# September 26 , 2011

— 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, D.C. 20460 

# Economic Analysis for the Final Section 4 Test Rule for Certain High Production Volume Chemicals; Third

Group of Chemicals EPA
- HQ
- OPPT
- 2009
- 0112

### i 

## Contributors
The EPA analyst responsible for this report was Lynne Blake

- Hedges . Analytical and draft preparation support was provided by Abt Associates Inc. under EPA Contract No. EP

- W08

- 0100.

### ii 

## Cont ent s Chapter 1

– Introduction

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

- 1 1.1 Statement of Need

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

- 1 1.2 Organization of This Report

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

- 3 Chapter 2

– Use, Production, and Market Information

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

- 1 2.1 Introduction

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

- 1 2.2 Chemical Use and Market Information

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

- 4 2.3 Chemical

- Specific Use and Market Information

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

- 9 Chapter 3

– Social Costs of the Final Rule

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

- 1 3.1 Industry Costs

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

- 1 3.2 EPA Costs

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

- 18 3.3 Summary of Total Social Costs

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

- 18 Chapter 4

– Company

- Level Impact and Small Business Impact Analysis

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

- 1 4.1 Company

- Level Impact

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

- 1 4.2 Small Entity Impact Analysis

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

- 6 Chapter 5

– Benefits

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

- 1 5.1 Use Values

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

- 1 5.2 Non

- Use Values

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

- 2 5.3 Benefits of the Required Tests

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

- 2 5.4 Benefits Related to Each Regulated Chemical

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

- 10 5.5 Potential Users of Information Generated by the Final Rule

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

- 16 Chapter 6

– Other Impact Analyses

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

- 1 6.1 Paperwork Reduction Act

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

- 1 6.2 Unfunded Mandates Reform Act

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

- 3 6.3 Executive Order 13132

– Federalism

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

- 3 6.4 Executive Order 13045

- Children‟s Health

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

- 4 6.5 Executive Order 13211

– Energy Supply, Distribution, or Use

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

- 4 6.6 National Technology Transfer and Advancement A ct

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

- 4 6.7 Executive Order 12898

– Environmental Justice

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

- 5 Chapter 7

– References

................................ ................................ ................................ ............................ 7

- 1 Appendix A

– Derivation of Chemical Price Estimates

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

- 1 A.1 Chemical Market Reporter

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

- 1 A.2 United States International Trade Commission

– Synthetic Organic Chemicals

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

- 2 A.3 Similar Chemical Prices

– CMR

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

- 2 A.4 Small Quantity Catalog Prices

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

- 2 A.5 Small Quantity Catalog Prices for Similar Chemicals

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

- 6 A.6 American Chemistry Council Prices

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

- 8 Appendix B

– Cost Details

................................ ................................ ................................ ...................... B

- 1 Appendix C

– Wage Rate Calculations

................................ ................................ ................................ . C

- 1 C.1 Derivation of Loaded Wage Rates

................................ ................................ ............................... C

- 1

### iii 

## Exhibits
Exhibit 2

- 1: Chemicals Included in the Final High Production Volume Chemical Test Rule

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

- 2 Exhibit 2

- 2: Employee and Sales Information for Potentially Impacted Companies Included in the Analysis

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

- 5 Exhibit 2

- 3: Distribution of Potentially Impacted Companies by Number of Employees

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

- 6 Exhibit 2

- 4: Distribution of Potentially Impacted Companies by Annual Sales

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

- 6 Exhibit 2

- 67: Summary St atistics for Chemical Prices: $2009

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

- 8 Exhibit 2

- 89: Chemical Use Information

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

- 9 Exhibit 3

- 1: Tests Required by EPA for HPV Chemicals, Based on the OECD‟s Screening Information Data Set (SIDS)

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

- 2 Exhibit 3

- 2: Test Requirements for Chemicals Included in the Final Rule

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

- 5 Exhibit 3

- 3: EPA Estimates of Laboratory Costs of Final Tests (2009$)

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

- 9 Exhibit 3

- 4: Costs for Analytical Methodology Validation

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

- 13 Exhibit 3

- 5: Derivation of Loaded Hourly Rates by Labor Category

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

- 14 Exhibit 3

- 6: Industry Reporting Cost and Burden Estimate for the Final Rule (2009$)

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

- 14 Exhibit 3

- 7: Export Notification Cost Estimate for the Final Rule (2009$)

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

- 16 Exhibit 3

- 8: Summary of Total Industry Compliance Costs Triggered by the Final Rule (2009$)

......... 3

- 16 Exhibit 3

- 9: Estimated Governmen t Costs for the Final Rule (2009$)

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

- 18 Exhibit 3

- 10: Summary of Total Social Costs Triggered by the Final Rule (2009$)

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

- 19 Exhibit 4

- 1: Annualized Costs Under Least and Average Cost Scenarios (Total for All Chemicals) ($2009)

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

- 3 Exhibit 4

- 2: Summary Statistics for Chemical

- Specific Cost

- to

- Sales Ratios 1



### ................................ ......... 4

- 4 Exhibit 4

- 3: Summary Statistics for Company

- Specific Cost

- to

- Sales Ratios, for Chemicals with Cost

- to

Sales Ratios Greater Than 1 Percent

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

- 5 Exhibit 4

- 4: Sensitivity Analysis: Summary Statistics for Chemical

- Specific Cost

- to

- Sales Ratios

........ 4

- 5 Exhibit 4

- 5: Sensitivity Analysis: Summary Statistics for Company

- Specific Cost

- to

- Sales Ratios, for Chemicals with Cost

- to

- Sales Ratios Greater Than 1 Percent

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

- 6 Exhibit 4

- 6: Summary Statistics for Company

- Specific Cost

- to

- Sales Ratios for Small Companies

....... 4

- 8 Exhibit 6

- 1: Reporting Burden Estimate for the Final Rule

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

- 1 Exhibit 6

- 2: Total Industry Burden Hour Estimate for the Final Rule

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

- 2 Exhibit 6

- 3: Estimated Government Burden for the Final Test Rule

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

- 2 Exhibit A

- 1: Summary of Chemical Price Sources and Estimation Methods

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

- 1 Exhibit A

- 2: USITC Synthetic Organic Chemicals Prices (2009$)

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

- 2 Exhibit A

- 3: Chemical Market Reporter Similar Chemical Prices (2009$)

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

- 2 Exhibit A

- 4: Compariso n Between Chemical Market Reporter and Sigma

- Aldrich Prices

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

- 3 Exhibit A

- 5: Comparison Between CMR and Fisher Scientific Prices

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

- 4 Exhibit A

- 6: Prices Derived from Sigma

- Aldrich

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

- 5 Exhibit A

- 7: Prices of Similar Chemicals

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

- 7 Exhibit A

- 8: American Chemistry Counci l Prices

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

- 8 Exhibit B

- 1: Industry Compliance and Government Costs, Least Cost Scenario

................................ ..... B

- 2 Exhibit B

- 2: Industry Compliance and Government Costs, Average Cost Scenario

................................ B

- 3 Exhibit B

- 3: Annualized Social Costs

................................ ................................ ................................ ...... B

- 4 Exhibit B

- 4: Annualized Industry Compliance Costs

................................ ................................ ............... B

- 5 Exhibit C

- 1: Detail of Labor Categories Used in the Analysis

................................ ................................ . C

- 1 Exhibit C

- 2: Derivation of Loaded Wage Rates

................................ ................................ ....................... C

- 3

### 1

- 1 Chapter 1 

## – Introduction
Under the Toxic Substances Control Act (TSCA), the U.S. EPA (EPA) can impose information reporting and other requirements on producers, importers, processors, users, distributors, and disposers of chemicals to ensure the safe management of toxic chemicals. Under TSCA Section 4, EPA is authorized to require by rule that manufacturers (including importers) and/or processors of chemical substances conduct testing to determine the effect of chemical substances on human health and the environment. In particular, the Administrator requires that testing be conducted if the Agency finds that:
(1)(A) (i) the manufacture, distribution in commerce, processing, use, or disposal of a chemical substance or mixture, or any combination of such activities, may present an unr easonable risk of injury to health or the environment, (ii) there are insufficient data and experience upon which the effects of such manufacture, distribution in commerce, processing, use, or disposal of such substance or mixture or of any combination of such activities on health or the environment can reasonably be determined or predicted, and (iii) testing of such substance or mixture with respect to such effects is necessary to develop such data; or
(B) (i) a chemical substance or mixture is or will be produced in substantial quantities, and (I) it enters or may reasonably be anticipated to enter the environment in substantial quantities or (II) there is or may be significant or substantial human exposure to such substance or mixture,
(ii) there are i nsufficient data and experience upon which the effects of the manufacture, distribution in commerce, processing, use, or disposal of such substance or mixture or of any combination of such activities on health or the environment can reasonably be determine d or predicted, and
(iii) testing of such substance or mixture with respect to such effects is necessary to develop such data



### . In 1998, a national effort was announced to expand the availability of information regarding the most widespread chemicals in commerce. To support this effort, in 2006, EPA promulgated its first test rule for 17 high production volume (HPV) chemicals that, under TSCA Section 4, have annual production and/or importation volumes of one million pounds or more (71 FR 13708, March 16, 2006). On December 8, 2006, EPA issued a direct final rule that revoked testing requirements for one of the chemicals subject to the test rule (71 FR 71508) . In 2011, EPA finalized a second test rule for an additional 19 HPV chemicals (76 FR 1067, January 7, 2011). Now, based on a 2010 proposal (75 FR 8575, February 25, 2010) , EPA is finalizing a third test rule for 1 5 more HPV chem icals. The final rule will require the development of data similar to that specified under Screening Information Data Set (SIDS) testing battery of the Organisation for Economic Co

- operation and Development (OECD).
1.1 Statement of Need Fully functioning comp etitive markets result in a socially efficient allocation of resources. Efficient allocation of resources will occur if each seller and each buyer have complete information on their own actions and make decisions based on the full costs of their own action s. On the other hand, if the market is unable to efficiently allocate goods and services, a market failure exists. Executive Order 12866 requires the identification of the specific market failure that the significant rule addresses. The major causes of mar ket 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 final test rule is designed to address the issu e of inadequate information and, to the extent that the information provided by the rule helps firms internalize social

### 1

- 2

costs, the rule addresses the negative externalities that are generated from the manufacture , distribution in commerce, processing, use, or disposal of certain HPV chemicals.
1.1.1 Inadequate Information Economic theory supports perfect information among buyers and sellers as a requirement for rational decision making and for the efficient allocation of resources. When buyers or sellers do not have complete information about the true costs or benefits of their choices, rational decision making cannot occur and the market fails. 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 better decisions. For many reasons information regarding the hazards associated with a chemical sub stance may not be widely known. Two of these reasons are: Producers may know this information, but have no incentive to reveal it to their customers (because the costs are not borne by the producer and are 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 hazards posed by a chemical substan ce. Typically, the producers‟ level of information regarding a product exceeds the consumers‟ level of information. In the second case, chemical hazard information is inadequate (e.g., unknown to both consumers and producers); producers may have little inc entive to acquire such information due to the potential costs associated with its acquisition. Because information is by nature a public good and likely to impose costs on producers, they have little incentive to develop information. Information is non

- riv al (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 u se and benefit from that information without having made a contribution to its development. This reduces the incentive to provide the information, resulting in a failure of the market to efficiently provide the information. In addition, individual consumer s are unlikely to be willing to pay the cost of chemical tests to acquire the information if they can use information developed and paid for by others.
1.1.2 Externalities Externalities, another cause of market failure, occur when the actions of one economic e ntity 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 involved in the market transaction. Such is the case where manufacturing or other busi ness activities harm human health or the environment, resulting in negative externalities. When information is missing about the human health and/or environmental costs to producers or if the costs are external to producers‟ decision making, these costs ar e not internalized by the business entity and not incorporated into business decisions. The result can be the overuse or overproduction of certain harmful products. EPA often intervenes when negative externalities pose risks to human health and the enviro nment. For example, risks may arise as a result of chemical exposure to the general population from the manufacture, distribution in commerce, processing, use, or disposal of chemicals. As a first step in mitigating externalities, the EPA Office of Pollut ion Prevention and Toxics (OPPT) routinely screens chemicals for

### 1

- 3

the potential risks they may pose. This screening is used to determine if risks from the manufacture, distribution in commerce, processing, use, or disposal of chemicals are of sufficient co ncern 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 lacki ng, EPA‟s ability to effectively identify significant risks arising from externalities is compromised. By providing information, the final test regulation will address market failure due to inadequate information by ensuring that basic information about th e health and environmental effects of certain HPV chemicals is available to the public. This information can be used by consumers, producers, the public sector, and others to make more informed decisions regarding chemicals. These users may also apply this information toward remedying externalities. To the extent that the availability of this information induces the producers to account for these social costs, either because of fear of litigation, or because of the benefits of corporate stewardship, availab ility of information will address the negative externalities generated by producing or using these chemicals.
1.2 Organization of This Report This report presents EPA‟s economic analysis for the final rule. Regulated chemicals and companies are characterized i n Chapter 2 . Costs, including laboratory, administrative, export notification, and government costs, are reported in Chapter 3

. The economic impact analysis for the final rule is presented in Chapter 4 . This chapter also includes a small business impact analysis as mandate d by the Regulatory Flexibility Act (RFA), and amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). Chapter 5 addresses the benefits of the f inal rule using a “value of information” framework. 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. Several additional impact analyses are presented in Chapter 6 : an unfunded mandates statement, which is required by the Unfunded Mandates Reform Act (UMRA); an environmental justice statement, which ad dresses the requirements of Executive Order 12898; a children‟s health statement, which is mandated by Executive Order 13045; and the burden hour analysis, which responds to the requirements of the Paperwork Reduction Act (PRA).
Note that all dollar amoun ts in this analysis are reported in 2009 dollars. For cost inputs that were estimated prior to 2009, EPA applied the most relevant adjustment factor to ensure that all costs were comparable.

### 2

- 1 Chapter 2 

## – Use, Production, and Market Information

2.1 Introduction This chapter presents use, production, and market information for the 1 5 chemicals included in the final rule. Exhibit 2

- 1 provides the Chemical Abstracts Service Registry Number (CASRN) assigned by the Chemical Abstracts Service (CAS) to each of these chemicals, the chemicals‟ common names, and other synonyms us ed to research information presented in this analysis on the chemicals. 1 , 2

1 The CAS is a division of the American Chemical Society, and assigns unique CASRNs to chemical substances. All CASRNs are compiled in the CAS Registry, the largest and most current database of its kind. Each CASRN designates only one chemical substance, and is a link to significant information about the chemical. For more information, see the American Chemical Society‟s Chemical Abstracts Service at http://www.cas.org

. 2 EPA identified synonyms for each chemical by searching the National Institute of Standards and Technology (NIST) WebBook and the U.S. NLM ChemIDplus Lite by CAS number.

### 2

- 2 Exhibit 2
- 1 : Chemicals Included in the Final High Production Volume Chemical Test Rule
CASRN Common Chemical Name Synonyms

1 98

- 09

- 9 Benzenesulfonyl chloride Benzene sulfochloride; Benzene sulfonechloride; Benzenesulfonic chloride; Phenylsulfonyl chloride; Benzenesulfonic acid chloride; Benzenosulfochlorek; Benzenosulfochloride; Benzene sulphonyl chloride; Benezenesulfochloride; Benzenesulfon chloride; Benzenes ulfonic(acid)chloride; Benzenesulphonyl chloride; Benzenosulpho chloride; Benzolsulfochloride; Benzenesulfonyl chloride; Benzenesulphonyl chloride; Benzenesulfonyl chloride

2 98

- 56

- 6 Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- Toluene, p

- chloro

- α,α,α - trifluoro

- ; (p

- Chlorophenyl)trifluoromethane; p

- (Trifluoromethyl)chlorobenzene; p

- Chloro

- α,α,α trifluorotoluene; p

- Chlorobenzotrifluoride; p

- Chlorotrifluoromethylbenzene; p

- Trifluoromethylphenyl chloride; 1

- Chloro

- 4

- (trifluoromethyl )benzene; 4

- Chloro

- α,α,α - trifluorotoluene; 4

- Chlorobenzotrifluoride; para

- Chlorobenzotrifluoride; 1

- (Trifluoromethyl)

- 4

- chlorobenzene; 1

- Chloro

- 4

- (trifluoromethyl)benzene; Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- ; alpha,alpha,alpha

- Trifluoro

- 4

- chlorotoluene; para - Chloro

- alpha,alpha,alpha

- trifluorotoluene; para

Chlorotrifluoromethylbenzene; Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- ; Benzene, 1

- chloro

- 4

- (trifluoromethyl)

-

3 111

- 44

- 4 Ethane, 1,1'

- oxybis[2

- chloro

Bis(2

- chloroethyl) ether; s

- Dichloroethyl ether; Et hane, 1,1'

- oxybis[2

- chloro

- ; Ether, bis(2

- chloroethyl); β,β'

- Dichlorodiethyl ether; β,β'

- Dichloroethyl ether; Bis(β

- chloroethyl) ether; Bis(chloro

- 2

- ethyl) oxide; Chlorex; Di(β

- chloroethyl) ether; DCEE; Khloreks; 1

- Chloro

- 2

- (β

- Chloroethoxy)ethane; 2

- Chloro ethyl ether; 2,2'

- Dichlorethyl ether; 2,2'

- Dichlorodiethyl ether; 2,2'

- Dichloroethyl ether; 2,2'

- Dichlorodiethyl oxide; sym

- Dichloroethyl ether; Bis(chloroethyl) ether; Chloroethyl ether; Clorex; Di(2

- chloroethyl) ether; Dichlorodiethyl ether; Dichloroethe r; Dichloroethyl ether; Dichloroethyl oxide; Dwuchlorodwuetylowy eter; Ether dichlore; ENT 4,504; Oxyde de chlorethyle; 1,1'

- Oxybis(2

- chloroethane); 1,5

- Dichloro

- 3

- oxapentane; 2,2'

- Dichloorethylether; 2,2'

- Dichlor

- diaethylaether; 2,2'

- Dicloroetiletere; β,β

- Dichlorodiethyl ether; Ethane, 1,1'

- oxybis*2

- chloro

- ; Diethylene glycol dichloride; Ether, bis(chloroethyl); 1

- Chloro

- 2

- (2

- chloroethoxy)ethane; 2,2'

- Dichloorethylether; 2,2'

- Dichlor

diaethylaether; Dichloroether; Dichloroethyl ether

4 127

- 68

- 4 Benzenesulfonic acid, 3

- nitro

- , sodium salt

(1:1) 3

- Nitrobenzenesulfonic acid, sodium salt; Benzenesulfonic acid, 3

- nitro

- , sodium salt; Sodium 3

- nitrobenzenesulfonate; Sodium m

- nitrobenzenesulfonate; Benzenesulfonic acid, 3

- nitro

- , sodium salt; Benzenesul fonic acid, m

- nitro

- , sodium salt; Ludigol; Ludigol F,60; Nacan; Nitrobenzen

- m - sulfonan sodny; Nitrobenzen

- m - sulfonan sodny [Czech] ; Nitrol S; Sodium 3

- nitrobenzenesulfonate; Sodium m

- nitrobenzenesulfonate; Tiskan; Tiskan [Czech]; m

- Nitrobenzenesulfonic acid sodium salt; Benzenesulfonic acid, 3

- nitro

- , sodium salt (1:1); Benzenesulfonic acid, m

- nitro

- , sodium salt; Sodium 3

- nitrobenzenesulphonate; Benzenesulfonic acid, m

- nitro

- , sodium salt; m

- Nitrobenzenesulfonic acid, sod ium salt

5 515

- 40

- 2 Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- Neophyl chloride; 2

- Chloromethyl

- 2

- phenylpropane; (2

- Chloro

- 1,1

- dimethylethyl)benzene; Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- ; β

- Chloro

- tert

- butylbenzene; β,β

- Dimethylphenethyl chloride; (β

- Chloro

- α,α - dimethyl)ethylbenzene; 2

- Methyl

2

- phenylpropyl chloride; (beta

- Chloro

- tert

- butyl)benzene

6 2494

- 89

- 5 Ethanol, 2

- [(4

- aminophenyl)sulfonyl]

- , 1

-

(hydrogen sulfate) 4

- ((2

- Sulfatoethyl)sulfonyl)aniline; 2

- ((p

- Aminophenyl)sulphonyl)ethyl hydrogensulphate; Ethanol, 2

- ((4

- aminophenyl)sulfonyl)

- , 1

- (hydrogen sulfate); Ethanol, 2

- sulfanilyl

- , hydrogen sulfate (ester)

7 5026

- 74

- 4 2

- Oxiranemethanamine, N

- [4

- (2

-

oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- Oxiranemethanamine, N

- [4

- (oxiranylmethoxy)phenyl]

- N

- (oxi ranylmethyl)

- ; Aniline, p

- (2,3

- epoxypropoxy)

- N,N

- bis(2,3

- epoxypropyl)

- ; p - (Diglycidylamino)phenyl glycidyl ether; p

- Aminophenol triglycidyl ether; ERL 0500; ERL

- 0510(Triglycidyl

- p Aminophenol); N,N,O

- Tris(epoxypropyl)

- p - aminophenol; 4

- (Diglycidylamino)phen yl glycidyl ether; 4

- (2

- Oxiranylmethoxy)

- N,N

- bis(2

- oxiranylmethyl)aniline; BRN 1393091; N

- (4

- (Oxiranylmethoxy)phenyl)

- N

- (oxiranylmethyl)oxiranemethanamine; TK 12759; 2

- Oxiranemethanamine, N

- (4

- (2

- oxiranylmethoxy)phenyl)

- N

- (2

- oxiranylmethyl)

- ; p - (2,3

- Epoxyp ropoxy)

- N,N

- bis(2,3

- epoxypropyl)aniline;
8 22527

- 63

- 5 Propanoic acid, 2

- methyl

- , 3

- (benzoyloxy)

-

2,2,4

- trimethylpentyl ester 3

- Benzoyloxy

- 2,2,4

- trimethylpentyl isobutyrate; Isobutyric acid, 3

- hydroxy

- 2,2,4

- trimethylpentyl ester benzoate
9 25321

- 41

- 9 Benzenesulfonic acid, dimethyl

- Dimethylbenzenesulfonic acid; Xylene sulfonic acid; Xylenesulphonic acid; Xylenesulfonic acid

10 52556

- 42

- 0 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

-

propen - 1

- yloxy)

- , sodium salt (1:1) 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propenyloxy)

- , monosodium salt; 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propen - 1

- yloxy)

- , sodium salt (1:1); Sodium 3

- (allyloxy)

- 2

- hydroxypropanesulphonate; 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propenyloxy)

- , monosodium salt
1 1 68082

- 78

- 0 Lard, oil, Me esters Lard oil fatty acids, methyl esters; Lard oil methyl esters; Lard oil, methyl ester; Lard oil, methyl esters; Lard, methyl es ter; Lard, methyl esters; Lard, oil, Me esters; Oils, lard, Me esters; Lard, oil, Me esters
1 2 68442

- 60

- 4 Acetaldehyde, reaction products with

formaldehyde, by

- products from EINECS 270

- 480

- 6

### 2

- 3 Exhibit 2
- 1 : Chemicals Included in the Final High Production Volume Chemical Test Rule
CASRN Common Chemical Name Synonyms
1 3 68610

- 90

- 2 2

- Butenedioic acid (2E)

- , di

- C8

- 18

- alkyl

esters (C8

- C18)Dialkyl fumarate; 2

- Butenedioic acid (E)

- , di

- C8

- 18

- alkyl esters

1 4 70693

- 50

- 4 Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- [2

-

(2

- nitrophenyl)diazenyl]

- 2

- Nitro

- 2'

- hydroxy

- 3',5'

- bis(alpha,alpha

- dimethylbenzyl)azobenzene; 2,4

- Bis(1

- methyl

- 1

- phenylethyl)

- 6

- ((2

- nitrophenyl)azo)phenol; Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- (2

- (2

- nitrophenyl)dia zenyl)

- ; Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- ((2

- nitrophenyl)azo)

- 1 5 72162

- 15

- 3 1

- Decene, sulfurized 1

- Decene, sulfurized; 1

- Decene, sulfurized Sources: National Institute of Standards and Technology , 2008, and U.S. U.S. NLM, 2008a.

### 2

- 4

2.2 Chemical Use and Market Information EPA collected chemical use and market information for the chemicals included in the final rule to analyze the rule‟s potential impact on manufacturers of these substances. For example, chemical use information is useful in determining the markets the chemi cals are sold in and the general profitability of those markets. Producer, price, and production volume data are used more specifically to estimate the annual revenue that each manufacturer of the chemicals in the final rule generates from those chemicals, and to compare these revenues to the compliance costs for each chemical pursuant to the final rule. The current chapter discusses methods employed to evaluate use and market information for each chemical included in the final rule, and presents a summary of results. Market information presented includes publicly available producer, production, trade, and price information, where these data were available. Chemical

- specific use and market information for each chemical included in the final rule is presente d in Section 2.3

. 2.2.1 Chemical Producer and Production Information EPA acquired chemical producer and production information from submissions required by the Toxic Sub stances Control Act (TSCA) Inventory Update Reporting (IUR) Revisions rule (70 FR 75059, December 19, 2005) and the Preliminary Assessment Information Reporting (PAIR); Addition of Certain Chemicals rule (71 FR 47122, August 16, 2006)

. The IUR rule requir es manufacturers and importers of certain chemical substances contained in the TSCA Chemical Substances Inventory with a site

- specific production /import volume of 25 ,000 pounds or more to report current data on their production volumes, plant sites, and ot her information related to the manufacture of the chemicals. Since 1986, reporting under the IUR rule has taken place at four

- year intervals

. 3 

### The data presented in this chapter are from the 2006 reporting cycle, which covers production in calendar year 20 05 , and represent s the most recent data available

. The PAIR rule require s manufacturers and importers that manufactured or imported certain HPV Challenge Program 4 

### orphan (unsponsored) chemicals during their latest complete corporate fiscal year (which could be the calendar year 2005, or a year spanning months in 2005 or 2006) to submit a one

- time
r eport on general production/ importation volume, end use, and exposur e
- related information to EPA. Manufacturers were included in this analysis if they reported, through either rule, any production volume for any of the chemicals regulated under this final High Production Volume Chemical test rule. In cases where the volum es reported under both rules did not match, the higher production volume was used in this analysis.
IUR rule and PAIR rule submissions can include both confidential business information (CBI) and non

confidential information related to producers and produc tion volumes. Manufacturer‟s identities and p roduction volume s used in calculations for this analysis were considered CBI ; however, this report presents those data in a non

- CBI format.

3 The 2005 amendments to the IUR rule changed the reporting cycle from four years to five years; the next reporting cycle covers calendar yea r 2010. 4 EPA‟s voluntary HPV Challenge Program was created to en courage the development of a baseline set of data on approximately 2,800 HPV chemicals. Since the Program‟s inception in 1998, industry chemical manufacturers and importers have participated in the Challenge by sponsoring 2,250 chemicals. More than 350 companies and 100 consortia have sponsored chemicals directly in the Program

. HPV chemicals that are not sponsored under the Program may be subject to a test rule under TSCA S ection 4 , such as t his final rule

.

### 2

- 5

Based on IUR and PAIR reporting, EPA identified 3 1 global ultimate pare nt companies that produce the 1 5 chemicals included in the final test rule. A company was included in this analysis if it reported under either the IUR or PAIR rule. This figure may not include all potentially affected entities because, for example, compan ies that manufactured or imported less than 25,000 pounds of a subject chemical at an individual site in 2006 are not required to comply with IUR reporting; however, EPA believes this figure presents a reasonable estimate for the purpose of analyzing the e ffects of the final rule. If the 2006 production volumes reported by a company for a specific chemical differed between the submissions for the IUR and PAIR rule, the larger of the reported volumes was used in this analysis. Once producers of each chemica l were identified, EPA used facility

- specific Dun & Bradstreet identification numbers (DUNS numbers) from Dun & Bradstreet‟s DUNS Market Identifier database (Dun & Bradstreet, 2008) and information about facility location provided in the IUR database to id entify facilities and their global ultimate parent companies. 5 

### A search conducted using the Dun & Bradstreet database also provided data on annual sales and number of employees at the parent company level for all facilities determined to be potentially sub ject to the final rule. EPA was able to collect information on sales and employment for most of the parent companies using the Dun & Bradstreet database. Annual sales data and employee data were available for 3 0 of the 3 1 global ultimate parent companies i dentified. 6 

### Exhibit 2

- 2 Exhibit 2

- 2 provides summary statistics of the available data for the 3 1 c ompanies included in this analysis. As shown in Exhibit 2

- 2 Exhibit 2

- 2 , potentially impacted companies vary widely as measured by both number of employees and annual sales.

Exhibit 2
- 2 : Employee and Sales Info rmation for Potentially Impacted

Companies Included in the Analysis

Statistical Measure Number of Employees Annual Sales Minimum Value 5 $ 187,086 Maximum Value 430,000 $ 170,088,644,172 Median Value 3,272 $1, 401,274,101 Mean Value 35, 497 $ 1 3,71 5 ,463,866 Standard Deviation 9 6,780 $ 35, 322,934,044 Source: Dun & Bradstreet, 2008. Note: Employee and annual sales data were available for 3 0 of the 3 1 global ultimate parent companies identified.


### Exhibit 2

- 3 Exhibit 2

- 3 and Exhibit 2

- 4 Exhibit 2

- 4 show the distribution of potentially impacted companies considered in the analysis by number of employees and annual sales, respectively.

5 Dun & Bradstreet is a New York

- based company that provides business information through a global commercial database. It assigns DUNS numbers to identify businesses around the world. These numbers are required for many U.S. federal govern ment transactions and therefore are widely used and assigned. DUNS numbers are also frequently used in corporate research. Database entries provide legal and trade names, physical and mailing addresses, geographical descriptions, product and industry descr iptors, sales and number of employees for three years and associated growth rates, as well as up to 40 vital statistics about each organization. 6 The reporting year for the most current data in the Dun & Bradstreet database varied across companies.

### 2

- 6 

### 0 1 2 3 4 5 6 7 8

0 to 100 101 to 500 501 to 2,500 2,501 to 10,000 10,001 to

50,000 >50,001 Number of Companies



### Number of Employees



### 0 2 4 6 8 10 12

$0 to $100 $101 to $500 $501 to $1000 $1,001 to

$10,000 >$10,001 Number of Companies



### Annual Sales ($Millions) Exhibit 2
- 3 : Distribution of Potentially Impacted Companies by Number of Employees

Source: Dun & Bradstreet, 2008.

Exhibit 2
- 4 : Distribution of Potentially Impacted Companies by Annual Sales

Source: Dun & Bradstreet, 2008.



### The distribution of chemicals included in the final rule by publicly

- available production volume range falls entirely in the range of 10 million pounds or less annually.

2.2.2 Chemical Price Information No p ublished price data were available for any of the chemicals in the Chemical Market Reporter (CMR) (ICIS, 2006). Some chemicals were listed in the U.S. International Trade Commission‟s report entitled Synthetic Organic Chemicals (USIT C, 1992); for the remainder of chemicals, EPA derived prices from Comment [LB
- H1]: The exhibit does not show this.

### 2

- 7

these and other publications using a number of assumptions. This section first discusses the method used to obtain chemical prices from the CMR and USITC, and then discusses the methods used to derive chemical prices for the remaining chemicals. Based on this chemical price search method, EPA has either obtained or derived price data for all 1 5 chemicals included in the final rule.
Price Data Available from the CMR and USITC. Using the following sequential methodological steps, EPA was able to locate price data for two chemicals:

CMR: First, EPA searched the CMR for price data using common chemical names, and searched the CMR for price data using synonyms for each common chemic al name as list ed in Exhibit 2

- 1

. No price data was available for any of the chemicals in the CMR

. USITC: Where available, EPA used the average price per pound of c hemicals from various Harmonized Tariff Schedule (HTS) chemical groups in USITC‟s report entitled Synthetic Organic Chemicals. For two chemicals , the price was available as part of an HTS group. Because the last USITC report was published in 1992, EPA then inflated these costs using the producer price index ( PPI ) for chemical manufacturing.

EPA

- Derived Price Data. EPA derived prices for the remaining chemicals using the methods described below.


### Similar Chemical Prices. For one chemical, EPA used CMR data for another chemical that is similar in chemical composition, use, or manufacture.
Small Quantity Catalog Prices

. Online chemical catalogs published by Sigma

- Aldrich Company (2008) and Fisher Scientific (2008) provided small quantity price informat ion for six of the remaining chemicals for which data were not available using the sources and methods described above. However, because small quantity catalog prices are often significantly higher than the bulk quantity prices reported in the CMR, EPA adjusted the small quantity catalog prices for these six chemicals to approximate bulk quantity prices. To determine the appropriate adjustment factor, EPA randomly selected 1 5 chemicals (not subject to this final rule) for which price data were avail able from both the CMR (2006, inflated to 200 8 prices using PPI) and Sigma

- Aldrich (2008) , and compared the prices to develop scaling factors (see Exhibit A

- 4 in Appendix A ). These prices were then inflated to 2009 dollars using the PPI for chemical manufacturing. F or example, the price of a 1

- kilogram quantity of Benzene, (2

- ch loro

- 1,1

- dimethylethyl)

- ( CASRN 515

- 40

- 2), as found in the Sigma

- Aldrich catalog, is $ 130.50

. Using standard conversion methods (1 kilogram = 2.204 pounds), the implied small quantity price per pound for this chemical is $ 59.19

. This small quantity price is then divided by a scaling factor of 46.51 to arrive at an estimated bulk quantity price of $ 1.27 per pound for this chemical. Small Quantity Catalog Prices of Similar Chemicals. For five additional chemicals, EPA w as able to find “similar chemicals” with prices quoted in the Sigma

- Aldrich or Fisher Scientific catalog

. The Agency followed the same method as that described above to scale these small quantity catalog prices to approximate bulk quantity prices. American Chemistry Council Prices. The American Chemistry Council (ACC) publishes a “Guide to the Business of Chemistry,” which contains price information for certain types of chemicals. According to the guide published in 2008 (ACC, 2008), a rule of thumb for specialty che micals is that the price is greater than $1.25 per pound. To be conservative, EPA used a price of $1.25 per pound for the remaining one chemical.

### 2

- 8

Appendix A Appendix A provides further detail on the methods used to estimate chemical prices. Exhibit 2

- Exhibit 2

- 5 presents the price per pound for the chemicals included in this final rule, as well as the publicly available production volume ranges (as noted earlier, this analysis uses actual production volumes as reported through the IUR or PAIR rules, which may be considered CBI). Exhibit 2

- 6 5 Exhibit 2

- 6 presents summary statistics of this price information. Exhibit 2

- Exhibit 2

- 7 presents the distribution of chemical prices.

Exhibit 2
- 5 : Chemical Price and Production Volume Information

Chemical (CASRN) Price/lb ($200 9 ) Source for Pricing Production Volume Range (lbs) Source for

Production Volume 1 Benzenesulfonyl chloride (98

- 09

- 9) $0.5 8 USITC 1M to < 10M IUR Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- (98

- 56

- 6) $0.25 Sigma

- Aldrich 1M to < 10M IUR Ethane, 1,1'

- oxybis[2

- chloro

- (111

- 44

- 4) $0.51 Sigma

- Aldrich 1M to < 10M IUR Benzenesulfonic acid, 3

- nitro

- , sodium salt (1:1) (127

- 68

- 4) $0.30 Sigma

- Aldrich 1M to < 10M IUR Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- (515

- 40

- 2) $1.2 5 Sigma

- Aldrich 1M to < 10M IUR Ethanol, 2

- [(4

- aminophenyl)sulfonyl]

- , 1

- (hydrogen sulfate) (2494

- 89

- 5) $0.7 3 Sigma

- Aldrich ( by proxy) 1M to < 10M IUR

2

- Oxiranemethanamine, N

- [4

- (2

- oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- (5026

- 74

- 4) $0.7 2 Sigma

- Aldrich 1M to < 10M IUR Propanoic acid, 2

- methyl

- , 3

- (benzoyloxy)

- 2,2,4

- trimethylpentyl ester (22527

- 63

- 5) $1

. 25 ACC 1M to < 10M IUR Benzenesulfonic acid, dimethyl

- (25321

- 41

- 9) $2.8 4 USITC 1M to < 10M IUR
1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propen - 1

- yloxy)

- , sodium salt (1:1) (52556

- 42

- 0) $1.1 2 Sigma

- Aldrich 1M to < 10M IUR
Lard, oil, Me esters (68082

- 78

- 0) $0.7 1 Sigma

- Aldrich ( by proxy) 1M to < 10M IUR Acetaldehyde, reaction products with formaldehyde, by

- products from (68442

- 60

- 4) $0.24 CMR (by proxy) 1M to < 10M IUR

2

- Butenedioic acid (2E)

- , di

- C8

- 18

- alkyl esters (68610

- 90

- 2) $33. 00 Fisher ( by proxy) 1M to < 10M IUR Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- [2

- (2

- nitrophenyl)diazenyl]

- (70693

- 50

- 4) $5. 88 Sigma

- Aldrich ( by proxy) 1M to < 10M IUR

1

- Decene, sulfurized (72162

- 15

- 3) $0.2 0 Sigma

- Aldrich ( by proxy) 1M to < 10M IUR

1 “IUR ” p roduction volume information from U.S. EPA, 2009.

Exhibit 2
- 6 5 7 : Summary Statistics for Chemical Prices : $200 9 Minimum p rice per pound $ 0. 20 Maximum p rice per pound $33. 00 Mean p rice per pound $ 3. 31 Median p rice per pound $ 0.7 2 Standard deviation $ 8. 34 Formatted: Body Text Char

### 2

- 9 Exhibit 2
- 7 : Distribution of Prices for Chemicals Included in the Final Rule in 2009$



### 2.3 Chemical
- Specific Use and Market Information This section presents use information for each of the chemicals included in the final test rule. To find information on chemical uses, EPA relied on readily available secondary sources. This section is meant to provide a broad overview of uses and , due to resources available, is not expected to be a complete, exhaustive review. EPA was able to obtain use information for 1 2 of the 15 c hemicals using various
sources

. Chemical use information is presented in Exhibit 2

- 8 6 Exhibit 2

- 8

. Data reported to EPA through the IUR rule repo rting requirements (2006 reporting cycle) are also shown.

Exhibit 2
- 8 6 9 : Chemical Use Information Chemical (CASRN) Use IUR
- Reported Use Information 1 Benzenesulfonyl chloride (98
- 09
- 9) chemical intermediate for benzene sulfonamides, thiophenol, glybuzole, n

- 2

- chloroethyl amides, and benzonitrile reagent for Friedel

- Crafts sulfonylation esters are useful as insecticides and miticides ( U.S. NLM , 2008b ) Industrial Sector: Other Basic Organic Chemica l Manufacturing Commercial/Consumer Product Category: Rubber and plastic products

2 Benzene, 1
- chloro
- 4
- (trifluoromethyl)
- (98
- 56
- 6) solvent for industrial cleaning, aerosols, adhesives, coatings, inks, and electronic applications. 1,1,1

- trichloroethane alternative dye intermediate dielectric fluid dinitroaniline herbicide intermediate ingredient in home maintenance product (Ash , 2003 ; Merck Index , 2001; U.S. NLM , 2009 ) Industrial Sectors: Adhesive Manufacturing; All Other Chemical Product and Preparation Manufacturing; Other Basic Inorganic Chemical Manufacturing; Other Basic Organic Chemical Manufacturing; Paint and Coating Manufacturing; Resin and Synthetic Rubber Manufacturing 

### 0 1 2 3 4 5 6

$0 to $0.50 $0.51 to $1.00 $1.01 to $3.00 >$3.01 Number of Chemicals



### Price Range ($/lb)

### 2

- 10 Exhibit 2
- 8 6 9 : Chemical Use Information Chemical (CASRN) Use IUR
- Reported Use Information 3 Ethane, 1,1'
- oxybis[2
- chloro
- (111
- 44
- 4) scavenges lead deposits in gasoline an anesthetic an acaricide in the manufacture of medicines and pharmaceuticals in an oil solution sprayed on corn silks to control earworms general solvent selective solvent for production of high

- grade lubricating oi ls intermediate and crosslinking agent in organic synthesis textile scouring and cleansing in fulling compounds in wetting and penetrating compounds in paints, varnishes, lacquers, finish removers, spotting and dry cleaning in soil fumigants ( U.S. NLM , 2008b; Ash, 2003; M erck Index , 2001 ) Industrial Sector: Basic Organic Chemical Manufacturing (functions as a corrosion inhibitor or anti

scaling agent) Commercial/Consumer Product Category: Other

4 Benzenesulfonic acid, 3
- nitro
- , sodium salt (1:1) (127
- 68
- 4) stabilizer for fiber reactive dyeing assistant in discharge printing viscosity control agent in cosmetics oxidizing agent in demetalizers and industrial cleaners anti

- reduction agent ( Ash , 2003; U.S. NLM , 2008b ) None reported

5 Benzene, (2
- chloro
- 1,1
- dimethylethyl)
- (515
- 40
- 2) pesticide raw material precursor to catalysts used for olefin polymerization (Chemhost, Inc. , 2009; U

. S

. P atent and Trade Office, 1984 and 2006) Industrial Sector: Pesticide and Other Agricultural Chemical Manufacturing Commercial/Consumer Product Category: Agricultural products (non

pesticidal) 6 Ethanol, 2
- [(4
- aminophenyl)sulfonyl]
- , 1
- (hydrogen sulfate) (2494
- 89
- 5) indicator and/or reagent (U.S. NLM, 2008a) Commerical/Consumer Product Category: Reported as CBI

7 2
- Oxiranemethanamine, N
- [4
- (2
- oxiranylmethoxy)phenyl]
- N
- (2
- oxiranylmethyl)
- (5026
- 74
- 4) in epoxy resins (composite aircraft bodies/parts) (Ashford’s Dictionary of Industrial Chemicals, 2001) Industrial Sectors: Resin and Synthetic Rubber Manufacturing; Aerospace Product and Parts Manufacturing
8 Propanoic acid, 2
- methyl
- , 3
- (benzoyloxy)
- 2,2,4
- trimethylpentyl ester (22527
- 63
- 5) plasticizer ( Velsicol Chemical Corporation, 2009 ) Industrial Sector: Other Plastics Product Manufacturing Commercial/Consumer Product Category: Rubber and plastic products 9 Benzenesulfonic acid, dimethyl
- (25321
- 41
- 9) esterification an acetylation catalyst catalyst for coatings and foundry resins in the preparation of esters hardening agent in plastics activator for nicotine insecticides curing agent for resins, phenolic foundry resins descaling agent in foundry sand castings plating aid in electroplating baths hydrotrope for agricultural formulations
sur factant in cosmetics (Ash , 2003; Ashford , 2001 ) None reported

### 2

- 11 Exhibit 2
- 8 6 9 : Chemical Use Information Chemical (CASRN) Use IUR
- Reported Use Information 10 1
- Propanesulfonic acid, 2
- hydroxy
3
- (2
- propen - 1
- yloxy)
- , sodium salt (1:1) (52556
- 42
- 0) polymerizable surfactant for vinylic systems antistatic properties promotes adhesion of pigments emulsion polymerization in paper, textile, fiber, and adhesives industries ( Ash, 2003 ) Industrial Sectors: All Other Chemical Product and Preparation Manufacturing; Other Basic Organic Chemical Manufacturing. Commercial/Consumer Product Category: Other
1 1 Lard, oil, Me esters (68082
- 78
- 0) lubricants ( Lubriplate Lubricants Co., 2009 ) Industry Sector: Other Basic Organic Chemical Manufacturing 1 2 Acetaldehyde, reaction products with formaldehyde, by
- products from (68442
- 60
- 4) No use information found. Commercial/Consumer Product Category: CBI

1 3 2
- Butenedioic acid (2E)
- , di
- C8
- 18
- alkyl esters (68610
- 90
- 2) Non

- specified consumer use from PAIR reporting. (U.S EPA , 2011) Industry Sector: Other Basic Organic Chemical Manufacturing Industrial Function: Lubricant 1 4 Phenol, 2,4
- bis(1
- methyl
- 1
- phenylethyl)
- 6
- [2
- (2
- nitrophenyl)diazenyl]
- (70693
- 50
- 4) No use information found. Commercial/Consumer Product Category: CBI

1 5 1
- Decene, sulfurized (72162
- 15
- 3) No use information found Industry Sector: Other Petroleum and Coal Products Manufacturing; Industrial Function: Lubricant

### 3

- 1 Chapter 3 

## – Social Costs of the Final Rule
This chapter presents estimates of the social costs that industry (chemical manufacturers and other entities affected by the final rule) and EPA may incur due to the requirements included in the final rule, and discusses the method used to measure each. In dustry may incur costs related to laboratory testing requirements (discussed in Section 3.1.1 ), analytical methodology validation (Section 3.1.2 ), administrative activities (Section 3.1.3 ), and export notification requirements (Secti on 3.1.4 ). Total industry compliance costs are summarized in Section 3.1.5. Non

- monetized costs are described in Section 3.1.6. EPA may incur costs related to revie wing and processing letters of intent, study plans, final reports, and exemption applications submitted by industry (Section 3.2 ). The total social costs are summar ized in Section 3.3

. 3.1 Industry Costs Industry compliance costs include costs for laboratory testing, analytical methodology validation, administration, and export n otification. The methodology for estimating each of these cost types is described below in greater detail.
3.1.1 Laboratory Testing Costs The premise of the final rule is that basic toxicity information, comparable to that generated by the Screening Information Data Set (SIDS) Programme of the Organisation for Economic Co

- operation and Development (OECD), should be available for all HPV chem icals included in the rule. The OECD HPV SIDS Programme seeks information on the identity of each chemical; its uses, sources, and extent of exposure; physical and chemical properties; environmental fate; and certain limited toxicity data for humans and th e environment. While SIDS is more comprehensive in data coverage than the requirements of the final rule (e.g., uses, sources, and extent of exposure), it is not intended to describe a chemical thoroughly, but rather to provide enough information to suppor t an initial (or screening

- level) assessment and to assign a priority for further work, if necessary. Included in the OECD HPV SIDS Programme is the development of test data, if such data are not already available, related to six health and environmental
e ffect endpoints for international HPV chemicals: (1) acute toxicity; (2) repeat dose toxicity; (3) developmental and reproductive toxicity; (4) genetic toxicity (gene mutations and chromosomal aberrations); (5) ecotoxicity (studies in fish, Daphnia, and al gae); and (6) environmental fate (including physical/chemical properties). The test data identified under SIDS have been agreed upon by the 29 member countries of the OECD as providing the minimum data set required to make an informed preliminary judgment about the hazards of a given HPV chemical. EPA‟s final required testing follows the SIDS model. Exhibit 3

- 1 Exhibit 3

- 1 provides a description of the tests that may be required for chemicals under the final rule. To determine which testing would be required for each chemical, EPA examined available test data for the chemicals in the final rule (U.S. EPA, 2009b). Based upon this review, EPA is requiring testing only for those endp oints where data are unavailable or deemed inadequate. Tests required for each chemical included in the final rule are summarized in Exhibit 3

- 2 Exhibit 3

- 2

.

### 3

- 2

Exhibit 3
- 1 : Tests Required by EPA for HPV Chemicals, Based on the OECD ’s Screening Information Data Set (SIDS)

Protocol Name Protocol Number(s) Description Test Code (used in this analysis)

Melting Point ASTM E 324

- 99 The melting point is the temperature at which a substance transitions from the solid to liquid phase. The ASTM E 324

- 99 melting point test determines the initial and final melting points (melting range) of stable, crystalline organic solids whose melting poin ts fall between 30 and 250°C. A1

Boiling Point ASTM E 1719

- 05 The ASTM E 1719

- 05 boiling point test determines the boiling point and vapor pressure of pure liquids and azeotropes (i.e., mixtures of two chemicals that boil at a unique temperature) that are condensable at total reflux and boil in between 12 and 302°C. A2

Vapor Pressure ASTM E 1782

- 03 The vapor pressure indicates the tendency of a solid or liquid to evaporate. The ASTM E 1782

- 0 3 vapor pressure test determines the vapor pressure of pure liquids or melted solids within the temperature range 0°C to 500°C and the pressure range 5 kPa to 2000 kPa using differential thermal analysis, differential scanning calorimetry, or preferably hig h

- pressure versions of these instruments. A3

Partition Coefficient 799.6755; or ASTM

E 1147

- 92(2005) ; or 799.6756 The octanol/ water partition coefficient (log K OW ) indicates how easily a compound might dissolve in water or in fat. The ASTM E 1147

- 9 2 partition coefficient test determines the logarithm of the log K OW of non

- ionizable and ionizable compounds by inputting the retention time on a liquid chromatographic column into an empirically derived equation. This information is used to assess the lip ophilicity (i.e., the ability to dissolve in fat) of chemicals. A4

Water Solubility ASTM E 1148

- 02 ;

or 799.6784; or 799.6786 The physical property describing the ability of a given substance to dissolve in water

is termed water solubility. The ASTM E1148

- 02 water solubility test determines the affinity of water

- and air

- stable chemicals to water. A5

Ready Biodegradation Choice of: ASTM

1720

- 01, ISO 14593 , ISO 7827 , ISO 9408 , ISO 9439, ISO 10707, or ISO 10708 The biodegradation test provides a measure of how quickly chemicals will be broken

down in the environment by natural processes such as bacterial digestion. The ASTM E 1720

- 01 ready biodegradability test uses the generation of carbon dioxide by a dilute se wage inoculum as a proxy to determine the biodegradability of organic compounds in a closed vessel. Biodegradation of 60% or more during the closed vessel test indicates that in most environmental compartments the chemical’s biodegradation will go to compl etion. B

Acute Toxicity to Fish ASTM E 729

-

96(2002) The ASTM E 729

- 96 acute toxicity test determines the concentration of chemical

needed to reach a toxicity threshold in certain species of freshwater and saltwater fish. The standard thresholds used are the concentration at which there is a 50% fatality rate in the test organisms (LC 50 ) or the concentration at which there is a 50% adverse effect response rate in the test organisms (EC 50 ) during 2

- to 8

- day exposures in either static (no replacement of tox icant), renewal (periodic replacement of toxicant), or flow

- through (continuous or intermittent replacement of makeup water and toxicant) conditions . Lower thresholds represent higher toxicity in the target organisms.

C Acute Toxicity to Daphnia ASTM E 729

-

96(2002) The ASTM E 729

- 96 acute toxicity test determines the concentration of chemical

needed to reach a toxicity threshold in Daphnia crustaceans. The standard thresholds used are the concentration at which there is a 50% fatality rate in the test or ganisms (LC 50 ) or the concentration at which there is a 50% adverse effect response rate in the test organisms (EC 50 ) during 2

- to 8

- day exposures in either static (no replacement of toxicant), renewal (periodic replacement of toxicant), or flow

- through (c ontinuous or intermittent replacement of makeup water and toxicant) conditions . Lower thresholds represent higher toxicity in the target organisms.

Acute Toxicity to Plants ASTM E 1218

- 04e1 The ASTM E 1218

- 04e1 toxicity test determines the concentration of chemical needed to reach a toxicity threshold in freshwater and saltwater microalgae. The standard threshold used is the concentration at which there is a 50% growth inhibition rate (IC 50 ) during 72

- , 96

- , or 120

- hour exposures in static (no replacement of toxicant) conditions. Chronic Toxicity to Daphnia ASTM E 1193

-

97(2004) The ASTM E 1193

- 97 chronic toxicity test determines the concentration of chemical

needed to reach a toxicity threshold in Daphnia magna Straus crustaceans. Exposures are conducted using flow

- through (continuous or intermittent replacement of makeup water and toxicant) methods and last over the life cycle of the organisms.

### 3

- 3

Exhibit 3
- 1 : Tests Required by EPA for HPV Chemicals, Based on the OECD ’s Screening Information Data Set (SIDS)

Protocol Name Protocol Number(s) Description Test Code (used in this analysis)

Acute Inhalation Toxicity 799.913 0 This test gives an indication of potential harm from inhaling a chemical compound. T he standard test to measure the acute inhalation toxicity of gases, volatile substances, and aerosols in mammals is defined in 40 CFR § 799.9130. This test is conducted duri ng a period of 24 hours or less us ing inhalation at no less than three dose levels (and a control, when using a vehicle other than water) in animals of both sexes. Occurrence, severity, and reversibility for as many behaviorally and clinically abnormal out comes as possible should be catalogued during the experiment, and an attempt to determine the relationship between dose level and effect should be made. This test can be used to determine a regimen of doses for longer

- term (i.e., subchronic and chronic) in halation toxicity studies.

D Acute Oral Toxicity ASTM E 1163

-

98(2002) or 799.9110 (d)(1)(i)(A) This test gives an indication of harm from ingesting a chemical compound. T he

standard test to measure the acute oral toxicity of liquid or solid chemicals in mammals is defined in 40 CFR § 799.9110. This test is conducted during a period of 24 hours or less using single or multiple ingestion doses at no less than three dose levels (and a control, when using a vehicle other than water) in animals of both sexes. O ccurrence, severity, and reversibility for as many behaviorally and clinically abnormal outcomes as possible should be catalogued during the experiment, and an attempt to determine the relationship between dose level and effect should be made. This test ca n be used to determine a regimen of doses for longer

- term (i.e., subchronic and chronic) oral toxicity studies.

BALB/c 3T3 Neutral Red Uptake Cytotoxicity; or N/A This test provides an indication of a chemical’s toxic effect on a cell, the basic building block of the body. The BALB/c 3T3 Neutral Red Uptake Cytotoxicity test determines the magnitude of cellular toxicity of water

- soluble chemicals on the BALB/c 3T3 mouse fibroblast cell line. Cell viability after short

- term (24 hour) in vitro chemical expos ure is measured using the cells’ ability to take up the Neutral Red dye as a proxy

.

BHK Neutral Red Uptake Cytotoxicity N/A This test provides an indication of a chemical’s toxic effect on a cell, the basic building block of the body. The BHK Neutral Red Uptake Cytotoxicity test determines the magnitude of cellular toxicity of chemicals on a baby hamster kidney (BHK) fibroblast cell line. Cell viability after in vitro chemical exposures of unknown length is measured using the cells’ ability to take up the Neutral Red dye as a proxy

.

Bacterial Reverse Mutation 799.9510 This test measures a chemical’s ability to change the genetic code of bacteria, which is an indicator of the chemical’s ability to change the genetic code of humans. The Bacterial Reverse Mutation test described in 40 CFR §7 99.9510 seeks to determine the e xistence of genotoxicity during chemical exposure using mutated Salmonella typhimurium and Escherichia coli bacterial cultures. Reversal of the test organism mutations (e.g., substitution, addition, deletion) by the test chemical after 48

- 72 hour in vitro chemical exposure is measured using the bacteria’s ability to synthesize specific amino acids as a marker. Positive results in this test are used to determine chemicals that should be further tested for carcinogenic, reproductive, and developmental effect potential. E1

Chromosome Aberration, in vitro ; or 799.9537 The in vitro Chromosome Aberration test described in 40 CFR § 799.9537 seeks to determine whether chemical exposure causes chromosomal aberrations in primary cell cultures, such as Chinese hamster fibroblasts, human, or other mammalian peripheral blood lymphocytes. Generation of chromosomal aberrations such as polyploidy (excess chromosomes) or endoreduplication (duplication of the genome without mitosis) by the test chemical is measured using basic microscopy techniques after exposure. Positive results in this test are used to determine chemicals that should be further tested for carcinogenic, reproductive, and developmental effect potential. E2 In Vivo Mammalian Cytogenetics Tests: Bone Marrow Chromosomal Analysis; or 799.9538 The in vivo Mammalian Bone Marrow Chromosomal Aberration test described in 40 CFR § 799.9538 seeks to determine whether chemical exposure causes chromosomal aberrations in rodents, such as rats, mice, and Chinese hamsters. Generation of chromosome or chromatid aberrations such as polyploidy (excess chromosomes) or endoreduplication (duplication of the genome without mitosis) by the test chemical is measured using basic microscopy te chniques. Positive results in this test are used to determine chemicals that should be further tested for carcinogenic potential, particularly in bone marrow. Erythrocyte Micronucleus (bone 799.9539 The Mammalian Erythrocyte Micronucleus test described in 40 C FR § 799.9539 seeks to determine whether chemical exposure causes damage to the

### 3

- 4

Exhibit 3
- 1 : Tests Required by EPA for HPV Chemicals, Based on the OECD ’s Screening Information Data Set (SIDS)

Protocol Name Protocol Number(s) Description Test Code (used in this analysis) marrow), in vivo chromosomes or the mitotic apparatus of erythroblasts (immediate precursor to red blood cells) in the bone marrow of rodents, such as rats or mice. The proportion of immature erythrocytes among the total is measured using basic microscopy techniques, and a dose

- response relationship is investigated. Positive results in this test are used to determine chemicals that shou ld be further tested for carcinogenic potential, particularly with regard to erythrocyte production.

Repeated Dose Oral Toxicity 799.9305 This test gives an indication of harm from ingesting a chemical compound. T he standard test to measure the repeated dose oral toxicity of liquid or solid chemicals in mammals is defined in 40 CFR § 799.9305. The test should be conducted after the acute oral test described in 40 CFR § 799.9110 in order to establish an appropriate dose range. This test is conducted during a period of 14 or 28 days using multiple ingestion doses at no less than three dose levels plus a control (dose = 0) in animals (typically rodents) of both sexes. Occurrence and severity for as many behaviorally and clinically abnormal outcomes as possible should be catalogued during the experiment, and histopathological investigations are done on specific sets of organs.

F1 Repro/Devel Toxicity Screening 799.9355 These tests indicat e the likelihood of a chemical to have an impact on the offspring of those exposed to the chemical. T he standard test to measure the reproductive or developmental toxicity of chemicals in mammals is defined in 40 CFR § 799.9355. Male animals are dosed for a minimum of 4 weeks with a schedule as follows: a minimum of 2 weeks pre

- mating, during the mating period, and approximately 2 weeks post

- mating. Females are dosed with a s chedule as follows: at least 2 weeks pre - mating, time

- to

- conception, duration of preg nancy, and at least 4 days post

delivery. Occurrence and severity of changes in gonadal function, mating behavior, conception, development of the conceptus, and parturition (birth) are catalogued during the experiment.

Combined Repeated Dose with Repro/Devel Toxicity Screen 799.9365 T he standard test to measure the reproductive or developmental toxicity of chemicals in mammals is defined in 40 CFR § 799.9365. Male animals are dosed for a minimum of 4 weeks with a sched ule as follows: a minimum of 2 weeks pre

mating, during the mati ng period, and approximately 2 weeks post

- mating. Females are dosed with a schedule as follows : at least 2 weeks pre

- mating, time

- to

conception, duration of pregnancy, and at least 4 days post

- delivery. Occurrence and sever ity for as many behaviorally and clinically abnormal outcomes as possible in the adult animals should be catalogued during the experiment, and histopathological investigations are done on specific sets of organs. Additionally, occurrence and severity of ch anges in gonadal function, mating behavior, conception, development of the conceptus, and parturition (birth) are catalogued during the experiment.

Repro/Devel Toxicity Screening 799.9355 T he standard test to measure the reproductive or developmental toxicity of chemicals in mammals is defined in 40 CFR § 799.9365. Male animals are dosed for a minimum of 4 weeks with a schedul e as follows: a minimum of 2 weeks pre

mating, during the mati ng period, and approximately 2 weeks post

- mating. Females are dosed with a s chedule as follows: at least 2 weeks pre

- mating, time

- to

conception, duration of pregnancy, and at least 4 days post

- delivery. Occurrence and severity for as many behaviorally and clinically abnormal outcomes a s possible in the adult animals should be catalogued during the experiment, and histopathological investigations are done on specific sets of organs. Additionally, occurrence and severity of changes in gonadal function, mating behavior, conception, develop ment of the conceptus, and parturition (birth) are catalogued during the experiment. F2

### 3

- 5 Exhibit 3
- 2 : Test Requirements for Chemicals Included in the Final Rule

CASRN Chemical Name Required Tests (See Test Codes in Exhibit 3
- 1 Exhibit 3
- 1 ) 1 98

- 09

- 9 Benzenesulfonyl chloride C2, E1, E2, F1 2 98

- 56

- 6 Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- B, C 6 3 111

- 44

- 4 Ethane, 1,1'

- oxybis[2

- chloro

- C6, F1 4 127

- 68

- 4 Benzenesulfonic acid, 3

- nitro

- , sodium salt (1:1) A3, F2 5 515

- 40

- 2 Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- A1, A3, A4, A5, B, C1, D, E1, E2, F1 6 2494

- 89

- 5 Ethanol, 2

- [(4

- aminophenyl)sulfonyl]

- , 1

- (hydrogen

sulfate) A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1

7 5026

- 74

- 4 2

- Oxiranemethanamine, N

- [4

- (2

-

oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- A1, A2, A3, A4, A5, B, C2, F1

8 22527

- 63

- 5 Propanoic acid, 2

- methyl

- , 3

- (benzoyloxy)

- 2,2,4

-

trimethylpentyl ester A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1 9 25321

- 41

- 9 Benzenesulfonic acid, dimethyl

- A2, A3, A4 10 52556

- 42

- 0 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propen - 1

-

yloxy)

- , sodium salt (1:1) A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1 1 1 68082

- 78

- 0 Lard, oil, Me esters A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1 1 2 68442

- 60

- 4 Acetaldehyde, reaction products with formaldehyde,

by

- products from A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1 1 3 68610

- 90

- 2 2

- Butenedioic acid (2E)

- , di

- C8

- 18

- alkyl esters A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1 1 4 70693

- 50

- 4 Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- [2

- (2

-

nitrophenyl)diazenyl]

- A1, A2, A3, A4, A5, B, C1, D, E1, E2, F1 1 5 72162

- 15

- 3 1

- Decene, sulfurized A2, A3, A4, A5, B, C1, D, E1, E2, F1

.

### 3

- 6

Although the rule includes a variety of voluntary consensus standard protocols (for example, ASTM E 729 for acute toxicity or ISO 9408 for ready biodegradation), cost estimates are based on OECD or EPA protocols, which are expected to be representative of the voluntary consensus standards. 7 

### These testing cost estimates generally include direct labor, overhead, other direct costs such as laboratory supplies, and general and administrative services. Estimating the potential testing costs for each chemical pursuant to requirements contained in the final rule is complicated in that industry may have choices associated with the species and/or route of administration used in a particular test, as well as choices between multiple tests to satisfy a particular endpoint testing requirement. Therefore, if cost data for a specific O ECD test protocol were available for multiple species and routes of administration, EPA used the average cost for all available species and routes of administration as the test cost estimate. In addition, EPA computed a “least cost” and an “average cost” s cenario where multiple test protocols were available to satisfy a test requirement. The “least cost” scenario assumes that manufacturers will choose the least costly protocol when choices are available. While EPA does expect that manufacturers will choose the least expensive protocol, there may be cases where the manufacturer chooses an alternate test based on availability, suitability for a particular chemical, quality control reasons, or other factors unknown to EPA at this time. Therefore, the “average
c ost” scenario assumes that the manufacturer may choose any of the tests that fulfill the testing requirement, and is calculated as the average of all the available testing options‟ costs. Individual estimates of test costs will vary across testing laborat ories based upon factors such as labor costs, discounts provided to clients for volume testing, profit margins, and other testing. In some cases, EPA has accommodated this variation by developing multiple estimates for a particular test and using the
avera ge of the estimates to represent the cost of the test. The following paragraphs list the known test protocols for each of the tests required by the final rule, and describe, for each, which protocols this analysis includes in the least cost and average cos t scenarios. Exhibit 3

- 3 Exhibit 3

- 3 presents the protocols required by the rule, the basis for the cost estimate, and final cost estimates used in the analysis. Category A. Phy sical/chemical property testing. Physical/chemical property testing includes tests to measure the melting point (A1; ASTM E 324); boiling point (A2; ASTM E 1719); vapor pressure (A3; ASTM E 1782); n
- Octanol/Water Partition Coefficient (log 10 basis) or log K ow 

### (A4; 40 CFR §799.6755, ASTM E 1147, or 40 CFR 7§99.6756, depending on the estimated log K ow 

### of the chemical); and water solubility (A5; ASTM E 1148, 40 CFR §799.6784, 40 CFR §799.6784, or 40 CFR §799.6786, depending on the chemical‟s estimated water s olubility) of a chemical. 8 

### For each individual physical/chemical property test, EPA used only one OECD protocol as a basis for the cost estimate. Therefore, the least and average cost scenarios for each of these test costs is the same. Category B. Environ mental fate testing. To test environmental fate, a manufacturer can choose one of the following ready biodegradation tests: ASTM 1720 (sealed vessel CO 2 

### production test), ISO 14593

7 Sec tion 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104

- 113, directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise imp ractical. 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, such as ASTM International, f ormerly the American Society for Testing and Materials (ASTM). Another voluntary consensus standard body is the International Organization for Standardization (ISO). 8 EPA recommends, but does not require, that log K ow be quantitatively estimated prior to initiating the n
Octanol/Water Partition Coefficient (log 10 basis) or log K ow test requirement . One method, among many similar methods, for estimating log K ow is described in Meylan and Howard (1992). In addition, EPA recommends, but does not require, that water solubility be quantitatively estimated prior to initiating the water solubility test requirement. One method, among many similar methods, for estimating water solubility is described in Meylan et al. (1996).

### 3

- 7

(CO 2 

### headspace test), ISO 7827 (analysis of DOC), ISO 9408 (determination o f oxygen demand in a closed respirometer), ISO 9439 (CO 2 

### evolution test), ISO 10707 (closed bottle test), or ISO 10708 (two

phase closed bottle test). OECD protocols for ready biodegradation, on which cost estimates are based, are the following: OECD 301A (DOC die

- away test), OECD 301B (carbon dioxide evolution test), OECD 301C (modified MITI test (I)), OECD 301D (closed bottle test), OECD 301E (modified OECD screening test), and OECD 301F (manometric respirometry test). For this test category, the test cos t used in the least cost scenario is based on the cheapest of the OECD tests (OECD 301D). The test cost used in the average cost scenario is based on the average of all of the OECD tests, because there are no special conditions requiring a manufacturer to use one or the other. Category C. Aquatic toxicity testing. If aquatic toxicity testing is required for a particular chemical, a manufacturer must determine if the test chemical falls into one of two test groups, based on the chemical‟s log K ow 

### . Test Group 1 consists of chemicals with a log K ow 

### of less than 4.2. Test Group 2 consists of test chemicals with a log K ow 

### greater than or equal to 4.2. Each test group has different testing requirements and, therefore, different testing costs. Because EPA does not know which test group a chemical will fall within (i.e., the log K ow 

### is unknown), the testing costs of both groups are estimated. For example, the following situations occur under testing categories C1 and C2:
C1: Conduct the Acute Toxicity to Fish test (A STM E 729), Acute Toxicity to Daphnia test (ASTM E 729), and the Toxicity to Plants test (ASTM E 1218) [Test Group 1] or conduct the Chronic Toxicity to Daphnia test (ASTM E 1193) and the Toxicity to Plants test (ASTM E 1218) [Test Group 2]. In this case, the sum of the acute testing costs is averaged with the chronic test cost to obtain the testing cost estimate for testing categories C1 and C2 under both the least and average cost scenarios. C2: Conduct the Acute Toxicity to Daphnia test (A STM E 729) and the Toxicity to Plants test (ASTM E 1218) [Test Group 1] or conduct the Chronic Toxicity to Daphnia test (ASTM E 1193) and the Toxicity to Plants test (ASTM E 1218) [Test Group 2]. In this case, the two test costs are averaged to obtain the testing cost estimate for testing category C2 under both the least and average cost scenarios. Category D. Mammalian toxicity testing

– acute. The acute mammalian toxicity testing requirement is met by implementing one of two methods defined in the final rule (Method A or Method B). The method a manufacturer selects is based on the chemical‟s physical state at room temperature. For those test substances that are gases at room temperature, Method A is required; otherwise, Method B is required. Method A requ ires an Acute Inhalation Toxicity test in rats (40 CFR 799.9130). Method B requires an Acute Oral Toxicity test (ASTM E 1163 or 40 CFR §799.9110(d)(1)(i)(A) and, if the manufacturer chooses to, a Neutral Red Uptake Cytotoxicity test (BALB/c 3T3 or BHK). Th e cost of the cytotoxicity test is estimated as the sum of the two cytotoxicity test costs (BALB/c 3T3 plus BHK), which is a conservative estimate that is likely to overestimate actual cytotoxicity test costs. Because the chemical's physical state at room temperature is unknown, a least and average cost scenario are estimated. Under the least cost scenario, the cost of the acute mammalian toxicity testing requirements is assumed to be the cost of the Acute Oral Toxicity Test, which is the cheaper of the two methods. Under the average cost scenario, the cost of the acute mammalian toxicity testing requirements is assumed to be the average of the Method A testing requirement and the sum of the Method B testing requirement and the least expensive cytotoxicity t est. The cytotoxicity tests are included in the average cost scenario even though they are optional, because they are animal

- saving tests and so may be preferred.

### 3

- 8

Category E. Mammalian toxicity testing

– genotoxicity. For gene mutations (E1), manufacturers are required to conduct the in vitro Bacterial Reverse Mutation test (40 CFR §799.9510). For chromosomal damage (E2), manufacturers can conduct one of three tests: the in vitro Mammalian Chromosome Aberration test (40 CFR §799.9537), the Mammalian Bone Ma rrow Chromosomal Aberration test (40 CFR §799.9538), or the Mammalian Erythrocyte Micronucleus test (40 CFR §799.9539). Under the least cost scenario, the cost of chromosomal testing is assumed to be the cost of the least expensive test (40 CFR §799.9539), while under the average cost scenario, the cost of chromosomal testing is assumed to be the average of all three test options because the test the manufacturer may conduct is unknown. Category F. Mammalian toxicity testing

– repeated dose/reproduction/de velopmental. For test category F1, a manufacturer can either conduct the Combined Repeated Dose Toxicity Study with the Reproduction/Developmental Toxicity Screening Test (40 CFR §799.9365), or conduct the Reproduction/Developmental Toxicity Screening Test (40 CFR §799.9355) and the Repeated Dose 28

- Day Oral Toxicity Study in rodents (40 CFR §799.9305). Testing costs under the least cost scenario are assumed to be the cheaper of these two options (conducting 40 CFR §799.9365). Testing costs under the averag e cost scenario are assumed to be the higher cost option (conducting both 40 CFR §799.9355 and 40 CFR §799.9305). For test category F2, the manufacturer would conduct the individual protocol 40 CFR §799.9355 under both the least and average cost scenarios.
Estimated Total Test Costs. The final rule requires only that the required test results be obtained once for each chemical; each manufacturer is not required to do the tests separately. Typically, manufacturers form a “task force” or panel through a comm on trade organization to coordinate any testing required by TSCA Section 4. Therefore, i n order to obtain the total test costs under the final rule, EPA assumes that a required test will be performed only once per chemical. The costs of the tests required for each chemical were summed for all chemicals, and then the total cost per chemical was summed across all chemicals included in the final rule. Following this method, the total laboratory cost for testing the chemicals included in the final rule is estimated to range from approximately $2. 7 9 million under the least cost scenario to approximately $3.4 2 million under the average cost scenario . ( Exhibit B

- 1 Exhibit B

- 1 and Exhibit B

- 2 Exhibit B

- 2 ) in Appendix B provide the total test costs for each chemical, under the least and average cost sc enarios, respectively.) These estimates may overstate the true testing burden because they are based on the assumption that each chemical is tested independently. If more than one chemical is tested at a time (for example, if a manufacturer sends a group o f chemicals to be tested at the same laboratory at the same time), testing costs could be lower due to economies of scale (for example, the test‟s quality control procedures may be performed by batch, making the per

- chemical cost lower). Dividing these tot als by the 15 chemicals in the final rule yields an average laboratory test cost per chemical of approximately $1 86 , 000 under the least cost scenario and approximately $ 2 28 ,000 under the average cost scenario.

### 3

- 9 Exhibit 3
- 3 : EPA Estimates of Laboratory Costs of Final Tests (2009$)

Testing Category Test Code Protocol Name Required Protocol Number(s) Basis for Cost Estimate Cost

Estimate 2009$ 1

Physical/Chemical Properties A1 Melting Point ASTM E 324

- 99 OECD 102 (Least & Average Cost Scenarios) $1,6 51

A2 Boiling Point ASTM E 1719

- 05 OECD 103 (Least & Average Cost Scenarios) $1,6 8 7

A3 Vapor Pressure ASTM E 1782

- 03 OECD 104 (Least & Average Cost Scenarios) $ 10,072

A4 Partition Coefficient Method A: 799.6755; or Method B: ASTM E 1147

- 92(2005) or Method C: 799.6756 OECD 107 (Least & Average Cost Scenarios) $ 8,040

A5 Water Solubility Method A: ASTM E 1148

- 02 ; or Methods B or C: 799.6784 (shake flask and column elution); or Method D: 799.6786 OECD 105 (Least & Average Cost Scenarios) $ 7,040

Environmental Fate and Pathways B Ready Biodegradation Choice of: ASTM 1720 (sealed vessel CO2 production test), ISO 14593 (CO2 headspace test), ISO 7827 (analysis of DOC), ISO 9408 (determination of oxygen demand in a closed respirometer), ISO 9439 (CO2 evolution test), ISO 10707 (closed bottle test), or ISO 10708 (two

phase closed bottle test) OECD 301A $10, 625 OECD 301B $9, 311 OECD 301C $23, 578 OECD 301D $7, 712 OECD 301E $10, 568 OECD 301F $10, 411 Least Cost Scenario (OECD 301D ) $7, 712 Average Cost Scenario (Average of All Protocols ) $ 12,034

Aquatic Toxicity C 1 (Test Group 1) Acute Toxicity to Fish ASTM E 729

- 96(2002) OECD 203 $11, 648 Acute Toxicity to Daphnia ASTM E 729

- 96(2002) OECD 202 (Part 1) $6, 171 Acute Toxicity to Plants ASTM E 1218

- 04e1 OECD 201 $10, 511 Test Group 1 Sum $ 28,330 (Test Group 2) Chronic Toxicity to Daphnia ASTM E 1193

- 97(2004) OECD 202 $37, 897 Acute Toxicity to Plants ASTM E 1218

- 04e1 OECD 201 $10, 511 Test Group 2 Sum $ 48,408 Least & Average Cost Scenarios ( Average of C1 Test Group 1 and 2 Sums) $ 38,369

C2 (Test Group 1) Acute Toxicity to Daphnia ASTM E 729

- 96(2002) OECD 202 (Part 1) $6, 171 Acute Toxicity to Plants ASTM E 1218

- 04e1 OECD 201 $10, 511 Test Group 1 Sum $16, 682 (Test Chronic Toxicity to Daphnia ASTM E 1193

- 97(2004) OECD 202 $37, 897

### 3

- 10 Exhibit 3
- 3 : EPA Estimates of Laboratory Costs of Final Tests (2009$)

Testing Category Test Code Protocol Name Required Protocol Number(s) Basis for Cost Estimate Cost

Estimate 2009$ 1 Group 2) Acute Toxicity to Plants ASTM E 1218

- 04e1 OECD 201 $10, 511 Test Group 2 Sum $ 48,408 Least & Average Cost Scenarios (Average of C2 Test Group 1 and 2 Sums) $32, 545

C3 (Test Group 1) Acute Toxicity to Fish ASTM E 729

- 96(2002) OECD 203 $11, 648 Acute Toxicity to Plants ASTM E 1218

- 04e1 OECD 201 $10, 511 Test Group 1 Sum $ 22,159 (Test Group 2) Chronic Toxicity to Daphnia ASTM E 1193

- 97(2004) OECD 202 $37, 897 Acute Toxicity to Plants ASTM E 1218

- 04e1 OECD 201 $10, 511 Test Group 2 Sum $ 48,408 Least & Average Cost Scenarios (Average of C3 Test Group 1 and 2 Sums) $ 35,284

C4 (Test Group 1 ) Acute Toxicity to Fish ASTM E 729

- 96(2002) OECD 203 $11, 648 Acute Toxicity to Daphnia ASTM E 729

- 96(2002) OECD 202 (Part 1) $6, 171 Test Group 1 Sum $17, 820 (Test Group 2) Chronic Toxicity to Daphnia ASTM E 1193

- 97(2002) OECD 202 $37, 897 Least & Average Cost Scenarios (Average of C4 Test Group 1 and 2 Sums) $27, 858

C 5 (Test Group 1) Acute Toxicity to Daphnia ASTM E 729

- 96(2002) OECD 202 (Part 1) $6, 171 (Test Group 2) Chronic Toxicity to Daphnia ASTM E 1193

- 97(2004) OECD 202 $37, 897 Least & Average Cost Scenarios (Average of C5 Test Group 1 and 2 Sums) $ 22,034
C6 Acute Toxicity to Plants ASTM E 1218

- 04e1 OECD 201 (Least & Average Cost Scenarios) $10, 511

Mammalian Toxicity

- Acute D (Method A) Acute Inhalation Toxicity 799.913 OECD 403 $ 15,136

(Method B) Acute Oral Toxicity ASTM E 1163

- 98(2002) or 799.9110 (d)(1)(i)(A) OECD 423 $2, 601 BALB/c 3T3 Neutral Red Uptake Cytotoxicity; or N/A N/A $3, 884 BHK Neutral Red Uptake Cytotoxicity N/A N/A $ 5,014 Sum of Cytotoxicity Tests $8, 898 Least Cost Scenario ( OECD 423 ) $2, 601 Average Cost Scenario ( Average of 403 and (423 + least expensive Cytotoxicity test )) $10, 811 Mammalian E1 Bacterial Reverse Mutation 799.9510 OECD 471 $8, 4 69

### 3

- 11 Exhibit 3
- 3 : EPA Estimates of Laboratory Costs of Final Tests (2009$)

Testing Category Test Code Protocol Name Required Protocol Number(s) Basis for Cost Estimate Cost

Estimate 2009$ 1 Toxicity

– Genotoxicity (Least & Average Cost Scenarios)

E2 Chromosome Aberration, in

vitro; or 799.9537 OECD 473 $23, 892 In Vivo Mammalian Cytogenetics Tests: Bone Marrow Chromosomal Analysis; or 799.9538 N/A $ 50,207
Erythrocyte Micronucleus (bone marrow), in vivo 799.9539 OECD 474 $17, 308 Least Cost Scenario ( OECD 474 ) $17, 308 Average Cost Scenario ( Average of 473, 799.9538, and 474 ) $30, 469

Mammalian Toxicity

– Repeated Dose/ Reproduction/ Developmental F1 Repeated Dose Oral Toxicity; and, 799.9305 OECD 407 $ 65,486 Repro/Devel Toxicity Screening; or, 799.9355 OECD 421 $ 132,494 Combined Repeated Dose with Repro/Devel Toxicity Screen 799.9365 OECD 422 $ 134,377 Least Cost Scenario ( OECD 422 ) $ 134,377 Average Cost Scenario ( Sum of OECD 407 and OECD 421 ) $ 166,178

F2 Repro/Devel Toxicity

Screening 799.9355 OECD 421
(Least & Average Cost Scenarios) $ 63,733

1 Test costs were estimated in different years, so EPA used the Employment Cost Index (ECI) Current

- Dollar Historical Listing from the Bureau of Labor Statistics (BLS, 20 10a ), U.S. Department of Labor, to conv ert all test cost estimates to 200 9$

.

### 3

- 12

3.1.2 Analytical Methodology Validation Costs When conducting tests, laboratories perform analytical methodology validation to ensure that proper dose concentrations are used in toxicity studies. An analytical methodology validation approach assumes that an acceptable analytical method is available fo r a particular chemical and that the method is directly related to the matrix used for the test. When analytical methodologies are not suitable or known, they must be developed or modified. Analytical method validation includes all of the procedures that demonstrate that a particular method used for quantitative measurement of analytes in a given matrix is reliable and reproducible for the intended use. The fundamental parameters for this validation include (1) accuracy, (2) precision, (3) selectivity, (4) sensitivity, (5) reproducibility, and (6) stability. Validation involves documenting, through the use of specific laboratory investigations, that the performance characteristics of the method are suitable and reliable for the intended analytical applicati ons. The acceptability of analytical data corresponds directly to the criteria used to validate the method. Factors that may increase the cost of analytical method development and validation costs include (1) testing new chemicals that lack any established methodology or historical analytical data to use as a starting point, and (2) testing chemicals that present challenging conditions or possess characteristics that require special or additional procedures during sample preparation and analysis. If previou s testing on a chemical of interest has been conducted by either a laboratory or client, information may be available that can assist with sample preparation and analytical testing. This can help to minimize the costs of method development and validation. Analytical method development and analytical costs can also vary depending on characteristics of the test substance. Characteristics of chemicals that may impact the cost of analytical method development and validation include chemical stability, chemical properties, matrix properties and interactions with the chemical, and whether the chemicals are mixtures or multi

- component chemicals or polymers. For example, chemicals are not always stable under every test or analysis condition, and a chemical could de compose or transform into a different chemical under testing conditions, which will invalidate the test results. Such chemicals will require additional effort to identify alternate conditions or matrices for testing to eliminate the potential for stability issues to affect the testing results. Certain properties may also affect the costs of analytical method development. Some chemicals may interact with the dosing matrix and require special or even different handling and processing procedures that can impac t the level of method development efforts. Once analytical methodology validation is completed for a specific chemical, however, it need not be repeated for tests of a similar nature (e.g., tests using the same dosing matrix), provided testing is done at the same laboratory. However, it is possible that analytical methodology validation may be required for both short

- term and long

- term tests where there are separate requirements for dose concentration ranges (e.g., parts per million for acute tests and par ts per billion for chronic tests).
For this final rule, EPA has assumed an exposure concentration in the parts per billion range requiring multi

- step preparation, concentration, and cleanup before analysis by gas or high

- pressure liquid spectroscopy, resul ting in an estimated analytical method validation cost ranging from $2,500 to $10,000. For the purpose of this analysis, a cost of $3,500 has been assigned for short

- term tests (acute), and a cost of $8,500 has been assigned for tests that are assumed to b e long

- term tests (genotoxicity and reproductive/developmental toxicity), as shown in Exhibit 3

- 4 Exhibit 3

- 4 . Because analytical method validation may not be necessary for all te sts when multiple tests are completed on the same chemical, these costs could be overestimated.

### 3

- 13 Exhibit 3
- 4 : Costs for Analytical Methodology Validation
Testing Category Test Symbol Cost Estimate
Physical Chemical Properties A no additional costs
Environmental Fate and Pathways B no additional costs

Aquatic Toxicity C Test Group 1 $3,500 Test Group 2 $8,500 Test Group 1 and 2 Average $6,000 Mammalian Toxicity

- Acute D $3,500
Mammalian Toxicity

- Genotoxicity E $ 8 ,500
Mammalian Toxicity

– Repeated Dose/ Reproduction/ Developmental F $ 8 ,500



### 3.1.3 Administrative Costs In addition to laboratory costs, entities subject to the final test rule will also incur expenses associated with the administration of the testing program itself. Administrative activities include “reporting activities,” such as preparing letters of intent, study plans, exemption applications, and final reports, and “non

- reporting activities,” such as soliciting laborato ry bids, selecting laboratories, monitoring tests under progress, developing cost

- sharing agreements, and auditing the laboratories for compliance with EPA‟s Good Laboratory Practice (GLP) standards. Total administrative costs are calculated as the sum of the costs of reporting and non

- reporting activities. This section discusses the methods and data employed to estimate reporting and non

- reporting costs. Reporting Activities. Reporting activities include preparing letters of intent, study plans, exemption applications, final reports, and robust summaries. As noted above, manufacturers typically form a “task force” or panel through a common trade organization to coordinate testing and reporting required by TSCA Section 4. One panel may often represent groups of chemicals. EPA reviewed the list of chemicals subject to the final test rule, and sorted them into groups of similar chemicals (e.g., hydrocarbons, dyes, alkyl halides). This sorting results in an estimated 1 1 chemical groupings. Assuming that each gro uping is sponsored by a panel, EPA estimates that 1 1 panels will be formed in response to the rule. Reporting costs per panel include costs associated with submitting letters of intent, study plans, final reports, and exemption applications. The analysis assumes that the panels will each submit one letter of intent and one set of study plans for their gro up of chemicals, resulting in 1 1 letters of intent and 1 1 study plans submitted to EPA. In addition, one final report is assumed to be required for each t est conducted for each chemical. 9 

### To estimate the total number of final reports, the total number of tests required for each chemical is summed across all chemicals, which results in an estimated 118 final reports that will be submitted to EPA in response to this rule. EPA also assumes that it will receive five exemption applications per panel, resulting in a total of 55 requests. Finally, respondents may choose to develop and submit robust summaries of the full, final toxicological study reports. The robu st summaries should contain technical information to adequately describe the study and results, and should be written such that the information provided is sufficient to allow a technically qualified person to evaluate study results without needing to revi ew an entire study report.

9 While some of the chemicals may require longer

- term aquatic testing based on chemical characteristics, EPA could not be certain of the number. Therefore, EPA did not include an estimate for progress reports.

### 3

- 14

Typically, a robust summary would include a description of the test substance, methods, results, conclusions, data quality description, and references associated with the full study. Based on professional judgment, EPA estimates that 8 to 16 hours of technical time are needed to develop and review a robust summary, depending on the type of study conducted. Therefore, for this analysis, EPA assumes an average of 12 hours of technical time to prepare a robust summary. Because submis sion of robust summaries is voluntary, EPA does not expect that many companies will undertake this activity. EPA estimates that 10 percent of full, final toxicological study reports may include a robust summary. Therefore, EPA expects approximately 12 robu st summaries. EPA estimates that it takes a respondent 40 hours to prepare a letter of intent and study plan, 73 hours to write a final report, and 2 hours to prepare an exemption application (U.S. EPA, 2002). These unit labor hours were derived from previous information collection requests and are believed to reflect the burdens that will be incurred for the final test rule. Wage rates associated with the predominant skill level (managerial, technical, and clerical) required to complete each of the re porting activities described in this section are presented in Exhibit 3

- 5 Exhibit 3

- 5

. These wage rates have been estimated following the method described in a memorandum titled, “Wage Rates for Economic Analyses of the Toxics Release Inventory Program” (Rice, 2002). This meth od uses average December 2009 wages, benefits, and total compensation data extracted from the Employer Costs for Employee Compensation Summary available from the BLS Web site. Appendix C provides detailed information on the estimation of these wage rates.

Exhibit 3
- 5 : Derivation of Loaded Hourly Rates by Labor Category
Labor Category 200 9 Wage Rate 200 9 Benefits and O verhead Loading Factor 200 9 Loaded Hourly Wage Rate Managerial $ 42.36 16 1 % $ 68.24 Technical $3 5.96 1 65 % $ 59.49 Clerical $ 17.21 1 64 % $2 8.31 Source: Methodology from “ Wage Rates for Economic Analyses of the Toxics Release Inventory Program ” (Rice, 2002 ). Wage rates and benefits extracted from the Employer Costs for Employee Compensation Summary, Bureau of Labor Statistics ( BLS, 20 10 c ); assumed overhead rate of 17% applied to wage rates based on assumptions in Rice (2002) and U.S. EPA (2002)

. 

### Exhibit 3

- 6 Exhibit 3

- 6 details the respondents‟ reporting cost and burden estimates. As shown, the total reporting cost and burden estimates are approximately $ 482,664 and 9,308 hours , respectively.

Exhibit 3
- 6 : Industry Reporting Cost and Burden Estimate for the Final Rule ( 200 9$)

Reporting Activity Unit Labor Annual Submissions Total Category 1 Hours Wage Rate Cost Hours Cost Letter of Intent and Study Plan T 40 $59.49 $2,380 11 440 $26,176 Final Report Record & Prepare Test for Submission Laboratory Review Corporate Review Type & Print Results Record Keeping T

T M C C 40

6 6 20 1 $59.49

$59.49 $68.24 $28.31 $28.31 $2,380

$357 $409 $566 $28.31 1 18 4, 7 20

7 0 8 7 0 8 2, 3 60 1 18 $2 80,793

$4 2,119 $ 48,314 $6 6,812 $3, 341 Robust Summaries T 12 $59.49 $714 12 14 4 $8, 567 Exemption Applications T 2 $59.49 $119 55 110 $6,544 TOTAL 9, 308 $ 482,664 1 Labor categories are as follows: T = Technical; M = Managerial; C = Clerical. Numbers may not add up due to rounding

### 3

- 15

Non

- Reporting Activities. In addition to reporting activities, manufacturers need to conduct a number of
non
- reporting activities. In January 2007, EPA conducted a brief study to investigate the types of non

reporting activities manufacturers conduct and the magnitude of associate d costs. 10 

### The non

- reporting activities identified include soliciting laboratory bids, selecting laboratories, monitoring tests in progress, developing cost

- sharing agreements, and auditing the laboratories for compliance with EPA‟s GLP standards. These act ivities, in addition to identifying manufacturers, arranging meetings, and employing toxicologists who may be hired to provide testing expertise for the testing, are considered to represent the costs of managing the testing consortium. While these costs wi ll vary based on a number of circumstances, the report suggests that managing the testing consortium is equivalent, on average, to 15 percent of the chemical testing costs, which is the assumption used in this analysis. Based on the study, an additional 10 percent of the testing costs are estimated to cover the costs of the technical expert who may work for the consortium, including that expert‟s study review and site visits to the laboratory. Therefore, total non

- reporting administrative costs are assumed to equal an additional 25 percent of the total testing costs. Because laboratory

- testing costs are estimated as $2. 7 9 million under the least cost scenario and $3.4 2 million under the average cost scenario, non

- reporting costs are approximately $0.70 milli on and $0.8 5 under the least and average cost scenarios, respectively.
Total Administrative Costs. As stated previously, total administrative costs pursuant to the final rule are estimated as the sum of reporting and non

- reporting costs. Thus, total admini strative costs are estimated to be $1. 18 million under the least cost scenario and $1.3 4 million under the average cost scenario.
3.1.4 Export Notification Costs Under Section 12(b) of TSCA, exporters must notify EPA if they export or intend to export a chemica l subject to various TSCA sections (40 CFR §707.60 through 75). Therefore, all exporters of chemicals regulated under the final rule must notify EPA about each country to which a chemical included in the final rule is shipped. This is a one

- time notificati on requirement, and the exporter needs to submit the notice only when it is exporting a particular chemical for the first time to a country for which it has not previously submitted a notification. A detailed analysis of the impact of export notifications would require data on the identity and/or number of exporters exporting chemicals included in the final rule and the identity and/or number of countries to which each chemical included in the final rule is exported. While data on aggregate export volumes f or various chemicals are published in U.S. Department of Commerce publications, detailed data identifying exporters and destination countries for all the chemicals included in the final rule are not readily available from secondary data sources. For this r eason, it is difficult to estimate the number of export notifications that would be triggered by the promulgation of the final rule. Given these data limitations, the costs of export notifications for the final rule are based on data available from EPA‟s E xport Notifications Tracking System (U.S. EPA, 2004a). According to these data, EPA received approximately 786 export notifications associated with 30 unique chemicals. Therefore, on average, there were approximately 25 export notifications per chemical in 2003 that were related to TSCA Section 4. This analysis assumes that there will also be 25 export notifications per chemical subject to the final rule. U.S. EPA (1992a) estimated that the export notification burden was 1.5 hours per notification letter. I n particular, the analysis assumed that it takes 1 hour of technical time to write each export notification letter and 0.5 hours of clerical time to print and send out each letter. However, most of the repeat submissions received by EPA are only computer

- g enerated form letters (Blake

- Hedges, 1999). While it

10 U.S. EPA, 2007.

### 3

- 16

might take 1 hour of technical time to prepare an initial letter, for subsequent submissions the analysis assumed that it would require only 0.5 hours of clerical time to reproduce the letter, based on t he U.S. EPA (1992a) estimate for clerical time to print and send. Because notification letters are expected from both first

- time filers and more experienced filers, the present analysis assumes that the export notification burden of the final rule ranges f rom 0.5 hours to 1.5 hours. The 2009$ wage rate for technical staff is $ 59.49 per hour , while that for clerical staff is $ 28.31 per hour (see Exhibit 3

- 5 Exhibit 3

- 5 ). This transl ates into a low

- end labor cost estimate of $ 14.15 per notice and a high

- end labor cost estimate of $73.65 per notice. In addition, industry incurs approximately $13.34 per notice (2009$) for sending each notice to EPA via registered mail ($10.60 for regist ered mail, $2.30 for a return receipt, and $0.44 for postage) (USPS, 2010). Accounting for labor and shipping costs, the total cost of preparing and submitting an export notification is estimated to range from $27.49 per notice to $86.99 pe r notice. For the least cost scenario, the analysis uses the 0.5 hour labor burden and $ 2 7.49 cost per notice; for the average cost scenario, the analysis uses a 1.0 hour labor burden and the average of the low

- end and high

end notification cost, which is $ 57.24. Assumi ng that 15 chemicals are regulated under the final rule, and that 25 notifications will be submitted for each chemical, it is estimated that a total of 375 notifications will be submitted in response to the final rule. Thus, the total cost of export notifi cations triggered by the final rule is $10, 309 under the least cost scenario and $2 1,465 under the average cost scenario. These estimates are summarized in Exhibit 3

- 7 Exhibit 3

- 7

.

Exhibit 3
- 7 : Export Notification Cost Estimate for the Final Rule (2009$)

Compliance Cost Category Cost

Category Hours Wage Rate Least Cost

Scenario Highest

Cost Scenario Average

Cost Scenario Write Export Notification Letter Technical Labor 0

- 1 $59.49 $0 $59.49 $29. 75 Copy or Print and Send Export Notification Letter Clerical Labor 0.5 $28.31 $14.15 $14.15 $14.15
Total Labor Cost per Letter $14.15 $73.65 $43.90 Shipping Cost per Letter Fixed Cost

-- -- $13.34 $13.34 $13.34 Total Cost per Letter (Labor and Shipping) $27.49 $86.99 $57.24 Total Cost for 375 Notification Letters $10, 309 $3 2,621 $2 1,465


### 3.1.5 Total Industry Compliance Costs The total compliance costs borne by the regulated industry are summarized in Exhibit 3

- 8 Exhibit 3

- 8 . The total industry compliance costs triggered by the final rule are estimate d to equal $ 4. 28 million under the least cost assumption and $5. 08 million under the average cost assumption. These estimates include laboratory, methodology validation, administrative, and export notification costs. Laboratory costs may be overestimated due to the economies of scale that could arise if multiple chemicals are tested together or multiple tests are conducted on the same chemical. Total compliance costs may also be overestimated to the extent that firms can claim tax deductions for some of these costs.

Exhibit 3
- 8 : Summary of Total Industry Compliance Costs Triggered by the Final Rule (200 9 $)

Compliance Cost Category Cost ($ million, unadjusted) Least Cost Scenario Average Cost Scenario Laboratory c osts (S ection 3.1.1 ) 2. 79 3.4 2 Analytical me thodology validation costs (S ection 3.1.2 ) 0. 31 0. 31 Administrative costs (S ection 3.1.3 ) 1. 18 1.3 4 Export notification costs (S ection 3.1.4 ) 0.01 0.02 Total industry compliance costs (Section 3.1.5 ) 4. 28 5. 08 Average compliance cost per chemical 0.2 9 0.3 4

### 3

- 17

3.1.6 Non
- Monetized Costs The proposed rule requires that manufacturers, importers, and/or processors of chemicals included in the proposed rule perform screening

- level toxicity tests on the chemicals. EPA routinely conducts an assessment of laboratory capacity and has applied those findings to this analysis, whi ch allowed EPA to examine the potential for laboratory capacity to become a factor in the economic impact of the proposed rule. The following summarizes conclusions from the most recent laboratory capacity assessment (U.S. EPA, 20 10 ). EPA anticipates that Contract Research Organizations (CROs) will conduct the majority of testing rather than in

- house laboratories. Currently, the testing industry in general appe a rs to be operating well under capacity due to the economic recession

. Many C ROs rely on the pharmaceutical and biotechnology sectors for a substantial part of their business. During economic downturns, customers in these sectors tend to curtail research and development, including toxicological testing, on new products. Combined wi th recent consolidations in the testing industry, these conditions have produced a notable decrease in testing demand. The one possible caveat is that implementation of the European Union‟s Registration, Evaluation, Authorisation and Restriction of Chemi cals (REACH) legislation that could still create a spike in testing demand. REACH requires the registration of chemicals and submission of test data to identify risks th at chemical s may pose. The registration of the first group of chemicals began in June 2 008 and is scheduled to end in December 2010. The fact that laboratories have still not seen an influx in testing as the first registration deadline approaches, however, may indicate that manufacturers and importers have existing data ready to submit, plan to use alternative methods (e.g., SAR) to meet the data requirements, or the number of chemicals

Because it is operating under capacity, it appears that the testing industry would be able to adjust to any potential increase in demand over a reasonable tim e frame. Such an expansion would only be initiated, however, once a backlog of test requests has been sustained for several months and is anticipated to continue over a long period of time. Due to their historical reliance on pharmaceutical and biotechnolo gy client testing, few U.S. laboratories would engage in speculative expansion in anticipation of increased future testing driven by EPA or European chemical testing initiatives. Additionally, the testing industry is increasing ly becoming a global market . China, and to a lesser extent India, are emerging as serious potential competitors to what has historically been a largely U.S. and European controlled market. While there are still barriers to overcome, the capabilities of Chinese and Indian CROs are qu ickly approaching those of established laboratories in the United States and Europe. With labor costs representing a significant proportion of testing costs, China and India can offer similar capabilities at a much reduced cost. Manufacturer‟s willingness to move business to these overseas providers will depend on China and India‟s ability to demonstrate credibility and quality, and for the results of work done in their facilities to be accepted by industry stakeholders, including regulatory bodies. Given that the amount of testing required by the proposed rule is not extensive and the tests are not significantly complex, it appears that testing capacity is not a significant factor in meeting the requirements of the proposed rule in the sh ort

- term . In addition, the less than expected level of demand for screening

- level testing resulting from other initiatives, such as REACH, should allow CROs to meet testing needs as a result of the proposed rule. In the long

- term, the supply should adjust to the demand, so that capacity is not a concern.

### 3

- 18

3.2 EPA Costs EPA will also incur costs resulting from the final rule. Once data are collected and submitted by industry, EPA must review and process letters of intent, study plans, final reports, robust summar ies, and exemption applications for completeness, adherence to protocols, and findings. EPA assumes that, on average, a Federal GS

- 13, Step 1, full

- time equivalent (FTE), equivalent to 2,080 hours per year, will conduct its collection procedures under the final rule. The annual 2009 fully loaded salary for a GS

- 13, Step 1, FTE is $ 13 9,083 (annually) and $66.87 (hourly)

. This includes a base salary of $ 86,927 plus 60 percent for overhead and benefits (i.e., $ 52,156 ). 11 

### Multiplying the hourly rate by the overhead factor yields an hourly wage of $ 66.87 for the FTE. Appendix C provides a detailed description of thes e calculations. As explained earlier in Section 3.1.2 , approximately 11 letters of intent and study plans, 55 exemption applications, 1 18 final rep orts, and 12 robust summaries are estimated to be file d in response to the final rule. It is estimated that it takes on average 3 hours to process a letter of intent and study plan, 5 hours to process a final report, 1 hour to review a robust summary, and 1 hour to review each exemption application. Error! Reference source not found. presents the estimated total government costs based on these assumptions. As s hown, the total government costs for the fi nal rule are estimated to be approximately $4 6,138

.

Exhibit 3
- 9 : Esti mated Government Cost s for the Final Rule ( 200 9$)

Item Unit Labor Total Items Total Cost Hours Rate Cost/Item Letter of Intent and Study Plans 3 $66.87 $200.60 11 $2,207 Final Reports 5 $ 6 6.87 $ 334.33 118 $39,451 Robust Summaries 1 $66.87 $66.87 12 $802 Exemption Applications 1 $ 66.87 $66.87 55 $3.678 Total $ 46,138



### 3.3 Summary of Total Social Costs
The estimated total social costs of the final rule are the sum of industry and EPA costs ( Exhibit 3

- 10 Exhibit 3

- 10 ). The total social costs under the least and average cost scenarios are $4.3 3 milli on and $5. 13 million, respectively. Industry compliance costs are presented before tax. As with any costs, tax deductions would lower the portion borne by industry, but the amount deducted would still represent a cost to society because the costs borne by the government will increase. Similarly, some costs may be passed on to customers, suppliers, and/or workers in the form of changed prices and wages. However, a detailed analysis of such cost redistribution is beyond the scope of this report.

11 The unloaded Federal GS

- 13 Step 1 salary ($ 86,927 , effective January 200 9 ), from the Office of Personnel Management salary table for Washington

- Baltimore

- Northern Virginia (OPM, 200 9 ). The 60 percent fringes

- and

overhead rate is from an EPA/OPP E guide (U.S. EPA , 1992 b ).

### 3

- 19 Exhibit 3
- 10 : Summary of Total Social Cost s Triggered by the Final Rule ( 200 9$)

Cost Category Cost ($ million) Least Cost Scenario Average Cost Scenario Total industry compliance cost s (unadjusted) a 4. 28 5. 08 Total government cost s (unadjusted) 0.0 4 6 0.0 4 6 Total social cost s triggered by the final rule (unadjusted) 4. 3 3 5. 13 Annualized social costs (3 years, 3% discount rate) 1.5 3 1. 8 1 Annualized social costs (3 years, 7% discount rate) 1.6 5 1.9 5
a Total industry compliance cost s include laboratory, analytical methodology validation, administration, and export notification costs.


### Chemical

- specific estimates of laboratory, analytical methodology validation, administration, export notification, and government costs under the least and average cost scenarios can be found in Appendix C of this report. These costs are not expected to occur in a single year, however. They are expected to occur over the several years during which the actual testing occurs and EPA reviews studies. A three

- year time period is assumed for this analysis. Thus, total social costs of the rule have been annualized over 3 years. The issues involved in selecting the appropriate social discount rate are complex and subject to considerable debate in the economics literature. This literature largely focuses on the appropriate treatment of displaced private investment, often referred to as the private rate of return to capital, and displaced consumption, often referred to as the consumption rate of interest. The literature and E PA‟s economic guidance document suggest that the appropriate rate to use for environmental actions is usually the consumption rate of interest. Historical rates of return on relatively risk

- free investments, adjusted for taxes and inflation, suggest that a consumption rate of interest of 2 to 3 percent is appropriate (U.S. EPA, 2000). A 3 percent discount rate is used for the primary analysis in this report, following common EPA convention. EPA guidance also recommends following OMB‟s basic guidance on disc ount rates for regulatory and other analyses provided in OMB Circular A

- 4 (OMB, 2003). The OMB suggests using both a 3 and a 7 percent discount rate, in real terms. Therefore, results are presented for the 3 percent and 7 percent discount rates. As shown, total annualized social costs under the least cost scenario range from $ 1.5 4 to $1. 6 5 million using a 3 percent and a 7 percent discount rate, respectively. Total annualized social costs under the average cost scenario range from $1. 8 1 to $ 1.9 5 million usi ng a 3 percent and a 7 percent discount rate, respectively. Detailed social cost estimates are presented in Appendix B , in Exhibit B

- 1 Exhibit B

- 1 through Exhibit B

- 4

.

### 4

- 1 Chapter 4

– Company
- Level Impact and Small Business Impact Analysis
This chapter assesses the impact of this final HPV test rule on the manufacturers of chemicals subject to the rule. In the previous chapter the total industry costs were presented, and in this chapter EPA estimates the per

- company cost incurred because of this final ru le. Such an analysis is particularly relevant for small businesses, as defined by the U.S. Small Business Administration (SBA). This analysis satisfies the requirements of the Regulatory Flexibility Act (RFA) of 1980, as amended by the Small Business Regul atory Enforcement Act (SBREFA) of 1996.
4.1 Company
- Level Impact When a chemical manufacturer/importer faces a mandatory test rule, it must decide whether to comply with the testing requirement or to discontinue production/importation of the chemical. Once th e rule is finalized, a company would have 30 days to stop production/importation before it becomes responsible for testing. The costs associated with testing requirements increase the cost of manufacturing/importing chemicals for these companies and decrea se the overall profitability of the affected products. If profitability falls below acceptable levels, firms may choose to discontinue production of the chemical (provided this can occur within 30 days of publication of the final rule), to raise prices of products, or to suffer reduced profitability for continued production of the chemical. The profitability of producing and selling a chemical is measured by the flow of costs and revenues associated with the chemical over time. The testing required by this rule is a short

- term effort to develop basic toxicological data. Evaluations of profitability of a chemical product line, however, are not based on one or even a very few years‟ results, but rather on the total expected earnings stream (appropriately disco unted) associated with a chemical over time. Thus, losses in one year may be appropriately balanced against revenues in another year to assess the net present value of the stream of earnings (revenues less costs) of a chemical. 12


### The development of a comple te net present value analysis of the company

- specific profitability of a particular chemical, with and without testing costs, would ideally require company

- level information on expected costs and the revenues stream, which is typically difficult to obtain. Although data on revenues are available at the company level, these revenues are often the combined revenues from all operations of the company. Thus, the revenues may include operations that are independent of chemical sales, and therefore are not releva nt to include in the analysis. Further, the financial structures of companies vary, making it difficult to meaningfully compare across companies; budgets within companies may be organized such that full company resources are not available to cover testing costs, and costs are borne by only a small unit or division within the company. Determining the specific levels at which testing costs may affect all of the individual companies that manufacture chemicals affected by this final test rule is not possible gi ven available data. Therefore, this analysis is performed in a two

- part method, whereby a chemical

- level analysis is performed to compare the total annualized cost of testing with the annual revenues for the chemical in question, across all manufacturers. If the testing costs are greater than 1 percent of the annual revenue for a particular chemical, then in the second part, the affected companies are examined to evaluate the potential of testing costs to adversely affect the companies‟ profitability. The
a nnualization is based on standard values for the economic life of the chemical and the discount rate for all chemicals considered.

12 The use o f net present value calculations to evaluate the profitability of an investment or a business is discussed in many financial management texts, including Brealey and Myers (1996), Schall and Haley (1991), and Van Horne and Wachowicz (1997).

### 4

- 2

Such a chemical

- level analysis serves as a proxy for company

- level analysis if testing costs borne by each individual company that manufactures the chemical are in proportion to the total revenue of a company (assuming that the price of the chemical is the same across companies). To the extent that this is not true, costs will be over

- or underestimated. To minimize the possibil ity of underestimating impacts, the purpose of the second step of this analysis is to consider the impacts, at the company level, for companies that manufacture chemicals with a cost

- to

- sales ratio greater than 1 percent. In this analysis, the overall
reve nue of the company is accounted for when estimating the cost

- to

- sales ratio. The steps used in this analysis are described below.
4.1.1 Calculate Annualized Costs Because testing is a short

- term effort to develop basic toxicological data, while the profitability of a chemical product line is based on the total earnings stream associated with the chemical over time and appropriately discounted, a company that experiences losses in a product line in one year due to testing requirements may also recoup these losses through profits earned in future years from the tested chemical. Annualized costs represent the amount that a company would have to pay each year over the period of analysis, such that the sum of these annual payments equal the present value of the overall cost of the rule. The standard formula for annualizing a lump sum cost is given by:

A = I [I(1 + i) n 

### / ((1 + i) n



### - 1)]
where A equals the annualized amount, I is the initial lump sum investment cost (equal to the one

- time cost to comply with the rule), i is the discount rate, and n is the useful life of the investment (equal to the financial life of the affected company). The initial lump sum costs to comply w ith the final rule under the least and average cost scenarios are presented in Chapter 3 . Testing costs represent an opportunity cost to the company conducting the testing, as the company is not able to otherwise use or invest the money spent on testing. In order to annualize those costs, they are discounted over an appropriate time period at a discount rate that reflects this opportunity cost of capital. The discoun t rate reflecting the opportunity cost of capital is estimated to be 7 percent and is consistent with OMB Circular A

- 4 (OMB, 2003). This represents the average rate of return on low

- yielding capital investments, such as housing, and the returns on high

- yie lding investments, such as corporate capital. Determining the number of years, n , to use in the annualization formula requires consideration of the “useful life” of the investment, which is longer than the time in which costs are actually incurred. This is because the analysis of impacts looks at the long

- term profitability of the chemical product line, and it is not uncommon for product lines to be profitable in some years and operate at a loss during others, with overall profitability in the long term. Fo r this analysis, the life of the chemical product line is assumed to be 15 years. The one

- time testing costs are thus annualized over a 15

- year period using a 7 percent discount rate. Exhibit 4

- 1 summarizes EPA‟s estimates of total annualized testing costs under both the least and the average cost scenarios. ( Appendix B , Exhibit B

- 4 , presents the complete list of chemical

- specific estimates of annualized costs.) The annualized total industry compliance costs are $0.4 7 million under the least cost scenario and $0. 5 6 milli on under the average cost scenario . Industry compliance costs are likely to be overstated because this analysis does not account for the tax deductibility of these costs.

### 4

- 3 Exhibit 4
- 1 : Annuali z ed Costs Under Least and Average Cost Scenarios

(Total for All Chemicals) ($2009)
Category Cost ($ million) 1 Least Cost Scenario Average Cost Scenario Annualized Laboratory Cost $ 305,794 $ 375,475 Annualized Methodology Development Cost $ 33,487 $ 33,487 Annualized Administration Cost $ 129,427 $ 146,847 Annualized Export Notification Cost $ 1,132 $ 2,357 Annualized Industry Compliance Costs 2 $ 469,840 $ 558,166 1 All costs were annualized over a 15

- year time horizon using a 7 percent discount rate. 2 Industry compliance costs include laboratory costs, methodology development costs, administration costs, and export notification costs.


### 4.1.2 Compare Annualized Compliance Costs to Annual Revenues To determine if the annualized compliance costs of testing could result in an adverse economic impact for a given chemical, the annualized compliance costs of testing for each specific chemical were compared to the annual revenues for those chemicals. As d escribed earlier, this chemical

- level analysis is performed to screen for impacts at a 1 percent threshold and higher. For chemicals with an impact greater than this threshold, further analysis is performed on individual manufacturers (see Section 4.1.3 ). To develop an estimate of expected annual sales revenue, the price per pound of each chemical 13 

### was multiplied by the total volume of production and importation in the United States. 14 

### The annualized cost of testing each of these chemicals was then divided by the annual sales revenue the chemical was expected to generate. If a chemical

- specific cost

- to

- sales ratio is less than 1 percent, the test rule is assumed to ha ve low potential for an adverse economic impact on the affected chemicals. If a chemical

specific cost

- to

- sales ratio is 1 percent or greater, it is assumed that there could be a potential for an adverse impact on a chemical‟s profitability. Exhibit 4

- 2 presents the distribution, under the least and average cost scenarios, of cost

- to

- sales ratios for the chemicals in the final test rule as well as summary statistics.

Un der the least cost scenario , 7 out of the 1 5 chemicals ( 47 percent) are affected at a level of less than 1 percent of their sales. Under the average cost scenario , 5 out of 1 5 chemicals ( 3 3 percent) are affected at a level of less than 1 percent. Therefore , the potential for adverse economic impacts due to the final test rule is judged to be low for at least 3 3 percent of the regulated chemicals. However, 8 chemicals (5 3 percent) and 10 chemicals ( 6 7 percent) of the 1 5 chemicals are affected at a level grea ter than or equal to 1 percent of their sales under the least and average cost scenarios, respectively . These chemicals are further evaluated below.

13 The method use d to derive chemical price estimates is found in Appendix A. 14 Production/import volumes were obtained through reports submitted by manufacturers as required by the IUR and PAIR rules; see Chapter 2. Volumes used in this calculation may be considered confidential business information and are not shown in this report.

### 4

- 4 Exhibit 4
- 2 : Summary Statistics for Chemical
- Specific Cost
- to - Sales Ratios 1 Statistical Measure Least Cost Scenario Average Cost Scenario Total Number of Regulated Chemicals 1 5 15 Number of Chemicals with Production Volume and Price Data 1 5 1 5 Number of Chemicals with Cost

- to

- Sales Ratio <1 percent 7 5 Number of Chemicals with Cost

- to

- Sales Ratio 1 to 3 percent 4 5 Number of Chemicals with Cost

- to

- Sales Ratio 3 to 5 percent 2 3 Number of Chemicals with Cost

- to

- Sales Ratio 5 to 10 percent 1 1 Number of Chemicals with Cost

- to

- Sales Ratio > 10 percent 1 1 Mean Cost

- to

- Sales Ratio 2. 38 % 2. 81 % Median Cost

- to

- Sales Ratio 1. 53 % 1. 79 % Standard Deviation 2. 83 % 3. 40 % 1 Compliance costs were annualized over a 15

- year time horizon using a 7 percent discount rate.


### 4.1.3 Conduct Further Analysis on Chemicals Affected at 1 Percent For chemicals with a cost

- to

- sales ratio greater than 1 percent, EPA conducted further analysis to evaluate the potential of testing costs to adversely affect the profitability of the affected companies. 15 

### EPA attempted to understand potential impacts on companies that produce chemicals with testing cost

- to

- sales ratios greater than 1 percent by examining these companies‟ individual revenue data compared to their share of compliance costs.
To calculate each company‟s share of compliance costs, EPA assumed that the annualized cost of performing chemical

- specific testing is borne by companies in proportion to their production and/or importation volume. For example, Company A‟s cost share for testing chemical X was computed by first calculating Company A‟s fraction of overall chemical X production (the volume of chemical X produced/imported by Company A divided by the total production of chemical X.) This fraction was then multiplied by the total annualized test ing costs for the chemical to obtain Company A‟s cost share. The cost share was computed under both the least and average cost scenarios. Using revenue data on global parent companies (Dun & Bradstreet, 2008) for companies that produce chemicals for which the cost

- to

- sales ratio is greater than 1 percent, EPA estimated company

- specific cost

- to

- sales ratios. Based on this analysis, EPA concludes that the costs of the testing requirements for chemicals produced by a specific company exceed 1 percent of compan y revenues for only one of the companies.
Exhibit 4

- 3 provides summary information on company

- specific cost

- to

- sales ratios, and indicates that the impact of compani es‟ share of testing costs is less than 1 percent of a company‟s revenues, on average. This result is due to a company‟s overall revenue typically being larger than the revenue generated only by the specific chemical of interest. Company

- specific testing c osts range from less than 0.01 percent to approximately 17 percent of company revenues. These data suggest that even if revenues generated from the tested chemical included in the final rule would not support the costs of its testing, other product lines i n the company could potentially support these costs. Finally, it may be possible for companies to increase the prices of the chemicals somewhat to recoup testing costs; however, because price elasticity information was not available for the chemicals, it i s not possible to estimate the extent to which this could occur. As noted above, insofar as company revenues are generated from independent operations such that these resources are not available to fund testing costs, the company

- specific ratio may be an
u nderestimate of the actual impact of the costs of testing.

15 EPA used a 1 percent threshold based on an EPA study entitled “Review of Economic Impact Methodology Applied to TSCA Section 4 Test Rules.” This study found that chemical

- specific cost

- to

- sales ratios for voluntary testing initiatives were less than 1 p ercent. While the study did not conclude that a cost

- to

- sales ratio greater than 1 percent would lead to adverse financial impacts, EPA used this estimate as a reasonable threshold to determine whether there is a need to further evaluate impacts on a firm (D‟Ruiz and Riordan, 1998).

### 4

- 5 Exhibit 4
- 3 : Summary Statistics for Company
- Specific Cost
- to - Sales Ratios, for

Chemicals with Cost
- to - Sales Ratios Greater Than 1 Percent Statistic al Measure Least Cost Scenario Average Cost Scenario Total Number of Affected Companies 15 1 9 Number of Companies with Sales Data 15 1 9 Total Number of Affected Chemicals 8 10 Minimum Cost

- to

- Sales Ratio < 0.01% <0.01% Maximum Cost

- to

- Sales Ratio 14. 30 % 1 7.17 % Mean Cost

- to

- Sales Ratio 0. 65 % 0. 79 % Median Cost

- to

- Sales Ratio < 0.01% < 0.01% Standard Deviation 3. 05 % 3. 66 % Notes: Compliance costs were annualized over a 15

- year time horizon using a 7 percent discount rate. Information is presented at the global parent company level.


### 4.1.4 Conduct a Sensitivity Analysis Many chemicals may have a useful life that differs from the 15

- year assumption used above. Therefore, EPA conducted a sensitivity analysis to examine the robustness of the results to a chang e in the annualization assumptions. If total compliance costs are annualized over a shorter horizon of seven years, 31 percent of the chemicals are affected at a level of less than 1 percent under the least cost scenario and the average cost scenario. Exhibit 4

- 4 summarizes the impact of the final rule if costs are annualized over
a seven
- year time horizon. A maximum of 11 chemicals are affected at a level of greater th an 1 percent if costs are computed under both the least and average cost methods, and annualized over a seven

- year period. Using the alternative scenario assumptions shifts three and one chemical(s) from a level of less than 1 percent to a level of greater than 1 percent under the least and average cost scenarios, respectively.

Exhibit 4
- 4 : Sensitivity Analysis: Summary Statistics for Chemical
- Specific Cost
- to - Sales Ratios Impact Category Least Cost Scenario Average Cost Scenario Total Number of Regulated Chemicals 1 5 1 5 Number of Chemicals with Cost

- to

- Sales Ratio <1 percent 4 4 Number of Chemicals with Cost

- to

- Sales Ratio 1 to 3 percent 5 3 Number of Chemicals with Cost

- to

- Sales Ratio 3 to 5 percent 2 3 Number of Chemicals with Cost

- to

- Sales Ratio 5 to 10 percent 2 3 Number of Chemicals with Cost

- to

- Sales Ratio > 10 percent 2 2 Notes: Compliance costs were annualized over a 7

- year time horizon using a 7 percent discount rate. 

### Using the same method described in Section 4.1.3, EPA concludes that the cost of the company

- specific testing requirements for the chemicals affected at a level greater than 1 percent, if costs are annualized
over a seven
- year time horizon, also exceed 1 percent of company reve nues for only one of the companies. For the sensitivity analysis, the average impact of each company's share of testing costs is approximately 1 percent

. This result, however, is driven mostly by the cost

- to

- sales ratio of the single firm exceeding 1 perc ent because the median cost

- to

- sale ratio is less than 0.1 percent

.

### 4

- 6 Exhibit 4
- 5 : Sensitivity Analysis: Summary Statistics for Company
- Specific Cost
- to Sales Ratios, for Chemicals with Cost
- to - Sales Ratios G reater Than 1 Percent

Statistical Measure Least Cost Scenario Average Cost Scenario Total Number of Affected Companies 21 21 Number of Companies with Sales Data 21 21 Total Number of Affected Chemicals 11 11 Minimum Cost

- to

- Sales Ratio < 0.01% < 0.01% Maximum Cost

- to

- Sales Ratio 24.16% 29.02% Mean Cost

- to

- Sales Ratio 1.03% 1.23% Median Cost

- to

- Sales Ratio < 0.01% < 0.01% Standard Deviation 4.93% 5.92% Note: Compliance costs were annualized over a 7

- year time horizon using a 7 percent discount rate Information is presented at the global parent company level.


### 4.2 Small Entity Impact Analysis To determine the impact that the rule might have on small businesses, this section examines the relationship between the compliance costs and company sales for sma ll businesses. Since companies that are small (as defined by SBA) are most likely to be adversely affected by the rule, this analysis focuses on these companies. The RFA, as amended by SBREFA, requires regulators to assess the effects of regulations on sma ll entities, including businesses, nonprofit organizations, and governments. In some instances, agencies are also required to examine regulatory alternatives that may reduce adverse economic effects on significantly impacted small entities. The RFA require s 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 specificall y 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; a nd 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 final rule is not expected to affect small governments and small organizations, as defined under RFA Section 601. However, some small businesses may be affected by the final rule. Thus, this section assesses the potential impact of the final rule on small businesses. The major steps used in the analysis are de scribed below.
4.2.1 Select a Relevant Small Business Definition The RFA relies on the definition of a “small business” found in the Small Business Act, which authorizes SBA to develop definitions for “small business” typically based upon a sales or employment l evel depending on the relevant North American Industry Classification System (NAICS) code for the industry. For this analysis, EPA uses SBA‟s definition of a small business for each industry. Entities potentially affected by the final testing rule include manufacturers and processors of one or more of the 1 5 subject chemical substances, i.e., chemical manufacturing and petroleum refineries (NAICS codes 325 and 324110). Under 13 CFR 121, SBA defines small business for the six

- digit NAICS industry based on
em ployment thresholds (SBA, 2004). These size standards range from 500 employees to 1,500 employees for the six

- digit NAICS codes that are potentially affected by the final rule. For example, SBA defines a company in NAICS 325320 (Pesticide and Other Agricul tural Chemical Manufacturing) as small if it has fewer than 500 employees. On the other hand, a company in NAICS 324110 (Petroleum Refineries) is considered small if it has fewer than 1,500 employees. To obtain a worst

- case estimate of the number of small businesses affected by the final rule, EPA chose an employment threshold of 1,500 employees to

### 4

- 7

determine small business status. Throughout the remainder of this report, this definition is referred to as an “employment

- based definition.” For this analysis, EPA considered an alternative definition based upon sales for the purpose of sensitivity analysis. Under this definition, a manufacturer or importer is defined as small under 40 CFR 704.3 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 or importation volume at the facility is less than or equal to 100,000 lbs.; or (2) Total annual sales of the company, combined with those of an y parent company, are below $4 million

. This “sales

- based definition” also includes a provision that allows adjustment to the total annual sales values for inflation whenever EPA deems it necessary to do so.
4.2.2 Identify the Affected Population For each manuf

acturer/importer of the chemicals identified in Chapter 2 , EPA identified the ultimate parent company and obtained sales and employment data for companies for whic h data are available from Dun & Bradstreet Market Identifier (Dun & Bradstreet, 2008). 16



### The search identified 3 1 affected global ultimate parent companies as defined by their global DUNS number or the highest parent level found in other sources. Sales and employment data could be found for 3 0 of the global ultimate parent companies . EPA was not able to locate the global ultimate parent company for one of the companies that submitted production information for the 2006 Inventory Update Reporting (IUR) rule.
4.2.3 Identify Small Businesses Parent company sales data, collected as explained above, were used to identify companies that qualified for “small business” status, per both the employment

- based and the sales

- based definitions specified above. Based on the employment criteria, 1 3 compani es ( 42 percent) were identified as small. Furthermore, three companies ( 10 percent) were identified as small according to the sales criteria.
4.2.4 Calculate Each Company’s Share of Testing Costs As explained in Chapter 3 , the industry compliance costs (the sum of laboratory costs, methodology development costs, administration costs, and export notification costs) were computed under least and average cost scenarios. Thes e costs were annualized over a 15

- year time horizon using a 7 percent

16 Dun and Bradstreet is a New York

- based company that provides business information through a global commercial database. It assigns DUNS numbers to identify businesses around the world. These numbers are required for many U.S. federal government transactions and therefore are widely used and assigned. DUNS numbers are also frequently used in corporate research. Database entries provide legal and trade names, physical and mailing addresses, geographical descriptions, product and industry descriptors, sales and number of employees for three years and associated growth rates, as well as up to 40 vital statistics about each organization. While the reporting year varied by company, company sales and employment data were primarily retr ieved from the database in October 2008.

### 4

- 8

discount rate. The annualized compliance costs for all 1 5 chemicals were approximately $0



### . 4 7 million under the least cost scenario and approximately $0.5 6 million under the average cost scenario

. 17 

### Similar to the analysis above, to calculate each company‟s share of compliance costs, EPA assumed that the cost of performing chemical

- specific testing is borne by companies in proportion to their production and/or importation volume. This frac tion was then multiplied by the total annualized testing costs for the chemical to obtain Company A‟s cost share. Total per

- company testing costs were computed by summing all the chemical

- specific cost shares for each company. This method was used to get a worst

- case estimate of the rule‟s impact on small businesses. For example, if Company A produced Chemicals X, Y, and Z, then one combined cost was examined rather than three chemical

- specific shares. Cost shares were computed under both the least and aver age cost scenarios.
4.2.5 Determine the Size of the Adverse Impact for Small Businesses To determine the size of the adverse impact, each company‟s total share of testing costs (for all chemicals it manufactures/imports) was then compared to its total sales.

S mall businesses were grouped based on the cost

- to

- sales ratios: less than 1 percent, greater than 1 percent, and greater than 3 percent. Exhibit 4

- 6 presents summary statistics for company

- specific cost

to

- sales ratios for small companies, as well as a summary of the results using the employment

- based, as well as the sales

- based, definition of a small business, under both the least and the average cost scenarios.
Exhibit 4

- 6 indicates that the number of small businesses affected at the 1 and 3 percent levels is identical regardless of the small business definition used: the analysis based on employment data correlates quite closely with the one based on sales data for the com panies. Of the 1 3 companies that qualified for small business status per the employment criteria, one had cost

- to

- sales ratios of greater than 1 percent under the least and average cost scenarios. The results are identical if the sales definition is used.

Exhibit 4
- 6 : Summary Statistics for Company
- Specific Cost
- to - Sales Ratios for Small Companies

Statistical Measure Employment Definition 1 Sales Definition 2 Least Cost Scenario Average Cost Scenario Least Cost Scenario Average Cost

Scenario Total Number of Identified Companies 3 1 3 1 3 1 3 1 Number of Companies with Data 3 0 3 0 3 0 3 0 Total Number of Identified Small Companies 13 13 3 3 Number Impacted at >1 percent 1 1 1 1 Number Impacted at >3 percent 1 1 1 1 Minimum Cost

- to

- Sales Ratio <0.01% <0.01% <0.01% 0.01% Maximum Cost

- to

- Sales Ratio 14.30 % 1 7.17 % 14.30 % 17.17 % Mean Cost

- to

- Sales Ratio 1.14 % 1.36 % 4.78 % 5.74 % Median Cost

- to

- Sales Ratio 0. 01 % 0. 01 % 0.03 % 0.03 % Standard Deviation 3.95 % 4.75 % 8.24 % 9.90 % Compliance costs are annualized over a 15

- year time horizon using a 7 percent discount rate. 1 Companies with fewer than 1,500 employees are considered small under this definition. 2 Companies with either (1) total annual sales below $40 million and annual production volume or importation volume less than or equal to 100,000 lbs.; or (2) total annual sales below $4 million are considered small under this definition.


### 4.2.6 Companies without Data Data on sales and employees are missing for one of the 3 1 companies . An analysis was conducted to determine the potential impact on these companies, using the median revenue for small companies with revenue data to estimate the likely revenue of the companies without data. The median revenue for small

17 Annualized over 15 years using a 7 percent discount rate. Note that these figures include only the industry compliance cost and not the cost to the government. Also note that industry compliance costs may be overestimated to the extent that companies can claim tax deductions for some of these costs.

### 4

- 9

companies with revenue data is $2 4.3 million (using the employment

- based definition of small business as described in Section 4.2.1 ). If this figure represented the sales fo r the companies without sales data, the cost

- to

- sales ratio would be less than 1 percent. Another way to look at this figure is that the overall revenue of the company would need to be less than $ 250,0 0 0 in order for testing cost impacts to be near
or exce ed 1 percent of sales. This value is slightly greater than the lowest revenue and significantly less than the median income

. 4.2.7 Conclusions EPA estimates that small entities will not be adversely affected by the final testing rule. For the final rule, EPA es timates that the small entities that are potentially directly regulated by this rule include small for

profit businesses; no nonprofit organizations or governments are expected to be affected by this final rule. EPA estimates that there are 1 3 small entiti es that would be affected by this final rule under the number of employees

- based definition, and 3 small entities that would be affected under the sales

- based definition. Of these, EPA estimates that there is one small business for which the cost impact of the testing exceeds 1 percent of the company‟s revenue.

### 5

- 1 Chapter 5 

## – Benefits

Th e final rule targets high production volume (HPV) chemicals for which basic toxicological (hazard) information is unavailable and requires testin g of these chemicals to provide information on their effects on human health and the environment. The benefit s of the testing requirement will result from the development of a basic set of hazard information on these chemicals and the use of this information by the public, industry, and government. Th e information developed because of the final rule will be made publicly available and is expected to yield benefits resulting from the direct use of the information (use value)

. In addition, there may be non

- use benefits because of the value that society places on just knowing that the test data exist , regardless of whether they ever use the information (non

- use value). This chapter discusses the use value of the final rule qualitatively. The non

- use va lues are only discussed briefly. Due to the scientific nature of the information that would result from the final rule, non

- use benefits are not likely to comprise a large percentage of the total benefits.
5.1 Use Values
T he final rule will increase the public ly available data about a chemical‟s risks and consequently is likely to result in (a) a reduc tion in the costs of risk

- based decisions about the chemical, and (b) an improve ment in the expected outcome of the decisions (U.S. EPA, 2006)

. Reduced cost of ri sk

- based decision making. By making new information about toxic substances available to the public (including EPA and other government agencies), this final rule can serve to replace other information

- gathering, management, and dissemination activities rel ated to the regulated chemicals. 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 final rule increases the efficiency ( and s trength ) of the decision

- making process. Improved outcome of decisions. Information

- based policies contribute to better decisions by redirecting
reso urces toward their most highly valued uses. With incomplete information regarding toxic chemicals, public and private decision makers are not able to adequately assess 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 c an be misdirected if basic risk

- screening information is unavailable or inadequate. With more information, EPA can better direct its limited resources toward high

- priority risks. It is also likely that once detailed toxicological information is available on these HPV chemical s, producers and users of these chemicals will adjust the volume of production and use to minimize adverse effects. Improved information can therefore help lead to more socially optimal reductions in risks to humans and the environment

. This chapter discu sses the use benefits of the HPV chemical test rule qualitatively. Quantification of the benefits of the final rule would require more specific information about each user‟s use patterns and preferences, and the changes in these that would result from the additional information made available under the final rule. These data are not readily available; to collect 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 test rule. However, such a survey (or one for similar information) has not been conducted. Furthermore, the exact nature and scope of the benefits resu lting from this final rule would depend on the outcome of the tests that would be performed; to the extent that the test results did indicate a potential health or environmental risk from a chemical, the benefits related to understanding and avoiding this risk would be greater

.

### 5

- 2

5.2 Non
- Use Values The value that society places on the information resulting from this final rule may go beyond what people experience through the use of the data. Specifically, members of society may experience a “non

- use” value associated with just knowing that the test data exist regardless of whether they ever use the information. Non

- use values have also been referred to as “existence” or “intrinsic” values and encompass a variety of motivations. For example, individuals may p lace a value on the availability of the test data for others to use in the current time period (vicarious consumption), or place value on preserving or ensuring the availability of the data (or the decisions or policies that result from the information) fo r the benefit of family and others in the future (bequest value). However, a quantitative discussion of these benefits is not provided here, as measuring non

- use values can be extremely difficult for several reasons. First, there is no market equivalent to accurately reflect these values. Second, non

- use values are not associated with easily observable behaviors. Third, non

- use values may be held by both users and non

users of a resource, and non

- users may be less familiar with particular services provided by the resources in question.
5.3 Benefits of the Required Tests Taken together, the tests required under the final HPV chemical test rule provide screening

- level hazard and environmental fate information, used to determine whether more research is warranted t o completely characterize the hazards and risks associated with the chemical. Consistent with the HPV Screening Information Data Set (SIDS) p rogram of the Organisation for Economic Co

- operation and Development (OECD) (described in Chapter 3 of this report) the data obtained by this battery of tests relate to six health and environmental effect endpoints for HPV chemicals

– acute toxicity; repeat dose toxicity; develo pmental and reproductive toxicity; genetic toxicity (gene mutations an d chromosomal aberrations); ecotoxicity (studies in fish, Daphnia, and algae); and environmental fate (including ready biodegradation)

– as well as physical/chemical properties. The test data identified under SIDS have been internationally agreed upon by the 29 member countries of OECD as providing the minimum data set required to make an informed preliminary judgment about the hazards of a given HPV chemical. For the purposes of the fin al rule, EPA has grouped required tests into six categories: (1) Physical/chemical properties (2) Environmental fate and pathways (3) Aquatic toxicity (4) M ammalian t oxicity

- acute (5) M ammalian toxicity

- genotoxicity (6) M ammalian toxicity

- repeate d do se/reproduction/ developmental

. Screening

- level t ests that provide information on the toxicity of a chemical (e.g., aquatic toxicity, mammalian toxicity) provide information on the health and environmental effects of the chemical, and can be used to assess how “dangerous” the chemical is to the populations exposed. Results of these screening

- level tests

– and any further research as necessary

– may help reveal the need for special containers and storage procedures , engineering controls, and pers onal protect ive equipment in the workplace to adequately control health and environmental risks associated with manufacture, processing, and/or use of the chemicals. A risk assessment is not complete without an estimation of the level of population exposure, which is why physical/chemical properties and environmental fate and pathways tests are needed. These tests show how the chemical may interact with the environment or the body, and the methods by which it may be dispersed. The information developed from these tests benefits workers , consumers, or persons living in locations impacted by chemical emissions , as government regulation and

### 5

- 3

response to long

- term and emergency releases can be more targeted and effective. In particular, the tests help agencies prioritize the regulation of chemical emissions based on the level of exposure. The following sections describe the tests that could be required for a chemical under this final rule and the test‟s role as a screening

- level indicator (the b enefit s associated with each in dividual test)

. Section 5.4 lists the tests required for each chemical.
5.3.1 Physical/Chemical Properties Melting Point (ASTM E 324

- 99) ( ASTM , 2009c)

. The melting point is the temperature at which a substance transitions from the solid to liquid phase. The ASTM E 324

- 99 melting point test determines the initial and final melting points (melting range) of stable, crystalline organic solids whose melting points fall betwee n 30°C and 250°C.
The data generated by this test benefit industry and workers through the determination of the physical phase of the chemical in industrial settings or during transport, making the identification of optimal storage temperatures and contain er systems possible. Improper storage or containment of hazardous chemicals can result in worker injury or plant damage. Since the melting point is an intrinsic property of a chemical, this test can also be used to help identify unknown chemicals at indust rial sites. Melting point information also benefits government and industry scientists undertaking occupational and environmental exposure and risk assessments. A chemical‟s phase (e.g., solid, liquid, or gas) has a large impact on the expected fate and tr ansport of the chemical in the environment and within the body. With information on a chemical‟s melting point, the ambient temperature can be used to help determine whether the chemical exists in a solid or liquid phase. The chemical‟s phase also affects the magnitude of certain exposure pathways (e.g., chemicals in the liquid pha se are more readily absorbed by skin than those in the solid phase). This benefit in turn indirectly helps workers , consumers, or persons living in locations impacted by chemical emissions , as government regulation and response to long

- term and emergency releases can be more targeted and effective. Boiling Point (

ASTM E 1719

- 05 ) ( ASTM , 2009a)

. The ASTM E 1719

- 05 boiling point (ebulliometric) test determines the boiling point and vapor pressure of pure liquids and azeotropes (i.e., mixtures of two chemicals that boil at a unique temperature) that are condensable at total reflux and boil between 285 K and 575 K (approximately 12°C and 302°C, respectively). The data generated by thi s test benefit industry and workers through the determination of the physical phase of the chemical in industrial settings or during transport, making the identification of optimal storage temperatures and container systems possible. Information on a chemi cal‟s boiling point can help to determine whether a chemical exists in the liquid or gas phase. The buildup of pressure in containers due to low boiling point and high vapor pressure liquids can be a severe workplace and transportation hazard. Thus, the us e of these data to provide safe, hazard

- free transportation and workplaces will benefit the general public, industrial workers, and the industries they work in by decreasing the liability of transport and workplace accidents. Since the boiling point is an intrinsic property of a chemical, this test can also be used to help identify unknown chemicals at industrial sites. A chemical‟s boiling point also benefits government and industry scientists undertaking occupational and environmental exposure and risk as sessments for a number of reasons: It has a marked impact on the expected fate of chemicals in the environment and in the body (i.e., gases are frequently exposed to different transfo rmative chemistry than liquids). It has an impact on the expected transport of chemicals in the environment and in the body (i.e., gases travel more extensively than liquids due to conve ction and diffusion in air).

### 5

- 4

It can help determine whether the chemical exists in the liquid or gas phase during the exposure period, wh ich can affect the exposure outcomes (e.g., chemicals in the gas phase can be inhaled, increasing the magnitude of exposure). Vapor Pressure (ASTM E 1782

- 08) (ASTM, 2009b)

. The vapor pressure indicates the tendency of a solid or liquid to evaporate. The ASTM E 1782

- 08 vapor pressure test determines the vapor pressure of pure liquids or melted solids within the temperature range 273 K to 773 K (approximately 0°C to 500°C, respectively) and the pressure range 5 kPa to 2000 kPa using differential thermal ana lysis (DTA), differential scanning calorimetry (DSC), or preferably high

- pressure versions of these instruments (HPDTA and HPDSC).
The data generated by this test benefit industry and workers through the determination of the physical phase (e.g., liquid o r gas) of the chemical in industrial settings or during transport, making the identification of optimal storage temperatures and container systems possible. The buildup of pressure in containers due to low boiling point and high vapor pressure liquids can be a severe workplace and transportation hazard. Thus, the use of these data to provide safe, hazard

- free transportation and workplaces will benefit the general public, industrial workers, and the industries they work in by decreasing the liability of tran sport and workplace accidents. Like boiling point, v apor pressure information also benefits government and industry scientists undertaking occupational and environmental exposure and risk assessments because of its impact on the expected fate of the chemic als, the expected transport of the chemicals, and the exposure outcome. Partition Coefficient (ASTM E 1147

- 9 2(2005) ) ( ASTM , 2005). The octanol

- water partition coefficient ( logK ow 

### ) indicates how a compound partitions between water and non

- polar organic che micals (e.g., fat s and oils) . The ASTM E 1147 partition coefficient test determines the logarithm of the octanol/water partition coefficient of non

- ionizable and ionizable compounds by inputting the ir retention time on a liquid chromatographic column into an empirically derived equation. (The regulations at 40 CFR 799.6755

- 6 provide alternate protocols for obtaining a chemical‟s octanol

- water partition coefficient.) This information is then used to assess the chemical‟s lipophilicity , or affinity to non
- polar organic chemicals. Some important benefits to industry chemica l users involve clean up , waste

- handling procedures , and chemical identification . Cleanup procedures are highly dependent on these data, since facilities need to know what materials the chemical tends to adsorb to. Waste storage is also affected, since facilities typically store miscible substances together. Additionally, the test can be used to help identify unknown chemicals at industrial sites.

Industrial users also benefit from thes e data through the determination of chemicals‟ solubility in fat. Persistent, fat

- soluble chemicals can bioaccumulate in regularly exposed workers , or consumers of end

use products

. This information can help identify the need for special containers, engine ering controls, and pers onal protective equipment in the workplace . Proper controls can reduce the likelihood of occupational injury and death, thereby reducing liability to industry and benefiting workers. It can also help preemptively identify products w hose use is likely to result in bioaccumulation in consumers

. Partition coefficient information also benefits government and industry scientists undertaking fate and transport studies. Chemical fate and transport is highly influenced by the tendency of ch emicals to adsorb to non

- polar organic matter such as sediment, soil, and dust. Chemicals with high logK ow 

### partition coefficients are more likely to adsorb to these particles, which can impede or accelerate their dispersal, depending on local conditions. I n soil matrices, these chemicals predominately adsorb to organic material, while chemicals that are more water soluble percolate through the soil more rapidly, potentially

### 5

- 5

contaminating groundwater . In dusty conditions, they predominately travel with the p articulate matter, rather than move by convection and diffusion. Occupational and environmental risk assessors benefit from these data because logK ow 

### heavily influences the magnitude of chemical uptake in the human body (e.g., a high logK ow 

### typically res ults in higher dermal transfer coefficients and higher inhalation efficiency). It also influences the partitioning of the chemical inside of the body and consequently is used in the estimation of chemical half

- life (e.g., exposure to chemicals with high lo gK ow 

### partition coefficients often results in extensive bioaccumulation)

. This benefit in turn indirectly helps workers , consumers, or persons living in locations impacted by chemical emissions , as government regulation and response to long

- term and emergen cy releases can be more targeted and effective. Water Solubility (ASTM E 1148

- 02) ( ASTM , 2008a). The physical property describing the ability of a given substance to dissolve in water is termed water solubility. The ASTM E1148

- 02 water solubility test det ermines the affinity of water

- and air

- stable chemicals to water. The regulations at 40 CFR 799.6784 and 799.6786 provide alternate protocols for obtaining a chemical‟s water solubility.) Some important benefits to industry chemica l users involve clean up , waste

- handling procedures , and chemical identification . Cleanup procedures are highly dependent on these data, since facilities need to know what materials the chemical tends to adsorb to. Waste storage is also affected, since facilities typically store mi scible substances together. Additionally, the test can be used to help identify unknown chemicals at industrial sites.

Industrial users also benefit from these data through the determination of chemicals‟ solubility in fat. Persistent, fat

- soluble chemicals can bioaccumulate in regularly exposed workers , or consumers of end

use products

. This information can help identify the need for special containers, engineering controls , and pers onal protective equipment in the workplace . Proper controls can reduce the likelihood of occupational injury and death, thereby reducing liability to industry and benefiting workers. It can also help preemptively identify products whose use is li kely to result in bioaccumulation in consumers. Water solubility information also benefits government and industry scientists undertaking fate and transport studies. Chemical fate and transport is highly influenced by the affinity of chemicals to water. C hemicals with high solubility are more likely to travel with water flows (i.e., rivers, aquifers, rain percolation through soil and sediment), and as a result can travel extensive distances. In soil matrices, these chemicals predominately percolate through the organic matrix , potentially threatening groundwater supplies

. Occupational and environmental risk assessors will benefit from these data because water solubility heavily influences the magnitude of chemical uptake in the human body (e.g., high water solubility typically results in lower dermal transfer coefficients and inhalation efficiency) and the possible site of toxic effects (e.g., upper respiratory tract versus lungs) . It also influences the partitioning of the chemical inside of the body and co nsequently is used in the estimation of chemical half

- life. This benefit in turn indirectly helps workers , consumers, or persons living in locations impacted by chemical emissions , as government regulation and response to long

- term and emergency releases c an be more targeted and effective.
5.3.2 Environmental Fate and Pathways Ready Biodegradation (ASTM 1720

- 01 , sealed vessel CO 2 

### production test) ( ASTM , 2008b). The biodegradation test measures how quickly chemicals will be broken down in the environment by natura l processes such as bacterial digestion . The ASTM E 17 2 0

- 01 ready biodegradability test uses the

### 5

- 6

generation of carbon dioxide by a dilute sewage inoculum as a proxy to determine the biodegradability of organic compounds in a closed vessel. Biodegradation o f 60 percent or more during the closed

- vessel test indicates that in most environmental compartme nts the chemical will biodegrade completely. The International Organization for Standardization (ISO)‟s standards ISO 14593, ISO 7827, ISO 9408, ISO 9439, ISO 10707 and ISO 10708 provide alternate protocols test for biodegradation. The appropriate method is determined by the test substance‟s physical and chemical properties, including its water solubility. ISO 10634 provides guidance for selection of an appropri ate test method for a given test substance. For industries that keep chemicals in stock for extended periods of time , these data have a significant benefit, since biodegradability influences the choice of storage conditions, including container type, humidity, temperature, and expected storage time. These data also benefit government and industry scientists undertaking f

ate and transport studies, as well as occupational and environmental exposure and risk assessments. They can be used as a proxy measure for persistence in the environment. All else being equal, chemicals expected to biodegrade in most environmental compart ments will neither have as long a residence time nor travel as far as a non

- biodegradable equivalent. This, in turn , affects the potential for ecological and human exposure and consequent risk.
5.3.3 Aquatic Toxicity Aquatic toxicity data are beneficial to industry, regulators , and the public for a variety of reasons. Industry and regulators may use the information during the formulation of plans for water emissions schedules and the filing of National Pollutant Discha rge Elimination System (NPDES) permits with EPA‟s Office of Wastewater Management (OWM). These data also benefit government and industry scientists undertaking ecological toxicity and risk assessments. The assessments use , in conjunction with fate and tran sport and ecological exposure models , acute fish toxicity thresholds to estimate the acute effects of a particular emission or pattern of emissions on targeted populations of fish ; acute Daphnia toxicity thresholds to estimate the acute effects of a partic ular emission or pattern of emissions on targeted populations of crustaceans or other aquatic life ; microalgae toxicity to estimate the short

- term effects of a particular emission or pattern of emissions on targeted populations of aquatic plant life ; or ch roni c Daphnia toxicity thresholds to estimate the long

- term effects of a particular emission or pattern of emissions on targeted populations of crustaceans or other aquatic life. They can also be used as general indicato rs of toxicity, such as in life cycle analyses. Government response to industrial emissions as a consequence of ecological risk assessment results can therefore be better tailored to protect ecological resources, benefiting the general public. More detail on these aquatic toxicity tests is pr ovided below. Acute Toxicity to Fish (

ASTM E 729

- 96 ) ( ASTM , 2007b). The ASTM E 729

- 96 acute toxicity test determines the concentration of chemical needed to reach a toxicity threshold in certain species of freshwater and saltwater fish. The standard thresh olds used are the concentration at which there is a 50 percent fatality rate in the test organisms (LC 50 

### ) or the concentration at which there is a 50 percent adverse effect response rate in the test organisms (EC 50 

### ) during two

- to eight

- day exposures in ei ther static (no replacement of toxicant), renewal (periodic replacement of toxicant), or flow

- through (continuous or intermittent replacement of makeup water and toxicant) exposures ( Hoffman et al., 2003)

. Lower thresholds represent higher toxicity in the target organisms. Because the toxic endpoint in the LC 50 

### is death, it represents a very crude measure of chemical toxicity, unlike the EC 50 

### or chronic studies , which measure more subtle effects. Acute Toxicity to Daphnia ( ASTM E 729

- 96 ) ( ASTM , 2007b). The ASTM E 729

- 96 acute toxicity test determines the concentration of chemical needed to reach a toxicity threshold in Daphnia crustaceans. The standard thresholds used are the concentration at which there is a 50 percent fatality rate in the test organisms ( LC 50 

### ) or the concentration at which there is a 50 percent adverse effect response rate in the

### 5

- 7

test organisms (EC 50 

### ) during two

- to eight

- day exposures in either static (no replacement of toxicant), renewal (periodic replacement of toxicant), or flow

- throug h (continuous or intermittent replacement of makeup water and toxicant) exposures. 8 

### Lower thresholds represent higher toxicity in the target organisms. Because the toxic endpoint in the LC 50 

### is death, it represents a very crude measure of chemical toxicity , unlike the EC 50 

### or chronic studies that measure more subtle effects. Acute Toxicity to Plants (ASTM E 1218

- 04e1) ( ASTM , 2007a). The ASTM E 1218

- 04e1 toxicity test determines the concentration of chemical needed to reach a toxicity threshold in freshwater and saltwater microalgae. The standard threshold used is the concentration at which there is a 50 percent growth inhibition rate (IC 50 

### ) during 72

- , 96

- , or 120

- hour exposures in static (no replacement of toxicant) conditions. Chronic Toxicity to Daphnia ( ASTM E 1193

- 97

) ( ASTM , 2004). The ASTM E 1193

- 97 chronic toxicity test determines the concentration of chemical needed to reach a toxicity threshold in Daphnia magna crustaceans. Exposures are conducted using flow

- through (continuous or intermittent repla cement of makeup water and toxicant) methods and last over the life cycle of the organisms.
5.3.4 Mammalian Toxicity

– Acute Several types of mammalian acute toxicity tests are available. Industry can use acute inhalation toxicity data to determine the level of hazard or potential risk posed by gases, or other volatile chemicals ; and acute oral toxicity data or cytotoxicity data to determine the level of hazard or potential risk posed by liquid or solid chemicals . (E levated levels of cytotoxicity indicate the pot ential for adverse health outcomes on cells, the smallest building block of the body. ) This hazard level can help identify the need for special containers, engineering controls, and pers onal protective equipment in the workplace. Proper use of this informa tion can reduce the likelihood of occupational injury and death, thereby reducing liability to industry and benefiting workers. These toxicity data also benefit government and industry scientists undertaking occupational and environmental exposure and ris k assessments or toxicity assessments. O ccupational and environmental exposure and risk assessments use acute toxicity information in conjunction with fate and transport and exposure models to estimate the acute effects of ambient workplace concentrations or end

- of

- pipe emissions on targeted populations of workers , consumers, or persons living in close proximity to emissions streams. This benefit in turn indirectly helps workers , consumers, or persons living in locations impacted by chemical emissions , as g overnment regulation and response to long

- term and emergency releases can be more targeted and effective. Toxicity assessments are able to use the cytotoxicity information to estimate the potential for adverse health effects in workers , consumers, or the g eneral public. As a result, government responses, primarily in the form of demands for further toxicity testing, are likely to be more targeted and effective. More detail on various types of mammalian acute toxicity tests is provided below.
Acute Inhalatio n Toxicity (40 CFR § 799.9130 ). This test gives an indication of potential harm from inhaling a chemical compound. The regulation at 40 CFR § 799.9130 defines the standard test to measure the acute inhalation toxicity of gases, volatile substances, and aeros ols in mammals. This test is conducted during a period of 24 hours or less us ing inhalation at no less than three dose levels (and a control, when using a vehicle other than water) in animals of both sexes. Occurrence, severity, and reversibility for as
ma ny behaviorally and clinically abnormal outcomes as possible should be catalogued during the experiment, and an attempt to determine the relationship between dose level and effect should be made. This test can be used to determine a regimen of doses for lo nger
- term (i.e., subchronic and chronic) inhalation toxicity studies.

### 5

- 8

Acute Oral Toxicity (40 CFR §799.911 0 ). This test gives a n indication of harm from ingesting a chemical compound. The regulation at 40 CFR § 799.9110 defines the standard test to measure the acute oral toxicity of liquid or solid chemicals in mammals. This test is conducted during a period of 24 hours or less using single or multiple ingestion doses at no less than three dose levels (and a control, when using a vehicle other than water) in animals of both sexes. Occurrence, severity, and reversibility for as many behaviorally and clinically abnormal outcomes as possible should be catalogued during the experiment, and an attempt to determine the relationship between dose level and effect sho uld be made. This test can be used to determine a regimen of doses for longer

- term (i.e., subchronic and chronic) oral toxicity studies. ASTM E 1163

- 98(2002) provides an alternate protocol to test for acute oral toxicity. BALB/c 3T3 Neutral Red Uptake Cyt otoxicity. This test provides an indication of a chemical‟s toxic effect on a cell, the basic building block of the body. The BALB/c 3T3 Neutral Red Uptake Cytotoxicity test determines the magnitude of cellular toxicity of water soluble chemicals on the BALB/c 3T3 mouse fibroblast cell line. Cell viability after short

- t erm (24

- hour) in vitro chemical exposure is measured using the cells‟ ability to take up the Neutral Red dye as a proxy ( MB Research Laboratories , 2009)

. BHK Neutral Red Uptake Cytotoxicity

. This test provides an indication of a chemical‟s toxic effect on a cell, the basic building block of the body. The BHK Neutral Red Uptake Cytotoxicity test determines the magnitude of cellular toxicity of chemicals on a baby hamster kidney (BHK) fibrobla st cell line. Cell viability after in vitro chemical exposures of unknown length is measured using their ability to take up the Neutral Red dye as a proxy ( Shirai et al. , 1989)

. 5.3.5 Mammalian Toxicity
- Genotoxicity Industry can use genotoxicity data to approx imate the potential risk of carcinogenicity, or reproductive and developmental effects posed by chemicals prior to conducting a full risk assessment. Elevated levels of genotoxicity, chromosomal aberrations , or aberrant erythrocyte production during the te st indicate increased potential for these effects. High genotoxicity might require the use of special containers, engineering controls, and pers onal protective equipment in the workplace. Proper use of this information can reduce the likelihood of chronic disease or risk to specific groups of workers (e.g., pregnant women) due to occupational exposure, thereby reducing liability to industry and benefiting workers. These toxicity data also benefit government and industry scientists undertaking toxicity asse ssments. Such assessments can use genotoxicity information to estimate the potential for carcinogenicity in workers , consumers, or the general public exposed to certain compounds. Genotoxicity can also serve as a carcinogenicity screening tool for new chem icals. As a result, government responses, primarily in the form of demands for further toxicity testing, are likely to be more targeted and effective. More detail on specific mammalian genotoxicity tests is provided below.
Bacterial Reverse Mutation ( 40 CF R §799.951 0 )

. This test measures a chemical‟s ability to change the genetic code of bacteria, which is an indicator of the chemical‟s abilit y to change the genetic code of humans. The Bacterial Reverse Mutation test described in 40 CFR § 799.9510 seeks to d etermine the existence of genotoxicity during chemical exposure using mutated Salmonella typhimurium and Escherichia coli bacterial cultures. Reversal of the test organism mutations (e.g., substitution, addition, deletion) by the test chemical after 48

- to 72

- hour in vitro chemical exposure is measured using the bacteria‟s ability to synthesize specific amino acids as a marker. Positive results in this test are used to determine chemicals that should be further tested for carcinogenic, reproductive, and dev elopmental effect potential. Chromosome Aberration, in vitro ( 40 CFR §799.9537 )

. The in vitro Chromosome Aberration test described in 40 CFR § 799.9537 seeks to determine whether chemical exposure causes chromosomal aberrations in primary cell cultures, such as Chinese hamster fibroblasts, human, or other mammalian

### 5

- 9

peripheral blood lymphocytes. Generation of chromosomal aberrations such as polypl oidy (excess chromosomes) or endoreduplication (duplication of the genome without mitosis) by the test chemical is measured using basic microscopy techniques after exposure. Positive results in this test are used to determine chemicals that should be furth er tested for carcinogenic, reproductive, and developmental effect potential. In Vivo Mammalian Cytogenetics Tests: Bone Marrow Chromosomal Analysis (40 CFR §799.9538). The in vivo Mammalian Bone Marrow Chromosomal Aberration test described in 40 CFR § 799. 9538 seeks to determine whether chemical exposure causes chromosomal aberrations in rodents, such as rats, mice, and Chinese hamsters. Generation of chromosome or chromatid aberrations such as polyploidy (excess chromosomes) or endoreduplication (duplicati on of the genome without mitosis) by the test chemical is measured using basic microscopy techniques. Positive results in this test are used to determine chemicals that should be further tested for carcinogenic potential, particularly in bone marrow. Eryth rocyte Micronucleus (bone marrow), in vivo: ( 40 CFR §799.9539). The Mammalian Erythrocyte Micronucleus test described in 40 CFR § 799.9539 seeks to determine whether chemical exposure causes damage to the chromosomes or the mitotic apparatus of erythroblast s (immediate precursor to red blood cells) in the bone marrow of rodents, such as rats or mice. The proportion of immature erythrocytes among the total is measured using basic microscopy techniques, and a dose

- response relationship is investigated. Positiv e results in this test are used to determine chemicals that should be further tested for carcinogenic potential, particularly with regard to erythrocyte production.
5.3.6 Mammalian Toxicity
- Repeated Dose/Reproduction/Developmental Industry can use repeated dos e oral toxicity data along with reproductive and developmental toxicity data to determine the level of hazard or potential risk posed by chemicals. This hazard level can help identify the need for special containers, engineering controls, and pers onal prot ective equipment in the workplace. Proper use of this information can reduce the likelihood of occupational injury , disease, and death, thereby reducing liability to industry and benefiting workers. Industry can also benefit from this information during sa fety testing of consumer products, as it prevents the commercialization of hazardous products and the resulting liability. Mammalian toxicity data can be used in developing regulatory standards, such as those found in EPA‟s Integrated Risk Information Sys tem (IRIS), to the benefit of government and industry scientists undertaking occupational and environmental exposure and risk assessments. Such assessments use both repeated dose and reproductive and developmental toxicity information in conjunction with f ate and transport and exposure models to estimate the effects of ambient workplace concentrations or end

- of

- pipe emissions on targeted populations of workers, consumers, persons living in close proximity to emissions streams, and sensitive subpopulations ( e.g., pregnant women , young children ), and/or on the general population. This benefit in turn indirectly helps workers , consumers, or persons living in locations impacted by chemical emissions , as government regulation and response to long

- term and emergen cy releases can be more targeted and effective

. More detail on various types of mammalian repeated dose/reproduction/developmental toxicity tests is provided below. Repeated Dose Oral Toxicity (40 CFR §799.9305). This test gives a n indication of harm from ingesting a chemical compound. The regulation at 40 CFR §799 .9305 defines the standard test to measure the repeated dose oral toxicity of liquid or solid chemicals in mammals. The test should be conducted after the acute oral test described in 40 CFR §799

. 9110 in order to establish an appropriate dose range. This test is conducted during a period of 14 or 28 days using multiple ingestion doses a t no less than three dose levels plus a control (dose = 0) in animals (typically rodents) of both sexes. Occurrenc e and severity for as many behaviorally and clinically abnormal outcomes as possible should be catalogued during the experiment, and histopathological investigations are done on specific sets of organs. An attempt to

### 5

- 10

determine the relationship between dose level and effect should be made with the no observed effects level (NOEL) serving as one of the parameters of importance. If possible, the no observed adverse effect level (NOAEL), lowest observed adverse effect level (LOAEL), and dose at which an effect is seen in 50 percent of the test animal population (ED 50 

### ) should be determined. Reproductive and Developmental Toxicity Screening ( 40 CFR §799.9355 )

. These tests give an indication of the likelihood of a chemical to have an impact on the offspring of thos e exposed to the chemical. The regulation at 40 CFR §799 .9355 defines the standard test to measure the reproductive or developmental toxicity of chemicals in mammals. Male animals are dosed for a minimum of four weeks with a schedule as follows: a minimum of two weeks pre

- mating, during the mating period, and approximately two weeks post

- mating. Females are dosed with a schedule as follows: at least two weeks pre
- mating, time

- to

- conception, duration of pregnancy, and at least four days post

- delivery. Occurr ence and severity of changes in gonadal function, mating behavior, conception, development of the conceptus, and parturition (birth) are catalogued during the experiment. An attempt to determine the relationship between dose level and effect should be made with the no observed effects level (NOEL) serving as one of the parameters of importance. If possible, the no observed adverse effect level (NOAEL), lowest observed adverse effect level (LOAEL), and dose at which an effect is seen in 50 percent of the tes t animal population (ED 50 

### ) should be determined. Combined Repeated Dose with Reproductive and Developmental Toxicity Screen (40 CFR §799.9365). The reg u lation at 40 CFR § 799.9365 defines the standard test to measure the reproductive or developmental toxici ty of chemicals in mammals. Male animals are dosed for a minimum of four weeks with a schedule as follows: a minimum of two weeks pre

- mating, during the mating period, and approximately two weeks post

- mating. Females are dosed with a schedule as follows: a t least two weeks pre
- mating, time

- to

- conception, duration of pregnancy, and at least four days post

- delivery. Occurrence and severity for as many behaviorally and clinically abnormal outcomes as possible in the adult animals should be catalogued during th e experiment, and histopathological investigations are done on specific sets of organs. Additionally, occurrence and severity of changes in gonadal function, mating behavior, conception, development of the conceptus, and parturition (birth) are catalogued during the experiment. An attempt to determine the relationship between dose level and effect should be made with the no observed effects level (NOEL) serving as one of the parameters of importance. If possible, the no observed adverse effect level (NOAEL) , lowest observed adverse effect level (LOAEL), and dose at which an effect is seen in 50 percent of the test animal population (ED 50 

### ) should be determined.
5.4 Benefits Related to Each Regulated Chemical Total benefits that result from the required tests discussed above would depend on the production volume of chemical substances included in this final rule, the tests required for each of the chemical substances, and other chemical

- specific characteristics that would impact the exposure of the chemicals. Section 4(a)(1)(B) of TSCA allows EPA to require testing if it finds that a chemical is reasonably expected to be released into the environment in substantial quantities, or if there may be substantial or s ignificant human exposure. For all of the chemical substances included in this final rule, EPA has made preliminary findings that they are produced in substantial quantities; there may be substantial human exposure to them; existing data are insufficient t o determine or predict their health and environmental effects; and testing is necessary to develop such data. Under the final rule, the chemicals would be required to complete a battery of tests, described above, that provide screening

- level hazard and env ironmental fate information. The sections below briefly describe EPA‟s findings for each chemical (U.S. EPA, 2009), which indicate why society may benefit when screening

- level hazard and risk information is known. The total benefit of this final testing ru le will depend on the production volume of chemicals, insofar as greater volume implies a greater risk of exposure. The production volume for each chemical was provided in Exhibit 2

- Exhibit 2

- 6 ( Chapter 2 of this report). Any known information about exposure volume is

### 5

- 11

included with the description of the findings. For each chemical, a cha rt shows which specific tests are required by this final rule. Tests are only required where the resulting data are not otherwise available for the chemical.
5.4.1 Benzenesulfonyl chloride (CASRN 98
- 09
- 9) The Inventory Update Reporting ( IUR ) commercial/consumer product category “Rubber and plastic products” was reported for this chemical. Chemicals in this category may be in such products as tires, footwear, flooring, bottles, sporting equipment, games, and toys. It is expected that these pro ducts will be widely used by consumers (including children) ; hence, the number of people exposed is likely to exceed 10,000. Additionally, products such as tires and flooring are also used in a commercial setting, which may lead to exposures of more than 1 ,000 commercial workers. Based on this information, EPA believes that this chemical may have “substantial or significant human exposure” (U.S. EPA, 2011). A substantial or significant number of consumers, workers, or others who are exposed to the chemical would benefit from the decisions that are made ( e.g., policies, regulations) when hazard information is known

.
Tests R equired under the Final HPV Chemical Test R ule for Benzenesulfonyl chloride (CASRN 98
- 09
- 9)

Melting Point Boiling Point Vapor Pressure Pa rtition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###    Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.2 Benzene, 1
- chloro
- 4
- (trifluoromethyl)
- (CASRN 98
- 56
- 6) The number of potentially exposed consumers is estimated to be very large based on the use (home maintenance product) cited in the Household Chemicals Database ( U.S. NLM, 2009). It is expected that home maintenance products will be widely used by consumers ; hence, the number of people exposed is likely to exceed 10,000. Based on this information, EPA believes that this chemical may have “substantial or significant human exposure” (U.S. EPA, 2011). A substantial or significant number of consumers, workers, o r others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Benzene, 1
- chloro
- 4
- (trifluoromethyl)
- (CASRN 98
- 56
- 6)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Do se/Repro/ Devel 

###   Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.3 Ethane, 1,1'
- oxybis[2
- chloro
- (CASRN 111
- 44
- 4) The IUR commercial/consumer product category “Other” ( chemicals contained in commercial and consumer products not elsewhere classified ) was reported for this chemical. This indicates that this chemical is present in an unknown number of commercial and consumer products that may potentially have a high number of exposures. Based on this information, EPA believes that this chemical may hav e “substantial or significant human exposure” (U.S. EPA, 2011). Other sources report that the chemical is used in a variety of ways, including use in the manufacture of medicines and pharmaceuticals; in paints, varnishes, lacquers, finish removers, spottin g , and dry cleaning ; and in the production of high

- grade lubricating oils ( U.S. NLM, 2008b ; Ash, 2003; Merck Index, 2001). Therefore, a substantial or significant

### 5

- 12

number of workers, consumers, or others who are exposed to the chemical would benefit from th e decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Ethane, 1,1'
- oxybis[2
- chloro
- (CASRN 111
- 44
- 4)

Melting Point Boiling Point Vapor Pressure Pa rtition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###   Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.4 Benzenesulfonic acid, 3
- nitro
- , sodium salt (1:1) (CASRN 127
- 68
- 4) The total number of potentially exposed workers exceeds 1,000 , based on NIOSH (1990) (U.S. EPA, 2011)

. Other sources report that the chemical is used in a variety of ways, including as a visco sity control agent in cosmetics and an oxidizing agent in industrial cleaners ( U.S. NLM, 2008b). The workers, consumers, or others who are exposed to the chemical woul d benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Benzenesulfonic acid, 3
- nitro
- , sodium salt (1:1) (CASRN 127
- 68
- 4)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###   Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.5 Benzene, (2
- chloro
- 1,1
- dimethylethyl)
- (CASRN 515
- 40
- 2) The IUR commercial/consumer product category “Agricultural products (non

- pesticidal)” was reported for this chemical. Chemicals in this category may be used to increase the productivity and quality of farm crops; examples include fertilizers and soil conditioners. It is expected that these products will be widely used by commercial workers and consumers ; hence, the number of people exposed is likely to e xceed 1,000 commercial workers and 10,000 consumers. Based on this information, EPA believes that this chemical may have “substantial or significant human exposure.” (U.S. EPA, 2011)

. A substantial or significant number of workers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Benzene, (2
- chloro
- 1,1
- dimethylethyl)
- (CASR N 515
- 40
- 2)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###          Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.6 Ethanol, 2
- [(4
- aminophenyl)sulfonyl]
- , 1
- (hydrogen sulfate) (CASRN 2494
- 89
- 5) The IUR commercial/consumer product category( ie s) were claimed as confidential business information for this chemical. This indicates that this chemical is present in an unknown number of commercial and consumer products that may potentially have a high number of exposures. Based on this information,

### 5

- 13

EPA believes that this chemical may have “substantial or significant human exposure.” (U.S. EPA, 2011)

. Other sources report that the chemical is used as an indicator and/or reagent ( U.S. NLM, 2008a)

. A substantial or significant number of workers, consumers, or others who are exposed to the chemical would b enefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Ethanol, 2
- [(4
- aminophenyl)sulfonyl]
- , 1
- (hydrogen sulfate) (CASRN 2494
- 89
- 5)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###           Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.7 2
- Oxiranemethanamine, N
- [4
- (2
- oxiranylmethoxy)phenyl]
- N
- (2
- oxiranylmethyl)
- (CASRN 5026
- 74
- 4) The total number of potentially exposed workers is likely to exceed 1,000 based on reported IUR data (U.S. EPA, 2011)

. IUR submitters reported that this chemical is used in the “ Resin and synthetic rubber manufacturing ” and the “ Aerospace product and parts manufacturing ” categories

. Another source report s that this chemical is used in epoxy resins for composite aircraft bodies/parts (Ashford, 2001). The workers, travelers, or others who are exposed to the chemical would benefit from the de cisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for 2
- Oxiranemethanamine, N
- [4
- (2
- oxiranylmethoxy)phenyl]
- N
- (2
- oxiranylmethyl)
- (CASRN 5026
- 74
- 4)

Mel ting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###         Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.8 Propanoic acid, 2
- methyl
- , 3
- (benzoyloxy)
- 2,2,4
- trimethylpentyl ester (CASRN 22527
- 63
- 5) The IUR commercial/consumer product category “Rubber and plastic products” was reported for this chemical. Chemicals in this category may be in such products as tires, footwear, flooring, bottles, sporting equipment, games, and toys. It is expe cted that these products will be widely used by consumers (including children) ; hence, the number of people exposed is likely to exceed 10,000. Additionally, products such as tires and flooring are also used in a commercial setting, which may lead to expos ures of
more than 1,000 commercial workers. Other product categories identified in the IUR were claimed as confidential business information

. Based on this information, EPA believes that this chemical may have “substantial or significant human exposure” (U .S. EPA, 20 11 ). A substantial or significant number of workers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known

.

### 5

- 14

Tests R equired under the Final HPV Chemical Test R ule for Propanoic acid, 2
- methyl
- , 3
- (benzoyloxy)
- 2,2,4
- trimethylpentyl ester (CASRN 22527
- 63
- 5)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Tox icity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###           Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.9 Benzenesulfonic acid, dimethyl
- (CASRN 25321
- 41
- 9) The total number of potentially exposed workers exceeds 1,000 , based on NIOSH (1990) (U.S. EPA, 20 11 )

. Other sources report that this chemical is used in a variety of ways, including as a catalyst for coatings and foundry resins, a hardening agent in plastics, an activator for nicotine insecticides, and a plating aid in electroplating baths (Ash , 2003; Ashf ord, 2001 ). The workers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Benzenesulfonic acid, dimethyl
- (CASRN 25321
- 41
- 9)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###    Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.10 1
- Propanesulfonic acid, 2
- hydroxy
- 3
- (2
- propen - 1
- yloxy)
- , sodium salt (1:1) (CASRN 52556
- 42
- 0) The IUR commercial/consumer product category “Other” ( chemicals contained in commercial and consumer products not elsewhere classified ) was reported for this chemical. This indicates that this chemical is present in an unknown number of commercial and consumer products that may potentially have a high number of exposures. Based on this informatio n, EPA believes that this chemical may have “substantial or significant human exposure” (U.S. EPA, 20 11 ). Other sources report that this chemical is used as an emulsion polymerization in paper, textile, fiber, and adhesives industries (Ash , 2003 ). A substa ntial or significant number of workers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known

.
Tests R equired under the Final HPV Che mical Test R ule for 1
- Propanesulfonic acid, 2
- hydroxy
- 3
- (2
- propen - 1
- yloxy)
- , sodium salt (1:1) (CASRN 52556
- 42
- 0)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###           Note: Specific benefits related to these tests are described in Section 5.3

.



### 5.4.11 Lard, oil, Me esters (CASRN 68082
- 78
- 0) The total number of potentially exposed workers exceeds 1,000 , based on N IOSH (1990 ) (U.S. EPA, 20 11 )

. Other sources report that this chemical is used as a lubricant (Lubriplate Lubricants Co. , 2009 ) The

### 5

- 15

w orkers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Lard, oil, Me esters (CASRN 68082
- 78
- 0)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mamm alian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###           Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.12 Acetaldehyde, reaction products with formaldehyde, by
- products from (CASRN 68442
- 60
- 4) The IUR commercial/consumer product category( ie s) were claimed as confidential business information for this chemical (U.S. EPA, 2006b) . This indicates that this chemical is present in an unknown number of commercial and consumer products that may potentially have a high number of exposures. Additionally, PAIR data indicate consumer use; therefore, it is expected that products containing this chemical may be used by more than 10,000 consumers. Based on this information, EPA believes that this chemical may have “substantial or significant human exposure” (U.S. EPA, 20 11 ). A substantial or significant numbe r of workers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Acetal dehyde, reaction products with formaldehyde, by
- products from (CASRN 68442
- 60
- 4)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###           Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.13 2
- Butenedioic acid (2E)
- , di
- C8
- 18
- alkyl esters (CASRN 68610
- 90
- 2) PAIR data indicate consumer use; therefore, it is expected that products containing this chemical may be used by more than 10,000 consumers. Based on this information, EPA believes that this chemical may have “substantial or significant human exposure” (U.S. EPA, 20 11 ). A substantial or significant number of workers, consumers, or others who are exposed to the chemical w ould benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for 2
- Butenedioic acid (2E)
- , di
- C8
- 18
- alkyl esters (CASRN 68610
- 90
- 2)

Meltin g Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###           Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.14 Phenol, 2,4
- bis(1
- methyl
- 1
- phenylethyl)
- 6
- [2
- (2
- nitrophenyl)diazenyl]
- (CASRN 70693
- 50
- 4) The IUR commercial/consumer product category( ie s) were claimed as confidential business information for this chemical. This indicates that this chemical is present in an unknown number of commercial and

### 5

- 16

consumer products that may potentially have a h igh number of exposures. Based on this information, EPA believes that this chemical may have “substantial or significant human exposure” (U.S. EPA, 20 11 ). A substantial or significant number of workers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made (e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for Phenol, 2,4
- bis(1
- methyl
- 1
- phenylethyl)
- 6
- [2
- (2
- nitrophenyl)diazenyl]
- ( CASRN 70693
- 50
- 4)

Melting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###           Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.4.15 1
- Decene, sulfurized (CASRN 72162
- 15
- 3) The total number of potentially exposed workers exceeds 1,000 , based on NIOSH (1990) (U.S. EPA, 20 11 Workers, consumers, or others who are exposed to the chemical would benefit from the decisions that are made ( e.g., policies, regulations) when hazard and toxicity information is known.

Tests R equired under the Final HPV Chemical Test R ule for 1
- Decene, sulfurized (CASRN 72162
- 15
- 3)

Mel ting Point Boiling Point Vapor Pressure Partition

Coefficient Water

Solubility Ready

Biodegra
dation Aquatic

Toxicity Mammalian

Toxicity
- Acute Mammalian

Toxicity
- Genotox Mammalian

Toxicity

– Repeated Dose/Repro/ Devel 

###          Note: Specific benefits related to these tests are described in Section 5.3

. 

### 5.5 Potential Users of Information Generated by the Final Rule
A s discussed above, a wide range of groups are expected to benefit from the availability of this information, including consumers, workers, scientists, industry representatives, government organizations, public health officials, the medical community, and foreign interests. By incorporating new hazard data on these chemicals into their decision

- making processes, users will achieve benefits resulting from improved decision

- making processes, and ultimately risk reduction. The data would be made available to the public, and may b e incorporated into numerous databases and sources that contain toxicological information. A few examples of these sources include the Hazardous Substances Data Bank (HSDB), Registry of Toxic Effects of Chemical Substances (RTECS), Integrated Risk Informat ion System (IRIS), the Toxic Substances Control Act Test Submissions (TSCATS), and TOXicology information onLINE (TOXLINE). These databases provide a variety of toxicological information in the form of study abstracts, information on effects, and more comp rehensive information combining hazard and exposure information to provide risk information (e.g., IRIS). The U.S. National Library of Medicine (NLM) houses TOXLINE, a bibliographic database that includes the toxicological effects of drugs and other chemic als. Users can access TOXLINE through the Internet. NLM estimates that a single month‟s a ccess to the database (February 200 9 ) consisted of 72 , 552 s earches via the Internet (Thomas, 2009 ).

### 5

- 17

The distribution of TSCATS user accounts purchased through a past vendor, Oxford Molecular Group (OMG) , 18 

### indicates that the users of toxicological data are diverse. In 1998, a representative of OMG suggested that 6 percent of account holders were government, 38 percent were the private sector, 4 percent were academic org anizations, 40 percent were foreign interests, and 11 percent were nonsubscribers (estimates may not add due to rounding) (Hoffman, 1998). The current vendor , National Information Services Corp. (NISC), does not track this information. However, it do es track the subscribers and non

- subscribers to whom NISC supplies copies of toxicological studies cited in the TSCATS database. NISC supplies approximately 38 percent of the copies to U.S. industrial entities, 27 percent to U.S. non

- industrial entities, 19 percent to non

- U.S. governments, 7 percent to U

. S

. consultants, and 11 percent to international consultants (Earle, 2003). Clearly, there is a wide variety of users of toxicological data. It is expected that there will be similar uses for the data generat ed as a result of this final test rule, and that some of these data may be incorporated into these databases. Users of, and the benefits they derive from , toxicological information are discussed in more detail below.
5.5.1 Consumers/Buyers Economic theory maint ains that competitive markets provide goods and services to the extent that the marginal benefit of the good or service to consumers is more than or equal to the marginal cost of production. Underlying this conclusion are two assumptions: that both consume rs and producers have perfect information, and that the cost of conducting a market transaction is negligible. The need for chemical testing information stems from the fact that, in some cases, neither producers nor consumers have perfect information regar ding the hazards associated with certain chemicals. If basic information on chemical hazards were known, consumers might alter the amount they would be willing to pay for the chemical. Therefore, in the absence of complete information, the private market m ay be misallocating resources to the production of the chemical substance. Thus, one advantage of mandatory testing and dissemination of test results is that consumers can make better choices about products containing chemicals if they are better aware of the potential hazards. Consumers can respond to additional information by changing their purchasing decisions (i.e., increasing or decreasing consumption, as appropriate); by reducing the amount they are willing to pay for the product; or by changing the way they handle, store, use, or dispose of the product. This may move the market toward a more efficient allocation of resources. Thus, the role of toxicity information in resolving uncertainties can be particularly valuable.
5.5.2 Workers Hazard information can play a role in guiding workers‟ employment decisions and work practices. If workers are aware of workplace hazards (e.g., the hazard associated with chemical substances to which they are exposed), they may choose not to work at a particular facility. If t hey decide to work there, informed workers can make better decisions about the precautions, if any, they should take to reduce their exposure to that chemical. These precautions may include taking proper care while handling and using certain chemicals or w earing protective clothing. Alternatively, a worker may seek a wage premium to compensate for increased workplace risk. Viscusi and O‟Connor (1984) conclude that the value of new information to the worker can be measured by the increase in the wage premium (differential) as a greater understanding of workplace risk is gained. Thus, workers can seek a risk premium or take averting actions to protect themselves if information is available about the health effects of the chemicals they come into

18 Oxford Molecular Group‟s Chemical Information System, which housed TSCATS, was acquired by National Information Services Corp. (NISC) in 2000.

### 5

- 18

contact with a t work. EPA expects the potential benefits to workers to be large for chemicals included in the final rule since they are manufactured and processed in large volumes.
5.5.3 Science and Health Communities Chemical toxicity information is useful to a variety of sc ientific and health communities. For example, medical professionals are concerned about the health of patients exposed to chemicals, poison control centers distribute information on toxicity and treatment associated with poisoning, and scientists use toxic ity information to characterize the effects of chemicals and to assess risks of chemical exposure. The literature includes specific examples where toxicity data have been summarized and interpreted: Kapp et al. (1996) summarize the results of TSCA Section 4 test rule studies for isopropanol, Glickman et al. (1995) report the results of aquatic toxicity studies for cumene (isopropyl benzene), and Bogdanffy et al. (1990) present results of subchronic inhalation tests for vinyl fluoride. In addition, several p ublished studies also rely on information from the RTECS database. RTECS is a database of toxicological information compiled, maintained, and updated by the National Institute of Occupational Safety and Health (NIOSH). Numerous vendors currently offer acce ss to the database. RTECS currently covers more than 152,000 chemicals and provides data on mutagenic effects, reproductive effects, tumorgenic effects, and acute toxicity effects, for example (NIOSH, 2005). Examples of published scientific literature usin g this particular database include Ruder et al. (1990) and Jones et al. (1998). The former study uses toxicity data available from the RTECS database to compute national estimates of occupational exposure to animal bladder tumorigens, while the latter stud y uses toxicological data from the RTECs database to compute relative potency factors for chemical compounds associated with increased risk of atherosclerosis to humans. The test results generated by the final rule are also expected to be used by scientis ts to increase the understanding of the health and environmental effects of these chemicals to which people may be exposed in the places where they live, work, study, and play.
5.5.4 The General Public In addition to its impact on consumers of chemicals or prod ucts, the production or use of a chemical substance may impose external costs on society in the form of increased health risks to the general public and increased risks to the physical environment. If these external costs are known, individuals can take
av erting actions to protect themselves. However, if the adverse impacts are unknown to the public, inefficiencies in the production and consumption of the chemical substance will persist.
The final test rule is valuable because the health and environmental d ata it generates provide a better understanding of the external costs involved in the production and use of chemical substances. Because the information will be made publicly available, members of the general public will then be empowered to help address t he market failure through individual actions they may take to protect themselves from exposure to the chemical substance (averting behaviors) or activities designed to pressure firms or governments to reduce the externalities associated with production (e. g., lobbying activities). One can expect that if reliable test data are disseminated to the public, community and public interest groups can initiate a dialogue with the manufacturers of hazardous chemicals and encourage them to improve their safety measur es and assess their environmental management plans.
5.5.5 Firms and their Shareholders As noted earlier, industry is an important user of chemical hazard information. Physical/chemical properties and environmental fate information is used to better develop the h andling and safety procedures for chemicals, develop emergency preparedness plans, follow principles of the Responsible

### 5

- 19

Care® Initiative of the American Chemistry Council (ACC), and competitively participate in today‟s chemical market. Toxicity data help t o screen the chemicals for which such precautions are most important. The ACC‟s Responsible Care® Initiative includes as guiding principles the following:

“ To make health, safety, the environment, and resource conservation critical considerations for all
n ew and existing products and processes; To work with customers, carriers, suppliers, distributors, and contractors to foster the safe use, transport, and disposal of chemicals; and To support education and research on the health, safety, and environmental effects of our products and processes” (ACC, 2006). Consideration of these principles supports the need for toxicological information on chemical products used and manufactured by this industry. The Chemical Industry Institute of Toxicology, a research institute sponsored by ACC, government, and industry, notes that chemical research has helped companies ensure safety in manufacturing, use, and disposal of chemicals (Chemical Industry Institute of Toxicology, 1998, 2001). Thus, companies are more likely to avoid potential liability concerns from inappropriate handling of chemicals. Similar advantages are expected from the information developed as a result of the final rule. Data generated as a result of the final rule are also expected to be sufficient fo r the OECD SIDS program. Data meeting the requirements of the SIDS program can be used to develop initial assessments of chemicals that are shared worldwide. Because this information is shared, companies may avoid duplicative efforts to meet the requiremen ts of other countries where they may also manufacture and sell certain chemicals. This could lead to cost savings for companies that operate internationally. Corporate shareholders also benefit from the data developed in the rule. Basic microeconomic theo ry assumes that the primary objective of any firm, whether privately or publicly held, is to maximize profits. When a firm is incorporated and its shares are traded on the stock market, maximizing a firm‟s profits is analogous to maximizing shareholder val ue. There are a number of ways in which the provision of information regarding the production practices and output of a firm can affect shareholder value. First, production processes and output that result in adverse consequences to human health and the en vironment may eventually result in substantial liabilities to the firm. Therefore, any new information regarding potential threats to human health or the environment may cause investors to re

- evaluate the potential future liabilities (and hence profitabili ty) of a firm. Second, when an investor who prefers providing capital to environmentally benign companies discovers that a firm‟s use of toxics is inconsistent with his or her preferences, he or she may move investment funds toward other, more environmenta lly friendly firms. There is a growing body of empirical literature evaluating the effects of environmental information disclosures on firms and their shareholders. In an effort to estimate the economic cost of hazardous waste mismanagement, Muoghalu and R ogers (1992) modeled the effect of Superfund lawsuit announcements on firms‟ stock values. The authors estimated that stock values dropped an average of $30.7 million when news of a new Superfund lawsuit was made public. Blacconiere and Patten (1994) exami ned the effect of the 1984 Union Carbide chemical leak in Bhopal, India, on other chemical firms‟ stock prices. They found that firms in which chemical operations made up a larger portion of total revenue experienced greater losses in stock value immediate ly following the leak. Thus, some evidence suggests that investors respond to new information regarding a firm‟s potential environmental liabilities by reassessing the value of the firm‟s stock. If test results are disseminated to the

### 5

- 20

public, shareholders can better consider the importance placed on the firm‟s manufacture or use of particular chemicals and may encourage the firm to address shareholder concerns regarding chemical production and use to avoid potential losses in the capital markets. It is cle ar that, while beneficial to shareholders, this information may also cost the company if share values drop. These costs would offset some of the benefits to shareholders.
5.5.6 Government The information developed in response to the final rule will benefit socie ty by reducing costs and improving the quality of government decision and policy making. EPA itself is a user of TSCA Section 4 test results in three primary ways. First, EPA can use the chemical

- specific information acquired through a test rule to help id entify hazards of concern and to screen and prioritize regulatory activities, including identifying areas where regulatory intervention is not required. Second, EPA can serve its “clients” by providing these test results to other agencies within the federa l government as well as to public agencies at other levels of government. Finally, EPA can use information

- reporting rules as an alternative to other forms of regulation. Each of these uses is discussed below. Support EPA Regulatory Activities . When develo ping risk management strategies, EPA must decide whether or not to regulate the use of a chemical substance or mixture to protect society. Basic toxicity data are not available for many chemicals, but exposure controls have no environmental value if these chemicals are not a concern. The lack of data on health and environmental effects can affect sound decision making by government and others (Wehmeier, 2001). Regulating most certainly involves costs to both EPA (e.g., resources required to develop, promulg ate, and enforce a regulation) and to society at large (e.g., foregone benefits derived from the use of the chemical substance, resources diverted from other uses). Although not regulating avoids these costs, society will face a welfare loss if the chemica l turns out to harm human health and the environment. Taylor et al. (1993) considered the value of test information in supporting decisions about the control of chemicals whose cancer potency is untested or unknown. While not specifically addressing the va lue of the basic toxicity testing data required by this final rule, their results suggest there is value to (cancer) testing information, particularly at intermediate levels of anticipated human exposure to a chemical. The authors contend that information (from cancer testing) may be less valuable where very high levels of exposure are expected because no test can perfectly distinguish carcinogens from non

- carcinogens. In the EPA context, the probability that a chemical poses a risk depends on the chemical ‟s toxicological properties, exposure pathways, dose

- response relationships, and other factors. Testing rules help resolve some of these uncertainties. Thus, test information can help EPA decision makers avoid over

- regulating a relatively safe chemical and under

- regulating a risky chemical. Provide Information to Other Government Agencies . Under TSCA Section 4, EPA has the authority to require firms to conduct tests of specific chemicals to determine the potential risk posed by these substances. However, ot her governmental agencies, such as the Food and Drug Administration, Consumer Product Safety Commission, NIOSH, and Occupational Safety and Health Administration, share regulatory authority over chemical substances or products containing them, or, in the c ase of NIOSH, compile summaries of available information and recommend exposure limits. Therefore, EPA serves as a conduit for chemical hazard information between the chemical producers and these other agencies. In addition to providing chemical test resul ts to other federal agencies, EPA may make this information available to other interested parties such as state, local, and tribal government agencies, which can use the data to inform their own decision making. Information Provision as an Alternative to Traditional Regulation . Publicly disclosing TSCA Section 4 chemical test results also provides an alternative to traditional regulation. As described above, the

### 5

- 21

provision of chemical pollution and hazard information can be used to, among other things, empo wer individuals to take actions that they deem appropriate in response to chemical risks. In addition to fulfilling democratic notions of “right

- to

- know” information, regulations provide a low

- cost avenue for pollution and hazard control when regulatory re sources are scarce due to the large number of substances to be controlled (Tietenberg, 1998).
5.5.7 Foreign Interests The toxicity data developed as a result of the test rule are also expected to save other countries the expense of collecting and interpreting to xicological data. At the United Nations Conference on Environment and Development in 1992, delegates adopted Agenda 21 of Chapter 19, which discusses chemical safety and includes program areas. One program area is international assessments of chemical risk s, part of which includes the assessment of chemical hazards. The International Forum on Chemical Safety (IFCS) was formed in 1994 and has developed priorities for action in the implementation of Agenda 21. These include recognition of the activities spons ored by OECD in the area of chemical management and encouragement of the use of OECD as a means to carry out activities on chemical safety (IFCS, 1998). Data developed as a result of the final rule will be sufficient for the development of initial
assessme nts of chemicals under OECD‟s SIDS program. Thus, other countries will benefit from the development of these data and can use the data without having to independently develop the information. Such information exchange will result in cost savings to other c ountries and will enable their governments to more effectively manage chemicals for safety as pledged under Agenda 21.

### 6

- 1 Chapter 6 

## – Other Impact Analyses
Several statutes and executive orders (EOs) pertain to the final test rule. This chapter presents statements discussing unfunded mandates, environmental justice, children‟s health, and paperwork burden, among others.
6.1 Paperwork Reduction Act The Paperwork Reduction Act mandates that federal agencies estimate the recordke eping and reporting burden of a final 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. T his 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 previou sly 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.
6.1.1 Industry Burden In this report, total industry burden hours represent the sum of time spent on reporting and on other administrative activities. Industry respondents will spend time on reporting activities associated with TSCA Section 4 test rules: preparing letters of intent and study plans, preparing test results for submission to EPA, recording test results, preparing laboratory reviews, preparing corporate reviews, conducting associated clerical work for final report preparation, conducting recordkeeping activities, and applyi ng for exemptions. Under this final rule, respondents are also asked to submit robust summaries on a voluntary basis. In addition to the reporting burden, respondents will spend additional time on other, non

- reporting administrative activities such solicit ing laboratory bids, selecting laboratories, monitoring tests under progress, developing cost

- sharing agreements, and auditing the laboratories for compliance with EPA‟s Good Laboratory Practice (GLP) standards. The procedure for estimating the total indus try burden follows.
Estimate the Reporting Burden. As shown in Section 3.1.3 of this report, EPA estimates that approximately 11 panels will submit letters of inten t and study plans, resulting in 1 18 final reports. EPA also assumes that it will receive five exemption applications per panel, resulting in a total of 55 requests pursuant to the final rule. Additionally, it is estimated that 10 percent of final test repo rts will be accompanied by a robust summary of results. EPA estimated that it takes a respondent 40 hours to prepare a letter of intent and study plan, 73 hours to write a final report for a short

- term study, 12 hours to prepare a robust summary, and 2 hou rs to prepare an exemption application. The unit labor hours are derived from the previous information collection requests and are believed to reflect the burden that will be incurred for the final rule. The reporting burden estimates for this rule are det ailed in Exhibit 6

- 1 . The total reporting burden generated by the rule is estimated to be approximately 9, 308 hours

.

Exhibit 6
- 1 : Reporting Burden Estimate for the Final Rule Item Hours per Item Total Items Total Hours Letter of Intent and Study Plans 40 1 1 44 0 Final Reports 73 1 18 8, 614 Robust Summaries 12 12 144 Exemption Applications 2 55 110 Total 9, 308


### Estimate the Other Administrative Burden. Respondents also spend time on other administrative activities including soliciting laboratory bids, selecting laboratories, monitoring tests under progress,

### 6

- 2

developing cost

- sharing agreements, and auditing the laboratories for compliance with EPA‟s Good Laboratory Practice (GLP) standards. EPA has calculated the costs and burdens of these activities as 25 percent of the total laboratory testing costs. Based on this calculation, other administrative costs associated with laboratory testing are estimated to amount to $0.70 million ($0.8 5 million) under the least (average) cost assumption. These costs are translated into burden estimates using an average labor cos t of $ 55.01 per hour, which is based on a labor mix that is 20 percent managerial, 60 percent technical, and 20 percent clerical. The estimated administrative burden based on this approach is 12, 659 (15, 543 ) hours under the least (average) cost assumption.
Estimate the Export Notification Burden. As explained in Section 3.1.4 , EPA expects 25 export notifications to be file d for each chemical included in the final rule ( 375 notification letters in total). This analysis assumes that the export notification burden ranges from 0.5 hours to 1.5 hours per notice. Thus, this analysis assumes that export notification requires 0.5 h ours per notice under the least cost scenario and 1 hour per notice under the average cost scenario. Consequently, the export notification burden triggered by the final rule is estimated to equal 187.5 hours ( 375 hours ) under the least (average) cost
scena rio.
Estimate the Total Industry Burden. The total industry burden is the sum of the total administrative burden and the export notification burden. Total industry burden estimates are summarized in Exhibit 6

- 2

. The total industry burden is estimated to equal 22, 154 hours (25, 226 hours) in the least (average) cost scenario. The average burden per panel is estimated to be 2,0 14 (2 , 293 ) hours in the least (average) cost scenario. 19

Exhibit 6
- 2 : Total Industry Burden Hour Estimate for the Final Rule
Activity Least Cost Scenario (Hours) Average Cost Scenario (Hours) Reporting Activities 9, 308 9, 308 Other Administrative Activities 12, 659 15, 543 Export Notification Burden 187.5 375 Total Industry Burden 22, 154 25, 226 Average Burden Per Panel ( 11 panels) 1 9 2,0 14 2, 293


### 6.1.2 Government Burden The government will also spend time processing, reviewing, and analyzing the information that will be collected under the final test rule. As explained in Section 3.2 , this work is assumed to be performed by a GS

- 13, Step 1, FTE employee.
It is further assumed that 11 letters of intent and study plans, 1 18 final reports, 12 robust summaries, and 55 exemption requests will be filed in response to this rule . The estima ted unit government burden for processing letters of intent and study plans (3 hours), final reports (5 hours), and robust summaries and exemption applications (1 hour each) is derived from the previous information collection requests. Exhibit 6

- 3 presents the estimated government burden hours based on these assumptions. The total government burden is estimated to equal 715 hours

.

Exhibit 6
- 3 : Estimated Government Burden for the Final Test Rule Item Hours per Item Total Items Total Hours Letter of Intent and Study Plans 3 11 33 Final Reports 5 1 18 590 Robust Summaries 1 12 12 Exemption Requests 1 55 55 Total 690

19 The per

- panel c ost assumes that the export notification burden is distributed evenly across all panels.

### 6

- 3

6.2 Unfunded Mandates Reform Act Federal agencies are required to assess the effects of federal regulations on state, local, or tribal governments, and on the private sector under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA). In particular, UMR A requires that agencies prepare a written statement to accompany any rulemaking that “includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or m ore (annually adjusted for inflation) in any one year” (Section 202(a)). The written impact statement under Section 202 must include (1) an identification of the statutory authority; (2) an assessment of the benefits and costs of the rule; and (3) a descri ption of the agency‟s consultation with state, local, and tribal government officials during the development of the rule. EPA estimates that the final rule will not cost the private or public sectors $100 million or more in any one year. As shown in Chapter 3 , the maximum total cost incurred by the private sector in complying with the final rule and associated requirements triggered by the rule is approximately $5. 0 8 million (average cost scenario). This includes laboratory and administrative costs, as well as the cost of export notifications under the average cost scenario. Assuming a 7 percent discount rate and a 15

- year amortization period, the maximum annualized compliance cost for industry is approximately $0 .5 6 million per year (average cost scenario). 20 

### Government cost, annualized using similar assumptions, is estimated to equal $ 5,0 6 4 p er year. Furthermore, because the final rule is focused on manufacturers and importers of chemicals, EPA does not believe that it imposes costs on any non

- federal government entity, or on state, local, and tribal governments. Moreover, while it does not impose costs on state, local, and tribal governments, the final rule can be of value to these agencies. As explained in Chapter 5 , if EPA makes the test data collected as a result of the final rule publicly available, then other government a gencies can use the data to inform their own regulations and decision making. Executive Order 12875, “Enhancing the Intergovernmental Partnership” (58 FR 58093, October 28, 1993), requires federal agencies to determine whether certain regulatory actions cr eate unfunded federal mandates on state, local, or tribal governments. In March 1999, EPA conducted a search of past submissions to the Agency for letters of intent to test, exemption applications, and export notifications and found that state, local, or t ribal governments have never submitted these to the Agency.
6.3 Executive Order 13132

– Federalism Under Executive Order 13132, “ Federalism ” (64 FR 43255, August 10, 199 9), EPA must determine if a rule has “federalism implications

. ” This analysis demonstrates that this final rule will not have sub stantial direct effects on the s tates, on the relationship between t he national government and the s tates, or on the distribution of power and responsibilities among the various levels of government, as specif ied in t he executive order. The final rule establish es testing and recordkeeping requirements that apply to manufacturers (including importers) and processors of certain chemicals. Because EPA has no in formation to indicate that any s tate or local government manufactures or processes the chemical substan ces covered by this action, the final r ule does not apply directly to s tates and localities and will not affect s tate and local governments. Executive Order 13175

– Consultation and Coordination with Indian Tri bal Governments u nder Executive Order 13175, “ Consultation and Coordination with Indian Tribal Governments ” (65 FR 67249, November 9, 200 0), EPA must determine if final rule has tribal implication s. This analysis demonstrates that this final rule will not have any e ffect on tribal governments,

20 As described in Chapter 4, compliance costs are annualized using a 7 percent discount rate to reflect the opportunity cost of capital, and over a 15

- year period to r eflect the life of the chemical.

### 6

- 4

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 executive order. Thi s is based on a search conducted in March 1999 of past submissions to EPA. This search demonstrated that state , local, or tribal governments have never submitted letters of intent to test, exemption applications, or export notifications to EPA. Furthermore , based on the submissions received for the most recent IUR and PAIR rule reporting periods, none of the chemicals listed in this final rule are manufactured by state, local, or tribal governments (in quantities of 25,000 lbs or more at a single site). Thu s, EPA has no information to indicate that any tribal government manufactures or processes the chemical substances covered by this action, and EO 13175 does not apply to this final rule.
6.4 Executive Order 13045
- Children’s Health Executive Order 13045, “ Pr otection of Children from Environmental Health Risks and Safety Risks ” (62 FR 19885, April 23, 1997), requires that federal agencies examine the impacts of each re gulatory action on children for any economically significant regulation (as defined by Execut ive Order 12866) that the agency has reason to believe may disproportionately affect children. The final rule is not subject to EO 13045, because it 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

. Nevertheless, the information obtained by the testing in 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 final rule present potential risks, allowing the Agency and others to take appropriate action to investigate and mitigate those risks.
6.5 Executive Order 13211

– Energy Supply, Distribution, or Use
One chemical in the final regulation ha s been identified as having uses associated with energy supply, distribution or use (see Exhibit 2

- 8 6 Exhibit 2

- 9 for detail) which is identified by IUR as “o ther p etroleum and c oal p roducts m anufacturing .” Given the low cost of the rule and lack of restrictions on the use of the chemicals resulting from the final rule, it is unlikely that there will be significant impacts on the supply, distribution, or use of energy

. 6.6 National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Pu blic Law 104

– 113 (15 U.S.C. 272 note), directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with 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. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides n ot to use available and applicable voluntary consensus standards.
This final rule involves technical standards because it proposes to require the use of particular test methods. If the Agency makes findings under TSCA section 4(a), EPA is required by TSCA section 4(b) to include specific standards or test methods that are to be used for the development of the data required in the test rules issued under TSCA section 4. For some of the testing that would be required by this rule, EPA is proposing the use of voluntary consensus standards issued by ASTM and ISO that evaluate the same type of toxicity as the TSCA and OECD test guidelines, where applicable. Copies of the 17 ASTM and ISO standards referenced in th e final regulatory text at § 799.5087(h) have been p laced in the docket for this final rulemaking. Interested parties may obtain copies of the ASTM standards from the American Society for Testing and Materials, 100 Bar Harbor Dr., West Conshohocken, PA 19428

– 2959, and copies of the ISO standards from the In ternational Organization fo r Standardization, Case Postale 56 , CH

- 1211 Gen eva 20 , Switzerland. In the final rule, EPA intends to seek approval from the Director of the Federal

### 6

- 5

Register for the incorporation by reference of the ASTM and ISO standards used i n the final rule in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. EPA is not aware of any potentially applicable voluntary consensus standards that evaluate partition coefficient ( n
- octanol/water) generator column, water solubility (column elution and generator column), acute inhalation toxicity, bacterial reverse mutations, in vivo mammalian bone marrow chromosomal aberrations, combined repeated dose with reproductive/developmental toxicity screen, repeated dose 28

– day oral toxicity screen, or the rep roductive developmental toxicity screen that could be considered in lieu of the TSCA guidelines, 40 CFR 799.6756, 799.6784, 799.6786, 799.9130, 799.9510, 799.9538, 799.9365, 799.9305, and 799.9355, respectively, upon which the test standards in this final rule are based.
6.7 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), requires each agen cy to address and identify

“ disproportionally high and adverse human health or environmental effects of its programs, policies, and activities on minority a nd low

- income populations .”
The final rule does not have an adverse impact on the environmental and health conditions in low

- income and minority communities that require special consideration by the Agency under EO 12898. The Agency believes that the information collected under this final rule, if finalized, will assist EPA and others in determining the potential hazards and risks associated with the chemicals covered by the rule. Although not directly impacting environmental justice

- related concerns, this information will enable the Agency to better protect human health and th e environment, including in low

- income and mi nority communities.
The final rule is directed at 1 5 chemicals for which basic toxicity information is currently unavailable even though they are widely used in commerce. All consumers of these chemical products and all workers who come into contact with t hese 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 final rule will be disproportionately distributed across different geographi c regions or among different categories of individuals.

### 7

- 1 Chapter 7 

## – References
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Glickman, A. H., H. C. Alexander, R. J. Buccafusco, C. R. Morris, B. O. Francis, D. C. Surprenant, and T. J. Ward. 1995. “An Evaluation of the Aquatic Hazard of Cumene.” Ecotoxicology and Envi ronmental Safety 31(3): 287

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. 1998. Resolution on Priorities for Action in Implementing Environmentally Sound Management of Chemicals. Intergovernmental Forum on Chemical Safety. <http://www.who.int/ifes/fs_res2.htm>. Jones, T. D., M. D. Morris, and S. R. Basavaraju. 1998. “Atherosclerotic Risks from Chemicals: Part II. A RASH Analysis of In Vitro and In Vivo Bioassay Data to Evaluate 45 Potentially Hazardous Compounds.” Archives of Environmental Contamination and Toxicology 35(1):165

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National I nstitute for Occupational Safety and Health (NIOSH). 1990. National Occupational Exposure Survey, conducted from 1981 to 1983. < http://www.cdc.gov/noes/default.html > A ccessed 12 February 2009

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U

. S

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### A

- 1



## Appendix A

– Derivation of Chemical Price Estimates

This appendix describes the derivation price estimates for the chemicals included in the final third test rule for high production vol ume chemicals. Based on data availability, six different estimation methodologies were used; all prices are in 200 9 dollars. Exhibit A

- 1 Exhibit A

- 1 summarizes each of the
source s and methods for price estimation.

Exhibit A
- 1 : Summary of Chemical Price Sources and Estimation Meth ods

Source Name Type Date Published Number of Chemical

Prices F ound Range of Prices for

Chemicals in This Test Rule ( 200 9$ ) USITC Synthetic Organic Chemicals Bulk quantity prices 1992 2 $0.58

- $2.84 Chemical Market Reporter (Similar chemicals) Bulk quantity prices 2006 1 $0.24 Sigma

- Aldrich Small quantity chemical catalog 2008 6 $0.25

- $1. 25 Sigma

- Aldrich (Similar chemicals) Small quantity chemical catalog 2008 4 $0.20

- $5.88 Fisher Chemical Company (Similar chemicals) Small quantity chemical catalog 2008 1 $33.00 American Chemistry Council General estimates 2008 1 $1.2 5 

### EPA used bulk quantity prices when they were available because the bulk quantity prices of chemicals are most accurate when estimating the impact of this final test rule on high p roduction volume manufac turers. The prices listed in the Chemical Market Rep orter ( CMR ) were preferred over those in the United States International Trade Commission‟s ( USITC‟s ) report Synthetic Organic Chemicals because the CMR data
are more recen t. When prices were not available through either source , EPA identified chemicals si milar in c omposition, manufacture, or use to the regulated chemical with the expectation that prices for these proxy chemicals would be similar. When bulk chemical prices were not available either for the regulated chemical or a similar chemical, EPA used small quantity chemical catalogs published by Sigma

- Aldrich and Fisher Chemical Compa ny. Small quantity catalog prices are known to be significantly more exp ensive per unit than bulk quantity pricing; therefore , EPA developed bulk quantity scaling factors for each catalog to estimate bulk quantity pricing. Again, for chemicals without prices available in these catalogs, EPA used similar chemicals as proxies. Finally, for chemical prices that were not available for either bulk or small quantities, EPA used the American Chemistry Council‟s Guide to the Business of Chemistry , which provides a “rule of thumb” for basic and specialty chemical pri ces. To be conservative, EPA used the speciality chemical pric e estimate of $1.25 per pound. This price is within the ranges estimated using the other methods.


### A.1 Chemical Market Reporter
EPA searched the CMR ( last published in 2006) for price data using common chemical names, and using synonyms for each common chemical name Error! Reference source not found.

. No Price data for any of the chemicals regulated under the final rule was available from the CMR.

### A

- 2



### A.2 United States International Trade Commission

– Synthetic Organic Chemicals For two chemicals, EPA used the average price per pound of chemicals as reported in various Harmonized Tariff Schedule (HTS) chemical groups in USITC‟s report titled Synthetic Organic Chemicals. For two chemical s , the price was available as part of an HTS group. Because the last USITC report was published in 1992, EPA then inflated these costs using the producer price index (PPI) for chemical manufacturing. Exhibit A

- 2 Exhibit A

- 2 shows these prices. To the extent that these prices may have changed since 1992, for reasons other than inflation, the actual price may be higher or lower than the estimate provided here

.

Exhibit A
- 2 : USITC Synthetic Organic Chemicals Prices (2009$)

CASRN Chemical Name Price/kg (1992$) (a) Inflation Factor

(1992$ to 2009$) 1 (b) Price/kg

(2009$) (c) = (a) (b) Estimated

Price/lb (2009$) 2 (d) = (c) / 2.205 98

- 09

- 9 Benzenesulfonyl

chloride $0.71 1.79 $1.27 $0.58 25321

- 41

- 9 Benzenesulfonic

acid, dimethyl

- $3.48 1.79 $6.23 $2.84

1 The PPI for chemical manufacturing in 1992 was 125.8; the same index for 2009 was 224.7 (preliminary data , BLS 2010b). The costs from the USITC report were inflated using a factor of ( 224.7 /125.8) = 1. 79

. 2 1 kg = 2.205 lb

. 

### A.3 Similar Chemical Prices

– CMR EPA identified chemicals that were similar in composition, manufacture, or use, and used prices for these chemicals as proxies for the chemicals for which prices could not be found in either of the bulk price sources described above. The CMR, last publishe d in August 2006, contained price information for one of these chemicals (see Exhibit A

- 3 Exhibit A

- 3 )

. To the extent that a proxy chemical is different from the regulated chemica l, the actual price may be higher or lower than the estimate provided here.

Exhibit A
- 3 : Chemical Market Reporter Similar Chemical Prices (200 9 $)

CASRN Chemical Name Similar Chemical Name [CASRN] Price/lb

(2006$) 1 (a) Inflation Factor

(2006$ to 2009$) 2 (b) Estimated

price/lb (2009$) (c) = (a) (b) 68442

- 60

- 4 Acetaldehyde,

reaction products with formaldehyde, by

products from Formaldehyde [50

- 00

- 0] $0.21 1.14 $0.24

1 C hemical M

arket R eporter (ICIS, 2006). 2 The PPI for chemical manufacturing in 2006 was 19 6 .8; the same index for 2009 was 224.7 (preliminary data, BLS, 20 10b ). The costs from the CMR were inflated using a factor of 224.7 / 19 6 .8 = 1.1 4

. 

### A.4 Small Quantity Catalog Prices
An online chemical catalog published by the Sigma

- Aldrich Company ( Sigma

- Aldrich, 2008) provided small quantity price information for six of the remaining chemicals for which data were not available using the sources and methods described above. However, because small quanti ty catalog prices are often significantly higher than the bulk quantity prices reported in the CMR, EPA adjusted the small quantity catalog prices for these six chemicals to approximate bulk quantity prices, using scaling factors derived as described below

.

### A

- 3

A.4.1 Derivation of Small Quantity Scaling Factors 

### To determine the appropriate scaling factor to adjust small quantity prices to approximate bulk quantity prices, EPA selected 1 5 chemicals (not subject to this final rule) for which price data were available f rom both the CMR ( ICIS, 2006, inflated to 200 8 prices using the PPI) and Sigma

- Aldrich (2008) , and compared the prices. Similarly, EPA selected 10 chemicals, for which price data were available from both the CMR and the Fisher Scientific chemical catalog, to develop scaling factors for prices from that catalog (used in Section A.5 ).

P rices were obtained from the catalogs for chemical formulations sold in (1) 1 kg qua ntities, (2) quantities between 100 g and 500 g, and (3) quantities less than 1 g. EPA estimated th e implied price per pound using the largest quantity range available for each chemical. EPA estimated the implied price per pound (assuming that prices were directly proportional to volume), and within each of the three quantity categories , developed scaling factors by dividing the Sigma

- Aldrich implied price per pound by the CMR price per pound. 21



### Exhibit A

- 4 shows the scaling factors developed to estimate the bulk price of chemicals available from the Sigma

- Aldrich Company.

Exhibit A
- 4 : Comparison Between Chemical Market Re porter and Sigma
- Aldrich Prices

CASRN CMR

Price/lb 1 (a) Sigma
- Aldrich Price (Varies by Quantity (Q))

Q = 1 kg 500 g ≥ Q ≥ 100 g Q ≤ 1 g Implied Price/lb 2 (b) Scaling

Factor (c) = (b) / (a) Implied Price/lb 2 (d) Scaling

Factor (e) = (d) / (a) Implied Price/lb 2 (f) Scaling

Factor (g) = (f) / (a) 108

- 31

- 6 $0.58 $25.95 44.61 $58.42 100.44 n/a n/a 64

- 19

- 7 $0.53 $19.30 36.46 $71.94 135.91 $12,247 23,138 58

- 08

- 2 $8.14 $74.50 9.15 $690.28 84.77 $5,715 702 75

- 20

- 7 $0.26 $27.03 102.38 $87.23 330.32 n/a n/a 67

- 48

- 1 $0.62 $35.83 57.58 $654.28 1,051.28 $65,771 105,679 85

- 44

- 9 $0.64 $9.21 14.39 $33.02 51.61 n/a n/a 532

- 32

- 1 $0.94 $17.33 18.39 $46.33 49.17 $6,305 6,691 112

- 57

- 2 $1.98 $29.85 15.09 $64.55 32.64 n/a n/a 112

- 27

- 6 $0.81 $13.15 16.15 n/a n/a n/a n/a 7446

- 70

- 0 $0.99 $34.44 34.83 $132.00 133.49 n/a n/a 1317

- 39

- 1 $1.79 n/a n/a $38.96 21.75 n/a n/a 143

- 07

- 7 $0.33 $25.21 76.03 $81.42 245.58 n/a n/a 7719

- 12

- 2 $0.57 $33.75 59.20 $664.12 1,165.09 n/a n/a 7447

- 40

- 7 $0.63 $39.08 62.21 $128.63 204.77 n/a n/a 7646

- 69

- 7 $7.15 $748.43 104.61 $311.38 43.52 n/a n/a Average 46.51 260. 74 34,0 53 1 The CMR price per pound was inflated, using the PPI for chemical manufacturing , from August 2006 dollars to December 2008 dollars. 2 The Sigma

- Aldrich implied price per pound was calculated by dividing the stated price per unit quantity by the appropriate conversion factor (e.g., 2.20 5 lb/kg). Sources: Chemical Market Reporter (ICIS, 2006 ) and Sigma

- Aldrich, 2008.


### Exhibit A

- 5 shows the scaling factors developed to estimate the bulk price of chemicals available from Fisher Scientific, using the same methodology as for the Sigma

- Aldrich catalog. Only t he volume range actually used in the analysis is shown.

21 A fourth scaling factor was developed because one chemical was only available in a 1.2 mg quantity.

### A

- 4 Exhibit A
- 5 : Comparison Between CMR and Fisher Scientific Prices

CASRN CMR

Price/lb 1 (a) Fisher Scientific Price (Varies by Quantity (Q)) 500 g ≥ Q ≥ 100 g Implied Price/lb 2 (b) Scaling Factor (c) = (b) / (a) 58

- 08

- 2 $8.14 $155.71 19.12 75

- 20

- 7 $0.26 $59.46 225.18 85

- 44

- 9 $0.64 $49.72 77.71 532

- 32

- 1 $0.94 $60.26 63.95 112

- 57

- 2 $1.98 $33.38 16.88 7446

- 70

- 0 $0.99 $77.84 78.72 1317

- 39

- 1 $1.79 $32.93 18.38 143

- 07

- 7 $0.33 $43.29 130.58 7447

- 40

- 7 $0.63 $49.05 78.08 7646

- 69

- 7 $7.15 $111.24 15.55 Average 65.8 3 1 The CMR price per pound was inflated, using the PPI for chemical manufacturing, from August 2006 dollars to December 2008 dollars. 2 The Fisher Scientific implied price per pound was calculated by dividing the stated price per unit quantity by the appropriate con version factor (e.g., 2.205 lbs/kg). Sources: Chemical Market Reporter (ICIS , 2006 ) and Fisher Scientific, 2008.

A.4.2 Conversion of Small Quantity Catalog Price s 

### For the chemicals included in the final rule for which EPA did not find prices using the steps described in Sections A.1 through A.3 , EPA searched the Sigma

- Aldrich catalog (as well as the Fisher Scientific catalog). The Agency collected price information for each formulation and quantity of the available chemicals. If a chemi cal was available in a 1

- kilogram quantity, EPA used the price(s) given for this quantity. If multiple formulations of a particular quantity were available, EPA used the arithmetic mean of these prices. This price

- per
- kilogram estimate was then adjusted, u sing the scaling factors as derived above, to estimate the bulk quantity price

- per
- pound of each chemical.
Several chemicals were not available in 1

- kilogram quantities, and in these cases, EPA estimated the price per pound using the largest available qua ntity range.
Exhibit A

- 6 Exhibit A

- 6 shows the prices gathered from Sigma

- Aldrich for chemicals included in the final test rule, and the derivation of their bulk quantity price e stimates.

### A

- 5 Exhibit A
- 6 : Prices Derived from Sigma
- Aldrich

CAS RN Chemical Name Formulation D etails Quantity (a) Price

(b) Implied

P rice/kg 1 (c) Implied

P rice/lb (d) = (c) / 2.205 Scaling

F actor 2 (e) Estimated

Bulk Price/lb (2009$) 4 (f) = (d) (e) 98

- 56

- 6 Benzene, 1

- chloro

- 4

-

(trifluoromethyl)

- 98% 250 g $35.10 $140.40 100 g $15.10 $151.00 Average 3 $145.70 $66. 09 260. 74 $0.25 111

- 44

- 4 Ethane, 1,1'

- oxybis[2

- chloro

- 99% 500 g $56.10 $112.20 100 g $47.90 $479.00 Average 3 $295.60 $134. 08 260. 74 $0.51 127

- 68

- 4 Benzenesulfonic acid, 3

- nitro

- ,

sodium salt (1:1) 98% 500 g $50.7 $101.40 98% 100 g $24.7 $247.00 Average 3 $174.20 $79.0 2 260. 74 $0.30 515

- 40

- 2 Benzene, (2

- chloro

- 1,1

-

dimethylethyl)

- 99% 1 kg $130.50 $130.50 $59. 19 46.5 1 $1.2 5

5026

- 74

- 4 2

- Oxiranemethanamine, N

- [4

- (2

-

oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- Sigma (1.22 g/mL) 0.25 L $127.50 $418.03 $189.6 2 260. 74 $0.7 2

52556

- 42

- 0 1

- Propanesulfonic acid, 2

-

hydroxy

- 3

- (2

- propen - 1

- yloxy)

- , sodium salt (1:1) Solution 40 wt. % in H 2 O (1.17 g/mL) 1 L $70.10 $116.24 $52.7 3 46.5 1 $1.1 2

1 The implied price per kilogram is the price per unit quantity, converte d to price per kilogram. For example, ($90.20 / 500g)(1,000g / 1 kg) = $180.40 / kg

. 2 The scal ing factors are derived in Exhibit A

- 4 and Exhibit A

- 5 above. 3 The average price is calculated when more than one price is available for a chemical, within a given quantity range

. The average price is then converted to a price per pound and sca led to a bulk quantity price estimate using scaling factors. 4 Prices were originally scaled to 2008 dollars and were then inflated to 2009 dollars using the PPI for chemical manufacturing

.

### A

- 6



### A.5 Small Quantity Catalog Prices for Similar Ch emicals If none of the above methods yielded a price estimate, EPA used the same method as described in Section A.4 for small quantity chemical catalogs to estimat e the bulk price per pound of chemicals, using proxy chemicals similar in composition, manufacture, or use. One similar chemical was not available in the Sigma

- Aldrich catalog but was available in the Fisher Scientific catalog.
Exhibit A

- 7 Exhi bit A

- 7 shows the prices gathered from Sigma

- Aldrich and Fisher Scientific for chemicals similar to those included in the final test rule, and the calculation of their bulk quantity price
e stimates.

### A

- 7 Exhibit A
- 7 : Prices of Similar Chemicals

CAS RN Chemical Name Similar Chemical Price Used Formulation

D etails [Source] Quantity (a) Price

(b) Implied

P rice/kg (c) Implied P rice/lb

(d) = (c) / 2.205 Scaling

F actor (e) Estimated

Bulk P rice/lb (2009$) 1 (f) = (d) (e) 2494

- 89

- 5 Ethanol, 2

- [(4

-

aminophenyl)sulfonyl]

- , 1

- (hydrogen sulfate) Acetanilide [103

- 84

- 4] reagent grade,

97% [Sigma

Aldrich] 1 kg $76.00 $76.00 $34.4 7 46.51 $0.7 3

68082

- 78

- 0 Lard, oil , Me esters Methyl palmitate [112

- 39

- 0] ≥97% [Sigma

Aldrich] 1 kg $74.00 $74.00 $33.5 7 46.51 $0.7 1

68610

- 90

- 2 2

- Butenedioic acid (2E)

- ,

di

- C8

- 18

- alkyl esters 2

- Ethylhexyl fumarate [141

- 02

- 6] Di

- 2

- ethylhexyl

Fumarate, MP Biomedicals [Fisher] 100 g $486.43 $4,864.30 $2,20 6

. 41 65.83 $3 3.00

70693

- 50

- 4 Phenol, 2,4

- bis(1

- methyl

- 1

-

phenylethyl)

- 6

- [2

- (2

- nitrophenyl)diazenyl]

- Azobenzene [103

- 33

- 3] 96% [Sigma

Aldrich] 100 g $343.40 $3,434.00 $1,55 7

. 54 260.74 $ 5.88

72162

- 15

- 3 1

- Decene, sulfurized 1

- Decene [872

- 05

- 9] ampule of

1000 mg [Sigma

Aldrich] 1 g $15.40 $15,400.00 $6,98 5 .3 2 34,053 $0. 20

1 Prices were originally scaled to 2008 dollars and were then inflated to 2009 dollars using the PPI for chemical manufacturing

.

### A

- 8



### A.6 American Chemistry Council Prices For one chemical, EPA could not estimate the price using any of the five methods described above. For these chemicals, EPA used the American Chemistry Council ‟s Guide to the Business of Chemistry , which contains price information for certain types of chemicals. According to the guide pub lished in 2008 (ACC , 2008), a rule of thumb for specialty chemicals is that the price is greater than $1.2 5 per pound

. As shown in Exhibit A

- 8 Exhibit A

- 8 , one chemical is a spec ialty chemical.

Exhibit A
- 8 : American Chemistry Council Prices CASRN Chemical Name Chemical Type Estimated Price/lb (2009$) 22527

- 63

- 5 Propanoic acid, 2

- methyl

- , 3

-

(benzoyloxy)

- 2,2,4

- trimethylpentyl ester specialty $1.25

### B

- 1 

## Appendix B

– Cost Details

### B

- 2 Exhibit B
- 1 : Industry Compliance and Government Costs, Least Cost Scenario

CASRN Chemical Name Testing Cost Analytical Methodology Validation Cost Total

Administrative Cost 1 Export

Notification Cost Total Industry

Compliance Cost 2 Government

Cost Total Social

Cost 3 1 98

- 09

- 9 Benzenesulfonyl chloride $192,699 $23,000 $66,397 $687 $282,783 $1,7 56 $284,5 40 2 98

- 56

- 6 Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- $18,222 $6,000 $1 3,171 $687 $3 8,080 $1,0 74 $3 9,1 55 3 111

- 44

- 4 Ethane, 1,1'

- oxybis[2

- chloro

- $144,888 $14,500 $44, 837 $687 $204, 913 $1,0 74 $205, 987 4 127

- 68

- 4 Benzenesulfonic acid, 3

- nitro

- , sodium salt (1:1) $73,805 $8,500 $27,562 $687 $110,555 $1,0 74 $111, 629 5 515

- 40

- 2 Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- $ 235,650 $26,500 $ 9 8,020 $687 $360, 847 $3 ,802 $364, 6 50 6 2494

- 89

- 5 Ethanol, 2

- [(4

- aminophenyl)sulfonyl]

- , 1

- (hydrogen

sulfate) $237,327 $26,500 $10 4,237 $687 $368,751 $4,1 44 $372,8 95 7 5026

- 74

- 4 2

- Oxiranemethanamine, N

- [4

- (2

-

oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- $ 203,125 $14,500 $ 84,251 $687 $302,563 $3, 120 $305,6 83 8 22527

- 63

- 5 Propanoic acid, 2

- methyl

- , 3

- (benzoyloxy)

- 2,2,4

-

trimethylpentyl ester $237,327 $26,500 $10 2,750 $687 $367,264 $4,1 44 $371, 408 9 25321

- 41

- 9 Benzenesulfonic acid, dimethyl

- $ 19,799 $0 $1 7,873 $687 $38,359 $1, 415 $39,7 75 10 52556

- 42

- 0 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propen - 1

-

yloxy)

- , sodium salt (1:1) $237,327 $26,500 $104,237 $687 $368,751 $4,1 44 $372,8 95 1 1 68082

- 78

- 0 Lard, oil, Me esters $ 237,327 $26,500 $ 102,750 $687 $367,264 $4,1 44 $371, 408 1 2 68442

- 60

- 4 Acetaldehyde, reaction products with

formaldehyde, by

- products from $237,327 $26,500 $104,237 $687 $368,751 $4,1 44 $372,8 95 1 3 68610

- 90

- 2 2

- Butenedioic acid (2E)

- , di

- C8

- 18

- alkyl esters $ 237,327 $26,500 $104,237 $687 $368,751 $4,1 44 $372,8 95 1 4 70693

- 50

- 4 Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- [2

- (2

-

nitrophenyl)diazenyl]

- $ 237,327 $26,500 $104,237 $687 $368,751 $4,1 44 $372,8 95 1 5 72162

- 15

- 3 1

- Decene, sulfurized $23 5,676 $26,500 $ 100,012 $687 $362,875 $3, 802 $366,6 78 Total $2, 785,144 $305,000 $1, 178, 807 $10, 3 10 $4, 279,260 $ 46,125 $4, 3 25, 385
1 Total administrative cost includes both reporting and non

- reporting administrative costs. 2 Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost. 3 Total social cost includes total industry compliance cost and government cost.

### B

- 3 Exhibit B
- 2 : Industry Compliance and Government Costs, Average Cost Scenario

CASRN Chemical Name Testing Cost Analytical

Methodology Validation Cost Total Administrative Cost 1 Export

Notification Cost Total Industry

Compliance Cost 2 Government Cost Total Social

Cost 3 1 98

- 09

- 9 Benzenesulfonyl chloride $237,661 $23,000 $77,637 $1,431 $339,729 $1,7 56 $341,4 85 2 98

- 56

- 6 Benzene, 1

- chloro

- 4

-

(trifluoromethyl)

- $22,545 $6,000 $14, 251 $1,431 $4 4,227 $1,0 74 $45, 301

3 111

- 44

- 4 Ethane, 1,1'

- oxybis[2

- chloro

- $176,689 $14,500 $52, 787 $1,431 $245, 407 $1,0 74 $246, 4 82

4 127

- 68

- 4 Benzenesulfonic acid, 3

- nitro

- , sodium salt (1:1) $73,805 $8,500 $27,562 $1,431 $111,298 $1,0 74 $112, 373

5 515

- 40

- 2 Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- $293,133 $26,500 $112, 394 $1,431 $433, 458 $3, 802 $43 7,2 60

6 2494

- 89

- 5 Ethanol, 2

- [(4

-

aminophenyl)sulfonyl]

- , 1

- (hydrogen sulfate) $294,820 $26,500 $118,610 $1,431 $441,362 $4,1 44 $445, 50 5

7 5026

- 74

- 4 2

- Oxiranemethanamine,

N

- [4

- (2

- oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- $239,248 $14,500 $93,282 $1,431 $348,461 $3, 120 $351,5 81

8 22527

- 63

- 5 Propanoic acid, 2

-

methyl

- , 3

- (benzoyloxy)

- 2,2,4

- trimethylpentyl ester $294,820 $26,500 $117,123 $1,431 $439,874 $4,1 44 $44 4,018

9 25321

- 41

- 9 Benzenesulfonic acid,

dimethyl

- $19,799 $0 $17,873 $1,431 $39,103 $1, 415 $40, 518

10 52556

- 42

- 0 1

- Propanesulfonic acid,

2

- hydroxy

- 3

- (2

- propen 1

- yloxy)

- , sodium salt (1:1) $294,820 $26,500 $118,610 $1,431 $441,362 $4,1 44 $445, 505

1 1 68082

- 78

- 0 Lard, oil, Me esters $294,820 $26,500 $117,123 $1,431 $439,874 $4,1 44 $44 4,018

1 2 68442

- 60

- 4 Acetaldehyde, reaction

products with formaldehyde, by

products from $294,820 $26,500 $118,610 $1,431 $441,362 $4,1 44 $445, 505

1 3 68610

- 90

- 2 2

- Butenedioic acid (2E)

- ,

di

- C8

- 18

- alkyl esters $294,820 $26,500 $118,610 $1,431 $441,362 $4,1 44 $445, 505

1 4 70693

- 50

- 4 Phenol, 2,4

- bis(1

-

methyl

- 1

- phenylethyl)

- 6

- [2

- (2

- nitrophenyl)diazenyl]

- $294,820 $26,500 $118,610 $1,431 $441,362 $4,1 44 $445, 505

1 5 72162

- 15

- 3 1

- Decene, sulfurized $293,169 $26,500 $114,386 $1,431 $435,486 $3, 802 $439, 288

Total $3,4 19,792 $305,000 $1,3 37, 469 $2 1,465 $5, 083,726 $4 6,125 $5, 129, 851
1 Total administrative cost includes both reporting and non

- reporting administrative costs. 2 Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost. 3 Total social cost includes total industry compliance cost and government cost.

### B

- 4 Exhibit B
- 3 : Annualized Social Costs 1

CASRN Chemical Name Least Cost Scenario Average Cost Scenario 3 years, 3% 3 years, 7% 3 years, 3% 3 years, 7% 1 98

- 09

- 9 Benzenesulfonyl chloride $100,5 93 $108,4 24 $120,7 25 $130,1 23 2 98

- 56

- 6 Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- $13, 8 42 $14, 9 20 $1 6,0 15 $17, 2 62 3 111

- 44

- 4 Ethane, 1,1'

- oxybis[2

- chloro

- $72, 8 23 $78, 4 92 $87, 1 39 $93, 9 22 4 127

- 68

- 4 Benzenesulfonic acid, 3

- nitro

- , sodium salt (1:1) $39,4 64 $42,5 36 $39,7 27 $42,8 20 5 515

- 40

- 2 Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- $128, 9 15 $138, 9 50 $154, 5 85 $166, 6 1 9 6 2494

- 89

-

5 Ethanol, 2

- [(4

- aminophenyl)sulfonyl]

- , 1

- (hydrogen sulfate) $131,8 30 $142,0 92 $157, 500 $169,7 61

7 5026

- 74

-

4 2

- Oxiranemethanamine, N

- [4

- (2

- oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- $108,0 68 $116,4 81 $124,2 95 $133,9 71

8 22527

- 63

- 5 Propanoic acid, 2

- methyl

- , 3

- (benzoyloxy)

- 2,2,4

-

trimethylpentyl ester $131, 304 $141,5 25 $156,9 74 $169, 194

9 25321

- 41

- 9 Benzenesulfonic acid, dimethyl

- $14,0 62 $15,1 56 $14,3 24 $15,4 40

10 52556

- 42

- 0 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propen - 1

-

yloxy)

- , sodium salt (1:1) $131,8 30 $142,0 92 $157, 500 $169,7 61

1 1 68082

- 78

- 0 Lard, oil, Me esters $131 , 304 $141,5 25 $156,9 74 $169,1 94

1 2 68442

- 60

- 4 Acetaldehyde, reaction products with

formaldehyde, by

- products from $131,8 30 $142,0 92 $157, 500 $169,7 61

1 3 68610

- 90

- 2 2

- Butenedioic acid (2E)

- , di

- C8

- 18

- alkyl esters $131,8 30 $142,0 92 $157, 500 $169,7 61

1 4 70693

- 50

- 4 Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- [2

- (2

-

nitrophenyl)diazenyl]

- $131,8 30 $142,0 92 $157, 500 $169,7 61

1 5 72162

- 15

- 3 1

- Decene, sulfurized $129,6 32 $139,7 23 $155, 302 $167,3 92
Total $1, 5 29, 155 $1,6 48, 195 $1,8 13, 558 $1,9 54, 738 1 Total social cost includes total industry compliance cost and government cost. Total social costs are discounted over three years because these costs are expected to occur over the few years during which the actual testing occurs and EPA reviews studies. Discount rates of b oth 3 and 7 percent are presented following OMB Guidance contained in Circular A

- 4.

### B

- 5 Exhibit B
- 4 : Annualized Industry Compliance Costs 1

CASRN Chemical Name Least Cost Scenario Average Cost Scenario 15 years, 7% 7 years, 7% 15 years, 7% 7 years, 7% 1 98

- 09

- 9 Benzenesulfonyl chloride $31,048 $52,471 $37,300 $63,038 2 98

- 56

- 6 Benzene, 1

- chloro

- 4

- (trifluoromethyl)

- $4,1 81 $7,0 66 $4,8 56 $8, 206 3 111

- 44

- 4 Ethane, 1,1'

- oxybis[2

- chloro

- $22,4 98 $3 8,022 $26,9 44 $45, 536 4 127

- 68

- 4 Benzenesulfonic acid, 3

- nitro

- , sodium salt (1:1) $12,138 $20,514 $12,220 $20,652 5 515

- 40

- 2 Benzene, (2

- chloro

- 1,1

- dimethylethyl)

- $39, 619 $66,9 56 $47,5 91 $80, 430 6 2494

- 89

- 5 Ethanol, 2

- [(4

- aminophenyl)sulfonyl]

- , 1

- (hydrogen

sulfate) $40,487 $68,423 $48,459 $81,896
7 5026

- 74

- 4 2

- Oxiranemethanamine, N

- [4

- (2

-

oxiranylmethoxy)phenyl]

- N

- (2

- oxiranylmethyl)

- $33,220 $56,142 $38,259 $64,658 8 22527

- 63

- 5 Propanoic acid, 2

- methyl

- , 3

- (benzoyloxy)

- 2,2,4

-

trimethylpentyl ester $40,324 $68,147 $48,296 $81,620 9 25321

- 41

- 9 Benzenesulfonic acid, dimethyl

- $4,212 $7,118 $4,293 $7,256 10 52556

- 42

- 0 1

- Propanesulfonic acid, 2

- hydroxy

- 3

- (2

- propen - 1

-

yloxy)

- , sodium salt (1:1) $40,487 $68,423 $48,459 $81,896 1 1 68082

- 78

- 0 Lard, oil, Me esters $40,324 $68,147 $48,296 $81,620
1 2 68442

- 60

- 4 Acetaldehyde, reaction products with

formaldehyde, by

- products from $40,487 $68,423 $48,459 $81,896 1 3 68610

- 90

- 2 2

- Butenedioic acid (2E)

- , di

- C8

- 18

- alkyl esters $40,487 $68,423 $48,459 $81,896 1 4 70693

- 50

- 4 Phenol, 2,4

- bis(1

- methyl

- 1

- phenylethyl)

- 6

- [2

- (2

-

nitrophenyl)diazenyl]

- $40,487 $68,423 $48,459 $81,896 1 5 72162

- 15

- 3 1

- Decene, sulfurized $39,842 $67,333 $47,814 $80,806 Total $ 4 69,840 $ 794,031 $5 58,166 $9 43,302
1 Total industry compliance cost includes testing cost, analytical methodology validation cost, administrative cost, and export notification cost. Total industry compliance costs are annualized at a 7 percent discount rate, which reflects t he opportunity cost of capital, and over 15 years, which represents the life of the chemical. Results are also presented usin g a discounting timeline of 7 years to test the sensitivity of results to a shorter chemical lifetime, as some chemicals included i n the final rule may have a lifetime that is less than 15 years. Industry compliance costs are used in the analysis of impacts of the rule on companies and the discount period differs from t hat used to calculate social costs.

### C

- 1 

## Appendix C

– Wage Rate Calculations

This appendix describes the derivation of the fully loaded labor rates and inflation factors used in calculating costs of labor, materials, and other inputs. All cost estimates are presented in 2009 dollars.
C.1 Derivation of Loaded W age Rates 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 categor y following the method described in Wage Rates for Economic Analysis of the Toxics Release Inventory Program (Rice, 2002). This appendix describes the method employed to estimate the fully loaded unit labor costs for each labor category, and presents the r esults 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 C

- 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 thi s analysis.

Exhibit C
- 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 (2006, Table 2); Weinstein (2004)

. C.1.1 Derivation of Unit Labor Rates for Managerial, Professional/Technical, and Clerical Industry Employees 

### 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 2009 (BLS, 2010c, Table 2). 22


### The costs of fringe benefits such as paid leave and insurance, specific to each labor category, are taken from the same BLS report (BLS, 2010c). Fringe benefits as a percentage of wages are calculated separately for each labor category. For example, for December 2009, the average wage rate for professional/technical labor was $35.96, and the average fringe benefit was $17.42. 23 

### Therefore, fringe benefits as a percentage of wages were $17.42/$3 5.96, or approximately 48 percent (see Exhibit C

- 2 Exhibit C

- 2 ).

22 Past economic analyses used ECEC data series specific to white

- collar workers in the manufacturing sector. However, t hose data sets were disc ontinued 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. 23 Past economic analyses have used the term “techn ical” 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, 2004).

### C

- 2

An additional loading factor of 17 percent is applied to wages to account for overhead. 24 

### This approach is used fo r 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 10, 2002 (Rice, 2002), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report , August 2002 (U.S. EPA, 2002). 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, the December 2009 fully loaded wage for professional/technical labor is $ 35.96 × (1+ 0.4 84 + 0.17) = $ 59.49. Fully loaded costs for managerial and clerical labor are calculated in a similar manner, as shown in Exhibit C

- 2 Exhibit C

- 2

. C.1.2 Derivation of Unit Labor Rates for EPA Staff 

### Unit labor rates for EPA staff are calculated based on annual federal salaries for the Washington

Baltimore area published by the Office of Perso nnel Management (OPM) and effective January 2009 (OPM, 2009). The average salary for one full

- time equivalent (FTE) staff member is estimated as the salary for a GS

- 13 Step 1 employee, which is $ 86,927 annually without fringe benefits and overhead costs

. I n 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 $139,083. The Agency loading factor of 1.6 is from an EPA guide entitled Instructions for Preparing Information Collection Requests (ICRs) (U.S. EPA, 1992b, 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 Office of Pollution Prevention and Toxics ICRs to reflect both fringe benefits and overhead for federal staff. For example, it was used in an August 2000 document supporting ICR No. 1139.06, with the following explanation:
The annual costs per FTE are deri ved by multiplying the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication fa ctor 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.

24 The change was used in the 2003 PMN SNUR economic analysis (U.S. EPA, 2003). In some earlier reports, the 17 percent had been applied to wages

- plus

- fringe benefits.

### C

- 3 Exhibit C
- 2 : Derivation of Loaded Wage Rates

Labor Category Data Source for Wage Information Date Wage Fringe Benefit Fringes as %

wage Overhead as

% wage 1 Fringe +

overhead factor Loaded Wages (a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)=(a) (e) Managerial BLS ECEC , Private Manufacturing industries ,

“Management, business, and financial occupations” 2 Dec

- 0 9 $ 42.36 $ 18.68 44.10% 17% 1.6 1 $ 68.24
Professional/ Technical BLS ECEC , Private Manufacturing industries,

“Professional and related occupations“ 2 Dec

- 0 9 $ 35.96 $1 7.42 48.44 % 17% 1.6 5 $ 59.49
Clerical BLS ECEC , Private Manufacturing industries, “Office

and administrative support occupations” 2 Dec

- 0 9 $17. 21 $8. 17 47.47 % 17% 1.6 4 $28. 31
EPA staff FTE Annual federal staff cost: OPM Washington

- Baltimore

Northern Virginia, DC

- MD

- PA

- VA

- WV, area, GS

- 13 Step 1 pay rates, with 60% overhead. 3 Jan

- 0 9 $ 86,927 (annual) -- [Included in 60% overhead] 60% 1.60 $ 139,083 (annual) $ 41.79 (hourly) -- $ 66.87 (hourly) Notes: 1 An overhead rate of 17% was used based on assumptions in Rice ( 2002) and U.S. EPA ( 2002). 2 BLS ( 20 10c, Supplemental Table 2)

. 3 The federal salary is the unloaded federal GS

- 13 Step 1 salary ($ 86,927 for 200 9 ), from the OPM salary table for Washington

- Bal timore

- Northern Virginia (OPM, 200 9 ). The 60% fringes

- and

- overhead rate is from an EPA guide , Instructions for Preparing Information Collection Requests (ICRs) (U.S. EPA , 1992 b , page 30, footnote 9).