### *** EO12866/13563 Review Draft – Deliberative – Do Not Cite, Quote, or Release During the Review ***



# Economic Analysis of the Significant New Use Rule for Toluene Diisocyanate (TDI) and Related Compounds (EPA DOCKET EPA-HQ-OPPT-2010-0520)

Draft – 7/28/14

—Does not contain TSCA CBI—

Rin2070-AJ91_EO12866_TDI-SNU R_NPRM_EA_2014-07-29.docx



## 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U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, DC 20460*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

i 

## Contributors

The EPA analyst responsible for this report was 

### Stephanie Suazo . Analytical and draft preparation support was provided by Abt Associ ates Inc. under EPA Contract No. EP-W-08-010.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

ii 

## Executive Summary

This report estimates the costs of a Significant New Use Rule (SNUR) being proposed by the U.S. Environmental Protection Agency (EPA) for toluene diisocyanate (TDI) and related compounds. The proposed rule will apply to the sev en chemicals listed in Table ES- 1: Toluene Diisocyanate Related Compounds Subject to this Action with a Proposed Significant New Use of “Any Use in a Consumer Product” and Table ES- 2 below.

Table ES- 1: Toluene Diisocyanate Related Compounds Subject to this Action with a Proposed Significant New Use of “Any Use in a Consumer Product”

Chemical Name Chemical Abstracts Index Name Chemical Abstract Service Registry Number (CASRN) Toluene diisocyanate

trimer Benzene, 1,3-diisocyanatomethyl-, trimer 9019-85-6

Poly(toluene diisocyanate) Benzene, 1,3-diisocyanatomethyl-, homopolymer 9017-01-0

Toluene diisocyanate

dimer 1,3-Diazetidine-2,4-dione, 1,3bis(3- isocyanatomethylphenyl)- 26747-90-0

Tolulene diisocyanate “cyclic” trimer 1,3,5-Triazine-2,4,6(1H,3H,5H)trione, 1,3,5- tris(3isocyanatomethylphenyl)- 26603-40-7

Table ES- 2: Toluene Diisocyanates Subject to this Action with a Proposed Significant Use of “Any Use in A Consumer Product (Except fo r Use in Coatings, Adhesives, Elastomers, Binders, and Sealants at Less than or Equal to 0.1 Percent in a Consumer Product)”

Chemical Name Chemical Abstracts Index Name Chemical Abstract Service Registry Number (CASRN) 2,6-Toluene diisocyanate Benzene, 1,3-diisocyanato-2-methyl- 91-08-7 2,4-Toluene diisocyanate Benzene, 2,4-diisocyanato-1-methyl- 584-84-9 Toluene diisocyanate unspecified isomer Benzene, 1,3-diisocyanatomethyl- 26471-62-5

EPA is proposing a significant new use rule (SNUR) under the Toxic Substance Control Act (TSCA) section 5(a)(2) for 2,4-toluene d iisocyanate, 2,6-toluene diisocyanate, toluene diisocyanate unspecified isomers (these three chemical substances are hereafter referred to as toluene diisocyanates or TDI) and related compounds (toluene diisocyanate trimer, poly(toluene diisocyanate), toluene diisocyanate dimer, and toluene diisocyanate cyclic trimer). The proposed significant new use is any use in a consumer produc t of the chemical substances listed in Table ES- 1 or any use in a consumer product of any ch emical listed in Table ES- 2 other than use in coatings, elastomers, adhesives, binders, and sealan ts that results in less than or equal to 0.1 percent by weight of TDI in a consumer product. For this proposed rule, the general SNUR article exemption for persons who import or process chem ical substances listed in Table ES-1 and ES-2 as part of an article would not apply. The ar ticle exemption at 40 CFR 721.45(f) is based on an assumption that people and the environment will gene rally not be exposed to chemical substances in articles (see 49 FR 35014; September 5, 1984). However, TDI and related compounds are volatile and as such could migrate out of articles that contain them. For instance, studies of TDI in polyurethane products reported that after the r eaction between an isocyanate and an alcohol to form polyurethane products, residual levels of is ocyanates were detected on the surface of the*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

iii products, which if used could lead to exposure (Krone, 2004; Bello et. al, 2007). Because TDI and related compounds are known to be volatile ch emical substances, have been reported to migrate from products, and are sensitizers, EPA w ould like the opportunity to evaluate such potential uses in consumer products for any associat ed risks or hazards that might exist before those uses would begin. Consumer products are often marketed as do-it-yourself (DIY) products
and as a result consumers would be unaware of the potential hazards of consumer products, including articles containing TDI or other d iisocyanates. Consequently, insufficient and inadequate hazard communication may lead to incorrect use and increased consumer and bystander exposures, particularly for sensitive groups, such as children. The proposed SNUR requires manufacturers, importers, or processors of the seven chemicals to notify EPA at least 90 days prior to the occurrence of any significan t new use. A firm intending to engage in these activities would be required to submit a Significant New Use Notice (SNUN), incurring an estimated submission cost of $8,589 per chemical , and potentially other minor costs, such as export notification and consumer notification co sts. The required notification will provide EPA with the opportunity to evaluate the intended u se and, if necessary, to prevent or limit potentially adverse effects from that activity before it occurs.

In addition to any firms that may make a SNUN submission, the proposed SNUR may also affect firms that do not make a submission. By avoiding a significant new use, a firm can avoid submission and testing costs but may incur othe r compliance costs. The firm may also incur “hidden” costs; for example, it could forego prof itable opportunities to use the chemical in an application that would be a significant new use, or limit production volume to avoid a significant

new use.

Costs are estimated at the firm level and reflect the burden of a SNUR on the firms that make a

submission. The hidden costs to the firms that do not make a submission are not quantified. EPA receives fewer than ten SNUNs per year. The number of firms affected by not making submissions to EPA is not known; therefore, cost s are not aggregated acr oss the affected entities.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

iv 

## Table of Contents

Contributors .................................................................................................................. .................... i Executive Summary ............................................................................................................. ........... ii
1 Introduction................................................................................................................. ............ 6 1.1 Statutory Authority and Significant New Uses under the Proposed SNUR................... 7 1.2 Summary of Methodology ............................................................................................. 8 1.3 Organization of this Report ............................................................................................ 8 2 Industry Compliance Costs ................................................................................................... .. 9 2.1 Wage Rates ................................................................................................................ .. 10 2.2 Unit Industry Compliance Costs .................................................................................. 11

2.2.1 Rule Familiarization ............................................................................................ 11 2.2.2 CDX Registration, CDX Electronic Sign ature, and Pay.gov Account Setup ...... 11 2.2.3 Form Completion and Submission Fee ............................................................... 12 2.2.4 Recordkeeping for Companies Choosing to Submit a SNUN ............................. 14 2.2.5 Recordkeeping for Companies that do not Submit a SNUN ............................... 14
2.2.6 Customer Notification ......................................................................................... 15 2.2.7 Import Certification ............................................................................................. 15 2.2.8 Export Notification .............................................................................................. 15 2.3 Article Importation and Processing .............................................................................. 18
2.3.1 Affected Entities .................................................................................................. 18 2.3.2 Potential Compliance Activ ities (Article Importers) ........................................... 19 2.3.3 Potential Compliance Activiti es (Processors of Articles) ................................... 22 2.4 Summary of Per Submission Costs, by Option ............................................................ 23
2.5 Likelihood of SNUN Submission ................................................................................ 23 2.6 Potential for Subsequent Regulatory Actions .............................................................. 24 3 Agency Costs ................................................................................................................ ........ 25
3.1 Labor Rates for EPA Staff ........................................................................................... 25 3.2 SNUN Processing Costs ............................................................................................... 26 3.3 Export Notification Cost .............................................................................................. 30

4 Benefits .................................................................................................................... ............. 31 5 Additional Analyses ......................................................................................................... ..... 32 5.1 Regulatory Flexibility Act ........................................................................................... 32 5.2 Unfunded Mandates Reform Act (UMRA) .................................................................. 33 5.3 Paperwork Reducti on Act (PRA) ................................................................................. 33
5.4 Executive Order 1313 2, Federalism ............................................................................. 33 5.5 Executive Order 12898, Environmental Justice ........................................................... 33 5.6 Executive Order 13045, Protection of Children ........................................................... 34 5.7 Executive Order 13175, Tribal Governments .............................................................. 34 5.8 Executive Order 13211, Energy Su pply, Distribution, or Use ..................................... 34 5.9 Executive Order 13563, Improving Regul ation and Regulatory Review .................... 34
6 References................................................................................................................... .......... 36 Appendix A: Inflators and Wage Rates ......................................................................................... 40*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

v 

## List of Tables

Table ES- 1: Toluene Diisocyanate Related Co mpounds Subject to this Action with a Proposed Significant New Use of “Any Use in a Consumer Product” ........................................................... ii Table ES- 2: Toluene Diisocyanates Subject to this Action with a Proposed Significant Use of “Any Use in A Consumer Product Other Than Use in Coatings, Adhensives, Elastomers, Binders, and Sealants at Less than or Equal to 0.1 Percent in a Consumer Product” .................................... ii Table 1: Toluene Diisocyanate Related Com pounds Subject to this Action with a Proposed Significant New Use of “Any Use in a Consumer Product” ........................................................... 6 Table 2: Toluene Diisocyanates Subject to this Action with a Proposed Significant Use of “Any
Use in a Consumer Product Other than Use in Coatings, Adhesives, Elastomers, Binders, and Sealants at Less than or Equal to 0.1 Percent in a Consumer Product”” ......................................... 6 Table 3: Loaded Industry Wage Rates, December 2012 ............................................................... 10
Table 4: Rule Familiarization Burden and Cost for SNUR Submitters ......................................... 11 Table 5: CDX Registration, CDX Electronic Signa ture, and Pay.gov Account Setup Burden and
Cost for First-Time Submitters ................................................................................................ ...... 12 Table 6: Industry Cost Estimate to Complete the SNUN Form .................................................... 13 Table 7: Industry Cost Estimate to Complete and Submit the SNUN Form ................................. 14
Table 8: Annual Per-Chemical Costs of Recor dkeeping Requirement for Companies that Choose
not to Submit a SNUN .......................................................................................................... ......... 15 Table 9: Derivation of Total Mailing Cost for 12 Notices ............................................................ 17 Table 10: TSCA 12(b) Export Notifi cation Cost per Notification ................................................ 18 Table 11: Examples of Industries that may Import Articles Containing TDI ............................... 19 Table 12: Range of Costs Associated with an Im porter’s Identification of Chemicals Subject .... 21 Table 13: Compliance Options and Associated Co sts Incurred by a Firm Due to the Proposed

SNUR .......................................................................................................................... .................. 23 Table 14: Derivation of Loaded Agency Wage Rates ................................................................... 26 Table 15: Derivation of Inflation Factors for Agency Extramural Costs ...................................... 27 Table 16: Agency Costs for SNUN and Ot her Submission Review and Processing .................... 28 Table 17: TSCA 12(b) Export Notification Co st: Agency Burden per Activity (2012$) .............. 30 Table A-1: Derivation of Loaded Wage Rates .............................................................................. 42
Table A-2: Derivation of Inflation Factors .................................................................................... 44*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

6 

## 1 Introduction

This report estimates the costs of the proposed Si gnificant New Use Rule (S NUR) for seven toluene diisocyanate (TDI) chemicals and related compounds: (1) Toluene diisoc yanate, (2) Toluene diisocyanate trimer, (3) 2,6-Toluene diisocyanate, (4) 2,4-Toluene diisocyanate, (5) Poly(toluene diisocyanate), (6) Toluene diisocyanate dimer, and (7) Toluene diis ocyanate “cyclic” trimer. The CAS RN and common
names of these chemicals are found in Table 1 and Table 2 below.

Table 1: Toluene Diisocyanate Related Compo unds Subject to this Action with a Proposed Significant New Use of “Any Use in a Consumer Product”

Chemical Name Chemical Abstracts Index Name Chemical Abstract Service Registry Number (CASRN) Toluene diisocyanate trimer Benzene, 1, 3-diisocyanatomethyl-, trimer 9019-85-6 Poly(toluene diisocyanate) Benzene, 1,3-diisocyanatomethyl-, homopolymer 9017-01-0

Toluene diisocyanate dimer 1,3-Diazetidine-2,4-dione, 1,3bis(3- isocyanatomethylphenyl)- 26747-90-0

Tolulene diisocyanate “cyclic”

trimer 1,3,5-Triazine-2,4,6(1H,3H,5H)trione, 1,3,5-tris(3isocyanatomethylphenyl)- 26603-40-7

Table 2: Toluene Diisocyanates Subject to this Action with a Proposed Significant Use of “Any Use in a Consumer Product (Except for Use in Coatings, Adhesives, Elastomers, Binders, and Sealants at Less than or Equal to 0.1 Percent in a Consumer Product)”

Chemical Name Chemical Abstracts Index Name Chemical Abstract Service Registry Number (CASRN) 2,6-Toluene diisocyanate Benzene, 1,3-diisocyanato-2-methyl- 91-08-7 2,4-Toluene diisocyanate Benzene, 2,4-diisocyanato-1-methyl- 584-84-9 Toluene diisocyanate unspecified isomer Benzene, 1,3-diisocyanatomethyl- 26471-62-5

TDI and its related polyisocyanates are generally s upplied by their manufacturers as raw materials to formulators who take advantage of the diisocyanates’ chemistry to combine them with other chemicals and create different polyurethanes with a wide variet y of applications (EPA, 2011). The chemicals are commonly available in unreacted forms as part of produc t mixtures, and are widely used in construction, automotive, and other similar applications that re quire an end-use reaction as part of the functional performance of a product (EPA, 2011). Diisocyanates are well-known dermal and inhalation sensitizers in the workplace and have been documented to cause ast hma, lung damage, and, in severe cases, fatal reactions (EPA, 2011).

In the past, consumer exposures have not been a focus of concern with respect to diisocyanates, because of the assumption that consumers were generally exposed to products containing only cured polyurethanes, which are generally considered to be inert and non-toxic (Kr one and Klinger, 2005). However, an increase in consumer availability of, or exposure to, polyurethane products intended to further react and undergo “curing” has occurred in the marketplace (EPA, 2011). For example, products, such as coatings, elastomers, adhesives, and sealants, may contain TDI compounds that are not completely reacted when applied and can provide potential exposures to the consumer (Krone, 2004; Bello et. al, 2007). The 2012 Chemical Data Reporting (CDR) database indicates that TDI chemicals are used in the following consumer or commercial categor ies: (1) adhesives and sealants, (2) paints and*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

7 coatings, and (3) foam seating and bedding products (EPA, 2013). Consumer products are often marketed as do-it-yourself (DIY) products and as a result consum ers would be unaware of the potential hazards of consumer products, including articles containing TDI or other diisocyanates. Consequently, insufficient and inadequate hazard communication may lead to incorrect use and increased consumer and bystander exposures, particularly for sensitive groups, such as children



### .

EPA believes that the use of any of these chemic als substances beyond the limited ongoing uses could significantly increase the magnitude and duration of exposure to TDI and that such an increase should not occur without an opportunity for EPA to review. The proposed SNUR requires manufacturers, importers, or processors of the seven chemicals to notify EPA at least 90 days prior to the occurrence of any significant new use. A firm intending to engage in these activities would be required to submit a Significant New Use Notice (SNUN). The required notifi cation allows EPA to evaluate the intended use and, if necessary, to prevent or limit the potential c onsumer and general population health affects that may result from exposures to uncured TDI and related compounds. For this proposed rule, the general SNUR article exemption for persons who import or process ch emical substances listed in Table 1 and 2 as part of an article would not apply. The article exemp tion at 40 CFR 721.45(f) is based on an assumption that people and the environment will genera lly not be exposed to chemical substances in articles (see 49 FR 35014; September 5, 1984). However, TDI and relate d compounds are volatile and as such could migrate out of articles that contain them. For instance, studies of TDI in polyurethane pr oducts reported that after the reaction between an isocyanate and an alcohol to form polyurethane products, residual levels of isocyanates were detected on the surface of the produc ts, which if used could lead to exposure (Krone, 2004; Bello et. al, 2007) . Because TDI and rela ted compounds are known to be volatile chemical substances, have been reported to migrate from products, and are sensitizers, EPA would like the opportunity to evaluate such potential uses in consumer products for any associated risks or hazards that might exist before those uses would begin. .



### 1.1 Statutory Authority and Significant New Uses under the Proposed SNUR

Section 5(a)(2) of TSCA (15 U.S.C. 2604(a)(2)) author izes EPA to determine that a use of a chemical substance is a “significant new use.” EPA must make this determination by rule after considering all relevant factors, including those listed in TSCA se ction 5(a)(2). Once EPA determines that a use of a chemical substance is a significant new use, TSCA se ction 5(a)(1)(B) requires persons to submit a SNUN to EPA at least 90 days before manufacturing, importing, or processing the chemical substance for that use (15 U.S.C. 2604(a)(1)(B)).The general SNUR provi sions are found at 40 CFR Part 721, Subpart A.

EPA may promulgate a SNUR for a substance when potential use could result in significant changes in human exposure or environmental relea se levels and/or that concern exists about the substance’s health or environmental effects (40 CFR §721.170). According to TSCA Section 5(a)(2), the determination that a chemical use qualifies as a significant new use must consider all relevant factors, including:

 The projected volume of manufacturing, importation, and processing of the chemical substance;

 The extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance;

 The extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance; and

 The reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

8 EPA is proposing to define the significant new use as any use in a consumer product of the chemical substances listed in Table ES-1 or any use in a cons umer product of the chemical substances listed in Table ES-2, except for use in coatings, elastomers, a dhesives, binders, and sealants that results in less than or equal to 0.1 percent weight of TDI in a consumer product. Consumer products, in general, are products readily available for purchase by the consumer. A company would be expected to submit a SNUN for any of the seven chemicals included in the proposed SNUR prior to initiating a new use.



### 1.2 Summary of Methodology

This analysis quantifies, to the extent possible, the co sts to society of the propo sed rule by identifying the costs to industry associated with performing the requi red reporting and recordkeeping, and the costs to EPA of administering the rule. Industry costs consist of rule familiarization; registration with the Central Data Exchange (CDX) electronic reporting tool; co llection, compilation, and submission of required information for significant new uses of the subject ch emicals; export notification; and recordkeeping. Agency costs include reviewing and processing the data received as a result of the rule. Data sources for this analysis include burden estimates derived from previous information collection requests and economic analyses for related rules, compensati on data acquired from government publications, and supplementary market research to produce an estimat e of the universe of affected entities and measure the impact of the proposed rule on small entities.

In addition to costs, this report qualitatively discusses th e benefits of the proposed rule based on the value of the information it will provide. The benefits analys is was undertaken to address the implicit call for cost-benefit balancing contained in TSCA, as well as the requirements of Executive Order 12866.



### 1.3 Organization of this Report

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

### 2 presents estimates of the industry costs to co mply with the proposed rule, and Chapter 

### 3 provides estimates of the government costs associated with th e administration of the proposed rule. Chapter 

### 4 addresses the benefits of the propo sed rule. Several additional impact analyses are presented in Chapter 

### 5

, including: small entity impact analysis, as mandated by the Regulatory Flexibility Act (RFA); a burden hour analysis that responds to the requirements of the Paperwork Reduction Act (PRA); an analysis of unfunded mandates that pertains to the Unfunded Mandates Reform Act (UMRA); an analysis of environmental justice implications that addresses the requirements of Executive Order 12898; and an analysis of children’s health pertinent to Executive Order 13045.

Note that all dollar amounts in this analysis are reported in 2012 dollars.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

9 

## 2 Industry Compliance Costs

The proposed SNUR discussed in this report specifies that any manufacture, import, or processing of the chemicals or the importation or processing of an ar ticle for a designated significant new use will require reporting under section 5(a)(1)(A) of TSCA. Therefore, a firm intending to manufacture, import, and/or process any of these chemicals for these applications must submit a SNUN. Alternatively, a firm can decide not to manufacture, import, and/or process these chemicals or to manufacture, import, and/or process these chemicals in such a way that it is not co nsidered a significant new use. The firm, therefore, has two options:

 Option 1: Submit a SNUN. A SNUN indicates to EPA that the firm would like to manufacture, import, and/or process the chemical or the import or process an article for a significant new use, which, in this case, means use in a consumer pr oduct of the chemical substances listed in Table ES-1 or any use in a consumer product of the ch emical substances listed in Table ES-2 , except for use in coatings, elastomers, adhesives, binders, an d sealants that results in less than or equal to 0.1 percent weight of TDI in a consumer produc t. The firm must submit the SNUN to EPA at least 90 days before it plans to commence the ma nufacture, import, and/or processing of the new use of the substance; the SNUN provides EPA with the opportunity to evaluate the intended use and, if necessary, to prohibit or limit that activity before it occurs. If EPA allows the manufacture, import, and/or processing of any of the seven chem icals for a significant new use, then the costs associated with this option are th e costs of submitting the SNUN (including a user fee) plus, if there is any export of these chemicals, the export notification costs that result from TSCA Section 12 (b) requirements that are automatically tri ggered for chemicals regulated under TSCA Section 5 (see Section 2.2.8 for details).

 Option 2: Comply with SNUR limits (not manufac ture, import, and/or process a new use of the
chemical ). A firm can avoid engaging in a Significant New Use and submitting a SNUN by not manufacturing, importing, and/or processing, or importing or processing as part of an article, any
of the seven listed chemicals in a manner such th at they would be considered significant new uses. That is, if the firm does not use any unc ured TDI and related compounds in a consumer product it would meet all applicable SNUR require ments. While this option avoids the costs of submitting a SNUN, it may entail the “hidden” cost of the foregone profit as a result of not engaging in the commercial activity originally pl anned, and may involve substituting one of the subject chemicals for another, more costly substa nce. If the firm elects to produce the chemical for research and development (R&D) purposes onl y (an exemption for R&D purposes is provided in 40 CFR §721.47), it may have costs associated with R&D recordkeeping. In addition, if the firm exports any existing stockpiles of the chemic als, it will incur the export notification costs. The firm may also pursue this option temporarily by complying with SNUR restrictions while also pursuing Option 1. Due to the uncertainty rela ted to this option, and EPA’s expectation that affected entities will select Option 1; the costs of Option 2 are not fully quantified in this report.

The remainder of this chapter estimates the quantif ied portion of costs associated with the proposed SNUR for these uses of the subject chemicals. Section 2. 1 summarizes the wage rates used in this chapter. Section 2.2 provides the unit industry compliance cost s, including the costs of rule familiarization, registration with the Central Data Exchange (CDX) electronic reporting tool, completing the SNUN form, submission fee, import certification, and export notifi cation. Section 2.3 discusses the implications and potential compliance costs associated with removing the general SNUR article exemption for persons who import or process 2,4-toluene diisocyanate, 2, 6-toluene diisocyanate, toluene diisocyanate*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

10 unspecified isomers and related chemical substances as part of an article. Total costs under each option are presented in Section 2.4.



### 2.1 Wage Rates

The proposed rule involves activities that may require efforts by employees in three labor classifications: managerial, technical, and clerical. Costs for each act ivity are calculated by estimating the labor hours required in each labor category and multiplying those burdens by the wage rate for each labor category. This section presents the estimated wage rate in each labor category.

Loaded wage rates for managerial, technical, and clerical personnel are derived by combining data on wages and fringe benefits with estimates of overh ead rates, following the methodology described in Wage Rates for Economic Analysis of th e Toxics Release Inventory Program (EPA, 2002b). Wage data for each labor category in December 2012 are provided by the Employer Costs for Employee Compensation (ECEC) Supplemental Tables available on the BLS we bsite (BLS, 2013a). The loaded wage rate is $72.84 for managerial labor; $64.38 for technical labor; and $29.81 for clerical labor. Table 3 presents the basic data used to calculate the loaded wage rates for a ll three categories of labor. Appendix A: provides more information on the wage rates and inflators used in this analysis.

Table 3: Loaded Industry Wage Rates, December 2012

Labor Category Data Sources Date Wage (2012$) Fringe
Benefit (2012$) Fringes

as %

wage Overhead

%

wage 2 Fringe +

overhead

factor Loaded Wages 1 (2012$)

(a) (b) (c) =(b)/(a) (d) (e)=(c)+ (d)+1 (f)=(a) x (e)

Managerial BLS ECEC , Private Manufacturing industries

, “Mgt, Business, and

Financial” 3 Dec12 $43.95 $21.45 48.81% 17% 1.66 $72.87

Professional/

Technical BLS ECEC , Private Manufacturing industries,
“Professional and

related“ 3 Dec12 $38.53 $19.30 50.09% 17% 1.67 $64.38

Clerical BLS ECEC , Private Manufacturing industries,
“Office and Administrative Support” 3 Dec12 $17.64 $8.87 50.28% 17% 1.67 $29.81

1 Wage data are rounded to the closest penni es in this table; however, in calculatio ns using these numbers for this report,
unrounded values were used.

2 An overhead rate of 17% was used based on assumptions in Wage Rates for Economic Analyses of the Toxics Release Inventory Program (EPA, 2002b), and the Re vised Economic Analysis fo r the Amended Inventory Update Rule: Final Report (EPA, 2002a).

3 Employer Costs for Employee Compensation Supplementary Tables December 2 012, U.S. Bureau of Labor Statistics, March 18, 2013 (BLS, 2013a).*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

11 

### 2.2 Unit Industry Compliance Costs

2.2.1 Rule Familiarization

The proposed rule requires submitters and their staff to become familiar with the SNUR and its various requirements. Rule familiarization is estimated to re quire 0.55 hours of technical labor and 0.27 hours of managerial labor, as described in the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (EPA, 2009a), which measures the costs of mandatory electronic reporting of
SNUNs and other TSCA Section 5 notices. As shown in Table 4, the total labor cost associated with rule familiarization is $54.84.

Table 4: Rule Familiarization Burd en and Cost for SNUR Submitters

Reporting Activity Clerical Labor (at $29.51/hour) Technical Labor (at $64.38/hour) Managerial Labor (at $72.87/hour) Total Labor Cost (2012

dollars)

Burden Cost Burden Cost Burden Cost Burden Cost Rule Familiarization 0.00 $0.00 0.55 $35.41 0.27 $19.43 0.82 $54.84

Note: Costs may not equal labor wage rate tim es burden hours as shown, due to rounding. Unrounded estimates were used during

the actual cost calculations.
Source: See Table 3; EPA, 2009a.

2.2.2 CDX Registration, CDX Electronic Signature, and Pay.gov Account Setup

The proposed SNUR requires first-time submitters of any TSCA section 5 notice (including Premanufacture Notices (PMNs), Significant New Use Notices (SNUNs), Test Market Exemption (TME) applications, Low Volume Exemption (LVE) notices, Low Exposure/Low Release (LoREX) exemption notices, Biotechnology Notices for genetically modifi ed microorganisms, Notices of Commencement of Manufacture or Import (NOCs), and support documents to Section 5 notices) to register their company and key users with the CDX reporting tool, deliver a CDX electronic signature to EPA, and establish and use a Pay.gov E-payment account. 1 These activities are only required of first-time submitters of any
Section 5 notice. These activities are estimated to require the following burden s, based on the estimates presented in the Economic Analysis of the Premanufacture No tification Electronic Reporting Final Rule (EPA, 2009a):

 CDX registration: EPA estimates that companies will spend approximately 0.18 hours per employee to register with CDX, and that an average of four technical staff members and one manager will need to register for each company, totaling approximately 0. 92 hours of burden per

company.

 CDX electronic signature: EPA estimates that companies will spend 0.25 hours preparing, submitting, and filing an electronic signature agreem ent (Authentication of Identity) form to EPA per employee. This burden will apply to four technical staff members and one manager per company, totaling 1.25 hours of burden per company. In addition, EPA estimates that a manager will spend an additional 0.50 hours accessing, preparing, and submitting verification forms (Verification of Authorization) for all authorized submitters to EPA. The total burden incurred by companies submitting and then verifying electronic si gnature agreements is 1.75 hours. Note that this burden does not include any additional time required to contact EPA’s CDX help desk to notify a change of submitter status, should one occur.

1 Although the proposed rule does not require submitters to establish and use a Pay.gov account, the burden estimates in this analysis are conservative insofar as to include the use of Pay.gov as a required activity.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

12  Filing the electronic signature agreement may be done either through mail or electronically. EPA believes the cost of electronic filing to be neglig ible, while the cost of mailing in the agreement
for verification will involve extra costs. For this economic analysis, EPA has conservatively chosen to consider the cost of paper filing via the US Postal Service. This cost is estimated to be $2.60 per company (including five $0.46 stamps 2 and five $0.06 business envelopes 3 ).

 Payment via Pay.gov account: EPA estimates that one manager per company will spend approximately 0.13 hours setting up a Pay.gov ID account, logging into the system, finding the appropriate form, and filling it out. This burde n does not include the time required to click ‘submit’ on the form and wait for payment processing.

As shown in Table 5, the labor cost associated w ith CDX registration, CDX electronic signature, and Pay.gov account setup by a first-time submitter is $189. As noted above, an additional $2.30 in mailing cost per company is attributable to these activities, for a total cost of approximately $192 per company.

Table 5: CDX Registration, CDX Electronic Signature, and Pay.gov Account Setup Burden and
Cost for First-Time Submitters

Reporting Activity Clerical Labor (at $29.51/hour) Technical Labor (at $64.38/hour) Managerial Labor (at $72.87/hour) Total Labor Cost (2012 dollars)

Burden Cost Burden Cost Burden Cost Burden Cost CDX Registration 0.00 $0.00 0.73 $47.21 0.18 $13.36 0.92 $60.57

CDX Electronic Signature 0.00 $0.00 1 $64.38 0.75 $54.65 1.75 $119.03

Mailing Cost $2.60 E-Payment (Pay.gov ID) 0.00 $0.00 0.00 $0.00 0.13 $9.71 0.13 $9.71 Total 0.00 $0.00 1.73 $111.59 1.07 $77.72 2.80 $191.91

Note: Costs may not equal labor wage rate times burden hours as show n, due to rounding. Unrounded es timates were used during the

actual cost calculations.
Source: See Table 3; EPA, 2009a.

2.2.3 Form Completion and Submission Fee

Respondents who choose to submit a SNUN are required to gather and submit information regarding the data elements identified in the applicable SNUN reporting form. The methodology and calculations used in this analysis assume that the employee respons ible for collecting, filling out, and submitting the requested information has a reasonable level of familiarity with the company and knowledge of operations at the site. It is assumed that for most entities these tasks are similar to other employee duties that require familiarity with EPA, State, and other Federal agency requests for chemical information and do not require additional familiarization or training be yond the basic rule familiarization described above. In addition, this analysis focuses on the marginal costs of submitting information for the proposed rule and not the total costs for the compan y to comply with a range of other Federal and State environmental, health, and safety regulations or accounting requireme nts that rely on this type of information.

Estimates of the costs of completing a Significant New Use Notice (SNUN) form are based on the costs of completing a PMN submission, since the data requirements are the same and the same form is used for both.

2 Price for a stamp was taken from the U.S. Postal Service website on April 9, 2013. (See USPS, 2013a)

3 Price for an envelope was determined based on the per unit price of a regular business envelope. See “Staples® #10, Self-Sealing Envelopes, 50 0/Box." Available at: http://www.s taples.com/ (Accessed 1/25/2012).*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

13 The PMN submission cost s came from EPA’s 1994 Regulatory Impact Analysis of Amendments to Regulations for TSCA Section 5 Premanufacture Notifications, which relied on industry estimates of the effort needed to collect and compile all data requi red for a PMN submission, prepare the form, submit the form and data to EPA, and maintain a file of th e submission (EPA, 1994, Table III-2 and pages III-11, - 12, and -13). The 1994 estimates were based on a survey conducted by the Chemical Manufacturers Association, which became the American Chemistr y Council. These burdens include “the time spent reading and becoming familiar with the form, gatherin g the required information and preparing the report, producing sanitized responses for items claimed as c onfidential business information, and maintaining a file of the submission” (EPA, 1994. p. III 11-13) . The burden associated with SNUN submission and preparation has been adjusted to reflect burden reductions resulting from the 2009 final PMN Electronic Reporting (ePMN) Rule that requires the electronic submission of all TSCA section 5 notices. Electronic submission of SNUN forms is expected to remove all clerical burden and reduce the recordkeeping burden associated with preparing a SNUN (EPA, 2009a). 4 In addition, electronic submission is expected to generate and an additional 0.18 hours of techni cal burden, for the completion of the User Fee Payment
Identification Number and email address data elements on the electronic SNUN form.

SNUN form completion and electronic submission is estimated to require 73.68 hours of technical labor and 18.00 hours of managerial labor (EPA, 2009a). Table 6: Industry Cost Estimate to Complete the SNUN Form combines the estimated reporting burden and loaded wage rates for all three labor categories to estimate the per-SNUN cost of form completion. The labor cost incurred by a SNUN submission for both large and small busin ess submitters is $6,089.

Table 6: Industry Cost Estimate to Complete the SNUN Form

Reporting

Activity Clerical Labor (at $29.51/hour) Technical Labor (at $64.38/hour) Managerial Labor (at $72.87/hour) Total Labor
Cost (2012 dollars)

Burden Cost Burden Cost Burden Cost Burden Cost

Form Completion 0.00 $0.00 74.20 $4,777.00 18.00 $1,311.66 92.2 $6,089

Note: Costs may not equal labor wage rate tim es burden hours as shown, due to rounding. Unrounded estimates were used during
the actual cost calculations.
Source : Loaded wages include fringe benefits and overhead. See Tabl e 3 of this report for derivati on. Wage rates presented in this table are rounded values; however, unr ounded values are used to calc ulate total labor costs. For this reason, total labor costs may not equal the product of rounded values.
The estimate of no clerical burden is taken from the Economic Analysis of th e Premanufacture Notice Electronic Reporting Final

Rule (EPA, 2009a, page 7). Technical and managerial labor burden is from the PMN Amendments RIA (EPA, 1994, Table III-2). An additional eleven minutes (0.18 hours) of technical burden is estimated to complete the User Fee Payment Identification Number and Email
Address data elements on the Electr onic SNUN form (EPA, 2009a page 15).

In addition, each submitting large business must pay a $2,500 per-SNUN submission fee, and each submitting small business must pay a $100 per-SNUN subm ission fee. Table 7 adds the labor cost and

4 The Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (EPA, 2009a) reported
a 0.5 hour clerical and a 0.5 hour tec hnical burden associated w ith recordkeeping in addition to the burden estimates from the 1994 RIA (EPA, 1994, p. III-14). These burden estimates (the 0.5 for clerical burden and 0.5 for technical burden) are based on the recordkeeping burden for polymer exceptions and not the recor dkeeping burden associated
with PMN submissions. Therefore, for this analysis, the 0.5 ho ur for clerical labor and the 0.5 hour fo r technical labor were removed. It is important to note that for this analysis , clerical burden changes are not appli cable because the entir e clerical burden

is assumed to be eliminated under th e electronic reporting requirements. In summary, we do not include the one hour recordkeeping burden (0.5 hour for clerical, 0.5 for technical) reported in the ePMN EA..*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

14 submission fee to estimate the total cost of a SNUN submission. The total cost of a SNUN submission is $8,589 for large business submitters and $6,189 for small business submitters.

Table 7: Industry Cost Estimate to Complete and Submit the SNUN Form

Reporting Population Labor Cost Submission Fee Total Cost (2012 Dollars) Large Business Submitters $6,089 $2,500 $8,589 Small Business Submitters $6,089 $100 $6,189

Source : Table 6; EPA, 1994

2.2.4 Recordkeeping for Companies Choosing to Submit a SNUN

Companies submitting a SNUN must, under 40 CFR §721.40, keep records of the information contained in the SNUN. Some EPA reports have assumed that SN UN recordkeeping hours would be five percent of SNUN submission hours, or about five to six hours. 5 For this report, the SNUN recordkeeping hours were included in the SNUN submission hours (see Section 2.2.3) and the SNUN recordkeeping costs under 40 CFR §721.40 were not se parately estimated. 6

2.2.5 Recordkeeping for Compani es that do not Submit a SNUN

If a firm that manufactures, imports, or processes a s ubstance subject to the proposed SNUR chooses not to submit a SNUN, they must keep records that doc ument compliance with SNUR conditions for avoiding a Significant New Use. Such recordkeeping requiremen ts essentially involve copying and filing relevant records, including those related to: category of use. Records must be maintained for five years from the date of their creation (40 CFR 721.40). For firms th at choose to not submit a SNUN, costs for compliance with the recordkeeping requirements are estimated to be five percent of the reporting burden for reporting information for a specific section of the SNUN form and are performed by clerical staff (EPA, 2005b, pages 10 and 14). EPA used the per-activity burden for reporting category of use presented in the Information Collection Request (ICR) for TSCA Sec tion 5(a)(2) Significant New Use Rules for Existing Chemicals (Renewal) (EPA, 2005b, page 12). Any clerical burden associated with these activities was
removed to reflect the burden reduction associated with electronic submissions (EPA, 2009a).

The total recordkeeping burden for a company that do es not submit a SNUN is estimated to be 0.15 hours and $9.66, and is derived in Table 8.

5 For example, OPPT’s Information Collection Request (ICR) for TSCA Section 5(a)(2) Significant New Use Rules for Existing Chemicals (Renewal), October 11, 2005, estimates SNUN reco rdkeeping costs at 5.67 hours (ICR 118.08, page 15).

6 SNUN submission costs estimated in Section 2.2.3 of this report were based on PMN submission costs from a 1994 report, Regulatory Impact Analysis of Amendments to Regulations for TSC Section 5 Premanufacture Notifications (EPA, 1994). Page III-14 of the 1994 report refers to “the normal records kept with a PMN submission
which are included in the estimates fo r submission costs.” Page III-12 iden tifies “maintaining a file of the submission” as part of the labor hours for the PMN reporting form. These statements imply that the 95 to 114 total hours for a PMN submission (page III-10 of EPA 1994) included recordkeeping hours.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

15 Table 8: Annual Per-Chemical Costs of Recor dkeeping Requirement for Companies that Choose
not to Submit a SNUN

Reporting Activity Total Burden
Associated per Activity

(Hours) Percent of Reporting Burden
Attributed to Recordkeeping Recordkeeping Burden

(hours) (2012$)

Category of use 1 3 5% 0.15 $9.66

Source:

1 US EPA, 2005b Office of Po llution Prevention and Toxics Information Collection Request (ICR) for TSCA Section 5(a)(2) Significant New Use Rules for Existing Chemicals (Renewal) (page 13)

2.2.6 Customer Notification

Manufacturers, processors, and importers of chemicals subject to SNURs must notify recipients of such chemicals of the SNUR or verify that knowledge of the SNUR has been otherwise acquired by recipients, or that the recipients are unable to engage in signifi cant new uses. Since it is not expected that all such entities will have complete knowledge of all uses of a ny products subject to a SNUR, and because filing a SNUN could require significantly more burden, it is assumed that manufacturers, processors, and importers will most often choose to notify their customers of SNUR regulatory activities. As this notification may be accomplished by simply annotat ing an MSDS, EPA estimates the associated burden to be about one hour of a technical employee’s time or $64.38 per manufacturer, processor, or importer per chemical. The proposed SNUR will cover a total of seven chemicals.

2.2.7 Import Certification

In general, promulgation of a final SNUR trigge rs a TSCA Section 13 import certification requirement and the corresponding regulations at 19 CFR §12.118 to 12.127 and 19 CFR §127.28 for all imports of the relevant chemical substances. Thus, any U.S. manufacturer, importer, or processor receiving an imported shipment of chemicals subject to the propo sed SNUR would have to certify that all chemical substances in the shipment either comply with all applicable rules and orders under TSCA or that all chemical substances in the shipment are not subject to TSCA. 7 The statement must be on or attached to a commercial invoice or entry document belonging to the imported shipment.

In practice, import certification is fulfilled by checking a box on an invoice or entry document and generally imposes no additional burden or cost on the importer (EPA, 2009c). Any potential burden
associated with a submitter’s familiarization with this requirement is assumed to be included in the more general SNUR familiarization burden discussed above.

2.2.8 Export Notification

Under Section 12(b) of TSCA, exporters must notify EPA if they export or intend to export a chemical subject to various TSCA secti ons (40 CFR §707.60 through 75). Fo r TSCA 5(a)(2) (the section under which EPA promulgates significant new use rules) a nd certain other TSCA sections, this is a one-time

7 The exact statements are as follows: For imports of chemical substances su bject to TSCA, “I certify that all chemical substances in this shipment comply with all applicable rules or orders under TSCA and that I am not offering a chemical substance for entry in violation of TSCA or any applicable rule or order under TSCA.” For imports of chemical substances not subject to TSCA (e.g., pesticides), “I certify that all chemicals in this shipment are not subject to TSCA.” (40 CFR 707.20)*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

16 notification requirement 8 per destination country for each expor ter of a chemical substance. After receiving a notification from a firm, EPA notifies the importing country and the United States State Department (40 CFR §707.70). To calculate th e burden associated with making a single export notification, EPA first estimated the average annual nu mber of export notifications made by an exporter.
EPA then derived the annual and per notification burden associated with preparing and submitting an export notification.

EPA estimated the average burden associated with ma king a single notification, but did not estimate either the total number of exporters of a SNUR ch emical or the number of notifications per SNUR chemical. This is because the SNURs apply to a variety of different chemicals with a variety of unrelated uses, manufacturers, and processors, making it impractical within the resources available for this report to assess the potential number of exporters and importing countries per chemical.

Most underlying data in this section come from the 2009 TSCA Section 12(b) ICR, ICR No.: 0795.13 [Information Collection Request for] Notification of Chemical Exports - TSCA Section 12(b) Supporting Statement for Request for OMB Review under the Paperwork Reduction Act (EPA, 2009b), with updating for inflation.

Estimated Number of Annual Export Notifications per Exporter

EPA’s 2009 TSCA Section 12(b) ICR esti mated that the average exporter making notifications will make 12 notifications per year

. 9 This includes notifications resultin g from SNURs and notifications resulting from other TSCA activities. Therefore, it is likely that an exporter will make less than 12 notifications per year as a result of this proposed SNUR. A notif ication is typically no more than one page per chemical/country combination, and one notificati on mailing often includes mult iple chemicals and/or
destination countries. 10

The percent of notificati ons resulting from SNURs in general is unknown, and it is also unknown how many notifications may result from this rulemaking, as not all manufacturers may choose to export a chemical, or they may make several notifications for a single chemical.

Exporter Costs

The 2009 TSCA Section 12(b) ICR (EPA, 2009b, pa ge 11, Table 3), estimated the annual export notification cost for an exporter under the one-tim e export notification requirement. These costs include the cost to the exporter of compiling a list of their products that are subject to TSCA Section 12(b) requirements, writing or revising an export notifica tion letter to EPA, checking the outgoing shipments, and sending the notification letters w ith the associated shipping costs.

The per-notification cost was calculated based on th e average burden per firm. Exporters who make a larger number of notifications per year may benef it from economies of scale and have lower costs per notification; conversely firms making fewer notifica tions may have a higher cost per notification.

8 On November 14, 2006, EPA revised the export notifica tion requirement for chemicals subject to TSCA §5(a)(2), 5(b), 5(e)(1) and 5(e)(2) from an annual to a one-time requirement per destination country for each exporter (November 14, 2006, 71 FR 66234).

9 EPA calculated the average number of export notifications per exporter in the 2009 TSCA Section 12(b) ICR (EPA, 2009b) by dividing the estimated number of submitted notifica tions (3,500) by the estimated number of exporters (300).

10 Based on review by an EPA economist of notifications received under TSCA Sections 4, 5 and 6 over approximately three we eks in early 2010.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

17 Estimated Submission (Mailing) Costs. Regulated companies will in cur mailing costs for export
notifications delivered to EPA. Notifications are ass umed shipped via the U.S. Postal Service (USPS) as first-class registered mail with a return receipt (USPS, 2013b). The estimated per-shipment and annual mailing costs incurred by individual submitters are detailed in Table 9.

Table 9: Derivation of Total Mailing Cost for 12 Notices

Postal Service Cost Registered mail, regular, with $0 declared value $11.20
Return receipt, requested at time of mailing (receive by mail) $2.55
Postage, regular First Class, up to 1 ounce $0.46
Cost per export notice - Subtotal $14.21

× 12
Total Mailing Cost for 12 Notices $171

Source: Mailing rates are from the US Post al Service web site as of April 2012 (http://www.usps.com/prices/). The mailing

method comes from the Economic Analysis of the Proposed Change to TS CA Section 12(b) Export Notification Requirements, November 2005 (EPA, 2005a), as clarified in a late r SNUR economic analysis (EPA, 2007c, Table 8).

Note: Calculations may be rounded.

Compile and Maintain the List of Products. Since TSCA §12(b) information collection activity has been in place for twenty years, most respondents w ill have already developed a list of their products subject to TSCA §12(b) export notification. R espondents need only check for new regulations promulgated and any new products exported by the co mpany. Updating the list is estimated to take an average of one hour of technical time, which may also include some proportion of legal time (EPA, 2009b). The total burden can vary from two hours per y ear up to two hours per month, depending on the number of products exported by the company and the number of their products subject to TSCA §12(b) (EPA, 2009b).

The number of submitters per year who report unde r TSCA §12(b) has varied over time, rising from around 160 in 1991 to over 460 in 2000, and declining since. In the most recent TSCA §12(b) ICR, EPA estimated there would be approxima tely 300 submitters per year in near-future years (EPA, 2009b). Of these 300 submitters, EPA estimated that 200 companies were near the lower burden estimate of two hours per year, and 100 companies were near the upp er estimate of 24 hours per year. Compiling the list for all respondents was therefore estimated to take 2,800 hours (2 hours x 200 firms plus 24 hours x 100 firms), or an average of about 9.3 hours of technical time per firm per year for 12 notifications per year (EPA, 2009b).

Write or Revise Export Notification. Companies that export chemicals subject to TSCA §12(b) reporting must prepare an export notification to send to EPA when export shipments are made. Time for initial preparation of the export notice may vary de pending on whether the company has prior experience with this requirement. This step is estimated to ta ke an average of one hour of technical time (which may also include some proportion of legal time) per firm per year for 12 notifications per year (EPA, 2009b).

Check Orders and Send Notifications. Companies that export chemicals subject to TSCA §12(b) reporting must check outgoing shipments against the lis t of their products described above. A form letter notifying EPA and providing the required data must be printed and mailed within the required time period. This process is estimated to take an average one half hour of clerical time per export notification or six hours for 12 notifications (EPA, 2009b).*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

18 The burdens and associated costs for each notificatio n activity are provided in Table 10. EPA estimates that the burden associated with making one notificat ion is approximately 1. 36 hours and $84.22.

Table 10: TSCA 12(b) Export Notifi cation Cost per Notification

Technical Clerical Total

$/Hr Hours 2012$ $/Hr Hours 2012$ Hours 2012$ Compile list $64.38 9.3 $599 -- -- -- 9.3 $599

Write letter $64.38 1 $64 -- -- -- 1 $64

Check order and send
notice -- -- -- $29.51 6 $177 6 $177

Mailing cost 1 -- -- -- -- -- -- -- $171 Total per average facility 2` 10.30 $663.11 6.00 $177.06 16.30 $1,005 Total per Notification $0.86 $55.26 0.50 $14.76 1.36 $84.22

Notes: Costs may not equal labor wage rate times burden hours as shown due to roundin g. Unrounded estimates were used during the
actual cost calculations.

1 Mailing costs reflect April 2012 U SPS rates and can be found in Table 9.

2 An average facility submitting notifications is assumed to submit 12 e xport notifications per year.
Source: Appendix A of this report derives technical and clerical hourly labor costs. Other costs are from ICR No.: 0795.13 [Information Collection Request for] Notifi cation of Chemical Exports - TSCA Section 12(b) Supporting Statement for Request for OMB Review under the Paperwork Reduction Act (EPA, 2009b, p.10), and are updated to 2012 dollars.



### 2.3 Article Importati on and Processing

The proposed SNUR contains a provision to eliminat e the exemption for the importation or processing of consumer articles containing TDI and related compounds . This will require importers and processors of consumer articles containing TDI and related compounds to notify EPA at least 90 days before importing or processing consumer articles containing chemicals s ubject to the proposed rule. In addition, the rule may also affect firms that do not currently import or process articles containing the chemicals, but who may be interested in importing or processing these artic les in the future or who may be interested in ensuring that the articles they import or process are in compliance with the requirements of the SNUR. Although there are no specific requirements in the rule for these companies, they may choose to
undertake some activities assure them selves that they are not undertaking a new use. Importers have varying levels of knowledge about the chemical cont ent of the articles they import, yet under TSCA the definition of “manufacture” means to “import..., produce or manufacture” 11 and importers are responsible parties under the proposed SNUR. In order to unde rstand and monitor their liability, companies might undertake a range of activities to ensure that the ar ticles they import do not violate existing regulations.

2.3.1 Affected Entities

SNUR reporting requirements for persons who may process articles containing chemicals substances subject to the SNUR are similarly described in § 40 CFR 721.5; however, the reporting requirements for processors (including processors of articles containing subject chemicals) are specifically limited. As described in § 40 CFR 721.5(c), a processor is not requi red to submit a SNUN if he can document that (1) he does not know the specific chemical identity of the chemical substance being processed; and (2) that he is processing the chemical substance without knowle dge that the substance is subject to a SNUR. This analysis focuses on the standard business practices th at a processor would already undertake that would serve to document compliance with the rule.

11 TSCA section 3(7).*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

19 Table 11 contains example NAICS codes for firm s that may import or process consumer articles containing TDI or its related compounds. Articles may include products such as paints, adhesives, and foam products. This is not meant to be an exhaustive list, but rather an example of the types of industries that may be impacted by the articles exemption. As shown in Table 11, a wide variety of industries may import consumer articles containing TDI or its related compounds.

Table 11: Examples of Industries that may Import or Process Articles Containing TDI

NAICS
Code Section Description

326 Plastics and Rubber

Products Manufacturing Industries in the Plastics and Ru bber Products Manufacturing subsector make goods by processing plastics materials and raw rubber. Many manufacturing activities use plastics or rubber, for example the manufacture of footware, or furniture.

423 Merchant Wholesalers,
Durable Goods Industries in the Merchant Wholesalers, Durable Goods subsector sell capital or durable goods to other businesses. Durable goods are new or used items genera lly with a normal life ex pectancy of three years or more. Durable goods merchant wholesale trade establishments are engaged in wholesaling products, such as motor vehicles, furniture, construction materials, machinery and equipment (including household-type appliances), metals and minerals (except petroleum), sporting goods, toys and hobby goods, recyclable materials, and parts.

424 Merchant Wholesalers,
Nondurable Goods Industries in the Merchant Wholesalers, Nondurable Goods subsector sell nondurable goods to other businesses. Nondurable goods are items generally with a normal life expectancy of less than three years. Nondurable goods merchant wholesale trade establishments are engaged in wholesaling products, such as paper and paper products, chemicals and chemical products, drugs, textiles and textile products, apparel, footwear, groceries, farm products, petr oleum and petroleum products, alcoholic beverages, books, magazines, newspapers, flowers an d nursery stock, and tobacco products.

442 Furniture and Home Furnishings Stores Industries in the Furniture and Home Furnishings Stores subsector retail new furniture and home furnishings from fixed point-of-sale locations. Esta blishments in this subsector usually operate from
showrooms and have substantial areas fo r the presentation of their products.

450 General
Merchandise Stores Industries in the General Merchandise Stores su bsector retail new general merchandise from fixed point-of-sale locations. Establishments in this subsector are unique in that they have the equipment and staff capable of retailing a large variety of goods from a single location. This includes a variety of display equipment and staff trained to provide information on many lines of products.

2.3.2 Potential Compliance Ac tivities (Article Importers)

Given the existing regulatory limitations on certain ch emicals both internationally and within the U.S., certain regulated industries have be gun to develop industry-wide processes and other resources to support companies that are interested in understanding and managing their supply chains. Because the rule would not prescribe the steps that an importer must take to identify a chemical subject to a SNUR in articles, there are a variety of specific actions that a compan y could take to identify specific substances in its articles. Importers are expected to take actions that are commensurate with the level of risk each company perceives, and the resources it has available.

There is currently no single widely accepted standard procedure to identify regulated chemicals in a supply chain; however, there are a number of organiza tions that help provide information on the content of articles, organize declarations from suppliers, or certify suppliers based on materials or processes used. Importers (or processors) subject to SNURs may refer to these sources for assistance in their own strategy to identify a chemical subject to a SNUR in articles.

ASTM International, formerly known as the Americ an Society for Testing and Materials (ASTM), has developed a Standard Guide for Assessment of Material s and Products for Declarable Substances (“ASTM F2577”) which provides guidance for the d ecision process to assess materials and products for*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

20 declarable substances. Based on ASTM F2577, the following list includes activities that an importer could perform to identify any restricted chemicals in imported articles. This list is intended to capture the general types of activities that might be performed.

1) Understand applicable requirements (Per Firm Cost). The importer would need to read and understand the SNUR, within the context of the co mpany’s products. This burden is as derived in Section 2.2.1 of this report.

2) Identify the type of imported articles that potentially contain the restricted substances (Per Firm Cost). This determination may be done based on an understanding of the uses of the restricted substance and the application of any a priori knowledge of the material and its manufacture to assess the probability that each regulated substance may be present.

3) Identify all suppliers involved (Per Firm Cost). The importer may choose to identify all suppliers from whom the articles identified in th e previous step are imported, and as necessary, make aware of the importer’s potential notice obligations respecting the regulated chemical

substances.

4) Collect data from suppliers (Per Article Cost). Importers may choose to obtain verification from suppliers identified in step 3 that the regulated chemical substance is not found in the article. This may be accomplished through, for example, agreements with supplie rs, declarations through databases or surveys, or by using a third-party certification system.

5) Chemical testing (Per Article Cost). Importers may perform their own laboratory testing of certain articles (or components of articles) to determ ine if they contain the restricted substance.

6) Recordkeeping (Per Firm Cost). The importer may choose to keep records confirming the activities completed.

Table 12 contains the cost ranges associated with th e above activities. The activities and cost derivations

are discussed in more detail in Understanding the Costs Associated with Eliminating Exemptions for
Articles in SNURs (EPA, Not Yet Published).*** EO12866/13563 Review Draft –Do Not Cite,Quote, or Release During the Review ***21Table 12: Range ofCostsAssociated with an Importer’s Identification of Chemicals SubjectActivityCost (2012$)NotesPer Rule CostsRule familiarization $55Discussed in SectionError! Reference source not found.of this documentIdentify the type of importedarticles that potentially containthe restricted substances$130 to $1,550Actual costs may vary based on number of articles imported and the complexityof the article itself (number of components)Identify all suppliers involved $950Actual costs may vary depending on the number of articles imported, numberof suppliers, and frequency of supplier changesRecordkeeping$10Actual costs may vary depending on recordkeeping system already in place.This cost would particularly be associated with companies that have noprevious experience complying with chemical restriction rules; companies thatalready have methods in place to identify chemicals in articles likely alreadyhave recordkeeping systems in placePer Article-Related CostsCollect data from suppliers$5 to $515 perarticle reviewed.$0 if no datacollected.Actual costs only apply to those companies that choose to collect data fromsuppliers. They will vary depending on the specific data collection methodchosen. Total costs depend on considerations including the number of articlesimported, number of suppliers, and frequency of supplier changes.Chemical testing$130 per articletested. $0 if notesting.Actual costs only apply to those companies that choose to collect data fromsuppliers. They will vary depending on the specific chemical being tested for;the complexity of the article and sample preparation required; and the exactfees of the laboratory chosen for the analysis. Total costs per company willdepend on considerations including the number of articles tested, which may beaffected by the number of suppliersand risk associated with each, andfrequency of supplier changes.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

22 Variation in costs associated with these activities would depend on a company’s level of activity to comply with other regulations on chemicals in article s, the complexity of the supply chains; and the size of the company. Total costs per importer will furthe r depend on the number of affected articles and the frequency of supplier change. Rest rictions on TDI currently do not exist under the European Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations. However, the European Commission Regulation limits TDI to 1 mg/kg in plastic products intended to come into contact with food (European Commission, 2011). Furtherm ore, TDI is prohibited in cosmetic products in Canada, New Zealand, and the European Union (A ustralian Government, 2013) . Tolune diisocyanates unspecified isomers (CAS 26471-62-5) is placed on the California Proposition 65 list of chemicals known to cause cancer, birth defects, or other reproductiv e harm, and has a maximum allowable dose level of 20μg/day (OEHHA, 2013).

Firms that have previously selected suppliers that ha ve agreed to uphold certain standards, or who have otherwise sufficiently demonstrated that they ar e not supplying TDI-based chemicals, would not likely incur any additional costs associated with these activities. Essentially, the product’s certification would allow importers or processors of articles to learn whether an article does or does not contain TDI or whether suppliers have agreed to uphold certain pr oduction standards. There are labeling systems for products in which independent entities ensure that the production of products does not utilize specific chemicals. For example, the European Union has de veloped a voluntary labeling system, called the EU Ecolabel. Producers, importers and retailers can vol untarily apply for the EU Ecolabel (EC, 2013). Labeled products signal to consum ers that the product in question has a reduced environmental impact throughout the product’s life cycle, such as the manufacturing stage and/or during the final product disposal. The criteria are specifically designed to fo cus on the stage of the lif e cycle where a product has the most environmental impact (EC, 2013).

Firms with less experience with other regulations that are planning to import articles that could potentially contain TDI-based chemicals may incur a larger burden should they choose to conduct some or all of the activities listed above to ensure compliance. These firm s may choose to reach out to a wide variety of upstream firms including to gather information on the ch emical content of articles, for example, through MSDSs or other documentation. Firms may also choose to conduct additional research on their suppliers to ensure that they are purchasing from reputable ma nufacturers and chemical suppliers who will provide necessary technical support, as well as regulatory st andards (AFIRM, 2011). Furthermore, a company could choose to have articles tested. If a company ch ooses to conduct testing they may also need to conduct additional research to ensure the laboratory is accredited, reliable and follows Good Laboratory Practices (GLP) (AFIRM, 2011). For those compan ies choosing to undertake actions to assess the composition of the articles they import, EPA expects that in all likelihood, these importers would take
actions that are commensurate with the level of risk (of a chemical to be a part of an article) each company perceives, and the resources it has available.

2.3.3 Potential Compliance Activi ties (Processors of Articles)

Under § 40 CFR 721.5(a)(2), manufacturers, importers, or processors of subject chemical substances who distribute the substance in commerce must notify the r ecipient, in writing, of the applicability of SNUR requirements, or document that the recipient has su ch knowledge or will not undertake any significant new use described in the rule. Therefore, the article processor, as the recipient of any subject chemical substance, should receive written notification from th e supplier, and would keep this documentation as part of their standard business practice.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

23 Should a processor need to demonstrate compliance with the SNUR, it is expected that processors would use notification from the supplier or other shipping or labeling documents (such as Material Safety Data Sheets (MSDS), etc.) received with the article in the ordinary course of business.

To the extent that processors desi re extra certainty that the articl es they process are not subject to a SNUR, they may undertake the steps to identify re gulated chemicals outlined above for importers.



### 2.4 Summary of Per Submission Costs, by Option

The number of firms affected by not making submissions to EPA is not known; therefore, costs are not aggregated across the affected en tities. The following table summarizes the costs to comply with the proposed rule amendment, as described in more detail in section 2.2 above.

Table 13: Compliance Options and Associated Cost s Incurred by a Firm Due to the Proposed
SNUR Option 1 Costs Quantified Costs per Chemical (2012$) 2

1. Electronic submission of a Significant New Use Notice (SNUN), indicating to EPA that
the firm would like to manufacture, import, or process the
chemical for a Significant New Use

as defined in the

SNUR. Costs of submitting a SNUN, including rule familiarization, CDX registration (for companies that are first-time submitters), form completion, user fee, export notification, and any test costs, Rarely, a firm may choose to conduct toxicity or fate testing to support the SNUN, but such testing is not required by law. 3 $54.84 rule familiarization cost; $8,589 submission cost (including SNUN recordkeeping and fee $2,500 for large businesses). EPA usually receives well under ten SNUNs per year. Export notifications costs are estimated at $84.22 per notification; total cost per company will vary. First time submitters would incur $191.91 for CDX registration and associated activities. Companies manufacturing, importing, or processing a chemical curr ently used in commerce in the United States will incur a cost $64.38 for notifying consumers of SNUR regulatory activities

.

2. Manufacture, import, or process in a way
that avoids a Significant New Use. Cost of the profit foregone as a result of not engaging in the commercial activity originally planned (opportunity costs), recordkeeping, and export
notification costs. Opportunity costs are not quantified Other costs include rule familiarization ($54.84), recordkeeping ($9.66), export notification costs ($84.22 per notification), and customer notification ($64.38) may appl y. Costs associated with article importation may include activities such as article identification ($130 to $1,550), supplier identification ($950) recordkeeping ($10), collecting data from suppliers ($5 to $515 per article), and te sting ($130 per article tested).

Notes:

1 Firms may be subject to both op tions at once, since subm ission of a SNUN results in profits fo regone as a result of not manufa cturing, importing, or processing the chemical.

2 Quantified costs are attributable to the SNUR only if a firm would not otherwise follow the sp ecified practices. Costs are deta iled in
Section 2.2.

3 EPA does not require the development of test data for submission of a SNUN, although a firm may submit test data already in its possession and/or describe any other availabl e data. Because EPA does not require the de velopment of test data, EPA assumes tha t no firms will incur testing costs as a result of the proposed SNUR.



### 2.5 Likelihood of SNUN Submission

This analysis assumes that very few entities are e xpected to submit a SNUN. EPA has, over the years, promulgated SNURs that cover a total of more than 1,000 chemicals. In res ponse, the Agency receives only a handful of SNUNs per year. For example, th e number of SNUNs received was four in Federal*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

24 fiscal year (FY) 2005, eight in FY2006, six in FY 2007, eight in FY2008, seven in FY2009, two in FY2010, and ten in FY2011 12

.



### 2.6 Potential for Subsequent Regulatory Actions

The Agency recognizes that if submission of a SNUN does result from a SNUR, the Agency may take additional regulatory actions under TSCA. These a dditional regulatory actions might be necessary to
further evaluate an intended new use and associated activ ities, or to prohibit or li mit that activity before it occurs to prevent unreasonable risk of injury to human health or the environment. It is not known what specific subsequent regulatory actions , if any, the Agency may determine are necessary after reviewing a SNUN. Any such actions are highly dependent on the circumstances surroundi ng the individual SNUN (e.g., available information and sci entific understanding about the chemical and its risks at the time the SNUN is being reviewed).

Should the Agency’s review of the SNUN result in furt her regulatory actions, the Agency will initiate and follow the appropriate procedures for taking those ac tions. Included in those procedures would be an

assessment of the costs and benefits of those actions.

12 In-person count of SNUNs conducted by Kimberly Wilson of Abt Associates Inc, on April 8, 2010 at EPA’s Confidential Information Business Center (CBIC) and updated values for FY2010 and FY2011 provided by Lynn Blake-Hedges of US EPA on September 1, 2011.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

25 

## 3 Agency Costs

As described in the following sections, EPA’s co sts to review and process SNUN submissions are
assumed to be the same as EPA costs to review PMNs.



### 3.1 Labor Rates for EPA Staff

Agency labor costs are calculated based on annua l Federal salaries for the Washington-Baltimore area published by the Office of Personnel Management effective January 2012 (OPM, 2012). EPA assumes that, on average, a federal GS-13, Step 5 full-tim e equivalent (FTE) will conduct its collection and administrative activities under the proposed rule. 13 The average salary for a GS-13 Step 5 employee was $100,904 in 2012 without fringe benefits and overhead co sts. In order to derive the fully loaded salary, EPA multiplied the annual salary by an assumed loading f actor of 1.6 to reflect federal fringe benefits and overhead, which results in a fully loaded annual salary of $161,446.40 (see Table 14: Derivation of Loaded Agency Wage Rates). Dividing the fully loaded annual salary by 2,080 hours (i.e., the number of hours in a work year) yields an hourly FTE wage rate of $77.62.

The Agency loading factor of 1.6 is from an EPA guide entitled Instructions for Preparing Information Collection Requests (ICRs) (EPA, 1992, page 30, footnote 9). The 60 percent assumption was labeled “the benefits multiplication factor” in the EPA guide , but has been used in many EPA OPPT ICRs to reflect both fringe benefits and overhead for federa l staff. For example, it was used in a document supporting EPA ICR No. 1139.06 (EPA, 2000), with the following explanation:

The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication factor used is recommended in EPA’s Office of Policy, Planning, and Evaluation’s Instructions for Preparing Information Collection Requests (ICRs) (June 1, 1992). An EPA internal phone call between Carol Rawie (OPPT/EETD/RIB) and Carl Koch (OPPE/RMD/IMB) on May 3, 1994, indicated that the 1.6 factor included not only benefits
but also overhead.

Fully loaded costs for Agency labor are shown in Table 14.

13 The GS-13 Step 5 is consistent with ICR No. 0574.14 (12/18 /2007) (EPA, 2007a), which covers PMN SNURs. Use of this grade level follows the approach introduc ed in EPA, 2007b. That report represente d a change from an earlier PMN SNUR economic analysis (EPA, 2003), which used an averag e of GS-12 Step 1 and GS-12 Step 10 salaries.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

26 Table 14: Derivation of Loaded Agency Wage Rates

Labor Category Data Source for Wage
Information Date Wage Frin g e Benefit Fringes

as %

wage Overhead

as %

wage Fringe +

overhead

factor Loaded Wages

(a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)=(a)*(e)

EPA staff

FTE Annual Federal staff cost:OPM WashingtonBaltimore-NorthernVirginia, DC-MD-PA-VAWV, area, GS-13 Step 5

pay rates, with 60%
overheads a

. Jan 1,

2012 $100,904.00 (annual)

-- [Included
in 60% overhead] 60% b 1.60 $161,446.40 (annual)

$48.51 (hourly) $77.62 (hourly)

Notes :

a The Agency salary is the unloaded federal GS-13 Step 5 salary ($100,904 for 2012),from th e OPM salary table for the Washington-Baltimore-Northern Virginia Lo cality Pay Area (OPM, 2012). Hourly rates are based on a nnual salary divided by 2,080 hours.

b The 60% fringes-and-overhead rate is fro m an EPA guide, Instructions for Prepari ng Information Collect ion Requests (ICRs) (EPA, 1992, page 30, footnote 9).



### 3.2 SNUN Processing Costs

The list of review steps, estimates of extramural costs, and the percent of chemicals requiring a particular review step are derived from the costs for processing PMN submissions in Table VII-1 of a 1994 EPA report, Regulatory Impact Analysis of Amendments to Regulations for TSCA Section 5 Premanufacture Notifications (EPA, 1994). The Agency burden associat ed with processing a PMN has been adjusted to reflect burden reductions resulting from the 2009 fi nal PMN Electronic Reporting (ePMN) Rule that requires the electronic submission of all TSCA section 5 notices. Electronic submission of SNUN forms is expected reduce Agency burden by 16.5 percent (EPA, 2009b, p.28).

For each review step, the “EPA staff” cost is calcu lated by multiplying the number of FTEs (in the first column) by the fully loaded hourly salary. This s hows EPA staff cost for chemicals requiring the selected review step.

The Extramural Cost column shows costs for contractor support and other outside purchases for chemicals requiring the selected review step, and is inflated from 1993 prices using the Bureau of Labor Statistics (BLS) Employment Cost Index (ECI) data (BLS, 2013b). The not seasonally adjusted ECI for total compensation of private industry professional and related workers (Series ID CIU2010000120000I) is used because it is the only series with continuous data since 1985, and that includes professional and technical labor, which perform the major ity of Agency extramural activities.

Table 15 contains the derivation of inflation f actors for Agency extramural costs.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

27 Table 15: Derivation of Inflation Fa ctors for Agency Extramural Costs

Item Inflation Index Source 1 Starting

year Index for starting

year

(a) Index
for
2012

(b) Inflation
factor (b)/(a) 2

Agency Extramural costs White collar labor; equipment; supplies BLS ECI, Total comp, Private industry, Professional and related , 4 th Q [BLS , 2013b] 3 1993 67.0 118.2 1.76

Notes:

1 In 2006, Bureau of Labor Statistics (BLS) Employment Cost Index (ECI) series “were rebased to December 2005 = 100 from June 1989 = 100.” The change is reflected in the indices in this table and explaine d on the BLS website, Employment Cost Index News Release Text: Employment Cost Index, March 2006 (BLS, 2006b). The Consumer Price Index (CPI) was not rebased.

2 Inflation factors are rounded to three decimal places in this ta ble, but calculations in this report use the unrounded values.

3 Beginning with the report Economic Analysis of Expedited Significant New Use Rules for 25 Chemical Substances: EPA Docket OPPT-2009-0922 (EPA 2010), we began to use the not -seasonally adjusted CIU2010000120000I for private industry Professional, and Related workers, in stead of SA CIS2010000W00000I for private industry white collar workers because BLS
retired the “white-collar” series.
Source: (BLS 2013b) Bureau of Labor St atistics. Employment Cost Index – Total Co mpensation: Professional and Related Private Industry, Not Seasonally Adjusted. (Series ID: CIU2010000120000I (B)), extracted April 2013. (BLS, 2013b).

The Percent of Cases column in Table 16 is a weighti ng factor applied to reflect the fact that not all chemicals require each review step. For exampl e, in the PMN process, all chemicals require Administrative Prescreening, but not all chemicals requ ire the intensive scrutiny of “Standard Review.” The three types of submissions resulting from a SNUR may have weighting factors that differ from each other and from the weighting factors for PMNs. Cha nges in weighting factors could cause actual review costs to be higher or lower than calculated here. For example, some SNUNs require little review because they are determined to be “invalid” – i.e. not require d in the first place. However, often a SNUN may take more Agency time than a typical PMN because of fact ors such as the need to retrieve old PMN records from archives, and the likelihood that more data re quiring EPA review is submitted with a SNUN than would be submitted on average with a PMN. Resources were not available to update the review hours to reflect the current review process or to tailor the cost estimates to SNUNs. Therefore, for this analysis, the review steps and weighting factors are assumed to be the same as those derived in 1994 for PMNs.

The Weighted Cost column is calculated by multiply ing the un-weighted Costs (EPA staff cost plus extramural costs) by the percentage of cases requiring this review step. Weighted costs are then multiplied by the burden reduction of 16.5 percent to account fo r burden savings generated by electronic submission. This calculation yields total Agency costs of $5,0 86, per SNUN, for submission review and processing, as
shown in Table 16.*** EO12866/13563 Review Draft –Do Not Cite,Quote, or Release During the Review ***28Table 16: Agency Costs for SNUN and Other Submission Review and ProcessingReview StepsEPA staff (FTE) CostExtramuralCost2UnweightedCostPct.ofCasesWeightedCost3ePMNBurdenReduction4Weighted Costwith ePMNBurdenReductionFTEfractionCost perFTE1FTE Total($2012)1993dollars2012dollars(a)(b)(c)=(a)*(b)(d)(e)(f)=(c)+(e)(g)(h)=(f)*(g)(i)(j)=(h)*(1-(i))Pre-notice consultation 0.0024 $161,446 $387.47 $4.00 $7.06 $395 41% $161.76 0.165 $135Administrative prescreen/notice receipt/user fee0.0024 $161,446 $387.47 $92.00 $162.30 $550 100% $549.78 0.165 $459CRSS (Chemical Reviewand Search Strategy)0.0025 $161,446 $403.62 $268.00 $472.80 $876 100% $876.42 0.165 $732SAT (Structure ActivityTeam)0.0006 $161,446 $96.87 $14.00 $24.70 $122 100% $121.57 0.165 $102Engineering/Exposure 0.0015 $161,446 $242.17 $56.00 $98.79 $341 100% $340.96 0.165 $285Exposure/Fate 0.0008 $161,446 $129.16 $0.00 $0.00 $129 100% $129.16 0.165 $108Focus 0.0009 $161,446 $145.30 $23.00 $40.58 $186 100% $185.88 0.165 $155Standard Review Functions 0.0219 $161,446 $3,535.68 $511.00 $901.50 $4,437 29% $1,286.78 0.165 $1,074Division Directors Meeting 0.0129 $161,446 $2,082.66 $113.00 $199.35 $2,282 15% $342.30 0.165 $286OrderDevelopment/NegotiationReview0.0171 $161,446 $2,760.73 $22.00 $38.81 $2,800 3% $83.99 0.165 $70Post Order Data Review 0.0886 $161,446 $14,304. $0.00 $0.00 $14,304 3% $429.12 0.165 $358Order Modification 0.2167 $161,446 $34,985.43 $0.00 $0.00 $34,985 3% $1,049.56 0.165 $876New Chemical SNURDevelopment0.0277 $161,446 $4,472.07 $85.00 $149.96 $4,622 7% $323.54 0.165 $270Notices of Commencement 0.0012 $161,446 $193.74 $40.00 $70.57 $264 31% $81.93 0.165 $68FOIA (Freedom ofInformation Act) Requests0.0333 $161,446 $5,376.17 $287.00 $506.32 $5,882 1% $58.62 0.165 $49CBI (Confidential BusinessInformation) Substantiation0.0004 $161,446 $64.58 $3.00 $5.29 $70 100% $69.87 0.165 $58TOTAL$6,091$5,086Notes:1GS-13 Step 5 salaries loaded with benefits and overhead. See Table 14 for derivation.2Extramural costs consist of contracting support and other purchases directly attributable to the PMN review process inflated from 1993 prices using Table 15.*** EO12866/13563 Review Draft –Do Not Cite,Quote, or Release During the Review ***293Weighted costs were calculated using unrounded unit cost estimates, so results may differ from calculations using the rounded values shown in this table.4Electronic submission is expected to generate a cost savings of 16.5% to the Agency (EPA 2009a, p. 28).Sources:FTEs per review step, 1993 extramural costs, and percents of cases are from EPA, 1994 Table VII-1, GS-13 salaries are from OPM,2012.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

30 

### 3.3 Export Notification Cost

Under TSCA Section 12(b), exporters must notify EPA if they intend to export chemicals subject to SNURs, as described in Section 2.2.8. The Ag ency burden and cost due to TSCA §12(b) export

notification result from three tasks. In the first t ask, EPA receives export notifications from companies that intend to export one of the chemicals subject to TSCA §12(b) (EPA, 2009b). In the second task, EPA staff prepares separate notification letters that are subsequently reviewed and delivered to importing countries, their embassies, or representatives, and to the importing country’s US embassies (EPA, 2009b). (See Table 9: Derivation of Total Mailing Cost for 12 Notices for the cost of mailing one notification). The third task is comprised of EPA staff responses to public inquiries and other TSCA 12(b) activities. The work of responding to non-routine requests fo r information and clarification from industry and importing countries, and of handling other tasks associated with the TSCA §12(b) program, was estimated to require roughly 400 hours per year (EPA , 2009b). Since the current rulemaking covers only a very small percent of the chemicals subject to TSCA 12( b) reporting, a very small percent of such activity will be attributable to the current rulemaking.

Because it is unknown how many, if an y, notifications EPA will receive or send as a result of the current rulemaking, the costs to the Agency are presented per activity. The burden for the first two Agency activities is provided in Table 17. To estimate the Agency cost, hourly burd ens are multiplied by the loaded wage rate of a GS-13, Step 5, which is derived in Table 15.

Table 17: TSCA 12(b) Export Notification Co st: Agency Burden per Activity (2012$)

Agency Activity Hours per Activity FTE per Activity 1 Loaded Mailing
Cost Total Agency Cost per Activity GS-13, Step 5 FTE Wage Rate

(a) (b) = (a)/2,080 (c) (d) (e) = ((b)*(c))+(d)

Process an incoming

notification from an exporting company 0.1 0.000048 $161,446 $0.00 $7.76

Prepare and mail a

notification to an importing country 0.5 0.00024 $161,446 $13.75 $52.56

Notes:

1 The burden associated with an Agency activi ty is the burden for the Agency to process one incoming notification, or to prepare and mail an outgoing notification
Source: Appendix A of this report derives Agency labor costs. Ma iling costs are from Table 9: Derivation of Total Mailing Cost for 12 Notices of this report. Other burdens are from ICR No.: 0795.13 [Information Collect ion Request for] Notification of Chemical Exports - TSCA Section 12(b) Supporting Statement for Request for OMB R eview under the Paperwork Reduction Act (EPA 2009b), updated for inflation.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

31 

## 4 Benefits

A SNUN submission provides EPA with the opportunity to evaluate the intended use and, if necessary, to prohibit or limit that activity before it occurs. It allo ws the Agency to take imme diate action to mitigate an activity that the Agency deems harmful to the environment or human health.

Diisocyanates are well known dermal and inhala tion sensitizers in the workplace and have been documented to cause asthma, lung damage, and in sev ere cases, fatal reactions (U.S. EPA, 2011). The International Agency for Research on Cancer (IARC ) classified toluene diisocyanate as “possibly carcinogenic to humans” (Carcinogenicity Group 2B) (IARC 1986; IARC 1999). TDI has also been classified by the European Commission (EC) as Ca tegory 3 for carcinogenicity (“causes concerns for humans owing to possible carcinogenic effects”) (European Commission 1997, 2004; ESIS v.4.50 2006); and by the United States National Toxicology Program (NTP) as “reasonably anticipated to be a human carcinogen” (NTP 2005).

There has been an increase in consumer availability of, or exposure to, polyuret hane products intended to further react and undergo “curing” in the marketplac e (EPA, 2011). Use of TDI beyond the confines of a controlled production facility could result in exposures to consumers through application or use of the product and the general public (EPA, 2011). Unlike workers who are protected by workplace regulations and, in most cases, have access to hazard informati on and receive training for working with TDI, most consumers are unaware of the potential hazards of products containing TDI or other diisocyanates. Consequently, insufficient and inadequate hazard co mmunication may lead to incorrect use and increased consumer and bystander exposures, particular ly for sensitive groups, such as children.

The proposed SNUR allows EPA to address the potentia l health effects that may result from exposures to the consumer while applying and/ or using consumer products cont aining uncured TDI and related compounds (e.g., spray-applied sealants and coatings), by allowing the Agency to evaluate the use of, or exposure to, these chemicals, and to take preventive action to limit or prohibit any Significant New Use. The proposed rule also addresses the potential for in cidental exposures to the general population while such products containing uncured TDI and related compounds are applied and/or used in or around buildings, including homes or schools. EPA also expects that the proposed rule may restrict future uses or exposure to the chemicals, as a company may choose to modify planned uses, a nd general population or consumer exposures to the chemical in such a way that does not trigger a SNUR, as opposed to submitting a SNUN. Therefore, the proposed SNUR may limit future exposure to the chemicals.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

32 

## 5 Additional Analyses

5.1 Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et. seq.), as amended by the Small Business Regulatory Enforcement Fairness Act, requires regulator s to consider the impact of regulations on small entities, in particular small businesses. The requi rement to submit a SNUN applies to any person (including small or large entities) who intends to engage in any activity described in the rule as a significant new use. Where a use is new, by definiti on no small or large entities presently engage in such activities. Although some small entities may decide to manufacture or process a substance for the new use after the SNUR is promulgated, EPA receives very few SNUNs, and few of those are submitted by small entities. In response to the promulgation of SNURs c overing over 1,000 chemical substances, the Agency receives only a handful of SNUNs per year. For example, the number of SNUNs was four in Federal fiscal year 2005, eight in FY2006, six in FY2007, ei ght in FY2008, seven in FY2009, two in 2010, and ten in 2011 (EPA, 2012), for an average of 6 per year from all SNURs. EPA has no reason to believe that this SNUR would alter the pattern of SNUN submissions that EPA has historically seen. In addition, the estimated reporting cost for submission of a SNUN is minimal regardless of the size of the firm, averaging about $8,500 including SNUN recordkeeping and reporting costs. The Agency currently offers some relief to certain small businesses with sales (includi ng those of subsidiary/parent companies) of less than $40 million per year by reducing the SNUN submission fee from $2,500 to $100. This lower fee reduces the cost of submitting a SNUN to about $6,100 for smaller firms. During the six-year period from 2005-2010, only three submitters self-identified as small in their SNUN submission (EPA, 2012). 14 EPA believes that there will be minimal impact to processo rs and importers of the chemical substance subject to the final SNUR as part of an article. The SNUR does not require processors and importers of articles that contain the chemicals subject to the final SNUR to conduct specific activities to ascertain if they are importing or processing an article that uses a chemi cal subject to the rule. Therefore processors and importers are expected to take actions that are commensurate with the level of risk each company perceives, and the resources it has available. EPA has no reason to believe that a firm would voluntarily incur substantial costs to comply with the SNUR, but rather EPA believes each firm will choose the most efficient route to identify whether it is importing or pr ocessing the subject chemical substances in articles.

This leaves open the question of how many small businesses are affected but do not submit SNUNs. For example, businesses may change their behavior in or der to use a chemical in a manner that avoids triggering Significant New Use notification require ments, and make no submission to EPA. Data and
resources were not available to estimate the number of such small businesses affected by the current rule. Based on past considerations and on the limited data available, EPA expects that any compliance with a SNUR will not have a significant economic impa ct on a substantial number of small entities.

Small businesses may be affected by this proposed SNUR without EPA being aware; for example, if the
firms have made no submissions or comments to EPA. However, even if a small business were interested in supplying a SNUR chemical, the SNUR’s impact on profits is generally expected to be minor. For example, the firm may have a small expense of keep ing records (approximately $9.26) and/or of changing workplace practices to comply with any new restrict ions. If modifying practices would be overly costly,

14 The three “small” submitters were id entified by review of actual SNUN submissions from the years 2005-2010.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

33 the small business may instead forego production, thus sacr ificing profits. The lost profits, if any, were not quantified for this report.



### 5.2 Unfunded Mandates Reform Act (UMRA)

The proposed rule does not impose any enforceable duty, contain any unfunded mandate, or otherwise have any effect on small governments because none of the current producers of the subject chemicals are governments. Additionally, it is not expected that any governments will initiate production of these

chemicals.



### 5.3 Paperwork Reduction Act (PRA)

According to the Paperwork Reduction Act (PRA), 44 U. S.C. 3501 et seq., an Agency may not conduct or sponsor, and a person is not requi red to respond to a collection of information that requires OMB approval under the PRA, unless it has been approve d by OMB and displays a currently valid OMB
control number. The OMB control numbers for EPA’s re gulations in title 40 of the CFR, after appearing

in the Federal Register , are listed in 40 CFR, part 9, and include d on the related collection instrument, or form, if applicable. The information collection requi rements related to this action have already been approved by OMB pursuant to the PRA under OMB control number 2070-0038 (EPA ICR No. 1188).

This action does not impose any burden requiring additi onal OMB approval. If an entity were to submit a SNUN to the Agency, the annual burd en is estimated to average 97.66 hours per response: 0.82 hours for rule familiarization (Section 2.2.1), 2.80 hours fo r CDX registration, CDX electronic signature, and pay.gov account setup (Section 2.2.2), 91.68 hours for form completion, submission and recordkeeping (Sections 2.2.3), 1 hour for consumer notifications (Section 2.2.6) and 1.36 hours for export notification (Section 2.2.8).



### 5.4 Executive Order 13132, Federalism

Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999) , requires EPA to develop an accountable process to ensure “meaningful and timel y input by State and local officials in the development of regulatory policies that have federa lism implications.” Policies that have federalism implications are defined in the Executive Order to incl ude regulations that have “substantial direct effects on the States, on the relationship between the national gove rnment and the States, or on the distribution of power and responsibilities among the va rious levels of government” (64 FR 43255, August 10, 1999).

The proposed rule establishes reporting and recordk eeping requirements that apply to manufacturers (including importers) and processors of certain chem icals. EPA has no information to indicate that any state or local government manufactures or processes th e chemical substances covered by this action.



### 5.5 Executive Order 12898, Environmental Justice

Executive Order 12898, “Federal Actions to Address E nvironmental Justice in Minority Populations and Low Income Populations” (59 FR 7629, February 16, 1994), establishes federal executive policy on environmental justice. Its main provision directs fede ral agencies, to the greatest extent practicable and permitted by law, to make environmental justice pa rt of their mission by identifying and addressing, as*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

34 appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations a nd low-income populations in the United States.

The information collected under this proposed rule, if finalized, will assist EPA and others in determining the potential hazards and risks associated with va rious chemicals manufactured and used at high production volumes. Although not directly impacting environmental justice-re lated concerns, this information will enable the Agency to better protect human health and the environment, including in lowincome and minority communities.



### 5.6 Executive Order 13045, Protection of Children

Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), requires EPA to identify and assess environmental health and safety risks that may disproportionately affect childre n. This type of analysis is required for rules that will have an impact of $100 million or more only. The impact of this SNUR will be less than $100 million and therefore no analysis of such impacts on children is required.



### 5.7 Executive Order 13175, Tribal Governments

Executive Order 13175 is Consultation and Coordination wi th Indian Tribal Governments (59 FR 22951, November 6, 2000). This rule does not have Tribal implications because EPA has no information to indicate that any tribal governmen t manufactures or processes the chemical substances covered by this action.



### 5.8 Executive Order 13211, Energy Supply, Distribution, or Use

This rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), because this action is not expected to affect energy supply, distribution, or use.



### 5.9 Executive Order 13563, Improving Regul ation and Regulat ory Review

Executive Order 13563, Improving Regulation and Regulatory Review (76 FR 3821, January 21, 2011), requires EPA to base regulations on the best availabl e science, allow for public participation and the open exchange of ideas, promote predictability and re duce uncertainty, identify and use the best, most innovative, and least burdensome tools for achieving regul atory ends, consider both the costs and benefits qualitatively and quantitatively and ensure regulations are accessibl e, consistent, written in plain language, and easy to understand.

The proposed rule establishes reporting and recordk eeping requirements that apply to manufacturers (including importers) and processors of certain chemicals. Consiste nt with EO 13563, this document qualitatively and quantita tively describes both the costs and benef its of the proposed rule as well as the underlying data used in the analyses. EPA chose the b est available data to analyze the costs and benefits described in this document and the best analytic appr oaches given the available data and other constraints.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

35*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

36 

## 6 References

40 CFR 721 Toxic Substances Control Act, Significant New Uses for Chemical Substances Code of Federal Regulations . Part 721 Title 40, July 27, 19 88, as amended, June 23, 1993.

AFIRM, 2011. Apparel and Footwear International RSL Management. AFIRM Supplier Toolkit.
Available at: http://www.afirm-group.com/AFIRMSupplierToolkitFinalJune6.pdf.

Australian Government (2013). Inventory multi-tie red assessment and prioritization (IMAP): Human Health Tier II Assessment for Toluene Diisocyana tes. Department of Health and Ageing, National
Industrial Chemicals Notification a nd Assessment Scheme. Last update d June 6, 2013. Accessed July 22, 2013. Available at http://www.nicnas.gov.au/chemical-information/imap-assessments/imapgroup-assessment-report?assessment_id=124

. Bello, D., Herrick, C. A., Smith, T. J., Woskie, S. R., St reicher, R. P., Cullen, M. R., Liu, Y., and Redlich, C. A. 2007. Skin Exposure to Isoc yanates: Reasons for Concern. Environ Health Perspect 115.

BLS, 2006a. U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation: Changes to NAICS and SOC, Table 2. ECEC Occupational Comparability between SOC and OCS. Downloaded February 2006 from http://www.bls.gov/ncs/ect/sp/ecsm0003.htm.

BLS, 2006b. U.S. Bureau of Labor Statistics, Employment Cost Index News Release Text: Employment Cost Index, March 2006 (April 28, 2006), at http://www.bls.gov.

BLS, 2006c. U.S. Bureau of Labor Statistics. Change has Come to the ECI (June 14, 2006) at http://www.bls.gov/ncs/ect/sp/ecsm0001.htm.

BLS, 2013a. U.S. Bureau of Labor Statistics. “Employer Costs for Employee Compensation Supplementary Tables December 2012

. ” Accessed March 18, 2012. Available at: http://www.bls.gov/ncs/ect/sp/ecsuptc25.pdf (Note: The BLS report title and content are updated periodically to include more recent data, on the same website.)

BLS, 2013b. Bureau of Labor Statistics. Employment Cost Index – Total Compensation: Professional and Related Private Industry, Not Seasonally Adjusted. (Series ID: CIU2010000120000I (B))

, extracted March 18, 2013. http:/data.bls.gov/cgi-bin/srgate

.

BLS, 2013c. U.S. Bureau of Labor Statistics. Consumer Price Index- All Urban Consumers, U.S. City Average (Series ID: CUUR0000SA0), extracted March 18, 2013. Available through http:/data.bls.gov/cgi-bin/srgate

Branch, 2006. Raphael E. Branch and Lowell Mason. U.S. Bureau of Labor Statistics, “Seasonal adjustment in the ECI and the conversion to NAICS and SOC.” Monthly Labor Review . Vol. 129, No. 4, April 2006. Available at www.bls.gov.

Caroll, 2006. Richard E. Caroll. U.S. Bureau of La bor Statistics, “Changes affecting the Employment
Cost Index: an overview.” Monthly Labor Review . Vol. 129, No. 4, April 2006. Available at www.bls.gov .

EPA, 1992. U.S. EPA, Office of Policy, Planning, and Evaluation. Instructions for Preparing Information Collection Requests (ICRs). Washington, DC, June 1, 1992.

EPA, 1994. U. S. EPA, Office of Toxic Substances, Regulatory Impacts Branch. Regulatory Impact Analysis of Amendments to Regulations for TSCA Section 5 Premanufacture Notifications. Washington, DC, September 9, 1994. (OTS/RIB later became OPPT/EPAB.)

EPA, 2000. U.S. EPA, Office of Pollution Prevention and Tox ics, ICR No. 1139.06. OMB Control No.: 2070-0033 [Information Collection Request for] TS CA Existing Chemical Test Rules, Consent*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

37 Orders, Test Rule Exemptions, and Voluntary Test Data Submissions: Supporting Statement for Request for OMB Review under the Paperwork Reduction Act . Attachment 5, Wage Rates Estimation, August 29, 2000.

EPA, 2002a. U.S. EPA, Office of Poll ution Prevention and Toxics, Econo mic and Policy Analysis Branch. Revised Economic Analysis for the Amended Inventory Update Rule: Final Report. Washington, DC. August 2002.

EPA, 2002b. U.S. EPA, Office of Pollution Prevention and Toxics, Ec onomic and Policy Analysis Branch, Wage Rates for Economic Analysis of th e Toxics Release Inventory Program. Washington, DC: June 10, 2002.

EPA, 2003. U.S. EPA, Office of Pollution Prevention and Toxics, Economic and Policy Analysis Branch. Economic Analysis of Expedited Significant New Use Rules for 65 Chemical Substances. Washington, DC, 2003. Available from the Federal Docket Management System as EPA-HQ-OPPTS-2002-0078 at http://www.regulations.gov.

EPA, 2005a. Office of Pollution Prevention and To xics, Economic and Policy Analysis Branch. Economic Analysis of the Proposed Change to TSCA Section 12(b) Export Notification Requirements, November 2005, available from the Federal Docket Mana gement System as EPA-HQ-OPPT-2005-005 8-0017 at http://www.regulations.gov.

EPA, 2005b. U.S. EPA, Office of Pollution Prevention and Toxics ICR No. 118.08. [Information Collection Request for] TSCA Section 5(a)(2) Significant New Use Rules for Existing Chemicals (Renewal). Supporting Statement for a Request fo r OMB Review under the Paperwork Reduction Act

, October 11, 2005.

EPA, 2007a. U.S. EPA, Office of Pollution Prevention and Toxics , EPA ICR No. 0574.14. OMB Control No.: 2070-0014 [Information Collection Request for] Pre-Manufacture Review Reporting and Exemption Requirements for New Chemical Substances and Significant New Use Reporting Requirements for Chemical Substances: Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act , December 6, 2007.

EPA, 2007b. U.S. EPA, Office of Pollution Prevention and Toxics, Economic and Policy Analysis Branch. Economic Analysis of Expedited Significant New U se Rules for 65 Chemical Substances (EPA Docket OPPT-2003-0063), December 4, 2006 (Revised March 12, 2007).

EPA, 2007c. U.S. EPA, Office of Poll ution Prevention and Toxics, Econo mic and Policy Analysis Branch. Economic Analysis of Expedited Significant New U se Rules for 38 Chemical Substances (EPA Docket

OPPT- 2006-0898 ), August 17, 2007.

EPA, 2009a. U.S. EPA, Office of Pollution Prevention and Toxics, Economic and Policy Analysis

Branch . Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule

. (EPA-HQ-OPPT-2008-0296). July 13, 2009.

EPA, 2009b. U.S. EPA, Office of Pollution Prevention and Toxics. EPA ICR No.: 0795.13 OMB Control Number 2070-0030 [Information Collection Request fo r] Notification of Chemical Exports - TSCA Section 12(b) Supporting Statement for Request for OMB Review under the Paperwork Reduction

Act . March 6, 2009 at http://www.regulations.gov.

EPA, 2009c, U.S. Environmental Protection Agency, Office of Pollution Prevention and Toxics. 2009. Section 13 Import Certification . Available at: http://www.epa.gov/opptintr/importexport/pubs/sec13.html. A ccessed March 30, 2010.

EPA, 2010. U.S. Environmental Protection Agency, Office of Pollution Prevention and Toxics. Economic Analysis of Expedited Significant New Use Rules for 25 Chemical Substances , (EPA Docket OPPT2009-0922).*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

38 EPA, 2011. U.S. Environmental Protection Agency. Toluene Diisocyanate (TDI) And Related Compounds Action Plan [RIN 2070-ZA14]. April 2011

EPA, 2012. U.S. Environmental Protection Agency “Count of SNUN Submissions as tracked in EPA’s
Confidential Business Information Tracki ng System (CBITS)”. February, 2012.

EPA. 2013. U.S. Environmental Protection Agency. 2012 Chemical Data Reporting Database. Available at: http://java.epa.gov/o ppt_chemical_search/.

EPA. Not Yet Published. U.S. EPA, Office of Pollution Prevention and Toxics. Understanding the Costs Associated with Eliminating Exemptions for Articles in SNURs

. European Chemical Substances Information System (ESIS) [database on the Internet], 2006. CAS No. 91- 08-7; 2-methyl-m-phenylene diisocyanate. CAS No . 584-84-9; 4- methyl-m-phenylene diisocyanate. CAS No. 26471-62-5; M-tolylidene diisocyanate. Ve rsion 4.50. European Chemical Bureau (ECB). Available from: http://ecb.jrc.it/esis.

European Commission, 1997. Summary Record - Toluene di-isocyanates. Commission Working Group on the Classification and Labelling of Dangerous Subs tances. Meeting at ECB Ispra, 15-21 October 1997. Report No.:ECBI/51/97 - Rev. 3.

European Commission, 2004. 2-methyl-m-phenylene diisocyanate. 4-methyl-m- phenylene diisocyanate. M-tolylidene diisocyanate. Commission Directive 2004/ 73/EC of April 29, 2004. Annex 1A. Official Journal of the European Union. 16.6.2004. L 216/49. European Commission. 29th ATP.

European Commission. 2011. Plastic materials and ar ticles intended to come into contact with food. Commission Regulation (EU) No 10/2011 of 14 January 2011. Official Journal of the European Union.

15.1.2011.

European Commission. 2013. “More about the EU Ecolabel.” Available at http://ec.europa.eu/environment/ ecolabel/the-ecolabel-scheme.html . Last updated March 25, 2013.

I 

### ARC.1986. International Agency for Research on Cancer . Monographs on the evaluation of the carcinogenic risk of chemicals to humans: some chemicals used in plastics and elastomers. IARC Monograph 39. Lyon, France: World Health Organization, International Agency for Research on Cancer, pp. 287-323.

IARC.1999. International Agency for Research on Cancer. Toluene Diisocyanates May 3, 2010. <http://monographs.iarc.fr/ENG/monographs/vol71/mono71-37.pdf>.

Krone, C. A. (2004). Diisocyanates a nd Nonoccupational Disease: A Review. Archives of Environmental

Health 59, 306-316.

Krone, C., and Klinger, T. (2005). Isocyanates, polyurethane and childhood asthma. Pediatric Allergy and Immunology 16, 378-379.

NTP, 2005. National Toxicology Program. Report on Carc inogens, Eleventh Edition; U.S. Department of Health and Human Services, Pub lic Health Service. Substance Profile, Toluene Diisocyanates. http://ntp.niesh.nih.gov/ntp/roc/eleventh/profiles/s177tdi.pdf

. OEHHA, 2013. State of California Office of Environmental Health Hazard Assessment. Current Proposition 65 List. July 26, 2013. Available at http://oehha.ca.gov/prop65/prop65_list/Newlist.html

. OPM, 2012. Office of Personnel Mana gement, Salary Table 2012-DCB, Washington BaltimoreNorthern Virginia, DC-MD-PA-VA-WV. Accessed from http://www.opm.gov/oca/12tables/pdf/DCB.pdf.

SBA. 2008. United States Small Business Administration. Table of Small Business Size Standards Matched to North American Industry Classification System Codes. Available at: http://www.sba.gov/idc/groups/public/documen ts/sba_homepage/serv_sstd_tablepdf.pdf.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

39 Sleemi, 2006. Fehimida Sleemi. U.S. Bureau of Labor Statistics, “Employment Cost Index Publication Plans”. Monthly Labor Review. Vol. 129, No. 4, April 2006. available at www.bls.gov/opub/mlr/2006/04/art2full.pdf.

U.S. Postal Service (USPS) 2013a. “Compare Servic es and Prices” <https://www.usps.com/ship/servicechart.htm>. Accessed April 9, 2013.

U.S. Postal Service (USPS) 2013b. “A dd Insurance and Extra Services ” <https://www.usps.com/ship/insurance-and-ex tra-services.htm>. Accessed April 9, 2013.

Weinstein, 2004. Harriet G. Weinstein and Mark A. Loewenstein, U.S. Bureau of Labor Statistics.

C omparing Current and Former Indu stry and Occupation ECEC Series. Originally posted August 25, 2004 at http://www.bls.gov/opub/cwc/cm20040823ar01p1.htm.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

40 

## Appendix A: Inflators and Wage Rates

This appendix describes the derivation of the fully lo aded labor rates and inflation factors used in calculating costs of labor, materials, and other in puts. Costs for this report are for year-end 2012.



### A.1 Derivation of Loaded Wage Rates

Unit labor costs are calculated by adding fringe benef its and overhead to the wage or salary to derive a fully loaded labor cost. The basic method is described in Wage Rates for Economic Analysis of the Toxics Release Inventory Program (EPA, 2002b). The resulting loaded labor rates are given in Table A-1. Costs are calculated for several labor categories: Managerial, Professional/Technical, Clerical, and EPA staff.

In March 2004, BLS began using the North American Industry Classification System (NAICS) codes
instead of the Standard Industrial Classificati on (SIC) System, and the Standard Occupational Classification (SOC) system instead of the Occupa tional Classification System (OCS). The following table shows the crosswalk between old and new occupational titles.

EPAB Reports Labor Category 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: Employer Costs for Employee Compensation: Changes to NAICS and SOC, Table 2 . ECEC Occupational Comparability between SOC and OCS (BLS, 2006a and Weinstein, 2004).



### A.1.1 Derivation of Labor Rates for Manageri al, Professional/Technical, Clerical, and
Production Labor

Wages and fringe benefits for managerial, professiona l/technical, clerical and production labor were taken from the Bureau of Labor Statistics (BLS) Employer Costs for Employee Compensation (ECEC) data, 15 for December, for manufacturing industries. 16

The cost of fringe benefits such as paid leave and insurance, specific to each labor category, are taken from the same ECEC series. Fringe benefits as a perc ent of wages are calculated separately for each labor category. For example, for December 2012, th e average wage rate for professional/technical 17 labor was $38.53; the average fringe benefit was $19.30. Fr inge benefits as a percent of wages were $119.30/$38.53, or approximately 50.09 percent.

15 This follows the approach introduced in Economic Analysis of Expedited Significant New Use Rules for 65 Chemical
Substances: EPA Do cket OPPT-2003-0063 (EPAB, 2007a).

16 Employer Costs for Employee Compensation Supplementary Tables December 2012. (BLS, 2013a). This follows the approach introduced in EPAB, 2007a. Earlier PMN SNUR economic analyses, such as EPA, 2003 , used ECEC data for “All Goods Producing” sectors (manufacturing, mining, and construction). However, the manufacturing sector data seem more relevant since the SNURs mainly affect the chemicals industry.

17 This follows terminology introduced in EPAB, 2007a. Earlier SNUR economic analyses used the term “technical” labor. Here the category is called “professi onal/technical” labor, to make clear how it relates to BLS categories. In 2004, BLS changed from the Occupational Classificati on System, OCS, to the Standard Occupational Classification system, SOC. In the process, the “Professional specialty and te chnical” category became the “Professional and related” catego ry. However, the coverage of the old and new occupational groups is appr oximately the same. See the BLS article, C omparing Current and Former Industry
and Occ upation ECEC Series (Weinstein, 2004).*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

41 An additional loading factor of 17 percent is applie d to wages to account for overhead. This approach is used for consistency with Office of Pollution Prev ention and Toxics economic analyses for two major rulemakings: Wage Rates for Economic Analyses of the Toxics Release Inventory Program (EPA, 2002b),

and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report (EPA, 2002a). This overhead loading factor is added to the benefits loading factor, and the total is then applied to the base wage to derive the fully loaded wage. For example, the December 2012 fully loaded wage for professional/technical labor is $38.53 × (1+0.5009 + 0.17) = $64.38.

Fully loaded costs for managerial, clerical, and pr oduction labor are calculated in a similar manner, as
shown in Table A-1.



### A.1.3 Derivation of Labor Rates for EPA Staff

Agency labor costs are calculated based on annua l Federal salaries for the Washington-Baltimore area published by the Office of Personnel Management effective January 2012 (OPM, 2012). The average salary for one FTE staff member is estimated as the salary for a GS-13 Step 5 employee. 18

Multiplying the annual pay by an assumed loading factor of 1.6 to reflect Federal fringe benefits and overhead, the loaded annual salary of EPA staff was calculated to be $161,446.

The Agency loading factor is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs) (EPA, 1992, page 30, footnote 9). The 60 pe rcent 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 overh ead for Federal staff. For example, it was used in an August 2000 document supporting ICR No. 1139.06 (EPA, 2000), with the following explanation:

“The annual costs per FTE are derived by multiplyin g the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication factor u sed 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.” (ICR No.1139.06)

18 The GS-13 Step 5 is consistent with ICR No. 0574.14 (12/18/2007), which covers PMN SNURs. Use of this grade level follows the approach introduced in EPAB, 2007a. That repor t represented a change from th e earlier PMN SNUR economic analysis (EPA, 2003), which used an average of GS-12 Step 1 and GS-12 Step 10 salaries.*** EO12866/13563 Review Draft –Do Not Cite,Quote, or Release During the Review ***42Table A-1: Derivation of Loaded Wage RatesEPAB LaborCategoryData SourcesDateWageFringeBenefitFringes as% WageOver-head %Wage2Fringe +OverheadFactorLoaded Wages1(a)(b)(c) =(b)/(a)(d)(e)=(c)+(d)+1(f)=(a) x (e)ManagerialBLSECEC, PrivateManufacturingindustries,“Mgt, Business, andFinancial”3Dec-12 $43.95 $21.45 48.81% 17% 1.66 $72.87Professional/TechnicalBLSECEC, PrivateManufacturingindustries, “Professional andrelated“3Dec-12 $38.53 $19.30 50.09% 17% 1.67 $64.38ClericalBLSECEC, PrivateManufacturingindustries,“Office andAdministrative Support”3Dec-12 $17.64 $8.87 50.28% 17% 1.67 $29.51EPA staffFTEAnnual Federal staff cost: OPMWashington-Baltimore-NorthernVirginia, DC-MD-PA-VA-WV, area,GS-13 Step 5 pay rates, with 60%overhead.4Jan-12$100,904(annual)--[Included in60%overhead]60% 1.6$161,446.40(annual)Notes:1Wage data are rounded to the closest pennyin this table; however, in calculationsusing these numbers for this report, unrounded values were used.2An overhead rate of 17% was used based on assumptions inWage Rates for Economic Analyses of the Toxics Release Inventory Program(EPA, 2002b), and theRevised Economic Analysisfor the Amended Inventory Update Rule: Final Report(EPA, 2002a).Employer Costs for Employee Compensation Supplementary Tables December2012, U.S. Bureau of LaborStatistics, March 18, 2013 (BLS, 2013).43The Federal salary is the unloaded FederalGS-13 Step 5 salary ($100,904) for 2012, from the Office of Personnel Management salary table for Washington-Baltimore-Northern Virginia(OPM, 2012). The 60% fringes-and-overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests(ICRs) (EPA, 1992, page 30, footnote 9).*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

43 

### A.2 Derivation of Inflation Factors

Complete information on the derivation of the inflation factors used is given in Table A-2. In 2006, the Bureau of Labor Statistics (BLS) made several change s to the Employment Cost Index. The changes are described on a BLS web page, “Change has come to the ECI,” (BLS, 2006c) and in several April 2006 Monthly Labor Review articles posted on the BLS web site: “Changes affecting the Employment Cost Index: an overview” (Caroll, 2006); “Employment Cost Index Publication Plans” (Sleemi, 2006); and “Seasonal adjustment in the ECI and the conve rsion to NAICS and SOC” (Branch, 2006).

Under a mandate from OMB, BLS changed its classif ication of industries and occupations from the Standard Industrial Classification (SIC) and Occ upational Classification System (OCS) to the North American Industry Classification System (NAICS) and Standard Occupational Classification (SOC) system. In 2006, BLS adjusted all ECI series to reflect this change.

In addition to changing the industr y and occupational classification syst ems, in 2006, BLS rebased the
ECI from June 1989 = 100 to December 2005 = 100 for all current and historical non-seasonally adjusted series, including the NAICS and SIC based series. (Seas onally adjusted indices, including those in Table A-2 of this report, may not exactly equal 100 for December 2005 as a result of the seasonal adjustment. Seasonal adjustments are explained in Branch, 2006.)

According to BLS, the official ECI for the year s 1975-2005 is the SIC-OCS based series, and for subsequent years, the official ECI is th e NAICS-SOC based series (Sleemi, 2006, p.8). 19

“Starting year” indices in Table A-2 continue to be SIC-OCS based. Current year indices are NAICSSOC based. We use indices from both the NAICS-S OC and the SIC-OCS based ECI series because neither series spans the entire period over which t esting and other costs need to be inflated.

19 BLS has been publishing the NIACS-SOC based ECI series si nce March 2001 and it became official in March 2006. The SICOCS based series and NAICS-SOC series ha ve different series ID numbers, even wh en they describe essentially the same population. For example the series ID for seasonally adjust ed total compensation for all private industry workers is

ECS10002I for the SIC-OCS series and CIS2010000000000I for the NAICS-SOC series

.*** EO12866/13563 Review Draft –Do Not Cite, Quote, or Release During the Review ***

44 Table A-2: Derivation of Inflation Factors

Item Inflation Index Source 1 Starting

Year Index for
Startin g Year (a) Index for
2012

(b) Inflation

Factor (b)/(a) 2

Export notification BLS ECI, ,Total comp, Private industry, Professional and

related , 4 th Q [BLS, 2013b ] 3 1992 64.9 118.2 1.821

Agency Extramural costs White collar labor; equipment; supplies BLS ECI, Total comp, Private industry, Professional and

related , 4 th Q [BLS, 2013b] 3 1993 67 118.2 1.76

Labels, placards etc. BLS CPI, All urban consumers, not SA. CUUR0000SA0, Annual [BLS 2013c] 1997 160.5 229.594 1.430

File cabinet

Photocopies BLS CPI, All urban consumers, not SA. CUUR0000SA0, Annual [BLS 2013c ] 1988 118.3 229.594 1.941 Record keeping materials

Key: BLS = Bureau of Labor Statistics. CPI = Consumer Price Index. ECI = Employment Co st Index. SA = Seasonally Adjusted. Total Comp = Total Compensation (wages/salaries an d benefits). 4th Q = Fourth Quarter.

Notes:

1 In 2006, Bureau of Labor Statistics (BLS) Employment Cost Inde x (ECI) series “were rebased to December 2005 = 100 from June 1989 = 100.” The change is reflected in the indice s in this table and expl ained on the BLS website, Employment Cost Index News Release Text: Employment Cost Index, March 2006 (BLS, 2006b). The Consumer Price Index (CPI) was not rebased.

“Starting year” ECI indices are SIC-OCS based: Seasonally Adjust ed (SA) ECS10002I for private industry All Workers, and not SA ECU11122I for private industry Professional and Related Workers.

After 2006, ECI indices are NAICS-SOC based: Seasonally Adju sted (SA) CIS2010000000000I for private industry All Workers, and

not SA CIU2010000120000I (B) for private industry Prof essional, and Rela ted workers.

2 Inflation factors are rounded to three decimal places in this ta ble, but calculations in this report use the unrounded values. BLS CPI values were published with one decimal place through 2006 and with th ree decimal places after that.

3 Beginning with the report Economic Analysis of Expedite d Significant New Use Rules for 25 Chemical Substances: EPA Docket

OPPT-2009-0922 (EPA, 2010) we began to use the not-seasonally adjust ed CIU2010000120000I for private industry Professional, and Related workers, instead of SA CIS2010000W00 000I for private industry white collar work ers because BLS reti red the “white-colla r”
series.