*** EO 12866 Review Draft – Deliberative – Do Not Cite, Quote or Release During Review ***

Economic Analysis for the TSCA Section 8(a) 

Proposed Reporting Requirements for Certain 

Chemical Substances as Nanoscale Materials

RIN 2070–AJ54

DRAFT

September 26, 2014

EO12866_Nano Section 8(a) _NPRM_EA_9-26-14.docx

-- Does not contain TSCA CBI --

Prepared by

Economic and Policy Analysis Branch

Economics, Exposure and Technology Division

Office of Pollution, Prevention, and Toxics

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue

Washington, DC 20460
*** EO 12866 Review Draft – Deliberative – Do Not Cite, Quote or Release During Review ***

This Page Intentionally Left Blank
Contributors

The EPA analysts responsible for this report are Kristen Loughery and Lynne Blake-Hedges of 

the Economic and Policy Analysis Branch; Economics, Exposure and Technology Division; 

Office of Pollution Prevention and Toxics. Analytical and draft preparation support was provided 

by Abt Associates, Inc. under EPA Contract No. EP-W-08-010.
i

Table of Contents

Table of Contents......................................................................................................................................... i

Table of Figures..........................................................................................................................................iii

Executive Summary................................................................................................................................... iv

Chapter 1 – Introduction.........................................................................................................................1-1

1.1 Statutory Authority .......................................................................................................................1-1

1.2 Regulatory and Programmatic Background..................................................................................1-1

1.3 Statement of Need.........................................................................................................................1-3

1.4 Summary of Methodology ............................................................................................................1-4

1.5 Organization of This Report .........................................................................................................1-5

Chapter 2 – Affected Entities..................................................................................................................2-1

2.1 Chemical Substances Subject to this Rule ....................................................................................2-1

2.2 The Regulated Community...........................................................................................................2-1

2.3 Estimated Number of Large (non-Small) and Small Business .....................................................2-4

2.4 Estimated Number of Nanomaterials per Company .....................................................................2-6

Chapter 3 – Industry Compliance Costs................................................................................................3-1

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

3.2 Wage Rates...................................................................................................................................3-1

3.3 Unit Industry Compliance Costs...................................................................................................3-1

3.4 Discounting Methods....................................................................................................................3-7

3.5 Total Industry Compliance Costs..................................................................................................3-8

Chapter 4 – Agency Costs .......................................................................................................................4-1

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

4.2 EPA Costs.....................................................................................................................................4-1

Chapter 5 – Total Social Costs and Sensitivity Analyses......................................................................5-1

Chapter 6 - Sensitivity Analyses.............................................................................................................6-1

6.1 Annual Industry Growth Rate.......................................................................................................6-1

6.2 Number of Nanomaterials per Firm..............................................................................................6-6

6.3 Annual Nanomaterials Growth Rate...........................................................................................6-12

6.4 Summary of all Analyses............................................................................................................6-17

Chapter 7 – Benefits.................................................................................................................................7-1

7.1 Market Failure...............................................................................................................................7-1

7.2 Benefits of Information-Based Policies........................................................................................7-1

7.3 Potential Users of Information Generated by the Proposed Rule .................................................7-3

Chapter 8 – Small Entity Impact Analysis ............................................................................................8-1

8.1 Select a Relevant Small Business Definition................................................................................8-1

8.2 Identify the Small Business Population ........................................................................................8-2

8.3 Estimate the Cost-to-Sales Ratio for Small Companies................................................................8-4

Chapter 9 – Other Impact Analyses.......................................................................................................9-1

9.1 Paperwork Reduction Act (PRA)..................................................................................................9-1

9.2 Unfunded Mandates Reform Act (UMRA) ..................................................................................9-1

9.3 Executive Order 13132 – Federalism............................................................................................9-2

9.4 Executive Order 13175 – Consultation and Coordination with Indian Tribal Governments........9-2

9.5 Executive Order 13045 – Children’s Health.................................................................................9-2

9.6 Executive Order 12898 – Environmental Justice..........................................................................9-2

9.7 Executive Order 13211 – Energy Supply, Distribution, or Use....................................................9-3

9.8 National Technology Transfer and Advancement Act..................................................................9-3
ii

Appendix A – Wage Rate Calculations...............................................................................................A-1

A.1 Derivation of Industry Unit Wage Rates......................................................................................A-1

A.2 Derivation of Agency Unit Wage Rates ......................................................................................A-2

Appendix B – Small Business Sensitivity Analysis.............................................................................B-1

B.1 Estimation of the number of nanomaterials per small Firm.........................................................B-1

B.2 Conclusions..................................................................................................................................B-2

Appendix C - References ......................................................................................................................C-1
iii

Table of Figures

Table 1-1: TSCA-authorized Reporting Requirements..............................................................................1-1

Table 2-1: Sample Small Business and Large Business Characteristics....................................................2-5

Table 2-2: Estimated Universe Small Business and Large Businesses......................................................2-5

Table 2-3: Estimated Nanomaterials per Firm, with R&D Exclusion .......................................................2-7

Table 3-1: Loaded Industry Wage Rates, 2013$........................................................................................3-1

Table 3-2: Industry One-Time Cost Estimate to Familiarize with the Rule (2013$) (per Firm) ...............3-2

Table 3-3: Industry Burden Estimate to Complete the Proposed Form (per Report).................................3-3

Table 3-4: Industry Cost Estimate to Complete the Proposed Form (2013$) (Per Report).......................3-3

Table 3-5: Industry Burden and Cost of Electronic Reporting Requirements...........................................3-6

Table 3-6: Industry Burden and Cost of Electronic Reporting Requirements (Subsequent Years, per Firm) 

(2013$) ................................................................................................................................................3-6

Table 3-7: Industry Cost Estimate to Maintain Records (2013$) (per Report)..........................................3-7

Table 3-8: Total Annual Industry Burden Hours.......................................................................................3-8

Table 3-9: Total Annualized Industry Costs............................................................................................3-10

Table 4-1: Estimate of Agency Hours for the Proposed Rule....................................................................4-1

Table 4-2: Agency Cost and Burden Hour Estimate for the Proposed Rule..............................................4-2

Table 5-1: Total Social Burden and Cost of the Proposed Rule ................................................................5-1

Table 6-1: Estimated Number of Reports (Increased Annual Growth Rate Scenario) ..............................6-1

Table 6-2: Total Annual Industry Labor Burden (Increased Annual Growth Rate Scenario) ...................6-3

Table 6-3: Annual Industry Labor Costs (Increased Annual Growth Rate Scenario)................................6-4

Table 6-4: Agency Cost Estimate for the Proposed Rule (Increased Annual Growth Rate Scenario) ......6-5

Table 6-5: Total Social Costs for the Proposed Rule (Increased Annual Growth Rate Scenario).............6-5

Table 6-6: Estimated High- and Low-End Estimated Number of Commercially Relevant Nanomaterials 

per Firm...............................................................................................................................................6-6

Table 6-7: Total Annual Industry Burden Hours (Low-and High-End Nanomaterials Estimates Scenario)

.............................................................................................................................................................6-8

Table 6-8 : Annual Industry Labor Costs (Low-and High-End Nanomaterials Estimates Scenario)........6-9

Table 6-9: Agency Cost Estimate for the Proposed Rule (Low-and High-End Nanomaterials Estimates 

Scenario)............................................................................................................................................6-10

Table 6-10: Total Social Costs for the Proposed Rule.............................................................................6-11

Table 6-11: Total Industry Burden Hours (Increased Nanomaterials Growth Scenario).........................6-13

Table 6-12: Annual Industry Labor Costs (Increased Nanomaterials Growth Scenario) ........................6-14

Table 6-13: Agency Cost Estimate for the Proposed Rule (Increased Nanomaterials Growth Scenario)6-15

Table 6-14: Total Social Costs for the Proposed Rule.............................................................................6-16

Table 6-15: Comparison of Annualized Costs of Sensitivity Analysis (Millions 2013$)........................6-17

Table 8-1: Sample Small Business and Large Business Characteristics....................................................8-3

Table 8-2: Universe Small Business and Large Business Estimates .........................................................8-4

Table 8-3: Characterization of Economic Impacts.....................................................................................8-4

Table 8-4: Estimate of Impacts on Small Business Sample.......................................................................8-5

Table 9-1: Industry Burden Estimates for the Proposed Rule....................................................................9-1

Exhibit A-1: Detail of Labor Categories Used in the Analysis.................................................................A-1

Exhibit A-2: Derivation of Loaded Industry Wage Rates.........................................................................A-2

Exhibit A-3: Derivation of Loaded Agency Wage Rates..........................................................................A-3

Exhibit B-1: Number of Nanomaterials per Company after the R&D Exclusion.....................................B-1
iv

Executive Summary

This economic analysis estimates and evaluates the costs and benefits of collecting information for 

nanomaterials through a rule proposed by the U.S. Environmental Protection Agency (EPA), under the 

authority granted by Section 8(a) of the Toxic Substances Control Act (TSCA). The proposed rule would

require that persons who currently manufacture (including import), or process certain nanoscale materials 

(alternately described as “nanomaterials companies” and “nanomaterials firms” in this report), and/or 

persons who begin to manufacture, (including import), or process nanomaterials (as defined by the 

proposed rule) after the effective date of this rule, to electronically report to EPA certain information

including specific chemical identity, production volume, methods of manufacture and processing, use, 

exposure and release information, and available health and safety data. 

The proposed rule builds on a history of Federal and international oversight of nanotechnology. EPA has 

developed a Nanomaterial Research Strategy (NRS) and previously conducted a Nanoscale Materials 

Stewardship Program (NMSP) to collect information on nanomaterials in commerce (both discussed in 

Chapter 1). Other Federal agencies have also collaborated to better understand the opportunities and risks 

posed by nanotechnology, as have members of the Organisation for Economic Co-operation and

Development (OECD).

EPA conservatively estimates that there are approximately 800 U.S. nanomaterials manufacturers, and 

processors subject to TSCA (see Chapter 2). Around 500 firms (nearly 65 percent of firms) are estimated 

to be small businesses with less than $4 million in revenue, and these firms are exempt from the reporting 

requirements of the proposed rule. Each of the remaining 300 firms is expected to report on 

approximately five commercially-relevant nanomaterials in the first year of the rule. While this analysis 

assumes that the universe of nanomaterials firms remains constant over the 10-year analysis period, the 

total number of regulated nanomaterials is assumed to double.

Under the proposed rule, industry is conservatively estimated to incur a burden of approximately 206,098 

hours in the first year and 22,755 hours in subsequent years, with costs of approximately $13.9 million 

and $1.5 million, respectively (see Chapter 3), while the Agency is expected to use approximately 6,539 

hours in the first year and 723 hours in subsequent years, with costs of approximately $0.51 million and 

$0.06 million respectively (see Chapter 4). Discounted over a 10-year period at three and seven percent,

total annualized costs are estimated to be approximately $2.80 million and $3.08 million, respectively.

As required by the Regulatory Flexibility Act of 1980 and the Small Business Regulatory Enforcement 

Fairness Act of 1996, a small entity impact analysis conducted in Chapter 8 is based on small business 

definitions provided by the U.S. Small Business Administration (SBA). EPA found that the costs of the 

proposed rule did not exceed 1 percent of the value of sales for any of the small businesses evaluated.

The rule is expected to provide benefits to EPA and the public. Increased and improved data on the 

production, sale, and use of nanomaterials in the U.S. will allow EPA to more effectively determine 

whether additional risk assessment and management measures are needed. This information will lead to 

reduced cost of risk-based decision making and improved decisions concerning nanomaterials. These 

benefits are discussed qualitatively in Chapter 7 of this report.
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Chapter 1 – Introduction

This report estimates and evaluates the costs and benefits expected to result from an information 

collection rule for nanoscale material manufacturers and processors proposed by the U.S. Environmental 

Protection Agency (EPA) under the authority granted by Section 8(a) of the Toxic Substances Control 

Act (TSCA). The proposed rule would require that persons who currently manufacture (including import), 

or process certain nanoscale materials (alternately described as “nanomaterials companies” and 

“nanomaterials firms” in this report), and/or persons who begin to manufacture (including import), or 

process nanomaterials (as defined by the proposed rule) after the effective date of this rule, to 

electronically report to EPA certain information, described in detail below. Section 1.1 provides 

background information on EPA’s statutory authority for the proposed rule; Section 1.2 reviews the 

regulatory background; Section 1.3 discusses the need for the regulation; Section 1.4 presents a brief 

summary of the methodology used in the analysis; and Section 1.5 describes the organization of the 

remainder of this report.

1.1 Statutory Authority

Under Section 8(a) of TSCA, EPA has statutory authority to impose information reporting and 

recordkeeping requirements on manufacturers and processors of chemical substances used in commerce. 

Insofar as the information is known, or readily available, EPA may issue an information collection rule 

requiring the following items:

Table 1-1: TSCA-authorized Reporting Requirements

Reporting Elements

(A) The common or trade name, the chemical identity, and the molecular structure of each chemical 

substance or mixture for which such a report is required. 

(B) The categories or proposed categories of use of each such substance or mixture. 

(C) The total amount of each such substance and mixture manufactured or processed, or reasonable 

estimates of the total amount to be manufactured or processed. 

(D) A description of the byproducts resulting from the manufacture, processing, use, or disposal of 

each such substance or mixture. 

(E) All existing data concerning the environmental and health effects of such substance or mixture. 

(F) The number of individuals exposed, and reasonable estimates of the number who will be 

exposed, to such substance or mixture in their places of employment and the duration of such 

exposure. 

(G) In the initial report under paragraph (1) on such substance or mixture, the manner or method of 

its disposal, and in any subsequent report on such substance or mixture, any change in such 

manner or method.

Source: TSCA Section 8(a), Paragraph (2), Subparagraphs (A) through (G)

1.2 Regulatory and Programmatic Background

Nanoscale materials, alternately referred to in this report as nanomaterials, constitute a unique class of 

chemicals. Nanomaterials are chemical substances organized in structures with dimensions measuring 

from 1 to 100 nanometers (nanoscale). Under the proposed rule, reporting would be required of certain 

solid chemical substances manufactured or processed in the range of 1 to 100 nanometers at ambient 

conditions.
1-2

Several regulatory and programmatic activities precede or coincide with the proposed rule. These 

activities are briefly described in this section. The Nanoscale Materials Stewardship Program (NMSP), a 

voluntary information collection program for nanomaterials manufacturers, processors, and users 

established by EPA in January 2008, is described in Section 1.2.1. The broader EPA Nanomaterial 

Research Strategy (NRS) is described in Section 1.2.2. The government-wide National Nanotechnology 

Initiative (NNI) is described in Section 1.2.3. Sections 1.2.4 and 1.2.5 present two international programs 

to encourage global collaboration in nanotechnology regulation.

1.2.1 EPA Nanoscale Materials Stewardship Program (NMSP)1

On January 28, 2008, EPA formally instituted the Nanoscale Materials Stewardship Program (NMSP). 

The NMSP was a voluntary information collection program to assemble data from manufacturers, 

importers, and processors, and users of industrial nanomaterials subject to TSCA. In addition to industry 

and commercial organizations, researchers were also invited to participate in the NMSP (EPA, 2007). By 

the end of the program, 31 companies and associations had responded under the Basic program, 

submitting information on 132 nanomaterials (EPA, 2009d).

According to the NMSP Interim Report (EPA, 2009b), the program has “considerably increased [EPA’s] 

understanding of the types of nanoscale materials in commerce.” Submissions typically provided physical 

and chemical properties, commercial uses, manufacturing processes, and risk management practices; 

however, very few submissions provided data on exposure and toxicity. Overall, EPA considers the

NMSP a success for having informed EPA’s regulatory understanding of nanomaterials; however, a 

significant number of the environmental health and safety data gaps remain.

1.2.2 EPA Nanomaterial Research Strategy (NRS)

The Nanomaterial Research Strategy (NRS) is a document released by the EPA Office of Research and 

Development (ORD) on September 29, 2009 describing EPA’s strategy for conducting and supporting 

research to understand the environmental health and safety implications of exposure to manufactured 

nanomaterials and the ways in which nanotechnology can be used in environmental protection 

applications (EPA, 2009c). The document has three main purposes: (1) to guide EPA researchers and 

managers as they conduct EPA’s research program; (2) to assist scientists in other organizations as they 

plan their own research programs; and (3) to inform the public of how EPA intends to generate scientific 

information to guide environmental decisions related to nanomaterials (EPA, 2009c).

The NRS focuses on developing scientific information for nanomaterial decision support. EPA has 

focused the NRS on four areas to take advantage of its scientific expertise as well as fill the gaps of 

information not addressed by other organizations. The four research themes are:

 Sources, Fate, Transport, and Exposure

 Human Health and Ecological Research to Inform Risk Assessment and Test Methods

 Risk Assessment Methods and Case Studies

 Preventing and Managing Risks

The NRS is the guiding document for the EPA Nanotechnology Research Program. EPA plans to 

collaborate across government, industry, and the international community to implement this strategy 

(EPA, 2009c).

 

1 The NMSP Information Collection Request (ICR) (EPA, 2007) and Interim Report (EPA, 2009b) are referenced 

throughout this report, where applicable.
1-3

1.2.3 U.S. National Nanotechnology Initiative (NNI)

The 21st Century Nanotechnology Research and Development Act of 2003 resulted in the implementation 

of the National Nanotechnology Initiative (NNI). The NNI created a framework for a comprehensive 

nanotechnology R&D program by establishing shared goals, priorities, and strategies. The NNI consists 

of individual and cooperative nanotechnology-related activities of 25 federal agencies with a range of 

research and regulatory roles and responsibilities. EPA coordinates its nanotechnology research activities 

with other federal agencies through the NNI (EPA, 2009b).

1.2.4 OECD Working Party on Manufactured Nanomaterials (WPMN)

In 2006, the Organisation for Economic Co-operation and Development (OECD) Chemicals Committee 

established its Working Party on Manufactured Nanomaterials (WPMN). The objective of the WPMN is 

to promote international cooperation in human health and environmental safety-related aspects of 

manufactured nanomaterials. The WPMN is engaged in a variety of projects to further the understanding 

of the properties and potential risks of nanomaterials (EPA, 2009b).

1.2.5 International Organization for Standardization (ISO) Technical Committee 229

The International Organization for Standardization (ISO) has established a technical committee to 

develop international standards for nanotechnology. This technical committee, ISO/TC229, is working to 

develop standards for terminology and nomenclature, metrology and instrumentation, including 

specifications for reference materials, test methodologies, modeling and simulation, and science-based 

health, safety and environmental practices (EPA, 2009b).

1.3 Statement of Need

Executive Order 12866 requires regulatory Agencies to identify the specific market failure that a 

significant rule addresses. The major causes of market failure identified in the Office of Management and 

Budget (OMB) guidance (OMB, 2003) on Executive Order 12866 are externality, natural monopoly, 

market power, and inadequate or asymmetric information. The proposed rule is designed to address the 

issue of inadequate information about nanomaterial manufacture and use in commerce and, to the extent 

that new information indicates the presence of negative externalities, inform future rulemaking and/or 

legislation governing the manufacture, processing, and use of nanomaterials.

1.3.1 Inadequate Information

Economic theory requires that buyers and sellers have complete information about the costs and benefits 

of their economic choices to produce an efficient allocation of resources. When buyers or sellers do not 

have perfect information, rational decision making cannot occur and a market failure exists. As an 

example, a producer may not consider substituting a less hazardous chemical for a hazardous chemical if 

knowledge about either chemical’s hazard is unknown or uncertain. More complete information on the 

hazards associated with the chemical will allow a producer to make more socially efficient decisions.

There are many reasons why information regarding the hazards associated with a chemical substance may 

not be widely known. Two of these reasons are:

 Producers may know this information but have no incentive to act on it or reveal it to their 

customers (because the costs are not borne by, and are therefore external to, the producer).

 This information may be unknown to both the producers and their customers.

The first of these reasons is known as asymmetric information; that is, a case in which consumers and 

producers do not have the same level of information regarding the aggregate production, uses, and 
1-4

hazards of a chemical substance. Typically, the producers’ level of information regarding these items, 

particularly hazards, exceeds the consumers’ level of information.

In the second case, chemical production, use, and hazard information is inadequate and/or unavailable 

(i.e., unknown to both consumers and producers). Producers may have little incentive to acquire such 

information due to the potential costs associated with its acquisition. Information is by nature a public 

good; that is, non-rival (one person’s use of information does not diminish the amount remaining for other 

users) and non-excludable (once made available, information cannot be easily withheld from others). 

Thus, where information is provided by one person, others are free to use and benefit from that 

information without having made a contribution to its development. This situation reduces the incentive 

to provide the information, resulting in a failure of the market to efficiently provide the information. In 

addition, individual consumers are unlikely to be willing to pay the cost of collecting and reporting 

information if they can use information developed and paid for by others.

1.3.2 Externalities

Externalities are another cause of market failure. An externality occurs when the actions of one economic 

agent impose costs (or benefits) on parties that are “external” to the market transaction; that is, these costs 

(or benefits) are not borne by the producers or consumers directly involved. Such is the case where 

manufacturing or other business activities harm human health or the environment in excess of the costs 

borne by the parties to this activity, resulting in negative externalities. When information is missing about 

the human health and environmental costs to society, or when these costs are external to producers’ 

decision making, the costs are not incorporated into business decisions. The result can be the overuse 

and/or overproduction of certain harmful products.

EPA often intervenes when negative externalities pose risks to human health and the environment. For 

example, risks may arise as a result of chemical exposure to the general population from the manufacture, 

processing, and use of chemicals. As a first step in mitigating externalities, the EPA Office of Pollution 

Prevention and Toxics (OPPT) routinely screens chemicals for the potential risks they may pose. This 

screening is used to determine if risks from the manufacture, processing, or use of chemicals are of 

sufficient concern to warrant risk management. Given that EPA’s TSCA Inventory recognizes more than 

75,000 chemicals in commerce, chemical risk screening represents a significant effort. Risk is a function 

of hazard and exposure and when information on either is lacking, EPA’s ability to effectively identify 

significant risks arising from externalities is compromised.

1.3.3 Effect of the Proposed Rule

The proposed rule will address market failure due to inadequate information by ensuring that basic 

information about the production, use, and environmental health and safety impacts of manufactured 

nanomaterials is available to the public. This information can be used by consumers, producers, the public 

sector, and others to make more informed decisions regarding the production, sale, and use of 

nanomaterials. The information may also be used to resolve externalities. To the extent that the provision 

of this information induces the producers to account for external social costs, either due to fear of 

litigation or due to the benefits of corporate stewardship, increased availability of information will 

address the negative externalities generated by producing or using these chemicals.

1.4 Summary of Methodology

This analysis seeks to quantify, to the extent possible, the costs to society of the proposed rule by 

identifying the costs to industry (and to small entities, in particular) associated with performing the 

required reporting and recordkeeping, and the costs to EPA of administering the rule. Industry costs 

consist of the collection, compilation, and submission of required information for the nanomaterials 
1-5

handled by each reporting firm. Agency costs include reviewing and processing the data received as a 

result of the rule. Small entity impact is defined as a small business’ estimated cost of compliance with 

the proposed rule as a percent of sales. Data sources for this analysis include burden estimates derived 

from information collection requests for similar regulations, compensation data acquired from 

government publications, and supplementary market research to produce an estimate of the universe of 

affected entities. EPA believes the inputs for this analysis (e.g., estimated size of universe) are 

conservative and that the final burden and cost estimates are therefore conservative (i.e., the total cost of 

the proposed rule may be overestimated).

This report qualitatively discusses the benefits of the proposed rule based on the value of the information 

it will provide. The benefits analysis was undertaken to address the implicit call for cost-benefit balancing 

contained in TSCA, as well as the requirements of Executive Order 12866.

1.5 Organization of This Report

The remainder of this report provides EPA’s economic analysis in support of the proposed rule. The 

affected chemical substances and companies are characterized in Chapter 2. Chapter 3 estimates industry 

cost of complying with the proposed rule, and Chapter 4 estimates government costs associated with the 

administration of the proposed rule. Chapter 5 presents the total social costs. Chapter 7 addresses the 

benefits of the proposed rule using a “value of information” framework. Chapter 8 provides the small 

entity impact analysis for the proposed rule, as mandated by the Regulatory Flexibility Act (RFA), and 

amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). Several additional 

impact analyses are presented in Chapter 9, including: a burden hour analysis, which responds to the 

requirements of the Paperwork Reduction Act (PRA); an unfunded mandates statement, which is required 

by the Unfunded Mandates Reform Act (UMRA); an environmental justice statement, which addresses 

the requirements of Executive Order 12898; and a children’s health statement, which is mandated by 

Executive Order 13045. Note that all dollar amounts in this analysis are reported in 2013 dollars.
2-1

Chapter 2 – Affected Entities

This chapter presents information about the manufacturers, production, and uses of nanomaterials subject 

to the proposed rule. Section 2.1 provides a definition of nanoscale materials affected by the rule; Section 

2.2 describes and estimates the population of affected organizations; Section 2.3 divides the population 

estimate into large (non-small) and small businesses subpopulations; and Section 2.4 estimates the 

number of nanomaterials handled by each reporting firm subject to TSCA.

2.1 Chemical Substances Subject to this Rule

The proposed rule requires the reporting and maintenance of records concerning chemical substances as 

nanoscale materials. For the purposes of the rule, reporting is required for nanoscale materials where at 

least 10 percent of the primary particles, aggregates, or agglomerates are manufactured or processed in 

the size range of 1 to 100 nm. Reporting is also required if the chemical substance has different 

morphology or is coated with different chemical substances.

Nanomaterials of a single molecular identity may vary both in the number of dimensions at nanoscale and 

the measurements in each dimension. For example, silver nanomaterials are available as nanoparticles 

(i.e., nanoscale in three dimensions) as well as nanorods (i.e., nanoscale in two dimensions). Silver 

nanoparticles and nanorods are also available in dozens of different particle sizes and diameters, 

respectively. Each of these configurations constitutes a distinct physical form. In addition, nanomaterials 

with different shapes, morphology, or coatings are also required to be reported. 

The rule would not require manufacturers or processors to report information that has already been 

submitted to EPA. The reporting requirements of this proposed rule would not apply to any person for a 

nanoscale material submitted as a new chemical notice under section 5 of TSCA to EPA since January 1, 

2005. In addition, any person who has already reported part of or all of the required information under the 

Nanoscale Materials Stewardship Program would not need to report that information again. If, however, 

information required by this proposed rule had not been reported or new information is now available 

reporting of that information would be required. 

2.2 The Regulated Community

As previously noted, the proposed rule affects firms manufacturing and/or processing chemical 

substances at the nanoscale. The rule applies to organizations operating in the U.S. and thus under EPA’s 

jurisdiction. Only those organizations handling nanomaterials with TSCA-covered applications are 

subject to the rule.2

The NMSP ICR (EPA, 2007) estimated that at the time of its publication, the population of organizations 

involved in the manufacture or application of nanomaterials was approximately 600, based on an estimate 

of the size of the global nanotechnology industry from the National Science Foundation (NSF) (Roco, 

2005). Due to the age of these data and their limitations, this report provides updated estimates of the 

number of U.S.-based nanomaterials manufacturers, processors, and distributors and the relative size of 

these firms.

 

2 Not all of the nanoscale materials manufactured, imported, or used by these firms will constitute “chemical 

substances” according to the TSCA definition. TSCA applies to chemical substances exclusive of the following in 

the circumstances specified in TSCA section 3: pesticides, tobacco and tobacco products; nuclear materials, firearms 

and ammunition; food and food additives; drugs and medical devices; and cosmetics.
2-2

Three sources were used to estimate the number of U.S.-based nanomaterials firms and to construct a 

sample of firms used to estimate both the number of large and small businesses and the number of 

nanomaterials supplied by each firm. The sources are:

 Lux Research: Nanotech ReportTM, 5th ed. (2007)

 BCC Research: Nanotechnology: A Realistic Market Assessment (2008)

 Nanowerk: Company & Labs Directory (2009)

These sources are described in more detail in the sections below.

2.2.1 Lux Research Nanotech ReportTM

The Lux Research Nanotech ReportTM (Lux Research, 2007) is a market research report covering the field 

of nanotechnology. The Nanotech Report describes four categories of products: nanomaterials, 

nanointermediates, nano-enabled products, and nanotools. For each product in these categories, the 

Nanotech Report provides properties, fabrication methods, key applications, environmental/health/safety 

concerns, and general market descriptors such as market size, market drivers, and market challenges. For 

select products, it also shares major market players and patents. The report suggests that there are over 

1,500 nanotechnology companies worldwide but does not provide details regarding estimation methods.

The Nanotech Report also profiles 121 nanotechnology companies worldwide. Eighty-four of these 

companies (69.42 percent) are based in the U.S., and of these U.S. companies, 31 companies (36.90 

percent) are involved in the manufacture of nanomaterials.

Lux describes its sample of 121 nanotechnology companies as “a representative sample of companies 

across regions, sectors, and company types.” As such, multiplying the base estimate of nanotechnology 

companies worldwide (1,500) by the percent of the sample that are based in the U.S. (69.42 percent) and 

by the percent of sampled U.S. companies that are nanomaterials manufacturers (36.90 percent) produces 

an estimate of 384 nanomaterials manufacturers in the U.S.

This universe estimate is limited for several reasons. Lux Research does not describe the methodology 

used to arrive at the estimate of 1,500 nanotechnology companies worldwide, nor does it describe 

sampling methods that would verify the representativeness of the sample. Further, Lux acknowledges that 

the sample in its report includes the best known companies by design, but it does not specify any other 

selection criteria. EPA believes the slightly larger worldwide population estimate derived from the BCC 

Research Nanotechnology Report (described in the following section) is a more reliable estimate for the 

purposes of this analysis. EPA also recognizes the inherent limitations of the Lux sample; however, given 

the report’s description of its sample, EPA assumes the sample to be representative of the universe of U.S. 

nanomaterials manufacturers.

2.2.2 BCC Research Nanotechnology Report

The BCC Research report Nanotechnology: A Realistic Market Assessment (BCC Research, 2008) is also 

a market research report covering the field of nanotechnology. The report divides the nanotechnology 

market into three segments: nanomaterials, nanodevices, and nanotools. It then discusses the 

nanotechnology market’s size and structure, funding sources, and environmental, health, and safety 

concerns and regulation in general terms.

Due to the poorly defined and evolving nature of the nanotechnology market, the BCC report 

acknowledges that sizing the market is difficult, if not impossible. It suggests that estimates of the number 

of companies with “nanotechnology activities” worldwide can be as high as 1,600.
2-3

The report refers to a sample of 165 nanotechnology companies profiled by BCC Research and provides 

summary statistics of this sample; however, the report does not include the companies in the sample. Of 

the 165 companies in the sample, 112 companies (67.88 percent) are based in the U.S. Additionally, of 

the full 165 company sample, 125 companies (75.76 percent) are nanomaterials manufacturers. However, 

the report does not specify how many or what percent of the U.S. companies are specifically involved in 

the manufacture of nanomaterials. Combining the reported percentages yields an estimate of 85 

companies in the sample (51.42 percent of the sample) that are U.S. nanomaterials manufacturers.

Multiplying the estimated total number of nanotechnology companies worldwide (1,600) by the percent 

of the sample that are based in the U.S. (67.88 percent) and by the percent of the sample that are 

nanomaterials manufacturers (75.76 percent) suggests an estimated 823 U.S. nanomaterials firms. 

This estimate is potentially limited for two reasons. BCC Research does not describe the methodology 

used to arrive at the high-end estimate of 1,600 companies with “nanotechnology activities” worldwide, 

nor does it explain its method for selecting a subset of these nanotechnology companies to profile in its 

report. Thus, the set of profiled companies may not be a representative sample. EPA recognizes the 

inherent limitations of this sample; however, based on EPA best professional judgment, the Agency 

considers 823 companies to be a reasonable and conservative estimate of the number of U.S. 

nanomaterials firms for the purposes of this analysis3.

2.2.3 Nanowerk Company & Labs Directory

Nanowerk (Nanowerk, 2009) is an online resource for information on nanotechnology and nanoscience. 

The site provides an introduction to nanotechnology in layman’s terms, nanotechnology news coverage, 

general information about the nanotechnology market, and disclosure of the environmental, health, and 

safety concerns around nanotechnology. It also claims to maintain “the most extensive industry database” 

of nanomaterials suppliers in its Company & Labs Directory.

The Company & Labs Directory lists manufacturers and suppliers in five categories of nanomaterials: 

Carbon Nanotubes, Fullerenes, Fibers and Wires, Nanoparticles, and Quantum Dots. The database 

provides each company’s name, a brief description, and country of origin. According to aggregate 

statistics found on the website, the database contains 262 companies, 120 of which are identified in the 

listing as U.S. companies. Many of these companies manufacture several nanomaterials and are therefore 

listed in multiple nanomaterials categories.

The Nanowerk databases are compiled from publicly available information on nanotechnology 

manufacturers’ websites. According to Michael Berger of Nanowerk (Berger, 2009), the lists are regularly 

maintained and updated with new findings. Although it claims to be the most comprehensive source 

available, the Company & Labs Directory is a “best effort undertaking” rather than a comprehensive 

listing of all suppliers. Notably, the databases exclude companies not known to Nanowerk and companies 

without publicly listed information.

2.2.4 Conclusion: Regulated Community Population Estimate and Representative Sample

As noted above, EPA considers the 823 companies, estimated using BCC Research’s data, to be a 

reasonable and conservative estimate of the current number of U.S. nanomaterials firms for the purposes 

of this analysis. This estimate reflects probable growth in the population since EPA’s judgment in the 

NMSP ICR (EPA, 2007) that the population at that time was approximately 600 companies. Due to 

 

3 This estimate does not account for companies that may manufacture or process nanomaterials for use in producing 

other products in-house. As a result, this report may underestimate the number of nanomaterials firms subject to the 

rule.
2-4

uncertainty in predicting the future nanomaterials market, EPA assumes that the universe of U.S. 

nanomaterials firms remains constant over the analysis period; however, the number of nanomaterials 

handled by each reporting firm is assumed to double over the analysis period of 10 years (see section 2.4

for more details).

This analysis uses a sample of firms to estimate the percent of U.S. nanomaterials firms that are large or 

small businesses and to estimate the number of nanomaterials manufactured, processed, or sold by large 

and small businesses. To construct this sample, EPA compiled a list of the U.S. nanomaterials 

manufacturers profiled by Lux Research and Nanowerk.4 To avoid duplicates, the Agency considered 

companies found in both sources to be the same if they had identical or similar names and/or addresses. 

Based on this method, the sample includes 12 companies defined by Lux Research as nanomaterials 

firms, 101 companies defined by Nanowerk as nanomaterials firms, and an additional 19 companies 

defined by both Lux and Nanowerk as nanomaterials firms, for a total of 132 companies in the sample.

2.3 Estimated Number of Large (non-Small) and Small Business

The general exemptions to TSCA 8(a) reporting (as described within the statute itself) apply to the 

proposed rule, including exemptions for small businesses that eliminate the reporting and recordkeeping 

requirements under the rule. Under TSCA regulations, according to 40 CFR 704.3, a manufacturer of a 

chemical substance is defined as small if it meets either of the following criteria: (1) total annual sales of 

the company, combined with those of any parent company, are below $40 million and annual production 

volume (including importation volume) at each facility is less than or equal to 100,000 pounds; or (2) 

total annual sales of the company, combined with those of any parent company, are below $4 million. 

Based on EPA’s experience with NMSP and PMN submissions, a small business exemption that allows 

manufacturers not to report quantities of nanoscale materials up to 100,000 pounds would exclude a large 

proportion of potential reporting under the rule. For the purposes of this rule, EPA therefore proposes that 

the definition of “small business” be any company whose annual sales, when combined with that of a 

parent, are less than $4 million.

To estimate the number of small and large businesses in the population of U.S. nanomaterials firms, EPA 

matched the sample described above to the Dun & Bradstreet (D&B) corporate database to identify 

company and parent company sales, measured the percentage of companies defined as small and large 

within the sample, and applied these percentages to the population estimate. The specific procedures and 

results of the analysis are described in the following sections.

2.3.1 Search and Matching Procedure

EPA attempted to obtain sales data from the Dun & Bradstreet corporate database for the 132 companies 

in the sample described above, following a rigorous search and matching procedure. The procedure began 

with a basic search by company name for each company in the sample. Companies for which the initial 

search returned a single match were checked for a U.S. address and considered positively matched. 

Companies for which the initial search returned multiple matches were subsequently filtered by zip code. 

Companies not found in the D&B database were considered unmatched.

As noted above, the relevant small business definition for this rulemaking considers the sales of the parent 

company when classifying a subsidiary as a small business. Therefore, for the matched companies 

identified in the D&B database as subsidiaries of a parent company, the parent company’s sales were 

 

4 While the BCC Research report refers to and summarizes a sample of 165 nanotechnology companies profiled in 

supporting research, the report does not provide the specific companies in this sample.
2-5

recorded. For all other matched companies, the company’s sales were recorded. The complete D&B 

search and matching procedure is described in further detail in Chapter 8.

A total of 103 companies in the sample were found in the D&B database. Of these, 83 companies have no 

parent company, and 20 companies have a parent company; however, one of the parent companies was 

already a member of the sample, thus reducing the matched subset to 83 + 20 – 1 = 102 companies. An 

additional two companies were identified as joint ventures, and one company was verified closed. 

Twenty-six companies remained unmatched against the D&B database.

Annual sales data were obtained from the D&B database and internet-based searches for 95 of these 102 

companies. Using these data, the companies in this sample can be categorized as large or small businesses 

under the TSCA 8 definition of small business.

2.3.2 Results and Analysis

Of the 95 nanomaterials manufacturers and parent companies with observed annual sales, 61 companies 

(64.2 percent of this sample) meet the small business definition with less than $4 million in reported 

annual sales, and 34 companies (35.8 percent of this sample) do not meet the small business definition, 

having $4 million or more in reported annual sales. These results are provided in Table 2-1.

Table 2-1: Sample Small Business and Large Business 

Characteristics

Population Category Sales 

Threshold

Actual 

Number of 

Firms in 

Sample

Percent of 

Sample

Small Businesses < $4 

million 61 64.2%

Large Businesses ≥ $4 

million 34 35.8%

Total -- 95 100%

Source: D&B, 2009; Lux Research, 2007; Nanowerk, 2009.

Multiplying the percent of U.S.-based nanomaterials manufacturers that meet the small business 

definition (64.2 percent) by the previously estimated population of U.S.-based nanomaterials 

manufacturers (823 companies) yields an estimate of 528 small business nanomaterials firms and a 

complementary estimate of 295 large (non-small) business nanomaterials firms. 

Table 2-2: Estimated Universe Small Business and Large 

Businesses

Population 

Category Sales Threshold

Est. Number of 

Firms in 

Universe

Percent of 

Sample

Small Businesses < $4 million 528 64.2%

Large Businesses ≥ $4 million 295 35.8%

Total -- 823 100%

Source: BCC Research, 2006; D&B, 2009.

Based on these estimates, 295 firms are expected to submit chemical reports each year under the proposed 

rule. EPA assumes that the number of nanomaterials firms will remain constant over the next ten years. 

EPA has conducted an alternative analysis, presented in Section 6.1 that accounts for potential growth in 

the number of firms manufacturing nanomaterials.
2-6

2.4 Estimated Number of Nanomaterials per Company

In the NMSP ICR (EPA, 2007), EPA estimated that large businesses participating in the NMSP would 

submit information on two nanomaterial products. This section presents updated estimates of the number 

of nanomaterials per firm that will be subject to the proposed rule.

To estimate the number of nanomaterials per firm, EPA researched the 34 large businesses in the D&Bmatched sample (of 95 companies), compiled a list of nanomaterials supplied by each large business, 

excluded specific nanomaterials without TSCA uses, and calculated the median number of nanomaterials 

per firm. The specific procedures and results of the analysis are described below.

2.4.1 Nanomaterial Identification Procedure

The identification of the nanomaterials produced by each large business was performed by manual 

examination of online product offerings. This procedure captured both nanomaterials supplied for direct 

sale and nanomaterials supplied as a component in a larger product. The procedure only captured 

nanomaterials with verified TSCA uses, based on the industries and applications advertised on each 

manufacturer’s website5. The final count distinguishes nanomaterials by chemical and physical structure6, 

as well as size at the nanoscale. The count also distinguishes nanomaterials identified as distinct products 

by their manufacturers. As defined in this chapter, to qualify as a nanomaterial, at least 10 percent of a 

chemical substance has to exist in a form with two or more dimensions at the nanoscale.

Of the 34 large business nanomaterials firms identified, 26 had product information available on a 

company website. Of these, 23 firms manufactured nanomaterials for TSCA-related uses. The number of 

identified TSCA-related nanomaterials manufactured per firm varied widely, from one nanomaterial up to 

66 nanomaterials.

2.4.2 Results and Analysis

The median number of TSCA-related nanomaterials per large business in the reduced sample for this 

analysis (n = 23) is 13 nanomaterials. EPA considers 13 nanomaterials per reporting business to be a 

reliable estimate for the purposes of this analysis, as small businesses are exempt from the requirements 

of this rule. The proposed rule also exempts chemicals with strictly research and development (R&D) 

applications. The estimates presented in this section include chemicals for R&D applications, and 

estimates presented in the following section exclude them.

2.4.3 R&D Exclusion

The general exemptions to TSCA 8(a) reporting (as described within the statute itself) apply to the 

proposed rule including exemptions for chemicals with strictly research and development applications.

In the NMSP Interim Report (EPA, 2009b), EPA identified a total of 234 unique existing nanomaterials 

from various sources including the NMSP. Of these, 91 nanomaterials (38.89 percent) were found to be 

“commercially relevant,” defined as being commercially available in five or more forms such as unique 

 

5 Where product-level detail was available, screening occurred at the product-level; otherwise, screening occurred at 

the company level. Several nanomaterials with strictly medical and cosmetic uses were eliminated.

6 Examples of unique nanomaterial physical structures include, but are not limited to, nanoparticles, nanopowders, 

nanofibers, nanotubes, nanorods, fullerenes, and colloids.
2-7

sizes or chemical and physical structures. The remaining 143 nanomaterials (61.11 percent) were 

considered produced for research and development applications.

EPA therefore estimates a current average of 5.06 nanomaterials (38.89 percent of 13 nanomaterials) with 

commercial relevance per reporting business.7 As previously mentioned, the total number of 

nanomaterials subject to the proposed rule is assumed to double over the analysis period of 10 years. As a 

result, it is assumed that nanomaterials firms will report on approximately 0.56 additional nanomaterials 

per year8.

Table 2-3: Estimated Nanomaterials per Firm, with R&D Exclusion

Population 

Category

Nanomaterials 

per Firm

R&D 

Exclusion (%)

R&D 

Exclusion 

(#)

“Commercial” Nanomaterials per Firma

First Year Subsequent

Years

Reporting 

Businesses 13 61.11% 7.94 5.06 0.56

Notes:

a The total number of nanomaterials subject to the proposed rule is assumed to double over the analysis period of 

10 years. As a result, it is assumed that nanomaterials firms will report on approximately 0.56 additional

nanomaterials per year.

Source: D&B 2009; EPA, 2007; EPA, 2009b; Company websites.

 

7 This estimate is an average; therefore, while no individual company may produce, process, or sell a fraction of a 

nanomaterial, the aggregated population of producers may produce, on average, a fraction of a nanomaterial.

8 The first year, reporting will be on 5.06 nanomaterials. This number is estimated to double in years 2 through 10 

for a total of 10.12. Therefore, the annual increase in years 2 through 10 is calculated as 5.06/9= 0.56. 
3-1

Chapter 3 – Industry Compliance Costs

3.1 Introduction

This chapter presents estimates of the total costs that nanomaterial manufacturers and other entities may 

incur due to the requirements included in the proposed rule and discusses the method used to measure 

each. 

3.2 Wage Rates

The proposed rule involves activities that may require efforts by employees in three labor classifications: 

managerial, technical, and clerical. Costs for each activity are calculated by estimating the labor hours 

required in each labor category and multiplying those burdens by the wage rate for each labor category. 

This section presents the estimated wage rate in each labor category.

Loaded wage rates for managerial, technical, and clerical personnel are derived by combining data on 

wages and fringe benefits with estimates of overhead rates following the methodology described in 

“Wage Rates for Economic Analysis of the Toxics Release Inventory Program” (EPA, 2002b). Wage and 

fringe benefit data for each labor category are calculated using the December 2013 quarterly estimates 

from the Employer Costs for Employee Compensation (ECEC) Supplemental Tables available on the 

BLS website (BLS, 2014). The loaded wage rate for managerial labor is $77.82; for technical labor, 

$64.55; and for clerical labor, $30.35. Table 3-1 presents the basic data used to calculate the loaded wage 

rates for all three categories of labor, and Appendix A provides more detailed information on the 

estimation of these wage rates.

Table 3-1: Loaded Industry Wage Rates, 2013$

Labor Category Base 

Wagesa

Fringe Benefitsa + 

Overhead Factorb

Loaded 

Wages

Managerial $46.25 1.68 $77.82 

Professional/

Technical $38.16 1.69 $64.55 

Clerical $18.05 1.68 $30.35 

Notes:

a Wage rates and fringe benefits are calculated using the December 2013

quarterly estimates from BLS (2014).

b An overhead rate of 17% of base wages is used here, based on methodology 

and assumptions in EPA (2002a) and EPA (2002b).

Source: BLS, 2014.

3.3 Unit Industry Compliance Costs

3.3.1 Rule Familiarization

The proposed rule requires reporting businesses and their staff to become familiar with the 8(a) rule and 

its various requirements. Rule familiarization is estimated to require 0.55 hours of technical labor and 

0.27 hours of managerial labor. This burden is equivalent to the rule familiarization burden estimated in

the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (EPA, 

2009a), because the reporting requirements for the proposed information collection rule are similar to 

those required by a PMN form. Since this analysis assumes that no additional nanomaterials firms enter 

the market over the 10-year analysis period, rule familiarization costs are only incurred in the first year of 

the rule. As shown in Table 3-2, the labor cost associated with rule familiarization is $56.51.
3-2

Table 3-2: Industry One-Time Cost Estimate to Familiarize with the Rule (2013$) (per Firm)

Reporting Activity

Clerical Labor (at 

$30.35/hour)

Technical Labor (at 

$64.55/hour)

Managerial Labor 

(at $77.82/hour) Total Labor Cost

Burden Cost Burden Cost Burden Cost Burden Cost

Rule Familiarization 0 $0.00 0.55 $35.50 0.27 $21.01 0.82 $56.51

Source: BLS, 2014; EPA, 2009a.

3.3.2 Form Completion

The proposed rule requires reporters to gather and submit information consisting of all of the reporting 

elements found on the full NMSP reporting form. The reporting element burden estimates used here are 

taken from the NMSP ICR (EPA, 2007) with the exception of clerical burden. The burden estimates in the 

NMSP ICR assume that data elements are reported on a form whereas the proposed rule requires 

electronic reporting though CDX. The total per-report industry burden of the proposed rule is estimated to 

be 136.60 labor hours. This burden estimate is presented in Table 3-3 below.9

 

9 The burden estimates presented in Table 3-3 are derived from the NMSP ICR (EPA, 2007). While some reporting 

elements are expected to require a fixed, one-time burden (e.g., “Submitter information”), the estimates presented 

here are assumed to allocate the burden for these elements among multiple reports. For example, the cumulative 

burden incurred to gather “Submitter information” is assumed to be greater than 3.00 hours, but the burden allocated 

to a single report is estimated to be 3.00 hours.
3-3

Table 3-3: Industry Burden Estimate to Complete the Proposed Form (per Report)

Reporting Element Clerical 

Hours

Technical 

Hours

Managerial 

Hours

Total 

Hours

1 Submitter information 0.00 2.00 1.00 3.00

2 Chemical identity information 0.00 7.50 1.00 8.50

3A Physical properties 0.00 2.00 0.50 2.50

3B Additional physical properties 0.00 4.00 1.00 5.00

4 Description of uses 0.00 3.00 1.50 4.50

5 Amount of substance to be manufactured/imported 0.00 1.00 1.50 2.50

6 Description of byproducts 0.00 0.50 0.00 0.50

7 Human exposure and environmental release 0.00 52.00 9.50 61.50

8

Physical properties related to understanding and 

assessing exposures and releases 0.00 4.00 1.00 5.00

9 Overview of lifecycles 0.00 10.00 2.00 12.00

10 Release point control technology 0.00 2.00 0.40 2.40

11 Worker exposure information 0.00 2.00 0.40 2.40

12 Protective equipment or engineering control 0.00 2.00 0.40 2.40

13 Information on cleaning/reuse/disposal of used 

protective equipment 0.00 1.00 0.20 1.20

14 Additional procedures or other equipment intended to 

mitigate exposures to nanoscale materials 0.00 1.00 0.20 1.20

15 Description of worker training and hazardous 

communication 0.00 1.00 0.20 1.20

16 Number of individuals other than workers exposed to 

the chemical and duration of exposure 0.00 1.00 0.20 1.20

17 Manner or method of disposal for consumer use of 

products 0.00 2.00 0.40 2.40

18 Test data in the submitter's possession of information 

on health/environmental effects 0.00 7.20 10.00 17.20

Total 0.00 105.20 31.40 136.60

Source: EPA, 2007

Table 3-4 combines the estimated reporting burden and loaded wage rates for all three labor categories to 

estimate the per-report cost of complying with the reporting requirements.

3.3.3 Electronic Reporting 

The proposed rule would require submitters to register with EPA’s Central Data Exchange (CDX) and use 

the Chemical Information Submission System (CISS) to prepare and submit a data file. CDX is EPA’s 

electronic system for environmental data exchange to the Agency. CDX also provides the capability for 

submitters to access their data through the use of web services. EPA developed CISS for use in 

submitting data for TSCA sections 4, 8(a), and 8(d) electronically to the Agency. CISS, a web-based 

Table 3-4: Industry Cost Estimate to Complete the Proposed Form (2013$) (Per Report)

Reporting 

Activity

Clerical Labor (at 

$30.35/hour)

Technical Labor (at 

$64.55/hour)

Managerial Labor (at 

$77.82/hour) Total Labor Cost

Burden Cost Burden Cost Burden Cost Burden Cost

Form 

Completion 0 $0.00 105.2 $6,790.37 31.4 $2,443.63 136.6 $9,234.00

Source: BLS, 2014; EPA, 2007.
3-4

reporting tool, provides user-friendly navigation, works with CDX to secure online communication, 

creates a completed Portable Document Format (PDF) for review prior to submission, and enables data, 

reports, and other information to be submitted easily.

EPA believes that electronic reporting reduces the reporting burden for submitters by reducing the cost 

and time required to review, edit, and transmit data to the Agency. It also allows submitters to share a 

draft submission within their organization, and more easily save a copy for their records or future use. 

The resource and time requirements to review and process data by the Agency will also be reduced and 

document storage and retrieval will require fewer resources.

EPA estimated that affected facilities would incur additional burden and cost due to the electronic 

reporting requirements of the proposed rule. This includes costs in the first year to complete a subscriber 

agreement and register with CDX. Some respondents will incur CDX costs in subsequent years due to 

employee turnover or compromised electronic signatures. These costs are offset by reductions in reporting 

and recordkeeping costs due to electronic reporting. Understanding the electronic reporting requirements 

is expected to be part of rule familiarization discussed in Section 3.4.1 and are not included again in this 

section.

Some company users who have already registered with CDX to meet other EPA electronic reporting 

requirements, for example to submit Premanufacture Notices (PMNs) or to report under the Chemical 

Data Reporting rule (CDR), will not need to register again as a result of this rule. While EPA expects that 

some nanomaterial manufacturers and processors will have employees who have registered with CDX, 

there was no way to determine how many new users would need to register as a result of this rule. 

Therefore, the Agency used the most conservative assumption that all affected submitters would register 

with CDX and, thus, incur an associated cost. This assumption would result in overestimating the costs 

associated with the final rule.

When registering with CDX, users are assigned to one of two roles in the CDX system, an Authorizing 

Official or a Support Registrant.

Authorized Official (AO): The AO is the person legally responsible for the submission. The 

AO is typically a senior official for the respondent. The AO is the only user who can start a new 

form, or reopen a completed form to begin the amendment process, and is the only user who can 

electronically sign and submit a form. AOs can also assign Support Registrants to edit and 

complete forms on his or her behalf. AOs must submit a subscriber agreement to EPA, and 

register with CDX.

Support Registrants: A Support Registrant is a person designated by an AO to submit 

supporting documents on his or her behalf. Support Registrants can edit a submission that is 

created by the AO. Support Registrants are only allowed to edit submissions that the AO has 

granted him or her access. Support Registrants do not have any access rights to create or submit a 

form. Once the AO creates a form, they will provide the Support Registrant with a passphrase to 

access the submission and complete all sections of the form. Once the Support Registrant has 

finished completing the form, the AO will access the submission, review it, and submit it. 

Support Registrants must register with CDX, but do not need to submit a subscriber agreement to 

EPA.

This analysis uses a simplifying assumption that an average of five employees at each respondent will 

register with CDX: one manager (who will serve as AO) four technical staff members (who will serve as 

Support Registrants). 
3-5

First Year Costs

Respondents will incur electronic reporting costs in the first year to register with CDX, submit a 

subscriber agreement, contact EPA’s CDX Help Desk and perform ongoing problem resolution to resolve 

problems with their certifications or agreements.

Subscriber Agreement/Electronic Signature Agreement. An AO must complete a subscriber 

agreement in order to establish their identity and their relation to the entity for which they will 

submit electronic documents, as well as to document a unique correlation with the device that will 

be used to create their electronic signature. While users can comply with the subscriber 

agreement provisions in CDX either by submitting a paper subscriber agreement with a wet-ink 

signature, or by submitting an electronic signature agreement, this analysis assumes that all will 

submit electronic signature agreements. Preparing, submitting, and filing a subscriber agreement 

and an electronic signature agreement is estimated to require an average of 15 minutes of time per 

registrant (EPA, 2011). Because only an AO must complete the subscriber and electronic 

signature agreement, this is assumed to be managerial time. In addition, the burden estimate is

assumed to include identity verification through a third party electronic verification process that 

is an available service through CDX.

CDX Registration. CDX users will need to register with CDX, which involves selecting a user 

name and password, providing contact information, and identifying the facility and the 

registrant’s role (e.g., AO or Support Registrant) at the facility. This is estimated to take an

average of 10 minutes per user (EPA, 2011). Because there are assumed to be one manager and 

four technical staff registering, this results in an estimate that each respondent (business) will 

spend 10 minutes of managerial time and 40 minutes of technical time to register with CDX. 

Help Desk. CDX users are assumed to spend an average of 4 minutes contacting EPA’s CDX 

Help Desk for technical support (EPA, 2011), which results in an estimate of 4 minutes of 

managerial time and 16 minutes of technical time per respondent. 

Problem Resolution. Three percent of respondents each year are assumed to spend an average 

of one hour of technical time working with EPA’s CDX Help Desk to resolve problems involving 

their registrations or agreements (EPA, 2011).

Subsequent Year Costs 

In subsequent years, respondents may incur electronic reporting costs due to employee turnover and 

compromised electronic signatures as well ongoing problem resolution.

Employee Turnover. It is assumed that each year 10 percent of CDX users will be replaced by 

new employees, who will have to comply with the subscriber agreement and/or CDX registration 

requirements (EPA, 2011). Thus, in subsequent years 10 percent of AOs will spend 15 minutes of 

managerial time to complete a subscriber agreement. In addition, 10 percent of all users (both

managerial and technical) will spend10 minutes to register with CDX.

Report Compromised Signature. Each year 1 percent of respondents are assumed to report a 

compromised or surrendered electronic signature, which requires the submittal of a new 

subscriber agreement (EPA, 2011). This will entail 15-20 minutes of managerial time to report 

the compromised signature and prepare, submit, and file a new agreement, plus an additional 4 

minutes contacting the Help Desk for a total of approximately 24 minutes.
3-6

Help Desk. CDX users are assumed to spend an average of 4 minutes contacting EPA’s CDX 

Help Desk for technical support (EPA, 2011), which results in an estimate of 4 minutes of 

managerial time and 16 minutes of technical time per respondent. 

Problem Resolution. Three percent of respondents each year are assumed to spend an average 

of one hour of technical time with EPA’s CDX Help Desk to resolve problems involving their 

registrations or agreements (EPA, 2011).

Table 3-5 and Table 3-6 present the first year burden and costs and subsequent year labor burden and 

costs for electronic reporting.

Table 3-5: Industry Burden and Cost of Electronic Reporting Requirements

(First Year, per Firm) (2013$)

Reporting Activity

Clerical Labor 

(at $30.35/hour)

Technical Labor 

(at $64.55/hour)

Managerial 

Labor (at 

$77.82/hour)

Number 

of Annual 

Activities

Total Labor 

Cost

Burden Cost Burden Cost Burden Cost Burde

n

Cost

CDX Registration 0.00 $0.00 0.67 $43.25 0.17 $13.23 1 0.84 $56.48

Electronic 

Subscriber 

Agreement/

Electronic Signature

0.00 $0.00 0.00 $0.00 0.25 $19.46 1 0.25 $19.46

Help Desk 0.00 $0.00 0.24 $15.49 0.06 $4.67 1 0.30 $20.16

Problem Resolution 0.00 $0.00 1.00 $64.55 0 $0.00 0.03 0.03 $1.94

Totals 1.42 $98.04

Table 3-6: Industry Burden and Cost of Electronic Reporting Requirements (Subsequent Years, per 

Firm) (2013$)

Reporting Activity

Clerical Labor 

(at $30.35/hour)

Technical Labor 

(at $64.55/hour)

Managerial 

Labor (at 

$77.82/hour)

Number 

of Annual 

Activities

Total Labor Cost

Burden Cost Burden Cost Burden Cost Burden Cost

CDX Registration 0.00 $0.00 0.67 $43.25 0.17 $13.23 0.10 0.08 $5.65

Electronic 

Subscriber 

Agreement/

Electronic Signature

0.00 $0.00 0.00 $0.00 0.25 $19.46 0.10 0.03 $1.95

Help Desk 0.00 $0.00 0.24 $15.49 0.06 $4.67 0.10 0.03 $2.02

Report 

Compromised 

Signature

0.00 $0.00 0.00 $0.00 0.40 $31.13 0.01 0.00 $0.31

Problem Resolution 0.00 $0.00 1.00 $64.55 0.00 $0.00 0.03 0.03 $1.94

Totals 0.17 $11.87
3-7

3.3.4 Recordkeeping

Reporting businesses will be required to compile and maintain records of the collected information. Based 

on estimates taken from the Regulatory Impact Analysis of Amendments to Regulations for TSCA Section 

5 Premanufacture Notification (EPA, 1994) which estimates the burden associated with PMN form 

completion and submission, estimates of recordkeeping of paper records is expected to require one hour 

of technical labor, and one hour of clerical labor per report for all reporters.10 Estimates from this RIA 

were used in the NMSP ICR (EPA, 2007) to estimate about half the burdens presented in Table 3-3. 

However, the original PMN burden estimates from the 1994 RIA include recordkeeping costs (EPA, 

1994, pages III-13 and III-14). To account for the additional recordkeeping burden not captured by these 

estimates EPA used the additional two hour recordkeeping burden for polymer exception submissions, 

which have more stringent recordkeeping requirements than PMNs (EPA, 1994, page IV-6). In addition 

this two hour burden is consistent with the estimate of 1 to 3 hours of recordkeeping burden per Section 

8(a) notice presented in the Information Collection Request for Toxic Substance Control Act Section 8(a) 

Chemical-Specific Information Gathering Rules (EPA, 2006).

This proposed rule would require electronic reporting, however, which is expected to reduce the 

recordkeeping burden. EPA assumes that the final rule will reduce recordkeeping burden by half because 

of the efficiencies in creating and storing documents electronically. The full recordkeeping burden and 

associated cost estimates are presented in Table 3-7.

Table 3-7: Industry Cost Estimate to Maintain Records (2013$) (per Report)

Reporting 

Activity

Clerical Labor (at 

$30.35/hour)

Technical Labor

(at $64.55/hour)

Managerial Labor 

(at $77.82/hour) Total Labor Cost

Burden Cost Burden Cost Burden Cost Burden Cost

Recordkeeping 0.5 $15.17 0.5 $32.27 0 $0.00 1 $47.44

Source: BLS, 2014; EPA, 1994.

3.4 Discounting Methods

Discounting refers to the economic conversion of future costs (and benefits) to their present values, 

accounting for the fact that society tends to value future costs or benefits less than comparable near-term 

costs or benefits. Discounting is important when the values of costs or benefits occur over a multiple year 

period and may vary from year to year. Discounting enables the accumulation of the cost and benefit 

values from multiple years at a single point in time, accounting for the difference in how society values 

those costs and benefits depending on the year in which the values are estimated to occur.

The proposed rule requires that firms incur a one-time cost related to the reporting and maintenance of 

records pertaining to each nanomaterial manufactured or processed for redistribution and use in the 

United States. 

Costs are discounted over a 10-year period using rates of three and seven percent.11 The 10-year analysis 

period was selected because the number of nanomaterials is assumed to double over the next 10 years. 

The analysis assumes that first year costs are incurred at the beginning of the period; as a result, costs 

incurred during the first year do not need to be discounted. Costs accrued in subsequent years are 

discounted (for the discount rate r = 3 percent and r = 7 percent and t = time in years) back to the 

beginning of the 10-year period (present value), as follows:

 

11 These discount rates values reflect guidance from the Office of Management and Budget regulatory analysis 

guidance document, Circular A-4 (OMB 2003).
3-8

Present Value = ∑

(Undiscounted Value)t

(1 + r)

t

10

t=1

This analysis also presents the 10-year annualized costs of the rule. Conceptually, the annualized cost is 

equivalent to the level annual payment that one would have to make to pay off a debt equal to the net 

present value of the costs for a given interest rate (the discount rate). The costs are annualized such that 

the net present value of the costs is equivalent to a stream of 10 equal payments assuming that all costs 

are incurred at the end of each year.

Annualized Cost = (PV) ∗

r ∗ (1 + r)

10

(1 + r)

11 − 1

(

3.5 Total Industry Compliance Costs

As explained in Chapter 2, EPA estimates that 295 reporters will submit chemical reports for an average 

of 5.06 nanomaterials per firm in the first year of the rule, resulting in approximately 1,493 reports. The 

total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period, 

with an average of approximately 0.56 additional nanomaterials per firm in subsequent years, resulting in 

annual total of 165 additional reports annually. As indicated in Table 3-9, the total cost of the rule to 

nanomaterials firms drops from approximately $13.9 million in the first year of the rule to approximately 

$1.53 million in subsequent years (without discounting). The annualized cost of the rule over the 10-year 

analysis period is $2.71 million with a three percent discount rate and $2.97 million with a seven percent 

discount rate.

Table 3-8: Total Annual Industry Burden Hours

Year Number 

of Firmsa

Reports 

per 

Firmb

Rule 

Familiarization

c Burden (per 

Firm)

Form 

Completion 

and 

Recordkeeping 

Burden (per 

Report)

Electronic 

Reporting 

Requirements

(per Firm)d

Total 

Burden 

Per 

Firm

Total

Industry

Number 

of 

Reportsb

Total 

Industry 

Burden

1 295 5.06 0.82 137.6 1.42 698 1,493 206,098

2 295 0.56 0.00 137.6 0.17 77 165 22,755

3 295 0.56 0.00 137.6 0.17 77 165 22,755

4 295 0.56 0.00 137.6 0.17 77 165 22,755

5 295 0.56 0.00 137.6 0.17 77 165 22,755

6 295 0.56 0.00 137.6 0.17 77 165 22,755

7 295 0.56 0.00 137.6 0.17 77 165 22,755

8 295 0.56 0.00 137.6 0.17 77 165 22,755

9 295 0.56 0.00 137.6 0.17 77 165 22,755

10 295 0.56 0.00 137.6 0.17 77 165 22,755

Total - 10.10 - - - - 2,978 410,893

Notes:

a EPA assumes that the number of firms remains constant over the analysis period.

b The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials 

firms will report on an average of approximately 0.56 additional nanomaterials per firm in subsequent years for a total of 165 additional 

reports per year.

c Derived in Table 3-2

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding
3-9
3-10

Table 3-9: Total Annualized Industry Costs

Year

Number 

of 

Firmsa

Report

s per 

Firmb

Rule 

Familiarization

c Cost (per 

Firm)

Form 

Completion 

and 

Recordkeepin

g Cost (per 

Report)d

Electronic 

Reporting 

Requirement

s Cost (per 

Firm)e

Total 

Cost 

(per 

Firm)

Discounted Cost 

(Per Firm)

Total 

Industry 

Number 

of 

Reportsb

Total 

Industry 

Cost 

(Millions 

2013$)

Industry Discounted 

Cost

(Millions 2013$)

3 % 

Discount 

Rate

7 % 

Discount 

Rate

3 % 

Discount 

Rate

7 % 

Discount 

Rate

1 295 5.06 $56.51 $9,281 $98.04 $47,021 $47,021 $47,021 1,493 $13.87 $13.87 $13.87 

2 295 0.56 $0.00 $9,281 $11.87 $5,198 $5,046 $4,858 165 $1.53 $1.49 $1.43 

3 295 0.56 $0.00 $9,281 $11.87 $5,198 $4,899 $4,540 165 $1.53 $1.44 $1.34 

4 295 0.56 $0.00 $9,281 $11.87 $5,198 $4,757 $4,243 165 $1.53 $1.40 $1.25 

5 295 0.56 $0.00 $9,281 $11.87 $5,198 $4,618 $3,965 165 $1.53 $1.36 $1.17 

6 295 0.56 $0.00 $9,281 $11.87 $5,198 $4,484 $3,706 165 $1.53 $1.32 $1.09 

7 295 0.56 $0.00 $9,281 $11.87 $5,198 $4,353 $3,463 165 $1.53 $1.28 $1.02 

8 295 0.56 $0.00 $9,281 $11.87 $5,198 $4,226 $3,237 165 $1.53 $1.25 $0.95 

9 295 0.56 $0.00 $9,281 $11.87 $5,198 $4,103 $3,025 165 $1.53 $1.21 $0.89 

10 295 0.56 $0.00 $9,281 $11.87 $5,198 $3,984 $2,827 165 $1.53 $1.17 $0.83 

Total - 10.1 - - 2,978 - - -

Annualized Cost $9,180 $10,081 $2.71 $2.97

Notes:

a EPA assumes that the number of firms remains constant over the analysis period.

b The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials firms will report on an average of approximately 

0.56 additional nanomaterials per firm in subsequent years for a total of 165 additional reports per year.

c Derived in Table 3-2

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

e Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding.
4-1

Chapter 4 – Agency Costs

4.1 Introduction

EPA will also incur costs in administering the proposed rule. Specifically, EPA will be required to 

provide industry and public assistance to facilitate compliance and process submissions. These costs are 

discussed in Section 4.2.

4.2 EPA Costs

The proposed rule requires EPA to provide industry and public assistance (e.g., provide guidance and 

facilitate compliance), process submitted reports, and maintain the information technology systems that 

support these activities. Based on previous estimates of Agency time used in economic analyses of 

Preliminary Assessment Information Reporting (PAIR) rules, which require Agency activity similar to 

that required under the proposed rule, it is estimated to take 1.25 labor hours per report to provide 

industry and public assistance and 3.13 labor hours per report to provide data processing and systems 

support for a total of 4.38 labor hours per report (EPA, 2003a) when the reporting is accomplished 

through non-electronic reporting. The electronic reporting required by the proposed rule is expected to 

result in cost savings to EPA.

This analysis used the same methodology as that in the Economic Analysis of the Premanufacture 

Notification Electronic Reporting Final Rule (EPA, 2009a) to calculate EPA burden savings from 

electronic reporting. Potential Agency burden savings associated with the electronic reporting of the 

respective TSCA reports were characterized based on information in the CDX Business Case Analysis 

regarding the estimated monetary benefit from using CDX. Of the six Program Data Flows studied in the 

CDX Business Case Analysis, monetary benefits from using CDX as compared to a paper submission 

baseline were quantified for two flows: TRI (Toxic Release Inventory) and e-NOI (electronic Notice of 

Intent under the National Pollution Discharge Elimination System). Benefits ranged from eleven percent 

savings (e-NOI) to 22 percent savings (TRI) compared to the cost of the baseline process. For this 

analysis, EPA assumed an average annual savings of 16.5 percent. Applying the 16.5 percent annual 

savings to burden estimates described above results in an estimated 1.25/report for providing industry and 

public assistance and 3.13/report for data processing and systems support.

Table 4-1: Estimate of Agency Hours for the Proposed Rule

Administrative Activity for All Reporters Hours

Industry/Public Assistance 1.25 / report

Data Processing and Systems Support Personnel 3.13 / report

Total 4.38 / report

Source: EPA, 2003a.

EPA assumes that, on average, a Federal GS-13, Step 5 full-time equivalent (FTE) will conduct its 

collection and administrative activities under the proposed rule. The annual 2013 fully loaded salary for a 

GS-13, Step 5 FTE is $161,446. This estimate includes a base salary of $100,904 plus a 60 percent load 

increase to account for benefits and overhead (i.e., $60,542).12 Dividing the fully loaded annual salary by 

 

12 The base Federal GS-13 Step 5 salary ($100,904, effective January 2013) is from the Office of Personnel 

Management salary table for Washington-Baltimore-Northern Virginia (OPM, 2013). The 60 percent fringe 

benefits-and-overhead rate is from an EPA/OPPE guide (EPA, 1992). 
4-2

2,087 hours (i.e., the number of hours in a work year as defined by OPM) yields an hourly FTE wage rate 

of $77.36. Appendix A provides a detailed description of these calculations.

Multiplying 4.38 hours by the $77.36 hourly FTE wage rate yields a total cost of approximately $339 to 

administer and process a chemical report. Further, as explained in Chapter 3, approximately 1,493

chemical reports will be filed in the first year of the rule and 165 reports in subsequent years. As shown in

Table 4-2, the total Agency hours and costs for the proposed rule are estimated to total 6,539 hours and

$0.51 million in the first year of the rule before decreasing to 723 hours and $0.06 million in subsequent 

years. The annualized costs of the rule over the 10-year analysis period are $0.10 million with a three 

percent discount rate and $0.11 million with a seven percent discount rate. 

Table 4-2: Agency Cost and Burden Hour Estimate for the Proposed Rule

Year Wage Rate 

(FTE)

Hours 

per 

Report

Agency 

Cost per 

Report Total 

Number of 

Reportsa

Total Discounted Cost 

(Millions 2013$)

(2013$) Hours

Cost 

(Millions 

2013$)

3% 

Discount 

Rate

7% 

Discount 

Rate

1 $77.36 4.38 $339 1,493 6,539 $0.51 $0.51 $0.51 

2 $77.36 4.38 $339 165 723 $0.06 $0.05 $0.05 

3 $77.36 4.38 $339 165 723 $0.06 $0.05 $0.05 

4 $77.36 4.38 $339 165 723 $0.06 $0.05 $0.05 

5 $77.36 4.38 $339 165 723 $0.06 $0.05 $0.04 

6 $77.36 4.38 $339 165 723 $0.06 $0.05 $0.04 

7 $77.36 4.38 $339 165 723 $0.06 $0.05 $0.04 

8 $77.36 4.38 $339 165 723 $0.06 $0.05 $0.03 

9 $77.36 4.38 $339 165 723 $0.06 $0.04 $0.03 

10 $77.36 4.38 $339 165 723 $0.06 $0.04 $0.03 

Total - 43.8 - 2,978 13,046

- - -

Annualized Cost $0.10 $0.11 

Notes:

aThe total number of nanomaterials subject to the rule is assumed to double in the 10-year analysis period. As a result, nanomaterials 

firms will report on an average of approximately 0.56 additional nanomaterials per firm in subsequent years for a total of 165 

reports per year.

Source: EPA, 2003a; OPM, 2013
5-1

Chapter 5 – Total Social Costs and Sensitivity Analyses

Table 5-1 presents the total social burden and costs of the proposed rule in the first and subsequent years, 

and the annualized costs discounted over the 10-year period using three and seven percent discount rates. 

As indicated, the total burden of the rule is expected to be approximately 423,939 hours over the 10-year 

analysis period, while the annualized costs are expected to be from approximately $2.80 million with a

three percent discount rate and approximately $3.08 million with a seven percent discount rate. 

Table 5-1: Total Social Burden and Cost of the Proposed Rule

Year Burden (Hours) Discounted Costs (2013$)3 % Discount Rate 7 % Discount Rate

Industry Agency Total Industry Agency Total Industry Agency Total

1 206,098 6,539 212,637 $13.87 $0.51 $14.38 $13.87 $0.51 $14.38

2 22,755 723 23,478 $1.49 $0.05 $1.54 $1.43 $0.05 $1.48 

3 22,755 723 23,478 $1.44 $0.05 $1.49 $1.34 $0.05 $1.39 

4 22,755 723 23,478 $1.40 $0.05 $1.45 $1.25 $0.05 $1.30 

5 22,755 723 23,478 $1.36 $0.05 $1.41 $1.17 $0.04 $1.21 

6 22,755 723 23,478 $1.32 $0.05 $1.37 $1.09 $0.04 $1.13 

7 22,755 723 23,478 $1.28 $0.05 $1.33 $1.02 $0.04 $1.06 

8 22,755 723 23,478 $1.25 $0.05 $1.30 $0.95 $0.03 $0.98 

9 22,755 723 23,478 $1.21 $0.04 $1.25 $0.89 $0.03 $0.92 

10 22,755 723 23,478 $1.17 $0.04 $1.21 $0.83 $0.03 $0.86 

Total 410,893 13,044 423,939 - - - - - -

Annualized Costs $2.71 $0.10 $2.80 $2.97 $0.11 $3.08

Source: EPA, 2003a; OPM, 2013
6-1

Chapter 6 - Sensitivity Analyses

To show the possible range of costs and burden associated with the proposed rule, EPA conducted several 

alternative analyses that estimate how sensitive the cost and burden estimates presented in Chapter 3 and 

Chapter 4 are to changes in the estimated number of nanomaterials and firms subject to the proposed rule. 

EPA conducted three sensitivity analyses, estimating: 1) costs based on a potential growth in the number 

of firms subject to the proposed rule over the 10 year period; 2) a low and high cost based on the range of 

number of reports submitted by a firm in year one; and 3) a low and high cost based the growth rate of the 

number of nanomaterials over the ten year period 

6.1 Annual Industry Growth Rate 

In Chapter 3 and Chapter 4, EPA assumes that the number of firms subject to the rule will remain static 

throughout the period of analysis. As an alternative analysis, EPA estimated the cost to industry and the 

Agency assuming an annual growth rate of 5.8 percent in the number of firms subject to the rule. The 

growth rate of 5.8 percent was calculated using the number nanomaterials firms identified in the 2005 

NMSP ICR (611) and the number of firms estimated in this report (823) and calculated using the formula 

below:

Growth Rate =

∆Number of Firms

Firms year 1

(Number of years)

=

(823 − 611)

(611)

(2011 − 2005)

= 0.058

6.1.1 Estimated Number of Nanomaterials

To be consistent with the main analysis presented in Chapter 3 and Chapter 4 EPA assumes each firm will 

submit 5.06 reports in its first year and 0.56 reports in each subsequent year (see Section 2.4). The total 

number of reports submitted each year is the sum of the first-year reports submitted by new firms and 

subsequent-year reports submitted by existing firms for a total of 4,354 reports over the 10-year period. 

Table 6-1: Estimated Number of Reports (Increased Annual Growth Rate Scenario)

Year

Number of Firms Reports per Firm Total

New 

Firms

Existing 

Firms Total First Year

Subsequent 

Years

New 

Firms

Existing 

Firms Total

1 295 0 295 5.06 0.56 1,493 0 1,493

2 17 295 312 5.06 0.56 86 165 251

3 18 312 330 5.06 0.56 91 175 266

4 19 330 349 5.06 0.56 96 185 281

5 20 349 369 5.06 0.56 101 195 297

6 21 369 390 5.06 0.56 106 207 313

7 23 390 413 5.06 0.56 116 218 335

8 24 413 437 5.06 0.56 121 231 353

9 25 437 462 5.06 0.56 127 245 371

10 27 462 489 5.06 0.56 137 259 395

Total - - - - - 2,474 1,880 4,354

 
6-2

6.1.2 Industry, Agency and Total Costs

Table 6-2 presents the annual industry labor burden for both new and existing firms. There are 295 firms 

expected to submit reports in year 1, and a total 489 firms are estimated to submit reports by the end of 

the 10 year period. Each new firm is estimated to incur 699 labor burden hours in their first year and 77 

hours each subsequent year. The total industry labor burden is estimated to be 600,828 hours. The costs 

per firm and total industry costs are presented in Table 6-3. Total annualized costs are $3.85 million with 

a 3 percent discount rate and $4.07 million with a 7 percent discount rate. 

Agency costs are derived following the method described in Section 4.2. EPA expects that approximately 

4,354 reports will be submitted over the next 10 years, resulting in a total Agency burden of 19,071 labor 

hours. Table 6-4 presents Agency burden and cost estimates for each year over the 10-year period. 

Annualized costs are expected to be $0.14 million with a three percent discount rate and $0.15 million 

with a 7 percent discount rate. 

The 5.8 percent linear growth rate in the number of nanomaterials firms over a 10-year period is expected 

to yield a total social burden of 619,898 hours and total annualized social costs of $3.99 million with a 3 

percent discount rate ($4.22 million with a 7 percent discount rate). 
6-3

Table 6-2: Total Annual Industry Labor Burden (Increased Annual Growth Rate Scenario)

Year

Number of Firms Total 

Number of 

Reportsa

Rule Familiarization 

Burden (Hours per 

Firm)b

Form 

Completion and 

Recordkeeping 

Burden (Hours 

per Report)c

Electronic Reporting 

Requirements 

Burden (Hours per 

Firm)d

Total Burden per 

Firm (Hours per 

Firm)

Total 

Industry 

Burden 

Hours Existing New Total Existing New Existing New Existing New

1 0 295 295 1,493 0 0.82 138 0 1.42 0 699 206,058

2 295 17 312 251 0 0.82 138 0.17 1.42 77 699 34,657

3 312 18 330 266 0 0.82 138 0.17 1.42 77 699 36,669

4 330 19 349 281 0 0.82 138 0.17 1.42 77 699 38,757

5 349 20 369 296 0 0.82 138 0.17 1.42 77 699 40,923

6 369 21 390 313 0 0.82 138 0.17 1.42 77 699 43,166

7 390 23 413 334 0 0.82 138 0.17 1.42 77 699 46,185

8 413 24 437 352 0 0.82 138 0.17 1.42 77 699 48,660

9 437 25 462 372 0 0.82 138 0.17 1.42 77 699 51,212

10 462 27 489 396 0 0.82 138 0.17 1.42 77 699 54,540

Total - - - 4,354 - - - - - - - 600,828

Notes:

a The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials firms will report on an average of 

approximately 0.56 additional nanomaterials per firm in subsequent years.

b Derived in Table 3-2

c Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding.
6-4

Table 6-3: Annual Industry Labor Costs (Increased Annual Growth Rate Scenario)

Year

Number of Firms

Total 

Number 

of 

Reportsa

Rule Familiarization 

Cost (per Firm)b 

(2013$)

Form Completion 

and Recordkeeping 

Cost (per Report)c 

(2013$)

Electronic 

Reporting 

Requirements (per 

Firm)d (2013$)

Total Cost per 

Firm (2013$)

Total 

Industry 

Cost 

(Millions 

2013$)

Discounted Cost 

(Millions 2013$)

Existing New Total Existing New Existing New Existing New Existing New Existing New

1 0 295 295 1,493 $0.00 $56.51 0 $9,281 0 $98.04 0 $47,1

19 

$13.90 $13.90 $13.90 

2 295 17 312 251 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$2.34 $2.27 $2.18 

3 312 18 330 266 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$2.47 $2.33 $2.16 

4 330 19 349 281 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$2.61 $2.39 $2.13 

5 349 20 369 296 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$2.76 $2.45 $2.11 

6 369 21 390 313 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$2.91 $2.51 $2.08 

7 390 23 413 334 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$3.12 $2.61 $2.08 

8 413 24 437 352 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$3.28 $2.67 $2.04 

9 437 25 462 372 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$3.45 $2.73 $2.01 

10 462 27 489 396 $0.00 $56.51 $9,281 $9,281 $11.87 $98.04 $5,209 $47,1

19 

$3.68 $2.82 $2.00 

Total - - - 4,354 - - - - - - - -

Annualized Cost $3.85 $4.07 

Notes:

a The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials firms will report on an average of approximately 0.56 

additional nanomaterials per firm in subsequent years.

b Derived in Table 3-2

c Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding.
6-5

Table 6-4: Agency Cost Estimate for the Proposed Rule (Increased Annual Growth Rate 

Scenario)

Year Wage 

Rate 

Hours 

per 

Report

Agency 

Cost per 

Report 

(2013$)

Total 

Number 

of 

Reportsa

Total Discounted Cost 

(Millions 2013$)

Burden

Cost 

(Millions 

2013$)

3% 

Discount 

Rate

7% 

Discount 

Rate

1 $77.36 4.38 $339 1,493 6,539 $0.51 $0.51 $0.51 

2 $77.36 4.38 $339 251 1,099 $0.09 $0.08 $0.08 

3 $77.36 4.38 $339 266 1,165 $0.09 $0.08 $0.08 

4 $77.36 4.38 $339 281 1,231 $0.10 $0.09 $0.08 

5 $77.36 4.38 $339 296 1,296 $0.10 $0.09 $0.08 

6 $77.36 4.38 $339 313 1,371 $0.11 $0.09 $0.08 

7 $77.36 4.38 $339 334 1,463 $0.11 $0.09 $0.08 

8 $77.36 4.38 $339 352 1,542 $0.12 $0.10 $0.07 

9 $77.36 4.38 $339 372 1,629 $0.13 $0.10 $0.07 

10 $77.36 4.38 $339 396 1,734 $0.13 $0.10 $0.07 

Total - 43.80 - 4,354 19,071 - - -

Annualized Cost $0.14 $0.15 

Notes:

aThe total number of nanomaterials subject to the rule is assumed to double in the 10-year analysis period. As a result, 

nanomaterials firms will report on an average of approximately 0.56 additional nanomaterials per firm in subsequent years 

for a total of 165 reports per year.

Source: EPA, 2003a; OPM, 2013

Table 6-5: Total Social Costs for the Proposed Rule (Increased Annual Growth Rate Scenario)

Year Burden (Hours) Discounted Costs (2013$)3 % Discount Rate 7 % Discount Rate

Industry Agency Total Industry Agency Total Industry Agency Total 

1 206,058 6,539 212,597 $13.90 $0.51 $14.41 $13.90 $0.51 $14.41

2 34,657 1,099 35,757 $2.27 $0.08 $2.35 $2.18 $0.08 $2.26 

3 36,669 1,165 37,834 $2.33 $0.08 $2.42 $2.16 $0.08 $2.24 

4 38,757 1,231 39,988 $2.39 $0.09 $2.48 $2.13 $0.08 $2.21 

5 40,923 1,296 42,220 $2.45 $0.09 $2.54 $2.11 $0.08 $2.18 

6 43,166 1,371 44,537 $2.51 $0.09 $2.60 $2.08 $0.08 $2.15 

7 46,185 1,463 47,648 $2.61 $0.09 $2.70 $2.08 $0.08 $2.15 

8 48,660 1,542 50,202 $2.67 $0.10 $2.77 $2.04 $0.07 $2.12 

9 51,212 1,629 52,841 $2.73 $0.10 $2.83 $2.01 $0.07 $2.08 

10 54,540 1,734 56,274 $2.82 $0.10 $2.92 $2.00 $0.07 $2.07 

Total 600,822 19,071 619,898 - - - - - -

Annualized Costs $3.85 $0.14 $3.99 $4.28 $0.15 $4.22

Source: EPA, 2003a; OPM, 2013
6-6

6.2 Number of Nanomaterials per Firm

6.2.1 Low and High-End Estimates for the Number of Nanomaterials per Firm

As described in Section 2.4, the median number of TSCA-related nanomaterials manufactured per firm is 

13 (based on a sample of 34 firms), and after excluding those produced for R&D purposes (approximately 

61 percent of all nanomaterials), EPA estimated 5.06 to be “commercially relevant” and therefore subject 

to the proposed rule. The number of nanomaterials produced by the 34 businesses in the sample ranged 

from 1 to 66. As a sensitivity analysis, EPA has estimated industry and Agency burden associated with 

the proposed rule using the high and low values from this range. Assuming a low-end estimate of 1 

nanomaterial, on average each firm will report on 0.39 nanomaterials in the first year and 0.04 in the 

subsequent years. Using the high-end estimate of 66 nanomaterials, a firm will submit 25.67 reports in the 

first year and 2.85 reports in all future years. 

Table 6-6: Estimated High- and Low-End Estimated Number of 

Commercially Relevant Nanomaterials per Firm

Population 

Category

Nanomaterials 

per Firm

R&D 

Exclusion 

(%)

R&D 

Exclusion 

(#)

“Commercial” 

Nano-materials per 

Firma

First 

Year

Subsequent 

Years

Reporting 

Businesses

1 61.11% 0.61 0.39 0.04

66 61.11% 40.33 25.67 2.85

Notes:

a The total number of nanomaterials subject to proposed rule is assumed to double over the 

analysis period of 10 years. (see section 2.4 for more details) 

6.2.2 Industry, Agency and Total Costs

Low-end estimates. Based on the number of firms and the burden estimates derived in Section 2.3 and 

Section 3.3, and using the low-end estimate of 0.39 reports in the first year and 0.04 in the subsequent 

years, the total industry burden is 16,491 hours in the first year and 1,673 hours future years, with an 

annualized cost of $0.21 million with a 3 percent discount rate ($0.23 with a 7 percent discount rate) 

Table 6-7 and Table 6-8 present the industry cost and burden estimates.

Table 6-9 contains the Agency burden estimate of 504 hours in the first year and 52 hours each 

subsequent year, and the annualized cost of estimates of $0.01 million with a 3 percent discount rate 

($0.01 million with a 7 percent discount rate).

Table 6-10 presents the total social costs of $0.22 million with a 3 percent discount rate and $0.24 million 

with a 7 percent discount rate.

High-end estimates. Using the high end estimate of 25.67 reports in the first year, and 2.85 reports in 

each subsequent year, the industry burden is 1,042,657 hours in the first year and 115,737 hours in each 

subsequent year, with an annualized cost of $13.76 million with a 3 percent discount rate ($15.10 with a 7 

percent discount rate). The industry burden and cost estimates are presented in Table 6-7 and Table 6-8

respectively.
6-7

Table 6-9 presents the total Agency burden estimate of 33,168 hours in the first year and 3,682 in each 

subsequent year, and the annualized Agency cost estimate of $0.50 million with a 3 percent discount rate 

($0.55 with a 7 percent discount rate). 

Table 6-10 contains the total social costs and burden of using the high end-estimate. The total social 

burden is 2.12 million hours over the ten year period, and the annualized cost is $14.26 million with a 3 

percent discount rate and $15.66 with a 7 percent discount rate. 
6-8

Table 6-7: Total Annual Industry Burden Hours (Low-and High-End Nanomaterials Estimates Scenario)

Year

Number 

of 

Firmsa

Reports per 

Firmb Rule 

Familiarizationc

Burden (per 

Firm)

Form 

Completion 

and 

Recordkeeping 

Burden (per 

Report)

Electronic 

Reporting 

Requirements 

(per Firm)d

Total Burden 

Per Firm

Total Industry 

Number of 

Reportsb

Total Industry 

Burden

Low High Low High Low High Low High

1 295.0 0.39 25.67 0.82 137.6 1.42 55.90 3,534 115 7,573 16,491 1,042,657

2 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

3 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

4 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

5 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

6 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

7 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

8 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

9 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

10 295.0 0.04 2.85 0.00 137.6 0.17 5.67 392 12 841 1,673 115,737

Total - 0.75 51.32 - - - - 221 15,139 31,544 2,084,293

Notes:

a EPA assumes that the number of firms remains constant over the analysis period.

b The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials firms will report on an average of 

approximately 0.56 additional nanomaterials per firm in subsequent years for a total of 165 additional reports per year.

c Derived in Table 3-2

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding
6-9

Table 6-8 : Annual Industry Labor Costs (Low-and High-End Nanomaterials Estimates Scenario)

Year

Number 

of 

Firmsa

Reports per 

Firmb Rule 

Familiarization 

Cost (per 

Firm)b

(2013$)

Form 

Completion 

and 

Recordkeeping 

Burden Cost 

(per Report)b

(2013$)

Electronic 

Reporting 

Requirements 

(per Firm)b 

(2013$)

Total Burden Per 

Firm

Total 

Industry 

Number of 

Reportsb

Total Industry Cost

(Millions $2013)

Low High Low High Low High

3% Discount Rate 7% Discount Rate 

Low High Low High

1 295 0.39 25.67 $56.51 $9,281 $98.04 $3,774 $238,409 115 7,573 $1.11 $70.33 $1.11 $70.33

2 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.11 $7.58 $0.11 $7.30

3 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.11 $7.36 $0.10 $6.82

4 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.10 $7.14 $0.09 $6.37

5 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.10 $6.94 $0.09 $5.96

6 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.10 $6.73 $0.08 $5.57

7 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.09 $6.54 $0.08 $5.20

8 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.09 $6.35 $0.07 $4.86

9 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.09 $6.16 $0.07 $4.54

10 295 0.04 2.85 $0.00 $9,281 $11.87 $383 $26,464 12 841 $0.09 $5.98 $0.06 $4.25

Tota

l

- 0.75 51.32 - - - - 221 15,139

Annualized Cost $0.21 $13.76 $0.23 $15.10 

Notes:

a EPA assumes that the number of firms remains constant over the analysis period.

b The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials firms will report on an average of approximately 0.56 

additional nanomaterials per firm in subsequent years for a total of 165 additional reports per year.

c Derived in Table 3-2

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding
6-10

Table 6-9: Agency Cost Estimate for the Proposed Rule (Low-and High-End Nanomaterials Estimates Scenario)

Year Wage 

Rate 

Hours 

per 

Report

Agency 

Cost per 

Report 

Total Number of 

Reportsa Total Burden

Discounted Cost (Millions 2013$)

3% Discount Rate 7% Discount Rate

Low High Low High Low High Low High

1 $77.36 4.38 $339 115 7,573 504 33,168 $0.039 $2.57 $0.039 $2.57 

2 $77.36 4.38 $339 12 841 52 3,682 $0.004 $0.28 $0.004 $0.27 

3 $77.36 4.38 $339 12 841 52 3,682 $0.004 $0.27 $0.003 $0.25 

4 $77.36 4.38 $339 12 841 52 3,682 $0.004 $0.26 $0.003 $0.23 

5 $77.36 4.38 $339 12 841 52 3,682 $0.004 $0.25 $0.003 $0.22 

6 $77.36 4.38 $339 12 841 52 3,682 $0.003 $0.25 $0.003 $0.20 

7 $77.36 4.38 $339 12 841 52 3,682 $0.003 $0.24 $0.003 $0.19 

8 $77.36 4.38 $339 12 841 52 3,682 $0.003 $0.23 $0.002 $0.18 

9 $77.36 4.38 $339 12 841 52 3,682 $0.003 $0.22 $0.002 $0.17 

10 $77.36 4.38 $339 12 841 52 3,682 $0.003 $0.22 $0.002 $0.15 

Total - 43.80 - 221 15,139 969 66,311 - -

Annualized Cost $0.01 $0.50 $0.01 $0.55 

Notes:

aThe total number of nanomaterials subject to the rule is assumed to double in the 10-year analysis period. As a result, nanomaterials firms will report on an 

average of approximately 0.56 additional nanomaterials per firm in subsequent years for a total of 165 reports per year.

Source: EPA, 2003a; OPM, 2013
6-11

Table 6-10: Total Social Costs for the Proposed Rule

Year 

Burden (Hours)

Discounted Costs ( Millions 2013$)

3 % Discount Rate 7 % Discount Rate

Industry Agency Total Industry Agency Total Industry Agency Total 

Low High Low High Low High Low High Low High Low High Low High Low High Low High

1 16,491 1,042,657 504 33,168 16,994 1,059,651 $1.11 $70.33 $0.04 $2.57 $1.15 $72.90 $1.11 $70.33 $0.04 $2.57 $1.15 $72.90

2 1,673 115,737 52 3,682 1,724 117,462 $0.11 $7.58 $0.00 $0.28 $0.11 $7.86 $0.11 $7.30 $0.00 $0.27 $0.11 $7.56

3 1,673 115,737 52 3,682 1,724 117,462 $0.11 $7.36 $0.00 $0.27 $0.11 $7.63 $0.10 $6.82 $0.00 $0.25 $0.10 $7.07

4 1,673 115,737 52 3,682 1,724 117,462 $0.10 $7.14 $0.00 $0.26 $0.11 $7.41 $0.09 $6.37 $0.00 $0.23 $0.10 $6.61

5 1,673 115,737 52 3,682 1,724 117,462 $0.10 $6.94 $0.00 $0.25 $0.10 $7.19 $0.09 $5.96 $0.00 $0.22 $0.09 $6.17

6 1,673 115,737 52 3,682 1,724 117,462 $0.10 $6.73 $0.00 $0.25 $0.10 $6.98 $0.08 $5.57 $0.00 $0.20 $0.08 $5.77

7 1,673 115,737 52 3,682 1,724 117,462 $0.09 $6.54 $0.00 $0.24 $0.10 $6.78 $0.08 $5.20 $0.00 $0.19 $0.08 $5.39

8 1,673 115,737 52 3,682 1,724 117,462 $0.09 $6.35 $0.00 $0.23 $0.10 $6.58 $0.07 $4.86 $0.00 $0.18 $0.07 $5.04

9 1,673 115,737 52 3,682 1,724 117,462 $0.09 $6.16 $0.00 $0.22 $0.09 $6.39 $0.07 $4.54 $0.00 $0.17 $0.07 $4.71

10 1,673 115,737 52 3,682 1,724 117,462 $0.09 $5.98 $0.00 $0.22 $0.09 $6.20 $0.06 $4.25 $0.00 $0.15 $0.06 $4.40

Total 31,544 2,084,293 969 66,311 32,513 2,116,806 - - - - - -

Annualized Costs $0.21 $13.76 $0.01 $0.50 $0.22 $14.26 $0.23 $15.10 $0.01 $0.55 $0.24 $15.66 

Source: EPA, 2003a; OPM, 2013
6-12

6.3 Annual Nanomaterials Growth Rate

6.3.1 Low and High-End Estimates in the Growth Rate of the Number Nanomaterials per Firm

The main analysis presented in this report assumes that the number of nanomaterials reported per firm 

will double over the next 10 years (or an annual growth rate of approximately 8 percent). EPA calculated 

two alternative cost scenarios: 1) assuming the number of nanomaterials per firm will grow by 50 percent 

over the next 10 years, and 2) assuming the number of nanomaterials per firm quadruples over the next 10 

years. For both analyses, EPA assumes that each firm will still manufacture 13 nanomaterials in year 1 

and report on the 5.06 commercially relevant nanomaterials subject to the proposed rule. 

6.3.2 Industry, Agency and Total Costs 

Low-end estimates. A 50 percent increase in the number of nanomaterials manufactured by each firm 

over the next 10 years will result in approximately 0.28 additional reports each year, for a total of 2,239

reports over the 10 year period. As indicated in Table 6-11 and Table 6-12, industry will incur a labor 

burden of 206,058 hours in the first year and 11,461 hours in each subsequent year and the annualized 

cost will be $2.09 million with 3 percent discount rate ($2.36 million with a 7 percent discount rate). 

Table 6-13 contains the total Agency burden and cost under this scenario; 9,807 hours in the first year and 

363 in each subsequent year and an annualized cost of $0.08 million with a 3 percent discount rate and 

$0.09 million with a 7 percent discount rate.

The combined industry and Agency burden of this scenario is 319,011 hours over the 10-year period with 

an annualized social cost of $2.17 million with a 3 percent discount rate and $2.45 with a 7 percent 

discount rate. The total social costs are presented in Table 6-15.

High-end estimates. Assuming the number of nanomaterials per firm quadruples over the next 10 years, 

approximately 1.69 reports will be submitted every year after year 1, for a total of 5,971 reports over the

10-year period. As shown in Table 6-11 and Table 6-12, industry is estimated to incur a labor burden of 

206,098 hours in the first year and 68,517 hours in each subsequent year. The annualized costs of this 

scenario are approximately $5.23 million with a 3 percent discount rate and $5.49 million with a 7 percent 

discount rate. 

Table 6-13 present the Agency burden and costs estimates of this scenario. The Agency burden is 

estimate to be 6,538 hours in the first year and 2,179 in each subsequent year. The annualized cost is

$0.19 million with a 3 percent discount rate and $0.20 million with a 7 percent discount rate.

The total social burden of this scenario is presented in See Table 6-14 and is 1,141,719 hours over the 10-

year period with an annualized social cost of $5.43 million with a 3 percent discount rate and $5.69 

million with a 7 percent discount rate.
6-13

Table 6-11: Total Industry Burden Hours (Increased Nanomaterials Growth Scenario)

Year Number 

of Firmsa

Reports per Firmb

Rule 

Familiarizationc

Burden (per 

Firm)

Form 

Completion 

and 

Recordkeeping 

Burden (per 

Report)

Electronic 

Reporting 

Requirements 

(per Firm)d

Total Burden Per 

Firm

Total Industry 

Number of Reportsb

Total Industry 

Burden

Low High Low High Low High Low High

1 295.0 5.06 5.06 0.82 137.6 1.42 698.50 699 1,493 1,493 206,058 206,058

2 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

3 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

4 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

5 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

6 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

7 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

8 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

9 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

10 295.0 0.28 1.69 0.00 137.6 0.17 38.85 232 83 498 11,461 68,517

Total - 7.59 20.24 - - - - 2,239 5,971 309,204 822,708

Notes:

a EPA assumes that the number of firms remains constant over the analysis period.

b The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials firms will report on an average of 

approximately 0.56 additional nanomaterials per firm in subsequent years for a total of 165 additional reports per year.

c Derived in Table 3-2

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding
6-14

Table 6-12: Annual Industry Labor Costs (Increased Nanomaterials Growth Scenario)

Year Number of 

Firmsa

Reports per 

Firmb

Rule 

Familiarization 

Cost (per 

Firm)b(2013$)

Form 

Completion 

and 

Recordkeeping 

Burden Cost 

(per Report)b

(2013$)

Electronic 

Reporting 

Requirements 

(per Firm)b

(2013$)

Total Burden Per 

Firm

Total Industry 

Number of 

Reportsb

Total Industry Cost (Millions 

$2013)

Low High Low High Low High

3% Discount 

Rate 

7% Discount 

Rate 

Low High Low High

1 295 5.06 5.06 $56.51 $9,281 $98.04 $47,119 $47,119 1,493 1,493 $13.90 $13.90 $13.90 $13.90

2 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.75 $4.49 $0.72 $4.32

3 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.73 $4.36 $0.68 $4.04

4 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.71 $4.23 $0.63 $3.77

5 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.69 $4.11 $0.59 $3.53

6 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.67 $3.99 $0.55 $3.30

7 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.65 $3.87 $0.52 $3.08

8 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.63 $3.76 $0.48 $2.88

9 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.61 $3.65 $0.45 $2.69

10 295 0.28 1.69 $0.00 $9,281 $11.87 $2,621 $15,667 83 498 $0.59 $3.54 $0.42 $2.51

Total - 7.59 20.24 - - - - 2,239 5,971

Annualized Costs $2.09 $5.23 $2.36 $5.49 

Notes:

a EPA assumes that the number of firms remains constant over the analysis period.

b The total number of nanomaterials subject to the rule is assumed to double over the 10-year analysis period. As a result, nanomaterials firms will report on an average of approximately 0.56 

additional nanomaterials per firm in subsequent years for a total of 165 additional reports per year.

c Derived in Table 3-2

d Derived from Table 3-3, Table 3-5, Table 3-6, and Table 3-7

Values may not calculate exactly due to rounding
6-15

Table 6-13: Agency Cost Estimate for the Proposed Rule (Increased Nanomaterials Growth Scenario)

Year Wage 

Rate 

Hours per 

Report

Agency 

Cost per 

Report 

Total Number of 

Reportsa Total Burden

Discounted Cost (Millions 2013$)

3% Discount Rate 7% Discount Rate

Low High Low High Low High Low High

1 $77.36 4.38 $339 1,493 1,493 6,538.03 6,538.03 $0.51 $0.51 $0.51 $0.51 

2 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.03 $0.16 $0.03 $0.16 

3 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.03 $0.16 $0.02 $0.15 

4 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.03 $0.15 $0.02 $0.14 

5 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.02 $0.15 $0.02 $0.13 

6 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.02 $0.15 $0.02 $0.12 

7 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.02 $0.14 $0.02 $0.11 

8 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.02 $0.14 $0.02 $0.10 

9 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.02 $0.13 $0.02 $0.10 

10 $77.36 4.38 $339 83 498 363.22 2,179.34 $0.02 $0.13 $0.02 $0.09 

Total - 43.80 - 2,239.05 5,970.80 9,807.04 26,152.10 - -

Annualized Costs $0.08 $0.19 $0.09 $0.20 

Notes:

aThe total number of nanomaterials subject to the rule is assumed to double in the 10-year analysis period. As a result, nanomaterials firms will report on an 

average of approximately 0.56 additional nanomaterials per firm in subsequent years for a total of 165 reports per year.

Source: EPA, 2003a; OPM, 2013
6-16

Table 6-14: Total Social Costs for the Proposed Rule

Year 

Burden (Hours)

Discounted Costs ( Millions 2013$)

3 % Discount Rate 7 % Discount Rate

Industry Agency Total Industry Agency Total Industry Agency Total 

Low High Low High Low High Low High Low High Low High Low High Low High Low High

1 206,058 206,058 6,538 6,538 212,596 212,596 $13.90 $13.90 $0.51 $0.51 $14.41 $14.41 $13.90 $13.90 $0.51 $0.51 $14.41 $14.41

2 11,461 68,517 363 2,179 11,824 70,696 $0.75 $4.49 $0.03 $0.16 $0.78 $4.65 $0.72 $4.32 $0.03 $0.16 $0.75 $4.48

3 11,461 68,517 363 2,179 11,824 70,696 $0.73 $4.36 $0.03 $0.16 $0.76 $4.52 $0.68 $4.04 $0.02 $0.15 $0.70 $4.18

4 11,461 68,517 363 2,179 11,824 70,696 $0.71 $4.23 $0.03 $0.15 $0.73 $4.38 $0.63 $3.77 $0.02 $0.14 $0.65 $3.91

5 11,461 68,517 363 2,179 11,824 70,696 $0.69 $4.11 $0.02 $0.15 $0.71 $4.26 $0.59 $3.53 $0.02 $0.13 $0.61 $3.65

6 11,461 68,517 363 2,179 11,824 70,696 $0.67 $3.99 $0.02 $0.15 $0.69 $4.13 $0.55 $3.30 $0.02 $0.12 $0.57 $3.42

7 11,461 68,517 363 2,179 11,824 70,696 $0.65 $3.87 $0.02 $0.14 $0.67 $4.01 $0.52 $3.08 $0.02 $0.11 $0.53 $3.19

8 11,461 68,517 363 2,179 11,824 70,696 $0.63 $3.76 $0.02 $0.14 $0.65 $3.89 $0.48 $2.88 $0.02 $0.10 $0.50 $2.98

9 11,461 68,517 363 2,179 11,824 70,696 $0.61 $3.65 $0.02 $0.13 $0.63 $3.78 $0.45 $2.69 $0.02 $0.10 $0.47 $2.79

10 11,461 68,517 363 2,179 11,824 70,696 $0.59 $3.54 $0.02 $0.13 $0.61 $3.67 $0.42 $2.51 $0.02 $0.09 $0.44 $2.61

Total 309,204 822,708 9,807 26,152 319,011 848,860 - - - - - -

Annualized Costs $2.09 $5.23 $0.08 $0.19 $2.17 $5.43 $2.36 $5.49 $0.09 $0.20 $2.45 $5.69 

Source: EPA, 2003a; OPM, 2013
6-17

6.4 Summary of all Analyses

Table 6-15 presents a summary of the costs and assumptions of the sensitivity analyses. As shown in the 

table, the total annualized industry costs range from $0.21 million per year (with a three percent discount 

rate) with the assumption that a firm submits 0.39 reports in the first year to $13.76 million per year (with 

a three percent discount rate) under the assumption a firm submits 25.67 reports in the first year. This 

would suggest that the cost estimates are more sensitive to the number of reports submitted in the first 

year, than increased costs in subsequent years (either through the growth in the number of nanomaterials 

or the number firms subject to the proposed rule).

Table 6-15: Comparison of Annualized Costs of Sensitivity Analysis (Millions 2013$)

Scenario Annualized Costs at 3% discount rate Annualized Costs at 7% discount rate

Industry Agency Total Industry Agency Total

Main Analysis $2.71 $0.10 $2.80 $2.97 $0.11 $3.08

Annual Industry 

Growth Rate of 5.8 

percent

(Section 6.1)

$3.85 $0.14 $3.99 $4.28 $0.15 $4.22 

0.39 Nanomaterials 

per Firm in Year 1 

(Section 6.2)

$0.21 $0.01 $0.22 $0.23 $0.01 $0.24 

25.67 Nanomaterials 

per Firm in Year 1 

(Section 6.2)

$13.76 $0.50 $14.26 $15.10 $0.55 $15.66 

The number of 

nanomaterials will 

grow by 50% over 10 

years(Section 6.3)

$2.09 $0.08 $2.17 $2.36 $0.09 $2.45 

The number of 

nanomaterials will 

quadruple over 10 

years (Section 6.3)

$5.23 $0.19 $5.43 $5.49 $0.09 $5.69 

Note: Totals may not sum due to rounding 
7-1

Chapter 7 – Benefits

As noted in the NMSP Interim Report (EPA, 2009b), EPA requires additional information to fulfill its 

mandate under TSCA to fully assess the risks posed by the production, sale, and use of nanomaterials in 

the United States. With this information, EPA will be able to screen these chemicals more effectively to 

identify whether additional risk assessment and management steps are needed.

By enhancing the data supplied to Agency risk-screening programs, EPA expects to more effectively and 

expeditiously reduce the potential risks posed by nanomaterials. The more EPA can base its decisions on 

actual data rather than on assumptions, the better EPA is able to tailor its risk management decisions to 

the level of actual risk whether higher or lower than it would be if based on assumptions alone. 

Ultimately, enhancing the risk screening process will have positive consequences for human and 

ecosystem health and will enable a more efficient allocation of EPA’s and society’s resources. EPA 

would have an increased ability to anticipate industry trends, particularly for chemicals for which EPA 

has concerns.

The benefits resulting from the proposed rule are discussed qualitatively in this section. Quantification of 

the benefits of the proposed rule would require more specific information about each user’s use patterns 

and preferences as well as the changes in these patterns and preferences that would result from the 

additional information made available under the proposed rule. These data are not readily available and 

collecting such data would be cost-prohibitive. For example, one approach would be to conduct a national 

willingness-to-pay (WTP) survey of the general public to determine the value that the public places on the 

availability of the information resulting from the proposed rule. However, such a survey, or a survey to 

collect similar information, has not been conducted.

7.1 Market Failure

When buyers or sellers do not have perfect information, rational decision making cannot occur and a 

market failure exists. Information regarding the hazards associated with a chemical substance may not be 

widely known for several reasons. In one case, known as asymmetric information, consumers and 

producers do not have the same level of information regarding the aggregate production, uses, and 

hazards of a chemical substance. Because information is a public good, producers are reluctant to provide 

information (that is, businesses may perceive the high costs of collecting and disclosing information to be 

greater than the benefits from increased access to chemical information). Individual consumers are 

simultaneously unlikely to be willing to pay the cost of collecting and reporting information if they can 

use information developed and paid for by others.

In addition to concerns about these direct costs, industry may have a disincentive to disclose data due to 

the possibility of liability or regulation (Applegate, 1991). For example, some firms releasing Toxic 

Release Inventory (TRI) data saw a negative response in financial markets, indicating further reasons why 

businesses may be reluctant to disclose information (Konar and Cohen, 1997). As a result, data on the 

chemicals subject to the proposed rule may be produced below what is optimal for society. 

7.2 Benefits of Information-Based Policies

The proposed rule will supply information on nanomaterial production to which the Agency (or the 

public) does not currently have access. Increasing and improving the amount of available data serves to 

reduce inefficiencies, described above, arising from asymmetric information.
7-2

Increased and improved data on the production, sale, and use of nanomaterials in the U.S. would allow 

EPA and others to use the data more effectively as part of screening and prioritization programs. 

Screening chemicals for potential risks is an essential first step in developing and prioritizing risk 

management activities. Effective risk-screening by EPA depends on the ability to characterize chemical 

uses accurately and to predict potential exposures. Current screening activities are greatly hampered by 

the incomplete and inconsistent nature of available data. In addition, EPA’s current screening activities 

are further hampered by the fact that EPA must rely on relatively limited public sources of information. 

This proposed rule will benefit society by filling these information gaps and contributing to better

assessments of potential risks and risk management decisions.

The proposed rule will increase publicly available data about a chemical’s potential risks and 

consequently is likely to result in (a) a reduction in the cost of risk-based decision making about the 

chemical, and (b) an improvement in the expected outcome of the decisions.

 Reduced cost of risk-based decision making. By making new information about potentially toxic 

substances available to the public (including EPA and other government agencies), this proposed rule 

can replace other information-gathering, management, and dissemination activities related to 

nanomaterials. Once the data are publicly available, information users and decision makers will avoid 

the time and resource costs required to individually perform these activities. In effect, the proposed 

rule increases the efficiency (and strength) of the decision-making process.

 Improved outcome of decisions. Information-based policies contribute to better decisions by 

redirecting resources toward their most highly valued uses. With incomplete information regarding 

toxic chemicals, public and private decision makers are not able to assess adequately the benefits and 

costs of actions that involve these substances. For example, EPA decisions regarding whether, when, 

and how to target chemicals for further risk assessment can be misdirected if basic risk-screening 

information is unavailable or inadequate. With more information to supplement the data provided in 

the NMSP and fill gaps in the current understanding of the benefits and risks of nanoscale substances, 

EPA can better direct its limited resources toward high-priority risks. Improved information can 

therefore help lead to more socially optimal reductions in risks to humans and the environment.

The proposed rule will generate both types of benefits. First, it will provide data that are otherwise 

unavailable or reduce EPA’s and other decision-makers’ reliance on databases and information sources

that are inadequate for accurately characterizing the risks associated with the nanomaterials in commerce 

that need to be evaluated and potentially regulated. As discussed in Chapter 4, EPA will bear the cost of 

collecting and managing the data; however, by providing more reliable and complete data on 

nanomaterial uses and exposures, the rule will also allow EPA to save time and resources in screening 

chemicals and in developing risk management priorities.

Second, the proposed rule will allow EPA to better prioritize its risk management activities—to move 

more quickly in addressing nanomaterials that pose relatively high risks (and/or relatively low riskmanagement costs).

For example, potential problems from incomplete information include the designation of an 

inappropriately high priority level to a chemical substance, resulting in unnecessary effort and resource 

expenditures for both regulated parties and EPA in cases where adequate data would have led the Agency 

to act differently. Similarly, if a business cannot provide adequate data for its product, that product may 

be subject to regulations which are unsuitable for its true hazard level (Applegate, 1991). In these cases, it 

is in the best interest of the business to disclose information about its chemical production. Reporting 

through TSCA ensures the public that the chemical information provided by firms is credible, and thus is 

more likely to be utilized efficiently (Cohen and Santhakumar, 2007). As described by Konar and Cohen 
7-3

(1997), information provision can also serve as informal regulation, providing financial incentives for 

reducing behaviors which may lead to negative externalities.

Specific benefits that accrue from the use of the information generated by this proposed rule are discussed 

in the following sections.

7.3 Potential Users of Information Generated by the Proposed Rule

EPA is expected to be the primary user of the information generated by the proposed rule, although other 

public and private organizations, in particular those interested in managing the health and environmental 

risks posed by nanomaterials, will also use the data. The information is expected to be applied and 

disseminated by these users in a number of ways; however, it will primarily serve to reduce the costs of 

screening and managing chemical risks and to improve risk management decisions. The American public 

will be the ultimate beneficiaries of the proposed rule. By lowering the cost of decision-making in the 

public sector, the rule will free up resources for other public or private uses. Similar gains will also result 

from cost savings in private-sector decision-making. By improving risk management decisions, the rule 

will also help to better target risk management activities to the areas where the net benefits (i.e., risk 

reductions net of control costs) are expected to be the largest.

The users and beneficiaries of the reporting program and the benefits they derive from improved data on 

nanomaterials are discussed in more detail in the sections below.

7.3.1 EPA Risk-Screening and Management Programs

EPA’s Office of Pollution Prevention and Toxics (OPPT) has a multifaceted approach to managing 

chemical risks. Chemicals enter OPPT’s system primarily through a request by the Interagency Testing 

Committee or a request by the public or are otherwise identified by the Agency. The chemicals then enter 

one of several more detailed screening processes. Depending on the outcome of these screening 

processes, the next step may include entering one of EPA’s risk management programs. EPA’s current 

programs and tools to evaluate and manage chemical risks include:

 Risk Screening. OPPT screens chemicals on the TSCA Inventory to identify potential risks and 

determine whether more detailed assessments should be undertaken. With the data currently 

available, EPA does not have the information needed to effectively and systematically screen most 

nanomaterials, some of which may not even be included in the inventory. The proposed rule would 

supply exposure-related information that the Agency does not currently have, recognizing that 

industry has a greater knowledge than EPA about its own operations and the uses of chemicals it 

manufactures and/or sells. Without this information, EPA would likely: (1) not screen these 

chemicals, (2) screen them using outdated or anecdotal exposure information, or (3) screen them but 

rely on exposure estimates using modeling data. Therefore, data collected as a result of the proposed 

rule will improve the Agency’s ability to screen nanomaterials in commerce, allowing the Agency to 

better focus its chemical screening programs and to identify potentially risky situations earlier than 

otherwise possible.

 Master Testing List. The data collected under the proposed rule for nanomaterials would also help to 

determine which chemicals substances belong on the Master Testing List (MTL). The MTL is a list of 

chemicals identified by the Agency as having inadequate data for health and/or environmental risk 

assessments. OPPT uses the MTL to establish priorities for chemical testing, keep the public 

informed, solicit input from industry on specific chemical exposure and risk assessment needs, and to 

encourage industry to perform testing. Exposure-related manufacturing, processing, and use data 

would enable EPA to better target testing needs to situations in which potential exposures are known 
7-4

to occur, thereby increasing the efficiency of efforts in these programs and facilitating earlier 

completion of critical testing needs.

 Design for the Environment (DfE) program. EPA’s DfE program incorporates principles and 

strategies from both the Existing Chemicals review program, by focusing on specific chemical uses 

and establishing partnerships with industry to develop voluntary long-range plans for risk 

management. The data collected under the proposed rule would help to identify use cluster candidates 

for this program. The data could be used to assist in ranking activities, identifying high-risk areas, and 

developing realistic approaches for reducing risk.

7.3.2 Other Federal Risk Management Programs

Other governmental agencies, such as the Occupational Safety and Health Administration (OSHA), the 

National Institute for Occupational Safety and Health (NIOSH), and the Consumer Product Safety 

Commission (CPSC), share regulatory authority over chemical substances or products containing them. In 

the case of NIOSH, the agency compiles summaries of available information and recommends exposure 

limits. Therefore, EPA serves as a conduit for chemical hazard information between the chemical 

producers and these other agencies.

OSHA currently manages occupational exposure to chemicals by setting a variety of chemical and 

personal protection standards, by requiring preparation of emergency response and process safety 

management plans and by requiring provision of health and safety data to workers for chemicals used in 

the workplace. OSHA will be able to use the data collected under the proposed rule to identify chemicals 

with large numbers of potentially exposed workers or with uses that suggest greater exposure potential. 

The information provided by the proposed rule could increase OSHA’s ability to manage chemical 

hazards, exposures, and risks in occupational settings.

NIOSH will also benefit from the exposure-related information collected under the proposed rule. The 

exposure information that NIOSH uses to determine occupational safety and health in businesses 

nationwide may be based on outdated information collected under the National Occupational Exposure 

Survey (NOES). Completed in 1983, NOES collected information such as plant site location, plant site 

SIC, information on the plant site’s occupational safety and health programs, occupational titles of 

workers potentially exposed, the number of employees per occupational title, information on process 

steps, and trade names of products. Recognizing that some of the nanomaterials reported under the 

proposed rule may have been developed in the last decade, NIOSH could use the data in place of the 

NOES data to identify chemicals with large numbers of potentially exposed workers or with uses that 

suggest greater exposure potential.

CPSC also could use the new data directly in conducting its exposure and risk assessment activities (e.g., 

screening consumer products for chemical hazards). CPSC obtains risk information to screen chemical 

hazards from a network of hospital emergency rooms. This information is limited to injuries and illnesses 

resulting from acute exposures only.

Additional data required by the proposed rule would provide a better source of reliable information on the 

chemicals used in consumer products. CPSC would improve its ability to identify the nanomaterials used 

in consumer products and, with consideration of hazard data, to identify chemical–consumer use 

situations presenting greater potential risk. The information could improve CPSC’s ability to meet its 

program objective of protecting the public from chemical hazards in consumer products.

7.3.3 State and Local Programs

The data collected under the proposed rule will also help state and local authorities with rulemaking, 

information collection, and voluntary program activities. Because state and local governments must 
7-5

address chemicals, use patterns, and exposure scenarios that may be unique or isolated, state and local 

agency access to improved data on nanomaterials will assist in identifying situations that pose potentially 

high risks for individual states or locations within those states.

7.3.4 Nongovernmental Organization (NGO) Initiatives and Private-Sector Stewardship

Many private-sector organizations have a strong interest in reducing risks and providing leadership in 

preventing pollution while still maintaining productive economic enterprises. These organizations can 

better meet these objectives by developing a better understanding of how chemicals are used in general. 

This will allow them to more effectively manage risks and participate in community, regional, and 

national priority setting for chemicals.

The publicly available (non-CBI) information collected under the proposed rule can support activities 

typically undertaken by NGOs, such as tracking industry trends, organizing grassroots involvement in 

risk-based decision-making, and conducting outreach and educational programs. These organizations 

could use the new data to identify and establish priorities for risks; to evaluate chemicals and chemical 

use patterns to determine areas of concern; to identify and promote pollution prevention opportunities; 

and to focus pollution prevention, public outreach, and education initiatives and activities.

Industry can use the collected data to improve corporate product stewardship programs through access to 

use information reported by multiple companies. The American Chemistry Council’s Responsible Care 

program is one example of a corporate product stewardship program that could use this information. Use 

information supplied under the rule could be used to further strengthen this program. The Responsible 

Care program requires companies to take responsibility for their products from cradle to grave, which 

requires an understanding of how their product is being used not only by their customers, but also further 

down the value chain. Despite this private effort, some companies have told EPA that they do not know 

how their chemicals are used. Non-CBI information provided by multiple companies could give an 

individual company a better understanding of the downstream uses of its products, therefore enabling 

more effective implementation of the Responsible Care concepts.
8-1

Chapter 8 – Small Entity Impact Analysis

This chapter estimates the impact that the proposed rule may have on small entities by examining the 

relationship between the compliance costs and company sales for small companies.

The Regulatory Flexibility Act (RFA) of 1980, as amended by the Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 1996, requires regulators to assess the effects of regulations on 

small entities, including businesses, nonprofit organizations, and governments. In some instances, 

agencies also are required to examine regulatory alternatives that may reduce adverse economic effects on 

significantly impacted small entities. The RFA requires agencies to prepare an initial and final regulatory 

flexibility analysis for each rule unless the Agency certifies that the rule 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 types, 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, that would lessen the rule’s 

burden on small entities.

The major steps followed in the analysis are described below.

8.1 Select a Relevant Small Business Definition

The RFA relies on the definition of “small business” found in the Small Business Act, which authorizes the 

Small Business Administration (SBA) to develop definitions for “small business” for industries in each 

North American Industry Classification System (NAICS) code. These definitions can be based either on a 

company’s number of employees or its sales, depending on SBA’s criteria for that industry. As nascent 

fields, nanotechnology manufacturing, processing, and distribution have not been assigned NAICS codes 

under the most recent classification system 2007. This analysis therefore applies the SBA small business 

definitions to a sample of nanomaterials companies matched in the D&B database (further described in 

Section 0) according to the NAICS listed for the global parent company of each company in that database. 

Note that there are two definitions of small business used in this Economic Analysis. The first definition,

which has been used in the previous chapters of this Economic Analysis, is used to determine if a 

nanomaterials firm is exempt from the proposed rule requirements. According to this definition, which was 

adapted from the standard TSCA definition provided in 40 CFR 704.3, a manufacturer of a TSCA Section 

8(a) chemical substance is defined as small if total annual sales of the company, combined with those of 

any parent company, are below $4 million13. The second definition, which is used only in this chapter, is 

based on the small business definitions found in the SBA for the various industries. The small business 

thresholds for the industries identified in the D&B database range from 100 to 1,000 employees. Twenty 

companies in the sample meet the SBA small business definition. Thus, although considered small 

 

13 The original definition of a small business under 40 CFR 704.3 has been modified for this rule. The original 

definition defined a manufacturer or importer of a substance as small if (1) its total annual sales, when combined 

with those of its parent company (if any), are less than $40 million and the annual production or importation volume 

of a particular substance at any individual site owned or controlled by the manufacturer or importer is less than 

100,000 pounds, or (2) its total annual sales, when combined with those of its parent company (if any), are less than 

$4 million, regardless of the quantity of substances produced or imported by that manufacturer or importer.
8-2

businesses for the purposes of this small entity impact analysis, they are expected to incur the full 

compliance costs of the rule. All twenty of these nanomaterials firms are expected to experience an impact 

of less than one percent of sales.

Table 8-1: Ultimate Parent NAICs Codes for the 20 Small Businesses in Sample

Ultimate 

Parent NAICS

Code

Description Number 

of Firms Small Business Threshold

325131 Inorganic Dye and Pigment Manufacturing 3 Less than 1,000 employees

325188 All Other Basic Inorganic Chemical Manufacturing 4 Less than 1,000 employees

325998 All Other Miscellaneous Chemical Product and 

Preparation Manufacturing 2 Less than 500 employees

331221 Rolled Steel Shape Manufacturing 1 Less than 1,000 employees

334413 Semiconductor and Related Device Manufacturing 1 Less than 500 employees

335991 Carbon and Graphite Product Manufacturing 1 Less than 750 employees

423220 Home Furnishing Merchant Wholesalers 1 Less than 100 employees

423330 Roofing, Siding, and Insulation Material Merchant 

Wholesalers 1 Less than 100 employees

423510 Metal Service Centers and Other Metal Merchant 

Wholesalers 2 Less than 100 employees

541712 Research and Development in the Physical, 

Engineering, and Life Sciences (except Biotechnology) 4 Less than 500 employees

Note: NAICS codes, descriptions, and small business definitions are all from the 2007 NAICS

Source: D&B, 2009; SBA, 2010

8.2 Identify the Small Business Population

To estimate the number of small and large businesses in the population of U.S. nanomaterials firms, EPA 

matched the sample described in Chapter 2 to the Dun & Bradstreet (D&B) corporate database to identify 

company and parent company sales and employment, measured the percentage of companies defined as 

small and large within the sample (based on the SBA definitions), and applied these percentages to the 

population estimate.

EPA attempted to obtain sales and employment data from the Dun & Bradstreet corporate database for the 

132 companies in the sample described in Chapter 2, following a rigorous search and matching procedure.

The procedure began with a basic search by company name for each company in the sample. Companies 

for which the initial search returned a single match were checked for a U.S. address and considered 

positively matched. Companies for which the initial search returned multiple matches were subsequently 

filtered by zip code. Companies not found in the D&B database were considered unmatched.

As noted above, the SBA small business definitions consider either the sales or employment of parent 

companies when classifying a subsidiary as a small business. Therefore, for the matched companies 

identified in the D&B database as subsidiaries of a parent company, the parent company’s data were 

recorded. For all other matched companies, the company’s data were recorded.

A more intensive matching procedure was subsequently applied to the set of companies not matched in 

the original procedure. After undertaking basic online research, each unmatched company was identified 

as either (a) owned or acquired by a parent company; (b) a joint venture between two or more companies; 

(c) out of business; or (d) none of these. This information was then used to perform a new round of 
8-3

matching in the D&B database, yielding several more matches. For the matched companies identified by 

this procedure, the parent company’s data were recorded.

Several special cases occurred during the search and matching process. In two cases, a company had 

multiple apparent registrations under a single name and at a single address; however, these entries were 

not linked in the D&B database, as generally are companies with shared ownership, thus causing 

difficulty in identifying the parent company. In one of these cases, the entries were few enough in number 

to identify the parent company; however, in the other case, the parent could not be identified.

A total of 103 companies in the sample were found in the D&B database. Of these, 83 companies have no 

parent company, and 20 companies have a parent company; however, one of the parent companies was 

already a member of the sample, thus reducing the matched subset to 83 + 20 – 1 = 102 companies. An 

additional two companies were identified as joint ventures, and one company was verified closed. 

Twenty-six companies remained unmatched against the D&B database. 14

Annual sales data were obtained from the D&B database and internet-based searches for 95 of these 102 

companies. Of the 95 nanomaterials manufacturers and parent companies found with sales data, 34 have 

annual sales equal to or greater than $4 million and are therefore subject to the proposed rule. Within this 

subset, 20 companies (58.8 percent) meet the SBA small business definitions for their respective NAICS 

classifications, and 14 companies (41.2 percent) do not meet the SBA small business definitions. These 

results are provided Table 8-2. All of these companies are considered large businesses under the rule 

definition of small business.

Table 8-2: Sample Small Business and Large Business 

Characteristics

Population Category

Number of 

Firms in 

Sample

Percent of 

Sample

Small Businesses 20 58.8%

Large Businesses 14 41.2%

Total 34 100.0%

Note: Entries may not sum to total due to rounding.

Source: D&B, 2009; Lux Research, 2007; Nanowerk, 2009.

Multiplying the percent of U.S.-based nanomaterials manufacturers that meet the SBA small business 

definitions (58.8 percent) by the previously estimated population of U.S.-based nanomaterials 

manufacturers subject to the proposed rule (295 companies) yields an estimate of around 174 small 

business nanomaterials firms and a complementary estimate of around 121 large (non-small) business 

nanomaterials firms that are subject to the rule.15 All of these companies would be considered large 

businesses under the rule definition of small business.

 

14 EPA believes the 102-company sample to be representative. However, if a small business is less likely to register 

in the D&B database, it is possible that this report underestimates the number and percentage of small companies in 

the universe of U.S. nanomaterials firms.

15 As previously stated, the analysis assumes that the universe of nanomaterials firms remains constant over the 10-

year analysis period, while the total number of nanomaterials subject to the proposed rule is expected to double.
8-4

Table 8-3: Universe Small Business and Large Business 

Estimates

Population Category

Est. Number of 

Firms in 

Universe

Percent of 

Sample

Small Businesses 174 58.8%

Large Businesses 121 41.2%

Total 295 100.0%

Note: Entries may not sum to total due to rounding.

Source: BCC Research, 2006; D&B, 2009.

8.3 Estimate the Cost-to-Sales Ratio for Small Companies

As previously stated, the number of nanomaterials produced for commercial applications by the 174 small 

U.S.-based nanomaterials manufacturers, processors, and distributors estimated above is assumed to double 

over the analysis period. It is assumed that nanomaterials firms will produce 5.06 regulated nanomaterials in 

the first year of the rule, and an additional 0.56 nanomaterials per year in subsequent years.

16 (9.8Appendix 

B presents a sensitivity analysis for the cost-to-sales ratio based on the number of nanomaterials produced.)

As indicated in Table 3-9, the total cost of the rule over the 10-year analysis period is $2.71 million with a

three percent discount rate and $2.97 million with a seven percent discount rate. On a per-firm basis,

annualized costs are approximately $9,180 with a three percent discount rate and $10,081 with a seven 

percent discount rate.

17

Past small business analyses developed by EPA have used a lower impact threshold of compliance costs 

of less than 1 percent of sales and a higher impact threshold as compliance costs of greater than 3 percent 

of sales to evaluate whether or not the economic impacts faced by the small entities are significant. 

Therefore, to determine the magnitude of any potential adverse impact of the proposed rule on small 

entities, annualized per-company compliance costs were compared to annual sales. D&B data for the 20 

small businesses (by SBA definitions) identified among the 34 companies in the 95-company sample of 

U.S.-based nanomaterials firms subject to the proposed rule were used to develop cost-to-sales ratios for 

these companies, which are believed to represent the broader universe of small businesses.18

Given expected annualized per-company costs ranging between approximately $9,180 and $10,081, a one

percent-of-sales threshold for economic impact equates to sales thresholds of approximately $918,000 and 

$1,008,000, respectively; in other words, in order for the compliance cost to exceed one percent of sales, 

sales must be less than these values. Similarly, three percent-of-sales thresholds for economic impact 

range from approximately $306,000 to $336,000. These equivalences are show in Table 8-4.

Table 8-4: Characterization of Economic Impacts

Economic Impact 

Type

Cost-to-Sales 

Percentage

Equivalent Sales Dollar 

Threshold ($1,000)

($2013)

 

16 This estimate is an average; therefore, while no individual company may produce, process, or sell a fraction of a 

nanomaterial, the aggregated population of producers may produce, on average, a fraction of a nanomaterial. This 

average will under- or over-estimate the compliance cost incurred by each company and consequently under- or 

over-estimate the cost-to-sales compliance cost ratio for each company.

17 Note that annualized per-firm costs are calculated using the per-firm costs from Table 3-8 and not as the quotient 

of the total annualized costs and the total number of firms.

18 EPA believes the 20-company sample discussed here to represent the universe of small business nanomaterials 

manufacturers, importers, processors, and distributors. However, it is possible that the sample is not representative, 

in which case the small entity impacts might be positively or negatively biased.
8-5

Annualized 

(3%)

Annualized 

(7%)

Higher Impact > 3% < $306 < $336

Lower Impact 1% to 3% $306 to $918 $336 to 1,008

Less than 1% Impact < 1% > $918 > $1,008

Table 8-5 summarizes the estimated cost impacts for the sample of small business, and applies these 

sample percentages to estimate the larger universe of impacted businesses. As indicated, all 20 small

businesses (100.0 percent) from the sample, and thus all small businesses in the universe, are expected to 

experience no adverse economic impact (that is, an impact of less than one percent of sales). 

Table 8-5: Estimate of Impacts on Small Business Sample

Economic Impact 

Type

Cost-to-Sales 

Percentage

Sample Universe 3% Discount Rate 7% Discount Rate

Number Percent Number Percent Number Percent

Higher Impact > 3% 0 0.0% 0 0.0% 0 0.0%

Lower Impact 1% to 3% 0 0.0% 0 0.0% 0 0.0%

Less than 1% Impact < 1% 20 0.0% 20 0.0% 174 00.0%

Total -- 20 100.0% 20 100.0% 174 100.0%

Source: D&B, 2009; EPA, 2009a.

In EPA’s judgment, these are conservative estimates. There are several reasons why the rule may impact 

certain small businesses more than others. Recently chartered companies may have lower sales at the time 

of reporting and therefore experience a relatively higher impact under the rule as a percentage of current, 

annual sales; however, these firms are expected to recover the initial compliance cost with future sales. 

Some firms may sell only a single nanomaterial that comprises (and limits) its entire revenue stream, 

raising the impact of the rule as a percent of sales; other firms may offer a broad portfolio of products 

other than nanomaterials. In the latter case, sales of non-nanomaterial products might offset the costs of 

complying with the proposed rule and thus reduce the estimated impact as a percentage of sales. In EPA’s 

judgment, no companies are expected to experience a prohibitive cost or burden under the proposed rule.
9-1

Chapter 9 – Other Impact Analyses

Several statutes and executive orders (EOs) pertain to the proposed rule. This chapter presents statements 

discussing paperwork reduction, unfunded mandates, regulatory planning and review, tribal governments, 

children’s health, and environmental justice, among others.

9.1 Paperwork Reduction Act (PRA)

According to the Paperwork Reduction Act (PRA), 44 USC 3501 et seq., an agency may not conduct or 

sponsor, and a person is not required to respond to, a collection of information that requires Office of 

Management and Budget (OMB) approval under the PRA, unless it has been approved by OMB and 

displays a currently valid OMB control number. The information collection requirements related to this 

action have already been approved by OMB pursuant to the PRA under OMB control number 2070-0067 

(EPA ICR No. 1198). The proposed rule will impose a burden requiring additional OMB approval. The 

ICR addendum is available for comment in the public docket for the proposed rule.

This section estimates the burden and costs for both the respondents and the Agency associated with the 

recordkeeping and reporting requirements of the proposed rule. In this context, the term “burden” is 

interpreted as the total time, effort, or financial resources expended by people to generate, maintain, 

retain, disclose, or provide information to or for a federal agency. This includes the time needed by 

regulated entities to review instructions and to develop, acquire, install, and use technology and systems 

to collect, validate, verify, and disclose information. Time taken to adjust existing ways to comply with 

any previously applicable instructions and requirements and to train personnel to respond to the 

information collection task is also included. In this section, burden hours for both the industry 

respondents and the government are estimated. 

Table 9-1 presents a summary of the total burden and costs to industry associated with the proposed rule 

over the first three years of its promulgation. The data used to populate this table are explained in greater 

detail in Chapter 3. 

Table 9-1: Industry Burden Estimates for the Proposed Rule

Year

Reporting 

Populatio

n

Rule 

Familiarizatio

n Burden 

(Hours)

Form

Completion 

and Record 

Keeping 

Burden 

(Hours)

Electronic 

Reporting 

Requirements 

(Hours)

Number 

of Reports

Total 

Burden 

(Hours)

1 295 0.82 137.60 1.42 1,493 206,098

2 295 0.00 137.60 0.17 165 22,754

3 295 0.00 137.60 0.17 165 22,754

Average 295 0.27 137.60 0.59 608 83,869

Notes: Values may not calculate due to rounding.

See Chapter 3 for more details.

9.2 Unfunded Mandates Reform Act (UMRA)

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA, Public Law 104-4), 2 U.S.C. 1531-1538 for State, local, or tribal 

governments or the private sector. Based on EPA’s experience with similar information collection rules, 

State, local, and tribal governments have not been affected by this reporting requirement, and EPA does 
9-2

not have any reason to believe that any State, local, or tribal government will be affected by this 

rulemaking. 

9.3 Executive Order 13132 – Federalism

Under Executive Order 13132, “Federalism” (64 FR 43255, August 10, 1999), EPA has determined that 

the proposed rule does not have “federalism implications” because it will not have 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 levels of government, as specified in the 

executive order. The proposed rule establishes reporting and recordkeeping requirements that apply to 

manufacturers and processors of certain chemicals. Because EPA has no information to indicate that any 

state or local government manufactures or processes the chemical substances covered by this action, the 

proposed rule does not apply directly to states and localities and will not affect state and local 

governments. Thus, EO 13132 does not apply to the proposed rule.

9.4 Executive Order 13175 – Consultation and Coordination with Indian Tribal 

Governments

As required by Executive Order 13175, entitled Consultation and Coordination with Indian Tribal 

Governments (65 FR 67249, November 9, 2000), EPA has determined that this proposed rule does not 

have tribal implications because it will not have any effect on tribal governments, on the relationship 

between the Federal government and the Indian tribes, or on the distribution of power and responsibilities 

between the Federal government and Indian tribes, as specified in the Order. Thus, EO 13175 does not 

apply to the proposed rule.

9.5 Executive Order 13045 – Children’s Health 

Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” 

(62 FR 19885, April 23, 1997), requires that federal agencies examine the impacts of each regulatory 

action on children for any economically significant regulation (as defined by Executive Order 12866) that 

the Agency has reason to believe may disproportionately affect children.

EPA interprets EO 13045 as applying only to those regulatory actions that concern health or safety risks, 

such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. 

The proposed rule does not establish an environmental standard intended to mitigate health or safety risks 

and will not have an annual effect on the economy of $100 million or more, nor does it otherwise have a 

disproportionate effect on children. Nevertheless, the information obtained from the reporting required by 

this rule will be used to inform the Agency’s decision-making process regarding chemicals to which 

children may be disproportionately exposed. This information will also assist the Agency and others in 

determining whether the chemicals in this proposed rule present potential risks, allowing the Agency and 

others to take appropriate action to investigate and mitigate those risks.

9.6 Executive Order 12898 – Environmental Justice

Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and 

Low Income Populations” (59 FR 7629, February 16, 1994), establishes federal executive policy on 

environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and 

permitted by law, to make environmental justice 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 populations and low-income populations in the United States.
9-3

The Agency believes that the information collected under this proposed rule, if finalized, will assist EPA 

and others in determining the potential hazards and risks associated with various chemicals manufactured 

and used at the nanoscale. Although not directly impacting environmental justice-related concerns, this 

information will enable the Agency to better protect human health and the environment, including in lowincome and minority communities.

The proposed rule is directed at all nanoscale substances for which basic production, use, and toxicity 

information is currently unavailable. All consumers of these chemicals and the products made from them 

and all workers who come into contact with these chemicals could benefit if data regarding the chemicals’ 

health and environmental effects were developed. Therefore, it does not appear that the costs and the 

benefits of the proposed rule will be disproportionately distributed across different geographic regions or 

among different categories of individuals.

9.7 Executive Order 13211 – Energy Supply, Distribution, or Use

This proposed rule is not subject to Executive Order 13211, “Actions Concerning Regulations That 

Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), because it is not 

a significant regulatory action under Executive Order 12866.

9.8 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, 12(d) (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 applicable 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. NTTAA directs EPA to provide Congress, through OMB, explanations when the 

Agency decides not to use available and applicable voluntary consensus standards. 

The proposed rule does not involve technical standards. Therefore, EPA is not considering the use of any 

voluntary consensus standards.
A-1

Appendix A– Wage Rate Calculations

This appendix describes the derivation of the fully loaded wage rates and inflation factors used in 

calculating costs of labor, materials, and other inputs. All cost estimates are presented in 2011 dollars.

The fully loaded unit labor cost for managerial, professional/technical, and clerical labor in the regulated 

industry and for EPA staff is estimated by adding fringe benefits and overhead costs to the hourly wage or 

annual salary for each category following the method described in Wage Rates for Economic Analysis of 

the Toxics Release Inventory Program (EPA, 2002b). This appendix describes the method employed to 

estimate the fully loaded unit labor costs for each labor category and presents the results of the analysis.

Labor categories used in the analysis correspond to the U.S. Bureau of Labor Statistics (BLS) Standard 

Occupational Classification (SOC) system. In March 2004, BLS began using the North American 

Industry Classification System (NAICS) instead of the Standard Industrial Classification (SIC) System, 

and the Standard Occupational Classification (SOC) system instead of the Occupational Classification 

System (OCS). Exhibit A-1 summarizes the crosswalk between old and new occupational titles, and lists 

the SOC titles that correspond to the managerial, professional/technical, and clerical labor categories used 

in this analysis (Weinstein and Loewenstein, 2004).

Exhibit A-1: Detail of Labor Categories Used in the Analysis

Labor Category Used in 

the Analysis BLS Old Title (OCS) BLS New Title (SOC)

Managerial Executive, administrative, and managerial Management, business, and 

financial

Professional/Technical Professional specialty and technical Professional and related

Clerical Administrative support, including clerical Office and administrative support

Source: BLS (2014); Weinstein and Loewenstein (2004).

A.1 Derivation of Industry Unit Wage Rates

Wages and fringe benefit data for managerial, professional/technical, and clerical labor are from the BLS 

Employer Costs for Employee Compensation (ECEC) historical data for December 2013 (BLS, 2014).19

The costs of fringe benefits such as paid leave and insurance, specific to each labor category, are taken 

from the same BLS report (BLS, 2014). Fringe benefits as a percentage of wages are calculated separately 

for each labor category. For example, the wage rate for professional/ technical labor in 2013 was $38.16, 

and the average fringe benefit was $19.90.

20 Therefore, fringe benefits as a percentage of wages were 

$19.90/$38.16, or approximately 52 percent (see Exhibit A-2).

 

19 Past economic analyses used ECEC data series specific to white-collar workers in the manufacturing sector. 

However, those data sets were discontinued in March 2007, and these historical data were the best alternative. In a 

phone conversation (February 11, 2009), a BLS employee could not identify a better data set to use.

20 Past economic analyses have used the term “technical” labor. Here the category is called “professional/technical” 

labor, to make clear how it relates to BLS categories. In 2004, BLS changed from the Occupational Classification 

System, OCS, to the Standard Occupational Classification system, SOC. In the process, the “Professional specialty 

and technical” category became the “Professional and related” category. However, the coverage of the old and new 

occupational groups is approximately the same. See the BLS article, “Comparing Current and Former Industry and 

Occupation ECEC Series” (Weinstein and Loewenstein, 2004).
A-2

An additional loading factor of 17 percent is applied to wages to account for overhead.21 This approach is 

used for consistency with Office of Pollution Prevention and Toxics (OPPT) economic analyses for two 

major rulemakings: Wage Rates for Economic Analyses of the Toxics Release Inventory Program, June 

2002 (EPA, 2002b), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final 

Report, August 2002 (EPA, 2002a). This overhead loading factor is added to the benefits loading factor, 

and the total is then applied to the base wage to derive the fully loaded wage. For example, fully loaded 

wage for professional/technical labor in 2013 is $38.16 × (1+ 0.52 + 0.17) = $64.55. 

Fully loaded costs for managerial and clerical labor are calculated in a similar manner, as shown in 

Exhibit A-2.

Exhibit A-2: Derivation of Loaded Industry Wage Rates

Labor 

Category

Data Source for 

Wage Information

Wage Fringe 

Benefit

Fringes as 

% wage

Overhea

d as % 

wage1

Fringe + 

overhead 

factor

Loaded 

Wages

(a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)=(a)x(e)

Managerial

BLS ECEC, Private 

Manufacturing 

industries,

“Management, 

business, and financial 

occupations”2

$46.25 $23.71 51.26% 17% 1.68 $77.82 

Professional/ 

Technical

BLS ECEC, Private 

Manufacturing 

industries, 

“Professional and 

related occupations“2

$38.16 $19.90 52.15% 17% 1.69 $64.55 

Clerical

BLS ECEC, Private 

Manufacturing 

industries, “Office and 

administrative support 

occupations”2

$18.05 $9.23 51.14% 17% 1.68 $30.35 

Notes:

1 The wage and fringe benefit rates are calculated as the average of the quarterly rates in 2013.

2 An overhead rate of 17% was used based on assumptions in Rice (2002) and U.S. EPA (2002).

A.2 Derivation of Agency Unit Wage Rates

Unit wage rates for EPA staff are calculated based on annual federal salaries for the WashingtonBaltimore area published by the Office of Personnel Management (OPM) and effective January 2013 

(OPM, 2013). The average salary for one full-time equivalent (FTE) staff member is estimated as the 

salary for a GS-13 Step 5 employee, which is $100,904 annually without fringe benefits and overhead 

costs. In order to derive the fully loaded salary, EPA multiplied the annual salary by an assumed loading 

factor of 1.6 to reflect federal fringe benefits and overhead, which results in a fully loaded annual salary 

of $161,446 (see Exhibit A-3: Derivation of Loaded Agency Wage Rates).

 

21 The change was used in the 2003 PMN SNUR economic analysis (EPA, 2003b). In some earlier reports, the 17 

percent had been applied to wages-plus-fringe benefits.
A-3

The Agency loading factor of 1.6 is from an EPA guide entitled Instructions for Preparing Information 

Collection Requests (ICRs) (EPA, 1992, page 30, footnote 9). The 60 percent assumption was labeled 

“the benefits multiplication factor” in the EPA guide, but has been used in many EPA OPPT ICRs to 

reflect both fringe benefits and overhead for federal staff. For example, it was used in a document 

supporting EPA ICR No. 1139.06 (EPA, 2000), with the following explanation:

The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits 

multiplication factor). The multiplication factor used is recommended in EPA’s Office of Policy, 

Planning, and Evaluation’s Instructions for Preparing Information Collection Requests (ICRs)

(June 1, 1992). An EPA internal phone call between Carol Rawie (OPPT/EETD/RIB) and Carl 

Koch (OPPE/RMD/IMB) on May 3, 1994, indicated that the 1.6 factor included not only benefits 

but also overhead.

Fully loaded costs for Agency labor are shown in Exhibit A-3: Derivation of Loaded Agency Wage Rates.

Exhibit A-3: Derivation of Loaded Agency Wage Rates

Labor 

Category

Data Source 

for Wage 

Information

Date

Wage Fringe 

Benefit

Fringes as 

% wage

Overhea

d as % 

wage

Fringe + 

overhead 

factor

Loaded Wages

(a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)=(a)x(e)

EPA staff 

FTE

Annual federal 

staff cost: OPM 

WashingtonBaltimoreNorthern 

Virginia, DCMD-PA-VAWV, area, GS13 Step 5 pay 

rates a

Jan-13

$100,904

(annual)

--

[Included in 

60% 

overhead]

60% b 1.60

$161,446

(annual)

$48.35

(hourly) $77.36 (hourly)

Notes:

a The Agency salary is the unloaded federal GS-13 Step 5 salary ($100,904 for 2013), from the OPM salary table for the

Washington-Baltimore-Northern Virginia Locality Pay Area (OPM, 2013). Hourly rates are based on annual salary divided by 

2,087 hours.

b The 60% fringes-and-overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs)

(EPA, 1992, page 30, footnote 9).
B-1

Appendix B – Small Business Sensitivity Analysis

The following presents an alternative small business analysis to demonstrate the sensitivity of the small 

business analysis to changes in the assumed number of nanomaterials produced by each small firm. The 

current small business analysis in Chapter 8 assumes that both small and large firms produce on average 

5.1 “commercial” nanomaterials per firm. In this alternative analysis we calculate the number of 

nanomaterials manufactured separately for large and small firms and how this change affects the number 

of small businesses significantly affected by the proposed rule. 

B.1 Estimation of the number of nanomaterials per small Firm 

In Section 2.4 of this report EPA calculates the number of nanomaterials produced by each firm, based on 

a sample of 34 large businesses, using the TSCA-based definition of annual revenue greater than $4 

million. Within this group of 34 companies, EPA then calculated the median number of nanomaterials

and makes the assumption that both small and large businesses produce the same number of 

nanomaterials. However, this assumption is conservative and may overestimate the impact of the 

requirements on small businesses. In this appendix, we present the costs to small businesses using the 

sample of 34 businesses that are currently used in Chapter 2 to estimate the average number of 

nanomaterials produced by small and large companies as opposed to all companies.

Of the 34 nanomaterial-producing firms identified in Chapter 2, 26 had product information available on a 

company website. Twenty-three of these firms manufactured nanomaterials for TSCA-related uses. Of 

these 23 firms, 12 are small and 11 are large using SBA’s NAICS-specific sales or employee-based

definitions. EPA calculated the median number of nanomaterials for these 12 small companies to be 11.5 

nanomaterials. This is slightly lower than the median number for all companies, 13, which is used to 

calculate the number of nanomaterials per firm in Section 2.4. Based on results in Chapter 2, EPA 

estimated that the number of nanomaterials that are produced for R&D purposes is 61.11 percent. 

Subtracting 61.11 percent R&D nanomaterials from the total number of nanomaterials produces an 

estimate of 4.47 “commercial” nanomaterials produced by each small firm. This is slightly fewer than the 

5.06 “commercial” nanomaterials estimated for all companies in Section 2.4.3 of this report. 

Exhibit B-1: Number of Nanomaterials per Company after the R&D Exclusion

Company Size Nanomaterials 

per Firm

R&D 

Exclusion (%)

R&D 

Exclusion 

(#)

“Commercial

” Nanomaterials per 

Firm

All Large Businesses 

under TSCA 

definition 

13.0 61.11% 7.9 5.1

Subset of Small

Businesses (SBA 

definition)

11.5 61.11% 7.0 4.47

Note: Small businesses included here are the set of companies considered large under the TSCA 

definition (and therefore subject to the proposed rule) but also considered small under the NAICSspecific SBA definition.
B-2

B.2 Conclusions

EPA completed an analysis of impacts on small entities in Chapter 8 and found that no small businesses 

were impacted at greater than 1% of their sales. Costs to these entities were based upon the reporting 

costs per nanomaterial. In this section, EPA’s calculations suggest that the number of nanomaterials that a 

small entity will necessarily report on could be overestimated. In this case, it follows that costs would also 

be overestimated if there are fewer reports required. Therefore, it is reasonable to conclude that no small 

entities would be impacted at greater than one percent of sales under the alternative estimate of the 

number of nanomaterials presented above.
C-1

Appendix C- References

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Substances Control. Columbia Law Review, 91(2): 261-333.

BCC Research. 2008. Nanotechnology: A Realistic Market Assessment.

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Supplemental Tables: December 2006 to March 2014.” Available at: 

http://www.bls.gov/ncs/ect/sp/ecsuphst.pdf. Accessed July 2014.

Berger, 2009. Personal Communication between Michael Berger, Nanowerk, and Daniel Gross, Abt 

Associates. August 11, 2009. 

Cohen, M. and V. Santhakumar. 2007. Information Disclosure as Environmental Regulation: A 

Theoretical Analysis. Environmental and Resource Economics, 37(3): 599-620.

Dun & Bradstreet (D&B). 2009. Duns Market Identifier Database.

Konar, S. and M. Cohen. 1997. Information As Regulation: The Effect of Community Right to Know 

Laws on Toxic Emissions. Journal of Environmental Economics and Management, 32: 109-124.

Lux Research. 2007. The Nanotech ReportTM. 5th Ed.

Nanowerk. 2009. “Company & Labs Directory.” Available at: 

http://www.nanowerk.com/nanotechnology/research/nanotechnology_links.php. Accessed 

October 08, 2009.

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Nanotechnology and Occupational Health. University of Minnesota, October 3, 2005.

U.S. Environmental Protection Agency (EPA), Office of Policy, Planning and Evaluation. 1992. 

Instructions for Preparing Information Collection Requests (ICRs).

U.S. Environmental Protection Agency (EPA). Office of Pollution Prevention and Toxics; Economics,

Exposure, and Technology Division; Regulatory Impacts Branch, 1994. Regulatory Impact

Analysis of Amendments to Regulations for TSCA Section 5 Premanufacture Notifications

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2000. 

Supporting Statement for EPA ICR No. 1139.06: TSCA Existing Chemical Test Rules, Consent 

Orders, Test Rule Exemptions, and Voluntary Test Data Submissions.

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2002a. 

Economic Analysis for the Amended Inventory Update Rule: Final Report. EPA-HQ-OPPT-2002-

0054-0260.

U.S. Environmental Protection Agency (EPA). Office of Pollution, Prevention and Toxics. 2002b. Wage 

Rates for Economic Analyses of the Toxics Release Inventory Program.
C-2

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2003a. 

Economic Analysis for the Addition of 47 Chemical Abstract Service (CAS)-numbered Chemicals 

Requested to be added to EPA's Preliminary Assessment Information Reporting (PAIR) Rule in 

the 48th, 50th, and 51st Reports of the TSCA Interagency Testing Committee. EPA-HQ-OPPT2002-0061-0005.

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2003b. 

Economic Analysis of Expedited Significant New Use Rules for 65 Chemical Substances. EPAHQ-OPPTS-2002-0078.

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2006. 

Supporting Statement for EPA ICR No. 1198.05: Information Collection Request for Toxic 

Substance Control Act Section 8(a) Chemical-Specific Information Gathering Rules

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2007. 

Supporting Statement for EPA ICR No. 2250.01: Information Collection in Support of EPA’s 

Stewardship Program for Nanoscale Materials.

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2009a. 

Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (EPAHQ-OPPT-2008-0296).

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2009b. 

Nanoscale Materials Stewardship Program Interim Report.

U.S. Environmental Protection Agency (EPA), Office of Research and Development. 2009c.

Nanomaterial Research Strategy.

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics. 2009d. 

“Nanoscale Materials Stewardship Program.” Available at: 

http://www.epa.gov/oppt/nano/stewardship.htm. Accessed October 08, 2009.

U.S. Environmental Protection Agency (EPA). 2011. Supporting Statement for EPA Information 

Collection Request Number 2002.05, “Cross-Media Electronic Reporting Rule” Office of 

Environmental Information, U.S. Environmental Protection Agency. June 22, 2011.

U.S. Office of Personnel Management (OPM). 2013. “Salary Table 2013-DCB: for the Locality Pay Area 

of Washington-Baltimore-Northern Virginia, DC-MD-VA-WV-PA.” Effective January 2013. 

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White House Office of Management and Budget (OMB). 2003. Circular A-4. Available at: 

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