

Scenario Low

End

Scenario High

End

Scenario Low

End

Scenario High

End

Scenario Low

End

Scenario High

End

Scenario

where all wood veneer laminated products are exempt from the definition of hardwood plywood

. ULEF Exemption. CARB Recordkeeping. Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $6 $11 $6 $11 $7 $13 $7 $13

Total $100 $100 $100 $100 $111 $111 $111 $111

Option SCUR: Proposed Option. Statutory emissions standards where laminated products made with compliant platforms and NAF resins are exempt from the definition of hardwood plywood. ULEF Exemption. Reduced Recordkeeping. Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators 2 $26 $21 $26 $21 $27 $21 $27 $21

Retailers $10 $10 $10 $10 $16 $16 $16 $16

Wholesalers $16 $16 $16 $16 $17 $17 $17 $17

Laminators 3 $18 $30 $19 $32 $18 $31 $19 $33

Total $72 $79 $72 $81 $80 $87 $81 $89

Option CE: CARB 1 emissions

standards where all wood veneer laminated products are exempt

from the definition of hardwood plywood Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $6 $11 $6 $11 $7 $13 $7 $13

Total $99 $99 $99 $99 $111 $111 $111 $111

Option CI: CARB 1 emissions

standards where all wood veneer laminated products are included in the definition of hardwood plywood Producers $1 $1 $1 $1 $1 $1 $1 $1

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $ 99 110 $193 $ 106 117 $205 $ 103 114 $200 $ 110 121 $212

Total $ 192 203 $281 $ 199 210 $292 $ 207 217 $297 $ 214 224 $310

Option NE: NAF emissions

standards where all wood veneer laminated products are exempt

from the definition of hardwood plywood Producers $281 $281 $281 $281 $274 $274 $274 $274

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $6 $11 $6 $11 $7 $13 $7 $13

Total $379 $379 $379 $379 $383 $383 $383 $383

Option NI: NAF emissions

standards where all wood veneer laminated products are included in the definition of hardwood plywood Producers $281 $281 $281 $281 $274 $274 $274 $274

Fabricators 2 $27 $22 $27 $22 $28 $22 $28 $22

Retailers $13 $13 $13 $13 $20 $20 $20 $20

Wholesalers $52 $52 $52 $52 $55 $55 $55 $55

Laminators 3 $ 99 110 $193 $ 106 117 $205 $ 103 114 $200 $ 110 121 $212

Total $ 473 484 $561 $ 479 490 $573 $ 480 490 $570 $ 486 497 $582
Option SCR SCUR is the proposed option.

1 Low and high end scenarios reflect the estimated number of laminators and the number of product lines certified per firm, not the low and high costs for each category of entities.

2 To avoid double-counting, this row represents costs to fabricator s that are not laminators. Costs under the “Low End Scenario” reflect the low end of the estimated number of laminators (approximately 7,000 firms), and costs under the “High End Scenario” reflect the high end estimate of the number of laminators (a pproximately 14,000 firms). The estimated number of fabricators th at are not laminators is inversely proportional to the estimated number of laminators. So in the Low End Scenario there are 73,000 fabricators that are not laminators, and in the High End Scenario there are 66,000 firms that are not laminators. As a result, the costs to fabricators that are not laminators are higher under the “L ow End Scenario” then under the “High End Scenario”.

3 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, MDF or veneer core platform. This includes both laminators that are considered panel producers under the proposed rule and laminators that are considered fabricators under the proposed rule. Formatted Table

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### 2903

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## 2.7 Summary of Costs by Entity Type and Activity for Options SI, SE, SCR, 2904 

## SEUR, and SCUR 2905

2906

Table 2

- 89 through Table 2

- 93 present a summary of the per-entity and total costs for analytical 2907 options SI, SE, SCR, SEUR, and SCUR. The costs presen ted in these tables are broken out by the type of 2908 entity, the baseline status under the CARB ATCM, and the activity being performed. 2909*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-1672910Table2-89: Option SE: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsPanelmanufacturersAll panel manufacturers62 entitiesBecome familiar with TSCA rule$294- - -62100%$0.02- - -Supplier Notification$337- - -62100%$0.02- - -On-site daily quality control testingd0 or $10,8320 or $8323455%$0.4$0.03Set-up to label products as TSCAcompliant$149`- - -62100%$0.009- - -Keep additional records$3,71162100%$0.2$0.2Manufacture productsnot certified underCARB ATCM16 entities and49.6 msf ofproductionHave products tested and certified bya TPCe$5,185 to $31,183$2,365 to $6,23016100%$0.4$0.08Changes to raw materialsf0 or $20 to $110 per thousand square feet(msf) of product produced47,300 msf95%$1.1$1.1Manufacture productscertified as ULEFunder CARB ATCM17 entitiesHave products tested and certified asPhase 2 or NAF by a TPCe$12,312 to $51,292($2,790) to $51,29217100%$0.6$0.5Wood veneerlaminatedproductmanufacturersAll laminatorsg,h7,486 to 13,875entitiesBecome familiar with the TSCA rule$294- - -7,486 to 13,875100%$2.2 to$4.1- - -Supplier Notification$343- - -7,486 to 13,875100%$2.6 to$4.8Set-up to label products as TSCAcompliant$4,552- - -7,486 to 13,875100%$34.1 to$63.2- - -Keep additional recordsi,jNon-employer firms: 0 or $179Employer firms: 0 or $12,917481 to 891 non-emplyr343 to 635 employer11%$4.5 to$8.4$4.5 to $8.4Fabricatorsthat are notlaminatorsAll fabricators that arenot laminators66,103 to72,492 entitiesBecome familiar with the TSCA rulek$294- - -66,103 to 72,492100%$19.5 to$21.3- - -Set-up to label products as TSCAcompliantk, l$133or$4,552- - -64,290 minor cost;1,813 to 8,202 moresubstantive cost100%$16.8 to$45.9- - -Fabricators notcompliant with CARBATCM requirements33,665 to40,054entitiesSupplier Notification$343- - -33,665 to 40,054100%$11.5 to$13.7- - -Keep additional recordsj, kNon-employer firms: 0 or $179Employer firms: 0 or $12,9172,163 to 2,573 nonemployers; 1,541 to1,833 employers11%$20.3 to$24.1$20.3 to$24.1WholesalersAll wholesalers85,560 entitiesBecome familiar with the TSCA rule$373- - -85,560100%$31.9- - -*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-168Table2-89: Option SE: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsIf repackaging or replacing an originallabel, set-up to label products asTSCA compliant$4,552- - -8551%$3.9- - -Wholesalers that arenot compliant withCARB ATCM53,731entitiesmSupplier Notification$34553,731100%$18.5- - -Set up systems to keep additionalrecordsn0 or $2,511- - -30,62957%$76.9- - -Keep additional recordsoNon-employer firms: 0 or $100Employer firms: 0 or $4,9803,826 non-employers;2,642 employer43%$48.4$48.4RetailersAll retailers759,048 entitiesBecome familiar with the TSCA rule$283- - -759,048100%$214.7- - -Retailers that are notcompliant with CARBATCM658,150 entitiesSupplier Notification$75- - -658,150100%$49.1- - -Total Rule Cost$595$79aCategories designated as “All” entities (e.g., All Panel Manufacturers, All Wholesalers, etc.) apply to all entities in the U.S. selling composite wood products, including both entities that complywith the CARB ATCM and those that do not. For each industry, the various sub-categories in the baseline status column (such asentities not compliant with the CARB ATCM) are subsets of the“All” entity categories. Some products are not certified under the CARB ATCM in the baseline because they are not sold in California, and some firms are not compliant with the labeling andrecordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.bEstimated number of entities reflects those entities selling composite wood products or goods containing regulated composite wood products. Production volume is only listed for entities with acost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.cReported values represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activitieswith a single value reported spanning both cost columns, entities are estimated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the unitcost is based on the production volume affected rather than the number of entities affected.dPanel producers with a standard certification or a new NAF certification are assumed to conduct daily on-site quality controltesting in order to comply with the proposed requirement that testedlots must be held until test results indicate that the emissions standard has been met. Particleboard and MDF manufacturers are assumed to be conducting daily on-site quality control testing tocomply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification will already have been exemptedfrom quality control testing. Hardwood plywood manufacturers with a standard certification are assumed to send panels to an off-site lab for quality control testing in the baseline, and thus wouldincur incremental costs to conduct daily on-site testing. Hardwood plywood manufacturers with a new NAF certification are assumed to conduct daily on-site quality control testing for the first threemonths.eIncremental testing costs depend on several factors including the type of composite wood product, the number of products certified, the baseline CARB ATCM certification level (Phase 2,ULEF, or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum of this value and the cost of on-site daily quality control testing.fEstimated raw materials costs vary with the type of composite wood product, the resin used in the baseline, and the composition of the core or platform used for hardwood plywood in the baseline.Of the estimated 4.6 million square feet (mmsf) of hardwood plywood that is not certified under the CARB ATCM, producers are estimated to incur incremental costs of $50/msf (3/8” basis) forchanges to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of that production volume). The remaining hardwood plywood productionvolume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MDFproduction is estimated to comply with the emission standards in the*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-169Table2-89: Option SE: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsbaseline, so MDF producers are not expected to make raw materials changes. Particleboard producers are estimated to incur incremental costs of $20/msf (3/4” basis) for raw materials changes forall the 45 mmsf of production volume that is not certified under the CARB ATCM in the baseline. The remaining particleboard production is not estimated to make raw materials changes because itmeets the emission standard in the baseline. Thus, of the 49.6 mmsf of composite wood manufactured by stock panel producers that is not certified under the CARB ATCM, 47.3 mmsf (95%) isestimated to change raw materials.gAll laminators are defined as fabricators under Option SE and do not incur costs to change raw materials, or to test and certify products, under this option.hUnder Option SE all laminators are defined as fabricators.iTo simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities arecompliant with the CARB ATCM in the baseline.jBased on conversations with fabricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not already complying with the CARB ATCM are assumed toincur additional recurring recordkeeping costs averaging $12,917 for employer firms and $179 for non-employer firms to comply with the recordkeeping requirements in the TSCA rule (althoughrecurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). The analysis estimates that 11% of laminators incur these costs.kThere are 79,978 fabricators, which can be categorized as laminators or as fabricators that are not laminators. Total costs depend on how many entities are in each group. The higher estimate forthe number of laminators corresponds to the lower estimate for the number of fabricators that are not laminators, so total costs vary inversely between the two groups. Thus, when adding all therows together to yield the Total Rule Cost in the final row of this table, the order of the Total Cost ranges for this row mustbe reversed. Under Option SE there is no low and high value for the totalcost. The cost ranges for laminators and fabricator that are not laminators reflect different estimates for the number of laminators. That is, the low estimate reflects 7,846 laminators and 72,492fabricators that are not laminators, which is a total of 79,978 firms; the high estimate reflects 13,875 laminators and 66,103fabricators that are not laminators, which is also 79,978 firms combined.Thus, there are 79,978 firms defined as fabricators in both cases.lBased on conversations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM and 67%of firms that are not already complying with the CARBATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying withthe CARB ATCM are assumed to incur more substantive costs(averaging $4,552) to set up labels.mThe analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline.nUnder Option SE, firms must keep additional records equivalent to those required by the CARB ATCM. However, firms that are compliant with the CARB ATCM will already be keepingsufficient records to comply with the requirements. In conversations with entities complying with the CARB ATCM, 57% of wholesalers reported incurring average costs of $2,511 to set uprecordkeeping systems to comply with the rule. (Fabricators and retailers did not report incurring such costs.) So 57% of thewholesalers and are not compliant with the CARB ATCM are estimatedto incur costs averaging $2,511 to update their recordkeeping systems to comply with Option SE. The existing recordkeeping systems at the remaining wholesalers, as well as at panelmanufacturers, laminators, and fabricators, are assumed to be sufficient to comply with the TSCA rule.oBased on conversations with wholesalers complying with the CARB ATCM, 43% of wholesalers that are not already complying with the CARB ATCM are assumed to incur additional recurringrecordkeeping costs. They are estimated to incur costs averaging $4,890 per firm for employer firms and $100 for non-employerfirms to comply with Option SE (although recurring recordkeepingcosts for these entities are assumed to be a function of firm size as measured by revenues). The remaining wholesalers are notestimated to incur these recordkeeping costs because their existingrecords are sufficient to comply with the rule’s requirements.2911*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-1702912Table2-90: Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsPanelmanufacturersAll panel manufacturers62 entitiesBecome familiar with TSCA rule$294- - -62100%$0.02- - -Supplier Notification$337- - -62100%$0.02- - -On-site daily quality control testingd0 or $10,8320 or $8323455%$0.4$0.03Set-up to label products as TSCAcompliant$149`- - -62100%$0.009- - -Keep additional records$3,71162100%$0.2$0.2Manufacture productsnot certified underCARB ATCM16 entities and49.6 msf ofproductionHave products tested and certified bya TPCe$5,185 to $31,183$4,485 to $6,23016100%$0.4$0.09Changes to raw materialsf0 or $20 to $110 per thousand square feet(msf) of product produced47,300 msf95%$1.1$1.1Manufacture productscertified as ULEFunder CARB ATCM17 entitiesHave products tested and certified asPhase 2 or NAF by a TPCe$12,312 to $51,292($2,806) to $51,29217100%$0.6$0.5Wood veneerlaminatedproductmanufacturersAll laminatorsh7,486 to 13,875entities and362,414 msf ofproductionBecome familiar with the TSCA rule$294- - -7,486 to 13,875100%$2.2 to$4.1- - -Supplier Notification$343- - -7,486 to 13,875100%$2.6 to$4.8Set-up to label products as TSCAcompliant$4,552- - -7,486 to 13,875100%$34.1 to$63.2- - -Have products tested and certified bya TPCe$26,226 to $70,782$5,685 to $61,9507,486 to 13,875100%$201.6to$443.6$50.1 to$101.9On-site daily quality control testingd$10,832$8327,486 to 13,875100%$81.1 to$150.3$6.2 to$11.5Changes to raw materialsg0 or $90 per thousand square feet (msf) ofproduct produced107,482 msf switchingresins and 184,023 msfswitching platforms51%$14.3$14.3Keep additional recordsi,jNon-employer firms: $3,711 to $3,890Employer firms: $3,711 to $16,6284,371 to 8,102 non-emp3,115 to 5,773 employer100%$32.3 to$59.8$32.3 to$59.8Fabricatorsthat are notlaminatorsAll fabricators that arenot laminators66,103 to 72,492entitiesBecome familiar with the TSCA rulek$294- - -66,103 to 72,492100%$19.5 to$21.3- - -Set-up to label products as TSCAcompliantk, l$133or$4,552- - -64,290 minor cost;1,813 to 8,202 moresubstantive cost100%$16.8 to$45.9- - -*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-171Table2-90: Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsFabricators notcompliant with CARBATCM requirements33,665 to40,054 entitiesSupplier Notification$343- - -33,665 to 40,054100%$11.5 to$13.7- - -Keep additional recordsj, kNon-employer firms: 0 or $179Employer firms: 0 or $12,9172,163 to 2,573 nonemployers; 1,541 to1,833 employers11%$20.3 to$24.1$20.3 to$24.1WholesalersAll wholesalers85,560 entitiesBecome familiar with the TSCA rule$373- - -85,560100%$31.9- - -If repackaging or replacing anoriginal label, set-up to labelproducts as TSCA compliant$4,552- - -8551%$3.9- - -Wholesalers that arenot compliant withCARB ATCM53,731entitiesmSupplier Notification$34553,731100%$18.5- - -Set up systems to keep additionalrecordsn0 or $2,511- - -30,62957%$76.9- - -Keep additional recordsoNon-employer firms: 0 or $100Employer firms: 0 or $4,98013,666 non-employers;9,436 employer43%$48.4$48.4RetailersAll retailers759,048entitiesBecome familiar with the TSCA rule$283- - -759,048100%$214.7- - -Retailers that are notcompliant with CARBATCM658,150 entitiesSupplier Notification$75- - -658,150100%$49.1- - -Total Rule Cost$919.4to$1254.3$177.3 to$258.2aCategories designated as “All” entities (e.g., All Panel Manufacturers, All Wholesalers, etc.) apply to all entities in the U.S. selling composite wood products, including both entities that complywith the CARB ATCM and those that do not. For each industry, the various sub-categories in the baseline status column (such asentities not compliant with the CARB ATCM) are subsets of the“All” entity categories. Some products are not certified under the CARB ATCM in the baseline because they are not sold in California, and some firms are not compliant with the labeling andrecordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.bEstimated number of entities reflects those entities selling composite wood products or goods containing regulated composite wood products. Production volume is only listed for entities with acost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.cReported values represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activitieswith a single value reported spanning both cost columns, entities are estimated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the unitcost is based on the production volume affected rather than the number of entities affected.dPanel producers with a standard certification or a new NAF certification are assumed to conduct daily on-site quality controltesting in order to comply with the proposed requirement that testedlots must be held until test results indicate that the emissions standard has been met. Particleboard and MDF manufacturers are assumed to be conducting daily on-site quality control testing tocomply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification will already have been exemptedfrom quality control testing. Hardwood plywood manufacturers with a standard certification are assumed to send panels to an off-site lab for quality control testing in the baseline, and thus would*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-172Table2-90: Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsincur incremental costs to conduct daily on-site testing. Hardwood plywood manufacturers with a new NAF certification are assumed to conduct daily on-site quality control testing for the first threemonths. Laminators defined as hardwood plywood manufacturers do not perform testing in the baseline, and thus would also incurcosts for on-site daily quality control testing.eIncremental testing costs depend on several factors including the type of composite wood product, the number of products certified, the baseline CARB ATCM certification level (Phase 2, ULEF,or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum ofthis value and the cost of on-site daily quality control testing.fEstimated raw materials costs vary with the type of composite wood product, the resin used in the baseline, and the composition of the core or platform used for hardwood plywood in the baseline.Of the estimated 4.6 million square feet (mmsf) of hardwood plywood that is not certified under the CARB ATCM, producers are estimated to incur incremental costs of $50/msf (3/8” basis) forchanges to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of that production volume). The remaining hardwood plywood productionvolume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MDFproduction is estimated to comply with the emission standards in thebaseline, so MDF producers are not expected to make raw materials changes. Particleboard producers are estimated to incur incremental costs of $20/msf (3/4” basis) for raw materials changes forall the 45 mmsf of production volume that is not certified under the CARB ATCM in the baseline. The remaining particleboard production is not estimated to make raw materials changes because itmeets the emission standard in the baseline. Thus, of the 49.6 mmsf of composite wood manufactured by stock panel producers that is not certified under the CARB ATCM, 47.3 mmsf (95%) isestimated to change raw materials.gFor products made by laminators (and thus are defined as hardwood plywood producers under Option SI), 30% of the production volume is assumed to incur costs of $30/msf (5/8” basis) to makechanges to resin systems in order to meet the emissions standards and 51% of the production volume is assumed to incur costs of$60/msf (5/8” basis) to switch to lower emission platforms in orderto meet the emissions standards. Some production is assumed to meet the emission standard in the baseline and does not incur costs for raw materials changes.hUnder Option SI all laminators are defined as hardwood plywood producers, so they must have their products tested and certified by a TPC and meet the hardwood plywood emissions standards.iTo simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities arecompliant with the CARB ATCM in the baseline.jBased on conversations with fabricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not already complying with the CARB ATCM are assumed toincur additional recurring recordkeeping costs averaging $12,917 for employer firms and $179 for non-employer firms to comply with the recordkeeping requirements in the TSCA rule (althoughrecurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). As a simplification, the analysis assumes that all laminators incur these costs, andthat fewer than 11% of fabricators that are not laminators do so. The result is that 11% of all fabricators (which representsthe combination of fabricators and laminators that are not fabricators) areassumed to incur recurring recordkeeping costs.kThere are 79,978 fabricators, which can be categorized as laminators or as fabricators that are not laminators. Total costs depend on how many entities are in each group. The higher estimate forthe number of laminators corresponds to the lower estimate for the number of fabricators that are not laminators, so total costs can vary inversely between the two groups. Thus, when adding all therows together to yield the Total Rule Cost in the final row of this table, the order of the Total Cost ranges for this row mustbe reversed (i.e., the high value in this range is used to calculate the lowvalue for the Total Rule Cost, and the low value in this range is used to calculate the high value for the Total Rule Cost).lBased on conversations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM and 67%of firms that are not already complying with the CARBATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying withthe CARB ATCM are assumed to incur more substantive costs(averaging $4,552) to set up labels.mThe analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-173Table2-90: Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsnUnder Option SI, firms must keep additional records equivalent to those required by the CARB ATCM. However, firms that are compliant with the CARB ATCM will already be keepingsufficient records to comply with the requirements. In conversations with entities complying with the CARB ATCM, 57% of wholesalers reported incurring average costs of $2,511 to set uprecordkeeping systems to comply with the rule. (Fabricators and retailers did not report incurring such costs.) So 57% of thewholesalers and are not compliant with the CARB ATCM are estimatedto incur costs averaging $2,511 to update their recordkeeping systems to comply with Option SI. The existing recordkeeping systems at the remaining wholesalers, as well as at panel manufacturers,laminators, and fabricators, are assumed to be sufficient to comply with the TSCA rule.oBased on conversations with wholesalers complying with the CARB ATCM, 43% of wholesalers that are not already complying with the CARB ATCM are assumed to incur additional recurringrecordkeeping costs. They are estimated to incur costs averaging $4,890 per firm for employer firms and $100 for non-employerfirms to comply with Option SI (although recurring recordkeepingcosts for these entities are assumed to be a function of firm size as measured by revenues). The remaining wholesalers are notestimated to incur these recordkeeping costs because their existingrecords are sufficient to comply with the rule’s requirements.29132914*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-1742915Table2-91: Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsPanelmanufacturersAll panel manufacturers62 entitiesBecome familiar with TSCA rule$294- - -62100%$0.02- - -On-site daily quality control testingd0 or $10,8320 or $8323455%$0.4$0.03Set-up to label products as TSCAcompliant$149- - -62100%$0.009- - -Keep additional records$3,71162100%$0.2$0.2Manufacture productsnot certified underCARB ATCM16 entities and49.6 msf ofproductionHave products tested and certified bya TPCe$5,185 to $31,183$2,365 to $6,23016100%$0.4$0.08Changes to raw materialsf0 or $20 to $110 per thousand square feet(msf) of product produced47,300 msf95%$1.1$1.1Manufacture productscertified as ULEFunder CARB ATCM17 entitiesHave products tested and certified asPhase 2 or NAF by a TPCe$12,312 to $51,292($2,790) to $51,29217100%$0.6$0.5Wood veneerlaminatedproductmanufacturersAll laminators7,486 to 13,875entitiesBecome familiar with the TSCA rule$294- - -7,486 to 13,875100%$2.2 to$4.1- - -Set-up to label products as TSCAcompliant$4,552- - -7,486 to 13,875100%$34.1 to$63.2- - -Laminators defined ashardwood plywoodproducers under TSCA150 to 277entities and 7,248msf ofproductionHave products tested and certified bya TPCe$61,676 to $70,782$55,690 to $61,950150 to 277100%$9.3 to$19.6$8.4 to$17.2On-site daily quality control testingd$10,832$832150 to 277100%$1.6 to$3.0$0.1 to $0.2Changes to raw materialsg0 or $30 per thousand square feet (msf) ofproduct produced2,149 msf30%$0.06$0.06Keep additional recordsNon-employer firms: $3,890Employer firms: $16,62888 to 162 non-emp62 to 115 employer100%$1.4 to$2.5$1.4 to $2.5Laminators defined asfabricators underTSCA7,336 to 13,598entities and355,164 msfChanges to raw materialsh0 or $30 per thousand square feet (msf) ofproduct produced105,317 msf30%$3.2$3.2Laminators definedas fabricators; notcompliant withCARB ATCMrequirements forfabricators7,336 to 13,598entitiesiKeep additional recordsjNon-employer firms: 0 or $179Employer firms: 0 or $12,917394 to 729 nonemployers280 to 520 employer9%$3.7 to$6.8$3.7 to $6.8Fabricatorsthat are notAll fabricators that arenot laminators66,103 to 72,492entitiesBecome familiar with the TSCA rulek$294- - -66,103 to 72,492100%$19.5 to$21.3- - -*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-175Table2-91: Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearslaminatorsSet-up to label products as TSCAcompliantk, l$133or$4,552- - -64,290 minor cost;1,813 to 8,202 moresubstantive cost100%$16.8 to$45.9- - -Fabricators notcompliant with CARBATCM requirements33,665 to 40,054entitiesKeep additional recordsj, kNon-employer firms: 0 or $179Employer firms: 0 or $12,9172,163 to 2,573 nonemployers; 1,541 to1,833 employers11%$20.3 to$24.1$20.3 to$24.1WholesalersAll wholesalers85,560 entitiesBecome familiar with the TSCA rule$373- - -85,560100%$31.9- - -If repackaging or replacing anoriginal label, set-up to labelproducts as TSCA compliant$4,552- - -8551%$3.9- - -Wholesalers thatimport and are notcompliant with CARBATCM15,045 entitiesmSet up systems to keep additionalrecordsn0 or $2,511- - -8,57657%$21.5- - -Keep additional recordsoNon-employer firms: 0 or $100Employer firms: 0 or $4,9803,826 non-employers;2,642 employer43%$13.5$13.5RetailersAll retailers759,048 entitiesBecome familiar with the TSCA rule$283- - -759,048100%$214.7- - -Total Rule Cost$435 to$447$56 to $66aCategories designated as “All” entities (e.g., All Panel Manufacturers, All Wholesalers, etc.) apply to all entities in the U.S. selling composite wood products, including both entities that complywith the CARB ATCM and those that do not. For each industry, the various sub-categories in the baseline status column (such asentities not compliant with the CARB ATCM) are subsets of the“All” entity categories. Some products are not certified under the CARB ATCM in the baseline because they are not sold in California, and some firms are not compliant with the labeling andrecordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.bEstimated number of entities reflects those entities selling composite wood products or goods containing regulated composite wood products. Production volume is only listed for entities with acost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.cReported values represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activitieswith a single value reported spanning both cost columns, entities are estimated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the unitcost is based on the production volume affected rather than the number of entities affected.dPanel producers with a standard certification or a new NAF certification are assumed to conduct daily on-site quality controltesting in order to comply with the proposed requirement that testedlots must be held until test results indicate that the emissions standard has been met. Particleboard and MDF manufacturers are assumed to be conducting daily on-site quality control testing tocomply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification will already have been exemptedfrom quality control testing. Hardwood plywood manufacturers with a standard certification are assumed to send panels to an off-site lab for quality control testing in the baseline, and thus wouldincur incremental costs to conduct daily on-site testing. Hardwood plywood manufacturers with a new NAF certification are assumed to conduct daily on-site quality control testing for the first threemonths. Laminators defined as hardwood plywood manufacturers do not perform testing in the baseline, and thus would also incurcosts for on-site daily quality control testing.eIncremental testing costs depend on several factors including the type of composite wood product, the number of products certified, the baseline CARB ATCM certification level (Phase 2, ULEF,or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum ofthis value and the cost of on-site daily quality control testing.*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-176Table2-91: Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsfEstimated raw materials costs vary with the type of composite wood product, the resin used in the baseline, and the composition of the core or platform used for hardwood plywood in the baseline.Of the estimated 4.6 million square feet (mmsf) of hardwood plywood that is not certified under the CARB ATCM, producers are estimated to incur incremental costs of $50/msf (3/8” basis) forchanges to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of that production volume). The remaining hardwood plywood productionvolume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MDFproduction is estimated to comply with the emission standards in thebaseline, so MDF producers are not expected to make raw materials changes. Particleboard producers are estimated to incur incremental costs of $20/msf (3/4” basis) for raw materials changes forall the 45 mmsf of production volume that is not certified under the CARB ATCM in the baseline. The remaining particleboard production is not estimated to make raw materials changes because itmeets the emission standard in the baseline. Thus, of the 49.6 mmsf of composite wood produced by stock panel producers that is not certified under the CARB ATCM, 47.3 mmsf (95%) isestimated to change raw materials.gFor products made by laminators that continue to use added formaldehyde resins (and thus are defined as hardwood plywood producers under TSCA), 30% of the production volume is assumed toincur costs of $30/msf (5/8” basis) to make changes to resin systems in order to meet the emissions standards. The remaining production is assumed to meet the emission standard in the baseline anddoes not incur costs for raw materials changes.hLaminators defined as fabricators are estimated to incur costs of $30/msf (5/8” basis) to switch to NAF resins for approximately 30% of the production volume of laminated products. Theremaining production uses NAF resins in the baseline (and does not incur costs for raw material changes), or continues using added formaldehyde resin and thus is defined as hardwood plywoodunder TSCA (addressed in a prior row in the table).iTo simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities arecompliant with the CARB ATCM in the baseline.jBased on conversations with fabricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not already complying with the CARB ATCM are assumed toincur additional recurring recordkeeping costs averaging $12,917 for employer firms and $179 for non-employer firms to comply with the recordkeeping requirements in the TSCA rule (althoughrecurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). The analysis estimates that 11% of laminators overall (combined for both thosedefined as hardwood plywood producers and those defined as fabricators) incur these costs. All the laminators defined as hardwood plywood producers are assumed to incur these additionalrecordkeeping costs. Thus, the remainder of the 11% of laminators incurring the additional recordkeeping costs are laminatorsdefined as fabricators. For example, the low estimate for the numberof laminators is 7,486. The number of laminators incurring additional recordkeeping costs is 824 (824≈11%*7,846). All 150 laminators defined as hardwood plywood producers are assumed toincur the additional recordkeeping costs. Thus, the remaining 674 (674=824-150) laminators incurring additional recordkeepingcosts are laminators defined as fabricators, of which 394 are nonemployer firms and 280 are employer firms. And the 674 firms is 9% of the 7,336 total firms in this category.kTotal costs for laminators and fabricators depend on how many entities are in each group. When more laminators are defined ashardwood plywood producers fewer are defined as fabricators, sototal costs can vary inversely between the two groups. Thus, when adding all the rows together to yield the Total Rule Cost inthe final row of this table, the order of the Total Cost ranges for thisrow must be reversed (i.e., the high value in this range is used to calculate the low value for the Total Rule Cost, and the low value in this range is used to calculate the high value for the Total RuleCost).lBased on conversations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM and 67%of firms that are not already complying with the CARBATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying withthe CARB ATCM are assumed to incur more substantive costs(averaging $4,552) to set up labels.mThe analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline, and that 28% of wholesalers are importers. Combining these yields an estimate that 15,045 wholesalers*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-177Table2-91: Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsimport and are not CARB compliant.nUnder the TSCA rule, wholesalers and retailers that do not import products are only required to keep invoices and bills of lading. These records are already kept as part of ordinary businesspractices, so there are no incremental recordkeeping costs estimated for these entities. Firms that import must keep additional records beyond invoices and bills of lading under the TSCA rule.However, firms that are compliant with the CARB ATCM will already be keeping sufficient records to comply with the TSCA requirements for importers. In conversations with entities complyingwith the CARB ATCM, 57% of wholesalers reported incurring average costs of $2,511 to set up recordkeeping systems to comply with the rule. (Fabricators and retailers did not report incurringsuch costs.) So 57% of the 15,045 wholesalers that import and are not compliant with the CARB ATCM (or 8,576 wholesalers) areestimated to incur costs averaging $2,511 to update theirrecordkeeping systems to comply with the TSCA rule. The existing recordkeeping systems at the remaining wholesalers that import, as well as at panel manufacturers, laminators, and fabricators,are assumed to be sufficient to comply with the TSCA rule.oBased on conversations with wholesalers complying with the CARB ATCM, 43% of 15,045 wholesalers that import and are not already complying with the CARB ATCM are assumed to incuradditional recurring recordkeeping costs. They are estimated to incur costs averaging $4,890 per firm for the 2,642 employer firms and $100 for the 3,826 non-employer firms to comply with theTSCA rule (although recurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). The remaining wholesalers are not estimated to incur theserecordkeeping costs because their existing records are sufficient to comply with the rule’s requirements.29162917*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-1782918Table2-92: Option SEUR: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsPanelmanufacturersAll panel manufacturers62 entitiesBecome familiar with TSCA rule$294- - -62100%$0.02- - -On-site daily quality control testingd0 or $10,8320 or $8322134%$0.2$0.02Set-up to label products as TSCAcompliant$149- - -62100%$0.009- - -Keep additional records$3,71162100%$0.2$0.2Manufacture productsnot certified underCARB ATCM16 entities and49.6 msf ofproductionHave products tested and certified bya TPCe$5,185 to $31,183$4,485 to $6,23016100%$0.4$0.09Changes to raw materialsf0 or $20 to $110 per thousand square feet(msf) of product produced47,300 msf95%$1.1$1.1Wood veneerlaminatedproductmanufacturersAll laminators7,486 to 13,875entitiesgBecome familiar with the TSCA rule$294- - -7,486 to 13,875100%$2.2 to$4.1- - -Set-up to label products as TSCAcompliant$4,552- - -7,486 to 13,875100%$34.1 to$63.2- - -Keep additional records,hNon-employer firms: 0 or $179Employer firms: 0 or $12,917481 to 891 non-emplyr343 to 635 employer11%$4.5 to$8.4$4.5 to $8.4Fabricatorsthat are notlaminatorsAll fabricators that arenot laminators66,103 to 72,492entitiesBecome familiar with the TSCA rulei$294- - -66,103 to 72,492100%$19.5 to$21.3- - -Set-up to label products as TSCAcomplianti, j$133or$4,552- - -64,290 minor cost;1,813 to 8,202 moresubstantive cost100%$16.8 to$45.9- - -Fabricators notcompliant with CARBATCM requirements33,665 to 40,054entitiesKeep additional recordsh, iNon-employer firms: 0 or $179Employer firms: 0 or $12,9172,163 to 2,573 nonemployers; 1,541 to1,833 employers11%$20.3 to$24.1$20.3 to$24.1WholesalersAll wholesalers85,560 entitiesBecome familiar with the TSCA rule$373- - -85,560100%$31.9- - -If repackaging or replacing anoriginal label, set-up to labelproducts as TSCA compliant$4,552- - -8551%$3.9- - -Wholesalers thatimport and are notcompliant with CARBATCM15,045 entitieskSet up systems to keep additionalrecordsl0 or $2,511- - -8,57657%$21.5- - -Keep additional recordsmNon-employer firms: 0 or $100Employer firms: 0 or $4,9803,826 non-employers;2,642 employer43%$13.5$13.5RetailersAll retailers759,048 entitiesBecome familiar with the TSCA rule$283- - -759,048100%$214.7- - -Total Rule Cost$420$44*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-179Table2-92: Option SEUR: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsaCategories designated as “All” entities (e.g., All Panel Manufacturers, All Wholesalers, etc.) apply to all entities in the U.S. selling composite wood products, including both entities that complywith the CARB ATCM and those that do not. For each industry, the various sub-categories in the baseline status column (such asentities not compliant with the CARB ATCM) are subsets of the“All” entity categories. Some products are not certified under the CARB ATCM in the baseline because they are not sold in California, and some firms are not compliant with the labeling andrecordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.bEstimated number of entities reflects those entities selling composite wood products or goods containing regulated composite wood products. Production volume is only listed for entities with acost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.cReported values represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activitieswith a single value reported spanning both cost columns, entities are estimated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the unitcost is based on the production volume affected rather than the number of entities affected.dPanel producers with a standard certification or a new NAF certification are assumed to conduct daily on-site quality controltesting in order to comply with the proposed requirement that testedlots must be held until test results indicate that the emissions standard has been met. Particleboard and MDF manufacturers are assumed to be conducting daily on-site quality control testing tocomply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification will already have been exemptedfrom quality control testing. Hardwood plywood manufacturers with a standard certification are assumed to send panels to an off-site lab for quality control testing in the baseline, and thus wouldincur incremental costs to conduct daily on-site testing. Hardwood plywood manufacturers with a new NAF certification are assumed to conduct daily on-site quality control testing for the first threemonths. Laminators defined as hardwood plywood manufacturers do not perform testing in the baseline, and thus would also incurcosts for on-site daily quality control testing.eIncremental testing costs depend on several factors including the type of composite wood product, the number of products certified, the baseline CARB ATCM certification level (Phase 2, ULEF,or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum ofthis value and the cost of on-site daily quality control testing.fEstimated raw materials costs vary with the type of composite wood product, the resin used in the baseline, and the composition of the core or platform used for hardwood plywood in the baseline.Of the estimated 4.6 million square feet (mmsf) of hardwood plywood that is not certified under the CARB ATCM, producers are estimated to incur incremental costs of $50/msf (3/8” basis) forchanges to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of that production volume). The remaining hardwood plywood productionvolume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MDFproduction is estimated to comply with the emission standards in thebaseline, so MDF producers are not expected to make raw materials changes. Particleboard producers are estimated to incur incremental costs of $20/msf (3/4” basis) for raw materials changes forall the 45 mmsf of production volume that is not certified under the CARB ATCM in the baseline. The remaining particleboard production is not estimated to make raw materials changes because itmeets the emission standard in the baseline. Thus, of the 49.6 mmsf of composite wood produced by stock panel producers that is not certified under the CARB ATCM, 47.3 mmsf (95%) isestimated to change raw materials.gTo simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities arecompliant with the CARB ATCM in the baseline.hBased on conversations with fabricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not already complying with the CARB ATCM are assumed toincur additional recurring recordkeeping costs averaging $12,917 for employer firms and $179 for non-employer firms to comply with the recordkeeping requirements in the TSCA rule (althoughrecurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). The analysis estimates that 11% of laminators overall (combined for both thosedefined as hardwood plywood producers and those defined as fabricators) incur these costs. All the laminators defined as hardwood plywood producers are assumed to incur these additionalrecordkeeping costs. Thus, the remainder of the 11% of laminators incurring the additional recordkeeping costs are laminatorsdefined as fabricators. For example, the low estimate for the numberof laminators is 7,486. The number of laminators incurring additional recordkeeping costs is 824 (824≈11%*7,846). All 150 laminators defined as hardwood plywood producers are assumed to*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-180Table2-92: Option SEUR: Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsincur the additional recordkeeping costs. Thus, the remaining 674 (674=824-150) laminators incurring additional recordkeepingcosts are laminators defined as fabricators, of which 394 are nonemployer firms and 280 are employer firms. And the 674 firms is 9% of the 7,336 total firms in this category.iTotal costs for laminators and fabricators depend on how many entities are in each group. When more laminators are defined ashardwood plywood producers fewer are defined as fabricators, sototal costs can vary inversely between the two groups. Thus, when adding all the rows together to yield the Total Rule Cost inthe final row of this table, the order of the Total Cost ranges for thisrow must be reversed (i.e., the high value in this range is used to calculate the low value for the Total Rule Cost, and the low value in this range is used to calculate the high value for the Total RuleCost).jBased on conversations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM and 67%of firms that are not already complying with the CARBATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying withthe CARB ATCM are assumed to incur more substantive costs(averaging $4,552) to set up labels.kThe analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline, and that 28% of wholesalers are importers. Combining these yields an estimate that 15,045 wholesalersimport and are not CARB compliant.lUnder the TSCA rule, wholesalers and retailers that do not import products are only required to keep invoices and bills of lading. These records are already kept as part of ordinary businesspractices, so there are no incremental recordkeeping costs estimated for these entities. Firms that import must keep additional records beyond invoices and bills of lading under the TSCA rule.However, firms that are compliant with the CARB ATCM will already be keeping sufficient records to comply with the TSCA requirements for importers. In conversations with entities complyingwith the CARB ATCM, 57% of wholesalers reported incurring average costs of $2,511 to set up recordkeeping systems to comply with the rule. (Fabricators and retailers did not report incurringsuch costs.) So 57% of the 15,045 wholesalers that import and are not compliant with the CARB ATCM (or 8,576 wholesalers) areestimated to incur costs averaging $2,511 to update theirrecordkeeping systems to comply with the TSCA rule. The existing recordkeeping systems at the remaining wholesalers that import, as well as at panel manufacturers, laminators, and fabricators,are assumed to be sufficient to comply with the TSCA rule.mBased on conversations with wholesalers complying with the CARB ATCM, 43% of 15,045 wholesalers that import and are not already complying with the CARB ATCM are assumed to incuradditional recurring recordkeeping costs. They are estimated to incur costs averaging $4,890 per firm for the 2,642 employer firms and $100 for the 3,826 non-employer firms to comply with theTSCA rule (although recurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). The remaining wholesalers are not estimated to incur theserecordkeeping costs because their existing records are sufficient to comply with the rule’s requirements.29192920*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-1812921Table2-93: Option SCUR (Proposed Rule): Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARBATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsPanelmanufacturersAll panel manufacturers62 entitiesBecome familiar with TSCA rule$294- - -62100%$0.02- - -On-site daily quality control testingd0 or $10,8320 or $8322134%$0.2$0.02Set-up to label products as TSCAcompliant$149- - -62100%$0.009- - -Keep additional records$3,71162100%$0.2$0.2Manufacture productsnot certified underCARB ATCM16 entities and49.6 msf ofproductionHave products tested and certified bya TPCe$5,185 to $31,183$4,485 to $6,23016100%$0.4$0.09Changes to raw materialsf0 or $20 to $110 per thousand square feet(msf) of product produced47,300 msf95%$1.1$1.1Wood veneerlaminatedproductmanufacturersAll laminators7,486 to 13,875entitiesBecome familiar with the TSCA rule$294- - -7,486 to 13,875100%$2.2 to$4.1- - -Set-up to label products as TSCAcompliant$4,552- - -7,486 to 13,875100%$34.1 to$63.2- - -Laminators defined ashardwood plywoodproducers under TSCA150 to 277entities and 7,248msf ofproductionHave products tested and certified bya TPCe$61,676 to $70,782$55,690 to $61,950150 to 277100%$9.3 to$19.6$8.4 to$17.2On-site daily quality control testingd$10,832$832150 to 277100%$1.6 to$3.0$0.1 to $0.2Changes to raw materialsg0 or $30 per thousand square feet (msf) ofproduct produced2,149 msf30%$0.06$0.06Keep additional recordsNon-employer firms: $3,890Employer firms: $16,62888 to 162 non-emp62 to 115 employer100%$1.4 to$2.5$1.4 to $2.5Laminators defined asfabricators underTSCA7,336 to 13,598entities and355,164 msfChanges to raw materialsh0 or $30 per thousand square feet (msf) ofproduct produced105,317 msf30%$3.2$3.2Laminators definedas fabricators; notcompliant withCARB ATCMrequirements forfabricators7,336 to 13,598entitiesiKeep additional recordsjNon-employer firms: 0 or $179Employer firms: 0 or $12,917394 to 729 nonemployers280 to 520 employer9%$3.7 to$6.8$3.7 to $6.8Fabricatorsthat are notlaminatorsAll fabricators that arenot laminators66,103 to 72,492entitiesBecome familiar with the TSCA rulek$294- - -66,103 to 72,492100%$19.5 to$21.3- - -Set-up to label products as TSCAcompliantk, l$133or$4,552- - -64,290 minor cost;1,813 to 8,202 moresubstantive cost100%$16.8 to$45.9- - -*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-182Table2-93: Option SCUR (Proposed Rule): Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARBATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearsFabricators notcompliant with CARBATCM requirements33,665 to 40,054entitiesKeep additional recordsj, kNon-employer firms: 0 or $179Employer firms: 0 or $12,9172,163 to 2,573 nonemployers; 1,541 to1,833 employers11%$20.3 to$24.1$20.3 to$24.1WholesalersAll wholesalers85,560 entitiesBecome familiar with the TSCA rule$373- - -85,560100%$31.9- - -If repackaging or replacing anoriginal label, set-up to labelproducts as TSCA compliant$4,552- - -8551%$3.9- - -Wholesalers thatimport and are notcompliant with CARBATCM15,045 entitiesmSet up systems to keep additionalrecordsn0 or $2,511- - -8,57657%$21.5- - -Keep additional recordsoNon-employer firms: 0 or $100Employer firms: 0 or $4,9803,826 non-employers;2,642 employer43%$13.5$13.5RetailersAll retailers759,048 entitiesBecome familiar with the TSCA rule$283- - -759,048100%$214.7- - -Total Rule Cost$434 to$447$56 to $65aCategories designated as “All” entities (e.g., All Panel Manufacturers, All Wholesalers, etc.) apply to all entities in the U.S. selling composite wood products, including both entities that complywith the CARB ATCM and those that do not. For each industry, the various sub-categories in the baseline status column (such asentities not compliant with the CARB ATCM) are subsets of the“All” entity categories. Some products are not certified under the CARB ATCM in the baseline because they are not sold in California, and some firms are not compliant with the labeling andrecordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.bEstimated number of entities reflects those entities selling composite wood products or goods containing regulated composite wood products. Production volume is only listed for entities with acost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.cReported values represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activitieswith a single value reported spanning both cost columns, entities are estimated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the unitcost is based on the production volume affected rather than the number of entities affected.dPanel producers with a standard certification or a new NAF certification are assumed to conduct daily on-site quality controltesting in order to comply with the proposed requirement that testedlots must be held until test results indicate that the emissions standard has been met. Particleboard and MDF manufacturers are assumed to be conducting daily on-site quality control testing tocomply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification will already have been exemptedfrom quality control testing. Hardwood plywood manufacturers with a standard certification are assumed to send panels to an off-site lab for quality control testing in the baseline, and thus wouldincur incremental costs to conduct daily on-site testing. Hardwood plywood manufacturers with a new NAF certification are assumed to conduct daily on-site quality control testing for the first threemonths. Laminators defined as hardwood plywood manufacturers do not perform testing in the baseline, and thus would also incurcosts for on-site daily quality control testing.eIncremental testing costs depend on several factors including the type of composite wood product, the number of products certified, the baseline CARB ATCM certification level (Phase 2, ULEF,or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum ofthis value and the cost of on-site daily quality control testing.fEstimated raw materials costs vary with the type of composite wood product, the resin used in the baseline, and the composition of the core or platform used for hardwood plywood in the baseline.Of the estimated 4.6 million square feet (mmsf) of hardwood plywood that is not certified under the CARB ATCM, producers are estimated to incur incremental costs of $50/msf (3/8” basis) for*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-183Table2-93: Option SCUR (Proposed Rule): Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARBATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearschanges to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of that production volume). The remaining hardwood plywood productionvolume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MDFproduction is estimated to comply with the emission standards in thebaseline, so MDF producers are not expected to make raw materials changes. Particleboard producers are estimated to incur incremental costs of $20/msf (3/4” basis) for raw materials changes forall the 45 mmsf of production volume that is not certified under the CARB ATCM in the baseline. The remaining particleboard production is not estimated to make raw materials changes because itmeets the emission standard in the baseline. Thus, of the 49.6 mmsf of composite wood produced by stock panel producers that is not certified under the CARB ATCM, 47.3 mmsf (95%) isestimated to change raw materials.gFor products made by laminators that continue to use added formaldehyde resins (and thus are defined as hardwood plywood producers under TSCA), 30% of the production volume is assumed toincur costs of $30/msf (5/8” basis) to make changes to resin systems in order to meet the emissions standards. The remaining production is assumed to meet the emission standard in the baseline anddoes not incur costs for raw materials changes.hLaminators defined as fabricators are estimated to incur costs of $30/msf (5/8” basis) to switch to NAF resins for approximately 30% of the production volume of laminated products. Theremaining production uses NAF resins in the baseline (and does not incur costs for raw material changes), or continues using added formaldehyde resin and thus is defined as hardwood plywoodunder TSCA (addressed in a prior row in the table).iTo simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities arecompliant with the CARB ATCM in the baseline.jBased on conversations with fabricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not already complying with the CARB ATCM are assumed toincur additional recurring recordkeeping costs averaging $12,917 for employer firms and $179 for non-employer firms to comply with the recordkeeping requirements in the TSCA rule (althoughrecurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). The analysis estimates that 11% of laminators overall (combined for both thosedefined as hardwood plywood producers and those defined as fabricators) incur these costs. All the laminators defined as hardwood plywood producers are assumed to incur these additionalrecordkeeping costs. Thus, the remainder of the 11% of laminators incurring the additional recordkeeping costs are laminatorsdefined as fabricators. For example, the low estimate for the numberof laminators is 7,486. The number of laminators incurring additional recordkeeping costs is 824 (824≈11%*7,846). All 150 laminators defined as hardwood plywood producers are assumed toincur the additional recordkeeping costs. Thus, the remaining 674 (674=824-150) laminators incurring additional recordkeepingcosts are laminators defined as fabricators, of which 394 are nonemployer firms and 280 are employer firms. And the 674 firms is 9% of the 7,336 total firms in this category.kTotal costs for laminators and fabricators depend on how many entities are in each group. When more laminators are defined ashardwood plywood producers fewer are defined as fabricators, sototal costs can vary inversely between the two groups. Thus, when adding all the rows together to yield the Total Rule Cost inthe final row of this table, the order of the Total Cost ranges for thisrow must be reversed (i.e., the high value in this range is used to calculate the low value for the Total Rule Cost, and the low value in this range is used to calculate the high value for the Total RuleCost).lBased on conversations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM and 67%of firms that are not already complying with the CARBATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying withthe CARB ATCM are assumed to incur more substantive costs(averaging $4,552) to set up labels.mThe analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline, and that 28% of wholesalers are importers. Combining these yields an estimate that 15,045 wholesalersimport and are not CARB compliant.nUnder the TSCA rule, wholesalers and retailers that do not import products are only required to keep invoices and bills of lading. These records are already kept as part of ordinary business*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 2-184Table2-93: Option SCUR (Proposed Rule): Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARBATCMType ofEntityBaseline Status underCARB ATCMaNumber ofEntities orProductionVolumebActivities with Incremental CostsEstimatedAverage Incremental Cost per EntitycNumber of Entities orProduction VolumeIncurring Non-ZeroCostsPercentIncurringNon-ZeroCostsTotal Cost (million2010$)Initial Start-upor First Year CostsAnnual RecurringCosts inSubsequent YearsFirstYearSubsequentYearspractices, so there are no incremental recordkeeping costs estimated for these entities. Firms that import must keep additional records beyond invoices and bills of lading under the TSCA rule.However, firms that are compliant with the CARB ATCM will already be keeping sufficient records to comply with the TSCA requirements for importers. In conversations with entities complyingwith the CARB ATCM, 57% of wholesalers reported incurring average costs of $2,511 to set up recordkeeping systems to comply with the rule. (Fabricators and retailers did not report incurringsuch costs.) So 57% of the 15,045 wholesalers that import and are not compliant with the CARB ATCM (or 8,576 wholesalers) areestimated to incur costs averaging $2,511 to update theirrecordkeeping systems to comply with the TSCA rule. The existing recordkeeping systems at the remaining wholesalers that import, as well as at panel manufacturers, laminators, and fabricators,are assumed to be sufficient to comply with the TSCA rule.oBased on conversations with wholesalers complying with the CARB ATCM, 43% of 15,045 wholesalers that import and are not already complying with the CARB ATCM are assumed to incuradditional recurring recordkeeping costs. They are estimated to incur costs averaging $4,890 per firm for the 2,642 employer firms and $100 for the 3,826 non-employer firms to comply with theTSCA rule (although recurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). The remaining wholesalers are not estimated to incur theserecordkeeping costs because their existing records are sufficient to comply with the rule’s requirements.29222923

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# 3 Benefits 2924

2925

Evidence for potential health effects associated with formaldehyde exposure exposures at the level 2926

associated with non-industrial environments is provided by a wide variety of human clinical, 2927 epidemiology, and animal studies (U.S. EPA 2010c). As is typical for health effects associated with a 2928 reactive gas, some of these health effects are commonly found at the portal of entry (e.g., sensory 2929 irritation). Other reported health effects include effects on the nervous and reproductive systems, 2930 developmental effects, and immunomodulation. 2931

2932 The health effects for which benefits are monetized in this economic analysis include : (1) 2933 nasopharyngeal cancer for individuals of all ages , (2) and eye irritation for individuals of all ages , (3) 2934 asthma in children ages 6 to 17, and (4) . The analysis also includes a qualitative discussion of non2935 monetized benefits from avoided respiratory related effects, and benefits from avoiding reduced fertility 2936 in women ages 20 to 40. 2937

2938 The potential benefits of the proposed TSCA Title VI Implementation Rule are estimated for 2939 several analytical options which are presented in Table 3-1. 2940

2941

2942

2943 Field Code Changed

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### Table 3-1: Analytical Options Considered in the Benefits Analysis

Analytical Option a Emissions

Standards Notes aAnalytical options with emissions standards at the levels required by TSCA Title VIb Option SE: S tatutory emissions standards where wood veneer laminated products are

e xempt from the definition of hardwood plywood Hardwood plywood MDF

Thin MDF

Particleboard Laminators do not need TPC testing or certification. No ULEF

certification. 0.05

ppm 0.11

ppm 0.13

ppm 0.09

ppm Same emissions

standards as Phase 2 of

the CARB ATCM

. Recordkeeping and supplier notification equivalent to CARB

ATCM.

Option SI: S tatutory
emissions standards

where wood veneer laminated products are

i ncluded in the definition of hardwood plywood Same as above Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier notification equivalent to CARB ATCM. All laminators must have products tested and certified by a TPC. No ULEF certification.

Option SP: S tatutory
emissions standards

where wood veneer laminated products other

than Custom and

Architectural P anel products are exempt

from the definition of hardwood plywood Same as above

Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and suppl ier notification equivalent to CARB ATCM. Only laminators making Custom or Architectural panels must have products tested and certified by a TPC. Laminators making other products do not need TPC testing or certification. No ULEF certification.

Option SN: S tatutory
emissions standards

where wood veneer laminated products made using NAF resins to

attach wood veneers to

N AF platforms are exempt from the

definition of hardwood plywood Same as above

Same emissions standards as Phase 2 of the CARB ATCM, wit h a different definition of hardwood plywood . Recordkeeping and supplier notification equivalent to CARB ATCM. Laminators using NAF resins to attach wood veneers to NAF platforms do not need TPC testing and certification. Laminators making other products do not ne ed TPC testing or certification. No

ULEF certification.

Option SC: S tatutory emissions standards where wood veneer laminated products

made with wood veneers attached to

c ompliant platforms using no-added formaldehyde (NAF) resins are exempt from the definition of hardwood plywood Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification. No ULEF certification.

Option SC SCR : S tatutory emissions

standards where wood

veneer laminated products made with

wood veneers attached

to c ompliant platforms using no

- added formaldehyde ( NAF ) resins are exempt from

the definition of hardwood plywood

. R educed recordkeepingrequirements for nonmanufacturers compared to other options. Same as above

Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier notification equivalent to CARB ATCM. Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or cer tification. No ULEF certification. Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required. Formatted Table

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### Table 3-1: Analytical Options Considered in the Benefits Analysis

Option SEUR: S tatutory emissions

standards where wood veneer laminated products are e xempt from the definition of hardwood plywood. U LEF certification

allowed. c R educed recordkeeping requirements for non-manufacturers. Laminators do not need TPC testing or certification. ULEF certification

allowed. Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required.

Option SFCC: S tatutory emissions standards with regulatory provisions that

are f ully c onsistent with C ARB ATCM. Tested lots may be shipped before test results are available. Laminators do not need TPC testing or certification. ULEF certification allowed. Panel producers and fabricators must label products.

Option SC R SCUR : Proposed Option.

S tatutory emissions

standards where wood

veneer laminated products made with

wood veneers attached

to c ompliant platforms using NAF resins are exempt from the

definition of hardwood plywood. U LEF

certification allowed. c

R educed recordkeepingrequirements for nonmfgrs. compared to other options. manufacturers. Same as above

Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood

D istributors Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Other laminators must have products tested and certified by a TPC. ULEF certification allowed.

Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. Other recordkeeping equivalent to

CARB ATCM. No supplier notification required

.Analytical options with emissions standards other thanthe levels required by TSCA Title VICARBPhase 1 levelsd Option CE: C ARB 1 emissions standards where wood veneer laminated products are

e xempt from the definition of hardwood plywood H ardwood plywood MDF

Thin MDF

Particleboard Laminators do not need TPC testing or certification. 0.08

ppm 0.21

ppm 0.21

ppm 0.18

ppm Same emissions

standards as Phase 1 of

the CARB ATCM

. Recordkeeping and supplier notification equivalent to CARB

ATCM.

Option CI: C ARB 1

emissions standards

where wood veneer laminated products are

i ncluded in the definition of hardwood plywood Same as above Same emissions standards as Phase 1 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeep ing and supplier notification equivalent to CARB ATCM. Laminators must have products tested and certified by a TPC.NAF emissionlevelse Option NE: N AF emissions standards where wood veneer laminated products are

e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification.

Option NI: N AF emissions standards where all wood veneer laminated products

are i ncluded in the definition of hardwood plywood Laminators must have products tested and certified by a TPC.NAF emission levels Option NE: NAF emissions

standards where wood veneer laminated products

are exempt from the

definition of hardwood plywood Hardwood plywood : 90% of samples < 0.04 ppm. All samples < 0.05 ppm. MDF and particleboard : 90% of sampl es < 0.04 ppm. 

### All samples < 0.06 ppm Note: This document discusses various options with respect to formaldehyde and composite wood products, including emissions standards that are

different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for Requires all composite wood product manufacturers to meet

NAF emission standards

. Recordkeeping and supplier

notification equivalent to

CARB ATCM. Formatted Table

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Formatted Table

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### Table 3-1: Analytical Options Considered in the Benefits Analysis

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

a Panel producers must have products tested and certified by a

TPC under all options. Recordkeeping and supplier notification requirements are equivalent to the CARB ATCM

unless noted otherwise.

b Emission levels for TSCA Title VI standard certification (and

CARB Phase 2): Hardwood plywood = 0.05 ppm; MDF = 0.11 ppm; Thin MDF = 0.13 ppm; Particleboard = 0.09 ppm.

c Emission levels for ULEF certification with reduced quality

control testing : Hardwood plywood: 90% of samples < 0.05 ppm and all samples < 0.05 ppm; MDF: 90% of samples < 0.06 ppm and all samples < 0.09 ppm; thin MDF: 90% of samples < 0.08 ppm and all samples < 0.11 ppm; Particleboard: 90% of samples < 0.05 ppm and all samples < 0.08 ppm. Emission levels for ULEF certification with quarterly TPC test exemption : Hardwood plywood: 90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; thin MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; Particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm.

d Emission levels for CARB Phase 1: Hardwood plywood = 0.08 ppm; MDF = 0.21 ppm; Thin MDF = 0.21 ppm; Particleboard = 0.18 ppm.

e Emission levels for NAF certification: Hardwood plywood:

90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF and particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm. Option NI: NAF emissions

standards where all wood veneer laminated p roducts

are included in the definition of hardwood plywood Same as above Requires all composite wood product manufacturers

to meet NAF emission sta ndards, with a different definition of hardwood plywood . CARB recordkeeping and supplier notification

.

Note : This document discusses various options with re spect to formaldehyde and composite wood products, including emissions standards that are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informa tional purposes. The breadth of the discussion here should not necessarily imply that EPA has correspondi ng flexibility in implementing the statute.


### 2944 Figure 3-1 presents an overview of the benefits assessment approach used in this economic 2945 analysis. The estimated changes in formaldehyde exposure under each analytical option vary by type of 2946 housing (structure type, amount of composite wood products, and elapsed time since composite wood 2947 products were installed), climate zone, and the ages and occupations of the exposed individuals (see 2948 section 3.1). Changes in risks of the adverse health outcomes associated with these changes in exposure 2949 are estimated for nasopharyngeal cancer (section 3.3) and non

- cancer health effects (section ), including 2950 sensory irritation, asthma incide nce, and reduced fertility. the corresponding estimated values of these 2951

risk reductions (section 3.4 ). Non-cancer health effects are presented discussed in section 3.5 sections and

, 2952 including the monetized benefits from reduced sensory irritation (section 3.5.1 ), a qualitative discussion 2953 of respiratory related illnesses (section 3.5.2 ), and fertility benefits (section 3.5.3 for cancer and non

2954 cancer risk reductions, respectively. ). The estimated numbers of individuals experiencing these exposure 2955 reductions are presented in section 3.6. Finally, sectio n 3.7 presents the results of the benefits assessment. 2956

2957 Formatted Table

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### Figure 3-1: Overview of Benefits Assessment Approach

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CHANGE IN EXPOSURE:

Estimate the changes in formaldehyde exposure attributable to the regulatory options VALUE OF RISK

REDUCTION:

Estimate the value of reductions

in adverse health risks INDIVIDUALS AFFECTED:

Estimate number of individuals

experiencing reductions in formaldehyde exposure attributable to the regulation

CHANGE IN RISK:

Use concentration-response

functions to estimate the resulting reductions in adverse

health risks

BENEFITS:

Combine: (1) adverse health risk reductions, (2) value of

reductions in adverse health

risks, and (3) number of individuals experiencing

reduction in risk to estimate total

benefits by regulatory option

Note: varies by type of housing, climate zone, age and occupation of

individual, policy

scenario

Note: includes nasopharyngeal cancer, eye irritation, asthma, and reduced fertility

Note: total net present

value and annualized

value for 30 years under the policy

scenario

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### 2958

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## 3.1 Estimating the Changes in Exposure by Analytical Option 2959

2960 The potential for benefit from the reduction of formaldehyde emissions from composite wood 2961 products potentially exists anywhere where individua ls reside, work, or othe rwise spend a substantial 2962 amount of time where new composite wood products will be introduced to an indoor space. The exposure 2963 scenarios included in this benefits analysis includ e two broad categories where a substantial amount of 2964 new composite wood products might be introduced to residences: (1) new home construction and (2) 2965 major renovations that include kitchen remodeling. Ta ble 3-2 includes a brief description of the factors 2966 that were used in this analysis to define the various exposure scenarios. For each analytical option, there 2967 are 3,300 different exposure scenarios derived from 22 different composite wood product age/source 2968 combinations, 5 structure types, 5 climate zones, a nd 6 individual age/employment status combinations. 2969

2970 Table 3-2: Exposure Factor Categories Used to Define Population Groups

Exposure

Factor Exposure Factor Categories Discussion

Composite wood product source and age

(n = 22) 1. New housing construction for 11 ages of the housing

2. Renovated housing for 11 ages of the installed composite wood products

Note: EPA calculated exposures using a 1.5 year emissions half life of form aldehyde from composite wood products. With this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11 years the emissions would be

near zero. New housing has a larger volume of newly installed composite wood products (and therefore a higher formaldehyde loading rate) relative to newly renovated housing, so the two sources are analyzed separately. The analysis considers composite wood products that are up to 11 years old. Thus, the analysis considers 11 different ages of new homes and 11 different ages of renovated housing.

Structure type

(n = 5) 1. Single family attached housing 2. Single family detached housing 3. Apartment 4. Manufactured Housing (e.g., mobile homes) 5. Recreational Vehicles and Camper/Trailers The type of structure affects the volume of composite wood products in each structure, air exchange rates, and interactions with indoor

sinks.

Climate zone

(n = 5) 1. Zone 1: <2,000 cooling degree days (CDD) and more than 7,000 heating degree days (HDD) 2. Zone 2: <2,000 CDD and 5,500 to 7,000 HDD 3. Zone 3: <2,000 CDD and 4,000 to 5,499 HDD 4. Zone 4: <2,000 CDD and <4,000 HDD. 5. Zone 5: >2,000 CDD and <4,000 HDD Note: Number of degree days is over a 30-year period. Because exposure modeling results are sensitive to indoor temperature and relative humidity, variation in these two factors are captured in the analysis by considering five climate zones separately.

Age and employment

status

(n = 6) 1. Infants: less than age 2 2. Children: aged 2 through 15 3. Ages 16+; work full-time outside the composite wood products industry 4. Ages 16+; work in composite wood products

fabrication 5. Ages 16+; work part-time outside the composite wood products industry 6. Ages 16+; unemployed or not in the labor force Average daily concentrations of formaldehyde exposure were estimated to vary according to age and employment status because these factors affect the formaldehyde exposures outside the housing unit and the amount of time spent inside and outside the housing unit.



### 2971

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## 3.2 Time Frame for the Analysis 2972

2973 This analysis estimates the benefits of each analytical option for lowering formaldehyde 2974 emissions from composite wood products over a 30-year period. This time frame was selected to be as 2975 short as possible while being long enough to capture th e important effects of the policy. In general, the 2976 downside of choosing a longer analysis time frame is th at uncertainties about both the baseline and policy 2977 scenarios increase with time. For example, the likelihood that alternative technologies for manufacturing 2978 composite wood products might be developed increase s over time (which could result in different 2979 formaldehyde emission rates for products and/or diffe rent costs for reducing formaldehyde emissions). 2980 Similarly, uncertainties about changing demographics, medical treatments for adverse health effects, and 2981 consumer preferences with respect to composite wo od products all increase with time. However, 2982 selecting a time frame that is too short would not capture all of the important effects of the policy 2983

scenarios under consideration. 2984

2985 The benefits analysis assumes that after eleven years any continuing (and declining) emissions 2986 from a given composite wood product would contri bute negligibly to that product's effect on 2987 formaldehyde exposure. Thus, composite wood products are assumed to contribute to formaldehyde 2988 exposure for 11 years. 37 

### Specifically: 2989

2990

 in the first year only new composite wood products are affected by the policy; 2991

 in the second year new and one-year-old co mposite wood products are affected by the 2992 policy; 2993

 in the third year new, one- and two-year-old composite wood products are affected by the 2994 policy; 2995

 in general, in the n th year, new, one-, two-, three-,..., and ( n -1)-year-old composite wood 2996 products are affected by the policy, for n = 1, 2, ..., 10; and 2997

 in the eleventh and all subsequent years new, one-, two-, three-, four-, five-, six-, seven-, 2998 eight-, nine-, and ten-year-old composite wood products are affected by the policy. 2999

3000 Since the exposure scenarios are defined in part according to the 11 different ages for composite 3001 wood products, it is not until the 11 th 

### year after the implementation of the rule that benefits are realized 3002 under every exposure scenario. That is, it is not until the 11 th 

### year after rule implementation that ten-year 3003 old composite wood products would have been required to be produced in compliance with the emissions 3004 standards. Thus, the benefits are phased in over a period of eleven years. 3005

3006 Similarly, the benefits from a given year of composite wood production will phase-out over time. 3007 Since the analysis considers the benefits and costs from 30 years of composite wood production, the 3008 estimated exposures have the following time profile after the 30 th 

### and last year of composite wood 3009 production considered in the analysis: 3010

3011

 in the 31 st

### year, only one-, two-, three-, four-, five-, six-, seven-, eight-, nine-, and ten3012 year-old composite wood products are produced before the 31 st 

### year (benefits from new 3013 composite wood products are produced after y ear 30 and therefore are not considered in 3014 the analysis); 3015

 in the 32 nd 

### year, only two-, three-, four-, five-, si x-, seven-, eight-, nine-, and ten-year-old 3016 composite wood products are produced before the 31 st 

### year (benefits from new and one- 3017

37 EPA calculated exposures using a 1.5 year emissions half li fe of formaldehyde from composite wood products With. this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11 years the emissions would be near zero.

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

May 1, 2013 3-10 

### year old composite wood products are produ ced after year 30 and therefore are not 3018 considered in the analysis); 3019

 in general, in the n th year after year 30, only n year-old and older composite wood 3020 products are produced before year 31, for n = 1, 2, ..., 10; and 3021

 in the 41 st 

### and all subsequent years, all 11 ages of composite wood products that 3022 potentially contribute to formaldehyde exposure are produced after the 30 th 

### year and 3023 therefore are not considered in the analysis. 3024

3025 Given this phase-in and phase-out, a time period of thirty years of composite wood production 3026 was selected so that the first ten years of the policy (when the benefits of the policy are being phased in) 3027 and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of 3028 the policy are being phased out) do not obscure the steady state benefits that would be experienced from 3029 the policy. It is necessary to include the phase-in an d phase-out of the benefits in order to be consistent 3030 with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions 3031 standards. Given that this analysis assumes that after eleven years any continuing (and declining) 3032 emissions from a given composite wood product would contribute negligibly to that product's effect on 3033 formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to 3034 40 years of exposure reductions. The first 10 years ar e a phase-in period for exposure reductions, the next 3035 20 years are a steady-state, and the next 10 years are a phase-out period. 3036

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May 1, 2013 3-11 

## 3.3 Assessing the Change in Cancer Risk 3037

3038 In 1991, EPA classified formaldehyde as a pr obable human carcinogen, “based on limited 3039 evidence in humans, and sufficient evidence in animals,” and derived an inhalation unit risk for assessing 3040 formaldehyde cancer risk. The inhalation unit risk and supporting documentation is included in EPA’s 3041 Integrated Risk Information System (IRIS) assessment of formaldehyde (Ref. 5). Formaldehyde is also 3042 listed under section 112(b)(1) of th e Clean Air Act (CAA) as a hazardous air pollutant (HAP). The CAA 3043 requires EPA to regulate emissions of HAPs from a pu blished list of industrial source categories. The 3044 EPA has developed lists of major and area source categories that must meet emission standards for HAPs 3045 and has developed (or is developing) standards for these source categories. The plywood and composite 3046 wood products (PCWP) National Emission Standards for Hazardous Air Pollutants (NESHAP), codified 3047 at 40 CFR part 63, subpart DDDD, first issued in 2004, is one of these standards. The PCWP NESHAP 3048 controls emissions of formaldehyde and other HAPs (p rimarily acetaldehyde, acrolein, methanol, phenol, 3049

and p roprionaldehyde propionaldehyde ) from various process units (e.g., blenders, dryers, formers, board 3050 coolers, and presses) at PCWP facilities. 3051

3052 In 2004, the EPA determined that unit risk de rived from the Chemical Industry Institute of 3053 Toxicology (CIIT 1999 ; CIIT 1999) ) biologically-based cancer dose-response modeling of formaldehyde3054 induced respiratory cancer (5.5 x 10-9 per micrograms per cubic meter ( μ g/m3)) better reflected the 3055

current state of the science than the 1991 IRIS cancer unit risk. In 2004, EPA determined that the CIIT

3056

derived inhalation unit risk better reflected the curre n t state of the science than the 1991 IRIS cancer 3057

inhalation unit risk. The authors of the CIIT modeling ( Conolly, et al. 2004 (Conolly et al . 2004) ) 3058 presented their risk estimates as values more cons ervative than their maximum likelihood estimates, and 3059 as “conservative in the face of modeling uncertainties.” Consequently, EPA used the CIIT value in risk 3060 assessments supporting regulatory actions developed under the authority of the Clean Air Act. For 3061 example, in the 2006 rulemaking that reconsidered the PCWP NESHAP, OAR stated “[i]n the case of 3062 formaldehyde, we have determined that the cancer potency derived using the approach developed by 3063 CIIT, which has been peer reviewed by an external review panel sponsored by EPA and the Canadian 3064 government, represents an appropriate alternative to EPA’s current IRIS URE [unit risk estimate] for 3065 formaldehyde. Therefore, this potency represents the best available peer-reviewed science at this time.” 3066 (EPA 2006 (Ref. 6, p. 8348). ). However, subsequent research published by the EPA suggests that the 3067 CIIT model was not appropriate and was very sensitive to unmeasured parameters such that very different 3068 estimates, including the 1991 IRIS assessment values, we re consistent with the available scientific data. 3069 Because the CIIT values do not reflect the uncertainty in estimates using the data that are available, EPA 3070 has decided that those estimates do not reflect the broad range of possible risk and that the data are not 3071 supportive of interpreting 5.5 X 10-9 per μg/m 3 

### as providing a health-protective estimate of human risk. 3072 Furthermore, the 1991 IRIS assessment values are consis tent with unit risks estimated by Schlosser et al. 3073 ( Schlosser, et al. 2003 (2003) ) based on Benchmark Dose modeling of the best available data at the time. 3074 In addition, the CIIT values do not address the potential risk of increased leukemias or lymphomas. Thus, 3075 in 2010, EPA returned to using the Agency’s current value on IRIS, 1.3 X 10-5 per μg/m 3 

### , which was last 3076 revised in 1991 as better reflecting the current state of the science as to the potential human cancer risk of 3077 exposure to formaldehyde ( EPA 2010b Ref. 7). ). 3078

3079 The inhalation unit risk is defined as the upper-bound excess lifetime cancer risk estimated to 3080 result from continuous exposure to an agent at a concentration of 1 μg/m3 in air (see 3081 http://www.epa.gov/iris/help_gloss.h tm#i). The change in excess cancer risk can be estimated by 3082 multiplying the lifetime average daily concentration (LADC) of formaldehyde exposure, in mg/m 3 

### , by the 3083 inhalation unit risk of 0.013 per mg/m 3 

### and the age-dependent adjustment factor (ADAF) of 10, 3, or 1 for 3084 individuals aged less than 2, 2-15, or 16 and older, re spectively. Note that EPA policy is to apply ADAFs 3085 when there is a mutagenic mode of action. The 1991 IRIS assessment did not make a formal finding of a 3086 mutagenic mode of action. However, there is sc ientific support for a mutagenic mode of action. 3087

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May 1, 2013 3-12 

### Therefore, EPA believes that application of ADAFs is the preferred approach in this case but is also 3088 presenting the calculations without applying ADAFs. The lower estimate of benefits excludes the 3089 ADAFs and the higher estimate of benefits includes the ADAFs. 3090

3091 Since the inhalation unit risk was estimated to be applied to the LADC, the most straightforward 3092 approach to calculate excess lifetime risk associated with exposure to formaldehyde would be to take the 3093 average daily concentration (ADC) for various life segments of an individual and construct the overall 3094 LADC, then multiply the ADCs by the unit risk and ADAF. For example, assume that an individual has 3095 the following life profile: 3096

3097
Age 0 (infant): Lives in a new house Age 2 (child): Lives in the same house (now with 2 years of off-gassing) Age 16: Moves to a new house Age 32: Moves to a new house Age 48: Moves to a new house Age 64: Moves to a new house Age 70: Death



### 3098

The excess lifetime risk could be calculated as: 3099

3100

Excess lifetime risk ൌ

1

ܧܮ ە ۖ ۔ ۖ ۓ ቀ ܥܦܣ ଴ିଵ 

### ൈ ሺ 2 ݕ݁ܽݏݎ ሻ ൈ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ ቁ

൅൫ܥܦܣ ଶିଵହ 

### ൈ ሺ 14 ݕ݁ܽݏݎ ሻ ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ ൯ ൅൫ܥܦܣ ଵ଺ିଷଵ 

### ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯ ൅ ൫ܥܦܣ ଷଶିସ଻ 

### ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯ ൅൫ܥܦܣ ସ଼ି଺ଷ 

### ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯ ൅ ൫ܥܦܣ ଺ସି଺ଽ 

### ൈ ሺ 6 ݕ݁ܽݏݎ ሻ ൯ ۙ ۖ ۘ ۖ ۗ

ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ (3)



### 3101

where: 3102

3103

ADC 0-1 = the ADC from exposure to formaldehyde in a new house for two years.

ADC 2-15 = the ADC from exposures over 14 years from a house that is 2 years old in the first year.

ADC a-a+16 = the ADC from exposures over 16 years from a ho use that is new in the first year (for the 16- 31, 32-47, and 48-63 age intervals)

ADC 64-69 = the ADC from exposures over 6 years from a house that is new in the first year (for the 64-69 age interval)

ADAF infant the infant age-dependent adjustment factor of 10

ADAF chil d the child age-dependent adjustment factor of 3 Unit Risk the inhalation unit risk for cancer of 0.013 per mg/m 3
LE= the life expectancy of the individual


### 3104

Note that the unit risk is an estimate of excess lifetime cancer risk associated with an average 3105 lifetime exposure to one unit of the carcinogen; it gives no information about how this lifetime excess risk 3106 is distributed across the ages within a lifetime. It al so gives no information about whether the distribution 3107 of annual exposures that result in a given average lifetime exposure matters. Equation (3) implicitly 3108 assumes that the distribution of exposures throughout a lifetime doesn’t matter – i.e., that all that matters 3109 is the lifetime average exposure. 3110

3111 To calculate the expected number of excess cancer cases resulting from a given excess 3112 lifetime risk, this excess risk must be multiplied by the relevant population. If pop denotes the size of the 3113 population that incurs the excess lifetime risk, then the expected number of cancer cases associated with 3114 exposure to formaldehyde given the scenario described above is: 3115

3116

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May 1, 2013 3-13 

### Number of cancer cases = excess lifetime risk * pop. (4)



### 3117 This calculation could then be done for both the baseline scenario and the policy scenario (in 3118 which exposures would be lower) to estimate the number of cancer cases avoided as a result of the policy: 3119

3120

Number of cancer cases baseline 

### = excess lifetime risk baseline 

### * pop

Number of cancer cases policy scenario 

### = excess lifetime risk policy scenario 

### * pop Number of cases avoided due to policy scenario

= Number of cancer cases b aseline 

### - Number of cancer cases p olic y scenario



### . (5)



### 3121

If V denotes the value of an avoided case, then the value of the avoided cases is: 3122

3123

Value of avoided cases = V* Number of cases avoided. (6)



### 3124

If the lifetime costs of this action were also added up, the overall net gain or loss that this 3125

individual would receive from this action could be estima ted. If this could be done for all individuals in 3126 society, the overall net benefits of the policy could be estimated. To do this, it would be necessary to 3127 assume a life profile for every individual (i.e., how often each individual moves, and the structure type 3128 and age of housing they live in at each stage of their life, and how recently it has been renovated). 3129

3130 Instead, this analysis utilizes an annual approach, which evaluates the expected change in the 3131 lifetime cancer risk for an individual arising from a single year of reduced formaldehyde exposure. In 3132 contrast, a lifetime approach would require assuming a lifetime formaldehyde exposure profile for each 3133 individual and evaluating the expected change in the lifetime cancer risk for an individual arising from a 3134 lifetime of reduced formaldehyde exposure. The exposure model was designed to produce a LADC 3135 associated with the same scenario used to calculate the ADC. Thus, it can produce a LADC for any life 3136 segment for which an ADC can be calculated (e.g., exposure over the course of 11 years to an individual 3137 who moves into a 2 year old house). Conceptually, this would be equivalent to the lifetime average daily 3138 concentration if one were exposed to the pollutant for only this life segment and no other time. Another 3139 interpretation is that it is the contribution to the overall LADC from this life segment. In other words: 3140

3141

ܥܦܣܮ ௧ 

### ൌ ܥܦܣ൫
௧ 

### ൈ ሺ ݐ ݀݋݅ݎ݁݌ ݅݊ ݁ݎݑݏ݋݌ݔ݁ ݂݋ ݏݎܻ݁ܽ ሻ ൯

ሺ ܻ݁ܽݏݎ ݅݊ ܽ ݈݂݅݁ݐ݅݉݁ ሻ ൌ ൭ ݕ݈ܽ݅ܦ ܽ݃݁ݎ݁ݒܣ ݅݉݁ݐ݂݅݁ܮ

݊݋݅ݐܽݎݐ݊ܿ݁݊݋ܥ ݂ ݈݂݅݁ ݎ݋

ݐ ݐ݁݃݉݁݊ݏ ൱

(7)



### 3142

Where: 3143

3144 ܥܦܣܮ ෍ ൌ ܥܦܣܮ

௧
௧ୀ௧௜௠௘ ௣௘௥௜௢ௗ௦ (8)



### 3145 Equation (3) combined with equation (7) can be used to calculate the excess cancer risk 3146 associated with any given life segment. For example, the excess cancer risk associated with the 2-15 year 3147 old life segment for a child starting in a 2-year old house could be calculated as: 3148

3149 ሺ ݔܧܿ݁ݏݏ ܿܽ݊ܿ݁ݎ ݎ݅ݏ݇ ሻ ஺௚௘ ଶିଵହ 

### ൌ ܥܦܣܮ ଶିଵହ 

### ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ (9)



### 3150 Excess cancer risk for segment t consisting of a single year for a single individual can be 3151

calculated as: 3152

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May 1, 2013 3-14 

### 3153 ሺ ݔܧܿ݁ݏݏ ܿܽ݊ܿ݁ݎ ݎ݅ݏ݇ ሻ ௧ 

### ൌ ܥܦܣܮ ௧ 

### ൈ ൫ܨܣܦܣ ௔ ௘௚௔௧ ௧ 

### ൯ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ (10)



### 3154 In equation (10), the LADC t 

### is determined by the concentration in a home in which the individual 3155 resides, e.g., a one-year old home fo r a seventeen-year old individual. 3156

3157 The advantage to this approach is that the life profile for each individual is not necessary; it is 3158 only necessary to know his or her location for that life segment. 3159

3160 It is easy to show that, mathematically, the lifetime approach to calculating excess risk and the 3161 annual approach are equivalent. The annual approach simply estimates the amount that any given year of 3162 exposure contributes to the overall excess cancer risk from some lifetime average daily concentration. 3163 Specifically, starting with equation (3) from above: 3164

3165

ൌ ݇ݏ݅ݎ ݎܿܽ݊ܿ݁ ݏݏܿ݁ݔܧ

൬ 1

ܧܮ ൰

ە ۖ ۔ ۖ ۓ ቀܥܦܣ

଴ିଵ 

### ൈ ሺ 2 ݕ݁ܽݏݎ ሻ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ቁ

൅൫ܥܦܣ ଶିଵହ 

### ൈ ሺ 14 ݕ݁ܽݏݎ ሻ ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ ൯ ൅൫ܥܦܣ
ଵ଺ିଷଵ 

### ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯ ൅ ൫ܥܦܣ
ଷଶିସ଻ 

### ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯ ൅൫ܥܦܣ
ସ଼ି଺ଷ 

### ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯ ൅ ൫ܥܦܣ
଺ସି଺ଽ 

### ൈ ሺ 6 ݕ݁ܽݏݎ ሻ ൯ ۙ ۖ ۘ ۖ ۗ

ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ

ൌ

ە

ۖ ۖ ۔ ۖ ۖ ۓ ቀ ܥܦܣ ଴ିଵ ൈ ሺ 2 ݕ݁ܽݏݎ ሻ ൫ܨܣܦܣ ௡௔௙௡௜௧ ൯ ቁ

ܧܮ ൅ ൫ܥܦܣ ଶିଵହ ൈ ሺ 14 ݕ݁ܽݏݎ ሻ ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ ሻ ൯

ܧܮ

൅ ൫ܥܦܣ
ଵ଺ିଷଵ ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯

ܧܮ ൅ ൫ܥܦܣ
ଷଶିସ଻ ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯

ܧܮ ൅ ൫ܥܦܣ
ସ଼ି଺ଷ ൈ ሺ 16 ݕ݁ܽݏݎ ሻ ൯

ܧܮ ൅ ൫ܥܦܣ
଺ସି଺ଽ ൈ ሺ 6 ݕ݁ܽݏݎ ሻ ൯

ܧܮ ۙ ۖ ۖ ۘ ۖ ۖ ۗ

ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ (11)



### ൌ ቊ ܥܦܣܮ ଴ିଵ 

### ൈ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ ൅ ܥܦܣܮ ଶିଵହ 

### ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ

൅ܥܦܣܮ ଵ଺ିଷଵ 

### ൅ ܥܦܣܮ ଷଶିସ଻ 

### ൅ ܥܦܣܮ ସ଼ି଺ଷ 

### ൅ ܥܦܣܮ ଺ସି଺ଽ 

### ቋ

ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ

ൌ ൛ ܥܦܣܮ ଴ିଵ 

### ൈ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ൟ ൅ ሼ ܥܦܣܮ ଶିଵହ 

### ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ሽ

൅ ሼ ܥܦܣܮ ଵ଺ିଷଵ 

### ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ሽ ൅ ሼ ܥܦܣܮ ଷଶିସ଻ 

### ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ሽ

൅ ሼ ܥܦܣܮ ସ଼ି଺ଷ 

### ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ሽ ൅ ሼ ܥܦܣܮ ଺ସି଺ଽ 

### ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ሽ

ൌ ൛ ܥܦܣܮ ଴ 

### ൈ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ൟ ൅ ൛ ܥܦܣܮ ଵ 

### ൈ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ൟ

൅ ሼ ܥܦܣܮ ଶ 

### ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ሽ ൅ ڮ

൅ ሼ ܥܦܣܮ ଵହ 

### ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻሽ ൅ ሼ ܥܦܣܮ ଵ଺ 

### ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻሽ ൅ ڮ

൅ ሼ ܥܦܣܮ ଺ଽ 

### ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ሽ (12)



### 3166

where: 3167

3168

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

May 1, 2013 3-15 ADC 0-1 = the ADC from exposure to formaldehyde in a new house for two years.

ADC 2-15 = the ADC from exposures over 14 years from a house that is 2 years old in the first year.

ADC a-a+16 = the ADC from exposures over 16 years from a ho use that is new in the first year (for the 16- 31, 32-47, and 48-63 age intervals)

ADC 64-69 = the ADC from exposures over 6 years from a house that is new in the first year (for the 64-69 age interval)

ADAF infant the infant age-dependent adjustment factor of 10

ADAF chil d the child age-dependent adjustment factor of 3 Unit Risk the inhalation unit risk for cancer of 0.013 per mg/m 3
LE= The life expectancy of the individual

LADC 0-1 = ADC 0-1 / LE

LADC 2-15 = ADC 2-15 / LE

LADC a-a+16 = ADC a-a+16 / LE

LADC 64-69 = ADC 64-69 / LE 

### 3169

The change in excess cancer risk resulting from the policy (relative to baseline) is: 3170

3171

ൌ ൛ ൫ܥܦܣܮ ଴ ௕ 

### ܥܦܣܮ െ ଴ ௣ 

### ൯ ൈ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ൟ ൅ ൛൫ܥܦܣܮ
ଵ ௕ 

### െ ܥܦܣܮ ଵ ௣ 

### ൯ ൈ ൫ܨܣܦܣ ௡௔௙௡௜௧ 

### ൯ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ൟ൅ڮ൅ ൛ ൫ܥܦܣܮ ଺ଽ ௕ 

### െ ܥܦܣܮ ଺ଽ ௣ 

### ൯ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ൟ (13)



### 3172

where LADC B 

### and LADC P 

### refer to the baseline and policy scenario LADCs, respectively. To 3173 evaluate the impact of the policy for a single year (for example, when the individual is 15 years old) the 3174 change in excess cancer risk for this single year would be simply: 3175

3176 ൌ ൛൫ܥܦܣܮ ଵହ ௕ 

### െܥܦܣܮ ଵହ ௣ 

### ൯ ൈ ሺ ܨܣܦܣ ௟௜௛௖ௗ 

### ሻ ൈ ሺ ܷ݊݅ݐ ܴ݅ݏ݇ ሻ ൟ (14)



### 3177 Thus, the annual excess cancer risk reduction can be calculated for an individual of any age 3178 associated with one year of the policy. At the popula tion level, the annual approach consists of analyzing 3179 a population profile of individuals consistent with cu rrent demographic data, and placing them in housing 3180 stock consistent with current real estate data and calculating the benefits accruing from one year of the 3181 policy, all else constant. 3182

3183 Since the policy is analyzed over a period of thirty years, the analysis assumes that the 3184 demographic profile of the population (e.g., population distribution by age, size, and type of housing) 3185 does not change over time. Thus, depending on how these demographics actually change over the next 3186 thirty years, this assumption could result in the in troduction of an upward or downward bias into the 3187 benefits estimate. For example, if the number of people moving into new housing is lower than assumed 3188 over the next thirty years then the current assumption in troduces an upward bias to the benefits estimate. 3189 Similarly, if the population increases over time, then the current assumption introduces a downward bias 3190

to the benefits estimate. 3191

3192 It is also worth noting that if the analysis were to attempt to account for demographic shifts over 3193 time, it would also be necessary to estimate how these demographic shifts would affect the demand for 3194 composite wood products and therefore impact the costs that correspond to the estimated benefits – 3195 something that would not be possible to model wit hout introducing additional uncertainty. Therefore, 3196 attempting to relax the simplifying assumption that demographics are constant over the 30-year analysis 3197 time frame would address one uncertainty while introduc ing another uncertainty and it is not clear that 3198 this would reduce the overall uncertainty in the estimate of net benefits. 3199

3200 There are a number of advantages to using the annual approach as opposed to the lifetime 3201 approach. With the annual approach actual demographic data can be used to estimate the number of 3202

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### individuals in each exposure scenario. This way the housing stock used in the simulation will resemble 3203 the existing housing stock. Recent data from the Census and housing surveys are a reasonable 3204 approximation of what the distributio n will be in the near future. This approach avoids the need to 3205 estimate a survival function to correctly account for premature deaths (or be concerned with new births). 3206 Assuming demographics do not change, using a populat ion-weighted annual approach accounts for these 3207

factors. 3208

3209 It is also important to note some caveats associated with the annual approach. As just mentioned, 3210 some distribution of population and housing stock must be assumed, and it is assumed that the current 3211 distribution is a good indicator of the future distribution. In other words, the analysis is implicitly 3212 assuming a steady state, where the present distribution closely approximates the future distribution. 3213

3214
3.3.1 Lower Estimate of the Excess Number of Cancer Cases 3215

3216 Most individuals in the analysis are more than 0 years old, so applying a unit risk – i.e., an excess 3217 lifetime risk – to them might overstate their excess risk of the cancer. For example, consider someone 3218 who is 50 years old in the year of the analysis and has not yet gotten the cancer. Should the entire excess 3219 lifetime risk (the unit risk) be applied to this indi vidual for the remaining expected years of his life? Or 3220 should a modified excess risk, conditional on his not having gotten the cancer in his first 49 years, be 3221 applied? Because the unit risk provides no information about how excess risk is distributed over the 3222 course of a lifetime, there is no clear answer. 3223

3224 To address this uncertainty this analysis therefore includes a lower estimate of the excess number 3225 of cancer cases that is calculated by multiplying the unit risk by a lowering factor that takes into account 3226 the age at which an individual experiences the change in exposure and the incidence of the cancer by that 3227 age. Specifically, the lowering factor is calculated as the percentage of incidence of the cancer that 3228 occurs within the age range spanning from the age at which the change in exposure is experienced 3229 through the end of the expected lifetime. For exampl e, 56.6 percent of respiratory tract cancers occur 3230 between ages 50 and 81 (the life expectancy of a 50 year old). Therefore the lowing factor for an 3231 individual experiencing a one year change in exposure at age 50 is 0.566. This approach implicitly 3232

assumes that the excess lifetime risk of the cancer is distributed across the ages within a lifetime in the 3233 same pattern seen in the age-specific incidences of the cancer in the population. 3234

3235 3.3.2 Summary of Approach to Estimate Change in Cancer Risk 3236

3237 Equations (15) and (16) present the equations that are used to calculate the lower and higher 3238 estimates for the change in cancer risk associated with a one year change in the average daily 3239 concentration of formaldehyde exposure. Note that EPA policy is to apply ADAFs when there is a 3240 mutagenic mode of action. The 1991 IRIS assessment did not make a formal finding of a mutagenic mode 3241 of action. However, there is scient ific support for a mutagenic mode of action. Therefore, EPA believes 3242 that application of ADAFs is the preferred approach in this case but is also presenting the calculations 3243 without applying ADAFs. The lower estimate of bene fits excludes the ADAFs and the higher estimate of 3244

benefits includes the ADAFs. 3245

3246

ሺCancer Ris k Changeሻ ୪୭୵ୣ୰ ୣୱ୲୧୫ୟ୲ୣ ൌ ൫ADC ୠ ൯ െ ൫ADC ୮ ൯

LE ൈ ሺ Unit Risk ሻ ൈ ሺLowering Factorሻ (15)



### 3247

ሺCancer Ris k Changeሻ ୦୧୥୦ୣ୰ ୣୱ୲୧୫ୟ୲ୣ ൌ ൫ADC ୠ ൯ െ ൫ADC ୮ ൯

LE ൈ ADAF ൈ ሺ Unit Risk ሻ (16)



### 3248

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May 1, 2013 3-17 

### where: 3249

3250

ADC b = the baseline average daily concentration of one year of formaldehyde exposure (in mg/m 3 )

ADC p = the average daily concentration of one year of formaldehyde exposure (in mg/m 3 ) in the policy scenario LE = the life expectancy of the individual given his current age (i.e., the age to which he is expected to live, given his current age) ADAF = the age dependent adjustment factor (10 for 0-1 year olds, 3 for 2-15 year olds, 1 otherwise) Lowering Factor = factor calculated as the percentage of incidence of the cancer that occurs within the age range spanning from the age at which the change in exposure is experienced through the end of the expected lifetime.


### 3251

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## 3.4 Estimating the Value of Reductions in Cancer Risk 3252

3253 In this analysis the number of excess cancer cases are estimated and then they are divided into 3254 two categories: (1) instances where individuals will ultimately die from the cancer, and (2) instances 3255 where individuals ultimately die from something other than the cancer. Note that these two categories 3256 reflect the two possible outcomes for nasopharyngeal cancer, instead of reflecting different types of 3257

cancers. Hereafter the first outcome is referred to as fatal cancer and the second outcome as nonfatal 3258 cancer. Each outcome is valued differently – the value of a reduction in the risk of fatal cancer is 3259 described in section 3.4.1, and the value of a reduction in the risk of non-fatal cancer, described in section 3260

3.4.2. 3261

3262 In order to monetize the value of reduced cancer risk, it is necessary to estimate the time periods 3263 when these benefits would accrue so that the present value of these benefits can be calculated. The 3264 method for estimating the timing for when the reduced cancer risks are realized and the method for 3265 calculating the value of reducing these risks at the time of the exposure is described below in section 3266

3.4.3. 3267

3268
3.4.1 The Value of a Micro Ri sk Reduction for Fatal Cancer 3269

3270 The value of reducing risk for nasopharyngeal cancer is estimated as a weighted average of the 3271 value of reducing both fatal and nonfatal cancer risks. According to data from the Surveillance, 3272 Epidemiology, and End Results (SEER) Program of the National Cancer Institute, the 15 year survival 3273 rate for cancers of the nasopharynx is 42.9 percent (SEER 2010). Thus, the analysis assumes that 57.1 3274 percent of the reductions in cancer risk are reductions in mortality risk and therefore are valued as such. 3275 The analysis uses the value of mortality risk (VMR) of $8.01 per micro-risk. A micro risk reduction is a 3276 reduction of 1/1,000,000 in the risk of mortality. This benefit is assumed to be accrued at the end of the 3277 year in which a cancer case was avoided and no additional benefits (e.g., from avoiding cancer treatment 3278 costs) are included in the instances of a mortality risk reduction. 3279

3280
3.4.2 The Value of a Micro Risk Reduction for Non-Fatal Cancer 3281

3282 As noted above, 42.9 percent of the cancer risk reductions are assumed to be reductions in risk for 3283

non-fatal cancer. While it is the value of a micro reduct ion in risk (a risk redu ction of 1/1,000,000) of 3284 non-fatal nasopharyngeal cancer that is of interest, this was estimated by first estimating the expected 3285 value of a single avoided case of non-fatal nasopharyngeal cancer and then dividing by 1,000,000 to 3286 obtain the implied value of a micro risk reduction. 38 

### 3287

3288 Non-fatal cases of nasopharyngeal cancer were valued using a cost-of-illness (COI) approach. 3289 The value of an avoided case of non-fatal nasopharyngeal cancer was estimated to be the present 3290 discounted value ( pdv ) of the stream of expected medical expenditures and opportunity costs associated 3291 with the illness from the year of diagnosis to a preset age (set at 99 in this analysis), taking into account 3292 that the individual may die of other causes in each year in the analysis. 39 

### 3293

3294

38 If 1,000,000 people are each willing to pay y for a risk reduction of 1 in 1,000,000, then that risk reduction applied to 1,000,000 individuals would result in 1 expected case avoided, and the value of that expected avoided case would be the sum of the individuals’ WTPs for their risk reductions, or 1,000,000* y . If Y denotes the value of that expected avoided case, then Y = 1,000,000*y, so that y = Y/1,000,000. For example, suppose the estimated value of an avoided case of non-fatal nasopharyngeal cancer is $140,000. The implied value of a micro risk reduction would be $0.14.

39 This COI approach likely understates the true value of avoiding a case of non-fatal nasopharyngeal cancer because it

omits the individual’s willingness to pay to avoid the pain and suffering associated with the illness, which may be

substantial.

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### One approach to estimating the costs associated with a chronic illness such as cancer, described in 3295 EPA’s Cost of Illness Handbook (U.S. EPA 2001), is to divide annual costs into three categories: (1) 3296 initial costs – costs of diagnosis and initial treatment costs – that occur in the year of diagnosis, (2) 3297 “maintenance” costs which the cancer patient incurs in each subsequent year prior to death, and (3) 3298 terminal costs – the costs incurred in the patient’s last year of life. This analysis followed this general 3299 approach. Because this section is concerned only with non-fatal cases of nasopharyngeal cancer, only the 3300 first two categories are included. 3301

3302 As described more fully below, the stream of annual costs of a cancer will depend on: 3303

3304

 the stage of the cancer when it is first diagnosed; 3305

 the individual’s employment status (full-time worker, part-time worker, or unemployed 3306 or retired) each year from the year of diagnosis on (since the value of an hour lost to the 3307 illness depends on this status, as is explained below); and 3308

 the individual’s age in the year of diagnosis. 3309

3310 3.4.2.1 An outline of the approach 

### 3311

3312 The analysis estimated the pdv of a case of non-fatal nasopharyngeal cancer, conditional on age at 3313 diagnosis, using the following steps: 3314

3315

 Develop a profile of nasopharyngeal cancer – i.e., a description of the stages of the cancer 3316 and the treatments typically carried out or recommended at each stage, their frequencies, 3317 durations, and costs. 3318

 Estimate COI conditional on stage at diagnosis and age at diagnosis, a : 3319

o Estimate the medical costs and opportunity costs in the year of diagnosis, given 3320 the stage at diagnosis and age at diagnosis. 3321

o Estimate the “maintenance” medical costs and associated opportunity costs in the 3322 kth year after diagnosis, k = 1, 2, ..., given the stage at diagnosis and age at 3323 diagnosis. 3324

o Given these (conditional) kth year costs, k = 0, 1, 2, ..., and the survival 3325 probabilities for ages a , a +1, a +2, etc. (i.e., the probability of not dying of some 3326 other cause each year), estimate the expected total COI in each year, conditional 3327 on a given stage at diagnosis and age at diagnosis, a

. 3328

o Given a discount rate, d , estimate the present discounted value ( pdv ) of the 3329 stream of costs from the age at diagnosis, a , to a preset age (99). 3330

o Estimate COI conditional only on age at diagnosis :

. 3331

 Obtain probabilities of diagnosis of nasopha ryngeal cancer at each stage of the cancer. 3332

 Using these probabilities, calculate the expected pdv , now conditional only on age at 3333 diagnosis. 3334

3335 The methods at each step are described in detail in the sections below and are shown 3336 schematically in Figure 3-2. 3337

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### 3338 Figure 3-2: Summary of Cost of Illness Method



### 3339

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### 3.4.2.2 Treatment profile for non-fatal nasopharyngeal cancer 

### 3340

3341 The first step in estimating the costs associated with a cancer is to develop a profile of the illness 3342 – i.e., a description of the medical procedures that are performed as a result of the illness, and the 3343 recommended frequency and estimated duration of each procedure in the year of diagnosis of the illness 3344 and in each subsequent year. 3345

3346 This section provides an overview of the treatme nt profile for (non-fatal) nasopharyngeal cancer 3347 in the United States. According to the American Cancer Society, nasopharyngeal carcinoma includes 3348 three types of cancer: keratinizing squamous cell carcinoma, non-keratinizing differentiated carcinoma, 3349 and undifferentiated carcinoma. Most cases in the United States are keratinizing squamous cell 3350 carcinoma, while other types are more common in other parts of the world (American Cancer Society 3351 2011b). The risk of nasopharyngeal cancer increases with age; this cancer is rarely found in children 3352 under the age of 18 years (American Cancer Society 2011b; Lou, et al. 2010). 3353

3354 Diagnosis and initial treatments: procedures 

### 3355

3356 The year in which the cancer is diagnosed includes diagnosis and initial treatment. Diagnostic 3357 procedures include: medical history and physical exam , biopsy, imaging tests, and blood tests (American 3358 Cancer Society 2011b ). Specifically, the type of biopsy is usually an endoscopic biopsy and imaging 3359 tests include both a CT scan and an MRI (Lo and Lu 2010; Lou, et al. 2010). Since a majority of patients 3360 with nasopharyngeal cancer have been shown to have an elevated level of an Epstein-Barr virus (EBV) 3361 antibody, the blood tests to diagnose this cancer involve EBV-specific serology (Lo and Lu 2010). 3362

3363 Treatment generally does not vary by type of na sopharyngeal cancer, but differs by stage at which 3364 the cancer is diagnosed (American Cancer Society 20 11b). The analysis assumed that the distribution of 3365 all nasopharyngeal cancer diagnoses by stage of illne ss applies to formaldehyde-related nasopharyngeal 3366 cancer patients as well. Table 3-3 presents a descri ption of each stage, the percent of nasopharyngeal 3367 cancer cases diagnosed at each stage, and long-term (ten -year) relative survival rates. Relative survival 3368 rates indicate the proportion of cases diagnosed at each stage who survive for a given number of years 3369 after diagnosis, adjusting for other causes of death. Most cases of nasopharyngeal cancer are diagnosed at 3370 Stages III or IV (Piccirillo, et al. 2007). 3371

3372

3373 Table 3-3: Stages of Nasopharyngeal Cancer at Diagnosis

Stage of Cancer at Diagnosis Description Cases Diagnosed (%) Long-Term Relative Survival Rate (%) Stage I Tumor is confined to the nasopharynx. 15.0 62.6 Stage II Tumor has spread to tissues of the left or right sides of the upper

p art of the throat, and/or has spread to nearby lymph nodes. 6.7 51.6

Stage III Tumor has spread to the sinuses or bones near the nasopharynx, or has spread to nearby lymph nodes. 21.8 46.2

Stage IV Tumor has grown into the skull and/or cranial nerves, the hypopharynx, the eye, or its nearby tissues; has spread to lymph nodes that are larger than 6 cm across or are located in the shoulder area above the collarbone; and/or has spread to distant

sites. 45.3 37.1

Unknown Information is insufficient to indicate a stage. 11.2 44.6 Sources: American Cancer Society 2011b; Piccirillo, et al. 2007.



### 3374 Due to difficulties in operating on the nasopharynx and the effectiveness of other types of 3375 treatment, surgery is not a main treatment option for nasopharyngeal cancer (American Cancer Society 3376 2011b). Prior to the landmark Intergro up 0099 trial, as published by Al-Sarraf et al. (2010n), the primary 3377

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### treatment option for all patients with nasopharyngeal cancer was radiation therapy. However, the 3378 Intergroup 0099 trial on Stage III and IV cancers chan ged the way in which locally advanced stages of 3379 nasopharyngeal cancer are treated (Cooper 2010). In this trial, radiation therapy was administered 3380 concurrently with chemotherapy for a total of se ven weeks, followed by adjuvant chemotherapy over 3381 approximately eight weeks, with the doses and treatm ent schedules presented in Table 3-4 (U.S. Census 3382 Bureau 2010n; Cooper 2010). Patients receiving this prescribed course of treatment experienced a 3383 statistically significant (p=0.005) im provement in overall survival, compared with patients who received 3384 radiation therapy alone ( Al

- Sarraf, et al. 1998 U.S. Census Bureau 2010n ). 3385

3386

3387 Table 3-4: Dosages of Radiation Therapy and Chemotherapy in the Intergroup 0099 Trial

Therapy Site/Method Drug Dosage Schedule Radiation Primary tumor N /A 70 Gy 1.8-2 Gy per day, Monday through Friday Affected lymph nodes 66-70 Gy Uninvolved lymph nodes 50 Gy Chemotherapy Rapid (15-20 minutes)

intravenous infusion Cisplatin 100 mg/m2 Days 1, 22, and 43 of radiotherapy Cisplatin 80 mg/m2 Days 71, 99, and 127 96-hour infusion 5-fluorouracil 1,000 mg/m2/day Days 71-74, 99-102, and 127-130 Sources:U.S. Census Bureau 2010n; Cooper 2010.
One gray (Gy) is the absorption of one joule of energy, in the fo rm of ionizing radiation, divide d by one kilogram of matter. Radiation sessions take 15 to 30 minutes and are typically given five days a week for one to ten weeks (American Cancer Society 2011c).


### 3388 Hence, while radiation therapy is still the primary treatment option for early stage nasopharyngeal 3389 cancer, chemotherapy combined with radiation therapy (known as “chemoradiation”) is currently the 3390 recommended treatment for later stages of this cancer (American Cancer Society 2011b). Stage I cancers 3391 are treated with radiation therapy aimed at the nasopharyngeal tumor and nearby lymph nodes, as a 3392 preventive measure (American Cancer Society 2011b). Patients diagnosed with Stage II, III, IVA, or IVB 3393 cancer are included in the group of locally advanced cancers that are treated with chemoradiation and 3394 adjuvant chemotherapy (American Cancer Society 2011b). In addition, the American Cancer Society 3395 provides a separate treatment profile for Stage IVC cancer, which is characterized by distant metastasis. 3396 However, since cancer with distant metastasis usually is not curable (Lin 2010), it was assumed that all 3397 patients with Stage IV cancers who survive (and are therefore included in the analysis of non-fatal cases) 3398 receive the treatment profile for Stages IVA and IVB. 3399

3400 Given this information on the dosages and sche dule from the Intergroup 0099 trial from the 3401 American Cancer Society, the analysis developed the following profile for initial treatment of non-fatal 3402 nasopharyngeal cancer: 3403

3404

 Diagnosis at Stage I: Radiation therapy to the primary tumor and uninvolved lymph 3405

nodes. 3406

 Diagnosis at Stage II, III or IV: Radiation therapy to the primary tumor and affected 3407 lymph nodes; concurrent and adjuvant chem otherapy with cisplatin; and adjuvant 3408 chemotherapy with 5-fluorouracil (5-FU). 3409

3410 After treatment, the maintenance phase begins. This phase consists of follow-up treatment, which 3411 is presented by Tham and Lu 

## ( 2010 

## ) as an evidence-based follow-up schedule and regimen that draws 3412 from the recommendations of professional organizat ions (including the National Comprehensive Cancer 3413 Network and the American Head and Neck Society). The following profile of follow-up treatment for 3414 nasopharyngeal cancer is recommended for all patients treated with radiation therapy: 3415

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###  Physical exams to check for signs of cancer recurrence: every one to three months for the 3417 first year after treatment, every two to four months in the second year, every four to six 3418 months in years three to five post-treatment, then every six to twelve months thereafter. 40 

### 3419

 Thyroid function screening tests 41 

### (i.e. thyroid-stimulating hormone and free thyroxine 3420 tests): every six to twelve months. 3421

 MRI of the head and neck: three months after radiation therapy, then annually. 3422

3423 A dental evaluation, smoking cessation counseling, and patient support groups may also be 3424 recommended (Tham and Lu 2010 

## ). However, since these treatments are recommended on an individual 3425 basis and information on the proportion of patients who receive these treatments is not available, they 3426 were not included in this analysis. 3427

3428 Frequencies and durations of treatments 

### 3429

3430 To estimate the amount of time lost by an individual diagnosed with nasopharyngeal cancer in 3431 each year, the analysis first estimated time values for each procedure carried out during each year outlined 3432 in the treatment profile. The treatment profile outlines the frequency of procedures in the year of 3433 diagnosis and all subsequent years. Treatment frequency also varies by stage of the illness (i.e., Stages I – 3434 IV), though some treatments are common to all stages. 3435

3436 Three components of lost time were estimated for each treatment procedure: the time taken for 3437 the procedure, the time spent waiting before and after the procedure, and the travel time to and from the 3438 facility where the procedure is carried out. Wait and travel times were assumed to be twenty and forty3439 five minutes, respectively. The opportunity costs asso ciated with the time it takes for patients to recover 3440 from the treatments were excluded from the analysis because data on the duration of recovery times 3441 associated with these treatments were not readily ava ilable. Thus, this omission introduces a downward 3442 bias to the extent to which recovery time results in lost work time, lost time available for performing 3443 domestic chores, and lost leisure time. 3444

3445 The entire treatment profile, including the diagnostic and recommended treatment procedures, 3446 and the estimated durations of each, are detailed in Table 3-5 and Table 3-6. Table 3-5 gives the 3447 breakdown of estimated wait times, travel times (to and from the locations of the treatments), and times 3448 per visit. Table 3-6 gives the frequency and total time associated with each medical procedure, separately 3449 for the year of diagnosis and subsequent years. The medical and opportunity costs associated with these 3450 procedures are described in the subsections below. 3451

3452

40 The estimation of medical costs, uses the midpoint of all ranges for the frequency of each medical procedure or service in the treatment profile.

41 Thyroid function tests are recommended because research i ndicates a high incidence of hypothyroidism in patients who

have received radiation therapy to the entire neck (National Ca ncer Institute 2011c), which is typical in the treatment of nasopharyngeal cancer (Lo and Lu 2010).

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### Table 3-5: Estimated Lost Time (in Minutes) Per Visit Per Treatment Procedure

Procedure Procedure Time Wait Time i Travel Time (Round Trip) j Total Time Per

Visit

Dia g nosis: All Sta g es at Dia g nosis Medical history and physical exam a 20 20 45 85 Biopsy (endoscopic or fine needle aspiration) 20 20 45 85 Imaging tests: CT scan b 10 20 45 75 Imaging tests: MRI c 60 20 45 125 Epstein-Barr virus (EBV) specific serology (blood test) 5 0 d 0 d 5

Treatment: Sta g e I at Dia g nosis Radiation therapy sessions e 30 20 45 95 Treatment: Stage II, III, or IV at Diagnosis Radiation therapy sessions e 30 20 45 95 Chemotherapy with cisplatin f 20 20 45 85 Chemotherapy with 5-fluorouracil g 3,840 0 h 45 3,885 Follow-Up Care: All Stages at Diagnosis Physical exam a 20 20 45 85 Laboratory tests for thyroid levels 5 0 d 0 d 5

MRI of the head and neck c 60 0 d 0 d 60

N ote that the initial phase of treatment for all stages-at-diagnosis of nasopharyngeal cancer includes diagnosis and treatment, while the maintenance phase consists of follow-up care.

N otes:

a. Average time spent with physician was 20.9 minutes in 2005 ( Abbo, et al. 2008 Personal Communication with AWI 2010 ).

b. Procedure takes a few minutes (Mayo Clinic 2010a 2010b ).

c. Procedure takes less than an hour (Mayo Clinic 2010a).

d. Assumed to be included in time lost for other procedures.

e. Session takes 15 to 30 minutes (American Cancer Society 2011a 2011c ).

f. Rapid infusion of cisplatin takes 15 to 20 minutes (Cooper 2010).

g. Chemotherapy with 5-fluorouracil is given as a 96-hour infusion (U.S. Census Bureau 2010n; Cooper 2010 ), which implies a 4-day hospital stay.

h. No wait time assumed for overnight stay.

i. Press Ganey Associates, Inc. (2010) reported an average wait time of 21 minutes for internal medicine and 22 minutes for famil y practice in 2009. j. Based on Federal Highway Administration (2011) data, the average one-way travel time for medical/dental reasons was approximately 23.15 minutes in 2009.


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### Table 3-6: Estimated Total Lost Time (in Minutes), by Treatment Procedure

Procedure Frequency in

First Year Frequency Subsequent

Years Total Time (First Year) Total Time (Subsequent

Years) Diagnosis: All Stages at Diagnosis Medical history and physical exam 1 0 85 0 Biopsy (endoscopic or fine needle aspiration) 1 0 85 0 Imaging tests: CT scan 1 0 75 0 Imaging tests: MRI 1 0 125 0 Epstein-Barr virus (EBV) specific serology (blood test) 1 0 5 0

Subtotal 375 0 Treatment: Stage I at Diagnosis Radiation therapy sessions 35 0 3,325 0

Subtotal 3,325 0 Treatment: Stage II, III, and IV at Diagnosis Radiation therapy sessions 35 0 3,325 0 Chemotherapy with cisplatin 6 0 510 0 Chemotherapy with 5-fluorouracil 3 0 11,655 0

Subtotal 15,490 0

Follow-U p Care: All Sta g es at Dia g nosis Physical exam 3 1.7 255 434 Laboratory tests for thyroid levels 1 1.5 5 8

MRI of the head and neck 1 1 60 60

Subtotal 320 501

N ote that the initial phase of treatment for all stages-at-diagnosis of nasopharyngeal cancer includes diagnosis and treatment, while the maintenance phase consists of follow-up care.


### 3454 3.4.2.3 Estimated medical costs in the year of diagnosis and in subsequent years 

### 3455

3456 This section describes the calculation of mean medical expenditures for each procedure and 3457 service in the treatment profile, as well as the estima tion of expected medical costs of illness for (non3458 fatal) nasopharyngeal cancer in the year of diagnosis and in subsequent years. For the average cost of 3459 each procedure, the analysis relied on two data sources provided by the Agency for Healthcare Research 3460 and Quality (AHRQ): the Medical Expenditure Panel Survey (MEPS) (Personal Communication with 3461 CPA 2011) and Healthcare Cost and Utilization Project (HCUP) (Personal Communication with 3462 Evergreen Engineering 2009). Note that mean expend itures from MEPS and HCUP are converted to 2010 3463 dollars using the Bureau of Labor Statistics’ Consumer Price Index for medical care. 3464

3465 The Household Component of MEPS includes separate data files for types of medical events 3466 (e.g., office-based medical provider visits, outpatie nt visits, and hospital inpatient stays), which provide 3467 information on the expenditures for specific events for a nationally representative sample of families and 3468

individuals. The data files include variables that indicate the conditions with which a patient has been 3469 diagnosed and the procedures undergone during a pa rticular medical event. ICD-9-CM (International 3470 Classification of Diseases, Ninth Re vision, Clinical Modification) codes are used to identify specific 3471 diseases and procedures. In addition, some data files include variables that indicate any services that 3472 patients received during their visit (e.g., laboratory tests, chemotherapy, and CT scan or MRI). 3473

3474 The analysis used the MEPS outpatient visit and office-based provider visit event files for 1996- 3475 2007 for all procedures and services in the treatment profile, except chemotherapy with 5-fluorouracil. 3476 Since chemotherapy with 5-fluorouracil involves a 96-hour infusion, the analysis assumed that this 3477 service is provided during an inpatient hospital stay; 2009 data on this specific procedure from HCUPnet, 3478 the online query system of HCUP, were used to estimate the mean cost of the procedure. 3479

3480

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### For each procedure and service for which there are sufficient observations in both the outpatient 3481 visits and office-based medical provider visits event files, the mean estimates across the two files were 3482 pooled, following the approach of DerSimonian and La ird (1986). The method for pooling is described in 3483 detail in Appendix L of the BenMAP user manual (Abt Associates Inc. 2010). It is described briefly here. 3484

3485 The first step in pooling is to calculate a pooled estimate under the assumption of a fixed effects 3486 model – i.e., that the different samples are both from the same population, and the only reason the sample 3487 means differ is because of sampling error. This pooled estimate is a weighted average of the individual 3488 sample means, where the weights are the corresponding inverse variances divided by the sum of the 3489 inverse variances. The next step is to test for ho mogeneity of the mean expenditures across the two event 3490 types (outpatient visits and office-based medical provider visits). The test statistic is the weighted sum of 3491 squares of the differences between each mean estimate and the pooled estimate calculated in the first step, 3492 where the weights are the inverse variances of the mean estimates. If the test indicates that the mean 3493 expenditures are homogeneous (i.e., the fixed effects model is correct), then the pooled estimate 3494 calculated on the first step is used. If the test indicates that the mean expenditures are not homogeneous, a 3495 random effects model is used. To do this, a between-event type variance is first calculated. The pooled 3496 estimate based on the random effects model is calculated in almost the same way as under the fixed 3497 effects model; however, the weights now incorporate both the within-event type variance and the 3498 between-event type variance. 3499

3500 Diagnosis 

### 3501

3502 Diagnosis includes medical history and a physical exam, an endoscopic biopsy, a CT scan, an 3503 MRI, and EBV-specific serology. The analysis assumed that doctor visits for physical examinations 3504 include medical history. The cost of a physical exam was estimated as the mean expenditure by all 3505 individuals who had a physical examina tion only (ICD-9-CM procedure code 89). 3506

3507 For the endoscopic biopsy, the analysis first investigated MEPS data on the ICD-9-CM procedure 3508 code for operations on the pharynx (ICD-9-CM proced ure code 29), which includes pharyngeal biopsies. 3509 However, since there are very few observations for operations on the pharynx, the analysis used the 3510 procedure codes for operations on the nose and na sal sinuses (ICD-9-CM procedure codes 21 and 22). 3511 These codes include both surgical and diagnostic pro cedures, with the diagnostic procedures primarily 3512 consisting of biopsies. The type of biopsy used to diagnose nasopharyngeal cancer does not involve 3513 surgery (Lo and Lu 2010), so observations with surg eries were excluded, and the mean expenditures for 3514 the remaining observations with proced ure codes 21 and 22 was calculated. 3515

3516 The MEPS event files for outpatient and office-based provider visits include a variable that 3517 indicates whether a particular medical event included a CT scan or MRI. Since these two services are 3518 bundled together in the MEPS variable, it was assumed that the cost for a CT scan is equal to the cost for 3519 an MRI. Due to a lack of data on a CT scan or MRI for patients with head and neck cancers, mean 3520 expenditures were calculated for MRI or CT scans fo r patients with a diagnosis of “symptoms involving 3521 the head and neck” (ICD-9-CM diagnosis code 784). 3522

3523 EBV-specific serologic testing is the preferred method to diagnose EBV infections (National 3524 Center for Infectious Diseases 2006). Therefore, for this service, the analysis calculated the mean 3525 expenditures for outpatient and office-based visits for which the only service provided was a laboratory 3526 test and the individual’s only diagnosi s is EBV (ICD-9-CM diagnosis code 075). 3527

3528

3529

3530

3531

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### Treatment 

### 3532

3533 Treatment for all patients includes radiation therap y. Because nasopharyngeal cancer is relatively 3534 rare in the United States, there are no records for this specific illness in MEPS. Because pairwise t-tests 3535 found significant differences in mean expenditures for radiation therapy across different cancer types, the 3536 analysis estimated the mean per-session expenditure for radiation therapy for cancer types that are 3537 primarily treated with the radiation treatment used for treating nasopharyngeal cancer – external beam 3538 radiation therapy (EBRT) (American Cancer Society 2011a, b). 42 

### This approach seems reasonable 3539 because radiation therapy costs depend on the type of radiation therapy and the number of sessions 3540 (American Cancer Society 2011c ). ). The analysis considered using MEPS data on expenditures for head 3541 and neck cancers, but there are too few observations in the MEPS database on these diseases. Of the 3542 observations for radiation therapy for a malignant neoplasm of unspecified parts of the mouth (one of 3543 only two types of head and neck cancer included in the MEPS office-based visits file), there are only 36 3544 observations, 35 of which are for one individual’s doctor visits. 3545

3546 Treatment for Stages II, III, and IV includes chemotherapy with the drugs cisplatin and 5- 3547 fluorouracil. The cost of chemotherapy depends on a number of factors, including the drugs used and the 3548 frequency and method of treatment (American Cancer Society 2010). The analysis accounted for variation 3549 in costs due to frequency by using per-visit expenditu res for outpatient or office-based visit costs. For 3550 cisplatin, the method of treatment is not a factor b ecause this drug is always given intravenously (Medline 3551 Plus 2009). Due to a lack of data on nasopharyngeal ca ncer, the analysis estimated chemotherapy costs by 3552 using expenditures for chemotherapy during outpatien t and office-based visits for other cancer types 3553 treated with the same drug, cisplatin, as li sted by the National Cancer Institute (2011a). 43 

### There are no 3554 significant differences (based on pairwise t-tests) within each MEPS event file in the average 3555 expenditures for chemotherapy across the cancer types that are treated with cisplatin and have sufficient 3556 observations (>30). Thus, the analysis assumed that the cost of chemotherapy with cisplatin for 3557 nasopharyngeal cancer equals the average cost for chemotherapy using this drug for these other cancer 3558
types. 3559

3560 The first approach considered for estimating the cost of adjuvant chemotherapy with 5- 3561 fluorouracil (5-FU) was to compare expenditures in MEPS for chemotherapy during inpatient hospital 3562 stays across cancer types treated with this drug, as listed by the National Cancer Institute (2011b). 3563 However, since there are significant differences in av erage expenditures across cancer types, it cannot be 3564 assumed that the cost of chemotherapy with 5-fluorour acil for nasopharyngeal cancer is equal to the mean 3565 expenditures for chemotherapy for these cancers. Instead, the analysis used 2009 data from HCUPnet to 3566 obtain the mean hospital charge and cost for infusi ons of cancer chemotherapeutic substances (ICD-9-CM 3567 procedure code 99.25). The mean cost provided by HC UPnet is intended to reflect the actual costs for 3568 hospital stays and is estimated using a cost-to-ch arge ratio (Personal Communication with Evergreen 3569 Engineering 2009). 44 

### However, application of these ratios ofte n results in an underestimation of costs for 3570 stays where a large percentage of charges are for room and board (Personal Communication with 3571 Evergreen Engineering 2009), which seems likely for ch emotherapy treatments. In contrast, for a variety 3572 of reasons hospital charges typically overstate actual medical expenditures, often substantially (Personal 3573

42 The cancer types that are treated with EBRT and included in the MEPS data are: malignant neoplasm of unspecified parts of the mouth; malignant neoplasm of other and ill-defi ned parts of lip, oral cavity, and pharynx; esophagus cancer; colorectal cancer; laryngeal cancer; lung cancer; basal and squamous cell skin cancer; breast cancer; cervical cancer; testicular cancer; bladder cancer; brain cancer; thyroid cancer; and multiple myeloma.

43 The cancer types that are treated with cisplatin and included in the MEPS data are: malignant neoplasm of other and illdefined parts of lip, oral cavity, and pharynx; lung cancer; cervical cancer; testicular cancer; and bladder cancer.

44 AHRQ calculates cost-to-charge ratios using hospital-sp ecific accounting information from the Centers for Medicare

and Medicaid Services (Personal Communication with Evergr een Engineering 2009). Hospital-specific information is necessary because detailed charges are not available in all states.

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### Communication with HPVA 2011b). Therefore, the analysis adjusted this charge estimate downward 3574 using MEPS, which provides both charges and expenditures, to calculate the ratio of expenditures to 3575 charges for inpatient hospital stays for treatment or therapy for all types of cancer. On average, the cost of 3576 these procedures is 63.97 percent of the charge for them. This percentage was applied to the hospital 3577 charges from HCUPnet to estimate the mean expenditures for a hospital stay for a chemotherapy infusion. 3578

3579 Follow-up care 

### 3580

3581 Follow-up care consists of a physical exam, laboratory tests for thyroid levels, and an MRI of the 3582 head and neck. The estimation of average costs of a physical exam and an MRI of the head and neck is 3583 described above. The thyroid tests that are used to monitor the thyroid levels of individuals with 3584 hypothyroidism are thyroid stimulation hormone and thyroxine tests (PubMed Health 2010). These are 3585 also the thyroid function tests recommended for follow-up care of nasopharyngeal cancer. Hence, the 3586 analysis calculated the average expenditure of outpatient and office-based visits for which the only 3587 service was a laboratory test and the individual’s on ly diagnosis is hypothyroidism (ICD-9-CM diagnosis 3588 code 244). 3589

3590 Expected medical costs of nasopharyngeal cancer 

### 3591

3592 Using the treatment profile and mean medical expenditures from MEPS and HCUPnet, the 3593 analysis estimated expected medical costs of hospital inpatient stays and outpatient and office-based visits 3594 for individuals diagnosed with Stage I nasopharyngeal cancer (Table 3-7) and those diagnosed with Stage 3595 II, III, or IV I nasopharyngeal cancer (Table 3-8). These expected costs include those incurred during the 3596 year of diagnosis and in each subsequent year. 3597

3598 Table 3-7: Expected Medical Costs for Stage I (Non-Fatal) Nasopharyngeal Cancer (2010$)

Treatment Phase Event Unit Cost in First Year Unit Cost in Subsequent

Years Outpatient and Office-Based Provider Care Initial Diagnosis $2,086 $0 Treatment: Radiation therapy $14,424 $0 Maintenance Follow-up care $1,446 $1,337 Total $17,955 $1,337


### 3599 Table 3-8: Expected Medical Costs for Stages II, III, and IV of (Non-Fatal) Nasopharyngeal Cancer (2010$)

Treatment Phase Treatment Type Unit Cost in First Year Unit Cost in Subsequent

Years

In p atient Care Initial Treatment: Chemotherapy with 5-fluorouracil $88,184 $0 Outpatient and Office-Based Provider Care Initial Diagnosis $2,086 $0 Treatment: Radiation therapy $14,424 $0 Treatment: Chemotherapy with cisplatin $4,095 $0 Maintenance Follow-up care $1,446 $1,337

Total $110,234 $1,337


### 3600 3.4.2.4 Estimated opportunity costs in the year of diagnosis and in subsequent years 

### 3601

3602 In addition to medical costs, cancer patients also incur opportunity costs – i.e., the value of time 3603 lost to treating the illness. The analysis identified three categories of activity – work, leisure, and 3604 housekeeping – that an individual could spend time on. 3605

3606

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May 1, 2013 3-29 

### The expected value of an hour spent at work was calculated as the average total compensation 3607 (wages plus employment benefits). This analysis va lues non-work time (both leisure time and time spent 3608 on non-market activities, such as housekeeping) by assuming that “an individual will engage in such 3609 unpaid activities only if, at the margin, the value of these activities is greater than the wages that could be 3610 earned in paid employment. Hence after-tax wages provide a lower bound estimate of the value of non3611 work time. There are two different values for time considered in this analysis – one for time spent at 3612 work and another for time spent at leisure or housekeeping activities – that were used to estimate the 3613 opportunity cost associated with nasopharyngeal cancer. 3614

3615 Valuing any lost time of children can be difficult. However, based on the National Cancer 3616 Institute’s Surveillance Epidemiology and End Results (SEER) database (SEER 2010), there are virtually 3617 no cases of nasopharyngeal cancer among children, so this problem did not arise for this analysis. 3618

3619 The analysis assumed that full-time workers work 40 hours a week, for an average of 5.714 hours 3620 per day (including weekends). It was assumed that everyone spends 8 hours sleeping, so the time spent in 3621 leisure or housekeeping activities by the average full -time worker is estimated as 24 – 8 – 5.714 = 10.286. 3622

If v work 

### denotes the value of an hour of work, and v leisure 

### denotes the value of an hour of leisure or 3623 housekeeping, then the expected value of a full day lost to nasopharyngeal cancer for a full-time worker is 3624

. 3625

leisure work wor time full 

### v v day full a of value E * 286

. 10 * 714

. 5 ) ( ker 

###  

 (17)



### 3626 The analysis assumed that part-time workers work 20 hours a week, for an average of 2.857 hours 3627 per day. Under this assumption, the time spent in leisure or housekeeping activities by the average part3628 time worker is 24 – 8 – 2.857 = 13.143. Thus the expected value of a full day lost to nasopharyngeal 3629 cancer for a part-time worker is 3630

. 3631

leisure work wor time part 

### v v day full a of value E * 143

. 13 * 857

. 2 ) ( ker 

###  

 (18)



### 3632 Finally, someone who is unemployed or retired would spend all 16 non-sleeping hours in 3633 leisure or housekeeping activities. The expected value of a full day lost to nasopharyngeal cancer for an 3634 unemployed or retired person, therefore, is 3635

. 3636

leisure retired unemployed 

### v day full a of value E * 16 ) ( / 

###  (19)



### 3637 The BLS Labor Force Statistics Current Population Survey provides age group-specific 3638 proportions of the U.S. non-instit utionalized population that are (1) employed full time, (2) employed 3639 part-time, (3) unemployed, and (4) retired. Using thes e proportions, the analysis constructed age-specific 3640

expected values of a full day lost to nasopharyngeal cancer. If 

## ) ( a p i 

### denotes the probability of being in 3641

the i th employment status at age a , the expected value of a full day lost to nasopharyngeal cancer for 3642

someone age a is: 3643

3644



## ) ( * ) ( ) ( 4

1 

## day full a of value E a p day full a of value E i

i i a 

# 

 

##  (20)



### 3645 where employment status is 3646

3647

full-time worker if i =1, 3648 part-time worker if i =2, 3649 unemployed if i =3, and 3650

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### retired if i =4, 3651

3652

and the values for i =1, 2, 3, and 4 are given in equations (17) through (19) above. Table 3-9 3653 presents the age ranges provided by BLS for each employment status. 3654

3655 Table 3-9: Age Ranges by Employment Status

Employment Status Age Group

Full-time / Part-time 16 – 17

18 – 19

20 – 24

25 - 54

55 +

Unemployed / Retired 16 – 17

18 – 19

20 – 24

25 – 29

30 – 34

35 – 39

40 – 44

45 – 49

50 – 64 a

65 – 69

70 – 74

75 + a. Data for ages 55 – 64 were not available. This age range was assumed to have the same probabilities as for 50 – 54.


### 3656 To estimate the value of work time, average hourly wages were obtained for full-time and part3657 time workers in all occupations from the National Compensation Survey (U.S. Bureau of Labor Statistics 3658 2011a). Hourly wages were $22.77 for full-time work ers and $12.10 for part-time workers in 2010. 3659 These wages were loaded with benefits obtained from BLS Employer Costs for Employee Compensation 3660 data. Total benefits were estimated to be $10.05 for full-time workers and $3.35 for part-time workers 3661 (U.S. Bureau of Labor Statistics 2 011b). Therefore, total compensation used to estimate the value of 3662 work time was $32.82 for a full-time wo rker and $15.45 for a part-time worker. 3663

3664 As noted above, the value of leisure time was estimated as after-tax wages. The analysis 3665 estimated an average income tax rate by dividing national income from wages and salaries by the total 3666 value of income taxes at the federal and state levels. According to the Bureau of Economic Analysis 3667 (BEA) National Economic Accounts, wage and salary disbursements in 2010 were approximately $6.4 3668 trillion (U.S. Bureau of Economic Analysis 2011a), and the value of federal income taxes withheld 3669 (minus refunds) and state income taxes was approx imately $1.5 trillion (U.S. Bureau of Economic 3670 Analysis 2011b). The computed average tax rate – about twenty-three percent – was applied to the wages 3671 for full-time and part-time workers, resulting in estimated after-tax wages of $17.46 and $9.28, 3672 respectively. 3673

3674 Using equations (17), (18), and (19) given above, the expected full-day values for individuals 3675 having each of the four employment statuses were calculated. These are shown in Table 3-10. 3676

3677

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### Table 3-10: Expected Full-Day Values by Employment Status (2010$)

Value of Work Value of Leisure

Employment

Status Work

Hours /

Day [A] Compensation /

Hour

[B] Work Value / Day

[C] = [A] * [B] Leisure

Hours /

Day [D] After-Tax Wages /

Hour [E] Leisure Value / Day

[F] = [D] * [E] Total Full Day

Value

[G] = [C] + [F]
Full-Time 5.714 $32.82 $187.55 10.286 $17.46 $179.55 $367.10
Part-Time 2.857 $15.45 $44.14 13.143 $9.28 $121.92 $166.06 Unemployed 0.000 $0.00 $0.00 16.000 $9.28 $148.42 $148.42

N ot in Labor

Force 0.000 $0.00 $0.00 16.000 $9.28 $148.42 $148.42

Source:U.S. Bureau of Economic Analysis 2011a, b; U.S. Bureau of Labor Statistics 2011a, b



### 3678 The probabilities of employment status at each age were then multiplied by the corresponding 3679 expected full-day values in Table 3-10 (see equation (20)) to estimate the expected full-day value of an 3680 individual at each age. These values are presented in Table 3-11. 3681

3682 Table 3-11: Expected Full-Day Values by Age

Probabilit y of Em p lo y ment Status

Age Full Time Part Time Unemployed Not In Labor

Force Expected Value of Full Day Expected Value

Per Hour 16-17 1.13% 12.23% 5.10% 81.54% $153.04 $9.57
18-19 8.99% 26.25% 10.74% 54.02% $172.71 $10.79
20-24 36.41% 23.02% 11.15% 29.43% $232.10 $14.51
25-29 62.38% 9.90% 8.71% 19.01% $286.58 $17.91
30-34 64.27% 10.20% 7.55% 17.98% $290.77 $18.17
35-39 65.43% 10.38% 6.75% 17.44% $293.33 $18.33
40-44 66.40% 10.53% 6.42% 16.65% $295.47 $18.47
45-49 65.41% 10.38% 6.66% 17.55% $293.30 $18.33
50-54 63.26% 10.04% 5.86% 20.85% $288.53 $18.03
55-64 56.24% 17.06% 5.86% 20.85% $274.41 $17.15
65-69 23.44% 7.11% 2.20% 67.25% $200.93 $12.56
70-74 12.99% 3.94% 1.10% 81.96% $177.53 $11.10

75+ 5.09% 1.54% 0.44% 92.93% $159.82 $9.99 Source: U.S. Bureau of Economic Analysis 2011a, b; U.S. Bureau of Labor Statistics 2011a, b, c



### 3683 As shown in Table 3-5 above, much of lost time associated with nasopharyngeal cancer consists 3684 of partial rather than full days lost. Assuming that these lost hours are distributed across the two types of 3685 activity (work and leisure) in the same proportions that these activities occur in a typical day for 3686 individuals in each of the three employment status cat egories, an expected opportunity cost associated 3687 with a given treatment is estimated as the number of hours lost as a result of the treatment times the 3688 expected value per hour, shown in the right-most column of Table 3-11. The expected value per hour was 3689 calculated by dividing the expected value of a full day by 16, since the assumption of 16 waking hours per 3690 day underlies the expected value of a full day (see equati ons (17), (18), and (19)). Note that it is possible 3691 that the assumption that lost hours are distributed across the two types of activity (work and leisure) in the 3692 same proportions that these activities occur in a typical day may tend to lead toward an underestimate of 3693 the benefits if full time workers are more likely to schedule treatments during working hours rather than 3694 leisure hours. It is also worth noting that the opport unity cost estimates do not include work or leisure 3695 time lost due to the side effects of chemotherapy, beca use there is wide variation in how individuals react 3696 to treatments, and information could not be located on the typical or average recovery time from 3697 chemotherapy. 3698

3699

3700

3701

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### 3.4.2.5 Annual expected opportunity cost by age 

### 3702

3703 Expected opportunity costs associated with nasopharyngeal cancer were estimated for the year in 3704 which diagnosis occurs and for all subsequent years by multiplying the estimated number of hours lost in 3705 the year (lost time is given in minutes in Table 3-6) times the expected value per hour lost, given in Table 3706 3-11. Since the expected value of a lost hour varies by age, expected opportunity costs also vary by age. 3707 In addition, since treatments differ by cancer stage at diagnosis, expected opportunity costs also differ by 3708 stage at diagnosis. Table 3-12 gives age- and stage at diagnosis-specific opportunity costs, separately for 3709 the year of diagnosis and subsequent years. 3710

3711 Table 3-12: Total Expected Value of Time Lost Treating (Non-Fatal) Nasopharyngeal Cancer (2010$)

First Year Subsequent Years Age Stage I Stage II, III, and IV Stage I Stage II, III, and IV

16-17 $640.87 $2,580.20 $33.80 $33.80

18-19 $723.20 $2,911.70 $38.14 $38.14

20-24 $971.92 $3,913.07 $51.26 $51.26

25-29 $1,200.06 $4,831.58 $63.29 $63.29

30-34 $1,217.61 $4,902.23 $64.21 $64.21

35-39 $1,228.32 $4,945.37 $64.78 $64.78

40-44 $1,237.30 $4,981.50 $65.25 $65.25

45-49 $1,228.19 $4,944.83 $64.77 $64.77

50-54 $1,208.23 $4,864.46 $63.72 $63.72

55-64 $1,149.07 $4,626.30 $60.60 $60.60

65-69 $841.38 $3,387.48 $44.37 $44.37

70-74 $743.42 $2,993.10 $39.21 $39.21

75+ $669.24 $2,694.44 $35.29 $35.29

Sources: Wages and Benefits from U.S. Bureau of Labor Statistics 2011 a, b, c; Income and Tax information from U.S. Bureau of

E conomic Analysis 2011a, b; Average time with a physician from Personal Communication with AWI 2010; Time for chemotherapy with 5-fluorouracil from U.S. Census Bureau 2010 n; Cooper 2010; Time for rapid infusion of cisplatin from Cooper 2010; Radiation therapy time from American Cancer Society 2011c; CT scan time fromMayo Clinic 2010b ; MRI time f rom Mayo Clinic 2010a; MRI time from ; Average wait time based on Press Ganey Associates Inc. 2010; Average travel time based on Federal Highway Administration 2011.



### 3712 Consider the following example: the opportunity cost in the year of diagnosis for someone 3713 diagnosed at age 60 with Stage III nasopharyng eal cancer would be calculated as follows: 3714

3715 Calculate total hours lost in year of diagnosis: 3716

3717 • Diagnosis (all stages at diagnosis) = 375 minutes = (375/60) hours = 6.25 hours 3718 • First-year follow-up care (all stages at di agnosis) = 320 minutes = 320/60 hours = 5.33 hours 3719 • First-year treatments (for Stages II, II, and IV at diagnosis) = 15,490 mins. = 258.17 hours 3720

3721 Therefore, total first-year hours lo st = 6.25 + 5.33 + 258.17 = 269.75. 3722

3723 The expected value of a lost hour for someone age 60 is $17.15 (see Table 3-11). The estimated 3724 opportunity cost in the year of diagnosis for someon e diagnosed at age 60 with Stage III nasopharyngeal 3725

cancer would be 3726 269.75 hours x $17.15 per hour = $4,626. 3727

3728

3729

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### 3.4.2.6 Total expected cost of non-fatal nasopharyngeal cancer 

### 3730

3731 Expected cost in the kth year after diagnosis, conditional on age and stage of cancer at diagnosis 

### 3732

3733 If a person is diagnosed with nasopharyngeal cancer at age a and lives throughout the year of 3734 diagnosis, the total costs associated with the illness that year will be ) ( 1

, 1 a 

### OC MC  

### , where MC 1 

### denotes 3735

the medical costs in the first year and OC a,1 

### denotes the opportunity costs in the first year for someone 3736 diagnosed at age a . While these costs also depend on the stage of the cancer at diagnosis, for ease of 3737 exposition, that is (temporarily) omitted here. 3738

3739 Although the analysis is considering only non-fatal cases of the cancer, people can still die of 3740 other causes. If the cancer patient dies of other causes partway through the year, he will not incur all of 3741
) ( 1

, 1 a 

### OC MC  

### . The analysis assumes that deaths from other causes occur uniformly throughout the 3742

year and thus, on average, the expected cost associated with nasopharyngeal cancer for the first year 3743 among those who die of some other cause that year is ) ( 1

, 1 2 1

a 

### OC MC 



### . 3744

3745 Survival probabilities were obtained from the Centers for Disease Control and 3746 Prevention/National Center for Health Statistics (2010b). 45 

### Since survival probabilities are age-specific, 3747 age is inserted into the calculations here. 3748

3749 Suppose an individual is diagnosed with nasopharyngeal cancer at age a . Let sp a 

### denote the 3750 probability of surviving from age a to age ( a +1). Then the expected cost during the year of diagnosis of 3751 nasopharyngeal cancer for an individual diagnosed at age a is: 3752

3753

3754 ) ( * ) 1 ( ) ( * ) (cos 1

, 1 2 1 1

, 1 1

, a a a a a 

### OC MC sp OC MC sp t E 

    (21)



### 3755

3756 Similarly, the expected cost associated with nasopharyngeal cancer for that individual during the 3757 second year (at age a +1) is: 3758

3759

. 3760 ) ( * ) 1 ( ) ( * ) (cos 2

, 1 2 2 1 1 2

, 1 2 1 2

, 1      

### 

    a a a a a 

### OC MC sp OC MC sp t E (22)



### 3761 In general, the expected cost associated with nasopharyngeal cancer during the k th year after 3762 diagnosis (i.e., in year ( k +1) of the cancer) for an individual diagnosed at age a is: 3763

3764 ) ( * ) 1 ( ) ( * ) (cos 1

, 1 2 1 1

, 1 1

,           

### 

    k k a k k a k k a k k a k k a 

### OC MC sp OC MC sp t E (23)



### 3765 For example, suppose an individual is diagnosed with Stage III nasopharyngeal cancer at age 3766 60. The survival probability at age 60 (the probability of surviving from age 60 to age 61) is 0.990718. 3767 Using the first-year medical cost from Table 3-8 ( $110,234) and the first-year opportunity cost for 3768 someone diagnosed with Stage III nasopharyngeal cance r at age 60 from Table 3-12 ($4,626), the total 3769 expected cost in the first year is: 3770

3771

45 Having nasopharyngeal cancer may increase the probabilities of dying of other causes. However, because no such information was identified, this analysis us es general population survival probabilities.

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### ) 626

, 4 $ 234

, 110 ($ * ) 990718

. 0 1 ( ) 626

, 4 $ 234

, 110 ($ * 990718

. 0 ) (cos 2 1 1

, 60 

### 

    t E



### = $114,327 (24)



### 3772 The age-specific expected costs in the first year (the year of diagnosis) and in subsequent years 3773 for individuals diagnosed with Stage I nasopharyngeal cancer and at Stages II, III, or IV are shown in 3774

Table 3-13. 3775

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May 1, 2013 3-35 

### Table 3-13: Annual Cost of (Non-Fatal) Nasopharyngeal Cancer (2010$)

Diagnosed in Stage I Diagnosed in Stage II, III, IV Age at Diagnosis First Year Subsequent Years First Year Subsequent Years 16 $18,591 $1,370 $112,783 $1,370 17 $18,590 $1,370 $112,777 $1,370 18 $18,672 $1,374 $113,103 $1,374 19 $18,671 $1,374 $113,099 $1,374 20 $18,919 $1,387 $114,095 $1,387 21 $18,918 $1,387 $114,091 $1,387 22 $18,917 $1,387 $114,088 $1,387 23 $18,917 $1,387 $114,087 $1,387 24 $18,917 $1,387 $114,087 $1,387 25 $19,146 $1,399 $115,007 $1,399 26 $19,146 $1,399 $115,007 $1,399 27 $19,146 $1,399 $115,008 $1,399 28 $19,146 $1,399 $115,008 $1,399 29 $19,146 $1,399 $115,007 $1,399 30 $19,163 $1,400 $115,076 $1,400 31 $19,163 $1,400 $115,074 $1,400 32 $19,162 $1,400 $115,072 $1,400 33 $19,162 $1,400 $115,069 $1,400 34 $19,161 $1,400 $115,066 $1,400 35 $19,171 $1,400 $115,106 $1,400 36 $19,171 $1,400 $115,101 $1,400 37 $19,170 $1,400 $115,095 $1,400 38 $19,168 $1,400 $115,088 $1,400 39 $19,167 $1,400 $115,079 $1,400 40 $19,174 $1,400 $115,105 $1,400 41 $19,173 $1,400 $115,096 $1,400 42 $19,171 $1,400 $115,084 $1,400 43 $19,169 $1,400 $115,072 $1,400 44 $19,167 $1,400 $115,059 $1,400 45 $19,155 $1,399 $115,009 $1,399 46 $19,153 $1,399 $114,995 $1,399 47 $19,150 $1,399 $114,980 $1,399 48 $19,148 $1,399 $114,963 $1,399 49 $19,145 $1,398 $114,945 $1,398 50 $19,121 $1,397 $114,845 $1,397 51 $19,118 $1,397 $114,823 $1,397 52 $19,114 $1,397 $114,801 $1,397 53 $19,110 $1,396 $114,778 $1,396 54 $19,107 $1,396 $114,756 $1,396 55 $19,044 $1,393 $114,496 $1,393 56 $19,040 $1,392 $114,472 $1,392 57 $19,035 $1,392 $114,444 $1,392 58 $19,030 $1,392 $114,412 $1,392 59 $19,024 $1,391 $114,374 $1,391 60 $19,016 $1,391 $114,327 $1,391 61 $19,007 $1,390 $114,274 $1,390 62 $18,998 $1,389 $114,218 $1,389 63 $18,989 $1,389 $114,164 $1,389 64 $18,980 $1,388 $114,112 $1,388 65 $18,665 $1,371 $112,826 $1,371 66 $18,656 $1,371 $112,769 $1,371 67 $18,645 $1,370 $112,703 $1,370 68 $18,632 $1,369 $112,625 $1,369 69 $18,617 $1,368 $112,536 $1,368 70 $18,503 $1,361 $112,044 $1,361

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

May 1, 2013 3-36 

### Table 3-13: Annual Cost of (Non-Fatal) Nasopharyngeal Cancer (2010$)

Diagnosed in Stage I Diagnosed in Stage II, III, IV Age at Diagnosis First Year Subsequent Years First Year Subsequent Years 71 $18,484 $1,360 $111,929 $1,360 72 $18,462 $1,358 $111,796 $1,358 73 $18,437 $1,356 $111,643 $1,356 74 $18,409 $1,354 $111,472 $1,354 75 $18,304 $1,348 $110,987 $1,348 76 $18,270 $1,346 $110,781 $1,346 77 $18,233 $1,343 $110,555 $1,343 78 $18,192 $1,340 $110,305 $1,340 79 $18,147 $1,337 $110,032 $1,337 80 $18,097 $1,333 $109,731 $1,333 81 $18,043 $1,329 $109,401 $1,329 82 $17,983 $1,325 $109,040 $1,325 83 $17,918 $1,320 $108,644 $1,320 84 $17,847 $1,315 $108,212 $1,315 85 $17,769 $1,309 $107,741 $1,309 86 $17,684 $1,303 $107,227 $1,303 87 $17,592 $1,296 $106,669 $1,296 88 $17,493 $1,288 $106,064 $1,288 89 $17,385 $1,280 $105,410 $1,280 90 $17,268 $1,272 $104,703 $1,272 91 $17,142 $1,263 $103,941 $1,263 92 $17,008 $1,253 $103,124 $1,253 93 $16,863 $1,242 $102,249 $1,242 94 $16,709 $1,231 $101,316 $1,231 95 $16,546 $1,219 $100,323 $1,219


### 3776 Present discounted value of costs conditional on age at diagnosis 

### 3777

3778 Because cancer is a chronic illness, costs are incurred for a number of years. The COI-based 3779

value of a cancer case is the pdv of the stream of expected costs associated with the illness, from the year 3780 of diagnosis to the year of death of the patient (or a preset year). Since the analysis is considering only 3781 non-fatal cases of nasopharyngeal cancer, death w ould be from some other cause. As shown in Table 3782 3-13, expected first-year and subsequent-year costs (including medical costs and opportunity costs) were 3783 calculated for each age at diagnosis, starting at age 16, separately for those diagnosed at Stage I and those 3784 diagnosed at Stages II, III, or IV. Expected costs take into account the probability of dying of some other 3785 cause at each age, as explained above. Denoting the discount rate as d , the pdv of a case of 3786 nasopharyngeal cancer for an individual diagnosed at age a , conditional on a given stage-at-diagnosis, is 3787

3788 

# 

  



##   M

k k k k a

a 

## d t E pdv

0 1

, 

## ) 1 ( ) (cos (25)



### 3789

where

1

, 

### ) (cos

  k k a 

### t E 

### is given by equation (23) above. The sums of the expected costs were taken 3790

through age 99. 3791

3792 While the dependence of cost on stage of the cancer at diagnosis has been omitted from 3793 equations (23) and (25), cost does in fact depend on this, as shown in Table 3-13. The final step is to 3794 calculate an expected pdv , where the expectation is taken over the stage at diagnosis. Using the 3795 percentages of cases diagnosed at each stage given in Table 3-13 above, and assuming that the cases with 3796 unknown stage at diagnosis have the same distribution of stages at diagnosis as the cases whose stages are 3797

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

May 1, 2013 3-37 

### known, 16.89 percent of cases are diagnosed at Stage I and 83.11 percent are diagnosed at Stages II, III, 3798 or IV. Table 3-14 shows the stage at diagnosis-specific pdv s, and the expected pdv , calculated as a 3799 weighted average of the two stage stages at diagnosis-specific pdv s, where the weights are these 3800 percentages, separately for each age at diagnosis. These pdv s are estimated for a 3 and a 7 percent 3801

discount rate. The final column of Table 3-14 shows the implied values of a micro risk reduction (a risk 3802 reduction of 1/1,000,000), which is just the expected pdv divided by 1,000,000. 3803

3804

3805

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

May 1, 2013 3-38 

### Table 3-14: Present Discounted Values of Nonfatal Nasopharyngeal Cancer by Age at Diagnosis

Age at Diagnosis 3 Percent Discount Rate 7 Percent Discount Rate

PDV for Diagnosis at Stage I PDV for Diagnosis at Stage II, III, or

IV Expected

PDV Implied Value

of a Micro

Risk

Reduction PDV for Diagnosis at

Stage I PDV for Diagnosis at Stage II, III,

or IV Expected

PDV Implied Value o f

a Micro Risk

Reduction

16 $60,328 $154,520 $138,609 $0.139 $38,090 $132,282 $116,371 $0.116 17 $60,207 $154,394 $138,484 $0.138 $60,207 $154,394 $138,484 $0.138 18 $60,297 $154,728 $138,777 $0.139 $60,297 $154,728 $138,777 $0.139 19 $60,169 $154,597 $138,646 $0.139 $60,169 $154,597 $138,646 $0.139 20 $60,681 $155,857 $139,780 $0.140 $60,681 $155,857 $139,780 $0.140 21 $60,544 $155,717 $139,640 $0.140 $60,544 $155,717 $139,640 $0.140 22 $60,404 $155,575 $139,499 $0.139 $60,404 $155,575 $139,499 $0.139 23 $60,262 $155,431 $139,355 $0.139 $60,262 $155,431 $139,355 $0.139 24 $60,115 $155,285 $139,209 $0.139 $60,115 $155,285 $139,209 $0.139 25 $60,638 $156,605 $140,394 $0.140 $60,638 $156,605 $140,394 $0.140 26 $60,481 $156,448 $140,238 $0.140 $60,481 $156,448 $140,238 $0.140 27 $60,320 $156,287 $140,076 $0.140 $60,320 $156,287 $140,076 $0.140 28 $60,153 $156,120 $139,909 $0.140 $60,153 $156,120 $139,909 $0.140 29 $59,980 $155,947 $139,736 $0.140 $59,980 $155,947 $139,736 $0.140 30 $59,768 $155,693 $139,489 $0.139 $59,768 $155,693 $139,489 $0.139 31 $59,585 $155,508 $139,305 $0.139 $59,585 $155,508 $139,305 $0.139 32 $59,396 $155,317 $139,114 $0.139 $59,396 $155,317 $139,114 $0.139 33 $59,202 $155,121 $138,918 $0.139 $59,202 $155,121 $138,918 $0.139 34 $59,001 $154,917 $138,715 $0.139 $59,001 $154,917 $138,715 $0.139 35 $58,774 $154,662 $138,464 $0.138 $58,774 $154,662 $138,464 $0.138 36 $58,560 $154,444 $138,248 $0.138 $58,560 $154,444 $138,248 $0.138 37 $58,340 $154,219 $138,023 $0.138 $58,340 $154,219 $138,023 $0.138 38 $58,112 $153,985 $137,791 $0.138 $58,112 $153,985 $137,791 $0.138 39 $57,877 $153,743 $137,549 $0.138 $57,877 $153,743 $137,549 $0.138 40 $57,618 $153,455 $137,266 $0.137 $57,618 $153,455 $137,266 $0.137 41 $57,368 $153,197 $137,010 $0.137 $57,368 $153,197 $137,010 $0.137 42 $57,111 $152,930 $136,745 $0.137 $57,111 $152,930 $136,745 $0.137 43 $56,846 $152,655 $136,471 $0.136 $56,846 $152,655 $136,471 $0.136 44 $56,572 $152,370 $136,188 $0.136 $56,572 $152,370 $136,188 $0.136 45 $56,307 $152,115 $135,932 $0.136 $56,307 $152,115 $135,932 $0.136 46 $56,017 $151,813 $135,631 $0.136 $56,017 $151,813 $135,631 $0.136 47 $55,718 $151,501 $135,322 $0.135 $55,718 $151,501 $135,322 $0.135 48 $55,409 $151,179 $135,002 $0.135 $55,409 $151,179 $135,002 $0.135 49 $55,091 $150,846 $134,671 $0.135 $55,091 $150,846 $134,671 $0.135 50 $54,799 $150,584 $134,404 $0.134 $54,799 $150,584 $134,404 $0.134 51 $54,460 $150,227 $134,050 $0.134 $54,460 $150,227 $134,050 $0.134 52 $54,111 $149,860 $133,686 $0.134 $54,111 $149,860 $133,686 $0.134 53 $53,752 $149,482 $133,312 $0.133 $53,752 $149,482 $133,312 $0.133 54 $53,383 $149,094 $132,927 $0.133 $53,383 $149,094 $132,927 $0.133 55 $51,727 $145,725 $129,847 $0.130 $51,727 $145,725 $129,847 $0.130 56 $51,344 $145,321 $129,447 $0.129 $51,344 $145,321 $129,447 $0.129 57 $50,948 $144,903 $129,032 $0.129 $50,948 $144,903 $129,032 $0.129 58 $50,539 $144,467 $128,601 $0.129 $50,539 $144,467 $128,601 $0.129 59 $50,115 $144,012 $128,151 $0.128 $50,115 $144,012 $128,151 $0.128 60 $49,676 $143,535 $127,680 $0.128 $49,676 $143,535 $127,680 $0.128 61 $49,222 $143,037 $127,190 $0.127 $49,222 $143,037 $127,190 $0.127 62 $48,755 $142,524 $126,684 $0.127 $48,755 $142,524 $126,684 $0.127 63 $48,275 $142,000 $126,168 $0.126 $48,275 $142,000 $126,168 $0.126 64 $47,783 $141,465 $125,640 $0.126 $47,783 $141,465 $125,640 $0.126 65 $47,833 $142,268 $126,316 $0.126 $47,833 $142,268 $126,316 $0.126 66 $47,306 $141,693 $125,749 $0.126 $47,306 $141,693 $125,749 $0.126 67 $46,760 $141,091 $125,157 $0.125 $46,760 $141,091 $125,157 $0.125 68 $46,194 $140,461 $124,537 $0.125 $46,194 $140,461 $124,537 $0.125

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

May 1, 2013 3-39 

### Table 3-14: Present Discounted Values of Nonfatal Nasopharyngeal Cancer by Age at Diagnosis

Age at Diagnosis 3 Percent Discount Rate 7 Percent Discount Rate

PDV for Diagnosis at Stage I PDV for Diagnosis at Stage II, III, or

IV Expected

PDV Implied Value

of a Micro

Risk

Reduction PDV for Diagnosis at

Stage I PDV for Diagnosis at Stage II, III,

or IV Expected

PDV Implied Value o f

a Micro Risk

Reduction

69 $45,608 $139,800 $123,889 $0.124 $45,608 $139,800 $123,889 $0.124 70 $45,171 $139,531 $123,592 $0.124 $45,171 $139,531 $123,592 $0.124 71 $44,541 $138,804 $122,881 $0.123 $44,541 $138,804 $122,881 $0.123 72 $43,888 $138,039 $122,135 $0.122 $43,888 $138,039 $122,135 $0.122 73 $43,211 $137,234 $121,352 $0.121 $43,211 $137,234 $121,352 $0.121 74 $42,510 $136,389 $120,531 $0.121 $42,510 $136,389 $120,531 $0.121 75 $41,904 $135,811 $119,948 $0.120 $41,904 $135,811 $119,948 $0.120 76 $41,154 $134,887 $119,054 $0.119 $41,154 $134,887 $119,054 $0.119 77 $40,378 $133,920 $118,119 $0.118 $40,378 $133,920 $118,119 $0.118 78 $39,577 $132,908 $117,143 $0.117 $39,577 $132,908 $117,143 $0.117 79 $38,749 $131,848 $116,122 $0.116 $38,749 $131,848 $116,122 $0.116 80 $37,893 $130,738 $115,055 $0.115 $37,893 $130,738 $115,055 $0.115 81 $37,009 $129,575 $113,939 $0.114 $37,009 $129,575 $113,939 $0.114 82 $36,097 $128,357 $112,772 $0.113 $36,097 $128,357 $112,772 $0.113 83 $35,155 $127,080 $111,552 $0.112 $35,155 $127,080 $111,552 $0.112 84 $34,183 $125,742 $110,276 $0.110 $34,183 $125,742 $110,276 $0.110 85 $33,180 $124,341 $108,943 $0.109 $33,180 $124,341 $108,943 $0.109 86 $32,148 $122,874 $107,549 $0.108 $32,148 $122,874 $107,549 $0.108 87 $31,084 $121,339 $106,093 $0.106 $31,084 $121,339 $106,093 $0.106 88 $29,990 $119,732 $104,573 $0.105 $29,990 $119,732 $104,573 $0.105 89 $28,865 $118,053 $102,988 $0.103 $28,865 $118,053 $102,988 $0.103 90 $27,710 $116,300 $101,336 $0.101 $27,710 $116,300 $101,336 $0.101 91 $26,525 $114,472 $99,616 $0.100 $26,525 $114,472 $99,616 $0.100 92 $25,312 $112,567 $97,828 $0.098 $25,312 $112,567 $97,828 $0.098 93 $24,072 $110,586 $95,972 $0.096 $24,072 $110,586 $95,972 $0.096 94 $22,805 $108,529 $94,049 $0.094 $22,805 $108,529 $94,049 $0.094 95 $21,513 $106,398 $92,059 $0.092 $21,513 $106,398 $92,059 $0.092


### 3806

3807 3.4.3 Timing of Reduced Cancer Risk and Present Value of Reduced Cancer Risk at the 3808 Time of the Exposure Reduction 3809

3810 The available studies that link formaldehyde exposure to cancer risk do not provide any 3811 information about the latency periods between exposure and cancer incidence. Therefore, this analysis 3812 relies on the assumption that the incidence of na sopharyngeal cancer caused by formaldehyde exposure 3813 has the same distribution as the incidence of nasopharyngeal cancer from any cause. 3814

3815 The National Cancer Institutes’ Surveillance Epidemiology and End Results (SEER) 3816 nasopharyngeal cancer incidence data included the number of cancer diagnoses for ten year age brackets 3817 that ranged from ages 20 to 79 and also included an age bracket for age 80 and older (Ries, et al. 2007). 3818 To estimate the timing of avoided cancer for a hypothetical person, it was assumed that the timing of 3819 cancer diagnosis would follow the distribution between the age of exposure and the individual’s life 3820 expectancy age. Table 3-15 presents an example of how this calculation is performed for individuals who 3821 are age 50 at the time they experience a change in formaldehyde exposure that reduces their cancer risk. 3822 Thus, conditional on avoiding a cas e of nasopharyngeal cancer because of an exposure reduction that 3823 occurred at age 50, there is a 40.7 percent chance that the avoided cancer would have occurred between 3824 ages 50 and 59, a 37.8 percent chance that it would have occurred between ages 60 and 69, a 21.0 percent 3825 chance that it would have occurred between ages 70 and 79, and a 0.4 percent chance that it would have 3826 occurred at age 80. Note that although the table presents these percentages for the age brackets for which 3827

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

May 1, 2013 3-40 

### the incidence data were available, the analysis uses annual incidence rates estimated by assuming the 3828 incidence rates are uniformly distributed within the age brackets for which they were reported. 3829
3830 Table 3-15: Distribution of Timing of Avoided Cancer Risk: Example for a Reduction in Exposure Experienced at Age 50

Age

(1) Cancer Incidence

Distribution (2) Timing of Avoided Cancer

Risk a

(3)

0-29 4.5% n.a.

30-39 12.1% n.a.

40-49 23.4% n.a.

50-59 23.0% 40.7%

60-69 21.4% 37.8%

70-79 11.9% 21.0%

80 3.7% 0.4%

81+ n.a.

Total 100% 100%

a Calculated as column (2) divided by 56.6%, where 56.6% is the percentage of cancer death incidence between the ages of 50 and 81 (the ages that span from when the change in exposure was experienced through the end of the expected lifetime).
Source: Ries, et al. 2007



### 3831 3.4.3.1 Present Value of Reduced Cancer Risk at the Time of the Exposure Reduction 

### 3832

3833 Once the distribution of the timing of the avoided can cer risk is estimated (see section 3.4.3), this 3834 distribution can be applied to the estimated values of reduced cancer risk at the time the cancer is avoided. 3835 Using the example presented above in section 3.4.3 an individual with an exposure reduction at age 50 3836 has a 40.7% chance of realizing the benefit from that re duction between the ages of 50 and 59. This is 3837 assumed to be uniformly distributed across the 10 years in that age range; therefore, there is a 4.7% 3838 chance this individual realizes this benefit in each year between the ages 50 and 59. Thus, by multiplying 3839 the probability that cancer is avoided in a given year by the value of the risk reduction discounted to the 3840 year when the exposure reduction was experienced, the analysis can estimate the present value of reduced 3841 cancer risk at the time of the exposure reduction. For an individual with a given age at exposure, this 3842 calculation can be described with the following formula: 3843

3844

݊݋݅ݐܿݑܴ݇݁݀ݏܴ݅ݎܽ݊ܿ݁ܥܸܲ ௔௘ ௧ୀ ൌ ෍ ݅݀݁݀݋ݒܣݎܲ ௧ ܥܨܸܰ ൈ ݈ܽݐܽܨ݊݋ܰݎܲ ൅ ܴܯܸ ൈ ݈ܽݐܽܨݎܲሺ ൈ ௧ ሻ
ሺ1 ൅ ݀ሻ ሺ௧ାଵି௔௘ሻ ௅ா

௧ୀ௔௘ (26)



### 3845

where: 3846

3847

PVCancerRiskReduction t=ae is the present value of the reduced cancer risk at the time of the exposure reduction for individual age ae at the time of the exposure reduction.

PRAvoided t is the probability that reduction in cancer risk is realized in period t. This probability is conditional on the age at exposure. PrFatal is the probability that a case of nasoph aryngeal cancer is fatal, 57.1 percent. VMR is the value of a micro mortality risk reduction, $8.01. PrNonFatal is the probability that a case of nas opharyngeal cancer is not fatal, 42.9 percent.

VNFC t is the value of a micro risk reduction for nonfatal cancer diagnosed in period t, or 1/1,000,000 of the value of an avoided case of nonfatal nasopharyngeal cancer. This value is conditional on the age at diagnosis. d is the 3 percent or 7 percent discount rate.


### 3848 Table 3-16 presents the present values for micro risk reductions for fatal and nonfatal cancer, both 3849 separately and combined, by the age at exposure. Note that the combined value for fatal and nonfatal 3850

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

May 1, 2013 3-41 

### cancer is simply the average of the two separate values weighted according to the probability that cancer 3851 is fatal, which is 57.1 percent of nasopharyngeal cases (SEER 2010). 3852

3853

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

May 1, 2013 3-42 

### Table 3-16: Present Discounted Values for Nasopharyngeal Cancer by Age at Exposure

A g e at Ex p osure 3 Percent Discount Rate 7 Percent Discount Rate

PV of

Micro Risk

Reduction

for Fatal

Cancer PV of

Micro Risk

Reduction

for

Nonfatal

Cancer PV of Micro

Risk

Reduction

for Cancer (fatal and nonfatal) PV of

Micro Risk

Reduction

for Fatal

Cancer PV of Micro

Risk

Reduction for

Nonfatal

Cancer PV of

Micro Risk

Reduction

for Cancer (fatal and nonfatal)

0 $1.809 $0.030 $1. 01 05 $0.333 $0.005 $0.19

1 $1.850 $0.031 $1. 04 07 $0.352 $0.005 $0.20

2 $1.919 $0.032 $1. 08 11 $0.381 $0.006 $0. 21 22

3 $1.963 $0.032 $1. 10 13 $0.403 $0.006 $0.23

4 $2.019 $0.033 $1. 13 17 $0.430 $0.006 $0. 24 25

5 $2.082 $0.034 $1. 17 20 $0.461 $0.007 $0. 26 27

6 $2.145 $0.035 $1. 20 24 $0.494 $0.007 $0. 28 29

7 $2.209 $0.037 $1. 24 28 $0.528 $0.008 $0.30

8 $2.275 $0.038 $1. 27 32 $0.565 $0.008 $0. 32 33

9 $2.343 $0.039 $1. 31 35 $0.605 $0.009 $0. 34 35

10 $2.414 $0.040 $1. 35 40 $0.647 $0.009 $0. 36 37

11 $2.486 $0.041 $1. 39 44 $0.693 $0.010 $0. 39 40

12 $2.561 $0.042 $1. 43 48 $0.741 $0.011 $0. 41 43

13 $2.637 $0.044 $1. 48 52 $0.793 $0.012 $0. 44 46

14 $2.717 $0.045 $1. 52 57 $0.848 $0.012 $0. 47 49

15 $2.798 $0.046 $1. 57 62 $0.908 $0.013 $0. 51 52

16 $2.882 $0.048 $1. 62 67 $0.971 $0.014 $0. 54 56

17 $2.969 $0.049 $1. 66 72 $1.039 $0.015 $0. 58 60

18 $3.058 $0.051 $1. 71 77 $1.112 $0.016 $0. 6 2 64

19 $3.149 $0.052 $1. 76 82 $1.190 $0.017 $0. 67 69

20 $3.222 $0.053 $1. 81 86 $1.244 $0.018 $0. 70 72

21 $3.297 $0.054 $1. 85 91 $1.301 $0.019 $0. 73 75

22 $3.375 $0.056 $1. 89 95 $1.363 $0.020 $0. 76 79

23 $3.455 $0.057 $ 1.94 2.00 $1.429 $0.021 $0. 80 83

24 $3.538 $0.058 $ 1.98 2.05 $1.501 $0.022 $0. 84 87

25 $3.624 $0.060 $2. 03 10 $1.577 $0.023 $0. 88 91

26 $3.713 $0.061 $2. 08 15 $1.659 $0.024 $0. 93 96

27 $3.805 $0.063 $2. 13 20 $1.747 $0.025 $ 0.98 1.01

28 $3.900 $0.064 $2. 19 25 $1.841 $0.027 $1. 03 06

29 $3.998 $0.066 $2. 24 31 $1.943 $0.028 $1. 09 12

30 $4.062 $0.067 $2. 28 35 $2.001 $0.029 $1. 12 16

31 $4.134 $0.068 $2. 32 39 $2.068 $0.030 $1. 16 19

32 $4.209 $0.069 $2. 36 43 $2.139 $0.031 $1. 20 23

33 $4.286 $0.070 $2. 40 48 $2.216 $0.032 $1. 24 28

34 $4.366 $0.071 $2. 45 52 $2.298 $0.033 $1. 29 33

35 $4.449 $0.073 $2. 49 57 $2.386 $0.035 $1. 33 38

36 $4.535 $0.074 $2. 54 62 $2.480 $0.036 $1. 39 43

37 $4.624 $0.075 $2. 59 67 $2.581 $0.037 $1. 44 49

38 $4.717 $0.077 $2. 64 73 $2.690 $0.039 $1. 51 55

39 $4.813 $0.078 $2. 70 78 $2.807 $0.041 $1. 57 62

40 $4.869 $0.079 $2. 73 81 $2.866 $0.042 $1. 60 65

41 $4.927 $0.080 $2. 76 85 $2.927 $0.042 $1. 64 69

42 $4.985 $0.081 $2. 79 88 $2.989 $0.043 $1. 67 73

43 $5.044 $0.081 $2. 83 92 $3.054 $0.044 $1. 71 76

44 $5.104 $0.082 $2. 86 95 $3.120 $0.045 $1. 75 80

45 $5.156 $0.083 $2. 89 98 $3.179 $0.046 $1. 78 83 Formatted Table

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

May 1, 2013 3-43 

### Table 3-16: Present Discounted Values for Nasopharyngeal Cancer by Age at Exposure

A g e at Ex p osure 3 Percent Discount Rate 7 Percent Discount Rate

PV of

Micro Risk

Reduction

for Fatal

Cancer PV of

Micro Risk

Reduction

for

Nonfatal

Cancer PV of Micro

Risk

Reduction

for Cancer (fatal and nonfatal) PV of

Micro Risk

Reduction

for Fatal

Cancer PV of Micro

Risk

Reduction for

Nonfatal

Cancer PV of

Micro Risk

Reduction

for Cancer (fatal and nonfatal)

46 $5.217 $0.083 $ 2.92 3.01 $3.249 $0.047 $1. 82 88

47 $5.279 $0.084 $ 2.96 3.05 $3.320 $0.048 $1. 86 92

48 $5.341 $0.085 $ 2.99 3.09 $3.394 $0.049 $1. 90 96

49 $5.404 $0.086 $3. 03 12 $3.469 $0.050 $ 1.94 2.00

50 $5.469 $0.087 $3. 06 16 $3.549 $0.051 $ 1.99 2.05

51 $5.535 $0.087 $3. 10 20 $3.631 $0.052 $2. 03 10

52 $5.601 $0.088 $3. 14 24 $3.715 $0.053 $2. 08 14

53 $5.668 $0.089 $3. 17 27 $3.801 $0.054 $2. 13 19

54 $5.735 $0.090 $3. 21 31 $3.889 $0.055 $2. 18 24

55 $5.790 $0.090 $3. 24 34 $3.964 $0.056 $2. 22 29

56 $5.857 $0.091 $3. 28 38 $4.054 $0.058 $2. 27 34

57 $5.923 $0.092 $3. 32 42 $4.146 $0.059 $2. 32 39

58 $5.989 $0.092 $3. 35 46 $4.237 $0.060 $2. 37 45

59 $6.054 $0.093 $3. 39 50 $4.328 $0.061 $2. 42 50

60 $6.111 $0.093 $3. 42 53 $4.413 $0.062 $2. 47 55

61 $6.182 $0.094 $3. 46 57 $4.519 $0.064 $2. 53 61

62 $6.252 $0.095 $3. 50 61 $4.625 $0.065 $2. 59 67

63 $6.321 $0.095 $3. 54 65 $4.730 $0.066 $2. 65 73

64 $6.388 $0.096 $3. 58 69 $4.832 $0.067 $2. 70 79

65 $6.430 $0.096 $3. 60 71 $4.900 $0.068 $2. 74 83

66 $6.486 $0.096 $3. 63 75 $4.988 $0.069 $2. 79 88

67 $6.535 $0.097 $3. 66 77 $5.061 $0.070 $2. 83 92

68 $6.571 $0.097 $3. 68 79 $5.112 $0.070 $2. 86 95

69 $6.589 $0.096 $3. 69 80 $5.126 $0.070 $2. 87 96

70 $6.647 $0.097 $3. 72 84 $5.227 $0.071 $ 2.92 3.02

71 $6.736 $0.097 $3. 77 89 $5.377 $0.073 $3. 01 10

72 $6.824 $0.098 $3. 82 94 $5.531 $0.075 $3. 09 19

73 $6.912 $0.099 $3. 87 99 $5.687 $0.077 $3. 18 28

74 $6.999 $0.100 $ 3.92 4.04 $5.845 $0.079 $3. 27 37

75 $6.978 $0.098 $ 3. 90 4.03 $5.823 $0.078 $3. 25 36

76 $7.039 $0.099 $ 3.94 4.06 $5.936 $0.079 $3. 32 42

77 $7.078 $0.098 $ 3.96 4.08 $6.009 $0.080 $3. 36 47

78 $7.066 $0.097 $ 3.95 4.08 $5.983 $0.079 $3. 34 45

79 $6.900 $0.093 $3. 86 98 $5.650 $0.074 $3. 16 26

80 $6.803 $0.090 $3. 80 92 $5.480 $0.070 $3. 06 16

81 $6.900 $0.091 $3. 86 98 $5.650 $0.072 $3. 16 26

82 $6.999 $0.092 $ 3.91 4.04 $5.828 $0.074 $3. 26 36

83 $7.100 $0.092 $ 3.97 4.09 $6.014 $0.076 $3. 36 47

84 $7.203 $0.093 $4. 02 15 $6.208 $0.078 $3. 47 58

85 $7.100 $0.090 $ 3.97 4.09 $6.014 $0.074 $3. 36 47

86 $7.100 $0.088 $ 3.97 4.09 $6.014 $0.074 $3. 36 47

87 $7.100 $0.087 $ 3.97 4.09 $6.014 $0.073 $3. 36 47

88 $7.100 $0.085 $ 3.96 4.09 $6.014 $0.071 $3. 36 46

89 $7.100 $0.084 $ 3.96 4.09 $6.014 $0.070 $3. 36 46

90 $7.203 $0.084 $4. 02 15 $6.208 $0.072 $3. 47 58

91 $7.308 $0.084 $4. 08 21 $6.410 $0.074 $3. 58 69

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

May 1, 2013 3-44 

### Table 3-16: Present Discounted Values for Nasopharyngeal Cancer by Age at Exposure

A g e at Ex p osure 3 Percent Discount Rate 7 Percent Discount Rate

PV of

Micro Risk

Reduction

for Fatal

Cancer PV of

Micro Risk

Reduction

for

Nonfatal

Cancer PV of Micro

Risk

Reduction

for Cancer (fatal and nonfatal) PV of

Micro Risk

Reduction

for Fatal

Cancer PV of Micro

Risk

Reduction for

Nonfatal

Cancer PV of

Micro Risk

Reduction

for Cancer (fatal and nonfatal)

92 $7.415 $0.085 $4. 14 27 $6.622 $0.075 $3. 70 81

93 $7.524 $0.085 $4. 20 33 $6.843 $0.077 $3. 82 94

94 $7.635 $0.085 $4. 26 40 $7.075 $0.079 $ 3.95 4.07



### 3854

3855

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

May 1, 2013 3-45 

## 3.5 Estimating the Value of Non-cancer Risk Reductions 3856

3857 This section describes the approach to estimating the benefits associated with avoiding a selected 3858

suite of non-cancer effects as a result of the proposed TS CA Title VI Implementation Rule. This approach 3859

is summarized from the EPA draft report titled “Approach to Assessing Non-cancer Health Effects from 3860 Formaldehyde and Benefits from Reducing Non-cancer Health Effects as a Result of Implementing 3861 Formaldehyde Emission Limits for Composite Wood Products” ( U.S. EPA 2013 November 2011)

. ). 3862 EPA’s non-cancer approach document (U.S. EPA ) evaluated the non-cancer health evidence used in the 3863

derivation of candidate reference concentrations from the June 2010 draft IRIS Toxicological Review of 3864 Formaldehyde. While the draft IRIS Toxicological Review of Formaldehyde identified seven categories 3865 of non-cancer health effects, EPA determined there was sufficient evidence for quantitative 3866

concentration

- response modeling for only three categories of effects. The specific non

- cancer endpoints 3867 selected for the TSCA Title VI benefits assessment were: eye irritation, asthma, and reduced fertility. In 3868

the non

- cancer approach document, EPA derived concentration

- response functions for these three derived 3869 concentration-response functions for three of these endpoints and recommended accompanying unit 3870 values for use in the benefits assessment based on a literature review of the endpoints. The National 3871

Research Council of the National Academy of Sciences ( NAS NRC ) peer reviewed the draft IRIS 3872 Toxicological Review in 2011, and where possible, EPA’s non-cancer approach document followed 3873

NAS NRC recommendations, such as excluding two studies that NAS NRC recommended should not be 3874

advanced in the derivation of reference concentrations. After subsequent work, EPA determined there 3875 was sufficient evidence for monetizing the impacts for only one effect, sensory irritation. EPA 3876 determined that reduced fertility should not be qua ntified in the overall benefits analysis. And EPA 3877 determined that respiratory related effects should not be monetized at this time, but they are qualitatively 3878

discussed below. 3879

3880 All of the non-market benefits are estimated to result from reduced exposure to formaldehyde 3881 from composite wood products as a result of the proposed rule. The benefits for each avoided endpoint a 3882

non-cancer risk reduction are a function of the: (1) concentration-response function (e.g., increase in risk 3883 of health endpoint per unit increase in formaldehyde concentration), (2) unit values of the avoided illness, 3884 (3) impacted population, (4) background rate of the he alth endpoint (if appli cable), and (5) estimated 3885 change in exposure associated with the rule. All of these inputs are described briefly below, and some 3886 (e.g., impacted population, change in exposure as a result of the rule) are described in more detail in other 3887 sections of this document. The benefits equations for avoiding cases of eye irritation , asthma, and reduced 3888 fertility as a result of the proposed rule are provided below. 3889

3890 The exposures before (“baseline”) and after the rule (“policy”) have been modeled as described in 3891 Section 3.1. As necessary, average daily concentrations (ADC) of formaldehyde in air will be converted 3892 from units of mg/m 3 

### to ppb or vice versa using this conversion factor: 814 ppb formaldehyde = 1 mg/m 3



### , 3893 which corresponds to a temperature of 25°C, a pr essure of 1 atm, and a molecular weight for 3894 formaldehyde of 30.03 g/mol. 3895

3896 3.5.1 Eye Irritation 3897

3898 Information from two studies reporting sensory ir ritation in humans from chronic formaldehyde 3899 inhalation exposures in a residential environment was combined to create the concentration-response 3900 function for eye irritation. Liu et al. (1991) employed in-home measurements over a seven-day period to 3901 calculate cumulative exposure based on time spent in the home for over 1,000 mobile home residents, 3902 including both young children (< 4 years) and the elderly (> 65 years). Liu et al. (1991) reported that 3903 formaldehyde exposure was a significant predictor of bu rning eyes in a multivariate logistic regression. 3904 The prevalence of eye irritation increased with increasing cumulative exposure in a categorical analysis of 3905 participants in the 20-64 age group for both summer and winter exposure estimates. While not appropriate 3906

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May 1, 2013 3-46 

### to derive a concentration-response function, this study provided the most specific information on the 3907 relative timing of inhalation exposures to formaldeh yde and the report of sens ory irritation: exposures 3908 were recorded in a two-week period preceding th e collection of endpoint data on sensory irritation. 3909

3910 Hanrahan et al. (1984) assessed average exposure in the home (from 30-60 minute air samples) 3911 and occurrence of adverse health outcomes (by questionnaires), including burning eyes, in a study of 61 3912 teenage and adult (mean age 48) residents of mobi le homes in Wisconsin. Measured formaldehyde 3913 concentrations ranged from less than 100 ppb to 800 ppb. Hanrahan et al. (1984) provided a graphical 3914 representation (Figure 1 in the paper) of the best-fitti ng logistic regression model results to the predicted 3915 prevalence of burning eyes for formaldehyde exposures from 100 to 800 ppb. 3916

3917 This analysis fit a power model to the prevalence odds ratio (p/(1-p)) of burning eyes (estimated 3918 from Figure 1 of Hanrahan et al. (1984) as a fu nction of average formaldehyde concentration. The 3919 resulting functional form of th e prevalence odds ratio was estimated to be p/(1-p) = Z = 7x10 -7 

### Conc 2.3743



### . 3920 This can be solved for prevalence (e.g., p/(1-p) = Z; p = Z/(1 + Z)) for use in the benefits equation. Since 3921 Liu et al. (1991) produced similar results for a two-week period, the analysis adjusted the prevalence to an 3922 annual basis consisting of 26 two-week periods (e.g., p = 26 * Z/(1 + Z)). While Hanrahan et al. (1984) 3923 did not administer questionnaires to children explicitly, this analysis assumes that the concentration3924 response function applies to that age group as well. 3925

3926 There are additional sources of uncertainty asso ciated with using this concentration-response 3927 function. It does not account for the possibility that irritant effects may diminish with the time exposed. 3928 Furthermore, the Hanrahan et al. (1984) data fro m which this concentration-response function was 3929 derived included formaldehyde exposures only above 100 ppb. Thus, it may be problematic to apply this 3930 concentration-response function to estimate the rela tionship between lower formaldehyde exposures and 3931 burning eye prevalence. To address this potential problem this analysis includes an estimate of irritation 3932

benefits where it is assumed that reductions below 40 ppb do not result in any additional reductions in 3933 burning eye prevalence. 3934

3935 The value for willingness to pay (WTP) to avoid eye irritation is based on an estimate from 3936 Industrial Economics (IEc) (1993). IEc (1993) estim ated WTP to avoid a minor respiratory restricted 3937 activity day using the WTP estimates from Tolley et al . (1986) and Weitzel (1990). This analysis uses the 3938 IEc (1993) mid-range estimate for eye irritation, which is $26 in 2010$. Note that this willingness to pay 3939 value is for the symptom of “eye irritation” while the Hanrahan et al. (1984) data used to estimate the 3940 concentration-response function was for “burning eyes,” a type of “eye irritation.” It is also worth noting 3941 that the willingness to pay to avoid eye irritation decl ines with the number of symptom days an individual 3942 experiences. Thus, applying the WTP to avoid a single day of eye irritation as the WTP per day for 3943 avoiding multiple days of eye irritation would tend to overstate the WTP for avoiding multiple days of 3944 eye irritation. However, this potential problem is not a concern in the case of this analysis because the 3945 expected annual number of eye irritation cases per individual is less than one. 3946

3947 By combining the concentration-response information with the unit value and other relevant 3948 terms, the analysis calculates the higher estimate for the monetized benefits of avoided eye irritation cases 3949

as: 3950

3951 ቆ כ ܻܨ כ ܹܶܲ כ ܱܲܲ ൌ ܥܦܫܣ כ ܣ ௕ ஻



### ܥܦܫܣ כ ܣ ൅ 1 ௕ ஻ 

### െ ܥܦܫܣ כ ܣ ௣ ஻



### ܥܦܫܣ כ ܣ ൅ 1 ௣ ஻ 

### ቇ (27)



### 3952

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

May 1, 2013 3-47 

### where: 3953 POP is the exposed population (includes all ages and housing types); 3954 WTP is $26 in 2010$ based on the mid-range estimate for eye irritation from IEc (1993); 3955 FY is a factor of 26 converting two- week incidence of eye irritation, as stated in Liu et al. (1990), to 3956 an annual basis; 3957

AIDC b 

### and AIDC p 

### are the average indoor daily concentrations (AIDC) in units of ppb for the 3958 baseline and policy scenarios, respectively. These AIDCs include exposures during time spent 3959 at home, school, work, and in vehicles; 46 

### and 3960

A and B are the coefficients that define the power function that EPA fit to the prevalence odds ratio 3961 data for burning eyes in response to average air formaldehyde concentrations in mobile homes 3962 from Hanrahan et al. (1984). The prevalence odds ratio, p/(1-p), is A*X B 

### and prevalence is 3963 therefore (A* X B 

### )/(1 + A* X B 

### ), where A is 7x10 -7 

### , B is 2.3743, and X represents the 3964 concentration (AIDC b 

### or AIDC p 

### ). 3965

3966 In addition, the analysis calculates a lower estimate for the monetized benefits of avoided eye 3967 irritation to address the potential problem of applying a concentration-response function to formaldehyde 3968 exposure levels that are lower than observed in the study from which the concentration-response function 3969 was derived. In this lower estimate it is assumed that reducing formaldehyde exposure levels below 40 3970 ppb do not result in any additional reductions in burning eye prevalence cases. The lower irritation 3971

benefit is estimated as follows: 3972

3973 ቆ כ ܻܨ כ ܹܶܲ כ ܱܲܲ ൌ ሻሽ40 ,ሺAIDC ሼmax כ ܣ ௕ ஻



### 1 ൅ ܣ כ ሼmax ሺAIDC, 40ሻሽ ௕ ஻ 

### െ ܣ כ ሼmax ሺAIDC, 40ሻሽ ௣ ஻



### 1 ൅ ܣ כ ሼmax ሺAIDC, 40ሻሽ ௣ ஻ 

### ቇ (28)



### 3974 In this lower estimate, 40 is the minimum formaldehyde exposure level that the health effect 3975 function is applied to. That is, it is assumed that reducing formaldehyde exposure below 40 ppb does not 3976 achieve any additional reduction in eye irritation prevalence. 3977

3978 3.5.2 Non-monetized Respiratory Related Effects 3979

3980 Formaldehyde exposure is associated with a range of respiratory related effects. Effects from 3981 repeated exposure in humans include irritation of the upper respiratory tract, decrements in pulmonary 3982 function, and nasal epithelial lesions such as metaplasia and loss of cilia. Animal studies suggest that 3983 formaldehyde may also cause airway inflammation. 3984

3985

46 AIDCs are calculated from average daily concentrations. Infants (0-2), children (3-15), full time working adults, unemployed/retired adults, and part-time working adults are assumed to spend 11.7%, 14.3%, 4.1%, 13.8%, and 15.8% of their time outdoors, where background exposure levels are assumed to be .0037 mg/m 3

.

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

May 1, 2013 3-48 

### 3.5.2 In occupational studies of formaldehyde exposure, lung function deficits and 3986 decreases in spirometric values (that is, the volume and speed of air that is 3987 exhaled or inhaled) have been reported both in preshift versus postshift 3988 measurements and as a result of long-term exposures ( Alexandersson and 3989 Hedenstierna 1989, Alexandersson, et a l. 1982, Herbert, et al. 1994, Holmström 3990 and Wilhelmsson 1988, Horvat h, et al. 1988, Malaka an d Kodama 1990, Neghab, et 3991
al. 2011 ). Studies of long-term formaldehyde exposure also report increased 3992 respiratory symptoms, such as cough, increased phlegm, chest tightness, and 3993 chest colds, in exposed workers ( Alexandersson and Hedenstierna 1989, 3994 Alexandersson, et al. 1982, Herbert, et al. 1994, Holmström and Wilhelmsson 1988, 3995 Malaka and Kodama 1990, Neghab, et al. 2011 ). In addition, some studies report 3996 an association between formaldehyde exposure in residential settings and 3997 respiratory symptoms (e.g., Garrett, et al. 1999 ). Furthermore, there are also 3998 studies that report that formaldehyde exposure may increase the prevalence of 3999 asthma – particularly in the young (e.g., Krzyzanowski, et al. 1990 ). Studies on 4000 asthma, as well as mechanistic information and their analyses, were evaluated in 4001 EPA’s recent Draft Toxicological Re view of Formaldehyde – Inhalation 4002 Assessment through the Integrated Risk Information System (IRIS) Program (U.S. 4003
EPA 2010c ). This draft IRIS assessment was released in June 2010 for public 4004 comment and external peer review by the National Research Council of the 4005 National Academy of Sciences (NRC). The NRC released their review report in 4006 April 2011 (NRC 2011 Asthma in Children 4007

4008

The meta

- analysis of formaldehyde

- associated childhood asthma conducted by McGwin et al. () 4009 was identified as the most relevant study to developing a concentration

- response function for use in the 4010

benefits assessment. The meta

- analysis was based on seven peer

- reviewed studies providing quantitative 4011 information on the association between formaldehyde exposure and asthma in children (mean age in the 4012 studies ranged from 2

– 14). Most of the studies were cross

- sectional or case

- control in design, collected 4013 information on asthma prevalence (either self

- reported or doctor diagnosed), and assigned formaldehyde 4014 exposures (range: 1 to > 87.5 μg/m 3 

### ) from the home or school setting. Of the seven studies included in the 4015

meta

- analysis, six reported increased risks of asthma associated with exposure to formaldehyde. The 4016 pooled random effects odds ratio (OR) for the seven studies was 1.17 per 10 μg/m 3 

### f ormaldehyde (95% 4017

CI: 1.01

- 1.36). (Random effects models are preferred with heterogeneous data as they allow for different 4018 effects or slopes in the source studies.) 4019

4020 McGwin et al. () noted that one of the seven studies () may have had ‘undue influence on t he 4021 study data’ and recomputed the pooled OR without that study. That study was focused on very young 4022 children (mean age: 1.9 years; range: 6 months to 3 years), and NAS () noted that study participants of 4023 such young ages are now thought to be more likely t o have lower respiratory illnesses with wheezing of 4024 an infectious origin rather than asthma. Therefore, this analysis uses the McGwin et al. () random effects 4025 model excluding Rumchev et al. () as the basis of the concentration

- response function for use in the 4026 benefits assessment. Note that while the mean age for the six remaining studies ranges from 8 to 14 4027 years old, the minimum age across the six studies was 6 and the maximum was 17 and this is the age 4028 range for which benefits are estimated in this anal ysis. The pooled random effects OR reported by 4029 McGwin et al. () after excluding Rumchev et al. () was 1.24 per 10 μg/m 3 

### increase in formaldehyde 4030 concentration (95% CI 1.09

– 1.42). Thus, converting to an OR ba sed on parts per billion (assuming 4031

conditions of 25°C and 1 atm) results in an OR of 1.027 per ppb increase in formaldehyde exposure, with 4032

a 95% CI of 1.008

- 1.047 per ppb. 4033

4034 All of the studies included in the McGwin et al. () meta

- analysis measured individuals’ exposure 4035 to formaldehyde at a single poin t in time; almost all of them related that single formaldehyde 4036

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

May 1, 2013 3-49 

### measurement to asthma prevalence rather than incidence. The most reasonable interpretation of the 4037 McGwin (2010) meta

- analysis concentration

- response function for use in the benefits analysis is that (1) 4038 the formaldehyde exposure measurements reflect typica l or average exposure levels of the individuals in 4039 the study and (2) under reasonable assumptions, prevalence can be considered cumulative incidence. 47 

### 4040 Given this, the McGwin et al. () concent ration

- response function is interpreted as a long

- term exposure 4041 function relating exposure to a constant level of formaldehyde over the course of childhood to a given 4042 probability of getting asthma sometime during that childhood. The corresponding health im pact function 4043 relates changes in long

- term constant or average exposure to changes in the incidence of asthma during 4044

childhood. Because the concentration

- response function from McGwin et al. (2010) is log

- linear in form, 4045 the health impact function is 4046

4047

ൌ ܱܲܲܥ כ ܫ݊ܿܣ ௖ 

### כ ቀ 1

െ ൫݁ ሺ ୪୬ ሺ ைோ ሻ ൈ ሺ AIDC ೛ ି AIDC ್ ሻ 

### ൯ ቁ ( 29 )



### where 4048

4049

 POPC is the exposed population of children 4050

 IncA

c 

### is the cumulative baseline incidence rate of asthma among children (for an n

- year period). 4051

 OR is the odds ratio derived from the McGwin et al. () meta

- analysis of studies associating asthma 4052 with formaldehyde exposure. 48 

### EPA converted the OR for six of the seven studies from units of 4053 effect per 10 μg/m 3 

### to effect per ppb formaldehyde (MW = 30.03, T=2 5°C, P = 1 atm), and 4054 estimated an OR of 1.027 per ppb increase in formaldehyde exposure, with a 95% CI of 1.008

- 1.047 4055 per ppb. 4056

 AIDC p 

### and AIDC b 

### are the average indoor daily concentrations (AIDC) in units of ppb for the policy 4057 and baseline scenarios, respect ively (the difference between these terms will be negative). These 4058 AIDCs include exposures experienced at home, school, work, and in vehicles. 49 

### 4059

4060 However, this economic analysis considers one

- year changes in formaldehyde exposure

– not 4061 changes that last ov er the course of childhood. Therefore, it is necessary to transform the health impact 4062 function so that it can be applied to one

- year changes in formaldehyde exposure. If exposure is constant 4063

over an n

- year period, then it is reasonable to assume that the probability of getting formaldehyde

- related 4064 asthma is uniformly distributed throughout that period

– i.e., that the probability of getting asthma as a 4065 result of exposure to formaldehyde in any one of the n years is (1/ n ) times the probability for the whol e n

4066 year period. Given this, when the economic analysis applies the health impact function to any given 4067 annual change in exposure, the change in incidence of asthma is first calculated as if the one

- year 4068 exposure changes were occurring over the entire n

- y ear period. This result is then divided by n so it 4069 reflects the change in asthma incidence from a one year change in formaldehyde exposure. 4070

4071 Estimating the baseline incidence rate of asthma is not trivial. First, estimating asthma in very 4072 young children (under 5 years old) is problematic because doctors may rely on signs and symptoms rather 4073 than lung function testing (spirometry) in making diagnostic decisions (U.S. HHS ) . Second, while 4074 asthma prevalence rates are widely available, asthma incidence rates are not. Estimating incidence from 4075 prevalence is not straightforward because of the as sumptions that must be made. In light of these 4076

47 Prevalence can be considered cumulative incidence within a given age bracket if it is assumed that once an individual gets asthma the individual continues to have asthma within that given age bracket.

48 Excluding one of the studies (Rumchev, et al. 2002; McGwinet al. (2010) reported an OR from a random effects metaanalysis model of 1.24 per 10 μg/m 3 formaldehyde (95% CI: 1.07-1.45) with a p-value of 0.0026.

49 AIDCs are calculated from average daily concentrations. Infants (0-2), children (3-15), full time working adults,

unemployed/retired adults, and part-time working adults are assumed to spend 11.7%, 14.3%, 4.1%, 13.8%, and 15.8% of their time outdoors, where background exposure levels are assumed to be .0037 mg/m 3

.

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

May 1, 2013 3-50 

### difficulties, the analysis estimates the incidence rates using data on asthma prevalence by age bracket. 4077

The available dat a indicate that the asthma prevalence among 0

- 4 years olds is 7.9 percent and asthma 4078 prevalence among 5

- 14 year olds is 16.2 percent (CDC ). Although this analysis accounts for the 4079 probability that individuals with asthma become asymptomatic at some point in their lives, it assumes that 4080 once a child gets asthma, he or she does not outgrow it before age 17. For example, for ages 0

- 4, the 4081 prevalence rate is 7.9 percent. This means that 7.9 percent of individuals ages 0

- 4 have asthma. Since 4082 this age range starts at birth, all of these asthma cases must have started within the age range

– i.e., in this 4083 case, prevalence equals cumulative incidence (assuming no migration in or out). For any age range that 4084 starts at an age greater than 0, however, prevalence d oes not equal incidence, since some of the prevalent 4085 cases may have started at an age less than the lower bound of the age range. For example, the 16.2 4086 percent of individuals with asthma between the ages of 5 and 14 include those individuals whose asthma 4087 started during ages 0

- 4. The incidence rate for the age range 5

- 14 was estimated by subtracting 7.9 4088 percent from 16.2 percent to estimate that 8.3 percent of individuals in the age range of 5

- 14 are newly 4089 diagnosed with asthma. This implies, if these new cases are uniformly distributed over the 10 ages within 4090 that age range, the per

- age (annual) incidence rate for 5 to 14

- year olds would be 0.083/10 = 0.0083, or 4091

0.83%. 4092

4093 This analysis calculates a lower estimate and a higher estimate. Both estimates use t he same 4094 basic method; however, the lower estimate includes benefits for ages 6 through 17, whereas the higher 4095 estimate includes benefits for ages 2 through 17

. To calculate the number of avoided asthma cases (and 4096 thus benefits) for any given age, the analy sis first calculates the per capita cumulative risk reduction over 4097

an n

- year period and then divides the results by n to get the age

- specific per capita risk reductions. Each 4098

age

- specific per capita risk reduction is then multiplied by the age

- specific ex posed population to get the 4099

age

- specific number of asthma cases avoided. 4100

4101 To facilitate the application of this approach to different ages, the analysis makes the simplifying 4102 assumption that the annual incidence rate of 0.83%, calculated for children a ged 5

– 14, is similarly 4103 applicable to all ages through age 17. 50 

### Given this assumption, the value of n doesn’t matter because n 4104 cancels out in the calculation. First, the cumulative baseline incidence rate for n

- year olds is calculated 4105 by multiplying the annual baseline incidence rate (0.83%, assume d to be the same for all ages through age 4106 17) by n , and then the resulting cumulative risk reduction over the n

- year period is divided by n to get 4107

age

- specific (annual) per capita risk reductions, for all ages in the range through age n . The calculation of 4108

the reduction in risk for an individual at a given age (i.e., in a given year) is thus 4109

4110

4111

ൌ ሺ ܫ݊ܿܣ ௔ 

### כ ݊ ሻ ቀ1

െ ൫݁ ሺ ୪୬ ሺ ைோ ሻ ൈ ሺ AIDC ೛ ି AIDC ್ ሻ 

### ൯ ቁ

݊ ( 30 )



### 4112

where is the annual baseline asthma incidence rate (0.83%). The corresponding age

- specific number of 4113 avoided asthma cases is, then, 4114

4115

4116

ൌ ܱܲܲܥ כ ሺ ܫ݊ܿܣ ௔ 

### כ ݊ ሻ ቀ1

െ ൫݁ ሺ ୪୬ ሺ ைோ ሻ ൈ ሺ AIDC ೛ ି AIDC ್ ሻ 

### ൯ ቁ

݊ ( 31 )



### 4117

50 Given the prevalence rate of 7.9% for ages 0 – 4 from CDC (see Table 3-17 below), this may be a conservative assumption (i.e., an assumption that would tend to understate benefits).

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

May 1, 2013 3-51 

### where POPC is the exposed popula tion of children of the given age. The lower estimate does this 4118 calculation for ages 6 through 17; the higher estimate does the calculation for ages 2 through 17. In both 4119 estimates, the resulting monetized benefit is the sum of the age

- specific monetized benefits. 4120

4121 EPA has included asthma exacerbation as a health effect in many of its economic analyses, but 4122 not the incidence of asthma (i.e., the creation of new cases). EPA did value a decrease in asthma 4123 incidence as a result of reduced ozone exposure in its first prospective study of the benefits and costs of 4124 the Clean Air Act (EPA ). This analysis estimates WTP to avoid asthma by utilizing the methods that 4125 were developed to estimate the unit value in EP A’s BenMAP (), which relies primarily on two stud ies 4126

that estimated WTP to avoid a case of adult

- onset asthma. 51 

### One study, Blumenschein and Johannesson 4127 (), estimated an annual WTP; the other study, O'Co nor and Blomquist (), estimated a monthly WTP, from 4128

which an annual estimate was derived. 4129

4130 The analy sis first estimated the pdv of the stream of annual WTPs to avoid a case of child

- onset 4131 asthma, assuming that once a child gets asthma he ha s it for the rest of his life (i.e., there are no 4132 asymptomatic asthmatics). The inputs to the analysis are: 4133

4134

 A stud y

- specific annual WTP to avoid asthma

– $189/month, or $2,268 per year (1996$) in 4135 Blumenschein and Johannesson (1998); $1,200/year (1990$) in O'Conor and Blomquist (1997). 4136

 A discount rate (the analysis used 3% and 7%). 4137

 Age

- specific populations for each age in the age range considered in the analysis: 6

– 17 for the 4138

lower estimate; 2

– 17 for the higher estimate. Age group

- specific population data were obtained 4139 from the U.S. Census Bureau, 52 

### and it was assumed that the population within an age group is 4140

unifor mly distributed among the ages in that age group. 4141

 Age

- specific life expectancies. The analysis obtained life expectancies for selected ages (0, 1, 5, 4142 10, 15, ...) from the National Vital Statistics Repo rts, Vol. 59, No. 4, March 16, 2011, Table 6. 53 

### 4143

The anal ysis linearly interpolated life expectancies for the ages that were not included among 4144

those obtained. 4145

4146 Using these inputs, the analysis calculated the age

- specific pdv of the stream of annual WTPs, for each 4147 age of onset in the age range (6

- 17 for the lowe r estimate; 2

– 17 for the higher estimate) to the age

4148 specific life expectancy. If 4149

4150
denotes the annual WTP, 4151 denotes the age at onset of asthma (where = 6, 7, ..., or 17 for the lower estimate and = 2, 3, ..., 4152

or 17 for the higher estimate), 4153

denotes the life expectancy for an individual age a, and 4154

dr denotes the discount rate, 4155

4156 then the present discounted value of the stream of annual WTPs for someone who gets asthma at age a is 4157

4158

4159

51 For a description of the two studies on which the WTP to avoid adult-onset asthma is based, see the BenMAP User Manual, Appendix J, Section J.2.3.

52 http://www.census.gov/compendia/statab/cats/population.html

53 http://www.cdc.gov/nchs/da ta/nvsr/nvsr59/nvsr59_04.pdf

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

May 1, 2013 3-52 

# 

  

##        

  a

LE

j j annual

a 

## dr WTP pdv

1 1 

## ) 1 ( ( 32 )



### 4160 The analysis then cal culated a weighted average pdv , using the percentages of the population in 4161 the age categories as the weights. This assumes that any child in the age range is equally likely to have 4162 asthma. Using the lower estimate to illustrate, if 4163

4164 denotes the percent o f children in the age range [6

- 17] who are age j

, j = 6, ..., 17, and 4165 denotes the expected present discounted value of annual WTP s to avoid asthma for a randomly 4166 selected individual in the age range [6

- 17], 4167

4168

Then 4169

4170


# 

  

##  17

6 ] 17 6 [ j j j 

## pdv p pdv ( 33 )



### 4171

The calculation of for the higher estimate is carried out the same way, with the youngest age of 6 replaced 4172 with a youngest age of 2. 4173

4174 It is worth noting that the annual (or monthly) WTP estimates from the two studies were for 4175

adult

- onset asthma. There is evidence that parents are willing to pay more to avoid adverse health effects 4176 in their children than they are to avoid the same adverse health effects in themselves (). Using the WTP 4177 estimates from these two studies as inputs to the calculation of a unit value for child

- onset asthma could 4178

thus tend to understate the true value. 4179

4180 There is substantial evidence, however, that non

- trivial percentages of asthmatics become 4181 asymptomatic at some point in their lives. The Centers for Disease Control, Nat ional Health Interview 4182 Survey (NHIS) has collected data on asthma in the U.S. for at least a decade, and data are available online 4183 for the years 2001 through 2009. For each year, the NHIS asked several asthma

- related questions. The 4184 results are presented, separately for each year, in two sets of tables: one set of tables refers to “lifetime 4185 asthma”; the other set refers to “current asthma.” The CDC website describes the meanings of “lifetime 4186

asthma” and “current asthma” as follows: 54 

### 4187

4188 A positive response to the question: "Has a doctor or other health professional ever told 4189 you that you had asthma?" determined lifetime asthma. To determine the prevalence of 4190 asthma episodes or attacks, persons answering "yes" to the lifetime asthma question were 4191 then asked, "During the past 12 months, have you had an episode of asthma or an asthma 4192 attack?" Since 2001, current asthma status ha s also been collected. To determine current 4193 asthma, persons answering "yes" to the lifetime asthma question were then asked, "Do 4194 you sti ll have asthma?" 4195

4196 The 2009 population and prevalence rate results for the total U.S. population in the current 4197

asthma and lifetime asthma tables are available online and are shown in below. 4198

4199

54 See Centers for Disease Control and Prevention, National Health Interview Survey (NHIS) Data: Asthma – Background Information. Available online at: http://www.cdc.gov/asthma/nhis/default.htm#09

.

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May 1, 2013 3-53 

### The analysis calculated the per cent of individuals who said they were diagnosed with asthma and 4200 also said they still have asthma by dividing the “current asthma population” by the “lifetime asthma 4201 population,” separately for each age group. The analysis then calculated the percent of asthmatics who 4202 are asymptomatic by subtracting this from 100%. For example, in the 5

- 14 age group, 6,534,000 4203 individuals said they had been diagnosed with asthma; of these, 4,515,000

– or 69.1%

-- said they still 4204 have asthma. That implies that 100%

- 69.1% = 30.9% of asthmatics in this ag e group are asymptomatic. 4205

4206 The percentages of individuals who were diagnosed with asthma at some point in their lives but 4207 considered themselves asymptomatic when they answ ered the NHIS questions were substantial, ranging 4208 from about 20% (in the 0

- 4 age grou p) to almost 53% (in the 20

- 24 age group). This suggests that the 4209

above calculation of the pdv (equation 27) may overstate the value of avoiding a case of asthma, because 4210 it includes (discounted) annual WTPs out to the life expectancy for the age

- of

- onset of the asthma. 4211

4212 Unfortunately, the NHIS asthma tables do not in clude the kind of longitudinal information that 4213

are need ed to properly estimate the value of avoiding child

- onset asthma, taking into account that some 4214 proportion of child asthmatics will becom e asymptomatic later in life. Ideally, it is necessary to know, for 4215 each age at onset, y , in the age range [6

- 17], the percentage of asthmatic children who become 4216 asymptomatic at age x , for all. This would require foll owing a cohort of asthmatic children over time. 4217 Instead, the NHIS data is cross

- sectional

– i.e., it looks at individuals of di fferent ages at a single point in 4218 time. Still, because the percentages of respondents in the NHIS who said they are asymptomatic are non

4219 trivial, and consistent wit h what other sources report, it is worthwhi le to attempt to take these percentages 4220 into account in devising an estimate of the value of an avoided case of child

- onset asthma. 4221

4222 The analysis first calculated the weighted average percent asymptomatic for thos e age groups that 4223 are (largely) after childhood

– age groups (15

- 19) and older. The weight for the i th group was the 4224 proportion of all individuals in age groups (15

- 19) and older who are in the i th group. The weighted 4225 average percent asymptomatic across t hese age groups was 41%. The analysis assumed that an asthmatic 4226 child who becomes asymptomatic is equally likely to do so at any age after childhood. This was 4227 represented by a set of equally spaced ages, starting with age 17, the midpoint of the first age category 4228 (15

- 19)

– ages 17, 27, 37, 47, 57, and 67. Since the total proportion of child asthmatics who will become 4229 asymptomatic at some point after childhood is assumed to be 41%, and each age is assumed to have an 4230 equal probability of being the age at w hich the individual becomes asymptomatic, 41%/6 = 6.8% is the 4231 proportion of child asthmatics who become asymptomatic at each of the 6 representative ages. 4232

4233*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 3-54Table3-17: Results of the 2009 National Health Interview Survey Questions on Asthma and Implied Percentage of AsymptomaticIndividualsCharacteristicTotalPopulationChildren(<18)Adults(18+)Ages 0-14Ages 15-340-45-1415-3415-1920-2425-3435-6465+Lifetime asthma population (in1000s) (Table 1-1 )39,93010,19629,7341,6686,53412,4713,1243,7325,61514,9724,284Current asthma population (in1000s) (Table 3-1 )24,5677,11117,4561,3324,5156,3631,8391,7582,7659,4502,906Percent of asthmatics who stillhave asthma:61.5%69.7%58.7%79.9%69.1%51.0%58.9%47.1%49.2%63.1%67.8%Percent of asthmatics who arenow asymptomatic:38.5%30.3%41.3%20.1%30.9%49.0%41.1%52.9%50.8%36.9%32.2%Prevalence (%) Told They HadAsthma Sometime in theirLifetime (Table 2-1)13.313.813.17.916.215.215.217.813.912.511.3Prevalence (%) who CurrentlyHave Asthma (Table 4-1)8.29.67.76.311.27.898.46.87.97.7Population (in 1000s) implied byTables 1-1 and 2-1 :300,22673,884226,97721,11440,33382,04620,55320,96640,396119,77637,912Population (in 1000s) implied byTables 3-1 and 4-1 :299,59874,073226,70121,14340,31381,57720,43320,92940,662119,62037,740Average implied population:299,91273,978226,83921,12840,32381,81120,49320,94740,529119,69837,826Source:Centers for Disease Control and Prevention 200942344235

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May 1, 2013 3-55 

### For each of the representative ages (17, 27, 37, 47, 57, and 67), the analysis calculated and 4236 given that age

- wh en

- asthma

- stops, using equations ) and ) above and replacing in equation ) with the 4237 representative age, for all values of a . It was assumed that asthma starts at the beginning of an age and 4238 stops in the middle of an age, so that if a child gets asthma at age x and becomes asymptomatic at age y , 4239 the number of years the child has asthma is y

– x + 0.5. For example, to calculate assuming that all 4240 asthmatic children become asymptomatic at age 27, equation ) becomes: 4241

4242



#  



  

##        

  5

. 0 27

1 1 

## ) 1 ( a

j j annual

a 

## dr WTP pdv for each a in [6

- 17]. ( 34 )



### 4243 The analysis then used equation ) to calculate the resulting value for. The results are shown for 4244

the lower estimate in and , using a 3 percent and a 7 percent discount rate, respectively. Results for the 4245 higher estimat e are shown in and , using a 3 percent and a 7 percent discount rate, respectively. 4246

4247

Table 3

- 18 : Calculation of Lower Estimate WTP to Avoid Child

- Onset Asthma, Assuming Some Proportion of Asthmatics Become As ymptomatic, Using a 3 Percent Discount Rate

Age at Which Asthmatic Becomes Asymptomatic,

x =** Percent Who Become Asymptomatic at Age

x Weighted Average PDV (in 2010$), Assuming Individuals Become Asymptomatic at Age x, Based on:*

Blumenschein and

Joha nnesson (1998) O'Conor and Blomquist (1997)

17 6.8% $16,987 $10,789

27 6.8% $40,334 $25,618

37 6.8% $57,706 $36,653

47 6.8% $70,633 $44,863

57 6.8% $80,251 $50,973

67 6.8% $87,408 $55,519

Never becomes asymptomatic 59.0% $93,341 $59,287

Overall Weighted PDV (in 2010$): $79,214 $50,314

Average of Two Study

- Specific PDV s: $64,764 

### *Inflated to 2010$ using the CPI

- U "all items".

** The analysis assumes the child gets asthma at the be ginning of an age (e.g., at the beginning of age 6)

and becomes asymptomatic in the middle of an age (e .g., halfway through age 17). Ages included for the

lower estimate are 6

– 17.



### 4248

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

May 1, 2013 3-56 

### Table 3

- 19 : Calculation of Lower Estimate WTP to Avoid Child

- Onset Asthma, Assu ming Some Proportion of Asthmatics Become Asymptomatic, Using a 7 Percent Discount Rate

Age at Which Asthmatic Becomes Asymptomatic,

x =** Percent Who Become Asymptomatic at Age

x Weighted Average PDV (in 2010$), Assuming Individuals Become Asymptomatic a t Age x, Based on:*

Blumenschein and Johannesson (1998) O'Conor and Blomquist (1997)

17 6.8% $15,078 $9,577

27 6.8% $31,353 $19,914

37 6.8% $39,626 $25,169

47 6.8% $43,832 $27,841

57 6.8% $45,970 $29,199

67 6.8% $47,057 $29,889

Never becomes asymptomatic 59.0% $47,660 $30,272

Overall Weighted PDV (in 2010$): $43,352 $27,535

Average of Two Study

- Specific PDV s: $35,443 

### *Inflated to 2010$ using the CPI

- U "all items".

** The analysis assumes the child gets asthma at the beginning o f an age (e.g., at the beginning of age 6) and becomes asymptomatic in the middle of an age (e.g., halfway through age 17). Ages included for the

lower estimate are 6

– 17.



### 4249

4250

4251

Table 3

- 20 : Calculation of High er Estimate WTP to Avoid Child

- Onset Asthma, Assuming Some Proportion of Asthmatics Become Asymptomatic, Using a 3 Percent Discount Rate

Age at Which Asthmatic Becomes Asymptomatic,

x =** Percent Who Become Asymptomatic at Age

x Weighted Average PDV (in 2 010$), Assuming Individuals Become Asymptomatic at Age x, Based on:*

Blumenschein and Johannesson (1998) O'Conor and Blomquist (1997)

17 6.8% $22,003 $13,976

27 6.8% $44,066 $27,989

37 6.8% $60,483 $38,417

47 6.8% $72,699 $46,176

57 6.8% $81,789 $51,949

67 6.8% $88,553 $56,245

Never becomes asymptomatic 59.0% $94,151 $59,801

Overall Weighted PDV (in 2010$): $80,804 $51,324

Average of Two Study

- Specific PDV s: $66,064 

### *Inflated to 2010$ using the CPI

- U "all items".

** The analysis assumes the c hild gets asthma at the beginning of an age (e.g., at the beginning of age 6) and becomes asymptomatic in the middle of an age (e.g., halfway through age 17). Ages included for the higher estimate are 2

– 17.



### 4252

4253

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

May 1, 2013 3-57 

### 4254

4255

Table 3

- 21 : Calculation of Higher Estimate WTP to Avoid Child

- Onset Asthma, Assuming Some Proportion of Asthmatics Become Asymptomatic, Using a 7 Percent Discount Rate

Age at Which Asthmatic Becomes Asymptomatic,

x =** Percent Who Become Asymptomati c at Age

x Weighted Average PDV (in 2010$), Assuming Individuals Become Asymptomatic at Age x, Based on:*

Blumenschein and Johannesson (1998) O'Conor and Blomquist (1997)

17 6.8% $18,745 $11,906

27 6.8% $33,217 $21,098

37 6.8% $40,574 $25,771

47 6.8 % $44,314 $28,147

57 6.8% $46,215 $29,354

67 6.8% $47,182 $29,968

Never becomes asymptomatic 59.0% $47,717 $30,308

Overall Weighted PDV (in 2010$): $43,886 $27,875

Average of Two Study

- Specific PDV s: $35,881 

### *Inflated to 2010$ using the CPI

- U "all it ems".

** The analysis assumes the child gets asthma at the be ginning of an age (e.g., at the beginning of age 6) and becomes asymptomatic in the middle of an age (e.g., halfway through age 17). Ages included for the higher estimate are 2

– 17.



### 4256

The actua l distribution of ages at which asthmatic children become asymptomatic is not known, 4257 and the resulting pdv depends on this distribution. In the absence of any further information, the analysis 4258

assumed this distribution is uniform

– i.e., an asthmatic is eq ually likely to become asymptomatic at any 4259 age. Selecting evenly spaced ages starting at age 17 was just a convenient way to model this. 4260

4261 Combining the WTP to avoid a case with the estimate of the number of avoided cases, the 4262 analysis estimates the monetiz ed benefits of avoiding the development of asthma for 6

- 17 year olds, for 4263

the lower estimate, as: 4264

4265

4266

ൌ ܹܶܲ כ ܱܲܲܥ כ ܫ݊ܿܣܽ כ ݊ ቀ 1

െ ൫݁ ሺ ୪୬ ሺ ைோ ሻ ൈ ሺ AIDC ೛ ି AIDC ್ ሻ 

### ൯ ቁ

݊ ( 35 )



### 4267

where WTP is $64,764 (if a 3 percent discou nt rate is used) or $35,443 (if a 7 percent discount 4268 rate is used) and now POPC is the population of exposed children ages 6

– 17. An analogous calculation 4269 is done for the higher estimate, where WTP is $66,064 (if a 3 percent discount rate is used) or $35, 881 (if 4270 a 7 percent discount rate is used) and POPC is now specific to the age range [2, 17]. 4271 ). The NRC suggested EPA should examine studies relating formaldehyde exposures to asthma, 4272 pulmonary function and changes in pulmonary pathology. EPA is currently revising the draft assessment 4273 in response to the NRC review. 4274

4275 EPA is committed to evaluating alternative approaches to quantifying the benefits associated with 4276 reduced respiratory symptoms such as exacerbation of symptoms among those who have chronic 4277

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

May 1, 2013 3-58 

### respiratory diseases, e.g., bronchitis and asthma. For instance, the agency will explore the extent to which 4278 approaches used to quantify respiratory symptoms in air quality rules might be applied to residential 4279 exposure to formaldehyde. If a scientifically defensib le approach is available by the time the final rule is 4280 promulgated, EPA will include such quantificat ion as part of the benefits analysis. 4281

4282 Although uncertainty remains regarding how best to quantify the formaldehyde exposure’s effect 4283 on respiratory outcomes, EPA considers these effe cts to be important non-monetized impacts that 4284 contribute to the overall benefits of this rule, as i ndicated by the “+B” in the various tables summarizing 4285

benefits. 4286

4287 3.5.3 Female Fertility 4288

4289 At this time, EPA does not feel that it has sufficient information on the relationship between 4290 formaldehye exposure and reduced fertility to include a valuation estimate in the overall benefits analysis. 4291 Based on a review of the developmental and reproductive toxicity studies in humans and animals in the 4292 draft IRIS assessment (U.S. EPA 2010c), the Taskinen et al. (1999) retrospective cohort study appears to 4293 have the best available evidence of female reproductive toxicity for the purpose of deriving a 4294 concentration-response relationship for use in the benefits assessment. In Taskinen et al. (1999) subjects 4295

recruited subjects from a woodworkers’ union and other businesses involving wood processing in 4296

Finland , and were linked to a national register of births. Women were included if they were born between 4297 1946 and 1975, had a live birth at age 20

− 40 years during 1985

− 1995, had worked in the wood 4298 processing industry for at least 1 month, and had first employment in the wood processing industry 4299 beginning at least 6 months before the index pregna ncy (the first pregnancy that fulfilled the above 4300 criteria). While 1,094 women met these criteria, the final sample included 602 women due to the response 4301 rate from mailed questionnaires (64%) and exclusions due primarily to infertility history, unknown time 4302 to pregnancy, and contraceptive failure. 4303

4304 Estimates of mean daily exposure to formaldehyde were based on measurements taken at the 4305 women’s factories of employment during the early 1990s

. , and were categorized as low, medium and 4306 high. Where measurements were unavailable, measurem ents from equivalent industries were used. An 4307 exposure index representing a time

- weighted average exposure (TWA) was established for ev ery person 4308 in the study based on the concentration of their wor kplace formaldehyde multiplied by the proportion of 4309 the workday exposed to formaldehyde. The investigators categorized time

- weighted average 4310 formaldehyde exposure into categories of low (mean o f 18 ppb), medium (mean of 76 ppb), and high 4311 (mean of 219 ppb) exposure. Time-to-pregnancy data were analyzed by a discrete proportional hazards 4312 regression procedure with a fecundability density ratio (FDR) as the outcome. This ratio compared the 4313 average incidence densities of pregnancies for exposed women with that of the employed, unexposed 4314 women. As explained by Taskinen et al. (1999), an FDR significantly below unity suggests that 4315 conception was delayed. The age-, employment-, smoking-, alcohol consumption-, parity-, and menstrual 4316 irregularity-adjusted FDR was 0.64 (95% CI: 0.43

− 0.92) for women exposed to high formaldehyde levels 4317 compared with the unexposed controls, indicating that there was a substantial, and statistically significant

, 4318 delay in time to conception in this group of women. 4319

4320 This analysis relied on Table 5 of Taskinen et al. (1999) to derive its concentration

- response 4321 relationship. That table provided provides information on time-to-pregnancy (in menstrual cycles) for 4322 women in low, medium, and high levels of formaldehyde exposure, as well as non-exposed to 4323 formaldehyde. The fraction of women who took longer than 13 menstrual cycles to conceive was 9.1% 4324 for non-exposed, 10.1% for low, 11.7% for medium, and 20.5% for high levels of formaldehyde 4325 exposure. In most women, 13 menstrual cycles would correspond to approximately 12 months, and 4326 infertility is often defined as the inability to conceive within 12 months. Thus, these data were used to 4327 generate a concentration

- response function for formaldehyde exp osure and infertility in women. 4328

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

May 1, 2013 3-59 

### 4329 First, the average formaldehyde exposure concentr ations were adjusted for background exposures 4330 to formaldehyde estimated from a personal exposure study. Jurvelin et al. () estimated personal 48

- hour 4331 exposures to formaldehy de in the summer/fall of 1997 for 15 persons in Helsinki, Finland. Personal 4332 exposure levels were significantly correlated with indoor residential concentrations. The mean personal 4333 exposure level was 21.4 ppb. According to EPA’s non

- cancer approach document (U.S. EPA ), the 24

- hr 4334

time

- weighted average exposure levels were determined to be 21 ppb for “non

- exposed”, 26 ppb for low, 4335

43 ppb for medium, and 89 ppb for high levels of formaldehyde exposure. 4336

4337 This analysis uses the concentration

- response function e stimated in EPA’s non

- cancer approach 4338 document (U.S. EPA ). This concentration

- response function was estimated by fitting a linear regression 4339 to these formaldehyde concentrations and the corr esponding fraction of women who took longer than 12 4340

months to con ceive, where Risk = alpha + beta*Concentrat ion. Thus, the estimated regression equation 4341 did not include any confounder variables. Alph a was estimated to be 0.056 (5.6%) and beta was 4342 estimated to be 0.0016 per ppb. 4343

4344 The number of women in the U.S. wishing to become pregnant can be estimated from CDC 4345 information on pregnancy and contraception use (CDC 2010). In particular, the percentage of women 4346 seeking pregnancy over the course of a year can be estimated as the sum of the percentage who reported 4347 not using contraception because they were seeking pregnancy and the percentage who are intentionally 4348 pregnant or postpartum after an intentional pregnancy. The percen tages of women who reported not 4349 using contraception because they were seeking pregnancy were 4.3%, 6.3%, 5.9%, and 5.1% for age 4350 ranges 20

- 24, 25

- 29, 30

- 34, and 35

- 39, respectively. The percentages of women who were pregnant or 4351 postpartum were 10.0%, 7.7%, 8.1%, and 1.9% for age ranges 20

- 24, 25

- 29, 30

- 34, and 35

- 39, 4352 respectively. Since half of pregna ncies are intended, according to CDC (2010), the percentage of women 4353 seeking pregnancy over the course of a year was estimated as the percentage of those currently seeking 4354 pregnancy plus half the percentage who are pregnant or postpartum. These estimates are 9.3%, 10.2%, 4355 10.0%, and 6.1% for age ranges 20

- 24, 25

- 29, 30

- 34, and 35

- 39, respectively. 4356

4357 Fertility problems are not uncommon during a woma n’s reproductive cycle. Garceau et al. () 4358 claims that one in six couples experience fertility difficulty at som e point in time in their reproductive 4359 lives. The CDC () reports that nearly 12% of women of childbearing age in the United States have sought 4360 some type of cycle

- based fertility service at some point in their reproductive cycles. While obtaining 4361

some fertil ity service is common, only 3.8% obtain ovulat ion drugs, 1.1% undergo artificial insemination 4362 and 0.3% engage in assisted reproductive technology, primarily in

- vitro fertilization (IVF). The remainder 4363 seek advice, undergo tests, or obtain medical help to p revent miscarriages or surgery for blocked tubes. 4364 These rates vary by age group as shown in the table from CDC () below. 4365

4366 presents the probabilities of seeking pregnancy and of obtaining cycle

- based treatment that are 4367 used in the analysis. Note that the last three columns, which present the percentages of women using a 4368 particular fertility treatment given that they have sought some fertility treatment, do not sum to one 4369 hundred percent. This is because the costs associated with fertility treatments other than the three 4370 presented in the table were not estimated. Thus, these costs are implicitly assumed to be zero for the 4371 purpose of this analysis. 4372

4373

4374

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

May 1, 2013 3-60



### Table 3

- 22 : Probability of Seeking Pregnancy and of Obtaining Cycle

- Based Fertility Treatment

in U.S. Women

Percent Obtaining Treatment Percent Obtaining Treatment Conditional on Some Fertility

Treatment Being Sought

Age Group Percent Seeking Pregnancy Any Fertility

Service Ovulation drugs IUI IVF Ovulation

dru gs IUI IVF

20

- 24 9.3% 4.9% 1.0% 0.2% 0.0% 20.41% 4.08% 0.00% 25

- 29 10.2%

30

- 34 10.0% 17.7% 5.3% 1.8% 0.4% 29.94% 10.17% 2.26%

35

- 39 6.1% 17.3% 4.6% 1.4% 0.3% 23.96% 7.29% 3.65% Source: Percent seeking pregnancy is from CDC 2010b and percent obtaining treatment is from CDC 2005



### 4375 Infertility is generally defined as the inability to become pregnant after trying to become pregnant 4376 for a year (CDC ). Thu s, delayed fertility , the health outcome to which this economic analysis relates 4377 formaldehyde exposure, is effectively the same as infertility given this definition. That said, it is 4378 important to use WTP values that are appropriate for the specific type o f infertility being evaluating

– 4379 infertility cases where a successful pregnancy can be achieved. This economic analysis estimates the 4380 willingness to pay to avoid delayed fertility using a cost of illness approach, where the cost of illness is 4381

estimated as the cost of fertility treatments for those patients who ultimately become pregnant. 4382

4383 Katz () reports estimates of the median fertility treatment costs for women who successfully 4384 became pregnant, which are likely to closely reflect the actual treatment c osts for women with delayed 4385 fertility who seek treatment for their condition. 4386

4387 One fertility treatment option is to take medication to stimulate ovulation in order to improve the 4388 chances of conceiving. Another option is intrauterine insemination, a proce ss in which the sperm is placed 4389 in the uterus (intrauterine insemination, or IUI) by artificial means. In vitro fertilization (IVF) is yet 4390 another option in which human egg cells are fertiliz ed by sperm outside the body and then transferred 4391 back to the pat ient's uterus. Katz () estimates the median treatment costs for women who had successful 4392 outcomes as $925 for medication; $4,124

- $8,542 for IUI; 55 

### and $24,010

- $38,545 for IVF. 56 

### This analysis 4393 converts the estimates from Katz (2011) to 2010$ and uses the mi dpoints of the ranges estimated by Katz 4394 (). The resulting estimates are $1,001, $6,848, and $33,831 for medication, IUI, and IVF, respectively. 4395

4396 There are two sources of potential bias associated with using this cost of illness approach. First, 4397

since mo st fertility treatments are paid for out

- of

- pocket rather than through insurance, patients’ 4398 willingness to pay for these treatments will be at least as high as the cost of the treatments, for those 4399 patients that seek the treatments

– that is, these patient s are willing to pay the going rate for the treatment 4400 and may be willing to pay more than the going rate. To the extent that they would be willing to pay more 4401 than the going rate, the cost

- of

- illness estimates understate their true willingness to pay. On the other 4402 hand, since some women with fertility problems may not seek treatment, this implies that their 4403 willingness

- to

- pay to avoid infertility is lower than the cost of treatment. Thus the cost

- of

- illness 4404 estimates will overstate the willingness to pay f or these women. Since these two biases go in opposite 4405 directions, it is not clear whether the end resu lt will be an upward or a downward bias. 4406

4407 Combining the concentration

- response information with the population estimates, unit value, 4408 probability of seek ing pregnancy, and probability of using a particular cycle

- based treatment given that 4409 one is seeking a fertility service, and assuming that all women seeking pregnancy but having difficulty 4410

55 $4,124 was the median for IUI with clomiphene citrat e and $8,524 was the median for IUI with gonadotropins.

56 $24,010 was the median for IVF without a donor egg and $33,831 was the median with a donor egg.

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### getting pregnant opt for some kind of fertility service, the analy sis estimates the monetized benefits of 4411 increased fecundity in women of childbearing age as: 4412

4413

ൌ ෍ ܹܣܤܥܱܲܲ ௔ 

### ൈ ܣܶܧܤ ൈ ܥܦܫܣ൫ ௕ 

### െ ܥܦܫܣ ௣ 

### ൯ ൈ ܵܲݎܲ ௔ 

### ൈ ሺ ݏ݁݀ܯݎܲ
௔ 

### ൈ ݐݏ݋ܥݏ݁݀ܯ ൅ ܫܷܫݎܲ ௔

௔ 

### ൈ ݐݏ݋ܥܫܷܫ ൅ ܨܸܫݎܲ ௔ 

### ൈ ݐݏ݋ܥܨܸܫ ሻ ( 36 )



### 4414

4415

Where: 4416

 POPCBAW

a 

### is the exposed population of childbearing

- aged women 4417

 Subscript a denotes an age group (20

- 24, 25

- 29, 30

- 34, or 30

- 39) 4418

 BETA is the slope derived by EPA by fitting a linear regression to the data in Taskinen et al. () 4419 relating the risk of not conceiving in a year to average formaldehyde occupational exposures 4420 (EPA also adjusted these time

- weighted concentrations for background exposures of 4421 formaldehyde). The slope was determined to be 0.0016 incre ase in risk of not conceiving in one 4422 year per unit increase in ppb formaldehyde concentration 4423

 AIDC p 

### and AIDC b 

### are the average indoor daily concentrations (AIDC) in units of ppb for the 4424 policy and baseline scenarios, respectively (the difference between the se terms will be negative). 4425 These AIDCs include exposures experienced at home, school, work, and in vehicles. 57 

### 4426

 PrSP

a 

### is the probability a woman in age group a is seeking to become pregnant, estimated as the 4427 percentage of women in age group a who are not u sing contraception because they want to 4428 become pregnant plus half the women in age group a who are pregnant or are postpartum from 4429 Table 5 CDC (). Note that only half of the pregnant or postpartum women are included because 4430 half of pregnancies are unintend ed according to CDC (). The estimated percentages are 9.3%, 4431 10.2%, 10.0%, and 6.1% for age ranges 20

- 24, 25

- 29, 30

- 34, and 35

- 39, respectively. 4432

 PrMeds

a 

### is the probability of using fertility drugs (ovulation medication) among women in age 4433

group a given that they have sought some fertility service, from CDC (). It is 20.41%, 29.94%, 4434 and 23.96% for women aged 20

- 29, 30

- 34, and 35

- 39, respectively. 4435

 PrIUI

a 

### is the probability of using artificial intrauterine insemination (IUI) among women in age 4436

group a given th at they have sought some fertility serv ice from CDC (). It is 4.08%, 10.17%, and 4437 7.29% for women aged 20

- 29, 30

- 34, and 35

- 39, respectively. 4438

 PrIVF

a 

### is the probability of using in vitro fertil ization (IVF) assisted reproductive technology 4439 among women in age group a given that they have sought some fe rtility service fr om CDC (). It 4440 is 0.00%, 2.26%, and 3.65% for women aged 20

- 29, 30

- 34, 35

- 39, respectively 4441

 MedsCost is $1,001in 2010$, the average treatm ent cost for women with successful outcomes 4442 after using o vulation drugs reported by Katz () 4443

 IUICost is $6,848 in 2010$, the midpoint of th e average IUI treatment cost for women with 4444 successful outcomes reported by Katz () 4445

 IVFCost is $33,831 in 2010$, the midpoint of the average IVF treatment cost for women with 4446 successful outcomes reported by Katz () 4447

4448

57 AIDCs are calculated from average daily concentrations. Infants (0-2), children (3-15), full time working adults, unemployed/retired adults, and part-time working adults are assumed to spend 11.7%, 14.3%, 4.1%, 13.8%, and 15.8% of their time outdoors, where background exposure levels are assumed to be .0037 mg/m 3

.

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### At this time, EPA does not feel that it has sufficient information on the relationship between 4449 formaldehye exposure and reduced fertility to include a quantification or valuation estimate in the overall 4450 benefits analysis. EPA does feel that this effect is an important non-monetized impact which should be 4451 recognized as a contribution to the overall benefits of this rule, as indicated by the “+B” in the various 4452 tables summarizing benefits. 4453

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## 3.6 Estimated Numbers of Affected Individuals 4454

4455 The number of individuals benefitting from th e reduction of formaldehyde emissions from 4456 composite wood products potentially includes anyone who resides, works, or otherwise spends a 4457 substantial amount of time where new composite wood products are introduced to an indoor space. This 4458 benefits analysis includes monetized benefits for on ly two broad categories where a substantial amount of 4459 new composite wood products might be introduced to residences: (1) new home construction and (2) 4460 major renovations that include kitchen remodeling. As described in section 3.1, exposures were estimated 4461 separately for the various categories listed in Table 3- 17. Table 3-17 also includes a brief description of 4462

the data sources and methods that were used to estim ate these populations. Addi tional description of how 4463 the populations were estimated for renovated housing is provided in section 3.6.1. A summary of the 4464 estimated number of affected individuals is presented in section 3.6.2. 4465

4466

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### Table 3-17: Exposure Factor Categories Used to Define Population Groups

Exposure

Factor Exposure Factor Categories Description

Composite wood product source and age 1. New housing construction for 11 ages of the housing

2. Renovated housing for 11 ages

of the installed composite wood products The American Community Survey (ACS) reports house age in segments, the most recent being 2005 to 2009. One fifth of population living in homes constructed between 2005 and 2009 was used to estimate the number of people inhabiting new construction on an annual basis. The 2009 American Housing Survey (AHS) asked respondents about renovation activities in a two year period. Half of the kitchen renovation rate in owner-occupied housing, stratified by housing type and home vintage, was applied to ACS populations to estimate people exposed due to renovation activities in owner and renter occupied homes annually. Structure type 1. Single family attached

2. Single family detached

3. Apartment

4. Manufactured Housing

5. Recreational Vehicles and

Camper/Trailers The 2007-2009 ACS reports housing type in a variable that takes the following values: Mobile home or trailer; One-family house detached; One-family house attached; 2 Apartments; 3-4 Apartments; 5-9 Apartments; 10-19 Apartments; 20-49 Apartments; 50 or more apartments; Boat, RV, van, etc. This variable was recoded to provide the five categories in the benefits analysis.

Climate zone 1. Zone 1: <2,000 cooling degree days (CDD) and more than 7,000 heating degree days (HDD)

2. Zone 2: <2,000 CDD and

5,500 to 7,000 HDD

3. Zone 3: <2,000 CDD and

4,000 to 5,499 HDD

4. Zone 4: <2,000 CDD and

<4,000 HDD.

5. Zone 5: >2,000 CDD and

<4,000 HDD Note: Number of degree days is over a 30-year period. Each public use micro area (PUMA) in the ACS was assigned a climate rating by mapping from NO AA division data to PUMAs using NOAA data matching climat e divisions to counties. The NOAA data used to develop the climate ratings is from NOAA’s publication “Climatography Of The Un ited States No. 85: Divisional Normals of Temperature, Precipitation, and Heating and Cooling Degree Days”. The data is available for between one and ten

divisions in each state. A climate division is a region within a state that is as climatically homogeneous as possible.

Not all counties were available in the NOAA dataset. Hawaii and Alaska were not included, though as Alaska has the same climate rating for the entire state, this was not a problem. Hawaii’s counties are individual islands, as are the climate regions, which made creating that mapping straightforward. Other missing cases include independent cities, the District of Columbia, and a few counties in New Mexico and Arizona. In these cases, each missing area was assigned the same region as adjacent counties in the database.

For the PUMAs with multiple county matches that had different climates, a population-weighted average climate rating was assigned

. Age and employment

status 1 Infants: less than age 2

2 Children: aged 2 through 15

3 Ages 16+; work full-time

outside the composite wood products industry

4 Ages 16+; work in composite

wood products fabrication

5 Ages 16+; work part-time

outside the composite wood products industry

6 Ages 16+; unemployed or not

in the labor force An individual observation’s age is available in the ACS from ages 0 to 95, with ages above 95 being counted as 95. For the exposure categories 1 and 2, infants and children were defined as ages 0-1 and 2-15, respectively. Individuals aged 16-95 working 20+ hrs, not at home, in any industry categories other than those listed below were included in category 3. Individuals that reported employment in the industries that manufacture furniture and related products or that manufacture prefabricated wood buildings and mobile homes were defined as working in composite wood product fabrication (category 4). Individuals aged 16-95 working 0-20 hrs, not at home, in any other industry categories were included in category 5. Individuals aged 16-95 who were not working, retired, or not in the labor force were counted in category 6. Also counted in category 6 were

individuals who work from home.



### 4467

4468

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### 4469 3.6.1 Composite Wood Products Installed During Renovation 4470

4471 The ACS does not provide any information with respect to renovation for home-owners or 4472 renters. Thus, it was necessary to use another data source to estimate renovation rates among the 4473 population, and apply those rates to the ACS population estimates. 4474

4475 The National 2009 American Housing Survey (AHS) Dataset was used to determine the average 4476 frequency of kitchen renovation among homeowners. Kitchen renovation was determined to be the most 4477 likely source of new composite wood products being introduced in a home. In order to obtain a mean 4478 value that would be consistent with the ACS data, the variable in the AHS indicating the year the home 4479 was built was recoded into nine categories so th at there were no overlaps between the AHS and ACS 4480 categories. 4481

4482 As noted in a recent Joint Center for Housing Studies’ report (Will 2010), data specific to the 4483 frequency or expenditures of remodeling and renovation in rental housing are not available. However, 4484 home renovation data were available for owner-occup ied housing in the following categories: single4485 family detached homes, single-family attached homes, manufactured housing, and apartments. Because 4486 renovation frequency data for renter-occupied housing were not available, the renovation frequency for 4487 owner-occupied housing was used for both owner- and renter-occupied housing. 4488

4489 Table 3-18 presents the average renovation frequency by housing type and year of construction. 4490 The overall average is 2.7 percent. Homes built in recent years renovate less, on average, than homes 4491 from previous decades. Since homes built in the last 11 years are accounted for in the new home exposure 4492 category in this analysis, these homes were assumed not to conduct a renovation. Note that a non-trivial 4493 percentage of homeowners renovate kitchens in even the newest homes (i.e., homes built in 2009 also 4494 surveyed in 2009). However, to simplify the analysis separate exposure scenarios were not estimated for 4495 housing that is both new and recently renovated. Instead, these scenarios were simply treated as new 4496 homes. This simplifying assumption may result in an underestimate for the formaldehyde exposures 4497 experienced by individuals living in newer homes that were recently renovated. 4498

4499

4500 Table 3-18: Frequency of Kitchen Renovation by Housing Type and Year Built, 2009 AHS

Year Built Single-Family

Detached

Homes Single-Family

Attached

Homes Apartments Manufactured Housing

2005 or later

- - - -

2000 to 2004

- - - -

1990 to 1999 2.8% 2.7% 1.4% 1.1%

1980 to 1989 3.4% 2.1% 4.0% 2.1%

1970 to 1979 2.9% 2.6% 3.2% 2.4%

1960 to 1969 2.3% 2.2% 0.8%

2.2% 1950 to 1959 2.8% 3.8% 2.1%

1940 to 1949 3.0% 2.1% 2.3%

1939 or earlier 2.8% 3.0% 2.7%



### 4501

4502 There were two year built categories of manufa ctured housing where no kitchen renovations were 4503 reported. Each of these cells has fewer than 20 observations associated with it. Since there was not a 4504

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### statistically significant difference between ma nufactured housing renovation in 1960-1969 and 1940- 4505 1949, the analysis used the same mean renovation ra te for all manufactured housing built prior to 1969. 4506 The renovation frequencies presented in Table 3-18 were applied to all homes by housing age and 4507 structure type. Applying the renovation percentage s presented in Table 3-18 to the 2007-2009 ACS 4508 National Dataset results in the population totals and household counts presented in Table 3-19. It should 4509 be noted that the renovation percentage was applied to the aggregated totals by housing age and structure 4510
type. 4511

4512 Table 3-19: Total Population in Renovated Houses

Housing Type Population in

Renovated Homes Percent of Total Population Renovated

Households Percent of Total

Households
Single-Family Detached 4,922,274 2.8% 1,768,967 2.8%
Single-Family Attached 367,710 2.6% 142,962 2.6%
Apartment 1,344,143 2.5% 634,781 2.5%
Manufactured Housing 268,559 1.8% 109,549 1.8%

Total 6,902,686 2.7% 2,656,259 2.7%



### 4513

4514 3.6.2 Summary of Population Estimates 4515

4516 The analysis estimates that there will be about 10 million individuals living in housing units 4517 where composite wood products have been installed wi thin the past year (i.e., individuals who have 4518 moved into new home or live in a home where there was a renovation). Since these individuals are 4519 estimated to be affected by the emissions from these products over a period of 11 years, by the 11 th 

### year it 4520 is estimated that about 106 million individuals live in housing units where composite wood products have 4521 been installed within the past 11 years. Table 3-20 and Table 3-21 present a summary of the population 4522 estimates by the categories that are used to define the different exposure groups. See Table 3-17 and 4523 section 3.6.1 for a description of how these populations were estimated. The reductions in micro risks of 4524 adverse health outcomes (see sections 3.3 and 3.5) are applied to these population estimates and 4525 combined with the values of reducing micro risks for the various adverse health outcomes (see sections 4526 3.4 and 3.5) to estimate the total value of the reduced risks of adverse health outcomes. 4527

4528

4529

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### Table 3-20: Population Estimates by Age of New Construction, Years since Renovation and Structure Type

Age of new construction in

Years Years since renovation Structure Type

Category Population Category Population Category Population

0-1 2,738,898 0-1 6,902,685 New Apt 4,755,876

1-2 2,738,898 1-2 6,902,685 New Man 1,405,598
2-3 2,738,898 2-3 6,902,685 New RV 52,063
3-4 2,738,898 3-4 6,902,685 New SF Att 2,235,686
4-5 2,738,898 4-5 6,902,685 New SF Det 21,678,650
5-6 2,738,898 5-6 6,902,685 Total New 30,127,874
6-7 2,738,898 6-7 6,902,685 Ren Apt 14,785,584
7-8 2,738,898 7-8 6,902,685 Ren Man 2,954,145
8-9 2,738,898 8-9 6,902,685 Ren SF Att 4,044,810
9-10 2,738,898 9-10 6,902,685 Ren SF Det 54,144,991
10-11 2,738,898 10-11 6,902,685 Total Renovated 75,929,530

Total New 30,127,874 Total Renovated 75,929,530 All Structures 106,057,404

Source: U.S. Census Bureau 2009c, d Note: See Table 3-17 and section 3.6.1 for a description of how these populations were estimated. Age of new construction and years since renovation indicates the number of years since composite wood products were introduced to the house. For example, “0-1” for years since renovation indicates that the structure was renovated within the past year. Totals may not add due to rounding.

Abbreviations: “New SF Att” is new construction of single-fa mily attached housing (up to 11 years old) “New SF Det” is new construction of single- family detached housing (up to 11 years old). “New SF Apt” is new construction of multi-family housing (up to 11 years old). “New SF Man” is new construction of manufactured housing (up to 11 years old). “New SF CT” is new campers and trailers (up to 11 years old). “New SF Att” is renovated single-family attached housing (up to 11 years old) “New SF Det” is renovated single-family detached housing (up to 11 years old). “New SF Apt” is renovated multi-family housing (up to 11 years old). “New SF Man” is renovated manufactured housing (up to 11 years old). Note: Campers and Trailers are assumed to never be renovated.


### 4530 Table 3-21: Population Estimates by Climate Zone, Age of Individual, and Occupation

Climate Zone Occu p ation of Individual Category Population Category Population Zone 1 13,177,114 Infants 0-1 3,309,269
Zone 2 23,906,632 Children 2-15 21,312,289
Zone 3 20,637,107 Not CWP Industry 55,523,507
Zone 4 21,214,309 Fabrication 238,487
Zone 5 27,122,241 Unemployed 19,508,314
- Part Time 6,165,538
Total 106,057,404 Total 106,057,404

Source: U.S. Census Bureau 2009c, d Note: See Table 3-17 and section 3.6.1 for a descriptio n of how these populations were estimated. Totals may not add due to rounding.

Abbreviations: Zone 1: Fewer than 2,000 cooling degree days and more than 7,000 heating degree days over 30 years. Zone 2: Fewer than 2,000 cooling degree days and 5,500 to 7,000 heating degree days over 30 years. Zone 3: Fewer than 2,000 cooling degree days and 4,000 to 5,499 heating degree days over 30 years. Zone 4: Fewer than 2,000 cooling degree days and fewer than 4,000 heating degree days over 30 years. Zone 5: 2,000 or more cooling degree days and fewer than 4,000 heating degree days over 30 years.


### 4531

4532

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## 3.7 Results of Benefits Assessment 4533

4534 This section presents the results of the benefits assessment. Detailed results are presented for the 4535 analytical options with emissions standards that are consistent with the TSCA Title VI statute. Summary 4536 results are presented for the additional options that consider alternative formaldehyde emissions 4537 standards. Section 3.7.1 presents the total benefits at tributable to reductions in cancer risk by combining 4538 the changes in cancer risk (see section 3.3), the value of the reductions in risk (see section 3.4) and the 4539 number of individuals experiencing reductions in risk (see section 3.6). Section 3.7.2 presents the total 4540

benefits attributable to reductions in non-cancer a dverse health risks by combining the changes in non4541 cancer adverse health risks (see section 3.5), the value of the reductions in risk (see section 3.5) and the 4542 number of individuals experiencing reductions in risk (see section 3.6). 4543

4544 As described in section 3.2, this analysis assumes that after eleven years any continuing (and 4545 declining) emissions from a given composite wood pr oduct would contribute negligibly to that product's 4546 effect on formaldehyde exposure. Thus, composite wood products are assumed to contribute to 4547 formaldehyde exposure for 11 years. 58 

### Specifically: 4548

4549

 in the first year only new composite wood products are affected by the policy; 4550

 in the second year new and one-year-old co mposite wood products are affected by the 4551 policy; 4552

 in the third year new, one- and two-year-old composite wood products are affected by the 4553 policy; 4554

 in general, in the n th year, new, one-, two-, three-,..., and ( n -1)-year-old composite wood 4555 products are affected by the policy, for n = 1, 2, ..., 10; and 4556

 in the eleventh and all subsequent years new, one-, two-, three-, four-, five-, six-, seven-, 4557 eight-, nine-, and ten-year-old composite wood products are affected by the policy. 4558

4559 Since the exposure scenarios are defined in part according to the 11 different ages for composite 4560 wood products, it is not until the 11 th 

### year after the implementation of the rule that benefits are realized 4561 under every exposure scenario. That is, it is not until the 11 th 

### year after rule implementation that ten-year 4562 old composite wood products would have been required to be produced in compliance with the emissions 4563 standards. Thus, the benefits are phased in over a period of eleven years. 4564

4565 Similarly, the benefits from a given year of composite wood production will phase-out over time. 4566 Since the analysis considers the benefits and costs from 30 years of composite wood production, the 4567 estimated exposures have the following time profile after the 30 th 

### and last year of composite wood 4568 production considered in the analysis: 4569

4570

 in the 31 st

### year, only one-, two-, three-, four-, five-, six-, seven-, eight-, nine-, and ten4571 year-old composite wood products are produced before the 31 st 

### year (benefits from new 4572 composite wood products are produced after y ear 30 and therefore are not considered in 4573 the analysis); 4574

 in the 32 nd 

### year, only two-, three-, four-, five-, si x-, seven-, eight-, nine-, and ten-year-old 4575 composite wood products are produced before the 31 st

### year (benefits from new and one4576 year old composite wood products are produ ced after year 30 and therefore are not 4577 considered in the analysis); 4578

58 EPA calculated exposures using a 1.5 year emissions half li fe of formaldehyde from composite wood products With. this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11 years the emissions would be near zero.

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###  in general, in the n th year after year 30, only n year-old and older composite wood 4579 products are produced before year 31, for n = 1, 2, ..., 10; and 4580

 in the 41 st 

### and all subsequent years, all 11 ages of composite wood products that 4581 potentially contribute to formaldehyde exposure are produced after the 30 th 

### year and 4582 therefore are not considered in the analysis. 4583

4584 Given this phase-in and phase-out, a time period of thirty years of composite wood production 4585 was selected so that the first ten years of the policy (when the benefits of the policy are being phased in) 4586 and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of 4587 the policy are being phased out) do not obscure the steady state benefits that would be experienced from 4588 the policy. It is necessary to include the phase-in an d phase-out of the benefits in order to be consistent 4589 with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions 4590 standards. Given that this analysis assumes that after eleven years any continuing (and declining) 4591 emissions from a given composite wood product would contribute negligibly to that product's effect on 4592 formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to 4593 40 years of exposure reductions. The first 10 years ar e a phase-in period for exposure reductions, the next 4594 20 years are a steady-state, and the next 10 years are a phase-out period. 4595

4596 Since the eleventh year is the first steady-state or typical year, undiscounted benefits estimates are 4597 presented in this section in order to convey the a nnual benefits from a typical year. In addition, the 4598 present discounted value for the thirty year stream of benefits and the annualized value for the stream of 4599 benefits are estimated using discount rates of 3 and 7 percent. Benefits are discounted back to the 4600 beginning of the 40-year period, as follows: 4601

4602 ෍ൌ ݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏ݅ܦ ݐ݁݊ݏ݁ݎܲ ሻ݁ݑܸ݈ܽ ݁݀ݐ݊ݑ݋ܿݏܷ݊݀݅ሺ ௧ 

### ሻ݁ݐܽݎ ݐ݊ݑ݋ܿݏ݀݅ ൅ 1ሺ ௧ ସ଴

௧ୀଵ (29)



### 4603 The benefits for discount rate, d , are annualized over a 30 year period to be consistent with the 4604 annualized costs using the following formula: 4605

4606

ሺܣ݊݊ݑ݈ܽ݅ݖ݁݀ ܤ݁݊. ሻ ൌ ሺܲܦܸ ସ଴ ௬௘௔௥ ௕௘௡௘௙௜௧௦ ௦௧௥௘௔௠ 

### ሻ כ ݀ כ ሺ1 ൅ ݀ሻ ଷ଴



### ሺ1 ൅ ݀ሻ ଷଵ 

### െ 1 (30)



### 4607 Table 3-22 and Table 3-23 present descriptions of the analytical options and the exposure groups 4608 with the abbreviations that are used in the results tables below. Table 3-24 summarizes the assumptions 4609 that differentiate between the lower benefit estimates and the higher benefit estimates. 4610

4611

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### Table 3-22: Analytical Options Summary

Analytical

O p tion Description

Option SE S tatutory emissions standards where all wood veneer laminated products are e xempt from the definition of hardwood plywood

Option SI S tatutory emissions standards where all wood veneer laminated products are i ncluded in the definition of hardwood plywood

Option SN S tatutory emissions standards where wood veneer laminated products made using NAF resins to

attach wood veneers to N AF platforms are exempt from the definition of hardwood plywood

Option SC S tatutory emissions standards where all wood veneer laminated products made with wood veneers

attached to c ompliant platforms using no-added formaldehyde ( NAF ) resins are exempt from the definition of hardwood plywood

Option SCR Proposed Option.

S tatutory emissions standards where wood veneer laminated products made with wood veneers

attached to c ompliant platforms using NAF resins are exempt from the definition of hardwood plywood. R educed recordkeeping requirements for non- mfgrs. manufacturers compared to other options.

Option SEUR S tatutory emissions standards where wood veneer laminated products are e xempt from the definition of hardwood plywood. U LEF certification allowed. R educed recordkeeping requirements for non-manufacturers.

Option SFCC S tatutory emissions standards with regulatory provisions that are f ully c onsistent with C ARB

ATCM.

Option

SN SCUR: Proposed Option.

S tatutory emissions standards where all wood veneer laminated products made using NAF resins to

attach with wood veneers attached to NAF c ompliant platforms using NAF resins are exempt from the definition of hardwood plywood

. U LEF certification allowed. c R educed recordkeeping requirements for non-mfgrs.

Option CE C ARB 1 emissions standards where all wood veneer laminated products are e xempt from the definition of hardwood plywood

Option CI C ARB 1 emissions standards where all wood veneer laminated products are i ncluded in the definition of hardwood plywood

Option NE N AF emissions standards where all wood veneer laminated products are e xempt from the definition of hardwood plywood

Option NI N AF emissions standards where all wood veneer laminated products are i ncluded in the definition of hardwood plywood


### 4612 Formatted Table

Formatted Table

Formatted Table

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

May 1, 2013 3-71 

### Table 3-23: Exposure Group Descriptions and Abbreviations Used in Results Tables

Exposure Group Descriptions (and abbreviations) Composite Wood Product Source and Age:

1. New housing construction for 11 ages of the housing (Structure age 0-1 through Structure age 10-11)

2. Renovated housing for 11 ages of the installed composite wood products (0-1 years post ren. through 10-11 years post ren.) Structure Type:

1. New apartment (New Apt)

2. New manufactured housing (New Man)

3. New recreational vehicles and camper/trailers (New RV)

4. New single family attached (New SF Att)

5. New single family detached (New SF Det)

6. Renovated apartment (Ren Apt)

7. Renovated manufactured housing (Ren Man)

8. Renovated single family attached (Ren SFAtt)

9. Renovated single family detached (Ren SF Det)

Climate Zone:

1. (Zone 1) <2,000 cooling degree days (CDD) and more than 7,000 heating degree days (HDD)

2. (Zone 2) <2,000 CDD and 5,500 to 7,000 HDD

3. (Zone 3) <2,000 CDD and 4,000 to 5,499 HDD

4. (Zone 4) <2,000 CDD and <4,000 HDD.

5. (Zone 5) >2,000 CDD and <4,000 HDD Note: Number of degree days is over a 30 year period.

Age and Employment Status:

1. Infants: less than age 2 (Infants 0-1)

2. Children: aged 2 through 15 (Children 2-15)

3. Ages 16+; work full-time outside the composite wood products industry (Not CWP Industry)

4. Ages 16+; work in composite wood products fabrication (Fabricator)

5. Ages 16+; unemployed or not in th e labor force (Retired/Unemployed)

6. Ages 16+; work part-time outside the composite wood products industry (Part Time)



### 4613 Table 3-24: Summary of Lower and Higher Benefit Estimate Assumptions

Health Outcome Lower Estimate Higher Estimate

Cancer Does not apply age-dependent adjustment factor (ADAF) to the inhalation unit risk. a Multiplies the inhalation unit risk by a lowering factor. b Applies age-dependent adjustment factor (ADAF)

to the inhalation unit risk. a

Eye Irritation Does not include benefits for reductions in the indoor average daily concentration below 40ppb. Includes benefits for any reduction in the indoor average daily concentration, including reductions below 40ppb.

Asthma Includes benefits for 6

- 17 year olds only. The willingness

- to

- pay (WTP) to avoid asthma, which is age

- specific, is lower for this age group compared to the higher estimate. Includes benefits for 2

- 17 year olds only. The willingness

- to

- pay (WTP) to avoid asthma, w hich is age

- specific, is higher for this age group compared to the lower estimate.

Fertility There is only one fertility estimate presented.

a EPA policy is to apply ADAFs when there is a mutagenic mode of action. The 1991 IRIS assessment did not make a formal finding of a mutagenic mode of action. However, there is scientific support for a mutagenic mode of action. Therefore, EPA believes application of ADAFs is the pref erred approach in this case but is also presenting the calculations without applying ADAFs.

b The lowering factor is calculated as the percentage of incidence of the cancer that occurs within the age range spanning from the age at which the change in exposure is experienced through the end of the expected lifetime.


### 4614

4615 Formatted Table

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

May 1, 2013 3-72 

### 4616
3.7.1 Total Benefits Attributab le to Cancer Risk Reductions 4617

4618 The benefits of reducing the risk of nasopharyngeal cancer is are estimated as a weighted average 4619 of the value of reducing fatal and no nfatal cancer risks. As noted above (see section 3.4.1), the fifteen 4620 year survival rate for cancers of the nasopharynx is 42.9 percent (SEER 2010). Thus, the analysis 4621 assumes that 57.1 percent of the reductions in cancer risk are reductions in mortality risk and therefore are 4622 valued as the value of mortality risk (VMR) presented in section 3.4.1. Likewise, the analysis assumes 4623 that 42.9 percent of the cancer risk reductions are reductions in the risk of nonfatal cancer and are valued 4624 using a cost of illness approach presented in section 3. 4.2. The results presented in this section generally 4625 include the number of individuals experiencing exposure reductions annually as a result of the analytical 4626 option (see section 3.6), the average individual’s micro risk reduction for cancer (see section 3.3), and the 4627 total benefits for the reduction in cancer risk. The analysis includes both lower and higher estimates for 4628 the reduction in cancer risk, where the lower estimate adjusts the cancer risk downward based according 4629 to the distribution of cancer incidence by age (see section 3.3.1). Note that the value for each micro risk 4630 reduction for cancer is conditional on the age at the time of the exposure (see Table 3-16). 4631

4632 Table 3-25 through Table 3-30 present the annual benefits using a 3 percent discount rate 4633 associated with reduced cancer risk for a typical year under the analytical options with the statutory 4634 emissions standards (see Table 3-22 for a description of the analytical options and Table 3-23 for a 4635 description of the exposure groups). Because the exposure model assumes that the benefits of reduced 4636 emissions from newly installed composite wood products are accrued over 11 years and the numbers of 4637 individuals in different exposure groups are assumed to be the same in each year, the annual benefits are 4638 the same starting in the eleventh year. Thus, the eleventh and subsequent years are defined as typical 4639 years for the purpose of this analysis. Table 3-31 presents the typical annual benefits, the present 4640 discounted value of the 40-year stream of benefits, and the annualized benefits associated with reduced 4641 cancer risk for all analytical options. 4642

4643 The results in Table 3-25 through Table 3-30 indicate that the cancer-related benefits are 4644 generally higher for composite wood products that have been more recently installed, new housing 4645 compared to renovated housing, warmer and more humid climate zones, younger individuals, and 4646 individuals who work in the composite wood products industry. 4647

4648 The results in Table 3-31 indicate that the most protective option with emissions standards that 4649 are consistent with the TSCA Title VI statute (Optio n SN, which would require la minated products to be 4650 made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood 4651 plywood) has cancer-related benefits that are less than 20 percent larger than the benefits of the least 4652 protective option options with emissions standards that are consistent with the TSCA Title VI statute 4653 ( Option Options SE, SEUR, and SFCC, which exempts exempt all laminated products from the definition 4654 of hardwood plywood). The cancer-related benefits under Option SI, SC , SCR, and the proposed option 4655 (Option SCR SCUR ) are only slightly less than those under Option SN, the difference being less than 5 4656 percent. Options SC and

, SCR , and SCUR would both require laminated products to be made with NAF 4657 resins in order to be exempted from the definition of hardwood plywood. Option SI includes laminated 4658 products in the definition of hardwood plywood. Analytical options that would require NAF resin 4659 technologies for all composite wood products (Options NE and NI) would result in benefits about four 4660 times larger than under the proposed analytical opti on with emissions standards consistent with the TSCA 4661 Title VI statute, and analytical options that would require less stringent emissions standards than the 4662 statute (Options CE and CI) would result in benefits about 25 percent lower. 4663

4664

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

May 1, 2013 3-73 

### Table 3-25: Cancer Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Option SE , SEUR, SFCC (3% discount rate)

Composite Wood Source and Age Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0-1 2,739 0.43 1.08 $2.5 $5.3 Structure age 1-2 2,739 0.28 0.69 $1.6 $3.4 Structure age 2-3 2,739 0.18 0.45 $1.0 $2.2 Structure age 3-4 2,739 0.12 0.29 $0.7 $1.5 Structure age 4-5 2,739 0.08 0.20 $0.5 $1.0 Structure age 5-6 2,739 0.06 0.13 $0.3 $0.7 Structure age 6-7 2,739 0.04 0.10 $0.2 $0.5 Structure age 7-8 2,739 0.03 0.07 $0.2 $0.4 Structure age 8-9 2,739 0.03 0.06 $0.2 $0.3 Structure age 9-10 2,739 0.02 0.05 $0.1 $0.3 Structure age 10-11 2,739 0.02 0.04 $0.1 $0.2 0-1 years post-ren. 6,903 0.25 0.60 $3.8 $8.5 1-2 years post-ren. 6,903 0.16 0.39 $2.5 $5.5 2-3 years post-ren. 6,903 0.11 0.26 $1.6 $3.6 3-4 years post-ren. 6,903 0.07 0.17 $1.1 $2.4 4-5 years post-ren. 6,903 0.05 0.12 $0.8 $1.7 5-6 years post-ren. 6,903 0.04 0.08 $0.6 $1.2 6-7 years post-ren. 6,903 0.03 0.06 $0.4 $0.9 7-8 years post-ren. 6,903 0.02 0.05 $0.4 $0.7 8-9 years post-ren. 6,903 0.02 0.04 $0.3 $0.6 9-10 years post-ren. 6,903 0.02 0.04 $0.3 $0.5 10-11 years post-ren. 6,903 0.02 0.03 $0.3 $0.5 Total 106,057 0.08 0.20 $19.4 $42.1

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4665

4666

4667

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

May 1, 2013 3-74 

### Table 3-26: Cancer Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Options SI, SC, SCR, and SCR SCUR (Proposed Option, 3% discount rate)

Composite Wood Source and Age Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0-1 2,739 0.48 1.19 $2.7 $5.9
Structure age 1-2 2,739 0.31 0.76 $1.7 $3.8
Structure age 2-3 2,739 0.20 0.49 $1.1 $2.4
Structure age 3-4 2,739 0.13 0.32 $0.7 $1.6
Structure age 4-5 2,739 0.09 0.21 $0.5 $1.1
Structure age 5-6 2,739 0.06 0.15 $0.4 $0.7
Structure age 6-7 2,739 0.04 0.10 $0.3 $0.5
Structure age 7-8 2,739 0.03 0.08 $0.2 $0.4
Structure age 8-9 2,739 0.03 0.06 $0.2 $0.3
Structure age 9-10 2,739 0.02 0.05 $0.1 $0.3
Structure age 10-11 2,739 0.02 0.04 $0.1 $0.2
0-1 years post-ren. 6,903 0.30 0.72 $4.5 $10.2
1-2 years post-ren. 6,903 0.19 0.46 $2.9 $6.6
2-3 years post-ren. 6,903 0.13 0.30 $1.9 $4.3
3-4 years post-ren. 6,903 0.08 0.20 $1.3 $2.9
4-5 years post-ren. 6,903 0.06 0.14 $0.9 $2.0
5-6 years post-ren. 6,903 0.04 0.10 $0.6 $1.4
6-7 years post-ren. 6,903 0.03 0.07 $0.5 $1.0
7-8 years post-ren. 6,903 0.03 0.05 $0.4 $0.8
8-9 years post-ren. 6,903 0.02 0.04 $0.3 $0.7
9-10 years post-ren. 6,903 0.02 0.04 $0.3 $0.6
10-11 years post-ren. 6,903 0.02 0.03 $0.3 $0.5

Total 106,057 0.10 0.23 $22.0 $48.0

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4668

4669

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

May 1, 2013 3-75 

### Table 3-27: Cancer Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Option SN, 3% discount rate

Composite Wood Source and Age Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0-1 2,739 0.49 1.23 $2.8 $6.1 Structure age 1-2 2,739 0.32 0.78 $1.8 $3.9 Structure age 2-3 2,739 0.20 0.51 $1.2 $2.5 Structure age 3-4 2,739 0.13 0.33 $0.8 $1.6 Structure age 4-5 2,739 0.09 0.22 $0.5 $1.1 Structure age 5-6 2,739 0.06 0.15 $0.4 $0.8 Structure age 6-7 2,739 0.05 0.11 $0.3 $0.5 Structure age 7-8 2,739 0.03 0.08 $0.2 $0.4 Structure age 8-9 2,739 0.03 0.06 $0.2 $0.3 Structure age 9-10 2,739 0.02 0.05 $0.1 $0.3 Structure age 10-11 2,739 0.02 0.04 $0.1 $0.2 0-1 years post-ren. 6,903 0.31 0.76 $4.7 $10.8 1-2 years post-ren. 6,903 0.20 0.49 $3.1 $6.9 2-3 years post-ren. 6,903 0.13 0.32 $2.0 $4.5 3-4 years post-ren. 6,903 0.09 0.21 $1.4 $3.0 4-5 years post-ren. 6,903 0.06 0.14 $0.9 $2.0 5-6 years post-ren. 6,903 0.04 0.10 $0.7 $1.4 6-7 years post-ren. 6,903 0.03 0.07 $0.5 $1.1 7-8 years post-ren. 6,903 0.03 0.06 $0.4 $0.8 8-9 years post-ren. 6,903 0.02 0.05 $0.3 $0.7 9-10 years post-ren. 6,903 0.02 0.04 $0.3 $0.6 10-11 years post-ren. 6,903 0.02 0.04 $0.3 $0.5 Total 106,057 0.10 0.24 $22.9 $50.1

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4670

4671

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

May 1, 2013 3-76 

### Table 3-28: Cancer Benefits for Statutory Opti ons by Structure Type, Annual Benefits for Typical Year, 3% discount rate

Structure Type Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion O p tions SE , SEUR, and SFCC New Apt 4,756 0.17 0.38 $1.7 $3.3
New Man 1,406 0.14 0.35 $0.4 $0.9

New RV 52 0.26 0.73 $0.0 $0.1
New SF Att 2,236 0.11 0.26 $0.5 $1.1
New SF Det 21,679 0.10 0.26 $4.7 $10.2 Ren Apt 14,786 0.11 0.26 $3.6 $7.4
Ren Man 2,954 0.11 0.27 $0.7 $1.6
Ren SF Att 4,045 0.07 0.17 $0.6 $1.4
Ren SF Det 54,145 0.06 0.14 $7.1 $16.0 Total 106,057 0.08 0.20 $19.4 $42.1
Options SI, SC , SCR and SC R SCUR (Proposed Option) New Apt 4,756 0.19 0.42 $1.9 $3.7

New Man 1,406 0.16 0.40 $0.5 $1.1

New RV 52 0.34 0.96 $0.0 $0.1

New SF Att 2,236 0.12 0.29 $0.6 $1.2

New SF Det 21,679 0.11 0.28 $5.1 $11.0
Ren Apt 14,786 0.13 0.30 $4.1 $8.5

Ren Man 2,954 0.13 0.34 $0.9 $2.0

Ren SF Att 4,045 0.08 0.19 $0.7 $1.6

Ren SF Det 54,145 0.07 0.16 $8.2 $18.7

Total 106,057 0.10 0.23 $22.0 $48.0
Option SN New Apt 4,756 0.20 0.44 $1.9 $3.8
New Man 1,406 0.17 0.42 $0.5 $1.1

New RV 52 0.37 1.04 $0.0 $0.1
New SF Att 2,236 0.12 0.29 $0.6 $1.2
New SF Det 21,679 0.12 0.29 $5.2 $11.3 Ren Apt 14,786 0.14 0.31 $4.3 $8.9
Ren Man 2,954 0.14 0.36 $0.9 $2.2
Ren SF Att 4,045 0.09 0.20 $0.8 $1.7
Ren SF Det 54,145 0.07 0.17 $8.6 $19.6 Total 106,057 0.10 0.24 $22.9 $50.1

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4672

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

May 1, 2013 3-77 

### Table 3-29: Cancer Benefits for Statutory O ptions by Climate Zone, Annual Benefits for Typical Year, 3% discount rate

Climate Zone Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion O p tions SE , SEUR, and SFCC Zone 1 13,177 0.07 0.17 $2.1 $4.5
Zone 2 23,907 0.07 0.18 $3.9 $8.4
Zone 3 20,637 0.08 0.18 $3.4 $7.4
Zone 4 21,214 0.09 0.21 $4.0 $8.6
Zone 5 27,122 0.10 0.25 $6.0 $13.1 Total 106,057 0.08 0.20 $19.4 $42.1
Options SI, SC , SCR and SC R SCUR (Proposed Option)

Zone 1 13,177 0. 1 08 0. 2 19 $2.3 $5.1

Zone 2 23,907 0.08 0.20 $4.4 $9.6

Zone 3 20,637 0.09 0.20 $3.9 $8.5

Zone 4 21,214 0.10 0.24 $4.5 $9.8

Zone 5 27,122 0.12 0.29 $6.8 $15.0

Total 106,057 0.10 0.23 $22.0 $48.0
Option SN Zone 1 13,177 0.08 0.20 $2.4 $5.3
Zone 2 23,907 0.09 0.21 $4.6 $10.0
Zone 3 20,637 0.09 0.21 $4.0 $8.8
Zone 4 21,214 0.10 0.25 $4.7 $10.2
Zone 5 27,122 0.12 0.30 $7.1 $15.6
Total 106,057 0.10 0.24 $22.9 $50.1

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4673

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

May 1, 2013 3-78 

### Table 3-30: Cancer Benefits for Statutory Options by Age/Employment Status, Annual Benefits for Typical Year, 3% discount rate

Age/Employment

Status Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion O p tions SE , SEUR, and SFCC Infants 0-1 3,309 0.12 1.27 $0.4 $4.4
Children 2-15 21,312 0.11 0.34 $3.1 $9.6 Not CWP Industry 55,524 0.08 0.12 $12.0 $18.2

Fabricator 238 0.32 0.48 $0.2 $0.3 Retired/Unemployed 19,508 0.05 0.13 $2.6 $7.8
Part Time 6,166 0.08 0.12 $1.1 $1.7 Total 106,057 0.08 0.20 $19.4 $42.1
Options SI, SC , SCR and SC R SCUR (Proposed Option)

Infants 0-1 3,309 0.14 1.45 $0.5 $5.1

Children 2-15 21,312 0.12 0.38 $3.5 $10.8
Not CWP Industry 55,524 0.09 0.13 $13.5 $20.5

Fabricator 238 0.33 0.50 $0.2 $0.3
Retired/Unemployed 19,508 0.06 0.15 $3.1 $9.2

Part Time 6,166 0.09 0.13 $1.3 $2.0

Total 106,057 0.10 0.23 $22.0 $48.0

O p tion SN Infants 0-1 3,309 0.14 1.51 $0.5 $5.3
Children 2-15 21,312 0.13 0.40 $3.6 $11.3 Not CWP Industry 55,524 0.10 0.14 $14.0 $21.3

Fabricator 238 0.34 0.50 $0.2 $0.3 Retired/Unemployed 19,508 0.07 0.16 $3.2 $9.7
Part Time 6,166 0.10 0.14 $1.3 $2.1 Total 106,057 0.10 0.24 $22.9 $50.1

See Table 3-22 for a description of options and Table 3- 23 for a description of the exposure group abbreviations.


### 4674

4675 Table 3-31: Cancer Benefits for All Options, Present Discounted Value of 40- Y ear Stream of Benefits and Annualized Benefits (millions 2010$, 3% discount rate)

Analytical Option Annual Benefits in Typical Year PDV of 40-Year Stream

of Benefits Annualized Benefits

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Option Options SE /SEUR/SFCC $19 $42 $356 $776 $17 $38 Option SI/SC/SCR /SCUR (Proposed) $22 $48 $405 $887 $20 $43 Option SN $23 $50 $422 $926 $20 $45 Option CE $15 $32 $272 $592 $13 $29 Option CI $17 $37 $311 $680 $15 $33 Option NE $84 $182 $1,545 $3,359 $75 $163 Option NI $88 $190 $1,618 $3,523 $79 $171 See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4676

4677
3.7.2 Total Benefits Attributable to No n-cancer Health Effect Risk Reductions 4678

4679 The benefits of reducing risk for non-cancer health effects are estimated using the methods 4680 described in section 3.5. The presented results generally include the number of individuals experiencing 4681 exposure reductions annually as a result of the analytical option (see section 3.6) and the average 4682 Formatted Table

Formatted Table

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

May 1, 2013 3-79 

### individual’s micro risk reduction for the non-cancer h ealth effect. A micro risk reduction represents a 4683 1/1,000,000 reduction in risk. As described in section 3.5, the benefits benefit under a 3 percent discount 4684 rate from avoiding a case of eye irritation , asthma, and reduced fertility were is $26 , $ 35

, 443

- $66,064

, 4685 and $1,969

- $5,336 (depending on age), respectively.

. Thus these values this value multiplied by 4686 1/1,000,000 correspond corresponds to the values value for a single micro risk reduction. 4687

4688 3.7.2.1 Eye Irritation 

### 4689

4690 Table 3-32 through Table 3-37 present the annual benefits using a 3 percent discount rate 4691 associated with reduced eye irritation risk for a typical year under the analytical options with the statutory 4692 emissions standards (see Table 3-22 for a description of the analytical options and Table 3-23 for a 4693 description of the exposure groups). Because the exposure model assumes that the benefits of reduced 4694 emissions from newly installed composite wood products are accrued over 11 years and the numbers of 4695 individuals in different exposure groups are assumed to be the same in each year, the annual benefits are 4696 the same starting in the eleventh year. Thus, the eleventh and subsequent years are defined as typical 4697 years for the purpose of this analysis. Table 3-38 presents the typical annual benefits, the present 4698 discounted value of the 40-year stream of benefits, and the annualized benefits associated with reduced 4699 eye irritation risk for all analytical options. 4700

4701 The results in Table 3-32 through Table 3-37 indica te that the eye irritation-related benefits are 4702 generally higher for composite wood products that have been more recently installed, new housing 4703 compared to renovated housing, warmer and more humi d climate zones, and individuals who work in the 4704 composite wood products industry. 4705

4706 The results in Table 3-38 indicate that the most protective option with emissions standards that 4707 are consistent with the TSCA Title VI statute (Optio n SN, which would require la minated products to be 4708 made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood 4709 plywood) has eye irritation-related be nefits that are about 9 to 17 percent larger than the benefits of the 4710 least protective option options with emissions standards that are consistent with the TSCA Title VI statute 4711 ( Option Options SE, SEUR, and SFCC, which exempts exempt all laminated products from the definition 4712 of hardwood plywood). The eye irritation-related benefits under options SI, SC, SCR, and the proposed 4713 option (Option SC R , which SCUR) are only slightly less than those under Option SN, the difference being 4714 less than 4 percent. Options SC, SCR, and the proposed option (Option SCUR) would require laminated 4715 products to be made with NAF resins in order to be exempted from the defini tion of hardwood plywood ) 4716 are only slightly less than those under Option SN, the difference being less than 4 percent. , while Option 4717 SI includes laminated products in th e definition of hardwood plywood. Analytical options that would 4718 require NAF resin technologies for all composite wood products (Options NE and NI) would result in 4719 benefits that are about three times larger than under the proposed analytical option with emissions 4720

standards consistent with the TSCA Title VI statut e, and analytical options that would require less 4721 stringent emissions standards than the statute (Options CE and CI) would result in benefits about 20 to 25 4722 percent lower. 4723

4724

4725

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

May 1, 2013 3-80 

### Table 3-32 : : Eye Irritation Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Option Options SE , SEUR, and SFCC (3% discount rate)

Composite Wood Source and Age Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0-1 2,739 5,739.76 17,934.82 $0.409 $1.277 Structure age 1-2 2,739 203.22 7,230.14 $0.014 $0.515 Structure age 2-3 2,739 60.81 3,136.33 $0.004 $0.223 Structure age 3-4 2,739 49.65 1,491.51 $0.004 $0.106 Structure age 4-5 2,739 43.18 787.82 $0.003 $0.056 Structure age 5-6 2,739 39.33 464.81 $0.003 $0.033 Structure age 6-7 2,739 37.00 305.69 $0.003 $0.022 Structure age 7-8 2,739 35.56 222.10 $0.003 $0.016 Structure age 8-9 2,739 34.67 175.79 $0.002 $0.013 Structure age 9-10 2,739 34.11 149.07 $0.002 $0.011 Structure age 10-11 2,739 33.77 133.20 $0.002 $0.009 0-1 years post-ren. 6,903 112.26 5,728.63 $0.020 $1.028 1-2 years post-ren. 6,903 86.43 2,596.25 $0.016 $0.466 2-3 years post-ren. 6,903 71.76 1,297.15 $0.013 $0.233 3-4 years post-ren. 6,903 63.15 720.53 $0.011 $0.129 4-5 years post-ren. 6,903 57.98 445.52 $0.010 $0.080 5-6 years post-ren. 6,903 54.82 305.07 $0.010 $0.055 6-7 years post-ren. 6,903 52.86 228.99 $0.009 $0.041 7-8 years post-ren. 6,903 51.65 185.82 $0.009 $0.033 8-9 years post-ren. 6,903 50.89 160.47 $0.009 $0.029 9-10 years post-ren. 6,903 50.41 145.21 $0.009 $0.026 10-11 years post-ren. 6,903 50.11 135.89 $0.009 $0.024 Total 106,057 208.69 1,604.93 $0.575 $4.426

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4726

4727

4728

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

May 1, 2013 3-81 

### Table 3-33 : : Eye Irritation Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Options SI, SC, SCR, and SCR SCUR (Proposed Option, 3% discount rate)

Composite Wood Source and Age Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0-1 2,739 6,217.72 19,737.86 $0.443 $1.406
Structure age 1-2 2,739 210.18 7,944.66 $0.015 $0.566
Structure age 2-3 2,739 62.95 3,437.11 $0.004 $0.245
Structure age 3-4 2,739 50.90 1,627.35 $0.004 $0.116
Structure age 4-5 2,739 43.93 853.79 $0.003 $0.061
Structure age 5-6 2,739 39.79 499.08 $0.003 $0.036
Structure age 6-7 2,739 37.28 324.51 $0.003 $0.023
Structure age 7-8 2,739 35.74 232.90 $0.003 $0.017
Structure age 8-9 2,739 34.78 182.18 $0.002 $0.013
Structure age 9-10 2,739 34.18 152.94 $0.002 $0.011
Structure age 10-11 2,739 33.81 135.57 $0.002 $0.010
0-1 years post-ren. 6,903 122.41 6,705.17 $0.022 $1.203
1-2 years post-ren. 6,903 92.35 3,032.09 $0.017 $0.544
2-3 years post-ren. 6,903 75.31 1,506.47 $0.014 $0.270
3-4 years post-ren. 6,903 65.32 828.24 $0.012 $0.149
4-5 years post-ren. 6,903 59.31 504.27 $0.011 $0.091
5-6 years post-ren. 6,903 55.65 338.60 $0.010 $0.061
6-7 years post-ren. 6,903 53.38 248.76 $0.010 $0.045
7-8 years post-ren. 6,903 51.97 197.75 $0.009 $0.035
8-9 years post-ren. 6,903 51.09 167.78 $0.009 $0.030
9-10 years post-ren. 6,903 50.54 149.74 $0.009 $0.027
10-11 years post-ren. 6,903 50.19 138.71 $0.009 $0.025

Total 106,057 222.99 1,806.48 $0.615 $4.981

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4729

4730

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

May 1, 2013 3-82 

### Table 3-34 : : Eye Irritation Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Option SN, 3% discount rate

Composite Wood Source and Age Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0-1 2,739 6,376.53 20,360.47 $0.454 $1.450 Structure age 1-2 2,739 211.50 8,191.74 $0.015 $0.583 Structure age 2-3 2,739 63.70 3,541.31 $0.005 $0.252 Structure age 3-4 2,739 51.33 1,674.50 $0.004 $0.119 Structure age 4-5 2,739 44.20 876.73 $0.003 $0.062 Structure age 5-6 2,739 39.95 511.01 $0.003 $0.036 Structure age 6-7 2,739 37.38 331.08 $0.003 $0.024 Structure age 7-8 2,739 35.80 236.67 $0.003 $0.017 Structure age 8-9 2,739 34.82 184.41 $0.002 $0.013 Structure age 9-10 2,739 34.21 154.29 $0.002 $0.011 Structure age 10-11 2,739 33.83 136.40 $0.002 $0.010 0-1 years post-ren. 6,903 125.94 7,039.10 $0.023 $1.263 1-2 years post-ren. 6,903 94.42 3,181.77 $0.017 $0.571 2-3 years post-ren. 6,903 76.55 1,578.67 $0.014 $0.283 3-4 years post-ren. 6,903 66.07 865.53 $0.012 $0.155 4-5 years post-ren. 6,903 59.78 524.67 $0.011 $0.094 5-6 years post-ren. 6,903 55.94 350.27 $0.010 $0.063 6-7 years post-ren. 6,903 53.56 255.66 $0.010 $0.046 7-8 years post-ren. 6,903 52.09 201.92 $0.009 $0.036 8-9 years post-ren. 6,903 51.16 170.33 $0.009 $0.031 9-10 years post-ren. 6,903 50.59 151.32 $0.009 $0.027 10-11 years post-ren. 6,903 50.22 139.69 $0.009 $0.025 Total 106,057 227.75 1,875.87 $0.628 $5.173

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4731

4732

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

May 1, 2013 3-83 

### Table 3-35 : : Eye Irritation Benefits for Statutory Options by Structure Type, Annual Benefits for Typical Year, 3% discount rate

Structure Type Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion O p tions SE , SEUR, and SFCC New Apt 4,756 2,051.74 5,159.38 $0.254 $0.638
New Man 1,406 1,014.86 4,151.36 $0.037 $0.152
New RV 52 11,928.14 17,386.79 $0.016 $0.024
New SF Att 2,236 254.44 2,622.20 $0.015 $0.152
New SF Det 21,679 226.55 2,333.65 $0.128 $1.315 Ren Apt 14,786 57.48 2,164.15 $0.022 $0.832
Ren Man 2,954 140.99 1,937.64 $0.011 $0.149
Ren SF Att 4,045 43.27 1,054.63 $0.005 $0.111
Ren SF Det 54,145 62.91 747.91 $0.089 $1.053 Total 106,057 208.69 1,604.93 $0.575 $4.426
Options SI, SC, SCR, and SCR SCUR (Proposed Option) New Apt 4,756 2,199.43 5,731.54 $0.272 $0.709

New Man 1,406 1,130.49 4,790.85 $0.041 $0.175

New RV 52 14,647.20 22,139.03 $0.020 $0.030

New SF Att 2,236 269.06 2,856.59 $0.016 $0.166

New SF Det 21,679 240.54 2,522.31 $0.136 $1.422
Ren Apt 14,786 59.90 2,466.91 $0.023 $0.948

Ren Man 2,954 151.22 2,386.52 $0.012 $0.183

Ren SF Att 4,045 44.62 1,203.59 $0.005 $0.127

Ren SF Det 54,145 64.81 867.77 $0.091 $1.222

Total 106,057 222.99 1,806.48 $0.615 $4.981
Option SN New Apt 4,756 2,250.38 5,929.20 $0.278 $0.733
New Man 1,406 1,166.51 5,010.67 $0.043 $0.183
New RV 52 15,302.17 23,687.63 $0.021 $0.032
New SF Att 2,236 274.12 2,937.91 $0.016 $0.171
New SF Det 21,679 245.40 2,587.86 $0.138 $1.459 Ren Apt 14,786 60.75 2,571.04 $0.023 $0.988
Ren Man 2,954 154.76 2,537.77 $0.012 $0.195
Ren SF Att 4,045 45.09 1,254.96 $0.005 $0.132
Ren SF Det 54,145 65.47 909.00 $0.092 $1.280 Total 106,057 227.75 1,875.87 $0.628 $5.173

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4733

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

May 1, 2013 3-84 

### Table 3-36 : : Eye Irritation Benefits for Statutory Opti ons by Climate Zone, Annual Benefits for Typical Year, 3% discount rate

Climate Zone Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion O p tions SE , SEUR, and SFCC Zone 1 13,177 93.78 1,169.86 $0.032 $0.401
Zone 2 23,907 90.38 1,226.80 $0.056 $0.763
Zone 3 20,637 99.30 1,281.44 $0.053 $0.688
Zone 4 21,214 175.84 1,658.12 $0.097 $0.915
Zone 5 27,122 477.73 2,354.12 $0.337 $1.660 Total 106,057 208.69 1,604.93 $0.575 $4.426
Options SI, SC, SCR, and SCR SCUR (Proposed Option)

Zone 1 13,177 98.5 1,316.1 $0.034 $0.451

Zone 2 23,907 94.93 1,382.86 $0.059 $0.860

Zone 3 20,637 104.54 1,445.01 $0.056 $0.775

Zone 4 21,214 186.56 1,862.55 $0.103 $1.027

Zone 5 27,122 514.96 2,649.27 $0.363 $1.868

Total 106,057 222.99 1,806.48 $0.615 $4.981
Option SN Zone 1 13,177 100.16 1,366.58 $0.034 $0.468
Zone 2 23,907 96.50 1,436.66 $0.060 $0.893
Zone 3 20,637 106.34 1,501.38 $0.057 $0.806
Zone 4 21,214 190.00 1,932.95 $0.105 $1.066
Zone 5 27,122 527.32 2,750.74 $0.372 $1.940
Total 106,057 227.75 1,875.87 $0.628 $5.173

See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4734

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

May 1, 2013 3-85 

### Table 3-37 : : Eye Irritation Benefits for Statutory Options by Age/Employment Status, Annual Benefits for Typical Year, 3% discount rate

Age/Employment

Status Individuals

Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion O p tions SE , SEUR, and SFCC Infants 0-1 3,309 403.55 2,185.76 $0.035 $0.188
Children 2-15 21,312 88.42 1,532.89 $0.049 $0.849 Not CWP Industry 55,524 46.85 1,287.54 $0.068 $1.859
Fabricator 238 26,845.10 26,845.10 $0.166 $0.166 Retired/Unemployed 19,508 453.31 2,177.11 $0.230 $1.104
Part Time 6,166 172.96 1,613.61 $0.028 $0.259 Total 106,057 208.69 1,604.93 $0.575 $4.426
Options SI, SC, SCR, and SCR SCUR (Proposed Option)

Infants 0-1 3,309 429.17 2,456.66 $0.037 $0.211

Children 2-15 21,312 95.31 1,714.52 $0.053 $0.950
Not CWP Industry 55,524 47.49 1,444.11 $0.069 $2.085

Fabricator 238 27,758.76 27,758.76 $0.172 $0.172
Retired/Unemployed 19,508 501.70 2,501.58 $0.254 $1.269

Part Time 6,166 187.18 1,835.40 $0.030 $0.294

Total 106,057 222.99 1,806.48 $0.615 $4.981

O p tion SN Infants 0-1 3,309 437.92 2,549.98 $0.038 $0.219
Children 2-15 21,312 97.65 1,777.13 $0.054 $0.985 Not CWP Industry 55,524 47.55 1,498.10 $0.069 $2.163
Fabricator 238 28,077.14 28,077.14 $0.174 $0.174 Retired/Unemployed 19,508 517.93 2,612.92 $0.263 $1.325
Part Time 6,166 191.93 1,911.72 $0.031 $0.306 Total 106,057 227.75 1,875.87 $0.628 $5.173

See Table 3-22 for a description of options and Table 3- 23 for a description of the exposure group abbreviations.


### 4735

4736

Table 3-38 : : Eye Irritation Benefits for All Options, Present Discounted Value of 40- Y ear Stream of Benefits and Annualized Benefits (millions 2010$, 3% discount rate)

Analytical Option Annual Benefits in Typical Year PDV of 40-Year Stream

of Benefits Annualized Benefits

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Option SE /SEUR/SFCC $0.6 $4.4 $10.9 $83.9 $0.5 $4.1
Option SI/SC/SCR /SCUR (Proposed) $0.6 $5.0 $11.7 $94.5 $0.6 $4.6
Option SN $0.6 $5.2 $11.9 $98.1 $0.6 $4.8
Option CE $0.5 $3.4 $8.9 $64.3 $0.4 $3.1
Option CI $0.5 $3.9 $9.7 $73.1 $0.5 $3.5
Option NE $1.5 $16.3 $27.9 $307.3 $1.4 $14.9
Option NI $1.5 $16.8 $27.9 $316.6 $1.4 $15.4
See Table 3-22 for a description of options and Table 3-23 for a description of the exposure group abbreviations.


### 4737 3.7.2.2 Female Fertility 

### 4738

4739 Formaldehyde’s potential mode of action for reproductive outcome is uncertain. EPA reviewed 4740 epidemiologic studies that evaluated formaldehyde exposure in relation to fecundability (the per-cycle 4741 probability of conception). Please see EPA’s Draft Toxicological Review of Formaldehyde – Inhalation 4742 Assessment through the Integrated Risk Info rmation System (IRIS) Program (U.S. EPA 2010c ) and the 4743 Formatted Table

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

May 1, 2013 3-86 

### Review of the Environmental Protection Agency's Dr aft IRIS Assessment of Formaldehyde (NRC 2011) 4744 for broader treatment of reproductive and developmenta l toxicity effects of formaldehyde. At this time, 4745

EPA does not feel that it has suffic ient information on the relationshi p between formaldehye exposure and 4746 reduced fertility to include a valuation estimate in the overall benefits analysis. 4747

4748 Due to the uncertainties in both the concentration-response function and the economic valuation, 4749 EPA does not feel that it has sufficient information on the relationship between formaldehye exposure and 4750 reduced fertility to include a valuation estimate in the overall benefits analysis at this time. EPA does feel 4751 that this effect is an important non-monetized impact which should be recognized as a contribution to the 4752

overall benefits of this rule. 4753

4754

4755

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

May 1, 2013 3-87 

### 3.7.3 Summary of Benefits Assessment Results 4756

4757

Table 3-39 4758

3.7.2.2 Asthma 

### 4759

4760 through present the annual benefits using a 3 percent discoun t rate associated with reduced 4761 asthma risk for a typical year under the analytical options with the statutory emissions standards (see for 4762 a description of the analytical options and for a description of the exposure groups). Because the 4763 exposure model assumes that the benefits of reduced emissions from newly installed composite wood 4764 products are accrued over 11 years and the numbers of individuals in different exposure groups are 4765 assumed to be the same in each year, the annual benefits are the same star ting in the eleventh year. Thus, 4766 the eleventh and subsequent years are defined as typical years for the purpose of this analysis. presents 4767 the typical annual benefits, the present discounted value of the 40

- year stream of benefits, and the 4768

annualized ben efits associated with reduced asthma risk for all analytical options. 4769

4770 The results in through indicate that the asthma

- related benefits are generally higher for 4771 composite wood products that have been more recently installed, new housing compared to reno vated 4772 housing, warmer and more humid climate zones, and individuals who work in the composite wood 4773 products industry. 4774

4775 The results in indicate that the most protective option with emissions standards that are 4776 consistent with the TSCA Title VI statute (Op tion SN, which would require laminated products to be 4777 made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood 4778 plywood) has asthma

- related benefits that are less than 20 percent larger than the benefits of the lea st 4779 protective option with emissions standards that are cons istent with the TSCA Title VI statute (Option SE, 4780 which exempts all laminated products from the definition of hardwood plywood). The asthma

- related 4781 benefits under the proposed option (Option SC R

, which would require laminated products to be made 4782 with NAF resins in order to be exempted from the definition of hardwood plywood) are only slightly less 4783 than those under Option SN, the difference being abou t 4 percent. Analytical options that would requir e 4784 NAF resin technologies for all composite wood products (Options NE and NI) would result in benefits 4785 that are nearly four times larger than under the proposed analytical option with emissions standards 4786 consistent with the TSCA Title VI statute, and analyt ical options that would require less stringent 4787 emissions standards than the statute (Options CE and CI) would result in benefits about 25 percent lower. 4788

4789

4790 presents the average annual number of cases avoided by health outcome and option from an annual 4791 formaldehyde exposure reduction under the rule. 4792

4793

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

May 1, 2013 3-88 

### Table 3-39 : Asthma Benefits : Average Annual Number of Cases Avoided by Composite Wood

Source Health Outcome and Age, Annual Benefits for Typical Year, Option SE (3 % discount rate)

Composite Wood Source and Age Analytical Option Individuals Affected (thousands) Cancer Average Micro Risk

Reduction Per

Individual Eye

Irritation Annual Benefit (millions, 2010$)

lower Estimate high

er Estimat

e lower

Estimate h

i

g h

e

r E

s
t

i

m

a
t

e Lower

Estimate H

i

g h

e

r E

s
t

i

m

a
t

e Structure age 0

- 1 Option

SE/SEUR/SFCC

4

9

2

9 7

1

8 658.1

1 6

5

4

. 5

2 $ 21 .0 $31.1 22
,133 170,214

Structure age 1

- 2 Option SI/SC/SCR/SCUR (Proposed Option)

492 10 718 2

4 429.13 2
3,650 4

2

7

. 0

0

1

9

1

, 5

9

0 $13.7 $

2

0

. 3

Structure age 2

- 3 Option SN

492 11 718 2

5 281.08 2
4,154 2

7

9

. 9

4

1

9

8

, 9

5

0 $9.0 $

1

3

. 3 Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Inserted Cells

Formatted Table

Deleted Cells

Deleted Cells

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

May 1, 2013 3-89 Structu

re age 3

- 4 492 718 186.28 185.77 $5.9 $8.8

Structu

re age 4

- 5 492 718 125.93 125.84 $4.0 $6.0

Structu

re age 5

- 6 492 718 87.67 87.84 $2.8 $4.2

Option CE



### Structure age 6

- 7 7 492 1

6 718 18,0

15 63.46 130,7

20 63.80 $

2

. 0 $3.0

Option CI



### Structure age 7

- 8 8 492 1

9 718 19,5

63 48.17 148,3

89 48.62 $

1

. 5 $2.3

S

t

r

u

c

t

u

r

e

a

g

e

8

- 9

O

p

t
i

o

n

N

E 492 71

8 38.53

39 .04 $1.2 9

2 $1.9 58,

492 626,726

Structu

re age 9

- 10 4 92 718 32.44 33.00 $1.0 $1.6

Structu

re age 10

- 11 492 718 28.61 29.19 $0.9 $1.4

0

- 1

years post

ren. 1,12

6 1,48

8 423.28 426.95 $30.9 $42.0

1

- 2

years post

ren. 1,12

6 1,48

8 277.27 279.86 $20.2 $27.5

2

- 3 years post

- ren. Option NI
1,126 40 1

, 4 1

8

3 185. 58

, 494 $13.4 645,678 $18.2 Inserted Cells Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Inserted Cells

Formatted Table

Deleted Cells

Deleted Cells

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

May 1, 2013 3-90 8

8

9

7 . 6

9

3

- 4

years post

ren. 1,12

6 1,48

8 124.10 125.53 $9.1 $12.3

4

- 5

years post

ren. 1,12

6 1,48

8 86.30 87.43 $6.3 $8.6

5

- 6

years post

ren. 1,12

6 1,48

8 62.38 63.33 $4.6 $6.2

6

- 7

years post

ren. 1,12

6 1,48

8 47.27 48.10 $3.4 $4.7

7

- 8

years post

ren. 1,12

6 1,48

8 37.74 38.50 $2.8 $3.8

8

- 9

years post

ren. 1,12

6 1,48

8 31.73 32.44 $2.3 $3.2

9

- 10

years post

ren. 1,12

6 1,48

8 27.94 28.62 $2.0 $2. 8

10

- 11

years post

ren. 1,12

6 1,48

8 25.55 26.21 $1.9 $2.6

Total 17,8

02 24,2

70 138.69 139.52 $159.9 $225.7

See Table 3-22 for a description of options and for a description of the exposure group abbreviations.


### 4794

Table 3-40 and Table 3-41 4795 Formatted Table

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

May 1, 2013 3-91 

### Table 3

- 46 : Asthma Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Option s SI, SC , and SCR (Proposed Option, 3% discount rate)

Composite Wood Source and Age Individuals Affected (thousands) Average Micro Risk

Reduction Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Es timate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0

- 1 492 718 720.23 716.05 $23.0 $34.0
Structure age 1

- 2 492 718 469.70 467.17 $15.0 $22.2
Structure age 2

- 3 492 718 307.23 305.82 $9.8 $14.5
Structure age 3

- 4 492 718 202.99 202.31 $6 .5 $9.6
Structure age 4

- 5 492 718 136.55 136.35 $4.4 $6.5
Structure age 5

- 6 492 718 94.40 94.50 $3.0 $4.5
Structure age 6

- 7 492 718 67.72 68.01 $2.2 $3.2
Structure age 7

- 8 492 718 50.86 51.28 $1.6 $2.4
Structure age 8

- 9 492 718 40.22 40.72 $1.3 $1.9
Structure age 9

- 10 492 718 33.51 34.06 $1.1 $1.6
Structure age 10

- 11 492 718 29.28 29.86 $0.9 $1.4

0

- 1 years post

- ren. 1,126 1,488 502.45 506.15 $36.6 $49.8

1

- 2 years post

- ren. 1,126 1,488 328.30 330.92 $23.9 $32.5

2

- 3 years post

- ren. 1,126 1,488 216. 31 218.22 $15.8 $21.5

3

- 4 years post

- ren. 1,126 1,488 144.84 146.28 $10.6 $14.4

4

- 5 years post

- ren. 1,126 1,488 99.44 100.58 $7.3 $9.9

5

- 6 years post

- ren. 1,126 1,488 70.69 71.64 $5.2 $7.0

6

- 7 years post

- ren. 1,126 1,488 52.52 53.35 $3.8 $5.2

7

- 8 year s post

- ren. 1,126 1,488 41.05 41.81 $3.0 $4.1

8

- 9 years post

- ren. 1,126 1,488 33.81 34.53 $2.5 $3.4

9

- 10 years post

- ren. 1,126 1,488 29.25 29.93 $2.1 $2.9

10

- 11 years post

- ren. 1,126 1,488 26.38 27.04 $1.9 $2.7

Total 17,802 24,270 157.25 158.05 $181.3 $255.2

See Table 3

- 28 for a description of options and Table 3

- 29 for a description of the exposure group abbreviations.


### 4796

4797

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

May 1, 2013 3-92 

### Table 3

- 47 : Asthma Benefits by Composite Wood Source and Age, Annual Benefits for Typical Year, Option SN, 3% discount rate

Composite Wood Source and Age Individuals Affected (thousands) Average Micro Risk

Reduction Per Individual Annual Benefit (millions

, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Structure age 0

- 1 492 718 741.80 737.42 $23.6 $35.0
Structure age 1

- 2 492 718 483.82 481.15 $15.4 $22.8
Structure age 2

- 3 492 718 316. 35 314.84 $10.1 $14.9
Structure age 3

- 4 492 718 208.82 208.08 $6.7 $9.9
Structure age 4

- 5 492 718 140.27 140.02 $4.5 $6.6
Structure age 5

- 6 492 718 96.75 96.82 $3.1 $4.6
Structure age 6

- 7 492 718 69.20 69.48 $2.2 $3.3
Structure age 7

- 8 492 718 51.80 52.21 $1.7 $2.5
Structure age 8

- 9 492 718 40.81 41.30 $1.3 $2.0
Structure age 9

- 10 492 718 33.89 34.43 $1.1 $1.6
Structure age 10

- 11 492 718 29.52 30.09 $0.9 $1.4

0

- 1 years post

- ren. 1,126 1,488 529.92 533.63 $38.7 $52.5

1

- 2 years post

- ren. 1,126 1,488 346.07 348.70 $25.2 $34.3

2

- 3 years post

- ren. 1,126 1,488 227.69 229.60 $16.6 $22.6

3

- 4 years post

- ren. 1,126 1,488 152.08 153.52 $11.1 $15.1

4

- 5 ye ars post

- ren. 1,126 1,488 104.03 105.18 $7.6 $10.3

5

- 6 years post

- ren. 1,126 1,488 73.59 74.55 $5.4 $7.3

6

- 7 years post

- ren. 1,126 1,488 54.35 55.19 $4.0 $5.4

7

- 8 years post

- ren. 1,126 1,488 42.21 42.97 $3.1 $4.2

8

- 9 y ears post

- ren. 1,126 1,488 34.54 35.26 $2.5 $3.5

9

- 10 years post

- ren. 1,126 1,488 29.71 30.39 $2.2 $3.0

10

- 11 years post

- ren. 1,126 1,488 26.67 27.33 $1.9 $2.7

Total 17,802 24,270 163.72 164.50 $188.8 $265.5

See Table 3

- 28 for a description of options and Table 3

- 29 for a description of the exposure group abbreviations.


### 4798

4799

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

May 1, 2013 3-93 

### Table 3

- 48 : Asthma Benefits for Statutory Options by Structure Type, Annual Benefits for Typical Year, 3% discount rate

Structure Type Individuals Affected (thousands) Average Micro Risk

Reduction Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Esti mate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion SE New Apt 556 862 266.14 264.79 $9.6 $15.1

New Man 249 350 237.10 235.72 $3.8 $5.5

New RV 6 7 574.29 569.84 $0.2 $0.3

New SF Att 277 417 183.96 183.23 $3.3 $5.0

New SF Det 4 ,325 6,266 164.75 163.92 $46.1 $67.9
Ren Apt 1,867 2,765 188.57 188.12 $22.8 $34.4

Ren Man 473 646 192.74 192.42 $5.9 $8.2

Ren SF Att 627 861 122.55 122.06 $5.0 $6.9

Ren SF Det 9,422 12,096 103.46 103.19 $63.1 $82.5

Total 17,802 24,270 138.69 138.19 $159.9 $225.7
Option s SI , SC and SC R (Proposed Option) New Apt 556 862 295.59 294.01 $10.6 $16.7

New Man 249 350 273.92 272.21 $4.4 $6.3

New RV 6 7 738.78 733.05 $0.3 $0.4

New SF Att 277 417 199.77 198.84 $3.6 $5.5

New SF Det 4,325 6,266 177.31 176. 30 $49.7 $73.0
Ren Apt 1,867 2,765 215.51 214.88 $26.1 $39.2

Ren Man 473 646 241.27 240.68 $7.4 $10.3

Ren SF Att 627 861 139.77 139.05 $5.7 $7.9

Ren SF Det 9,422 12,096 120.57 120.09 $73.6 $96.0

Total 17,802 24,270 157.25 156.56 $181.3 $255.2
Option SN New Apt 556 862 305.83 304.17 $11.0 $17.3

New Man 249 350 286.70 284.88 $4.6 $6.6

New RV 6 7 794.08 787.93 $0.3 $0.4

New SF Att 277 417 205.28 204.28 $3.7 $5.6

New SF Det 4,325 6,266 181.70 180.62 $50.9 $74.8
Ren Apt 1,867 2,765 224.88 224.18 $ 27.2 $40.9

Ren Man 473 646 258.07 257.39 $7.9 $11.0

Ren SF Att 627 861 145.77 144.98 $5.9 $8.2

Ren SF Det 9,422 12,096 126.53 125.99 $77.2 $100.7

Total 17,802 24,270 163.72 162.95 $188.8 $265.5

See Table 3

- 28 for a description of options and Table 3

- 29 for a description of the exposure group abbreviations.


### 4800

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

May 1, 2013 3-94 

### Table 3

- 49 : Asthma Benefits for Statutory Options by Climate Zone, A nnual Benefits for Typical Year, 3% discount rate

Climate Zone Individuals Affected (thousands) Average Micro Risk

Reduction Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion SE

Zone 1 2,157 2,935 117.81 120.09 $16.5 $23.3

Zone 2 3,956 5,341 121.47 123.44 $31.1 $43.6

Zone 3 3,294 4,466 125.35 127.16 $26.7 $37.5

Zone 4 3,656 4,999 142.67 144.41 $33.8 $47.7

Zone 5 4,739 6, 528 168.76 170.72 $51.8 $73.6

Total 17,802 24,270 138.69 140.62 $159.9 $225.7
Option s SI , SC and SC R (Proposed Option)

Zone 1 2,157 2,935 133.7 135.84 $18.7 $26.3

Zone 2 3,956 5,341 138.07 139.91 $35.4 $49.4

Zone 3 3,294 4 ,466 142.44 144.12 $30.4 $42.5

Zone 4 3,656 4,999 161.55 163.14 $38.3 $53.9

Zone 5 4,739 6,528 190.97 192.76 $58.6 $83.1

Total 17,802 24,270 157.25 159.04 $181.3 $255.2
Option SN

Zone 1 2,157 2,935 139.22 141.33 $19 .4 $27.4

Zone 2 3,956 5,341 143.86 145.64 $36.9 $51.4

Zone 3 3,294 4,466 148.40 150.03 $31.7 $44.3

Zone 4 3,656 4,999 168.12 169.66 $39.8 $56.0

Zone 5 4,739 6,528 198.69 200.43 $61.0 $86.4

Total 17,802 24,270 163.72 1 65.45 $188.8 $265.5

See Table 3

- 28 for a description of options and Table 3

- 29 for a description of the exposure group abbreviations.


### 4801

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

May 1, 2013 3-95 

### Table 3

- 50 : Asthma Benefits for Statutory Options by Age/Employment Status, Annual Benefits for Typical Year, 3% discount rate

Age/Employment

Status Individuals Affected (thousands) Average Micro Risk Reduction

Per Individual Annual Benefit ( millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

O p tion SE

Infants 0

- 1

- - - - - - Children 2

- 15 14,844 21,312 137.84 140.45 $132.5 $197.8
Not CWP Industry 499 499 129.14 129 .14 $4.2 $4.3

Fabricator 1 1 519.55 519.55 $0.0 $0.0
Retired/Unemployed 1,712 1,712 154.12 154.12 $17.1 $17.4

Part Time 745 745 125.95 125.95 $6.1 $6.2

Total 17,802 24

, 270 138.69 140.87 $159.9 $225.7
Option s SI , SC and SC R (Proposed Option)

Infants 0

- 1

- - - - - - Children 2

- 15 14,844 21,312 155.56 158.28 $149.6 $222.9
Not CWP Industry 499 499 145.82 145.82 $4.7 $4.8

Fabricator 1 1 535.19 535.19 $0.0 $0.0
Retired/Unemployed 1,712 1,712 180.12 180.12 $20.0 $20.4

Part Time 745 745 145.63 145.63 $7.0 $7.2

Total 17,802 24

, 270 157.25 159.53 $181.3 $255.2

O p tion SN

Infants 0

- 1

- - - - - - Children 2

- 15 14,844 21,312 161.73 164.49 $155.5 $231.6
Not CWP Industry 499 499 1 51.64 151.64 $4.9 $5.0

Fabricator 1 1 540.63 540.63 $0.0 $0.0
Retired/Unemployed 1,712 1,712 189.16 189.16 $21.0 $21.4

Part Time 745 745 152.48 152.48 $7.4 $7.5

Total 17,802 24

, 270 163.72 166.02 $188.8 $265.5

See Table 3

- 28 for a description of options and Table 3

- 29 for a description of the exposure group abbreviations.


### 4802

4803

Table 3

- 51 : Ast hma Benefits for All Options, Present Discounted Value of 40

- Y ear Stream of

Benefits and Annualized Benefits (millions 2010$, 3% discount rate)

Analytical Option Annual Benefits in Typical

Year PDV of 40

- Year Stream of

Benefits Annualized Benefits

Low er Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Option SE $160 $226 $2,947 $4,158 $143 $202
Option SI/SC /SCR (Proposed) $181 $255 $3,347 $4,710 $162 $229
Option SN $189 $266 $3,486 $4,903 $169 $238
Option CE $123 $174 $2,263 $3,192 $110 $155
Option CI $140 $197 $2,586 $3,638 $126 $177
Option NE $619 $874 $11,455 $16,188 $556 $786
Option NI $646 $912 $11,955 $16,882 $580 $819

See Table 3

- 28 for a description of options and Table 3

- 29 for a description of the exposure group abbreviations.


### 4804

3.7.2.3 Infertility 

### 4805

4806 presents the annual benefits using a 3 perc ent discount rate associated with reduce d infertility 4807 risk for a typical year under the analytical options with the statutory emissions standards (see for a 4808 description of the analytical options and for a descri ption of the exposure groups). Because the exposure 4809

model assumes that the benefit s of reduced emissions from newly installed composite wood products are 4810

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

May 1, 2013 3-96 

### accrued over 11 years and the numbers of individuals in different exposure groups are assumed to be the 4811 same in each year, the annual benefits are the same starting in the eleventh yea r. Thus, the eleventh and 4812 subsequent years are defined as typical years for the purpose of this analysis. presents the typical annual 4813 benefits, the present discounted value of the 40

- year stream of benefits, and the annualized benefits 4814

associated with re duced infertility risk for all analytical options. 4815

4816 The results in indicate that the infertility

- related benefits are genera lly higher for composite 4817 wood products that have been more recently inst alled, new housing compared to renovated housing, 4818

warmer an d more humid climate zones, and individuals who work in the composite wood products 4819 industry. 4820

4821

The results in present the total benefits by health eff ect and analytical option for 3 and 7 percent 4822 discount rates, respectively. The results indicate that the most protective option with emissions standards 4823

that are consistent with the TSCA Title VI statute (Option SN, which would require laminated products to 4824 be made with both NAF resins and NAF platforms in order to be exempted from the definition of 4825 hardwood plywood) has infertility

- related quantified benefits that are less than 20 percent larger than the 4826 quantified benefits of the least protective option with emissions standards that are consistent with the 4827 TSCA Title VI statute (Option SE, which exempts all laminated products from the definition of hardwood 4828 plywood). The infertility

- related quantified benefits under the proposed option (Option SC R , which 4829 would require laminated products to be made with NAF resins in order to be exempted from the definition 4830

o f hardwood plywood) are only slightly less than th ose under Option SN, the difference being less than 4 4831 percent. Analytical options that would require NA F resin technologies for all composite wood products 4832 (Options NE and NI) would result in benefits that are about four times larger than under the proposed 4833 analytical option with emissions standards consistent with the TSCA Title VI statute, and analytical 4834 options that would require less stringent emissions standards than the statute (Options CE and CI) woul d 4835 result in benefits about 25 percent lower. 4836

4837

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

May 1, 2013 3-97 

### Table 3

- 52 : Infertility Benefits for Statutory Option s by Exposure Group, Annual Benefits for Typical Year, 3% discount rate

Exposure Group Individuals

Affected ( thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Option

SE Options

SI/ SC /SCR Option

SN Option

SE Options

SI/ SC /SCR Option

SN

Com p osite Wood Product Source and A g e Structure age 0

- 1 44 4,970 5,500 5,685 $0.24 $0.2 7 $0.27
Structure age 1

- 2 44 3,203 3,537 3,653 $0.15 $0.17 $0.18
Structure age 2

- 3 44 2,089 2,300 2,373 $0.10 $0.11 $0.11
Structure age 3

- 4 44 1,388 1,521 1,567 $0.07 $0.07 $0.08
Structure age 4

- 5 44 946 1,030 1,059 $0.05 $0.05 $0.05
Structure age 5

- 6 44 668 721 739 $0.03 $0.03 $0.04
Structure age 6

- 7 44 493 526 537 $0.02 $0.03 $0.03
Structure age 7

- 8 44 382 403 410 $0.02 $0.02 $0.02
Structure age 8

- 9 44 313 326 330 $0.02 $0.02 $0.02
Structure age 9

- 10 44 269 277 280 $0.01 $0.01 $0.01
Structure ag e 10

- 11 44 241 246 248 $0.01 $0.01 $0.01

0

- 1 years post

- ren. 79 3,387 4,016 4,236 $0.28 $0.34 $0.35

1

- 2 years post

- ren. 79 2,205 2,601 2,739 $0.18 $0.22 $0.23

2

- 3 years post

- ren. 79 1,460 1,709 1,796 $0.12 $0.14 $0.15

3

- 4 years post

- ren. 79 990 1,147 1,202 $0.08 $0.10 $0.10

4

- 5 years post

- ren. 79 695 793 828 $0.06 $0.07 $0.07

5

- 6 years post

- ren. 79 508 571 592 $0.04 $0.05 $0.05

6

- 7 years post

- ren. 79 391 430 444 $0.03 $0.04 $0.04

7

- 8 years post

- ren. 79 317 342 350 $0.03 $0.03 $0.03

8

- 9 years post

- ren. 79 270 286 291 $0.02 $0.02 $0.02

9

- 10 years post

- ren. 79 241 251 254 $0.02 $0.02 $0.02

10

- 11 years post

- ren. 79 223 229 231 $0.02 $0.02 $0.02
Structure Type New Apt 110 1,838 2,046 2,118 $0.18 $0.20 $0.21

New Man 19 1,664 1,923 2,014 $0.03 $0.04 $0.04

New RV 0 4,401 5,827 6,326 $0.00 $0.00 $0.00

New SF Att 44 1,278 1,391 1,430 $0.06 $0.06 $0.06

New SF Det 310 1,180 1,275 1,308 $0.45 $0.49 $0.50
Ren Apt 264 1,318 1,505 1,571 $0.34 $0.38 $0.40

Ren Man 32 1,375 1,722 1,844 $0.05 $0.06 $0.06

R en SF Att 56 906 1,032 1,076 $0.05 $0.06 $0.07

Ren SF Det 518 778 905 949 $0.46 $0.53 $0.56

Climate Zone

Zone 1 161 969 1,094 1,137 $0.16 $0.18 $0.19

Zone 2 292 993 1,123 1,168 $0.32 $0.36 $0.37

Zone 3 259 1,007 1,139 1,185 $0.28 $0.32 $0.33

Zone 4 2 81 1,134 1,281 1,332 $0.34 $0.39 $0.40

Zone 5 359 1,325 1,499 1,559 $0.51 $0.58 $0.60
Age/Employment Status

Infants 0

- 1

- - - - - - - Children 2

- 15

- - - - - - - NotCWP Industry 1,046 1,075 1,207 1,253 $1.21 $1.36 $1.41

Fabricator 2 4,087 4,222 4,26 9 $0.01 $0.01 $0.01
Retired/Unemployed 169 1,284 1,492 1,564 $0.26 $0.30 $0.32

Part Time 134 1,115 1,281 1,339 $0.14 $0.16 $0.16
All Exposure Groups

Total 1,352 1,110 1,255 1,306 $1.62 $1.83 $1.90

See Table 3

- 2 8 for a description of options and Table 3

- 29 for a description of the exposure group abbreviations.

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

May 1, 2013 3-98 

### 4838

Table 3

- 53 : Infertility Benefits for All Options, Present Disco unted Value of 40

- Y ear Stream of Benefits and Annualized Benefits (millions 2010$, 3% discount rate)

Analytical Option Annual Benefits in Typical Year PDV of 40

- Year Stream

of Benefits Annualized Benefits

Option SE $1.6 $29.8 $1.4
Option SI/SC /SCR (Proposed) $1.8 $33.8 $1.6
Option SN $1.9 $35.1 $1.7
Option CE $1.2 $22.7 $1.1
Option CI $1.4 $25.8 $1.3
Option NE $7.1 $131.2 $6.4
Option NI $7.4 $137.2 $6.7

See Table 3

- 28 for a descriptio n of options and Table 3

- 29 for a description of the exposure group abbreviations.


### 4839

4840

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

May 1, 2013 3-99 

### 3.7.3 Summary of Benefits Assessment Results 4841

4842 and present the total benefits by health effect and analytical option for 3 and 7 perc ent discount 4843 rates, respectively. The results indicate that the most protective option with emissions standards that are 4844 consistent with the TSCA Title VI statute (Option SN, which would require laminated products to be 4845 made with both NAF resins and NAF p latforms in order to be exempted from the definition of hardwood 4846 plywood) has benefits that are less than 20 percent la rger than the benefits of the least protective option 4847 with emissions standards that are consistent with the TSCA Title VI statute (Option SE, which exempts 4848 all laminated products from the definition of hardwood plywood). The benefits under the proposed option 4849 (Option SC R SCUR , which would require laminated products to be made with NAF resins in order to be 4850 exempted from the definition of hardwood plywood) are only slightly lower those of Option SN, the 4851 difference being less than 5 percent. Analytical options that would require all composite wood products 4852 to be made with NAF resin technologies (Options NE and NI) would result in quantified benefits nearly 4853 four times larger than under the analytical options with emissions standards consistent with the TSCA 4854 Title VI statute and analytical options that would re quire less stringent emissions standards (Options CE 4855 and CI) compared to the statute would result in quantified benefits about 25 percent lower . More than 80 4856 percent of the total monetized benefits are attributable to reductions in cancer risk

. 4857

4858

About 84 percent of the total benefits are attributable to reductions in asthma risk and about 12 4859 percent are attributable to reductions in cancer risk. About 2 and 1 percent of the total benefits are 4860 attributable to avoiding eye irritation and reduced fertility, respectively. 4861

4862

4863 There are additional potential unquantified benefits for all of the options from other avoided 4864

health effects. While EPA has not valued these avoide d health effects in this proposal, EPA believes that 4865 the effects could be substantial and has represented their inclusion in the table below using the letter “B”. 4866

4867

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

May 1, 2013 3-100 

### Table 3-40: Total Benefits for All Options (millions 2010$, 3% discount rate)

Analytical Option Cancer Eye

Irritation Asthma Infertilit y

Total Benefits

lower hi g her lower hi g her lower hi g her low er Annual Benefit for T yp ical Year Option SE /SEUR/SFCC $19.4 $42.1 $0.6 $4.4 $ 159.9 20 +B $ 225.7 46 +B $ 1 $18 1
Option SI/SC/SCR /SCUR (Proposed) $22.0 $48.0 $0.6 $5.0 $ 181.3 23 +B $ 255.2 53 +B $ 1 $20 5 Option SN $22.9 $50.1 $0.6 $5.2 $ 188.8 24 +B $ 265.5 55 +B $ 1 $21 4
Option CE $14.8 $32.1 $0.5 $3.4 $ 123.0 15 +B $ 173.5 36 +B $ 1 $13 9
Option CI $16.9 $36.9 $0.5 $3.9 $ 140.3 17 +B $ 197.4 41 +B $ 1 $15 9
Option NE $83.8 $181.6 $1.5 $16.3 $ 618.7 85 +B $ 874.4 198 +B $ 7 $71 1
Option NI $87.6 $190.3 $1.5 $16.8 $ 645.6 89 +BF $ 911.7 207 +B $ 7 $74 2

PDV of 40-Year Stream of Benefits Option SE /SEUR/SFCC $356 $776 $11 $84 $ 2,947 367 +B $ 4,158 860 +B $ $3,3
Option SI/SC/SCR /SCUR (Proposed) $405 $887 $12 $94 $ 3,347 417 +B $ 4,710 981 +B $ $3, 7 Option SN $422 $926 $12 $98 $ 3,486 434 +B $ 4,903 1,024 +B $ $3, 9
Option CE $272 $592 $9 $64 $ 2,263 281 +B $ 3, 192 656 +B $ $2,5
Option CI $311 $680 $10 $73 $ 2,586 321 +B $ 3,638 753 +B $ $2, 9
Option NE $1,545 $3,359 $28 $307 $ 11,455 1,573

+B $ 16,188 3,667 +B $1 $13,1

Option NI $1,618 $3,523 $28 $317 $ 11,955 1,646

+B $ 16,882 3,840 +B $1 $13, 7

Annualized Benefits Option SE /SEUR/SFCC $17.3 $37.7 $0.5 $4.1 $ 143.0 18 +B $ 201.8 42 +B $ 1 $16 2
Option SI/SC/SCR /SCUR (Proposed) $19.7 $43.0 $0.6 $4.6 $ 162.4 20 +B $ 228.7 48 +B $ 1 $18 4
Option SN $20.5 $44.9 $0.6 $4.8 $ 169.2 21 +B $ 238.0 50 +B $ 1 $19 2 Option CE $13.2 $28.7 $0.4 $3.1 $ 109.9 14 +B $ 155.0 32 +B $ 1 $12 4
Option CI $15.1 $33.0 $0.5 $3.5 $ 125.5 16 +B $ 176.6 37 +B $ 1 $14 2
Option NE $75.0 $163.1 $1.4 $14.9 $ 556.1 76 +B $ 785.8 178 +B $ 6 $63 8
Option NI $78.5 $171.0 $1.4 $15.4 $ 580.3 80 +B $ 819.5 186 +B $ 6 $66 6
See Table 3-22 for a description of options and for a description of . “BF” represents the exposure group abbreviations. unquantified health benefits.


### 4868 Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

Deleted Cells

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

May 1, 2013 3-101 

### Table 3-41: Total Benefits for All Options (millions 2010$, 7% discount rate)

Analytical Option Cancer Eye

Irritation Asthma Infertility

lower hi g her lower hi g her lower hi gh

Annual Benefit for T yp ical Year Option SE /SEUR/SFCC $9.6 $20.6 $0.6 $4.4 $ 87.5 10 B $ 122

.

Option SI/SC/SCR /SCUR (Proposed) $10.9 $23.5 $0.6 $5.0 $ 99.2 11

+B $ 138

.

Option SN $11.3 $24.6 $0.6 $5.2 $ 103.3 12

+B $ 144

.

Option CE $7.3 $15.7 $0.5 $3.4 $ 67.3 8 +B $ 94.3 1 9
Option CI $8.4 $18.1 $0.5 $3.9 $ 76.8 9 +B $ 107

.

Option NE $41.5 $88.6 $1.5 $16.3 $ 338.6 43

+B $ 474. 9

Option NI $43.5 $93.0 $1.5 $16.8 $ 353.3 45

+B $ 495. 1

PDV of 40-Year Stream of Benefits Option SE /SEUR/SFCC $103 .5 $223 .2 $ 6. 7 $51 .0 $ 950 110

+B $ 1,33 0

Option SI/SC/SCR /SCUR (Proposed) $118 .0 $256 .4 $7 .2 $ 58 57.5 $ 1,081 125

+B $ 1,50 9

Option SN $123 .1 $268 .0 $7 .3 $ 60 59.8 $ 1,126 130

+B $ 1,57 2

Option CE $79 .0 $170 .2 $5 .4 $39 .1 $ 728 84 +B $ 1,01 9

Option CI $91 $197 $ 90. 6 $ 45 196.7 $ 834 5.9 $ 1,164 44.5 $ 15 97 +B $ 94 6 24
Option NE $451 .0 $ 968 967.

6 $16 .4 $186 .0 $ 3,711 467

+B $ 5,204 1

Option NI $ 473 47

2.6 $1,016 .1 $16 .4 $ 192 191.7 $ 3,873 489

+B $ 5,428 1

Annualized Benefits Option SE /SEUR/SFCC $7.7 $16.6 $0.5 $3.8 $ 70. 8 +B $ 99.2 2 0
Option SI/SC/SCR /SCUR (Proposed) $8.8 $19.1 $0.5 $4.3 $ 80.6 9 +B $ 112

.

Option SN $9.2 $20.0 $0.5 $4.5 $ 84.0 10

+B $ 117

.

Option CE $5.9 $12.7 $0.4 $2.9 $54.3 $76.0 $1.0 $ 61. 6 +B Option CI $6.8 $14.7 $0.4 $3.3 $ 62.2 7 +B $ 86.8 1 8
Option NE $33.6 $72.2 $1.2 $13.9 $ 276.7 35

+B $ 388

.

Option NI $35.2 $75.8 $1.2 $14.3 $ 288.9 36

+B $ 404

.

See Table 3-22 for a description of options and for a description of . “B” represents the exposure group abbreviations unquantified health benefits

. 

### presents the average annual number of cases avoided by health outcome and option from an annual 4869 formaldehyde exposure reduction under the policy. 4870

4871 Formatted Table

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### Table 3

- 56 : Average Annual Number of Cases Avoided b y Health Outcome and Option

Analytical Option Cancer Eye

Irritation Asthma Infertility

lower hi g her lower hi g her lower hi g her Option SE 9 21 22,133 170,214 2,469 3,416 1,501
Option SI/ SC /SCR (Proposed) 10 24 23,650 191,590 2,799 3,864 1,696
Option S N 11 25 24,154 198,950 2,915 4,019 1,765
Option CE 7 16 18,015 130,720 1,899 2,627 1,144
Option CI 8 19 19,563 148,389 2,166 2,988 1,301
Option NE 39 92 58,492 626,726 9,554 13,235 6,566 Option NI 40 97 58,494 645,678 9,968 13,800 6,874

See Table 3

- 28 for a description of options

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# 4 Net Benefits 4872

4873 This chapter evaluates the various analytical op tions under consideration in terms of their net 4874 benefits (i.e. benefits minus costs). In reviewing the net benefits, it is important to remember that these 4875 estimates only partially account for the benefits of the rule; some potentially important groups of benefits 4876 are excluded from monetization. Evidence for health effects associated with formaldehyde exposure is 4877 provided by a wide variety of human clinical, epidemiology, and animal studies. In 2010, EPA released 4878

a draft IRIS assessment of adverse cancer and non-cancer health effects from inhalation of formaldehyde. 4879 The draft IRIS assessment identified seven categorie s of non-cancer health outcomes: (1) sensory 4880 irritation; (2) upper respiratory tract pathology; (3) pulmonary function effects; (4) asthma and allergic 4881 sensitization (atopy); (5) immune function effects; (6) neurological and behavioral toxicity; and (7) 4882 developmental and reproductive toxicity. At this time, only three of the non

- cancer health effect 4883 categories were sensory irritation was judged to have sufficient data for quantitative concentration4884 response modeling in support of the benefits assessment : s ensory irritation, asthma, and female 4885 reproductive toxicity.

. Therefore, the net benefits estimates estimate includes monetized benefits for four 4886 health effects: (1) nasopharyngeal cancer for individuals of all ages, (2) and eye irritation for individuals 4887 of all ages , (3) asthma . However, because EPA believes that the unquantified benefits for other health 4888 related effects could be substantial, they have been represented in children ages 2 to 17 and 6 to 17, and 4889 (4) female reproductive toxicity (i.e. reduce d fertility) in women ages 20 to 40. the net benefits table with 4890

the letter “B”. 4891

4892

Table 4-1 presents the analytical options that are considered in this economic analysis. The 4893 analytical options can be grouped into two basic categor ies. The first category contains analytical options 4894 with emissions standards at the levels required by TSCA Title VI. Within this category there are several 4895 different options for how to regulate wood veneer laminated products. The second category contains 4896 emissions standards other than the levels required by TSCA Title VI. There is one set of options with the 4897 same emissions standards as Phase 1 of the CARB ATCM, and another set of options requiring all 4898 products to meet the NAF emissions standards. This document discusses options with alternative 4899 emissions standards simply for informational purposes. The breadth of the discussion here should not 4900 necessarily imply that EPA has corresponding fl exibility in implementing the statute. 4901

4902

4903

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### Table 4-1: Analytical Options Considered in the Economic Analysis

Analytical Option a Emissions

Standards Notes aAnalytical options with emissions standards at the levels required by TSCA Title VIb Option SE: S tatutory emissions standards where wood veneer laminated products

are e xempt from the definition of hardwood plywood Hardwood plywood MDF

Thin MDF

Particleboard Laminators do not need TPC testing or certification. No ULEF

certification. 0.05

ppm 0.11

ppm 0.13

ppm 0.09

ppm Same emissions

sta ndards as Phase 2

of the CARB ATCM

. Recordkeeping and supplier notification equivalent to CARB

ATCM.

Option SI: S tatutory
emissions standards

where wood veneer laminated products are

i ncluded in the

definition of hardwood plywood Same as above

Same em issions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier notification equivalent to CARB ATCM. All laminators must have products tested and certified by a TPC. No ULEF certification.

Option SP: S tatutory
emissions standards

where wood veneer laminated products

other than Custom and

Architectural P anel products are exempt

from the definition of hardwood plywood Same as above

Same emissions standards as Phase 2 of the CARB ATCM, with a di fferent definition of hardwood plywood . Recordkeeping and supplier notification equivalent to CARB ATCM. Only laminators making Custom or Architectural panels must have products tested and certified by a TPC. Laminators making other products do not need TPC testing or certification. No ULEF

certification.

Option SN: S tatutory
emissions standards

where wood veneer laminated products made using NAF resins

to attach wood veneers

to N AF platforms are exempt from the

definition of hardwood plywood Same as above

Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkeeping and supplier notification equivalent to CARB ATCM. Laminators using NAF resins to attach wood veneers to NAF platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification.

No ULEF certification.

Option SC: S tatutory emissions standards where wood veneer laminated products

made with wood veneers attached to

c ompliant platforms using no-added formaldehyde (NAF) resins are exempt from the definition of hardwood plywood Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification. No ULEF certification.

Option SC SCR : S tatutory emissions

standards where wood

veneer laminated products made with

wood veneers attached

to c ompliant platforms using no

- added formaldehyde ( NAF ) resins are exempt from

the definition of hardwood plywood

. R educed recordkeepingrequirements for nonmanufacturers compared to other options. Same as above

Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood . Recordkee ping and supplier notification equivalent to CARB ATCM. Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and certification. Laminators making other products do not need TPC testing or certification. No ULEF certification. Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. No supplier notification required. Formatted Table

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### Table 4-1: Analytical Options Considered in the Economic Analysis

Option SEUR: S tatutory emissions

standards where wood veneer laminated products are e xempt from the definition of hardwood plywood. U LEF certification

allowed. c R educed recordkeeping requirements for non-manufacturers. Laminators do not need TPC testing or certification. ULEF certification

allowed. Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoic es and bills of lading. No supplier notification required.

Option SFCC: S tatutory emissions standards with regulatory provisions that

are f ully c onsistent with C ARB ATCM. Tested lots may be shipped before test results are available. Laminators do not need TPC testing or certification. ULEF certification allowed. Panel producers and fabricators must label products.

Option SC R SCUR : Proposed Option.

S tatutory emissions

standards where wood

veneer laminated products made with

wood veneers attached

to c ompliant platforms using NAF resins are exempt from the

definition of hardwood plywood. U LEF

certification allowed. c

R educed recordkeepingrequirements for nonmfgrs. compare d to other options. Same as above

Same emissions standards as Phase 2 of the CARB ATCM, with a different definition of hardwood plywood

D istributors Laminators using NAF resins to attach wood veneers to compliant platforms do not need TPC testing and ce rtification. Other laminators must have products tested and certified by a TPC. ULEF certification allowed.

Wholesalers and retailers that are not manufacturers under TSCA would only be required to keep invoices and bills of lading. Other recordkeeping

e quivalent to CARB ATCM. No supplier notification required.Analytical options with emissions standards other than thelevels required by TSCA Title VICARBPhase 1 levelsd Option CE: C ARB 1 emissions standards where wood veneer laminated products

are e xempt from the definition of hardwood plywood Hardwood plywood MDF

Thin MDF

Particleboard Laminators do not need TPC testing or certification. 0.08

ppm 0.21

ppm 0.21

ppm 0.18

ppm Same emissions

standards as Phase 1

of the CARB ATCM

. Recordkeeping and supplier notification equivalent to CARB

ATCM.

Option CI: C ARB 1

emissions standards

where wood veneer laminated products are

i ncluded in the

definition of hardwood plywood Same as above

Same emissions standards as Phase 1 of the CARB ATCM, with a dif ferent definition of hardwood plywood . Recordkeeping and supplier notification equivalent to CARB ATCM. Laminators must have products tested and certified by a TPC.NAF emissionlevelse Option NE: N AF emissions standards where wood veneer laminated products

are e xempt from the definition of hardwood plywood Laminators do not need TPC testing or certification.

Option NI: N AF emissions standards where all wood veneer laminated products

are i ncluded in the definition of hardwood plywood Laminators must have products tested and certified by a TPC.NAF emission levels Option NE: NAF emissions

standards where wood veneer laminated products are exempt
from the definition of hardwood plywood Hardwood plywood : 90% of samples < 0.04 ppm. All sample s < 0.05 ppm. MDF and particleboard : 90% of samples < 0.04 ppm. 

### All samples < 0.06 ppm Note: This document discusses various options with respect to formaldehyde and composite wood products, including emissions standards that are

different from those set in TSCA Title VI. This document Requires all composite wood product manufacturers to meet

NAF emission standards

. Recordkeeping and supplier notification equivalent to

CARB ATCM. Formatted Table

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### Table 4-1: Analytical Options Considered in the Economic Analysis

discusses alternative emissions standards simply for informational purposes. The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute.

a Panel producers must have products tested and certified by a TPC under all options. Recordkeeping and supplier notification requirements are equivalent to the CARB

ATCM unless noted otherwise.

b Emission levels for TSCA Title VI standard certification

(and CARB Phase 2): Hardwood plywood = 0.05 ppm; MDF = 0.11 ppm; Thin MDF = 0.13 ppm; Particleboard = 0.09 ppm.

c Emission levels for ULEF certification with reduced quality

control testing : Hardwood plywood: 90% of samples < 0.05 ppm and all samples < 0.05 ppm; MDF: 90% of samples < 0.06 ppm and all samples < 0.09 ppm; thin MDF: 90% of samples < 0.08 ppm and all samples < 0.11 ppm; Particleboard: 90% of samples < 0.05 ppm and all samples < 0.08 ppm. Emission levels for ULEF certification with quarterly TPC test exemption : Hardwood plywood: 90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; thin MDF: 90% of samples < 0.04 ppm and all samples < 0.06 ppm; Particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm.

d Emission levels for CARB Phase 1: Hardwood plywood = 0.08 ppm; MDF = 0.21 ppm; Thin MDF = 0.21 ppm; Particleboard = 0.18 ppm.

e Emission levels for NAF certification: Hardwood plywood:

90% of samples < 0.04 ppm and all samples < 0.05 ppm; MDF and particleboard: 90% of samples < 0.04 ppm and all samples < 0.06 ppm. Option NI: NAF emi ssions

standards where all wood veneer laminated products are

included in the definition of hardwood plywood Same as above Requires all composite wood product manufacturers to meet NAF emission standards, with a different definition of hardwood plywood . C ARB recordkeeping and supplier notification.

Note : This document discusses various options with re spect to formaldehyde and composite wood products, including emissions standards that are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informational pur poses. The breadth of the discussion here should not necessarily imply that EPA has correspondi ng flexibility in implementing the statute.


### 4904 Formatted Table

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## 4.1 Discounting and Time Frame for the Analysis 4905

4906 This analysis estimates the costs and benefits of each analytical option for a 30-year period of 4907 composite wood product production. Thus, the estimate s of the costs reflect the annualized costs of 30 4908 years of composite wood production being subject to the rule’s requirements. Likewise, the benefits 4909 estimates reflect the annualized benefits associated with the formaldehyde exposure reductions resulting 4910 from 30 years of composite wood production being subj ect to the rule’s requirements. Both the costs and 4911 the benefits are discounted using 3 and 7 percent discount rates, so that costs and benefits incurred in the 4912 future are expressed in present terms that are comparable. Because the timing of the costs and the 4913 benefits vary, they are annualized to make their comparison easier. An annualized value is the amount 4914 one would have to pay at the beginning of each time period so that the sum of all payments in present 4915 value terms equals the original stream of values. 4916

4917 The 30-year time frame was selected to be as short as possible while being long enough to 4918 capture the important effects of the policy. In general, the downside of choosing a longer analysis time 4919 frame is that uncertainties about both the baseline and policy scenarios increase with time. For example, 4920 the likelihood that alternative technologies for manufacturing composite wood products might be 4921 developed increases over time (which could result in different formaldehyde emission rates for products 4922 and/or different costs for reducing formaldehyde em issions). Similarly, uncertainties about changing 4923 demographics, medical treatments for adverse health effects, and consumer preferences with respect to 4924 composite wood products all increase with time. Howe ver, selecting a time frame that is too short would 4925 not capture all of the important effects of the policy scenarios under consideration. 4926

4927 The benefits analysis assumes that after eleven years any continuing (and declining) emissions 4928 from a given composite wood product would contri bute negligibly to that product's effect on 4929 formaldehyde exposure. Thus, composite wood products are assumed to contribute to formaldehyde 4930 exposure for 11 years. 59 

### Specifically: 4931

4932

 in the first year only new composite wood products are affected by the policy; 4933

 in the second year new and one-year-old co mposite wood products are affected by the 4934 policy; 4935

 in the third year new, one- and two-year-old composite wood products are affected by the 4936 policy; 4937

 in general, in the n th year, new, one-, two-, three-,..., and ( n -1)-year-old composite wood 4938 products are affected by the policy, for n = 1, 2, ..., 10; and 4939

 in the eleventh and all subsequent years new, one-, two-, three-, four-, five-, six-, seven-, 4940 eight-, nine-, and ten-year-old composite wood products are affected by the policy. 4941

4942 Since the exposure scenarios are defined in part according to the 11 different ages for composite 4943 wood products, it is not until the 11 th 

### year after the implementation of the rule that benefits are realized 4944 under every exposure scenario. That is, it is not until the 11 th 

### year after rule implementation that ten-year 4945 old composite wood products would have been required to be produced in compliance with the emissions 4946 standards. Thus, the benefits are phased in over a period of eleven years. 4947

4948 Similarly, the benefits from a given year of co mposite wood production will phase-out over time. 4949 Since the analysis considers the benefits and costs from 30 years of composite wood production, the 4950

59 EPA calculated exposures using a 1.5 year emissions half li fe of formaldehyde from composite wood products With. this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11 years the emissions would be near zero.

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### estimated exposures have the following time profile after the 30 th 

### and last year of composite wood 4951 production considered in the analysis: 4952

4953

 in the 31 st

### year, only one-, two-, three-, four-, five-, six-, seven-, eight-, nine-, and ten4954 year-old composite wood products are produced before the 31 st 

### year (benefits from new 4955 composite wood products are produced after y ear 30 and therefore are not considered in 4956 the analysis); 4957

 in the 32 nd 

### year, only two-, three-, four-, five-, si x-, seven-, eight-, nine-, and ten-year-old 4958 composite wood products are produced before the 31 st

### year (benefits from new and one4959 year old composite wood products are produced after year 30 and therefore are not 4960 considered in the analysis); 4961

 in general, in the n th year after year 30, only n year-old and older composite wood 4962 products are produced before year 31, for n = 1, 2, ..., 10; and 4963

 in the 41 st 

### and all subsequent years, all 11 ages of composite wood products that 4964 potentially contribute to formaldehyde exposure are produced after the 30 th 

### year and 4965 therefore are not considered in the analysis. 4966

4967 Given this phase-in and phase-out, a time period of thirty years of composite wood production 4968 was selected so that the first ten years of the policy (when the benefits of the policy are being phased in) 4969 and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of 4970 the policy are being phased out) do not obscure the steady state benefits that would be experienced from 4971 the policy. It is necessary to include the phase-in an d phase-out of the benefits in order to be consistent 4972 with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions 4973 standards. Given that this analysis assumes that after eleven years any continuing (and declining) 4974 emissions from a given composite wood product would contribute negligibly to that product's effect on 4975 formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to 4976 40 years of exposure reductions. The first 10 years ar e a phase-in period for exposure reductions, the next 4977 20 years are a steady-state, and the next 10 years are a phase-out period. 4978

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## 4.2 Summary of Net Benefits 4979

4980

Table 4-2 and Table 4

- 3 present the total annualized net benefits by analytical option and 4981

discount rate. The proposed rule (Option SCUR) has quantifi ed net benefits of -$24 million to -$60 4982 million per year using a 3 percent discount rate, and -$57 million to -$79 million per year using a 7 4983 percent discount rate. 4984

4985

The estimated quantified net benefits under the analytical options that have emissions standards 4986 that are consistent with TSCA Title VI range from negative $109 -$18 million to positive $ 206 -$273 4987 million using a three percent discount rate. Of these analytical options, Option SI is the only option 4988

where net difference between quantified benefits are negative and costs is smallest under the lower 4989

estimate of net Option SEUR. The next smallest difference between quantified benefits using the three 4990 percent discount rate. Option SC R (the and costs is under the proposed option ) is the only option (Option 4991 SCUR). Of the analytical options that ha s have emissions standards that are consistent with TSCA Title 4992

VI where both the lower and the higher estimate for net , the largest difference between quantified benefits 4993

and costs is positive using the 7 percent discount rate. under Option SI (which includes laminated 4994 products in the definition of hardwood plywood). 4995

4996

There are smaller net benefits (smaller positive and larger negative quantified net benefits ) under 4997 Options CE and CI (the analytical options with emissions standards lower than those that are consistent 4998

with TSCA Title VI ). Net benefits are lower under these options because the estimated benefits are 4999 substantially lower while the estimate d costs are only modestly lower (because the costs are largely 5000 driven by the certification, testing, and chain of custody requirements, which are not affected by the 5001 emissions standards). 5002

5003 ) compared to the proposed option (Option SCUR). The difference between quantified benefits 5004 and costs is largest under Options NE and NI (which have emission s limits that are more stringent than 5005 those required by the statute ) have substantially higher costs and benefits than the options with emissions 5006

standards that ar e consistent with TSCA Title VI. Net benefits are positive under these options using a 3 5007 percent discount rate, and are positive for the higher estimate of net benefits using a 7 percent discount 5008 rate but are negative for the lower estimate using a 7 perc ent discount rate. ). 5009

5010 There are additional unquantified benefits for all of the options from respiratory and other 5011 avoided health effects. While EPA has not valued these avoided health effects in this proposal, EPA 5012 believes that the effects could be substantial and has represented their inclusion in the table below using 5013

the letter “B”. 5014

5015 Table 4-2: Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 3 percent discount rate)

Analytical Option 

### Costs Benefits Net Benefits



### Low End

Estimate High End

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate
Option SE $100 $100 $18 +B $42 +B ($82) +B ($58) +B
Option SI $204 $293 $20 +B $48 +B ($273) +B ($157) +B
Option SP $104 $104 Not estimated Not estimated Not estimated Not estimated
Option SN $128 $137 $21 +B $50 +B ($116) +B ($79) +B
Option SC $112 $121 $20 +B $48 +B ($101) +B ($64) +B
Option SCR $72 $81 $20 +B $48 +B ($61) +B ($24) +B
Option SEUR $60 $60 $18 +B $42 +B ($42) +B ($18) +B
Option SFCC $100 $100 $18 +B $42 +B ($82) +B ($58) +B

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Option SCUR (proposed) $72 $81 $20 +B $48 +B ($60) +B ($24) +B
Option CE $99 $99 $14 +B $32 +B ($86) +B ($67) +B
Option CI $203 $292 $16 +B $37 +B ($277) +B ($167) +B
Option NE $379 $379 $76 +B $178 +B ($303) +B ($201) +B
Option NI $484 $573 $80 +B $186 +B ($493) +B ($297) +B
Option SCUR is the proposed option. Parentheses indicate negative net benefits. Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. Higher estimate of net benefits is calculated by subtract ing low end cost estimate from higher benefits estimate. “B” represents the unquantified health benefits.


### 5016

5017

Table 4

- 3 : Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 7 percent discount rate)

Analytical Option Costs Benefits Net Benefits

Low

End Lower

Estimate High End Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

Option SE $ 

### 100 112 $ 

### 100 112 $ 

### 162 8 B $ 

### 245 20 +B 

### $62 ($103)

+B 

### $145 ($91) +B

Option SI $ 

### 194 218 $ 

### 293 311 $ 

### 184 9 +B $ 

### 278 23 +B ($ 

### 109) 302)

+B 

### $84 ($195) +B

Option SP $ 

### 104 115 $ 

### 104 115 Not estimated Not estimated Not estimated Not estimated

Option SN $ 

### 143 139 $ 

### 185 148 $ 

### 192 10 +B $ 

### 289 24 +B 

### $7 ($138) +B 

### $146 ($114) +B

Option SC $ 

### 112 123 $ 

### 121 132 $ 

### 184 9 +B $ 

### 278 23 +B 

### $63 ($123)

+B 

### $166 ($100) +B

Option SCR $80 $89 $9 +B $23 +B ($80) +B ($57) +B
Option SEUR $68 $68 $8 +B $20 +B ($60) +B ($48) +B
Option SFCC $111 $111 $8 +B $20 +B ($103) +B ($91) +B
Option SC R SCUR (proposed) $ 72 80 $ 81 89 $ 184 9 +B $ 278 23 +B $103 ($79) +B $206 ($57) +B

Option CE $ 

### 99 111 $ 

### 99 111 $ 

### 125 6 +B $ 

### 188 16 +B 

### $25 ($104)

+B 

### $89 ($95) +B

Option CI $ 

### 192 217 $ 

### 292 310 $ 

### 142 7 +B $ 

### 214 18 +B ($ 

### 150) 303)

+B 

### $22 ($199) +B

Option NE $ 

### 379 383 $ 

### 379 383 $ 

### 639 35 +BF $ 

### 970 86 +B 

### $259 ($348)

+B 

### $591 ($297) +B

Option NI $ 

### 473 490 $ 

### 573 582 $ 

### 667 36 +B $ 

### 1,013 90 +B 

### $94 ($546)

+B 

### $540 ($400) +B

Option SC R SCUR is the proposed option. Parentheses indicate negative net benefits. Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. Higher estimate of net benefits is calculated by subtract ing low end cost estimate from higher benefits estimate. “B” represents the unquantified health benefits.


### 5018

5019

5020 Formatted Table

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### Table 4

- 3 : Total Annualized Costs, Benefits, and Net Be nefits for All Options (millions 2010$, 7 percent discount rate)

Analytical Option Costs Benefits Net Benefits

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Option SE $112 $112 $80 $121 ($31) $9 Op tion SI $208 $311 $91 $137 ($220) ($71) Option SP $115 $115 Not estimated Not estimated Not estimated Not estimated Option SN $154 $195 $95 $143 ($99) ($11) Option SC $123 $132 $91 $137 ($41) $14 Option SC R (proposed) $81 $89 $91 $137 $2 $57
Option CE $111 $111 $62 $93 ($49) ($18) Option CI $207 $310 $71 $106 ($239) ($101) Option NE $383 $383 $317 $480 ($66) $97 Option NI $480 $582 $331 $501 ($251) $21 Option SC R is the proposed option. Parentheses indicate neg ative net benefits. Lower estimate of net benefits is calculated by subtracting high end cost estimate from lower benefits estimate. Higher estimate of net benefits is calculated by subtract ing low end cost estimate from higher benefits estimate.

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# 5 Small Business Impacts 5021

5022 This chapter presents the impact of the costs of the proposed TSCA Title VI Implementation Rule 5023

on the financial condition of small entities. The Re gulatory Flexibility Act (RFA) of 1980, amended by 5024 the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires regulators to 5025 assess the effects of regulations on small entitie s including businesses, nonprofit organizations, and 5026 governments. In some instances, agencies are also required to examine regulatory alternatives that may 5027 reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to 5028 prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the 5029 rule will not have a significant economic impact on a substantial number of small entities. The RFA, 5030 however, does not specifically define “a significant economic impact on a substantial number” of small 5031 entities. Sections 603 and 604 of the RFA require that regulatory flexibility analyses identify the types, 5032 and estimate the numbers, of small entities to which the rule will apply; and describe the rule 5033 requirements to which small entities will be subject and any regulatory alternatives, including exemptions 5034 and deferral, which would lessen the rule’s burden on small entities. 5035

5036 The proposed rule will affect small businesses, but small non-profit organizations or small 5037 governments are not expected to be affected by the proposed rule because they are not expected to be 5038 panel producers, fabricators, wholesalers, or import ers. Under the Regulatory Flexibility Act (RFA), a 5039 “small business” is determined by the U.S. Small Business Administration’s regulations at 13 CFR 5040 121.201 (which create small business size standard s using either a sales or employment threshold, 5041 depending on the nature of the industry), unless an agency establishes an alternate definition. 5042

5043 To fulfill the requirements of the RFA, this analysis addresses two basic questions regarding the 5044 proposed rule: (1) the number and type of small entities potentially affected, and (2) the extent of the 5045 rule’s potential economic impact on those entities as measured by the cost-to-revenue ratio. This ratio is a 5046 good measure of entities’ ability to afford the costs attributable to a regulatory requirement, because 5047 comparing compliance costs to revenues or expenses provides a reasonable indication of the magnitude of 5048 the regulatory burden relative to a commonly available measure of economic activity. Where regulatory 5049 costs represent a small fraction of a typical entity’s revenues or expenses, the financial impacts of the 5050 regulation on such entities may be considered as not significant. The impact ratios are calculated using 5051 annualized costs, because these costs are more representative of the continuing costs entities face to 5052 comply with the rule. 5053

5054 The small business impacts are presented separately according to the types of requirements they 5055 are subject to. The number of small firms in the affected NAICS codes (described in Chapter 2) were 5056 estimated using Census data and SBA’s small business size standards. Table 5-1 presents a summary of 5057 the number of small firms affected by the rule. Section 5.1 presents the small business impacts for stock 5058 panel producers. Section 5.2 presents the small business impacts for wood veneer laminated product 5059 producers. Section 5.3 presents the small business impacts fabricators, wholesalers, and retailers. 5060 Finally, section 5.4 presents a summary of the small business impacts. 5061

5062

5063

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### Table 5-1: Summary of Affected Number of Firms

Employer Status Firm Type Number of

Affected Firms Number of Affected

Small Firms

Employers Stock Panel Producer 54 31

Wood Veneer Laminated Product 5,260 5,260

Fabricator 28,014 27,879

Wholesale 34,948 34,324

Retail 247,689 202,630

All Firms 315,965 270,123

Nonemployers Stock Panel Producer



### - -
Wood Veneer Laminated Product 2,226 2,226

Fabricator 44,478 44,478

Wholesale 50,612 50,612

Retail 511,359 511,359

All Firms 608,675 608,675

All Firms Stock Panel Producer 54 31

Wood Veneer Laminated Product 7,486 7,486

Fabricator 72,492 72,356

Wholesale 85,560 84,936

Retail 759,048 713,988

All Firms 924,640 878,798 Note that for the cost estimates presented in Chapte r 2, stock panel producer firms were assumed to incur separate costs per type of composite panel product. As a result, the number of stock panel producer firms reported is higher in Chapter 2 compared to the number reported here. For example, a firm that owns a both particleboard mill and an MDF mill is counted twice in Chapter 2, but counted only once here. This is why the number of panel producer firms is 62 in Chapter 2 and 54 here.



### 5064

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## 5.1 Small Business Impacts for Stock Panel Producers 5065

5066 Table 5-2 presents the number of small stock hardwood plywood, MDF, and particleboard mills 5067 and firms subject to the TSCA Title VI rule’s requirements for testing and third-party certification. 5068 (Stock panel producers exclude hardwood plywood producers that are defined as laminated product 5069 manufacturers under the CARB ATCM. Those firms are discussed in Section 5.2.) The small business 5070 status of the majority of affected composite panel producing firms was determined using Dun & 5071 Bradstreet (D&B), an online database containing information on the sales volume, number of employees, 5072 and primary NAICS of establishments (Dun & Brad street 2010). For the remaining firms, the small 5073 business status was determined using other business information directories, company websites, and 5074 annual reports. 5075

5076 Table 5-2: Stock Panel Producers, by Sector and Small Business Status

Sector Total Number in Industry Number of Small Entities

Firms Mills Firms Mills Stock Hardwood Plywood 32 41 22 22 Medium Density Fiberboard 14 22 

### 5 5

Particleboard 16 30 

### 5 7

Total 1 54 90 

### 31 33 Note: Total does not equal sum of rows because some firms and mills produce more than one produ ct. Note that for the cost estimates presented in Chapter 2, firms were assumed to incur se parate costs per type of composite panel product. As a result, the number of firms reported is higher in Chapter 2 compared to th e number reported here. For example, a firm that owns both a particleboard mill and an MDF mill is counted twice in Chapter 2, but counted only once here. This is why the number of panel producer firms is 62 in Chapter 2 and 54 here.
Sources: Composite Panel Association 2007, Dun & Bradstreet 2010



### 5077 As indicated in Table 5-2, 31 of the 54 firms (approximately 57 percent of the total) and 33 of the 5078 90 mills (37 percent) are small. Of these, 22 of the affected small firms (approximately 71 percent) are 5079 hardwood plywood producers; five are MDF produ cers, and five are particleboard producers 5080 (approximately 16 percent each). 5081

5082 Table 5-3 summarizes the economic impact to affected small panel producers as a result of the 5083 TSCA Title VI rule. Firm-specific revenue data fr om Dun & Bradstreet were available for most small 5084 firms; where data were not available, revenues were imputed as the average revenue for small firms in the 5085 corresponding product category. 5086

5087 While all affected small firms incur rule familiarization and supplier notification costs due to the 5088 TSCA Title VI rule, only a fraction will incur costs associated with changing production processes and 5089 raw materials, or with testing and certification (since most firms already incurred those costs due to the 5090 CARB ATCM). Per-firm costs for firms with prod uction process, raw mate rials, and testing and 5091 certification costs were calculated by dividing the tota l annualized costs by the number of affected firms. 5092

5093 All stock panel mills were assumed to have two pr oduct lines, and the baseline certification status 5094 of their product lines was determined according to CARB’s (2011a) list of certified mills and CARB’s 5095 (2011c) list of no-added formaldehyde (NAF) and ul tra low emitting formaldehyde (ULEF) exemptions. 5096 For example, if CARB only listed a mill as having Phase 2 (i.e., standard) certification, it was assumed 5097 that the mill had two product lines with standard certification. As another example, a mill that is listed by 5098 CARB as Phase 2 certified and also listed as having NAF exempt status would be assumed to have one 5099 NAF product line and one product line with standard certification. The exception to this is particleboard, 5100 where it is assumed that 5 of the 25 particleboard mills with standard certification status under the CARB 5101 ATCM also produce a product line that is not certified under the CARB ATCM. There are only 3 5102 particleboard mills that are small and have standard certification status under the CARB ATCM. To 5103

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### ensure that cost impacts are not understated, the analysis assumed all 3 small particleboard mills with 5104 standard certification under the CARB ATCM also have a product line that is uncertified in the baseline. 5105

5106 The analysis assumes that most mills making products that are not certified or that have ULEF 5107

certification under the CARB ATCM will seek standard certification under the TSCA Title VI rule. The 5108 exception is mills that have a product line that is U LEF certified and a product line that is NAF certified 5109 under the CARB ATCM. These mills are assumed to convert the ULEF product line to NAF, so that both 5110 product lines will be NAF cert ified under TSCA Title VI. 5111

5112 As indicated in Table 5-3, 25 27 small stock panel firms (approximately 81 87 percent of the total) 5113 are expected to experience cost impacts that are less than one percent of their revenues, 5 3 firms 5114 (approximately 16 10 percent) are expected to experience impacts at levels between one and three percent 5115 of their revenue, and 1 firm (approximately 3 percent) is expected to be incur costs exceeding three 5116 percent of their revenue. Total cost impacts ranged from zero to approximately 5.5 percent of firm 5117

revenues. 5118

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### Table 5-3: Number of Small Composite Panel Producers, by Product Type, Baseline and PostRule Product Lines, and Impact Level

Product

Type Baseline Product

Lines (CARB ATCM certification) Post-Rule

Product Lines (TSCA Title VI certification) Number

of

Affected

Small

Firms Per-Firm

Costs (thousands

, 2010$) Per-Firm

Revenues (thousands,

2010$) Range of Impacts Number of Firms with Impacts

<1% 1-3% >3

%

Hardwood Plywood 2 product lines

without certification 2 product lines

with NAF

certification 7 $35 $2,500; $4,955; $6,200; $7,000; $7,500; $12,000;

and $12,410 0.3% - 1.4% 6 1

-

2 product lines with

ULEF certification 2 product lines

with standard

certification 4 $ 70 4 $2,600; $4,600; $12,410;

and $20,000 0.4% - 2.7% 2 4 2

- -

1 prod. with NAF cert.; 1 prod. with

ULEF cert. 2 product lines

with NAF

certification 3 $4 $12,410

- <0.1% 1

- -

2 product lines with

standard

certification. 2 product lines

with standard

certification 7 $16 $2,300; $3,700; $12,410; $12,410; $12,410; $24,000;

and $30,000 0.047% - 0.

61% 7
- -

2 product lines with

NAF certification 2 product lines

with NAF

certification 2 $3.6 $5,200

and $60,000 0.006% -

0.07% 2 - -

Hardwood Plywood &

Particleboard 2 HWPW prod.

without certification; 1 PB prod. without cert., 1 PB prod. with

standard

certification 2 HWPW prod. with NAF cert.; 2 PB prod. with

standard

certification 1 $332 $6,000 5.5%

- - 1

Particleboard 1 prod without cert.; 1 prod. with

standard cert. 2 prod. with

standard

certification 2 $296 10,411

and $15,000 2.0% - 2.8%

- 2

-

2 prod. with NAF

cert. 2 prod. with

NAF cert. 1 $3.6 $11,053 0.03% 1

- -

1 prod. with NAF cert.; 1 prod. with

standard cert. 1 prod. with NAF cert.; 1 prod. with

standard cert. 1 $3.6 $12,803 0.03% 1

- -

MDF 2 product lines with

standard

certification 2 product lines

with standard

certification 5 $3.6 $14,100; $14,867; $14,867; $15,000;

and $15,500 0.023% -

0.025% 5
- -

Total 31 - - 0.0% - 5.5% 25 27 5 3 1

Notes: Numbers in parentheses represent cost savings. HWPW = hardwood plywood. PB = particleboard. Formatted Table

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## 5.2 Small Business Impacts for Wood Veneer Laminated Product Producers 5119 

## (including firms making products defined as hardwood plywood ) 5120

5121 The small business impact analysis for wood veneer laminated product producers (including firms 5122 making products defined as hardwood plywood under the proposed option) follows four basic steps: (1) 5123 estimate the number of small firms, (2) estimate the cost per firm, (3) estimate the revenue distribution of 5124 affected firms, and (4) based on the number of affected firms, the per-firm costs, and the revenue 5125 distribution, estimate the number of firms by cost-reve nue ratio. These steps are described in more detail 5126

below. 5127

5128
5.2.1 Number of Small Laminator Firms 5129

5130 Due to the uncertainty in the estimated number and characteristics of wood veneer laminated 5131 product producers, this analysis assumes that all wo od veneer laminated product producers are small. To 5132 ensure that per-firm costs are not understated, th e number of small wood veneer laminated product 5133 producers is estimated as the lower bound of affected firms from presented in Chapter 2 (i.e., 7,486 5134 firms). As discussed in Chapter 2, the costs to laminators were estimated in part by estimating the 5135 consumption of veneer by firms in laminator NAICS c odes; using that information to estimate the surface 5136 area of wood veneer laminated products that are pr oduced; and estimating the production process and raw 5137 materials costs based on that surface area If the small entity analysis were to use the upper bound for the 5138 estimated number of laminators (i.e., 13,875 firms), the total costs for changes to production processes 5139 and raw materials would be spread out over nearly twice as many firms. This would reduce the estimated 5140 impact per firm. Therefore, using the lower bound estimate of affected firms yields a higher estimate of 5141 the impact per firm. 5142

5143
5.2.2 Per-Firm Costs for Laminators 5144

5145 Table 5-4 summarizes the per-firm cost components for wood veneer laminated product 5146 producers. The per-firm costs associated with rule familiarization, supplier noti fication, labeling system 5147 setup, and recordkeeping are estimated by annualizi ng the per-firm costs presented in Table 2-84, Table 5148 2-85, and Table 2-86 in Chapter 2. All costs except for recurring recordkeeping costs were estimated as 5149 an average cost applied to all firms. Recurring recordkeeping costs were estimated to include a fixed cost 5150 component of 2 hours of labor per firm plus a vari able cost estimated as a function of revenue. 5151

5152 As described in Chapter 2, the recordkeeping and labeling costs were estimated based on the 5153 responses to a questionnaire administered to nine fa bricator firms. The firms that reported recurring 5154 recordkeeping costs described these costs as data entry costs, which are costs that are likely to increase 5155

with the volume of a firm’s sales. Based on revenue data from the Dun and Bradstreet database and other 5156 publically available sources, the two respondents repor ting recurring recordkeeping costs appeared to be 5157 larger firms that likely have revenues that are significantly larger than the average revenue for affected 5158 firms. Nevertheless, the costs they reported were still assumed to be the average costs incurred by 5159

affected firms. For fabricators and wood veneer la minated product manufacturers, the per firm recurring 5160 recordkeeping cost was estimated to be $12,917, which is $12,290 per year when annualized over 30 5161 years using a three percent discount rate. For the purpose of the small business analysis, the cost impact 5162 associated with recurring recordkeeping activities is estimated as a fixed cost per firm associated with 2 5163 hours of labor plus a variable cost in terms of a pe rcentage of firm revenue. This variable cost is 5164 calculated such that the average annualized recurrin g recordkeeping costs are $12,290 per firm incurring 5165 this cost. The variable portion of the recordkeeping cost is estimated to range from 0.1 percent to 0.8 5166 percent of average revenues, depending on the NAICS code. 5167

5168

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### The per-firm costs of production process and raw material changes were estimated at the industry 5169 level as the total annualized cost of the changes divided by the number of wood veneer laminated product 5170 producers using added-formaldehyde resins in the base line. In addition, wood veneer laminated product 5171 manufacturers that are assumed not to switch to NAF resins after rule implementation are estimated to 5172 incur additional annualized recurring recordkeeping co sts of $3,531 per firm (the same as stock panel 5173 producers). 5174

5175 Table 5-4: Annualized Per-Firm Cost Components for Wood Veneer Laminated Product Producers, by NAICS

NAICS Rule

Familiarization Labeling Setup Production

Process and Raw

Material Costs Recordkeeping Test ing and

Certification (products defined

as fabricated products hardwood) plywood ) Testing and Certification (products defined as hardwood) plywood) Basic Recordkeeping Additional Recordkeeping ( for products

defined as

hardwood plywood) Fixed Costs Variable Fi

xed Costs (Percent

of Average Revenues) Variable Costs (Percent of Average Revenues)

321211

$14.29 $220.97 $56,470.59

$ 47.27 60,622 0.1% $47.

27 

### $60,622 0.

1%

$3,530.59 337110 $2,025.36 0.6% 0.6%

337129 $2,025.36 0.8% 0.8%

337121 $545.17 0.2% 0.2%

337122 $545.17 0.5% 0.5%

337211 $954.43 0.2% 0.2%

337127 $954.43 0.2% 0.2%

337215 $954.43 0.2% 0.2%

321911 $758.19 0.1% 0.1%

337212 $2,857.50 0.4 % 0.4%

321999 $2,857.50 0.4% 0.4%

339920 $2,857.50 0.2% 0.2%

339932 $2,857.50 0.3% 0.3%

339992 $2,857.50 0.4% 0.4%

Notes: $14.29 is estimated as the initial cost of $294 annualized over 30 years using a 3% discount rate. $16.65 is estimated as the initial cost of $169 (material cost) plus $174 (labor cost) annualized over 30 years using a 3% disc ount rate. $220.87 is estimated as the initial cost of $4,552 annualized over 30 years using a 3% discount rate. Production process and raw material costs are estimated as the total cost of production for each NAICS divided by the number of laminated product producers using added-formaldehyde resins in the baseline. Recordkeeping costs for fabricated products are described above in section 5.2.2. See Chapter 2 for a description of testing and certification costs. $3,530.59 is estimated as the recurring cost of $3,710. 72 annualized over 30 years using a 3% discount rate. NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Woo d television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Non upholstered wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 337127: Institutional furniture manufactur ing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom architectur al woodwork and millwork manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's vehicle manufacturing; 339992: Musical instrument manufacturing.



### 5176 Costs are calculated separately for four categories of wood veneer laminated product producers, 5177 depending on the types of costs they are estimated to incur: 5178

5179 Formatted Table Merged Cells

Merged Cells

Merged Cells

Merged Cells

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###  Laminators that use NAF resins in the baseline. They are estimated to incur costs for rule 5180 familiarization, supplier notification, and labeling setup. 5181

5182

 Laminators that use added-formaldehyde resins in the baseline, switch to NAF resins, and are among 5183 the fabricators that are not estimated to incur recurring recordkeeping costs (i.e., all fabricators that 5184 make products sold in California and 89 percent of the fabricators making products that are not sold 5185 in California). They are estimated to incur costs for rule familiarization, supplier notification, 5186 labeling setup, and production process and raw material (to switch to NAF resins). 5187

5188

 Laminators that use added-formaldehyde resins in the baseline, switch to NAF resins, and are among 5189 the fabricators that are estimated to incur recurring recordkeeping costs (i.e., 11 percent of the 5190 fabricators making products that are not sold in California). They are estimated to incur costs for rule 5191 familiarization, supplier notification, labeling setup, production process and raw material (to switch to 5192 NAF resins), and fabricator recordkeeping. 5193

5194

 Laminators that continue to use added-formaldehyde resins under the TSCA Title VI rule, so that 5195 their products are included in the definition of hard wood plywood. (These represent 2 percent of all 5196 laminators.) They are estimated to incur costs for rule familiarization, supplier notification, labeling 5197 setup, production process and raw material (to switch to enhanced UF resin systems and low emitting 5198 platforms), fabricator recordkeeping, testing an d certification, and panel producer recordkeeping. 5199

5200 In general, the analysis uses a simplifying assumption that firms with the less frequent costs also 5201 incur the more frequent costs. That is, if 10% of firms incur recordkeeping costs and 5% incur labeling 5202 costs, the small entity analysis assumes that 5% incur both recordkeeping and labeling costs, and 5% 5203 incur just recordkeeping costs. The analysis also assu mes that all firms with testing and certification costs 5204 also incur recordkeeping costs due to the TSCA Title VI rule. 5205

5206
5.2.3 Revenue Distribution fo r Affected Laminator Firms 5207

5208 Revenue distributions for employer and nonemplo yer wood veneer laminated product producers 5209 were estimated at the industry level using data from the 2007 Economic Census and the Census Bureau’s 5210 2008 Nonemployer Statistics. While employer data were available at the six-digit NAICs level, 5211 nonemployer data were only available at the three-digit level. As with fabricators, revenues were 5212 assumed to be uniformly distributed within each revenue bracket, and revenue floors of $20,000 and 5213 $1,000 were set for employers and nonemployers, respectively. Table 5-5 and Table 5-6 present the 5214 estimated revenue distributions for employer and nonemployer wood veneer laminated product producers. 5215*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 5-9Table 5-5: Estimated Revenue Distribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thousands, 2010$)PercentileNAICS321211NAICS321911NAICS321999NAICS337110NAICS337121NAICS337122NAICS337127NAICS337129NAICS337211NAICS337212NAICS337215NAICS339920NAICS339932NAICS3399921$50 $27 $23 $23 $25 $22 $27 $22 $27 $27 $50 $23 $22 $222$81 $35 $27 $28 $30 $25 $34 $25 $35 $35 $81 $27 $25 $253$112 $43 $30 $32 $36 $30 $43 $29 $43 $43 $112 $31 $29 $294$136 $51 $34 $37 $42 $33 $51 $31 $51 $51 $136 $36 $31 $315$164 $60 $38 $41 $47 $36 $59 $34 $60 $60 $164 $40 $34 $346$192 $68 $43 $46 $53 $39 $66 $38 $68 $68 $192 $44 $38 $387$216 $76 $47 $50 $60 $43 $74 $41 $76 $76 $216 $48 $41 $418$244 $85 $50 $54 $65 $46 $82 $44 $84 $85 $244 $52 $44 $449$272 $93 $54 $59 $71 $50 $90 $47 $92 $93 $272 $56 $47 $4710$300 $100 $58 $63 $77 $53 $98 $51 $100 $100 $300 $60 $51 $5111$324 $124 $62 $68 $82 $56 $116 $53 $116 $124 $324 $64 $54 $5412$352 $144 $65 $72 $88 $60 $136 $56 $132 $144 $352 $69 $56 $5613$380 $168 $69 $77 $94 $63 $156 $60 $148 $168 $380 $73 $60 $6014$404 $188 $73 $81 $99 $66 $176 $63 $168 $188 $404 $77 $63 $6315$432 $208 $77 $85 $112 $70 $200 $66 $184 $208 $432 $81 $66 $6616$460 $232 $81 $89 $124 $73 $220 $69 $200 $232 $460 $85 $69 $6917$484 $252 $85 $94 $136 $77 $240 $72 $216 $252 $484 $89 $72 $7218$520 $276 $89 $98 $152 $80 $260 $75 $232 $276 $520 $94 $76 $7619$560 $296 $93 $104 $164 $83 $284 $78 $248 $296 $560 $98 $79 $7920$600 $320 $97 $116 $176 $87 $304 $81 $264 $320 $600 $108 $81 $8121$640 $340 $100 $124 $192 $90 $324 $85 $280 $340 $640 $120 $85 $8522$680 $360 $116 $132 $204 $94 $344 $88 $296 $360 $680 $136 $88 $8823$720 $384 $128 $144 $216 $97 $364 $91 $316 $384 $720 $148 $91 $9124$760 $404 $144 $152 $228 $100 $388 $94 $332 $404 $760 $164 $94 $9425$805 $428 $156 $160 $244 $112 $408 $97 $348 $428 $805 $176 $98 $9826$845 $448 $172 $168 $256 $124 $428 $100 $364 $448 $845 $192 $104 $10427$885 $472 $184 $180 $268 $132 $448 $108 $380 $472 $885 $204 $124 $11228$925 $492 $200 $188 $284 $144 $468 $120 $396 $492 $925 $220 $140 $12429$965 $520 $212 $196 $296 $156 $492 $128 $412 $520 $965 $232 $160 $13630$1,015 $550 $224 $208 $308 $168 $520 $136 $428 $550 $1,015 $248 $180 $14831$1,105 $585 $240 $216 $320 $176 $550 $144 $444 $585 $1,105 $260 $200 $15632$1,195 $615 $252 $224 $336 $188 $585 $156 $460 $615 $1,195 $276 $220 $16833$1,285 $650 $268 $232 $348 $200 $620 $164 $480 $650 $1,285 $288 $240 $18034$1,375 $680 $280 $244 $360 $212 $655 $172 $496 $680 $1,375 $300 $256 $19235$1,465 $715 $296 $252 $376 $220 $685 $180 $520 $715 $1,465 $316 $276 $20436$1,555 $745 $308 $260 $388 $232 $720 $192 $550 $745 $1,555 $328 $296 $21237$1,660 $780 $320 $272 $400 $244 $755 $200 $575 $780 $1,660 $344 $316 $22438$1,750 $810 $336 $280 $412 $252 $785 $208 $605 $810 $1,750 $356 $336 $23639$1,840 $845 $348 $288 $428 $264 $820 $216 $635 $845 $1,840 $372 $356 $248*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 5-10Table 5-5: Estimated Revenue Distribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thousands, 2010$)PercentileNAICS321211NAICS321911NAICS321999NAICS337110NAICS337121NAICS337122NAICS337127NAICS337129NAICS337211NAICS337212NAICS337215NAICS339920NAICS339932NAICS33999240$1,930 $875 $364 $300 $440 $276 $855 $228 $660 $875 $1,930 $384 $372 $26041$2,020 $905 $376 $308 $452 $288 $890 $236 $690 $905 $2,020 $400 $392 $26842$2,110 $940 $392 $316 $468 $296 $920 $244 $720 $940 $2,110 $412 $412 $28043$2,200 $970 $404 $324 $480 $308 $955 $252 $745 $970 $2,200 $428 $432 $29244$2,290 $1,000 $420 $336 $492 $320 $990 $264 $775 $1,000 $2,290 $440 $452 $30445$2,380 $1,075 $432 $344 $515 $332 $1,060 $272 $805 $1,075 $2,380 $456 $472 $31646$2,470 $1,135 $444 $352 $540 $340 $1,135 $280 $830 $1,135 $2,470 $468 $488 $32447$2,625 $1,195 $460 $364 $570 $352 $1,225 $288 $860 $1,195 $2,625 $484 $515 $33648$2,775 $1,255 $472 $372 $600 $364 $1,300 $300 $890 $1,255 $2,775 $496 $540 $34849$2,950 $1,315 $488 $380 $630 $376 $1,390 $308 $915 $1,315 $2,950 $525 $570 $36050$3,100 $1,375 $500 $388 $660 $384 $1,480 $316 $945 $1,375 $3,100 $560 $595 $37251$3,275 $1,435 $540 $400 $690 $396 $1,555 $324 $975 $1,435 $3,275 $595 $625 $38052$3,425 $1,495 $580 $408 $715 $408 $1,645 $336 $1,015 $1,495 $3,425 $630 $655 $39253$3,600 $1,555 $620 $416 $745 $420 $1,720 $344 $1,105 $1,555 $3,600 $665 $680 $40454$3,775 $1,630 $660 $428 $775 $428 $1,810 $352 $1,195 $1,630 $3,775 $700 $710 $41655$3,925 $1,690 $700 $436 $805 $440 $1,885 $360 $1,285 $1,690 $3,925 $735 $735 $42856$4,100 $1,750 $740 $444 $835 $452 $1,975 $372 $1,390 $1,750 $4,100 $770 $765 $43657$4,250 $1,810 $780 $456 $860 $460 $2,065 $380 $1,480 $1,810 $4,250 $805 $795 $44858$4,425 $1,870 $820 $464 $890 $472 $2,140 $388 $1,570 $1,870 $4,425 $840 $820 $46059$4,575 $1,930 $860 $472 $920 $484 $2,230 $396 $1,675 $1,930 $4,575 $870 $850 $47260$4,750 $1,990 $900 $480 $950 $496 $2,305 $408 $1,765 $1,990 $4,750 $905 $875 $48461$4,900 $2,050 $940 $492 $980 $515 $2,395 $416 $1,855 $2,050 $4,900 $940 $905 $49262$5,125 $2,110 $975 $500 $1,015 $550 $2,470 $424 $1,960 $2,110 $5,125 $975 $935 $52063$5,425 $2,185 $1,045 $535 $1,105 $585 $2,675 $432 $2,050 $2,185 $5,425 $1,030 $960 $56564$5,700 $2,245 $1,135 $565 $1,195 $615 $2,900 $444 $2,140 $2,245 $5,700 $1,135 $990 $61065$6,000 $2,305 $1,240 $600 $1,285 $650 $3,125 $452 $2,230 $2,305 $6,000 $1,240 $1,060 $65566$6,300 $2,365 $1,345 $630 $1,375 $680 $3,375 $460 $2,335 $2,365 $6,300 $1,345 $1,165 $70067$6,575 $2,425 $1,435 $665 $1,465 $715 $3,600 $468 $2,425 $2,425 $6,575 $1,435 $1,270 $74568$6,875 $2,485 $1,540 $700 $1,555 $750 $3,825 $480 $2,550 $2,485 $6,875 $1,540 $1,375 $79069$7,175 $2,725 $1,630 $730 $1,645 $780 $4,075 $488 $2,775 $2,725 $7,175 $1,645 $1,480 $84070$7,450 $2,975 $1,735 $765 $1,735 $815 $4,300 $496 $3,000 $2,975 $7,450 $1,750 $1,585 $88571$8,200 $3,250 $1,825 $795 $1,825 $845 $4,525 $525 $3,225 $3,250 $8,200 $1,855 $1,690 $93072$9,050 $3,525 $1,930 $830 $1,915 $880 $4,775 $565 $3,450 $3,525 $9,050 $1,960 $1,795 $97573$9,875 $3,800 $2,035 $865 $2,005 $915 $5,000 $605 $3,675 $3,800 $9,875 $2,065 $1,900 $1,06074$10,700 $4,050 $2,125 $895 $2,095 $945 $5,500 $650 $3,900 $4,050 $10,700 $2,155 $2,005 $1,18075$11,550 $4,325 $2,230 $930 $2,185 $980 $6,025 $690 $4,125 $4,325 $11,550 $2,260 $2,110 $1,30076$12,400 $4,600 $2,320 $960 $2,275 $1,045 $6,525 $730 $4,350 $4,600 $12,400 $2,365 $2,215 $1,42077$13,250 $4,875 $2,425 $995 $2,365 $1,165 $7,025 $770 $4,600 $4,875 $13,250 $2,470 $2,320 $1,54078$14,050 $5,250 $2,575 $1,090 $2,455 $1,285 $7,575$815 $4,825 $5,250 $14,050 $2,725 $2,425 $1,660*** EO 12866 Review Draft – Deliberative – Do Not Quote, Cite, or Release During Review***May 1, 2013 5-11Table 5-5: Estimated Revenue Distribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thousands, 2010$)PercentileNAICS321211NAICS321911NAICS321999NAICS337110NAICS337121NAICS337122NAICS337127NAICS337129NAICS337211NAICS337212NAICS337215NAICS339920NAICS339932NAICS33999279$14,900 $5,750 $2,900 $1,195 $2,675 $1,390 $8,375$855 $5,100 $5,750 $14,900 $3,075 $2,575 $1,78080$16,350 $6,250 $3,200 $1,300 $3,025 $1,510 $9,200$895 $5,675 $6,250 $16,350 $3,400 $2,875 $1,90081$17,800 $6,750 $3,525 $1,405 $3,375 $1,630 $10,000$940 $6,225 $6,750 $17,800 $3,725 $3,150 $2,02082$19,300 $7,250 $3,825 $1,510 $3,725 $1,750 $11,250$980 $6,800 $7,250 $19,300 $4,075 $3,450 $2,14083$21,200 $7,875 $4,150 $1,615 $4,075 $1,870 $12,450$1,075 $7,350 $7,875 $21,200 $4,400 $3,750 $2,26084$23,450 $8,675 $4,450 $1,720 $4,450 $1,990 $13,650$1,195 $7,900 $8,675 $23,450 $4,725 $4,050 $2,38085$26,350 $9,450 $4,775 $1,825 $4,800 $2,110 $14,850$1,330 $8,425 $9,450 $26,350 $5,150 $4,325 $2,52586$30,800 $10,650 $5,200 $1,930 $5,400 $2,215 $16,600$1,465 $8,975 $10,650 $30,800 $5,850 $4,625 $2,92587$35,200 $12,750 $5,875 $2,035 $6,275 $2,335 $18,400$1,600 $9,500 $12,750 $35,200 $6,550 $4,925 $3,35088$38,550 $14,850 $6,575 $2,140 $7,175 $2,455 $20,950$1,735 $10,150 $14,850 $38,550 $7,250 $5,750 $3,75089$43,800 $17,900 $7,250 $2,245 $8,550 $2,825 $27,050$1,870 $11,950 $17,900 $43,800 $8,600 $6,800 $4,17590$51,200 $21,500 $8,150 $2,350 $10,200 $3,350 $31,150$1,990 $13,750 $21,500 $51,200 $10,450 $7,800 $4,57591$67,400 $26,550 $9,175 $2,455 $12,100 $3,850 $35,800$2,125 $16,500 $26,550 $67,400 $12,500 $8,700 $5,00092$85,600 $33,550 $10,500 $2,800 $14,000 $4,375 $51,500$2,260 $21,250 $33,550 $85,600 $14,550 $9,575 $6,25093$100,000 $41,400 $13,150 $3,325 $17,500 $4,900 $63,800$2,395 $26,200 $41,400 $100,000 $17,350 $11,200 $7,55094$100,000 $63,800 $16,300 $3,850 $22,950 $6,000 $76,100$2,650 $32,100 $63,800 $100,000 $20,600 $13,450 $9,25095$100,000 $100,000 $21,150 $4,400 $28,650 $7,275 $94,600$3,325 $48,500 $100,000 $100,000 $27,850 $17,150 $14,25096$100,000 $100,000 $31,500 $4,925 $37,350 $9,550 $100,000$4,000 $70,700 $100,000 $100,000 $39,000 $23,900 $18,45097$100,000 $100,000 $46,550 $6,500 $61,400 $14,950 $100,000$4,700 $99,000 $100,000 $100,000 $95,000 $43,450 $34,10098$100,000 $100,000 $97,000 $9,425 $100,000 $24,000 $100,000$6,900 $100,000 $100,000 $100,000 $100,000 $70,700 $48,80099$100,000 $100,000 $100,000 $20,150 $100,000 $79,700 $100,000$100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $98,800100$100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000$100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337129: Wood television, radio, and sewing machine cabinetmanufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 337127:Institutional furniture manufacturing; 337215: Showcase, partition,shelving, and locker manufacturing; 321911: Wood window anddoor manufacturing; 337212: Custom architectural woodwork and millworkmanufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's vehicle manufacturing; 339992: Musicalinstrument manufacturing.

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

May 1, 2013 5-12 

### Table 5-6: Estimated Revenue Distribution for Nonemployer Wood Veneer Laminated Product Producers, by NAICS

Percentile NAICS 321 NAICS 337 NAICS 339

1 $1,138 $1,179 $1,098

2 $1,259 $1,339 $1,219

3 $1,420 $1,540 $1,380

4 $1,581 $1,701 $1,500

5 $1,742 $1,902 $1,621

6 $1,862 $2,103 $1,742

7 $2,023 $2,264 $1,902

8 $2,184 $2,465 $2,023

9 $2,345 $2,626 $2,144

10 $2,465 $2,827 $2,264

11 $2,626 $2,988 $2,425

12 $2,787 $3,189 $2,546

13 $2,908 $3,390 $2,667

14 $3,069 $3,551 $2,787

15 $3,230 $3,752 $2,948

16 $3,390 $3,913 $3,069

17 $3,511 $4,114 $3,189

18 $3,672 $4,315 $3,310

19 $3,833 $4,476 $3,471

20 $3,994 $4,677 $3,591

21 $4,114 $4,838 $3,712

22 $4,275 $5,050 $3,833

23 $4,436 $5,400 $3,953

24 $4,557 $5,750 $4,114

25 $4,717 $6,050 $4,235

26 $4,878 $6,400 $4,356

27 $5,050 $6,700 $4,476

28 $5,350 $7,050 $4,637

29 $5,650 $7,350 $4,758

30 $5,950 $7,699 $4,878

31 $6,250 $7,999 $5,050

32 $6,600 $8,349 $5,300

33 $6,900 $8,699 $5,600

34 $7,200 $8,999 $5,900

35 $7,500 $9,349 $6,200

36 $7,799 $9,649 $6,450

37 $8,099 $10,000 $6,750

38 $8,399 $10,600 $7,050

39 $8,699 $11,200 $7,350

40 $8,999 $11,950 $7,599

41 $9,299 $12,550 $7,899

42 $9,649 $13,150 $8,199

43 $9,949 $13,750 $8,499

44 $10,450 $14,500 $8,799

45 $11,200 $15,100 $9,049

46 $11,800 $15,700 $9,349

47 $12,550 $16,300 $9,649

48 $13,150 $17,050 $9,949

49 $13,900 $17,649 $10,450

50 $14,500 $18,249 $11,200

51 $15,250 $18,849 $11,950

52 $15,850 $19,599 $12,550

53 $16,600 $20,199 $13,300

54 $17,200 $20,799 $13,900

55 $17,949 $21,399 $14,650

56 $18,549 $22,149 $15,250

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

May 1, 2013 5-13 

### Table 5-6: Estimated Revenue Distribution for Nonemployer Wood Veneer Laminated Product Producers, by NAICS

Percentile NAICS 321 NAICS 337 NAICS 339

57 $19,299 $22,749 $16,000

58 $19,899 $23,349 $16,750

59 $20,499 $23,949 $17,350

60 $21,249 $24,699 $18,099

61 $21,849 $25,750 $18,699

62 $22,599 $27,000 $19,449

63 $23,199 $28,500 $20,049

64 $23,949 $30,000 $20,799

65 $24,549 $31,500 $21,549

66 $25,750 $33,000 $22,149

67 $27,500 $34,500 $22,899

68 $29,250 $35,750 $23,499

69 $31,000 $37,250 $24,249

70 $32,750 $38,749 $24,849

71 $34,500 $40,249 $26,750

72 $36,250 $41,749 $28,750

73 $37,999 $43,249 $30,750

74 $39,749 $44,499 $32,750

75 $41,499 $45,999 $34,750

76 $43,249 $47,499 $36,750

77 $44,999 $48,999 $38,749

78 $46,749 $51,000 $40,749

79 $48,499 $55,000 $42,749

80 $51,000 $59,000 $44,749

81 $55,500 $63,500 $46,749

82 $60,500 $67,500 $48,749

83 $65,000 $71,500 $52,500

84 $70,000 $75,499 $58,000

85 $75,000 $79,499 $64,000

86 $79,499 $83,499 $69,500

87 $84,499 $87,499 $75,000

88 $89,499 $91,499 $80,999

89 $93,999 $95,499 $86,499

90 $98,999 $99,499 $91,999

91 $116,500 $118,000 $97,499

92 $139,000 $139,000 $115,000

93 $161,500 $158,500 $140,500

94 $182,499 $179,499 $164,500

95 $204,999 $198,999 $189,999

96 $227,499 $219,999 $215,499

97 $250,000 $239,499 $240,999

98 $367,500 $320,000 $337,500

99 $489,999 $459,999 $477,499

100 $10,000,000 $10,000,000 $10,000,000 Note: NAICS 321: Wood product manufacturing; 337: Furniture and related product manufacturing; 339: Miscellaneous manufacturing.



### 5216 5.2.4 Small Business Impact Summary for Wood Veneer Laminated Product Producers 5217

5218 Table 5-7 presents a summary of the number of affected small laminated product producers by 5219 NAICS code, category of costs incurred, and employment status. Table 5-8 and Table 5-9 present the 5220 small business impacts on employer and nonemployer wood veneer laminated product producers, 5221 respectively. Table 5-10 summarizes the impact s to all small laminated product producers. 5222

5223

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

May 1, 2013 5-14 

### The number of firms by cost-revenue ratio bracket is estimated from the estimated number of 5224 firms, the per-firm costs, and the revenue distribu tions presented above in Table 5-5 and Table 5-6. 60 

### For 5225 example, there are an estimated 165 employer wood veneer laminated product producers in the Wood 5226 Kitchen Cabinet and Countertop industry (NAICS 337110 ) that will incur rule familiarization, labeling, 5227 and raw materials costs ($2,260.62). Thus, employer firms with revenues below $75,354 ($2,260.62 5228 divided by 3%) have cost-impact ratios above thre e percent and firms with revenue above $226,062 5229 ($2,260.62 divided by 1%) have cost-impact ratios be low one percent. Finally, firms with revenues 5230 between $75,354 and $226,062 would have cost-impact ratios between 1 and 3 percent. Since the 12 th 

### 5231 percentile of revenues for NAICS 337110 is below $7 5,354, 12 percent of these firms (20 firms) have 5232 cost-impact ratios above three percent. Since the 32 nd 

### percentile of revenues for NAICS 337110 is below 5233 $226,062, 20 percent (32 minus 12 percent) or 33 of these firms have cost-impact ratios between one and 5234 three percent. The remaining 68 percent of these firms (112 firms) have a cost-impact ratio below one 5235
percent. 5236

5237 Overall, 5,532 small wood veneer laminated product producers (about 74 percent of the total) are 5238 expected to have costs impacts that are less than one percent of their revenues, 759 firms (about 11 5239 percent) are expected to experience impacts at levels between one and three percent of their revenue, and 5240 1,159 firms (about 15 percent) are expected to incur costs exceeding three percent of their revenues. 5241

5242

60 Nonemployers were assumed to account for 30 percent of all affected wood veneer laminated product manufacturers.

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

May 1, 2013 5-15 

### Table 5-7: Number of Wood Veneer Laminated Product Producers with Cost Impacts, by NAICS
Categories of Costs

Incurred NAICS

321211 NAICS

321911 NAICS

321999 NAICS

337110 NAICS

337121 NAICS

337122 NAICS

337127 NAICS

337129 NAICS

337211 NAICS

337212 NAICS

337215 NAICS

339920 NAICS

339932 NAICS

339992 All Small Employer Firms With Cost Impacts Rule fam., label. 51 821 88 267 338 704 259 55 152 100 459 17 5 5 Rule fam., label., raw

mat. 10 508 - 165 209 435 - 33 - - - - - -

Rule fam., label., raw mat., fab. record. 6 134 9 44 55 115 26 9 15 10 46 1 1 1

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 1 30 2 10 13 26 6 2 4 2 11 1 - -

Total 68 1,493 99 485 615 1,280 291 99 171 112 516 19 6 6 All Nonemployer Firms With Cost Impacts Rule fam., label. - 352 37 114 145 302 111 23 65 43 197 7 3 3 Rule fam., label., raw

mat. - 218 - 71 90 187 - 14 - - - - - -

Rule fam., label., raw mat., fab. record. - 58 4 19 24 49 11 4 7 4 20 1 - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. - 13 1 4 5 11 2 1 1 1 4 - - -

Total - 640 42 208 264 549 125 42 73 48 221 8 3 3 All Small Firms With Cost Impacts Rule fam., label. 51 1,173 125 381 483 1,006 370 78 217 142 656 24 8 8 Rule fam., label., raw

mat. 10 725 - 236 299 622 - 47 - - - - - -

Rule fam., label., raw mat., fab. record. 6 192 13 62 79 164 38 13 22 15 66 2 1 1

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 1 43 3 14 18 37 8 3 5 3 15 1 - -

Total 68 2,133 141 693 879 1,829 416 141 244 160 737 27 9 9 Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 3371 29: Wood television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Non upholstered wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 337127: Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom architectural woodwor k and millwork manufacturing; 321999: All other miscellaneous wood product manufact uring; 339920: Sporting and athletic goods manufacturing; 3 39932: Game, toy, and children's vehicle manufacturing; 339992: Musical instrument manufacturing.


### 5243

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

May 1, 2013 5-16 

### Table 5-8: Small Business Impacts on Employ er Wood Veneer Laminated Product Producers by

NAICS
Categories of Costs

Incurred NAICS

321211 NAICS

321911 NAICS

321999 NAICS

337110 NAICS

337121 NAICS

337122 NAICS

337127 NAICS

337129 NAICS

337211 NAICS

337212 NAICS

337215 NAICS

339920 NAICS

339932 NAICS

339992 All Small Employer Firms With Cost Impacts <1%
Rule fam., label. 51 821 87 264 338 697 259 54 152 100 459 17 5 5
Rule fam., label., raw

mat. 4 462 - 112 188 361 - 20 - - - - - -

Rule fam., label., raw mat., fab. record. 2 121 6 30 49 94 24 5 14 8 45 1 - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. -6 - - 2 2 1 -1 - 4 - - -

Total 57 1,410 93 406 577 1,154 284 80 166 108 508 18 6 6

All Small Em p lo y er Firms With Cost Im p acts >1% and <3%
Rule fam., label. -- 1 3 - 7 - 1-- - - - -
Rule fam., label., raw

mat. 2 41 - 33 19 65 - 7 - - - - - -

Rule fam., label., raw mat., fab. record. 2 12 1 8 6 18 2 2 1 1 1 - - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. -5 - 1 2 2 1 -1 - 3 - - -

Total 4 58 2 45 26 93 3 10 2 1 4 - - -
All Small Employer Firms With Cost Impacts >3%
Rule fam., label.

-- - - - - - --- - - - - Rule fam., label., raw

mat. 4 5 - 20 2 9 - 6 - - - - - -

Rule fam., label., raw mat., fab. record. 31 2 6 1 2 1 2 -1 - - - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 1 19 2 9 9 22 3 2 2 1 4 1 - -

Total 7 25 3 34 12 33 4 9 3 2 4 1 - -
Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 3371 29: Wood television, radio, and sewing machine ca b inet manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Nonupholstered wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 337127: Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom architectural woodwor k and millwork manufacturing; 321999: All other miscellaneous wood product manufact uring; 339920: Sporting and athletic goods manufacturing; 3 39932: Game, toy, and children's vehicle manufacturing; 339992: Musical instrument manufacturing.


### 5244

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

May 1, 2013 5-17 

### Table 5-9: Small Business Impacts on Nonemployer Wood Veneer Laminated Product Producers by

NAICS
Categories of Costs

Incurred NAICS

321211 NAICS

321911 NAICS

321999 NAICS

337110 NAICS

337121 NAICS

337122 NAICS

337127 NAICS

337129 NAICS

337211 NAICS

337212 NAICS

337215 NAICS

339920 NAICS

339932 NAICS

339992 

### All Small Nonemployer Firms With Cost Impacts <1%

Rule fam., label. - 130 14 48 61 127 47 10 27 18 83 2 1 1
Rule fam., label., raw

mat. - 22 - 3 14 30 - 1 - - - - - -

Rule fam., label., raw mat., fab. record. -6 - 1 4 7 1 -1 - 2 - - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. -- - - - - - --- - - - -

Total - 158 14 52 79 164 48 10 28 18 84 2 1 1 

### All Small Nonemployer Firms Wi th Cost Impacts >1% and <3%

Rule fam., label. - 95 10 32 41 85 31 7 18 12 55 2 1 1
Rule fam., label., raw

mat. - 44 - 9 21 43 - 2 - - - - - -

Rule fam., label., raw mat., fab. record. - 11 - 2 5 11 2 - 1 - 4 - - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. -- - - - - - --- - - - -

Total - 149 10 43 67 139 33 9 19 12 59 2 1 1 

### All Small Nonemployer Firms With Cost Impacts >3%

Rule fam., label. - 127 13 34 44 91 33 7 19 13 59 3 1 1
Rule fam., label., raw

mat. - 152 - 59 55 114 - 12 - - - - - -

Rule fam., label., raw mat., fab. record. - 41 3 16 15 31 8 3 5 4 14 1 - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. - 13 1 4 5 11 2 1 1 1 4 - - -

Total - 333 18 113 118 246 44 23 26 18 78 4 1 1
Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 3371 29: Wood television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Non upholstered wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 337127: Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom architectural woodwor k and millwork manufacturing; 321999: All other miscellaneous wood product manufact uring; 339920: Sporting and athletic goods manufacturing; 3 39932: Game, toy, and children's vehicle manufacturing; 339992: Musical instrument manufacturing.


### 5245

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

May 1, 2013 5-18 

### Table 5-10: Small Business Impacts on All Sm all Wood Veneer Laminated Product Producers by

NAICS
Categories of Costs

Incurred NAICS

321211 NAICS

321911 NAICS

321999 NAICS

337110 NAICS

337121 NAICS

337122 NAICS

337127 NAICS

337129 NAICS

337211 NAICS

337212 NAICS

337215 NAICS

339920 NAICS

339932 NAICS

339992 

### All Small Firms With Cost Impacts <1%

Rule fam., label. 51 951 101 312 399 824 306 64 179 118 542 19 6 6
Rule fam., label., raw

mat. 4 484 - 115 203 391 - 21 - - - - - -

Rule fam., label., raw mat., fab. record. 2 127 6 30 53 102 25 5 14 8 47 1 - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. -6 - - 2 2 1 -1 - 4 - - -

Total 57 1,568 107 458 656 1,318 332 90 194 126 592 20 7 7 

### All Small Firms With Cost Impacts >1% and <3%

Rule fam., label. - 95 11 35 41 92 31 7 18 12 55 2 1 1
Rule fam., label., raw

mat. 2 84 - 42 40 108 - 9 - - - - - -

Rule fam., label., raw mat., fab. record. 2 23 2 11 11 30 5 2 3 1 5 - - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. -5 - 1 2 2 1 -1 - 3 - - -

Total 4 208 13 88 93 232 37 18 21 14 63 2 1 1 

### All Small Firms With Cost Impacts >3%

Rule fam., label. - 127 13 34 44 91 33 7 19 13 59 3 1 1
Rule fam., label., raw

mat. 4 157 - 79 57 123 - 18 - - - - - -

Rule fam., label., raw mat., fab. record. 3 42 5 21 15 33 9 5 5 5 14 1 - -

Rule fam., label., raw mat., fab. record., test., cert., HWPW record. 1 31 2 13 15 33 6 3 4 2 9 1 - -

Total 7 358 21 147 130 279 48 32 28 20 82 4 2 2
Note: NAICS 321211: Hardwood Veneer and Plywood Manufacturers; 337110: Wood kitchen cabinet and countertop manufacturing; 337 129: Wood television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 337122: Non upholstered wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 337127: Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom architectural woodwor k and millwork manufacturing; 321999: All other miscellaneous wood product manufact uring; 339920: Sporting and athletic goods manufacturing; 3 39932: Game, toy, and children's vehicle manufacturing; 339992: Musical instrument manufacturing.


### 5246

5247

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

May 1, 2013 5-19 

## 5.3 Small Business Impacts for Fabricators, Wholesalers, and Retailers 5248

5249 The basic steps in the small business impact anal ysis for fabricators (excluding those fabricators 5250 that are laminators, which are discussed in Section 5. 2), wholesalers, and retailers are as follows: (1) 5251 estimate the number of small firms, (2) estimate the revenue distribution of affected firms, (3) estimate 5252 the cost per firm, and (4) based on the number of affected firms, the per-firm costs, and the revenue 5253 distribution, estimate the number of firms by cost-reve nue ratio. These steps are described in more detail 5254

below. 5255

5256
5.3.1 Number of Small Fabricator , Wholesale, a nd Retail Firms 5257

5258 The number of small employer firms in the affe cted fabricator, wholesaler, and retailer NAICS 5259 (described in Chapter 2) were estimated using data from the 2007 Economic Census, the Census Bureau’s 5260 2008 Nonemployer Statistics, and SBA’s small busines s size standards. For those retail NAICS where 5261 the Census revenue brackets overlapped the small busin ess revenue threshold, the firms in the overlapped 5262 bracket were counted as small. All nonemployer firms were assumed to be small. 5263

5264
5.3.2 Revenue Distribution for Affected Fabricator, Wholesale, and Retail Firms 5265

5266 The 2007 Economic Census has information on the number of employer firms by NAICS code in 5267 18 revenue brackets. The 2008 Nonemployer Statistics has information on the number of nonemployer 5268 firms by NAICS code in 12 revenue brackets. Impacts were separately estimated for six industry 5269 categories: (1) employer fabricators, (2) employer wholesalers, (3) employer retailers, (4) nonemployer 5270 fabricators, (5) nonemployer wholesalers, and (6) no nemployer retailers. For each industry category, the 5271 number of affected firms by revenue bracket was estimated by combining the number of affected firms by 5272 NAICS/employer status and the percentage of fi rms by revenue bracket within each affected 5273 NAICS/employer status category. After compiling these data, the overall revenue distributions for each 5274 percentile from 1 to 100 were calculated by assuming that revenues are uniformly distributed within each 5275 revenue bracket. The bottom revenue bracket was assigned a revenue floor of $20,000 for employers and 5276 $1,000 for nonemployers. Note that this analysis like ly overestimates the number of affected firms in this 5277 bottom revenue bracket because Census data includes firms with no revenue, and firms with no revenue 5278 do not sell composite wood products and therefore are unlikely to incur costs due to the rule. The 5279 resulting distributions are presented in Table 5-11. 5280

5281

5282 Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers

Percentile Type of Firm
Employers Nonemployers

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers

1 $25,110 $31,072 $25,110 $1,165 $1,206 $1,123



### 2 $30,220 $41,292 $31,072 $1,329 $1,370 $1,247



### 3 $34,478 $52,363 $36,182 $1,453 $1,576 $1,370



### 4 $39,588 $63,435 $42,143 $1,617 $1,782 $1,494



### 5 $44,698 $73,655 $47,253 $1,782 $1,946 $1,617



### 6 $49,808 $84,726 $53,215 $1,946 $2,152 $1,741



### 7 $54,918 $95,798 $58,325 $2,070 $2,358 $1,864



### 8 $59,176 $105,167 $64,286 $2,234 $2,522 $1,987



### 9 $64,286 $126,201 $69,396 $2,399 $2,728 $2,111



### 10 $69,396 $143,027 $75,358 $2,563 $2,934 $2,234

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

May 1, 2013 5-20 

### Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers

Percentile Type of Firm
Employers Nonemployers

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers

11 $74,506 $159,854 $80,468 $2,687 $3,098 $2,358



### 12 $79,616 $180,888 $86,430 $2,851 $3,304 $2,481



### 13 $84,726 $197,714 $91,540 $3,016 $3,510 $2,605



### 14 $88,985 $214,541 $96,650 $3,181 $3,715 $2,728



### 15 $94,095 $231,368 $102,611 $3,304 $3,880 $2,851



### 16 $99,205 $252,401 $109,374 $3,469 $4,086 $2,975



### 17 $104,315 $269,228 $121,994 $3,633 $4,291 $3,098



### 18 $113,581 $286,055 $134,614 $3,798 $4,456 $3,222



### 19 $126,201 $302,881 $143,027 $3,921 $4,662 $3,345



### 20 $138,821 $323,915 $155,647 $4,086 $4,867 $3,469



### 21 $151,441 $340,741 $164,061 $4,250 $5,032 $3,592



### 22 $164,061 $357,568 $176,681 $4,415 $5,371 $3,715



### 23 $176,681 $378,602 $189,301 $4,538 $5,729 $3,798



### 24 $189,301 $395,428 $197,714 $4,703 $6,138 $3,921



### 25 $201,921 $412,255 $210,334 $4,867 $6,496 $4,045



### 26 $210,334 $429,082 $218,748 $5,032 $6,854 $4,168



### 27 $222,954 $450,115 $231,368 $5,218 $7,263 $4,291



### 28 $235,574 $466,942 $243,988 $5,524 $7,621 $4,415



### 29 $248,194 $483,769 $252,401 $5,831 $8,031 $4,538



### 30 $260,815 $504,802 $265,021 $6,138 $8,389 $4,662



### 31 $273,435 $521,629 $277,641 $6,496 $8,747 $4,785



### 32 $286,055 $552,128 $286,055 $6,803 $9,156 $4,909



### 33 $298,675 $588,937 $298,675 $7,110 $9,514 $5,032



### 34 $307,088 $625,745 $307,088 $7,417 $9,923 $5,218



### 35 $319,708 $662,554 $319,708 $7,724 $10,384 $5,524



### 36 $332,328 $694,104 $332,328 $8,031 $11,151 $5,831



### 37 $344,948 $730,912 $340,741 $8,337 $11,919 $6,138



### 38 $357,568 $767,721 $353,362 $8,644 $12,686 $6,445



### 39 $370,188 $804,529 $361,775 $8,951 $13,453 $6,752



### 40 $382,808 $841,338 $374,395 $9,309 $14,220 $7,059



### 41 $395,428 $878,146 $387,015 $9,616 $15,141 $7,366



### 42 $408,048 $914,955 $395,428 $9,923 $15,908 $7,673



### 43 $416,462 $951,763 $408,048 $10,231 $16,676 $7,928



### 44 $429,082 $983,313 $416,462 $10,844 $17,443 $8,235



### 45 $441,702 $1,020,122 $429,082 $11,612 $18,210 $8,542



### 46 $454,322 $1,067,448 $441,702 $12,226 $18,977 $8,849



### 47 $466,942 $1,146,324 $450,115 $12,993 $19,745 $9,156



### 48 $479,562 $1,225,199 $462,735 $13,607 $20,512 $9,463



### 49 $492,182 $1,304,074 $471,149 $14,220 $21,433 $9,769



### 50 $504,802 $1,382,950 $483,769 $14,988 $22,200 $10,076



### 51 $517,422 $1,461,825 $496,389 $15,601 $22,967 $10,538



### 52 $531,095 $1,540,701 $504,802 $16,369 $23,734 $11,305



### 53 $567,903 $1,619,576 $517,422 $16,983 $24,502 $12,072



### 54 $604,712 $1,698,452 $531,095 $17,750 $25,269 $12,839

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

May 1, 2013 5-21 

### Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers

Percentile Type of Firm
Employers Nonemployers

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers

55 $636,262 $1,793,102 $562,645 $18,364 $26,856 $13,607



### 56 $673,070 $1,871,978 $594,195 $18,977 $28,646 $14,374



### 57 $709,879 $1,950,853 $620,487 $19,745 $30,436 $15,141



### 58 $746,687 $2,029,728 $652,037 $20,358 $32,226 $15,908



### 59 $783,496 $2,108,604 $683,587 $21,126 $34,017 $16,522



### 60 $815,046 $2,187,479 $709,879 $21,739 $35,807 $17,289



### 61 $851,855 $2,266,355 $741,429 $22,507 $37,853 $18,057



### 62 $888,663 $2,345,230 $772,979 $23,121 $39,643 $18,824



### 63 $925,472 $2,424,106 $799,271 $23,888 $41,434 $19,591



### 64 $962,280 $2,502,981 $830,821 $24,502 $43,224 $20,358



### 65 $993,830 $2,581,856 $862,371 $25,115 $45,014 $21,126



### 66 $1,030,639 $2,734,350 $888,663 $26,344 $46,805 $21,893



### 67 $1,098,998 $2,944,685 $920,213 $28,134 $48,851 $22,660



### 68 $1,193,649 $3,128,727 $951,763 $29,925 $50,641 $23,427



### 69 $1,288,299 $3,339,062 $983,313 $31,459 $53,711 $24,195



### 70 $1,382,950 $3,549,396 $1,009,605 $33,249 $57,803 $24,962



### 71 $1,493,375 $3,759,731 $1,041,155 $35,040 $61,895 $25,832



### 72 $1,588,026 $3,970,065 $1,114,773 $36,830 $65,988 $28,134



### 73 $1,682,677 $4,180,400 $1,193,649 $38,620 $70,080 $30,436



### 74 $1,793,102 $4,390,734 $1,288,299 $40,411 $74,172 $32,738



### 75 $1,887,753 $4,601,069 $1,382,950 $42,201 $77,753 $35,040



### 76 $1,982,403 $4,811,403 $1,461,825 $43,991 $81,845 $37,597



### 77 $2,077,054 $5,021,738 $1,556,476 $45,526 $85,937 $39,899



### 78 $2,187,479 $5,232,073 $1,651,126 $47,316 $90,029 $42,201



### 79 $2,282,130 $5,652,743 $1,730,002 $49,106 $94,122 $44,503



### 80 $2,376,780 $6,073,412 $1,824,652 $50,897 $98,214 $46,805



### 81 $2,487,206 $6,520,373 $1,919,303 $55,246 $102,307 $49,106



### 82 $2,581,856 $6,941,042 $1,998,178 $60,361 $114,584 $52,177



### 83 $2,813,225 $7,388,003 $2,092,829 $64,965 $128,395 $58,315



### 84 $3,155,019 $7,808,672 $2,187,479 $70,080 $140,672 $63,942



### 85 $3,523,104 $8,544,844 $2,266,355 $75,195 $154,483 $70,080



### 86 $3,864,898 $9,333,598 $2,361,005 $79,799 $168,294 $76,218



### 87 $4,232,984 $10,122,353 $2,455,656 $84,914 $180,571 $82,356



### 88 $4,574,777 $11,200,318 $2,534,531 $89,518 $194,383 $88,495



### 89 $4,916,571 $12,514,909 $2,629,183 $94,633 $208,194 $94,633



### 90 $5,310,949 $13,829,500 $2,944,685 $99,237 $220,471 $100,771



### 91 $6,178,579 $15,144,091 $3,260,186 $111,515 $234,282 $117,653



### 92 $7,046,209 $17,089,687 $3,601,980 $134,533 $246,559 $140,672



### 93 $7,913,840 $19,561,119 $3,917,482 $157,552 $276,229 $163,691



### 94 $9,570,224 $22,505,804 $4,232,984 $180,571 $332,497 $186,710



### 95 $11,778,738 $26,134,075 $4,548,485 $202,056 $386,208 $209,729



### 96 $14,723,422 $31,392,440 $4,863,987 $225,074 $442,477 $232,747



### 97 $19,087,866 $38,543,818 $5,179,489 $248,093 $498,745 $255,767



### 98 $26,659,913 $49,638,969 $5,847,302 $350,401 $670,110 $365,747

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

May 1, 2013 5-22 

### Table 5-11: Estimated Revenue Distribution for Fabricators, Wholesalers, and Retailers

Percentile Type of Firm
Employers Nonemployers

Fabricators Wholesalers Retailers Fabricators Wholesalers Retailers

99 $43,591,849 $74,037,784 $6,604,507 $485,957 $879,839 $478,284



### 100 $105,167,308 $105,167,307 $7,361,712 $2,557,673 $5,115,346 $10,230,695



### 5283 5.3.3 Costs per Small Fabricator , Wholesale, and Retail Firm 5284

5285 The costs per small firm are estimated by annualizing the costs per firm presented in Chapter 2. 5286 Except for recurring recordkeeping costs, the impact analysis uses a single average annualized cost per 5287 firm for each cost element (rule familiarization, labeling and initial recordkeeping). 5288

5289

Table 5-12: Per Firm Costs

Description of Costs Incurred Initial or

Annual Cost Annualized Cost
(3 Percent)

Fabricators

Rule Familiarization $294.40 $14.29 Initial Labeling (firms with minor costs) $132.81 $6.45 Initial Labeling (firms with more substantial costs) $4,552.00 $220.97 Recurring Recordkeeping 49.68 $47.27



### Wholesalers

Rule Familiarization $373.16 $18.11
Initial Recordkeeping $2,510.80 $121.88 Initial Labeling (firms with more substantial costs) $4,552.00 $220.97 Recurring Recordkeeping 51.08 $48.60



### Retailers

Rule Familiarization $282.84 $13.73



### 5290

5291 Recurring recordkeeping costs are assumed to be a function of revenue rather than a fixed cost 5292 per firm. As described in Chapter 2, the recordkeeping and labeling costs were estimated based on the 5293 responses to a questionnaire administered to seven wholesale firms and another questionnaire 5294

administered to nine fabricator firms. Based on re venue data from the Dun and Bradstreet database and 5295 other publically available sources, the two respondent s reporting recurring recordkeeping costs appeared 5296 to be larger firms that likely have revenues that are significantly larger than the average revenue for 5297 affected firms. Nevertheless, the costs they reported were still assumed to represent the average costs 5298 for the fraction of affected firms that will incur additional recordkeeping costs due to the rule. These 5299 average costs were compared to average industry revenues to calculate the cost impact of recurring 5300 recordkeeping. (This is equivalent to scaling the recurring recordkeeping costs to the revenues of the 5301 firm.) The cost impacts of recurring recordkeeping were then added to the cost impacts from the other 5302 cost elements to calculate the total cost impact. 5303

5304 As described in Chapter 2, 11 percent of the fabricators that are not currently complying with the 5305 CARB ATCM (because their products are not sold in California) are assumed to incur recurring 5306 recordkeeping costs that were estimated to average $12,917 and $179 per year for employer firms and 5307 nonemployer firms, respectively. This is $12,290 and $170 per year when annualized over 30 years using 5308 a three percent discount rate. The analysis assumes that these recordkeeping costs include a fixed cost 5309 component associated with 2 hours of labor ($47.27 a nnualized, based on labor rate s at fabricator firms) 5310 and a variable cost component that is estimated as a function of revenue. The variable cost component is 5311

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

May 1, 2013 5-23 

### estimated to be 0.3 percent of revenue, which is calcu lated by taking the employer firm variable cost of 5312 $12,243and dividing by the average employer firm revenue of $4.2 million (Given the revenue 5313

distribution for fabricators shown in Table 5-11, this is equivalent to a range of recurring recordkeeping 5314 costs of $120 to $304,002 per year for employer firm fabricators, and a range of $51 to $7,439 per year 5315 for non-employer firm fabricators.) As shown in Ta ble 5-12, the average annualized cost per firm to 5316 fabricators for the other rule’s other requirements ra nges from $14 to $220. The cost impacts from these 5317 costs are combined with the cost impacts from recurring recordkeeping to calculate total cost impacts. 5318

5319 For wholesalers, 43 percent of the firms that are not currently complying with the CARB ATCM 5320 (because their products are not sold in California) are assumed to incur recurring recordkeeping costs that 5321 were estimated to average $4,980 and $100 per year for employer and nonemployer firms, respectively. 5322 This is $4,739 and $95 per year when annualized ove r 30 years using a three percent discount rate. The 5323 analysis assumes that these recordkeeping costs include a fixed cost component associated with 2 hours of 5324 labor ($48.60 annualized, based on labor rates at wholes aler firms) and a variable cost component that is 5325 estimated as a function of revenue. The variable cost component is estimated to be 0.06 percent of 5326 revenue, which is calculated by taking the employer variable cost of $4,690 and dividing by the average 5327 employer firm revenue of $8.3 million. (Given the revenue distribution for wholesalers shown in Table 5328 5-11, this is equivalent to a ra nge of recurring recordkeeping costs of $65 to $59,410 per year for 5329 employer firm wholesalers, and a range of $48 to $2, 935 per year for non-employ er firm wholesalers.) 5330 As shown in Table 5-12, the average annualized cost per firm to wholesalers for the other rule’s other 5331 requirements ranges from $18 to $220 per year. The cost impacts from these costs are combined with the 5332 cost impacts from recurring recordkeeping to calculate total cost impacts. 5333

5334

5335 5.3.4 Small Business Impact Summary for Fabricators, Wholesalers, and Retailers 5336

5337 Table 5-13 presents the small business impacts on fabricators, wholesalers and retailers. Overall, 5338 about 95 percent of small firms are expected to have cost impacts that are less than one percent of their 5339 revenue, about 4 percent of small firms are expected to have cost impacts between one and three percent 5340 of their revenue, and about 1 percent of small firms are expected to have cost impacts that exceed three 5341 percent of their total revenue. The number of firms by cost-revenue ratio bracket is estimated from the 5342 estimated number of firms, the per-firm costs shown in Table 5-12, and the revenue distributions 5343 presented above in Table 5-11. 5344

5345 For example, 3,154 fabricator firms with employees are estimated to comply with the CARB 5346 ATCM because their products may be sold in California. These firms incur the incremental cost of 5347 $14.29 for rule familiarization with the TSCA Title VI rule, but do not incur incremental costs for the 5348 rule’s other requirements. Thus, only firms with revenues below $476 ($14.29 divided by 3%) would 5349 have cost-impact ratios above three percent and firm s with revenue below $1,429 ($14.29 divided by 1%) 5350 would have cost-impact ratios above one percent. Si nce the 1st percentile for employer fabricators is 5351 greater than $1,429, it is estimated that all 3,154 of these employer fa bricators have cost-impact ratios 5352 below one percent. It is also estimated that 5,032 fabricators that are nonemployer firms comply with the 5353 CARB ATCM because their products may be sold in California. Like the compliant firms with 5354 employees, these nonemployer firms only incur the incremental cost of $14.29 for rule familiarization. 5355 However, since the 1st percentile for nonemployer fabricators is greater than $476 and the 3 rd 

### percentile 5356 for revenue is greater than $1,429, it is estimated that 2 percent, or 101 of these firms have cost-impact 5357 ratios of between one and three percent, while the re maining 4,931 firms have cost-impact ratios of less 5358 than one percent. 5359

5360

5361

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

May 1, 2013 5-24 

### Table 5-13: Small Business Impacts on Fabricators, Wholesalers, and Retailers

Description of Costs Incurred Number of

Small Firms Average Cost

Per Firm for

Small Firms a 

### (annualized, 3

percent) Number of Firms with Impacts

<1% 1-3% >3%

Fabricator Employers

Rule Fam. 3,154 $14.29 3,154

- - Rule Fam. and Labeling (minor cost) 21,570 $20.74 21,570
Rule Fam. and Labeling (major cost) 1,460 $235.26 1,460 -

- Rule Fam., Labeling (major cost) and Rec.Rec. a 1,694 $282.53 1,626 68

- Total 27,879 

### Fabricator Nonemployers

Rule Fam. 5,032 $14.29 4,931 101

- Rule Fam. and Labeling (minor cost) 34,413 $20.74 32,004 2,409

- Rule Fam. and Labeling (major cost) 2,329 $235.26 885 629 815
Rule Fam., Labeling (major cost) and Rec.Rec. a 2,703 $282.53 730 811 1,162

Total 44,478



### Wholesale Em p lo y ers
Rule Fam. 30,884 $18.11 30,884

- - Rule Fam., Initial Rec. 845 $140.00 845 -

- Rule Fam., Initial Rec., Rec.Rec. a 2,252 $188.60 2,252 -

- Rule Fam., Initial Rec., Rec.Rec. a , Initial Labeling 343 $409.56 329 14

- Total 34,325 

### Wholesale Nonemployers

Rule Fam. 45,539 $18.11 43,717 1,822

- Rule Fam., Initial Rec. 1,247 $140.00 761 249 237

Rule Fam., Initial Rec., Rec.Rec. a 3,321 $188.60 1,760 764 797

Rule Fam., Initial Rec., Rec.Rec. a , Initial Labeling 506 $409.56 182 127 197

Total 50,613


### Retail Em p lo y ers

Rule Fam. 202,630 $13.73 202,630

- - Total 202,630 

### Retail Nonemployers

Rule Fam. 511,359 $13.73 496,018 15,341

- Total 511,359 

### All Fabricators, Wholesale and Retail Firms

All Costs 871,283 - 845,738 22,335 3,208

a The analysis estimates impacts due to rule familiarization, noti fication, labeling, and initial recordkeeping using an average cost that is treated as a fixed cost per firm, although in reality co sts will vary by firm. By contrast, recurring recordkeeping (o r “Rec. Rec.”) costs are estimated as a fixed cost plus a variable cost that is a function of revenue, since these costs are expected t o be larger for firms with larger sales volumes. These variable costs are es timated to be 0.3% of fabricator revenues and 0.06% of wholesa le

firm revenues.



### 5362

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

May 1, 2013 5-25 

## 5.4 Summary of Small Business Impacts 5363

5364 Table 5-14 presents a summary of the small business impacts from the proposed TSCA Title VI 5365 Implementation Rule. As indicated, 851, 296 298 small firms (about 97 percent) are expected to have costs 5366 impacts that are less than one percent of their revenues, 22, 133 131 firms (about 3 percent) are expected to 5367 experience impacts at levels between one and three percent of their revenue, and 4,369 firms (less than 1 5368 percent) are expected to incur costs exceeding three percent of their revenues. 5369

5370 Note that many of the firms with cost impacts above 1 percent of their revenues are fabricators, 5371 wholesalers, and retailers with annualized costs less than $250 (as shown in Table 5-13). All fabricators 5372 except those with recurring recordkeeping costs and all wholesalers except those with initial labeling 5373 costs that had impacts above 1% of their revenues had annualized costs that were below $250. Note that 5374 this implies that their revenues were below $25,000 ). These firms account for 92 percent of the firms 5375 with cost impacts that are between 1 and 3 percent and 42 percent of the firms with cost impacts that 5376 exceed 3 percent. 5377

5378 Table 5-14: Summary of Small Business Impacts

Employer Status Firm Type Number of

Affected Small

Firms Number of Firms by Cost-Impact

Ratio

<1% 1-3% >3%

Employers Stock Panel Producer 31 25 27 5 3 1

Wood Veneer Laminated Product 5,260 4,873 249 138

Fabricator 27,879 27,810 68 -

Wholesale 34,324 34,310 14 -

Retail 202,630 202,630 - -
All Firms 270,123 269, 648 650 336 334 139

Nonemployers Stock Panel Producer
- - - - Wood Veneer Laminated Product 2,226 659 545 1,021

Fabricator 44,478 38,550 3,949 1,977

Wholesale 50,612 46,420 2,961 1,231

Retail 511,359 496,018 15,341 -

All Firms 608,675 581,648 22,797 4,230

All Firms Stock Panel Producer 31 25 27 5 3 1

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

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

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

Retail 713,989 698,648 15,341 -
All Firms 878,798 851, 296 298 23, 133 131 4,369 Formatted Table

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May 1, 2013 6-1 

# 6 Environmental Justice and Other Impacts 5379

5380 In addition to the cost analysis presented in Chapter 2, the small business analysis presented in 5381 Chapter 5, several other types of impacts are important to consider in evaluating the effects of a 5382 regulation. This chapter presents the incremental impact of the proposed TSCA Title VI Implementation 5383

Rule on: 5384

5385

 Environmental Justice, as required by Executive Order 12898–Environmental Justice; 5386

 Employment impact analysis 5387

 Paperwork burden, as required by the Paper Work Reduction Act; 5388

 State and Local Governments, as required by the Unfunded Mandates Reform Act; 5389

 Federalism, as required by Executive Order 13132–Federalism; 5390

 Tribal governments, as required by Executi ve Order 13175–Consultation and Coordination 5391
with Indian Tribal Governments; 5392

 The environmental health risk or safety risk to children due to the regulation, as required by 5393

Executive Order 13045–Protection of Children From Environmental Health & Safety Risks; 5394

and 5395

 Whether voluntary consensus standards are used in its regulatory activities. 5396

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

May 1, 2013 6-2 

## 6.1 Environmental Justice 5397

5398 This proposed rule establishes standards that reduce emissions of formaldehyde from 5399 composite wood products. Formaldehyde exposure may cause a range of health effects including 5400 nasopharyngeal cancer, sensory irritation, asthma, and female reproductive toxicity. and respiratory related 5401 effects,. 5402

5403 The Economic Analysis for this rule monetizes the benefits from reducing each cases of these 5404 four identified health impacts, nasopharyngeal cancer and estimates total benef its as the sum of these four 5405 categories sensory irritation . Benefits valuation is done for formaldehyde exposure in five climate zones 5406 from nine different housing types (five types of new housing and four types of renovated housing), 5407 allowing for off-gassing of up to ten years, as well as occupational, school, and outside formaldehyde 5408 exposure. The population in these climate zones and housing types is broken down into broad age and 5409 employment categories to assess exposure. 5410

5411 Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy 5412 on Environmental Justice (EJ). Its main provision directs Federal agencies, to the greatest extent 5413 practicable and permitted by law, to make EJ part of their mission by identifying and addressing, as 5414 appropriate, disproportionately high and adverse human health or environmental effects of their programs, 5415 policies, and activities on minority and low-income populations in the U.S. 5416

5417 This Environmental Justice analysis expands on the primary analysis by analyzing the 5418 impacts specifically for minority and low-income populat ions. The methodology used in this analysis is a 5419 disaggregation of impacts, i.e. number of cases avoi ded, by environmental justice groups, specifically 5420 minority, tribal, and low-income populations. Disa ggregation takes into account the differences in 5421 housing types, climate zones, and age and employment categories, across environmental justice 5422 populations. Data are the same as used in the total be nefits analysis, presented earlier in this Economic 5423 Analysis, and are taken from the American Community Survey (information on race and ethnicity, age, 5424 family composition, and incomes: 2007

– to 2009), the American Housing Survey (information on 5425 housing types, age, and renovations: 2009), and the exposure assessment for this rule. 5426

5427 The race and ethnicity categories in the American Communities Survey (ACS) are self5428 reported and not mutually exclusive. In order to avoid double-counting populations, all individuals who 5429 identified as Hispanic separately were counted as su ch, regardless of any other reported racial category. 5430 For non-vacant households in which no race or ethnicity data was reported, the ACS reports the previous 5431 occupant’s racial category, which was used in this analysis. The ACS survey weights take into account 5432 other sources of demographic information, in addition to race and ethnicity, making the sample nationally 5433 representative. The ACS also contains detailed inform ation on housing, including age and type of housing 5434 (mobile home or trailer, single-family detached, singl e-family attached, apartment, and RVs). Population 5435 and housing information were combined to estimate the number of cases avoided by environmental 5436 justice population. As with the total benefits mo netization, the number of cases avoided, by 5437 environmental justice population, were then multiplied by monetization measures (e.g. willingness to pay, 5438 or cost of illness) to obtain benefits estimates by environmental justice population. This approach 5439 incorporates differences in housing type s across minority and income groups. 5440

5441 Table 6-1 and Table 6-2 present the estimated number of adverse health cases avoided for each 5442 year the regulation is in place. Table 6-1 presents the number of cases by health effect, option, and 5443 minority group and Table 6-2 presents the number of cases by health effect, option, income group. Table 5444

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

May 1, 2013 6-3 

### 6-3 and Table 6-4 present the number of cases avoided by option aggregated across all health effects by 5445 minority and income population, respectively. 5446

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

May 1, 2013 6-4 

### Table 6-1: Number of Cases Avoided by Minority Population (Average Number of Cases Avoided Per Year of Regulation)

Analytical Option Cancer Eye Irritation Asthma Fertility

Lower Higher Lower Higher Low er High er

All Individuals

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

SI/SC/SCR /SCUR 10 24 23,650 191,590 2,799 3,864 1,696

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

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

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

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

Option NI 40 97 58,494 645,678 9,968 13,800 6,874
Non-Hispanic White

Option SE /SEUR/SFCC 5 5 12 12,511 101,464 1,301 1,783 876 Option

SI/SC/SCR /SCUR 6 6 14 13,375 114,319 1,477 2,017 989

Option SN 6 6 15 13,657 118,743 1,538 2,09 8 1,028

Option CE 4 4 9 9 10,219 78,039 1,003 1,373 669

Option CI 5 5 11 11,076 88,658 1,145 1,562 759

Option NE 22 53 35,781 376,411 5,004 6,876 3,817

Option NI 23 55 35,783 387,742 5,222 7,167 3,993
Non-Hispanic Black

Option SE /SEUR/SFCC 1 1 3 3 3,144 23,118 399 532 212 Option

SI/SC/SCR /SCUR 1 1 3 3 3,367 26,011 451 601 240

Option SN 1 1 3 3 3,443 27,008 469 625 249

Option CE 1 1 2 2 2,542 17,703 306 408 162

Option CI 1 1 3 3 2,778 20,096 34 8 464 184

Option NE 5 5 13 6,738 83,156 1,561 2,079 929

Option NI 6 6 13 6,738 85,808 1,629 2,170 974
All Hispanic

Option SE /SEUR/SFCC 2 2 4

4 4,805 31,388 551 789 276 Option

SI/SC/SCR /SCUR 2 2 5

5 5,116 35,314 626 895 314

Option SN 2 2 5

5 5,222 36,666 652 932 327 Formatted Table Deleted Cells

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

May 1, 2013 6-5 Option CE 1 1 3

3 3,902 24,102 423 606 210

Option CI 2 2 4

4 4,234 27,352 484 692 240

Option NE 8 8 19 12,361 115,160 2,133 3,053 1,213

Option NI 8 8 20 12,362 118,593 2,227 3,187 1,272
Non-Hispanic Native American or Alaskan Indian

Option SE /SEUR/SFCC 0 0 0

0 108 942 17 23 10 Option

SI/SC/SCR /SCUR 0 0 0

0 117 1,075 19 26 11

Option SN 0 0 0

0 120 1,121 20 27 12

Option CE 0 0 0

0 87 727 13 17 7

Option CI 0 0 0

0 97 837 15 20 9

Option NE 0 0 1

1 267 3,334 62 84 41

Option NI 0 0 1

1 267 3,450 65 88 43
Non-Hispanic Other Race

Option SE /SEUR/SFCC 1 1 2

2 1,566 13,301 201 289 127 Option

SI/SC/SCR /SCUR 1 1 2

2 1,675 14,870 226 325 143

Option SN 1 1 2

2 1,712 15,412 235 337 149

Option CE 1 1 1

1 1,265 10,149 154 222 97

Option CI 1 1 1

1 1,377 11,446 175 250 109

Option NE 3 3 8

8 3,345 48,665 793 1,142 566

Option NI 3 3 8

8 3,345 50,085 825 1,187 592 Option SCR SCUR is the proposed option.


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

May 1, 2013 6-6 

### Table 6-2: Number of Cases Avoided by Income Population (Average Number of Cases Avoided Per Year of Regulation)

Analytical Option Cancer Eye Irritation Asthma Fertility

Lower Higher Lower Higher Low er High er Number of Cases Avoided in Typical Year

All Individuals
Option

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

SI/SC/SCR /SCUR 10 24 23,650 191,590 2,799 3,864 1,696

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

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

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

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

Option NI 40 97 58,494 645,678 9,968 13,800 6,874 Individuals Living Above Poverty Line
Option

SE /SEUR/SFCC 8 18 17,551 142,637 1,997 2,743 1,223 Option

SI/SC/SCR /SCUR 9 20 18,682 160,241 2,260 3,095 1,378

Option SN 9 21 19,056 166,305 2,352 3,217 1,433

Option CE 6 14 14,341 109,557 1,536 2,108 933

Option CI 7 15 15,517 124,097 1,748 2,392 1,057

Option NE 33 77 48,806 530,167 7,758 10,677 5,359

Option NI 34 80 48,808 545,677 8,086 11,117 5,601 

### Individuals Living Below Poverty Line

Option

SE /SEUR/SFCC 1 4 4,551 27,046 442 631 278 Option

SI/SC/SCR /SCUR 2 4 4,935 30,750 506 721 318

Option SN 2 4 5,064 32,023 528 752 332

Option CE 1 3 3,647 20,756 341 486 211

Option CI 1 3 4,017 23,829 392 558 243

Option NE 6 15 9,641 94,701 1,683 2,397 1,207

Option NI 6 16 9,642 98,084 1,766 2,514 1,274 Option SCR SCUR is the proposed option.



### 5448 Formatted Table Deleted Cells

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

May 1, 2013 6-7 

### Table 6-3: Summary of Number of Cases Avoided by Race and Ethnicity

Analytical Option Population

Affected (thousands) Population

Affected as

Percent % of

Total Affected

Po p ulation Total Lower

Estimates of

Cases Avoided Total Higher

Estimate of Cases

Avoided Percentage of

Total Cases

Avoided

Lower Estimate Percentage of

Total Cases

Avoided Higher Estimate

All Individuals

Option SE /SEUR/SFCC

106,057 100.0% 

### 26,112

22,142 

### 175,152

170,236 100% 100%

Option SI/SC/SCR /SCUR 

### 28,156

23,660 

### 197,175

191,615 100% 100%

Option SN


### 28,844

24,165 

### 204,759

198,975 100% 100%

Option CE


### 21,066

18,022 

### 134,508

130,737 100% 100%

Option CI



### 23,037

19,571 

### 152,696

148,407 100% 100%

Option NE


### 74,650

58,530 

### 646,619

626,818 100% 100%

Option NI


### 75,378

58,535 

### 666,449

645,775 100% 100%

Non-Hispanic White

Option SE /SEUR/SFCC

69,169 65.2% 

### 14,693

12,516 

### 104,135

101,477 56. 

### 3 5 % 59. 

### 5 6 %

Option SI/SC/SCR /SCUR 

### 15,847

13,381 

### 117,339

114,333 56. 

### 3 6 % 59. 

### 5 7 %

Option SN


### 16,230

13,664 

### 121,885

118,758 56. 

### 3 5 % 59. 

### 5 7 %

Option CE


### 11,895

10,223 

### 80,090

78,048 56. 

### 5 7 % 59. 

### 5 7 %

Option CI



### 12,985

11,081 

### 90,989

88,668 56. 

### 4 6 % 59. 

### 6 7 %

Option NE



### 44,625

35,804 

### 387,157

376,464 

### 59.8 61.2 % 

### 59.9 60.1 % Formatted Table

Formatted Table

Formatted Table

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

May 1, 2013 6-8 Option NI



### 45,022

35,806 

### 398,957

387,797 

### 59.7 61.2 % 

### 59.9 60.1 %

Non-Hispanic Black
Option SE /SEUR/SFCC

12,540 11.8% 3, 

### 756 145 23, 

### 865 121 14. 

### 4 2 % 13.6%

Option SI/SC/SCR /SCUR 

### 4,059 3,368 26, 

### 855 014 14. 

### 4 2 % 13.6%

Option SN



### 4,163 3,444 27, 

### 885 011 14. 

### 4 3 % 13.6%

Option CE



### 3,010 2,543 

### 18,275

17,705 14. 

### 3 1 % 13. 

### 6 5 %

Option CI



### 3,310 2,779 20, 

### 746 099 14. 

### 4 2 % 13. 

### 6 5 %

Option NE



### 9,233 6,743 

### 86,177

83,169 

### 12.4 11.5 % 13.3%

Option NI


### 9,347 6,744 

### 88,966

85,822 

### 12.4 11.5 % 13.3%

Non-Hispanic Other Race

Option SE /SEUR/SFCC

7,381 7.0% 

### 1,896 4,806 

### 13,720

31,393 21. 7 

### .3 % 

### 7.8 18.4 %

Option SI/SC/SCR /SCUR 

### 2,045 5,118 

### 15,340

35,319 

### 7.3 21.6 % 

### 7.8 18.4 %

Option SN



### 2,096 5,224 

### 15, 900

36,671 

### 7.3 21.6 % 

### 7.8 18.4 %

Option CE


### 1,516 3,904 

### 10,468

24,106 21. 7 

### .2 % 

### 7.8 18.4 %

Option CI



### 1,662 4,236 

### 11,807

27,356 

### 7.2 21.6 % 

### 7.7 18.4 %

Option NE


### 4,707

12,368 

### 50,381

115,178 

### 6.3 21.1 % 

### 7.8 18.4 %

Option NI



### 4,765

12,370 

### 51,873

118,612 

### 6.3 21.1 % 

### 7.8 18.4 %

Non-Hispanic Native American or Alaskan Indian

Option SE /SEUR/SFCC

652 0.6% 

### 134 108 

### 975

943 0.5% 0.6%

Option SI/SC/SCR /SCUR 

### 148 117 

### 1,112

1,075 0.5% 0.6%

Option SN



### 152 120 

### 1,160

1,121 0.5% 0.6%

Option CE



### 108 87 

### 752

727 0.5% 0.6%

Option CI



### 120 97 

### 866

837 0.5% 0.6% Formatted Table

Formatted Table

Formatted Table

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

May 1, 2013 6-9 Option NE



### 369 267 

### 3,459

3,335 0.5% 0.5%

Option NI



### 375 267 

### 3,582

3,451 0.5% 0.5%

All His p anic

Option SE /SEUR/SFCC

16,318 15.4% 

### 5,633 1,567 

### 32,458

13,303 

### 21.6 7.1 % 

### 18.5 7.8 %

Option SI/SC/SCR /SCUR 

### 6,057 1,676 

### 36,528

14,872 

### 21.5 7.1 % 

### 18.5 7.8 %

Option SN



### 6,203 1,712 

### 37,930

15,414 

### 21.5 7.1 % 

### 18.5 7.7 %

Option CE



### 4,53 7 1,265 

### 24,922

10,150 

### 21.5 7.0 % 

### 18.5 7.8 %

Option CI


### 4,960 1,378 

### 28,288

11,447 

### 21.5 7.0 % 

### 18.5 7.7 %

Option NE



### 15,715

3,348 

### 119,444

48,672 

### 21.1 5.7 % 

### 18.5 7.8 %

Option NI



### 15,869

3,348 

### 123,071

50,093 

### 21.1 5.7 % 

### 18.5 7.8 %

Option SCR SCUR is the proposed option.



### 5449 Formatted Table

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

May 1, 2013 6-10 

### Table 6-4: Summary of Number of Cases Avoided by Income

Analytical Option Population

Affected (thousands) Population

Affected as

Percent of Total

Affected

Po p ulation Total Lower

Estimates of Cases

Avoided Total Higher

Estimate of Cases

Avoided Percentage of

Total Cases

Avoided

Lower Estimate Percentage of

Total Cases

Avoided Higher Estimate

All Individuals

Option SE /SEUR/SFCC

106,057 100.0% 26,543
22,142 175,572
170,236 100% 100%

Option SI/SC/SCR /SCUR 28,611
23,660 197,670
191,615 100% 100%

Option SN
29,307
24,165 205,281
198,975 100% 100%

Option CE
21,440
18,022 134,798
130,737 100% 100%

Option CI
23,438
19,571 153,049
148,407 100% 100%

Option NE
75,298
58,530 648,430
626,818 100% 100%

Option NI
76,026
58,535 668,305
645,775 100% 100%

Individuals Livin g Below Povert y Line Option SE /SEUR/SFCC

13,081 12.3% 5,211 4,553 27, 891 049 20. 3 6 % 16.0 15.9 %

Option SI/SC/SCR /SCUR 5,683 4,937 31,722
30,754 20. 5 9 % 16.1%

Option SN 5, 843 066 33,038
32,027 20.6 21.0 % 16. 2 1 %

Option CE 4,156 3,648 21,400
20,759 20. 0 2 % 15.9%

Option CI 4, 599 018 24,574
23,832 20. 2 5 % 16.1%

Option NE 12,108 9,647 98,058
94,716 16. 8 5 % 15. 2 1 %

Option NI 12,229 9,648 101,607
98,100 16. 8 5 % 15. 3 2 %

Individuals Livin g Above Povert y Line

Option SE /SEUR/SFCC

92,631 87.3% 20,459 17,55

8 146,312 142,

655 79. 5 3 % 83. 7 8 %

Option SI/SC/SCR /SCUR 21,939 18,69

0 164,406 160,

261 79. 3 0 % 83.6%

Option SN 22,435 19,06

5 170,640 166,

326 79.2 78.9 % 83. 5 6 %

Option CE 16,609 14,34

7 112,349 109,

571 79. 8 6 % 83. 7 8 %

Option CI 18,070 15,52

4 127,285 124,

113 79. 5 3 % 83. 5 6 %

Option NE 59,846 48,83

9 545,209 530,

244 83. 0 4 % 84. 5 6 % Formatted Table

Formatted Table

Formatted Table

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

May 1, 2013 6-11 Option NI 60,307 48,84

3 561,338 545,

758 83. 0 4 % 84. 4 5 %

Option SCR SCUR is the proposed option.



### 5450 Table 6-5 presents a summary of quantified benefits for minority populations. Quantified 5451 benefits estimates are presented, for each analytical option, in both totals for each environmental justice 5452 population group and then as estimates for individuals within that group. As with the total benefits 5453 analysis for this rule, a range of estimates is presented : from lower to higher. Estimates are reported in 5454 2010 dollars, annualized at a 3% rate. 5455

5456 Results indicate that disaggregation of total benefits by population groups leads to variation in the 5457 range of individual benefits, by minority population. The population of all individuals affected by the 5458 rule shows the same estimates reported in the total benefits analysis; annualized quantified benefits 5459 ranging from $ 162 18 to $ 2 89 50 million per year for the options with emissions standards that are 5460 consistent with the statute, and $ 1. 53 0.17 to $ 2. 7 3 0.47 per individual. The affected Non-Hispanic White 5461 population accounted accounts for 65 percent of the total affected population, accrued 54 accrues about 60 5462 percent of the total annualized quantified benefits, and experienced experiences average 5463

annualized quantified benefits ranging from $ 1. 26 0.14 to $ 2.25 0.44 per individual. In comparison, 5464 benefits for minority populations are higher. 5465

5466 Minority populations represent about 35 percent of the individuals affected by the rule and are 5467

estimated to accrue about 46 40 percent of the proposed rule’s total quantifiedbenefits. The affected Non5468 Hispanic Black population accounted account for 12 percent of the total affected population, accrued 15 to 5469

16 accrue about 13 percent of the total annualized quantified benefits, and experienced experience average 5470

annualized quantified benefits ranging from $ 2.05 0.19 to $ 3. 49 0.51 per individual. The affected Hispanic 5471 population accounted accounts for 15 percent of the total affected population, accrued 22 accrues about 18 5472 percent of the total quantified benefits, and experien ces average quantified benefits ranging from $0.20 to 5473 $0.54 per individual. The affected Non-Hispanic Na tive American or Alaskan Indian population accounts 5474 for 0.6 percent of the total affected population, accrues 0.6 percent of the total annualized benefits, and 5475 experienced average annualized benefits ranging from $ 2.17 to $ 3.9 4 per in dividual. The affected Non

5476 Hispanic Native American or Alaskan Indian populatio n accounted for 0.6 percent of the total affected 5477 population, accrued 0.7 percent of the total annualized benefits, and experienced average annualized 5478 benefits ranging from $1. 6 6 to $2. 9 3 per individual. 0.17 to $0.46 per individual. 5479

5480 Following the Census methodology, low-income families are identified in this analysis as 5481 having annual incomes below the poverty threshold. The poverty threshold, as determined by the U.S. 5482 Census Bureau, varies by family size, age, and composition and is adjusted for inflation. Table 6-6 5483 presents a summary of quantified benefits for low-income populations. As with the total benefits analysis 5484 for this rule, a range of estimates is presented : from lower to higher. Estimates are reported in 2010 5485 dollars, annualized at a 3% rate. 5486

5487 Results indicate that disaggregation of total benefits by population groups leads to variation in the 5488 range of individual benefits, by income category. Th e population of all individuals affected by the rule 5489 shows the same estimates reported in the total benefits analysis; annualized quantified benefits ranging 5490 from $ 162 18 to $ 2 89 50 million per year for the options with emissions standards that are consistent with 5491 the statute, and $ 1. 53 0.17 to $ 2. 7 3 0.47 per individual. The affected low-income population 5492

accounted accounts for 12 percent of the total affected population, accrued 18 accrues about 14 percent of 5493

the total annualized quantified benefits, and experienced experiences average annualized quantified benefits 5494 ranging from $ 2.17 0.19 to $ 3.99 0.56 per individual. 5495

5496

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

May 1, 2013 6-12 

### Table 6-7 summarizes the number of cases avoided by affected minority and low-income 5497 population groups, and Table 6-8 summarizes the quantified benefits. This Environmental Justice 5498 analysis shows slightly larger individual benefits fo r affected minority and low-income population groups 5499 (see ).

. Minority populations represent 35 percent of the in dividuals affected by the rule and are estimated 5500

to accrue 46 40 percent of the proposed rule’s total quantified benefits. Individuals living below the 5501 poverty line represent 12 percent of the individuals affected by the rule and are estimated to accrue 15 to 5502

16 about 14 percent of the proposed rule’s total quantified benefits. Given these results, EPA has 5503 determined that this proposed rule will not have disproportionally high and adverse human health or 5504 environmental effects on any population, including any minority or low-income population. These 5505 proposed standards would reduce emissions of form aldehyde from composite wood products for all 5506 populations that are exposed, with slightly larger quantified benefits for individuals from minority or low5507 income affected populations. 5508

5509

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

May 1, 2013 6-13 

### Table 6-5: Summary of Quantified Benefits by Race and Ethnicity (annualized at 3% rate)

Analytical Option Population

Affected (thousands) Population

Affected as Percent

of Total Affected

Population Total Benefits

Lower Estimate (millions 2010$ or percent of total) Total Benefits Higher Estimate (millions 2010$ or percent of total) Total Benefits per

Affected Individual

Lower Estimate

(in dollars) Total Benefits per

Affected Individual

Higher Estimate

(in dollars)

All Individuals
Option SE /SEUR/SFCC

106,057 100.0% $ 

### 162 18 $ 

### 245 42 $ 

### 1.53 0.17 $ 

### 2.31 0.39

Option SI/SC/SCR /SCUR $ 

### 184 20 $ 

### 278 48 $ 

### 1.74 0.19 $ 

### 2.62 0.45
Option SN $ 

### 192 21 $ 

### 289 50 $ 

### 1.81 0.20 $ 

### 2.73 0.47
Option CE $ 

### 125 14 $ 

### 188 32 $ 

### 1.18 0.13 $ 

### 1.77 0.30
Option CI $ 

### 142 16 $ 

### 214 37 $ 

### 1.34 0.15 $ 

### 2.02 0.34
Option NE $ 

### 639 76 $ 

### 970 178 $ 

### 6.02 0.72 $ 

### 9.15 1.68
Option NI $ 

### 667 80 $ 

### 1,013 186 $ 

### 6.29 0.75 $ 

### 9.55 1.76

Non-Hispanic White
Option SE /SEUR/SFCC

69,169 65.2% 

### 53.5 60.4 % 

### 53.7 61.3 % $ 

### 1.26 0.16 $ 

### 1.90 0.37

Option SI/SC/SCR /SCUR 

### 53.6 60.4 % 

### 53.8 61.4 % $ 

### 1.43 0.18 $ 

### 2.16 0.42
Option SN 

### 53.6 60.4 % 

### 53.8 61.4 % $ 

### 1.49 0.18 $ 

### 2.25 0.44
Option CE 

### 53.6 60.5 % 

### 53.8 61.4 % $0. 

### 97 12 $ 

### 1.46 0.28
Option CI 

### 53.7 60.5 % 

### 53.8 61.5 % $ 

### 1.11 0.14 $ 

### 1.67 0.33
Option NE 

### 53.3 60.2 % 

### 53.6 61.0 % $ 

### 4.93 0.66 $ 

### 7.52 1.57
Option NI 

### 53.3 60.2 % 

### 53.6 61.0 % $ 

### 5.14 0.69 $ 

### 7.85 1.64

Non-His p anic Black Option SE /SEUR/SFCC

12, 540 539 11.8% 15.9 13.3 % 15.1 12.9 % $ 2.05 0.19 $ 2.96 0.43
Option SI/SC/SCR /SCUR 15.8 13.3 % 15.1 12.9 % $ 2.32 0.21 $ 3.35 0.49
Option SN 15.8 13.3 % 15.1 12.9 % $ 2.42 0.22 $ 3.49 0.51
Option CE 15.8 13.3 % 15.1 12.9 % $ 1.57 0.14 $ 2.26 0.33
Option CI 15.8 13.3 % 15.1 12.9 % $ 1.79 0.16 $ 2.58 0.38
Option NE 16.0 13.3 % 15.2 13.0 % $ 8.14 0.81 $ 11.77 1.84
Option NI 16.0 13.3 % 15.2 13.0 % $ 8.49 0.85 $ 12.29 1.93
Non-Hispanic Other Race Option SE /SEUR/SFCC

7, 381 380 7.0% 8.1 7.7 % 8.3 7.5 % $ 1.78 0.18 $ 2.76 0.43
Option SI/SC/SCR /SCUR 8.0 7.6 % 8.3 7.5 % $ 2.01 0.21 $ 3.11 0.48
Option SN 8.0 7.6 % 8.2 7.4 % $ 2.09 0.22 $ 3.23 0.50
Option CE 8.1 7.6 % 8. 3 7.5 % $ 1.36 0.14 $ 2.11 0.32 Option CI 8.0 7.6 % 8.2 7.4 % $ 1.55 0.16 $ 2.39 0.37
Option NE 7. 8 .2 % 8.5 7.7 % $ 7.14 0.80 $ 11.12 1.85
Option NI 7. 8 .2 % 8.4 7.6 % $ 7.43 0.84 $ 11.57 1.93
Non-Hispanic Native American or Alaskan Indian
Option SE /SEUR/SFCC

652 651 0.6% 0. 7 6 % 0.6% $ 1.66 0.17 $ 2.43 0.38
Option SI/SC/SCR /SCUR 0. 7 6 % 0. 7 6 % $ 1.92 0.19 $ 2.80 0.43
Option SN 0. 7 6 % 0. 7 6 % $ 2.01 0.20 $ 2.93 0.46
Option CE 0. 7 6 % 0. 7 6 % $ 1.28 0.13 $ 1.88 0.29
Option CI 0. 7 6 % 0. 7 6 % $ 1.49 0.15 $ 2.17 0.34 Option NE 0.6% 0.6% $ 6.29 0.69 $ 9.27 1.55
Option NI 0.6% 0.6% $ 6.62 0.72 $ 9.74 1.63
All Hispanic Option SE /SEUR/SFCC

16,318 15.4% 21.8 18.0 % 22.2 17.6 % $ 2.17 0.20 $ 3.33 0.45
Option SI/SC/SCR /SCUR 21.9 18.1 % 22.2 17.6 % $ 2.47 0.22 $ 3.78 0.51 Option SN 21.9 18.1 % 22.2 17.6 % $ 2.57 0.23 $ 3.94 0.54
Option CE 21.8 18.0 % 22.1 17.6 % $ 1.67 0.15 $ 2.55 0.34
Option CI 21.9 18.1 % 22.2 17.6 % $ 1.91 0.17 $ 2.92 0.39 Formatted Table

Formatted Table

Formatted Table

Formatted Table

Formatted Table

Formatted Table

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

May 1, 2013 6-14 Option NE 21.8 18.1 % 22.1 17.7 % $ 8.53 0.85 $ 13.12 1.94
Option NI 21.8 18.1 % 22.1 17.8 % $ 8.91 0.89 $ 13.71 2.03
Option SCR SCUR is the proposed option.



### 5510

5511
Table 6-6: Summary of Quantified Benefits by Poverty Status (annualized at 3% rate)

Analytical Option Population

Affected (thousands) Population

Affected as Percent

of Total Affected

Population Total Quantified

Benefits

Lower Estimate (millions 2010$ or percent of total) Total Quantified

Benefits Higher Estimate (millions 2010$ or percent of total) Total Quantified Benefits per

Affected

Individual

Lower Estimate

(in dollars) Total Quantified Benefits per

Affected

Individual Higher Estimate

(in dollars)

All Individuals Option SE /SEUR/SFCC

106,057 100.0% $ 162 18 $ 245 42 $ 1.53 0.17 $ 2.31 0.39
Option SI/SC/SCR /SCUR $ 184 20 $ 278 48 $ 1.74 0.19 $ 2.62 0.45
Option SN $ 192 21 $ 289 50 $ 1.81 0.20 $ 2.73 0.47 Option CE $ 125 14 $ 188 32 $ 1.18 0.13 $ 1.77 0.30
Option CI $ 142 16 $ 214 37 $ 1.34 0.15 $ 2.02 0.34
Option NE $ 639 76 $ 970 178 $ 6.02 0.72 $ 9.15 1.68
Option NI $ 667 80 $ 1,013 186 $ 6.29 0.75 $ 9.55 1.76
Individuals Living Below Poverty Line Option SE /SEUR/SFCC

13,081 12.3% 17.5 14.1 % 17.8 14.5 % $ 2.17 0.19 $ 3.33 0.46
Option SI/SC/SCR /SCUR 17.7 14.3 % 18.0 14.7 % $ 2.49 0.22 $ 3.82 0.53
Option SN 17.7 14.3 % 18.0 14.7 % $ 2.60 0.23 $ 3.99 0.56
Option CE 17.5 14.1 % 17.8 14.5 % $ 1.67 0.15 $ 2.56 0.35
Option CI 17.7 14.3 % 18.0 14.6 % $ 1.93 0.17 $ 2.95 0.41
Option NE 17.2 13.9 % 17.4 14.3 % $ 8.38 0.81 $ 12.90 1.94
Option NI 17.3 14.0 % 17.5 14.4 % $ 8.80 0.85 $ 13.55 2.05

Individuals Livin g Above Povert y Line Option SE /SEUR/SFCC

92,631 87.3% 81.4 85.6 % 81 85 .1% $ 1.43 0.16 $ 2.15 0.38
Option SI/SC/SCR /SCUR 81.3 85.5 % 80 84 .9% $ 1.62 0.19 $ 2.43 0.44
Option SN 81.2 85.4 % 80 84 .9% $ 1.68 0.19 $ 2.53 0.46
Option CE 81.4 85.7 % 81 85 .1% $ 1.10 0.13 $ 1.64 0.29
Option CI 81.2 85.5 % 80 84 .9% $ 1.25 0.14 $ 1.87 0.34 Option NE 81.8 85.9 % 81.5 85.3 % $ 5.64 0.71 $ 8.54 1.64
Option NI 81.7 85.8 % 81.4 85.2 % $ 5.88 0.74 $ 8.90 1.71
Option SCR SCUR is the proposed option. The number of individuals above and below the poverty line does not sum to the total number of individuals because poverty stat us could not

be determined for some individuals.



### 5512

5513 Formatted Table

Formatted Table

Formatted Table

Formatted Table

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

May 1, 2013 6-15 

### Table 6-7: Summary of Benefits Number of Cases Avoided by Race, Ethnicity, and Poverty Status under the Proposed Option (annualized at 3% rate)

Population Affected Populati

on Affected (thousan

ds) 

### Population Affected as
Percent of Total Affected Population Total Benefits

Low er Estimate



### (millions 2010$) Cancer Total Benefits High er Estimate 

### (millions 2010$) Eye

Irritation Total Benefits

Low er Estimate



### (% of total

affected population) Total

Benefits High er Estimate (% of total

affected population )



### lower higher lower higher lower higher

All Individuals 106,0

57 10 100% 2

4 $184 23
,650 $278 191,

590 100.0% 23,660 100.0%
191,615
Minority Race/Ethnicity 36,88

8 4 35% 10 $86 10,

275 $128 77,2

71 46.4% 10,279 46.2% 7
7,281
Poverty Status 1 3,08

1 2 12% 4 $28 4,9

35 $44 30,75

0 15. 4 % ,937 15.7% 3
0,754



### 5514

5515

Table 6-8: Summary of Number of Cases Avoided Quantified Benefits by Race, Ethnicity, and Poverty Status under the Proposed Option (annualized at 3% rate)

Population Affected Populatio

n Affected (thousan

ds) Populatio

n Affected

as Percent

of Total

Affected Populatio

n Cancer Tot

al Quantified

Benefits

Lower

Estimate (millions 2010$) Eye

Irritation Tot al Quantified

Benefits Higher

Estimate (millions 2010$) Asthm a Tot

al Quantified

Benefits

Lower

Estimate (% of total

affected population) Fertility

Total Quantified Benefits Higher Estimate (% of total affected population)



### lower higher lower higher lower higher lower higher

Number of Cases Avoided

All Individuals 

### 10 106,

057 

### 24 100% 

### 23,650 $2

0 

### 191,590 $48 

### 2,799 100.0% 

### 3,864 100.0

% 1,696 28,156 197,175

Minority Race/Ethnicity 

### 4 36,88

8 

### 10 35% 

### 10,275 $8 

### 77,271 $18 

### 1,322 39.6% 

### 1,847 38.6

% 708 12,309 79,836

Poverty Status 

### 2 13,08

1 

### 4 12% 

### 4,935 $3 

### 30,750 $7 

### 506 14.3% 

### 721 14.7% 318 5,761 31,793



### 5516 Formatted Table

Deleted Cells

Deleted Cells

Merged Cells Deleted Cells

Formatted Table

Formatted Table

Inserted Cells Inserted Cells Merged Cells Deleted Cells

Formatted Table

Deleted Cells

Deleted Cells

Deleted Cells

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

May 1, 2013 6-16 

## 6.2 Employment Impact Analysis 5517

5518 While a standalone analysis of employment impacts is not included in a standard cost-benefit 5519 analysis 61 

### , such an analysis is of particular concern in the current economic climate of sustained levels of 5520 high unemployment. Executive Order 13563, states, “Our regulatory system must protect public health, 5521 welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and 5522 job creation ” (emphasis added). For this rule, EPA presents a qualitative assessment of the potential for 5523 employment impacts in the short and long term for producers, fabricators, distributors, and retailers of 5524 composite wood products and goods made from them. 5525

5526 An environmental regulation can be understood as an increase in demand for a particular output: 5527 environmental quality. Meeting this new demand can result in increased demand for the various factors 5528 of production (including labor) available to the econom y. However, regulated sectors generally have to 5529 rely on revenues generated by their other (market) outputs to cover the costs of satisfying society's 5530 increased demand for environmental quality. This incr ease in the costs can lead to reduced demand by 5531 regulated sectors for labor and other factors of produc tion. The net effect of an environmental regulation 5532 on employment in the regulated sectors and the overall economy is therefore indeterminate. The costs 5533 imposed on directly regulated sectors may affect thei r competitive position and put some specific jobs at 5534 risk. At the same time, environmental regulations may create jobs in other sectors, e.g. in the 5535 environmental protection sector. Tracing out these opposing effects against the temporal dynamics of 5536 labor markets is complex and makes deriving estimate s of how regulations will impact economy-wide net 5537 employment a difficult task. 5538

5539 Adding to this complexity, effects on employment are also likely to change over time. 5540 Employment in some sectors will be affected at the time of promulgation or when a regulation becomes 5541 effective, while others will only be affected farther into the future. When the economy is at full 5542 employment, an environmental regulation is unlikely to have a considerable impact on long run net 5543 employment; instead, labor would primarily be reallocated from one productive use to another, e.g. from 5544 producing electricity or steel to producing pollution abatement equipment. Theory and peer-reviewed 5545 published empirical evidence support the argument that, in the case of full employment, the net 5546 employment effects from environmental regulation ar e likely to be small and transitory even in the 5547 regulated sector and therefore would have an imperceptible impact on the macro economy. 62 

### 5548

5549 On the other hand, Schmalansee and Stavins (2011 ) ) point out that positive net employment 5550 effects are possible in the near term, during a peri od of sustained unemployment, due to the potential 5551 hiring of previously unemployed workers by the regula ted sector to help meet new requirements (e.g., to 5552 install new equipment) or by the environmental protection sector to produce new abatement capital. On 5553 the other hand, it is also theoretically possible to ha ve near term negative net employment effects. For 5554 example, during periods of sustained high unemploymen t it may take workers displaced by regulations 5555 longer to find alternative employment. In the longer te rm, the net effect on employment is more difficult 5556 to predict and will depend on the way in which the related industries respond to the regulatory 5557 requirements and whether the labor market remains in sustained disequilibrium or returns to full 5558 employment. There are also significant methodological challenges in assessing the net employment 5559 impacts when the economy is not at full employment. For example, the opportunity cost of labor is more 5560 difficult to assess, labor demand caused by an environmental regulation may have positive external 5561 effects (the unemployment rate is reduced as workers are hired), and reductions in labor may give rise to 5562

61 Except to the extent that labor costs are part of total costs in a benefit cost analysis.

62 See Berman and Bui 2001, Morgenstern, et al. 2002.

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

May 1, 2013 6-17 

### negative external effects (as higher unemployment rates can be associated with longer durations of 5563 unemployment). 5564

5565 Section 6.2.1 discusses the qualitative assessment of immediate and short term impacts. Section 5566 6.2.2 describes longer term impacts, focusing primarily on annual, or ongoing, employment impacts in the 5567 regulated sectors. 5568

5569
6.2.1 Immediate and Short Te rm Employment Impacts 5570

5571 There are a number of initial activities that firms may need to perform to comply with this rule, 5572 depending on the type of firm (panel producer, fabricator , wholesaler, or retailer) and their baseline status. 5573

In the short term these activities include: 5574

5575

Rule Familiarization: Firms will need to read the rule in order to understand the requirements; 5576

5577 Testing and Certification: Panel producers will need to perform formaldehyde emission testing on 5578 their composite wood products and attain certification from an accredited TPC. These entities must 5579 undergo qualifying tests at a TPC lab, obtain an on-site audit from a TPC, implement quality control 5580 systems, and train quality control employees in order to receive initial certification; 5581

5582 Recordkeeping : Some firms will need to revise their recordkeeping systems in order to comply with 5583 the chain of custody requirements in the rule; and 5584

5585 Labeling : Firms that package or repackage composite wood products or finished goods containing 5586 composite wood products will need to modify their labels to include their name, the date the finished 5587 good was produced, and a statement of compliance. 5588

5589 Furthermore, some panel producers may need to change their production processes and raw 5590 materials in order to meet the emission levels required by the rule or to achieve NAF certification. Some 5591 panel producers may choose to install an on-site lab for quality control testing, so that they can receive 5592 test results (and thus ship tested lots) quicker than if they hired an off-site lab to perform the testing. And 5593 some laminators may choose to switch to NAF resins in order to avoid being considered a panel producer 5594

under the rule. 5595

5596 The average first year cost per firm is shown in Table 6-9. There will be a range of actual costs 5597 incurred, depending on such factors as whether or not the firm is in compliance with the CARB ATCM in 5598 the baseline; whether or not the firm’s existing recordkeeping systems are sufficient to comply with the 5599 rule’s chain of custody requirements; the size and complexity of the firm’s operations; and whether or not 5600 a laminator uses NAF resins and compliant platforms (and thus whether it is considered a platform 5601 producer or a fabricator under the rule). However, for the sectors with the largest number of firms 5602 affected by the rule (fabricators, wholesalers, and retailers), the average cost per firm in the first year is 5603 relatively modest, and is unlikely to create significant employment effects. To the extent that firms in 5604 these industries have costs that are significantly abov e average, they will typically be larger firms that 5605 have additional resources to comply with the rule’s requirements. 63 

### 5606

5607 Costs per firm are higher for panel producers and laminators. Costs are likely to be the highest 5608 for stock panel producers that are not CARB certified in the baseline, and for laminators that are 5609

63 The average employer firms in the affected fabricator, wholesale, and retail industries have 26, 17, and 32 employees per firm, respectively.

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

May 1, 2013 6-18 

### considered panel producers. The average number of employees in employer firms in the affected NAICS 5610 codes is 38 employees per firm for stock panel producers and 26 employees per firm for laminators. 5611 However, there are only 11 stock panel producers in th e U.S. that are not CARB certified for any of their 5612 products and another 5 that are CARB certified for some but not all of their products. While the analysis 5613 assumes that 150 to 277 U.S. laminators will be considered panel producers because they will continue to 5614 use NAF resins, information is not currently available to indicate the particular industries such firms are 5615 likely to be in, the specific types of products they make, their firm sizes or production volumes, or other 5616 characteristics that would provide insights into how their employment might be affected by the rule. 5617

5618 Table 6-9: Average First Year Cost per Firm for Affected Firms

T yp e of Firm Total First Year Cost ($ million) Number of Firms Average First Year Cost per

Firm

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario

Stock Panel Producers $ 3 2 $ 3 2 62 54 62 54 $ 48,387 36,27

7 $ 48,387 36,277

Laminators 1 $55 $102 7,486 13,875 $7, 347 407 $7, 351 385

Fabricators $91 $57 72, 215 492 65,826 66,103 $1,260 $ 866 855

Wholesalers $71 $71 85,560 85,560 $ 830 829 $ 830 829

Retailers $215 $215 759,048 759,048 $283 $283

1 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, MDF or veneer core platform. This includes both laminators that use NAF resins to affix veneer to a compliant platform (that are considered to be fabricators und er the proposed rule), and laminators that do not use NAF resins (that are considered panel producers under the proposed rule). Low and high end scenarios reflect the estimated number of laminators and the number of product lines certified per firm, not the low and high costs for each category

of entities.


### 5619 6.2.2 Longer Term Employment Impacts 5620

5621 Determining the direction of ongoing employment effects in the regulated industry, in the longer 5622 term, is challenging due to competing effects. Co mplying with the new or more stringent regulation 5623 requires additional inputs, including labor, and may alter the relative proportions of labor and capital used 5624 by regulated firms in their production processes. Mo rgenstern, Pizer and Shih (2002) demonstrate that 5625 environmental regulations can be understood as requiring regulated firms to add a new output 5626 (environmental quality) to their product mixes. Although legally compelled to satisfy this new demand, 5627 regulated firms have to finance this additional production with the proceeds of sales of their other 5628 (market) products. Satisfying this new demand requi res additional inputs, including labor, and may alter 5629 the relative proportions of labor and capital used by regulated firms in their production processes. 5630

5631 More specifically, Morgenstern, Pizer, and Shih (2 002) decompose the effect of regulation on net 5632 employment in the regulated sector into the following three subcomponents: 5633

5634

 

### The Demand Effect : higher production costs from complying with the regulation will raise 5635 market prices in regulated industries, reduci ng consumption (and production) of their output, 5636 thereby reducing demand for labor within the regulated industry. The “extent of this effect 5637 depends on the cost increase passed on to consumers as well as the demand elasticity of 5638 industry output” (p. 416). 5639

5640

 

### The Cost Effect : Assuming that the capital/labor ratio in the production process is held fixed, 5641 as “production costs rise, more inputs, including labor, are used to produce the same amount 5642 of output,” (p. 416). For example, to reduce pollutant emissions while holding output levels 5643 constant, regulated firms may require additional labor. 5644 Formatted Table

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

May 1, 2013 6-19 

### 5645

 

### The Factor-Shift Effect : Regulated firms’ production technologies may be more or less labor 5646 intensive after complying with the regulation (i.e., more or less labor is required relative to 5647 capital per dollar of output). “Environmental ac tivities may be more labor intensive than 5648 conventional production,” meaning that “the amount of labor per dollar of output will rise.” 5649 However, activities may, instead, be less labor intensive because “cleaner operations could 5650 involve automation and less employment, for example” (p. 416). 5651

5652 The demand effect is expected to have an unambiguously negative effect on employment, the cost 5653 effect to have an unambiguously positive effect on employment, and the factor-shift effect to have an 5654 ambiguous effect on employment. Without more information with respect to the magnitudes of these 5655 competing effects, it is not possible to predict the total effect an environmental regulation will have on 5656 overall employment levels in the regulated sector. However, regulations that impose smaller costs at the 5657 firm level are less likely to create noticeable net employment impacts (whether positive or negative) than 5658 regulations with more significant cost impacts. 5659

5660 Morgenstern et al. estimated the effects of pollution abatement expenditures on net employment 5661 in four highly polluting/regulated sect ors (pulp and paper, plastics, steel, and petroleum refining). They 5662 conclude that increased abatement expenditures generally have not caused a significant change in net 5663 employment in those sectors. More specifically, their results show that, on average across the industries 5664 studied, each additional $1 million (1987$) spent on pollution abatement results in a (statistically 5665 insignificant) net increase of 1.5 jobs. While the specific sectors Morgenstern et al. examined are 5666 different than the sectors considered here, the methodology that Morgenstern et al. developed is still an 5667 informative way to qualitatively assess the effects of this rulemaking on employment in the regulated 5668

sector. 5669

5670 The activities required for compliance with the ru le in the longer term include the following: 5671

5672 Testing and Certification: Once certified, a panel producer is required to conduct on-going small 5673 scale quality control testing, submit reports to the certifying TPC, and receive on-site audits and large 5674 chamber testing to maintain its certified status; 5675

5676 Recordkeeping : Firms that import, produce, or manufacture composite wood products must keep 5677 records showing the date of purchase of the composite wood product, the supplier, and all precautions 5678 taken to ensure that the product meets emissions standards; and 5679

5680 Labeling: Firms that package or repackage composite wood products or finished goods containing 5681 composite wood products will need to modify their labels to include their name, the date the finished 5682 good was produced, and a statement of compliance. 5683

5684 Furthermore, panel producers and laminators that changed their raw materials inputs will continue to 5685

use the alternative materials. 5686

5687 The average subsequent year cost per firm is shown in Table 6-10. Costs in subsequent years are 5688 less than the cost in the first year. There will be a range of actual costs incurred, based on the factors 5689 described above for the first year costs. As with th e first year costs, the average cost per firm for the 5690 sectors with the largest number of firms affected by the rule (fabricators, wholesalers, and retailers), is 5691 relatively modest and is unlikely to create significant employment effects for a typical firm. Costs per 5692 firm are higher for panel producers and laminators, particularly for stock panel producers that are not 5693 CARB certified in the baseline, and for laminators that are considered panel producers. 5694

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

May 1, 2013 6-20 

### 5695 Table 6-10: Average Subsequent Year Cost per Firm for Affected Firms

Type of Firm Total Subsequent Year Cost ($ million p er y ear) Number of Firms Average Subsequent Year

Cost p er Firm

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario

Stock Panel Producers $ 2 1 $ 2 1 62 54 62 54 $ 32,258 26,7

31 $ 32,258 26,731

Laminators 1 $17 $30 7,486 13,875 $2, 271 241 $2,162

Fabricators $24 $20 72, 215 492 65,826 66,10

3 $ 332 333 $ 304 307

Wholesalers $14 $14 85,560 85,560 $ 164 158 $ 164 158

Retailers - - 759,048 759,048 - - 0

1 Costs to laminators represent the costs to all firms that affix a wood or woody grass veneer to a purchased particleboard, MDF or veneer core platform. This includes both laminators that use NAF resins to affix veneer to a compliant platform (that are considered to be fabricators und er the proposed rule), and laminators that do not use NAF resins (that are considered panel producers under the proposed rule). Low and high end scenarios reflect the estimated number of laminators and the number of product lines cer tified per firm, not the low and high costs for each category

of entities.


### 5696

There are several reasons that the estimates from Morgenstern et al. cannot reasonably be applied 5697 in this setting to estimate the employment impacts of this rule. First, the industries regulated by this rule 5698 are not among the four sectors analyzed by Morgenstern et al, and they are different enough in structure 5699 that estimates would not be directly comparable to the pulp and paper industry that was included in the 5700 study. Also, Morgenstern et al. focused on pollution abatement costs rather than the types of certification, 5701 testing, chain of custody, and labeling required by this rule. Finally, the lack of published, peer-reviewed 5702 research on employment impacts from environmenta l regulation on the composite wood industry limits 5703 the ability to defensibly estimate employment impacts of emission standards for composite wood 5704 products. 5705

5706 The three effects described by Morgenstern, Pizer, and Shih can be described for this rule, but the 5707 magnitudes cannot be estimated. Affected firms will face higher costs to produce and sell their products, 5708 as certification, quality control procedures, and/or recordkeeping are required for compliance. Economic 5709 theory, outlined by Morgenstern et al., suggests that the demand effect will have a negative impact on 5710 employment in the regulated sector. As firms face higher costs of production, market prices for outputs 5711 will rise and consumer demand will decline, reduci ng the quantity produced. But the size of the demand 5712 effect cannot be quantified in this case because in formation about cost pass through to consumers is not 5713 available for the regulated sectors. The cost effect reflects the increase in employment required for firms 5714 to continue producing the same amount of output as prior to the regulatio n but without elasticity 5715 information for the markets affected by the rule, it is not possible to determine how production may 5716 change. The factor shift effect may be positive if quality control, recordkeeping, and other measures 5717 required by the rule are more labor-intensive than the firms’ ordinary operations, but the relative labor 5718 intensity is not known. Because the magnitude of these three effects is not known, the net impact on 5719 employment cannot be estimated. 5720

5721 6.2.3 Summary of Employment Impacts 5722

5723 The theoretical model developed in Morgenstern et al. cannot predict the net employment impacts 5724 in the regulated sectors due to the competing effects: the demand effect is negative, the cost effect is 5725 positive, and the factor shift effect is ambiguous. Therefore the overall effect is ambiguous. Because 5726 information is not available on the magnitude of each component effect, the overall net effect on 5727 employment cannot be determined. For example if there were two negative effects (assumes the factor- 5728

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May 1, 2013 6-21 

### shift effect is negative) and one positive effect the po sitive effect might dominate both negative effects, 5729 depending on their magnitudes, so the overall net e ffect depends on the magnitude of the competing 5730

effects. 5731

5732 Other uncertainties that characterize this analysis include: uncertainties about firms’ adjustments 5733 of capital and labor in response to the regulation (factor shift effect); uncertainties regarding labor 5734 intensities of different equipment an d choice of resin types to comply with the standards; uncertainties 5735 about the types of technologies that may be used for quality control programs; uncertainty about how 5736 relative market shares of domestic production of composite wood products versus imports may change 5737 over time; and uncertainties about how demand for composite wood products is affected by business 5738 cycle fluctuations. 5739

5740 Given the current level of unemployment, net positive employment effects are possible, 5741 especially in the near term, due to the potential hiring of idle labor resources by the regulated sector to 5742 plan for and meet new requirements. In the future, when full employment is expected to return, any 5743 changes in employment levels in the regulated sector due to this program are expected to be mostly offset 5744 by employment changes in other sectors. 5745

5746

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May 1, 2013 6-22 

## 6.3 Paperwork Burden Analysis 5747

5748 This section presents a summary of the burden and associated costs for the respondents associated 5749 with the recordkeeping and reporting requirements of the proposed TSCA Title VI Implementation Rule. 5750 The detailed paperwork burden analysis is presented in the information collection request (ICR) 5751 supporting statement for this proposed rulemaking. It provides the average annual burden and cost 5752 estimates for the next three years of the program. 5753

5754 The paperwork burden and associated costs include the activity types listed below. Note that not 5755 all entities will incur burden or costs from these activities because they may already be meeting the 5756 requirements under the CARB ATCM and/or their existing recordkeeping and labeling systems may 5757 already be sufficient. 5758

5759

 Rule Familiarization: All respondents will need to read the rule in order to understand 5760 the requirements; 5761

 Testing and Certification: All composite panel producers will need to perform 5762 formaldehyde emission testing on their compos ite wood products and attain certification 5763 from an accredited TPC. These entities must undergo qualifying tests at a TPC lab, 5764 obtain an on-site audit from a TPC, implemen t quality control systems, and train quality 5765 control employees in order to receive initial certification. Once certified, a mill is 5766 required to conduct on-going small scale quality control testing, submit monthly reports 5767 to the certifying TPC, and receive quarterly on-site audits and large chamber testing to 5768 maintain its certified status. Mills that produce products made with NAF resins that meet 5769 more stringent emissions limits may apply for exemptions from some of the on-going 5770 testing requirements; 5771

 Recordkeeping : Firms that import, produce, or manufacture composite wood panels, 5772 component parts, or finished goods are requi red to keep records showing the date of 5773 purchase of the composite wood product, the su pplier, and all precautions taken to ensure 5774 that the product meets emissions standards. Wholesalers and retailers that do not import, 5775 produce, or manufacture composite wood pane ls, component parts, or finished goods are 5776 required to maintain invoices and bills of lading; and 5777

 Labeling: Firms that package or repackage composite wood products or finished goods 5778 containing composite wood products will need to modify their labels to include their 5779 name, the date the finished good was produced, and a statement of compliance. 5780

5781 Note that the paperwork burden analysis in the ICR treats some baseline burdens and costs 5782 differently from the cost analysis in Chapter 2 of this economic analysis. Neither analysis includes 5783 burdens or costs that were already performed to me et the CARB ATCM requirements and will not need to 5784 be performed again to comply with the TSCA Title VI requirements. For example, both analyses assume 5785 that mills making product lines that have a standard certification 64 

### or a NAF certification under the CARB 5786

ATCM will not need to submit new data or resubmit exis ting data to their existing TPC in order to receive 5787 the equivalent certification under the TSCA Title VI regulations and therefore burdens and costs are not 5788

estimated for these activities. 5789

5790

64 The term standard certification is used here to describe a certification other than an ultra-low-emitting formaldehyde (ULEF) or NAF certification. The proposed rule does not pr ovide for reduced testing frequencies for products made with ULEF resins, so mills that have a ULEF certifica tion under the CARB ATCM will incur additional costs under the

TSCA Title VI rule.

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### The cost analysis in Chapter 2 of this economic analysis calculates the incremental cost of the 5791 TSCA Title VI rule. The incremental cost excludes the costs associated with activities performed in the 5792 baseline such as TPC audits at CARB certified panel producers, and recordkeeping at firms that sell 5793 products in California. The paperwork burden analys is in the ICR calculates the incremental burdens and 5794 costs of the rule, but it also calculates total burden and costs including activities that are performed to 5795 comply with the CARB ATCM in the baseline. Furthermore, the cost analysis in Chapter 2 is limited to 5796 domestic entities, while the ICR considers the burden and cost to both domestic and foreign entities. 5797

5798 Table 6-11 presents the summary of the three year average incremental and total cost burden. 5799 The columns labeled total burden and total cost presen t the bottom line burden and cost for the ICR. The 5800 columns labeled incremental burden and incremental cost present the burdens and costs with the baseline 5801 assumptions that are consistent with the economic analysis in Chapter 2. Note that these burden and cost 5802 estimates differ slightly from those presented in Chapter 2 because the unit burdens and costs are rounded 5803 slightly differently for the calculations. This is necessary because a different level of disaggregation is 5804 needed for the ICR supporting statement. (The IC R supporting statement calculates the costs at the 5805 activity level, while the cost analysis calculates them at the establishment level.) In addition, costs 5806 associated with changes to production processes or raw materials are not considered paperwork burden 5807 and therefore not included in the paperwork burden analysis. See the ICR supporting statement for a 5808 detailed description of how thes e calculations were performed. 5809

5810 Table 6-11: Summary of Three Year Average Incremental and Total Burden Hours and Costs, by Geographic Location ($2010)

Respondent Type Number of
Respondents Incremental Burden

Hours (excludes
baseline burden) Incremental Cost
(excludes baseline
cost) Total Burden

Hours (includes
baseline burden) Total Cost
(includes baseline
cost)

Domestic

Producers 370 193,453 187,274 $21, 680,292 128,77

2 22 1,328 215,023 $24, 683,876 064,20

8

Fabricators 79,701 1, 837,729 866,226 $ 62,701,579 64,002,

296 2, 608,828 637,325 $ 81,855,678 83,156,

395

Wholesalers 85,560 841,827 813,330 $ 32,656,187 31,360,

750 1, 156,087 127,590 $ 40,682,387 39,386,

950

Retailers 759,048 1,011,963 $71, 555,904 563,04

5 1,011,963 $71, 555,904 563,04

5

Total 924,679 3, 884,972 878,793 $188, 593,962 054,8

63 4, 998,206 991,901 $218, 777,845 170,5

98

Forei g n

Producers 1,129 234,293 170,643 $ 25,977,529 20,070,

682 $477,692 412,218 $ 53,971,653 47,412,

391

Fabricators 31,083 716,285 727,417 $24, 441,066 949,11

8 1, 020,576 031,708 $ 31,999,655 32,507,

707

Wholesalers 33,368 1, 029,608 018,476 $33, 513,802 008,51

0 1, 467,274 456,142 $44, 691,791 186,49

9

Retailers - - - - -

Total 65,580 1, 980,186 916,536 $ 83,932,397 78,028,

310 2, 965,542 900,068 $ 130,663,099 124,1
06,597

Total

Producers 1,499 427,744 357,917 $ 47,657,678 41,199,

455 $699,020 627,241 $ 78,655,528 71,476,

599

Fabricators 110,784 2, 554,012 593,643 $ 87,142,555 88,951,

415 3, 629,402 669,033 $ 113,855,243 115,6
64,102

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Wholesalers 118,928 1, 871,434 831,806 $ 66,169,963 64,369,

234 2, 623,362 583,732 $ 85,374,204 83,573,

449

Retailers 759,048 1,011,963 $71, 555,904 563,04

5 1,011,963 $71, 555,904 563,04

5

Total 990,259 5, 865,153 795,329 $ 272,526,100 266,0
83,149 7, 963,747 891,969 $ 349,440,8 79 342,2
77,195



### 5811

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## 6.4 Unfunded Mandates Reform Act (UMRA) 5812

5813 Title II of the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, establishes 5814 requirements for Federal agencies to assess the effect s of their regulatory actions on State, local, and 5815 Tribal governments, and the private sector. Un der section 202 of the UMRA, EPA generally must 5816 prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal 5817 mandates” that might result in expenditures by State, local, and Tribal governments, in the aggregate, or 5818 by the private sector, of $100 million or more (when adjusted annually for inflation) in any one year. The 5819 proposed rule is not expected to affect state, local, or Tribal governments because the proposed rule 5820 affects entities that manufacture, import, or sell composite wood products, and government entities are 5821 not engaged in these activities. 5822

5823

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## 6.5 Executive Order 13132 - Federalism 5824

5825 Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), directs federal 5826 agencies to consider whether a rule has federalism im plications (i.e. whether it has substantial direct 5827 effects on the states, on the relationship between the national government and the states, or on the 5828 distribution of power and responsibilities among the various levels of government, as specified in 5829 Executive Order 13132). 5830

5831 The proposed rule does not have any direct effects on states or local governments (individually or 5832 collectively), on the relationship between the national government and the states, or on the distribution of 5833 power and responsibilities among the various levels of government. No state or local governments are 5834 expected to engage in the import, manufacture, or sale of composite wood products, and thus state and 5835 local governments will not incur direct compliance costs as a result of the rule. The rule does not preempt 5836 state or local law, and the rule is required by statute. 5837

5838

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## 6.6 Executive Order 13175 - Tribal Implications 5839

5840 Executive Order 13175, entitled Consultation and Coordination w ith Indian Tribal Governments 5841 (59 FR 22951, November 6, 2000), directs federal agencies to consider whether a rule has tribal 5842 implications (i.e. whether it has substantial direct effects on tribal governments, on the relationship 5843 between the Federal government and the Indian tribes, or on the distribution of power and responsibilities 5844 between the Federal government and I ndian tribes). No tribal government is expected to engage in the 5845 import, manufacture, or sale of composite wood pr oducts, and thus tribal governments will not incur 5846 direct compliance costs as a result of the rule. Th e rule does not change the relationship between the 5847 Federal government and Indian tribes, or change the distribution of power. 5848

5849

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## 6.7 Executive Order 13045 - Protection of Children 5850

5851 Under Executive Order 13045, a regulation must be reviewed if the regulatory action is 5852 economically significant and concerns an environmental health risk or safety risk that may 5853 disproportionately affect children. This analysis shows that the per

- child benefits fr om this proposed rule 5854 are substantially larger than the average benefit per person across individuals of all ages. This proposed 5855 rule is not economically significant, but EPA has nevertheless evaluated the environmental health effects 5856 of formaldehyde emissions from composite wood pr oducts on children. The economic analysis only 5857 monetizes the potential benefits associated with avoided cases of nasopharyngeal cancer and eye 5858 irritation, some of which clearly would accrue to ch ildren. However, as indicated above, some studies 5859 have reported associations between elevated levels of formaldehyde levels and other health endpoints, 5860 such as respiratory symptoms. To the extent that th e reductions reported in this rule would lead to 5861 reduced respiratory symptoms in children, the monetized estimate for cancer alone is likely an 5862

underestimate. As shown in Table 6-12, children under the age of two represent 5 3 percent of the 5863 individuals affected by the rule and are estimated to accrue between 0. 3 and 1.7 10 percent of the proposed 5864

rule’s total quantified benefits. Children aged two through fifteen represent 19 20 percent of the 5865 individuals affected by the rule and are estimated to accrue about 75 16 to 22 percent of the proposed 5866

rule’s total quantified benefits. These results are driven by the benefits associated with avoiding asthma 5867 incidence, which are only estimated for children ages 6 through 17 for the lower benefits estimate and for 5868 children ages 2 through 17 for the higher benefi ts estimate. Given these results, EPA has determined that 5869 this proposed rule will not have disproportionally high and adverse human health or environmental effects 5870 on children. These proposed standards would reduce emissions of formaldehyde from composite wood 5871 products for individuals of all ages that are exposed and children are likely to accrue similar or higher 5872 benefits from the exposure reductions compared to adults. 5873

5874 Table 6-12: Summary of Quantified Benefits for Children Compared with All Individuals under the Proposed Option (annualized at 3% rate)

Population Affected Population

Affected Annually (thousands) Population

Affected as

Percent of

Total Affected

Population Total Quantified

Benefits

Lower Estimate (millions 2010$) Total Quantified

Benefits Higher Estimate (millions 2010$) Total Quantified

Benefits

Lower Estimate

(% of total

affected population) Total Quantified

Benefits Higher Estimate

(% of total

affected population) All Individuals 106,057 100.00% $ 184.31 20.22 $ 277.92 47.63 100.00% 100.00% Children ages 0-1 4,971 3,309 4.69 3.12 % $0.47 $4.79 0.26 2.35 % 1.72 10.06 %
Children ages 2-15 19,651 21,31

2 18.53 20.10 % $ 136.95 3.16 $ 209.99 10.57 74.31 15.63 % 75.56 22.19 %



### 5875

5876

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## 6.8 Executive Order 13211 - Energy Effects 5877

5878 Executive Order 13211, entitled Actions Concerning Regulations that Significantly Affect Energy 5879 Supply, Distribution, or Use (66 FR 28355, May 22, 2 001), directs federal agencies to identify actions 5880 that will have a significant adverse energy effect. Adverse effects are defined as: 5881

5882

 Reductions in crude oil supply in excess of 10,000 barrels per day; 5883

 Reductions in fuel production in excess of 4,000 barrels per day; 5884

 Reductions in coal production in excess of 5 million tons per year; 5885

 Reductions in natural gas production in excess of 25 million mcf per year; 5886

 Reductions in electricity production in excess of 1 billion kilowatt-hours per year or in excess of 5887 500 megawatts of installed capacity; 5888

 Increases in energy use required by the regulatory action that exceed any of the thresholds above; 5889

 Increases in the cost of energy prod uction in excess of one percent; 5890

 Increases in the cost of energy distribution in excess of one percent; or 5891

 Other similarly adverse outcomes. 5892

5893 The regulations under consideration will not signifi cantly reduce energy production nor significantly 5894 increase energy costs. 5895

5896

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

May 1, 2013 6-30 

## 6.9 National Technology Transfer and Advancement Act 5897

5898 Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), 5899 Public Law No. 104-113 (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its 5900 regulatory activities unless to do so would be incons istent with applicable law or otherwise impractical. 5901 Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, 5902 sampling procedures, and business practices) that are developed or adopted by voluntary consensus 5903

standards bodies. 5904

5905 The proposed rule involves numerous technical standards, many of which EPA is directed to use 5906 by TSCA Title VI. Technical standa rds identified in the statute includ e the two quarterly test methods, 5907 ASTM E-1333-96 and ASTM D-6007-02, a quality cont rol test method, ASTM D-5582-00, and various 5908 standards that define specific composite wood produc ts, such as ASTM D-5456-06 (Structural Composite 5909 Lumber Products), ASTM D-5055-05 (Prefabricated Wood I-Joists), ANSI A190.1 (Structural Glued 5910 Laminated Timber), ANSI/HPVA HP–1–2009 (Hardwo od and Decorative Plywood), ANSI A208.2–2 5911 2009 (Medium Density Fiberboard), ANSI A208.1–2009 (Particleboard), PS-1-0 7 (Structural Plywood), 5912 and PS-2-04 (Wood-Based Structural-Use Panels). 5913

5914 The proposed rule also incorporates other volunta ry consensus standards that EPA has identified, 5915 including the standards that define hardboard (ANS I A135.4, ANSI A135.5, and ANSI A135.6) and three 5916 alternative quality control test methods: EN 717-2 (g as analysis), EN 120 (perforator), and JIS A 1460 5917 (24-hour desiccator). 5918

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

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RISI. 2011a. Crow's Weekly Market Report . March 18, 2011. 6079

RISI. 2011b. Crow's Weekly Market Report . February 18, 2011. 6080

RISI. 2011c. Crow's Price Data: Southern Pine - 3/4" - U.S. Southeast . Accessed March 21, 6081

2011. 6082

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

May 1, 2013 R-5 

### RISI. 2011d. Particleboard and MDF Commentary . January 2011. 6083

SalesGenie. 2010. Business to Business Direct ory: California, NAICS 337110. Available at: 6084 http://www.salesgenie.com/ (Accessed December 17,) 6085

Schlosser, P., P. Lilly, R. Conolly, D. Janszen and J. Kimbell. 2003. Benchmark dose risk 6086 assessment for formaldehyde using airflow modeling and a single-compartment, DNA-protein 6087 cross-link dosimetry model to estimate human equivalent doses . Risk Analysis . 23 : 473–487. 6088

Schmalensee, R. and R. N. Stavins. 2011. A Guide to Economic and Policy Analysis of EPA’s 6089 Transport Rule. White paper commissioned by Excelon Corporation

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SEER Program ( www.seer.cancer.gov) . 2010. Survival of nasopharynx cancer. SEER*Stat 6091 Database: Incidence - SEER 13 Regs Research Data, Nov 2010 Sub (1992-2007) . Acessed 6092 October 12, 2011. 6093

Stavins, R. 2001. Lessons from the American Experiment with Market-Based Environmental 6094

Policies . October 1, 2001. 6095

Taskinen, H. K., P. Kyyronen, M. Sallmen, S. V. Virtanen, T. A. Liuldwnen, O. Huida, M. L. 6096

Lindbohm and A. Anttila. 1999. Reduced Fertility Among Female Wood Workers Exposed to 6097 Formaldehyde . American Journal of Industrial Medicine . 36 : 202-221. 6098

Tham, I. W. K. and J. J. Lu. 2010. Post-treatment Follow-Up of Patients with Nasopharyngeal 6099

Cancer . Nasopharyngeal Cancer . J. J. Lu, J. S. Cooper and A. W. M. Lee, Springer Berlin 6100 Heidelberg : 233-240. 6101

Tolley, G., et. al. 1986. Valuation of Reductions in Human Health Symptoms and Risks: Volumes 6102

1-4 , Final Report to the US Environmental Protection Agency. University of Chicago, Chicago, 6103

IL. 6104

U.S. Bureau of Economic Analysis. 2011a. National Income and Product Accounts Table 2.1 6105 Personal Income and Its Disposition

. 6106

U.S. Bureau of Economic Analysis. 2011b. National Income and Product Accounts Table 3.4U. 6107 Personal Current Tax Receipts

. 6108

U.S. Bureau of Labor Statistics. 2010a. Employer Costs for Employer Compensation. Series ID 6109

CMU2020000000000D.

. 6110

U.S. Bureau of Labor Statistics. 2010b. May 2009 National Industry-Specific Occupational 6111 Employment and Wage Estimates. NAICS 321000 - Wood Product Manufacturing

. 6112

U.S. Bureau of Labor Statistics. 2010c. May 2009 National Industry-Specific Occupational 6113 Employment and Wage Estimates. Sectors 44 and 45 - Retail Trade

. 6114

U.S. Bureau of Labor Statistics. 2010d. May 2009 National Industry-Specific Occupational 6115 Employment and Wage Estimates. Sector 42 - Wholesale Trade

. 6116

U.S. Bureau of Labor Statistics. 2010e. Employer Costs for Employer Compensation. Series ID 6117

CMU2020000000000P.

. 6118

U.S. Bureau of Labor Statistics. 2011a. National Compensation Survey: Occupational Earnings 6119 in the United States, 2010. Table 2

. 6120

U.S. Bureau of Labor Statistics. 2011b. Employer Costs for Employee Compensation, Total 6121 Benefits, All civilian occupations. Series ID CMU2030000000610D, CMU2030000000610P, 6122 CMU2030000000620D, CMU2030000000620P

. 6123

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

May 1, 2013 R-6 

### U.S. Bureau of Labor Statistics. 2011c. Labor Force Statistics from the Current Population 6124 Survey. Quarter 1, 2011

. 6125

U.S. Census Bureau. 1997. 1992 Enterprise Statistics: Company Summary

. 6126

U.S. Census Bureau. 2009a. Sector 42: EC0742I1: Wholesale Trade: Industry Series: 6127 Preliminary Summary Statistics for the United States: 2007

. 6128

U.S. Census Bureau. 2009b. Sector 31: EC0731I2: Manufacturing: Industry Series: Products 6129 Statistics for the United States: 2007

. 6130

U.S. Census Bureau. 2009c. American Housing Survey Microdata

. 6131

U.S. Census Bureau. 2009d. 2007-2009 American Community Survey (ACS) 3-Year Estimates

. 6132

U.S. Census Bureau. 2009e. Sector 31: EC0731I3: Manufacturing: Industry Series: Materials 6133 Consumed by Kind for the United States: 2007 . December 29, 2010. 6134

U.S. Census Bureau. 2010a. Sector 31: EC0731A1: Manufacturing: Geographic Area Series: 6135 Industry Statistics for the States

. 6136

U.S. Census Bureau. 2010b. Sector 44: EC0744A1: Retail Trade: Geographic Area Series: 6137 Summary Statistics for the United States, States, Metro Areas, Counties, and Places: 2007

. 6138

U.S. Census Bureau. 2010c. Data Item: Wholesale type of operation.” American FactFinder 6139 Help. Census Data Information

. 6140

U.S. Census Bureau. 2010d. Sector 00: NS0800A2: 2008 Nonemployer Statistics: Geographic 6141 Area Series: Nonemployer Statistics for the US, States, Metropolitan Areas, and Counties: 2008

. 6142

U.S. Census Bureau. 2010e. Number of Firms, Number of Es tablishments, Employment, Annual 6143 Payroll, and Estimated Receipts by Enterprise Employment Size for States, NAICS Sectors: 2007

. 6144 December 15, 2010. 6145

U.S. Census Bureau. 2010f. Sector 42: EC0742SSSZ5: Wholesale Trade: Subject Series - Estab 6146 & Firm Size: Summary Statistics by Employme nt Size of Firms for the United States: 2007

. 6147

U.S. Census Bureau. 2010g. Sector 44: EC0744SSSZ4: Retail Trade: Subject Series - Estab & 6148 Firm Size: Summary Statistics by Sales Si ze of Firms for the United States: 2007

. 6149

U.S. Census Bureau. 2010h. Sector 42: EC0742SSSZ2: Wholesale Trade: Subject Series - Estab 6150 & Firm Size: Summary Statistics by Employment Size of Establishments for the United States: 6151

2007

. 6152

U.S. Census Bureau. 2010i. Census Data Information. Survey Methodology: 2007 Economic 6153 Census: Retail Trade: Subject Series: Product Lines

. 6154

U.S. Census Bureau. 2010j. Sector 44: EC0744SLLS1: Retail Trade: Subject Series - Product 6155 Lines: Product Lines Statistics by Kind of Business for the United States and States: 2007

. 6156

U.S. Census Bureau. 2010k. Sector 31: EC0731SG3: Manufacturing: Summary Series: General 6157 Summary: Industry Statistics for Subsectors and Industries by Employment Size: 2007. 6158

U.S. Census Bureau. 2010l. Sector 00: NS0800A1: 2008 Nonemployer Statistics: Geographic 6159 Area Series: Nonemployer Statistics by Legal Form of Organization: 2008 6160

U.S. Census Bureau. 2010m. Census Data Information. Sector 44: EC0744SLLS1: Retail Trade: 6161 Subject Series - Product Lines: Product Lines Statis tics by Kind of Business for the United States 6162

and States: 2007. Data Item: Products and Services Code

. 6163

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

May 1, 2013 R-7 

### U.S. Census Bureau. 2010n. Sector 31: Manufacturing: EC0731SG1: Summary Series: General 6164 Summary: Industry Statistics for Industry Groups and Industries: 2007

. 6165

U.S. Census Bureau. 2010o. Sector 42: EC0742SSSZ3: Wholesale Trade: Subject Series - Estab 6166 & Firm Size: Summary Statistics for Single Un its and Multiunit Firms for the United States: 6167

2007

. 6168

U.S. Census Bureau. 2010p. Sector 44: EC0744SSSZ3: Retail Trade: Subject Series - Estab & 6169 Firm Size: Summary Statistics for Single Unit a nd Multiunit Firms for the United States: 2007

. 6170

U.S. Census Bureau. 2011. Sector 42: EC0742SLLS1: Wholesale Trade: Subject Series - Product 6171 Lines: Product Lines Statistics by Kind of Business for the United States and States: 2007

. 6172

U.S. Department of Health and Human Servic es (HHS) National Toxicology Program. 2011. 12th 6173 Report on Carcinogens . June 10, 2011. 6174

U.S. Environmental Protection Agency. 1998. Industry Specific Information Collection Request 6175 (ICR) for the Development of Plywood and Particleboard Maximum Achievable Control 6176 Technology (MACT) Standards

. 6177

U.S. Environmental Protection Agency. 2001. EPA Cost of Illness Handbook. Available at: 6178 http://www.epa.gov/oppt/coi/ (Accessed March 10, 2011) 6179

U.S. Environmental Protection Agency. 2006. National Emission Standards for Hazardous Air 6180 Pollutants: Plywood and Composite Wood Products; List of Hazardous Air Pollutants, Lesser 6181 Quantity Designations, Source Category List; Final Rule . Federal Register (71 FR 8341, 6182 February 16, 2006) (FRL–8028–9). 6183

U.S. Environmental Protection Agency. 2010a. U.S. EPA Pressed Wood Manufacturing Industry 6184 Survey

. 6185

U.S. Environmental Protection Agency. 2010b. Memorandum from Peter Preuss to Steve Page 6186 entitled “Recommendation for Formaldehyde Inhalation Cancer Risk Values . January 22, 2010. 6187

U.S. Environmental Protection Agency. 2010c. IRIS Toxicological Review of Formaldehyde6188 Inhalation Assessment (External Review Draft) . Washington, DC, U.S. Environmental Protection 6189 Agency. 6190

U.S. Environmental Protection Agency. 2013. Approach to Assessing Non-cancer Health Effects 6191 from Formaldehyde and Benefits from Reducing Noncancer Health Effects as a Result of 6192 Implementing Formaldehyde Emission Limits for Composite Wood Products

. 6193

U.S. Internal Revenue Service. 2007. Starting a Business and Keeping Records . Publication 583. 6194 Revised January 2007. 6195

U.S. International Tr ade Commission. 2008. Wood Flooring and Hardwood Plywood: 6196 Competitive Conditions Affecting the U.S. Industries

. 6197

U.S. International Tr ade Commission. 2011. U.S. Interactive Tariff and Trade Dataweb

. 6198

U.S. International Trade Commission (U.S. ITC). 2011a. HTS - 4408: Veneer Sheets and Sheets 6199 for Plywood and Other Wood Sawn Lengthwise, Sliced or Peeled, Not More Than 6 mm (.263 in. 6200 Thick: U.S. Domestic Exports: Annual Data: 2007

. 6201

U.S. International Trade Commission (U.S. ITC). 2011b. HTS - 4408: Veneer Sheets and Sheets 6202 for Plywood and Other Wood Sawn Lengthwise, Sliced or Peeled, Not More Than 6 mm (.263 in. 6203 Thick: U.S. Imports for Cons umption: Annual Data: 2007

. 6204

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

May 1, 2013 R-8 

### United States Postal Service. 2011. First-Class Mail Prices. Available at: 6205 http://www.usps.com/prices/first-class-mail-prices.htm (Accessed February 23,) 6206

Weitzel, D. L. 1990. Economic Valuation of Environmental Health Benefits: A Review of the 6207

Literature , National Economic Research Associates, Inc. Report to the Washington State 6208 Department of Ecology. 6209

Will, A. 2010. Estimating National Levels of Home Improvement and Repair Spending by Rental 6210 Property Owners , Joint Center for Housing Studies, Harvard University. 6211

6212

6213

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

May 1, 2013 A-9 

## Appendix A: Product Lines Assumed to Include Composite Wood Products 6214

6215 Table A-1 and Table A-2 present the product line s that are assumed to contain composite wood 6216 products. Census data on the number of firms that sell these product lines was used to estimate the 6217 number of retail and wholesale firms affected by the rule’s requirements. 6218

6219

Table A -1: Retail Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

20000 Industry total Total Yes

20100 Groceries & other foods for human consumption off the premises Broad

20101 Meat, fish, seafood& poultry, incl prepack meats req refrigeration Detailed

20102 Produce, including fresh & prepackaged fruits & vegetables Detailed

20103 Frozen foods, incl packaged foods sold in a frozen state Detailed

20104 Dairy products & related foods, incl milk, cheese, butter, etc Detailed

20105 Bakery products baked on premises Detailed

20106 Bakery products not baked on the premises, excl frozen Detailed

20107 Delicatessen items, incl deli meats & other service deli items Detailed

20108 Bottled, canned, or packaged soft drinks Detailed

20109 Candy Detailed

20111 All other foods Detailed

20113 All other foods Detailed

20114 All other foods Detailed

20130 Alcoholic beverages served for immediate consumption Broad

20140 Packaged liquor, wine, & beer Broad

20141 Distilled spirits, including liquor, brandy, & liqueurs Detailed

20142 Wine Detailed

20143 Beer & ale Detailed

20150 Cigars, etc & smokers' access, excl sls from vending op by others Broad

20160 Drugs, health aids, beauty aids, including cosmetics Broad

20161 Prescriptions Detailed

20162 Nonprescription medicines Detailed

20163 Vitamins, minerals, & other dietary supplements Detailed

20164 Health aids, incl first-aid prod; foot prod; ortho equip; etc Detailed

20165 Cosmetics, incl face cream, make-up, perfumes & colognes etc Detailed

20166 Oth hygiene needs, incl deodorants; hair & shaving products, etc Detailed

20167 Hearing aids & supplies Detailed

20180 Soaps, detergents, & household cleaners Broad

20190 Paper & related prod, incl paper towels, toilet tissue, wraps, etc Broad

20200 Men's wear, including accessories Broad

20201 Men's overcoats, topcoats, raincoats, outer jackets Detailed

20202 Men's suits & formal wear Detailed

20203 Men's sport coats & blazers Detailed

20204 Men's tailored & dress slacks Detailed

20205 Men's casual slacks & jeans, walking shorts, etc. Detailed

20206 Men's career & work uniforms Detailed

20207 Men's dress shirts Detailed

20208 Men's sport shirts, incl t-shirts, knit & woven shirts, etc Detailed

20209 Men's sweaters Detailed

20211 Men's hosiery, pajamas, robes, underwear Detailed

20212 Men's sports apparel, incl tennis, golf, jogging, swimming, etc Detailed

20214 Men's accessories, incl hats, gloves, neckwear, handkerchiefs, etc Detailed

20215 Custom-made garments Detailed

20216 Men's sweat tops, pants, & warm-ups Detailed

20217 Other men's wear Detailed

20220 Women's, juniors', and misses' wear, including accessories Broad

20221 Furs, fur garments Detailed

20222 Dresses, including all types Detailed

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

May 1, 2013 A-10 

### Table A -1: Retail Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

20223 Dressy & tailored coats, outer jackets, rainwear Detailed

20224 Suits, pantsuits, sport jackets, blazers Detailed

20225 Slacks/pants, jeans, walking shorts, skirts Detailed

20226 Tops, incl t-shirts, knit & woven shirts, blouses, sweaters Detailed

20227 Women's sports apparel, incl tennis, golf, jogging, swimming, etc Detailed

20229 Hosiery, including pantyhose, socks, tights Detailed

20231 Bras, girdles, corsets Detailed

20232 Lingerie, sleepwear, loungewear Detailed

20233 Hats, wigs, hairpieces Detailed

20234 Accessories, incl handbags, wallets, neckwear, gloves, belts, etc Detailed

20235 Custom-made garments Detailed

20236 Women's sweat tops, pants, & warm-ups Detailed

20237 Oth apparel, incl uniforms, smocks & oth apparel items Detailed

20238 Other women's, juniors', & misses' wear Detailed

20240 Children's wear, incl boys', girls', infants' & toddlers' Broad

20241 Boys' (sizes 2 to 7 and 8 to 20) clothing & accessories Detailed

20242 Girls' (sizes 4 to 6x and 7 to 14) clothing & accessories Detailed

20243 Infants' & toddlers' clothing & accessories Detailed

20260 Footwear, including accessories Broad

20261 Men's footwear, including dress & casual footwear Detailed

20262 Women's footwear, including dress & casual footwear Detailed

20263 Children's footwear, incl boys', girls', infants', & toddlers' Detailed

20265 Men's athletic footwear, incl sneakers & outdoor/hiking boots Detailed

20266 Women's athletic footwear, incl sneakers & outdoor/hiking boots Detailed

20267 Children's athletic footwear, incl sneakers & outdoor/hiking boots Detailed

20268 Footwear access, incl polishes, laces, trees, storage bags, etc Detailed

20269 All other footwear, including accessories Detailed

20270 Sewing, knitting materials & supplies, needlework goods, etc Broad

20271 Fabrics Detailed

20272 Patterns Detailed

20273 Sewing supplies, notions, yarns, laces, trimmings, etc Detailed

20280 Curtains, draperies, blinds, slipcovers, bed & table coverings Broad

20281 Curtains & draperies Detailed

20282 Vertical & horizontal blinds, woven wood blinds, & shades Detailed

20283 Furniture coverings, including ready-made & custom-made Detailed

20284 Domestics, incl towels, sheets, blankets, table linens, etc Detailed

20285 Furniture coverings & domestics Detailed

20300 Major household appliances Broad

20301 Kitchen appliances, parts, & accessories Detailed

20302 Laundry appliances, parts, & accessories Detailed

20303 Other major household appliances, parts, & accessories Detailed

20310 Small electric appliances & personal care appliances Broad

20320 TVs, video recorders, video cameras, video tapes, DVDs, etc Broad

20321 Televisions & related parts & accessories Detailed

20322 Video recorders, cameras & electronic game/DVD comb devices,

etc Detailed

20323 DVDs and video tapes, prerecorded and/or recordable Detailed

20324 Video recorders, cameras, tapes & electr game/DVD comb dev Detailed

20330 Audio equip, musical instr, radios, stereos, CDs, records, etc Broad

20331 Audio equipment, components, parts & accessories Detailed

20335 Compact discs, records, tapes, & audio books Detailed

20337 Musical instruments, sheet music, & related items Detailed

20338 Audio content downloads Detailed

20340 Furniture, sleep equipment & outdoor/patio furniture Broad Yes

20341 Upholstered furniture Detailed Yes

20342 Sleep sofas, daybeds, futons, & other dual-purpose pieces Detailed Yes

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

May 1, 2013 A-11 

### Table A -1: Retail Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

20343 Sleep equipment, incl mattresses, springs, cots, waterbeds, etc Detailed Yes

20344 Oth living room, dining room, bedroom furniture, incl headboards Detailed Yes

20345 All oth furniture, incl outdoor, office, computer-related, kitchen Detailed Yes

20346 Office furniture, including computer-related furniture Detailed Yes

20347 Outdoor/patio furniture Detailed Yes

20348 All other furniture, includi ng kitchen, dinette, etc. Detailed Yes

20360 Flooring & floor coverings Broad Yes

20361 Soft-surface (textile) floor coverings & accessories Detailed

20363 Hardwood flooring Detailed Yes

20364 Other hard-surface floor coverings & accessories Detailed

20370 Computer hardware, software, & supplies Broad

20375 Computer & peripheral equipment Detailed

20376 Prepackaged computer software, including software downloads Detailed

20380 Kitchenware & home furnishings Broad Yes

20381 Cookware & cooking accessories Detailed

20382 Dinnerware, china, glassware, tableware, giftware Detailed

20383 Decorative accessories, incl lamps, lampshades, mirrors, etc Detailed Yes

20384 All other kitchenware & home furnishings Detailed

20385 All other kitchenware & home furnishings Detailed

20386 Giftware & glassware, including vases Detailed

20387 All other kitchenware & home furnishings Detailed

20388 China/glassware Detailed

20389 Flatware & holloware Detailed

20391 Clocks Detailed Yes

20392 All other kitchenware & home furnishings Detailed

20400 Jewelry, incl watches, watch attach, novelty jewelry, etc Broad

20401 Diamond jewelry Detailed

20402 Pearl jewelry Detailed

20403 Other gemstone jewelry Detailed

20404 Loose gemstones, including diamonds & colored gemstones Detailed

20405 Karat gold jewelry Detailed

20406 Watches Detailed

20407 Diamond, gemstone, & pearl jewelry Detailed

20408 Estate/antique jewelry Detailed

20411 All other jewelry Detailed

20412 Costume & novelty jewelry Detailed

20413 All other jewelry Detailed

20414 Platinum jewelry Detailed

20415 All other jewelry Detailed

20420 Books Broad

20440 Photographic equipment & supplies Broad

20460 Toys, hobby goods, & games Broad Yes

20461 Toys, including wheel goods Detailed Yes

20462 Games, including video & electronic games Detailed

20463 Hobby goods Detailed Yes

20490 Optical goods, incl eyeglasses, contact lenses, sunglasses, etc Broad

20500 Sporting goods Broad Yes

20501 Team sporting goods equip sold to teams, institutions, etc Detailed Yes

20502 Team sporting goods equipment sold to individuals Detailed Yes

20503 Tennis equipment Detailed

20504 Golf equipment Detailed

20505 Snow-skiing & snowboarding equipment Detailed Yes

20506 Exercise/fitness equipment Detailed

20507 Firearms, hunting equipment, & supplies Detailed Yes

20508 Fishing tackle, including bait Detailed

20509 Camping & backpacking equipment & supplies Detailed

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

May 1, 2013 A-12 

### Table A -1: Retail Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

20511 Trophies & plaques Detailed

20512 Bicycles, parts & accessories Detailed

20513 Boats, canoes, kayaks, boat motors, parts & accessories Detailed

20514 New boats, motors, & parts & accessories Detailed

20515 Used boats, motors, & parts & accessories Detailed

20516 Scuba & skin diving equipment Detailed

20517 Water skiing, surfing, & sail boarding equipment Detailed

20518 Billiards equipment & supplies Detailed Yes

20519 Boats, motors, parts & accessories Detailed

20521 All other sporting goods Detailed Yes

20522 All other sporting goods Detailed Yes

20523 All other sporting goods Detailed Yes

20524 In-line roller skates & accessories Detailed

20525 All other sporting goods Detailed Yes

20526 All other sporting goods Detailed Yes

20527 Motorized sport vehicles, incl ATVs, snowmobiles, etc Detailed

20528 All other sporting goods Detailed Yes

20580 RVs, incl camping & travel trailers, campers, parts & accessories Broad Yes

20581 New camping trailers, including collapsible Detailed Yes

20582 New travel trailers, including 5th wheel Detailed Yes

20583 New truck campers for mounting on pick-up trucks Detailed Yes

20584 New motor homes Detailed Yes

20585 Used recreational vehicles Detailed

20586 All other recreational vehicles, parts, & accessories Detailed Yes

20600 Hardware, tools, & plumbing & electrical supplies Broad

20601 Hardware Detailed

20602 Tools & equipment Detailed

20603 Plumbing fixtures & supplies Detailed

20605 Wiring & wire products Detailed

20606 Welding supplies Detailed

20607 Electrical supplies Detailed

20620 Lawn, garden, & farm equipment & supplies Broad

20621 Cut flowers Detailed

20622 Cut flowers -- unarranged Detailed

20623 Cut flowers -- arranged Detailed

20624 Indoor potted plants -- blooming Detailed

20625 Indoor potted plants -- nonblooming Detailed

20626 Indoor potted plants & floral items Detailed

20627 Outdoor nursery stock Detailed

20628 Fertilizer, lime, chemicals, & other soil treatments Detailed

20631 Lawn & garden tools Detailed

20633 All other lawn, garden, & farm equip & supplies Detailed

20636 Lawn & garden machinery, equipment, & parts Detailed

20637 Farm machinery, equipment, & parts Detailed

20638 All other farm supplies, including grain & animal feed Detailed

20639 All other lawn & garden supplies Detailed

20640 Dimensional lumber & oth bldg/structural materials & supplies Broad Yes

20641 Dimensional lumber, nontreated Detailed

20642 Treated lumber Detailed

20643 Boards, all grades Detailed

20644 Gypsum, specialty boards, & treatments Detailed

20645 Engineered wood products, incl glue-lam, LVL, etc Detailed

20646 Structural panels, incl softwood plywood, & OSB Detailed

20647 Oth panel products, incl hardwood plywood, waferboard, etc Detailed Yes

20648 Bldg components, incl floor trusses, roof trusses, etc Detailed

20649 Connectors, including joist hangers, tie-downs, etc. Detailed

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

May 1, 2013 A-13 

### Table A -1: Retail Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

20651 Steel studs Detailed

20652 Doors & moulding Detailed Yes

20653 Windows, skylights, & patio doors Detailed Yes

20654 Glass Detailed

20655 Masonry supplies, including cement, lime, plaster, brick, etc. Detailed

20656 Insulation (all types) & weatherization products Detailed

20657 Siding, exterior trim, & soffit Detailed

20658 Roofing (all types), including roofing supplies Detailed

20659 Ceilings & ceiling systems Detailed

20661 Kitchen & bath cabinets & countertops Detailed Yes

20662 Heating & HVAC units; ductwork; heating stoves Detailed

20665 Refrigeration equipment & supplies Detailed

20666 All other building/structural materials & supplies Detailed

20670 Paint & sundries Broad

20673 Interior paint Detailed

20674 Exterior paint Detailed

20675 Stain, varnish, shellac, & other coatings Detailed

20676 Painting equipment, including tools, brushes, scrapers, etc. Detailed

20677 Painting supplies Detailed

20680 Manufactured (mobile) homes, excluding modular homes Broad Yes

20681 New single-section manuf (mobile) homes, less than 14 ft wide Detailed Yes

20682 New single-section manuf (mobile) homes, 14 ft wide Detailed Yes

20683 New single-section manuf (mobile) homes, more than 14 ft wide Detailed Yes

20684 New multisection manuf (mobile) homes, two sections Detailed Yes

20685 New multisection manuf (mobile) homes, three or more sections Detailed Yes

20686 Other new manufactured (mobile) homes & parts & accessories Detailed Yes

20687 Used single-section manufactured (mobile) homes Detailed

20688 Used multisection manufactured (mobile) homes Detailed

20690 Wallpaper & other flexible wallcoverings Broad

20700 Cars, trucks, motorcycles & other powered transportation vehicles Broad

20712 New motorcycles, motor scooters, motor bikes, incl parts & access Detailed

20713 Used motorcycles, motor scooters, motor bikes, incl parts & access Detailed

20714 All other powered transportation vehicles Detailed

20720 Automotive fuels Broad

20730 Automotive lubricants, including oil, greases, etc Broad

20740 Automotive tires, tubes, batteries, parts, accessories Broad

20741 Automotive tires & tubes Detailed

20742 Auto parts (over-the-counter), accessories, & sundry supplies Detailed

20749 Automotive batteries Detailed

20780 Household fuels, including oil, LP gas, wood, coal Broad

20800 Pets, pet foods, & pet supplies Broad

20850 All other merchandise Broad

20851 Stationery products Detailed

20852 Office paper, incl computer, copier, fax & typewriter paper Detailed

20853 Office & school supplies Detailed

20854 Office equipment Detailed

20855 Greeting cards Detailed

20856 Magazines & newspapers Detailed

20859 Luggage & leather goods Detailed

20861 Antiques, items over 100 years old Detailed

20862 Collectibles, incl items which are old, but less than 100 yrs old Detailed

20863 Art goods, including original pictures & sculptures Detailed

20864 Utility trailers, including horse/livestock trailers Detailed

20865 Telephones, including cellular phones Detailed

20866 Ice Detailed

20867 Coins, medals, & other numismatic items Detailed

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

May 1, 2013 A-14 

### Table A -1: Retail Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

20868 Stamps, autographs, & other philatelic materials & supplies Detailed

20869 Artists' materials & supplies Detailed

20871 Religious goods, except books Detailed

20873 Monuments & grave markers Detailed

20874 Fireworks Detailed

20876 Pools, pool chemicals, & pool supplies & accessories Detailed

20877 Souvenirs & novelty items Detailed

20878 Seasonal decorations Detailed

20879 Artificial/silk flowers, plants, & trees Detailed

20881 Craft supplies Detailed

20882 Typewriters Detailed

20883 All other merchandise Detailed

21100 Meals, snacks & nonalcoholic bvgs prepared for immediate cons Broad

21109 Soup and salad bars Detailed

21111 All other meals & snacks Detailed

21220 Meals, snacks & nonalcoholic bvgs prepared for catered event Broad

29810 All other merchandise Broad

29900 All nonmerchandise receipts Broad

29901 Construction receipts Detailed

29902 Repair & maintenance receipts Detailed

29903 Materials used in landscaping or lawn service Detailed

29904 Labor charges for work performed by this establishment Detailed

29905 Labor charges for work contracted out to other establishments Detailed

29906 Other labor charges Detailed

29907 Parts installed in repair Detailed

29908 Parts & materials used in furniture repair or upholstery work Detailed

29909 Delivery charges Detailed

29911 Delivery & installation charges Detailed

29912 Rental of video tapes, DVDs, video/DVD players, etc Detailed

29913 Receipts from coin-operated amusement machines Detailed

29914 Receipts from pleasure boat storage & docking services Detailed

29915 Receipts from instructions & lessons Detailed

29917 Receipts from photofinishing performed by this establishment Detailed

29918 Receipts from photofinishing contracted out to other estabs Detailed

29921 Rental or lease of boats, aircrafts, etc. Detailed

29922 Rental or lease of recreational vehicles Detailed

29924 Rental or lease of appliances, stereos, TVs, photo equip, etc Detailed

29927 Rental or lease of equipment Detailed

29929 Receipts from photocopying, faxing, & check cashing services Detailed

29932 Rental of space and/or mobile homes (residential) Detailed

29933 Rental of clothing, formal wear, etc. Detailed

29935 Carpet repair rcpts & oth labor charges - work perf by this estab Detailed

29936 Carpet cleaning receipts for work performed by this establishment Detailed

29938 Printing or engraving to order Detailed

29943 Value of service contracts Detailed

29944 Commissions rcvd for sale of credit life ins & arr of financing Detailed

29945 Wire services & commissions Detailed

29946 All other nonmerchandise receipts Detailed

29948 All other nonmerchandise receipts Detailed

29952 All other nonmerchandise receipts Detailed

29953 All other nonmerchandise receipts Detailed

29955 All other nonmerchandise receipts Detailed

29956 All other nonmerchandise receipts Detailed

29961 All other nonmerchandise receipts Detailed

29963 All other nonmerchandise receipts Detailed

29967 All other nonmerchandise receipts Detailed

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

May 1, 2013 A-15 

### Table A -1: Retail Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

29968 All other nonmerchandise receipts Detailed

29969 All other nonmerchandise receipts Detailed

29972 All other nonmerchandise receipts Detailed

29975 All other nonmerchandise receipts Detailed

29976 All other nonmerchandise receipts Detailed

29977 All other nonmerchandise receipts Detailed

29979 All other nonmerchandise receipts Detailed



### 6220

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

May 1, 2013 A-16 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

10000 Industry total Total Yes

10100 New and used automobiles, motorcycles, and trailers Broad

10112 Used automobiles Detailed

10114 Motor scooters, mopeds, and golf carts Detailed

10130 Light trucks and truck bodies, 14,000 lb or less Broad

10132 Used light trucks Detailed

10140 Medium trucks, 14,001 lb to 33,000 lb Broad

10141 New medium trucks and tractors Detailed

10142 Used medium trucks and tractors Detailed

10150 Heavy trucks and tractors, over 33,000 lb Broad

10155 Used heavy trucks, tractors, and trailers Detailed

10200 New and rebuilt automotive parts and supplies Broad

10213 Electrical engine parts Detailed

10214 Brake parts Detailed

10215 Exhaust system parts Detailed

10217 Hoses, belts, gaskets, and wiper blades Detailed

10218 Filters, including oil, air, gas, and transmission Detailed

10219 Engine parts, excl uding electrical parts Detailed

10221 Body parts and repair materials Detailed

10222 Suspension parts, including shocks, struts, and balljoints Detailed

10223 Other automotive parts and supplies Detailed

10224 Automotive accessories Detailed

10240 Used automotive parts, accessories, and equipment Broad

10300 Tires and tubes Broad

10311 New automobile tires and tubes Detailed

10312 Re-treaded and used tires and repair materials Detailed

10313 New truck and bus tires Detailed

10314 Re-treaded and used truck and bus tires and repair materials Detailed

10400 Household and lawn furniture Broad Yes

10411 Upholstered furniture Detailed Yes

10412 Mattresses and beds Detailed Yes

10413 Lawn and outdoor furniture Detailed

10414 Other furniture Detailed Yes

10415 Sleep sofas Detailed Yes

10420 Office and business furniture Broad Yes

10421 New wooden and metal office furniture Detailed Yes

10422 New store and restaurant furniture Detailed Yes

10423 New public furniture Detailed Yes

10424 Used office and business furniture Detailed

10500 Household china Broad

10520 Linens, domestics, curtains, and draperies Broad

10521 Bedspreads, blankets, and bedding Detailed

10522 Curtains and draperies Detailed

10523 Shades and blinds Detailed

10524 Towels and washcloths Detailed

10525 Other linens and domestics Detailed

10530 Flooring and floor coverings Broad Yes

10531 Rugs and carpeting Detailed

10532 Hardwood flooring Detailed Yes

10533 Other hard-surface floor coverings and accessories Detailed

10540 Miscellaneous home furnishings Broad Yes

10541 Metal flatware and kitchen utensils Detailed

10542 Mirrors, lamps, and picture frames Detailed Yes

10543 Other home furnishings Detailed

10600 Rough, dressed, and finished dimensional lumber Broad Yes

10611 Untreated lumber Detailed

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

May 1, 2013 A-17 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

10612 Treated lumber Detailed

10613 Boards Detailed

10620 Plywood and millwork Broad Yes

10621 Softwood plywood and Oriented Strand Board (OSB) Detailed

10622 Other panel products Detailed Yes

10623 Gypsum, waterboard, and other specialty boards Detailed

10624 Wood millwork Detailed Yes

10625 Metal millwork Detailed

10626 Trusses, wood siding, and wood shingles Detailed

10700 Concrete, cement, sand, gravel, stone, brick, block, and tile Broad

10711 Ready-mixed or transit-mixed concrete Detailed

10712 Cement and lime Detailed

10713 Sand, gravel, and crushed stone Detailed

10714 Brick, block, tile, and clay or cement sewer pipe Detailed

10720 Nonwood roofing, nonwood siding, and insulation materials Broad

10721 Nonwood roofing Detailed

10722 Nonwood siding Detailed

10723 Insulation materials Detailed

10730 Flat glass and other construction glass Broad

10740 Other construction products and materials Broad Yes

10741 Rain-carrying equipment Detailed

10742 Prefabricated buildings and non-wood structural assemblies Detailed Yes

10743 Manufactured mobile homes Detailed Yes

10744 Other construction materials Detailed

10800 Photographic equipment and supplies Broad

10813 Photographic film Detailed

10815 Other photographic equipment and supplies Detailed

10900 Office equipment, excluding computers Broad

10920 New computer equipment Broad

10921 Computers Detailed

10922 Computer storage devices Detailed

10923 Computer printers Detailed

10924 Other computer peripheral equipment Detailed

10930 Used computer equipment Broad

10950 Packaged computer software Broad

10960 Restaurant and hotel equipment and supplies Broad

10970 Store machines and equipment Broad Yes

10971 Vending machines Detailed

10972 Other store machines and equipment Detailed

10973 Electric signs Detailed

10974 Scales, except laboratory scales Detailed

10975 Store fixtures and displays Detailed Yes

11000 Surgical, medical, and hospital supplies Broad

11011 Surgical and medical instruments and equipment Detailed

11012 Orthopedic and prosthetic appliances and supplies Detailed

11013 Other surgical, medical, and hospital supplies Detailed

11020 Dental equipment, instruments, and supplies Broad

11021 Dental equipment Detailed

11022 Dental instruments and supplies Detailed

11030 Optical and ophthalmic goods and supplies Broad

11031 Ophthalmic goods Detailed

11033 Optometric equipment and supplies Detailed

11034 Eyeglasses, contact lenses, and other optical goods Detailed

11040 Religious and school supplies Broad

11041 Religious supplies Detailed

11042 School supplies Detailed

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

May 1, 2013 A-18 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

11050 Miscellaneous professional equipment and supplies Broad

11051 Architects' equipment and supplies Detailed

11052 Drafting instruments and supplies Detailed

11053 Engineers' equipment and supplies Detailed

11054 Laboratory equipment and supplies Detailed

11055 Scientific instruments Detailed

11056 Veterinarians' equipment and supplies Detailed

11057 Other professional equipment and supplies Detailed

11100 Semi-finished iron and steel products Broad

11111 Sheet bars and tin plate bars Detailed

11112 Wire rods Detailed

11113 Rough castings and foundry products Detailed

11114 Forgings Detailed

11116 Other semi-finished iron and steel products Detailed

11120 Flat iron and steel products Broad

11121 Plates Detailed

11122 Hot-rolled and cold-rolled strips Detailed

11123 Cold-rolled sheets Detailed

11124 Hot-rolled sheets Detailed

11126 Galvanized and coated sheets Detailed

11127 Tin plate and terneplate Detailed

11128 Fabricated and structural plate products Detailed

11129 Other flat iron and steel products Detailed

11140 Iron and steel wire and wire products Broad

11141 Wire, including plain, coated, barbed, and twisted Detailed

11142 Nails Detailed

11143 Wire rope, strand, strapping, and reinforcement mesh Detailed

11150 Iron and steel pipes and tubing Broad

11152 Tubing Detailed

11153 Standard steel pipes Detailed

11154 Other steel pipes Detailed

11160 Other iron and steel products Broad

11162 Hot-rolled bars and bar-size shapes Detailed

11163 Cold-finished bars and bar-size shapes Detailed

11164 Concrete reinforcement bars Detailed

11165 Structural shapes, excluding bar-size shapes Detailed

11167 Other finished products Detailed

11170 Alloy steel Broad

11171 Hot-rolled or cold-finished bars Detailed

11173 Pipes, tubing, and plates Detailed

11175 Other alloy steel Detailed

11180 Stainless steel Broad

11181 Plates Detailed

11182 Strips Detailed

11183 Sheets Detailed

11184 Bars and bar-size shapes Detailed

11185 Other stainless steel, including tubing Detailed

11200 Copper and brass Broad

11211 Structural copper wire mill products Detailed

11212 Flat products, including sheets, strips, and plates Detailed

11213 Tubular products Detailed

11214 Rods, nonelectrical wire, and extruded shapes Detailed

11220 Aluminum shapes and forms Broad

11221 Plates - .250 inch and over Detailed

11222 Sheets and coils - .006 to .249 inch Detailed

11223 Rolled or extruded rods Detailed

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

May 1, 2013 A-19 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

11224 Pipes and tubing Detailed

11225 Foil - up to .005 inch Detailed

11230 Other nonferrous metals Broad

11320 Minerals and ores Broad

11400 Electrical apparatus and equipment Broad

11411 Power and distribution transformers Detailed

11412 Switchgear and switchboard apparatus Detailed

11413 Motors and generators Detailed

11414 Conduit, raceway, and fittings Detailed

11415 Electric light bulbs Detailed

11416 Interior wiring, excluding conduit Detailed

11417 Exterior wiring and cable, excluding conduit Detailed

11418 Lighting fixtures Detailed

11419 Industrial controls Detailed

11421 Other electrical apparatus and equipment Detailed

11500 Electric household appliances Broad

11511 Televisions Detailed

11512 Radios, stereos, tape players, and CD players Detailed

11513 VCRs, video cameras, digital video disc (DVD) players Detailed

11514 Electric household ranges and ovens Detailed

11515 Household refrigerators and freezers Detailed

11516 Electric household washing machines and dryers Detailed

11517 Household vacuum cleaners and sewing machines Detailed

11518 Other electric household appliances Detailed

11600 Electronic parts and equipment Broad

11612 Integrated circuits Detailed

11613 Capacitors and resistors Detailed

11615 Semiconductors Detailed

11616 Electronic connectors and other passive electronic parts Detailed

11618 Other electronic parts and equipment Detailed

11650 Communications equipment and supplies Broad

11651 Telephones Detailed

11652 Other communications equipment Detailed

11700 Hardware Broad

11711 Hand tools, including power driven tools Detailed

11712 Bolts, nuts, rivets, and other fasteners, excluding nails Detailed

11713 Cutlery Detailed

11800 Plumbing and hydronic heating equipment Broad

11811 Plastic pipe fittings and va lves, excluding pipes and tubing Detailed

11812 Metal pipe fittings and valves, excluding pipes and tubing Detailed

11813 Plumbing fixtures Detailed

11814 Hydronic and gas furnaces, stoves, water heaters Detailed

11815 Boilers, radiators, and convectors Detailed

11816 Well pumps and motors Detailed

11818 Other plumbing and heating equipment and supplies Detailed

11900 Forced air heating and air-conditioning equipment Broad

11911 Forced air furnaces Detailed

11912 Central air-conditioners Detailed

11914 Heat pumps Detailed

11916 Air cleaning and filtration systems Detailed

11917 Compressors for air-conditioners Detailed

11918 Condensing units for air-conditioners Detailed

11919 Registers, grills, duct insulation Detailed

12000 Refrigeration equipment and supplies Broad

12011 Commercial refrigerators Detailed

12012 Unit coolers for commercial refrigerators Detailed

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

May 1, 2013 A-20 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

12013 Condensing units for commercial refrigerators Detailed

12014 Refrigerants Detailed

12015 Other commercial refrigeration equipment Detailed

12100 Construction and mining machinery Broad

12200 Farm machinery, equipment, and parts Broad

12215 New irrigation equipment Detailed

12216 Other new farm machinery and equipment Detailed

12220 Lawn and garden machinery, equipment, and parts Broad

12221 New power lawn mowers Detailed

12222 Other new lawn and garden machinery Detailed

12230 Food-processing machinery, equipment, and parts Broad

12231 New commercial food-processing machinery Detailed

12232 New packing, packaging, and bottling equipment Detailed

12233 Used commercial food-processing machinery Detailed

12234 Used packing, packaging, and bottling equipment Detailed

12300 Hydraulic and pneumatic pumps, motors, and parts Broad

12311 Pumps Detailed

12312 Motors Detailed

12313 Pump and motor parts Detailed

12320 General-purpose industrial machinery Broad

12321 New pumps, compressors, and equipment Detailed

12323 New diesel engines, excluding automotive engines Detailed

12326 New controlling, recording, and indicating instruments Detailed

12327 Other new general-purpose industrial machinery Detailed

12328 Used general-purpose industrial machinery Detailed

12330 Metalworking machinery, equipment, and parts Broad

12340 Materials handling machinery, equipment, and parts Broad

12341 New conveying equipment Detailed

12342 New hoists and cranes Detailed

12343 New forklifts Detailed

12344 New industrial trucks and tractors Detailed

12345 Used materials handling machinery Detailed

12350 Oil well, oil refinery, and pipeline machinery Broad

12351 New oil refining and pipeline machinery Detailed

12352 New oil field machinery, equipment, and supplies Detailed

12353 Used oil well, oil refinery, and pipeline machinery Detailed

12360 Other industrial machinery, equipment, and parts Broad

12361 New metal smelting and refining machinery Detailed

12362 New power plant machinery, excluding electrical Detailed

12363 New printing trades machinery Detailed

12364 New textile and sewing machinery and equipment Detailed

12365 New woodworking machinery Detailed

12366 Other new industrial machinery and equipment Detailed

12367 Used industrial machinery and equipment Detailed

12370 Mechanical power transmission supplies Broad

12371 Bearings and bushings Detailed

12372 Other mechanical power transmission supplies Detailed

12380 Industrial valves and fittings Broad

12390 Hydraulic and pneumatic valves Broad

12391 Hydraulic valves Detailed

12392 Pneumatic valves Detailed

12400 Hydraulic and pneumatic cylinders and rotary actuators Broad

12411 Hydraulic cylinders and rotary actuators Detailed

12412 Pneumatic cylinders and rotary actuators Detailed

12420 Hydraulic and pneumatic connectors and assemblies Broad

12421 Hydraulic and pneumatic connectors Detailed

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

May 1, 2013 A-21 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

12422 Hydraulic and pneumatic assemblies Detailed

12430 Other hydraulic and pneumatic accessories and parts Broad

12440 Welding supplies, excluding gases Broad

12450 Industrial containers and supplies Broad

12451 New and reconditioned drums and barrels Detailed

12460 Abrasives, strapping, tape, and inks Broad

12466 Other industrial supplies Detailed

12500 Beauty and barber equipment and supplies Broad

12511 Beauty and barber equipment Detailed

12512 Beauty and barber supplies Detailed

12520 Janitorial equipment and supplies Broad

12521 Power janitorial equipment Detailed

12522 Nonpower janitorial equipment Detailed

12523 Janitorial supplies Detailed

12530 Laundry and dry-cleaning equipment and supplies Broad

12540 Service establishment equipment and supplies Broad Yes

12541 Burial caskets and other funeral equipment Detailed Yes

12542 Other service establishment equipment Detailed

12543 Upholsterers' equipment Detailed

12544 Shoe repair equipment Detailed

12600 Aircraft and aeronautical equipment Broad

12613 Other new aircraft equipment and supplies Detailed

12614 Used aircraft and aeronautical equipment Detailed

12620 Marine machinery, equipment, and supplies Broad

12630 Other transportation equipment and supplies Broad

12700 Sporting and recreational goods and supplies Broad Yes

12711 Firearms, ammunition, and reloading equipment Detailed Yes

12712 Bicycles and bicycle tires and tubes Detailed

12713 Billiards, pool, and bowling equipment Detailed Yes

12714 Camping and fishing equipment and accessories Detailed

12715 Athletic equipment and accessories Detailed

12716 Skiing and snowboarding equipment Detailed Yes

12717 Marine pleasure craft, equipment, and accessories Detailed

12718 Other sporting and recreational goods Detailed Yes

12800 Toys and hobby goods and supplies Broad Yes

12811 Video game players Detailed

12812 Other toys and games, including children's vehicles Detailed Yes

12813 Crafts and craft supplies Detailed Yes

12814 Other hobby goods and accessories Detailed Yes

12900 Ferrous metal scrap Broad

12920 Nonferrous metal scrap Broad

12930 Recyclable paper and paperboard Broad

12940 Recyclable materials Broad

12941 Recyclable textiles Detailed

12943 Recyclable plastics Detailed

12944 Recyclable glass Detailed

13000 Jewelry, diamonds, gemstones, and watches Broad

13016 Other jewelry, silverware, and plated ware Detailed

13030 Precious metals--gold, silver, and platinum Broad

13120 Nonlumber forest products Broad

13130 Prerecorded compact discs (CDs) Broad

13140 Prerecorded video tapes, and digital video discs (DVDs) Broad

13150 Miscellaneous durable goods Broad

13153 Works of art Detailed

13154 Other miscellaneous durable goods Detailed

13155 Signs, excluding electric signs Detailed

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

May 1, 2013 A-22 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

13160 Fire extinguishers and fire safety equipment Broad

13170 Safety equipment Broad

13200 Printing and writing paper Broad

13211 Newsprint Detailed

13213 Other printing and writing paper Detailed

13300 Office paper, office supplies, greeting cards, and labels Broad

13312 Office and consumer paper, including stationery Detailed

13313 Inked ribbons, pens, and pencils Detailed

13314 Toner and toner cartridges Detailed

13316 Other office supplies Detailed

13400 Paper and plastic products Broad

13411 Cardboard boxes Detailed

13412 Paper dishes, cups, and napkins Detailed

13413 Industrial paper and plastic Detailed

13414 Disposable plastic boxes, containers, cups, dishes Detailed

13415 Other paper and plastic products Detailed

13500 Pharmaceuticals Broad

13512 Nonprescription drugs Detailed

13513 Cosmetics and beauty supplies Detailed

13516 Other toiletries and druggists' sundries Detailed

13517 Veterinarians' medicines Detailed

13600 Knit and woven piece goods Broad

13613 Synthetics, excluding synthetic knits Detailed

13700 Notions Broad

13800 Men's and boys' clothing Broad

13814 Men's and boys' work clothing and uniforms Detailed

13900 Women's, misses', and girls' clothing Broad

14000 Footwear Broad

14013 Women's, misses', and girls' footwear Detailed

14014 Men's and boys' footwear Detailed

14100 Packaged frozen food Broad

14112 Frozen fish and seafood products Detailed

14113 Frozen vegetables Detailed

14115 Frozen meat products Detailed

14117 Other frozen foods, excluding frozen dairy products Detailed

14200 Dairy products Broad

14212 Cheese Detailed

14214 Ice cream and other frozen dairy products Detailed

14217 Yogurt Detailed

14300 Poultry and poultry products Broad

14400 Confectioneries Broad

14415 Other confectioneries Detailed

14600 Fresh meat and meat products Broad

14611 Beef not slaughtered on location Detailed

14700 Fresh fruits and vegetables Broad

14800 Coffee, tea, and powdered drink mixes Broad

14811 Coffee Detailed

14812 Tea Detailed

14820 Bread, baked goods, and baking ingredients Broad

14830 Nonperishable (canned) food Broad

14831 Nonperishable (canned) fruits, vegetables, and juices Detailed

14839 Sauces, salad dressing, dips, and vinegar Detailed

14841 Condiments Detailed

14848 Other canned food, including canned poultry products Detailed

14850 Soft drinks and bottled water Broad

14851 Packaged soft drinks Detailed

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

May 1, 2013 A-23 

### Table A -2: Wholesale Trade Sector Affected Product Line Key

Product

Line Code Meaning of Products and services code Product

Line Level Composite Wood

Product Line?

14852 Pre-mix and post-mix bulk soft drinks Detailed

14853 Bottled water Detailed

14855 Sport and energy drinks Detailed

14880 Grocery specialties Broad

14885 Pet food Detailed

15300 Plastics materials and basic shapes Broad Yes

15311 Plastic pipes, rods, tubes, and shapes Detailed

15312 High pressure laminates Detailed Yes

15313 Plastics raw materials Detailed

15314 Other plastics materials and basic shapes Detailed

15320 Industrial gases Broad

15330 Chemicals and allied products Broad

15335 Detergents and soaps Detailed

15342 Adhesives, sealants, and glues Detailed

15344 Other chemicals and allied products Detailed

15400 Refined petroleum products Broad

15420 Liquefied petroleum (LP) Broad

15800 Farm supplies Broad

15814 Herbicides, soil sterilizers, and soil conditioners Detailed

15815 Insecticides, fungicides, and pesticides Detailed

15816 Other agricultural chemicals and fertilizers Detailed

15817 Seeds and bulbs for planting Detailed

16000 Paint, paint supplies, wallpaper, and wallpaper supplies Broad

16011 Architectural coatings Detailed

16012 Industrial/Original Equipment Manufacturer (OEM) coatings Detailed

16013 Special-purpose coatings Detailed

16014 Paint supplies Detailed

16015 Wallpaper and wallpaper supplies Detailed

16100 Books, periodicals, newspapers, and other printed materials Broad

16110 Flowers and florists' supplies Broad

16120 Art goods, including novelties and souvenirs Broad

16121 Art goods Detailed

16122 Novelties and souvenirs Detailed

16130 Textile bags, bagging, and burlap Broad

16150 Wigs, yarns, and leather products Broad

19700 Service receipts and labor charges Broad

19701 Labor charges for repair work Detailed

19702 Parts installed in repair work Detailed

19703 Other service receipts and labor charges Detailed

19720 Receipts for service contracts Broad

19730 Advertising specialties, including paper novelties Broad

19740 Receipts for installing equipment Broad

19810 Miscellaneous commodities Broad

19930 Sales of integrated systems Broad

19940 Rental and operating lease receipts Broad

19944 Other rental receipts Detailed

19950 Construction receipts Broad

19960 Custom computer software Broad

19970 Receipts for printing or photocopying Broad

19980 Receipts for machine shop job work Broad



### 6221