TSCA Title VI Proposed Implementation Rule EA



# Economic Analysis of the Formaldehyde Standards

for Composite Wood Products Act

Implementing Regulations Proposed Rule

Economic and Policy Analysis Branch

Economics, Exposure and Technology Division

Office of Pollution Prevention and Toxics

Office of Chemical Safety and Pollution Prevention

U.S. Environmental Protection Agency



# May 201 3TSCA Title VI Proposed Implementation Rule EA 

# Acknowledgment

EPA acknowledges the analytical and draft pre paration support of Abt Associates Inc. of Cambridge,

Massachusetts in the preparation of this report, provided under Contract No. EP

- W

- 08

- 10.



# 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 m ay 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 ap plicable regulatory requirements. Persons seeking information

on specific regulatory requirements should consult 40 CFR P art 770

, and the pre amble

for the regulatory action

.

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

constitute an endorsement by EPA.TSCA Title VI Proposed Implementation Rule EA i



# Table of Contents

ES Executive Summary

................................ ................................ ................................ .................... ES

- 1

1 Problem Definition and the Justification for Regulation

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

- 1

1.1 Problem with Formaldehyde Emissions from Composite Wood Products

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

- 2

1.2 Regulatory Background

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

- 3

1.3 Justification for Regulation

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

- 5

1.4 Alternative Regulatory Approaches for Reducing Exposure to Formaldehyde Emissions from

Composite Wood Products

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

- 7

2 Costs

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

- 1

2.1 Estimated Number of Affected Entities

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

- 6

2.2 Third Party Testing and Certification Costs

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

- 36

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

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

- 68

2.4 Estimated Costs for Wood Veneer Laminated Product Producers

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

- 88

2.5 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization Costs

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

- 106

2.6 Total Cost s of the Proposed TSCA Title VI Implementation Rule

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

- 140

2.7 Summary of Costs by Entity Type and Activity for Options SI, SE, SCR, SEUR, and SCUR

.. 2

- 145

3 Benefits

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

- 1

3.1 Estimating the Changes in Exposure by Analytical Option

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

- 5

3.2 Time Frame for the Analysis

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

- 6

3.3 Assessing the Change in Cancer Risk

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

- 8

3.4 Estimating the Value of Reductions in Cancer Risk

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

- 15

3.5 Estimating t he Value of Non

- cancer Risk Reductions

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

- 42

3.6 Estimated Numbers of Affected Individuals

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

- 47

3.7 Results of Benefits Assessment

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

- 52

4 Net Benefits

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

- 1

4.1 Discounting and Time Frame for the Analysis

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

- 4

4.2 Summary of Net Benefits

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

- 6

5 Small Business Impacts

................................ ................................ ................................ ................. 5

- 1

5.1 Small Business Impacts for Stock Panel Producers

................................ ................................ ........ 5

- 3

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

products defined as hardwood plywood )

................................ ................................ ........................ 5

- 6

5.3 Small Business Impacts for Fabricators, Wholesalers, and Retailers

................................ ............ 5

- 19

5.4 Summary of Small Business Impacts

................................ ................................ ............................ 5

- 25

6 Environmental Justice and Other Impacts

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

- 1

6.1 Environmental Justice

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

- 2

6.2 Employment Impact Analysis

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

- 11

6.3 Paperwork Burden Analysis

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

- 17

6.4 Unfunded Mandates Reform Act (UMRA)

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

- 19

6.5 Executive Order 13132

- Federalism

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

- 20

6.6 Executive Order 13175

- Tribal Implications

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

- 21

6.7 Executive Order 13045

- Protection of Children

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

- 22

6.8 Executive Order 13211

- Energy Effects

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

- 23

6.9 National Technology Transfer and Advancement Act

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

- 24

R Re ferences

................................ ................................ ................................ ................................ ..... R

- 1

A Appendix A: Product Lines Assumed to Include Composite Wood Products

....................... A

- 1TSCA Title VI Proposed Implementation Rule EA ES

- 1



# Executive Summary

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

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

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

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

- density

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

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

formaldehyde emission standards, and their compliance must be verified by a third

- party certifier (TPC).

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

These elements include: labeling, chain of custody requirements, sell

- through provisions, ultra low

emitting formaldehyde resins, no

- added formaldehyde

- based resins, finished goods, third

- party testing

and certification, aud iting and reporting of TPCs, recordkeeping, enforcement, laminated products, and

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

minimis amounts of composite wood products.

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

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

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



## Entities Subject to the Rule and their Baseline Status

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

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

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

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

others. And retailers sell composite wood product s directly to consumers.

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

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

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

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

the following discussion of the number of entities subject to the TSCA Title VI rule includes an es timate

of baseline compliance with the CARB ATCM.

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

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

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

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

manufacturers under the CARB ATCM. (Custom hardwood plywood produ cers are a type of wood

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

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

discussed in the next section.)

As shown in Table ES

- 1 , there are approximately 90 stock panel mills in the U.S. operated by 54

firms. This figure excludes mills and firms that only m ake products that are statutorily excluded from the

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

military specified plywood, structural plywood, and wood

- based structural

- use panels.TSCA Title VI Proposed Implementation Rule EA ES

- 2



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

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

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

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

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

of the MDF and 98% of the parti cleboard.

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

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

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

in California.)

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

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

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

construction or assembly of a finished good. 1 

### Wood veneer laminated product producers are considered

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

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

must comply with the labeling and chain of custody requirements in the CARB ATCM. But thes e
products are not certified or tested for emissions.

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

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

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

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

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

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

which are considered solely fabricators.

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

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

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

veneer to purchased platforms as part of the production process.

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

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

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

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

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

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

plywood, military specified plywood, and structural plywood).

Fabricators. Fabricators use composite wood products to produce compo nent parts or finished goods

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

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

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

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

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

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

the rule, and are not counted as laminators.TSCA Title VI Proposed Implementation Rule EA ES

- 3



### without affixing ven eer themselves. These 66,000 to 73,000 firms and the 7,000 to 14,000 laminators

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

ATCM, fabricated products sold in California must be made using certified co mposite wood products,

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

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

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

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

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

containing composite wood products. Approximately 32,000 of the wholesalers an d 101,000 of the

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

custody requirements in the CARB ATCM.

Table ES

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

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

Stock panel producers (i.e.,

manufacturers) 90 mills operated by 54

firms 79 mills have been certified by CARB for at least one

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

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

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

Wood veneer laminated product

producers (i.e., laminators) 7,000 to 14,000 firms 3 Wood ve neer 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.



## Analytical Options Considered

Table ES

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

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

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

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

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

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

products to meet the NAF emissions standards. This docu ment discusses options with 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.TSCA Title VI Proposed Implementation Rule EA ES

- 4



### Table ES

- 2 : Analytical Options Considered in the Economic Analysis

Analytical Option a Notes a Analytical options with emissions standards at the levels required by TSCA Title VI b 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

venee r 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

form aldehyde (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 certi fication. 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 non

manufacturers 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 ce rtification. 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 v eneer 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. Whole salers 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 wi th

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 recordke eping requirement s for non

manufacturers

. 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 with emissions standards other than the levels required by TSCA Title VI CARB Phase 1

le vels d 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.

NAF emission levels e 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 s tandards that

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

The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute.TSCA Title VI Proposed Implementation Rule EA ES

- 5



### 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 requirements

are equivalent to the CARB ATCM unless noted otherwise.

b Emission levels for TSCA Title VI standard cer tification (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 s amples

< 0.11 ppm; Particleboard: 90% of samples < 0.05 ppm and all samples < 0.08 ppm. Emission levels for ULEF certification wi th 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 sam ples < 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.



### Table ES

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

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 non

manufacturers. 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.



## Costs

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

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

- party

certification, labeling, and chain of custody activities require d by the rule. A summary of the activities

associated with the incremental costs that firms are estimated to incur under the proposed option is

presented in Table ES

- 4

.TSCA Title VI Proposed Implementation Rule EA ES

- 6



### Table ES

- 4 : 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 defined as panel manufacturers.

Some of the remaining laminated product producers that continue using added

- formaldehyde resins wi ll need to change their raw materials 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 h ardwood 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 holding 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 certification will already be exempted

from quality control testing, and particleboa rd and MDF manufacturers are assumed to be conducting daily on

- site quality control 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 systems 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.



### Table ES

- 5 summarizes the first year, subsequent year, and annualized costs of the dif ferent

analytical option. The total cost estimates are presented with low and high end scenarios, reflecting both

the range in the estimated number of wood veneer laminated product producers (7,000 to 14,000 firms)

and an assumption that they will certify and test either one or two different categories of product lines per

firm.TSCA Title VI Proposed Implementation Rule EA ES

- 7



### Table ES

- 5 : Total Costs by Analytical Options (millions 2010$)

Analytical Option 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 Analytical options with emissions standards at 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 $595 $595 $79 $79 $100 $100

Option SI: Statutory emissions standards where all

wood veneer laminated products are included in the

definition of hardwood plywood $919 $1,254 $177 $258 $ 204 $293

Option SP: Statutory emissions standards where all

laminated products other than Custom Plywood and

Architectural Panels are exempt from the definition of

hardwood plywood $600 $600 $8 2 $8 2 $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. $626 $639 $108 $118 $128 $137

Option SC: Statutory emissions standards where

laminated products made with compliant platforms and

NAF resins are exempt from the definition of

hardwood plywood. $609 $621 $91 $101 $112 $121

Option SCR: 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

- manufacturers compare d to other options. $435 $447 $56 $66 $72 $81

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 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

r equirement s for non

- manufacturers

. $434 $447 $56 $65 $72 $81 Analytical options with emissions standards other than the levels required by the statute CARB Phase 1 Option CE: CARB 1 emissions standards where all

wood veneer laminated products are exempt from the

definition of hardwood plywood $593 $593 $78 $78 $99 $99

Option CI: CARB 1 emissions standards where all

wood veneer laminated products are included in the

definition of hardwood plywood $918 $1,253 $176 $257 $ 203 $292

NAF emiss ion levels Option NE: NAF emissions standards where all wood

veneer laminated products are exempt from the

definition of hardwood plywood $889 $889 $372 $372 $379 $379

Option NI: NAF emissions standards where all wood

veneer laminated products are included in the

definition of hardwood plywood $1,214 $1,549 $471 $552 $ 484 $573

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA ES

- 8



### For the options with emissions requirements that are consistent with TSCA Title VI (Options SE,

SI, SP, SN, SC, SCR, SEUR, SFCC, and SCUR), the first year costs range from $420 million to $1,254

million and the annualized costs range from $60 million to $2 93 million per year. The proposed option

(Option SCUR) has first year costs of $434 million to $447 million. The annualized costs under Option

SCUR range from $72 million to $81 million per year, which is $12 million to $21 million more than the

least ex pensive option with emissions requirements that are consistent with the statute (Option SEUR).

The annualized costs under Options SCUR are about 19 to 28 percent lower compared to Option SFCC.

The primary difference between the costs under Option SCUR (t he proposed option) and Option SFCC

(the option fully consistent with CARB) is a result of reduced recordkeeping requirements for wholesalers

and retailers that are not manufacturers of composite wood products (where manufacturing is defined

under TSCA to include importing). These reduced recordkeeping costs are slightly offset by: (1)

exempting only those wood veneer laminated product producers that make laminated products with wood

veneers attached to compliant platforms using NAF resins under SCUR compa red to exempting all wood

veneer laminated product producers under SFCC, and (2) requiring mills to wait until test results indicate

that the emissions standards have been met before shipping a lot that has been tested under option SCUR

compared to allowin g the shipping of tested lots before test results are available under option SFCC.

Option SEUR differs from the proposed option (SCUR) by extending the wood veneer laminated

products exemption to all wood veneer laminated product producers, not just those that produce laminated

products by affixing a veneer to a compliant platform using NAF resins.

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

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

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

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

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

drivers and loosening emissions standards does not affect these costs.

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

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

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

associated with changes to raw materials a nd production processes account for the difference between the

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

the statute (SE, SI, SP, SN, SC, SCR, SEUR, SFCC, and SCUR).

Table ES

- 6 summarizes the total annualized costs using both a 3 percent and a 7 percent discount

rate. The results are similar under both discount rates.

Table ES

- 7 presents the costs by type of entity for the proposed option (Option SCUR). Stock

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

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

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

(Rule fami liarization represents the time spent becoming familiar with the requirements of the rule.) In

addition to taking reasonable precautions to ensure that they are purchasing composite wood products that

comply with the emissions standards and the other requ irements of the rule, retailers are subject to

recordkeeping provisions that require them to keep invoices and bills of lading. These records are

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

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

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

requirements for laminators that are con sidered panel producers under the rule, and by the additional

recordkeeping required to comply with the rule’s chain of custody requirements.TSCA Title VI Proposed Implementation Rule EA ES

- 9



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

unless they are made u sing no

- added formaldehyde (NAF) resins to affix the veneer to compliant and

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

to 4,000 are assumed to be using formaldehyde

- based resins. It is generall y less expensive for a laminator

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

As a result, nearly all laminators using formaldehyde

- based resins are likely to switch to NAF resins in

order to qualify for the exemption from the definition of hardwood plywood. 2 

### It is assumed that only

about 150 to 300 U.S. laminated product producers will continue using formaldehyde

- based resins, and

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

Table ES

- 6 : 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 $ 204 $293 $ 218 $311

Option SP $104 $104 $115 $115

Option SN $128 $137 $139 $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 SCUR (Proposed Option) $72 $81 $80 $89

Option CE $99 $99 $111 $111

Option CI $ 203 $292 $ 217 $310

Option NE $379 $379 $383 $383

Option NI $ 484 $573 $4 9 0 $582

Option SCUR is the proposed option.



### Table ES

- 7 : Costs for Proposed Option by Type of Entity (millions 2010$) 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 SCUR: Proposed Option. Stock Panel Producers $2 $2 $1 $1 $1 $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 $43 4 $447 $5 6 $6 5 $72 $81

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

low and high costs for each category of entities.

2 To avoid double

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

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

r eflect the high end estimate of the number of laminators (approximately 14,000 firms). The estimated number of fabricators t hat are

not laminators is inversely proportional 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 resul t, 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, MD F or

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

are considered fabricators under the proposed rule.

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

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

certified platforms will be regulated as fabricators.TSCA Title VI Proposed Implementation Rule EA ES

- 10



### Table ES

- 8 summarizes the cost of the proposed rule by entity type , baseline status under CARB,

and activity.TSCA Title VI Proposed Implementation Rule EA ES

- 11



### Table ES

- 8 : Cost Estimates for Proposed Rule by Type of Entity, Baseline Status, and Activity , Incremental to the CARB ATCM

Type of

Entity Baseline Status under CARB

ATCM Number of Mills,

Firms, or

Production

Volume (msf

† ) Activities with Incremental Costs

Estimated Number of Mills, Firms,

or Production Volume

Incurring Costs Total Cost (million 2010$)

First Year Subsequent

Years

Panel

manufacturers All panel manufacturers 62 mills Become familiar with TSCA rule 62 $0.02

- - -

On

- site daily quality control testing 21 $0.2 $0.02

Set

- up to label products as TSCA compliant 62 $0.009

- - -

Keep additional records 62 $0.2 $0.2

Manufacture products not

certified under CARB ATCM 16 mills Have products tested and certified by a TPC 16 $0.4 $0.09

49,600 msf Changes to raw materials 47,300 msf $1.1 $1.1

Wood veneer

laminated

product

manufacturers All laminators 7,486 to 13,875 firms Become familiar with the TSCA rule 7,486 to 13,875 $2.2 to $4.1

- - -

Set

- up to label products as TSCA compliant 7,486 to 13,875 $34.1 to $63.2

- - -

Laminators defined as hardwood

plywood producers under TSCA 150 to 277 firms Have products tested and certified by a TPC 150 to 277 $9.3 to $19.6 $8.4 to $17.2

On

- site daily quality control testing 150 to 277 $1.6 to $3.0 $0.1 to $0.2

Keep additional records 150 to 277 $1.4 to $2.5 $1.4 to $2.5

7,248 msf Changes to raw materials 2,149 msf $0.06 $0.06

Laminators defined as fabricators

under TSCA 7,336 to 13,598 firms

and 355,164 msf Changes to raw materials 105,317 msf $3.2 $3.2

Laminators defined as

fabricators; not compliant with

CARB ATCM requirements for

fabricators 7,336 to 13,598 firms Keep additional records 674 to 1249 $3.7 to $6.8 $3.7 to $6.8

Fabricators

that are not

laminators All fabricators that are not

laminators 66,103 to 72,492 firms Become familiar with the TSCA rule 66,103 to 72,492 $19.5 to $21.3

- - -

Set

- up to label products as TSCA compliant 66,103 to 72,492 $16.8 to $45.9

- - -

Fabricators not compliant with

CARB ATCM requirements 33,665 to 40,054 firms Keep additional records 3,703 to 4,406 $20.3 to $24.1 $20.3 to $24.1

Wholesalers All wholesalers 85,560 firms Become familiar with the TSCA rule 85,560 $31.9

- - -

If repackaging or replacing an original label,

set

- up to label products as TSCA compliant 855 $3.9

- - -

Wholesalers that import and are

not compliant with CARB ATCM 15,045 firms Set up systems to keep additional records 8,576 $21.5

- - -

Keep additional records 6,649 $13.5 $13.5

Retailers All retailers 759,048 firms Become familiar with the TSCA rule 759,048 $214.7

- - -

Total $434 to $447 $56 to $65

† Production volume is reported in thousands of square feet (msf) of productionTSCA Title VI Proposed Implementation Rule EA ES

- 12



## Benefits

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

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

adverse cancer and non

- cancer health effects from inhalation of formaldehyde. The draft IRIS assessment

identified seven categories of potential non

- cancer health outcomes: (1) sensory irritation; (2) upper

respiratory tract pathology; (3) pulmonary function effects; (4) asthma and allergic sensitization (atopy);

(5) immune function effects; (6) neurological and behavioral toxicity; and (7) developmental and

reproductive toxicity. This analysis focuses on four potential effects: nasopharyngeal cancer, eye

irritation, respiratory re lated effects, and reduced female fertility.

Nasopharyngeal Cancer . Formaldehyde is classified as a known human carcinogen by the National

Toxicology Program, based on evidence in humans and animals. This analysis uses the EPA’s 1991 IRIS

Inhalation Unit Risk factor of 1.3×10

- 5 cancer cases per μg/m3 of formaldehyde.

Eye Irritation . Formaldehyde

- induced eye, nose, and throat irritation has been well documented in a wide

range of epidemiologic and other human studies. Common effects of chemically induced sensory

irritation include lacrimation, burning of the eyes an d nose, rhinitis, burning of the throat, and cough. Eye

irritation is the most sensitive of reported effects in human studies.

Respiratory Related Effects . Formaldehyde exposure is associated with a range of respiratory related

effects. Effects from repeated exposure in humans include irritation of the upper respiratory tract,

decrements in pulmonary function, and nasal epithelial lesions such as metaplasia and loss of cilia.

Animal studies suggest that formaldehyde may also cause airway inflammation

.

Reduced Fertility . Epidemiologic studies suggest an association between occupational exposure to

formaldehyde and adverse reproductive outcomes in women, including reduced fertility.

At this time, sensory irritation i s the only non

- cancer effect j udged to have sufficient data for

quantitative concentration

- response modeling in support of the benefits assessment. Therefore, this

analysis predicts the number of cases avoided and monetizes the benefits for two health effects:

nasopharyngeal cancer for individuals of all ages, and eye irritation for individuals of all ages. Table ES

9 presents the estimated annual number of cases of each of thes e health effect avoided due to t he different

analytical options.

There is not sufficient information at this time on the relationship between formaldehye exposure

and reduced fertility to include a valuation estimate in the overall benefits analysis. The analysis also

includes a qualitative discussion of respiratory related effects related to formaldehyde exposure.

Although uncertainty remains regarding how best to quantify the effect of formaldehyde exposure on

fertility and respiratory outcomes, red ucing these effects is an important non

- monetized impact that

contributes to the overall benefits of the rule.TSCA Title VI Proposed Implementation Rule EA ES

- 13



### Table ES

- 9 : Annual Number of Cases Avoided in a Typical Year by Health Effect

Analytical Option Cancer Eye Irr itation

Lower Estimate Higher Estimate Lower Estimate Higher Estimate

Option SE 9 21 22,133 170,214

Option SI 10 24 23,650 191,590

Option SN 11 25 24,154 198,950

Option SC 10 24 23,650 191,590

Option SCR 10 24 23,650 191,590

Option SEUR 9 21 22,133 170,214

Option SFCC 9 21 22,133 170,214

Option SCUR (Proposed) 10 24 23,650 191,590

Option CE 7 16 18,015 130,720

Option CI 8 19 19,563 148,389

Option NE 39 92 58,492 626,726

Option NI 40 97 58,494 645,678

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



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

- risk

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

- fatal

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

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

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

micro

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

uses $26 as the value of an avoided case of eye irritation.

Reductions of form aldehyde emissions from composite wood products benefits individuals who

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

introduced to an indoor space. Benefits are calculated using an age

- dependent expo sure analysis that

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

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

product age/source combinations, 5 st ructure types (detached housing, attached housing, apartments,

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

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

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

construction and major renovations that include kitchen remodeling.

Table ES

- 10 and Table ES

- 11 present the total quantified benefits by health effect and analytical

option using 3 and 7 percent discount rates, respectively. The results indicate that the most protective

option with emissions standards that are consistent with the TSCA Title VI statute (Option SN, which

would require laminated products to be made with both NAF resins and NAF platforms in order to be

exempted from the definition of hardwood plywood) has quantified benefits that are less than 20 percent

larger than the quantified benefits of the least protective option with emissions standards that are

c onsistent with the TSCA Title VI statute (Option SE, which exempts all laminated products from the

definition of hardwood plywood). The quantified benefits under the proposed option (Option SCUR,

which would require laminated products to be made with NAF resins in order to be exempted from the

definition of hardwood plywood) are only slightly lower those of Option SN, the difference being less

than 5 percent. Analytical options that would require all composite wood products to be made with NAF

resin techn ologies (Options NE and NI) would result in quantified benefits nearly four times larger than

under the analytical options with emissions standards consistent with the TSCA Title VI statute and

analytical options that would require less stringent emissions standards (Options CE and CI) compared to

the statute would result in quantified benefits about 25 percent lower. Most of the total monetized

benefits are attributable to reductions in cancer riskTSCA Title VI Proposed Implementation Rule EA ES

- 14



### The cancer

- related benefits are generally higher for com posite wood products that have been

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

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

The eye irritation benefits are generally higher for populations exposed to composite wood

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

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

products industry. Also, the avoided risks for eye irritation for the small number of individuals living in

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

were notably higher compared to other exposure groups.

There are additional unquantified benefits due to respiratory and other avoided health effects

. The health benefits from avoided cases respiratory related and other health are potentially important non

monetized impacts that contribute to the overall benefits of this rule, so they are represented in Table ES

10 and Table ES

- 11 using the letter “ B ”.

Table ES

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

rate)

Analytical

Option Cancer Eye Irritation Total Benefits

Lower

Estimate Higher Estimate Lower Estimate Higher Estimate Lower Estimate Higher Estimate

Option SE $17 $38 $0.5 $4.1 $18 + B $42 + B

Option SI $20 $43 $0.6 $4.6 $20 + B $48 + B

Option SN $20 $45 $0.6 $4.8 $21 + B $50 + B

Option SC $20 $43 $0.6 $4.6 $20 + B $48 + B

Option SCR $20 $43 $0.6 $4.6 $20 + B $48 + B

Option SEUR $17 $38 $0.5 $4.1 $18 + B $42 + B

Option SFCC $17 $38 $0.5 $4.1 $18 + B $42 + B

Option SCUR

(Proposed) $20 $43 $0.6 $4.6 $20 + B $48 + B

Option CE $13 $29 $0.4 $3.1 $14 + B $32 + B

Option CI $15 $33 $0.5 $3.5 $16 + B $37 + B

Option NE $75 $163 $1.4 $14.9 $76 + B $178 + B

Option NI $79 $171 $1.4 $15.4 $80 + B $186 + B

Option SCUR is the proposed option. Benefits were not estimated for Option SP. “ B ” represent s the unquantified health

benefits.TSCA Title VI Proposed Implementation Rule EA ES

- 15



### Table ES

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

rate)

Analytical

Option Cancer Eye Irritation Total Benefits

Lower

Estimate Higher Estimate Lower Estimate Higher Estimate Lower Estimate Higher Estimate

Option SE $8 $17 $0.5 $3.8 $8 + B $20 + B

Option SI $9 $19 $0.5 $4.3 $9 + B $23 + B

Option SN $9 $20 $0.5 $4.5 $10 + B $24 + B

Option SC $9 $19 $0.5 $4.3 $9 + B $23 + B

Option SCR $9 $19 $0.5 $4.3 $9 + B $23 + B

Option SEUR $8 $17 $0.5 $3.8 $8 + B $20 + B

Option SFCC $8 $17 $0.5 $3.8 $8 + B $20 + B

Option SCUR

(Proposed) $9 $19 $0.5 $4.3 $9 + B $23 + B

Option CE $6 $13 $0.4 $2.9 $6 + B $16 + B

Option CI $7 $15 $0.4 $3.3 $7 + B $18 + B

Option NE $34 $72 $1.2 $13.9 $35 + B $86 + B

Option NI $35 $76 $1.2 $14.3 $36 + B $90 + B

Option SCUR is the proposed option. Benefits were not estimated for Option SP. “ B ” represent s the unquantified health

benefits.



## Net Benefits

Table ES

- 12 and Table ES

- 13 present the total annualized net benefits by analytical option and

di scount rate. The quantified net benefits under the analytical options that have emissions standards that

are consistent with TSCA Title VI range from negative $18 million to negative $273 million using a three

percent discount rate and negative $48 millio n to negative $546 million using a seven percent discount

rate . Of these analytical options, the difference between quantified benefits and costs is smallest under

Option SEUR. The next smallest difference between quantified benefits and costs is under t he proposed

option (Option SCUR). Of the analytical options that have emissions standards that are consistent with

TSCA Title VI, the largest difference between quantified benefits and costs is under Option SI (which

includes laminated products in the def inition of hardwood plywood).

There are larger negative quantified net benefits under Options CE and CI (the analytical options

with emissions standards lower than those that are consistent with TSCA Title VI) compared to the

proposed option (Option SCUR ). The difference between quantified benefits and costs is largest under

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

statute).

There are additional unquantified benefits for all of the options from respiratory and other

avoided health effects. While the benefits from these avoided health effects have not been quantified , the

effects could be substantial and so are represented in Table ES

- 12 and Table ES

- 13 using the letter “ B ”.

The proposed rule (Option SCUR) has quantified net benefits of

- $24 million to

- $60 million per

year using a 3 percent discount rate, and

- $57 million to

- $79 million per year using a 7 percent discount

rate. Costs for the proposed rule exceed quantified benefits by a larger margin than for Option SEUR,

which exempts all laminated products from the definition of hardwood plywood. However, both the

relative ranking of the options and the fact that quantified net benefits are negative for all the options

might change if additional health benefits could be quantified.TSCA Title VI Proposed Implementation Rule EA ES

- 16



### Table ES

- 12 : 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

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 subtracting low end cost estimate from higher benefits estimate.

“ B ” represent s the unquantified health benefits

.



### Table ES

- 13 : 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 $8 + B $20 + B ($103 ) + B ($91 ) + B

Option SI $218 $311 $9 + B $23 + B ($302 ) + B ($195 ) + B

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

Option SN $139 $148 $10 + B $24 + B ($138 ) + B ($114 ) + B

Option SC $123 $132 $9 + B $23 + B ($123 ) + B ($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 SCUR (proposed) $80 $89 $9 + B $23 + B ($79 ) + B ($57 ) + B

Option CE $111 $111 $6 + B $16 + B ($104 ) + B ($95 ) + B

Option CI $217 $310 $7 + B $18 + B ($303 ) + B ($199 ) + B

Option NE $383 $383 $35 + B $86 + B ($348 ) + B ($297 ) + B

Option NI $490 $582 $36 + B $90 + B ($546 ) + B ($400 ) + 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 subtracting l ow end cost estimate from higher benefits estimate.

“ B ” represent s the unquantified health benefits

.



## Small Business Impacts

Table ES

- 14 presents a summary of the small business impacts of the proposed option (Option

SC U R ). There are 878,798 small firms affected by the rule. As indicated, 851,29 8 small firms (about 97TSCA Title VI Proposed Implementation Rule EA ES

- 17



### percen t) are expected to have costs impacts that are less than one percent of their revenues, 23,13 1 firms

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

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

revenues.

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

wholesalers, and retailers with annualized costs of less than $250. This implies that their revenues were below $25,000. These firms account for 92 percent of the firms with cost impacts that are between 1 and

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

Table ES

- 14 : Summary of Smal l Business Impacts

Firm Type Number of Affected

Small Firms Number of Firms by Cost

- Impact

Ratio

<1% 1

- 3% >3%

Stock Panel Producer 31 2 7 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 878,798 851,29 8 23,13 1 4,369



## Environmental Justice Impacts

Table ES

- 15 presents a summary of the environmental justice impacts of the proposed option

(Option SC U R ). Minority and low

- income groups account for a larger proportion of the total benefits

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

affected by the rule and are estimated to accrue about 39 percent of the total quantified benefits. Low

income individuals compose 12 percent of the total affected population , and are estimated to accrue 14

percent of the total quantified benefits.

Table ES

- 15 : Summary of Environmental Justice Impacts

Population Type Share of Total

Population Share of Total

Quantified

Benefits

Race and Ethnicity

Non

- Hispanic White 65% 61%

Non

- Hispanic Black 12% 13%

Non

- Hispanic Other 7% 8%

Hispanic 15% 18%

Non

- Hispanic Native American or Alaskan Indian 0.6% 0.6%

All Individuals 100% 100%

Income

Individuals Living Below Poverty Line 12% 14%

Individuals Living Above Poverty Line 87% 85%

All Individuals 100% 100%



## Children’s Health Impacts

As shown in Table ES

- 16 , children aged zero through one represent 3 percent of the individuals

affected by the rule and are estimated to accrue 2 to 10 percent of the proposed rule’s total quantified

benefits for av oided cases of nasopharyngeal cancer and eye irritation

. C hildren aged two through fifteen

represent 20 percent of the individuals affected by the rule and are estimated to accrue 16 to 22 percent ofTSCA Title VI Proposed Implementation Rule EA ES

- 18



### the proposed rule’s total quantified benefits. These r esults are driven by the benefits associated with

avoiding cancer risk

.

Table ES

- 16 : 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

population) Total Quantifi ed

Benefits

Higher Estimate

(% of total

affected

population)

All Individuals 106,057 100.00% $20.22 $47.63 100.00% 100.00%

Children ages 0

- 1 3,309 3.12% $0.47 $4.79 2.35% 10.06%

Children ages 2

- 15 21,312 20.10% $3.16 $10.57 15.63% 22.19%TSCA Title VI Proposed Implementation Rule EA 1

- 1



# 1 Problem Definition and the Justification for Regulation

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

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

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

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

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

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

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

regulatory approaches.TSCA Title VI Proposed Implementation Rule EA 1

- 2



## 1.1 Problem with Formaldehyde Emissions from Composite W ood Products

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

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

particleboard and medium

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

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

shoe care agents, lacquers, plastics and paper product coatings. It is a by

- product of combustion and

c ertain other natural processes. Examples of sources of formaldehyde gas inside homes include cigarette

smoke, unvented, fuel

- burning appliances (gas stoves, kerosene space heaters), and composite wood

products made using formaldehyde

- based resins (ATSDR 2010 ).

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

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

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

membrane irritation are some potential effects from exposure. In addition, formaldehyde is a by

- product

of human metabolism; therefore, endogenous levels are present in the body.TSCA Title VI Proposed Implementation Rule EA 1

- 3



## 1.2 Regulatory Background

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

(ATCM) to reduce formaldehyde emission s from hardwood plywood, medium

- density fiberboard, and

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

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

t ook effect on January 1, 2009. The CARB ATCM requires manufacturers to meet formaldehyde

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

manufactured for use in California. The CARB ATCM also requi res that compliant composite wood

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

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

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

Urban Development (HUD).

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

and medium

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

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

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

- density

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

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

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

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

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

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

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

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

by CARB, manufacturers who use no

- added formaldehyde (NAF) resin systems are exempted from

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

use ultra low

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

frequ ency of ongoing testing or, if they meet more stringent emissions requirements, they may be

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

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

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

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

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

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

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

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

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

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

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

must be kept for two years.

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

sell panels and fi nished goods that comply with the applicable formaldehyde emission standards. They

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

products they purchase are in compliance with the applicable emission sta ndards. Like manufacturers,

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

good product bill of lading or invoice. They must also maintain records documenting compliance for aTSCA Title VI Proposed Implementation Rule EA 1

- 4



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

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

modified. One example of a modification that would make a distribu tor subject to the labeling

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

or sizes, and applies edge banding to them.

On March 24, 2008, 25 organizations and approximately 5,000 individuals p etitioned EPA

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

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

formaldehyde emitted from hardwood plywood, particleboard, and medium

- density fiberboard by

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

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

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

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

petition (Ref. 11). The notice announced the Agency’s intent to grant in par t and deny in part the

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

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

whether formaldehyde emitte d from hardwood plywood, particleboard, and medium

- density fiberboard

presents or will present an unreasonable risk to human health (including cancer and non

- cancer endpoints)

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

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

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

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

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

appropriate to protect against risks posed by formaldehyde emitted from pr essed wood products.

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

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

be appropriate to protect against risks posed by formaldehyde emitt ed from the products covered by the

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

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

public comments and held six half

- day public meetings in Research Triangle Park, NC ; Portland, OR;

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

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

docket number EPA

- HQ

- OPPT

- 2008

- 0627.

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

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

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

medium

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

United States and directs EPA to issue final implementing regulations by January 1, 201 3. ( Pursuant to

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

. ) TSCA Title VI

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

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

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

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

r equirements, sell

- through provisions, ultra low

- emitting formaldehyde resins, no

- added formaldehyde

based resins, finished goods, third

- party testing and certification, auditing and reporting of TPCs,

recordkeeping, enforcement, laminated products, and exc eptions from the requirements of regulations

promulgated for products and components containing de minimis amounts of composite wood products.TSCA Title VI Proposed Implementation Rule EA 1

- 5



## 1.3 Justification for Regulation

Market failure can justify government regulation; the major types of market failur es include the

following:

 Negative externalities, common property resources, and public goods

 Market power

 Inadequate or asymmetric information

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

regulation t o reduce inefficiencies in the allocation of society’s resources. This section describes why

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

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

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

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

Economic efficiency s uggests that in the absence of regulation the market for lower emitting

composite wood products would exist so long as the composite wood product purchasers’ willingness

- to

pay for low emission products equals or exceeds the incrementally higher cost of lo wer emitting products.

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

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

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

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

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

1.3.1 Externalities Associated with Formaldehyde Emissions from Composite Wood

Products

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

externalities. An efficient outcome is achieved when the marginal willingn ess

- to

- pay for a service is

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

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

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

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

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

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

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

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

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

from composite wood products.

Thus, formaldehyde emissions from composite w ood products may constitute an externality. As

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

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

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

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

increased exposure to formaldehyde if a renova tion occurs where high emitting composite wood products

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

this exposure, they would not be consulted by the current occupant making the decision. As a notherTSCA Title VI Proposed Implementation Rule EA 1

- 6



### example, children cannot express their willingness

- to

- pay for risk reduction and rely on their parents’ or

the property owners’ willingness

- to

- pay.

1.3.2 Inadequate Information

A second cause of market failure associated with the formaldehyde emission s from composite

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

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

an important prerequisite to the l ower emitting composite wood products because the consumer must

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

make an informed decision about whether lower emitting composite wood products are worth t he extra

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

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

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

1.3.3 Justification for Regulation at the Federal Level

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

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

comply with a single standard rather than a patchwork of dif ferent state regulations. Under TSCA Title

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

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

are less l ikely to promulgate regulations if there is a federal regulation in place.TSCA Title VI Proposed Implementation Rule EA 1

- 7



## 1.4 Alternative Regulatory Approaches for Reducing Exposure to

Formaldehyde Emissions from Composite Wood Products

This section examines alternative approaches for addressing the mark et failures discussed in the

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

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

prescribe a specific tec hnology for achieving the emissions standard. The advantage of a performance

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

for achieving the standard.

The primary alternative to a performance sta ndard is a market based regulatory approach that

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

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

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

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

achieve a more uniform reduction in emissions across source s compared to the emissions reductions

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

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

are not a concern ( Stavins 2001 )

– i.e., the negative pollution impacts are not localized ne ar the releases.

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

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

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

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

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

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

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

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

of the formaldehyde emissions from composite wood products into their private costs, an d therefore is

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

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

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

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

to these activities (see Chapter 2).TSCA Title VI Proposed Implementation Rule EA 2

- 1



# 2 Costs

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

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

estimating the number of affected entities and the resulting estimates are presented in sect ion 2.1 . The

per

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

wood flooring producers), m edium density fiberboard (MDF) producers, and particleboard producers are

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

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

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

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

recordkeeping, labeling, supplier notification, and rule f amiliarization. Finally, section 2.6 presents the

total costs of the regulation.

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

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

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

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

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

analytical options which are presented in Table 2

- 1

.

This document discusses various options with respect to formaldehyde and composite wood

products. In some instances, the statute chose an option and this document discusses an alternative

simply for informational purposes. The breadth of the discussion here should not imply that EPA

necessarily has corresponding flexibility in implementing the statute.TSCA Title VI Proposed Implementation Rule EA 2

- 2



### Table 2

- 1 : Analytical Options Considered in Cost Analysis

Analytical Option a Notes a Analytical options with emissions standards at the levels required by TSCA Title VI b 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 emissio ns 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 non

manufacturers compared to other options. Laminators using NAF resins to attach wood veneers to

compliant platforms do not ne ed 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

ladi ng. 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 non

manufa cturers. 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.

O ption 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 recordke eping requirements for non

manufacturers

. 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

l ading. No supplier notification required. Analytical options with emissions standards other than the levels required by TSCA Title VI CARB Phase 1 levels d 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.

NAF emission levels e 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 standar ds that

are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informati onal purposes.

The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the st atute.TSCA Title VI Proposed Implementation Rule EA 2

- 3



### 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 supp lier 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; Th in

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 < 0.0 4 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 p pm.



### Table 2

- 2 presents a summary of the different requirements under each analytical option. A

summary of the activities associated with the incremental costs that firms are estimated to incur under the

p roposed option is presented in Table 2

- 3

.

Table 2

- 2 : Regulatory Requirements of the Analytical Optio ns 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 non

manufacturers. 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.TSCA Title VI Proposed Implementation Rule EA 2

- 4



### 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 defined as panel manufacturers.

Some of the remaining laminated product producers that continue using added

- formaldehyde resins wi ll need to change their raw materials 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 h ardwood 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 holding 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 certification will already be exempted

from quality control testing, and particleboa rd and MDF manufacturers are assumed to be conducting daily on

- site quality control 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 systems 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.



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

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

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

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

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

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

formaldehyde emission r ates for products and/or lower costs for reducing formaldehyde emissions).

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

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

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

scenarios under consideration.

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

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

= 7%) back to the beginning of the 30

- year period, as follows:TSCA Title VI Proposed Implementation Rule EA 2

- 5 

## ∑ ( 1 )



### The present discounted value costs are annualized as follows:

( 2 )TSCA Title VI Proposed Implementation Rule EA 2

- 6



## 2.1 Estimated Number of Affected Entities

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

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

business is conducted and a firm is business organiza tion or entity consisting of one domestic

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

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

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

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

of requirements they will face under TSCA Title VI:

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

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

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

2.1.1 );

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

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

construction or assembly of a finished good. 3 

### Wood veneer laminated product producers are

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

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

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

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

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

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

certified platforms) (see section 2.1.2 ); and

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

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

subject to chain of custody requirements and wholesalers are potentially subject to lab eling

requirements (see section 2.1.4 ).

2.1.1 Estimated Number of Stock Panel Producers

Table 2

- 4 presents the total number of stock hardwood plywood, MDF, and particleboard

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

### The total number

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

wood product producers (described in section 2.1.1.1 ) and are consiste nt with data in other publically

available sources (see CPA 2007 ). The search to identify stock hardwood plywood mills (including

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

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

emission standards.

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

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

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

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

statutorily exempted in TSC A Title VI, and thus is not subject to the emission requirements.TSCA Title VI Proposed Implementation Rule EA 2

- 7 

### 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 tha t produce two different types of composite wood

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

composite wood panels.



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



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

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

National Emissions Standards for Hazardous Air Pollutants (NESHAP). T hrough a 1998 information

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

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

Industry Classification Sy stem (NAICS) classifications: softwood plywood and veneer, reconstituted

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

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

commenced operation since the date of the survey.

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

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

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

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

initial survey m ailing list

– a universe of mills that included hardboard and structural composite wood

product producers not regulated under TSCA Title VI.

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

employed to identif

y additional composite wood product mills that may have been excluded originally.

These approaches are described below.

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

conducted of the company websites of mills li sted in EPA’s Envirofacts aggregated mills database under

the relevant NAICS codes (see Table 2

- 5 ). A multisystem facility search was performed in the

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

NAICS codes, and results were cross

- checked against the original OAQPS list. The four NAICS codes

searched were:

o 321211: Hardwood Veneer and Plywood Mfg.;

o 321212: Softwood Veneer and Plywood Mfg.;

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

o 321219: Reconstituted Wood Product Mfg.TSCA Title VI Proposed Implementation Rule EA 2

- 8



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

the initial list, of which 52 were confirmed to be potentially in

- scope. Scope was determined in two

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

appeared to be within the scope of the survey. After notification letters w ere sent to all potentially in

scope respondents, respondent identification calls were placed to this group of mills to further confirm

scope. Because many companies and mills lacked complete or up

- to

- date websites, not all mills could be

categorized as d efinitively in or out of scope. Following respondent identification calls, these additional

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

- 5 gives

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

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

Wood Product Manufacturing Associations



### The Engineered Wood Association (APA)

The Composite Panel Association (CPA)

– website membership directory

The American Institute of Timber Construction (AITC)

Th e 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



### 2.1.2 Number of Wood Veneer Laminated Product Producers

Wood veneer laminated product producers are considered composite wood product fabricators

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

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

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

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

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

addition to being made with certified platforms).

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

associations and a series of intervie ws with hardwood veneer manufacturers and wholesalers. The

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

wood veneer laminated product producers, with the exception of business and household furni ture

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

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

producers.TSCA Title VI Proposed Implementation Rule EA 2

- 9



### The firms that were interviewed were select ed from a Hardwood Veneer and Plywood

Association (HPVA) list 5 

### and the companies listed as “Face Veneer Suppliers” at www.veneernet.com.

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

into four typ es: (1) specialized in hardwood veneer manufacture, (2) specialized in hardwood veneer and

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

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

calls were placed until two entities in each category participated in an interview. 6 

### One additional set of

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

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

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

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

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

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

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

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

Based on the interviews, the number of potential wood veneer laminated product pr oducers is

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

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

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

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

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

composite panel 7 

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

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

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

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

wood veneer laminated products.

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

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

data):

 321211 Hardwood veneer and plywood manufacturing

 321911 Wood window and door manufacturing

 337211 Wood offi ce furniture manufacturing

 337110 Wood kitchen cabinet and countertop manufacturing

 337121 Upholstered household furniture manufacturing

 337122 Nonupholstered wood household furniture manufacturing

 337127 Institutional furniture manufacturing

 337129 Wood t elevision, radio, and sewing machine cabinet manufacturing

 337212 Custom architectural woodwork and millwork manufacturing

 337215 Showcase, partition, shelving, and locker manufacturing

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

(Accessed April 18, 2011)

6 Note that one of the respondents on the veneer manu facturer 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 manufactu rer of hardwood veneer and other wood

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

7 Where a p anel means a flat or raised piece of composite wood product.TSCA Title VI Proposed Implementation Rule EA 2

- 10



### In addition, businesses in the following industries may also do the ir own veneering (although

many of them

– indicated with a “*”

– would be statutorily exempt from the TSCA Title VI rule even if

they do their own veneering 8 

### :

 321920 Wood container and pallet manufacturing*

 336111 Automobile manufacturing*

 336411 Aircraft manufacturing*

 336611 Ship building and repairing*

 336612 Boat building*

 321999 All other miscellaneous wood product manufacturing

 339920 Sporting and athletic goods manufacturing

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

 33999 2 Musical instrument manufacturing

 811420 Reupholstery and furniture repair

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

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

industries is 82,550.

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



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

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

rule as hardwood plywood producers. Table 2

- 6 presents the underlying dat a, assumptions and resulting

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

assumptions are described in more detail below.

Windows and Doors . There are about 1,500 employer establishments and 2,200 n onemployer

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

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

veneered components from suppliers), the analy sis assumes all producers affix veneer. This assumption

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



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

337211, 3371 21, 337122, and 337127) and about 5,000 nonemployer establishments. Note that the

Census does not report the number of nonemployer establishment s at the 6

- digit NAICS level, so the

number of establishments reported here is estimated by applying the propor tions of the 6

- digit NAICS as

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

NAICS.

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

companies to aff

ix veneer to their products. The Business and Institutional Furniture Manufacturing

8 Section 601(a)(3)(i) of TSC A 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 ai rcraft.

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

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

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

containing less than 3% by volume of composite wood product are statutorily exempt from the rule’s requirements.TSCA Title VI Proposed Implementation Rule EA 2

- 11



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

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

veneer themselves ( Personal Communication with BIFMA 2010 ). The American Home Furnishing

Alliance (AHFA) indicated that most domestic furniture producers would affix wood veneer themselves,

but estimated that there were about 250 firms that do this ( Personal Communication with AHFA 2010 ).

To develop a high end estimate for the number of wood furniture producers that affix veneer and thus

make wood veneer laminated products, the analysis assume d that 50 percent of establishments in these

industries manufacture products that contain veneer and 75 percent of those establishments do the

laminating themselves.

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

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

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

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

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

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

represents larger stoc k cabinet manufacturers, said 5 percent or less of cabinet manufacturers would do

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

members would do their own veneering. 10 

### Thus, the analysis assumes that 5 percent of these

establishments affix veneers and thus make wood veneer laminated products.

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

laminate their own hardwood veneers consist of a very diverse gro up of manufacturers, including

establishments that do not even use composite wood products let alone laminate their own hardwood

veneer, the analysis assumes that 5 percent of these establishments laminate their own hardwood veneers.

High End Estimate . The assumptions about the percentages of establishments in different

industries that are laminating their own hardwood veneer results in a high end estimate that as many as

14,000 establishments might laminate hardwood veneer, as shown in Table 2

- 6 . However, this estimate

conflicts with information provided in the interviews with nine companies that sell hardwood veneer,

described earlier. That info rmation indicated that no more than 30 percent of businesses laminating their

own hardwood veneer are nonemployer operations. However, the estimate of 14,000 businesses that do

their own veneering is based on about 7,000 nonemployer operations (50% of the total). Therefore, the

high end estimate of 14,000 establishments may overestimate the number of wood veneer laminated

product manufacturers.

Low End Estimate . To derive a low end estimate for the number of domestic entities that

laminate hardwood ve neer, the analysis extrapolated to the total number of wood veneer laminated

product establishments from the employer establishments by assuming that 30 percent of the total are

nonemployer establishments, based with information provided in the interviews with nine companies that

sell hardwood veneer, described earlier. In addition, it was assumed that 1 percent of manufacturers in

the miscellaneous manufacturing sectors laminate their own veneer as compared to the 5 percent that was

assumed for the upper bound estimate. Other assumptions were the same as for the upper bound estimate.

Table 2

- 7 presents the underlying data, assumptions and resulting est imates for the lower bound estimate

of domestic entities that laminate hardwood veneer.

10 Note that participants in the veneer sales in terviews did think this was common for architectural woodwork and

millwork manufacturers, but there are only about 4,000 entities in this sector

.TSCA Title VI Proposed Implementation Rule EA 2

- 12



### Table 2

- 6 : High End Estimate for Entities that Laminate Hardwood Veneer

Employer NAICS Nonemployer

NAICS Establishments in

Affected NAICS Entities Doing Own Veneering Description of Assumptions

Employers Non

employers Employers Non

employers All

Entities

321211: Hardwood veneer and plywood

manufacturing

321: Wood

product

manufacturing 303 456 68

- 68 50 Custom panel producers and 18

engineered wood flooring producers.

321911: Wood window and door manufacturing 1,493 2,246 1,493 2,246 3,739 Assume all wood window and door

producers do their own veneering.

321920: Wood container and pallet manufacturing 2,918 4,390

- - - Assume statutorily exempt.

321999: All other miscellaneous wood product

manufacturing 1,971 2,965 739 1,112 1,851 Assume 50 percent use veneer and 75

percent of those laminate the veneer

themselves.

337110: Wood kitchen cabinet and countertop

manufacturing

337: Furniture

and related

product

manufacturing 9,701 7,769 485 388 873 Assume 5 percent do their own veneering.

337211: Wood office furniture manufacturing 457 366 171 137 308

Assume 50 percent use veneer and 75

percent of those laminate the veneer

themselves. 337121: Upholstered household furniture

manufacturing 1,641 1,314 615 493 1,108

337122 Nonupholstered wood household furniture

manufacturing 3,414 2,734 1,280 1,025 2,305

337127: Institutional furniture manufacturing 776 621 291 233 524

337129: Wood television, radio, and sewing machine

cabinet manufacturing 265 212 99 80 179

337212: Custom architectural woodwork and

millwork manufacturing 2,235 1,790 838 671 1,509

337215: Showcase, partition, shelving, and locker

manufacturing 1,375 1,101 516 413 929

336111: Automobile manufacturing 336:

Transportation

equipment

manufacturing 188 98

- - - Assume 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 manufacturing 339:

Miscellaneous

manufacturing 1,881 3,925 94 196 290 Assume 5% do their own veneering.

339932: Game, toy, and children's vehicle

manufacturing 639 1,333 32 67 99 Assume 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 repair 4,693 22,549

- - - Assume statutorily exempt.

Total 36,606 56,189 6,751 7,124 13,875TSCA Title VI Proposed Implementation Rule EA 2

- 13



### Table 2

- 7 : Low End Estimate for Entities that Laminate Hardwood Veneer

NAICS Nonemployer

NAICS Establishments in

Affected NAICS Entities Doing Own Veneering Description of Assumptions

Employers Non

employers Employers Non

employers All

Entities

321211: Hardwood veneer and plywood

manufacturing

321: Wood

product

manufacturing 303 456 68 68 50 Custom panel producers and 18

engineered wood flooring producers.

321911: Wood window and door manufacturing 1,493 2,246 1,493 640 2,133 Assume all wood window and door

producers do their own veneering.

321920: Wood container and pallet manufacturing 2,918 4,390 Assume statutorily exempt.

321999: All other miscellaneous wood product

manufacturing 1,971 2,965 99 42 141 Assume 50 percent use veneer and 75

percent of those laminate the veneer

themselves.

337110: Wood kitchen cabinet and countertop

manufacturing

337: Furniture

and related

product

manufacturing 9,701 7,769 485 208 693 Assume 5 percent do their own

veneering.

337211: Wood office furniture manufacturing 457 366 171 73 244

Assume 50 percent use veneer and 75

percent of those laminate the veneer

themselves. 337121: Upholstered household furniture

manufacturing 1,641 1,314 615 264 879

337122 Nonupholstered wood household furniture

manufacturing 3,414 2,734 1280 549 1,829

337127: Institutional furniture manufacturing 776 621 291 125 416

337129: Wood television, radio, and sewing machine

cabinet manufacturing 265 212 99 42 141

337212: Custom architectural woodwork and

millwork manufacturing 2,235 1,790 112 48 160

337215: Showcase, partition, shelving, and locker

manufacturing 1,375 1,101 516 221 737

336111: Automobile manufacturing 336:

Transportation

equipment

manufacturing 188 98 0

- Assume 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 manufacturing 339:

Miscellaneous

manufacturing 1,881 3,925 19 8 27 Assume 1% do their own veneering.

339932: Game, toy, and children's vehicle

manufacturing 639 1,333 6 3 9 Assume 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 repair 4,693 22,549



### - - - Assume exempt.

Total 36,606 56,189 5,260 2,226 7,486TSCA Title VI Proposed Implementation Rule EA 2

- 14



### 2.1.3 Estimated Number of Affected Fabricator Establishments

Table 2

- 8 presents the estimated number of affected fabricator establishments and firms in each

industry. NAICS that reported using composite wood products as raw materials were identified as being

fabricators ( U.S. Census Bureau 2009 e ). Unlike for wholesale and retail entities (see section 2.1.4 ), it is

assumed that all fabricator entities sell goods containing composite wo od products.

Table 2

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

NAICS NAICS Description Employer

Estab. Non

Employer

Estab. Total

Number of

Estab. Number of

Firms

321211 /

321219 Decorative and custom panel producers a 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, 686 46, 704 81,390 79,978

a. Affected establishment and firm counts for decorative and custom panel producers (NAICS 321211 and 321219) were estimated from the list of

laminators and coaters in the Composite Panel Association's 2011 Surface and Panel Buyers Guide (CPA 2010 ).

Sources : Composite Panel Association 2010

, U.S. Census Bureau 2009e

, 2010k

, l



### As indicated in Table 2

- 8 , an estimated 79,978 fabricator firms comprising 81,390 establishments

will be affected by the proposed TSCA Title VI rule.

2.1.4 Estimated Number of Affected Wholesale and Retail Establishments

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

affected retail and wholesale industries to account for the fact that not all entities in these industries sell

composite wood products. This is necessary because not all establishments in affected industries are

expected to sell composite wood products. For example, some retail stores in the Floor Covering Stores

industry (NAICS 442210) might only sell carpet and rugs, and therefore would not be affected by the

T SCA Title VI rule’s requirements.

2.1.4.1 Description of the Data



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

number of wholesale and retail establishments that sell composite wood products in affected industriesTSCA Title VI Proposed Implementation Rule EA 2

- 15



### ( U.S. Census Bureau 2010j

, 2011 ). Product line data were not available at the firm level; however, ratios

of firms to establishments by NAICS are used to estimate the numbers of affected firms. Census

describes product lines as “major categories of products” ( U.S. Census Bureau 2010i ) and classifies them

with products and services codes (pro duct line codes), which “represent various types of products carried

or services rendered by an establishment” ( U.S. Census Bureau 2010m ). The Census datasets provide the

number of establishments selling specified product lines, by product line and NAICS code. For example,

the retail dat aset shows that of the 28,834 establishments classified in the furniture stores industry

(NAICS 442110), 9,968 sell the product line “office furniture, including computer

- related furniture” ( U.S.

Census Bureau 2010j ).

Different product line codes are used in the retail and wholesale sectors. In addition, they can

represent broad or detailed product lines. 11 

### B road product lines offer a more general category of products

and/or services, and are comprised of detailed product lines. For example, the broad product line

“flooring and floor coverings” contains the detailed product lines “hardwood flooring” and “othe r hard

surface floor coverings and accessories, including tile and sheet goods,” as well as others. These detailed

product lines provide greater insight for making assumptions and increase the accuracy of the

establishment estimates. Detailed product lin e data, however, are not available for all broad product lines

in the Census datasets.

2.1.4.2 Methodology



### The first step for refining the estimates of retailers and wholesalers that sell composite wood

products was to develop a list of the product line codes f or the establishments in affected industries.

Based on their descriptions, these unique product line codes were then categorized according to whether

they are expected to contain composite wood products. Because Census does not always provide data at

the detailed product line level, a broad product line was categorized as containing composite wood

products if it contained at least one detailed product line expected to be made with composite wood

products. This process led to the creation of two separate keys

– one for retail and one for wholesale

– which were then applied to the corresponding Census data (See Appendix A).

Table 2

- 9 provides an example of the product lines sold in an affected industry, as well as

whether the product line is broad or detailed, and whether it is expected to contain composite wood

products.

11 In the datasets, broad product lines are indicated by a zero in the final digit.TSCA Title VI Proposed Implementation Rule EA 2

- 16



### Table 2

- 9 : Example of Affected Est ablishment Count using Product Line Analysis: Window

Treatment Store Industry (NAICS 442291)

Product

Line Code Meaning of Product Line code Product

Line Level 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, woven wood blinds, & shades Detailed

20283 Furniture coverings, including ready

- made & custom

- made Detailed

20284 Domestics, incl towels, sheets, blankets, table linens, etc Detailed

20330 Audio equip, musical instr, radios, stereos, CDs, records, etc Broad

20340 Furniture, sleep equipment & outdoor/patio furniture Broad Yes

20360 Flooring & floor coverings Broad Yes

20361 Soft

- surface (textile) floor coverings & accessories Detailed

20363 Hardwood flooring Detailed Yes

20364 Other hard

- surface floor coverings & accessories Detailed

20380 Kitchenware & home furnishings Broad Yes

20381 Cookware & cooking accessories Detailed

20382 Dinnerware, china, glassware, tableware, giftware Detailed

20383 Decorative accessories, incl lamps, lampshades, mirrors, etc Detailed Yes

20384 All other kitchenware & home furnishings Detailed

20400 Jewelry, incl watches, watch attach, novelty jewelry, etc Broad

20420 Books Broad

20460 Toys, hobby goods, & games Broad Yes

20600 Hardware, tools, & plumbing & electrical supplies Broad

20620 Lawn, garden, & farm equipment & supplies Broad

20640 Dimensional lumber & oth bldg/structural materials & supplies Broad Yes

20670 Paint & sundries Broad

20690 Wallpaper & other flexible wallcoverings Broad

20850 All other merchandise Broad

20863 Art goods, including original pictures & sculptures Detailed

20877 Souvenirs & novelty items Detailed

20878 Seasonal decorations Detailed

20879 Artificial/silk flowers, plants, & trees Detailed

29810 All other merchandise Broad

29900 All nonmerchandise receipts Broad

29904 Labor charges for work performed by this establishment Detailed

29905 Labor charges for work contracted out to other establishments Detailed

29908 Parts & materials used in furniture repair or upholstery work Detailed

29911 Delivery & installation charges Detailed

29936 Carpet cleaning receipts for work performed by this establishment Detailed

29972 All other nonmerchandise receipts Detailed



### Figure 2

- 1 presents a description of the process used to estimate the number of establishments

selling composite wood product lines using a hypothetical example. Within affected industries, the

number o f establishments selling composite wood product lines was estimated as the minimum of:

 The total number of establishments in the industry, or

 The cumulative sum of the minimum of:TSCA Title VI Proposed Implementation Rule EA 2

- 17 

### o the broad product line count, or

o the sum of the affected detailed product line counts

for each affected broad product line.TSCA Title VI Proposed Implementation Rule EA 2

- 18



### Figure 2

- 1 : Hypothetical Example of Method Used to Refine Establishment CountsTSCA Title VI Proposed Implementation Rule EA 2

- 19



### As indicated in the hypothetical example in Figure 2

- 1 , the furniture industry sells two broad

product lines containing composite wood products: house hold furniture and office furniture. There are

14,000 establishments that sell the former line and 15,000 that sell the latter. Within the household

furniture line, two detailed product lines are sold; 8,000 establishments sell “chairs” and 8,000

establi shments sell “sofas.” Because the sum of the establishment counts for the detailed product lines

(16,000) is greater than the total number of establishments in the broad product line (14,000), the latter

line count is used. Within the office furniture li ne, two detailed product lines are sold; 6,000

establishments sell “desks” and 6,000 sell “chairs.” Because the sum of the establishment counts within

the detailed product lines (12,000) is less than the broad product line total (15,000), the former count is

used. The composite wood product lines are summed (26,000) and compared with the industry total.

This value represents the estimated number of establishments in the furniture industry selling composite

wood products. It is used in conjunction with t he industry total to determine the proportion of the

affected establishments within the industry, a value which is then applied to firm data to calculate

industry

- specific estimates for the number of affected firms.

It is important to note that the estima ted number of entities that sell composite wood products is

likely to be overstated after employing this method of estimation. Using the above example, if the data

indicate that 14,000 establishments sell household furniture and 12,000 sell office furnitu re, it is estimated

that the number of establishments that sell household or office furniture is the sum of these two, or

26,000. Thus, the analysis assumes that there is no overlap because the number of establishments that sell

both household and office furniture is not known; that is, no establishments are assumed to sell both

household and office furniture.

The results are presented here for the six digit NAICS, but the calculations described above were

performed at either the six or seven digit level, depending on which was the most detailed level available

in the Census data.

2.1.4.3 Results



### This section summarizes the results of the process used to adjust the firm and establishment

counts to account for the fact that not all entities in the affected wholes ale and retail industries sell

composite wood products. Employer establishment and firm counts are presented first, nonemployer data

second, and finally, summary data.

Employer Establishments



### Table 2

- 10 presents estimates of the number of affected wholesale employer establishments by

NAICS. This is estimated from the percentage of affected establishments in each industry, which is

calculate d from Census data on the number of establishments selling product lines that are expected to

contain composite wood products. The percentage of affected establishments within each industry is also

used to adjust the firm counts in Table 2

- 12 , since product line data are not collected at the firm level.

Note that the total establishment counts in Table 2

- 10 do not include manufacturers’ sales branches and

offices. Generally, Census categorizes wholesale establishments into one of two types of operation: 1)

manufacturers' sales branches and offices, which are “primarily maintained by manufacturing, refining,

and mining companies apart from their plants or mines for marketing their products at wholesale” ( U.S.

Ce nsus Bureau 2010c ), and 2) merchant wholesalers, except manufacturers' sales branches and offices.

Manufacturers’ sales branches and offices are excluded from this analysis, since these firms are already

counted as fabricators.TSCA Title VI Proposed Implementation Rule EA 2

- 20



### 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 equipment merchant wholesalers 13,223 0.82% 109

423710 Hardware merchant wholesalers 6,828 13.96% 953

423720 Plumbing equip. merchant wholesalers 6,939 26.52% 1,840

423730 HVAC equip. merchant wholesalers 5,071 16.55% 839

423740 Refrigeration equipment and supplies merchant wholesalers 1,265 8.77% 111

423810 Construction equipment merchant wholesalers 4,694 0.49% 23

423820 Farm and garden machinery and equipment merchant

wholesalers 8,320 5.13% 427

423830 Industrial machinery and equipment merchant wholesalers 29,838 1.60% 476

423840 Industrial supplies merchant wholesalers 8,361 3.56% 298

423850 Service establishment equipment and supplies merchant

wholesalers 4,576 14.16% 648

423910 Sporting and recreational goods and supplies merchant

wholesalers 6,192 58.28% 3,609

423920 Toy and hobby goods and supplies merchant wholesalers 2,497 100.00% 2,497

423930 Recyclable material merchant wholesalers 7,377 0.08% 6

423940 Jewelry merchant wholesalers 7,792 0.71% 55

423990 Other miscellaneous durable goods merchant wholesalers 10,185 20.70% 2,108

424110 Printing and writing paper merchant wholesalers 1,174 2.47% 29

424120 Stationery and office supplies merchant wholesalers 5,513 21.75% 1,199

424130 Industrial and personal service paper merchant wholesalers 4,679 2.78% 130

424210 Drugs and druggists' sundries merchant wholesalers 8,040 1.57% 126

424310 Piece goods, notions, and other dry goods merchant

wholesalers 3,445 4.33% 149

424320 Men's and boys' clothing and furnishings merchant

wholesalers 4,204 5.14% 216

424330 Women's and children's clothing merchant wholesalers 7,650 1.49% 114

424340 Footwear merchant wholesalers 1,649 3.15% 52

424410 General line grocery merchant wholesalers 2,547 12.92% 329

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% 191TSCA Title VI Proposed Implementation Rule EA 2

- 21



### 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 merchant wholesalers 4,851 0.39% 19

424610 Plastics materials and basic forms and shapes merchant

wholesaler 3,248 13.73% 446

424690 Other chemical and allied products merchant wholesalers 8,530 1.08% 92

424910 Farm supplies merchant wholesalers 7,432 0.98% 73

424920 Book, periodical, and newspaper merchant wholesalers 2,644 2.38% 63

424930 Flower, nursery stock, & florists' supplies merchant

wholesalers 4,213 1.42% 60

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

424950 Paint, varnish, and supplies merchant wholesalers 1,649 4.73% 78

424990 Other miscellaneous nondurable goods merchant wholesalers 12,492 6.47% 808

Total in Affected NAICS 321,242 44,909

Sources: U.S. Census Bureau 2010h

, 2011



### As indicated in Table 2

- 10 , there are a total of 321,242 wholesale employer establishments not

including manufacturers’ sales branches and offices. Of this total, an estimated 44,909 establishments

(approximately 14 percent) sell product lines expected to contain composite wood products. By industry,

the percent of wholesale establishments selling affected product lines ranges from 0.1 percent (NAICS

423930) to 100.0 percent (multiple industries).

Table 2

- 11 presents estimates of the number of affected employer establishments in the retail trade

industries. It also presents the proportions of affected establishments within each industry (i.e., the

percentage selling product lines expected to contain composit e wood products), which are used to adjust

retail employer firm counts in Table 2

- 13

.TSCA Title VI Proposed Implementation Rule EA 2

- 22



### Table 2

- 11 : Numbe r 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% 5,001TSCA Title VI Proposed Implementation Rule EA 2

- 23



### Table 2

- 11 : Numbe r 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



### As indicated in Table 2

- 11 , an estimated 404,758 of the 1,039,297 establishments in the affected

retail industries (approximately 39 percent) sell product lines expected to contain composite wood

products. By industry , the percent of retail establishments selling affected product lines ranges from 0.1

percent (NAICS 446130) to 100.0 percent (multiple industries).

Employer Firms



### Table 2

- 12 presents estimates of the number of affected wholesale employer firms. Total firm

counts were adjusted using corresponding establishment ratios to exclude manufacturers’ sales branches

and offices and prevent potential dou ble

- counting of manufacturing firms that have branch offices

designated as wholesale establishments. Counts were then multiplied by the corresponding affected

establishment ratios in Table 2

- 10 to estimate the number of affected employer firms.TSCA Title VI Proposed Implementation Rule EA 2

- 24



### Table 2

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

NAICS NAICS Description 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% 18TSCA Title VI Proposed Implementation Rule EA 2

- 25



### Table 2

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

NAICS NAICS Description 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

- counting of manufacturing firms that have branch offices

designated as wholesale establishments. The counts were adjusted according to the percentage of wholesale

establishments that are not manufacturers’ sales branches and offices.

b 

### Firm counts were also adjusted to exclude firms that do not sell any composite wood products, based on the

percentage of affected establishments in Table 2

- 10

.

Sources: U.S. Census Bureau 2010f

, h

, 2011TSCA Title VI Proposed Implementation Rule EA 2

- 26



### As indicated in Table 2

- 12 , there are an estimated 245,881 wholesale employer firms not

including manufacturers’ sales branches and offices. Of this total, it is estimated that 34,948 firms

(approximately 14 percent) sell product lines containing composite wood products.

Table 2

- 13 presents estimates of the number of affected retail employer firms. Total firm cou nts

were adjusted using the corresponding affected establishment ratios in Table 2

- 11 to estimate the number

of affected employer firms.

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 electronics stores 14,679 47.83% 7,021

443120 Computer and software stores 5,550 7.11% 394

443130 Camera and photographic supplies stores 788 0.91% 7

444110 Home centers 2,664 100.00% 2,664

444120 Paint and wallpaper stores 2,399 15.70% 377

444130 Hardware stores 12,152 100.00% 12,152

444190 Other building material dealers 30,467 78.80% 24,008

444210 Outdoor power equipment stores 4,146 11.59% 481

444220 Nursery, garden center, and farm supply stores 12,804 62.42% 7,993

445110 Supermarkets and other grocery (except convenience) stores 41,885 29.48% 12,348

445120 Convenience stores 22,168 28.96% 6,419

445210 Meat markets 5,502 1.63% 90

445220 Fish and seafood markets 2,022 3.34% 68

445230 Fruit and vegetable markets 2,851 3.81% 109

445291 Baked goods stores 3,126 0.79% 25

445292 Confectionery and nut stores 2,149 7.31% 157

445299 All other specialty food stores 4,258 10.94% 466

445310 Beer, wine, and liquor stores 27,421 3.33% 912

446110 Pharmacies and drug stores 19,067 74.76% 14,254

446120 Cosmetics, beauty supplies, and perfume stores 6,861 0.76% 52

446130 Optical goods stores 5,398 0.07% 4

446191 Food (health) supplement stores 5,123 2.28% 117

446199 All other health and personal care stores 7,612 0.16% 12

447110 Gasoline stations with convenience stores 53,375 4.80% 2,562

447190 Other gasoline stations 15,666 1.18% 185

448110 Men's clothing stores 4,952 6.57% 326

448120 Women's clothing stores 13,582 9.57% 1,300

448130 Children's and infants' clothing stores 2,724 39.96% 1,089

448140 Family clothing stores 8,299 74.85% 6,211

448150 Clothing accessories stores 3,618 3.70% 134TSCA Title VI Proposed Implementation Rule EA 2

- 27



### 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

.



### As indicated in Table 2

- 13 , an estimated 247,689 of the 657,847 employer firms in the affected

retail industries (approximately 38 percent) sell product lines containing composite wood products.

Nonemployer Establishm ents



### Table 2

- 14 and Table 2

- 15 present estimates of the number of affected nonemployer

establishments in the wholesale and retail trade sectors, respectively. As with employers, nonemployer

counts were calculated by apply ing the affected establishment ratios calculated in Table 2

- 10 and Table

2

- 11 to the total number of nonemployer establishments.TSCA Title VI Proposed Implementation Rule EA 2

- 28



### Table 2

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

NAICS NAICS Description Total

Nonemp loyer

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 material merchant wholesalers 1,245 78.08% 972

423390 Other construction material merchant wholesalers 1,628 84.92% 1,382

423410 Photographic equipment and supplies merchant wholesalers 328 3.83% 13

423420 Office equipment merchant wholesalers 1,555 2.69% 42

423430 Computer and software merchant wholesalers 3,430 1.76% 61

423440 Other commercial equipment merchant wholesalers 1,399 20.01% 280

423450 Medical equipment merchant wholesalers 2,663 0.81% 22

423490 Other professional equipment and supplies merchant wholesalers 739 3.66% 27

423510 Metal service centers and other metal merchant wholesalers 3,103 12.22% 379

423610 Elec. equip. and wiring merchant wholesalers 4,828 0.78% 37

423620 Electric appliance merchant wholesalers 1,131 2.38% 27

423690 Other electronic parts and equipment merchant wholesalers 4,809 0.82% 39

423710 Hardware merchant wholesalers 1,685 13.96% 235

423720 Plumbing equip. merchant wholesalers 1,713 26.52% 454

423730 HVAC equip. merchant wholesalers 1,252 16.55% 207

423740 Refrigeration equipment and supplies merchant wholesalers 312 8.77% 27

423810 Construction equipment merchant wholesalers 1,530 0.49% 7

423820 Farm and garden machinery and equipment merchant wholesalers 2,712 5.13% 140

423830 Industrial machinery and equipment merchant wholesalers 9,728 1.60% 156

423840 Industrial supplies merchant wholesalers 2,726 3.56% 97

423850 Service establishment equipment and supplies merchant

wholesalers 1,492 14.16% 211

423910 Sporting and recreational goods and supplies merchant

wholesalers 11,126 58.28% 6,485

423920 Toy and hobby goods and supplies merchant wholesalers 7,410 100.00% 7,410

423930 Recyclable material merchant wholesalers 8,691 0.08% 7

423940 Jewelry merchant wholesalers 22,883 0.71% 162

423990 Other miscellaneous durable goods merchant wholesalers 57,264 20.70% 11,852

424110 Printing and writing paper merchant wholesalers 695 2.47% 17

424120 Stationery and office supplies merchant wholesalers 3,264 21.75% 710

424130 Industrial and personal service paper merchant wholesalers 2,770 2.78% 77

424210 Drugs and druggists' sundries merchant wholesalers 2,796 1.57% 44

424310 Piece goods, notions, and other dry goods merchant wholesalers 4,610 4.33% 199

424320 Men's and boys' clothing and furnishings merchant wholesalers 5,626 5.14% 289

424330 Women's and children's clothing merchant wholesalers 10,238 1.49% 153

424340 Footwear merchant wholesalers 2,207 3.15% 70

424410 General line grocery merchant wholesalers 2,287 12.92% 295

424420 Packaged frozen food merchant wholesalers 2,948 1.34% 40

424450 Confectionery merchant wholesalers 1,741 0.41% 7

424460 Fish and seafood merchant wholesalers 1,807 0.35% 6

424480 Fresh fruit and vegetable merchant wholesalers 4,557 0.18% 8

424490 Other grocery and related products merchant wholesalers 9,486 1.81% 171

424510 Grain and field bean merchant wholesalers 3,326 0.39% 13

424610 Plastics materials and basic forms and shapes merchant

wholesaler 1,010 13.73% 139

424690 Other chemical and allied products merchant wholesalers 2,651 1.08% 28

424910 Farm supplies merchant wholesalers 2,473 0.98% 25TSCA Title VI Proposed Implementation Rule EA 2

- 29



### Table 2

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

NAICS NAICS Description Total

Nonemp loyer

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 base d on the percentage of affected entities in Table 2

- 10

. Sources: U.S. Census Bureau 2010d

, 2011



### As indicated in Table 2

- 14 , an estimated 50,612 of the 310,687 nonemployer establishments in

the affected wholesale trade industries (approximately 16 percent) sell product lines containing composite

wood products.

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% 503TSCA Title VI Proposed Implementation Rule EA 2

- 30



### 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



### As indicated in Table 2

- 15 , an estimated 511,359 of the 1,741,799 nonemployer establishments in

the affected retail trade industries (approximately 29 percent) sell product lines containing composite

wood products.

S ummary



### As indicated in Table 2

- 16 and Table 2

- 17 , an estimated 85,560 firms comprising 95,521

establishments in the wholesale trade sector are estimated to sell composite wood products or goodsTSCA Title VI Proposed Implementation Rule EA 2

- 31



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

establishments in the retail trade sector are estimated to sell such items.TSCA Title VI Proposed Implementation Rule EA 2

- 32



### 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 merchant wholesalers 1,199 945 710 1,909 1,655

424130 Industrial and personal service paper merchant

wholesalers 130 107 77 207 184

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

424310 Piece goods, notions, and other dry goods merchant

wholesalers 149 133 199 348 332

424320 Men's and boys' clothing and furnishings merchant

wholesalers 216 200 289 505 489TSCA Title VI Proposed Implementation Rule EA 2

- 33



### 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

, 2011TSCA Title VI Proposed Implementation Rule EA 2

- 34



### Table 2

- 17 : Total Affected Retail Entities, by Affected NAICS

NAICS NAICS Description Affected Employers Affected

Nonemp. Total Affected

Estab. Firms Firms =

Estab. Estab. Firms

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

441110 New car dealers 1,437 1,241 2,732 4,169 3,973

441210 Recreational vehicle dealers 3,100 2,749 4,294 7,394 7,043

441221 Motorcycle, ATV, and personal watercraft dealers 818 768 556 1,374 1,324

441229 All other motor vehicle dealers 247 235 2,480 2,727 2,715

441320 Tire dealers 32 18 19 51 37

442110 Furniture stores 28,834 19,714 16,399 45,233 36,113

442210 Floor covering stores 12,748 11,372 9,882 22,630 21,254

442291 Window treatment stores 598 514 464 1,062 978

442299 All other home furnishings stores 19,124 11,560 14,825 33,949 26,385

443111 Household appliance stores 2,260 1,889 1,492 3,752 3,381

443112 Radio, television, and other electronics stores 13,896 7,021 6,480 20,376 13,501

443120 Computer and software stores 741 394 658 1,399 1,052

443130 Camera and photographic supplies stores 18 7 16 34 23

444110 Home centers 6,953 2,664 2,412 9,365 5,076

444120 Paint and wallpaper stores 1,234 377 305 1,539 682

444130 Hardware stores 16,454 12,152 4,931 21,385 17,083

444190 Other building material dealers 31,166 24,008 14,152 45,318 38,160

444210 Outdoor power equipment stores 505 481 277 782 758

444220 Nursery, garden center, and farm supply stores 9,922 7,993 5,433 15,355 13,426

445110 Supermarkets and other grocery (except

convenience) stores 19,128 12,348 9,633 28,761 21,981

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

445210 Meat markets 98 90 53 151 143

445220 Fish and seafood markets 69 68 84 153 152

445230 Fruit and vegetable markets 112 109 304 416 413

445291 Baked goods stores 34 25 84 118 109

445292 Confectionery and nut stores 249 157 617 866 774

445299 All other specialty food stores 602 466 1,493 2,095 1,959

445310 Beer, wine, and liquor stores 1,047 912 400 1,447 1,312

446110 Pharmacies and drug stores 31,431 14,254 4,289 35,720 18,543

446120 Cosmetics, beauty supplies, and perfume stores 103 52 622 725 674

446130 Optical goods stores 9 4 2 11 6

446191 Food (health) supplement stores 205 117 503 708 620

446199 All other health and personal care stores 17 12 42 59 54

447110 Gasoline stations with convenience stores 4,680 2,562 373 5,053 2,935

447190 Other gasoline stations 251 185 20 271 205

448110 Men's clothing stores 547 326 272 819 598

448120 Women's clothing stores 3,467 1,300 1,590 5,057 2,890

448130 Children's and infants' clothing stores 2,838 1,089 2,833 5,671 3,922

448140 Family clothing stores 21,147 6,211 10,135 31,282 16,346

448150 Clothing accessories stores 277 134 739 1,016 873

448190 Other clothing stores 972 642 2,152 3,124 2,794

448210 Shoe stores 2,861 700 512 3,373 1,212

448310 Jewelry stores 2,478 1,669 3,720 6,198 5,389

448320 Luggage and leather goods stores 183 95 329 512 424

451110 Sporting goods stores 16,051 12,663 15,450 31,501 28,113

451120 Hobby, toy, and game stores 9,357 5,748 14,625 23,982 20,373

451130 Sewing, needlework, and piece goods stores 5,207 3,792 14,629 19,836 18,421

451140 Musical instrument and supplies stores 14 11 19 33 30

451211 Book stores 3,641 1,698 3,727 7,368 5,425

451212 News dealers and newsstands 293 251 2,302 2,595 2,553

451220 Prerecorded tape, compact disc, and record stores 2,348 1,325 2,246 4,594 3,571TSCA Title VI Proposed Implementation Rule EA 2

- 35



### Table 2

- 17 : Total Affected Retail Entities, by Affected NAICS

NAICS NAICS Description Affected Employers Affected

Nonemp. Total Affected

Estab. Firms Firms =

Estab. Estab. Firms

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

452111 Department stores (except discount department

stores) 3,533 21 2,541 6,074 2,562

452112 Discount department stores 5,001 14 3,597 8,598 3,611

452910 Warehouse clubs and supercenters 4,260 12 3,064 7,324 3,076

452990 All other general merchandise stores 33,061 8,862 23,776 56,837 32,638

453110 Florists 15,177 14,577 18,469 33,646 33,046

453210 Office supplies and stationery stores 9,032 5,024 5,721 14,753 10,745

453220 Gift, novelty, and souvenir stores 21,442 16,466 36,700 58,142 53,166

453910 Pet and pet supplies stores 65 44 62 127 106

453920 Art dealers 860 825 2,247 3,107 3,072

453930 Manufactured (mobile) home dealers 3,878 2,774 2,211 6,089 4,985

453991 Tobacco stores 440 332 2,041 2,481 2,373

453998 All other miscellaneous store retailers (except

tobacco stores) 5,006 4,274 23,217 28,223 27,491

454111 Electronic shopping 5,060 4,954 19,148 24,208 24,102

454113 Mail

- order houses 2,474 2,186 9,362 11,836 11,548

454210 Vending machine operators 41 37 218 259 255

454311 Heating oil dealers 1,254 1,064 381 1,635 1,445

454312 Liquefied petroleum gas (bottled gas) dealers 1,509 580 459 1,968 1,039

454390 Other direct selling establishments 5,475 5,052 172,819 178,294 177,871

Total in Affected NAICS 404,758 247,689 511,359 916,117 759,048

Sources: U.S. Census Bureau 2010g

, j

, lTSCA Title VI Proposed Implementation Rule EA 2

- 36



## 2.2 Third Party Testing and Certification Costs

This analysis presents cost estimates assuming that the costs of complying with certification

requirements under TSCA Title VI will be the same as complying with the requirements of the CARB Air

Toxics Control Measure (ATCM) to reduce formaldehyde emission s from composite wood products. It is

also assumed that mills that are certified by a CARB

- approved TPC will not have to generate new testing

data or incur significant costs to become certified by a TPC under the TSCA Title VI rule. TSCA Title

VI require s composite panel producers to perform formaldehyde emission testing on their composite

wood products and attain certification from an accredited third

- party certifier (TPC). Producers must

undergo qualifying tests at a TPC lab, obtain an on

- site audit fr om a TPC, implement quality control

systems, and train quality control employees in order to receive initial certification. Once a TPC certifies

a mill’s products, that mill is required to conduct on

- going quality control testing, submit monthly reports

t o the TPC, and receive quarterly on

- site audits and testing by its TPC to maintain its certified status.

Mills that manufacture products made with no

- added formaldehyde (NAF) resins that meet more stringent

emissions limits may apply for exemptions from s ome of the on

- going testing requirements.

CARB has accredited nine U.S. third

- party certifiers to offer formaldehyde certification and

testing programs. However, about 90 percent of the U.S. mills that have been certified to produce CARB

compliant prod ucts have the Composite Panel Association (CPA) or the Hardwood Plywood and Veneer

Association (HPVA) as their TPC. Therefore, this analysis relies on the prices charged by CPA and

HPVA ( Personal Communication with CPA 2011 and Personal Communication with HPVA 2011b ) for

TPC services in order to estimate the costs associated with obtaining and maintaining certification under

TSCA Title VI.

2.2.1 Certification Fees

CPA and HPVA charge administrative fees to mills for certifying their products. CPA charges a

quarterly fee of $1,500 regardless of NAF or ULEF status, which is equivalent to $6,000 per year. HPVA

charges an annual program fee of $4,500 to $5,500 (depending on membership status) to mills that are not

NAF or ULEF certified. Mills with ULEF or NAF certifications are required to pay the standard annual

program fee in the first year and an annual fee of $2,700 to $3,700 in all subsequent years. For simplicity,

this analysis assumes that the annual certification fee for mills without an NAF or ULEF exemption is

$6,000, and that the fees for mills with a ULEF

- or NAF exemption are $6,000 for the initial year, and

$3,700 in all subsequent years. 12



### Table 2

- 18 : Certification Fees

Cost Category Certification Type Fee

Initial Fee All $6,000

Annual Fee Standard $6,000

NAF/ULEF $3,700



### 2.2.2 Qualifying Test and Statistical Correlation

Under TSCA Title VI, a composite panel producer is required to obtain qualifying tests for each

product type (e.g., hardwood plywood

– veneer core) and production line from the mill for which

certification is sought. A TPC employee must select and mark th e panels to be tested during the initial

12 NAF and ULEF certificatio ns apply to product line s , and not necessarily to the entire facility. Mills with multiple

product lines could have one or more line s 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.TSCA Title VI Proposed Implementation Rule EA 2

- 37



### mill audit, with at least one panel being selected for each test. After panel selection has occurred, the mill

must ship the marked panels to the TPC for testing at the TPC facility. This testing can be performed

using the ASTM E

- 1333

- 10 test method (which is commonly referred to as a large chamber or large scale

test, and which is termed the primary test method under the CARB ATCM). Testing can also be

performed under the TSCA Title VI rule using the ASTM D

- 6007

- 02 test method (which is commonly

referred to as a small chamber test, and which is termed the secondary test method under the CARB

ATCM), upon a showing of equivalence with ASTM E

- 1333

- 10. However this analysis assumes that all

qualifying testing is perf

ormed using the large chamber test method. Results from the five large chamber

tests must not exceed the emission standards for each product type and production line.

In addition to the qualifying testing performed via the large chamber test method, a mi ll must

perform on

- going quality control testing on the applicable products. Quality control testing is typically

performed under the CARB ATCM using a small chamber test (ASTM D6007) or desiccator test (ASTM

D5582), and it is assumed that these will be t he most commonly used quality control tests under the

TSCA Title VI rule. These tests require smaller test samples and can be conducted at the TPC facility,

contract lab, or on

- site at a TPC

- approved lab at the composite wood mill. The TPC must develop a

statistical correlation between the large chamber and small scale test methods using a minimum of five

data pairs. It is assumed that mills will need to obtain all five data pairs during qualifying testing, though

it is possible that some mills may be ab le to use previous test results or data obtained from the resin

manufacturer. Each large chamber test requires results from one small chamber test or three desiccator

tests to calculate the correlation. TSCA Title VI requires producers to obtain quality control test results

for a production lot before product from that lot can be shipped, so it is likely that producers will perform

quality control testing on

- site to minimize the time taken to obtain testing results. This analysis assumes

that producers n ot currently performing testing on

- site will purchase and operate a small chamber testing

unit for quality control testing.

CPA and HPVA charge between $400 and $480 13 

### , though this analysis assumes that mills will

incur the higher cost of $480 for each tes t. Producers that perform quality control testing on

- site will

need to perform a small chamber equivalence test for each large chamber test. It is assumed that each

equivalence test will take two hours to perform.

In addition to the testing fee, mills will also incur costs associated with shipping panels to the

TPC, lost product, and labor time needed to prepare the panels 14 

### for shipping. Mills are expected to ship

at least five 4’ x 8’ panels for each product type via a commercial shipping carrier. Pa nels must be dead

stacked (i.e., having no layers between panels), bundled air

- tight, wrapped in polyethylene, and protected

by cover sheets. Based on conversations with CPA and with CARB

- certified mills, the total shipping cost

for the qualifying tests i s estimated to be approximately $200 per product line.

This analysis estimated the cost of each panel using the average cost per square foot of hardwood

plywood, $0.49 and particleboard, $0.28 ( RISI 2011c ). Assuming a panel size of 32 sq. ft., each

hardwood plywood panel will cost the mill $15.68, and each particleboard panel will cost $8.96. The

analysis assumes that it wil l take a managerial

- level employee half an hour to prepare the panels for

shipping. Using data published by the U.S. Bureau of Labor Statistics (BLS), EPA estimated the average

loaded hourly wage for a managerial position within the Veneer, Plywood, and E ngineered Wood

Products Industry to be $71.36. 15 

### Table 2

- 19 summarizes the initial unit testing costs, including fees,

preparation, lost product, and s hipping.

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 cabine ts.

14 The panels for the qualifying tests are selected during the initial on

- site audit.

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

2010b the average hourly wage for all management occupations in NAICS 321200 to be $44.46. Employer Costs forTSCA Title VI Proposed Implementation Rule EA 2

- 38



### 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

.



### 2.2.3 Quality Control Procedures

Under TSCA Title VI, mills will be required to ensure that all manufactured composite wood

products meet the formaldehyde emission standards by implementing routine quality control procedures

and receiving periodic qualit y control reviews from a third

- party certifier. The following sections provide

details of the requirements and costs associated with receiving on

- and off

- site audits, developing quality

control systems, and conducting routine quality control testing.

2.2.3.1 Q uality Control Audits



### The TPC is responsible for conducting on

- site visits to certified mills. Before the initial

certification, the TPC is expected to make at least one trip to the mill to inspect the mill’s quality control

and quality assurance systems and employees. During the initial visit, the TPC will assist the mill in

setting up quality control systems, including the quality control testing facility, if applicable, and methods

for selecting samples. After certification has been granted, the TPC i s obligated to perform an on

- site

audit at least once quarterly, unless the mill obtains NAF certification. Audits typically do not take more

than one day of travel and visitation, though if the mill requires a substantial number of modifications or

is un prepared, the duration of the visit may be longer ( Personal Communication with HPVA 2011b ).

TPCs may also conduct periodic “desk audits,” which are quality control checks performed over the

phone in which the mill’s quality control testing procedures and data are reviewed.

The cost of the audit is borne by the composite panel producer and has two components: audit

fees and travel costs. Site audit fees can range from $300 to $450 for initial visits and from $400 to $450

for quarterly visits, depending on the TPC. Travel costs can vary depending on the relative location of the

mill to the TPC; mills within a close proximity may not incur any travel costs, whereas a mill across the

country may incur travel costs of up to $2,000 per visit. It is assumed that travel is only necessary for the

annual audits, as other intermediate audits can be performed by contracting inspectors closer to the mill.

The fees for the desk audits range from $200 to $250 per audit, and no travel is required. Based on these

ranges, this analysis assumes tha t initial site audits will cost a mill $1,950 per visit ($450 fee plus $1,500

travel), quarterly audits will cost $450 per visit, and desk audits will cost $250 per review. In addition to

the fees charged by the TPC, mills will also incur labor costs asso ciated with the audit process. This

analysis assumes that a managerial

- level employee will be present for eight hours during the initial on

- site

Employee Compensation (ECEC) data (also published by BLS) for all pr ivate 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 rate of overhead on wages (not inc luding benefits), total

hourly compensation is estimated to be $71.36.TSCA Title VI Proposed Implementation Rule EA 2

- 39



### audit, four hours for every on

- site audit thereafter, and one hour for each desk audit. Table 2

- 20

summarizes the audit costs described above.

Table 2

- 20 : Quality Control Audit Costs

Cost Category Unit Cost Numb er 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

, Personal Communication with CPA 2011

, Personal

Communication with HP VA 2011b



### 2.2.3.2 Quality Control Manual and Personnel



### Mills are required to implement quality control procedures to ensure that all certified products

consistently meet the applicable emissions standards. In addition, the rule requires each mill to designate

a quality control manager and quality control empl oyees, if needed. The quality control manager must

have adequate training or experience to handle all quality control procedures, including on

- site testing and

shipping samples for TPC testing. All quality control procedures and designated quality contro l

personnel must be identified in a quality control manual. Prior to the mill’s initial certification, the TPC

will assist mills in developing and documenting appropriate quality control procedures. In some cases,

the mill’s resin supplier will also help to train quality control employees and develop quality control

procedures.

Based on conversations with CPA, HPVA, and composite panel producers, it is assumed that

training, implementing quality control systems, and developing the quality control manua l could take

between one and five days to complete, depending on the mill’s existing quality control systems. HPVA

and CPA noted that smaller mills often do not have quality control systems in place and that developing

these systems can be a time

- consumin g process. This analysis estimates that a managerial

- level employee

will spend forty hours training, becoming familiarized with the testing and certification requirements,

writing the quality control manual, and setting up quality control systems and test ing procedures.

2.2.3.3 Routine Quality Control Testing



### To maintain certification, a mill must perform routine quality control testing for each certified

product type and production line. Quality control testing is typically performed using one of the

correlate d small scale test methods described in Section 2.2.1

– a small chamber test (ASTM D6007) or a

desiccator (ASTM D5582).

The frequency of the req uired quality control testing depends on the product type and, for

hardwood plywood, the production volume. Hardwood plywood plants producing 100 thousand square

feet (msf) or less per week are required to test once per 100 msf; plants more than 100 msf b ut less than

200 msf per week must test once per week; plants producing more than 200 msf but less than 400 msf per

week are required to test twice per week; and those producing 400 msf or more per week are required to

test four times per week. Particlebo ard and MDF producers must test samples at least once per eight orTSCA Title VI Proposed Implementation Rule EA 2

- 40



### twelve hour shift, but this frequency may be reduced to one test per forty

- eight hours if the plant or

production line has shown consistent operations and low variability of test results. This analysis makes

the simplifying assumption that all producers will test each production line once daily. This results in a

conservative estimate of the cost of quality control testing for hardwood plywood producers.

Mills have the option of constru cting an on

- site lab and having it approved by a TPC, or

contracting with a certified third

- party lab to perform their quality control testing. The decision to

perform on

- site testing is dependent on the relative costs of building and running an on

- site l ab, and the

fees and shipping costs associated with hiring a third

- party lab. According to CPA and HPVA,

particleboard and MDF mills already have their own on

- site labs to test for formaldehyde (because they

have to test their products on a daily basis un der the CARB ATCM), while most smaller hardwood

plywood mills pay their TPC to conduct their quality control testing (In part because hardwood plywood

mills often use ULEF or NAF resins to qualify for exemptions fr om some of the on

- going testing

requiremen ts under the CARB ATCM). However, the CARB ATCM allows mills to ship panels from

certified product lines before test results are available. By contrast, the proposed TSCA rule requires

mills to wait until test results indicate that the emissions standard s have been met before shipping a lot

that has been tested. It is uncertain how often mills currently ship product from a lot being tested before

the test results are available and therefore it is uncertain how mills will choose to comply with this

requir ement. It may be the case that some mills normally maintain a level of inventory where they would

typically not ship any panels before test results have been determined for that lot, but other mills may ship

out panels on the same day they are produced. This analysis assumes that all mills that do not already do

so will opt to set up and operate a quality control testing facility on

- site, in order to minimize the time

spent waiting for test results, and to maximize their flexibility to ship out panels sho rtly after they have

been produced (Assuming that mills conduct on

- site testing may overstate the costs of this requirement if

some mills find it more cost effective to hold products in inventory until test results have been determined

by an outside lab).

Panel producers that have not already set up their own quality control testing facilities due to the

CARB ATCM will incur the cost of setting up a controlled lab environment, purchasing testing

equipment, and operating the lab on an on

- going basis. It is assumed that each mill will incur an initial

cost of $10,000 to create a lab and purchase small chamber or desiccator testing units. It is assumed that

the quality control manager will spend two hours each day performing routine quality control testing a t a

loaded wage rate of $71.36 per hour. It is also assumed that one panel will be needed for testing from

each production line at a cost of $15.68 per hardwood plywood panel and $8.96 per particleboard panel.

(See Section 2.2.2 for a description of how these costs were estimated.)TSCA Title VI Proposed Implementation Rule EA 2

- 41 

### 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 perf orm 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

, Personal Communication with HPVA 2011b

, RISI 2011c

.



### 2.2.4 NAF and ULEF Certifications

Under the proposed option, products made with NAF and ULEF resins may be eligible for

reduced large chamber and small scale testing frequencies. The application process for NAF and ULEF

certification includes an initial quality control testing period, and quarterly tests to be performed by the

TPC. The results from these tests must meet the emissions limits for NAF and ULEF certification

specified by TSCA Title VI in order for a product line to be exempt from quarterly TPC testing and/or to

have reduced testing frequencies.

2.2.4.1 NAF and ULEF Emissions Standards



### Product lines certified as using NAF and ULEF resins may be exempt from some of the quarterly

TPC testing and routine QC testing. N AF certification can be achieved by performing three months of

routine quality control testing and one quarterly large or small chamber test at the TPC. Ninety percent of

the results from routine testing and the result from the quarterly TPC test must be n o higher than 0.04

ppm; all test results must be no higher than 0.05 ppm for hardwood plywood, and 0.06 ppm for

particleboard, MDF, and thin MDF. Product lines approved for NAF certification are exempt from

routine quality control testing and quarterly TP C testing for two years. After two years, the mill may

reapply for NAF certification based on the results of at least one large or small chamber test.

The prop o sed option also allows for reduced testing frequencies for ULEF products. Under the

proposed option, mill s seeking ULEF certification are required to perform quality control testing on the

ULEF product type for the first sixth months after the initial certification and two quarterly large or small

chamber TPC tests. For hardwood plywood products to be exempt from additional quarterly TPC testing

and routine quality control testing, the two initial quarterly TPC tests and ninety percent of the initial

quality control tests must have emissions no higher than 0.04 parts per million (ppm), and all tes ts results

must be no higher than the cap value of 0.05 ppm. A hardwood plywood product line meeting these

requirements would be exempt from quarterly TPC testing and routine quality control testing for the twoTSCA Title VI Proposed Implementation Rule EA 2

- 42



### year duration of the approval. If ninety pe rcent of the quality control tests have emissions no higher than

0.05 ppm and all tests results are no higher than the cap value of 0.05 ppm, hardwood plywood products

may be approved for a reduction in TPC testing (semiannually instead of quarterly), and in quality control

testing frequency (weekly 16 

### ). ULEF certifications expire after two years, at which time a mill may

reapply by submitting test results from at least two large or small chamber tests.

For particleboard, MDF, and thin MDF product lines, ni nety percent of the results from the

quality control test results and the results of the two quarterly tests must be no higher than the ULEF

target values listed in Table 2

- 22 ; all results must be lower than the ULEF

- cap values. Particleboard,

MDF, and thin MDF products that meet the exemption values may be approved for an exemption from

the quarterly TPC testing and routine quality control testing for two years. Products that meet the quality

control testing reduction values may be approved for a reduction in TPC testing (semiannually instead of

quarterly), and in quality control testing frequency (weekly instead of once per eight to twelve hour shift)

. ULEF certifications expire after two years, at which time a mill may reapply by submitting test results

from at least two large or small chamber tests.

Table 2

- 22 summarizes the TSCA Title VI emissions standards for each product type and

certification type. Table 2

- 23 presents the amount of test ing and the results required to apply for each

type of NAF/ULEF certification under TSCA Title VI.

Table 2

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

Product Type Standard

Certification

NAF ULEF

(Quarterly TPC

Test Exemption) ULEF (QC Testing

Reduction)

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.

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 test ing at that frequency.TSCA Title VI Proposed Implementation Rule EA 2

- 43



### Table 2

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

NAF 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 a for 3 months One test 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. Testing frequency for HWPW depends on production volume. Testing is assumed to be weekly for purposes of this analysis.



### The CARB ATCM sets a minimum threshold for quality control testing requirements for NAF

and ULEF products but, based on communications with HPVA and with CARB

- certified mills, some

TPCs may have more stringent requirements. For example, HPVA requires mill s to have on

- site audits

and large chamber tests annually for NAF

- certified products, and quarterly for ULEF

- certified products,

which is more frequently than the CARB rule requires. This analysis therefore assumes that TPCs test

and audit mills with NAF or ULEF

- certified product lines more frequently than the CARB ATCM or

TSCA Title VI requires. As noted in Section 2.2.1 , it is assumed that mills w ill pay reduced recurring

administrative fees to the TPC after achieving ULEF or NAF certification status. Table 2

- 24 summarizes

the differences betw een how TPCs are assumed to implement a standard certification and a certification

with an NAF or ULEF exemption.

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

thereafterTSCA Title VI Proposed Implementation Rule EA 2

- 44



### 2.2.5 Average Certification and Testing Costs per Mill

As described at the beginning of this section, all U.S. hardwood plywood mills that are not CARB

certified in the baseline are assumed to apply for NAF certification, but particleboard mills are less likely

to become NAF

- certified. However, as some mills may not become NAF

- certified in practice, the next

section presents a range of certification costs. To simplify the analysis, testing and certification costs for

a “typical” mill were estimated using the unit costs described above. This analysis assumes that a

hardwood plywood mill will produce two product types (i.e., hardwood plywood with veneer core and

composite core) and not exceed a production volume of 200 msf per week. The typical particleboard or

MDF mill is assumed to produce two product types and test once daily for five days each week.

Some mills with existing CARB

- certified product lines might certify an additional product line

under TSCA Title VI. These mills would be paying certification fees in the baseline and so would not

incur the total cost of fees as a result of TSCA Title VI. It is assumed that mills will coordinate audits

needed for certifying a new product under TSCA Title VI with the audits already being performed for

CARB certified products. Note that mills having ULEF cert ifications are assumed to have the exempt ion

from routine testing requirements after the first six months under the CARB ATCM. Though some mills

may have reduced testing frequencies rather than the exemption

, most mills under the CARB ATCM have

sought the exemption instead of the reduced testing

.

The CARB ATCM allows mills to ship panels from certified product lines before test results are

available. By contrast, the proposed TSCA rule requires mills to wait until test results indicate that the

emissions standards have been met before shipping a lot that has been tested. Panel producers that have

not already set up their own quality control testing facilities due to the CARB ATCM will incur the cost

of setting up a controlled lab environment, purchasing testing equipment, and operating the lab on an on

going basis. It is assumed that each mill will incur an initial cost of $10,000 to create a lab and purchase

small chamber or desiccator testing units. It is assumed that the quality control manager will spend two

hours each day performing routine quality control testing at a loaded wage rate of $71.36 per hour. It is

also assumed that one panel will be needed for testing from each production line at a cost of $15.68 per

hardwood plywood panel and $8.96 p er particleboard panel. (See Section 2.2.2 for a description of how

these costs were estimated.)

This analysis also presents estimated testing an d certification costs for wood veneer laminated

product producers in the event that they are subject to these requirements. 17 

### Wood veneer laminators are

assumed to have testing and certification costs that are similar to stock hardwood plywood mills. Many

wood veneer laminated product producers produce panels in small batches according to customer

specifications, and therefore their production may include more variety in terms of core types and face

veneers compared to stock panel producers. Nevertheless, the analysis assumes that wood veneer

laminated product producers can limit the number of product lines requiring certifica tion to no more than

two

– one veneer core product line and one composite core product line.

The following tables present the costs to mills for each type of certification scenario. The tables

are organized by each type of product and type of certifica tion under the CARB ATCM and the TSCA

Title VI rule as follows.

 Hardwood Plywood Mills:

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

s tock hardwood plywood panel).TSCA Title VI Proposed Implementation Rule EA 2

- 45



###  Table 2

- 25 , two uncertified products (i.e., not certified unde r the CARB ATCM)

receiving NAF certifications under the TSCA Title VI rule;

 Table 2

- 26 , two uncertified products (i.e., not certified under the CARB A TCM)

receiving NAF certifications under Option SFCC;

 Table 2

- 27 , two uncertified products under the CARB ATCM receiving standard (i.e.,

Phase 2) cert ifications under the TSCA Title VI rule;

 Table 2

- 28 , two uncertified products under the CARB ATCM receiving standard (i.e.,

Phase 2) certifications und er Option SFCC;

 Table 2

- 29 , two products with standard certifications under the CARB ATCM receiving

NAF certifications under the TSCA Title VI rule;

 Table 2

- 30 , two products with standard certifications under the CARB ATCM receiving

standard certifications under the TSCA Title VI rule;

 Table 2

- 31 , two products with ULEF certifications under the CARB ATCM receiving

standard certifications under the options that eliminate the ULEF tes t ing exemptions and

reductions ;

 Table 2

- 32 , one product with ULEF certification under the CARB ATCM receiving NAF

certification under the options that require NAF certification , and a second product with

NAF certific ation under the CARB ATCM receiving NAF certification under the options

that require NAF certification ; and

 Table 2

- 33 , two products with ULEF certifi cations under the CARB ATCM rule

receiving NAF certifications under the options that require NAF certification

.

 Particleboard and MDF:

 Table 2

- 34 , one uncertified product under the CARB ATCM receiving standard

certification under the TSCA Title VI rule, and one product with standard certification

receiving standard certification under the TSCA Title VI rule;

 Table 2

- 35 , two products with ULEF certification under the CARB ATCM receiving

standard certifications under the options that eliminate the ULEF testing exemptions and

reductions ;

 Table 2

- 36 , one uncertified product and a second product with standard certification both

receiving NAF certifications under the options that require NAF certification ;

 Table 2

- 37 , two products with ULEF certifications under the CARB ATCM receiving

NAF certifications under the options that require NA F certification ;

 Table 2

- 38 , two products with standard certifications under the CARB ATCM receiving

NAF certifications under the options that require NAF certification ;

 Table 2

- 39 , one product with ULEF certification and a second product with NAF

certification under the CARB ATCM both receiving NAF c ertification under options that

require NAF certification ; andTSCA Title VI Proposed Implementation Rule EA 2

- 46



###  Table 2

- 40 , one product with standard certification and a second product with NAF

cert ification under the CARB ATCM both receiving NAF certification under the options

that require NAF certification

.

 Wood Veneer Laminated Product Producers:

 Table 2

- 41 , one product not certified under the CARB ATCM receiving standard

certification under the TSCA Title VI rule;

 Table 2

- 42 , two products not certified under the CARB ATCM receiving standard

certifications under the TSCA Title VI rule;

 Table 2

- 43 , one product not certified under the CARB ATCM receiving NAF

certification under the TSCA Title VI rule; and

 Tab le 2

- 44 , two products not certi fied under the CARB ATCM receiving NAF

certifications under the TSCA Title VI rule.

The cost estimates presented in the tables represent the actual costs incurred by a mill in the first

year of a product’s certification and each subsequent year, thereafte r. However, mills that have existing

CARB

- certified products will already be incurring some of these costs in the baseline. Therefore, the

incremental testing and certification costs of complying with TSCA Title VI requirements will be lower

for these mi lls. Table 2

- 45 presents the summary of incremental costs (actual costs minus baseline costs)

for obtaining certification by product type, number of product lines, and baseline certification status.TSCA Title VI Proposed Implementation Rule EA 2

- 47



### Table 2

- 25 : Annual Testing and Certification 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. 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 har dwood 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 month s (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 shi pping for the qualifying test and 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 2 hours a day to test samples for 13 weeks of quality control testing (13 0 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 c hamber

TPC test.

d. 4 hours for the on

- site audit and 0.5 hours to ship samples.

e. 1 panel for annual large chambe r TPC testing.

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

, Personal Communica tion with CPA 2011

, Personal

Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 48



### Table 2

- 26 : Annual Testing and Certification Costs for Hardwood Plywood Mills under

Option SFCC 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 $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 tested

lots

. NAF certification can be achieved based on testing results from one quarterly TPC test (using large or small chamber test)

and 3 months (i.e., 13 weeks) of routine quality control testing. Testing frequencies are those required by the TPC and may be

more frequent than TSCA Title VI requires.

b. 8 hours for the initial audit, 4 hours for a TPC routine audit, 0.5 hours each to prepar e shipping for the qualifying test and 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 chamber

TPC test.

d. 4 hours for the on

- site audit and 0.5 hours to ship samples.

e. 1 panel for annual large chamber TPC testing.

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

, Personal Communication wit h CPA 2011

, Personal

Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 49



### Table 2

- 27 : Annual Testing and Certification 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 b $71.36 590 hours 1 $42,102

Lost 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 d $71.36 546 hours 1 $38,963

Lost Product e $15.68 264 panels 2 $8,279

Subsequent Year Total $62,782

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 av ailable 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, 1 hour per

monthly desk audit for 8 months (8 hours total) , and 2 hours a day to test samples for 52 weeks of quality c ontrol testing (520

hours total)

.

c . 5 panels for qualifying testing, 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly larg e

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 2 hours a day to test samples for 52 weeks of qualit y control testing (520 hours to tal).

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. Bure au of Labor Statistics 2010b

, Personal Communication with CPA 2011

, Personal

Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 50



### Table 2

- 28 : Annual Testing and Certification Costs for Hardwood Plywood Mills

Under Option SFCC 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 $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

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 pe r
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 p anels 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 hour s 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

, Personal

Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 51



### Table 2

- 29 : Annual Testing and Certification Costs for Hardwood Plywood Mills

Existing Certification(s) : Two Standard Products

– New Certification(s) : Two Standard Products a



### Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

Qualifying Test $480 0 tests 2 $0 $0 $0

Correlation Test $71.36 0 tests 2 $0 $0 $0

Qualifying Test Shipping $200 0 shipment 2 $0 $0 $0

TPC Audit $450 4 audits 1 $1,800 $1,800 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 4 test 2 $3,840 $3,840 $0

TPC Testing Shipping $50 4 shipment 2 $400 $400 $0

Weekly 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 $10,000

Desk Audit $250 8 audits 1 $2,000 $2,000 $0

Mill Labor b $71.36 546 hours 1 $38,963 $7,421 $31,541

Lost Product c $15.68 264 panels 2 $8,279 $1,756 $6,523

First Year Total $72,782 $61,950 $10,832



### Subsequent Years

Re

- certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

TPC Audit $450 4 audit 1 $1,800 $1,800 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 4 test 2 $3,840 $3,840 $0

TPC Testing Shipping $50 4 shipment 2 $400 $400 $0

Weekly 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 $0

Mill Labor b $71.36 546 hours 1 $38,963 $7,421 $31,541

Lost Product c $15.68 264 panel 2 $8,279 $1,756 $6,523

Subsequent Year Total $62,782 $61,950 $832

a. These estimates apply to the options that require mills to hold tested lots until the results are available (all options o ther than Option SFCC). Mills without a small chamber unit are assumed to

comply with this requirement by purchasing test chambers and conducting daily on

- site QC testing , resulting in the incremental costs presented here

. There are no incremental costs for this

certification under Option SFCC.

b . 4 hours each for quarterly routine TPC audits (16 hours total)

, 0.5 hours each to pr epare for shipping the quarterly TPC tests ( 2 hours total)

, 1 hour per desk audit for 8 months (8 hours total) , and 2

hours a day to test samples for 52 weeks of quality control testing ( 520 hours total )

.

c . 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 L abor Statistics 2010b

, Personal Communication with CPA 2011

, Personal Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 52

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 sca le testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. 4 hours eac h for the initial audit and second routine TPC audit ( 8 hours total ) , 0.5 hours each to prepare shipping for the qualifying test and second audit (1 hour total) , 1 hour per desk audit for 2

months 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 2011c

. 

### Table 2

- 30 : Annual Testing and Certification Costs for Hardwood Plywood Mills a



### Existing Certification(s) : Two Standard Products

– New Certification(s) : Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in Baseline for

Existing ertification(s) In cremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

Qualifying Test $480 5 tests 2 $4,800 $0 $4,800

Correlation Test $71.36 10 tests 2 $1,427 $0 $1,427

Qualifying Test Shipping $200 1 shipment 2 $400 $0 $400

TPC Audit $450 2 audits 1 $900 $1,800 ($900)

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC 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 Testing

Shipping $50 0 shipments 2 $0 $5,200 ($5,200)

Small Chamber Testing

Unit $10,000 1 unit 1 $10,000 $0 $10,000

Desk Audit $250 2 audits 1 $500 $2,000 ($1,500)

Mill Labor b $71.36 141 hours 1 $10,062 $7,421 $2,640

Lost Product c $15.68 71 panels 2 $2,227 $1,756 $470

First Year Total $38,876 $61,950 ($23,074)



### Subsequent Years

Re

- 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 $0

TPC 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 Testing

Shipping $50 0 shipments 2 $0 $5,200 ($5,200)

Desk Audit $250 0 audits 1 $0 $2,000 ($2,000)

Mill Labor d $71.36 4.5 hours 1 $321 $7,421 ($7,100)

Lost Product e $15.68 1 panel 2 $31 $1,756 ($1,725)

Subsequent Year Total $7,062 $61,950 ($54,887)TSCA Title VI Proposed Implementation Rule EA 2

- 53



### Table 2

- 31 : Annual Testing and Certification Costs for Hardwood Plywood Mills

Existing Certification(s) : Two ULEF Products

– New Certification(s) : Two Standard Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Additional Product

Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Additional

Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $3,700 $2,300

Qualifying Test $480 0 tests 2 $0 $0 $0

Correlation Test $71.36 0 tests 2 $0 $0 $0

Qualifying Test Shipping $200 0 shipments 2 $0 $0 $0

TPC Audit $450 4 audits 1 $1,800 $450 $1,350

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 4 tests 2 $3,840 $3,840 $0

TPC Testing Shipping $50 4 shipments 2 $400 $400 $0

Small Chamber Testing

Unit $10,000 1 unit 1 $10,000 $0 $10,000

Desk Audit $250 8 audits 1 $2,000 $0 $2,000

Mill Labor a $71.36 546 hours 1 $38,963 $642 $38,320

Lost Product b $15.68 264 panels 2 $8,279 $125 $8,154

First Year Total $72,782 $10,658 $62,124



### Subsequent Years

Re

- certification Fee $6,000 1 fee 1 $6,000 $3,700 $2,300

TPC Audit $450 4 audits 1 $1,800 $450 $1,350

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 4 tests 2 $3,840 $3,840 $0

TPC Testing Shipping $50 4 shipments 2 $400 $400 $0

Desk Audit $250 8 audits 1 $2,000 $0 $2,000

Mill Labor a $71.36 546 hours 1 $38,963 $642 $38,320

Lost Product b $15.68 264 panels 2 $8,279 $125 $8,154

Subsequent Year Total $62,782 $10,658 $52,124

a. 4 hours each for quarterly routine TPC audits (16 hours total), 0.5 hours each to prepare for shipping the quarterly TPC t ests (2 hours total), 1 hour per desk audit for 8 months (8 hours 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 20 11b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 54



### Table 2

- 32 : Annual Testing and Certification Costs for Hardwood Plywood Mills a



### Existing Certification(s) : One ULEF Product and One NAF Product

– New Certification(s) : Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

Qualifying Test $480 5 tests 1 $2,400 $0 $2,400

Correlation Test $71.36 10 tests 1 $714 $0 $714

Qualifying Test Shipping $200 1 shipment 1 $200 $0 $200

TPC Audit $450 2 audits 1 $900 $450 $450

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $2,400 ($1,440)

TPC Testing Shipping $50 1 shipment 2 $100 $250 ($150)

Small Chamber Testing

Unit $10,000 1 unit 1 $10,000 $ 0 $ 10,000

Desk Audit $250 2 audits 1 $500 $0 $500

Mill Labor b $71.36 141 hours 1 $10,062 $642 $9,420

Lost Product c $15.68 71 panels 1 $1,113 $78 $1,035

First Year Total $32,149 $9,021 $23,128



### Subsequent Years

Re

- certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

TPC Audit $450 1 audit 1 $450 $450 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $2,400 ($1,440)

TPC Testing Shipping $50 1 shipment 2 $100 $250 ($150)

Mill Labor d $71.36 4.5 hours 1 $321 $642 ($321)

Lost Product e $15.68 1 panel 1 $16 $78 ($63)

Subsequent Year Total $7,047 $9,021 ($1,974)

a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. 4 hours each for the initial audit and second routin e TPC audit (8 hours total), 0.5 hours each to prepare shipping for the qualifying test and second audit (1 hour total), 1 ho ur per desk audit for 2

months 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 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 55



### Table 2

- 33 : Annual Testing and Certification Costs for Hardwood Plywood Mills a



### Existing Certification(s): Two ULEF Products

– New Certification(s): Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

Qualifying Test $480 5 tests 2 $4,800 $0 $4,800

Correlation Test $71.36 10 tests 2 $1,427 $0 $1,427

Qualifying Test Shipping $200 1 shipment 2 $400 $0 $400

TPC Audit $450 2 audits 1 $900 $450 $450

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $3,840 ($2,880)

TPC Testing Shipping $50 1 shipment 2 $100 $400 ($300)

Small Chamber Testing

Unit $10,000 1 unit 1 $10,000 $0 $ 10 ,000

Desk Audit $250 2 audits 1 $500 $0 $500

Mill Labor b $71.36 141 hours 1 $10,062 $642 $9,420

Lost Product c $15.68 71 panels 2 $2,227 $125 $2,101

First Year Total $36,576 $ 10 ,658 $2 5 ,918



### Subsequent Years

Re

- certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

TPC Audit $450 1 audit 1 $450 $450 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $3,840 ($2,880)

TPC Testing Shipping $50 1 shipment 2 $100 $400 ($300)

Mill Labor d $71.36 4.5 hours 1 $321 $642 ($321)

Lost Product e $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 meth od) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. 4 hours each for the initial audit and second routine TPC audit (8 hours total), 0.5 hours each to prepare shipping for the q ualifying test and second audit (1 hour total), 1 hour per desk audit for 2

months 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 Commun ication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 56



### Table 2

- 34 : Annual Testing and Certification Costs for Particleboard/MDF Mills

Existing Certification(s) : One Uncertified Product and One Standard Product

– New Certification(s) : Two Standard Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to C ertify

Additional Product

Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Additional

Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

Qualifying Test $480 5 tests 1 $2,400 $0 $2,400

Correlation Test $71.36 10 hours 1 $714 $0 $714

Qualifying Test Shipping $200 1 shipments 1 $200 $0 $200

TPC Audit $450 4 audits 1 $1,800 $1,800 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 3 tests 1 $1,440 $1,920 ($480)

TPC Testing Shipping $50 3 shipments 1 $150 $200 ($50)

Small Chamber Testing

Unit $10,000 0 units 1 $0 $0 $0

Desk Audit $250 8 audits 1 $2,000 $2,000 $0

Mill Labor a $71.36 546 hours 1 $38,963 $38,963 $0

Lost Product b $8.96 532 panels 1 $4,767 $2,365 $2,401

First Year Total $59,933 $54,748 $5,185



### Subsequent Years

Re

- certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

TPC Audit $450 4 audits 1 $1,800 $1,800 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 4 tests 2 $3,840 $1,920 $1,920

TPC Testing Shipping $50 4 shipments 2 $400 $200 $200

Desk Audit $250 8 audits 1 $2,000 $2,000 $0

Mill Labor c $71.36 546 hours 1 $38,96 3 $38,96 3 $0

Lost Product d $8.96 264 panels 2 $4,731 $2,365 $2,365

Subsequent Year Total $59,233 $54,748 $4,485

a. 4 hours each for quarterly routine TPC audits (16 hours total), 0.5 hours each to prepare for shipping the quarterly TPC t ests (2 hours total), 1 hour per desk audit for 8 months (8 hours total), and 2

hours a day to test samples for 52 weeks of quality control testing (520 hours total).

b. For each product line, 5 panels for qualifying testing, 1 panel each day, 5 days a week for small scale testing, and 1 panel for the quarterly large scale tests. Note that the 532 panels includes 268 for

the newly certified product line and 264 for the existing certified product line.

c. 4 hours each for 4 quarterly audits (16 hours total), 0.5 hours to prepare for quarterly TPC tests (2 hours total), 1 hour pe r d esk audit for 8 months (8 hours total), and 2 hours a day, 5 days 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 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 57



### Table 2

- 35 : Annual Testing and Certification Costs for Particleboard/MDF Mills

Existing Certification(s) : Two ULEF Products

– New Certification(s) : Two Standard Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Additional Product

Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Additional

Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $3,700 $2,300

Qualifying Test $480 0 tests 2 $0 $0 $0

Correlation Test $71.36 0 hours 2 $0 $0 $0

Qualifying Test Shipping $200 0 shipments 2 $0 $0 $0

TPC Audit $450 4 audits 1 $1,800 $450 $1,350

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 4 tests 2 $3,840 $3,840 $0

TPC Testing Shipping $50 4 shipments 2 $400 $400 $0

Small Chamber Testing

Unit $10,000 0 units 1 $0 $0 $0

Desk Audit $250 8 audits 1 $2,000 $0 $2,000

Mill Labor a $71.36 546 hours 1 $38,963 $642 $38,320

Lost Product b $8.96 264 panels 2 $4,731 $72 $4,659

First Year Total $59,233 $10,604 $48, 630



### Subsequent Years

Re

- certification Fee $6,000 1 fee 1 $6,000 $3,700 $2,300

TPC Audit $450 4 audits 1 $1,800 $450 $1,350

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 4 tests 2 $3,840 $3,840 $0

TPC Testing Shipping $50 4 shipments 2 $400 $400 $0

Desk Audit $250 8 audits 1 $2,000 $0 $2,000

Mill Labor a $71.36 546 hours 1 $38,963 $642 $38,320

Lost Product b $8.96 264 panels 2 $4,731 $72 $4,659

Subsequent Year Total $59,233 $10,604 $48, 630

a. 4 hours each for quarterly routine TPC audits (16 hours total), 0.5 hours each to prepare for shipping the quarterly TPC t ests (2 hours total), 1 hour per desk audit for 8 months (8 hours total), and 2

hours a day to test samples for 52 weeks of quality control testing (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 HP VA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 58



### Table 2

- 36 : Annual Testing and Certification Costs for Particleboard/MDF Mills a



### Existing Certification(s) : One Uncertified Product and One Standard Product

– New Certification(s) : Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Additional Produ ct

Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Additional

Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

Qualifying Test $480 5 tests 2 $4,800 $0 $4,800

Correlation Test $71.36 10 hours 2 $1,427 $0 $1,427

Qualifying Test Shipping $200 1 shipment 2 $400 $0 $400

TPC Audit $450 2 audits 1 $900 $1,800 ($900)

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $1,920 ($960)

TPC Testing Shipping $50 1 shipment 2 $100 $200 ($100)

Small Chamber Testing

Unit b $10,000 0 units 1 $0 $0 $0

Desk Audit $250 2 audits 1 $500 $2,000 ($1,500)

Mill Labor c $71.36 141 hours 1 $10,062 $38,963 ($28,90 1 )

Lost Product d $8.96 71 panels 2 $1,272 $2,365 ($1,093)

First Year Total $27,921 $54,748 ($26,82 7 )



### Subsequent Years

Re

- 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 $0

TPC Testing $480 1 test 2 $960 $1,920 ($960)

TPC Testing Shipping $50 1 shipment 2 $100 $200 ($100)

Desk Audit $250 0 audits 1 $0 $2,000 ($2,000)

Mill Labor e $71.36 4.5 hours 1 $321 $38,963 ($38,641)

Lost Product f $8.96 1 panel 2 $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 meth od) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Purchasing and setting up a small chamber test has a one

- time cost of approximately $10,000.

c. 4 hours each for the initial audit and second routine TPC audit (8 hours total), 0 .5 hours each to prepare shipping for the qualifying test and second audit (1 hour total), 1 hour per desk audit for 2

months for NAF products (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing (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 scale test.

e. 4 hours for the annual 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 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 59



### Table 2

- 37 : Annual Testing and Certification Costs for Particleboard/MDF Mills a



### Existing Certification(s) : Two ULEF Products

– New Certification(s) : Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

Qualifying Test $480 5 tests 2 $4,800 $0 $4,800

Correlation Test $71.36 10 hours 2 $1,427 $0 $1,427

Qualifying Test Shipping $200 1 shipments 2 $400 $0 $400

TPC Audit $450 2 audits 1 $900 $450 $450

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $3,840 ($2,880)

TPC Testing Shipping $50 1 shipment 2 $100 $400 ($300)

Small Chamber Testing

Unit b $10,000 0 units 1 $0 $0 $0

Desk Audit $250 2 audits 1 $500 $0 $500

Mill Labor c $71.36 141 hours 1 $10,062 $642 $9, 420

Lost Product d $8.96 71 panels 2 $1,272 $72 $1,201

First Year Total $25,621 $10,604 $15,017



### Subsequent Years

Re

- certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

TPC Audit $450 1 audit 1 $450 $450 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $3,840 ($2,880)

TPC Testing Shipping $50 1 shipment 2 $100 $400 ($300)

Desk Audit $250 0 audits 1 $0 $0 $0

Mill Labor e $71.36 4.5 hours 1 $321 $642 ($321)

Lost Product f $8.96 1 panel 2 $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 meth od) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Purchasing and setting up a small chamber test has a one

- time cost of approximately $10,000.

c. 4 hours each for the initial audit and second routine TPC audit (8 hours total), 0.5 hours each to prepare shipping for the qualifying test and second audit (1 hour total), 1 hour per desk audit for 2

months for NAF products (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing (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 scale test.

e. 4 hours for the on

- site audit and 0.5 hours to ship samples.

f. 1 panel for annual large scale testing.

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

, Personal Communication with CPA 2011

, Personal Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 60



### Table 2

- 38 : Annual Testing and Certification Costs for Particleboard/MDF Mills a



### Existing Certification(s) : Two Standard Products

– New Certification(s) : Two NAF Products

Cost Category Unit Cost Number of Units Repe titions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

Qualifying Test $480 5 tests 2 $4,800 $0 $4,800

Correlation Test $71.36 10 hours 2 $1,427 $0 $1,427

Qualifying Test Shipping $200 1 shipment 2 $400 $0 $400

TPC Audit $450 2 audits 1 $900 $1,800 ($900)

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $3,840 ($2,880)

TPC Testing Shipping $50 1 shipment 2 $100 $400 ($300)

Small Chamber Testing

Unit b $10,000 0 units 1 $0 $0 $0

Desk Audit $250 2 audits 1 $500 $2,000 ($1,500)

Mill Labor c $71.36 141 hours 1 $10,062 $38,963 ($28,9 01 )

Lost Product d $8.96 71 panels 2 $1,272 $4,731 ($3,459)

First Year Total $27,921 $59,233 ($31,312)



### Subsequent Years

Re

- 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 $0

TPC Testing $480 1 test 2 $960 $3,840 ($2,880)

TPC Testing Shipping $50 1 shipment 2 $100 $400 ($300)

Desk Audit $250 0 audits 1 $0 $2,000 ($2,000)

Mill Labor e $71.36 4.5 hours 1 $321 $38,963 ($38,641)

Lost Product f $8.96 1 panel 2 $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 meth od) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Purchasing and setting up a small chamber test has a one

- time cost of approximately $10,000.

c. 4 hours each for the initial audit a nd second routine TPC audit (8 hours total), 0.5 hours each to prepare shipping for the qualifying test and second audit (1 h our total), 1 hour per desk audit for 2

months for NAF products (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing (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 sca le test.

e. 4 hours for the on

- site audit and 0.5 hours to ship samples.

f. 1 panel for annual large scale testing.

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

, Personal Communication with CPA 2011

, Personal Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 61



### Table 2

- 39 : Annual Testing and Certification Costs for Particleboard/MDF Mills a



### Existing Certification(s) : One NAF Product and One ULEF Product

– New Certification(s) : Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

Qualifying Test $480 5 tests 1 $2,400 $0 $2,400

Correlation Test $71.36 10 hours 1 $714 $0 $714

Qualifying Test Shipping $200 1 shipment 1 $200 $0 $200

TPC Audit $450 2 audits 1 $900 $450 $450

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $2,400 ($1,440)

TPC Testing Shipping $50 1 shipment 2 $100 $250 ($150)

Small Chamber Testing

Unit b $10,000 0 units 1 $0 $0 $0

Desk Audit $250 2 audits 1 $500 $0 $500

Mill Labor c $71.36 141 hours 1 $10,062 $642 $9,420

Lost Product d $8.96 71 panels 2 $1,272 $45 $1,228

First Year Total $22,308 $8,987 $13,321



### Subsequent Years

Re

- certification Fee $3,700 1 fee 1 $3,700 $3,700 $0

TPC Audit $450 1 audit 1 $450 $450 $0

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $2,400 ($1,440)

TPC Testing Shipping $50 1 shipment 2 $100 $250 ($150)

Desk Audit $250 0 audits 1 $0 $0 $0

Mill Labor e $71.36 4.5 hours 1 $321 $642 ($321)

Lost Product f $8.96 1 panel 2 $18 $45 ($27)

Subsequent Year Total $7,049 $8,987 ($1,938)

a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test meth od) and 3 months (i.e., 13 weeks) of routine small scale testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Purchasing and setting up a small chamber test has a one

- time cost of approximately $10,000.

c. 4 hours each for the initial audit and second routine TPC audit (8 hours total), 0.5 hours each to prepare shipping for the qualifying tes t and second audit (1 hour total), 1 hour per desk audit for 2

months for NAF products (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing (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 sca le test.

e. 4 hours for the on

- site audit and 0.5 hours to ship samples.

f. 1 panel for annual large scale testing.

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

, Personal Communication with CPA 2011

, Personal Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 62



### Table 2

- 40 : Annual Testing and Certification Costs for Particleboard/MDF Mills a



### Existing Certification(s) : One NAF Product and One Standard Product

– New Certification(s) : Two NAF Products

Cost Category Unit Cost Number of Units Repetitions for

Product Types Total Cost to Certify

Product Line(s) Cost Incurred in

Baseline for Existing

Certification(s) Incremental Cost to

Certify Product Line(s)

First Year

Initial Certification Fee $6,000 1 fee 1 $6,000 $6,000 $0

Qualifying Test $480 5 tests 1 $2,400 $0 $2,400

Correlation Test $71.36 10 hours 1 $714 $0 $714

Qualifying Test Shipping $200 1 shipment 1 $200 $0 $200

TPC Audit $450 2 audits 1 $900 $1,800 ($900)

TPC Audit Travel $1,500 1 audit 1 $1,500 $1,500 $0

TPC Testing $480 1 test 2 $960 $2,400 ($1,440)

TPC Testing Shipping $50 1 shipment 2 $100 $250 ($150)

Small Chamber Testing

Unit b $10,000 0 units 1 $0 $0 $0

Desk Audit $250 2 audits 1 $500 $2,000 ($1,500)

Mill Labor c $71.36 141 hours 1 $10,062 $38,963 ($28,901 )

Lost Product d $8.96 71 panels 1 $645 $2,374 ($1,729)

First Year Total $23,980 $55,287 ($31,306)



### Subsequent Years

Re

- 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 $0

TPC Testing $480 1 test 2 $960 $2,400 ($1,440)

TPC Testing Shipping $50 1 shipment 2 $100 $250 ($150)

Desk Audit $250 0 audits 1 $0 $2,000 ($2,000)

Mill Labor e $71.36 4.5 hours 1 $321 $3 8,963 ($38,641)

Lost Product f $8.96 1 panel 2 $18 $2,374 ($2,356)

Subsequent Year Total $7,049 $55,287 ($48,238)

a. NAF certification can be achieved based on testing results from one quarterly test (using a primary or secondary test method) and 3 months (i.e., 13 weeks) of routine s mall scale testing. Testing

frequencies are those required by the TPC and may be more frequent than TSCA Title VI requires.

b. Pur chasing and setting up a small chamber test has a one

- time cost of approximately $10,000.

c. 4 hours each for the initial audit and second routine TPC audit (8 hours total), 0.5 hours each to prepare shipping for the q ualifying test and second audit (1 ho ur total), 1 hour per desk audit for 2

months for NAF products (2 hours total), and 2 hours a day to test samples for 13 weeks of quality control testing (130 hours total).

d. 5 panels for qualifying testing, 5 panels a week for 13 weeks of small scale tes ting, and 1 panel for the second large scale test.

e. 4 hours for the on

- site audit and 0.5 hours to ship samples.

f. 1 panel for annual large scale testing.

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

, Personal Communication with CPA 2011

, Personal Communica tion with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 63



### 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, 1 hour per

monthly desk audit for 8 months (8 hours total), and 2 hours a day to test samples for 52 weeks of quality control t esting (520

hours total).

b. 5 panels for qualifying testing, 1 panel a day for 52 weeks of quality control testing, and 1 panel for each quarterly large

chamber TPC test (excluding the first quarter in year 1).

c. 4 hours each for quarterly routine TPC au dits (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 2 hours a day to test samples for 52 weeks of qualit y control testing (520 hours total).

d. 1 pan el 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 2 010b

, Personal Communication with CPA 2011

, Personal

Communication with HPVA 2011b

, RISI 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 64



### 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

Subsequent 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, 1 hour per

mo nthly desk audit for 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 quality control testing, and 1 panel for each quar terly large

chamber TPC test (excluding the first quarter in year 1).

c. 4 hours each for quarterly routine TPC audits (16 hours total), 0.5 hours each to prepare for shipping the quarterly TPC t ests

(2 hours total), 1 hour per desk audit for 8 months (8 h ours total), and 2 hours a day to 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

.TSCA Title VI Proposed Implementation Rule EA 2

- 65



### 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 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 qu alifying test and

the subsequent TPC test (1 hour total), 40 hours for developing the quality control systems, 1 hour per desk audit for 2 audi ts

(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 2011c

.TSCA Title VI Proposed Implementation Rule EA 2

- 66



### Tab le 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 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 and

the subsequent TPC test (1 hour total), 40 hours for developing the quality control systems, 1 hour per desk audit for 2 audi ts

(2 hours total), and 2 hours a day to test samples for 13 weeks of quality cont rol 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 s cale testing.

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

, Personal Communica tion with CPA 2011

, Personal

Communication with HPVA 2011b

, RISI 2011c

.



### 2.2.5.1 Summary of Estimated Testing and Certification Costs



### Table 2

- 45 summarizes the estimated actual and incremental costs inc urred by mills for

complying with the testing and certification requirements of TSCA Title VI. As described above, mills

with existing CARB

- certified product lines will be incurring some testing and certifications costs in the

baseline. The incremental c osts of the rule represent the actual costs minus baseline costs.TSCA Title VI Proposed Implementation Rule EA 2

- 67



### 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 and 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 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 Standard Change 2 to NAF d $38,876 ($23,074) $7,062 ($54,887)

2 ULEF Change 2 to Standard e $72,782 $62,124 $62,782 $52,124

1 ULEF and 1 NAF Change ULEF to NAF d,e $32,149 $23,128 $7,047 ($1,974)

2 ULEF Change 2 to NAF d $36,576 $ 25 ,918 $7,062 ($3,595)



### Particleboard and MDF Mills

1 Uncertified and 1

Standard Change Uncertified to Standard $59,933 $5,185 $59,233 $4,485

2 ULEF Change 2 to Standard e $59,233 $48,630 $59,233 $48,630

1 Uncertified and 1

Standard Change 2 to NAF d $27,921 ($26,827) $7,049 ($47,699)

2 ULEF Change 2 to NAF d $25,621 $15,017 $7,049 ($3,555)

2 Standard Change 2 to NAF d $27,921 ($31,312) $7,049 ($52,184)

1 ULEF and 1 NAF Change ULEF to NAF d,e $22,308 $13,321 $7,049 ($1,938)

1 Standard and 1

NAF Change Standard to NAF d $23,980 ($31,306) $7,049 ($48,238)



### Wood Veneer Laminated Product Producers

1 Uncertified Change 1 to Standard a $72,508 $72,508 $56,522 $56,522

2 Uncertified Change 2 to 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 o ther than Option

SFCC). Mills without a small chamber unit are assumed to comply with this requirement by purchasing test chambers and conducting 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 perform 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 co sts for this certification Option SFCC.

d. Applies to options where NAF emissions standards are required

e. Applies to options that do not allow ULEF exemptionTSCA Title VI Proposed Implementation Rule EA 2

- 68



## 2.3 Estimated Costs for Stock Hardwood Plywood, MDF, and Particleboard

Producers

This section presents the potential costs to stock hardwood plywood, medium density fiberboard

(MDF) and particleboard producers under several analytical options. Section 2.3.1 presents the estimated

costs to composite wood panel producers for making changes to raw materials. Section 2.3.2 presents the

estimated costs of testing and third party certification for composite wood panel producers. Finally, the

total estimated costs for composite wood panel producers are presented in section 2.3.3

.

2.3.1 Costs of Changes to Raw Materials for Composite Wood Panel Producers

This section presents the estimated costs to stock hardwood plywood (section 2.3.1.1 ), MDF

(section 2.3.1.2 ), and particleboard (section 2.3.1.3 ) producers for making changes to production

processes and raw materials.

2.3.1.1 Stock Hardwood Plywood Producers Production Processes and Raw Materials Costs



### For stock hardwood plywood producers that are not compliant with the emissions standards in the

baseline, the costs associated with changing production processes and raw materials are estimated as the

costs of switching from UF to PVA resin systems and switching fr om conventional to lower emitting

cores. Because the emissions standard for hardwood plywood (0.05 ppm) is lower than the standards for

particleboard (0.09 ppm) and MDF (0.11 to 0.13 ppm), hardwood plywood made with a certified

particleboard or MDF core c ould conceivably exceed the emission standard even if a NAF resin such as

PVA was used to affix the veneer to the core. (Whether this occurs in practice depends on how

effectively the veneer acts as a barrier to the release of formaldehyde, and how far be low the standards the

actual emissions from the core are.)

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

certificat ion, low emission cores are assumed to include certified veneer core, particleboard and MDF

cores certified as ULEF under the CARB ATCM, and particleboard and MDF cores certified as NAF.

For analytical options requiring all products to meet NAF emission l evels, low emission cores would

include particleboard, MDF and veneer cores certified as NAF.

Hardwood plywood producers switching from UF to PVA resins and low emission cores would

not need to make any significant modifications or upgrades to existing equipment or processes because

PVA resins are generally a “drop

- in” technology for mills currently using UF. Thus, the estimated raw

material costs are only for purchasing the more expensive resins and cores. Note that switching to PVA

resins is just one possibility for achieving compliance. Some producers may achieve compliance by using

enhanced urea formaldehyde resins, melamine

- urea

- formaldehyde (MUF) resins, soy

- based resins, or

other resin systems. However, the cost of switching to PVA resins can pr ovide a reasonable

approximation for the compliance cost associated with changing raw materials and production processes

and therefore is the basis for the cost estimates in this analysis. Note also that not all mills will

necessarily have to switch to NA F or ULEF cores in order to meet the Phase 2 emissions standard for

hardwood plywood.

Number of Hardwood Plywood Mills and Affected Production Volume



### EPA identified 33 mills (owned by 27 firms) that appear to manufacture stock hardwood plywood

panels subject to the TSCA Title VI emissions requirements. Based on a review of CARB’s list of

certified mills, 26 of the 33 hardwood plywood stock panel mills identified by EPA are certified toTSCA Title VI Proposed Implementation Rule EA 2

- 69



### produce CARB compliant products ( 2011b ). This implies that there are 7 stock plywood mills that are

not CARB certified and that are expected to incur compliance costs to become certified due to the TSC A

Title VI regulation. For the purpose of this analysis it is also assumed that all 7 of these mills are three

ply mills (which buy cores and finish them with hardwood veneer).

In addition to the 33 hardwood plywood mills, EPA identified another 8 mills (owned by 7 firms)

that manufacture engineered wood flooring. Based on a review of CARB’s list of certified mills, 4 are

certified to produce CARB compliant products ( 2011b ).

According to CARB’s ( 2011b ) list of certi fied mills, 12 mills (including engineered wood

flooring mills) are certified to produce NAF hardwood plywood

– for the purpose of this analysis these

mills are assumed to produce NAF product exclusively. Note that additional CARB certified mills might

ha ve compliance costs if they produce some product lines that are not certified when the TSCA Title VI

requirements take effect in 2013. EPA is not aware of any mills in this situation, but the compliance costs

for individual mills producing some CARB certi fied product and some product not CARB certified would

be expected to be lower than the costs presented here.

According to U.S. ITC ( 2008 ), hardwood plywood production in 2006, including engineered

wood flooring, was estimated to be 1,786 thousand cubic meters, or 2,007 mm sf on a 3/8" basis.

Engineered wood flooring production was estimated to be 258 mmsf in 2006 and it is estimated that about

30 percent of engineered wood flooring production is manufactured as a wood veneer laminated product

( Personal Communication with HPVA 2011a ) and therefore 77 mmsf of engineered wood flooring

production is accounted for as wood veneer laminated product instead of hardwood plywood for the

purpose of this analysis. Thus, excluding the wood veneer laminated product results in an estimated 2006

d omestic production for hardwood plywood of 1,930 million square feet on a 3/8" basis. It is estimated

that current production levels are about 60 percent of their 2006 levels, or about 1,158 mmsf on a 3/8"

basis.

Table 2

- 46 presents the estimated production affected by analytical option. These results are

estimated by combining the production estimates described above and the emissions standards and l evels

reported by mills in EPA’s ( 2010a ) Pressed Wood Manufa cturing Industry Survey (PWMIS). EPA

administered this survey between June and October 2010 to domestic producers of composite wood

panels. The survey achieved a response from 33 hardwood plywood mills that received the survey. 18 

### The

survey asked about c urrent emissions levels and about planned levels. Since many composite wood

product mills were in the midst of modifying their production technology and raw materials to achieve

compliance with Phase 2 of the CARB ATCM when they completed the questionnair e, using data on their

emission levels at the time they responded to the survey would not accurately reflect the 2013 baseline.

Instead, baseline emission levels are estimated using responses to a question in the survey about the

emissions levels mills pl anned to achieve within the next three years of when they completed the survey

(i.e., three years from 2010). These emissions levels were weighted by the production levels the mills

reported in the survey, in order to estimate the average emission levels by certification standard. The

survey data were also used to estimate the share of total production volume represented by products

meeting each of the emissions standards.

18 The number of mills for each product type is limited to those that are subject to TSCA Title VI, and does not include

mills that only produce products that are exempted or not otherwise covered by TSCA Title VI (such as curv ed

plywood, wood packaging, and molded products that do not qualify as panels). The response rate includes mills that

only responded to a brief phone questionnaire, which collected information about the compliance standards being

achieved, but not specifi c emissions levels.TSCA Title VI Proposed Implementation Rule EA 2

- 70



### Table 2

- 46 : Hardwood Plywood Prod uction Affected By Analytical Option (mmsf)

Baseline Emission

Standard Production

Share Production

Level Affected Production

Options SI, SE,

SP, SC

, SCR,

SEUR, SFCC

, and SC U R 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 were grouped together in the CARB 2 category. Several

hardwood plywood mills appeared to be meeting CARB ULEF standards but did not report this in their response. For

example, they listed certification standard as “CARB 2” but resin type as “ULEF” and/or reported maximum emissions

that satisfy ULEF requirements. Due to difficulties in distinguishing between CARB 2 and CARB ULEF product lines in

the survey responses, and the fact that emissions levels ap peared similar among mills reporting either CARB 2 or CARB

ULEF certification standards, these mills were grouped together.

Option SCUR is the proposed option.

Source: U.S. Environmental Protection Agency 2010a

.



### Hardwood Plywood Producer Costs for Changing Raw Materials



### For cost estimation purposes, it is assumed that mills using urea formaldehyde (UF) resins in the

baseline will switch to polyvinyl acetate (PVA) resins in order to meet the emissions standards. 19 

### Some

mills may also have to switch to a low emitting core to meet the emissions standard. The main steps to

estimating the cost increase resulting from the TSCA Title VI rule for stock hardwood plywood mills

without baseline CARB certification are presented below:

1. Estimate the total production volume from facilities that are expect ed to continue to use UF resins

in the absence of a national rule.

2. Estimate the unit cost of switching from UF to PVA resins.

3. Estimate unit cost of switching from a CARB certified core to a low emission core.

4. Estimate the cost of third party certificati on and compliance testing.

5. Estimate the average cost per firm by multiplying the unit costs with the typical production

volume per firm under different scenarios for the raw materials changes that firms may need to

make to become certified.

Note that switc hing to PVA resins is just one possibility for achieving compliance. Some

producers may achieve compliance by using enhanced urea formaldehyde resins, melamine

- urea

formaldehyde (MUF) resins, soy

- based resins, or other resin systems. However, the cost of switching to

PVA resins can provide a reasonable approximation for the compliance cost associated with changing raw

materials and production processes and therefore is the basis for the cost estimates in this analysis.

19 Note that switching to a resin system other than PVA may be a lower cost compliance strategy. Using enhanced UF

resins and soy

- based resins are proven compliance strategies that may be less costly for some manufacturers.TSCA Title VI Proposed Implementation Rule EA 2

- 71



### Production Volume Switching to PVA Resins

As described above, it is estimated that only 0.4 percent of domestic baseline hardwood plywood

production will not be CARB certified in the absence of the TSCA Title VI rule. For the purpose of this

analysis it is assumed that about half of the product that is not CARB certified is already being produced

using PVA resins. It is assumed that these products already meet the CARB Phase 2 emission standards,

but that the producers have not chosen to incur the costs of CARB’s third

- party certificati on program because the products are not sold into California.

It is assumed that the other half of the uncertified product is being produced with UF resins, and

that the product exceeds the CARB Phase 2 emission limits. Thus, 0.2 percent of stock hardwoo d

plywood production, or 2,300 msf, is assumed to be subject to costs associated with changing resin

systems under the statutory option. Under options NI and NE, in addition to the 2,300 msf of uncertified

production switching resins, the 697,100 msf of pr oduction that is currently CARB 2 or ULEF certified

but not NAF certified is assumed to need to switch resin systems, for a total of 699,400 msf switching to

NAF resins. Firms using UF resins in the baseline are assumed to switch to PVA resins to meet the

TSCA Title VI emissions standards. PVA resins are a common resin choice of smaller mills, and are a

no

- added formaldehyde (NAF) resin.

Additional Cost of PVA Resins

Hardwood plywood mills switching from UF to PVA resins would not need to make any

sign ificant modifications or upgrades to existing equipment or processes because PVA resins are

generally a “drop

- in” technology for mills currently using UF. The only costs estimated are for

purchasing the more expensive resin.

The additional cost to hardwo od plywood mills for switching from UF to PVA resin depends on

the glue spread and the total surface area of the finished panels produced. It is assumed that these mills

apply two glue lines: one to adhere the face panel and the other to adhere the back p anel. The weight of

each glue line is about 30 pounds per thousand square feet (msf) of plywood produced, and PVA resin

costs about $0.50 per pound more than UF resin ( Personal Communication with Evergreen Engineering

2009 ) . It is assumed that the panels made by these mills average 5/8 inches thick. 20 

### Therefore, the extra

cost of using PVA can be estimated on a 5/8” basis as follows:

Additional cost of PVA (5/8” basis) = (30 pounds/msf of glue line) x (2 glue lines) x ($0.5) = $30

per msf of plywood produced.

Since hardwood plywood production volume is tabulated on a 3/8 inches basis, the following conversion

is needed to estimate the additional cost of PVA:

Additional cost of PVA (3/8” basis) = ($30/msf) x (.625”/.375”) = $50/msf of plywood produced.

As a result, these small mills converting their production from UF resins to PVA resins would

incur an additional cost of $50/msf of plywood produced on a 3/8” basis.

20 Common pa nel thicknesses range from 3/8 inch to 3/4 inch. A 5/8 inch basis is used to represent the average across all

mills.TSCA Title VI Proposed Implementation Rule EA 2

- 72



### Production Volume Switching to Low Emission Cores

Since nearly all domestic core supplier s are manufacturing only CARB certified products,

virtually the only source of cores that are not CARB certified would be imports. Given this, the baseline

level of production using cores that are not certified may be near zero. However, in order to meet the

hardwood plywood emissions standards, some hardwood plywood producers using CARB certified

particleboard or medium density fiberboard (MDF) cores may need to switch to ultra

- low emitting

formaldehyde (ULEF) or NAF cores. This is because the emissions standards are higher for particleboard

and MDF than for hardwood plywood. 21 

### In addition, 2 percent of engineered wood flooring producers

utilize composite cores ( Personal Communication with HPVA 2011a ), and would need to make the

switch to low emission cores, as we ll.

This analysis estimates the percentage of hardwood plywood and engineered wood flooring

production that would need to switch to low emission cores in three steps:

1. The percentage of hardwood plywood and engineered wood flooring production that use MD F

and particleboard for cores are estimated from the 2007 U.S. Economic Census ( U.S. Census

Bureau 2009e ) data on the value of raw materials used for production 22



### 2. These percentages are adjusted to account for the baseline us e of NAF or ULEF cores with the

percentage of domestic MDF and particleboard production that is estimated to be CARB NAF or

ULEF certified, estimated from EPA’s ( 2010a ) survey of composite wood product producers.

3. The estimated percentage of cores that must be switched to low emission cores is applied to the

estimat ed total production volume.

Table 2

- 47 presents the estimated production that would need to switch to low emission cores by

analytical option. The resulting estimates and a detailed description of the underlying calculations are

presented below in Table 2

- 47

.

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 Th e 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. T he 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 )

.TSCA Title VI Proposed Implementation Rule EA 2

- 73



### Table 2

- 47 : Hardwood Plywood Production Switching to Low Emission Cores

Analytical

Option Production

(mmsf,

3/8”) Production

Switching to

Low Emission

Cores

Description of Estimated Percentages a, b (%) (mmsf)

Options SI,

SE, SP, SC,

SCR,

SEUR,

SFCC , and

SCUR 4.6 32.3% 1.5 Based on conversations with HPVA ( 2011a ), 40% of hardwood plyw ood stock panels and 2% of engineered wood flooring

are 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 also est imated that 86.1% and 90.5% of

MDF and particleboard are not made with NAF or ULEF resins, respectively. Thus, the percentage of hardwood plywood

stock panels switching to low emission cores (35.48%) 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%. Similarly, the percentage of engineered wood flooring switching to low emission

cores (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%.

Sin ce engineered wood flooring represents about 9.4% of hardwood plywood production, the percentage of production

switching 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%.

Option s CI

and CE

- - - All mills are assumed to be able to meet these emissions standards without any changes to production processes or raw

materials.

Options NI

and NE 701.7 72.1% 505.9 Based on conversations with HPVA ( 2011a ), 40% of hardwood plyw ood stock panels and 2% of engineered wood flooring

are 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. Thus, the mix o f veneer core, MDF and

particleboard 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 particleboard

use added formaldehyde resins, respectively. Thus, the percentage of hardwood plywood stock panels switching to NAF

cores (73.25%) is calc ulated 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%. Likewise, the percentage of engineered wood flooring switching to NAF cores (61.23%) is calculated as the sum of

the three products: (1) 98% and 60.6 %, (2) 0.8% and 90.7%, and (3) 1.2% and 93.3%. Since engineered wood flooring

represents about 9.4% of hardwood plywood production, the percentage of production switching to NAF cores overall is

72.1%, calculated as the sum of the two products: (1) 61.23% and 9.4% and (2) 73.25% and 90.6%.

a The mix of composite wood products consumed were estimated using 2007 U.S. Census ( 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 value s 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 P articleboard Commentary.

b The percentages of composite platforms not made with NAF or ULEF resins was estimated from EPA’s ( 2010a ) survey of composite wood product producers.

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 t he standard

certification, low emission cores are assumed to include certified veneer core, particleboard and MDF cores certified a s 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 particleboa rd, MDF and veneer cores certified as NAF.

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 74



### Additional Cost of Low Emission Cores

The average cost of a Phase 2 certified core is approximately $300/msf, and NAF cores currently

cost 15 to 20 percent more than Phase 2 platforms. 23 

### So a high end estimate of the additional cost

associated with purchasing low emission cores is estimated at $45/msf

- $60/msf. Although there is

uncertainty about the extent to which hardwood plywood producers would need to switch to low emitting

cores in order to meet the emissions standards, this analysis adopts the conservative assumption (in terms

of being careful not to understate costs) that the cost for switching to low emission cores is $60/msf.

Summary of Hardwood Plywood Producer Costs for Chang ing Raw Materials

Table 2

- 48 presents the estimated costs of changing raw materials for hardwood plywood product

producers under the various analytica l options. Under options CI and CE there are no estimated material

costs because it is assumed that all mills can achieve CARB 1 emissions requirements with minimal

production and raw materials changes. The total costs are highest under options NI and NE b ecause a larger share of the production would need to switch to NAF cores. Note that the estimated cost of

switching to either the ULEF or NAF core is the same amount ($60). It is assumed that there would not be

a large difference between the cost of ULEF and NAF cores.

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, 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 SC U R the production switching to a PVA resin was calculated as 1/2

of the uncertified production because it was assumed that half of the uncertified product is already being produced using PVA resins.

b For analytical options NI and NE, the production switchin g to a PVA resin was calculated as the sum of half of the uncertified

production share and the CARB 2 certified production share.

This analysis uses the term “ low emission cores ” to mean cores with emissions low enough that hardwood plywood made from them

meets the applicable emission standard. For the standard certification, low emission cores are assumed to include certified veneer

core, particleboard and MDF cores certified as ULEF under the CARB ATCM, and particleboard and MDF cores certified as NAF.

For analytical options requiring all products to meet NAF emission levels, low emission cores would include particleboard, MD F and

veneer cores certified as NAF.

Option SCUR is the proposed option.



### 2.3.1.2 MDF Producers Production Processes and Raw Materials Costs



### This section presents the estimated costs to MDF producers that are not compliant with a

specified emission standard in the baseline for making the changes to production processes and raw

materials that would be necessary to achieve that standard. First the number of mills and the volume of

23 The price and availability of NAF platforms may improve over time as the market adjusts to the CARB rule and TSCA

Title VI.TSCA Title VI Proposed Implementation Rule EA 2

- 75



### production where changes to production processes and raw materials would be necessary are estimated.

Then the estimated increases in production and raw material costs to MDF producers are presented.

Number of M DF Mills and Affected Production Volume



### The MDF market is still recovering from a significant slump that began in 2008. According to

RISI ( 2011d ), MDF consumption was 2,350 million square feet (mmsf) in 2010 and is forecast to increase

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

scheduled to be implemented in 2013 this analysis uses the RISI ( 2011d ) value for 2012, the final year in

the forecast, to estimate the affected domestic MDF production. To estimate U.S. production, the

consumption fig ure is reduced to account for the 37 percent of domestic consumption that is attributable

to imports according to RISI’s ( 2011d ) forecast share of MDF consumption from imports for 2011. The

resulting estimate of U.S. production utilized in this analysis is 1,850 mmsf.

Table 2

- 49 presents the estimated production affected for each analytical option. These results

are estimated by combining the production estimates described above and the emissions standards and

level s reported by mills in EPA’s ( 2010a ) Pressed Wood Manufactur ing Industry Survey (PWMIS). EPA

administered this survey between June and October 2010 to domestic producers of composite wood

panels. The survey achieved a response from all 20 MDF mills that received the survey (there are 22

domestic MDF mills). 24 

### The survey asked about current emissions levels and about planned levels. Since

many composite wood product mills were in the midst of modifying their production technology and raw

materials to achieve compliance with Phase 2 of the CARB ATCM when they compl eted the

questionnaire, using data on their emission levels at the time they responded to the survey would not

accurately reflect the 2013 baseline. Instead , baseline emission levels are estimated using responses to a

question in the survey about the emis sions levels mills planned to achieve within the next three years of

when they completed the survey (i.e., three years from 2010) . These emissions levels were weighted by

the production levels the mills reported in the survey, in order to estimate the ave rage emission levels by

certification standard. The survey data were also used to estimate the share of total production volume

represented by products meeting each of the emissions standards.

Note that all mills reported that they planned to manufactu re only CARB certified products.

Thus, their production costs would only be affected under the analytical option where NAF resins were

required. According to CARB’s list of certified mills, 22 mills are CARB certified, including 7 certified

to produce NAF MDF. Of the 7 mills that are NAF certified, 2 are also certified to produce CARB 2

product manufactured using resins with added

- formaldehyde.

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 w as 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 com pliance standards being achieved, but not the

specific emissions levels.TSCA Title VI Proposed Implementation Rule EA 2

- 76



### 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

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 SCUR is the proposed option.

Sources: U.S. Environmental Protection Agency 2010a and RISI 2011d



### Estimated Costs for Changing Production Processes and Raw Materials



### This analysis assumes that producing NAF MDF is 20 percent more expensive than CARB 2

MDF, or about $110 per msf. 25



### Table 2

- 50 : Incremental Increase in Production Costs for MDF By Analytica l Option

Baseline Emission

Standard Affected Production (mmsf) Incremental Increase in Production Costs (millions,

2010$)

Options SI,

SE, SP, SC,

SCR,

SEUR,

SFCC , and

SCUR Options

CI and CE Options

NI and NE Options SI, SE,

SP, SC, SCR,

SEUR, SFCC

,

and 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 SCUR is the proposed option.

Sources: U.S. Environmental Protection Agency 2010a and RISI 2011d



### 2.3.1.3 Costs of Changes to Production Processes and Raw Materials for Particleboard Producers



### This section presents the estimated costs to particleboard producers that are not compliant with a

specified emission standard in the baseline for making the changes to production processes and raw

materials that would be necessary to achieve that standard. First the number of mills and the volume of

production where changes to production processes and raw materials would be necessary are estimated.

Then the estimated increases in production and raw material costs to particleboard producers are

presented.

25 The analysis assumes that NAF MDF is 20 percent more expensive. The MDF price was estimated based on prices of

about $567 and $523 msf for the West and East United States, respectiv ely , 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.TSCA Title VI Proposed Implementation Rule EA 2

- 77



### Number of Particleboard Mills and Affected Production Volume



### The particleboard market is still recovering from a significant slump that began in 2008.

According to RISI ( 2011d ), particleboard consumption was 2,570 million square feet (mmsf) in 2010 and

is forecast to increase 3.3 percent in 2011 to 2,650 mmsf and a further 10.3 percent to 2,930 mmsf in

2012. Since the rule is scheduled to be implemented in 2013 this analysis uses the RISI ( 2011d ) estimate

for 2012 to estimate the affected domestic particleboard production, which is the final year included in

RISI’s ( 2011d ) forecast. To estimate U.S. production, the consumption figure is reduced to account for

the 15 percent of domestic consumption that is attributable to imports accordin g to RISI’s ( 2011d )

forecast of particleboard consumption from imports for 2011. The resulting estimate of U.S. production

which is used in this analy sis is 2,490 mmsf.

Table 2

- 51 presents the estimated production affected for each analytical option. These results

are estimated by combining the pr oduction estimates described above and the emissions standards and

levels reported by mills in EPA’s ( 2010a ) Pressed Wood Manufacturing Industry Survey (PWMIS). EPA

administered this survey between June and October 2010 to domestic producers of composite wood

panels. The survey achieved a response from all 30 par ticleboard mills that were identified as operating

in the U.S. 26 

### The survey asked about current emissions levels and about planned levels. Since many

composite wood product mills were in the midst of modifying their production technology and raw

materials to achieve compliance with Phase 2 of the CARB ATCM when they completed the

questionnaire

, using data on their emission levels at the time they responded to the survey would not

accurately reflect the 2013 baseline. Instead , baseline emission levels are estimated using responses to a

question in the survey about the emissions levels mills planned to achieve within the next three years of

when they completed the survey (i.e., three years from 2010) . These emissions levels were weighted by

the production l evels the mills reported in the survey, in order to estimate the average emission levels by

certification standard. The survey data were also used to estimate the share of total production volume

represented by products meeting each of the emissions stand ards.

Note that the mills that reported manufacturing product that was not CARB certified also reported

that they planned to manufacture product that met the CARB 2 emissions requirements. That is, they

reported that it was not worthwhile for them to p ay for testing and third party certification even though

their products are being manufactured to meet the emissions standards. Thus, their production costs would

only be affected under the analytical option where NAF resins were required.

26 The number of mills for each product type is limited to those that are subject to the TSCA Title VI emis sion 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.TSCA Title VI Proposed Implementation Rule EA 2

- 78



### 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 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

- 2,324

a Note that mills reporting manufacturing product that was not CARB certified were meeting the CARB 2 emissions

levels, which explains why production is only affected under Option NAF.

b Some mills producing product currently certified under CARB 1 reported that they would continue this product line

after the CARB 2 e ffective date (although it would no longer be certified as CARB 1).

Option SCUR is the proposed option.

Sources: R ISI 2011a

, d

, U.S. Environmental Protection Agency 2010a



### Industry market reports indicate that panels that are not CARB 2 certified are generally not

available (RISI 2011), implying that few mills are offering product that is not CARB 2 certified. The

analysis assumes that between 10 and 25 percent of the 30 U.S. mills, or between 3 and 7 mills, are

offering product that i s not CARB certified and uses the midpoint number of 5 mills for estimating the

cost impacts

According to CARB’s list of certified mills, four mills are certified to produce NAF particleboard

– two of these mills are certified to produce both CARB 2 and CARB NAF particleboard.

Estimated Costs for Changing Production Processes and Raw Materials



### This analysis estimates the increased costs for changing production processes and raw materials

to meet the more stringent emissions requirements using RISI’s ( 2011a ) data for industrial particleboard

prices in the southeast, where RISI reported producers were more successful in passing through the higher

costs of producing CARB 2 certified particleboard. According to RISI, mills were partially successful in

passing along the higher costs in the fourth quarter of 2010, and were expected to be more successful in

passing along these costs in the f irst quarter of 2011, as almost all particleboard supply would be CARB 2

certified as of 2011 ( RISI 2011a

, b ). RISI’s ( RISI 2011c ) historical prices for particleboard indicate that

particleboard prices in the Southeast increased from about $315/msf to $335/msf between Octobe r 1,

2010 and March 18, 2011, an increase of about $20/msf. RISI attributes this increase primarily to the

transition to CARB 2, and therefore this analysis will use $20/msf as the estimated increased cost of

manufacturing CARB 2 particleboard for these m ills ( RISI 2011a

, b ).

This analysis assumes that producing NAF particleboard has twice the incremental costs of

producing CARB 2 particleboard, or $2 0/msf to transition from CARB 2 to CARB NAF and $40/msf to

switch from production that does not meet CARB 2 emissions standards to CARB NAF production.TSCA Title VI Proposed Implementation Rule EA 2

- 79



### Table 2

- 52 : Incremental Increase in Production Costs fo r 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

SCUR Options CI

and CE Options NI

and NE Options SI,

SE, SP, SC,

SCR, SEUR,

SFCC , and

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

- 2,324 $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 that their emissions were below the Title VI emission requirements, and this is why this

production is only affected under options NI and NE.

b Some mills producing product currently certified under CARB 1 reported that they would continue this product line after the

CARB 2 effective date (although it would no longer be certified as CARB 1).

Option SCUR is the proposed option.

Sources: RISI 2011a

, b

, U.S. Environmental Protection Agency 2010



### 2.3.1.4 Summary of Production Process and Raw Material Costs for Composite Wood Panel

Producers



### Table 2

- 53 presents a summary of the annualized increase in production process and raw material

costs for composite wood panel producers by analytical option.

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 SCUR Options

CI and CE Options

NI and NE Options

SI, SE, SP,

SC, SCR,

SEUR,

SFCC

,
and SCUR Options

CI an d CE Options

NI and NE Options

SI, SE, SP,

SC, SCR,

SEUR,

SFCC

,
and SCUR 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 SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 80



### 2.3.2 Certification and Testing Costs for Composite Wood Panel Producers

Table 2

- 54 presents a summary of the incremental initial, subsequent year, and annualized costs

associated with testing and certification for the different analytical options under various scenarios for the

products affected. See section 2.2 for a description of how these costs were estimated.

To determine the baseline product certification status all mills were assumed to have two product

lines, and the bas eline certification status of their product lines was determined by their certification status

according to CARB’s ( 2011b ) list of certified mills and CARB’s ( 2011c ) list of no

- added formaldehyde

(NAF) and ultra low emitting formaldehyde (ULEF) exemptions. For example, if a mill only had a Phase

2 certification listed, it was assumed that they had two product lines with the standard certification.

(Standard certification refers to certification where mills are not e xempt from any routine testing

requirements, i.e., not NAF or ULEF certification.) Another example is a mill that is listed as Phase 2

certified and also listed as having NAF exempt status would be assumed to have one NAF line and one

standard certificati on line (NAF certified mills are exempt from some routine testing requirements). The

exception to this is particleboard, where it is assumed that 5 of the 25 particleboard mills with standard

certification status also produce a product line that is not ce rtified. Mills that certify their products as

ULEF under the CARB ATCM are exempt from some routine testing requirements under the CARB

ATCM. Under the proposed TSCA Title VI rule these ULEF exemptions will not be available so these

mills will no longer be exempt from some routine testing unless they obtain NAF certification. The

analysis assumes that mills will seek standard certification for baseline uncertified and baseline ULEF

product lines

– with the exception of mills that have one product line th at is ULEF certified and another

product line that is NAF certified in the baseline. These mills are assumed to seek NAF certification for

their product line that was ULEF certified in the baseline, so they will have two product lines with NAF

certificati on. Note that switching to NAF certification results in an estimated certification and testing cost

savings because NAF products are not required to be tested as frequently as products with other

certifications.

Under the CARB ATCM mills may ship panels from certified product lines before test results are

available, but under the proposed rule they would have to wait until test results indicate that the emissions

standards have been met before shipping a lot that has been tested. MDF and particleboard mi lls are all

assumed to conduct daily quality control testing on site, so this requirement is not expected to adversely

affect these mills. (Once a quarter these mills will also have to store lots for which a sample has been sent

to a TPC for large chamber testing until the test results indicate that the emissions standards have been

met for the lot that has been tested.) However, CARB certified hardwood plywood mills are assumed to

outsource quality control testing to their TPC. It is uncertain how often hardwood plywood mills ship

product from a lot being tested before the test results are available and therefore it is uncertain how mills

will choose to comply with this requirement. It may be the case that some mills normally maintain a level

of invento ry where they would typically not ship any panels before test results have been determined for

that lot, but other mills may ship out panels on the same day they are produced. This analysis estimates

the costs of this requirement as the incremental cost o f installing a lab on site and conducting daily quality

control testing rather than outsourcing weekly quality control testing to a TPC. (Once a quarter these

mills will also have to store lots for which a sample has been sent to a TPC for large chamber t esting until

the test results indicate that the emissions standards have been met for the lot that has been tested.)

Assuming that mills conduct daily on

- site testing may overstate the costs of this requirement if some mills

find it more cost effective to hold products in inventory until test results have been determined by an

outside lab.TSCA Title VI Proposed Implementation Rule EA 2

- 81



### To be comparable with the benefits estimates, which were estimated for 30 year period, all costs

were annualized over a 30 year period. The results presented in Table 2

- 55 are calculated by multiplying

the number of affected entities by the corresponding cost increase or savings presented in Table 2

- 54

.TSCA Title VI Proposed Implementation Rule EA 2

- 82



### Table 2

- 54 : Per Mill Costs for Certifying and Testing Products, by change in product line certification 2010$)

Analytical

Option Product Type Baseline Product Lines

(CARB ATCM certification) Post

- Rule Product Lines

(TSCA Title VI

certification) First Year

Costs Subsequent

Year Costs 30

- Year Annualized

Costs (Annualized

over 30 Years Using

3 Percent Discount

Rate

3 Percent 7 Percent

SI, SE, SP,

SC, and

SCR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. $10,832 $832 $1,263 $1,467

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. $42,015 $7,062 $8,367 $8,972

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. $5,185 $4,485 $4,301 $4,200

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. $62,124 $52,124 $50,065 $48,934

MDF 2 prod. with ULEF cert. 2 prod. with standard cert. $48,630 $48,630 $46,269 $45,003

Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. $48,630 $48,630 $46,269 $45,003

Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. $23,128 ($1,974) ($695) ($77)

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. $13,321 ($1,938) ($1,125) ($730)

SFCC Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. $33,460 $7,062 $7,964 $8,376

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. $5,185 $4,485 $4,301 $4,200

SEUR,

SFCC, and

SCUR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. $10,832 $832 $1,263 $1,467

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. $42,015 $7,062 $8,367 $8,972

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. $5,185 $4,485 $4,301 $4,200

CI and CE Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. $81,614 $62,782 $60,622 $59,412

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. $5,185 $4,485 $4,301 $4,200

NI and NE Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. $42,015 $7,062 $8,367 $8,972

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. ($26,827) ($47,699) ($44,400) ($42,687)

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. $25,918 ($3,595) ($2,030) ($1,270)

MDF 2 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 Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. $23,128 ($1,974) ($695) ($77)

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. $13,321 ($1,938) ($1,125) ($730)

MDF 1 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 exempt from any ongoin g testing requirements (i.e., not ULEF

or NAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exempt from some of the routine testing requirements. ULEF

certified mills have reductions or exemptions from some of the routine testing requirements.

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 83



### Table 2

- 55 : Annualized Costs for Certifying and Testing Products, by analytical option and number of affected mills (thousands, 2010$)

Analytical

Option Product Type Baseline Product Lines

(CARB ATCM certification) Post

- Rule Product L ines

(TSCA Title VI

certification) Number of

Affected

Firms Number of

Affected

Mills 30

- Year Annualized Costs

(Annualized over 30 Years Using 3

Percent Discount Rate

3 Percent 7 Percent

SI, SE, SP,

SC, and

SCR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 $13 $15

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $92 $99

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $22 $21

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. 6 8 $401 $391

MDF 2 prod. with ULEF cert. 2 prod. with standard cert. 1 2 $93 $90

Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. 1 1 $46 $45

Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 ($3) ($0)

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 ($1) ($1)

Total $661 $660

SFCC Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $88 $92

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $22 $21

Total $109 $113

SEUR,

SFCC, and

SCUR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 $13 $15

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $92 $99

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $22 $21

Total $126 $134

CI and CE Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. 9 11 $667 $654

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $22 $21

Total $688 $675

NI and NE Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $92 $99

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 5 ($222) ($213)

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. 6 8 ($16) ($10)

MDF 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 2 ($5) ($4)

Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 ($3) ($2)

Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. 8 10 ($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 Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 ($3) ($0)

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 ($1) ($1)

MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 1 ($45) ($43)

Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 2 ($90) ($87)

Total ($2,407) ($2,294)

Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exemp t from any ongoing testing requirements (i.e., not ULEF or

NAF certification). NAF certification refers to mills that are certifying their products as NAF; these mills will be exempt from some of the routine testing requirements. ULEF

certified mills have reductions or exemptions from some of the routine testing requirements.

Option SCU R is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 84



### 2.3.3 Total Costs for Composite Panel Producers

The incremental costs associated with changing production processes and raw materials presented

in Table 2

- 48

, Table 2

- 50 , and Table 2

- 52 are combined with the certification and testing costs presented

in Table 2

- 54 and Table 2

- 55 to estimate the total first and subsequent year costs presented in Table 2

- 56

and the 30

- year annualized costs presented in Table 2

- 57 . Note that the production process and raw

material costs presented in Table 2

- 48

, Table 2

- 50 , and Table 2

- 52 are assumed to be equally distributed

across the mills incurring these costs to calculate the estimates presented in Table 2

- 56 and Table 2

- 57

.TSCA Title VI Proposed Implementation Rule EA 2

- 85



### Table 2

- 56 : Total First and Subsequent Year Costs f or Composite Panel Producers, by analytical option and number of affected mills

(thousands, 2010$)

Analytical

Option Product Type Baseline Product Lines

(CARB ATCM certification) Post

- Rule Product Lines

(TSCA Title VI certification) Number of

Affected

Fir ms Number of

Affected

Mills Total Costs

First Year Subsequent

Years

SI, SE, SP,

SC, and

SCR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 $108 $8

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $667 $283

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $926 $922

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. 6 8 $497 $417

MDF 2 prod. with ULEF cert. 2 prod. with standard cert. 1 2 $97 $97

Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. 1 1 $49 $49

Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 $116 ($10)

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 $13 ($2)

Total $2,473 $1,765

SFCC Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $573 $283

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $926 $922

Total $1,499 $1,205

SEUR,

SFCC, and

SCUR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 $108 $8

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $667 $283

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $926 $922

Total $1,701 $1,213

CI and CE Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. 9 11 $898 $691

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $26 $22

Total $924 $713

NI and NE Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $21,596 $21,212

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 5 $8,344 $8,240TSCA Title VI Proposed Implementation Rule EA 2

- 86



### Table 2

- 56 : Total First and Subsequent Year Costs f or Composite Panel Producers, by analytical option and number of affected mills

(thousands, 2010$)

Analytical

Option Product Type Baseline Product Lines

(CARB ATCM certification) Post

- Rule Product Lines

(TSCA Title VI certification) Number of

Affected

Fir ms Number of

Affected

Mills Total Costs

First Year Subsequent

Years

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. 6 8 $15,578 $15,342

MDF 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 2 $21,795 $21,758

Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 $1,711 $1,692

Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. 8 10 $18,982 $18,664

MDF 2 prod. with standard cert. 2 prod. with NAF cert. 8 13 $141,064 $140,792

Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. 11 20 $33,288 $32,871

Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 $9,722 $9,597

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 $10,896 $10,880

MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 1 $10,851 $10,834

Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 2 $3,329 $3,295

Total $297,155 $295,176

Note: Numbers in parentheses represent cost savings. Standard certification refers to certification where mills are not exem pt from any ongoing testing requirements (i.e., not ULEF

or NAF certification). NAF certification refers to mills that are certify ing their products as NAF; these mills will be exempt from some of the routine testing requirements. ULEF

certified mills have reductions or exemptions from some of the routine testing requirements.

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 87



### Table 2

- 57 : Total Annualized Costs for Composite Panel Producers, by analytical option and number of affected mills (thousands,

2010$)

Analytical

Option Product Type Baseline Product Lines

(CARB ATCM certification) Post

- Rule Product Lines

(TSCA Title VI certification) Number of

Affected

Firms Number of

Affected

Mills 30

- Year Annualized

Costs (Annualized over

30 Years Using 3

Percent Discount Rate

3 Percent 7 Percent

SI, SE, SP,

SC, and

SCR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 $13 $15

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $287 $288

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $878 $854

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with standard cert. 6 8 $401 $391

MDF 2 prod. with ULEF cert. 2 prod. with standard cert. 1 2 $93 $90

Particleboard 2 prod. with ULEF cert. 2 prod. with standard cert. 1 1 $46 $45

Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 ($3) ($0)

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 ($1) ($1)

Total $1,712 $1,682

SFCC Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $283 $282

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $878 $854

Total $1,160 $1,136

SEUR,

SFCC, and

SCUR Hardwood Plywood 2 prod. with standard cert. 2 prod. with standard cert. 8 10 $13 $15

Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $287 $288

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $878 $854

Total $1,178 $1,157

CI and CE Hardwood Plywood 2 prod. without cert. 2 prod. with standard cert. 9 11 $667 $654

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with standard cert. 3 5 $22 $21

Total $688 $675

NI and NE Hardwood Plywood 2 prod. without cert. 2 prod. with NAF cert. 9 11 $20,200 $19,657

Particleboard 1 prod. without cert.; 1 prod. with standard cert. 2 prod. with NAF cert. 3 5 $7,845 $7,633

Hardwood Plywood 2 prod. with ULEF cert. 2 prod. with NAF cert. 6 8 $14,608 $14,214

MDF 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 2 $20,703 $20,138

Particleboard 2 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 $1,611 $1,567

Hardwood Plywood 2 prod. with standard cert. 2 prod. with NAF cert. 8 10 $17,773 $17,294

MDF 2 prod. with standard cert. 2 prod. with NAF cert. 8 13 $133,971 $130,311

Particleboard 2 prod. with standard cert. 2 prod. with NAF cert. 11 20 $31,295 $30,448

Hardwood Plywood 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 4 5 $9,137 $8,890

MDF 1 prod. with NAF cert.; 1 prod. with ULEF cert. 2 prod. with NAF cert. 1 1 $10,353 $10,070

MDF 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 1 $10,309 $10,027

Particleboard 1 prod. with standard cert.; 1 prod. with NAF cert. 2 prod. with NAF cert. 1 2 $3,137 $3,052

Total $280,941 $273,301

Note: Numbers in parentheses represent cost savings.

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 88



## 2.4 Estimated Costs for Wood Veneer Laminated Product Producers

This section presents the estimated costs to wood veneer laminated product producers under

several analytical options. For this analysis a wood veneer laminated product is defined as a product

made by gluing a wood or woody grass veneer to the face and/or back of a purchased platform to produce

a finished product or component part (other than a stock hardwood plywood panel). 27 

### Wood veneer

laminated product producers are considered composite wood product fabricators rather than hardwood

plywood manufacturers under the CARB ATCM, and they are not required to meet the ATCM’s

emissions standards.

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

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

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

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

with certified platforms).

The estimated number of companies making wood veneer laminated products was presented

above in Section 2.1.2 . Section 2.3.1 presents the estimated costs to wood veneer laminated product

producers for making changes to raw materials. Section 2.4.2 presents the estimated costs of testing and

third party certification for wood veneer laminated product producers. Finally, the total estima ted costs

for wood veneer laminated product producers are presented in section 2.4.3

.

2.4.1 Costs of Changes to Raw Materials for Wood Veneer Laminated Product

Producers

This section presents the estimated costs to wood veneer laminated product producers for making

changes to raw materials. These costs are estimated as the costs of switching face resins from UF to PVA

resin systems and switching from con ventional to lower emitting platforms.

Because the emissions standard for hardwood plywood (0.05 ppm) is lower than the standards for

particleboard (0.09 ppm) and MDF (0.11 to 0.13 ppm), wood veneer laminated products included in the

definition of hardw ood plywood could conceivably exceed the emission standard even if a NAF resin

such as PVA was used to affix the veneer to a certified particleboard or MDF platform. (Whether this

occurs in practice depends on how effectively the veneer acts as a barrier to the release of formaldehyde,

and how far below the standards the actual emissions from the platform are.)

This analysis uses the term “ low emission platforms ” to mean platforms with emissions low

enough that wood veneer laminated products made from t hem meets the applicable hardwood plywood

emission standard. For the standard certification, low emission platforms are assumed to include certified

veneer platforms, particleboard and MDF platforms certified as ULEF under the CARB ATCM, and

particleboard and MDF platforms certified as NAF. For analytical options requiring wood veneer

laminated products to meet NAF emission levels, low emission platforms would include particleboard,

MDF and veneer platforms certified as NAF.

Wood veneer laminated produ ct producers switching from UF to PVA face resins and purchasing

low emission platforms would not need to make any significant modifications or upgrades to existing

equipment or processes because PVA resins are generally a “drop

- in” technology for plants c urrently

using UF face resins. Thus, the estimated raw material costs are only for purchasing the more expensive

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

veneer, such as high pressure laminate, thermally fused paper, vinyl film, decorative foil, or polypropylene film.TSCA Title VI Proposed Implementation Rule EA 2

- 89



### face resins and platforms. Note that switching to PVA face resins is just one possibility for achieving

compliance. Some producers may achie ve compliance by using enhanced urea formaldehyde resins,

melamine

- urea

- formaldehyde (MUF) resins, soy

- based resins, or other resin systems. However, the cost

of switching to PVA resins can provide a reasonable approximation for the compliance cost associ ated

with changing raw materials and production processes and therefore is the basis for the cost estimates in

this analysis.

Section 2.4.1.1 pre sents the estimated production of wood veneer laminated products. This

information is used to estimate the increase in raw material costs as a result of the proposed rule. Section

2.4.1.2 presents the estimated raw material costs to wood veneer laminated product producers by

analytical option.

2.4.1.1 Wood Veneer Laminated Product Production Volume



### This analysis estimates the production volume of wood ve neer laminated product producers

separately for the following primary categories of wood veneer laminated product producers listed below:

 Custom Panel Producers

 Engineered Wood Flooring Producers

 Composite Wood Product Fabricators

 Cabinet Manufacturers

 Household Furniture Manufacturers

 Office and Institutional Furniture Manufacturers

 Window and Door Manufacturers

 Architectural Woodwork and Millwork Manufacturers

Custom Panel Manufacturers



### Custom panel producers are defined here as producers that make custom hardwood plywood

panels to order by affixing veneer to purchased platforms. They make hundreds of different combinations

of platform types (particleboard, MDF, veneer

- core), platform ch aracteristics (e.g., moisture resistance,

fire resistance, density, other mechanical properties, and formaldehyde emissions), platform thickness,

species of veneer, etc. A firm might use more than a dozen different types of particleboard and MDF

platforms (not counting differences in thickness, size, density, etc.), and a much larger number of

different types of veneer

- core platforms. The specific characteristics of each order are determined by the

customer. Custom panel producers might make as little as four or five sheets of a given product, and can

make dozens or even hundreds of different combinations of platform type, thickness, and veneer species

in a single day. They often manufacture and ship a product within a few days of receiving an order.

Cu stom panel producers are generally small businesses.

Consultations with industry members indicate that there are about 50 custom panel producers,

although estimates ranged from 20 to 100. Industry members estimated that the typical production

volume fo r these producers ranges from less than 1 million to 15 million square feet (mmsf) per year,

with the production of most producers falling near the lower end of this range. Therefore, it is assumed

that average mill production volume is 2 mmsf on a 5/8” b asis, resulting in an estimate that total

production volume by custom panel producers is 100 mmsf per year on a 5/8” basis.TSCA Title VI Proposed Implementation Rule EA 2

- 90



### Engineered Wood Flooring Producers



### According to U.S. International Trade Commission ( 2008 ), engineered wood flooring production

was estimated to be 258 mmsf in 2 006. Based on conversations with HPVA, it is estimated that 2010

production levels for the hardwood plywood industry overall were about 60 percent of their 2006 levels,

which would imply engineered wood flooring production of about 155 mmsf on a 3/8" basi s. About 30

percent of engineered wood flooring production is estimated to be manufactured as a wood veneer

laminated product (while the other 70 percent of production is manufactured as a product meeting the

CARB definition of hardwood plywood). Thus, the quantity of engineered wood flooring made as a

wood veneer laminated product is estimated to be about 47 mmsf on a 3/8” basis, or 28 mmsf if calculated

on a 5/8” basis. Since it is estimated that there are about 18 domestic engineered wood flooring pr oducers

making wood veneer laminated products, it follows that the estimated average production volume per

firm is about 1.6 mmsf per year on a 5/8” basis.

Other Wood Veneer Laminated Product Producers



### The production volume of other wood veneer laminated products (other than other than custom

panel and engineered wood flooring) is estimated based on Census data on the quantity of veneer

consumed in the industry. Figure 2

- 2 presents the methodology employed for estimating the consumption

of hardwood veneer by these other wood veneer laminated product manufactures. First, the data on the

dollar value of total hardwood veneer produced is obtained and the average cost per square foot of

hardwood veneer is estimated. These data are combined to estimate the total quantity of hardwood veneer

produced. Next, the quantity of hardwood veneer that is imported is added to the total domestic

hardwood veneer produc tion, and then the quantity of hardwood veneer that is exported is subtracted.

This total reflects the estimated domestic consumption of hardwood veneer. Then, the dollar value of

hardwood veneer consumed by hardwood veneer and plywood producers is combine d with the estimated

average hardwood veneer cost per square foot to generate the estimated consumption of hardwood veneer by hardwood plywood producers. To estimate the quantity of veneer consumed by wood veneer laminated

product producers, the quantity o f hardwood veneer consumed by hardwood plywood producers is

subtracted from the quantity of total hardwood veneer consumed domestically. Note that this may

overstate the quantity of wood veneer laminated product production because veneer is also used in t he

manufacture of items that are not covered by the rule, such as statutorily exempt items, hobbyist uses, and

furniture repair.

The total dollar value of hardwood veneer produced is $1,075,909 thousand according to the 2007

Economic Census ( U.S. Census Bureau 2009b ). The corresponding cost per square foot of veneer is

estimated using U.S. ITC trade data on the value and quantity of veneer exported in 2007. According to

the U.S. ITC, 972, 952,757 square feet of veneer was exported in 2007, with a value of $438,302

thousand. 28 

### This results in an average veneer cost of $0.45 per square foot. Veneer costs vary widely

depending on the species, cut or pattern, and quality of the wood. While some laminators may primarily

use veneer that is priced higher than the estimated average of $0.45 per square foot, other laminators will

use veneer that is below this average cost. By combining the total dollar value of hardwood veneer

produced ($1,075,909 th ousand) and the average price of hardwood veneer ($0.45), the analysis estimates

that domestic production of hardwood veneer is 2,390,909 thousand square feet (msf).

Data on hardwood veneer imports and exports was obtained from the U.S. ITC Interactive Ta riff

and Trade Dataweb. According to U.S. ITC trade data, the quantity of U.S. hardwood veneer imports for

2007 was 656,721 msf, while the quantity of U.S. hardwood veneer exports was 986,223 msf. 29 

### The

28 Excludes tropical hard wood veneer.

29 Includes “Tropical Hardwood Veneer.”TSCA Title VI Proposed Implementation Rule EA 2

- 91



### estimated domestic hardwood veneer consumption of 2,06 1,407 msf is calculated by adding the imports

and subtracting the exports from the domestic hardwood veneer production.

The dollar value of hardwood veneer consumed by hardwood veneer and plywood manufacturers,

$626,244 thousand, is available from the 2007 Economic Census ( U.S. Census Bureau 2009e ). The

corresponding cost per square foot of veneer for hardwood plywood manufacturers is estimated using

U.S. ITC trade data on the value and quantity of veneer exported in 2007. By combining the total dollar

value of hardwood veneer consumed by the hardwood veneer and plywood manufacturers ($626,244

thousand) and the average price of exported hardwood veneer ($0.45), the analysis estimates that

consumption of hardwood vene er by plywood manufacturers is 1,391,653 msf. Thus, total domestic

veneer consumption by wood veneer laminated product producers is estimated to be 669,753 msf.TSCA Title VI Proposed Implementation Rule EA 2

- 92



### Figure 2

- 2 : Estimating Quantity of Harwood Veneer Consumed by Other Wood Veneer Laminated Product Producers (excluding

engineered wood flooring and custom panel producers)TSCA Title VI Proposed Implementation Rule EA 2

- 93



### To estimate the volume of wood veneer laminated product produced per volume of veneer

consumed it is assumed that about 30 percent of the veneer is lost during the production process due to

trimming, etc. It is also assumed that all wood veneer laminated product producers affix both a face and a

back veneer, so for each square foo t of veneer consumed, 0.35 (0.35 = half of 70%) square feet of wood

veneer laminated product is produced. Note that wood veneer laminated product producers may often

only affix a face veneer, but the estimated costs of switching adhesives are not affected by this

assumption since the number of glue lines assumed and the estimated quantity of product manufactured

are inversely related; 30 

### however, the estimates of platform costs are affected by this assumption.

Table 2

- 58 presents the estimated production of wood veneer laminated products other than

custom panels and engineered wood flooring, using the estimate of domestic consumption of hardwood

veneer by laminators.

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



### T he estimated production of 234,414 msf from Table 2

- 58 is disaggregated in Table 2

- 59

according to the relative share of the total value of hardwood veneer consumed by employer

establishments in the various wood veneer laminated product industries.

30 For a given quantity of veneer, a manufacturer that affixes only a face veneer produces twice the square footage of

laminated product as a manufacturer affixing both face and back veneers. But the former incurs half the cost per square

foot for glue comp ared to the latter. Thus, both manufacturers have the same cost for glue.TSCA Title VI Proposed Implementation Rule EA 2

- 94



### 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 Vene er

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 201 1b



### 2.4.1.2 Estimated Raw Materials Costs for Wood Veneer Laminated Product Producers



### Since wood veneer laminated product producers make higher value

- added products compared to

stock hardwood plywood panels, keeping resin costs low is not as critical to the ir competitiveness as it is

for stock panel producers. Many producers of wood veneer laminated products are believed to use PVA,

which is a NAF resin, as a face adhesive. PVA resin is more expensive than UF resin, but it has a number

of advantages: PVA i s easy to work with, easy to clean up, and the press temperature can be kept low.

However, some producers still use UF resins. For the purpose of cost estimation, it is assumed that if

wood veneer laminated products are not excluded from the definition o f hardwood plywood, virtually all

producers using UF resins will switch adhesive technologies in order to meet the emissions standards in

TSCA Title VI.TSCA Title VI Proposed Implementation Rule EA 2

- 95



### The main steps to estimating the change in raw material costs to wood veneer laminated product

produ cers under an analytical option where switching to NAF resins is the likely compliance strategy are

as follows:

1. Estimate the total production volume from facilities that are expected to continue to use UF resins

in the absence of a national rule.

2. Assumin g that mills using UF resins will switch to PVA resins, estimate unit cost of switching

from UF to PVA resins.

3. Estimate the production volume that will need to switch to low emission platforms in order to

achieve the hardwood plywood emission standard.

4. Estimate unit cost of switching to a low emission platform to achieve the hardwood plywood

emission standard.

5. Estimate total cost of switching from UF to PVA resins and low emission platforms by

multiplying the unit costs with the production volume that i s subject to the changes.

Note that switching to PVA face resins is just one possibility for achieving compliance with the

Phase 2 emissions standards. Some producers may achieve compliance by using enhanced urea

formaldehyde resins, melamine

- urea

- formald ehyde (MUF) resins, soy

- based resins, or other resin

systems. However, the cost of switching to PVA face resins can provide a reasonable approximation for

the compliance cost associated with changing raw materials and production processes and therefore is the

basis for the cost estimates in this analysis.

Production Volume Switching to PVA resins



### Table 2

- 60 presents the estimated quantity of wood ven eer laminated products currently

manufactured using UF resins, based on the estimated production volumes presented in section 2.4.1.1

and on conver sations with industry contacts about the share of products made using UF resins.TSCA Title VI Proposed Implementation Rule EA 2

- 96



### Table 2

- 60 : Estimating Wood Veneer Laminated Product Production Volume Manufactured

Using 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 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 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 pr oduction

uses formaldehyde

- added resins.

Cabinets 56,259 45% 25,317 About 45% of cabinet producers use

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

formaldehyde

- added resins, similar to

cabinet producers.

Office and Institutional

Furniture 44,539 5% 2,227 BIFMA ( 2010 ) reported formaldehyde

added resins were used very little if at all

for office and institutional furniture. Thus,

5% of production is assumed to be

produced with formaldehyde

- added resins.

Wood Window and

Door Manufacturing 53,915 45% 24,262 Informatio n on resin use by window and

door producers was limited, so it is

assumed that 45% of producers use

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

formaldehyde

- added resins, similar to

office and institutional furniture producers.

Total 362,414 107,482



### Production Volume Switching to Low Emission Platforms



### Under options SI, CI, and NI wood veneer laminated product producers would be considered

hardwood plywood producers, and therefore producers using composite core platforms might need to

switch to ULEF or NAF composite core platforms in order to meet the emissions standard. Under Option

SP, this would be the case only for custom panel producers since other wood veneer laminated productTSCA Title VI Proposed Implementation Rule EA 2

- 97



### producers would be considered fabricators under this option. Howeve r, under options SI, SP, CI, and NI

producers using veneer core platforms that meet the CARB 2 emissions standards but are not NAF or

ULEF platforms are expected to be able to achieve the emissions standards without switching platforms.

Under Option SN, h owever, wood veneer laminated product producers would also have to use NAF face

veneer and NAF platforms to be exempt from the definition of hardwood plywood. Under o ption s SC

, SCR , and SCUR (the proposed option), wood veneer laminated products would be exempted from the

emissions standards if they were made with NAF face resins and platforms compliant with the TSCA

Title VI emissions standards. But since all platforms will be compliant with the emissions standards after

the Title VI rule takes effect, the only estimated incremental costs are for switching to NAF res ins. It is

assumed that under o ptions SN, SC, SCR, and SC U R most wood veneer laminated product producers that

were not already doing so would use NAF platforms (Option SN) and /or NAF face resins (options SN,

SC

, SCR, and SC U R ) in order to avoid being categorized as hardwood plywood producers.

To summarize, the affected wood veneer laminated product producers are generally expecte d to:

 switch to ULEF and NAF composite core platforms under options SI, SP, CI, and NI

 switch to using NAF face resins and NAF platforms under Option SN, and

 make no changes to platforms under options SC , SCR, and SC U R , as TSCA Title VI compliant

platfo rms would be needed to qualify for the exemption, but all baseline platforms are assumed to be

TSCA Title VI compliant.

The resulting estimates and a detailed description of the underlying calculations are presented

below in Table 2

- 61 (for options SI, SP, CI, NI), and Table 2

- 62 (for Option SN).TSCA Title VI Proposed Implementation Rule EA 2

- 98



### Table 2

- 61 : Wood Veneer Laminated Product Production Switching to Low Emission Platforms:

Options SI, SP, CI, and NI

Product

Category Production

(msf, 5/8”) Production

Switching to Low

Emission Platforms Description of Estimated Percentages a, b

(%) (msf)

Architectural

Panels /

Custom

Panels 100,000 35.5% 35,500 Based on conversations with HPVA Personal Communication with HPVA 2011a ), 40% of

hardwood plywood is composite core, and this is also assumed to be th e 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 particleboar d 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 woo d 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 particle board 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, respectivel y. 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 Furnit ure 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 calculat ed 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. Th us, 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 Architectu ral 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 calculate d 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 materi als consumed. Values were

converted to volumes using prices of $480, $445, and $315 msf for hardwood plywood, MDF, and particleboard, respectively. Th e price of hardwood

plywood was estimated using the total 2007 export values and quantities from U.S. IT C ( 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 or ULEF resins was estimated from EPA’s ( 2010a ) survey of composite wood product

producers. Since the percen tage of ULEF production was not distinguished from other CARB 2 certified added

- formaldehyde production in EPA’s

( 2010a ) survey of composite wood product producers, it was estimated that 37% of CARB 2 certified added

- formaldehyde production is ULEF since 7

of the 19 CARB 2 certified mills that are not NAF exempt ar e ULEF exempt according to CARB’s lists of certified mills and ULEF and NAF mills.

This analysis uses the term “ low emission platforms ” to mean platforms with emissions low enough that wood veneer laminated products made from

them meets the applicable hardwood plywood emission standard.

Sources: California Air Resources Board 2011b , U.S. Census 2009e , U.S. EPA 2010a , U.S. ITC 2010

, and RISI 2011aTSCA Title VI Proposed Implementation Rule EA 2

- 99



### 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 co re, 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 p ercentage 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 hard wood

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 particlebo ard 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

mad e 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 hard wood plywood,

MDF and particleboard are not made with NAF resins. Thus, 80.4% is calculated as the

sum of the three products of: (1) 37.5% and 60.6%, (2) 22.19% and 90.7%, and (3)

40.28% and 93.3%.

Wood

Window and

Door

Manufacturing 53,915 86.7% 46,744 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed

in the Window and Door Manufacturing Industry (NAICS 321911) is 17.45% hardwood

plywood, 33.09% MDF and 49.46% particleboard. It was estimated that 60.6%, 90.7%,

and 93.3% of hardwood plywood, MDF and particleboard are not made with NAF

resins. Thus, 86.7% is calculated as the sum of the three products of: (1) 17.45% and

60.6%, (2) 33.09% and 90.7%, and (3) 49.46% and 93.3%.

Custom

architectural

woodwork and

millwork

manufacturing 30,474 81.8% 24,928 It was estimated that the mix of Hardwood Plywood, MDF and particleboard consumed

in the Architectural Woodwork and Millwork Industry (NAICS 337212) is 33.3%

hardwood plywood, 22 .8% MDF and 44.0% particleboard. It was estimated that

60.6%, 90.7%, and 93.3% of hardwood plywood, MDF and particleboard are not made

with NAF resins. Thus, 81.8% is calculated as the sum of the three products of: (1)

33.3% and 60.6%, (2) 22.78% and 9 0.7%, and (3) 43.95% and 93.3%.

Total 362,414 285,422 Total

a The mix of composite wood products consumed were estimated using U.S. Census ( 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

44 1231). 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 2011aTSCA Title VI Proposed Implementation Rule EA 2

- 100



### 2.4.1.3 Summary of the Costs of Changing Raw Materials for Wood Veneer Laminated Product

Panel Producers



### Table 2

- 63 presents the estimated costs of changing raw materials for wood veneer laminated

product producers under the various analytical options. No material costs are incurred under options SE,

SEUR , SFCC, CE, and NE since wood veneer laminated product producers are not subject to any

emissions requirements under these analytical options. The total costs are highest under options SI, CI

and NI, where all wood veneer laminated product producers would be considered hardwood plywood

producers. Total costs are lowest under Option SP, where only custom producers would be considered

hardwood plywood producers. Under Option SN, where wood veneer laminated product producers would

need to switch to NAF resin s and platforms in order to avoid being classified as hardwood plywood

producers, the estimated cost of changes to raw materials is about $ 20 million per year . Under o ption s

SC , SCR, and SC U R (the proposed option), where wood veneer laminated product prod ucers would need

to use NAF face resins and Title VI certified platforms in order to avoid being classified as hardwood

plywood producers, the estimated cost of changes to raw materials is about $ 3 million per year

.TSCA Title VI Proposed Implementation Rule EA 2

- 101



### 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 Emissi on

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 Exempt from Definition of Hardwood Plywood

No changes in raw materials needed 0 $0 0 $0 $0

Option SI, CI, and NI: All Laminated Products are Included in Definition of Hardwood Plywood

Architectural Panels / Custom Panels 25,000 $30 35,500 $60 $2,880

Engineered Wood Flooring 7,000 $30 504 $60 $240

Cabinets 25,317 $30 37,131 $60 $2,987

Household Furniture 22,152 $30 28,502 $60 $2,375

Office and Institutional Furniture 2,227 $30 24,764 $60 $1,553

Window and Door Manufacturers 24,262 $30 39,520 $60 $3,099

Architectural Woodwork and Millwork 1,524 $30 18,102 $60 $1,132

Total Annual Costs 107,482 $30 184,023 $60 $14,266

Option SP: Laminated Products are Exempt from Definition Except for Custom Panels

Architectural Panels / Custom Panels 25,000 $30 35,500 $60 $2,880

Engineered Wood Flooring

- - - - -

Cabinets

- - - - -

Household Furniture

- - - - -

Office and Institutional Furniture

- - - - -

Window and Door Manufacturers

- - - - -

Architectural Woodwork and Millwork

- - - - -

Total Annual Costs 25,000 $30 35,500 $60 $2,880

Option SN: Laminated Products Using Added Formaldehyde Resins or Platforms are Included in the Definition of

Hardwood Plywood

Architectural Panels / Custom Panels 25,000 $30 73,300 $60 $5,148

Engineered Wood Flooring 7,000 $30 17,136 $60 $1,238

Cabinets 25,317 $30 47,483 $60 $3,608

Household Furniture 22,152 $30 40,022 $60 $3,066

Office and Institutional Furniture 2,227 $30 35,809 $60 $2,215

Window and Door Manufacturers 24,262 $30 46,744 $60 $3,533

Architectural Woodwork and Millwork 1,524 $30 24,928 $60 $1,541

Total Annual Costs 107,482 $30 285,422 $60 $20,350

Option s SC

, SCR , and 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 emission standard. For the standard certification, low emissio n

platforms are assumed to include certified veneer platfo rms, 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 inc lude particleboard, MDF and veneer platforms certified as NAF.

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 102



### 2.4.2 Certification and Testing Costs for Wood Veneer Laminated Product Producers

Estimated certification and testing costs were presented in Section 2.2 for entities certifying 1 and

2 NAF products through a TPC, as well as for entities certifying 1 and 2 added formaldehyde products

through a TP C. As discussed in section 2.3.1 , wood veneer laminated product producers would be likely

to switch to a PVA resin technology if they are considered hardwood plywood producers under the

proposed rule. Nevertheless, it is po ssible that some wood veneer laminated product producers may

prefer to continue using added formaldehyde face resins for process or product reasons. Thus, testing and

certification costs are estimated under each analytical option assuming that two percent of producers

continue to use added formaldehyde resins. Table 2

- 64 presents costs associated with testing and

certification by the number of product lines that require certification. Since there is some uncertainty

about the number of product lines that would require a separate certification, this analysis presents the

total costs for each analytical option for certifying 1 and 2 different product li nes. To be comparable with

the benefits estimates, which were estimated for 30 year period, costs were annualized over a 30 year

period.

Table 2

- 64 : Estimated Wood Veneer Laminated Product Producer First an d

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 annualize d costs are higher for NAF certification and lower for added formaldehyde certification for

the 7 percent discount rate compared to the 3 percent discount rate.



### Table 2

- 65 presents the estimated annualized testing and certification costs by analytical option

under a variety of scenarios for the number of entities affected and the number of product lines that wo uld

require testing and certification. Under options SE, CE, SEUR, SFCC, and NE wood veneer laminated

product producers would not be required to do any testing. Under options SI, SP, SN, SC, SCR, SCUR,

CI and NI, it is assumed that all but two percent o f wood veneer laminated product producers would

switch to NAF resin technology and/or compliant or NAF platforms in order to reduce testing and

certification costs (options SI, SP, CI, and NI) or eliminate them (options SN

, SC

, SCR, and SC U R ).TSCA Title VI Proposed Implementation Rule EA 2

- 103



### Table 2

- 65 : Estimated Wood Veneer Laminated Product Producer Annualized Costs for

Testing and Certification (thousands, 2010$)

Analytical Option Total

Number

of

Affected

Entities Products

Lines

Requiring

Testing and

Certification Number of Affected Entities with

Testing and Certification costs by

Certification Type Costs Annualized Over

30 Years

(thousands, 2010$)

3%

Discount

Rate 7%

Discount

Rate

Option SE, 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 Mid

Range

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

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 SCUR is the proposed option.



### 2.4.3 Total Annualized Costs for Wood Veneer Laminated Product Producers

Table 2

- 66 presents the total estimated annualized costs by analytical option under a variety of

scenarios for the number of entities affected and the number of product lines that would require

certific ation. Under options SE, CE, SEUR, SFCC, and NE wood veneer laminated product producers

would not be required to do any testing and no incremental material costs are estimated because it is

assumed that they are already using compliant platforms. Under o ptions SI, SP, SN, SC, SCR, SC U R, CI,

and NI it is assumed that all but two percent of wood veneer laminated product producers would switch toTSCA Title VI Proposed Implementation Rule EA 2

- 104



### NAF resin technology and/or compliant or NAF platforms to reduce testing and certification costs

(options SI, SP , CI, and NI) or elimin ate them (options SN, SC

, SCR, and SC U R ).

The results presented in Table 2

- 66 demonstrate that testing and certification cost s are
overwhelmingly the dominant drivers of the costs for wood veneer laminated product producers. Even

under the scenarios with the fewest estimated numbers of affected entities and product lines, the costs

under Option SI far exceeds those estimated for options SN SC

, SCR, and SC U R , which only include

testing or certification costs for two percent of wood veneer laminated product producers. The

s ubstantially lower costs under o ption s SC

, SCR , and SCUR compared to Option SN reflects the

potentially high costs of switching platforms under option SN. Estimated costs (assuming 2 product lines

require testing) are lowest under Option SP because far fewer entities are affected under this option

compared to the others.TSCA Title VI Proposed Implementation Rule EA 2

- 105



### Table 2

- 66 : Estimated Wood Veneer Laminated Product Producer Annualized Costs for Raw Materials

Changes, T esting, 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:

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

Option s SC

, SCR , and 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 SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 2

- 106



## 2.5 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization

Costs

Under TSCA Title VI, EPA must promulgate regulations that establish labeling requirements,

chain of custody requirements, and recordkeeping requirements for industries that use composite wood

products for raw materials and sell products that contain compos ite wood. Producers that use composite

wood products as raw materials (hereafter referred to as fabricators), and wholesalers or distributers

(including importers) of composite wood products or regulated articles that contain composite wood

products, and retailers of composite wood products or regulated articles that contain composite wood

products, will be subject to chain of custody and labeling requirements. This set of firms along with

producers of hardwood plywood, MDF, and particleboard will also in cur costs associated with becoming

familiar with the rule’s requirements. The purpose of this section is to estimate the incremental costs of

rule familiarization, recordkeeping, and labeling requirements under the TSCA Title VI rule for all

producers, fa

bricators, wholesalers, and retailers that are potentially affected by the proposed rule.

Note that the TSCA Title VI rule requires importers of articles that are composite wood products,

or articles that contain composite wood products, to comply with the TSCA Section 13 import

certification regulations for “Chemical Substances in Bulk and As Part of Mixtures and Articles,” as

found at 19 CFR 12.118 through 12.127. Thus, any U.S. importer of composite wood products or articles

that contain composite wo od products would have to certify that all articles in the shipment either comply

with all applicable rules and orders under TSCA or that all the articles in the shipment are not subject to

TSCA. The statement must be on or attached to a commercial invoic e or entry document belonging to the

imported shipment. In practice, import certification is fulfilled by checking a box on an invoice or entry

document. It is assumed that this does not generally impose a significant additional burden or cost on the

imp orter. Any potential burden associated with a submitter’s familiarization with this requirement is

assumed to be included in the more general rule familiarization burden discussed below.

Section 2.5.1 describes telephone questionnaires that were developed to better understand the

potential costs of the labeling and recordkeeping requirements. Per

- firm rule familiarization,

recordkeeping, and labeli ng costs are presented in Section 2.5.2 . Section 2.5.3 presents the estimated

number of affected entities using information on baseline compliance and the percentage of entities

incurring costs, estimated from the results of a telephone questionnaire. And finally, total incremental

recordkeeping, labeling, a nd rule familiarization costs are presented in Section 2.5.4

.

2.5.1 Telephone Questionnaire

The proposed recordkeeping and labeling requirements under the TSCA Title VI rule are similar

to the requirements under the California Air Resources Board’s (CARB) Airborne Toxic Control Measure

(ATCM) to reduce formaldehyde emissions from composite wood products. So firms that manufacture or

sell composite wood products destined for California markets have experience implementing

recordkeeping and labeling requirements that are similar to the TSCA Title VI rule. To learn about the

experiences of the firms who are complying with the CARB ATCM requirements, two qu estionnaires

(one for fabricators and one for wholesalers) were administered to fewer than ten respondents per

questionnaire. These questionnaires asked respondents for descriptions of the changes they made and the

costs they incurred to implement any cha nges.

Retailers are also subject to the chain of custody and recordkeeping requirements. The California

Retailers Association indicated that retailers’ customary business practices were generally sufficient to

meet the chain of custody requirements in the CARB ATCM (California Retailers Association 2011 ), so

retailers were not administered a questionnaire.TSCA Title VI Proposed Implementation Rule EA 2

- 107



### 2.5.1.1 Questionnaire Administration



### Nine fabricator firms and seven wholesaler firms were administered telephone questionnaires that

asked about the changes that were made and the costs that were incurred in order to achieve compliance

with the CARB recordkeeping and labeling requirements. For fabricators, a diverse group of producers

was selected for the sample: one decorative panel manufacturer, two stock cabinet manufacturers, two

custom cabinet manufacturers, two household furniture manufacturers, and two business and institutional

furni ture manufacturers. Most of the fabricators contacted were located in California, and all of them

were implementing the CARB recordkeeping and labeling requirements. For wholesalers, the sample

included four composite wood product wholesalers and three h ousehold furniture wholesalers, all located

in California and complying with CARB requirements.

For each of these respondent types, a list of the appropriate NAICS industries was found from

one of the following sources: industry association member lists , the Dun & Bradstreet database, the

Random Lengths Big Book, or the SalesGenie database. From the industry association lists, industry

members were assigned random numbers and contacted in ascending order by number. For the D&B

database, the relevant se t of companies were identified by state and NAICS code, assigned random

numbers, and also contacted in ascending order. For the Random Lengths Big Book and the SalesGenie

database, first page numbers were selected randomly, and then individual firms were selected randomly

from that page to contact.TSCA Title VI Proposed Implementation Rule EA 2

- 108



### Table 2

- 67 : Sample of Firms Administered Recordkeeping and Labeling Questionnaire

Category Firm List Source Number of

Respondents

Fabricators

Decorative Panel Manufacturers Composite Panel Association (CPA).2011 Surface & Panel Buyers Guide. 1

Stock Cabinet Manufacturers in

California Kitchen Cabinet Manufacturers Association (KCMA). 2010. KCMA

Cabinet Manufacturers Members in California.

Dun and Bradstreet (D &B). 2011. Companies in California, NAICS

337110.

Note: After calls were placed to all KCMA stock cabinet members located

in CA the Dun and Bradstreet list was utilized. There was one response

from each list. 2

Custom Cabinet Manufacturers in

California SalesGenie. 2010. Companies in California, NAICS 337110.

Dun and Bradstreet (D&B). 2011. Companies in California, NAICS

337110.

Note: After it was determined that a high percentage of respondents on

the Sales G enie 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 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 Association 2010

, Random Lengths 2009

, SalesGenie 2010

.



### In order to estimate the average costs of complying with CARB’s recordkeeping and labeling

requirements, two separate questionnaires were administered to fabricators and wholesalers. First,

screener questio ns were administered to ensure that only firms that had made changes to comply with the

CARB regulations were selected to complete the survey. Then, firms were asked about the specific steps

they took to comply with CARB’s recordkeeping and/or labeling re quirements, and what the labor and

material costs of those changes were. Figure 2

- 3 and Figure 2

- 4 present the phone scripts that were used

to administer these questionnaires. The responses to the questionnaires are included in Table 2

- 69 and

Table 2

- 70

.TSCA Title VI Proposed Implementation Rule EA 2

- 109



### Figure 2

- 3 : Fabricator Firm Recordkeeping and Labeling Costs Questionnaire



### Introduction: Hello, this is ________ calling from Abt Associates on behalf of the U.S.

Environmental Protection Agency.

This past July Congress passed legislation that requires EPA to develop formaldehyde standards

for composite wood products that may include recordkeeping and labeling requirements for

manufacturers who fabricate composite wood products. The U.S. EPA is interested in learning from

firms that have implemented labeling and recordkeeping procedures to com ply with California’s

formaldehyde rule to help them develop national recordkeeping and labeling requirements.

Screener Questions:

1a (For Decorative Panel Manufacturers). Are you a manufacturer of decorative panels that uses

purchased hardwood plywood, medium density fiberboard, or particleboard for a platform? Do

you manufacture: (1) filled or coated products, (2) high pressure laminates, (3) hot stamp foils,

(4) low basis weight papers, (5) low pressure decorative laminates, (6) medium and high densit y

overlays, or (7) vinyl laminates? (Note that other types of decorative panel manufacturers would

be accepted as in

- scope)

1b (For Other Fabricators). Is your firm a manufacturer of [stock cabinets/custom cabinets/household

furniture/business or institut ional furniture] made using composite wood products?

2. Have you implemented labeling and recordkeeping procedures that meet the requirements of the

California formaldehyde rule?

3. Do you follow these procedures for all products using composite wood platf orms, including those sold

outside California where the labeling and recordkeeping procedures would not be required?

(Note that fabricators with any products that are CARB compliant are considered in

- scope)

4. Most of the questions I have are about how muc h it cost to implement the labeling and recordkeeping

procedures, are you the best person for me to ask about these costs?

Questionnaire:

1. Please describe in detail the changes you implemented in recordkeeping activities for complying with

CARB’s requir ements. 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 o r hours. (If hours

ask what type of employee)

2. Please describe in detail the changes you implemented to your existing labeling practices, or the new

labeling practices you introduced, in order to comply with CARB requirements.

3. What was the initial c ost to make changes to the labeling process?

4. If the CARB requirements increased your per

- label costs, what is the additional cost per label?

5. Do you generally label each CARB

- certified item you manufacture, or do you label a box or bundle of

items?

6. Do you have separate CARB

- certified inventory and not

- CARB

- certified inventory? If so, what

percentage of your inventory is CARB

- certified?TSCA Title VI Proposed Implementation Rule EA 2

- 110



### Figure 2

- 4 : Wholesaler Firm Recordkeeping Costs Questionnaire



### Introduction: Hello, this is ______ calling from Abt Associates on behalf of the U.S. Environmental

Protection Agency. This past July Congress passed legislation that requires EPA to develop

formaldehyde standards for composite wood products that may inc lude recordkeeping requirements for

companies that distribute composite wood products. The U.S. EPA is interested in learning from firms

that have implemented recordkeeping procedures to comply with California’s formaldehyde rule to help

them develop nati onal recordkeeping requirements.

Screener Questions:

1. Is your firm a wholesaler, distributor, or importer of composite wood products or products that contain

composite wood?

2. Background: The California rule requires records showing the date of pur chase, 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?

Questionna ire:

1. Before this rule was implemented, were you already keeping purchasing records for at least two years,

or was this something new that you had to start doing?

2. Did you need to modify your existing recordkeeping system for the purpose of complying with the

California rule?

3. Please describe the one time costs you incurred in order to implement this new system, either in terms

of dollars or hours.

4. Does maintaining the new recordkeeping system require more effort or additional costs compared to

your previous recordkeeping system? (If yes), how much additional effort or cost is required for

maintaining records under the new system? Please describe either in terms of dollars or hours.

2.5.1.2 Questionnaire Responses and Resulting Per

- Firm Cost Estimates



### The responses presented below include qualitative descriptions of recordkeeping and labeling

practice changes due to CARB Rule requirements. Table 2

- 68 presents the fully loaded wage rates used

for estimating labor costs. Table 2

- 69 and Table 2

- 70 summarize the responses to the fabricator and

wholesaler questionnaires, respectively, including descriptions of recordkeeping costs, label ing costs, and

the costs estimated based on the responses.

Since the recordkeeping functions described by responses appeared to be tasks likely be

performed by support staff, the analysis estimates these labor costs with the fully loaded wage for “offic e and administrative support” staff in private industry ($24.84 for fabricator industries and $25.54 for

wholesaler industries ( U.S. Bureau of Labor Statistics 2010a

, b

, d

, e )). Since the labeling system changes

described by respondents appeared to be tasks that would require technical labor, the analysis uses the

fully loaded wage rates for “computer and mathematical science” workers in private industry ($44.27,

U.S. Bureau of Labor Statistics 2010a

, b

, e ) (See Table 2

- 68 ). 31

31 May 2009 wages are taken from Occupation Employment Statistics (OES) data and converted into 2010 dollars using

Employer Cost for Employee Compensation (ECEC) data. To calculate a loaded wage rate, average total benefits for

all workers (42%) is added to the overhead rate (17%) to calculate an overall wage multiplier of 1.59.TSCA Title VI Proposed Implementation Rule EA 2

- 111



### 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 associated with benefits and overhead. According to ECEC d ata benefits

compensation was equal to 42% of wages and salaries data for all industries and occupations. Overhead costs are assumed to be

equal to 17% of wages ( Rice 2002 ).

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

, b

, c

, d

, e



### As shown in Table 2

- 69 , none of the fabricators reported incurring any initial set

- up costs for

recordkeeping, and only one of the nine reporting incurring recurring costs for re cordkeeping as a result

of the CARB rule. (The remaining fabricators did not incur recordkeeping costs because their existing

records were sufficient to comply with the CARB requirements.) The one respondent with recurring

recordkeeping costs reported sp ending 10 hours per week on recordkeeping for the CARB rule. As

calculated in Table 2

- 69 , EPA estimates that 10 hours per week is equivalent to a cost of $12,917 per

year.

This analysis assumes that the 11% of fabricators that are not already complying with the CARB

ATCM (because their products are not sold in California) incur an average cost of $12,917 per year to

comply with the recordkeeping requ irements of the TSCA Title VI rule. (The average cost per firm isTSCA Title VI Proposed Implementation Rule EA 2

- 112



### used in calculating total costs, but as described in Chapter 5 , the small entity analysis is based on an

estimate of recordkeeping costs that varies with firm size.) Because the recordkeep ing requirements are

similar in the CARB rule and the TSCA Title VI rule, no additional recordkeeping costs are estimated for

fabricators that are already complying with the CARB ATCM.

As shown in Table 2

- 69 , several of the respondents indicated that they already had labeling

systems in place and therefore they did not incur any significant costs associated with CARB’s labeling

requirements. However, this analysis assumes that these firms did in fact incur small costs associated

with making small changes to their labels. One of the firms that did report minor labeling costs reported

that it took “a few hours” to change over to using the new labels. T he analysis assumes that “a few

hours” is 3 hours for the purpose of estimating costs. The analysis also assumes that 67% of firms that

are not already complying with the CARB ATCM, and all firms that are already complying with the

CARB ATCM, incur the co sts associated with 3 labor hours (where 67% is calculated as 4/6, since 4 of

the 6 firms that reported labeling their products are assumed to have these costs). Two other firms that

responded to the questionnaire reported more substantial costs associate d with setting up their labeling

systems and therefore, it is assumed that the remaining 33% of firms that are not already complying with

the CARB ATCM will incur the average costs reported by these two firms (where 33% is calculated as

2/6 since 6 firms r eported that they labeled their products).

As shown in Table 2

- 70 , four of the seven wholesalers reported incurring initial costs to revise

their rec ordkeeping systems to comply with the CARB rule. Only two of the four were able to quantify

the time or cost they spent revising their recordkeeping systems. Based on their responses, the average

cost of revising recordkeeping systems is estimated at $2, 511. Thus, the analysis assumed that 57% of

wholesalers that are not already complying with the CARB ATCM will incur initial costs that average

$2,511 for revising recordkeeping systems to comply with the TSCA Title VI rule. The remaining 43%

of wholesal ers that are not already complying with the CARB ATCM and all firms that are already

complying with the CARB ATCM are assumed to have recordkeeping systems that do not need to be

modified in order to comply with the TSCA Title VI rule, and thus do not incu r significant initial

recordkeeping costs. Because the recordkeeping requirements are similar in the CARB rule and the

TSCA Title VI rule, no additional recordkeeping costs are estimated for wholesalers that are already

complying with the CARB rule.

Table 2

- 70 also indicates that three of the seven wholesalers reported incurring recurring

recordkeeping costs due to the CARB rule, but only one of them was able to quantify the additional time

spent on recordkeeping. That respondent reported spending half an hour to an hour per day on CARB

related recordkeeping. EPA estimates this is equivalent to a cost of $4,980 per year. Therefore, this

analysis assu mes that 57% of the wholesalers that are not already complying with the CARB ATCM do

not incur significant recurring costs, as their existing recordkeeping practices are sufficient to comply

with the TSCA Title VI rule’s requirements. The remaining 43% of wholesalers that are not already

complying with the CARB ATCM incur a recurring cost for recordkeeping that averages $4,980 per year.

(As with fabricators, the average cost per firm is used in calculating total costs, but the small entity

analysis in Cha pter 5 is based on an estimate of recordkeeping costs that varies with firm size.) Again,

because the recordkeeping requirements are similar in the CARB rule and the TSCA Title VI rule, no

additional recordkeeping costs are estimated for wholesalers that are already complying with the CARB

ATCM.TSCA Title VI Proposed Implementation Rule EA 2

- 113



### 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

for this analysis ); overhead c ost 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 b y

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 cost 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 -

B usiness and Institutional Furniture Manufacturers

8 Recordkeeping: No implementation cost; must keep invoices for Forest

Stewardship Council, CARB I, and CARB II.

Labeling: Not a significant cost; made stickers for CARB certification;

label each finished product. - - No Cost

Reported -

9 Recordkeeping: Unknown exact costs; must keep track of billing,

modify purchase orders, store certificates from suppliers.

Labeling: Initial cost of a “couple hundred man hours” ( assumed to be

200 hours for this analysis ); internal process of changing drawings on

labels; worked with BIFMA for labeling changes; no extra cost per

label; 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 2010bTSCA Title VI Proposed Implementation Rule EA 2

- 114



### 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. Co sts 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 complian ce 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



### 2.5.2 Recordkeeping, Labeling, Supplier Notification, and Rule Familiarization Cost s per

Firm

This section presents the total costs per fabricator, wholesaler, and retailer firm associated with

the recordkeeping and labeling requirements for the analytical options considered for the TSCA Title VI

rule. This analysis includes additional per firm costs to those that were reported in the questionnaire,

including costs associated with becoming familiar with the rule’s requirements and sending notification

letters to suppliers. 32 

### Although no fabricator or wholesaler firms quantified any cost s associated with

32 The CARB ATCM requires all firms that purchase composite wood products to obtain documentation from the ir

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 her e for the analytical options including supplier notification reflect the cost for purchasers to submit

requests for documentation to their suppliers, and the cost for the suppliers to provide the documentation.TSCA Title VI Proposed Implementation Rule EA 2

- 115



### sending notification letters to suppliers, several noted that this was necessary. Similarly, although no

respondents reported costs associated with learning about the rule, it will be necessary for each firm to

become familiar with it in order to determine whether they are subject to it, and if so, what steps will be

necessary to achieve compliance. It is assumed that the entire group of affected composite panel

producer, fabricator, wholesaler, and retailer firms will incur costs for bo th rule familiarization and

supplier notification. In summary, the following initial costs will be incurred in response to recordkeeping

and labeling requirements: (1) rule familiarization; (2) supplier notification; (2) labeling system setup;

and (3) reco rdkeeping system setup. There will also be recurring costs estimated on an annual basis for

maintaining records. These costs are described in more detail in the sections below.

2.5.2.1 Rule Familiarization and Supplier Notification Costs



### It is expected that all composite panel producer, fabricator, wood veneer laminated product

producer, wholesaler, and retailer firms, will need to spend time familiarizing themselves with the

regulation and either ensuring that their current systems are su fficient for the TSCA Title VI rule’s

requirements or identifying necessary changes. It is assumed that every firm will require four managerial

labor hours of initial rule familiarization costs. These per

- firm rule familiarization costs are estimated by

industry in Table 2

- 71

.

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



### It is assumed that affected fabricator, wood veneer laminated product producer, wholesaler, and

retailer firms that are not compliant with the CARB ATCM in the baseline will also incur costs for

sending notification letters to all of their composite wood product suppliers. The composite wood

product suppliers will conversely need to respond to all downstream firms requesting confirmation of

compliance with the TSCA Title VI rule’s requirements. Those firms that already comply with the

CARB ATCM in the baseline are assumed to already be maintaining supplier agreements that can be used

to meet the TSCA Title VI rule’s supplier notification requirements without incurring ad ditional costs. It

is assumed that each retailer entity will need to send notification letters to a total of 40 suppliers.

Fabricators and wholesalers are assumed to send notification letters to 20 suppliers. Notification

responses are estimated by assu ming that notification letters from downstream firms are distributed

equally across the upstream firms. Each upstream firm is assumed to respond to the notification letters it

receives (see Table 2

- 72 for the average number of notification and response letters sent by industry).

Supplier notification requires both material and labor costs. The material costs for each supplier

letter include: $0.10 fo r a printed letter, $0.02 for an envelope, and $0.44 for a stamp for a total of $0.56

in material costs per supplier letter. In terms of letter production and mailing, it is assumed that this

activity will require 2 hours of initial labor plus one minute of labor for each supplier notification letter or

response letter sent. The labor costs are estimated using the industry

- specific fully loaded wages for the

“office and administrative support” occupation (See Table 2

- 68 ). Supplier notification cost elements per

fabricator, wholesaler, retailer, and composite panel producer firms are presented in Table 2

- 72 below.

The total per

- firm costs is calculated as the sum of (1) material costs and (2) the number of labor hours

required multiplied by the fully loaded hourly wage.TSCA Title VI Proposed Implementation Rule EA 2

- 116



### 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 Pe r

Firm ($0.56

per letter) Office and

Administrative

Support Wage Total Per

Firm 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 Pos tal Service 2011



### 2.5.2.2 Labeling Costs



### Fabricators must label every finished good they produce, or every box containing finished goods,

with the fabricator’s name, the date the finished good was produced, and a statement of compliance.

Because this is similar to the labeling requirement in th e CARB ATCM, the average labeling costs for

fabricators are estimated based on the questionnaire results and presented in Table 2

- 69 of the previous

s ection. Based on the questionnaire results, it is estimated that 33% of fabricators who are not already

complying with the CARB ATCM (because their products are not sold in California) will incur average

incremental costs of $4,552 in the first year to ch ange their labels, and all other fabricators will incur an

average incremental cost of $132.81. Since none of the fabricators that took part in the telephone

questionnaire reported any recurring costs for labeling, no recurring labeling costs are estimate d.

It is assumed that 1 percent of wholesalers incur labeling costs, either because they are

repackaging goods that were originally labeled on the packaging instead of on the individual items, or

because they are replacing an original label applied by t he panel producer or fabricator with a label listing

a different company name. It is also assumed that these wholesalers incur the same costs as the

fabricators who are assumed to incur more substantial initial labeling costs (an average of $4,552).

It is assumed that panel producers, for whom product labeling is a customary business practice,

will incur the incremental costs of 6 hours for changing their labels twice. They may need to change their

labels once before the effective date of the rule (to indicate that the panels were produced before that date

if they are to be sold after the rule goes into effect) and again after their product lines are certified.

Table 2

- 73 : Summary of Average Labeling Set up Costs Per

- Firm

Firm Type Average Initial Costs



### Low High

Panel Producers (excl. laminators defined as hardwood plywood producers) $149.04

Laminators $4,552.00

Fabricators ( excluding laminators defined as fabricators) $132.81 $4,552.00

Wholesalers $4,552.00

Retailers

- -TSCA Title VI Proposed Implementation Rule EA 2

- 117



### 2.5.2.3 Recordkeeping Costs



### Under the CARB ATCM, fabricators, importers, distributors, and wholesalers are required to take

“reasonable precautions” to ensure that the composite wood products and finished goods they acquire are

in compliance with the applicable emission standards. T his includes instructing each supplier that the

product supplied must comply with applicable emissions standards, and obtaining written documentation

stating that. In addition, these firms must keep records showing the date of purchase, the supplier, as w ell

as all precautions taken to ensure that the product meets emissions standards. These records must be kept

for two years. The TSCA Title VI rule requires that records be kept for three years but this is not

expected to significantly affect the costs to regulated entities, so the cost of the additional recordkeeping

has not been estimated.

The average initial and recurring recordkeeping costs for fabricators and wholesalers are

estimated based on the questionnaire results and presented above in Table 2

- 69 and Table 2

- 70 above.

Based on the questi onnaire results, typical fabricators are not estimated to incur initial costs for

recordkeeping, because their existing recordkeeping systems are adequate and do not need to be modified

to comply with the TSCA Title VI requirements. It is estimated that 1 1% of the fabricators that are not

currently complying with the CARB ATCM because their products are not sold in California will incur

additional recurring recordkeeping costs

.

The single fabricator questionnaire respondent that reported incurring recurring recordkeeping

costs indicated that their recurring recordkeeping burden associated with the CARB ATCM was about 10

hours per week, which this analysis estimates to be about $12,917 per year (see Table 2

- 69 )

. However,

t h e burden reported by this fabricator questionnaire respondent seems unlikely to be representative for all

the fabricator firms that incur a recurring recordkeeping burden. This fabricator questionnaire respondent

was a firm with employees, but smaller firms, such as nonemployer firms

, are likely to need much less

time than 10 hours per week (about a quarter of a 40 hour work week ) to perform the necessary

recordkeeping activitie s. Since the recordkeeping requirements entail keeping track of composite wood

materials purchased and shipments that contain composite wood products, it is expected that the burden

associated with keeping records will typically increase with the volume o f a fabricator’s sales. Thus, t o
estimate the recurring recordkeeping burden for nonemployer fabricators, the analysis assumes that there

is a fixed

- cost component of the recurring recordkeeping costs associated with two hours of labor and a

variable cost component that is proportional to a firm’s revenue.

For fabricator employer firm s, the recurring recordkeeping cost is assumed to be comprised of a

fixed cost component of $49.68 (based on the cost of 2 hours of labor at fabricator firms ) and a variable

cost component of 0. 3 0338 percent of revenue (calculated by subtracting $ 49.68 from $12,917 and then

dividing by $4,241,245, the estimated average revenue for affected employer fabricators). The average

recurring recordkeeping cost for fabricator nonemployer firm s is then estimated as the sum of 49.68 and

0. 3 0338 percent of average nonemployer firm revenues ( $42,690 ) . The resulting average fabricator

nonemployer firm recurring recordkeeping cost is $ 179 .19 per year

.

Recurring recordkeepin g costs are estimated similarly for wholesale firms. It is estimated that

43% of wholesalers that are not currently complying with the CARB ATCM ( because their products are

not sold in California ) will incur additional recurring costs (see Table 2

- 70 ). The costs to those

wholesalers with recurring recordkeeping costs are estimated based on the wholesaler questionnaire. The

single wholesaler questionna ire respondent that reported incurring recurring recordkeeping costs indicated

that their recurring recordkeeping burden associated with the CARB ATCM was about forty five minutes

per day, which this analysis estimates to be about $4,980.30 per year (see Table 2

- 70 ). However, the

burden reported by this wholesaler questionnaire respondent seems unlikely to be representative for all

the wholesaler firms that incur a recurring recordkeeping burden. This wholesaler questionnaireTSCA Title VI Proposed Implementation Rule EA 2

- 118



### respondent was a firm with employees, but smaller firms such as nonemployer firms

, are likely to need

much less time than 3.75 hours per week ( nearly 10% of a 40 hour work week ) to perform the necessary

recordkeeping activities. Since the recordkeeping requirements entail keeping track of com posite wood

materials purchased and shipments that contain composite wood products, it is expected that the burden

associated with keeping records will typically increase with the volume of a wholesaler ’s sales. Thus, to

estimate the recurring recordkeepin g burden for nonemployer wholesalers , the analysis assumes that there

is a fixed

- cost component of the recurring recordkeeping costs associated with two hours of labor and a

variable cost component that is proportional to a firm’s revenue.

For employer firm s, the recurring recordkeeping cost is assumed to be comprised of a fixed cost

component of $ 51.08 (based on the cost of 2 hours of labor at wholesaler firms) and a variable cost

component of 0. 059 33 percent of revenue (calculated by subtracting $ 51.08 from $ 4

, 980.30 and then

dividing by $8,308,417, the estimated average revenue for affected employer wholesalers ). The average

recurring recordkeeping cost for nonemployer firm s is then estimated as the sum of 51.08 and 0. 05933

percent of average nonemplo yer revenues ($ 82

, 542 ). The resulting average wholesaler nonemployer

recurring recordkeeping cost is $1 00

. 05 per year

.

I t is estimated that 57% of the wholesalers that are not currently complying with the CARB

ATCM ( because their products are not sold in California ) will incur a n initial cost of $2,511 to change

their recordkeeping systems, and that these costs will average $2,511 for both employer and nonempl o yer

firm s

. It is assumed that t he remaining wholesalers do not have to upgrade their recordkeeping systems in

order to complying with the recordkeeping requirements.

Panel producers are assumed to incur an average labor burden of one hour per week (equivalent

to $3,710.72 per year) to maintain the following records for 3 years:

 Records of quarterly emission testing and quality control testing that identify the

accredited third

- party certifier conducting or overseeing the testing and the laboratory or

quality control facility actually performing the testing. These records must also incl ude

the date, the product type tested, the lot or batch number that the tested material

represents, the test method used, and the test results;

 Production records, including a description of the composite wood product(s), the date of

manufacture, lot or batch numbers, the amount of resin use by volume and weight, the

resin trade name, resin manufacturer and supplier contact information, and tracking

information allowing each product to be traced to a specific lot number or batch

produced;

 Records demons trating initial and continued eligibility for the reduced testing provisions

for products made with no

- added formaldehyde

- based resins, if applicable;

 Records of changes in production, including changes in resin use, resin composition, and

changes in t he process, such as changes in press time;

 Purchaser information for each composite wood product, if applicable, including the

name, contact person, address, phone number, e

- mail address if available, purchase order

or invoice number, and amount purcha sed;

 Transporter information for each composite wood product, if applicable, including name,

contact person, address, phone number, e

- mail address if available, and shipping invoice

number;

 Information on the disposition of non

- complying lots, including product type and amount

of composite wood products affected, lot or batch numbers, mitigation measures used,

results of retesting, and final disposition;

 Copies of labels used;TSCA Title VI Proposed Implementation Rule EA 2

- 119 

###  Panel producers are required to maintain an up

- to

- date quality control ma nual on their

premises; and

 Panel producers are required to maintain the credentials of their quality control managers

and quality control employees for as long as employees are serving in a quality control

capacity.

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 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 c

- - 11% of employer firms that do not

comply with CARB ATCM in

baseline c

- $12,916.80

11% of nonemployer firms that do

not comply with CARB ATCM in

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 c

- -

57% (for initial costs) and 43% (for

recurring costs) of employer firms

that do not comply with CARB

ATCM in baseline c $2,510. 80 $4, 9 80.30

57% (for initial costs) and 43% (for

recurring costs) of nonemployer

firms that do not comply with

CARB ATCM in 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 $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.



### 2.5.3 Number of Affected Entities

Several industries are already universally following the recordkeeping and labeling requirements

under the CARB rule, while other industries have not experienced widespread implementation of these

practices. In general, those industries that tend to distr ibute their products nationally have implemented

recordkeeping and labeling systems to comply with CARB, while regional operations generally have not.

Discussions with industry experts informed the baseline compliance assumptions for most

fabricators as well as all furniture wholesalers. 33 

### For the remaining fabricators baseline compliance was

33 Conversations with Industry ( Persona l Communication with AHFA 2010

, Personal Communication with BIFMA

2010

, Personal Communication with KC MA 2010

, Personal Communication with NALFA 2010 ) informed assumptionsTSCA Title VI Proposed Implementation Rule EA 2

- 120



### estimated as the percentage of total U.S. establishments located in California . For retail and wholesale

firms, baseline compliance was estimated as the percentage of firms with at least one establishment

located in California. Since all affected composite wood product producers will need to familiarize

themselves with the rule as well as respond to all supplier notification letters, baseline compliance with

the CARB regulation does not need to be determined.

2.5.3.1 Baseline CARB Compliance Percentages for Fabricator and Wood Veneer Laminated

Product Industries



### Many fabricators are al ready complying with the recordkeeping and labeling requirements of the

CARB ATCM and therefore would not incur any incremental costs for putting these systems in place to

comply with the TSCA Title VI rule. The baseline level of CARB compliance for most fabricator and

wood veneer laminated product industries was determined based on conversations with industry

associations. 34 

### However, baseline compliance for some fabricator and wood veneer laminated product

industries was estimated simply as the number of employer establishments located in California divided

by the total number of U.S. employer establishments in each industry. The estimated baseline CARB

compliance levels for fabricators and wood veneer laminated product producers are presented below in

Table 2

- 75

.

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 assumpti ons for the following fabricator NAICS codes: 321211,

321219, 337110, 337129, 321911, 337121, 337122, 337127, 337211, 337214, 337215, 336213, and 336214.TSCA Title VI Proposed Implementation Rule EA 2

- 121



### Table 2

- 75 : Percentage of Baseline CARB Compliance of Fabricator and Wood Veneer Laminated

Product Producer Industries, by Affected NAICS

NAICS NAICS Definition Baseline

CARB

Compliance Basis for Estimate or Assumption

321211 Hardwood Veneer and Plywood Manufacturing 100% ( Personal Commu nication with HPVA 2011a )

337110 Wood Kitchen Cabinet and Countertop

Manufacturing 50% ( Personal Communication with KCMA 2010 )

337129 Wood Television, Radio, and Sewing Machine

Cabinet Manufacturing 50% Assumed to be similar to kitchen cabinet and

countertop manufacturing.

321911 Wood Window and Door Manufacturing 100% Assumed to be 100%.

337121 Upholstered House Furniture Manufacturing 100% ( Personal Communication with AHFA 2010 )

337122 Non

- upholstered Wood Household Furniture

Manufacturing 100% ( Personal Communication with AHFA 2010 )

337124 Metal Household Furniture Manufacturing 100% Personal Communication with AHFA 2010

337127 Institutional Furniture Manufacturing 100% ( Personal Communication with BIFMA 2010 )

337211 Wood Office Furniture Manufacturing 100% ( Personal Communication with BIFMA 2010 )

337214 Office Furniture (except Wood) Manufacturing 100% ( Personal Communication with BIFMA 2010 )

337215 Showcase, Partition, Shelving, and Locker

Manufacturing 100% Assumed to be similar to furniture m anufacturing.

321918 Other Millwork (including Flooring) 9.23% % of Estab. in CA ( U.S. Census Bureau 2010a )

337212 Custom Architectural Woodwork and Millwork 9.83% % of Estab. in CA ( U.S. Census Bureau 2010a )

321999 All Other Miscellaneous Wood Product

Manufacturing 7.84% % of Estab. in CA ( U.S. Census B ureau 2010a )

336213 Motor Home Manufacturing 100% Assumed to be 100%.

336214 Travel Trailer and Camper 100% Assumed to be 100%.

321991 Manufactured Home (Mobile Home)

Manufacturing 10.90% % of Estab. in CA ( U.S. Census Bureau 2010a )

321992 Prefabricated Building Manufacturing 5.92% % of Estab. in CA ( U.S. Census Bureau 2010a )

339950 Sign Manufacturing 10.09% % of Estab. in CA ( U.S. Census Bureau 2010a )



### 2.5.3.2 Baseline CARB Compliance of Retailer and Wholesaler Industries



### This analysis assumes that retail and wholesale firms with establishments in California are

complying with the recordkeeping and labeling requirements of the CARB ATCM and therefore would

not incur any incremental costs for putting these systems in place t o comply with the TSCA Title VI

proposed rule. Because retailers make the large majority of their sales in the same states where they have

physical locations it is not likely that many retailers without California locations have established chain of

custo dy systems to meet the CARB ATCM’s requirements. Wholesalers are more likely than retailers to

sell products in states where they do not have physical locations. Thus, this assumption may lead to an

understatement of the level of baseline compliance amon g wholesalers. Note that two wholesale

industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers

(423220) are instead assumed to be fully compliant with the CARB ATCM chain of custody requirements

in the baseline. 35



### Beca use data on the number of firms with at least one establishment in California are not

available, the following steps must be taken to estimate baseline compliance for each affected industry:

(1) use 2007 Economic Census data to identify the number of affec ted retail and wholesale firms ( U.S.

Census Bureau 2009a

, 2010b

, d

, o

, p ); (2) estimate the number of single

- unit firms in California; (3)

35 These assumptions are based on two sources: ( Personal Communication with AHFA 2010

, Personal Communication

with BIFMA 2010 ).TSCA Title VI Proposed Implementation Rule EA 2

- 122



### estimate the number of multi

- unit firms with at least one establishment in California; and (4) estimate

baseline compliance as the percentage of U.S. firms with at least one establishment in California.

Figure 2

- 5 presents an example to demonstrate how the numbers of single

- unit firms located in

California are estimated.

Figure 2

- 5 : Example Methodology for Estimating the Number of Single

- Unit Firms in California

(NAICS 441210)



### The method for estimating the number of multi

- unit firms with an establishment located in

California is demonstrated in Figure 2

- 6 . The average U.S. number of establishments per multi

- unit firm

and the probability of a U.S. establishment not being located in California can be combined to estimate

the probability that a U.S. firm has at least one establishment located in California. Applying this

probability to the total number of U.S. multi

- unit firms, the number of multi

- unit firms with an

establishment in California is then estimated.TSCA Title VI Proposed Implementation Rule EA 2

- 123



### Figure 2

- 6 : Example Methodology for Estimating the Number of Multi

- Unit Firms with an

Establishment in California (NAICS 441210)



### Baseline CARB compliance is estimated as the sum of single

- unit firms in California and multi

unit fir ms with at least one establishment in California (See Figure 2

- 7 ).TSCA Title VI Proposed Implementation Rule EA 2

- 124



### Figure 2

- 7 : Example Methodology for Estimating Baseline CARB Compliance (NAICS 441210)



### Estimated baseline compliance with the CARB ATCM is presented in Table 2

- 76 for wholesaler

industries and Table 2

- 77 for retailer industries. As described above, firms that are already meeting the

requirements of the CARB ATCM are not expected to incur additional costs associated with setting up

chain of custody systems to comply with the TSCA Title VI proposed rule. Estimated baseline CARB

compliance of these in dustries varies widely by NAICS, from 5 percent to 92 percent of total U.S. firms.

Table 2

- 76 : Baseline Compliance of Wholesaler Firms, by Affected NAICS

NAICS NAICS Description Baseline Compliance a

423210 b Furniture merchant wholesalers 100%

423220 b Home furnishing merchant wholesalers 100%

423310 Lumber, plywood, millwork, and wood panel merchant wholesalers 12.3%

423320 Brick, stone, and related construction material merchant wholesalers 14.9%

423330 Roofing, siding, and insulation material merchant wholesalers 13.7%

423390 Other construction material merchant wholesalers 14.6%

423410 Photographic equipment and supplies merchant wholesalers 24.8%

423420 Office equipment merchant wholesalers 18.1%

423430 Computer and software merchant wholesalers 23.9%

423440 Other commercial equipment merchant wholesalers 13.0%

423450 Medical equipment merchant wholesalers 15.9%

423490 Other professional equipment and supplies merchant wholesalers 14.8%

423510 Metal service centers and other metal merchant wholesalers 15.1%

423610 Elec. equip. and wiring merchant wholesalers 19.3%

423620 Electric appliance merchant wholesalers 25.2%

423690 Other electronic parts and equipment merchant wholesalers 26.1%TSCA Title VI Proposed Implementation Rule EA 2

- 125



### Table 2

- 76 : Baseline Compliance of Wholesaler Firms, by Affected NAICS

NAICS NAICS Description Baseline Compliance a

423710 Hardware merchant wholesalers 19.4%

423720 Plumbing equip. merchant wholesalers 18.8%

423730 HVAC equip. merchant wholesalers 14.5%

423740 Refrigeration equipment and supplies merchant wholesalers 22.2%

423810 Construction equipment merchant wholesalers 11.4%

423820 Farm and garden machinery and equipment merchant wholesalers 9.5%

423830 Industrial machinery and equipment merchant wholesalers 12.3%

423840 Industrial supplies merchant wholesalers 16.2%

423850 Service establishment equipment and supplies merchant wholesalers 9.9%

423910 Sporting and recreational goods and supplies merchant wholesalers 21.1%

423920 Toy and hobby goods and supplies merchant wholesalers 30.5%

423930 Recyclable material merchant wholesalers 13.3%

423940 Jewelry merchant wholesalers 19.6%

423990 Other miscellaneous durable goods merchant wholesalers 17.9%

424110 Printing and writing paper merchant wholesalers 17.8%

424120 Stationery and office supplies merchant wholesalers 15.1%

424130 Industrial and personal service paper merchant wholesalers 17.2%

424210 Drugs and druggists' sundries merchant wholesalers 21.7%

424310 Piece goods, notions, and other dry goods merchant wholesalers 29.6%

424320 Men's and boys' clothing and furnishings merchant wholesalers 24.6%

424330 Women's and children's clothing merchant wholesalers 32.0%

424340 Footwear merchant wholesalers 33.1%

424410 General line grocery merchant wholesalers 19.7%

424420 Packaged frozen food merchant wholesalers 19.6%

424450 Confectionery merchant wholesalers 15.1%

424460 Fish and seafood merchant wholesalers 12.3%

424480 Fresh fruit and vegetable merchant wholesalers 23.2%

424490 Other grocery and related products merchant wholesalers 18.8%

424510 Grain and field bean merchant wholesalers 5.2%

424610 Plastics materials and basic forms and shapes merchant wholesaler 18.1%

424690 Other chemical and allied products merchant wholesalers 13.6%

424910 Farm supplies merchant wholesalers 13.1%

424920 Book, periodical, and newspaper merchant wholesalers 16.4%

424930 Flower, nursery stock, & florists' supplies merchant wholesalers 17.9%

424940 Tobacco and tobacco product merchant wholesalers 8.1%

424950 Paint, varnish, and supplies merchant wholesalers 18.0%

424990 Other miscellaneous nondurable goods merchant wholesalers 24.4%

a See Figure 2

- 5

, Figure 2

- 6 , and Figure 2

- 7 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 custody requirements in the baseline, based on conversation with

industry ( Personal Communication with AHFA 2010

, Personal Communicati on with BIFMA 2010 )

. Sources: U.S. Census Bureau 2010d

, o



### Table 2

- 77 : Baseline Compliance of Retailer Firms, by Affected NAICS

NAICS NAICS Description Baseline Compliance a

441110 New car dealers 11.5%

441210 Recreational vehicle dealers 11.6%

441221 Motorcycle, ATV, and personal watercraft dealers 10.7%

441229 All other motor vehicle dealers 10.6%

441320 Tire dealers 14.7%

442110 Furniture stores 15.2%

442210 Floor covering stores 11.2%TSCA Title VI Proposed Implementation Rule EA 2

- 126



### Table 2

- 77 : Baseline Compliance of Retailer Firms, by Affected NAICS

NAICS NAICS Description Baseline Compliance a

442291 Window treatment stores 15.0%

442299 All other home furnishings stores 15.4%

443111 Household appliance stores 10.5%

443112 Radio, television, and other electronics stores 16.8%

443120 Computer and software stores 15.1%

443130 Camera and photographic supplies stores 17.8%

444110 Home centers 16.2%

444120 Paint and wallpaper stores 19.0%

444130 Hardware stores 9.7%

444190 Other building material dealers 12.3%

444210 Outdoor power equipment stores 5.7%

444220 Nursery, garden center, and farm supply stores 8.7%

445110 Supermarkets and other grocery (except convenience) stores 15.3%

445120 Convenience stores 11.2%

445210 Meat markets 10.9%

445220 Fish and seafood markets 10.3%

445230 Fruit and vegetable markets 10.4%

445291 Baked goods stores 12.4%

445292 Confectionery and nut stores 13.9%

445299 All other specialty food stores 12.2%

445310 Beer, wine, and liquor stores 11.3%

446110 Pharmacies and drug stores 15.5%

446120 Cosmetics, beauty supplies, and perfume stores 12.4%

446130 Optical goods stores 16.1%

446191 Food (health) supplement stores 13.1%

446199 All other health and personal care stores 13.3%

447110 Gasoline stations with convenience stores 15.0%

447190 Other gasoline stations 13.1%

448110 Men's clothing stores 18.0%

448120 Women's clothing stores 17.0%

448130 Children's and infants' clothing stores 15.6%

448140 Family clothing stores 19.6%

448150 Clothing accessories stores 15.3%

448190 Other clothing stores 15.2%

448210 Shoe stores 19.1%

448310 Jewelry stores 14.4%

448320 Luggage and leather goods stores 16.1%

451110 Sporting goods stores 13.5%

451120 Hobby, toy, and game stores 14.2%

451130 Sewing, needlework, and piece goods stores 13.2%

451140 Musical instrument and supplies stores 12.2%

451211 Book stores 15.6%

451212 News dealers and newsstands 11.5%

451220 Prerecorded tape, compact disc, and record stores 14.5%

452111 Department stores (except discount department stores) 70.8%

452112 Discount department stores 74.7%

452910 Warehouse clubs and supercenters 92.0%

452990 All other general merchandise stores 9.8%

453110 Florists 9.2%

453210 Office supplies and stationery stores 17.6%

453220 Gift, novelty, and souvenir stores 12.8%

453910 Pet and pet supplies stores 12.9%TSCA Title VI Proposed Implementation Rule EA 2

- 127



### Table 2

- 77 : Baseline Compliance of Retailer Firms, by Affected NAICS

NAICS NAICS Description Baseline Compliance a

453920 Art dealers 13.7%

453930 Manufactured (mobile) home dealers 7.3%

453991 Tobacco stores 12.7%

453998 All other miscellaneous store retailers (except tobacco stores) 11.5%

454111 Electronic shopping 10.3%

454113 Mail

- order houses 11.3%

454210 Vending machine operators 11.0%

454311 Heating oil dealers 11.7%

454312 Liquefied petroleum gas (bottled gas) dealers 20.4%

454390 Other direct selling establishments 11.1%

a See Figure 2

- 5

, Figure 2

- 6 , and Figure 2

- 7 for a description of how baseline compliance was estimated.

Sources: U.S. Ce nsus Bureau 1997

, 2010b

, e

, p



### 2.5.3.3 Number of Firms Incurring Rule Familiarization, Supplier Notification, Recordkeeping, and

Labeling Costs



### All affected entities, regardless of baseline CARB compliance, are expected to incur rule

familiarization costs and costs associated with supplier notification and response letters. The number of

firms with incremental costs associated with impleme nting compliant recordkeeping and labeling systems

is estimated as the total number of firms in each affected industry in the U.S. that are not already

compliant with the CARB regulation. Information on the percentages of fabricator and wholesaler firms

in curring additional costs such as initial recordkeeping costs, recurring recordkeeping costs, or initial

labeling costs, is taken from summary statistics from the questionnaire results (See Table 2

- 69 and Table

2

- 70 ).

Table 2

- 78 presents the number of affected manufacturing firms by type. Table 2

- 79

, Table 2

- 80

, and Table 2

- 81 show the estimated levels of baseline compliance with the C ARB rule for all fabricator,

wood veneer laminated product producer, wholesaler, and retailer firms that use or sell composite wood

products by NAICS code. The estimated numbers of firms that will incur incremental costs, by type of

cost incurred, are als o presented. Table 2

- 82 summarizes the number of firms selling composite wood

products regulated under the TSCA Title VI Rule and the number of firms that are baseline compliant

with the CARB ATCM (i.e., firms selli ng composite wood products that may ultimately be sold in

California).

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 twice. There are 54 unique firms that produce composite

wood panels.TSCA Title VI Proposed Implementation Rule EA 2

- 128



### Table 2

- 79 : Baseline Compliance and Number of Fabricator and Laminated Product Producer 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 Number of Firms with

Recurring

Recordkeeping Costs

(the 11% of firms

without baseline

compliance) c Number of Firms

with More

Substantial Initial

Labeling Costs (the

33% of firms

without baseline

compliance) c Number of Firms

with Minor Initial

La beling Costs (the

67% of firms

without baseline

compliance and all

firms with baseline

compliance) c

321211 Decorative Panel

Manufacturers 71 71 100% 0 0 0 71 321219

337110 Cabinet Manufacturers 17,360 17,360 50% 8,680 955 2,864 14,496

337129 476 476 50% 238 26 79 397

321911 Window and Door

Manufacturers 3,582 3,582 100% 0 0 0 3,582

337121 2,790 2,790 100% 0 0 0 2,790

337122 Household Furniture

Manufacturers 6,061 6,061 100% 0 0 0 6,061

337124 579 579 100% 0 0 0 579

337127

Institutional and Office

Furniture Manufacturing 1,367 1,367 100% 0 0 0 1,367

337211 804 804 100% 0 0 0 804

337214 486 486 100% 0 0 0 486

337215 2,415 2,415 100% 0 0 0 2,415

321918 Custom architectural

woodwork & millwork

manufacturing and other

millwork manufacturing

(including flooring) 5,214 5,214 9% 4,745 522 1,566 3,648

337212 3,991 3,991 10% 3,592 395 1,185 2,806

321999 4,822 4,822

8% 4,436 488 1,464 3,358

336213 Motor home, travel trailer,

and camper manufacturing 112 112 100% 0 0 0 112

336214 1,203 1,203 100% 0 0 0 1,203

321991 Manufactured Home and

Prefabricated Building

Manufacturing 798 798 11% 710 78 234 564

321992 1,930 1,930

6% 1,814 200 599 1,331

339950 Sign Manufacturing 25,917 25,917 10% 23,325 2,566 7,697 18,220

Total Affected Fabricators 79,978 79,978 47,540 5,230 15,688 64,290

a Affected firms are those that sell composite wood products. S ee Table 2

- 8

. b See Table 2

- 75

.

c See Table 2

- 69 . None of the fabricators responding to the questionnaire reported incurring initial recordkeeping costs or recurring labeli ng costs.TSCA Title VI Proposed Implementation Rule EA 2

- 129



### Table 2

- 80 : Baseline Compliance and Number of Wholesaler Firms Incurring Different Types of 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

Complia nce Number of

Firms with

Initial

Labeling

Costs (1%

of all firms) Number of Firms with Incremental Recordkeeping Costs c

Options with

Recordkeeping

Requirements Consistent

with the CARB ATCM

(SE, SI, SP, SN, SC, SFCC,

CE, CI, NE, NI) Options with Reduced

Recordkeeping Requirements

(SCR, SEUR, SCUR)

Initial Costs

(57% of

firms

without

baseline

compliance) Recurring

Costs

(43% of

firms

without

baseline

compliance) Initial Costs

(57% of the

28% of firms

without

baseline

compliance that

are importers) Recurring

Costs

(43% of the

28% of firms

without

baseline

compliance

that are

importers)

423210 d Furniture merchant wholesalers 12,480 12,480 100% 0 125 0 0 0 0

423220 d Home furnishing merchant

wholesalers 13,759 6,496 100% 0 65 0 0 0 0

423310 Lumber, plywood, millwork, and

wood panel merchant wholesalers 10,130 10,130 12% 8,883 101 5,063 3,820 1,418 1,070

423320 Brick, stone, and related

construction material merchant

wholesalers 3,931 401 15% 341 4 194 147 54 41

423330 Roofing, siding, and insulation

material merchant wholesalers 2,279 1,779 14% 1,536 18 876 660 245 185

423390 Other construction material

merchant wholesalers 3,886 3,300 15% 2,818 33 1,606 1,212 450 339

423410 Photographic equipment and

supplies merchant wholesalers 1,178 46 25% 35 0 20 15 6 4

423420 Office equipment merchant

wholesalers 3,738 101 18% 83 1 47 36 13 10

423430 Computer and software merchant

wholesalers 11,293 200 24% 152 2 87 65 24 18

423440 Other commercial equipment

merchant wholesalers 5,279 1,057 13% 920 11 524 396 147 111

423450 Medical equipment merchant

wholesalers 9,593 78 16% 66 1 38 28 11 8

423490 Other professional equipment and

supplies merchant wholesalers 2,709 99 15% 84 1 48 36 13 10

423510 Metal service centers and other

metal merchant wholesalers 10,573 1,292 15% 1,096 13 625 471 175 132TSCA Title VI Proposed Implementation Rule EA 2

- 130



### Table 2

- 80 : Baseline Compliance and Number of Wholesaler Firms Incurring Different Types of 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

Complia nce Number of

Firms with

Initial

Labeling

Costs (1%

of all firms) Number of Firms with Incremental Recordkeeping Costs c

Options with

Recordkeeping

Requirements Consistent

with the CARB ATCM

(SE, SI, SP, SN, SC, SFCC,

CE, CI, NE, NI) Options with Reduced

Recordkeeping Requirements

(SCR, SEUR, SCUR)

Initial Costs

(57% of

firms

without

baseline

compliance) Recurring

Costs

(43% of

firms

without

baseline

compliance) Initial Costs

(57% of the

28% of firms

without

baseline

compliance that

are importers) Recurring

Costs

(43% of the

28% of firms

without

baseline

compliance

that are

importers)

423610 Elec. equip. and wiring merchant

wholesalers 13,035 101 19% 82 1 47 35 13 10

423620 Electric appliance merchant

wholesalers 3,675 88 25% 66 1 38 28 11 8

423690 Other electronic parts and

equipment merchant wholesalers 14,717 121 26% 89 1 51 38 14 11

423710 Hardware merchant wholesalers 6,722 938 19% 756 9 431 325 121 91

423720 Plumbing equip. merchant

wholesalers 5,252 1,392 19% 1,130 14 644 486 180 136

423730 HVAC equip. merchant wholesalers 3,455 571 14% 488 6 278 210 78 59

423740 Refrigeration equipment and

supplies merchant wholesalers 1,040 91 22% 71 1 40 31 11 9

423810 Construction equipment merchant

wholesalers 4,473 21 11% 19 0 11 8 3 2

423820 Farm and garden machinery and

equipment merchant wholesalers 8,964 461 10% 417 5 238 179 67 50

423830 Industrial machinery and equipment

merchant wholesalers 32,888 525 12% 460 5 262 198 73 55

423840 Industrial supplies merchant

wholesalers 8,213 293 16% 246 3 140 106 39 30

423850 Service establishment equipment

and supplies merchant wholesalers 5,050 715 10% 644 7 367 277 103 78

423910 Sporting and recreational goods and

supplies merchant wholesalers 16,709 9,739 21% 7,685 97 4,380 3,305 1,226 925

423920 Toy and hobby goods and supplies

merchant wholesalers 9,801 9,801 31% 6,807 98 3,880 2,927 1,086 820TSCA Title VI Proposed Implementation Rule EA 2

- 131



### Table 2

- 80 : Baseline Compliance and Number of Wholesaler Firms Incurring Different Types of 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

Complia nce Number of

Firms with

Initial

Labeling

Costs (1%

of all firms) Number of Firms with Incremental Recordkeeping Costs c

Options with

Recordkeeping

Requirements Consistent

with the CARB ATCM

(SE, SI, SP, SN, SC, SFCC,

CE, CI, NE, NI) Options with Reduced

Recordkeeping Requirements

(SCR, SEUR, SCUR)

Initial Costs

(57% of

firms

without

baseline

compliance) Recurring

Costs

(43% of

firms

without

baseline

compliance) Initial Costs

(57% of the

28% of firms

without

baseline

compliance that

are importers) Recurring

Costs

(43% of the

28% of firms

without

baseline

compliance

that are

importers)

423930 Recyclable material merchant

wholesalers 14,909 12 13% 10 0 6 4 2 1

423940 Jewelry merchant wholesalers 30,439 215 20% 173 2 99 74 28 21

423990 Other miscellaneous durable goods

merchant wholesalers 66,646 13,794 18% 11,320 138 6,452 4,868 1,807 1,363

424110 Printing and writing paper merchant

wholesalers 1,423 35 18% 29 0 17 12 5 3

424120 Stationery and office supplies

merchant wholesalers 7,607 1,655 15% 1,405 17 801 604 224 169

424130 Industrial and personal service paper

merchant wholesalers 6,614 184 17% 152 2 87 65 24 18

424210 Drugs and druggists' sundries

merchant wholesalers 8,694 136 22% 107 1 61 46 17 13

424310 Piece goods, notions, and other dry

goods merchant wholesalers 7,682 332 30% 234 3 133 101 37 28

424320 Men's and boys' clothing and

furnishings merchant wholesalers 9,509 489 25% 369 5 210 159 59 45

424330 Women's and children's clothing

merchant wholesalers 17,452 261 32% 178 3 101 77 28 22

424340 Footwear merchant wholesalers 3,755 119 33% 80 1 46 34 13 10

424410 General line grocery merchant

wholesalers 4,495 580 20% 466 6 266 200 74 56

424420 Packaged frozen food merchant

wholesalers 5,754 78 20% 63 1 36 27 10 8

424450 Confectionery merchant wholesalers 3,331 14 15% 12 0 7 5 2 1

424460 Fish and seafood merchant 3,721 13 12% 11 0 6 5 2 1TSCA Title VI Proposed Implementation Rule EA 2

- 132



### Table 2

- 80 : Baseline Compliance and Number of Wholesaler Firms Incurring Different Types of 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

Complia nce Number of

Firms with

Initial

Labeling

Costs (1%

of all firms) Number of Firms with Incremental Recordkeeping Costs c

Options with

Recordkeeping

Requirements Consistent

with the CARB ATCM

(SE, SI, SP, SN, SC, SFCC,

CE, CI, NE, NI) Options with Reduced

Recordkeeping Requirements

(SCR, SEUR, SCUR)

Initial Costs

(57% of

firms

without

baseline

compliance) Recurring

Costs

(43% of

firms

without

baseline

compliance) Initial Costs

(57% of the

28% of firms

without

baseline

compliance that

are importers) Recurring

Costs

(43% of the

28% of firms

without

baseline

compliance

that are

importers)

wholesalers

424480 Fresh fruit and vegetable merchant

wholesalers 9,203 16 23% 12 0 7 5 2 1

424490 Other grocery and related products

merchant wholesalers 17,300 312 19% 253 3 144 109 40 31

424510 Grain and field bean merchant

wholesalers 5,795 23 5% 22 0 13 9 4 3

424610 Plastics materials and basic forms

and shapes merchant wholesaler 3,607 496 18% 406 5 231 175 65 49

424690 Other chemical and allied products

merchant wholesalers 8,143 87 14% 75 1 43 32 12 9

424910 Farm supplies merchant wholesalers 6,836 68 13% 59 1 34 25 10 7

424920 Book, periodical, and newspaper

merchant wholesalers 16,045 382 16% 319 4 182 137 51 38

424930 Flower, nursery stock, & florists'

supplies merchant wholesalers 11,537 165 18% 135 2 77 58 22 16

424940 Tobacco and tobacco product

merchant wholesalers 2,300 11 8% 10 0 6 4 2 1

424950 Paint, varnish, and supplies

merchant wholesalers 2,704 128 18% 105 1 60 45 17 13

424990 Other miscellaneous nondurable

goods merchant wholesalers 56,245 3,639 24% 2,752 36 1,569 1,183 439 331

Total Affected Wholesalers 556,568 85,560 53,731 855 30,629 23,102 8,576 6,469

a Affected firms are those that sell composite wood products. S ee Table 2

- 16

. b See Table 2

- 76

. c See Table 2

- 70

. d Two wholesale industries, Furniture Merchant Wholesalers (423210) and Home Furnishing Merchant Wholesalers (423220) are assum ed to be fully compliant with the CARB ATCM

chain of custody requirements in the baseline, based on conversation with industry ( Personal Communication with AHFA 2010

, Personal Communication with BIFMA 2010 )

.TSCA Title VI Proposed Implementation Rule EA 2

- 133



### 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 Recreational vehicle dealers 7,043 7,043 12% 6,223

441221 Motorcycle, ATV, and personal watercraft dealers 9,934 1,324 11% 1,183

441229 All other motor vehicle dealers 24,905 2,715 11% 2,428

441320 Tire dealers 23,495 37 15% 32

442110 Furniture stores 36,113 36,113 15% 30,608

442210 Floor covering stores 24,232 21,254 11% 18,881

442291 Window treatment stores 4,334 978 15% 831

442299 All other home furnishings stores 26,385 26,385 15% 22,319

443111 Household appliance stores 13,969 3,381 11% 3,025

443112 Radio, television, and other electronics stores 28,227 13,501 17% 11,233

443120 Computer and software stores 14,806 1,052 15% 893

443130 Camera and photographic supplies stores 2,532 23 18% 19

444110 Home centers 5,076 5,076 16% 4,255

444120 Paint and wallpaper stores 4,344 682 19% 552

444130 Hardware stores 17,083 17,083 10% 15,432

444190 Other building material dealers 48,426 38,160 12% 33,463

444210 Outdoor power equipment stores 6,532 758 6% 715

444220 Nursery, garden center, and farm supply stores 21,508 13,426 9% 12,262

445110 Supermarkets and other grocery (except convenience)

stores 74,561 21,981 15% 18,617

445120 Convenience stores 35,015 10,139 11% 9,002

445210 Meat markets 8,766 143 11% 127

445220 Fish and seafood markets 4,544 152 10% 136

445230 Fruit and vegetable markets 10,823 413 10% 370

445291 Baked goods stores 13,763 109 12% 96

445292 Confectionery and nut stores 10,589 774 14% 666

445299 All other specialty food stores 17,905 1,959 12% 1,721

445310 Beer, wine, and liquor stores 39,442 1,312 11% 1,164

446110 Pharmacies and drug stores 24,805 18,543 15% 15,678

446120 Cosmetics, beauty supplies, and perfume stores 88,932 674 12% 590

446130 Optical goods stores 8,156 6 16% 5

446191 Food (health) supplement stores 27,185 620 13% 539

446199 All other health and personal care stores 33,783 54 13% 47

447110 Gasoline stations with convenience stores 61,137 2,935 15% 2,496

447190 Other gasoline stations 17,358 205 13% 178

448110 Men's clothing stores 9,083 598 18% 491

448120 Women's clothing stores 30,198 2,890 17% 2,400

448130 Children's and infants' clothing stores 9,814 3,922 16% 3,309

448140 Family clothing stores 21,840 16,346 20% 13,148

448150 Clothing accessories stores 23,620 873 15% 739

448190 Other clothing stores 34,597 2,794 15% 2,370

448210 Shoe stores 11,885 1,212 19% 980

448310 Jewelry stores 60,343 5,389 14% 4,614

448320 Luggage and leather goods stores 2,831 424 16% 356

451110 Sporting goods stores 38,976 28,113 13% 24,321TSCA Title VI Proposed Implementation Rule EA 2

- 134



### 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

451120 Hobby, toy, and game stores 20,373 20,373 14% 17,479

451130 Sewing, needlework, and piece goods stores 20,034 18,421 13% 15,988

451140 Musical instrument and supplies stores 9,656 30 12% 26

451211 Book stores 14,832 5,425 16% 4,581

451212 News dealers and newsstands 13,270 2,553 11% 2,261

451220 Prerecorded tape, compact disc, and record stores 6,315 3,571 14% 3,053

452111 Department stores (except discount department stores) 2,562 2,562 71% 748

452112 Discount department stores 3,611 3,611 75% 915

452910 Warehouse clubs and supercenters 3,076 3,076 92% 245

452990 All other general merchandise stores 32,639 32,638 10% 29,449

453110 Florists 43,160 33,046 9% 30,014

453210 Office supplies and stationery stores 11,371 10,745 18% 8,858

453220 Gift, novelty, and souvenir stores 77,835 53,166 13% 46,362

453910 Pet and pet supplies stores 14,243 106 13% 92

453920 Art dealers 23,850 3,072 14% 2,652

453930 Manufactured (mobile) home dealers 4,985 4,985 7% 4,621

453991 Tobacco stores 35,266 2,373 13% 2,072

453998 All other miscellaneous store retailers (except tobacco

stores) 94,838 27,491 12% 24,329

454111 Electronic shopping 67,565 24,102 10% 21,618

454113 Mail

- order houses 34,185 11,548 11% 10,247

454210 Vending machine operators 32,246 255 11% 227

454311 Heating oil dealers 4,675 1,445 12% 1,276

454312 Liquefied petroleum gas (bottled gas) dealers 4,116 1,039 20% 827

454390 Other direct selling establishments 717,235 177,871 11% 158,180

Total Affected Retailers 2,399,646 759,048 658,150

a Affected firms are those that sell composite wood products. S ee Table 2

- 17

. b See Table 2

- 77

.



### 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 number 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 manufactures corresponds to the higher estimate for fabricators,

and the higher estimate for wood veneer la minated product manufactures corresponds to the lowe r estimate for

fabricators.TSCA Title VI Proposed Implementation Rule EA 2

- 135



### 2.5.4 Total Estimated Costs of Rule Familiarization, Notification, and Recordkeeping

and Labeling Requirements

The total costs of the recordkeeping, supplier notification, labeling, and rule familiarization

requirements are estimated by applying the per

- firm costs to the number of affected composite panel

producer, fabricator, wholesaler, and retailer firms by industry. Table 2

- 84 summarizes the se costs

, except costs to panel producers, under all the options where these requirements are equivalent to the

CARB ATCM (all options except for SCR , SEUR, and SCUR ). Table 2

- 85 summarizes the se costs

, except costs to panel producers, under options SCR, SEUR, and SCUR (the proposed option )

. Table 2

- 86

presents the additional recordkeeping costs associated with panel production. These additional costs are

incurred by stock panel producers and laminated product producers under those analytical options that

define these producers, or a subset of them, as producing hardwood plywood.

Under options SCR, SEUR, and SCUR, firms that are not manufacturers under TSCA ( i.e.,

wholesalers and retailers that do not import composite wood products ) are only required to keep bi lls of

lading and invoices . Most distributors and retailers are likely to keep these records as part of their

customary business practices

. 36 

### T herefore this recordkeeping requirement is not assumed to impose any

additional burden on non

- manufacturers

. In addition, options SCR, SEUR, and SCUR do not include a

requirement for purchasers to send a separate letter to their suppliers

, whereas all the other options

include such a requirement.

Under options SCR, SEUR, and SCUR , i mporter s are required to keep records identifying the

panel producer and the date that the composite wood products were manufactured , but their customers do

not need to keep these records . For example, if an importer sells the goods to a domestic distributor who

then sells them to a d omestic retailer, only the importer would have to keep the additional records. The

domestic distributor and retailer would only be required to keep invoices and bills of lading.

Th is analysis estimate s the number of wholesalers who import composite w ood products to be

proportional to the ratio of the value of imports of composite wood products to the sum of the total import

and domestic shipment values

. As shown in Table 2

- 83

, imports represent 28 percent of the value of

imports and domestic shipments . Thus , it is estimated that 28 percent of wholesalers are importers of

composite wood products

. This results in an estimate that 24,000 of the 86,000 wholesalers import

composite wood products. The analysis assumes that wholesalers are responsible for all imports and

retailers do not import products directly without a wholesaler

. Since t he number of wholesalers th at

import products is estimated using the total customs value of imports ( which reflects imports by all

sectors ), t o the extent that some products are imported directly by retailers, the number of such retailers

(and the cost of their recordkeeping) would be reflected in the wholesale r estimate. And to the extent that

some fabricators import composite wood products directly, the estimated total recordkeeping cost may be

over stated (since the recordkeeping costs for fabricators are estimated separately).

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 ).TSCA Title VI Proposed Implementation Rule EA 2

- 136



### Table 2

- 83 : Customs Value of Imports and Domestic Value of Shipments, by Affected NAICS

(millions, 2010$)

NAICS Description Customs

Value of

Imports Domestic

Value of

Shipments Sum of

Imports and

Domestic

Shipments

321211 Hardwood veneer and plywood manufacturing $1,516 $3,327 $4,843

321219 Reconstituted wood product manufacturing $1,502 $6,721 $8,223

321911 Wood window and door manufacturing $491 $14,161 $14,653

321918 Other millwork (including flooring) $770 $7,483 $8,254

321991 Manufactured home (mobile home) manufacturing $2 $6,086 $6,089

321992 Prefabricated wood building manufacturing $50 $4,215 $4,265

321999 All other miscellaneous wood product manufacturing $1,927 $6,058 $7,984

336213 Motor home manufacturing $117 $5,779 $5,896

336214 Travel trailer and camper manufacturing $537 $10,641 $11,178

337110 Wood kitchen cabinet and countertop manufacturing $491 $18,658 $19,149

337121 Upholstered household furniture manufacturing $2,898 $11,269 $14,166

337122 Nonupholstered wood household furniture manufacturing

- - -

337124 Metal household furniture manufacturing $2,708 $2,393 $5,101

337127 Institutional furniture manufacturing $12,133 $5,799 $17,932

337129 Wood television, radio, and sewing machine cabinet manufacturing $4 $407 $411

337211 Wood office furniture manufacturing $697 $2,904 $3,601

337212 Custom architectural woodwork and millwork manufacturing

- - -

337214 Office furniture (except wood) manufacturing $410 $8,978 $9,388

337215 Showcase, partition, shelving, and locker manufacturing $4,283 $7,873 $12,156

339920 Sporting and athletic goods manufacturing $6,260 $12,510 $18,770

339932 Game, toy, and children's vehicle manufacturing $21,428 $2,712 $24,140

339950 Sign manufacturing $184 $13,003 $13,187

339992 Musical instrument manufacturing $1,190 $1,796 $2,986

Total $59,598 $152,772 $212,370



### Ratio of Customs Value of Imports to Sum of Imports and Domestic Shipments 28%

Sources: U.S. Census Bureau 2010k

, U.S. International Trade Commission 2011TSCA Title VI Proposed Implementation Rule EA 2

- 137



### 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 $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 $28,654,203

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 t ype, see

Table 2

- 78 through Table 2

- 81 . Note that because firms producing two different types of composite wood products are expected to

incur separate costs for each product type, the estimate of 62 stock panel producer firms tha t is used to estimate costs is derived by

counting firms that produce two different types of composite wood products twice. There are 54 unique firms that produce sto ck

panels.

b For derivation of rule familiarization and supplier notification per

- firm co sts, see Table 2

- 71 and Table 2

- 72 ; for deriva tion 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

.TSCA Title VI Proposed Implementation Rule EA 2

- 138



### Table 2

- 85 : Rule Familiarization, Supplier Notification, Labeling and Recordkeeping Costs

(excluding panel production recordkeeping costs shown in Table 2

- 86 ) for Option S EU R,

SCR, and SC U R (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 $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 2,642 $ 4,980.30 $ 13,158,351

Nonemployer Recurring Recordkeeping 3,826 $ 100.05 $ 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 t ype, see

Table 2

- 78 through Table 2

- 81 . Note that because firms producing two different types of composite wood products are expected to

incur separate costs for each product type, the estimate of 62 stock panel producer firms that is used to estimate costs is d erived by

counting firms that produce two different types of composite wood products twice. There a re 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 init ial 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).TSCA Title VI Proposed Implementation Rule EA 2

- 139



### Table 2

- 86 : Panel Production Recordkeeping Costs (2010$)

Regulatory Option Number of

Affected

Firms a Average Per

Firm 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 $3,710.72 $230,065 $218,897 $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 $951,214TSCA Title VI Proposed Implementation Rule EA 2

- 140



## 2.6 Total Costs of the Proposed TSCA Title VI Implementation Rule

Table 2

- 87 presents the total undiscounted first and subsequent year costs and Table 2

- 88 present s
the annualized costs of the proposed TSCA Title VI Implementation Rule. The costs are presented by

analytical option and cost scenario for wood veneer laminated product producers (i.e., a low end estimate

of 7,486 and a high end estimate of 13,875 for t he number of affected wood veneer laminated product

producers, and assuming 1 or 2 product lines requiring certification for the options where certification is

applicable). Note that the laminator’s costs presented in Table 2

- 87 and Table 2

- 88 include the costs to

all wood veneer laminated product pr oducers regardless of the requirements under each analytical option

presented. For example, under Option SE UR all laminated product producers are defined as fabricators,

but their costs are still reported separately in the laminator rows of the tables.

For the options with emissions requirements that are consistent with TSCA Title VI (Options SE,

SI, SP, SN, SC, SCR, SEUR, SFCC, and SC U R), the first year costs range from $ 420 million to $1,254

million and the annualized costs range from $ 60 million to $ 311 million per year. The proposed option

(Option SC U R) has first year costs of $43 4 million to $447 million. The annualized costs under Option

SC U R range from $72 million to $81 million per year using a 3 percent discount rate , which is $ 12 to $ 21

milli on more than the least expensive option with emissions requirements that are consistent with the

statute (Option SE UR ).

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

presented for information purposes since th ey are not consistent with the emissions requirements of the

statute), have estimated annualized costs ranging from $99 to $292 million per year using a 3 percent

discount rate . The estimated costs under Options CE and CI are similar to the estimated cost s under the

options with emissions requirements consistent with the statute, because recordkeeping, labeling, testing

and certification are the primary cost drivers and loosening emissions standards does not affect these

costs.

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

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

statute), have estimated annualized costs ranging from $379 to $573 million using a 3 percent discount

rate . The additional costs associated with changes to raw materials and production processes account for

the difference between the costs under these options compared to the options with emissions requirements

that are consistent with the statute (SE, SI, SP, SN, SC, SCR, and SC U R).TSCA Title VI Proposed Implementation Rule EA 2

- 141



### 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 $82 $82 $82 $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 $75 $122 $77 $124 $34 $45 $35 $47

Total $626 $636 $628 $639 $108 $116 $109 $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: 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 $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 SFCC: Statutory

emissions standards where all

wood veneer laminated products

are exempt from the definition of Producers $2 $2 $2 $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 $48TSCA Title VI Proposed Implementation Rule EA 2

- 142



### 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

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 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 fabricators that a re not laminators. Costs under the “Low End Scenario”

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

reflect the high end estimate of the number of laminators (approximately 1 4,000 firms). The estimated number of fabricators that

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

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

costs to fabricators that are not laminators are higher under the “Low End Scenario” then under the “High End Scenario”.

3 Costs to laminators represent the costs to all firms that affix a wo od 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 laminato rs

that are considered fabricators under the proposed rule.TSCA Title VI Proposed Implementation Rule EA 2

- 143



### 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 $110 $193 $117 $205 $114 $200 $121 $212

Total $204 $282 $211 $293 $218 $298 $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 $34 $47 $35 $49 $34 $48 $35 $49

Total $128 $136 $129 $137 $139 $146 $140 $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: Statutory emissions

standards where laminated products

made with compliant platforms and

NAF resins are exempt from the

definition of hardwood plywood.

Reduced Recordke e ping

. 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 $79 $73 $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 SFCC: Statutory emissions

standards where all wood veneer

laminated products are 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 $20TSCA Title VI Proposed Implementation Rule EA 2

- 144



### 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

exempt from the definition of

hardwood plywood. ULEF

Exemption. CARB Recordkeeping. 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 Optio n.

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 $110 $193 $117 $205 $114 $200 $121 $212

Total $203 $281 $210 $292 $217 $297 $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 $110 $193 $117 $205 $114 $200 $121 $212

Total $484 $561 $490 $573 $490 $570 $497 $582

Option 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 fabricators that are not laminators. Costs under the “Low End Scenario”

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

r eflect the high end estimate of the number of laminators (approximately 14,000 firms). The estimated number of fabricators t hat are

not laminators is inversely proportional 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 resul t, 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, MD F or

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

are considered fabricators under the proposed rule.TSCA Title VI Proposed Implementation Rule EA 2

- 145



## 2.7 Summary of Costs by Entity Type and Activity for Options SI, SE, SCR,

SEUR, and SCUR

Table 2

- 89 through Table 2

- 93 present a summary of the per

- entity and total costs for analytical

options SI, SE, SCR, SEUR, and SCUR. The costs presented in these tables are broken out by the type of

entity, the baseline status under the CARB ATCM, and the activity being performed.TSCA Title VI Proposed Implementation Rule EA 2

- 146 

### Table 2

- 89 : Option S E: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

Panel

manufacturers All panel manufacturers 62 entities Become familiar with TSCA rule $294

- - - 62 100% $0.02

- - -

Supplier Notification $337

- - - 62 100% $0.02

- - -

On

- site daily quality control testing d 0 or $10,832 0 or $832 34 55% $0.4 $0.03

Set

- up to label products as TSCA

compliant $149 `

- - - 62 100% $0.009

- - -

Keep additional records $3,711 62 100% $0.2 $0.2

Manufacture products

not certified under

CARB ATCM 16 entities and

49.6 msf of

production Have products tested and certified by

a TPC e $5,185 to $31,183 $2,365 to $6,230 16 100% $0.4 $0.08

Changes to raw materials f 0 or $20 to $110 per thousand square feet

(msf) of product produced 47,300 msf 95% $1.1 $1.1

Manufacture products

certified as ULEF

under CARB ATCM 17 entities Have products tested and certified as

Phase 2 or NAF by a TPC e $12,312 to $51,292 ($2,790) to $51,292 17 100% $0.6 $0.5

Wood veneer

laminated

product

manufacturers All laminators g,h 7,486 to 13,875

entities Become familiar with the TSCA rule $294

- - - 7,486 to 13,875 100% $2.2 to

$4.1 - - -

Supplier Notification $343

- - - 7,486 to 13,875 100% $2.6 to

$4.8

Set

- up to label products as TSCA

compliant $4,552

- - - 7,486 to 13,875 100% $34.1 to

$63.2 - - -

Keep additional records i,j Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 481 to 891 non

- emplyr

343 to 635 employer 11% $4.5 to

$8.4 $4.5 to $8.4

Fabricators

that are not

laminators All fabricators that are

not laminators 66,103 to

72,492 entities Become familiar with the TSCA rule k $294

- - - 66,103 to 72,492 100% $19.5 to

$21.3 - - -

Set

- up to label products as TSCA

compliant k, l $133

or

$4,552 - - - 64,290 minor cost;

1,813 to 8,202 more

substantive cost 100% $16.8 to

$45.9 - - -

Fabricators not

compliant with CARB

ATCM requirements 33,665 to

40,054

entities Supplier Notification $343

- - - 33,665 to 40,054 100% $11.5 to

$13.7 - - -

Keep additional records j, k Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 2,163 to 2,573 non

employers; 1,541 to

1,833 employers 11% $20.3 to

$24.1 $20.3 to

$24.1

Wholesalers All wholesalers 85,560 entities Become familiar with the TSCA rule $373

- - - 85,560 100% $31.9

- - -TSCA Title VI Proposed Implementation Rule EA 2

- 147 

### Table 2

- 89 : Option S E: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

If repackaging or replacing an original

label, set

- up to label products as

TSCA compliant $4,552

- - - 855 1% $3.9

- - -

Wholesalers that are

not compliant with

CARB ATCM 53,731

entities m Supplier Notification $345 53,731 100% $18.5

- - -

Set up systems to keep additional

records n 0 or $2,511

- - - 30,629 57% $76.9

- - -

Keep additional records o Non

- employer firms: 0 or $100

Employer firms: 0 or $4,980 3,826 non

- employers;

2,642 employer 43% $48.4 $48.4

Retailers All retailers 759,048 entities Become familiar with the TSCA rule $283

- - - 759,048 100% $214.7

- - -

Retailers that are not

compliant with CARB

ATCM 658,150 entities Supplier Notification $75

- - - 658,150 100% $49.1

- - -

Total Rule Cost $595 $79

a Categories 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 comply

with the CARB ATCM and those that do not. For each indus try, the various sub

- categories in the baseline status column (such as entities 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 and

recordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.

b Estimated number of entities reflects those entities selling composite wood p roducts or goods containing regulated composite wood products. Production volume is only listed for entities with a

cost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.

c Reported v alues represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activities

with a single value reported spanning both cost columns, entities are es timated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the u nit

cost is based on the production volume affected rather than the number of entities affected.

d Panel producers with a standard certification or a new NAF certification are assumed to conduct daily on

- site quality control testing in order to comply with the proposed requirement that tested

lots must be held until test results indicate that the emissions standard has been met. Part icleboard and MDF manufacturers are assumed to be conducting daily on

- site quality control testing to

comply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification wi ll already have been exempted

from 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

incur incremental costs to c onduct 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 three

months. e Incremental 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.

f Estimated raw materials costs vary with the type of composite wood product, the resin used in the baseline, and the compositi on 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 est imated to incur incremental costs of $50/msf (3/8” basis) for

changes 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 production

volume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MD F produc tion is estimated to comply with the emission standards in theTSCA Title VI Proposed Implementation Rule EA 2

- 148 

### Table 2

- 89 : Option S E: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

baseline, so MDF producers are not expected to make raw materials changes. Particleboard producers are estimated to incur in cremental costs of $20/msf (3/4” basis) for raw materials changes fo r

all 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 it

meets the emission standard in the baseline. Thus, of the 4 9.6 mmsf of composite wood manufactured by stock panel producers that is not certified under the CARB ATCM, 47.3 mmsf (95%) i s

estimated to change raw materials.

g All laminators are defined as fabricators under Option SE and do not incur costs to change r aw materials, or to test and certify products, under this option.

h Under Option SE all laminators are defined as fabricators.

i To simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities ar e compliant with the CARB ATCM in the baseline.

j Based 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 to

incur additional recurr ing recordkeeping costs averaging $12,917 for employer firms and $179 for non

- employer firms to comply with the recordkeeping requirements in the TSCA rule (although

recurring 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.

k There 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 for

the number of laminators corresponds to the lower estimate for the number of fabricators that are not laminators, so total co sts vary inversely between the two groups. Thus, when adding all the

rows together to yield t he Total Rule Cost in the final row of this table, the order of the Total Cost ranges for this row must be reversed. Under O ption SE there is no low and high value for the total

cost. 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 72,492

fabricators that are not laminators, which is a total of 79,978 firms; the high estimate reflects 13,875 laminators and 66,10 3 fabrica tors that are not laminators, which is also 79,978 firms combined.

Thus, there are 79,978 firms defined as fabricators in both cases.

l Based on conversations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM a nd 67% of firms that are not already complying with the CARB

ATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying wit h the CARB ATCM are assumed to incur more substantive costs

(averaging $4,552) to set up labels.

m The analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline.

n Under Option SE, firms must keep additional records equivalent to those required by the CARB ATCM. However, firms that are c ompliant with the CARB ATCM will already be keeping

sufficient records to comply with the requirements. In conversations with entities complying with the CARB ATCM, 57% of whol esalers reported incurring average costs of $2,511 to set up

recordkeeping systems to comply with the rule. (Fabricators and retailers did not report incurring such costs.) So 57% of the wholesalers and are not compl iant with the CARB ATCM are estimated

to 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 panel

manufacturers, laminators, and fabricators, are assumed to be sufficient to comply with the TSCA rule.

o Based 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 recurring

recordkeeping costs. They are estimated to incur costs averaging $4,890 p er firm for employer firms and $100 for non

- employer firms to comply with Option SE (although recurring recordkeeping

costs for these entities are assumed to be a function of firm size as measured by revenues). The remaining wholesalers are n ot estimated to incur these recordkeeping costs because their existing

records are sufficient to comply with the rule’s requirements.TSCA Title VI Proposed Implementation Rule EA 2

- 149 

### Table 2

- 90 : Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

Panel

manufacturers All panel manufacturers 62 entities Become familiar with TSCA rule $294

- - - 62 100% $0.02

- - -

Supplier Notification $337

- - - 62 100% $0.02

- - -

On

- site daily quality control testing d 0 or $10,832 0 or $832 34 55% $0.4 $0.03

Set

- up to label products as TSCA

compliant $149 `

- - - 62 100% $0.009

- - -

Keep additional records $3,711 62 100% $0.2 $0.2

Manufacture products

not certified under

CARB ATCM 16 entities and

49.6 msf of

production Have products tested and certified by

a TPC e $5,185 to $31,183 $4,485 to $6,230 16 100% $0.4 $0.09

Changes to raw materials f 0 or $20 to $110 per thousand square feet

(msf) of product produced 47,300 msf 95% $1.1 $1.1

Manufacture products

certified as ULEF

under CARB ATCM 17 entities Have products tested and certified as

Phase 2 or NAF by a TPC e $12,312 to $51,292 ($2,806) to $51,292 17 100% $0.6 $0.5

Wood veneer

laminated

product

manufacturers All laminators h 7,486 to 13,875

entities and

362,414 msf of

production Become familiar with the TSCA rule $294

- - - 7,486 to 13,875 100% $2.2 to

$4.1 - - -

Supplier Notification $343

- - - 7,486 to 13,875 100% $2.6 to

$4.8

Set

- up to label products as TSCA

compliant $4,552

- - - 7,486 to 13,875 100% $34.1 to

$63.2 - - -

Have products tested and certified by

a TPC e $26,226 to $70,782 $5,685 to $61,950 7,486 to 13,875 100% $201.6

to

$443.6 $50.1 to

$101.9

On

- site daily quality control testing d $10,832 $832 7,486 to 13,875 100% $81.1 to

$150.3 $6.2 to

$11.5

Changes to raw materials g 0 or $90 per thousand square feet (msf) of

product produced 107,482 msf switching

resins and 184,023 msf

switching platforms 51% $14.3 $14.3

Keep additional records i,j Non

- employer firms: $3,711 to $3,890

Employer firms: $3,711 to $16,628 4,371 to 8,102 non

- emp

3,115 to 5,773 employer 100% $32.3 to

$59.8 $32.3 to

$59.8

Fabricators

that are not

laminators All fabricators that are

not laminators 66,103 to 72,492

entities Become familiar with the TSCA rule

k $294

- - - 66,103 to 72,492 100% $19.5 to

$21.3 - - -

Set

- up to label products as TSCA

compliant k, l $133

or

$4,552 - - - 64,290 minor cost;

1,813 to 8,202 more

substantive cost 100% $16.8 to

$45.9 - - -TSCA Title VI Proposed Implementation Rule EA 2

- 150 

### Table 2

- 90 : Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

Fabricators not

compliant with CARB

ATCM requirements 33,665 to

40,054 entities Supplier Notification $343

- - - 33,665 to 40,054 100% $11.5 to

$13.7 - - -

Keep additional records j, k Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 2,163 to 2,573 non

employers; 1,541 to

1,833 employers 11% $20.3 to

$24.1 $20.3 to

$24.1

Wholesalers All wholesalers 85,560 entities Become familiar with the TSCA rule $373

- - - 85,560 100% $31.9

- - -

If repackaging or replacing an

original label, set

- up to label

products as TSCA compliant $4,552

- - - 855 1% $3.9

- - -

Wholesalers that are

not compliant with

CARB ATCM 53,731entities m Supplier Notification $345 53,731 100% $18.5

- - -

Set up systems to keep additional

records n 0 or $2,511

- - - 30,629 57% $76.9

- - -

Keep additional records o Non

- employer firms: 0 or $100

Employer firms: 0 or $4,980 13,666 non

- employers;

9,436 employer 43% $48.4 $48.4

Retailers All retailers 759,048entities Become familiar with the TSCA rule $283

- - - 759,048 100% $214.7

- - -

Retailers that are not

compliant with CARB

ATCM 658,150 entities Supplier Notification $75

- - - 658,150 100% $49.1

- - -

Total Rule Cost $919.4

to

$1254.3 $177.3 to

$258.2

a Categories 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 comply

with the CARB ATCM and those that do not. For each indus try, the various sub

- categories in the baseline status column (such as entities 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 and

recordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.

b Estimated number of entities reflects those entities selling composite wood p roducts or goods containing regulated composite wood products. Production volume is only listed for entities with a

cost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.

c Reported 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 activities

with 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 unit

cost is based on the production volume affected rather than the number of entities affected.

d Panel producers with a standar d certification or a new NAF certification are assumed to conduct daily on

- site quality control testing in order to comply with the proposed requirement that tested

lots must be held until test results indicate that the emissions standard has been met. Pa rticleboard and MDF manufacturers are assumed to be conducting daily on

- site quality control testing to

comply 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 exempted

from 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 wouldTSCA Title VI Proposed Implementation Rule EA 2

- 1 51 

### Table 2

- 90 : Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

incur 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 three

months. Laminators defined as hardwood plywood manufacturers do not perform testi ng in the baseline, and thus would also incur costs for on

- site daily quality control testing.

e Incremental testing costs depend on several factors including the type of composite wood product, the number of products cert ified, the baseline CARB ATCM cert ification level (Phase 2, ULEF,

or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum o f this value and the cost of on

- site daily quality control testing.

f Estimated 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 use d 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

changes to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of t hat production volume). The r emaining hardwood plywood production

volume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MD F production is estimated to comply with the emission standards in the

baseline, so MDF produc ers 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 for

all the 45 mmsf of production volume that is not certified under the CARB ATCM in th e baseline. The remaining particleboard production is not estimated to make raw materials changes because it

meets 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%) is

estimated to change raw materials.

g For products made by laminators (and thus are defined as hardwood plywood producers under Option SI), 30% of the production v olume is assumed to incur costs of $30/msf (5/8” basi s) to make

changes 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 order

to 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.

h Under Option SI all laminators are defined as hardwood plywood producers, so they must have their products tested and certifi ed by a TPC and mee t the hardwood plywood emissions standards.

i To simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities are compliant with the CARB ATCM in the baseline.

j Based on conversations with fab ricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not already complying with the CARB ATCM are assumed to

incur additional recurring recordkeeping costs averaging $12,917 for employer firms and $179 for non

- emplo yer firms to comply with the recordkeeping requirements in the TSCA rule (although

recurring 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 lami nators incur these costs, and

that fewer than 11% of fabricators that are not laminators do so. The result is that 11% of all fabricators (which represent s the combination of fabricators and laminators that are not fabricators) are

assumed to incur recurr ing recordkeeping costs.

k There 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 for

the number of laminators corres ponds 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 the

rows together to yield the Total Rule Cost in the final row of this table, the order of the Total Cost ranges for this row 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 Rule Cost).

l Based on con versations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM and 67% of firms th at are not already complying with the CARB

ATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of fir ms that are not already complying with the CARB ATCM are assumed to incur more substantive costs

(averaging $4,552) to set up labels.

m The analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline.TSCA Title VI Proposed Implementation Rule EA 2

- 152 

### Table 2

- 90 : Option SI: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

n Under Option SI, firms must kee p additional records equivalent to those required by the CARB ATCM. However, firms that are compliant with the CARB ATCM wil l already be keeping

sufficient records to comply with the requirements. In conversations with entities complying with the CARB AT CM, 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 incurring such costs.) So 57% of t he wholesalers and are not compliant with the CARB ATCM are estimated

to incur costs averaging $2,511 to update their recordkeeping systems to comply with Option SI. The existing recordkeeping s ystems at the remaining wholesalers, as well as at panel manufacturers,

laminators, and fabricators, are assumed to be sufficient to comply with the TSCA rule.

o Based 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 recurring

recordkeeping costs. They are estimated to incur costs averaging $4,890 p er firm for employer firms and $100 for non

- employer firms to comply with Option SI (although recurring recordkeeping

costs for these entities are assumed to be a function of firm size as measured by revenues). The remaining wholesalers are n ot estimated to incur these recordkeeping costs because their existing

records are sufficient to comply with the rule’s requirements.TSCA Title VI Proposed Implementation Rule EA 2

- 153 

### Table 2

- 91 : Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

Panel

manufacturers All panel manufacturers 62 entities Become familiar with TSCA rule $294

- - - 62 100% $0.02

- - -

On

- site daily quality control testing d 0 or $10,832 0 or $832 34 55% $0.4 $0.03

Set

- up to label products as TSCA

compliant $149

- - - 62 100% $0.009

- - -

Keep additional records $3,711 62 100% $0.2 $0.2

Manufacture products

not certified under

CARB ATCM 16 entities and

49.6 msf of

production Have products tested and certified by

a TPC e $5,185 to $31,183 $2,365 to $6,230 16 100% $0.4 $0.08

Changes to raw materials f 0 or $20 to $110 per thousand square feet

(msf) of product produced 47,300 msf 95% $1.1 $1.1

Manufacture products

certified as ULEF

under CARB ATCM 17 entities Have products tested and certified as

Phase 2 or NAF by a TPC e $12,312 to $51,292 ($2,790) to $51,292 17 100% $0.6 $0.5

Wood veneer

laminated

product

manufacturers All laminators 7,486 to 13,875

entities Become familiar with the TSCA rule $294

- - - 7,486 to 13,875 100% $2.2 to

$4.1 - - -

Set

- up to label products as TSCA

compliant $4,552

- - - 7,486 to 13,875 100% $34.1 to

$63.2 - - -

Laminators defined as

hardwood plywood

producers under TSCA 150 to 277

entities and 7,248

msf of

production Have products tested and certified by

a TPC e $61,676 to $70,782 $55,690 to $61,950 150 to 277 100% $9.3 to

$19.6 $8.4 to

$17.2

On

- site daily quality control testing d $10,832 $832 150 to 277 100% $1.6 to

$3.0 $0.1 to $0.2

Changes to raw materials g 0 or $30 per thousand square feet (msf) of

product produced 2,149 msf 30% $0.06 $0.06

Keep additional records Non

- employer firms: $3,890

Employer firms: $16,628 88 to 162 non

- emp

62 to 115 employer 100% $1.4 to

$2.5 $1.4 to $2.5

Laminators defined as

fabricators under

TSCA 7,336 to 13,598

entities and

355,164 msf Changes to raw materials h 0 or $30 per thousand square feet (msf) of

product produced 105,317 msf 30% $3.2 $3.2

Laminators defined

as fabricators; not

compliant with

CARB ATCM

requirements for

fabricators 7,336 to 13,598

entities i Keep additional records j Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 394 to 729 non

employers

280 to 520 employer 9% $3.7 to

$6.8 $3.7 to $6.8

Fabricators

that are not All fabricators that are

not laminators 66,103 to 72,492

entities Become familiar with the TSCA rule

k $294

- - - 66,103 to 72,492 100% $19.5 to

$21.3 - - -TSCA Title VI Proposed Implementation Rule EA 2

- 154 

### Table 2

- 91 : Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

laminators Set

- up to label products as TSCA

compliant k, l $133

or

$4,552 - - - 64,290 minor cost;

1,813 to 8,202 more

substantive cost 100% $16.8 to

$45.9 - - -

Fabricators not

compliant with CARB

ATCM requirements 33,665 to 40,054

entities Keep additional records j, k Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 2,163 to 2,573 non

employers; 1,541 to

1,833 employers 11% $20.3 to

$24.1 $20.3 to

$24.1

Wholesalers All wholesalers 85,560 entities Become familiar with the TSCA rule $373

- - - 85,560 100% $31.9

- - -

If repackaging or replacing an

original label, set

- up to label

products as TSCA compliant $4,552

- - - 855 1% $3.9

- - -

Wholesalers that

import and are not

compliant with CARB

ATCM 15,045 entities m Set up systems to keep additional

records n 0 or $2,511

- - - 8,576 57% $21.5

- - -

Keep additional records o Non

- employer firms: 0 or $100

Employer firms: 0 or $4,980 3,826 non

- employers;

2,642 employer 43% $13.5 $13.5

Retailers All retailers 759,048 entities Become familiar with the TSCA rule $283

- - - 759,048 100% $214.7

- - -

Total Rule Cost $435 to

$447 $56 to $66

a Categories 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 comply

with the CARB ATCM and those that do not. For each indus try, the various sub

- categories in the baseline status column (such as entities 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 and

recordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.

b Estimated number of entities reflects those entities selling composite wood p roducts or goods containing regulated composite wood products. Production volume is only listed for entities with a

cost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.

c Reported v alues represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activities

with a single value reported spanning both cost columns, entities are es timated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the u nit

cost is based on the production volume affected rather than the number of entities affected.

d Panel producers with a standard certification or a new NAF certification are assumed to conduct daily on

- site quality control testing in order to comply with the proposed requirement that tested

lots must be held until test results indicate that the emissions standard has been met. Part icleboard and MDF manufacturers are assumed to be conducting daily on

- site quality control testing to

comply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification wi ll already have been exempted

from 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

incur incremental costs to c onduct 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 three

months. Laminators defined as hardwood plywood manufacturers do not perform testing in the baseline, and thus would also incur costs for on

- site daily quality control testing.

e Incremental testing costs depend on several factors including the type of composite wood product, the number of products cert ified, the baseline CARB ATCM certif ication level (Phase 2, ULEF,

or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum o f this value and the cost of on

- site daily quality control testing.TSCA Title VI Proposed Implementation Rule EA 2

- 155 

### Table 2

- 91 : Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

f Estimated raw materials costs v ary 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 u nder the CARB ATCM, producers are estimated to incur incremental costs of $50/msf (3/8” basis) for

changes to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of t hat production volume). The rem aining hardwood plywood production

volume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MD F production is estimated to comply with the emission standards in the

baseline, so MDF producer s are not expected to make raw materials changes. Particleboard producers are estimated to incur incremental costs of $20/ms f (3/4” basis) for raw materials changes for

all 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 it

meets 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%) is

estimated to change raw materials.

g For products made by laminators that continue to use added formaldehyde resins (and thus are defined as hardwood plywood prod ucers under TSCA), 30% of the production volume is assumed to

incur 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 and

does not incur costs for raw materials changes.

h Lamin ators defined as fabricators are estimated to incur costs of $30/msf (5/8” basis) to switch to NAF resins for approximately 3 0% of the production volume of laminated products. The

remaining production uses NAF resins in the baseline (and does not incur co sts for raw material changes), or continues using added formaldehyde resin and thus is defined as hardwood plywood

under TSCA (addressed in a prior row in the table).

i To simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities are compliant with the CARB ATCM in the baseline.

j Based on conversations with fabricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not already complying with the CARB ATC M are assumed to

incur 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 (although

recurring recordkeeping costs for these entities a re assumed to be a function of firm size as measured by revenues). The analysis estimates that 11% of laminators overall (combined for both those

defined as hardwood plywood producers and those defined as fabricators) incur these costs. All the laminator s defined as hardwood plywood producers are assumed to incur these additional

recordkeeping costs. Thus, the remainder of the 11% of laminators incurring the additional recordkeeping costs are laminators defined as fabricato rs. For example, the low estim ate for the number

of 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

incur the additional recordkeeping costs. Thus, the remaining 674 (674=824

- 150) laminators incurring additional recordkeeping costs are laminators defined as fabricators, of which 394 are non

employer firms and 280 are employer firms. And the 674 firms is 9% of the 7,336 total firms in this category.

k Total costs for laminators and fabricators depend on how many entities are in each group. When more laminators are defined a s hardwood plywood producers fewer are defined as fabricators, so

total costs can vary inversely between the two groups. Thus, wh en adding all the rows together to yield the Total Rule Cost in the final row of this table, the order of the Total Cost rang es for this

row must be reversed (i.e., the high value in this range is used to calculate the low value for the Total Rule Cost, an d the low value in this range is used to calculate the high value for the Total Rule

Cost).

l Based 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 comply ing with the CARB

ATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying wit h the CARB ATCM are assumed to incur more substantive costs

(averaging $4,552) to set up labels.

m The analysis e stimates that 53,731 wholesalers are not CARB compliant in the baseline, and that 28% of wholesalers are importers. Combinin g these yields an estimate that 15,045 wholesalersTSCA Title VI Proposed Implementation Rule EA 2

- 156 

### Table 2

- 91 : Option SCR: Activities with Cost Estimates, by Type of Entity and Baseline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

import and are not CARB compliant.

n Under the TSCA rule, wholesalers and reta ilers 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

practices, so there are no incremental recordkeeping costs estimated for these entities. Firms that impo rt 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 requi rements for importers. In conversations with entities complying

with the CARB ATCM, 57% of wholesalers reported incurring average costs of $2,511 to set up recordkeeping systems to comply w ith the rule. (Fabricators and retailers did not report incurring

such costs.) So 57% of the 15,045 whole salers that import and are not compliant with the CARB ATCM (or 8,576 wholesalers) are estimated to incur costs averaging $2, 511 to update their

recordkeeping systems to comply with the TSCA rule. The existing recordkeeping systems at the remaining wholes alers that import, as well as at panel manufacturers, laminators, and fabricators,

are assumed to be sufficient to comply with the TSCA rule.

o Based on conversations with wholesalers complying with the CARB ATCM, 43% of 15,045 wholesalers that import and are not alrea dy complying with the CARB ATCM are assumed to incur

additional 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 the

TSCA rule (although recurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). Th e remaining wholesalers are not estimated to incur these

recordkeeping costs because their existing records are sufficient to comply with the rule’s requirements.TSCA Title VI Proposed Implementation Rule EA 2

- 157 

### Table 2

- 92 : Option SEUR: Activities with Cost Estimates, by Type of Entity and Bas eline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

Panel

manufacturers All panel manufacturers 62 entities Become familiar with TSCA rule $294

- - - 62 100% $0.02

- - -

On

- site daily quality control testing d 0 or $10,832 0 or $832 21 34% $0.2 $0.02

Set

- up to label products as TSCA

compliant $149

- - - 62 100% $0.009

- - -

Keep additional records $3,711 62 100% $0.2 $0.2

Manufacture products

not certified under

CARB ATCM 16 entities and

49.6 msf of

production Have products tested and certified by

a TPC e $5,185 to $31,183 $4,485 to $6,230 16 100% $0.4 $0.09

Changes to raw materials f 0 or $20 to $110 per thousand square feet

(msf) of product produced 47,300 msf 95% $1.1 $1.1

Wood veneer

laminated

product

manufacturers All laminators 7,486 to 13,875

entities g Become familiar with the TSCA rule $294

- - - 7,486 to 13,875 100% $2.2 to

$4.1 - - -

Set

- up to label products as TSCA

compliant $4,552

- - - 7,486 to 13,875 100% $34.1 to

$63.2 - - -

Keep additional records ,h Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 481 to 891 non

- emplyr

343 to 635 employer 11% $4.5 to

$8.4 $4.5 to $8.4

Fabricators

that are not

laminators All fabricators that are

not laminators 66,103 to 72,492

entities Become familiar with the TSCA rule

i $294

- - - 66,103 to 72,492 100% $19.5 to

$21.3 - - -

Set

- up to label products as TSCA

compliant i, j $133

or

$4,552 - - - 64,290 minor cost;

1,813 to 8,202 more

substantive cost 100% $16.8 to

$45.9 - - -

Fabricators not

compliant with CARB

ATCM requirements 33,665 to 40,054

entities Keep additional records h, i Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 2,163 to 2,573 non

employers; 1,541 to

1,833 employers 11% $20.3 to

$24.1 $20.3 to

$24.1

Wholesalers All wholesalers 85,560 entities Become familiar with the TSCA rule $373

- - - 85,560 100% $31.9

- - -

If repackaging or replacing an

original label, set

- up to label

products as TSCA compliant $4,552

- - - 855 1% $3.9

- - -

Wholesalers that

import and are not

compliant with CARB

ATCM 15,045 entities k Set up systems to keep additional

records l 0 or $2,511

- - - 8,576 57% $21.5

- - -

Keep additional records m Non

- employer firms: 0 or $100

Employer firms: 0 or $4,980 3,826 non

- employers;

2,642 employer 43% $13.5 $13.5

Retailers All retailers 759,048 entities Become familiar with the TSCA rule $283

- - - 759,048 100% $214.7

- - -

Total Rule Cost $420 $44TSCA Title VI Proposed Implementation Rule EA 2

- 158 

### Table 2

- 92 : Option SEUR: Activities with Cost Estimates, by Type of Entity and Bas eline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

a Categories 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 comply

with the CARB ATCM and those that do not. For each indus try, the various sub

- categories in the baseline status column (such as entities 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 and

recordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.

b Estimated number of entities reflects those entities selling composite wood p roducts or goods containing regulated composite wood products. Production volume is only listed for entities with a

cost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.

c Reported v alues represent average incremental costs, which characterize a population where some entities incur costs below average and others incur costs that are above average. For activities

with a single value reported spanning both cost columns, entities are es timated to incur the same average annual cost in the first year and in subsequent years. For changes to raw materials, the u nit

cost is based on the production volume affected rather than the number of entities affected.

d Panel producers with a standard certification or a new NAF certification are assumed to conduct daily on

- site quality control testing in order to comply with the proposed requirement that tested

lots must be held until test results indicate that the emissions standard has been met. Part icleboard and MDF manufacturers are assumed to be conducting daily on

- site quality control testing to

comply with the CARB ATCM, and do not incur incremental costs for this activity. Hardwood plywood producers with an existing ULEF or NAF certification wi ll already have been exempted

from 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

incur incremental costs to c onduct 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 three

months. Laminators defined as hardwood plywood manufacturers do not perform testing in the baseline, and thus would also incur costs for on

- site daily quality control testing.

e Incremental testing costs depend on several factors including the type of composite wood product, the number of products cert ified, the baseline CARB ATCM certif ication level (Phase 2, ULEF,

or NAF), and the TSCA certification level. Elsewhere in the report testing and certification costs are reported as the sum o f this value and the cost of on

- site daily quality control testing.

f Estimated raw materials costs v ary 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 u nder the CARB ATCM, producers are estimated to incur incremental costs of $50/msf (3/8” basis) for

changes to resin system for 2.3 mmsf (and additional costs of $60/msf for switching to low emission cores for a fraction of t hat production volume). The rem aining hardwood plywood production

volume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MD F production is estimated to comply with the emission standards in the

baseline, so MDF producer s are not expected to make raw materials changes. Particleboard producers are estimated to incur incremental costs of $20/ms f (3/4” basis) for raw materials changes for

all 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 it

meets 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%) is

estimated to change raw materials.

g To simplify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities are compliant with the CARB ATCM in the baseline.

h Based on conversations with fabricators complying with the CARB ATCM, 11% of all fabricators (including laminators) that are not alrea dy complying with the CARB ATCM are assumed to

incur 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 (although

recurring 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 those

defined as hardwood plywood producers and those defined as fabricators) incur these costs. All the laminators defined as har dwood plywood producers are assumed to incur these additional

recordkeeping costs. Thus, the remainder of the 11% of laminators incurring the additional recordkeeping costs are laminators defined as fabricato rs. For example, the low estimate for the number

of laminators is 7,486. The number of laminators incurring additional recordkeep ing costs is 824 (824≈11%*7,846). All 150 laminators defined as hardwood plywood producers are assumed toTSCA Title VI Proposed Implementation Rule EA 2

- 159 

### Table 2

- 92 : Option SEUR: Activities with Cost Estimates, by Type of Entity and Bas eline Status , Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b Activities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

incur the additional recordkeeping costs. Thus, the remaining 674 (674=824

- 150) laminators incurring additional recordkeeping costs are laminators d efined as fabricators, of which 394 are non

employer firms and 280 are employer firms. And the 674 firms is 9% of the 7,336 total firms in this category.

i Total costs for laminators and fabricators depend on how many entities are in each group. When mor e laminators are defined as hardwood plywood producers fewer are defined as fabricators, so

total costs can vary inversely between the two groups. Thus, when adding all the rows together to yield the Total Rule Cost in the final row of this table, the ord er of the Total Cost ranges for this

row 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 Rule

Cost).

j Based on conversations with fabricators complying with the CARB ATCM, all firms that are complying with the CARB ATCM and 67% of fi rms that are not already complying with the CARB

ATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying with the CARB ATCM are assumed to incur more substantive costs

(averaging $4,552) to set up labels.

k The 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

import and are not CARB compliant.

l Under the TSCA rule, wholesalers and retailers that do not import products are only required to keep invoices and bills of la ding. These rec ords are already kept as part of ordinary business

practices, so there are no incremental recordkeeping costs estimated for these entities. Firms that import must keep additio nal records beyond invoices and bills of lading under the TSCA rule.

However, f

irms that are compliant with the CARB ATCM will already be keeping sufficient records to comply with the TSCA requirements fo r importers. In conversations with entities complying

with 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 incurring

such costs.) So 57% of the 15,045 wholesalers that import and are not compliant with the CARB ATCM (or 8,576 wholesalers) ar e estimated to incur costs averaging $2,511 to update their

recordkeeping systems to comply with the TSCA rule. The existing recordkeeping systems at the remaining wholesalers that imp ort, as well as at panel manufacturers, laminators, and fabricators,

are assumed to be sufficient to comply with the TSCA rule.

m Based on conversations with wholesalers complying with the CARB ATCM, 43% of 15,045 wholesalers that import and are not alrea dy complying with the CARB ATCM are assumed to incur

additional 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 the

TSCA 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 these

recordkeeping costs because their existing records are sufficient to comply with the rule’s requirements.TSCA Title VI Proposed Implementation Rule EA 2

- 160 

### Table 2

- 93 : Option SCUR (Proposed Rule) : Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b A ctivities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

Panel

manufacturers All panel manufacturers 62 entities Become familiar with TSCA rule $294

- - - 62 100% $0.02

- - -

On

- site daily quality control testing d 0 or $10,832 0 or $832 21 34% $0.2 $0.02

Set

- up to label products as TSCA

compliant $149

- - - 62 100% $0.009

- - -

Keep additional records $3,711 62 100% $0.2 $0.2

Manufacture products

not certified under

CARB ATCM 16 entities and

49.6 msf of

production Have products tested and certified by

a TPC e $5,185 to $31,183 $4,485 to $6,230 16 100% $0.4 $0.09

Changes to raw materials f 0 or $20 to $110 per thousand square feet

(msf) of product produced 47,300 msf 95% $1.1 $1.1

Wood veneer

laminated

product

manufacturers All laminators 7,486 to 13,875

entities Become familiar with the TSCA rule $294

- - - 7,486 to 13,875 100% $2.2 to

$4.1 - - -

Set

- up to label products as TSCA

compliant $4,552

- - - 7,486 to 13,875 100% $34.1 to

$63.2 - - -

Laminators defined as

hardwood plywood

producers under TSCA 150 to 277

entities and 7,248

msf of

production Have products tested and certified by

a TPC e $61,676 to $70,782 $55,690 to $61,950 150 to 277 100% $9.3 to

$19.6 $8.4 to

$17.2

On

- site daily quality control testing d $10,832 $832 150 to 277 100% $1.6 to

$3.0 $0.1 to $0.2

Changes to raw materials g 0 or $30 per thousand square feet (msf) of

product produced 2,149 msf 30% $0.06 $0.06

Keep additional records Non

- employer firms: $3,890

Employer firms: $16,628 88 to 162 non

- emp

62 to 115 employer 100% $1.4 to

$2.5 $1.4 to $2.5

Laminators defined as

fabricators under

TSCA 7,336 to 13,598

entities and

355,164 msf Changes to raw materials h 0 or $30 per thousand square feet (msf) of

product produced 105,317 msf 30% $3.2 $3.2

Laminators defined

as fabricators; not

compliant with

CARB ATCM

requirements for

fabricators 7,336 to 13,598

entities i Keep additional records j Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 394 to 729 non

employers

280 to 520 employer 9% $3.7 to

$6.8 $3.7 to $6.8

Fabricators

that are not

laminators All fabricators that are

not laminators 66,103 to 72,492

entities Become familiar with the TSCA rule

k $294

- - - 66,103 to 72,492 100% $19.5 to

$21.3 - - -

Set

- up to label products as TSCA

compliant k, l $133

or

$4,552 - - - 64,290 minor cost;

1,813 to 8,202 more

substantive cost 100% $16.8 to

$45.9 - - -TSCA Title VI Proposed Implementation Rule EA 2

- 161 

### Table 2

- 93 : Option SCUR (Proposed Rule) : Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b A ctivities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

Fabricators not

compliant with CARB

ATCM requirements 33,665 to 40,054

entities Keep additional records j, k Non

- employer firms: 0 or $179

Employer firms: 0 or $12,917 2,163 to 2,573 non

employers; 1,541 to

1,833 employers 11% $20.3 to

$24.1 $20.3 to

$24.1

Wholesalers All wholesalers 85,560 entities Become familiar with the TSCA rule $373

- - - 85,560 100% $31.9

- - -

If repackaging or replacing an

original label, set

- up to label

products as TSCA compliant $4,552

- - - 855 1% $3.9

- - -

Wholesalers that

import and are not

compliant with CARB

ATCM 15,045 entities m Set up systems to keep additional

records n 0 or $2,511

- - - 8,576 57% $21.5

- - -

Keep additional records o Non

- employer firms: 0 or $100

Employer firms: 0 or $4,980 3,826 non

- employers;

2,642 employer 43% $13.5 $13.5

Retailers All retailers 759,048 entities Become familiar with the TSCA rule $283

- - - 759,048 100% $214.7

- - -

Total Rule Cost $434 to

$447 $56 to $65

a Categories 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 comply

with the CARB ATCM and those that do not. For each indus try, the various sub

- categories in the baseline status column (such as entities 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 and

recordkeeping requirements in the CARB ATCM because their products are not intended for sale in California.

b Estimated 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 a

cost estimated for a change in raw materials, in which case it is reported in thousand square feet (msf) of product produced.

c Reported values represent average incremental costs, which characterize a population where some entities incur costs below av erage and others incur costs that are above average. For activi ties

with 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 unit

cost is based on the production volume affected ra ther than the number of entities affected.

d Panel producers with a standard certification or a new NAF certification are assumed to conduct daily on

- site quality control testing in order to comply with the proposed requirement that tested

lots must be hel d until test results indicate that the emissions standard has been met. Particleboard and MDF manufacturers are assumed to b e conducting daily on

- site quality control testing to

comply with the CARB ATCM, and do not incur incremental costs for this activi ty. Hardwood plywood producers with an existing ULEF or NAF certification will already have been exempted

from 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

incur 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 three

months. Laminators defined as hardwood plywood manufacturers do not perform testing in the baseline, and thus would also incur costs for on

- site daily quality control testing.

e Incremental 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 o f this value and the cos t of on

- site daily quality control testing.

f Estimated raw materials costs vary with the type of composite wood product, the resin used in the baseline, and the compositi on of the core or platform used for hardwood plywood in the baseline.

Of the estimat ed 4.6 million square feet (mmsf) of hardwood plywood that is not certified under the CARB ATCM, producers are estimated to i ncur incremental costs of $50/msf (3/8” basis) forTSCA Title VI Proposed Implementation Rule EA 2

- 162 

### Table 2

- 93 : Option SCUR (Proposed Rule) : Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b A ctivities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

changes to resin system for 2.3 mmsf (and additional costs of $60/msf for switch ing to low emission cores for a fraction of that production volume). The remaining hardwood plywood production

volume is not estimated to need to make raw materials changes because it meets the emission standard in the baseline. All MD F production is est imated to comply with the emission standards in the

baseline, so MDF producers are not expected to make raw materials changes. Particleboard producers are estimated to incur in cremental costs of $20/msf (3/4” basis) for raw materials changes for

all the 4 5 mmsf of production volume that is not certified under the CARB ATCM in the baseline. The remaining particleboard productio n is not estimated to make raw materials changes because it

meets 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%) is

estimated to change raw materials.

g For products made by laminators that continue to use added formaldehyde resins (and thus are defined as har dwood plywood producers under TSCA), 30% of the production volume is assumed to

incur 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 standar d in the baseline and

does not incur costs for raw materials changes.

h Laminators defined as fabricators are estimated to incur costs of $30/msf (5/8” basis) to switch to NAF resins for approximat ely 30% of the production volume of laminated products. Th e

remaining 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 plywood

under TSCA (addressed in a prior row in the table).

i To simp lify the cost calculations, recordkeeping costs for this group are calculated assuming that none of these entities are compli ant with the CARB ATCM in the baseline.

j Based on conversations with fabricators complying with the CARB ATCM, 11% of all fabric ators (including laminators) that are not already complying with the CARB ATCM are assumed to

incur 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 (although

recurring 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 those

defined as hardwood plywood prod ucers and those defined as fabricators) incur these costs. All the laminators defined as hardwood plywood producers are assu med to incur these additional

recordkeeping costs. Thus, the remainder of the 11% of laminators incurring the additional recordkee ping costs are laminators defined as fabricators. For example, the low estimate for the number

of laminators is 7,486. The number of laminators incurring additional recordkeeping costs is 824 (824≈11%*7,846). All 150 laminators defined as hardwood plywo od producers are assumed to

incur the additional recordkeeping costs. Thus, the remaining 674 (674=824

- 150) laminators incurring additional recordkeeping costs are laminators defined as fabricators, of which 394 are non

employer firms and 280 are employer firms. And the 674 firms is 9% of the 7,336 total firms in this category.

k Total costs for laminators and fabricators depend on how many entities are in each group. When more laminators are defined a s hardwood plywood producers fewer are defined as fab ricators, so

total costs can vary inversely between the two groups. Thus, when adding all the rows together to yield the Total Rule Cost in the final row of this table, the order of the Total Cost ranges for this

row 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 calculat e the high value for the Total Rule

Cost).

l Based 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 CARB

ATCM are assumed to incur minor costs for setting up new labels ($133), while 33% of firms that are not already complying wit h the CARB ATCM are assumed to incur more substantive costs

(averaging $4,552) to set up labels.

m The analysis estimates that 53,731 wholesalers are not CARB compliant in the baseline, and that 28% of wholesalers are import ers. Combining these yields an estimate that 15,045 wholesalers

imp ort and are not CARB compliant.

n Under the TSCA rule, wholesalers and retailers that do not import products are only required to keep invoices and bills of la ding. These records are already kept as part of ordinary businessTSCA Title VI Proposed Implementation Rule EA 2

- 163 

### Table 2

- 93 : Option SCUR (Proposed Rule) : Activities with Cost Estimates, by Type of Entity and Baseline Status, Incremental to the CARB ATCM

Type of

Entity Baseline Status under

CARB ATCM a Number of

Entities or

Production

Volume b A ctivities with Incremental Costs

Estimated Average Incremental Cost per Entity c Number of Entities or

Production Volume

Incurring Non

- Zero

Costs Percent

Incurring

Non

- Zero

Costs Total Cost (million

2010$)

Initial Start

- up

or First Year Costs Annual Recurring

Costs in

Subsequent Years First

Year Subsequent

Years

practices, so there are no i ncremental 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 r ecords to comply with the TSCA requirements for importers. In conversations with entities complying

with the CARB ATCM, 57% of wholesalers reported incurring average costs of $2,511 to set up recordkeeping systems to comply w ith the rule. (Fabricators an d retailers did not report incurring

such costs.) So 57% of the 15,045 wholesalers that import and are not compliant with the CARB ATCM (or 8,576 wholesalers) ar e estimated to incur costs averaging $2,511 to update their

recordkeeping systems to comply wi th the TSCA rule. The existing recordkeeping systems at the remaining wholesalers that import, as well as at panel manufactu rers, laminators, and fabricators,

are assumed to be sufficient to comply with the TSCA rule.

o Based on conversations with wholesalers complying with the CARB ATCM, 43% of 15,045 wholesalers that import and are not alrea dy complying with the CARB ATCM are assumed to incur

additional 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 the

TSCA rule (although recurring recordkeeping costs for these entities are assumed to be a function of firm size as measured by revenues). Th e remaining wholesalers are not estimated to incur these

recordkeeping costs because their existing records are sufficient to comply with the rule’s requirements.TSCA Title VI Proposed Implementation Rule EA 3

- 1



# 3 Benefits

Evidence for potential health effects associated with formal dehyde exposure s at the level

associated with non

- industrial environments is provided by a wide variety of human clinical,

epidemiology, and animal studies (U.S. EPA 2010c ). As is typical for health effects associated with a

reactive gas, some of these health effects are commonly found at the portal of entry (e.g., sensory

irritation) . Other reported health effects include effects on the nervous and repr oductive systems,

developmental effects, and immunomodulation.

The health effects for which benefits are monetized in this economic analysis include

nasopharyngeal cancer for individuals of all ages and eye irritation for individuals of all ages

. The

an alysis also includes a qualitative discussion of non

- monetized benefits from avoided respiratory related

effects, and benefits from avoiding reduced fertility in women ages 20 to 40.

The potential benefits of the proposed TSCA Title VI Implementation Rule are estimated for

several analytical options which are presented in Table 3

- 1

.TSCA Title VI Proposed Implementation Rule EA 3

- 2



### Table 3

- 1 : Analytical Options Considered in the Benefits Analysis

Analytical Option a Notes a Analytical options with emissions standards at the levels required by TSCA Title VI b 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 emissio ns 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 non

manufacturers compared to other options. Laminators using NAF resins to attach wood veneers to

compliant platforms do not ne ed 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

ladi ng. 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 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

req uired.

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 recordke eping requirements for non

manufacturers

. Laminators using NAF resins to attach wood veneers to

compliant platforms do n ot 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

la ding. No supplier notification required. Analytical options with emissions standards other than the levels required by TSCA Title VI CARB Phase 1 levels d 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.

NAF emission levels e 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 standar ds that

are different from those set in TSCA Title VI. This document discusses alternative emissions standards simply for informati onal purposes.

The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the st atute.TSCA Title VI Proposed Implementation Rule EA 3

- 3



### Table 3

- 1 : Analytical Options Considered in the Benefits Analysis

a Panel producers must have products tested and certified by a TPC under all options. Recordkeeping and supp lier 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; Th in

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 s amples < 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 < 0.0 4 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.



### Figure 3

- 1 presents an overview of the benefits assessment approach used in this economic

analysis. The estimated changes in formaldehyde exposure under each analytical option vary by type of

housing ( structure type, amount of composite wood products, and elapsed time since composite wood

products were installed), climate zone, and the ages and occupations of the exposed individuals (see

section 3.1 ). Changes in risks of the adverse health outcomes associated with these changes in exposure

are estimated for nasopharyngeal cancer (section 3.3 ) and the corresponding estimated values of these risk

reductions (section 3.4 )

. N on

- cancer heal th effects are discussed in section 3.5 , including the monetized

benefits from reduced sensory irritation (section 3.5.1 ), a qualitative discussion of respiratory related

illnesses (section 3.5.2 ), and fertility benefits (section 3.5.3 ). The estimated numbers of individuals

ex periencing these exposure reductions are presented in section 3.6 . Finally, section 3.7 presents the

results of the benefits assessment.TSCA Title VI Proposed Implementation Rule EA 3

- 4



### Figure 3

- 1 : Overview of Benefits Assessment ApproachTSCA Title VI Proposed Implementation Rule EA 3

- 5



## 3.1 Estimating the Changes in Exposure by Analytical Option

The potential for benefit from the reduction of formaldehyde emissions from composite wood

products potentially exists anywhere where individuals reside, work, or otherwise spend a substantial

amount of time where new composite wood prod ucts will be introduced to an indoor space. The exposure

scenarios included in this benefits analysis include two broad categories where a substantial amount of

new composite wood products might be introduced to residences: (1) new home construction and ( 2)

major renovations that include kitchen remodeling. Table 3

- 2 includes a brief description of the factors

that were used in this analysis to define the various exposure scenarios. For each analytical option, there

are 3,300 different exposure scenarios derived from 22 different composite wood product age/source

combinations, 5 structure types, 5 climate zones, and 6 individual age/employment status combinations.

Table 3

- 2 : Exposure Factor Categories Used t o Define Population Groups

Exposure

Factor Exposure Factor Categories Discussion

Composite wood

product source

and age

(n = 22) 1. New housing construction for 11 ages of the housing

2. Renovated housing for 11 ages of the installed

composite wood products

Note: EPA calculated exposures using a 1.5 year

emissions half life of formaldehyde from composite

wood products. W

ith 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 c onsiders 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.

C limate 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.TSCA Title VI Proposed Implementation Rule EA 3

- 6



## 3.2 Time Frame for the Analysis

This analysis estimates the benefits of each analytical option for lowering formaldehyde

emissions from composite wood products over a 30

- year period. This time frame was selected to be as

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

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

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

c omposite wood products might be developed increases over time (which could result in different

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

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

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

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

scenarios un der consideration.

The benefits analysis assumes that after eleven years any continuing (and declining) emissions

from a given composite wood product would contribute negligibly to that product's effect on

formaldehyde exposure. Thus, composite wood pr oducts are assumed to contribute to formaldehyde

exposure for 11 years. 37 

### Specifically:

 in the first year only new composite wood products are affected by the policy;

 in the second year new and one

- year

- old composite wood products are affected by the

poli cy;

 in the third year new, one

- and two

- year

- old composite wood products are affected by the

policy;

 in general, in the n th year, new, one

- , two

- , three

- ,..., and ( n

- 1)

- year

- old composite wood

products are affected by the policy, for n = 1, 2, ..., 10; and

 in the eleventh and all subsequent years new, one

- , two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

- year

- old composite wood products are affected by the policy.

Since the exposure scenarios are defined in part according to the 11 different ages for composite

wood products, it is not until the 11 th 

### year after the implementation of the rule that benefits are realized

under every exposure scenario. That is, it is not until the 11 th 

### year after rule implementation that ten

- year
old composite woo d products would have been required to be produced in compliance with the emissions

standards. Thus, the benefits are phased in over a period of eleven years.

Similarly, the benefits from a given year of composite wood production will phase

- out over ti me. Since the analysis considers the benefits and costs from 30 years of composite wood production, the

estimated exposures have the following time profile after the 30 th 

### and last year of composite wood

production considered in the analysis:

 in the 31 st 

### year, only one

- , two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

year

- old composite wood products are produced before the 31 st 

### year (benefits from new

composite wood products are produced after year 30 and therefore are not considered in

t he analysis);

 in the 32 nd 

### year, only two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

- year

- old

composite wood products are produced before the 31 st 

### year (benefits from new and one

-

37 EPA calculated exposures using a 1.5 year emissions half life of formaldehyde from composite wood products With.

this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11

years the emissions would be near zero.TSCA Title VI Proposed Implementation Rule EA 3

- 7 

### year old composite wood products are produced after year 30 and therefore are not

considered in the analysis);

 in general, in the n th year after year 30, only n year

- old and older composite wood

products are produced before year 31, for n = 1, 2, ..., 10; and

 in the 41 st 

### and all subsequent years, all 11 ages of comp osite wood products that

potentially contribute to formaldehyde exposure are produced after the 30 th 

### year and

therefore are not considered in the analysis.

Given this phase

- in and phase

- out, a time period of thirty years of composite wood production

was s elected so that the first ten years of the policy (when the benefits of the policy are being phased in)

and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of

the policy are being phased out) do not obscure the steady state benefits that would be experienced from

the policy. It is necessary to include the phase

- in and phase

- out of the benefits in order to be consistent

with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions

standards. Given that this analysis assumes that after eleven years any continuing (and declining)

emissions from a given composite wood product would contribute negligibly to that product's effect on

formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to

40 years of exposure reductions. The first 10 years are a phase

- in period for exposure reductions, the next

20 years are a steady

- state, and the next 10 years are a phase

- out period.TSCA Title VI Proposed Implementation Rule EA 3

- 8



## 3.3 Ass essing the Change in Cancer Risk

In 1991, EPA classified formaldehyde as a probable human carcinogen, “based on limited

evidence in humans, and sufficient evidence in animals,” and derived an inhalation unit risk for assessing

formaldehyde cancer risk. T he inhalation unit risk and supporting documentation is included in EPA’s

Integrated Risk Information System (IRIS) assessment of formaldehyde (Ref. 5). Formaldehyde is also

listed under section 112(b)(1) of the Clean Air Act (CAA) as a hazardous air poll utant (HAP). The CAA

requires EPA to regulate emissions of HAPs from a published list of industrial source categories. The

EPA has developed lists of major and area source categories that must meet emission standards for HAPs

and has developed (or is dev eloping) standards for these source categories. The plywood and composite

wood products (PCWP) National Emission Standards for Hazardous Air Pollutants (NESHAP), codified

at 40 CFR part 63, subpart DDDD, first issued in 2004, is one of these standards. T he PCWP NESHAP

controls emissions of formaldehyde and other HAPs (primarily acetaldehyde, acrolein, methanol, phenol,

and propionaldehyde ) from various process units (e.g., blenders, dryers, formers, board coolers, and

presses) at PCWP facilities.

In 20 04, the EPA determined that unit risk derived from the Chemical Indust ry Institute of

Toxicology ( CIIT 1999 ) biologically

- based cancer dose

- response modeling of formaldehyde

- induced

respiratory cancer (5.5 x 10

- 9 per micrograms per cubic meter (μg/m3)) better reflected the current state

of the science than the 1991 IRIS cancer unit risk. The authors of the CIIT modeling ( Conolly, et al.

2004 ) presented their risk esti mates as values more conservative than their maximum likelihood

estimates, and as “conservative in the face of modeling uncertainties.” Consequently, EPA used the CIIT

value in risk assessments supporting regulatory actions developed under the authority of the Clean Air

Act. For example, in the 2006 rulemaking that reconsidered the PCWP NESHAP, OAR stated “[i]n the

case of formaldehyde, we have determined that the cancer potency derived using the approach developed

by CIIT, which has been peer reviewed by an external review panel sponsored by EPA and the Canadian

government, represents an appropriate alternative to EPA’s current IRIS URE [unit risk estimate] for

formaldehyde. Therefore, this potency represents the best available peer

- reviewed science at th is time.”

( EPA 2006 ). How ever, subsequent research published by the EPA suggests that the CIIT model was not

appropriate and was very sensitive to unmeasured parameters such that very different estimates, including

the 1991 IRIS assessment values, were consistent with the availabl e scientific data. Because the CIIT

values do not reflect the uncertainty in estimates using the data that are available, EPA has decided that

those estimates do not reflect the broad range of possible risk and that the data are not supportive of

interpre ting 5.5 X 10

- 9 per μg/m 3 

### as providing a health

- protective estimate of human risk. Furthermore,

the 1991 IRIS assessment values are consistent with unit risks estimated by Schlosser et al. ( Schlosser, et

al. 2003 ) based on Benchmark Dose modeling of the best available data at the time. In addition, the CIIT

values do not address the potential risk of increased leukemias or lymphomas. Thus, in 2010, EPA

returned to using the Agency’s current value on IRIS, 1.3 X 10

- 5 per μg/m 3 

### , which was last revised in

1991 as better reflecting the current state of the science as to the potential human cancer risk of exposure

to formaldehyde ( EPA 2010b ).

The inhalation unit risk is defined as the upper

- bound excess lifetime cancer risk estimated to

result from continuous exposure to an agent at a concentration of 1 μg/m3 in air (see

http://www.epa.gov/iris/help_gloss.htm#i). The change in excess cancer risk can be estimated by

mu ltiplying the lifetime average daily concentration (LADC) of formaldehyde exposure, in mg/m 3 

### , by the

inhalation unit risk of 0.013 per mg/m 3 

### and the age

- dependent adjustment factor (ADAF) of 10, 3, or 1 for

individuals aged less than 2, 2

- 15, or 16 and old er, respectively. Note that 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 believe s that application of ADAFs is the preferred approach in this case but is alsoTSCA Title VI Proposed Implementation Rule EA 3

- 9



### presenting the calculations without applying ADAFs. The lower estimate of benefits excludes the

ADAFs and the higher estimate of benefits includes the ADAFs.

Since the inhalation unit risk was estimated to be applied to the LADC, the most straightforward

approach to calculate excess lifetime risk associated with exposure to formaldehyde would be to take the

average daily concentration (ADC) for various life segments of an individual and construct the overall

LADC, then multiply the ADCs by the unit risk and ADAF. For example, assume that an individual has

the following life profile:

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



### The excess lifetime risk could be calculated as:

Excess lifetime risk

{ ( ( ) )

( )

( ) ( )

( ) ( ) } ( 3 )



### where:

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 house 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 child the child age

- dependent adjustment factor of 3

Unit Risk the inhalation unit risk for cancer of 0.013 per mg/m 3

LE= t he life expectancy of the individual



### Note that the unit risk is an estimate of excess lifetime cancer risk associated with an average

lifetime exposure to one unit of the carcinogen; it gives no information about how this lifetime excess risk

is distributed across the ages within a lifetime. It also gives no information about whether the distribution

of annual exposures that result in a given average lifetime exposure matters. Equation ( 3 ) implicitly

assumes that the distribution of exposures throughout a lifetime doesn’t matter

– i.e., that all that matters

is the lifetime average exposure.

To calculate the expected number of excess cancer cases resulting from a given excess

lifetime risk, this excess risk must be multiplied by the relevant population. If pop denotes the size of the

population that incurs the excess lifetime risk, then the expected number of cancer cases associated with

exposure to formaldehyde given the scenario descr ibed above is:TSCA Title VI Proposed Implementation Rule EA 3

- 10 

### Number of cancer cases = excess lifetime risk * pop. ( 4 )



### This calculation could then be done for both the baseline scenario and the policy scenario (in

which exposures would be lower) to estimate the number of cancer cases avoided as a result of the policy:

Number of cancer cases baseline 

### = excess lifetime ris k 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 baseline 

### - Number of cancer cases policy scenario



### . ( 5 )



### If V denotes the value of an avoided case, then the value of the avoided cases is:

Value of avoided cases = V* Number of cases avoided. ( 6 )



### If the lifetime costs of this action were also added up, the overall net gain or loss that this

individual would receive from this action could be estimated. If this could be done for all individuals in

society, the overall net benefits of the policy could be estimated. To do this, it would be necessary to

assume a life profile for every individual (i.e., how often each individual moves, and the structure type

and age of housing they live in at each stage of their life, and how recently it has been renovated).

Instead, this analysis utilizes an annual approach, which evaluates the expected change in the

lifetime cancer risk for an individual arising from a single year of reduced formaldehyde exposure. In

contrast, a lifetime approach would require assuming a lifetime f ormaldehyde exposure profile for each

individual and evaluating the expected change in the lifetime cancer risk for an individual arising from a

lifetime of reduced formaldehyde exposure. The exposure model was designed to produce a LADC

associated with th e same scenario used to calculate the ADC. Thus, it can produce a LADC for any life

segment for which an ADC can be calculated (e.g., exposure over the course of 11 years to an individual

who moves into a 2 year old house). Conceptually, this would be equi valent to the lifetime average daily

concentration if one were exposed to the pollutant for only this life segment and no other time. Another

interpretation is that it is the contribution to the overall LADC from this life segment. In other words:

( ) ( )

( 7 )



### Where:

∑

( 8 )



### Equation ( 3 ) combined with equation ( 7 ) can be used to calculate the excess cancer risk

associated with any given life segment. For example, the excess cancer risk associated with the 2

- 15 year

old life segment for a child starting in a 2

- year old house could be calculated as:

( 9 )



### Excess cancer risk for segment t consisting of a single year for a single individual can be

calculated as:TSCA Title VI Proposed Implementation Rule EA 3

- 11 

### ( ) ( 10 )



### In equation ( 10 ) , the LADC

t 

### is determined by the concentration in a home in which the individual

resides, e.g., a one

- ye ar old home for a seventeen

- year old individual.

The advantage to this approach is that the life profile for each individual is not necessary; it is

only necessary to know his or her location for that life segment.

It is easy to show that, mathematical ly, the lifetime approach to calculating excess risk and the

annual approach are equivalent. The annual approach simply estimates the amount that any given year of

exposure contributes to the overall excess cancer risk from some lifetime average daily conc entration.

Specifically, starting with equation ( 3 ) from above:

( )

{ ( ( ) )

( )

( ) ( )

( ) ( ) }

{ ( ( ) ) ( )

( ) ( )

( ) ( ) } ( 11 )



### { ( ) }

{ ( ) } { }

{ } { }

{ } { }

{ ( ) } { ( ) }

{ }

{ } { }

{ } ( 12 )



### where:TSCA Title VI Proposed Implementation Rule EA 3

- 12 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 house that is new in the first year (for the 16

-

31, 32

- 47, and 48

- 63 age intervals)

ADC 64

- 69 = the ADC from expo sures 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 child 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



### The change in excess cancer risk resulting from the policy (relative to baseline) is:

{ ( ) ( ) }

{ ( ) ( ) }

{ ( ) } ( 13 )



### where LADC B 

### and LADC P 

### refer to the baseline and policy scenario LADCs, respectively. To

evaluate the impact of the policy for a single year (for example, when the individual is 15 years old) the

change in excess cancer risk for this single year would be simply:

{ ( ) } ( 14 )



### Thus, the annual excess cancer risk reduction can be calculated for an individual of any age

associated with one year of the policy. At the population level, the annual approach consists of analyzing

a population profile of individuals consistent with cur rent demographic data, and placing them in housing

stock consistent with current real estate data and calculating the benefits accruing from one year of the

policy, all else constant.

Since the policy is analyzed over a period of thirty years, the analy sis assumes that the

demographic profile of the population (e.g., population distribution by age, size, and type of housing)

does not change over time. Thus, depending on how these demographics actually change over the next

thirty years, this assumption c ould result in the introduction of an upward or downward bias into the

benefits estimate. For example, if the number of people moving into new housing is lower than assumed

over the next thirty years then the current assumption introduces an upward bias t o the benefits estimate.

Similarly, if the population increases over time, then the current assumption introduces a downward bias

to the benefits estimate.

It is also worth noting that if the analysis were to attempt to account for demographic shifts o ver time, it would also be necessary to estimate how these demographic shifts would affect the demand for

composite wood products and therefore impact the costs that correspond to the estimated benefits

– something that would not be possible to model witho ut introducing additional uncertainty. Therefore,

attempting to relax the simplifying assumption that demographics are constant over the 30

- year analysis

time frame would address one uncertainty while introducing another uncertainty and it is not clear th at

this would reduce the overall uncertainty in the estimate of net benefits.

There are a number of advantages to using the annual approach as opposed to the lifetime

approach. With the annual approach actual demographic data can be used to estimate the number ofTSCA Title VI Proposed Implementation Rule EA 3

- 13



### individuals in each exposure scenario. This way the housing stock used in the simulation will resemble

the existing housing stock. Recent data from the Census and housing surveys are a reasonable

approximation of what the distribution will be in the near future. This approach avoids the need to

estimate a survival function to correctly account for premature deaths (or be concerned with new births).

Assuming demographics do not change, using a population

- weighted annual approach accounts for thes e

factors.

It is also important to note some caveats associated with the annual approach. As just mentioned,

some distribution of population and housing stock must be assumed, and it is assumed that the current

distribution is a good indicator of the fut ure distribution. In other words, the analysis is implicitly

assuming a steady state, where the present distribution closely approximates the future distribution.

3.3.1 Lower Estimate of the Excess Number of Cancer Cases

Most individuals in the analysis are m ore than 0 years old, so applying a unit risk

– i.e., an excess

lifetime risk

– to them might overstate their excess risk of the cancer. For example, consider someone

who is 50 years old in the year of the analysis and has not yet gotten the cancer. Shoul d the entire excess

lifetime risk (the unit risk) be applied to this individual for the remaining expected years of his life? Or

should a modified excess risk, conditional on his not having gotten the cancer in his first 49 years, be

applied? Because the u nit risk provides no information about how excess risk is distributed over the

course of a lifetime, there is no clear answer.

To address this uncertainty this analysis therefore includes a lower estimate of the excess number

of cancer cases that is cal culated by multiplying the unit risk by a lowering factor that takes into account

the age at which an individual experiences the change in exposure and the incidence of the cancer by that

age. Specifically, the lowering factor is calculated as the percent age 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. For example, 56.6 percent of respiratory tract cancers occur

between ages 50 and 81 (the life expectancy of a 50 year old). Therefore the lowing factor for an
individual experiencing a one year change in exposure at age 50 is 0.566. This approach implicitly

assumes that the excess lifetime risk of the cancer is distributed across the ages within a lifetime in the

same pattern seen in the age

- specific incidences of the cancer in the population.

3.3.2 Summary of Approach to Estimate Change in Cancer Risk

Equations ( 15 ) and ( 16 ) present the equations that are used to calculate the low er and high er

estimat es for the change in cancer risk associated with a one year change in the average daily

concentration of formaldehyde exposure. Note that 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 believe s

that application of ADAFs is the preferred approach in this case but is also presenting the calculations

without applying ADAFs. The lower estimate of benefits excludes the ADAFs and the higher estimate of

benefits includes the ADAFs.

( ) ( )

( 15 )

( ) ( )

( 16 )TSCA Title VI Proposed Implementation Rule EA 3

- 14



### where:

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)

Low ering 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.TSCA Title VI Proposed Implementation Rule EA 3

- 15



## 3.4 Estimating the Value of Reductions in Cancer Risk

In this analysis the number of excess cancer cases are estimated and then they are divided into

two categories: (1) instances where individuals will ultimately die from the cancer, and (2) instances

where individuals ultimately die from something other tha n the cancer. Note that these two categories

reflect the two possible outcomes for nasopharyngeal cancer , instead of reflect ing different types of

cancers. Hereafter the fi r st outcome is re f erred to as fatal cancer and the second outcome as nonfatal

canc er. Each outcome is valued differently

– the value of a reduction in the risk of fatal cancer is

described in section 3.4.1 , and the value of a red uction in the risk of non

- fatal cancer, described in section

3.4.2

.

In order to monetize the value of reduced cancer risk, it is necessary to estimate the time periods

when these benefits would accrue so that the present value of these benefits can be cal culated. The

method for estimating the timing for when the reduced cancer risks are realized and the method for

calculating the value of reducing these risks at the time of the exposure is described below in section

3.4.3

.

3.4.1 The Value of a Micro Risk Reduction for Fatal Cancer

The value of reducing risk for nasopharyngeal cancer is estimated as a weighted average of the

value of reducing both fat al and nonfatal cancer risks. According to data from the Surveillance,

Epidemiology, and End Results (SEER) Program of the National Cancer Institute, the 15 year survival

rate for cancers of the nasopharynx is 42.9 percent ( SEER 2010 ). Thus, t he analysis assumes that 5 7

. 1

percent of the reductions in cancer risk are reductions in mortality risk and therefore are valued as such.

The analysis uses the value of mortality risk (VMR) of $8.01 per micro

- risk. A micro risk reduction is a

reduction o f 1/1,000,000 in the risk of mortality. This benefit is assumed to be accrued at the end of the

year in which a cancer case was avoided and no additional benefits (e.g., from avoiding cancer treatment

costs) are included in the instances of a mortality ri sk reduction

.

3.4.2 The Value of a Micro Risk Reduction for Non

- Fatal Cancer

As noted above, 42

. 9 percent of the cancer risk reductions are assumed to be reductions in risk for

non

- fatal cancer. While it is the value of a micro reduction in risk (a risk red uction of 1/1,000,000) of

non

- fatal nasopharyngeal cancer that is of interest, this was estimated by first estimating the expected

value of a single avoided case of non

- fatal nasopharyngeal cancer and then dividing by 1,000,000 to

obtain the implied value of a micro risk reduction. 38



### Non

- fatal cases of nasopharyngeal cancer were valued using a cost

- of

- illness (COI) approach.

The value of an avoided case of non

- fatal nasopharyngeal cancer was estimated to be the present

discounted value (

pdv ) of the strea m of expected medical expenditures and opportunity costs associated

with the illness from the year of diagnosis to a preset age (set at 99 in this analysis), taking into account

that the individual may die of other causes in each year in the analysis. 39

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 appr oach 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.TSCA Title VI Proposed Implementation Rule EA 3

- 16



### One approach to estimating the costs associated with a chronic illness such as cancer, described in

EPA’s Cost of Illness Handbook (U.S. EPA 2001 ), is to divide annual costs into three categories: (1)

initial costs

– costs of diagnosis and initial treatment costs

– that occur in the year of diagnosis, (2)

“maintenance” costs which the cancer patient incurs in each subsequent year prior to death, and (3)

terminal costs

– the costs incurred in the patient’s last year of life. This analysis followed this general

approa ch. Because this section is concerned only with non

- fatal cases of nasopharyngeal cancer, only the

first two categories are included.

As described more fully below, the stream of annual costs of a cancer will depend on:

 the stage of the cancer when it is first diagnosed;

 the individual’s employment status (full

- time worker, part

- time worker, or unemployed

or retired) each year from the year of diagnosis on (since the value of an hour lost to the

illness depends on this status, as is explained below); and

 the individual’s age in the year of diagnosis.

3.4.2.1 An outline of the approach



### The analysis estimated the pdv of a case of non

- fatal nasopharyngeal cancer, conditional on age at

diagnosis, using the following steps:

 Develop a profile of nasopharyngeal cancer

– i.e., a description of the stages of the cancer

and the treatments typically carried out or recommended at each stage, their frequencies,

durations, and costs.

 Estimate COI conditional on stage at diagnosis and age at diagnosis, a :

o Estimate the me dical costs and opportunity costs in the year of diagnosis, given

the stage at diagnosis and age at diagnosis.

o Estimate the “maintenance” medical costs and associated opportunity costs in the

kth year after diagnosis, k = 1, 2, ..., given the stage at diagno sis and age at

diagnosis.

o Given these (conditional) kth year costs, k = 0, 1, 2, ..., and the survival

probabilities for ages a

, a +1, a +2, etc. (i.e., the probability of not dying of some

other cause each year), estimate the expected total COI in each year, conditional

on a given stage at diagnosis and age at diagnosis, a

.

o Given a discount rate, d , estimate the present discounted value ( pdv ) of the

stream of costs from the age at diagnosis, a , to a preset age (99).

o Estimate COI condi tional only on age at diagnosis.

 Obtain probabilities of diagnosis of nasopharyngeal cancer at each stage of the cancer.

 Using these probabilities, calculate the expected pdv , now conditional only on age at

diagnosis.

The methods at each step are described in detail in the sections below and are shown

schematically in Figure 3

- 2

.TSCA Title VI Proposed Implementation Rule EA 3

- 17



### Figure 3

- 2 : Summary of Cost of Illness MethodTSCA Title VI Proposed Implementation Rule EA 3

- 18



### 3.4.2.2 Treatment profile for non

- fatal nasopharyngeal cancer



### The first step in estimating the costs associated with a cancer is to develop a profile of the illness

– i.e., a description of the medical procedures that are performed as a result of the illness, and the

recommended frequency and e stimated duration of each procedure in the year of diagnosis of the illness

and in each subsequent year.

This section provides an overview of the treatment profile for (non

- fatal) nasopharyngeal cancer

in the United States. According to the American Canc er Society, nasopharyngeal carcinoma includes

three types of cancer: keratinizing squamous cell carcinoma, non

- keratinizing differentiated carcinoma,

and undifferentiated carcinoma. Most cases in the United States are keratinizing squamous cell

carcinoma, while other types are more common in other parts of the world ( American Cancer Society

2011b ). The risk of nasopharyngeal cancer increases with age; this cancer is rarely found in children

under the age of 18 years ( American Cancer Society 2011b ; Lou, et al. 2010 ).

Diagnosis and initial treatments: procedures



### The year in which the cancer is diagnosed includes diagnosis and initial treatment. Diagnostic

procedures include: medical history and physical exam, biopsy, imaging tests, and blood tests ( American

Cancer Society 2011b ). Specifically, the type of biopsy is usually an endoscopic biopsy and imaging

tests include both a CT scan and an MRI ( Lo and Lu 2010 ; Lou, et al. 2010 ). Since a majority of patients

with nasopharyngeal cancer have bee n shown to have an elevated level of an Epstein

- Barr virus (EBV)

antibody, the blood tests to diagnose this cancer involve EBV

- specific serology ( Lo and Lu 2010 ).

Treatment generally does not vary by type of nasopharyngeal cancer, but differs by stage at which

the cancer is diagnosed ( American Cancer Society 2011b ). The analysis assumed that the distribution of

all nasopharyngeal cancer diagnoses by stage of illness applies to formaldehyde

- related nasopharyngeal

cancer patients as well. Table 3

- 3 presents a description of each stage, the percent of nasopharyngeal

cancer cases diagnosed at each stage, and long

- term (ten

- year) relative survival rates. Relative survival

rates indicate the proportion of cases diagn osed at each stage who survive for a given number of years

after diagnosis, adjusting for other causes of death. Most cases of nasopharyngeal cancer are diagnosed at

Stages III or IV ( Piccirillo, et al. 2007 )

.

Table 3

- 3 : Stages of Nasopharyngeal Cancer at Diagnosis

Stage of Cancer at

Diagnosis Description Cases Diagnosed

(%) Long

- Term Relative

Survival Rate (%)

Stage I Tumor is confined to the nasopharynx. 15.0 62.6

Stage II Tumor has spread to tissues of the left or right sides of the upper

part of the throat, and/or has spread to nearby lymph nodes. 6.7 51.6

Stage III Tumor has spread to the sinuses or bones near the nasopharynx,

or has spread to nearby lymph nodes. 21.8 46.2

Stage IV Tumor has grown into the skull and/or cranial nerves, the

hypopharynx, the eye, or its nearby tissues; has spread to lymph

nodes that are larger than 6 cm across or are located in the

shoulder area above the collarbone; and/or has spread to distant

sites. 45.3 37.1

Unknown Information is insufficient to indicate a stage. 11.2 44.6

Sources: American Cancer Society 2011b ; Piccirillo, e t al. 2007

.



### Due to difficulties in operating on the nasopharynx and the effectiveness of other types of

treatment, surgery is not a main treatment option for nasopharyngeal cancer ( American Cancer Society

2011b ). Prior to the landmark Intergroup 0099 trial, as published by Al

- Sarraf et al. ( 2010n ), the primaryTSCA Title VI Proposed Implementation Rule EA 3

- 19



### treatment option for all patients with nasopharyngeal cancer was radiation therapy. However, the

Intergroup 0099 trial on Stage III and IV cancer s changed the way in which locally advanced stages of

nasopharyngeal cancer are treated ( Cooper 2010 ). In this trial, radiation therapy was administered

concurrently with chemotherapy for a total of seven weeks, followed by adjuvant chemotherapy over

approximately eight weeks, with the doses and treatment schedules present ed in Table 3

- 4 ( U.S. Census

Bureau 2010n ; Cooper 2010 ). Patients receiving this prescribed course of treatment experienced a

statistically significant (p=0.005) improvement in overall survival, compared w ith patients who received

radiation therapy alone ( U.S. Census Bureau 2010n ).

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 form of ionizing radiation, divided by one kilogram of matter.

Radiation sessions take 15 to 30 minutes and are typically given five days a week for one to ten weeks ( American Cancer Society 2011c ).



### Hence, while radiation therapy is still the primary treatment option for early stage nasopharyngeal

cancer, chemotherapy combined with radiation therapy (known as “chemoradiation”) is currently the

recommended treatment for later stages of this cancer ( American Cancer Society 2011b ). Stage I cancers

are treated with radiation therapy aimed at the nasopharyngeal tumor and nearby lymph nodes, as a

preventive measure ( American Cancer Soc iety 2011b ). Patients diagnosed with Stage II, III, IVA, or IVB

cancer are included in the group of locally advanced cancers that are treated with chemoradiation and

adjuvant chemotherapy ( American Cancer Society 2011b ). In addition, the American Cancer Society

provides a separate treatment profile for Stage IVC cancer, which is characterized by distant metastasis.

However, since cancer with distant metastasis usually is not curable ( Lin 2010 ), it was assumed that all

patients with Stage IV cancers who survive (and are therefore included in the analysis of non

- fatal cases)

receive the treatmen t profile for Stages IVA and IVB.

Given this information on the dosages and schedule from the Intergroup 0099 trial from the

American Cancer Society, the analysis developed the following profile for initial treatment of non

- fatal

nasopharyngeal cancer:

 D iagnosis at Stage I: Radiation therapy to the primary tumor and uninvolved lymph

nodes.

 Diagnosis at Stage II, III or IV: Radiation therapy to the primary tumor and affected

lymph nodes; concurrent and adjuvant chemotherapy with cisplatin; and adjuvant

che motherapy with 5

- fluorouracil (5

- FU).

After treatment, the maintenance phase begins. This phase consists of follow

- up treatment, which

is presented by Tham and Lu 

## ( 2010 

## ) as an evidence

- based follow

- up schedule and regimen that draws

from the recommendations of professional organizations (includin g the National Comprehensive Cancer

Network and the American Head and Neck Society). The following profile of follow

- up treatment for

nasopharyngeal cancer is recommended for all patients treated with radiation therapy:TSCA Title VI Proposed Implementation Rule EA 3

- 20 

###  Physical exams to check for signs o f cancer recurrence: every one to three months for the

first year after treatment, every two to four months in the second year, every four to six

months in years three to five post

- treatment, then every six to twelve months thereafter. 40



###  Thyroid function s creening tests 41 

### (i.e. thyroid

- stimulating hormone and free thyroxine

tests): every six to twelve months.

 MRI of the head and neck: three months after radiation therapy, then annually.

A dental evaluation, smoking cessation counseling, and patient support groups may also be

recommended ( Tham and Lu 2010 

## ). However, sin ce these treatments are recommended on an individual

basis and information on the proportion of patients who receive these treatments is not available, they

were not included in this analysis.

Frequencies and durations of treatments



### To estimate the amoun t of time lost by an individual diagnosed with nasopharyngeal cancer in

each year, the analysis first estimated time values for each procedure carried out during each year outlined

in the treatment profile. The treatment profile outlines the frequency of procedures in the year of

diagnosis and all subsequent years. Treatment frequency also varies by stage of the illness (i.e., Stages I

– IV), though some treatments are common to all stages.

Three components of lost time were estimated for each treatment procedure: the time taken for

the procedure, the time spent waiting before and after the procedure, and the travel time to and from the

facility where the procedure is carried out. Wait and travel times were assumed to be twenty and forty

five minutes, r espectively. The opportunity costs associated with the time it takes for patients to recover

from the treatments were excluded from the analysis because data on the duration of recovery times

associated with these treatments were not readily available. T hus, this omission introduces a downward

bias to the extent to which recovery time results in lost work time, lost time available for performing

domestic chores, and lost leisure time.

The entire treatment profile, including the diagnostic and recommended treatment procedures,

and the estimated durations of each, are detailed in Table 3

- 5 and Table 3

- 6

. Table 3

- 5 gives the

breakdown of estimated wait times, travel times (to and from the location s of the treatments), and times

per visit. Table 3

- 6 gives the frequency and total time associated with each medical procedure, separately

for the year of diagnosis and subsequent years. The medical and opportunity costs associated with these

procedures are described in the subsections below.

40 The estimation of med ical costs, uses the midpoint of all ranges for the frequency of each medical procedure or service

in the treatment profile.

41 Thyroid function tests are recommended because research indicates a high incidence of hypothyroidism in patients who

have receive d radiation therapy to the entire neck ( National Cancer Institute 2011c ), which is typical in the treatment of

nasopharyngeal cancer ( Lo and Lu 2010 ).TSCA Title VI Proposed Implementation Rule EA 3

- 21



### 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

Diagnosis: All Stages at Diagnosis

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: Stage I at Diagnosis

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

Note that the initial phase of treatment for all stages

- at

- diagnosis of nasopharyngeal cancer includes diagnosis and treatment, while the

maintenance phase consists of follow

- up care.

Notes:

a. Average time spent with physician was 20.9 minutes in 2005 ( Personal Communication with AWI 2010 ).

b. Procedure takes a few minutes ( Mayo Clinic 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 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 family

practice in 2009.

j. Based on Federal Highway Administration ( 2011 ) data, the average one

- way travel time for medical/dental reasons was

approximately 23.15 minutes in 2009.TSCA Title VI Proposed Implementation Rule EA 3

- 22



### Table 3

- 6 : Estimated Total Lost Time (in Minutes), by Treatment Procedure

Procedure Frequency in

First Year Frequency

Subsequent

Years Total Time

(First Year) Total Time

(Subsequent

Years)

Diagnosis: All Stages at Diagnosis

Medical history and physical exam 1 0 85 0

Biopsy (endoscopic or fine needle aspiration) 1 0 85 0

Imaging tests: CT scan 1 0 75 0

Imaging tests: MRI 1 0 125 0

Epstein

- Barr virus (EBV) specific serology (blood test) 1 0 5 0

Subtotal 375 0

Treatment: Stage I at Diagnosis

Radiation therapy sessions 35 0 3,325 0

Subtotal 3,325 0

Treatment: Stage II, III, and IV at Diagnosis

Radiation therapy sessions 35 0 3,325 0

Chemotherapy with cisplatin 6 0 510 0

Chemotherapy with 5

- fluorouracil 3 0 11,655 0

Subtotal 15,490 0

Follow

- Up Care: All Stages at Diagnosis

Physical exam 3 1.7 255 434

Laboratory tests for thyroid levels 1 1.5 5 8

MRI of the head and neck 1 1 60 60

Subtotal 320 501

Note that the initial phase of treatment for all stages

- at

- diagnosis of nasopharyngeal cancer includes diagnosis and treatment, while the

maintenance phase consists of follow

- up care.



### 3.4.2.3 Estimated medical costs in the year of diagnosis and in subsequent years



### This section describes the calculation of mean medical expenditures for each procedure and

service in the tre atment profile, as well as the estimation of expected medical costs of illness for (non

fatal) nasopharyngeal cancer in the year of diagnosis and in subsequent years. For the average cost of

each procedure, the analysis relied on two data sources provided by the Agency for Healthcare Research

and Quality (AHRQ): the Medical Expenditure Panel Survey (MEPS) ( Personal Communication with

CPA 2011 ) and Healthcare Cost and Utilization Project (HCUP) ( Personal Communication with

Evergreen Engine ering 2009 ). Note that mean expenditures from MEPS and HCUP are converted to 2010

dollars using the Bureau of Labor Statistics’ Consumer Price Index for medical care.

The Household Component of MEPS includes separate data files for types of medical eve nts

(e.g., office

- based medical provider visits, outpatient visits, and hospital inpatient stays), which provide

information on the expenditures for specific events for a nationally representative sample of families and

individuals. The data files include variables that indicate the conditions with which a patient has been

diagnosed and the procedures undergone during a particular medical event. ICD

- 9

- CM (International

Classification of Diseases, Ninth Revision, Clinical Modification) codes are used to iden tify specific

diseases and procedures. In addition, some data files include variables that indicate any services that

patients received during their visit (e.g., laboratory tests, chemotherapy, and CT scan or MRI).

The analysis used the MEPS outpatient v isit and office

- based provider visit event files for 1996

- 2007 for all procedures and services in the treatment profile, except chemotherapy with 5

- fluorouracil.

Since chemotherapy with 5

- fluorouracil involves a 96

- hour infusion, the analysis assumed that this

service is provided during an inpatient hospital stay; 2009 data on this specific procedure from HCUPnet,

the online query system of HCUP, were used to estimate the mean cost of the procedure.TSCA Title VI Proposed Implementation Rule EA 3

- 23



### For each procedure and service for which there are sufficient observations in both the outpatient

visits and office

- based medical provider visits event files, the mean estimates across the two files were

pooled, following the approach of DerSimonian and Laird ( 1986 ). The method for pooling is described in

detail in Appendix L of the BenMAP user manual ( Abt Associates Inc. 2010 ) . It is described briefly here.

The first step in pooling is to calculate a pooled estimate under the assumption of a fixed effects

model

– i.e., that the d ifferent samples are both from the same population, and the only reason the sample

means differ is because of sampling error. This pooled estimate is a weighted average of the individual

sample means, where the weights are the corresponding inverse varianc es divided by the sum of the

inverse variances. The next step is to test for homogeneity of the mean expenditures across the two event

types (outpatient visits and office

- based medical provider visits). The test statistic is the weighted sum of

squares of the differences between each mean estimate and the pooled estimate calculated in the first step,

where the weights are the inverse variances of the mean estimates. If the test indicates that the mean

expenditures are homogeneous (i.e., the fixed effects mo del is correct), then the pooled estimate

calculated on the first step is used. If the test indicates that the mean expenditures are not homogeneous, a

random effects model is used. To do this, a between

- event type variance is first calculated. The pooled

estimate based on the random effects model is calculated in almost the same way as under the fixed

effects model; however, the weights now incorporate both the within

- event type variance and the

between

- event type variance.

Diagnosis



### Diagnosis includes medical history and a physical exam, an endoscopic biopsy, a CT scan, an

MRI, and EBV

- specific serology. The analysis assumed that doctor visits for physical examinations

include medical history. The cost of a physical exam was estimated as the mean expend iture by all

individuals who had a physical examination only (ICD

- 9

- CM procedure code 89).

For the endoscopic biopsy, the analysis first investigated MEPS data on the ICD

- 9

- CM procedure

code for operations on the pharynx (ICD

- 9

- CM procedure code 29), whic h includes pharyngeal biopsies.

However, since there are very few observations for operations on the pharynx, the analysis used the

procedure codes for operations on the nose and nasal sinuses (ICD

- 9

- CM procedure codes 21 and 22).

These codes include both surgical and diagnostic procedures, with the diagnostic procedures primarily

consisting of biopsies. The type of biopsy used to diagnose nasopharyngeal cancer does not involve

surgery ( Lo and Lu 2010 ), so observations with surgeries were excluded, and the mean expenditures for

the remaining observations with procedu re codes 21 and 22 was calculated.

The MEPS event files for outpatient and office

- based provider visits include a variable that

indicates whether a particular medical event included a CT scan or MRI. Since these two services are

bundled together in the ME PS variable, it was assumed that the cost for a CT scan is equal to the cost for

an MRI. Due to a lack of data on a CT scan or MRI for patients with head and neck cancers, mean

expenditures were calculated for MRI or CT scans for patients with a diagnosis of “symptoms involving

the head and neck” (ICD

- 9

- CM diagnosis code 784).

EBV

- specific serologic testing is the preferred method to diagnose EBV infections ( Natio nal

Center for Infectious Diseases 2006 ). Therefore, for this service, the analysis calculated the mean

expenditures for outpatient and office

- based visits for which the only service provided was a laboratory

test and the individual’s only diagnosis is EBV (ICD

- 9

- CM diagnosis code 075).TSCA Title VI Proposed Implementation Rule EA 3

- 24



### Treatment



### Treatment for all patients includes radiation therapy. Because nasopharyngeal cancer is relatively

rare in the United States, there are no records for this specific illness in MEPS. Because pairwise t

- tests

found significant differences in mean expenditures for radiation therapy across different cancer types, the

analysis estimated the mean per

- session expenditure for radiation therapy for cancer types that are

primarily treated with the radiation tre atment used for treating nasopharyngeal cancer

– external beam

radiation therapy (EBRT) ( American Cancer Society 2011a

, b ). 42 

### This approach seems reasonable

because radiation therapy costs depend on the type of radiation therapy and the number of sessions

( American Cancer Society 2011c ). The analysis considered using MEPS data on expenditures for head

and neck cancers, but there are too few observations in the MEPS database on these diseases. Of the

observa tions for radiation therapy for a malignant neoplasm of unspecified parts of the mouth (one of

only two types of head and neck cancer included in the MEPS office

- based visits file), there are only 36

observations, 35 of which are for one individual’s docto r visits.

Treatment for Stages II, III, and IV includes chemotherapy with the drugs cisplatin and 5

- fluorouracil. The cost of chemotherapy depends on a number of factors, including the drugs used and the

frequency and method of treatment ( American Cancer Society 2010 ). The analysis accounted for variation

in costs due to frequency by using per

- visit expenditures for outpatient or office

- based visit costs. For

c isplatin, the method of treatment is not a factor because this drug is always given intravenously ( Medline

Plus 2009 ). Due to a lack of data on nasopharyngeal cancer, the analysis estimated chemotherapy costs by

using expenditures for chemotherapy during outpatient and office

- based visits for other cancer types

treated with the same drug, cisplatin, as listed by the National Cancer Institute ( 2011a ). 43 

### There are no

significant differences (based on pairwise t

- tests) within each MEPS event file in the average

expenditures for chemotherapy across the cancer types that are treated with cisplatin and have sufficient

observations (>30). Thus, the analysis a ssumed that the cost of chemotherapy with cisplatin for

nasopharyngeal cancer equals the average cost for chemotherapy using this drug for these other cancer

types.

The first approach considered for estimating the cost of adjuvant chemotherapy with 5

-

fluo rouracil (5

- FU) was to compare expenditures in MEPS for chemotherapy during inpatient hospital

stays across cancer types treated with this drug, as listed by the National Cancer Institute ( 2011b ).

However, since there a re significant differences in average expenditures across cancer types, it cannot be

assumed that the cost of chemotherapy with 5

- fluorouracil for nasopharyngeal cancer is equal to the mean

expenditures for chemotherapy for these cancers. Instead, the anal ysis used 2009 data from HCUPnet to

obtain the mean hospital charge and cost for infusions of cancer chemotherapeutic substances (ICD

- 9

- CM

procedure code 99.25). The mean cost provided by HCUPnet is intended to reflect the actual costs for

hospital stays a nd is estimated using a cost

- to

- charge ratio ( Personal Communication with Evergreen

Engineering 2009 ). 44 

### However, application of these ratios often results in an underestimation of costs for

stays whe re a large percentage of charges are for room and board ( Personal Communication with

Evergreen Engineering 2009 ), which seems likely for chemotherapy treatments. In contrast, for a variety

of reasons hospital charges typically overstate actual medical expenditures, often substantially ( Personal

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 o ther and ill

- defined parts of lip, oral cavity, and pharynx ; esophagus cancer;

colorectal cancer; laryngeal cancer; lung cancer; basal and squamous cell skin cancer; breast cancer; cervica l 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 o ther and ill

defined parts of lip, oral cavity, an d pharynx ; lung cancer; cervical cancer; testicular cancer; and bladder cancer.

44 AHRQ calculates cost

- to

- charge ratios using hospital

- specific accounting information from the Centers for Medicare

and Medicai d Services ( Personal Communication with Evergreen Engineering 2009 )

. Hospital

- specific information is

necessary because detailed charges are not available in all states.TSCA Title VI Proposed Implementation Rule EA 3

- 25



### Communication with HPVA 2011b ). Therefore, the analysis adjusted this charge estimate downward

using MEPS, which provides both charges and expenditures, to calculate the ratio of expenditu res to

charges for inpatient hospital stays for treatment or therapy for all types of cancer. On average, the cost of

these procedures is 63.97 percent of the charge for them. This percentage was applied to the hospital

charges from HCUPnet to estimate the mean expenditures for a hospital stay for a chemotherapy infusion.

Follow

- up care



### Follow

- up care consists of a physical exam, laboratory tests for thyroid levels, and an MRI of the

head and neck. The estimation of average costs of a physical exam and an MRI of the head and neck is

described above. The thyroid tests that are used to monitor the thyroid levels of individuals with

hypothyroidism are thyroid stimulation hormone and thyroxine tests ( PubMed Health 2010 ). These are

also the thyroid function tests recommended for follow

- up care of nasopharyngeal cancer . Hence, the

analysis calculated the average expenditure of outpatient and office

- based visits for which the only

service was a laboratory test and the individual’s only diagnosis is hypothyroidism (ICD

- 9

- CM diagnosis

code 244).

Expected medical costs of nasopharyngeal cancer



### Using the treatment profile and mean medical expenditures from MEPS and HCUPnet, the

analysis estimated expected medical costs of hospital inpatient stays and outpatient and office

- based visits

for individuals diagnosed with Stage I nasopharyngeal cancer ( Table 3

- 7 ) and those diagnosed with Stage

II, III, or IV I nasopharyngeal cancer ( Table 3

- 8 ). These expected costs include those incurred during the

year of diagnosis and in each subsequent year.

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



### Table 3

- 8 : Expected Medical Costs for Stages II, III, and IV of (Non

- Fatal) Nasopharyngeal Cancer

(2010$)

Treatment Phase Treatment Type Unit Cost in First Year Unit Cost in Subsequent

Years

Inpatient Care

Initial Treatment: Chemotherapy with 5

- fluorouracil $88,184 $0

Outpatient and Office

- Based Provider Care

Initial Diagnosis $2,086 $0

Treatment: Radiation therapy $14,424 $0

Treatment: Chemotherapy with cisplatin $4,095 $0

Maintenance Follow

- up care $1,446 $1,337

Total $110,234 $1,337



### 3.4.2.4 Estimated opportunity costs in the year of diagnosis and in subsequent years



### In addition to medical costs, cancer patients also incur opportunity costs

– i.e., the value of time

lost to treating the illness. The analysis identified three categories of activity

– work, leisure, and

housekeeping

– that an individual could spend time on.TSCA Title VI Proposed Implementation Rule EA 3

- 26



### The expected value of an hour spent at work was calculated as the average total compensation

(wages plus employment benefits). This analysis values non

- work time (both leisure time and time spent

on non

- market activities, such as housekeeping) by as suming that “an individual will engage in such

unpaid activities only if, at the margin, the value of these activities is greater than the wages that could be

earned in paid employment. Hence after

- tax wages provide a lower bound estimate of the value of n on

work time. There are two different values for time considered in this analysis

– one for time spent at

work and another for time spent at leisure or housekeeping activities

– that were used to estimate the

opportunity cost associated with nasopharyngea l cancer.

Valuing any lost time of children can be difficult. However, based on the National Cancer

Institute’s Surveillance Epidemiology and End Results (SEER) database ( SEER 2010 ), there are virtually

no cases of nasopharyngeal cancer amo ng children, so this problem did not arise for this analysis.

The analysis assumed that full

- time workers work 40 hours a week, for an average of 5.714 hours

per day (including weekends). It was assumed that everyone spends 8 hours sleeping, so the time s pent in

leisure or housekeeping activities by the average full

- time worker is estimated as 24

– 8

– 5.714 = 10.286.

If v work 

### denotes the value of an hour of work, and v leisure 

### denotes the value of an hour of leisure or

housekeeping, then the expected value of a full day lost to nasopharyngeal cancer for a full

- time worker is

.

( 17 )



### The analysis assumed that part

- time workers work 20 hours a week, for an average of 2.857 hours

per day. Under this assumption, the time spent in leisure or housekeeping activities by the average part

time worker is 24

– 8

– 2.857 = 13.143. Thus the expect ed value of a full day lost to nasopharyngeal

cancer for a part

- time worker is

.

( 18 )



### Finally, someone who is unemployed or retired would spend all 16 non

- sleeping hours in

leisure or housekeeping activities. The expected value of a full day lost to nasopharyngeal cancer for an

unemployed or retired person, therefore, is

.

( 19 )



### The BLS Labor Force Statistics Current Population Survey provides age group

- specific

proportions of the U.S. non

- institutionalized population that are (1) employed full time, (2) employed

part

- time, (3) unemploye d, and (4) retired. Using these proportions, the analysis constructed age

- specific

expected values of a full day lost to nasopharyngeal cancer. If denotes the probability of being in

the i th employment status at age a , the expected value of a full day lost to nasopharyngeal cancer for

someone age a is:

( 20 )



### where employment status is

full

- time worker if i =1,

part

- time worker if i =2,TSCA Title VI Proposed Implementation Rule EA 3

- 27



### unemployed if i =3, and

retired if i =4,

and the values for i =1, 2, 3, and 4 are given in equations ( 17 ) through ( 19 ) above. Table 3

- 9

presents the age ranges provided by BLS for each employment status.

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.



### To estimate the value of work time, average hourly wages were obtained for full

- time and part

time workers in all occupations from the National Compensation Survey ( U.S. Bureau of Labor Statistics

2011a ). Hourly wages were $22.77 for full

- time workers and $12.10 for part

- time workers in 2010.

These wages were loaded with benefits obtained from BLS Employer Costs for Employee Compensation

data. Total benefits were estimated to be $10.05 for full

- time workers and $3.35 for part

- time workers

( U.S. Bureau of Labor Statistics 2011b ). Therefore, total compensation used to estimate the value of

work time was $32.82 for a full

- time worker and $15.45 for a part

- time w orker.

As noted above, the value of leisure time was estimated as after

- tax wages. The analysis

estimated an average income tax rate by dividing national income from wages and salaries by the total

value of income taxes at the federal and state levels. According to the Bureau of Economic Analysis

(BEA) National Economic Accounts, wage and salary disbursements in 2010 were approximately $6.4

trillion ( U.S. Bureau of Economic Analysis 2011a ), and the value of federal income taxes wi thheld

(minus refunds) and state income taxes was approximately $1.5 trillion ( U.S. Bureau of Economic

Analysis 2011b ). The computed average tax rate

– about twenty

- three percent

– was applied to the wages

for full

- time and part

- time workers, resulting in estimated after

- tax wages of $17.46 and $9.28,

respectively.

Using equa tions ( 17 )

, ( 18 ) , and ( 19 ) given above, the expected full

- day values for individuals

having each of the four employment statuses were calculated. These are shown in Table 3

- 10

.TSCA Title VI Proposed Implementation Rule EA 3

- 28



### Table 3

- 10 : Expected Full

- Day Values by Employment Status (2010$)

Value of Work Value of Leisure

Employment

Status Work

Hours /

Day

[A] Compensation /

Hour

[B] Work Value /

Day

[C] = [A] * [B] Leisure

Hours /

Day

[D] After

- Tax

Wages /

Hour

[E] Leisure Value /

Day

[F] = [D] * [E] Total Full Day

Value

[G] = [C] + [F]

Full

- Time 5.714 $32.82 $187.55 10.286 $17.46 $179.55 $367.10

Part

- Time 2.857 $15.45 $44.14 13.143 $9.28 $121.92 $166.06

Unemployed 0.000 $0.00 $0.00 16.000 $9.28 $148.42 $148.42

Not in Labor

Force 0.000 $0.00 $0.00 16.000 $9.28 $148.42 $148.42

Source: U.S. Bureau of Economic Analysis 2011a

, b ; U.S. Bureau of Labor Statistics 2011a

, b



### The probabilities of employment status at each age were then multiplied by the corresponding

expected full

- day values in Table 3

- 10 (see equation ( 20 ) ) to estimate the expected full

- day value of an

individual at each a ge. These values are presented in Table 3

- 11

.

Table 3

- 11 : Expected Full

- Day Values by Age

Probability of Employment Status

Age Full Time Part Time Unemployed Not In Labor

Force Expected Value of

Full Day Expected Value

Per Hour

16

- 17 1.13% 12.23% 5.10% 81.54% $153.04 $9.57

18

- 19 8.99% 26.25% 10.74% 54.02% $172.71 $10.79

20

- 24 36.41% 23.02% 11.15% 29.43% $232.10 $14.51

25

- 29 62.38% 9.90% 8.71% 19.01% $286.58 $17.91

30

- 34 64.27% 10.20% 7.55% 17.98% $290.77 $18.17

35

- 39 65.43% 10.38% 6.75% 17.44% $293.33 $18.33

40

- 44 66.40% 10.53% 6.42% 16.65% $295.47 $18.47

45

- 49 65.41% 10.38% 6.66% 17.55% $293.30 $18.33

50

- 54 63.26% 10.04% 5.86% 20.85% $288.53 $18.03

55

- 64 56.24% 17.06% 5.86% 20.85% $274.41 $17.15

65

- 69 23.44% 7.11% 2.20% 67.25% $200.93 $12.56

70

- 74 12.99% 3.94% 1.10% 81.96% $177.53 $11.10

75+ 5.09% 1.54% 0.44% 92.93% $159.82 $9.99

Source: U.S. Bureau of Economic Analysis 2011a

, b ; U.S. Bureau of Labor Statistics 2011a

, b

, c



### As shown in Table 3

- 5 above, much of lost time associated with nasopharyngeal cancer consists

of partial rather than full days lost. Assuming that these lost hours are distributed across the two types of

activity (work and leisure) in the same proportions that these activities occur in a typical day for

individuals in each of the three employment status categories, an expected opportunity cost associated

with a given treatment is estimated as the number of hours lo st as a result of the treatment times the

expected value per hour, shown in the right

- most column of Table 3

- 11 . The expected value per hour was

calcu lated by dividing the expected value of a full day by 16, since the assumption of 16 waking hours per

day underlies the expected value of a full day (see equations ( 17 )

, ( 18 ) , and ( 19 ) ). Note t hat it is possible

that the assumption that lost hours are distributed across the two types of activity (work and leisure) in the

same proportions that these activities occur in a typical day may tend to lead toward an underestimate of

the benefits if full time workers are more likely to schedule treatments during working hours rather than

leisure hours. It is also worth noting that the opportunity cost estimates do not include work or leisure

time lost due to the side effects of chemotherapy, because there is wide variation in how individuals react

to treatments, and information could not be located on the typical or average recovery time from

chemotherapy.TSCA Title VI Proposed Implementation Rule EA 3

- 29



### 3.4.2.5 Annual expected opportunity cost by age



### Expected opportunity costs associated with nasopharyngeal cancer were estimated for the year in

which diagnosis occurs and for all subsequent years by multiplying the estimated number of hours lost in

the year (lost time is given in minutes in Table 3

- 6 ) times the expected value per hour lost, given in Table

3

- 11 . Since the expected value of a lost hour varies by age, expected opportunity costs also vary by age.

In addition, since treatments differ by cancer stage at diagnosis, expected opportunity c osts also differ by

stage at diagnosis. Table 3

- 12 gives age

- and stage at diagnosis

- specific opportunity costs, separately for

the year of diagnosis and subsequent years.

Table 3

- 12 : Total Expected Value of Time Lost Treating (Non

- Fatal) Nasopharyngeal Cancer

(2010$)

First Year Subsequent Years

Age Stage I Stage II, III, and IV Stage I Stage II, III, and IV

16

- 17 $640.87 $2,580.20 $33.80 $33.80

18

- 19 $723.20 $2,911.70 $38.14 $38.14

20

- 24 $971.92 $3,913.07 $51.26 $51.26

25

- 29 $1,200.06 $4,831.58 $63.29 $63.29

30

- 34 $1,217.61 $4,902.23 $64.21 $64.21

35

- 39 $1,228.32 $4,945.37 $64.78 $64.78

40

- 44 $1,237.30 $4,981.50 $65.25 $65.25

45

- 49 $1,228.19 $4,944.83 $64.77 $64.77

50

- 54 $1,208.23 $4,864.46 $63.72 $63.72

55

- 64 $1,149.07 $4,626.30 $60.60 $60.60

65

- 69 $841.38 $3,387.48 $44.37 $44.37

70

- 74 $743.42 $2,993.10 $39.21 $39.21

75+ $669.24 $2,694.44 $35.29 $35.29

Sources:

Wages and Benefits from U.S. Bureau of Labor Statistics 2011a

, b

, c ; Income and Tax information from U.S. Bureau of

Economic Analysis 2011a

, b ; Average time with a physician f rom Personal Communication with AWI 2010 ; Time for

chemotherapy with 5

-

fluorouracil from U.S. Census Bureau 2010n ; Cooper 2010 ; Time for rapid infusion of cisplatin from

Cooper 2010 ; Radiation therapy time from American Cancer Society 2011c ; CT scan time from Mayo Clinic 2010b ; MRI time

from Mayo Clinic 2010a ; Average wait time based on Press Ganey Associates I nc. 2010 ; Average travel time based on Federal

Highway Administration 2011

.



### Cons ider the following example: the opportunity cost in the year of diagnosis for someone

diagnosed at age 60 with Stage III nasopharyngeal cancer would be calculated as follows:

Calculate total hours lost in year of diagnosis:

• Diagnosis (all stages at diagnosis) = 375 minutes = (375/60) hours = 6.25 hours

• First

- year follow

- up care (all stages at diagnosis) = 320 minutes = 320/60 hours = 5.33 hours

• First

- year treatments (for Stages II, II, and IV at diagnosis) = 15,490 mins. = 258.17 hours

Therefore , total first

- year hours lost = 6.25 + 5.33 + 258.17 = 269.75.

The expected value of a lost hour for someone age 60 is $17.15 (see Table 3

- 11 ). The estimated

opportunity cost in the year of diagnosis for someone diagnosed at age 60 with Stage III nasopharyngeal

cancer would be

269.75 hours x $17.15 per hour = $4,626.TSCA Title VI Proposed Implementation Rule EA 3

- 30



### 3.4.2.6 Total expected cost of non

- fatal nasopharyngeal cancer

Expected cost in the kth year after diagnosis, conditional on age and stage of cancer at diagnosis



### If a person is diagnosed with nasopharyngeal cancer at age a and lives throughout the year of

diagnosis, t he total costs associated with the illness that year will be , where MC 1 

### denotes

the medical costs in the first year and OC a,1 

### denotes the opportunity costs in the first year for someone

diagnosed at age a

. While these costs also dep end on the stage of the cancer at diagnosis, for ease of

exposition, that is (temporarily) omitted here.

Although the analysis is considering only non

- fatal cases of the cancer, people can still die of

other causes. If the cancer patient dies of other ca uses partway through the year, he will not incur all of

. The analysis assumes that deaths from other causes occur uniformly throughout the

year and thus, on average, the expected cost associated with nasopharyngeal cancer for the fi rst year

among those who die of some other cause that year is

.

Survival probabilities were obtained from the Centers for Disease Control and

Prevention/National Center for Health Statistics ( 2010b ). 45 

### Since survival probabilities are age

- specific,

age is inserted into the calculations here.

Suppose an individual is diagnosed with nasopharyngeal cancer at age a . Let sp

a 

### denote the

probability of surviving from age a to age ( a +1). Then the expected c ost during the year of diagnosis of

nasopharyngeal cancer for an individual diagnosed at age a is:

( 21 )



### Similarly, the expected cost associated with nasopharyngeal cancer for that individual during the

second year (at age a +1) is:

.

( 22 )



### In general, the expected cost associated with nasopharyngeal cancer duri ng the k th year after

diagnosis (i.e., in year ( k +1) of the cancer) for an individual diagnosed at age a is:

( 23 )



### For example, suppose an individual is diagnosed with Stage III nasopharyngeal cancer at age

60. The survival probability at age 60 (the probability of surviving from age 60 to age 61) is 0.990718.

Using the first

- year medical cost from Table 3

- 8 ($110,234) and the first

- year opportunity cost for

someone diagnosed with Stage III nasopharyngeal cancer at age 60 from Table 3

- 12 ($4,626), the total

expected cost in the first year is:

45 Having nasopharyngeal cancer may increase the probabilities of dying of other causes. However, because no such

information was identified, this analysis uses general population survival probabilities.TSCA Title VI Proposed Implementation Rule EA 3

- 31 

### = $114,327 ( 24 )



### The age

- specific expected costs in the first year (the year of diagnosis) and in subsequent years

for individuals diagnosed with Stage I nasopharyngeal cancer and at Stages II, III, or IV are shown in

Table 3

- 13

.TSCA Title VI Proposed Implementation Rule EA 3

- 32



### Table 3

- 13 : Annual Cost of (Non

- Fatal) Nasopharyngeal Cancer (2010$)

Diagnosed in Stage I Diagnosed in Stage II, III, IV

Age at

Diagnosis First Year Subsequent Years First Year Subsequent Years

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 $1,361TSCA Title VI Proposed Implementation Rule EA 3

- 33



### 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



### Present discounted value of costs conditional on age at diagnosis



### Because cancer is a chronic illness, costs are incurred for a number of years. The COI

- based

value of a cancer case is the pdv of the stream of expected costs associated with the illness, from the year

of diagnosis to the year of death of the patient (or a preset year). Since the analysis is considering only

non

- fatal cases of nasopharyngeal cancer, death would be from some other cause. As shown in Table

3

- 13 , expected first

- year and subsequent

- year costs (including medical costs and opportunity costs) were

calculated for each age at diagnosis, starting at age 16, separately for those diagnosed at Stage I and those

diagnosed at Stages II, III, or IV. Exp ected costs take into account the probability of dying of some other

cause at each age, as explained above. Denoting the discount rate as d , the pdv of a case of

nasopharyngeal cancer for an individual diagnosed at age a , conditional on a given stage

- at

- di agnosis, is

( 25 )



### where is given by equation ( 23 ) above. The sums of the expected costs were taken

through age 99.

While the dependence of cost on stage of the cancer at diagnosis has been omitted from

equations ( 23 ) and ( 25 ) , cost does in fact depend on this, as shown in Table 3

- 13 . The final step is to

calculate an expected pdv , where the expectation is taken over the stage at diagnosis. Using the

percentages of cases diagnosed at each stage given in Table 3

- 13 above, and as suming that the cases with

unknown stage at diagnosis have the same distribution of stages at diagnosis as the cases whose stages areTSCA Title VI Proposed Implementation Rule EA 3

- 34



### known, 16.89 percent of cases are diagnosed at Stage I and 83.11 percent are diagnosed at Stages II, III,

or IV

. Table 3

- 14 shows the stage at diagnosis

- specific pdv s, and the expected pdv , calculated as a

weighted average of the two stage s at diagnosis

- specific pdv s, wh ere the weights are these percentages,

separately for each age at diagnosis. These pdv s are estimated for a 3 and a 7 percent discount rate. The

final column of Table 3

- 14 shows the implied values of a micro risk reduction (a risk reduction of

1/1,000,000), which is just the expected pdv divided by 1,000,000.TSCA Title VI Proposed Implementation Rule EA 3

- 35



### Table 3

- 14 : Present Discounted Values of Nonfatal Nasopharyngeal Cancer by Age at Diagnosis

Age at

Diagnosis 3 Percent Discount Rate 7 Percent Discount Rate

PDV for

Diagnosis

at Stage I PDV for

Diagnosis at

Stage II, III, or

IV Expected

PDV Implied Value

of a Micro

Risk

Reduction PDV for

Diagnosis at

Stage I PDV for

Diagnosis at

Stage II, III,

or IV Expected

PDV Implied Value of

a Micro Risk

Reduction

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 $0.125TSCA Title VI Proposed Implementation Rule EA 3

- 36



### Table 3

- 14 : Present Discounted Values of Nonfatal Nasopharyngeal Cancer by Age at Diagnosis

Age at

Diagnosis 3 Percent Discount Rate 7 Percent Discount Rate

PDV for

Diagnosis

at Stage I PDV for

Diagnosis at

Stage II, III, or

IV Expected

PDV Implied Value

of a Micro

Risk

Reduction PDV for

Diagnosis at

Stage I PDV for

Diagnosis at

Stage II, III,

or IV Expected

PDV Implied Value of

a Micro Risk

Reduction

69 $45,608 $139,800 $123,889 $0.124 $45,608 $139,800 $123,889 $0.124

70 $45,171 $139,531 $123,592 $0.124 $45,171 $139,531 $123,592 $0.124

71 $44,541 $138,804 $122,881 $0.123 $44,541 $138,804 $122,881 $0.123

72 $43,888 $138,039 $122,135 $0.122 $43,888 $138,039 $122,135 $0.122

73 $43,211 $137,234 $121,352 $0.121 $43,211 $137,234 $121,352 $0.121

74 $42,510 $136,389 $120,531 $0.121 $42,510 $136,389 $120,531 $0.121

75 $41,904 $135,811 $119,948 $0.120 $41,904 $135,811 $119,948 $0.120

76 $41,154 $134,887 $119,054 $0.119 $41,154 $134,887 $119,054 $0.119

77 $40,378 $133,920 $118,119 $0.118 $40,378 $133,920 $118,119 $0.118

78 $39,577 $132,908 $117,143 $0.117 $39,577 $132,908 $117,143 $0.117

79 $38,749 $131,848 $116,122 $0.116 $38,749 $131,848 $116,122 $0.116

80 $37,893 $130,738 $115,055 $0.115 $37,893 $130,738 $115,055 $0.115

81 $37,009 $129,575 $113,939 $0.114 $37,009 $129,575 $113,939 $0.114

82 $36,097 $128,357 $112,772 $0.113 $36,097 $128,357 $112,772 $0.113

83 $35,155 $127,080 $111,552 $0.112 $35,155 $127,080 $111,552 $0.112

84 $34,183 $125,742 $110,276 $0.110 $34,183 $125,742 $110,276 $0.110

85 $33,180 $124,341 $108,943 $0.109 $33,180 $124,341 $108,943 $0.109

86 $32,148 $122,874 $107,549 $0.108 $32,148 $122,874 $107,549 $0.108

87 $31,084 $121,339 $106,093 $0.106 $31,084 $121,339 $106,093 $0.106

88 $29,990 $119,732 $104,573 $0.105 $29,990 $119,732 $104,573 $0.105

89 $28,865 $118,053 $102,988 $0.103 $28,865 $118,053 $102,988 $0.103

90 $27,710 $116,300 $101,336 $0.101 $27,710 $116,300 $101,336 $0.101

91 $26,525 $114,472 $99,616 $0.100 $26,525 $114,472 $99,616 $0.100

92 $25,312 $112,567 $97,828 $0.098 $25,312 $112,567 $97,828 $0.098

93 $24,072 $110,586 $95,972 $0.096 $24,072 $110,586 $95,972 $0.096

94 $22,805 $108,529 $94,049 $0.094 $22,805 $108,529 $94,049 $0.094

95 $21,513 $106,398 $92,059 $0.092 $21,513 $106,398 $92,059 $0.092



### 3.4.3 Timing of Reduced Cancer Risk and Present Value of Reduced Cancer Risk at the

Time of the Exposure Reduction

The available studies that link formaldehyde exposure to cancer risk do not provide any

information about the latency periods between exposure and cancer incidence. Therefore, this analysis

relies on the assumption that the incidence of nasopharyngeal can cer caused by formaldehyde exposure

has the same distribution as the incidence of nasopharyngeal cancer from any cause.

The National Cancer Institutes’ Surveillance Epidemiology and End Results (SEER)

nasopharyngeal cancer incidence data included the nu mber of cancer diagnoses for ten year age brackets

that ranged from ages 20 to 79 and also included an age bracket for age 80 and older ( Ries, et al. 2007 ).

To estimate the timing of avoided cancer for a hypothetical person, it was assumed that the timing of

cancer diagnosis would follow the distribution betwe en the age of exposure and the individual’s life

expectancy age. Table 3

- 15 presents an example of how this calculation is performed for individuals who

are age 50 at the time they experience a change in formaldehyde exposure that reduces their cancer risk.

Thus, conditional on avoiding a case of nasopharyngeal cancer because of an exposure reduction that

occurred at age 50, there is a 40.7 percent chance that the avoided cancer would have occurred between

ages 50 and 59, a 37.8 percent chance that it would have occurred between ages 60 and 69, a 21.0 percent

chance that it would have occurred between ages 70 and 79, and a 0.4 percent chance that it would have

occurred at age 80. Note that although the table presents these percentages for the age brackets for whichTSCA Title VI Proposed Implementation Rule EA 3

- 37



### the incidence data were available, the analysis uses annual incide nce rates estimated by assuming the

incidence rates are uniformly distributed within the age brackets for which they were reported.

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 lifet ime).

Source: Ries, et al. 2007



### 3.4.3.1 Present Value of Reduced Cancer Risk at the Time of the Exposure Reduction



### Once the distribution of the timing of the avoided cancer risk is estimated (see section 3.4.3 ), this

distribution can be applied to the estimated values of reduced cancer risk at the time the cancer is avoided.

Using the example presented above in section 3.4.3 an individual with an exposure reduction at age 50

has a 40.7% chance of realizing the benefit from that reduction between the ages of 50 and 59. This is

assumed to be uniformly distributed across the 10 years in that age range; therefore, there is a 4.7%

chance this individual realizes this benefit in each year between the ages 50 and 59. Thus, by multiplying

the probability that cancer is avoided in a given year by the value of the risk re duction discounted to the

year when the exposure reduction was experienced, the analysis can estimate the present value of reduced

cancer risk at the time of the exposure reduction. For an individual with a given age at exposure, this

calculation can be d escribed with the following formula:

∑ ( 26 )



### where:

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 co nditional on the age at exposure.

PrFatal is the probability that a case of nasopharyngeal cancer is fatal, 57.1 percent.

VMR is the value of a micro mortality risk reduction, $8.01.

PrNonFatal is the probability that a case of nasopharyngeal cancer is not fatal, 42.9 percent.

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.



### Table 3

- 16 presents the present values for micro risk reductions for fatal and nonfatal cancer, both

separately and combined, by the age at exposure. Note that the combined value for fatal and nonfatalTSCA Title VI Proposed Implementation Rule EA 3

- 38



### cancer is simply the average of the two separate values weighted according to the probability that cancer

is fatal, which is 57.1 percent of nasopharyngeal cases ( SEER 2010 ).TSCA Title VI Proposed Implementation Rule EA 3

- 39 

### Table 3

- 16 : Present Discounted Values for Nasopharyngeal Cancer by Age at

Exposure

Age at Exposure 3 Percent Discount Rate 7 Percent Discount Rate

PV of

Micro Risk

Reduction

for Fatal

Cancer PV of

Micro Risk

Reduction

for

Nonfatal

Cancer PV of Micro

Risk

Reduction

for Cancer

(fatal and

nonfatal) PV of

Micro Risk

Reduction

for Fatal

Cancer PV of Micro

Risk

Reduction for

Nonfatal

Cancer PV of

Micro Risk

Reduction

for Cancer

(fatal and

nonfatal)

0 $1.809 $0.030 $1.05 $0.333 $0.005 $0.19

1 $1.850 $0.031 $1.07 $0.352 $0.005 $0.20

2 $1.919 $0.032 $1.11 $0.381 $0.006 $0.22

3 $1.963 $0.032 $1.13 $0.403 $0.006 $0.23

4 $2.019 $0.033 $1.17 $0.430 $0.006 $0.25

5 $2.082 $0.034 $1.20 $0.461 $0.007 $0.27

6 $2.145 $0.035 $1.24 $0.494 $0.007 $0.29

7 $2.209 $0.037 $1.28 $0.528 $0.008 $0.30

8 $2.275 $0.038 $1.32 $0.565 $0.008 $0.33

9 $2.343 $0.039 $1.35 $0.605 $0.009 $0.35

10 $2.414 $0.040 $1.40 $0.647 $0.009 $0.37

11 $2.486 $0.041 $1.44 $0.693 $0.010 $0.40

12 $2.561 $0.042 $1.48 $0.741 $0.011 $0.43

13 $2.637 $0.044 $1.52 $0.793 $0.012 $0.46

14 $2.717 $0.045 $1.57 $0.848 $0.012 $0.49

15 $2.798 $0.046 $1.62 $0.908 $0.013 $0.52

16 $2.882 $0.048 $1.67 $0.971 $0.014 $0.56

17 $2.969 $0.049 $1.72 $1.039 $0.015 $0.60

18 $3.058 $0.051 $1.77 $1.112 $0.016 $0.64

19 $3.149 $0.052 $1.82 $1.190 $0.017 $0.69

20 $3.222 $0.053 $1.86 $1.244 $0.018 $0.72

21 $3.297 $0.054 $1.91 $1.301 $0.019 $0.75

22 $3.375 $0.056 $1.95 $1.363 $0.020 $0.79

23 $3.455 $0.057 $2.00 $1.429 $0.021 $0.83

24 $3.538 $0.058 $2.05 $1.501 $0.022 $0.87

25 $3.624 $0.060 $2.10 $1.577 $0.023 $0.91

26 $3.713 $0.061 $2.15 $1.659 $0.024 $0.96

27 $3.805 $0.063 $2.20 $1.747 $0.025 $1.01

28 $3.900 $0.064 $2.25 $1.841 $0.027 $1.06

29 $3.998 $0.066 $2.31 $1.943 $0.028 $1.12

30 $4.062 $0.067 $2.35 $2.001 $0.029 $1.16

31 $4.134 $0.068 $2.39 $2.068 $0.030 $1.19

32 $4.209 $0.069 $2.43 $2.139 $0.031 $1.23

33 $4.286 $0.070 $2.48 $2.216 $0.032 $1.28

34 $4.366 $0.071 $2.52 $2.298 $0.033 $1.33

35 $4.449 $0.073 $2.57 $2.386 $0.035 $1.38

36 $4.535 $0.074 $2.62 $2.480 $0.036 $1.43

37 $4.624 $0.075 $2.67 $2.581 $0.037 $1.49

38 $4.717 $0.077 $2.73 $2.690 $0.039 $1.55

39 $4.813 $0.078 $2.78 $2.807 $0.041 $1.62

40 $4.869 $0.079 $2.81 $2.866 $0.042 $1.65

41 $4.927 $0.080 $2.85 $2.927 $0.042 $1.69

42 $4.985 $0.081 $2.88 $2.989 $0.043 $1.73

43 $5.044 $0.081 $2.92 $3.054 $0.044 $1.76

44 $5.104 $0.082 $2.95 $3.120 $0.045 $1.80

45 $5.156 $0.083 $2.98 $3.179 $0.046 $1.83TSCA Title VI Proposed Implementation Rule EA 3

- 40 

### Table 3

- 16 : Present Discounted Values for Nasopharyngeal Cancer by Age at

Exposure

Age at Exposure 3 Percent Discount Rate 7 Percent Discount Rate

PV of

Micro Risk

Reduction

for Fatal

Cancer PV of

Micro Risk

Reduction

for

Nonfatal

Cancer PV of Micro

Risk

Reduction

for Cancer

(fatal and

nonfatal) PV of

Micro Risk

Reduction

for Fatal

Cancer PV of Micro

Risk

Reduction for

Nonfatal

Cancer PV of

Micro Risk

Reduction

for Cancer

(fatal and

nonfatal)

46 $5.217 $0.083 $3.01 $3.249 $0.047 $1.88

47 $5.279 $0.084 $3.05 $3.320 $0.048 $1.92

48 $5.341 $0.085 $3.09 $3.394 $0.049 $1.96

49 $5.404 $0.086 $3.12 $3.469 $0.050 $2.00

50 $5.469 $0.087 $3.16 $3.549 $0.051 $2.05

51 $5.535 $0.087 $3.20 $3.631 $0.052 $2.10

52 $5.601 $0.088 $3.24 $3.715 $0.053 $2.14

53 $5.668 $0.089 $3.27 $3.801 $0.054 $2.19

54 $5.735 $0.090 $3.31 $3.889 $0.055 $2.24

55 $5.790 $0.090 $3.34 $3.964 $0.056 $2.29

56 $5.857 $0.091 $3.38 $4.054 $0.058 $2.34

57 $5.923 $0.092 $3.42 $4.146 $0.059 $2.39

58 $5.989 $0.092 $3.46 $4.237 $0.060 $2.45

59 $6.054 $0.093 $3.50 $4.328 $0.061 $2.50

60 $6.111 $0.093 $3.53 $4.413 $0.062 $2.55

61 $6.182 $0.094 $3.57 $4.519 $0.064 $2.61

62 $6.252 $0.095 $3.61 $4.625 $0.065 $2.67

63 $6.321 $0.095 $3.65 $4.730 $0.066 $2.73

64 $6.388 $0.096 $3.69 $4.832 $0.067 $2.79

65 $6.430 $0.096 $3.71 $4.900 $0.068 $2.83

66 $6.486 $0.096 $3.75 $4.988 $0.069 $2.88

67 $6.535 $0.097 $3.77 $5.061 $0.070 $2.92

68 $6.571 $0.097 $3.79 $5.112 $0.070 $2.95

69 $6.589 $0.096 $3.80 $5.126 $0.070 $2.96

70 $6.647 $0.097 $3.84 $5.227 $0.071 $3.02

71 $6.736 $0.097 $3.89 $5.377 $0.073 $3.10

72 $6.824 $0.098 $3.94 $5.531 $0.075 $3.19

73 $6.912 $0.099 $3.99 $5.687 $0.077 $3.28

74 $6.999 $0.100 $4.04 $5.845 $0.079 $3.37

75 $6.978 $0.098 $4.03 $5.823 $0.078 $3.36

76 $7.039 $0.099 $4.06 $5.936 $0.079 $3.42

77 $7.078 $0.098 $4.08 $6.009 $0.080 $3.47

78 $7.066 $0.097 $4.08 $5.983 $0.079 $3.45

79 $6.900 $0.093 $3.98 $5.650 $0.074 $3.26

80 $6.803 $0.090 $3.92 $5.480 $0.070 $3.16

81 $6.900 $0.091 $3.98 $5.650 $0.072 $3.26

82 $6.999 $0.092 $4.04 $5.828 $0.074 $3.36

83 $7.100 $0.092 $4.09 $6.014 $0.076 $3.47

84 $7.203 $0.093 $4.15 $6.208 $0.078 $3.58

85 $7.100 $0.090 $4.09 $6.014 $0.074 $3.47

86 $7.100 $0.088 $4.09 $6.014 $0.074 $3.47

87 $7.100 $0.087 $4.09 $6.014 $0.073 $3.47

88 $7.100 $0.085 $4.09 $6.014 $0.071 $3.46

89 $7.100 $0.084 $4.09 $6.014 $0.070 $3.46

90 $7.203 $0.084 $4.15 $6.208 $0.072 $3.58

91 $7.308 $0.084 $4.21 $6.410 $0.074 $3.69TSCA Title VI Proposed Implementation Rule EA 3

- 41 

### Table 3

- 16 : Present Discounted Values for Nasopharyngeal Cancer by Age at

Exposure

Age at Exposure 3 Percent Discount Rate 7 Percent Discount Rate

PV of

Micro Risk

Reduction

for Fatal

Cancer PV of

Micro Risk

Reduction

for

Nonfatal

Cancer PV of Micro

Risk

Reduction

for Cancer

(fatal and

nonfatal) PV of

Micro Risk

Reduction

for Fatal

Cancer PV of Micro

Risk

Reduction for

Nonfatal

Cancer PV of

Micro Risk

Reduction

for Cancer

(fatal and

nonfatal)

92 $7.415 $0.085 $4.27 $6.622 $0.075 $3.81

93 $7.524 $0.085 $4.33 $6.843 $0.077 $3.94

94 $7.635 $0.085 $4.40 $7.075 $0.079 $4.07TSCA Title VI Proposed Implementation Rule EA 3

- 42



## 3.5 Estimating the Value of Non

- cancer Risk Reductions

This section describes the approach to estimating the benefits associated with avoiding non

cancer effects as a result of the proposed TSCA Title VI Implementation Rule. This approach is

summarized from the EPA report titled “Approach to Assessing Non

- canc er Health Effects from

Formaldehyde and Benefits from Reducing Non

- cancer Health Effects as a Result of Implementing

Formaldehyde Emission Limits for Composite Wood Products” (U.S. EPA 201 3 )

. EPA’s non

- cancer approach document evaluated the non

- cancer health evidence used in the derivation of candidate

reference concentrations from the June 2010 draft IRIS Toxicological Review of Formaldehyde. While

the draft IRIS Toxicological Review o f Formaldehyde identified seven categories of non

- cancer health

effects, EPA derived concentration

- response functions for three of these endpoints and recommended

accompanying unit values for use in the benefits assessment based on a literature review of t he endpoints.

The National Research Council of the N ational Academy of Sciences (NRC ) peer reviewed the draft IRIS

Toxicological Review in 2011, and where possible, EPA’s non

- cancer approach document followed NRC

recommendations, such as excluding two stud ies that N RC recommended should not be advanced in the

derivation of reference concentrations. After subsequent work, EPA determined there was sufficient

evidence for monetizing the impacts for only one effect, sensory irritation. EPA determined that red uced

fertility should not be quantified in the overall benefits analysis. And EPA determined that respiratory

related effects should not be monetized at this time, but they are qualitatively discussed below.

All of the non

- market benefits are estimated to result from reduced exposure to formaldehyde

from composite wood products as a result of the proposed rule. The benefits for a non

- cancer risk

reduction are a function of the: (1) concentration

- response function (e.g., increase in risk of health

endpoi nt per unit increase in formaldehyde concentration), (2) unit values of the avoided illness, (3)

impacted population, (4) background rate of the health endpoint (if applicable), and (5) estimated change

in exposure associated with the rule. All of these in puts are described briefly below, and some (e.g.,

impacted population, change in exposure as a result of the rule) are described in more detail in other

sections of this document. The benefits equations for avoiding cases of eye irritation as a result of t he

proposed rule are provided below.

The exposures before (“baseline”) and after the rule (“policy”) have been modeled as described in

Section 3.1 . As necessary, average daily concentrations (ADC) of formaldehyde in air will be converted

from units of mg/m 3 

### to ppb or vice versa using this conversion factor: 814 ppb formaldehyde = 1 mg/m 3



### , which corresponds to a temperature of 25°C, a pressure of 1 a tm, and a molecular weight for

formaldehyde of 30.03 g/mol.

3.5.1 Eye Irritation

Information from two studies reporting sensory irritation in humans from chronic formaldehyde

inhalation exposures in a residential environment was combined to create the concent ration

- response function for eye irritation. Liu et al. ( 1991 ) employed in

- home measurements over a seven

- day period to

calcula te cumulative exposure based on time spent in the home for over 1,000 mobile home residents,

including both young children (< 4 years) and the elderly (> 65 years). Liu et al. ( 1991 ) reported that

formaldehyde exposure was a significant predictor of burning eyes in a multivariate logistic regression.

The prevalence of eye irritation increased with increasing cumulative exposure in a categorical analysis of

participants in the 20

- 64 age group for both summer and winter exposure estimates. While not appropriate

to derive a concentration

- response function, this study provided the most specific information on the

relative timing of inh alation exposures to formaldehyde and the report of sensory irritation: exposures

were recorded in a two

- week period preceding the collection of endpoint data on sensory irritation.TSCA Title VI Proposed Implementation Rule EA 3

- 43



### Hanrahan et al. ( 1984 ) assessed average exposure in the home (from 30

- 60 minute air samples)

and occurrence of adverse health outcomes (by questionnaires), including burning eyes, in a study of 61

teenage and adult (mean age 48) residents of mobile homes in Wisconsin. Measured formaldehyde

concentrations ranged from less than 100 ppb to 800 ppb. Hanrahan et al. ( 1984 ) provided a graphical

representation (Figure 1 in the paper) of t he best

- fitting logistic regression model results to the predicted

prevalence of burning eyes for formaldehyde exposures from 100 to 800 ppb.

This analysis fit a power model to the prevalence odds ratio (p/(1

- p)) of burning eyes (estimated

from Figure 1 of Hanrahan et al. (1984) as a function of average formaldehyde concentration. The

resulting functional form of the prevalence odds ratio was estimated to be p/(1

- p) = Z = 7x10

- 7 

### Conc 2.3743



### . This can be solved for prevalence (e.g., p/(1

- p) = Z; p = Z/(1 + Z )) for use in the benefits equation. Since

Liu et al. ( 1991 ) produced similar results for a two

- week period, the analysis adjus ted the prevalence to an

annual basis consisting of 26 two

- week periods (e.g., p = 26 * Z/(1 + Z)). While Hanrahan et al. ( 1984 )

did not administer questionnaires to children explicitly, this analysis assumes that the concentration

response function applies to that age group as well.

There are additional sources of uncertainty associated with using this concentration

- response function. It does not account for the possibility that irritant effects may diminish with the time exposed.

Furthermore, the Hanrahan et al. (1984) data from which this concentration

- response function was

derived included formaldehyde exposures only above 100 ppb. Thus, it may be problematic to apply this

concentration

- response function to estimate the relationship between lower formaldehyde exposures and

burning eye prevalence. To address this potential problem this analysis includes an estimate of irritation

benefits where it is assumed that reductions below 40 ppb do not result in any additional reductions in

burning eye prevalence.

The value for willingness to pay (WTP) to avo id eye irritation is based on an estimate from

Industrial Economics (IEc) ( 1993 ). IEc ( 1993 ) e stimated WTP to avoid a minor respiratory restricted

activity day using the WTP estimates from Tolley et al. ( 1986 ) and Weitzel ( 1990 ). This analysis uses the

IEc (1993) mid

- range estimate for eye irritation, which is $26 in 2010$. Note that t his willingness to pay

value is for the symptom of “eye irritation” while the Hanrahan et al. (1984) data used to estimate the

concentration

- response function was for “burning eyes,” a type of “eye irritation.” It is also worth noting

that the willingness to pay to avoid eye irritation declines with the number of symptom days an individual

experiences. Thus, applying the WTP to avoid a single day of eye irritation as the WTP per day for

avoiding multiple days of eye irritation would tend to overstate the W TP for avoiding multiple days of

eye irritation. However, this potential problem is not a concern in the case of this analysis because the

expected annual number of eye irritation cases per individual is less than one.

By combining the concentration

- resp onse information with the unit value and other relevant

terms, the analysis calculates the high er estimate for the monetized benefits of avoided eye irritation cases

as:
( )

( 27 )



### where:

POP is the exposed population (includes all ages and housing types);

WTP is $26 in 2010$ based on the mid

- range estimate for eye irritation from IEc (1993);

FY is a factor of 26 converting two

- week incidence of eye irritation, as stated in Liu et al. (1990), to

an annual basis;TSCA Title VI Proposed Implementation Rule EA 3

- 44



### AIDC b 

### and AIDC

p 

### are the average indoor daily concentrations (AIDC) in units of ppb for the

baseline and policy scenarios, respectivel y. These AIDCs include exposures during time spent

at home, school, work, and in vehicles; 46 

### and

A and B are the coefficients that define the power function that EPA fit to the prevalence odds ratio

data for burning eyes in response to average air formalde hyde concentrations in mobile homes

from Hanrahan et al. (1984). The prevalence odds ratio, p/(1

- p), is A*X B 

### and prevalence is

therefore (A* X B 

### )/(1 + A* X B 

### ), where A is 7x10

- 7 

### , B is 2.3743, and X represents the

concentration (AIDC b 

### or AIDC

p 

### ).

In addition, the analysis calculates a low er estimate for the monetized benefits of avoided eye

irritation to address the potential problem of applying a concentration

- response function to formaldehyde

exposure levels that are lower than observed in the study from which the concentration

- response function

was derived. In this low er estimate it is assumed that reducing formaldehyde exposure levels below 40

ppb do not result in any additional reductions in burning eye prevalence cases. The low er irritation

ben efit is estimated as follows:

( { }

{ } { }

{ } )

( 28 )



### In this lower estimate, 40 is the minimum formaldehyde exposure level that the health effect

function is applied to. That is, it is assumed that reducing formaldehyde exposure below 40 ppb does not

achieve any additional reduction in eye irritation prevalence.

3.5.2 Non

- mon etized Respiratory Related Effects

Formaldehyde exposure is associated with a range of respiratory related effects. Effects from

repeated exposure in humans include irritation of the upper respiratory tract, decrements in pulmonary

function, and nasal ep ithelial lesions such as metaplasia and loss of cilia. Animal studies suggest that

formaldehyde may also cause airway inflammation.

In occupational studies of formaldehyde exposure, lung function deficits and decreases in

spirometric values (that is, th e volume and speed of air that is exhaled or inhaled) have been reported both

in preshift versus postshift measurements and as a result of long

- term exposures ( Alexanders son and

Hedenstierna 1989

, Alexandersson, et al. 1982

, Herbert, et al. 1994

, Holmström and Wilhelmsson 1988

, Horvath, et al. 1988

, Malaka and Kodama 1990

, Neghab, et al. 2011 ). Studies of long

- term formaldehyde

exposure also report increased respiratory symptoms, such as cough, increased phlegm, chest tightness,

and chest colds, in exposed workers ( Alexandersson and Hedenstierna 1989

, Alexandersson, et al. 1982

, Herbert, et al. 1994

, Holmström and Wil helmsson 1988

, Malaka and Kodama 1990

, Neghab, et al. 2011 ).

In addition, some studies report an association between formaldehyde exposure in residential settings and

respiratory symptoms (e.g., Garrett, et al. 1 999 ). Furthermore, there are also studies that report that

formaldehyde exposure may increase the prevalence of asthma

– particularly in the young (e.g.,

Krzyzanowski, et al. 1990 ). Studies on ast hma, as well as mechanistic information and their analyses,

were evaluated in EPA’s recent Draft Toxicological Review of Formaldehyde

– Inhalation Assessment

through the Integrated Risk Information System (IRIS) Program (U.S. EPA 2010c )

. This draft IRIS

assessment was released in June 2010 for public comment and external peer review by the National

Research Council of the National Academy of Sciences ( NRC )

. The N RC released their review report in

46 AIDCs are calculated from average daily concentrations. Infants (0

- 2), ch ildren (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

.TSCA Title VI Proposed Implementation Rule EA 3

- 45



### April 2011 ( NRC 2011 )

. The NRC suggested EPA should examine studies relating formaldehyde

exposures to asthma, pulmonary function and changes in pulmonary pathology. EPA is currently revising

the draft assessment in response to the NRC review.

EPA is committed to evaluating alternative approaches to quantifying the benefits associated with

reduced respiratory symptoms such as exacerbation of symptoms among those who have chronic

respiratory diseases, e.g., bronchitis and asthma. For instance, the agency will explore the extent to which

approaches used to quantify respiratory symptoms in air quality rules might be applied to residential

exposure to formaldehyde. If a sci entifically defensible approach is available by the time the final rule is

promulgated, EPA will include such quantification as part of the benefits analysis.

Although uncertainty remains regarding how best to quantify the formaldehyde exposure’s effect

on respiratory outcomes, EPA considers these effects to be important non

- monetized impacts that

contribute to th e overall benefits of this rule, as indicated by the “ + B ” in the various tables summarizing

benefits.

3.5.3 F emale Fertility

At this time, EPA does not feel that it has sufficient information on the relationship between

formaldehye exposure and reduced fertility to include a valuation estimate in t he overall benefits analysis.

Based on a review of the developmental and reproductive toxicity studies in humans and animals in the

draft IRIS assessment (U.S. EPA 2010c ), the Taskinen et al. ( 1999 ) retrospective cohort study appears to

have the best available ev idence of female reproductive toxicity for the purpose of deriving a

concentration

- response relationship for use in the benefits assessment. Taskinen et al. ( 1999 ) recruited

subjects from a woodworkers’ union and other businesses involving wood processin g in Finland , and

were linked to a national register of births. Women were included if they were born between 1946 and

1975, had a live birth at age 20−40 years during 1985−1995, had worked in the wood processing industry

for at least 1 month, and had firs t employment in the wood processing industry beginning at least 6

months before the index pregnancy (the first pregnancy that fulfilled the above criteria). While 1,094

women met these criteria, the final sample included 602 women due to the response rate from mailed

questionnaires (64%) and exclusions due primarily to infertility history, unknown time to pregnancy, and

contraceptive failure.

Estimates of mean daily exposure to formaldehyde were based on measurements taken at the

women’s factories of employment during the early 1990s , and were categorized as low, medium and high

. Where measurements were unavailable, measurements from equivalent industries were used. Time

- to

pregnancy data were analyzed by a discrete proportional hazards regression procedure with a

fecundability density ratio (FDR) as the outcome. This ratio compared the average incidence densities of

pregnancies for exposed women with that of the employed, unexposed women. As explained by Taskinen

et al. ( 1999 ), an FDR significant ly below unity suggests that conception was delayed. The age

- , employment

- , smoking

- , alcohol consumption

- , parity

- , and menstrual irregularity

- adjusted FDR was 0.64

(95% CI: 0.43−0.92) for women exposed to high formaldehyde levels compared with the unexpo sed

controls, indicating that there was a statistically significant delay in time to conception in this group of

women.

Table 5 of Taskinen et al. ( 1999 ) provide s information on time

- to

- pregnancy (in menstrual

cycles) for women in low, medium, and high levels of formaldehyde exposure, as well as non

- exposed to

formaldehyde. The fraction of women who took longer than 13 menstrual cycles to conceive was 9.1%

for non

- exposed, 10.1% for low, 11.7% for medium, and 20.5% for high levels of formaldehyde

exposur e. In most women, 13 menstrual cycles would correspond to approximately 12 months, and

infertility is often defined as the inability to conceive within 12 months.TSCA Title VI Proposed Implementation Rule EA 3

- 46 

### At this time, EPA does not feel that it has sufficient information on the relationship bet ween formaldehye exposure and reduced fertility to include a quantification or valuation estimate in the overall

benefits analysis. EPA does feel that this effect is an important non

- monetized impact which should be

recognized as a contribution to the ove rall benefits of this rule , as indicated by the “+B” in the various

tables summarizing benefits

.TSCA Title VI Proposed Implementation Rule EA 3

- 47



## 3.6 Estimated Numbers of Affected Individuals

The number of individuals benefitting from the reduction of formaldehyde emissions from

composite wood products po tentially includes anyone who resides, works, or otherwise spends a

substantial amount of time where new composite wood products are introduced to an indoor space. This

benefits analysis includes monetized benefits for only two broad categories where a su bstantial amount of

new composite wood products might be introduced to residences: (1) new home construction and (2)

major renovations that include kitchen remodeling. As described in section 3.1 , exposures were estimated

separately for the various categories listed in Table 3

- 17

. Table 3

- 17 also includes a brief description of

the data sources and methods that were used to estimate these populations. Additional description of how

the populations were estimated for renovated housing is provided in section 3.6.1 . A summary of the

estimated number of affected individuals is presented in section 3.6.2

.TSCA Title VI Proposed Implementation Rule EA 3

- 48



### 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 co nstructed 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 renovat ion 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. Sin gle family detached

3. Apartment

4. Manufactured Housing

5. Recreational Vehicles and

Camper/Trailers The 2007

- 2009 ACS reports housing type in a variable that takes the

following values: Mobile home or trailer; One

- family house

detached; One

- family house attached ; 2 Apartments; 3

- 4 Apartments;

5

- 9 Apartments; 10

- 19 Apartments; 20

- 49 Apartments; 50 or more

apartments; Boat, RV, van, etc. This variable was recoded to provide

the five categories in the benefits analysis.

Climate zone 1. Zone 1: <2,000 cooling degree

days (CDD) and more than

7,000 heating degree days

(HDD)

2. Zone 2: <2,000 CDD and

5,500 to 7,000 HDD

3. Zone 3: <2,000 CDD and

4,000 to 5,499 HDD

4. Zone 4: <2,000 CDD and

<4,000 HDD.

5. Zone 5: >2,000 CDD and

<4,000 HDD

Note: Number of degree days is

over a 30

- year period. Each public use micro area (PUMA) in the ACS was assigned a

climate rating by mapping from NOAA division data to PUMAs

using NOAA data matching climate divisions to counties. The

NOAA data used to develop the climate ratings is from NOAA’s

publicat ion “Climatography Of The United States No. 85: Divisional

Normals of Temperature, Precipitation, and Heating and Cooling

Degree Days”. The data is available for between one and ten

divisions in each state. A climate division is a region within a state

tha t 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 indi vidual 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

assi gned 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: a ged 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 worki ng 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 bui ldings 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 work ing, retired, or not in the labor force

were counted in category 6. Also counted in category 6 were

individuals who work from home.TSCA Title VI Proposed Implementation Rule EA 3

- 49



### 3.6.1 Composite Wood Products Installed During Renovation

The ACS does not provide any information with respect to renova tion for home

- owners or
renters. Thus, it was necessary to use another data source to estimate renovation rates among the

population, and apply those rates to the ACS population estimates.

The National 2009 American Housing Survey (AHS) Dataset was used to determine the average

frequency of kitchen renovation among homeowners. Kitchen renovation was determined to be the most

likely source of new composite wood products being introduced in a home. In order to obtain a mean

value that would be consistent wi th the ACS data, the variable in the AHS indicating the year the home

was built was recoded into nine categories so that there were no overlaps between the AHS and ACS

categories.

As noted in a recent Joint Center for Housing Studies’ report ( Will 2010 ), data specific to the

frequency or expendit ures of remodeling and renovation in rental housing are not available. However,

home renovation data were available for owner

- occupied housing in the following categories: single

family detached homes, single

- family attached homes, manufactured housing, a nd apartments. Because

renovation frequency data for renter

- occupied housing were not available, the renovation frequency for

owner

- occupied housing was used for both owner

- and renter

- occupied housing.

Table 3

- 18 presents the average renovation frequency by housing type and year of construction.

The overall average is 2.7 percent. Homes built in recent years renovate less, on average, than homes

from previous decades. Since homes built in the last 11 years are accounted for in the new home exposure

category in this analysis, these homes were assumed not to conduct a renovation. Note that a non

- trivial

percentage of homeowners renovate kitchens in even the newest homes (i.e., homes built in 2009 also

surveyed in 2009). However, to simplify the analysis separate exposure scenarios were not estimated for

housing that is both new and recently renovated. Instead, these scenarios were simply treated as new

homes. This simplifying assumption may result in an underestimate for the formaldehyde exposures

experienced by individuals living in newer homes that were recently renovated.

Table 3

- 18 : Frequency of Kitc hen 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%



### There were two year built categories of manufactured housing where no kitchen renovations were

reported. Each of these cells has fewer than 20 observations associated with it. Since there was not aTSCA Title VI Proposed Implementation Rule EA 3

- 50



### statistically significant difference between manufactured housing renovation in 1960

- 1969 and 1940

- 1949, the analysis used the same mean renovation rate for all manufactured housing built prior to 1969.

The renovation frequencies presented in Table 3

- 18 were applied to all homes by housing age and

structure type. Applying the renovation percentages presented in Table 3

- 18 to the 2007

- 2009 ACS

National Dataset results in the population totals and household counts presented in Table 3

- 19 . It should

be noted that the renovation percentage was applied to the aggregated totals by housing age and structure

type.

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%



### 3.6.2 Summary of Population Estimates

The analysis estimates that there will be about 10 million individuals living in housing units

where composite wood products have been installed within the past year (i.e., individuals who have

moved into new home or live in a home where there was a renovation). Since these individuals are

estimated to be affected by the emissions from these products over a period of 11 years, by the 11 th 

### year it

is estimated that about 106 million individuals live in housing units where composite wood products have

been installed within the past 11 years. Table 3

- 20 and Table 3

- 21 present a summary of the population

estimates by the categories that are used to define the different exposure groups. See Table 3

- 17 and

section 3.6.1 for a descrip tion of how these populations were estimated. The reductions in micro risks of

adverse health outcomes (see sections 3.3 and 3.5 ) are applied to these population estimates and

combined with the values of reducing micro risks for the various adverse health outcomes (see sections

3.4 and 3.5 ) to estimate the total value of the reduc ed risks of adverse health outcomes.TSCA Title VI Proposed Implementation Rule EA 3

- 51



### 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 s ection 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 th e house. For example, “0

- 1” for years since renovation indicates that the structure was renovated

within the past year. Totals may not add due to rounding.

Abbreviations:

“New SF Att” is new construction of single

- family attached housing (up to 11 years old)

“New SF Det” is new construction of single

- family detached housing (up to 11 years old).

“New SF Apt” is new construction of multi

- family housing (up to 11 years old).

“New SF Man” is new construction of manufactured housing (up to 11 years old).

“N ew 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.



### Table 3

- 21 : Population Estimates by Climate Z one, Age of Individual, and

Occupation

Climate Zone Occupation of Individual

Category Population Category Population

Zone 1 13,177,114 Infants 0

- 1 3,309,269

Zone 2 23,906,632 Children 2

- 15 21

, 312

, 289

Zone 3 20,637,107 Not CWP Industry 55,523,507

Zone 4 21,214,309 Fabrication 238,487

Zone 5 27,122,241 Unemployed 19,508,314

- Part Time 6,165,538

Total 106,057,404 Total 106,057,404

Source: U.S. Census Bure au 2009c

, d

Note: See Table 3

- 17 and section 3.6.1 for a description of how these populations were estimated. Totals

may not add due to rounding.

Abbreviations:

Zone 1: Fewer than 2,000 cooling degree days and more than 7,000 heating degree days over 30 years.

Zone 2: Fewer than 2,000 cooling degree days and 5,500 to 7,000 heating degree days over 30 years.

Zone 3: Fewer than 2,000 cooling degree days and 4,000 to 5,499 heating degree days over 30 years.

Zone 4: Fewer than 2,00 0 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.TSCA Title VI Proposed Implementation Rule EA 3

- 52



## 3.7 Results of Benefits Assessment

This section presents the results of the bene fits assessment. Detailed results are presented for the

analytical options with emissions standards that are consistent with the TSCA Title VI statute. Summary

results are presented for the additional options that consider alternative formaldehyde emissi ons

standards. Section 3.7.1 presents the total benefits attributable to reductions in cancer risk by combining

the changes in cancer risk (see sect ion 3.3 ), the value of the reductions in risk (see section 3.4 ) and the

number of individuals experiencing reductions in risk (see section 3.6 ). Section 3.7.2 presents the total

benefits attributable to reductions in non

- can cer adverse health risks by combining the changes in non

cancer adverse health risks (see section 3.5 ), the value of the reductions in risk (see se ction 3.5 ) and the

number of individuals experiencing reductions in risk (see section 3.6 ).

As described in section 3.2 , this analysis assumes that after eleven years any continuing (an d

declining) emissions from a given composite wood product would contribute negligibly to that product's

effect on formaldehyde exposure. Thus, composite wood products are assumed to contribute to

formaldehyde exposure for 11 years. 47 

### Specifically:

 in th e first year only new composite wood products are affected by the policy ;

 in the second year new and one

- year

- old composite wood products are affected by the

policy ;

 in the third year new, one

- and two

- year

- old composite wood products are affected by the

p olicy ;

 in general, in the n th year, new, one

- , two

- , three

- ,..., and ( n

- 1)

- year

- old composite wood

products are affected by the policy, for n = 1, 2, ..., 10 ; and

 in the eleventh and all subsequent years new, one

- , two

- , three

- , four

- , five

- , six

- , seven

- , ei ght

- , nine

- , and ten

- year

- old composite wood products are affected by the policy

.

Since the exposure scenarios are defined in part according to the 11 different ages for composite

wood products, it is not until the 11 th 

### year after the implementation of the rule that benefits are realized

under every exposure scenario. That is, it is not until the 11 th 

### year after rule implementation that ten

- year
old composite wood products would have been required to be produced in comp liance with the emissions

standards. Thus, the benefits are phased in over a period of eleven years.

Similarly, the benefits from a given year of composite wood production will phase

- out over time.

Since the analysis considers the benefits and costs f rom 30 years of composite wood production, the

estimated exposures have the following time profile after the 30 th 

### and last year of composite wood

production considered in the analysis:

 in the 31 st 

### year, only one

- , two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

year

- old composite wood products are produced before the 31 st 

### year (benefits from new

composite wood products are produced after year 30 and therefore are not considered in

the analysis);

 in the 32 nd 

### year, only two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

- year

- old

composite wood products are produced before the 31 st 

### year (benefits from new and one

year old composite wood products are produced after year 30 and therefore are not

considered in the analysis);

47 EPA calcul ated exposures using a 1.5 year emissions half life of formaldehyde from composite wood products With.

this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11

years the emissions would be nea r zero.TSCA Title VI Proposed Implementation Rule EA 3

- 53 

###  in gene ral, in the n th year after year 30, only n year

- old and older composite wood

products are produced before year 31, for n = 1, 2, ..., 10; and

 in the 41 st 

### and all subsequent years, all 11 ages of composite wood products that

potentially contribute to formald ehyde exposure are produced after the 30 th 

### year and

therefore are not considered in the analysis.

Given this phase

- in and phase

- out, a time period of thirty years of composite wood production

was selected so that the first ten years of the policy (when th e benefits of the policy are being phased in)

and the ten years after the 30 years of composite wood production that is analyzed (when the benefits of

the policy are being phased out) do not obscure the steady state benefits that would be experienced from

the policy. It is necessary to include the phase

- in and phase

- out of the benefits in order to be consistent

with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions

standards. Given that this analysis as sumes that after eleven years any continuing (and declining)

emissions from a given composite wood product would contribute negligibly to that product's effect on

formaldehyde exposure, 30 years of production that complies with the emissions standards corr esponds to

40 years of exposure reductions. The first 10 years are a phase

- in period for exposure reductions, the next

20 years are a steady

- state, and the next 10 years are a phase

- out period.

Since the eleventh year is the first steady

- state or typical year, undiscounted benefits estimates are

presented in this section in order to convey the annual benefits from a typical year. In addition, the

present discounted value for the thirty year stream of benefits and the annualized value for the stream of

be nefits are estimated using discount rates of 3 and 7 percent. Benefits are discounted back to the

beginning of the 40

- year period, as follows:

∑ ( 29 )



### The benefits for discount rate, d , are annualized over a 30 year period to be consistent with the

annualized costs using the following formula:

( 30 )



### Table 3

- 22 and Table 3

- 23 present descriptions of the analytical options and the exposure groups

with the abbreviations that are used in the results tables below. Table 3

- 24 summarizes the assumptions

that differentiate between the lower benefit estimates and the higher benefit estimates.TSCA Title VI Proposed Implementation Rule EA 3

- 54



### Table 3

- 22 : Analytical Options Summary

Analytical

Option Description

Option SE S tatutory emissions standards where wood veneer laminated products are e xempt from the

definition of hardwood plywood

Option SI S tatutory emissions standards where 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 wood veneer laminated pr oducts 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 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

- manufacturers compared to other options.

Option SEUR S tatutory emissions standards wher e 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 u lly c onsistent with C ARB

ATCM.

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 non

- mfgrs.

Option CE C ARB 1 emissions standards where wood veneer laminated products are e xempt from the

definition of hardwood plywood

Option CI C ARB 1 emissions standards where wood veneer laminated products are i ncluded in the definition

of hardwood plywood

Option NE N AF emissions standards where wood veneer laminated products are e xempt fro m 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 plywoodTSCA Title VI Proposed Implementation Rule EA 3

- 55



### 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 prod ucts fabrication (Fabricator)

5. Ages 16+; unemployed or not in the labor force (Retired/Unemployed)

6. Ages 16+; work part

- time outside the composite wood products industry (Part Time)



### 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 concentrati on, including reductions

below 40ppb.

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 believe s application of ADAFs is the preferred approach in this case but is also presenting the

calculations without applying ADAFs.

b The lowering factor is calculated as the percentage of incidence of the cancer that occurs wi thin the age range

spanning from the age at which the change in exposure is experienced through the end of the expected lifetime.TSCA Title VI Proposed Implementation Rule EA 3

- 56



### 3.7.1 Total Benefits Attributable to Cancer Risk Reductions

The benefits of reducing the risk of nasopharyngeal cancer are estimated as a weighted average of

the value of reducing fatal and nonfatal cancer risks. As noted above (see section 3.4.1 ), the fifteen year survival rate for cancers of the nasopharynx is 42.9 percent ( SEER 2010 ). Thus, the analysis assumes

that 57.1 percent of the reductions in cancer risk are r eductions in mortality risk and therefore are valued

as the value of mortality risk (VMR) presented in section 3.4.1 . Likewise, the analysis assume s that 42.9

percent of the cancer risk reductions are reductions in the risk of nonfatal cancer and are valued using a

cost of illness approach presented in section 3.4.2 . The results presented in this section generally include

the number of individuals experiencing exposure reductions annually as a result of the analytical option

(see section 3.6 ), the average individual’s micro risk reduction for cancer (see section 3.3 ), and the total

b enefits for the reduction in cancer risk. The analysis includes both low er and high er estimates for the

reduction in cancer risk, where the lower estimate adjusts the cancer risk downward based according to

the distribution of cancer incidence by age (see section 3.3.1 ). Note that the value for each micro risk

reduction for cancer is conditional on the age at the time of the exposure (see Table 3

- 16 ).

Table 3

- 2 5 through Table 3

- 30 present the annual benefits using a 3 percent discount rate

associated with reduced cancer risk for a typical year under the analytical options with th e statutory

emissions standards (see Table 3

- 22 for a description of the analytical options and Table 3

- 23 for a

description of the exposure groups). Because the exposure model assumes that the benefits of reduced

emissions from newly installed composite wood products are accrued over 11 years and th e numbers of

individuals in different exposure groups are assumed to be the same in each year, the annual benefits are

the same starting in the eleventh year. Thus, the eleventh and subsequent years are defined as typical

years for the purpose of this ana lysis. Table 3

- 31 presents the typical annual benefits, the present

discounted value of the 40

- year stream of benefits, and the annualized benefits a ssociated with reduced

cancer risk for all analytical options.

The results in Table 3

- 2 5 through Table 3

- 30 indicate that the cancer

- related benefits are

generally higher for composite wood products that have been more recently installed, new housing

compared to renovated housing, warmer and more humid climate zones, younger individuals, and

individuals who work in the composite wood products industry.

The results in Table 3

- 31 indicate that the most protective option with emissions standards that

are consistent with the TSCA Title VI statute (Option SN, which would require laminated products to be

made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood

plywood) has cancer

- related benefits that are less than 20 percent larger than the benefits of the least

protective option s with em issions standards that are consistent with the TSCA Title VI statute (Option s

SE, SEUR, and SFCC, which exempt all laminated products from the definition of hardwood plywood).

The cancer

- related benefits under Option SI, SC , SCR, and the proposed option ( Option SC U R) are only

slightly less than those under Option SN, the difference being less than 5 percent. Options SC , SCR, and

SC U R would both require laminated products to be made with NAF resins in order to be exempted from

the definition of hardwood p lywood. Option SI includes laminated products in the definition of

hardwood plywood. Analytical options that would require NAF resin technologies for all composite

wood products (Options NE and NI) would result in benefits about four times larger than un der the

proposed analytical option with emissions standards consistent with the TSCA Title VI statute, and

analytical options that would require less stringent emissions standards than the statute (Options CE and

CI) would result in benefits about 25 perce nt lower.TSCA Title VI Proposed Implementation Rule EA 3

- 57



### Table 3

- 2 5 : 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$)

Low er

Estimate High er

Estimate Low er

Estimate High er

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 a bbreviations.TSCA Title VI Proposed Implementation Rule EA 3

- 58



### Table 3

- 26 : Cancer Benefits by Composite Wood Source and Age, Annual Benefits for

Typical Year, Option s SI

, SC , SCR , and 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.TSCA Title VI Proposed Implementation Rule EA 3

- 59



### 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.TSCA Title VI Proposed Implementation Rule EA 3

- 60



### Table 3

- 28 : Cancer Benefits for Statutory Options by Structure Type, Annual Benefits for

Typical Year, 3% discount rate

Structure Type Individuals

Affected

(thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

Option s 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

Option s SI , SC , SCR and SC U R (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 a bbreviations.TSCA Title VI Proposed Implementation Rule EA 3

- 61



### Table 3

- 29 : Cancer Benefits for Statutory Options by Climate Zone, Annual Benefits for

Typical Year, 3% discount rate

Climate Zone Individuals

Affected

(thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

Options 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 SCUR (Proposed Option)

Zone 1 13,177 0.08 0.19 $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 a bbreviations.TSCA Title VI Proposed Implementation Rule EA 3

- 62



### 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

Options 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 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

Option SN

Infants 0

- 1 3,309 0.14 1.51 $0.5 $5.3

Children 2

- 15 21,312 0.13 0.40 $3.6 $11.3

Not CWP Industry 55,524 0.10 0.14 $14.0 $21.3

Fabricator 238 0.34 0.50 $0.2 $0.3

Retired/Unemployed 19,508 0.07 0.16 $3.2 $9.7

Part Time 6,166 0.10 0.14 $1.3 $2.1

Total 106,057 0.10 0.24 $22.9 $50.1

See Table 3

- 22 for a description of options and Table 3

- 23 for a description of the exposure group abbreviations.



### Table 3

- 31 : Cancer Benefits for All Options, Present Discounted Value of 40

- Year Stream of

Benefits and Annualized Benefits (millions 2010$, 3% discount rate)

Analytical Option Annual Benefits in

Typical Year PDV of 40

- Year Stream

of Benefits Annualized Benefits

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

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.



### 3.7.2 Total Benefits Attributable to Non

- cancer Health Effect Risk Reductions

The benefits of reducing risk for non

- cancer health effects are estimated using the methods

described in section 3.5 . The presented results general ly include the number of individuals experiencing

exposure reductions annually as a result of the analytical option (see section 3.6 ) and the averag eTSCA Title VI Proposed Implementation Rule EA 3

- 63



### individual’s micro risk reduction for the non

- cancer health effect. A micro risk reduction represents a

1/1,000,000 reduction in risk. As described in section 3.5 , the benefit under a 3 percent discount rate

from avoiding a case of eye irritation is $26. Thus this value multiplied by 1/1,000,000 correspond s to

the value for a single micro risk reduction.

3.7.2.1 Eye Irritation



### Table 3

- 32 through Table 3

- 37 present the annual benefits using a 3 per cent discount rate

associated with reduced eye irritation risk for a typical year under the analytical options with the statutory

emissions standards (see Table 3

- 22 for a description of the analytical options and Table 3

- 23 for a

description of the exposure groups). Because the exposure model assumes that the benefits of reduced

emissions from newly installed composite wood products are accrued over 11 years an d the numbers of

individuals in different exposure groups are assumed to be the same in each year, the annual benefits are

the same starting in the eleventh year. Thus, the eleventh and subsequent years are defined as typical

years for the purpose of this analysis. Table 3

- 38 presents the typical annual benefits, the present

discounted value of the 40

- year stream of benefits, and the annualized benefits associated with reduced

eye irritation risk for all analytical options.

The results in Table 3

- 32 through Table 3

- 37 indicate that the eye irritation

- related benefits are

generally higher for composite wood products that have been more recently installed, new housing

compared to renovated housing, w armer and more humid climate zones, and individuals who work in the

composite wood products industry.

The results in Table 3

- 38 indicate that the mos t protective option with emissions standards that

are consistent with the TSCA Title VI statute (Option SN, which would require laminated products to be

made with both NAF resins and NAF platforms in order to be exempted from the definition of hardwood

ply wood) has eye irritation

- related benefits that are about 9 to 17 percent larger than the benefits of the

least protective option s with emissions standards that are consistent with the TSCA Title VI statute

(Option s SE, SEUR, and SFCC, which exempt all lami nated products from the definition of hardwood

plywood). The eye irritation

- related benefits under options SI, SC, SCR, and the proposed option (Option

SC U R ) are only slightly less than those under Option SN, the difference being less than 4 percent.

Options SC, SCR, and the proposed option (Option SCUR) would require laminated products to be made

with NAF resins in order to be exempted from the definition of hardwood plywood, while Option SI

includes laminated products in the definition of hardwood plywood. Analytical options that would

require NAF resin technologies for all composite wood products (Options NE and NI) would result in

benefits that are about three times larger than under the proposed analytical option with emissions

standards consist ent with the TSCA Title VI statute, and analytical options that would require less

stringent emissions standards than the statute (Options CE and CI) would result in benefits about 20 to 25

percent lower.TSCA Title VI Proposed Implementation Rule EA 3

- 64



### Table 3

- 32 : Eye Irritation Benefits by Composite Wood Source and Age, Annual Benefits

for Typical Year, 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 a bbreviations.TSCA Title VI Proposed Implementation Rule EA 3

- 65



### Table 3

- 33 : Eye Irritation Benefits by Composite Wood Source and Age, Annual Benefits

for Typical Year, Option s SI

, SC

, SCR, and SC U R (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 a bbreviations.TSCA Title VI Proposed Implementation Rule EA 3

- 66



### 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.TSCA Title VI Proposed Implementation Rule EA 3

- 67



### 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

Options 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

Option s SI

, SC

, SCR, and SC U R (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.TSCA Title VI Proposed Implementation Rule EA 3

- 68



### Table 3

- 36 : Eye Irritation Benefits for Statutory Options by Climate Zone, Annual Benefits

for Typical Year, 3% discount rate

Climate Zone Individuals

Affected

(thousands) Average Micro Risk Reduction

Per Individual Annual Benefit (millions, 2010$)

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

Options 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 SC U R (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 a bbreviations.TSCA Title VI Proposed Implementation Rule EA 3

- 69



### 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

Options 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 SC U R (Proposed Option)

Infants 0

- 1 3,309 429.17 2,456.66 $0.037 $0.211

Children 2

- 15 21,312 95.31 1,714.52 $0.053 $0.950

Not CWP Industry 55,524 47.49 1,444.11 $0.069 $2.085

Fabricator 238 27,758.76 27,758.76 $0.172 $0.172

Retired/Unemployed 19,508 501.70 2,501.58 $0.254 $1.269

Part Time 6,166 187.18 1,835.40 $0.030 $0.294

Total 106,057 222.99 1,806.48 $0.615 $4.981

Option SN

Infants 0

- 1 3,309 437.92 2,549.98 $0.038 $0.219

Children 2

- 15 21,312 97.65 1,777.13 $0.054 $0.985

Not CWP Industry 55,524 47.55 1,498.10 $0.069 $2.163

Fabricator 238 28,077.14 28,077.14 $0.174 $0.174

Retired/Unemployed 19,508 517.93 2,612.92 $0.263 $1.325

Part Time 6,166 191.93 1,911.72 $0.031 $0.306

Total 106,057 227.75 1,875.87 $0.628 $5.173

See Table 3

- 22 for a description of options and Table 3

- 23 for a description of the exposure group abbreviations.



### Table 3

- 38 : Eye Irritation Benefits for All Options, Present Discounted Value of 40

- Ye ar 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 a bbreviations.



### 3.7.2.2 Female F ertility



### Formaldehyde’s potential mode of action for reproductive outcome is uncertain. EPA reviewed

epidemiologic studies that evaluated formaldehyde exposure in relation to fecundability (the per

- cycle

probability of conception)

. Please see EPA ’s Draft Toxicological Review of Formaldehyde

– Inhalation

Assessment through the Integrated Risk Information System (IRIS) Program (U.S. EPA 2010c ) and theTSCA Title VI Proposed Implementation Rule EA 3

- 70



### Review of the Environmental Protection Agency's Draft IRIS Assessment of Formaldehyde (NRC 2011)

for broader treatment of reproductive and developmental toxicity effects of formaldehyde. At this time,

EPA does not feel that it has sufficient i nformation on the relationship between formaldehye exposure and

reduced fertility to include a valuation estimate in the overall benefits analysis.

Due to the uncertainties in both the concentration

- response function and the economic valuation,

EPA does not feel that it has sufficient information on the relationship between formaldehye exposure and

reduced fertility to include a valuation estimate in the overall benefits analysis at this time. EPA does feel

that this effect is an important non

- monetized impact which should be recognized as a contribution to the

overall benefits of this rule.TSCA Title VI Proposed Implementation Rule EA 3

- 71



### 3.7.3 Summary of Benefits Assessment Results

Table 3

- 39 presents the average annual number of cases avoided by health outcome and option

from an annual formaldehyde exposure reduction under the rule

.

Table 3

- 39 : Average Annual Number of Cases Avoided by Health Outcome and Option

Analytical Option Cancer Eye

Irritation

lower higher lower higher

Option SE/SEUR/SFCC 9 21 22,133 170,214

Option SI/SC/SCR/SCUR (Proposed Option ) 10 24 23,650 191,590

Option SN 11 25 24,154 198,950

Option CE 7 16 18,015 130,720

Option CI 8 19 19,563 148,389

Option NE 39 92 58,492 626,726

Option NI 40 97 58,494 645,678

See Table 3

- 22 for a description of options



### Table 3

- 40 and Table 3

- 41 present the total benefits by health effect and analytical option for 3

and 7 percent discount rates, respectively. The results indicate that the most protective option with

emissions standa rds that are consistent with the TSCA Title VI statute (Option SN, which would require

laminated products to be made with both NAF resins and NAF platforms in order to be exempted from

the definition of hardwood plywood) has quantified benefits that are le ss than 20 percent larger than the

quantified benefits of the least protective option with emissions standards that are consistent with the

TSCA Title VI statute (Option SE, which exempts all laminated products from the definition of hardwood

plywood). Th e quantified benefits under the proposed option (Option SCUR, which would require

laminated products to be made with NAF resins in order to be exempted from the definition of hardwood

plywood) are only slightly lower those of Option SN, the difference bein g less than 5 percent. Analytical

options that would require all composite wood products to be made with NAF resin technologies (Options

NE and NI) would result in quantified benefits nearly four times larger than under the analytical options

with emissio ns standards consistent with the TSCA Title VI statute and analytical options that would

require less stringent emissions standards (Options CE and CI) compared to the statute would result in

quantified benefits about 25 percent lower. More than 80 percen t of the total monetized benefits are

attributable to reductions in cancer risk.

There are additional potential unquantified benefits for all of the options from other avoided

health effects. While EPA has not valued these avoided health effects in this proposal, EPA believes that

the effects could be substantial and has represented their inclusion in the table below using the letter “ B ”.TSCA Title VI Proposed Implementation Rule EA 3

- 72



### Table 3

- 40 : Total Benefits for All Options (millions 2010$, 3% discou nt rate)

Analytical Option Cancer Eye

Irritation Total Benefits

lower higher lower higher lower higher

Annual Benefit for Typical Year

Option SE/SEUR/SFCC $19.4 $42.1 $0.6 $4.4 $20 + B $46 + B

Option SI/SC/SCR/SCUR (Proposed) $22.0 $48.0 $0.6 $5.0 $23 + B $53 + B

Option SN $22.9 $50.1 $0.6 $5.2 $24 + B $55 + B

Option CE $14.8 $32.1 $0.5 $3.4 $15 + B $36 + B

Option CI $16.9 $36.9 $0.5 $3.9 $17 + B $41 + B

Option NE $83.8 $181.6 $1.5 $16.3 $85 + B $198 + B

Option NI $87.6 $190.3 $1.5 $16.8 $89 + B F $207 + B

PDV of 40

- Year Stream of Benefits

Option SE/SEUR/SFCC $356 $776 $11 $84 $367 + B $860 + B

Option SI/SC/SCR/SCUR (Proposed) $405 $887 $12 $94 $417 + B $981 + B

Option SN $422 $926 $12 $98 $434 + B $1,024 + B

Option CE $272 $592 $9 $64 $281 + B $656 + B

Option CI $311 $680 $10 $73 $321 + B $753 + B

Option NE $1,545 $3,359 $28 $307 $1,573 + B $3,667 + B

Option NI $1,618 $3,523 $28 $317 $1,646 + B $3,840 + B

Annualized Benefits

Option SE/SEUR/SFCC $17.3 $3 7.7 $ 0.5 $ 4.1 $ 18 + B $ 42 + B

Option SI/SC/SCR/SCUR (Proposed) $19.7 $ 43.0 $ 0.6 $ 4.6 $ 20 + B $ 48 + B

Option SN $20.5 $44.9 $0.6 $4.8 $21 + B $50 + B

Option CE $13.2 $28.7 $0.4 $3.1 $14 + B $32 + B

Option CI $15.1 $33.0 $0.5 $3.5 $16 + B $37 + B

Option NE $75.0 $163.1 $1.4 $14.9 $76 + B $178 + B

Option NI $78.5 $171.0 $1.4 $15.4 $80 + B $186 + B

See Table 3

- 22 for a description of options. “ B F” represent s the unquantified health benefits.TSCA Title VI Proposed Implementation Rule EA 3

- 73



### Table 3

- 41 : Total Benefits for All Options (millions 2010$, 7% discount rate)

Analytical Option Cancer Eye

Irritation Total Benefits

lower higher lower higher lower higher

Annual Benefit for Typical Year

Option SE/SEUR/SFCC $9.6 $20.6 $0.6 $4.4 $10 B $25 + B

Option SI/SC/SCR/SCUR (Proposed) $10.9 $23.5 $0.6 $5.0 $11 + B $28 + B

Option SN $11.3 $24.6 $0.6 $5.2 $12 + B $30 + B

Option CE $7.3 $15.7 $0.5 $3.4 $8 + B $19 + B

Option CI $8.4 $18.1 $0.5 $3.9 $9 + B $22 + B

Option NE $41.5 $88.6 $1.5 $16.3 $43 + B $105 + B

Option NI $43.5 $93.0 $1.5 $16.8 $45 + B $110 + B

PDV of 40

- Year Stream of Benefits

Option SE/SEUR/SFCC $103.5 $223.2 $6.7 $51.0 $110 + B $274 + B

Option SI/SC/SCR/SCUR (Proposed) $118.0 $256.4 $7.2 $57.5 $125 + B $314 + B

Option SN $123.1 $268.0 $7.3 $59.8 $130 + B $328 + B

Option CE $79.0 $170.2 $5.4 $39.1 $84 + B $209 + B

Option CI $90.6 $196.7 $5.9 $44.5 $97 + B $241 + B

Option NE $451.0 $967.6 $16.4 $186.0 $467 + B $1,154 + B

Option NI $472.6 $1,016.1 $16.4 $191.7 $489 + B $1,208 + B

Annualized Benefits

Option SE/SEUR/SFCC $7.7 $16.6 $0.5 $3.8 $8 + B $20 + B

Option SI/SC/SCR/SCUR (Proposed) $8.8 $19.1 $0.5 $4. 3 $9 + B $23 + B

Option SN $9.2 $20.0 $0.5 $4.5 $10 + B $24 + B

Option CE $5.9 $12.7 $0.4 $2.9 $6 + B $16 + B

Option CI $6.8 $14.7 $0.4 $3.3 $7 + B $18 + B

Option NE $33.6 $72.2 $1.2 $13.9 $35 + B $86 + B

Option NI $35.2 $75.8 $1.2 $14.3 $36 + B $90 + B

See Table 3

- 22 for a description of options. “ B ” represent s the unquantified health benefits.TSCA Title VI Proposed Implementation Rule EA 4

- 1



# 4 Net Benefits

This chapter evaluates the various analytical options under consideration in terms of their net

benefits (i.e. benefits minus costs). In reviewing the net benefits, it is important to remember that these

estimates only partially account for the benefits of the rule; some potentially important groups of benefits

are excluded from monetization. Evidence for health effects associated with formaldehyde exposure is

provided by a wide variety of human clinical, epidemiology, and animal studies. In 2010, EPA released

a draft IRIS assessment of adverse can cer and non

- cancer health effects from inhalation of formaldehyde.

The draft IRIS assessment identified seven categories of non

- cancer health outcomes: (1) sensory

irritation; (2) upper respiratory tract pathology; (3) pulmonary function effects; (4) ast hma and allergic

sensitization (atopy); (5) immune function effects; (6) neurological and behavioral toxicity; and (7)

developmental and reproductive toxicity. At this time, only sensory irritation was judged to have

sufficient data for quantitative conce ntration

- response modeling in support of the benefits assessment.

Therefore, the net benefits estimate includes monetized benefits for nasopharyngeal cancer for individuals

of all ages, and eye irritation for individuals of all ages. However, because EPA believes that the

unquantified benefits for other health related effects could be substantial, they have been represented in

the net benefits table with the letter “ B ”

.

Table 4

- 1 presents the analytical options that are considered in this economic anal ysis. The

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

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

different options for how to r egulate wood veneer laminated products. The second category contains

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

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

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

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

necessarily imply that EPA has correspondi ng flexibility in implementing the statute.TSCA Title VI Proposed Implementation Rule EA 4

- 2



### Table 4

- 1 : Analytical Options Considered in the Economic Analysis

Analytical Option a Notes a Analytical options with emissions standards at the levels required by TSCA Title VI b 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

form aldehyde (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 certi fication. 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 non

manufacturers 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 ce rtification. 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 v eneer 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. Whole salers 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 wi th

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 requirement s for non

mfgrs. 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 retailer s that are not manufacturers under

TSCA would only be required to keep invoices and bills of

lading. No supplier notification required. Analytical options with emissions standards other than the levels required by TSCA Title VI CARB Phase 1 levels d 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.

NAF emission levels e 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 s tandards that

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

The breadth of the discussion here should not necessarily imply that EPA has corresponding flexibility in implementing the statute.TSCA Title VI Proposed Implementation Rule EA 4

- 3



### Table 4

- 1 : 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 requirements

are equivalent to the CARB ATCM unless noted otherwise.

b Emission levels for TSCA Title VI standard cer tification (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 s amples

< 0.11 ppm; Particleboard: 90% of samples < 0.05 ppm and all samples < 0.08 ppm. Emission levels for ULEF certification wi th 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 sam ples < 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.TSCA Title VI Proposed Implementation Rule EA 4

- 4



## 4.1 Discounting and Time Frame for the Analysis

This analysis estimates the costs and benefits of each analytical option for a 30

- year period of

composite wood product production

. Thus, the estimates of the costs reflect the annualized costs of 30

years of composite wood production being subject to the rule’s requirements. Likewise, the benefits

estimates reflect the annualized benefits associate d with the formaldehyde exposure reductions resulting

from 30 years of composite wood production being subject to the rule’s requirements. Both the costs and

the benefits are discounted using 3 and 7 percent discount rates

, so that costs and benefits inc urred in the

future are expressed in present terms that are comparable

. Because the timing of the costs and the

benefits vary, they are annualized to make their comparison easier. An annualized value is the amount

one would have to pay at the beginning o f each time period so that the sum of all payments in present

value terms equals the original stream of values.

The 30

- year time frame was selected to be as short as possible while being long enough to

capture the important effects of the policy. In gene ral, the downside of choosing a longer analysis time

frame is that uncertainties about both the baseline and policy scenarios increase with time. For example,

the likelihood that alternative technologies for manufacturing composite wood products might be

developed increases over time (which could result in different formaldehyde emission rates for products

and/or different costs for reducing formaldehyde emissions). Similarly, uncertainties about changing

demographics, medical treatments for adverse healt h effects, and consumer preferences with respect to

composite wood products all increase with time. However, selecting a time frame that is too short would

not capture all of the important effects of the policy scenarios under consideration.

The benefi ts analysis assumes that after eleven years any continuing (and declining) emissions

from a given composite wood product would contribute negligibly to that product's effect on

formaldehyde exposure. Thus, composite wood products are assumed to contribute to formaldehyde

exposure for 11 years. 48 

### Specifically:

 in the first year only new composite wood products are affected by the policy;

 in the second year new and one

- year

- old composite wood products are affected by the

policy;

 in the third year new, one

- and two

- year

- old composite wood products are affected by the

policy;

 in general, in the n th year, new, one

- , two

- , three

- ,..., and ( n

- 1)

- year

- old composite wood

products are affected by the policy, for n = 1, 2, ..., 10; and

 in the eleventh and all subsequent years new, one

- , two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

- year

- old composite wood products are affected by the policy.

Since the exposure scenarios are defined in part according to the 11 different ages for composite

wood products , it is not until the 11 th 

### year after the implementation of the rule that benefits are realized

under every exposure scenario. That is, it is not until the 11 th 

### year after rule implementation that ten

- year old composite wood products would have been requi red to be produced in compliance with the emissions

standards. Thus, the benefits are phased in over a period of eleven years.

Similarly, the benefits from a given year of composite wood production will phase

- out over time.

Since the analysis considers the benefits and costs from 30 years of composite wood production, the

48 EPA calculated exposures using a 1.5 year emissions half life of formaldehyde from composite wood products With.

this half life, the emission rate 10 years after new construction would be about 1 % of the initial value, and after 11

years the em issions would be near zero.TSCA Title VI Proposed Implementation Rule EA 4

- 5



### estimated exposures have the following time profile after the 30 th 

### and last year of composite wood

production considered in the analysis:

 in the 31 st 

### year, only one

- , two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

year

- old composite wood products are produced before the 31 st 

### year (benefits from new
composite wood products are produced after year 30 and therefore are not considered in

the analysis);

 in the 32 nd 

### year, only two

- , three

- , four

- , five

- , six

- , seven

- , eight

- , nine

- , and ten

- year

- old

composite wood products are produced before the 31 st 

### year (benefits from new and one

year old composite wood products are produced after year 30 and therefore are not

considered in the analysis);

 in general, in the n th year after year 30, only n year

- old and older composite wood

products are produced before year 31, for n = 1, 2, ..., 10; and

 in the 41 st 

### and all subsequent years, all 11 ages of composite wood products that

potentially contribute to formaldehyde exposure are produced after the 30 th 

### year and

therefore are not considered in the analysis.

Given this phase

- in and phase

- out, a time period of thirty years of composite wood production

was selected so that the first ten years of the policy (when the benefits of the policy are being phased in)

and the ten years after the 30 years of composite wood prod uction that is analyzed (when the benefits of

the policy are being phased out) do not obscure the steady state benefits that would be experienced from

the policy. It is necessary to include the phase

- in and phase

- out of the benefits in order to be consist ent

with the cost estimates, which reflect the costs of 30 years of production that complies with the emissions

standards. Given that this analysis assumes that after eleven years any continuing (and declining)

emissions from a given composite wood produc t would contribute negligibly to that product's effect on

formaldehyde exposure, 30 years of production that complies with the emissions standards corresponds to

40 years of exposure reductions. The first 10 years are a phase

- in period for exposure reduct ions, the next

20 years are a steady

- state, and the next 10 years are a phase

- out period.TSCA Title VI Proposed Implementation Rule EA 4

- 6



## 4.2 Summary of Net Benefits

Table 4

- 2 and Table 4

- 3 present the total annualized net benefits by analytical option and

disc ount rate. The proposed rule (Option SCUR) has quantified net benefits of

- $24 million to

- $60

million per year using a 3 percent discount rate, and

- $57 million to

- $79 million per year using a 7

percent discount rate.

The estimated quantified net ben efits under the analytical options that have emissions standards

that are consistent with TSCA Title VI range from

- $ 18 million to

- $ 273 million using a three percent

discount rate. Of these analytical options, the difference between quantified benefits a nd costs is smallest

under Option S EUR. The next smallest difference between quantified benefits and costs is under the

proposed option (Option SCUR) . Of the analytical options that have emissions standards that are

consistent with TSCA Title VI, the lar gest difference between quantified benefits and costs is under

Option SI (which includes laminated products in the definition of hardwood plywood ).

There are larger negative quantified net benefits under Options CE and CI (the analytical options

with emi ssions standards lower than those that are consistent with TSCA Title VI) compared to the

proposed option (Option SCUR)

. The difference between quantified benefits and costs is largest under

Options NE and NI (which have emissions limits that are more str ingent than those required by the

statute)

.

There are additional unquantified benefits for all of the options from re s piratory and other

avoided health effects. While EPA has not valued these avoided health effects in this proposal, EPA

believes that the effects could be substantial and has represented their inclusion in the table below using

the letter “ B ”.

Table 4

- 2 : Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 3

p ercent 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

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 subtracting low end cost estimate from higher ben efits estimate.

“ B ” represen t s the unquantified health benefits

.TSCA Title VI Proposed Implementation Rule EA 4

- 7



### Table 4

- 3 : Total Annualized Costs, Benefits, and Net Benefits for All Options (millions 2010$, 7

percent discount rate)

Analytical Option Costs Benefits Net Benefits

Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate Lower

Estimate Higher

Estimate

Option SE $112 $112 $8 B $20 + B ($103) + B ($91) + B

Option SI $218 $311 $9 + B $23 + B ($302) + B ($195) + B

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

Option SN $139 $148 $10 + B $24 + B ($138) + B ($114) + B

Option SC $123 $132 $9 + B $23 + B ($123) + B ($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 U R (proposed) $80 $89 $9 + B $23 + B ($79) + B ($57) + B

Option CE $111 $111 $6 + B $16 + B ($104) + B ($95) + B

Option CI $217 $310 $7 + B $18 + B ($303) + B ($199) + B

Option NE $383 $383 $35 + B F $86 + B ($348) + B ($297) + B

Option NI $490 $582 $36 + B $90 + B ($546) + B ($400) + 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 subtracting low end cost estimate from higher benefits estimate.

“ B ” represent s the unquantified health benefits.TSCA Title VI Proposed Implementation Rule EA 5

- 1



# 5 Small Business Impacts

This chapter presents the impact of the costs of the proposed TSCA Title VI Implementation Rule

on the financial condition of small entities. The Regulatory Flexibility Act (RFA) of 1980, amended by

the Small Business Regulatory Enforcement Fairness Act (S BREFA) of 1996, requires regulators to

assess the effects of regulations on small entities including businesses, nonprofit organizations, and

governments. In some instances, agencies are also required to examine regulatory alternatives that may

reduce adve rse economic effects on significantly impacted small entities. The RFA requires agencies to

prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the

rule will not have a significant economic impact on a substantial number of small entities. The RFA,

however, does not specifically define “a significant economic impact on a substantial number” of small

entities. Sections 603 and 604 of the RFA require that regulatory flexibility analyses identify the ty pes,
and estimate the numbers, of small entities to which the rule will apply; and describe the rule

requirements to which small entities will be subject and any regulatory alternatives, including exemptions

and deferral, which would lessen the rule’s burd en on small entities.

The proposed rule will affect small businesses, but small non

- profit organizations or small

governments are not expected to be affected by the proposed rule because they are not expected to be

panel producers, fabricators, wholesale rs, or importers. Under the Regulatory Flexibility Act (RFA), a

“small business” is determined by the U.S. Small Business Administration’s regulations at 13 CFR

121.201 (which create small business size standards using either a sales or employment thresho ld,

depending on the nature of the industry), unless an agency establishes an alternate definition.

To fulfill the requirements of the RFA, this analysis addresses two basic questions regarding the

proposed rule: (1) the number and type of small entitie s potentially affected, and (2) the extent of the

rule’s potential economic impact on those entities as measured by the cost

- to

- revenue ratio. This ratio is a

good measure of entities’ ability to afford the costs attributable to a regulatory requirement, because

comparing compliance costs to revenues or expenses provides a reasonable indication of the magnitude of

the regulatory burden relative to a commonly available measure of economic activity. Where regulatory

costs represent a small fraction of a typ ical entity’s revenues or expenses, the financial impacts of the

regulation on such entities may be considered as not significant. The impact ratios are calculated using

annualized costs, because these costs are more representative of the continuing costs entities face to

comply with the rule.

The small business impacts are presented separately according to the types of requirements they

are subject to. The number of small firms in the affected NAICS codes (described in Chapter 2) were

estimated using Cen sus data and SBA’s small business size standards. Table 5

- 1 presents a summary of

the number of small firms affected by the rule. Section 5.1 presents the small business impacts for stock

panel producers. Section 5.2 presents the small business impacts for wood veneer laminated product

producers. Section 5.3 presents the small busi ness impacts fabricators, wholesalers, and retailers.

Finally, section 5.4 presents a summary of the small business impacts.TSCA Title VI Proposed Implementation Rule EA 5

- 2



### Table 5

- 1 : Summary of Affected Number of Firms

Employer Status Firm Type Number of

Affected Firms Number of Affected

Small Firms

Employers Stock Panel Producer 54 31

Wood Veneer Laminated Product 5,260 5,260

Fabricator 28,014 27,879

Wholesale 34,948 34,324

Retail 247,689 202,630

All Firms 315,965 270,123

Nonemployers Stock Panel Producer



### - -

Wood Veneer Laminated Product 2,226 2,226

Fabricator 44,478 44,478

Wholesale 50,612 50,612

Retail 511,359 511,359

All Firms 608,675 608,675

All Firms Stock Panel Producer 54 31

Wood Veneer Laminated Product 7,486 7,486

Fabricator 72,492 72,356

Wholesale 85,560 84,936

Retail 759,048 713,988

All Firms 924,640 878,798

Note that for the cost estimates presented in Chapter 2, stock panel producer firms were assumed to incur

separate costs per type of composite panel product. As a result, the number of stock panel producer firms

reported is higher in Chapter 2 compared to the number reported here. For example, a firm that owns a both

particleboard mill and an MDF mill is counted twice in Chapter 2, but counted only once here. This is why

the number of panel produce r firms is 62 in Chapter 2 and 54 here.TSCA Title VI Proposed Implementation Rule EA 5

- 3



## 5.1 Small Business Impacts for Stock Panel Producers

Table 5

- 2 presents the number of small stock hardwood plywood, MDF, and particleboard mills

and firms subject to the TSCA Title VI rule’s requirements for testing and third

- party certification.

(Stock panel producers exclude hardwood plywood producers that are defined as laminated product

manufacturers under the CARB ATCM. Those firms are discussed in Section 5.2 .) The small business

status of the majority of affected composite panel producing firms was determined using Dun &

Bradstreet (D&B), an online database containing information on the sales volume, number of employees,

and primary NAICS o f establishments ( Dun & Bradstreet 2010 ). For the remaining firms, the small

business status was determined using other business information directories, company websites, and

annual reports.

Table 5

- 2 : St ock 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 product. Note that for the cost

estimates presented in Chapter 2, firms were assumed to incur separate costs per type of composite panel product. As a result , th e

number of firms reported is higher in Chapter 2 compared to the number reported here. For example, a firm that owns both a

particleboard mill and an MDF mill is counted twice in Chapter 2, but counted only once here. This is why the number of panel

prod ucer firms is 62 in Chapter 2 and 54 here.

Sources: Composite Panel Association 2007

, Dun & Bradstreet 2010



### As indicated in Table 5

- 2 , 31 of the 54 firms (approximately 57 percent of the total) and 33 of the

90 mills (37 percent) are small. Of these, 22 of t he affected small firms (approximately 71 percent) are

hardwood plywood producers; five are MDF producers, and five are particleboard producers

(approximately 16 percent each).

Table 5

- 3 summarizes the economic impact to affected small panel producers as a result of the

TSCA Title VI rule. Firm

- specific revenue data from Dun & Bradstreet were available for most small

firms; where data were not avai lable, revenues were imputed as the average revenue for small firms in the

corresponding product category.

While all affected small firms incur rule familiarization and supplier notification costs due to the

TSCA Title VI rule, only a fraction will inc ur costs associated with changing production processes and

raw materials, or with testing and certification (since most firms already incurred those costs due to the

CARB ATCM). Per

- firm costs for firms with production process, raw materials, and testing and

certification costs were calculated by dividing the total annualized costs by the number of affected firms.

All stock panel mills were assumed to have two product lines, and the baseline certification status

of their product lines was determined acc ording to CARB’s ( 2011a ) list of certified mills and CARB’s

( 2011c ) list of no

- added formaldehyde (NAF) and ultra low emitting formaldehyde (ULEF)

exemptions. For example, if CARB only listed a mill as having Phase 2 (i.e., standard) certification, it

was assumed that the mill had two product lines with standard certifi cation. As another example, a mill

that is listed by CARB as Phase 2 certified and also listed as having NAF exempt status would be

assumed to have one NAF product line and one product line with standard certification. The exception to

this is particlebo ard, where it is assumed that 5 of the 25 particleboard mills with standard certification

status under the CARB ATCM also produce a product line that is not certified under the CARB

ATCM. There are only 3 particleboard mills that are small and have standa rd certification status underTSCA Title VI Proposed Implementation Rule EA 5

- 4



### the CARB ATCM. To ensure that cost impacts are not understated, the analysis assumed all 3 small

particleboard mills with standard certification under the CARB ATCM also have a product line that is

uncertified in the baseline

.

The analysis assumes that most mills making products that are not certified or that have ULEF

certification under the CARB ATCM will seek standard certification under the TSCA Title VI rule. The

exception is mills that have a product line that is ULEF certified and a product line that is NAF certified

under the CARB ATCM. These mills are assumed to convert the ULEF product line to NAF, so that both

product lines will be NAF certified under TSCA Title VI.

As indicated in Table 5

- 3 , 27 small stock panel firms (approximately 8 7 percent of the total) are

expected to experience cost impacts that are less than one percent of their revenues, 3 firms

(ap proximately 10 percent) are expected to experience impacts at levels between one and three percent of

their revenue, and 1 firm (approximately 3 percent) is expected to be incur costs exceeding three percent

of their revenue. Total cost impacts ranged fro m zero to approximately 5.5 percent of firm revenues.TSCA Title VI Proposed Implementation Rule EA 5

- 5



### Table 5

- 3 : Number of Small Composite Panel Producers, by Product Type, Baseline and Post

Rule 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 $4 $2,600;

$4,600;

$12,410;

and

$20,000 0.4%

- 2.7% 4

- -

1 prod. with NAF

cert.; 1 prod. with

ULEF cert. 2 product lines

with NAF

certification 1 $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% 27 3 1

Notes: Numbers in parentheses represent cost savings. HWPW = hardwood plywood. PB = particleboard.TSCA Title VI Proposed Implementation Rule EA 5

- 6



## 5.2 Small Business Impacts for Wood Veneer Laminated Product Producers

(including firms making products defined as hardwood plywood )

The small business impact analysis for wood veneer laminated product producers (including firms

making products defined as hardwood plywood under the propose d option) follows four basic steps: (1)

estimate the number of small firms, (2) estimate the cost per firm, (3) estimate the revenue distribution of

affected firms, and (4) based on the number of affected firms, the per

- firm costs, and the revenue

distribu tion, estimate the number of firms by cost

- revenue ratio. These steps are described in more detail

below.

5.2.1 Number of Small Laminator Firms

Due to the uncertainty in the estimated number and characteristics of wood veneer laminated

product producers, thi s analysis assumes that all wood veneer laminated product producers are small. To

ensure that per

- firm costs are not understated, the number of small wood veneer laminated product

producers is estimated as the lower bound of affected firms from presented in Chapter 2 (i.e., 7,486

firms). As discussed in Chapter 2, the costs to laminators were estimated in part by estimating the

consumption of veneer by firms in laminator NAICS codes; using that information to estimate the surface

area of wood veneer lamin ated products that are produced; and estimating the production process and raw

materials costs based on that surface area If the small entity analysis were to use the upper bound for the

estimated number of laminators (i.e., 13,875 firms), the total cost s for changes to production processes

and raw materials would be spread out over nearly twice as many firms. This would reduce the estimated

impact per firm. Therefore, using the lower bound estimate of affected firms yields a higher estimate of

the impac t per firm.

5.2.2 Per

- Firm Costs for Laminators

Table 5

- 4 summarizes the per

- firm cost components for wood veneer laminated product

producers. The per

- firm costs associated with rule familiarization, supplier notification, labeling system

setup, and recordkeeping are estimated by annualizing the per

- firm costs presented in Table 2

- 84

, Table

2

- 85

, and Table 2

- 86 in Chapter 2. All costs except for recurring recordkeeping costs were estimated as

an average cost applied to all firms. Recurring recordkeep ing costs were estimated to include a fixed cost

component of 2 hours of labor per firm plus a variable cost estimated as a function of revenue.

As described in Chapter 2, the recordkeeping and labeling costs were estimated based on the

responses to a q uestionnaire administered to nine fabricator firms. The firms that reported recurring

recordkeeping costs described these costs as data entry costs, which are costs that are likely to increase

with the volume of a firm’s sales. Based on revenue data from the Dun and Bradstreet database and other

publically available sources, the two respondents reporting recurring recordkeeping costs appeared to be

larger firms that likely have revenues that are significantly larger than the average revenue for affected

f irms. Nevertheless, the costs they reported were still assumed to be the average costs incurred by

affected firms. For fabricators and wood veneer laminated product manufacturers, the per firm recurring

recordkeeping cost was estimated to be $12,917, whi ch is $12,290 per year when annualized over 30

years using a three percent discount rate. For the purpose of the small business analysis, the cost impact

associated with recurring recordkeeping activities is estimated as a fixed cost per firm associated w ith 2

hours of labor plus a variable cost in terms of a percentage of firm revenue. This variable cost is

calculated such that the average annualized recurring recordkeeping costs are $12,290 per firm incurring

this cost. The variable portion of the recor dkeeping cost is estimated to range from 0.1 percent to 0.8

percent of average revenues, depending on the NAICS code.TSCA Title VI Proposed Implementation Rule EA 5

- 7



### The per

- firm costs of production process and raw material changes were estimated at the industry

level as the total annualized cost of t he changes divided by the number of wood veneer laminated product

producers using added

- formaldehyde resins in the baseline. In addition, wood veneer laminated product

manufacturers that are assumed not to switch to NAF resins after rule implementation ar e estimated to

incur additional annualized recurring recordkeeping costs of $3,531 per firm (the same as stock panel

producers).

Table 5

- 4 : Annualized Per

- Firm Cost Components for Wood Veneer Laminated Produc t Producers,

by NAICS

NAICS Rule

Familiarization Labeling

Setup Production

Process and Raw

Material Costs Testing and

Certification

(products defined

as hardwood)

plywood) Basic Recordkeeping Additional

Recordkeeping

(for products

defined as

hardwood

plywood) Fixed

Costs Variable Costs

(Percent of

Average

Revenues)

321211

$14.29 $220.97 $56,470.59

$60,622 $47.27 0.1%

$3,530.59 337110 $2,025.36 0.6%

337129 $2,025.36 0.8%

337121 $545.17 0.2%

337122 $545.17 0.5%

337211 $954.43 0.2%

337127 $954.43 0.2%

337215 $954.43 0.2%

321911 $758.19 0.1%

337212 $2,857.50 0.4%

321999 $2,857.50 0.4%

339920 $2,857.50 0.2%

339932 $2,857.50 0.3%

339992 $2,857.50 0.4%

Notes:

$14.29 is estimated as the initial cost of $294 annualized over 30 years using a 3% discount rate.

$16.65 is estimated as the initial cost of $169 (material cost) plus $174 (labor cost) annualized over 30 years using a 3% di scount rate.

$220.87 is e stimated 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 counterto p manufacturing; 337129: Wood

television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 337122: N onupholstered

wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 33 7127: Institutional furniture manufacturing; 337215:

Showcase, partition, shelving, and locker manufacturing; 321911: Wood window and door manufacturing; 337212: Custom architect ural

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.



### Costs are calculated separately for four categories of wood veneer laminated pr oduct producers,

depending on the types of costs they are estimated to incur:

 Laminators that use NAF resins in the baseline. They are estimated to incur costs for rule

familiarization, supplier notification, and labeling setup.

 Laminators that use a dded

- formaldehyde resins in the baseline, switch to NAF resins, and are among

the fabricators that are not estimated to incur recurring recordkeeping costs (i.e., all fabricators that

make products sold in California and 89 percent of the fabricators makin g products that are not soldTSCA Title VI Proposed Implementation Rule EA 5

- 8



### in California). They are estimated to incur costs for rule familiarization, supplier notification,

labeling setup, and production process and raw material (to switch to NAF resins).

 Laminators that use added

- formaldehyde resi ns in the baseline, switch to NAF resins, and are among

the fabricators that are estimated to incur recurring recordkeeping costs (i.e., 11 percent of the

fabricators making products that are not sold in California). They are estimated to incur costs for rule

familiarization, supplier notification, labeling setup, production process and raw material (to switch to

NAF resins), and fabricator recordkeeping.

 Laminators that continue to use added

- formaldehyde resins under the TSCA Title VI rule, so that

their products are included in the definition of hardwood plywood. (These represent 2 percent of all

laminators.) They are estimated to incur costs for rule familiarization, supplier notification, labeling

setup, production process and raw material (to switch to enhanced UF resin systems and low emitting

platforms), fabricator recordkeeping, testing and certification, and panel producer recordkeeping.

In general, the analysis uses a simplifying assumption that firms with the less frequent costs also

incur th e more frequent costs. That is, if 10% of firms incur recordkeeping costs and 5% incur labeling

costs, the small entity analysis assumes that 5% incur both recordkeeping and labeling costs, and 5%

incur just recordkeeping costs. The analysis also assumes that all firms with testing and certification costs

also incur recordkeeping costs due to the TSCA Title VI rule.

5.2.3 Revenue Distribution for Affected Laminator Firms

Revenue distributions for employer and nonemployer wood veneer laminated product producers

were estimated at the industry level using data from the 2007 Economic Census and the Census Bureau’s

2008 Nonemployer Statistics. While employer data were available at the six

- digit NAICs level,

nonemployer data were only available at the three

- digit level. As with fabricators, revenues were

assumed to be uniformly distributed within each revenue bracket, and revenue floors of $20,000 and

$1,000 were set for employers and nonemployers, respectively. Table 5

- 5 and Table 5

- 6 present the

estimated revenue distributions for employer and nonemployer wood veneer laminated product producers.TSCA Title VI Proposed Implementation Rule EA 5

- 9



### Table 5

- 5 : Estimated Revenue D istribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thousands, 2010$)

Percentile 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

1 $50 $27 $23 $23 $25 $22 $27 $22 $27 $27 $50 $23 $22 $22

2 $81 $35 $27 $28 $30 $25 $34 $25 $35 $35 $81 $27 $25 $25

3 $112 $43 $30 $32 $36 $30 $43 $29 $43 $43 $112 $31 $29 $29

4 $136 $51 $34 $37 $42 $33 $51 $31 $51 $51 $136 $36 $31 $31

5 $164 $60 $38 $41 $47 $36 $59 $34 $60 $60 $164 $40 $34 $34

6 $192 $68 $43 $46 $53 $39 $66 $38 $68 $68 $192 $44 $38 $38

7 $216 $76 $47 $50 $60 $43 $74 $41 $76 $76 $216 $48 $41 $41

8 $244 $85 $50 $54 $65 $46 $82 $44 $84 $85 $244 $52 $44 $44

9 $272 $93 $54 $59 $71 $50 $90 $47 $92 $93 $272 $56 $47 $47

10 $300 $100 $58 $63 $77 $53 $98 $51 $100 $100 $300 $60 $51 $51

11 $324 $124 $62 $68 $82 $56 $116 $53 $116 $124 $324 $64 $54 $54

12 $352 $144 $65 $72 $88 $60 $136 $56 $132 $144 $352 $69 $56 $56

13 $380 $168 $69 $77 $94 $63 $156 $60 $148 $168 $380 $73 $60 $60

14 $404 $188 $73 $81 $99 $66 $176 $63 $168 $188 $404 $77 $63 $63

15 $432 $208 $77 $85 $112 $70 $200 $66 $184 $208 $432 $81 $66 $66

16 $460 $232 $81 $89 $124 $73 $220 $69 $200 $232 $460 $85 $69 $69

17 $484 $252 $85 $94 $136 $77 $240 $72 $216 $252 $484 $89 $72 $72

18 $520 $276 $89 $98 $152 $80 $260 $75 $232 $276 $520 $94 $76 $76

19 $560 $296 $93 $104 $164 $83 $284 $78 $248 $296 $560 $98 $79 $79

20 $600 $320 $97 $116 $176 $87 $304 $81 $264 $320 $600 $108 $81 $81

21 $640 $340 $100 $124 $192 $90 $324 $85 $280 $340 $640 $120 $85 $85

22 $680 $360 $116 $132 $204 $94 $344 $88 $296 $360 $680 $136 $88 $88

23 $720 $384 $128 $144 $216 $97 $364 $91 $316 $384 $720 $148 $91 $91

24 $760 $404 $144 $152 $228 $100 $388 $94 $332 $404 $760 $164 $94 $94

25 $805 $428 $156 $160 $244 $112 $408 $97 $348 $428 $805 $176 $98 $98

26 $845 $448 $172 $168 $256 $124 $428 $100 $364 $448 $845 $192 $104 $104

27 $885 $472 $184 $180 $268 $132 $448 $108 $380 $472 $885 $204 $124 $112

28 $925 $492 $200 $188 $284 $144 $468 $120 $396 $492 $925 $220 $140 $124

29 $965 $520 $212 $196 $296 $156 $492 $128 $412 $520 $965 $232 $160 $136

30 $1,015 $550 $224 $208 $308 $168 $520 $136 $428 $550 $1,015 $248 $180 $148

31 $1,105 $585 $240 $216 $320 $176 $550 $144 $444 $585 $1,105 $260 $200 $156

32 $1,195 $615 $252 $224 $336 $188 $585 $156 $460 $615 $1,195 $276 $220 $168

33 $1,285 $650 $268 $232 $348 $200 $620 $164 $480 $650 $1,285 $288 $240 $180

34 $1,375 $680 $280 $244 $360 $212 $655 $172 $496 $680 $1,375 $300 $256 $192

35 $1,465 $715 $296 $252 $376 $220 $685 $180 $520 $715 $1,465 $316 $276 $204

36 $1,555 $745 $308 $260 $388 $232 $720 $192 $550 $745 $1,555 $328 $296 $212

37 $1,660 $780 $320 $272 $400 $244 $755 $200 $575 $780 $1,660 $344 $316 $224

38 $1,750 $810 $336 $280 $412 $252 $785 $208 $605 $810 $1,750 $356 $336 $236

39 $1,840 $845 $348 $288 $428 $264 $820 $216 $635 $845 $1,840 $372 $356 $248TSCA Title VI Proposed Implementation Rule EA 5

- 10



### Table 5

- 5 : Estimated Revenue D istribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thousands, 2010$)

Percentile 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

40 $1,930 $875 $364 $300 $440 $276 $855 $228 $660 $875 $1,930 $384 $372 $260

41 $2,020 $905 $376 $308 $452 $288 $890 $236 $690 $905 $2,020 $400 $392 $268

42 $2,110 $940 $392 $316 $468 $296 $920 $244 $720 $940 $2,110 $412 $412 $280

43 $2,200 $970 $404 $324 $480 $308 $955 $252 $745 $970 $2,200 $428 $432 $292

44 $2,290 $1,000 $420 $336 $492 $320 $990 $264 $775 $1,000 $2,290 $440 $452 $304

45 $2,380 $1,075 $432 $344 $515 $332 $1,060 $272 $805 $1,075 $2,380 $456 $472 $316

46 $2,470 $1,135 $444 $352 $540 $340 $1,135 $280 $830 $1,135 $2,470 $468 $488 $324

47 $2,625 $1,195 $460 $364 $570 $352 $1,225 $288 $860 $1,195 $2,625 $484 $515 $336

48 $2,775 $1,255 $472 $372 $600 $364 $1,300 $300 $890 $1,255 $2,775 $496 $540 $348

49 $2,950 $1,315 $488 $380 $630 $376 $1,390 $308 $915 $1,315 $2,950 $525 $570 $360

50 $3,100 $1,375 $500 $388 $660 $384 $1,480 $316 $945 $1,375 $3,100 $560 $595 $372

51 $3,275 $1,435 $540 $400 $690 $396 $1,555 $324 $975 $1,435 $3,275 $595 $625 $380

52 $3,425 $1,495 $580 $408 $715 $408 $1,645 $336 $1,015 $1,495 $3,425 $630 $655 $392

53 $3,600 $1,555 $620 $416 $745 $420 $1,720 $344 $1,105 $1,555 $3,600 $665 $680 $404

54 $3,775 $1,630 $660 $428 $775 $428 $1,810 $352 $1,195 $1,630 $3,775 $700 $710 $416

55 $3,925 $1,690 $700 $436 $805 $440 $1,885 $360 $1,285 $1,690 $3,925 $735 $735 $428

56 $4,100 $1,750 $740 $444 $835 $452 $1,975 $372 $1,390 $1,750 $4,100 $770 $765 $436

57 $4,250 $1,810 $780 $456 $860 $460 $2,065 $380 $1,480 $1,810 $4,250 $805 $795 $448

58 $4,425 $1,870 $820 $464 $890 $472 $2,140 $388 $1,570 $1,870 $4,425 $840 $820 $460

59 $4,575 $1,930 $860 $472 $920 $484 $2,230 $396 $1,675 $1,930 $4,575 $870 $850 $472

60 $4,750 $1,990 $900 $480 $950 $496 $2,305 $408 $1,765 $1,990 $4,750 $905 $875 $484

61 $4,900 $2,050 $940 $492 $980 $515 $2,395 $416 $1,855 $2,050 $4,900 $940 $905 $492

62 $5,125 $2,110 $975 $500 $1,015 $550 $2,470 $424 $1,960 $2,110 $5,125 $975 $935 $520

63 $5,425 $2,185 $1,045 $535 $1,105 $585 $2,675 $432 $2,050 $2,185 $5,425 $1,030 $960 $565

64 $5,700 $2,245 $1,135 $565 $1,195 $615 $2,900 $444 $2,140 $2,245 $5,700 $1,135 $990 $610

65 $6,000 $2,305 $1,240 $600 $1,285 $650 $3,125 $452 $2,230 $2,305 $6,000 $1,240 $1,060 $655

66 $6,300 $2,365 $1,345 $630 $1,375 $680 $3,375 $460 $2,335 $2,365 $6,300 $1,345 $1,165 $700

67 $6,575 $2,425 $1,435 $665 $1,465 $715 $3,600 $468 $2,425 $2,425 $6,575 $1,435 $1,270 $745

68 $6,875 $2,485 $1,540 $700 $1,555 $750 $3,825 $480 $2,550 $2,485 $6,875 $1,540 $1,375 $790

69 $7,175 $2,725 $1,630 $730 $1,645 $780 $4,075 $488 $2,775 $2,725 $7,175 $1,645 $1,480 $840

70 $7,450 $2,975 $1,735 $765 $1,735 $815 $4,300 $496 $3,000 $2,975 $7,450 $1,750 $1,585 $885

71 $8,200 $3,250 $1,825 $795 $1,825 $845 $4,525 $525 $3,225 $3,250 $8,200 $1,855 $1,690 $930

72 $9,050 $3,525 $1,930 $830 $1,915 $880 $4,775 $565 $3,450 $3,525 $9,050 $1,960 $1,795 $975

73 $9,875 $3,800 $2,035 $865 $2,005 $915 $5,000 $605 $3,675 $3,800 $9,875 $2,065 $1,900 $1,060

74 $10,700 $4,050 $2,125 $895 $2,095 $945 $5,500 $650 $3,900 $4,050 $10,700 $2,155 $2,005 $1,180

75 $11,550 $4,325 $2,230 $930 $2,185 $980 $6,025 $690 $4,125 $4,325 $11,550 $2,260 $2,110 $1,300

76 $12,400 $4,600 $2,320 $960 $2,275 $1,045 $6,525 $730 $4,350 $4,600 $12,400 $2,365 $2,215 $1,420

77 $13,250 $4,875 $2,425 $995 $2,365 $1,165 $7,025 $770 $4,600 $4,875 $13,250 $2,470 $2,320 $1,540

78 $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 $1,660TSCA Title VI Proposed Implementation Rule EA 5

- 11



### Table 5

- 5 : Estimated Revenue D istribution for Employer Wood Veneer Laminated Product Producers, by NAICS (thousands, 2010$)

Percentile 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

79 $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 $1,780

80 $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 $1,900

81 $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 $2,020

82 $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 $2,140

83 $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 $2,260

84 $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 $2,380

85 $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 $2,525

86 $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 $2,925

87 $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 $3,350

88 $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 $3,750

89 $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 $4,175

90 $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 $4,575

91 $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 $5,000

92 $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 $6,250

93 $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 $7,550

94 $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 $9,250

95 $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 $14,250

96 $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 $18,450

97 $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 $34,100

98 $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 $48,800

99 $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 $98,800

100 $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 $100,000

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: Nonupholstered wood household furniture manufacturing; 337211: Wood office furniture manufacturing; 33 7127:

Institutional furniture manufacturing; 337215: Showcase, partition, shelving, and locker manufacturing; 321911: Wood window a nd door manufacturing; 337212: Custom architectural woodwork and millwork

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game, toy, and children's vehicle manufacturing; 339992: Musical

instrument manufacturing.TSCA Title VI Proposed Implementation Rule EA 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 $15,250TSCA Title VI Proposed Implementation Rule EA 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.



### 5.2.4 Small Business Impact Summary for Wood Veneer Laminated Product Producers

Table 5

- 7 presents a summary of the number of affected small laminated product producers by

NAICS code, category of costs incurred, and employment status. Table 5

- 8 and Table 5

- 9 present the

small business impacts on employer and nonemployer wo od veneer laminated product producers,

respectively. Table 5

- 10 summarizes the impacts to all small laminated product producers.TSCA Title VI Proposed Implementation Rule EA 5

- 14



### The number of firms by cost

- revenue ratio bracket is estimated from the estimated number of

firms, the per

- firm costs, and the revenue distributions presented above in Table 5

- 5 and Table 5

- 6

. 49 

### For

example, there are an estimated 165 employer wood veneer laminated product producers in the Wood

Kitchen Cabinet and Countertop industry (NAICS 337110) that will incur rule familiarization, labeling,

and raw materials costs ($2, 260

. 62 ). Thus, employer firms with revenues below $75, 354 ($2, 260

. 62

divided by 3%) have cost

- impact ratios above three percent and firms with revenue above $ 226

, 062

($ 2,260.62 divided by 1%) have cost

- impact ratios below one percent. Finally, firms with revenues

between $75, 354 and $ 226

, 062 would have cost

- impact ratios between 1 and 3 percent. Since the 12 th



### percentile of revenues for NAICS 337110 is below $75, 354 , 12 percent of these firms (20 firms) have

cost

- impact ratios above three percent. S ince the 32 nd 

### percentile of revenues for NAICS 337110 is below

$ 226

, 062 , 20 percent (32 minus 12 percent) or 33 of these firms have cost

- impact ratios between one and

three percent. The remaining 68 percent of these firms (112 firms) have a cost

- impact ra tio below one

percent.

Overall, 5, 532 small wood veneer laminated product producers (about 7 4 percent of the total) are

expected to have costs impacts that are less than one percent of their revenues, 759 firms (about 11

percent) are expected to experience impacts at levels between one and three percent of their revenue, and

1,1 59 firms (about 15 percent) are expected to incur costs exceeding three percent of their revenues.

49 Nonemployers were assumed to account for 30 percent of all affected wood veneer laminated product manufacturers.TSCA Title VI Proposed Implementation Rule EA 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; 337 129: Wood

television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 3371 22: 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 manufacturi ng; 337212: Custom architectural woodwork and millwork

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game,

toy, and children's vehicle manufacturing; 339992: Musical in strument manufacturing.TSCA Title VI Proposed Implementation Rule EA 5

- 16



### Table 5

- 8 : Small Business Impacts on Employer Wood Veneer Laminated Product Producers by

NAICS

Categories of Costs

Incurred NAICS

321211 NAICS

321911 NAICS

321999 NAICS

337110 NAICS

337121 NAICS

337122 NAICS

337127 NAICS

337129 NAICS

337211 NAICS

337212 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 Employer Firms With Cost Impacts >1% and <3%

Rule fam., label.

- - 1 3

- 7

- 1

- - - - - -

Rule fam., label., raw

mat. 2 41

- 33 19 65

- 7

- - - - - -

Rule fam., label., raw

mat., fab. record. 2 12 1 8 6 18 2 2 1 1 1

- - -

Rule fam., label., raw

mat., fab. record., test.,

cert., HWPW record. - 5

- 1 2 2 1

- 1

- 3

- - -

Total 4 58 2 45 26 93 3 10 2 1 4

- - -

All Small Employer Firms With Cost Impacts >3%

Rule fam., label.

- - - - - - - - - - - - - -

Rule fam., label., raw

mat. 4 5

- 20 2 9

- 6

- - - - - -

Rule fam., label., raw

mat., fab. record. 3 1 2 6 1 2 1 2

- 1

- - - -

Rule fam., label., raw

mat., fab. record., test.,

cert., HWPW record. 1 19 2 9 9 22 3 2 2 1 4 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; 337 129: Wood

television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 3371 22: 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 manufacturi ng; 337212: Custom architectural woodwork and millwork

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game,

toy, and children's vehicle manufacturing; 339992: Musical in strument manufacturing.TSCA Title VI Proposed Implementation Rule EA 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 With 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; 337 129: Wood

television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 3371 22: 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 manufacturi ng; 337212: Custom architectural woodwork and millwork

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game,

toy, and children's vehicle manufacturing; 339992: Musical in strument manufacturing.TSCA Title VI Proposed Implementation Rule EA 5

- 18



### Table 5

- 10 : Small Business Impacts on All Small Wood Veneer Laminated Product Producers by

NAICS

Categories of Costs

Incurred NAICS

321211 NAICS

321911 NAICS

321999 NAICS

337110 NAICS

337121 NAICS

337122 NAICS

337127 NAICS

337129 NAICS

337211 NAICS

337212 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; 33 7129: Wood

television, radio, and sewing machine cabinet manufacturing; 337121: Upholstered household furniture manufacturing; 337 122: 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 manufactur ing; 337212: Custom architectural woodwork and millwork

manufacturing; 321999: All other miscellaneous wood product manufacturing; 339920: Sporting and athletic goods manufacturing; 339932: Game,

toy, and children's vehicle manufacturing; 339992: Musical i nstrument manufacturing.TSCA Title VI Proposed Implementation Rule EA 5

- 19



## 5.3 Small Business Impacts for Fabricators, Wholesalers, and Retailers

The basic steps in the small business impact analysis for fabricators (excluding those fabricators

that are laminators, which are discussed in Section 5.2 ), wholesalers, and retailers are as follows: (1)

estimate the number of small firms, (2) estimate the revenue distribution of affected firms, ( 3) estimate

the cost per firm, and (4) based on the number of affected firms, the per

- firm costs, and the revenue

distribution, estimate the number of firms by cost

- revenue ratio. These steps are described in more detail

below.

5.3.1 Number of Small Fabricator , Wholesale, and Retail Firms

The number of small employer firms in the affected fabricator, wholesaler, and retailer NAICS

(described in Chapter 2) were estimated using data from the 2007 Economic Census, the Census Bureau’s

2008 Nonemployer Statistics, and SBA’s small business size standards. For those retail NAICS where

the Census revenue brackets overlapped the small business revenue threshold, the firms in the overlapped

bracket were counted as small. All nonemployer firms were assumed to be small.

5.3.2 Revenue Distribution for Affected Fabricator, Wholesale, and Retail Firms

The 2007 Economic Census has information on the number of employer firms by NAICS code in

18 revenue brackets. The 2008 Nonemployer Statistics has information on the number of n onemployer

firms by NAICS code in 12 revenue brackets. Impacts were separately estimated for six industry

categories: (1) employer fabricators, (2) employer wholesalers, (3) employer retailers, (4) nonemployer

fabricators, (5) nonemployer wholesalers, and (6) nonemployer retailers. For each industry category, the

number of affected firms by revenue bracket was estimated by combining the number of affected firms by

NAICS/employer status and the percentage of firms by revenue bracket within each affected

NA ICS/employer status category. After compiling these data, the overall revenue distributions for each

percentile from 1 to 100 were calculated by assuming that revenues are uniformly distributed within each

revenue bracket. The bottom revenue bracket was assigned a revenue floor of $20,000 for employers and

$1,000 for nonemployers. Note that this analysis likely overestimates the number of affected firms in this

bottom revenue bracket because Census data includes firms with no revenue, and firms with no r evenue do not sell composite wood products and therefore are unlikely to incur costs due to the rule. The

resulting distributions are presented in Table 5

- 11

.

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



### 11 $74,506 $159,854 $80,468 $2,687 $3,098 $2,358TSCA Title VI Proposed Implementation Rule EA 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

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



### 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 $14,374TSCA Title VI Proposed Implementation Rule EA 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

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



### 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 $10,230,695TSCA Title VI Proposed Implementation Rule EA 5

- 22



### 5.3.3 Costs per Small Fabricator, Wholesale, and Retail Firm

The costs per small firm are estimated by annualizing the costs per firm presented in Chapter 2.

Except for recurring recordkeeping costs, the impact analysis uses a single average annualized cost per

firm for each cost element (rule familiarization, labe ling and initial recordkeeping).

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



### Recurring recordkeeping costs are assumed to be a function of revenue rather than a fixed cost

per firm. As described in Chapter 2, the recordkeeping and labeling costs were estimated based on the

responses to a questionnaire administered to seven wholesa le firms and another questionnaire

administered to nine fabricator firms. Based on revenue data from the Dun and Bradstreet database and

other publically available sources, the two respondents reporting recurring recordkeeping costs appeared

to be larger firms that likely have revenues that are significantly larger than the average revenue for

affected firms. Nevertheless, the costs they reported were still assumed to represent the average costs

for the fraction of affected firms that will incur additio nal recordkeeping costs due to the rule. These

average costs were compared to average industry revenues to calculate the cost impact of recurring

recordkeeping. (This is equivalent to scaling the recurring recordkeeping costs to the revenues of the

firm. ) The cost impacts of recurring recordkeeping were then added to the cost impacts from the other

cost elements to calculate the total cost impact.

As described in Chapter 2, 11 percent of the fabricators that are not currently complying with the

CARB AT CM (because their products are not sold in California) are assumed to incur recurring

recordkeeping costs that were estimated to average $12,917 and $179 per year for employer firm s and

nonemployer firm s, respectively . This is $12,290 and $170 per year when annualized over 30 years using

a three percent discount rate. The analysis assumes that these recordkeeping costs include a fixed cost

component associated with 2 hours of labor ($47.27 annualized , based on labor rates at fabricator firms )

and a vari able cost component that is estimated as a function of revenue. The variable cost component is

estimated to be 0.3 percent of revenue, which is calculated by taking the employer firm variable cost of

$12,243and dividing by the average employer firm revenu e of $ 4.2 million (Given the revenue

distribution for fabricators shown in Table 5

- 11 , this is equivalent to a range of recurring recordkeeping

costs o f $120 to $304,002 per year for employer firm fabricators, and a range of $51 to $7,439 per year

for non

- employer firm fabricators.) As shown in Table 5

- 12 , the average annualized cost per firm to

fabricator s for the other rule’s other requirements ranges from $14 to $ 220 . The cost impacts from these

costs are combined with the cost impacts from recurring recordkeeping to calculate total cost impacts.TSCA Title VI Proposed Implementation Rule EA 5

- 23



### For wholesalers, 43 percent of the firms that are not currently complying with the CARB ATCM

(because their products are not sold in California) are assumed to incur recurring recordkeeping costs that

were estimated to average $4,980 and $100 per year fo r employer and nonemployer firm s, respectively.

This is $ 4,739 and $ 95 per year when annualized over 30 years using a three percent discount rate. The

analysis assumes that these recordkeeping costs include a fixed cost component associated with 2 hours of

labor ($4 8.60 annualized , based on labor rates at wholesaler firms ) and a variable cost component that is

estimated as a function of revenue. The variable cost component is estimated to be 0. 06 percent of

revenue, which is calculated by taking the employer variable cost of $ 4,690 and dividing by the average

employer firm revenue of $ 8.3 million

. (Given the revenue distribution for wholesalers shown in Table

5

- 11 , this is equivalent to a range of recurring recordkeeping costs of $ 65 to $ 59

, 410 per year for

employer firm wholesalers , and a range of $ 48 to $ 2

, 935 per year for non

- employer firm wholesalers .)

As shown in Table 5

- 12 , the average annualized cost per firm to wholesalers for the other rule’s other

requirements ranges from $ 18 to $ 220 per year . The cost impacts from these costs are combined with the

cost impacts from recurring recordkeeping to calculate tota l cost impacts.

5.3.4 Small Business Impact Summary for Fabricators, Wholesalers, and Retailers

Table 5

- 13 presents the small business impacts on fabricators, wholesalers and retailers. Overall,

about 95 percent of small firms are expected to have cost impacts that are less than one percent of th eir

revenue, about 4 percent of small firms are expected to have cost impacts between one and three percent

of their revenue, and about 1 percent of small firms are expected to have cost impacts that exceed three

percent of their total revenue. The number of firms by cost

- revenue ratio bracket is estimated from the

estimated number of firms, the per

- firm costs shown in Table 5

- 12 , and the revenue distri butions

presented above in Table 5

- 11

.

For example, 3,154 fabricator firms with employees are estimated to comply with the CARB

ATCM because their p roducts may be sold in California. These firms incur the incremental cost of

$14.29 for rule familiarization with the TSCA Title VI rule, but do not incur incremental costs for the

rule’s other requirements. Thus, only firms with revenues below $476 ($14 .29 divided by 3%) would

have cost

- impact ratios above three percent and firms with revenue below $1,429 ($14.29 divided by 1%)

would have cost

- impact ratios above one percent. Since the 1st percentile for employer fabricators is

greater than $1,429, it is estimated that all 3,154 of these employer fabricators have cost

- impact ratios

below one percent. It is also estimated that 5,032 fabricators that are nonemployer firms comply with the

CARB ATCM because their products may be sold in California. Like the compliant firms with

employees, these nonemployer firms only incur the incremental cost of $14.29 for rule familiarization.

However, since the 1st percentile for nonemployer fabricators is greater than $476 and the 3 rd 

### percentile

for revenue is greater t han $1,429, it is estimated that 2 percent, or 101 of these firms have cost

- impact

ratios of between one and three percent, while the remaining 4,931 firms have cost

- impact ratios of less

than one percent.TSCA Title VI Proposed Implementation Rule EA 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 Employers

Rule Fam. 30,884 $18.11 30,884

- -

Rule Fam., Initial Rec. 845 $140.00 845

-

-

Rule Fam., Initial Rec., Rec.Rec. a 2,252 $188.60 2,252

-

-

Rule Fam., Initial Rec., Rec.Rec. a , Initial Labeling 343 $409.56 329 14

-

Total 34,325



### Wholesale Nonemployers

Rule Fam. 45,539 $18.11 43,717 1,822

-

Rule Fam., Initial Rec. 1,247 $140.00 761 249 237

Rule Fam., Initial Rec., Rec.Rec. a 3,321 $188.60 1,760 764 797

Rule Fam., Initial Rec., Rec.Rec. a

, Initial Labeling 506 $409.56 182 127 197

Total 50,613



### Retail Employers

Rule Fam. 202,630 $13.73 202,630

- -

Total 202,630



### Retail Nonemployers

Rule Fam. 511,359 $13.73 496,018 15,341

-

Total 511,359



### All Fabricators, Wholesale and Retail Firms

All Costs 871,283

- 845,738 22,335 3,208

a The analysis estimates impacts due to rule familiarization, notification, labeling, and initial recordkeeping using an averag e cost

that is treated as a fixed cost per firm, although in reality costs will vary by firm. By contrast, recurring recordkeeping (or “Rec.

Rec.”) costs are estimated as a fixed cost plus a variable cost that is a function of revenue, since these costs are expected to be larger

for firms with larger sa les volumes. These variable costs are estimated to be 0.3% of fabricator revenues and 0.0 6 % of wholesale

firm revenues.TSCA Title VI Proposed Implementation Rule EA 5

- 25



## 5.4 Summary of Small Business Impacts

Table 5

- 14 presents a summary of the small business impacts from the proposed TSCA Title VI

Implementation Rule. As indicated, 851

, 29 8 small firms (about 9 7 percent) are expected to have costs

impacts that are less than one percent of their revenues, 22

, 13 1 firms (about 3 percent) are expected to

experience impacts at levels between one and three percent of their revenue, and 4

, 369 firms ( less than 1

percent) are expected to incur costs exceeding three percent of their revenues.

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

wholesalers, and retailers with annualized costs less than $250 (as shown i n Table 5

- 13 ). All fabricators

except those with recurring recordkeeping costs and all wholesalers except those with initial labeling

costs that had i mpacts above 1% of their revenues had annualized costs that were below $250. Note that

this implies that their revenues were below $25,000). These firms account for 9 2 percent of the firms

with cost impacts that are between 1 and 3 percent and 42 percent of the firms with cost impacts that

exceed 3 percent.

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 27 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 270,123 269,650 33 4 139

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 27 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 878,798 851,298 23,131 4,369TSCA Title VI Proposed Implementation Rule EA 6

- 1



# 6 Environmental Justice and Other Impacts

In addition to the cost analysis presented in Chapter 2, the small business analysis presented in

Chapter 5 , several other types of impacts are important to consider in evaluating the effects of a

regulation. This chapter presents the incre mental impact of the proposed TSCA Title VI Implementation

Rule on:

 Environmental Justice, as required by Executive Order 12898

– Environmental Justice;

 Employment impact analysis

 Paperwork burden, as required by the Paper Work Reduction Act;

 State and Loca l Governments, as required by the Unfunded Mandates Reform Act;

 Federalism, as required by Executive Order 13132

– Federalism;

 Tribal governments, as required by Executive Order 13175

– Consultation and Coordination

with Indian Tribal Governments;

 The environm ental health risk or safety risk to children due to the regulation, as required by

Executive Order 13045

– Protection of Children From Environmental Health & Safety Risks;

and

 Whether voluntary consensus standards are used in its regulatory activities.TSCA Title VI Proposed Implementation Rule EA 6

- 2



## 6.1 Envir onmental Justice

This proposed rule establishes standards that reduce emissions of formaldehyde from

composite wood products. Formaldehyde exposure may cause a range of health effects including

nasopharyngeal cancer, sensory irritation, and respiratory related effects,.

The Economic Analysis for this rule monetizes the benefits from reducing cases of

nasopharyngeal cancer and sensory irritation . Benefits valuation is done for formaldehyde exposure in

five climate zones from nine different housing ty pes (five types of new housing and four types of

renovated housing), allowing for off

- gassing of up to ten years, as well as occupational, school, and

outside formaldehyde exposure. The population in these climate zones and housing types is broken down

in to broad age and employment categories to assess exposure.

Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy

on Environmental Justice ( EJ ) . Its main provision directs Federal agencies, to the greatest extent

pra cticable and permitted by law, to make EJ part of their mission by identifying and addressing, as

appropriate, disproportionately high and adverse human health or environmental effects of their programs,

policies, and activities on minority and low

- income populations in the U.S.

This Environmental Justice analysis expands on the primary analysis by analyzing the

impacts specifically for minority and low

- income populations. The methodology used in this analysis is a

disaggregation of impacts, i.e. number of cases avoided, by environmental justice groups, specifically

minority, tribal, and low

- income populations. Disaggregation takes into account the differences in

housing types, climate zones, and age and employment categories, across environmental justic e populations. Data are the same as used in the total benefits analysis, presented earlier in this Economic

Analysis, and are taken from the American Community Survey (information on race and ethnicity, age,

family composition, and incomes: 2007 to 2009), the American Housing Survey (information on housing

types, age, and renovations: 2009), and the exposure assessment for this rule.

The race and ethnicity categories in the American Communities Survey (ACS) are self

reported and not mutually exclusive. In order to avoid double

- counting populations, all individuals who

identified as Hispanic separately were counted as such, regardless of any other reported racial category.

For non

- vacant households in which no race or ethnicity data was reported, the AC S reports the previous

occupant’s racial category, which was used in this analysis. The ACS survey weights take into account

other sources of demographic information, in addition to race and ethnicity, making the sample nationally

representative. The ACS also contains detailed information on housing, including age and type of housing

(mobile home or trailer, single

- family detached, single

- family attached, apartment, and RVs). Population

and housing information were combined to estimate the number of cases avoided by environmental

justice population. As with the total benefits monetization, the number of cases avoided, by

environmental justice population, were then multiplied by monetization measures (e.g. willingness to pay,

or cost of illness) to obtain be nefits estimates by environmental justice population. This approach

incorporates differences in housing types across minority and income groups.

Table 6

- 1 and Table 6

- 2 present the estimated number of adverse health cases avoided for each

y ear the regulation is in place. Table 6

- 1 presents the number of cases by health effect, option, and

minority group and Table 6

- 2 presents the number of cases by health effect, option, income group. Table

6

- 3 and Table 6

- 4 present the number of cases avoided by option aggregated across all health effects by

minority and income population, res pectively.TSCA Title VI Proposed Implementation Rule EA 6

- 3



### Table 6

- 1 : N umber of Cases Avoided by Minority Population (Average Number of Cases Avoided

Per Year of Regulation)

Analytical Option Cancer Eye Irritation

Lower Higher Lower Higher

All Individuals

Option SE/SEUR/SFCC 9 21 22,133 170,214

Option SI/SC/SCR/SCUR 10 24 23,650 191,590

Option SN 11 25 24,154 198,950

Option CE 7 16 18,015 130,720

Option CI 8 19 19,563 148,389

Option NE 39 92 58,492 626,726

Option NI 40 97 58,494 645,678

Non

- Hispanic White

Option SE/SEUR/SFCC 5 12 12,511 101,464

Option SI/SC/SCR/SCUR 6 14 13,375 114,319

Option SN 6 15 13,657 118,743

Option CE 4 9 10,219 78,039

Option CI 5 11 11,076 88,658

Option NE 22 53 35,781 376,411

Option NI 23 55 35,783 387,742

Non

- Hispanic Black

Option SE/SEUR/SFCC 1 3 3,144 23,118

Option SI/SC/SCR/SCUR 1 3 3,367 26,011

Option SN 1 3 3,443 27,008

Option CE 1 2 2,542 17,703

Option CI 1 3 2,778 20,096

Option NE 5 13 6,738 83,156

Option NI 6 13 6,738 85,808

All Hispanic

Option SE/SEUR/SFCC 2 4 4,805 31,388

Option SI/SC/SCR/SCUR 2 5 5,116 35,314

Option SN 2 5 5,222 36,666

Option CE 1 3 3,902 24,102

Option CI 2 4 4,234 27,352

Option NE 8 19 12,361 115,160

Option NI 8 20 12,362 118,593

Non

- Hispanic Native American or Alaskan Indian

Option SE/SEUR/SFCC 0 0 108 942

Option SI/SC/SCR/SCUR 0 0 117 1,075

Option SN 0 0 120 1,121

Option CE 0 0 87 727

Option CI 0 0 97 837

Option NE 0 1 267 3,334

Option NI 0 1 267 3,450

Non

- Hispanic Other Race

Option SE/SEUR/SFCC 1 2 1,566 13,301

Option SI/SC/SCR/SCUR 1 2 1,675 14,870

Option SN 1 2 1,712 15,412

Option CE 1 1 1,265 10,149

Option CI 1 1 1,377 11,446

Option NE 3 8 3,345 48,665

Option NI 3 8 3,345 50,085

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 6

- 4



### Table 6

- 2 : N umber of Cases Avoided by Income Population (Average Number of Cases Avoided

Per Year of Regulation)

Analytical Option Cancer Eye Irritation

Lower Higher Lower Higher

Number of Cases Avoided in Typical Year

All Individuals

Option SE/SEUR/SFCC 9 21 22,133 170,214

Option SI/SC/SCR/SCUR 10 24 23,650 191,590

Option SN 11 25 24,154 198,950

Option CE 7 16 18,015 130,720

Option CI 8 19 19,563 148,389

Option NE 39 92 58,492 626,726

Option NI 40 97 58,494 645,678

Individuals Living Above Poverty Line

Option SE/SEUR/SFCC 8 18 17,551 142,637

Option SI/SC/SCR/SCUR 9 20 18,682 160,241

Option SN 9 21 19,056 166,305

Option CE 6 14 14,341 109,557

Option CI 7 15 15,517 124,097

Option NE 33 77 48,806 530,167

Option NI 34 80 48,808 545,677



### Individuals Living Below Poverty Line

Option SE/SEUR/SFCC 1 4 4,551 27,046

Option SI/SC/SCR/SCUR 2 4 4,935 30,750

Option SN 2 4 5,064 32,023

Option CE 1 3 3,647 20,756

Option CI 1 3 4,017 23,829

Option NE 6 15 9,641 94,701

Option NI 6 16 9,642 98,084

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 6

- 5



### Table 6

- 3 : Summary of Number of Cases Avoided by Race and Ethnicity

Analytical Option Population

Affected

(thousands) Population

Affected as % of

Total Affected

Population Total Low er

Estimates of

Cases Avoided Total High er

Estimate of Cases

Avoided Percentage of

Total Cases

Avoided

Low er Estimate Perc entage of

Total Cases

Avoided

High er Estimate

All Individuals

Option SE/SEUR/SFCC

106,057 100.0% 22,142 170,236 100% 100%

Option SI/SC/SCR/SCUR 23,660 191,615 100% 100%

Option SN 24,165 198,975 100% 100%

Option CE 18,022 130,737 100% 100%

Option CI 19,571 148,407 100% 100%

Option NE 58,530 626,818 100% 100%

Option NI 58,535 645,775 100% 100%

Non

- Hispanic White

Option SE/SEUR/SFCC

69,169 65.2% 12,516 101,477 56.5% 59.6%

Option SI/SC/SCR/SCUR 13,381 114,333 56.6% 59.7%

Option SN 13,664 118,758 56.5% 59.7%

Option CE 10,223 78,048 56.7% 59.7%

Option CI 11,081 88,668 56.6% 59.7%

Option NE 35,804 376,464 61.2% 60.1%

Option NI 35,806 387,797 61.2% 60.1%

Non

- Hispanic Black

Option SE/SEUR/SFCC

12,540 11.8% 3,145 23,121 14.2% 13.6%

Option SI/SC/SCR/SCUR 3,368 26,014 14.2% 13.6%

Option SN 3,444 27,011 14.3% 13.6%

Option CE 2,543 17,705 14.1% 13.5%

Option CI 2,779 20,099 14.2% 13.5%

Option NE 6,743 83,169 11.5% 13.3%

Option NI 6,744 85,822 11.5% 13.3%

Non

- Hispanic Other Race

Option SE/SEUR/SFCC

7,381 7.0% 4,806 31,393 21.7% 18.4%

Option SI/SC/SCR/SCUR 5,118 35,319 21.6% 18.4%

Option SN 5,224 36,671 21.6% 18.4%

Option CE 3,904 24,106 21.7% 18.4%

Option CI 4,236 27,356 21.6% 18.4%

Option NE 12,368 115,178 21.1% 18.4%

Option NI 12,370 118,612 21.1% 18.4%

Non

- Hispanic Native American or Alaskan Indian

Option SE/SEUR/SFCC

652 0.6% 108 943 0.5% 0.6%

Option SI/SC/SCR/SCUR 117 1,075 0.5% 0.6%

Option SN 120 1,121 0.5% 0.6%

Option CE 87 727 0.5% 0.6%

Option CI 97 837 0.5% 0.6%

Option NE 267 3,335 0.5% 0.5%

Option NI 267 3,451 0.5% 0.5%

All Hispanic

Option SE/SEUR/SFCC

16,318 15.4% 1,567 13,303 7.1% 7.8%

Option SI/SC/SCR/SCUR 1,676 14,872 7.1% 7.8%

Option SN 1,712 15,414 7.1% 7.7%

Option CE 1,265 10,150 7.0% 7.8%

Option CI 1,378 11,447 7.0% 7.7%

Option NE 3,348 48,672 5.7% 7.8%

Option NI 3,348 50,093 5.7% 7.8%

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 6

- 6



### Table 6

- 4 : Summary of Number of Cases Avoided by Income

Analytical Option Population

Affected

(thousands) Population

Affected as

Percent of Total

Affected

Population Total Low er

Estimates of Cases

Avoided Total High er

Estimate of Cases

Avoided Percentage of

Total Cases

Avoided

Low er Estimate Percentage of

Total Cases

Avoided

High er Estimate

All Individuals

Option SE/SEUR/SFCC

106,057 100.0% 22,142 170,236 100% 100%

Option SI/SC/SCR/SCUR 23,660 191,615 100% 100%

Option SN 24,165 198,975 100% 100%

Option CE 18,022 130,737 100% 100%

Option CI 19,571 148,407 100% 100%

Option NE 58,530 626,818 100% 100%

Option NI 58,535 645,775 100% 100%

Individuals Living Below Poverty Line

Option SE/SEUR/SFCC

13,081 12.3% 4,553 27,049 20.6% 15.9%

Option SI/SC/SCR/SCUR 4,937 30,754 20.9% 16.1%

Option SN 5,066 32,027 21.0% 16.1%

Option CE 3,648 20,759 20.2% 15.9%

Option CI 4,018 23,832 20.5% 16.1%

Option NE 9,647 94,716 16.5% 15.1%

Option NI 9,648 98,100 16.5% 15.2%

Individuals Living Above Poverty Line

Option SE/SEUR/SFCC

92,631 87.3% 17,558 142,655 79.3% 83.8%

Option SI/SC/SCR/SCUR 18,690 160,261 79.0% 83.6%

Option SN 19,065 166,326 78.9% 83.6%

Option CE 14,347 109,571 79.6% 83.8%

Option CI 15,524 124,113 79.3% 83.6%

Option NE 48,839 530,244 83.4% 84.6%

Option NI 48,843 545,758 83.4% 84.5%

Option SCUR is the proposed option.



### Table 6

- 5 presents a summary of quantified benefits for minority populations. Quantified

b enefits estimates are presented, for each analytical option, in both totals for each environmental justice

pop ulation group and then as estimates for individuals within that group. As with the total benefits

analysis for this rule, a range of estimates is presented from low er to high er . Estimates are reported in

2010 dollars, annualized at a 3% rate.

Results indicate that disaggregation of total benefits by population groups leads to variation in the

range of individual benefits, by minority population. The population of all individuals affected by the

rule shows the same estimates reported in the total benef its analysis; quantified benefits ranging from $ 18

to $ 50 million per year for the options with emissions standards that are consistent with the statute, and

$ 0. 17 to $ 0

. 47 per individual. The affected Non

- Hispanic White population account s for 65 percent of

the to tal affected population, accrues about 60 percent of the total quantified benefits, and experiences

average quantified benefits ranging from $0

. 1 6 to $ 0

. 44 per individual. In comparison, benefits for

minority populations are highe r.

Minority populations represent about 35 percent of the individuals affected by the rule and are

estimated to accrue about 40 percent of the proposed rule’s quantified benefits. The affected Non

Hispanic B lack population account for 12 percent of the to tal affected population, accrue about 13 percent

of the total quantified benefits, and experience average quantified benefits ranging from $ 0.19 to $ 0.51

per individual. The affected Hispanic population account s for 15 percent of the total affected popu lation,

accrue s about 18 percent of the total quantified benefits, and experiences average quantified benefitsTSCA Title VI Proposed Implementation Rule EA 6

- 7



### ranging from $ 0

. 20 to $ 0

. 54 per individual. The affected Non

- Hispanic Native American or Alask an Indian population accounts for 0.6 percent of th e total affected population, accrue s 0. 6 percent of the total

annualized benefits, and experienced average ann ualized benefits ranging from $0

. 17 to $0

. 46 per

individual.

Following the Census methodology, low

- income families are identified in this analysis as

having annual incomes below the poverty threshold. The poverty threshold, as determined by the U.S.

Census Bureau, varies by family size, age, and composition and is adjusted for inflation. Table 6

- 6

presents a summary of quantified benefits for low

- income populations. As with the total benefits analysis

for this rule, a range of estimates is presented from low er to high er . Estimates are reported in 2010

dollars, annualized at a 3% rate.

Results indicate that disaggregation of total benefits by population groups leads to variation in the

range of individual be nefits, by income category. The population of all individuals affected by the rule

shows the same estimates reported in the total benefits analysis; quantified benefits ranging from $18 to

$50 million per year for the options with emissions standards that are consistent with the statute, and

$0.17 to $0.47 per individual. The affected low

- income population accounts for 12 percent of the total

affected population, accrue s about 14 percent of the total quantified benefits, and experiences average quantified benefits ranging from $ 0

. 19 to $ 0

. 56 per individual.

Table 6

- 7 summarizes the number of cases avoided by affected minority and low

- income

population groups , and Table 6

- 8 summarizes the quantified benefits. This Environmental Justice

analysis shows slightly larger individual benefits for affected minority and low

- income population

groups. Minority populations represent 35 percent of the individuals affected by the rule and are

estimated to accrue 40 percent of the proposed rule’s quantified benefits. Individuals living below the

poverty line represent 12 perc ent of the individuals affected by the rule and are estimated to accrue about

14 percent of the proposed rule’s quantified benefits. Given these results, EPA has determined that this

proposed rule will not have disproportionally high and adverse human he alth or environmental effects on

any population, including any minority or low

- income population. These proposed standards would

reduce emissions of formaldehyde from composite wood products for all populations that are exposed,

with slightly larger quant ified benefits for individuals from minority or low

- income affected populations.TSCA Title VI Proposed Implementation Rule EA 6

- 8



### 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

Low er Estimate

(millions 2010$ or

percent of total) Total Benefits

High er Estimate

(millions 2010$ or

percent of total) Total Benefits per

Affected Individual

L ow er Estimate

(in dollars) Total Benefits per

Affected Individual

High er Estimate

(in dollars)

All Individuals

Option SE/SEUR/SFCC

106,057 100.0% $18 $42 $0.17 $0.39

Option SI/SC/SCR/SCUR $20 $48 $0.19 $0.45

Option SN $21 $50 $0.20 $0.47

Option CE $14 $32 $0.13 $0.30

Option CI $16 $37 $0.15 $0.34

Option NE $76 $178 $0.72 $1.68

Option NI $80 $186 $0.75 $1.76

Non

- Hispanic White

Option SE/SEUR/SFCC

69,169 65.2% 60.4% 61.3% $0.16 $0.37

Option SI/SC/SCR/SCUR 60.4% 61.4% $0.18 $0.42

Option SN 60.4% 61.4% $0.18 $0.44

Option CE 60.5% 61.4% $0.12 $0.28

Option CI 60.5% 61.5% $0.14 $0.33

Option NE 60.2% 61.0% $0.66 $1.57

Option NI 60.2% 61.0% $0.69 $1.64

Non

- Hispanic Black

Option SE/SEUR/SFCC

12,539 11.8% 13.3% 12.9% $0.19 $0.43

Option SI/SC/SCR/SCUR 13.3% 12.9% $0.21 $0.49

Option SN 13.3% 12.9% $0.22 $0.51

Option CE 13.3% 12.9% $0.14 $0.33

Option CI 13.3% 12.9% $0.16 $0.38

Option NE 13.3% 13.0% $0.81 $1.84

Option NI 13.3% 13.0% $0.85 $1.93

Non

- Hispanic Other Race

Option SE/SEUR/SFCC

7,380 7.0% 7.7% 7.5% $0.18 $0.43

Option SI/SC/SCR/SCUR 7.6% 7.5% $0.21 $0.48

Option SN 7.6% 7.4% $0.22 $0.50

Option CE 7.6% 7.5% $0.14 $0.32

Option CI 7.6% 7.4% $0.16 $0.37

Option NE 7.8% 7.7% $0.80 $1.85

Option NI 7.8% 7.6% $0.84 $1.93

Non

- Hispanic Native American or Alaskan Indian

Option SE/SEUR/SFCC

651 0.6% 0.6% 0.6% $0.17 $0.38

Option SI/SC/SCR/SCUR 0.6% 0.6% $0.19 $0.43

Option SN 0.6% 0.6% $0.20 $0.46

Option CE 0.6% 0.6% $0.13 $0.29

Option CI 0.6% 0.6% $0.15 $0.34

Option NE 0.6% 0.6% $0.69 $1.55

Option NI 0.6% 0.6% $0.72 $1.63

All Hispanic

Option SE/SEUR/SFCC

16,318 15.4% 18.0% 17.6% $0.20 $0.45

Option SI/SC/SCR/SCUR 18.1% 17.6% $0.22 $0.51

Option SN 18.1% 17.6% $0.23 $0.54

Option CE 18.0% 17.6% $0.15 $0.34

Option CI 18.1% 17.6% $0.17 $0.39

Option NE 18.1% 17.7% $0.85 $1.94

Option NI 18.1% 17.8% $0.89 $2.03

Option SCUR is the proposed option.TSCA Title VI Proposed Implementation Rule EA 6

- 9



### 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

Low er Estimate

(millions 2010$ or

percent of total) Total Quantified

Benefits

High er Estimate

(millions 2010$ or

percent of total) Total Quantified

Benefits per

Affected

Individual

Low er Estimate

(in dollars) Total Quantified

Benefits per

Affected

Individual

High er Estimate

(in dollars)

All Individuals

Option SE/SEUR/SFCC

106,057 100.0% $18 $42 $0.17 $0.39

Option SI/SC/SCR/SCUR $20 $48 $0.19 $0.45

Option SN $21 $50 $0.20 $0.47

Option CE $14 $32 $0.13 $0.30

Option CI $16 $37 $0.15 $0.34

Option NE $76 $178 $0.72 $1.68

Option NI $80 $186 $0.75 $1.76

Individuals Living Below Poverty Line

Option SE/SEUR/SFCC

13,081 12.3% 14.1% 14.5% $0.19 $0.46

Option SI/SC/SCR/SCUR 14.3% 14.7% $0.22 $0.53

Option SN 14.3% 14.7% $0.23 $0.56

Option CE 14.1% 14.5% $0.15 $0.35

Option CI 14.3% 14.6% $0.17 $0.41

Option NE 13.9% 14.3% $0.81 $1.94

Option NI 14.0% 14.4% $0.85 $2.05

Individuals Living Above Poverty Line

Option SE/SEUR/SFCC

92,631 87.3% 85.6% 85.1% $0.16 $0.38

Option SI/SC/SCR/SCUR 85.5% 84.9% $0.19 $0.44

Option SN 85.4% 84.9% $0.19 $0.46

Option CE 85.7% 85.1% $0.13 $0.29

Option CI 85.5% 84.9% $0.14 $0.34

Option NE 85.9% 85.3% $0.71 $1.64

Option NI 85.8% 85.2% $0.74 $1.71

Option 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 status could not

be determined for some individuals.



### Table 6

- 7 : Summary of Number of Cases Avoided by Race, Ethnicity, and Poverty Status under the Proposed

Option (annualized at 3% rate)

Population Affected Cancer Eye Irritation Total



### lower higher lower higher lower higher

All Individuals 10 24 23,650 191,590 23,660 191,615

Minority Race/Ethnicity 4 10 10,275 77,271 10,279 77,281

Poverty Status 2 4 4,935 30,750 4,937 30,754TSCA Title VI Proposed Implementation Rule EA 6

- 10



### Table 6

- 8 : Summary of Quantified Benefits by Race, Ethnicity, and Poverty Status under the Proposed Option

(annualized at 3% rate)

Population Affected Population

Affected

(thousands) Population

Affected as

Percent of

Total Affected

Population Total

Quantified

Benefits

Low er

Estimate

(millions

2010$) Total Quantified

Benefits

High er Estimate

(millions 2010$) Total Quantified

Benefits

Low er Estima te

(% of total

affected

population) Total Quantified

Benefits

High er Estimate

(% of total

affected

population)

All Individuals 106,057 100% $20 $48 100.0% 100.0%

Minority Race/Ethnicity 36,888 35% $8 $18 39.6% 38.6%

Poverty Status 13,081 12% $3 $ 7 1 4 .3 % 14 .7%TSCA Title VI Proposed Implementation Rule EA 6

- 11



## 6.2 Employment Impact Analysis

While a standalone analysis of employment impacts is not included in a standard cost

- benefit

analysis 50 

### , such an analysis is of particular concern in the current economic climate of sustained levels of

high unemployment. Executive Order 13563, states, “Our regulatory system must protect public health,

welfare, safety, and our environment while promoting ec onomic growth, innovation, competitiveness, and

job creation ” (emphasis added). For this rule, EPA presents a qualitative assessment of the potential for

employment impacts in the short and long term for producers, fabricators, distributors, and retailers of

composite wood products and goods made from them.

An environmental regulation can be understood as an increase in demand for a particular output:

environmental quality. Meeting this new demand can result in increased demand for the various factors

o f production (including labor) available to the economy. However, regulated sectors generally have to

rely on revenues generated by their other (market) outputs to cover the costs of satisfying society's

increased demand for environmental quality. This i ncrease in the costs can lead to reduced demand by

regulated sectors for labor and other factors of production. The net effect of an environmental regulation

on employment in the regulated sectors and the overall economy is therefore indeterminate. The c osts

imposed on directly regulated sectors may affect their competitive position and put some specific jobs at

risk. At the same time, environmental regulations may create jobs in other sectors, e.g. in the

environmental protection sector. Tracing out th ese opposing effects against the temporal dynamics of

labor markets is complex and makes deriving estimates of how regulations will impact economy

- wide net

employment a difficult task.

Adding to this complexity, effects on employment are also likely to change over time.

Employment in some sectors will be affected at the time of promulgation or when a regulation becomes

effective, while others will only be affected farther into the future. When the economy is at full

employment, an environmental regulat ion is unlikely to have a considerable impact on long run net

employment; instead, labor would primarily be reallocated from one productive use to another, e.g. from

producing electricity or steel to producing pollution abatement equipment. Theory and pee r

- reviewed

published empirical evidence support the argument that, in the case of full employment, the net

employment effects from environmental regulation are likely to be small and transitory even in the

regulated sector and therefore would have an imper ceptible impact on the macro economy. 51



### On the other hand, Schmalansee and Stavins ( 2011 ) point out that positive net employment

effects are possible in the near term, during a p eriod of sustained unemployment, due to the potential

hiring of previously unemployed workers by the regulated sector to help meet new requirements (e.g., to

install new equipment) or by the environmental protection sector to produce new abatement capital. On

the other hand, it is also theoretically possible to have near term negative net employment effects. For

example, during periods of sustained high unemployment it may take workers displaced by regulations

longer to find alternative employment. In th e longer term, the net effect on employment is more difficult

to predict and will depend on the way in which the related industries respond to the regulatory

requirements and whether the labor market remains in sustained disequilibrium or returns to full

e mployment. There are also significant methodological challenges in assessing the net employment

impacts when the economy is not at full employment. For example, the opportunity cost of labor is more

difficult to assess, labor demand caused by an environm ental regulation may have positive external

effects (the unemployment rate is reduced as workers are hired), and reductions in labor may give rise to

negative external effects (as higher unemployment rates can be associated with longer durations of

unemplo yment).

50 Except to the extent that labor costs are part of total costs in a benefit cost analysis.

51 See Berman and Bui 2001

, Morgenstern, et al. 2002

.TSCA Title VI Proposed Implementation Rule EA 6

- 12



### Section 6.2.1 discusses the qualitative assessment of immediate and short term impacts

. Section

6.2.2 describes longer term impacts, focusing primarily on annual, or ongoing, employment impacts in the

regulated sectors.

6.2.1 Immediate and Short Term Employment Impacts

There are a number of initial activities that firms may need to perform to comply with this rule,

depending on the type of firm (panel producer, fabricator, wholesaler, or retailer) and their baseline status.

In the short term these activities include:

Rule Familiarization: Firms will need to read the rule in order to understand the requirements;

Testing and Certification: Panel producers will need to perform formaldehyde emission testing on

their composite wood products and attain certification fr om an accredited TPC. These entities must

undergo qualifying tests at a TPC lab, obtain an on

- site audit from a TPC, implement quality control

systems, and train quality control employees in order to receive initial certification;

Recordkeeping : Some firms will need to revise their recordkeeping systems in order to comply with

the chain of custody requirements in the rule; and

Labeling : Firms that package or repackage composite wood products or finished goods containing

composite wood product s will need to modify their labels to include their name, the date the finished

good was produced, and a statement of compliance.

Furthermore, some panel producers may need to change their production processes and raw

materials in order to meet the emi ssion levels required by the rule or to achieve NAF certification. Some

panel producers may choose to install an on

- site lab for quality control testing, so that they can receive

test results (and thus ship tested lots) quicker than if they hired an off

- s ite lab to perform the testing. And

some laminators may choose to switch to NAF resins in order to avoid being considered a panel producer

under the rule.

The average first year cost per firm is shown in Table 6

- 9 . There will be a range of actual costs

incurred, depending on such factors as whether or not the firm is in compliance with the CARB ATCM in

the baseline; whether or not the firm’s exist ing recordkeeping systems are sufficient to comply with the

rule’s chain of custody requirements; the size and complexity of the firm’s operations; and whether or not

a laminator uses NAF resins and compliant platforms (and thus whether it is considered a platform

producer or a fabricator under the rule). However, for the sectors with the largest number of firms

affected by the rule (fabricators, wholesalers, and retailers), the average cost per firm in the first year is

relatively modest, and is unlikely to create significant employment effects. To the extent that firms in

these industries have costs that are significantly above average, they will typically be larger firms that

have additional resources to comply with the rule’s requirements. 52



### Costs per firm are higher for panel producers and laminators. Costs are likely to be the highest

for stock panel producers that are not CARB certified in the baseline, and for laminators that are

considered panel producers. The average number of employees in empl oyer firms in the affected NAICS

codes is 38 employees per firm for stock panel producers and 26 employees per firm for laminators.

However, there are only 11 stock panel producers in the U.S. that are not CARB certified for any of their

52 The average employer firms in the affected fabricato r, wholesale, and retail industries have 26, 17, and 32 employees

per firm, respectively.TSCA Title VI Proposed Implementation Rule EA 6

- 13



### products and anot her 5 that are CARB certified for some but not all of their products. While the analysis

assumes that 150 to 277 U.S. laminators will be considered panel producers because they will continue to

use NAF resins, information is not currently available to ind icate the particular industries such firms are

likely to be in, the specific types of products they make, their firm sizes or production volumes, or other

characteristics that would provide insights into how their employment might be affected by the rule.

Table 6

- 9 : Average First Year Cost per Firm for Affected Firms

Type of Firm Total First Year Cost

($ million) Number of Firms Average First Year Cost per

Firm

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario

Stock Panel Producers $2 $2 54 54 $36,277 $36,277

Laminators 1 $55 $102 7,486 13,875 $7,407 $7,385

Fabricators $91 $57 72,492 66,103 $1,260 $855

Wholesalers $71 $71 85,560 85,560 $829 $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 con sidered to be fabricators under the proposed rule), and laminators that do not use NAF

resins (that are considered panel producers under the proposed rule). Low and high end scenarios reflect the estimated

number of laminators and the number of product li nes certified per firm, not the low and high costs for each category

of entities.



### 6.2.2 Longer Term Employment Impacts

Determining the direction of ongoing employment effects in the regulated industry, in the longer

term, is challenging due to competing effec ts. Complying with the new or more stringent regulation

requires additional inputs, including labor, and may alter the relative proportions of labor and capital used

by regulated firms in their production processes. Morgenstern, Pizer and Shih (2002) dem onstrate that

environmental regulations can be understood as requiring regulated firms to add a new output

(environmental quality) to their product mixes. Although legally compelled to satisfy this new demand,

regulated firms have to finance this addition al production with the proceeds of sales of their other

(market) products. Satisfying this new demand requires additional inputs, including labor, and may alter

the relative proportions of labor and capital used by regulated firms in their production proc esses.

More specifically, Morgenstern, Pizer, and Shih (2002) decompose the effect of regulation on net

employment in the regulated sector into the following three subcomponents:

 

### The Demand Effect : higher production costs from complying with the regulation will raise

market prices in regulated industries, reducing consumption (and production) of their output,

thereby reducing demand for labor within the regulated industry. The “extent of this effect

depends on the cost increase passed on to consu mers as well as the demand elasticity of

industry output” (p. 416).

 

### The Cost Effect : Assuming that the capital/labor ratio in the production process is held fixed,

as “production costs rise, more inputs, including labor, are used to produce the same amoun t

of output,” (p. 416). For example, to reduce pollutant emissions while holding output levels

constant, regulated firms may require additional labor.

 

### The Factor

- Shift Effect : Regulated firms’ production technologies may be more or less labor

intensive after complying with the regulation (i.e., more or less labor is required relative to

capital per dollar of output). “Environmental activities may be more labor intensive than

conventional production,” meaning that “the amount of labor per dollar of outp ut will rise.”TSCA Title VI Proposed Implementation Rule EA 6

- 14 

### However, activities may, instead, be less labor intensive because “cleaner operations could

involve automation and less employment, for example” (p. 416).

The demand effect is expected to have an unambiguously negative effect on employment , the cost

effect to have an unambiguously positive effect on employment, and the factor

- shift effect to have an

ambiguous effect on employment. Without more information with respect to the magnitudes of these

competing effects, it is not possible to pred ict the total effect an environmental regulation will have on

overall employment levels in the regulated sector. However, regulations that impose smaller costs at the

firm level are less likely to create noticeable net employment impacts (whether positive or negative) than

regulations with more significant cost impacts.

Morgenstern et al. estimated the effects of pollution abatement expenditures on net employment

in four highly polluting/regulated sectors (pulp and paper, plastics, steel, and petroleum re fining). They

conclude that increased abatement expenditures generally have not caused a significant change in net

employment in those sectors. More specifically, their results show that, on average across the industries

studied, each additional $1 milli on (1987$) spent on pollution abatement results in a (statistically

insignificant) net increase of 1.5 jobs. While the specific sectors Morgenstern et al. examined are

different than the sectors considered here, the methodology that Morgenstern et al. dev eloped is still an

informative way to qualitatively assess the effects of this rulemaking on employment in the regulated

sector.

The activities required for compliance with the rule in the longer term include the following:

Testing and Certification: Once certified, a panel producer is required to conduct on

- going small

scale quality control testing, submit reports to the certifying TPC, and receive on

- site audits and large

chamber testing to maintain its certified status;

Recordkeeping : Firms that import, produce, or manufacture composite wood products must keep

records showing the date of purchase of the composite wood product, the supplier, and all precautions

taken to ensure that the product meets emissions standards; and

Labeling: Firms that package or repackage composite wood products or finished goods containing

composite wood products will need to modify their labels to include their name, the date the finished

good was produced, and a statement of compliance.

Furthermore, panel producers and laminators that changed their raw materials inputs will continue to

use the alternative materials.

The average subsequent year cost per firm is shown in Table 6

- 10 . Costs in subsequent years are

less than the cost in the first year. There will be a range of actual costs incurred, based on the factors

described above for the first year costs. As with the first year costs, the average cost per firm for the

sectors with the largest number of firms affected by the rule (fabricators, wholesalers, and retailers), is

relatively modest and is unlikely to create significant employment effects for a typical firm. Costs per

firm are higher for panel producers and laminators, particularly for stock panel producers that are not

CARB certified in the baseline, and for laminators that are considered panel producers.TSCA Title VI Proposed Implementation Rule EA 6

- 15



### Table 6

- 10 : Av erage Subsequent Year Cost per Firm for Affected Firms

Type of Firm Total Subsequent Year

Cost ($ million per year) Number of Firms Average Subsequent Year

Cost per Firm

Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario Low End

Scenario High End

Scenario

Stock Panel Producers $1 $1 54 54 $26,731 $26,731

Laminators 1 $17 $30 7,486 13,875 $2,241 $2,162

Fabricators $24 $20 72,492 66,103 $333 $307

Wholesalers $14 $14 85,560 85,560 $158 $158

Retailers

- - 759,048 759,048

- -

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 con sidered to be fabricators under the proposed rule), and laminators that do not use NAF

resins (that are considered panel producers under the proposed rule). Low and high end scenarios reflect the estimated

number of laminators and the number of product li nes certified per firm, not the low and high costs for each category

of entities.



### There are several reasons that the estimates from Morgenstern et al. cannot reasonably be applied

in this setting to estimate the employment impacts of this rule. First, t he industries regulated by this rule

are not among the four sectors analyzed by Morgenstern et al, and they are different enough in structure

that estimates would not be directly comparable to the pulp and paper industry that was included in the

study. Al so, Morgenstern et al. focused on pollution abatement costs rather than the types of certification,

testing, chain of custody, and labeling required by this rule. Finally, the lack of published, peer

- reviewed

research on employment impacts from environmen tal regulation on the composite wood industry limits

the ability to defensibly estimate employment impacts of emission standards for composite wood

products.

The three effects described by Morgenstern, Pizer, and Shih can be described for this rule, but the

magnitudes cannot be estimated. Affected firms will face higher costs to produce and sell their products,

as certification, quality control procedures, and/or recordkeeping are required for compliance. Economic

theory, outlined by Morgenstern et al. , suggests that the demand effect will have a negative impact on

employment in the regulated sector. As firms face higher costs of production, market prices for outputs

will rise and consumer demand will decline, reducing the quantity produced. But the s ize of the demand

effect cannot be quantified in this case because information about cost pass through to consumers is not

available for the regulated sectors. The cost effect reflects the increase in employment required for firms

to continue producing th e same amount of output as prior to the regulation but without elasticity

information for the markets affected by the rule, it is not possible to determine how production may

change. The factor shift effect may be positive if quality control, recordkeepin g, and other measures

required by the rule are more labor

- intensive than the firms’ ordinary operations, but the relative labor

intensity is not known. Because the magnitude of these three effects is not known, the net impact on

employment cannot be estim ated.

6.2.3 Summary of Employment Impacts

The theoretical model developed in Morgenstern et al. cannot predict the net employment impacts

in the regulated sectors due to the competing effects: the demand effect is negative, the cost effect is

positive, and the factor shift effect is ambiguous. Therefore the overall effect is ambiguous. Because

information is not available on the magnitude of each component effect , the overall net effect on

employment cannot be determined. For example if there were two negative effects (assumes the factor

shift effect is negative) and one positive effect the positive effect might dominate both negative effects,

depending on their magnitudes, so the overall net effect depends on the magnitude of the competing

effects.TSCA Title VI Proposed Implementation Rule EA 6

- 16



### Other uncertainties that characterize this analysis include: uncertainties about firms’ adjustments

of capital and labor in response to the regulation (factor shif t effect); uncertainties regarding labor

intensities of different equipment and choice of resin types to comply with the standards; uncertainties

about the types of technologies that may be used for quality control programs; uncertainty about how

relative market shares of domestic production of composite wood products versus imports may change

over time; and uncertainties about how demand for composite wood products is affected by business

cycle fluctuations.

Given the current level of unemployment, net positive employment effects are possible,

especially in the near term, due to the potential hiring of idle labor resources by the regulated sector to

plan for and meet new requirements. In the future, when full employment is expected to return, any

change s in employment levels in the regulated sector due to this program are expected to be mostly offset

by employment changes in other sectors.TSCA Title VI Proposed Implementation Rule EA 6

- 17



## 6.3 Paperwork Burden Analysis

This section presents a summary of the burden and associated costs for the respondents associated

with the recordkeeping and reporting requirements of the proposed TSCA Title VI Implementation Rule.

Th e detailed paperwork burden analysis is presented in the information collection request ( ICR )

supporting statement for this proposed rulemak ing. It provides the average annual burden and cost

estimates for the next three years of the program.

The paperwork burden and associated costs include the activity types listed below. Note that not

all entities will incur burden or costs from these activities because they may already be meeting the

requirements under the CARB ATCM and/or their existing recordkeeping and labeling systems may

already be sufficient.

 Rule Familiarization: All respondents will need to read the rule in order to understan d

the requirements;

 Testing and Certification: All composite panel producers will need to perform

formaldehyde emission testing on their composite wood products and attain certification

from an accredited TPC. These entities must undergo qualifying tes ts at a TPC lab,

obtain an on

- site audit from a TPC, implement quality control systems, and train quality

control employees in order to receive initial certification. Once certified, a mill is

required to conduct on

- going small scale quality control testi ng, submit monthly reports

to the certifying TPC, and receive quarterly on

- site audits and large chamber testing to

maintain its certified status. Mills that produce products made with NAF resins that meet

more stringent emissions limits may apply for exe mptions from some of the on

- going

testing requirements;

 Recordkeeping : Firms that import, produce, or manufacture composite wood panels,

component parts, or finished goods are required to keep records showing the date of

purchase of the composite wood p roduct, the supplier, and all precautions taken to ensure

that the product meets emissions standards. Wholesalers and retailers that do not import,

produce, or manufacture composite wood panels, component parts, or finished goods are

required to maintain invoices and bills of lading; and

 Labeling: Firms that package or repackage composite wood products or finished goods

containing composite wood products will need to modify their labels to include their

name, the date the finished good was produced, and a statement of compliance.

Note that the paperwork burden analysis in the ICR treat s some baseline burdens and costs

differently from the cost analysis in Chapter 2 of this economic analysis . Neither analysis includes

burdens or costs that were already performed to meet the CARB ATCM requirements and will not need to

be performed again to comply with the TSCA Title VI requirements. For example, both analyses assume

that mills making product lines that have a standard certification 53 

### or a NAF certificatio n under the CARB

ATCM will not need to submit new data or resubmit existing data to their existing TPC in order to receive

the equivalent certification under the TSCA Title VI regulations and therefore burdens and costs are not

estimated for these activiti es

.

The cost analysis in Chapter 2 of this economic analysis calculates the incremental cost of the

TSCA Title VI rule . The incremental cost excludes the costs associated with activities performed in the

53 The term standard certification is used here to describe a certification other than an ultra

- low

- emitting formaldehyde

(ULEF) or NAF certification. The proposed rule does not provide for reduced testing frequencies for products made

with ULEF resins, so mills that have a ULEF certification under the CARB ATCM will incur additional costs under the

TSCA Title VI rule.TSCA Title VI Proposed Implementation Rule EA 6

- 18



### baseline such as TPC audits at CARB certified pane l producers , and recordkeeping at firms that sell

products in California . The paperwork burden analysis in the ICR calculates the incremental burdens and

costs of the rule, but it also calculates total burden and costs including activities that are perfor med to

comply with the CARB ATCM in the baseline . Furthermore, the cost analysis in Chapter 2 is limited to

domestic entities, while the ICR considers the burden and cost to both domestic and foreign entities.

Table 6

- 11 presents the summary of the three year average incremental and total cost burden.

The columns labeled total burden and total cost present the bottom line burden and cost for th e ICR. The

columns labeled incremental burden and incremental cost present the burdens an d costs with the baseline

assumptions that are consistent with the economic analysis in Chapter 2. Note that these burden and cost

estimates differ slightly from tho se presented in Chapter 2 because the unit burdens and costs are rounded

slightly differently for the calculations. This is necessary because a different level of disag g regation is

needed for the ICR supporting statement. ( The ICR supporting statement ca lculates the costs at the

activity level, while the cost analysis calculates them at the establishment level

. ) In addition, costs

associated with changes to production proces s es or raw materials are not considered paperwork burden

and therefore not includ ed in the paperwork burden analysis. See the ICR supporting statement for a

detailed description of how these calculations were performed.

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

Hou rs (includes

baseline burden) Total Cost

(includes baseline

cost)

Domestic

Producers 370 187,274 $21,128,772 215,023 $24,064,208

Fabricators 79,701 1,866,226 $64,002,296 2,637,325 $83,156,395

Wholesalers 85,560 813,330 $31,360,750 1,127,590 $39,386,950

Retailers 759,048 1,011,963 $71,563,045 1,011,963 $71,563,045

Total 924,679 3,878,793 $188,054,863 4,991,901 $218,170,598

Foreign

Producers 1,129 170,643 $20,070,682 412,218 $47,412,391

Fabricators 31,083 727,417 $24,949,118 1,031,708 $32,507,707

Wholesalers 33,368 1,018,476 $33,008,510 1,456,142 $44,186,499

Retailers

- - - - -

Total 65,580 1,916,536 $78,028,310 2,900,068 $124,106,597

Total

Producers 1,499 357,917 $41,199,455 627,241 $71,476,599

Fabricators 110,784 2,593,643 $88,951,415 3,669,033 $115,664,102

Wholesalers 118,928 1,831,806 $64,369,234 2,583,732 $83,573,449

Retailers 759,048 1,011,963 $71,563,045 1,011,963 $71,563,045

Total 990,259 5,795,329 $266,083,149 7,891,969 $342,277,195TSCA Title VI Proposed Implementation Rule EA 6

- 19



## 6.4 Unfunded Mandates Reform Act (UMRA)

Title II of the Unfunded Mandates Reform Act of 1995, Pub. L. 104

- 4, establishes

requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and

Tribal governments, and the private sector. Under section 202 of the UMRA, EPA generally must

prepare a written statement, including a cost

- benefit analysis, for proposed and final rules with “Federal

mandates” that might result in expenditures by State, local, and Tribal government s, in the aggregate, or

by the private sector, of $100 million or more (when adjusted annually for inflation) in any one year. The

proposed rule is not expected to affect state, local, or Tribal governments because the proposed rule

affects entities that manufacture, import, or sell composite wood products, and government entities are

not engaged in these activities.TSCA Title VI Proposed Implementation Rule EA 6

- 20



## 6.5 Executive Order 13132

- Federalism

Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), directs federal

agencies to c onsider whether a rule has federalism implications (i.e. whether it has substantial direct

effects on the states, on the relationship between the national government and the states, or on the

distribution of power and responsibilities among the various lev els of government, as specified in

Executive Order 13132).

The proposed rule does not have any direct effects on states or local governments (individually or

collectively), on the relationship between the national government and the states, or on the dis tribution of

power and responsibilities among the various levels of government. No state or local governments are

expected to engage in the import, manufacture, or sale of composite wood products, and thus state and

local governments will not incur direct compliance costs as a result of the rule. The rule does not preempt

state or local law, and the rule is required by statute.TSCA Title VI Proposed Implementation Rule EA 6

- 21



## 6.6 Executive Order 13175

- Tribal Implications

Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Gov ernments

(59 FR 22951, November 6, 2000), directs federal agencies to consider whether a rule has tribal

implications (i.e. whether it has substantial direct effects on tribal governments, on the relationship

between the Federal government and the Indian t ribes, or on the distribution of power and responsibilities

between the Federal government and Indian tribes). No tribal government is expected to engage in the

import, manufacture, or sale of composite wood products, and thus tribal governments will not i ncur
direct compliance costs as a result of the rule. The rule does not change the relationship between the

Federal government and Indian tribes, or change the distribution of power.TSCA Title VI Proposed Implementation Rule EA 6

- 22



## 6.7 Executive Order 13045

- Protection of Children

Under Executive Order 13045, a regulation must be reviewed if the regulatory action is

economically significant and concerns an environmental health risk or safety risk that may

disproportionately affect children. This proposed rule is not economically significant, but EPA has

nevertheless evaluated the environmental health effects of formaldehyde emissions from composite wood

products on children. The economic analysis only monetizes the potential benefits associated with

avoided cases of nasopharyngeal cancer and eye irritat ion, some of which clearly would accrue to

children. However, as indicated above, some studies have reported associations between elevated levels

of formaldehyde levels and other health endpoints, such as respiratory symptoms. To the extent that the

redu ctions reported in this rule would lead to reduced respiratory symptoms in children, the monetized

estimate for cancer alone is likely an underestimate. As shown in Table 6

- 12 , c hildren under the age of

two represent 3 percent of the individuals affected by the rule and are estimated to accrue between 3 and

10 percent of the proposed rule’s total quantified benefits. Children aged two through fifteen represent 20

percent of the individuals affected by the rule and are estimated to accrue about 16 to 22 percent of the

pr oposed rule’s total quantified benefits. Given these results, EPA has determined that this proposed rule

will not have disproportionally high and adverse human health or environmental effects on children.

These proposed standards would reduce emissions of formaldehyde from composite wood products for

individuals of all ages that are exposed and children are likely to acc rue similar or higher benefits from

the exposure reductions compared to adults.

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

Low er Estimate

(millions 2010$) Total Quantified

Benefits

High er Estimate

(millions 2010$) Total Quantified

Benefits

Low er Estimate

(% of total

affected

population) Total Quantified

Benefits

High er Estimate

(% of total

affected

population)

All Individuals 106,057 100.00% $20.22 $47.63 100.00% 100.00%

Children ages 0

- 1 3,309 3.12% $0.47 $4.79 2.35% 10.06%

Children ages 2

- 15 21,312 20.10% $3.16 $10.57 15.63% 22.19%TSCA Title VI Proposed Implementation Rule EA 6

- 23



## 6.8 Executive Order 13211

- Energy Effects

Executive Order 13211, entitled Actions Concerning Regulations that Significantly Affect Energy

Supply, Distribution, or Use (66 FR 28355, May 22, 2001), directs federal agencies to identify actions

that will have a significant adverse energy effect. Adverse effects are defined as:

 Reductions in crude oil supply in excess of 10,000 barrels per day;

 Reductions in fuel production in e xcess of 4,000 barrels per day;

 Reductions in coal production in excess of 5 million tons per year;

 Reductions in natural gas production in excess of 25 million mcf per year;

 Reductions in electricity production in excess of 1 billion kilowatt

- hours per year or in excess of

500 megawatts of installed capacity;

 Increases in energy use required by the regulatory action that exceed any of the thresholds above;

 Increases in the cost of energy production in excess of one percent;

 Increases in the cost of e nergy distribution in excess of one percent; or

 Other similarly adverse outcomes.

The regulations under consideration will not significantly reduce energy production nor significantly

increase energy costs.TSCA Title VI Proposed Implementation Rule EA 6

- 24



## 6.9 National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”),

Public Law No. 104

- 113 (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its

regulatory activities unless to do so would be inconsistent with ap plicable law or otherwise impractical.

Voluntary consensus standards are technical standards (e.g., materials specifications, test methods,

sampling procedures, and business practices) that are developed or adopted by voluntary consensus

standards bodies.

The proposed rule involves numerous technical standards, many of which EPA is directed to use

by TSCA Title VI. Technical standards identified in the statute include the two quarterly test methods,

ASTM E

- 1333

- 96 and ASTM D

- 6007

- 02, a quality control test method, ASTM D

- 5582

- 00, and various

standards that define specific composite wood products, such as ASTM D

- 5456

- 06 (Structural Composite

Lumber Products), ASTM D

- 5055

- 05 (Prefabricated Wood I

- Joists), ANSI A190.1 (Structural Glued

Laminated Timber), ANSI/HPVA HP

– 1

– 2009 (Hardwood and Decorative Plywood), ANSI A208.2

– 2

2009 (Medium Density Fiberboard), ANSI A208.1

– 2009 (Particleboard), PS

- 1

- 07 (Structural Plywood),

and PS

- 2

- 04 (Wood

- Based Structural

- Use Panels).

The proposed rule also incorporates other voluntary consensus standards that EPA has identified,

including the standards that define hardboard (ANSI A135.4, ANSI A135.5, and ANSI A135.6) and three

alternative quality control test methods: EN 717

- 2 (gas analysis), EN 120 (perforator), and JIS A 1460

(24

- hour desiccator).TSCA Title VI Proposed Implementation Rule EA R

- 1



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- 4



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- 6



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.TSCA Title VI Proposed Implementation Rule EA R

- 7



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Property Owners , Joint Center for Housing Studies, Harvard University.TSCA Title VI Proposed Implementation Rule EA A

- 1



## Appendix A: Product Lines Assumed to Include Composite Wood Products

Table A

- 1 and Table A

- 2 present the product lines that are assumed to contain composite wood

products. Census data on the number of firms that sell these product lines was used to estimate the

number of retail and wholesale firms affected by the rule’s requirements.

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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 2



### 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 YesTSCA Title VI Proposed Implementation Rule EA A

- 3



### 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, including 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 4



### 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. DetailedTSCA Title VI Proposed Implementation Rule EA A

- 5



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 6



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 7



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 8



### 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, excluding 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 9



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 10



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 11



### 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 valves, 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 12



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 13



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 14



### 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 DetailedTSCA Title VI Proposed Implementation Rule EA A

- 15



### 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