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EO12866_DentalEffluentGuidelinesandStandards RIN 2040-AF26 NPRM FRN Econ_20111229

United States

Environmental Protection

Agency

Economic Analysis for Proposed 

Effluent Limitation Guidelines and 

Standards for the Dental Category

DRAFT

November 2011
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

U.S. Environmental Protection Agency

Office of Water (4303T)/Office of Science and Technology

Engineering and Analysis Division

1200 Pennsylvania Avenue, NW

Washington, DC 20460
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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Table of Contents

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

Index of Tables.........................................................................................................................................................ii

1 Introduction ................................................................................................................................................... 1

2 Overview of Dental Offices and Other Facilities Potentially Subject to Proposed Regulation .............. 2

2.1 Number of Facilities Potentially Subject to the Proposed Regulation............................................................. 2

2.2 Adjustments to Account for Baseline Status................................................................................................... 3

3 Summary of the Proposed Regulation and Compliance Costs.................................................................. 5

3.1 Summary of Compliance Costs....................................................................................................................... 5

3.2 Linking Compliance Costs by Number of Chairs in Office to Offices by Revenue Range ............................ 8

4 Compliance Cost to Dental Facilities and Economic Impacts................................................................. 11

4.1 Estimated Cost of Compliance to Dental Offices.......................................................................................... 11

4.2 Economic Impact of Compliance Costs ........................................................................................................ 11

4.2.1 Cost-to-Revenue Analysis................................................................................................................... 12

4.2.2 Ratio of the Proposed Rule‟s Capital Costs to Total Dental Office Capital Assets............................ 16

4.2.3 Ratio of the Proposed Rule‟s Capital Costs to Annual Dental Office Capital Replacement Costs .... 17

4.2.4 Economic Impact for New Sources..................................................................................................... 19

5 Social Cost of the Proposed Dental Amalgam Rule.................................................................................. 21

5.1 Cost of Compliance on Social Cost Basis..................................................................................................... 21

5.2 Administrative Costs..................................................................................................................................... 22

5.3 Total Social Cost ........................................................................................................................................... 22

6 Cost-Effectiveness Analysis ........................................................................................................................ 23

6.1 Total Incremental Annualized Compliance Costs......................................................................................... 23

6.2 Toxic Weighting Factors............................................................................................................................... 23

6.3 Calculation of Annual Total Incremental Pound Equivalents Removed to Surface Waters ......................... 24

6.4 Cost-Effectiveness Results............................................................................................................................ 24

7 Regulatory Flexibility Act Assessment ...................................................................................................... 25
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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Index of Tables

Table 2-1: Dental Office Establishments by Revenue Range (NAICS 621210 - Offices of Dentists)......................3

Table 2-2: Adjusting Facility Counts to Account for Baseline Amalgam Use and Compliance Status....................4

Table 3-1: Fraction of Recurring Costs Incurred by Offices with Amalgam Separator Technology Already 

Installed..............................................................................................................................................................6

Table 3-2: Compliance Costs by Cost Category and Number of Chairs (2010 dollars)............................................6

Table 3-3: Summary of Annualized Compliance Costs for a Dental Facility, Accounting for Initial Installation and 

Reinstallation, and Operational and Certification Costs....................................................................................8

Table 3-4: Distribution of the Number of Chairs in Dental Office............................................................................9

Table 3-5: Number of Chairs in Office by Revenue Range.....................................................................................10

Table 4-1: Annualized Costs to Complying Facilities by Number of Chairs ..........................................................11

Table 4-2: Revenue Range/Number-of-Chairs Combinations for Cost Impact Analysis........................................13

Table 4-3: Cost-to-Revenue Impact Summary ........................................................................................................15

Table 4-4: Cost-to-Revenue Impact Summary by Number of Chairs......................................................................16

Table 4-5: Comparing Total Initial Outlay to Baseline Assets................................................................................17

Table 4-6: Composition of Dental Equipment for 6-Chair Office by Equipment Life............................................18

Table 4-7: Initial and Annual Replacement Outlay for Start-Up Dental Office by Number of Chairs ...................19

Table 4-8: Comparing Total Initial Compliance Outlay to Steady State Annual Replacement Outlay by Number of 

Chairs...............................................................................................................................................................19

Table 4-9: Comparing Total Initial Compliance Outlay to Initial Outlay by Number of Chairs.............................20

Table 5-1: Compliance Costs on Social Cost Basis for Proposed Dental Amalgam Rule.......................................22

Table 5-2: Summary of Social Cost for Proposed Dental Amalgam Rule...............................................................22

Table 6-1: Annualized Compliance Costs (millions$).............................................................................................23

Table 6-2: Toxic Weighting Factors for Pollutants in Dental Amalgam.................................................................23

Table 6-3: Total Incremental Pound-Equivalents Removed to Surface Waters ......................................................24

Table 6-4: PSES Cost-Effectiveness Analysis.........................................................................................................24

Table 7-1: Cost-to-Revenue Impact Analysis for Small Entities.............................................................................25
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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1 Introduction

The 1972 Clean Water Act (CWA) directs EPA to develop national technology-based regulations for categories of 

industries that discharge pollutants directly to surface waters (effluent limitations guidelines) or that discharge 

pollutants indirectly through sewage treatment plants (pretreatment standards), collectively referred to as ELGs.

As a result of the 2010 Effluent Guidelines planning process, EPA began a rulemaking to develop ELGs mandate 

a technology solution for mercury dischargers from the Dental Offices industry (NAICS 621210). The main 

technology EPA focused on as the basis of the proposed rulemaking is amalgam separators that achieve more than 

98.8 percent removal of particulate mercury amalgam in combination with certain best management practices

(BMPs).

This report assesses the cost and economic impact of potential regulatory of the proposed Dental Amalgam Rule, 

and is organized as follows:

 Section 2: Overview of Dental Offices and Other Facilities Potentially Subject to Proposed Regulation, 

reviews the structure of the regulated sector in terms of number of dental offices potentially subject to the 

proposed Dental Amalgam Rule and the distribution of these offices by revenue. This section also reviews 

certain adjustments to account for baseline status and the extent of costs likely to be incurred by dental 

offices in complying with the proposed Dental Amalgam Rule.

 Section 3: Summary of the Proposed Regulation and Compliance Costs, reviews the compliance costs that 

EPA expects would be incurred by dental offices under the proposed rule. This section also reviews the 

assignment of compliance requirements and costs to dental offices across the revenue ranges present in 

the sector, as the basis for estimating total compliance costs to complying dental facilities and assessing 

the impact of the proposed rule on these facilities.

 Section 4: Compliance Cost to Dental Facilities and Economic Impacts, combines the estimates of 

numbers of in-scope offices by relevant operating characteristics to estimate total nationwide compliance 

cost to complying facilities under the proposed rule. This section then uses the assigned compliance cost 

values by dental office revenue range to estimate the business impact on these offices, using the following 

impact measures:

 Cost to revenue analysis

 Ratio of capital costs to total dental office capital assets

 Ratio of capital costs to annual dental office capital replacement costs

 Economic impact for new sources

 Section 5: Social Cost of the Proposed Dental Amalgam Rule assesses the social cost of the Proposed 

Dental Amalgam Rule, including costs to regulated entities for complying with the proposed rule and the 

anticipated costs to permitting authorities for administering rule requirements.

 Section 6:Cost-Effectiveness Analysis presents cost-effectiveness results for the proposed regulation, 

accounting for the estimated reductions in pollutant discharges to U.S. waters from the regulation on a 

toxicity normalized basis, and in relation to the estimated cost of achieving those reductions. 

 Section 7:Regulatory Flexibility Act Assessment assesses the potential for significant economic impact on 

a substantial number of small dental office entities as a result of the proposed rule. This assessment relies 

on the cost-to-revenue analysis approach and findings presented in Section 4, as the basis for the small 

entity impact analysis.
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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2 Overview of Dental Offices and Other Facilities Potentially Subject to 

Proposed Regulation

In this section, EPA reviews its estimate of the number of dental offices that may be within the scope of the 

proposed Dental Amalgam Rule, including:

 A review of information from the Economic Census and other sources on the number of offices in the 

dental sector, and

 Adjustments to these counts to reflect baseline status in terms of use of mercury-containing materials 

(dental amalgam) and prior presence of treatment technology, and, as a result, the extent of costs likely to 

be incurred by facilities in complying with the proposed Dental Amalgam Rule. 

2.1 Number of Facilities Potentially Subject to the Proposed Regulation

To support the assessment of total costs and economic impact of the Proposed Dental Amalgam Rule, EPA relied 

on data from the 2007 Economic Census describing the number of firms and establishments in the Dental Office 

sector (NAICS 621210), and their annual receipts (revenue). EPA used the 2007 Census data for this analysis 

because these data are the most recent comprehensive public data on the Dental Office sector. Data on the number 

of Dental Office firms and establishments by revenue size are used to assess the number of regulated entities that 

may incur costs, the costs that these entities may incur (based on scale of business operations and associated need 

for compliance technology), and thus the rule‟s total cost. These data are also used to assess the potential impact 

of a regulation in terms of the level of costs that may be incurred by individual firms/establishments and whether 

these costs would be unduly burdensome in relation to firms‟ and establishments‟ ongoing revenue. 

EPA determined that the operating characteristics of the individual dental offices – in particular, the number of 

dental chairs in the office – would be a key determinant of the technology response and associated compliance 

costs that would be incurred by dental offices in complying with the Proposed Dental Amalgam Rule. Therefore, 

EPA estimated compliance costs for each dental office. In addition, in reviewing the 2007 Economic Census data 

for the Dental Office sector, EPA observed that almost all firms are single-establishment/single-office firms. The 

total of 127,057 establishments/offices is owned by 121,048 firms – thus no more than 6,009 firms or fewer than 

5 percent of firms can be multi-office firms. And only at the highest revenue ranges do firms frequently own and 

operate more than one office. Thus, as a practical matter, there is little difference between the number of dental 

offices and the number of dental firms. For this reason, EPA performed the impact analysis at the level of the 

office instead of at the level of the firm.

Beginning from the 2007 Economic Census counts of dental offices, EPA applied a number of adjustments to 

estimate the number of dental offices, in aggregate and by revenue range, that could be within the scope of the 

Proposed Dental Amalgam Rule (see Table 2-1, following page):

 As shown in Table 2-1, the Economic Census listed 127,057 dental offices in total. In addition, office 

counts are spread over 11 revenue ranges ranging from the lowest range, $0-$10,000, to the highest range, 

$10,000,000 and up, based on 2007 economic values. As described elsewhere in this report, EPA 

performed its cost and economic impact analysis based on 2010 dollar values. Because the Economic 

Census revenue ranges are defined in 2007 dollars, EPA adjusted these dollar values defining the revenue 

ranges to 2010 dollars using the GDP Deflator, a sector/commodity neutral basis for adjusting dollar 

values for general inflation over time. Table 2-1 lists the revenue range values in 2007 and 2010 dollars in 

the left set of columns of the table. This adjustment assumes that dental service prices matched the 
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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general rate of inflation over the 2007-2010 period, and that the industry remained constant in all other 

regards: total quantity of services provided, and total number and distribution of offices by revenue range. 

 Of the total of 127,057 offices, the Economic Census reported 116,792 offices as being in business for the 

full 2007 year and 10,265 offices as being in business for only part of the year. The numbers of dental 

offices listed in the 11 revenue ranges represent only the 116,792 offices that were in business for the full 

2007 year. Because the revenue range of offices is important in estimating the compliance requirements 

that an individual office would face and also for assessing small entity impacts, EPA assigned the 

remaining 10,265 offices in business for only part of the year across the revenue ranges of offices that 

were in business for the full year. EPA assigned these partial operating year offices to those revenue 

ranges that would contain only small businesses according to the Small Business Administration (SBA) 

criterion, $7.0 million, for defining small businesses in the dental office sector.1 EPA assigned these 

offices to the small business revenue ranges (the first nine revenue ranges) to prevent potentially 

understating the number of small businesses that could incur costs as a result of the Proposed Dental 

Amalgam Rule. The tenth revenue range includes the small business cutoff ($7.0 million); however, EPA 

assigned none of the partial operating year offices to this range – again to avoid potentially understating 

the number of small businesses that could incur costs under a rule. EPA assigned the partial year office 

count in proportion to the numbers of full operating year offices in these nine revenue ranges. The rightmost column in Table 2-1 reports the numbers of offices by revenue range after this adjustment.

Table 2-1: Dental Office Establishments by Revenue Range (NAICS 621210 - Offices of Dentists)

Revenue Ranges ($2007) Revenue Ranges ($2010) Number 

Establishments

Adjusted Number 

Establishments1 Low High Low High

0 $10,000 0 $10,448 160 174

$10,000 $24,999 $10,449 $26,120 471 513

$25,000 $49,999 $26,121 $52,242 940 1,023

$50,000 $99,999 $52,243 $104,485 2,401 2,613

$100,000 $249,999 $104,486 $261,213 13,034 14,183

$250,000 $499,999 $261,214 $522,427 28,766 31,303

$500,000 $999,999 $522,428 $1,044,856 42,803 46,578

$1,000,000 $2,499,999 $1,044,857 $2,612,141 25,046 27,255

$2,500,000 $4,999,999 $2,612,142 $5,224,283 2,783 3,028

$5,000,000 $9,999,999 $5,224,284 $10,448,567 330 330

$10,000,000 Or more $10,448,568 Or more 58 58

Establishments operated for the entire year 116,792 127,057

Establishments not operated for the entire year 10,265 -

Total Establishments 127,057 127,057

Source: 2007 Economic Census, U.S. Census Bureau; EPA adjustments

1 - With establishments not operating for the entire year assigned to first nine revenue ranges

Highlighting in the $5 million to $10 million revenue range indicates that this range contains the SBA small business size standard for Offices of Dentists. 

In addition to the dental offices that are reported in the Economic Census, EPA estimates that dental services that 

are potentially within the scope of this regulation, are performed at an additional 130 large dental institutional 

facilities (e.g., clinics or dental schools). Adding these 130 facilities to the 127,057 dental offices from the 

Economic Census brings the total of dental facilities that are potentially within the rule‟s scope to 127,187.

2.2 Adjustments to Account for Baseline Status

EPA also accounted for additional factors that will influence the extent to which dental offices would incur costs 

under the Proposed Dental Amalgam Rule (see Table 2-2, following page):

 

1

See discussion at Section 7: Regulatory Flexibility Act Assessment, for information on the assessment of small entity impacts.
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 First, EPA estimates that certain Specialty Dental practices do not place or remove dental amalgam and 

thus did not propose to include them in the scope of today‟s proposal. These specialty practices are: oral 

pathology, oral and maxillofacial radiology, oral and maxillofacial surgery, orthodontics, periodontics, or 

prosthodontics. Based on information from the American Dental Association (ADA), EPA estimates that 

21 percent of offices are specialty service practices, and that within this 21 percent, approximately 65 

percent don’t place or remove dental amalgam. As a result, of the total of dental offices, EPA estimates 

that approximately 14 percent don‟t place or remove dental amalgam, based on the specific dental 

services that they provide. 2 Because today‟s proposal would not apply to them, EPA assigned no 

compliance-related costs to these 17,215 offices and these facilities are not included in our analysis of 

impacts. 

 Second, EPA divided the number of in-scope offices into two groups; offices that have already installed 

amalgam separator technology and offices without separator technology. As described in the later cost 

analysis section, offices with separator technology already in-place will incur reduced costs compared to 

offices without treatment technology in place. From a review of state requirements, EPA estimated that 

40 percent of offices have amalgam separators in place already, and used this percentage to separate the 

offices into categories of technology in-place and no technology in-place. 

 Third, within the remaining of 60 percent of offices that have not already installed amalgam separator 

technology, EPA estimates that approximately 21 percent of these offices do not place or remove dental 

amalgam and thus would incur no treatment technology-related costs from the Proposed Dental Amalgam 

Rule. These facilities would incur no treatment technology costs for the rule, but would need to certify to 

their permitting authority that they don‟t process amalgam, for which a one-time only reporting cost 

would be incurred ($22). 

Table 2-2, below, lists the numbers of offices, by revenue range (from Table 2-1) and including large facilities, 

with these further breakouts. EPA carried these estimated numbers of dental facilities (dental offices and large 

institutional facilities) by baseline amalgam use and compliance status forward to the cost and economic impact 

analysis.

Table 2-2: Adjusting Facility Counts to Account for Baseline Amalgam Use and Compliance Status

Revenue Ranges ($2010)

Total (see 

Table 2-1)

Not Using 

Amalgam

Using 

Amalgam

Technology 

In-Place

No Technology In-Place

Low Low Total

With Technology 

Costs

No Technology 

Costs

0 $10,448 174 24 151 61 90 72 18

$10,449 $26,120 513 69 443 179 264 211 53

$26,121 $52,242 1,023 138 884 358 527 421 105

$52,243 $104,485 2,613 354 2,259 913 1,346 1,077 269

$104,486 $261,213 14,183 1,920 12,264 4,958 7,305 5,844 1,461

$261,214 $522,427 31,303 4,237 27,066 10,943 16,123 12,898 3,225

$522,428 $1,044,856 46,578 6,304 40,273 16,282 23,991 19,193 4,798

$1,044,857 $2,612,141 27,255 3,689 23,566 9,528 14,038 11,230 2,808

$2,612,142 $5,224,283 3,028 410 2,619 1,059 1,560 1,248 312

$5,224,284 $10,448,567 330 45 285 115 170 136 34

$10,448,568 Or more 58 8 50 20 30 24 6

Total Economic Census 127,057 17,198 109,859 44,416 65,443 52,355 13,089

Institutional Facilities 130 18 112 45 67 54 13

Total 127,187 17,215 109,972 44,462 65,510 52,408 13,102

Percentage adjustment factors 13.5% 86.5% 40.4% 59.6% 80.0% 20.0%

Source: EPA analysis, 2011

 

2

0.21 x 0.65 ≈ 0.135. See ______ for further information on this estimate.
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3 Summary of the Proposed Regulation and Compliance Costs

This section reviews the technology and other costs that dental facilities would incur in complying with the 

proposed rule requirements, and linking compliance costs to dental facilities based on operating characteristics 

(number of chairs and revenue).

3.1 Summary of Compliance Costs

EPA estimated that dental offices will incur several categories of compliance costs, as outlined below:

 Technology installation and other start-up costs: 

 Equipment purchase

 Equipment installation

 Initial baseline monitoring report

 One-time 90-day compliance report

 Recurring costs: 

 Replacement parts

 Amalgam separator operation and maintenance

 Recycling preparation and recycling service cost

 Best management practices

 Annual certification.

In assessing how amalgam separator costs, EPA determined that the treatment requirement for a given office 

would be driven by the number of treatment chairs in the dental office. Chairs were found to be the key driver of 

cost since the treatment capacity, and thus cost, of amalgam separators is based on the number of chairs serviced 

by the separator. Accordingly, EPA estimated costs for these cost categories based on the numbers of chairs in an 

office, organized within 6 number-of-chair ranges, as follows:

 1 to 2 chairs

 3 chairs

 4 chairs

 5 chairs

 6 chairs

 7+ chairs

EPA also estimated costs for the large institutional facilities described in Section 2.1, above. EPA estimated that 

these facilities would incur compliance technology costs in the same categories as other facilities, with 

compliance equipment costs being 50 percent greater than those incurred by facilities in the 7+ chairs category. 

All other costs are the same as those incurred for facilities in the 7+ chairs category.

EPA also differentiated costs at the office level based on whether offices already have amalgam separator 

technology in place, as described above. EPA assumed that offices with treatment in-place will incur no cost for 

purchasing and installing compliance technology at the time of initial regulatory compliance. However, EPA 

estimated additional permit-related costs and some ongoing incremental costs for such facilities. Specifically, 

EPA assumed that offices with technology in-place would incur recurring costs in relation to the costs otherwise 

incurred by offices without technology in-place, as follows (see Table 3-1):
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Table 3-1: Fraction of Recurring Costs Incurred by Offices with 

Amalgam Separator Technology Already Installed

Cost Category Fraction of Costs Incurred1

Replacement parts 50 percent

Amalgam separator maintenance 50 percent

Amalgam separator operation 100 percent

Recycling preparation and recycling service cost 50 percent

Initial baseline monitoring report 100 percent

One-time compliance report 100 percent

Annual certification 100 percent

1

- The fraction of costs estimated to be incurred by offices with technology in-place relative to costs 

estimated to be incurred by office without technology in-place.

Source: EPA estimates, 2011

EPA projects that there will be no incremental costs associated with the BMPs under today‟s proposed rule, 

because 1) costs for non-oxidizing, pH neutral line cleaners are roughly equivalent to other line cleaners; and 2) 

dentists will not incur additional costs by changing the location for flushing scrap amalgam.

Table 3-4, below, lists estimated Technology Costs, in 2010 dollars, by cost category (rows) and number of chairs 

including large facilities (columns), accounting for whether offices have already installed amalgam separator 

technology. 

Table 3-2: Compliance Costs by Cost Category and Number of Chairs (2010 dollars)

No Technology in Place Technology in Place

Operating Size: Number of Chairs and Large Facilities Operating Size: Number of Chairs and Large Facilities

Cost Element 1-2 3 4 5 6 7+

Large 

Facls 1-2 3 4 5 6 7+

Large 

Facls.

Technology Installation and Other Start-Up Costs

Equipment Purchase $502 $599 $599 $599 $1,058 $1,531 $2,297 $0 $0 $0 $0 $0 $0 $0

Installation $250 $250 $250 $250 $250 $250 $250 $0 $0 $0 $0 $0 $0 $0

One-time BMR $22 $22 $22 $22 $22 $22 $22 $22 $22 $22 $22 $22 $22 $22

One-time Compliance 

Report

$15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15

Recurring Costs

Replacement Parts $195 $219 $219 $219 $430 $647 $647 $98 $110 $110 $110 $215 $324 $324

Separator Maintenance $111 $111 $111 $111 $111 $111 $111 $55 $55 $55 $55 $55 $55 $55

Recycling Preparation $9 $9 $9 $9 $9 $9 $9 $4 $4 $4 $4 $4 $4 $4

Recycling Service $79 $79 $79 $79 $79 $79 $79 $40 $40 $40 $40 $40 $40 $40

Operational $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17

Annual Certification $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14

Source: EPA estimates, 2011

In assessing the costs of compliance, EPA estimated that amalgam separator equipment would have a service life 

of 10 years, at which time the compliance equipment would need to be replaced. For the estimation of 

reinstallation costs, EPA assumed that offices, regardless of original technology in-place status, would incur the 

full cost of purchasing compliance equipment at the time of technology reinstallation. However, because various 

modifications needed for equipment installation would have been completed during initial installation, EPA 

estimated, for reinstallation, that compliance equipment would be able to be installed at one-half the cost of the 

original installation. Further, EPA assumed that dental offices would incur ongoing expenses in the same way as 

described in the preceding paragraphs and Table 3-1. 

To summarize, EPA accounted for the initial installation and re-installation requirement by building up costs, as 

described, for two separate analysis periods: 
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1. Years 1-10.3In this period, dental offices that place or remove amalgam and have no technology in-place 

are assumed to install compliance equipment, if needed, and incur other start-up costs at the beginning of 

year 1. Recurring costs are then incurred, as described above, in years 1-10.

2. Years 11-20. In this period, all dental offices that place or remove amalgam are assumed to incur the cost 

of reinstalling compliance equipment at the beginning of year 11. Recurring costs are then incurred, as 

described, in years 11-20. 

For the assessment of compliance costs to dental facilities, EPA accumulated these costs on a present value basis 

at year 1 at a discount rate of 7 percent, which is intended to represent the opportunity cost of capital to society, 

on a pre-tax, constant dollar basis. 4 The resulting present value is then annualized over the full 20-year analysis 

period at the 7 percent interest rate. EPA used the resulting total annualized compliance costs in assessing the total 

estimated cost and impact of the rule to dental facilities, as described in subsequent sections of this report. Table 

3-2 above and, Table 3-3 below, report specific elements of compliance costs and summarize the tabulation of 

costs to develop estimates of the total annualized compliance cost to complying to dental facilities. 

Table 3-3, below, summarizes the tallying of these costs according to the initial installation and reinstallation 

specifications, and present value and annualized cost calculations, as described above. For each installation event, 

the table reports the total initial outlay and annually recurring costs, as incurred, and then summarizes the 

tabulation of these costs on a present value basis. Initial technology installation costs are directly tabulated at the 

beginning of year 1 (the year of initial compliance), while reinstallation costs are first tabulated on a present value 

basis at the beginning of year 11, and then further discounted to the beginning of year 1. Both present values are 

then summed and annualized over 20 years at a 7 percent discount rate. The resulting annualized costs include all 

of the cost elements except for operational and annual certification costs, which are tallied in the final part of the 

table. Because these costs are incurred annually and don‟t vary by technology in-place status, they are simply 

added to the annualized cost values in Table 3-3 to calculate the total annualized costs to dental facilities for the 

proposed rule.

 

3 Where year 1 would be the first year in which a facility complies with the rule.

4

For the assessment of the rule‟s social costs, EPA used an additional discount rate of 3 percent and also applied a different discounting 

treatment, as described in Section 5, below.
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Table 3-3: Summary of Annualized Compliance Costs for a Dental Facility, Accounting for Initial 

Installation and Reinstallation, and Operational and Certification Costs

No Technology in Place Technology in Place

Operating Size: Number of Chairs and Large Facilities Operating Size: Number of Chairs and Large Facilities

Cost Element 1-2 3 4 5 6 7+

Large 

Facls 1-2 3 4 5 6 7+

Large 

Facls.

Initial Installation Analysis

Total Initial Outlay $789 $886 $886 $886 $1,345 $1,818 $2,727 $37 $37 $37 $37 $37 $37 $66

Total Recurring Costs $393 $417 $417 $417 $628 $845 $1,268 $197 $209 $209 $209 $314 $423 $634

Present Value Total Recurring $2,760 $2,929 $2,929 $2,929 $4,411 $5,935 $8,902 $1,380 $1,464 $1,464 $1,464 $2,205 $2,967 $4,451

Total Present Value, at year 1 $3,549 $3,815 $3,815 $3,815 $5,756 $7,753 $11,630 $1,417 $1,502 $1,502 $1,502 $2,243 $3,005 $4,507

Reinstallation Analysis - equipment reinstalled at beginning of year 11

Total Initial Outlay (0.5 

installation charge)

$664 $761 $761 $761 $1,220 $1,693 $2,540 $664 $761 $761 $761 $1,220 $1,693 $2,540

Total Recurring Costs $393 $417 $417 $417 $628 $845 $1,268 $197 $209 $209 $209 $314 $423 $634

Present Value Total Recurring $2,760 $2,929 $2,929 $2,929 $4,411 $5,935 $8,902 $1,380 $1,464 $1,464 $1,464 $2,205 $2,967 $4,451

Total Present Value, at year 11 $3,424 $3,690 $3,690 $3,690 $5,631 $7,628 $11,442 $2,044 $2,226 $2,226 $2,226 $3,426 $4,661 $6,991

Total Present Value, at year 1 $1,741 $1,876 $1,876 $1,876 $2,862 $3,878 $5,817 $1,039 $1,131 $1,131 $1,131 $1,741 $2,369 $3,554

Combining Initial Installation and Re-Installation

Sum, Present Values at year 1 $5,290 $5,691 $5,691 $5,691 $8,618 $11,631 $17,446 $2,456 $2,633 $2,633 $2,633 $3,984 $5,374 $8,061

Annualized Cost over 20 years $499 $537 $537 $537 $814 $1,098 $1,647 $232 $249 $249 $249 $376 $507 $761

Including Operational and Certification 

Monthly Operational $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17

Annual Certification $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14 $14

Total Annualized Cost $531 $569 $569 $569 $845 $1,129 $1,238 $263 $280 $280 $280 $408 $539 $575 

Present values and annualized costs are calculated using a 7 percent discount rate. All costs are on a pre-tax basis, in $2010, and as of the time of compliance 

by complying entities. The social cost analysis, presented in Section 5 below, uses an additional 3 percent discount rate and applies a different discounting 

treatment.

Source: EPA analysis, 2011

As documented in Section 2.2, above, EPA anticipates that some dental facilities, that don‟t already have 

amalgam separator technology do not place or remove dental amalgam and thus would incur no treatment 

technology-related costs from the Proposed Dental Amalgam Rule. Although these facilities will not incur 

treatment technology-related compliance costs, they will incur the cost of the one-time baseline monitoring report

to document that they don‟t use amalgam in operations. EPA estimates this cost to be $22 for each of these 

facilities. In calculating the total compliance cost for the rule, this value is annualized using the discount rate and 

number of periods for non-recurring outlays, and added to the total rule costs for offices incurring technologyrelated costs based on the estimated number of offices not using dental amalgam, as summarized in Table 2-2.

3.2 Linking Compliance Costs by Number of Chairs in Office to Offices by Revenue 

Range 

The final step in developing compliance costs for use in the cost and economic impact analysis is to link 

compliance costs by number of chairs to dental offices by revenue range. As described above, at Section 2: 

Overview of Dental Offices and Other Facilities Potentially Subject to Proposed Regulation, the Economic 

Census reports information on dental offices by revenue ranges. However, as discussed in the preceding section, 

EPA determined that number of chairs is the key driver of technology requirements, and thus estimated 

compliance requirements and costs based on the number of chairs in the office. As a result, for estimating the 

compliance costs incurred by dental offices by revenue range, it is essential to link offices by number of chairs to 

offices by revenue range. This information is then used to estimate the total cost of regulatory compliance across 

dental offices – based on numbers of offices by revenue range – and to estimate the impact of rule requirements 

on dental offices, based on office revenue. 

Ideally this linkage would have been developed using a distribution of the number of chairs by dental office 

revenue range; however, EPA was not able to obtain such data. As an alternative approach, EPA identified two 

sources of data describing the distribution of number of chairs over all dental offices, regardless of office revenue. 
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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 “An Economic Study of Expanded Duties of Dental Auxiliaries in Colorado” Beazoglou, et.al., American 

Dental Association, 2009. This study, which is based on a survey of 154 dental offices in Colorado, 

provides a distribution of number of chairs by office. (ADA Colorado Study, 2009)

 “2009 Survey of Dental Practice: Income from the Private Practice of Dentistry” American Dental 

Association, 2009. This study reports indirectly a distribution of number of chairs by office. (ADA 

National Study, 2010)

Table 3-4, following page, summarizes the number-of-chair distributions from these sources. Although these 

sources do not use the same number-of-chair ranges, the summary distributions are relatively similar. For 

example, the ADA National Data distribution indicates that 56 percent of offices have 4 or fewer chairs and the 

ADA Colorado study indicates 64 percent of offices with 4 or fewer chairs.

Table 3-4: Distribution of the Number of Chairs in Dental Office

Number of Chairs

in Office Frequency Relative Frequency

Running Total, 

Frequency

ADA Colorado Study, 2009

1-2 15 9.7% 9.7%

3 39 25.3% 35.1%

4 45 29.2% 64.3%

5 22 14.3% 78.6%

6 9 5.8% 84.4%

7 or More 24 15.6% 100.0%

ADA National Study, 2010

1-2 89 12.5% 12.5%

3-4 310 43.4% 55.9%

5-6 191 26.8% 82.6%

7 or More 124 17.4% 100.0%

Source: “2009 Survey of Dental Practice: Income from the Private Practice of 

Dentistry” American Dental Association, 2010.

“An Economic Study of Expanded Duties of Dental Auxiliaries in Colorado” 

Beazoglou, et.al., American Dental Association, 2010.

EPA used these distributions to estimate the number of chairs in offices that process dental amalgam by revenue 

range. The estimation starts with the assumption that increasing the number of chairs in a dental office 

consistently increases office revenue. Beginning with the lowest number-of-chairs range, 1-2 chairs, EPA 

assigned these offices to the lowest and then successively higher revenue ranges until the entire percentage of 

offices with 1-2 chairs is “used up.” When the offices with a given number of chairs is “used up” without 

exhausting a specific revenue range, the available percentage of offices with that number of chairs is assigned 

within the revenue range assuming that offices are distributed uniformly by revenue across the revenue range. 

Once the revenue “break point” is reached, offices from the next higher “number of chairs” range are assigned to 

the remaining offices in the revenue range, and successively higher revenue ranges until that part of the chairs 

distribution is “used up.” This process is repeated until all offices by “number of chairs” are assigned across all 

revenue ranges.5

Table 3-5, below, summarizes the assignment process and results for the ADA Colorado and ADA National 

number-of-chair distributions. The table reports the assignment by revenue range and number of chairs for all

offices, regardless of baseline status, with the exception of large institutional facilities. Large institutional 

facilities are not included in this tally because EPA possesses no information on their revenue.

 

5 Exceptions to this assumption would include a possible dental office with exclusive clientele where a fewer chair-size dental office may 

be in a higher revenue range. EPA did not have data to support this and therefore finds it reasonable to assume increases in number of 

chairs in a dental office increases with office revenue.
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

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Table 3-5: Number of Chairs in Office by Revenue Range

Revenue Range Values 

($2010)

Offices By Revenue Range

(see Table 2-2) With Allocation by Number of Chairs in Office

Low High

Number of 

Offices

Percent of 

Total 

Offices

Running 

Total 

Percent

Number 

of Chairs

Number of 

Offices

Running 

Total

Percent of 

Total 

Offices

Running 

Total 

Percent

Cum Pcnt 

from ADA 

Distribution

Using ADA Colorado Study Distribution

0 $10,448 174 0.1% 0.1% 1-2 174 174 0.1% 0.1%

9.74%

$10,449 $26,120 513 0.4% 0.5% 1-2 513 687 0.4% 0.5%

$26,121 $52,242 1,023 0.8% 1.4% 1-2 1,023 1,710 0.8% 1.4%

$52,243 $104,485 2,613 2.1% 3.4% 1-2 2,613 4,322 2.1% 3.4%

$104,486 $193,476 

14,183 11.2% 14.6%

1-2 8,053 12,376 6.3% 9.7%

$193,477 $261,213 3 6,130 18,506 4.8% 14.6%

35.06% $261,214 $478,568 

31,303 24.6% 39.2%

3 26,047 44,552 20.5% 35.1%

$478,569 $522,427 4 5,256 49,808 4.1% 39.2%

64.29% $522,428 $879,904 

46,578 36.7% 75.9%

4 31,871 81,680 25.1% 64.3%

$879,905 $1,044,856 5 14,706 96,386 11.6% 75.9%

78.57% $1,044,857 $1,242,938 

27,255 21.5% 97.3%

5 3,445 99,831 2.7% 78.6%

$1,242,939 $1,868,020 6 10,870 110,700 8.6% 87.1% 84.42%

$1,868,021 $2,612,141 7+ 12,940 123,641 10.2% 97.3%

100.00%

$2,612,142 $5,224,283 3,028 2.4% 99.7% 7+ 3,028 126,669 2.4% 99.7%

$5,224,284 $10,448,567 330 0.3% 99.9% 7+ 330 126,999 0.3% 99.9%

$10,448,568 Or more 58 0.1% 100.00% 7+ 58 127,057 0.1% 100.00%

Total6127,057 100.00% -- 127,057 100.00%

Using ADA National Study Distribution 

0 $10,448 174 0.1% 0.1% 1-2 174 174 0.1% 0.1%

12.46%

$10,449 $26,120 513 0.4% 0.5% 1-2 513 687 0.4% 0.5%

$26,121 $52,242 1,023 0.8% 1.4% 1-2 1,023 1,710 0.8% 1.4%

$52,243 $104,485 2,613 2.1% 3.4% 1-2 2,613 4,322 2.1% 3.4%

$104,486 $231,731 

14,183 11.2% 14.6%

1-2 11,515 15,838 9.1% 12.5%

$231,732 $261,213 3-4 2,668 18,506 2.1% 14.6%

$261,214 $522,427 31,303 24.6% 39.2% 3-4 31,303 49,808 24.6% 39.2% 55.88%

$522,428 $760,147 

46,578 36.7% 75.9%

3-4 21,194 71,002 16.7% 55.9%

$760,148 $1,044,856 5-6 25,383 96,386 19.9% 75.9%

82.63% $1,044,857 $1,539,698 

27,255 21.5% 97.3%

5-6 8,605 104,991 6.8% 82.6%

$1,539,699 $2,612,141 7+ 18,650 123,641 14.7% 97.3%

100.00%

$2,612,142 $5,224,283 3,028 2.4% 99.7% 7+ 3,028 126,669 2.4% 99.7%

$5,224,284 $10,448,567 330 0.3% 99.9% 7+ 330 126,999 0.23% 99.9%

$10,448,568 Or more 58 0.1% 100.00% 7+ 58 127,057 0.1% 100.00%

Total 127,057 100.00% -- 127,057 100.00%

Source: EPA Analysis, 2011, as described in accompanying text

 

6 The total 127,057 offices include the entire dental industry – including those dental specialists discussed in Section 2.2 that EPA is 

proposing to be outside the scope of today‟s proposal. 
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

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4 Compliance Cost to Dental Facilities and Economic Impacts

4.1 Estimated Cost of Compliance to Dental Offices 

To estimate the total nationwide cost of compliance to dental offices for the proposed rule, EPA multiplied the 

estimated total annualized cost of rule compliance by number of chairs for dental offices. For large institutional 

facilities, costs of compliance are multiplied by the estimated number of facilities in the resulting size ranges (see

Table 3-5, above, and also Table 4-2, below). EPA then summed these values over the size ranges to yield the 

total estimated compliance cost. As described in Section 3.1, these calculations account for baseline compliance 

status – i.e., whether offices are assumed to have already installed amalgam separator technology. These costs are 

the pre-tax costs estimated to be incurred by complying entities – dental offices and large institutional facilities –

as of the year of compliance, and differ from the social costs presented in Section 5, below.

EPA completed these calculations separately for the two distributions of offices by number-of-chairs. Table 4-1, 

below, summarizes the results from these calculations. These total compliance cost estimates include the costs for 

dental offices that don‟t process dental amalgam, as described in Section 3.1, above.

Table 4-1: Annualized Costs to Complying Facilities by Number of Chairs

Annualized Cost (millions, $2010) for Alternative Number-of-Chairs Distributions 

Number of Chairs Colorado Survey ADA Survey

1-2 chairs $3.8 $4.9

3 chairs $10.7 $18.3 4 chairs $12.3

5 chairs $6.0 $16.7 6 chairs $5.3

7+ chairs $10.7 $14.4

Large Facilities $0.1 $0.1

Total Costs $49.0 $54.5

Present values and annualized costs are calculated using a 7 percent discount rate. All costs are on a pre-tax 

basis, in $2010, and as of the time of compliance by complying entities. The social cost analysis, presented in 

Section 5, below, uses an additional 3 percent discount rate and applies a different discounting treatment.

Source: EPA analysis, 2011

Costs are higher for the ADA National Data distribution compared to the ADA Colorado Data distribution 

because of the estimated greater occurrence of higher number-of-chair offices in the ADA National Data 

distribution compared to the ADA Colorado Data distribution. For example, 44 percent of offices are estimated to 

have 5 or more chairs under the ADA National Data distribution compared to 36 percent of offices under the 

ADA Colorado Data distribution. Both estimates cover the same number of offices/facilities.

4.2 Economic Impact of Compliance Costs

EPA devised a set of tests for analyzing economic achievability. As is often the practice, EPA conducted a costto-revenue analysis to examine the relationship between the costs of the proposed rule to current (or pre-rule) 

dental office revenues (see Section 4.2.1, below). In addition, EPA chose to examine the financial impacts of the 

proposed rule using two measures that utilize the data EPA has on dental office baseline assets and estimated 

replacement capital costs: (1) Ratio of the Proposed Rule‟s Capital Costs to Total Dental Office Capital Assets 

(Section 4.2.2 and (2) Ratio of the Proposed Rule‟s Capital Costs to Annual Dental Office Capital Replacement 

Costs (Section 4.2.3).
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

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4.2.1 Cost-to-Revenue Analysis

The cost-to-revenue measure compares the annualized cost of regulatory compliance, at a 7 percent discount rate,

with the revenue of regulated dental offices and provides a screening level assessment of the impact of 

compliance costs on dental offices. The cost-to-revenue measure assesses the loss in operating profit, on a 

constant annual cost basis, as a percentage of baseline revenue that a business would incur if none of the 

compliance costs were passed forward to customers. In using this impact measure, EPA assesses whether the 

compliance cost exceeds thresholds of one and three percent of revenue. This impact measure is also used in the 

Regulatory Flexibility Act assessment, at Section 7, below.

EPA framed the cost-to-revenue analysis around the revenue range/number-of-chairs combinations as developed 

in Table 3-5, above, and the total annualized compliance costs that would occur within each of these analysis 

combinations. Table 4-2, below, summarizes these analytic combinations. Note that EPA was not able to perform 

the cost-to-revenue impact analysis for large institutional facilities, as it has no revenue information for them.

However, since EPA performed the cost-to-revenue analysis on a range of office sizes, EPA projects the results of 

this analysis would be similar for large institutional facilities.

In general, EPA assesses that cost impact analyses should be performed using after-tax costs, as these costs 

account for the reduction in costs to affected entities resulting from tax deductibility of the outlays, and thus 

provide a better indication of the financial impact of regulatory requirements on complying entities. In the cost-torevenue analysis for the Proposed Dental Amalgam Rule, EPA used costs on a pre-tax instead of after-tax basis, 

because the appropriate tax rates for complying entities, which are often sole proprietorships or partnerships, are 

not known. Using pre-tax instead of after-tax costs increases the likelihood of finding that costs exceed the one 

percent or three percent of revenue impact threshold. 
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

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Table 4-2: Revenue Range/Number-of-Chairs Combinations for Cost Impact Analysis

Revenue Range/Number of Chairs Combinations Number of 

Offices

Percent of Total 

Low High Number of Chairs Offices

Using ADA Colorado Study Distribution

0 $10,448 1-2 151 0.1%

$10,449 $26,120 1-2 443 0.4%

$26,121 $52,242 1-2 884 0.8%

$52,243 $104,485 1-2 2,259 2.1%

$104,486 $193,476 1-2 6,963 6.3%

$193,477 $261,213 3 5,300 4.8%

$261,214 $478,568 3 22,521 20.5%

$478,569 $522,427 4 4,545 4.1%

$522,428 $879,904 4 27,557 25.1%

$879,905 $1,044,856 5 12,716 11.6%

$1,044,857 $1,242,938 5 2,978 2.7%

$1,242,939 $1,868,020 6 9,399 8.6%

$1,868,021 $2,612,141 7+ 11,189 10.2%

$2,612,142 $5,224,283 7+ 2,619 2.4%

$5,224,284 $10,448,567 7+ 285 0.3%

$10,448,568 Or more 7+ 50 0.1%

Total 109,859 100.00%

Using ADA National Study Distribution

0 $10,448 1-2 151 0.1%

$10,449 $26,120 1-2 443 0.4%

$26,121 $52,242 1-2 884 0.8%

$52,243 $104,485 1-2 2,259 2.1%

$104,486 $231,731 1-2 9,957 9.1%

$231,732 $261,213 3-4 2,307 2.1%

$261,214 $522,427 3-4 27,066 24.6%

$522,428 $760,147 3-4 18,325 16.7%

$760,148 $1,044,856 5-6 21,948 20.0%

$1,044,857 $1,539,698 5-6 7,440 6.8%

$1,539,699 $2,612,141 7+ 16,125 14.7%

$2,612,142 $5,224,283 7+ 2,619 2.4%

$5,224,284 $10,448,567 7+ 285 0.3%

$10,448,568 Or more 7+ 50 0.1%

Total 109,8597100.00%

Source: EPA analysis, 2011

Costs of compliance were assigned to each revenue range/number-of-chairs combination and then assessed 

relative to the low and high revenue values of a revenue range to determine whether offices within the revenue 

range would incur costs exceeding a given percent of revenue threshold. For each revenue range/number-of-chairs 

combination and a given percent of revenue threshold – i.e., one or three percent – EPA evaluated three cases:

1. If the calculated cost-to-revenue percentage is less than the threshold value at the low end of the revenue 

range, then EPA assessed that none of the dental offices in that revenue range would incur costs 

exceeding the given percent of revenue threshold. 

2. If the calculated cost-to-revenue percentage exceeds the threshold value at the high end of the revenue 

range, then EPA assessed that all of the dental offices in that revenue range would incur costs exceeding 

the given percent of revenue threshold.

3. If neither of the two prior conditions are met, this indicates that some, but not all, of the offices in the 

revenue range would exceed the percent of revenue threshold. To determine the number of offices 

exceeding the given percent of revenue threshold, EPA calculated the „break-even‟ revenue value for a 

 

7 The total 109,859 dental offices are all in-scope dental offices for the proposed dental amalgam rule as described in Section 2.2, but does 

not include large facilities as noted in 4.2.1
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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given compliance cost and percent of revenue threshold, by dividing the compliance cost value by the 

given percent of revenue threshold. This „break-even‟ revenue value is the revenue value at which 

compliance cost equals the percent of revenue threshold: offices with revenue below the „break-even‟ 

value will incur costs exceeding the given percent of revenue threshold, while offices with revenue above 

the „break-even‟ value will incur costs below the percent of revenue threshold. To calculate the number of 

offices with costs exceeding the percent of revenue threshold, EPA assumed that offices are distributed 

uniformly within the revenue range and calculated the fraction of offices below the „break-even‟ value as 

follows:

Where:

RVbe = „Break-even‟ revenue 

RVmin = Minimum value in revenue range

RVmax = Maximum value in revenue range

EPA tallied the estimated fraction of offices within each number-of-chairs/revenue range combination that exceed 

a given percent of revenue threshold. Results were developed separately for both the ADA Colorado Study and 

ADA National Study chairs-by-office distributions and accounting for technology in-place status. 

Because EPA does not have detailed data on baseline financial conditions of dental offices, the effect of the 

proposed pretreatment standard on dental office income statements and balance sheets cannot be measured by a 

closure analysis as is EPA‟s more typical practice for analyzing economic achievability. Closure analyses 

typically rely on accounting measures such as present value of after-tax cash flow. However, such accounting 

measures are difficult to implement for businesses that are organized as sole proprietorships or partnerships. Still, 

the 2007 Economic Census reports that approximately 700 offices of the approximately 110,000 total offices had 

revenue of less than $25,000 (2007 dollar basis, see Table 2-1,). In reviewing the implied operating characteristics 

of these low revenue offices EPA considered whether these offices should be excluded from the analyses on any 

of the following bases:

 These low revenue offices could be single-dentist and/or part-time businesses that provide services as a 

subcontractor on an independent fee-for-service basis, such as dental hygiene, in general service dental 

offices that are owned and operated by a larger dental practice. Because these establishments would not 

be the primary owner/operator of the dental offices in which they provide services, they would not 

directly incur the compliance costs of the Proposed Dental Amalgam Rule. If they incurred any of these 

costs, it would be on a limited fractional share basis, most likely in proportion to the total value of their 

services as a fraction of the total revenue in the office. On the other hand if these operators offer their 

services in a competitive market, it may be that none of the compliance costs are shared by these 

subcontractors.

 Another possibility is these very low revenue offices could be non-profit groups which provide pay-asyou-can or free services to a low-income populations. In this case, these small businesses may be viable 

enterprises because they receive in-kind donations not counted as revenue, e.g., services of a practicing 

dentist.

 Alternatively, these very low revenue establishments could be non-viable as for-profit businesses, if they 

are attempting to operate as general service dental practices. This reasoning is based on EPA‟s assessment 

of the ongoing outlay required for replacement of existing dental office capital equipment, which was 

performed for the third part of the cost impact analysis (Ratio of the Proposed Rule‟s Capital Costs to 

Annual Dental Office Capital Replacement Costs, Section 4.2.3, below). Specifically, in this analysis, 
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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EPA estimated that 1-2 chair offices would incur capital replacement costs of approximately $23,500 per 

year (the estimated annual cost of keeping equipment in good working order). This outlay would exceed 

or represent a very substantial fraction of annual revenue of the business in the below-$25,000 revenue 

range. Accordingly, these offices may not be operating viably as general service dental offices.

Given these considerations, EPA performed the cost-to-revenue analysis on two bases:

 Excluding the low revenue offices (below $23,500 revenue) from the cost-to-revenue analysis.

 Including the low revenue offices in the cost-to-revenue analysis.

For the rest of the economic analysis chapter, EPA refers to the low revenue offices as baseline set-aside offices.

Following the methodology outlined above, EPA estimated the occurrence of cost-to-revenue exceeding the one 

and three percent of revenue thresholds for the proposed rule for the ADA Colorado Study and ADA National 

Study chairs-by-office distributions. As described, EPA accounted for the number of offices estimated to have 

already installed amalgam separator technology, and the resulting compliance cost for these cases, in the cost-torevenue calculations. Table 4-3, below, and Table 4-4, following page, summarize the results from this analysis. 

Table 4-3 reports the results by technology in-place status; Table 4-4 reports the results by number of chair 

ranges. These findings are the same for both the ADA national and Colorado chairs-by-office distributions.

With the baseline set-aside offices excluded from the analysis, EPA estimates that 507 dental offices would incur 

costs exceeding one percent of revenue, representing 0.5 percent of dental offices expected to incur costs under 

the proposed regulation. No offices incur costs exceeding 3 percent of revenue. With the baseline set-aside offices

included in the analysis, EPA estimates that 965 dental offices would incur costs exceeding one percent of 

revenue, representing 0.9 percent of dental offices expected to incur costs under the proposed rule; 221 offices are 

estimated to incur costs exceeding 3 percent of revenue, representing 0.2 percent of offices expected to incur costs 

under the proposed rule. 

Of note, all of the instances in which the cost-to-revenue impact value exceeds one or three percent occur among 

dental offices in revenue ranges below the small business revenue threshold of $7.0 million. This finding is 

relevant for Section 7: Regulatory Flexibility Act Assessment.

Table 4-3: Cost-to-Revenue Impact Summary

Offices with Cost Exceeding 1 Percent of Revenue Offices with Cost Exceeding 3 Percent of Revenue

Technology inPlaceNo Tech 

in-Place Total Percentage

Technology inPlaceNo Tech 

in-Place Total Percentage

Excluding Baseline Set-Aside Offices from Analysis 

33 474 507 0.5% 0 0 0 0.0%

Including Baseline Set-Aside Offices in Analysis 

243 722 965 0.9% 51 169 221 0.2%

Calculations exclude the estimated approximately 13,000 offices with no technology in place, but that will be found not to install or remove dental amalgam, 

and thus incur only a minimal one-time reporting cost. 

Percentages of affected offices are calculated as a fraction of total offices estimated to incur costs under the Proposed Dental Amalgam Rule.

Source: EPA analysis, 2011
*** E. O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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Table 4-4: Cost-to-Revenue Impact Summary by Number of Chairs

Number of 

Chairs

Excluding Baseline Set-Aside Offices from Analysis Including Baseline Set-Aside Offices in Analysis

Costs >1% Rev. Costs >3% Rev. Costs >1% Rev. Costs >3% Rev.

Number % Number % Number % Number %

1-2 chairs 507 4.2% - 0.0% 965 7.9% 221 1.8%

3 chairs - 0.0% - 0.0% - 0.0% - 0.0%

4 chairs - 0.0% - 0.0% - 0.0% - 0.0%

5 chairs - 0.0% - 0.0% - 0.0% - 0.0%

6 chairs - 0.0% - 0.0% - 0.0% - 0.0%

7+ chairs - 0.0% - 0.0% - 0.0% - 0.0%

Total 507 0.5% - 0.0% 965 0.9% 221 0.2%

Percentages of affected offices are calculated as a fraction of total offices estimated to incur costs under the Proposed Dental Amalgam Rule.

Source: EPA analysis, 2011

From this analysis, EPA finds that the proposed rule would not have a material adverse impact on the dental

office sector, given the small percentage of offices potentially incurring costs in excess of one or three percent of 

revenue.

4.2.2 Ratio of the Proposed Rule’s Capital Costs to Total Dental Office Capital Assets

From the preceding analysis, EPA finds that the proposed rule will have minimal impact on operating finances

given that less than one percent of dental offices may incur annualized compliance costs exceeding one or three 

percent of revenue. Given this finding, it is possible that the more material impact of the Proposed Dental 

Amalgam Rule could result from the need of dental offices to finance the initial outlays required for rule 

compliance – in particular, technology purchase and installation. Accordingly, EPA undertook two additional 

analyses of potential impact based on the requirement to finance the initial outlay. The first of these, presented in 

this section, examines the initial outlay in relation to the baseline value of assets on the balance sheet of dental 

office businesses. The second analysis, presented in the next section (Section 4.2.3), examines the initial outlay in 

relation to the estimated steady state outlays for capital replacement for the dental office business. The steady 

state capital replacement outlay represents a value dental offices may reasonably expect to spend in the periodic 

outlays to replace and/or upgrade dental office capital equipment. For both tests, EPA assumes a low ratio implies 

limited impact on dental offices‟ ability to finance the initial spending on compliance capital costs of the proposed 

rule. A high ratio may still allow costs to be financed but could imply a need to change capital planning and 

budgeting.

For the analysis of capital outlays in relation to baseline assets, EPA relied on data from Risk Management 

Association (RMA)8to estimate the baseline assets of dental offices by revenue range. Specifically, EPA used 

asset to sales ratios for the dental office sector to estimate an asset value for the minimum and maximum revenue 

values for each of the revenue range/number of chairs combinations as analyzed in the preceding section: each 

revenue range/number of chairs combination then has a minimum and maximum asset value for use in the capital 

outlay to baseline asset value analysis. The RMA data contains the limitation that it may not be fully 

representative of all dental offices, because it only represents dental offices that are successful borrowers. So 

offices that are not financially healthy may be underrepresented in the RMA data. This would tend to understate 

EPA‟s finding of impacts.

Using the same approach to assigning compliance requirements to the revenue range/number-of-chairs analysis 

combinations, as described in Section 4.2.1, EPA then assigned the initial outlays only to the revenue 

range/number-of-chairs analysis combinations. The value of initial outlays were then compared to the minimum 

and maximum values of each revenue range/number-of-chairs analysis combination to assess the potential capital 

outlay/financing burden. In the same way as described for the preceding cost-to-revenue analysis, the capital 

 

8 Risk Management Association reports financial statement information received from lending institutions, for businesses in a wide 

range of economic sectors, including Dental Offices. These data include a wide range of income statement and balance sheet 

information as well as financial and operating ratios. 
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outlay to baseline asset value analysis accounted for whether offices have already installed amalgam separator 

technology and also used the alternative number of chairs by office distributions (ADA Colorado and ADA 

National). Also, EPA performed this analysis both including and excluding the baseline set-aside offices. For the 

analysis including the baseline set-aside offices, EPA assumed a minimum revenue value of $5,000 (and the 

corresponding baseline assets value) for the lowest revenue range, to prevent division by zero.

Table 4-5, below, reports the findings from this analysis, specifically the average outlay-to-assets ratio values by 

operating size (number-of-chairs), and the weighted average of the outlay-to-assets ratio across the number-ofchairs ranges. In the same way as for the cost-to-revenue impact analysis, EPA did not perform this analysis for 

the large institutional facilities, as it has no financial data on which to base the analysis. However, since EPA 

performed this analysis on a range of office sizes, EPA projects the results of this analysis would be similar for 

large institutional facilities.

Table 4-5: Comparing Total Initial Outlay to Baseline Assets 

Initial Compliance Outlay as Percentage of Baseline Assets (Outlay-to-Assets, OTA)

Excluding Baseline Set-Aside Offices from Analysis 

Technology in Place No Technology in Place

Number of Chairs Low High Low High

1-2 chairs 0.1% 0.1% 2.7% 1.3%

3 chairs 0.0% 0.0% 0.8% 0.5%

4 chairs 0.0% 0.0% 0.5% 0.3%

5 chairs 0.0% 0.0% 0.3% 0.2%

6 chairs 0.0% 0.0% 0.3% 0.2%

7+ chairs 0.0% 0.0% 0.2% 0.2%

Total 0.0% 0.0% 0.7% 0.4%

Including Baseline Set-Aside Offices in Analysis 

Technology in Place No Technology in Place

Number of Chairs Low High Low High

1-2 chairs 0.2% 0.1% 3.7% 1.7%

3 chairs 0.0% 0.0% 0.8% 0.5%

4 chairs 0.0% 0.0% 0.5% 0.3%

5 chairs 0.0% 0.0% 0.3% 0.2%

6 chairs 0.0% 0.0% 0.3% 0.2%

7+ chairs 0.0% 0.0% 0.2% 0.2%

Total 0.0% 0.0% 0.8% 0.5%

Source: EPA Analysis, 2011

With baseline set-asides excluded from the analysis, the resulting initial capital costs to total capital assets values 

are low, with an average value 0.4 percent to 0.7 percent for no technology in-place facilities and 0.0 percent for 

the technology in-place facilities. With baseline set-asides included in the analysis, the resulting initial capital 

costs to total capital assets values are low, with an average value 0.5 percent to 0.8 percent for the no technology 

in-place facilities and 0.0 percent for the technology in-place facilities.

EPA finds these results to indicate that dental offices should not encounter difficulty in financing the increase in 

assets that would result from installing amalgam separator technology. 

4.2.3 Ratio of the Proposed Rule’s Capital Costs to Annual Dental Office Capital Replacement 

Costs

As another test of the potential burden of financing the initial outlays for rule compliance, EPA compared the 

initial outlay with estimated steady state outlays for capital replacement for the dental office business. As stated 

above, the steady state capital replacement outlay represents a value dental offices may reasonably expect to 

spend in the periodic outlays to replace and/or upgrade dental office capital equipment. EPA assumes a low ratio 

implies limited impact on dental offices‟ ability to finance the initial spending on capital costs of the proposed 
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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rule. A high ratio may still allow costs to be financed but could imply a need to change capital planning and 

budgeting.

For this comparison, EPA relied on data describing the equipment needs and costs for starting a dental practice as 

compiled in Safety Net Dental Clinic Manual, prepared by the National Maternal & Child Oral Health Resource 

Center at Georgetown University. This publication reports overall costs in broad categories of major and small 

items for two specific number-of-chair offices (3 chairs and 6 chairs) and provides additional detail on specific 

equipment needs for the 6-chair office, including the estimated service life for the various items of equipment. 

EPA worked with this data in several ways to develop an estimate of the steady state capital replacement outlay:

 EPA used the detailed cost and service life information for the 6-chair office to develop a profile of startup outlays by service life and developed percentages of total start-up outlay by service life for two broad 

categories of major and small items (see Table 4-6, below). 

Table 4-6: Composition of Dental Equipment for 6-Chair Office by Equipment Life

Useful Life Category

Percent of value by service life category

Major items Percent Small items Percent

3 $0 0.0% $19,800 21.5%

5 $52,300 21.5% $0 0.0%

10 $79,125 32.6% $72,138 78.5%

12 $6,850 2.8% $0 0.0%

15 $104,545 43.1% $0 0.0%

Total $242,820 100.0% $91,938 100.0%

Based on 6-chair office specifications from Safety Net Dental Clinic Manual, National Maternal & Child Oral 

Health Resource Center (Georgetown University)

 EPA used the aggregate cost information by the major and small item categories, for the 3- and 6-chair 

offices, to estimate start-up outlays for other number-of-chair offices to be accounted for the analysis.

EPA interpolated between and/or extrapolated from the 3- and 6-chair office values to develop the startup cost estimates for the other chair size offices including additional analysis for the 8 and 9 chair-size 

offices. EPA adjusted some of the values for the 1-2 chair office to reflect the fact that some equipment 

needs have a minimum number and/or cost regardless of how few chairs are in the office. The first section 

of Table 4-7, following page, Initial Outlays by major and small items, reports the results from this step

(EPA assumed initial compliance outlay for 8 and 9 chair-size offices is the same as a 7 chair-size office). 

 EPA allocated the broad components of cost – major and small items – for each office size, into the 

specific service life categories based on the service life percentages reported in Table 4-6, above. The 

second section of Table 4-7, following page, Initial Outlays by Equipment Life Category, reports the 

results from this step.

 To estimate a steady-state replacement outlay, EPA divided the estimated outlays for each service life 

category, by the number of years for the service life category and summed these values over the service 

life categories for each of the number-of-chair office specifications. EPA recognizes that outlays for 

capital replacement and/or refurbishment will not generally occur on a uniform basis from year to year, 

but on average, over a period of several years, the annual replacement and/or refurbishment outlay should 

be approximately this “steady state” value. The third section of Table 4-7, Steady State Annual 

Replacement Outlay, by Equipment Life Category, reports the results from this step.
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Table 4-7: Initial and Annual Replacement Outlay for Start-Up Dental Office by Number of Chairs

Number of Chairs

1-2 3 4 5 6 7 8 9

Initial Outlays

Major Items $165,036 $185,234 $219,220 $253,207 $287,193 $321,179 $355,166 $389,152

Small Items $39,082 $52,218 $68,195 $84,172 $100,149 $116,126 $132,103 $148,080

Total $204,553 $237,452 $287,415 $337,379 $387,342 $437,305 $487,269 $537,232

Initial Outlays by Equipment Life Category

3 $8,417 $11,246 $14,687 $18,127 $21,568 $25,009 $28,450 $31,891

5 $35,640 $39,897 $47,217 $54,537 $61,857 $69,177 $76,498 $83,818

10 $84,585 $101,332 $124,943 $148,554 $172,165 $195,776 $219,387 $242,998

12 $4,668 $5,225 $6,184 $7,143 $8,102 $9,061 $10,019 $10,978

15 $71,243 $79,752 $94,384 $109,017 $123,650 $138,282 $152,915 $167,548

Total $204,553 $237,452 $287,415 $337,379 $387,342 $437,305 $487,269 $537,232

Steady State Annual Replacement Outlay, by Equipment Life Category

3 $2,806 $3,749 $4,896 $6,042 $7,189 $8,336 $9,483 $10,630

5 $7,128 $7,979 $9,443 $10,907 $12,371 $13,835 $15,300 $16,764

10 $8,459 $10,133 $12,494 $14,855 $17,216 $19,578 $21,939 $24,300

12 $389 $435 $515 $595 $675 $755 $835 $915

15 $4,750 $5,317 $6,292 $7,268 $8,243 $9,219 $10,194 $11,170

Total $23,531 $27,613 $33,641 $39,668 $45,696 $51,723 $57,751 $63,778

Source: EPA Analysis, 2011

As the final step in this analysis, EPA compared the estimated total initial outlay for the Proposed Dental 

Amalgam Rule to the estimated steady state annual replacement outlay values, from Table 4-7. Table 4-8, reports 

the results from this comparison. As shown in Table 4-8, the values for Initial Compliance Outlay as Percentage 

of Replacement Outlay are quite low, ranging from 2.2 percent to 3.5 percent, with a weighted average of 2.9 

percent across all number of chair ranges. 

Table 4-8: Comparing Total Initial Compliance Outlay to Steady State Annual Replacement Outlay by 

Number of Chairs

Number of Chairs

1-2 3 4 5 6 7 8 9

Wghtd 

avg.

Initial Compliance Outlay $789 $886 $886 $886 $1,345 $1,818 $1,818 $1,818

Baseline Annual Replacement Outlay $23,531 $27,613 $33,641 $39,668 $45,696 $51,723 $57,751 $63,778

Initial Compliance Outlay as Percentage 

of Replacement Outlay

3.4% 3.2% 2.6% 2.2% 2.9% 3.5% 3.1% 2.9% 2.9%

Source: EPA Analysis, 2011

4.2.4 Economic Impact for New Sources

EPA assessed whether today‟s proposed pretreatment standard for new sources would impose a barrier to entry. 

To performance this analysis, EPA relied on data describing the equipment needs and costs for starting a dental 

practice as compiled in Safety Net Dental Clinic Manual, prepared by the National Maternal & Child Oral Health 

Resource Center at Georgetown University. EPA calculated the initial outlay to start a dental office as shown 

above in Table 4-7 (see above Section 4.2.3, page 17, for details on how EPA calculated the initial outlay to start a 

dental office by number of chairs). EPA then compared the initial compliance cost for dental offices as estimated 

in Section 3.1 (see Table 3-3) to these start-up values. This comparison demonstrates that the amalgam separator 

capital costs would represent only 0.3 percent to 0.4 percent of the cost of starting a dental practice and therefore, 

do not pose a barrier to entry (see Table 4-9, below).
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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Table 4-9: Comparing Total Initial Compliance Outlay to Initial Outlay by Number of Chairs

Number of Chairs

1-2 3 4 5 6 7 8 9

Wghtd 

avg.

Initial Compliance Outlay $789 $886 $886 $886 $1,345 $1,818 $1,818 $1,818

Initial Outlay $204,553 $237,452 $287,415 $337,379 $387,342 $437,305 $487,269 $537,232

Initial Compliance Outlay 

as Percentage of Office 

Start-Up Costs

0.4% 0.4% 0.3% 0.3% 0.3% 0.4% 0.4% 0.3% 0.3%

Source: EPA analysis, 2011
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Economic Analysis for Proposed Effluent Limitation Guidelines and Standards for the Dental Category

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5 Social Cost of the Proposed Dental Amalgam Rule

The previous sections reviewed the estimated costs of the Proposed Dental Amalgam Rule to dental facilities and 

assessed the potential impact of the proposed rule on these facilities. This section reviews the costs of the 

Proposed Dental Amalgam Rule from the standpoint of cost to society, or social cost. The assessment of social 

cost builds from the estimated costs of regulatory compliance, as described in Section 3.1, but differs from the 

assessment of costs to dental facilities in the following respects:

 The assessment of cost of compliance to dental facilities used a discount rate of 7 percent for developing 

present and annualized values. As described previously, the 7 percent discount rate represents an 

estimated opportunity cost of capital to society, on a pre-tax, constant dollar basis. The analysis of social 

cost uses an additional discount rate, 3 percent, which represents a societal rate of time preference – the 

rate at which society desires to be compensated for deferring consumption from one year to the next. 

Social costs are presented on the basis of both a 3 and 7 percent discount rates. 

 The assessment of cost of compliance to dental facilities included only the costs incurred by these 

facilities. The assessment of social cost includes these costs of compliance, but also includes an additional 

cost that will be incurred by society, namely the cost to permitting authorities for administering the 

Proposed Dental Amalgam Rule.

 The assessment of cost of compliance to dental facilities developed present values and annualized costs as 

of the time at which dental facilities would comply with the rule‟s requirements – regardless of the 

specific calendar year in which compliance would occur. The assessment of social cost develops present 

and annualized values as of the expected year of rule promulgation, 2012, and the compliance period 3 

years following promulgation, in 2015. Specifically, using the analytic convention outlined previously for 

the assessment of compliance costs to dental facilities, costs are first developed over an assumed 20-year 

compliance period, which reflects initial installation of compliance equipment at the first year of 

compliance and then reinstallation at the 11th year of the 20-year analysis period. These costs are 

discounted to the year of compliance and then annualized over the 20 years of rule compliance. These 

present and annualized values, which are assumed to be as of 2015, or the first year of required 

compliance, are then discounted an additional three years to 2012, the year of rule promulgation.

In assessing social costs, EPA assumed that the regulation would result in no change in the total quantity of 

services provided by the dental industry. Thus, the social cost analysis includes no loss in economic surplus to 

society due to contraction of dental industry output, and the social cost estimate includes only the resource costs 

of compliance and rule administration. Given that the rule‟s total annualized costs are estimated to represent less 

than 0.1 percent of the total value of dental services, based on 2007 Economic Census values expressed in 2010 

dollars, EPA assesses that the assumption of no change in industry output is reasonable.

5.1 Cost of Compliance on Social Cost Basis

For the analysis of social cost, compliance costs are developed on the same basis as described in Section 3.1, with 

the exceptions, as noted above, that costs are calculated on a present value and annualized cost basis as of the year 

of rule promulgation, 2012, and using 3 percent and 7 percent discount rates. Table 5-1, summarizes these cost 

values for the proposed rule by the alternative number-of-chair distributions.
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Table 5-1: Compliance Costs on Social Cost Basis for Proposed Dental Amalgam Rule

Annualized Cost (millions, $2010) as of 2012, Year of Rule Promulgation

Using 3 percent discount rate Using 7 percent discount rate

Colorado Survey ADA Survey Colorado Survey ADA Survey

Compliance Cost $43.6 $48.5 $40.0 $44.5

Source: EPA Analysis, 2011

5.2 Administrative Costs

EPA estimates that permitting authorities will incur annual administrative costs basis as of the rule promulgation 

year, 2012, of $593,000 at a 3 percent discount rate, and $530,000 at a 7 percent discount rate. EPA estimated the 

annual recordkeeping costs and recurring costs (recordkeeping, inspections, reporting, and enforcement) for the 

following control authorities: 

403.10(e)States POTWs9

Approved Pretreatment

States (minus 

403.10(e)States)

EPA 

Regions10

Number of Control Authorities 5 1,600 31 9

EPA used a labor rate estimate of $47.2611 for these control authorities and an appropriate time estimate for each 

activity mentioned above (e.g. recordkeeping). Annual costs were assumed to meet a 5 year compliance schedule. 

Administrative Costs were assumed over a three year period, because of the pretreatment standards program ICR 

that is completed every three years. 

5.3 Total Social Cost

Table 5-2, below, summarizes the estimated total social cost for the Proposed Dental Amalgam Rule, including 

both compliance costs and administrative costs. Costs are reported by the alternative number-of-chair 

distributions and for the 3 and 7 percent discount rates.

Table 5-2: Summary of Social Cost for Proposed Dental Amalgam Rule

Annualized Cost (millions, $2010) as of 2012, Year of Rule Promulgation

Cost Category

Using 3 percent discount rate Using 7 percent discount rate

Colorado Survey ADA Survey Colorado Survey ADA Survey

Compliance Cost $43.6 $48.5 $40.0 $44.5

Cost to Permitting Authorities $0.6 $0.6 $0.5 $0.5

Total Social Cost $44.2 $49.1 $40.6 $45.0

Source: EPA Analysis, 2011

 

9 Estimated approved control authority POTWs nationwide via U.S. EPA, 2011. Information Collection Request: National Pretreatment 

Program OMB Control No. 2040-0009, EPA ICR No. 0002.14 (Draft). Office of Wastewater Management. Washington, DC. March.

10 All states in Region 4 have approved pretreatment programs, so the state has the approval authority. 

11 Metal products and machinery 150 POTW Study ($2010)
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6 Cost-Effectiveness Analysis

This cost-effectiveness analysis supports the proposed pretreatment standards for the Dental Industry. EPA 

traditionally defines cost-effectiveness (CE) as the total incremental annualized cost of a pollution control option 

per total incremental toxic pound-equivalent (i.e., pound of pollutant adjusted for relative toxicity) removed by 

that control option. EPA uses the cost-effectiveness analysis primarily in comparing the removal efficiency of 

regulatory options under consideration for a rulemaking. A secondary use is to compare the cost-effectiveness of 

the proposed option to those for ELGs for other industries. This definition includes the following concepts.

6.1 Total Incremental Annualized Compliance Costs

The cost-effectiveness analysis uses the estimated total annual costs of complying with the proposed rule. See 

Section 4 for further information on how compliance costs are calculated. As described in Section 4, EPA 

developed two estimates of incremental costs, reflecting different distributions of numbers of chairs in dental 

offices. EPA adjusts the compliance costs to 1981 dollars to allow for comparison with cost-effectiveness values 

for other promulgated regulations for different industries. For this proposal, EPA adjusted the value using the 

Bureau of Economic Analysis GDP Implicit Price Deflators.12 This adjustment factor is calculated as follows:

Adjustment factor = (1981$)/(2010$) = 52.270/ 110.992 = 0.47093. Table 6-1 shows the estimated annualized 

compliance costs converted to 1981 dollars.

Table 6-1: Annualized Compliance Costs (millions$)

Annualized Compliance 

Costs (2010$)

GDP Deflator to Convert 

2010$ to 1981$

Annualized 

Compliance Costs (1981$)

Colorado Survey $43.64 0.47 $21

ADA National Survey $48.47 $23

6.2 Toxic Weighting Factors

Because each pollutant differs in its potential harmful effects on human and aquatic life, EPA uses a toxic 

weighting factor (TWF) specific to each pollutant to calculate a toxicity normalized pollutant removal value for 

use in the cost-effectiveness analysis.

13 EPA derives toxic weighting factors for each pollutant using chronic 

aquatic life criteria (or toxic effect levels) and human health criteria (or toxic effect levels) established for the 

consumption of fish. Table 6-2 lists the TWFs for the pollutants found in dental discharges.

Table 6-2: Toxic Weighting Factors for Pollutants in Dental Amalgam

Total Mercury 117.12

Silver 16.47

Tin 0.30

Copper 0.63

Zinc 0.05

 

12 EPA typically uses the Engineering News Record Construction Cost Index. However, this approach is not appropriate for today‟s

proposal because the technology option does not require construction, 

13 See EPA 820-R-10-021 Technical Support Document for the 2010 Effluent Guidelines Program Plan for additional information on 

toxic weighting factors.
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6.3 Calculation of Annual Total Incremental Pound Equivalents Removed to Surface 

Waters

EPA estimated the annual reduction in pollutant loadings nationwide to waters of the U.S. associated with today‟s 

proposal for each pollutant identified in Table 6-2. Because this proposal is for indirect discharges, this estimate 

appropriately accounts for discharge reductions that occur at the POTW. See section XX of this support document 

for further information on how loadings are calculated. EPA adjusts the reductions in a pollutant‟s discharges for 

an option, or pollutant removals, for toxicity by multiplying the estimated removal quantity for each pollutant by 

its TWF. EPA refers to these adjusted removals as toxic weighted pound-equivalents (TWPEs). EPA then 

summed the TWPE reductions for each pollutant to estimate the total annual incremental pound-equivalent 

reductions for today‟s proposal. Table 6-3 presents the estimate of individual and total annual incremental poundequivalent removals from surface waters for the proposed rule.

Table 6-3: Total Incremental Pound-Equivalents Removed to Surface Waters

Pollutant

Incremental Removals from 

Baseline (lbs/yr) Toxic Weighting Factors

Incremental Removals from 

Baseline (lb-eq/yr)

Total Mercury 912 117.12 106,848

Silver 764 16.47 12,579

Tin 350 0.30 105

Copper 177 0.63 112

Zinc 39 0.05 2

Total 119,646

6.4 Cost-Effectiveness Results

Table 6-4 presents the cost-effectiveness data and results. As Table 6-4 shows, the cost-effectiveness value for the 

proposed rule is $171-$190/lb-eq ($1981).

Table 6-4: PSES Cost-Effectiveness Analysis

Pre-Tax Total Annualized 

Costs ($1981 M) Removals (lbs-eq)

Average CostEffectiveness ($1981)

ADA National Survey $23 119,646 $190

Colorado Survey $21 119,646 $171

There are no absolute scales for judging CE values as indicating that an option is “cost-effective” or “not costeffective.” The values are considered comparatively high or low only within a given context, such as comparison 

among alternative regulatory options considered for a given regulation, or to the C-E analysis values for effluent 

limitations guidelines for other industries.
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7 Regulatory Flexibility Act Assessment

As part of the cost and economic impact assessment for the Proposed Dental Amalgam Rule, EPA considered the 

potential impact on small entities in the dental office business. Of key concern in this assessment is whether the 

Proposed Dental Amalgam Rule could cause a Significant Impact on a Substantial Number of Small Entities

(SISNOSE).

As reported previously, the Small Business Administration criterion for defining a small entity in the Dental 

Office sector (NAICS 621210) is $7.0 million in revenue. In the same way as for the previous general economic 

impact analysis, EPA framed its small entity analysis around establishments, or individual dental offices, instead 

of using the firm. Because nearly 98 percent of small dental office firms are single establishment businesses, there 

is minimal difference in performing this analysis at the level of the dental office compared to the dental firm. 

To estimate the number of number of small business dental offices, EPA relied on dental office counts from the 

Economic Census, as used elsewhere in this analysis. EPA first segmented the Economic Census revenue range 

that contains the small business criterion into office counts that are above and below the criterion assuming that 

offices are uniformly distributed across this revenue range according to revenue size. This segmentation applies to 

less than one percent of the total number of small businesses in the dental office sector, so the error introduced by 

assuming a uniform distribution is minor, at most, in the overall analysis. In addition, as described previously, 

EPA also estimated that some in scope dental offices do not process dental amalgam, and thus would be expected 

to incur no or limited costs under the Proposed Dental Amalgam Rule. 

Based on these adjustments, EPA estimates that approximately 126,800 dental offices are small businesses and 

that approximately 109,600 of these small business dental offices are in scope for today‟s proposed rule and thus 

could incur costs under the Proposed Dental Amalgam Rule. Because the number of small business dental offices 

that process amalgam is only 259 offices less than the total dental offices (109,862) and cost-to-revenue impacts 

above the thresholds are located in the lower revenue ranges, there is no difference between the cost-to-revenue 

analysis performed for all dental offices, and that performed for small entities.

To assess the potential for Significant Impact on these small businesses, EPA relied on the method of the cost-torevenue impact analysis as presented in Section 4.2.1: Cost-to-Revenue Analysis, above, which used one and three 

percent of revenue thresholds as impact measures. As described at page 13, EPA performed this analysis on two 

bases: 

 Excluding the baseline set-aside offices from the cost-to-revenue analysis. 

 Including the baseline set-aside offices in the cost-to-revenue analysis.

Table 7-1, below, summarizes the results for small entities from this analysis. 

Table 7-1: Cost-to-Revenue Impact Analysis for Small Entities 

Offices with Cost Exceeding 1 Percent of Revenue Offices with Cost Exceeding 3 Percent of Revenue

Technology inPlaceNo Tech 

in-Place Total Percentage

Technology inPlaceNo Tech 

in-Place Total Percentage

Excluding Baseline Set-Aside Offices from Analysis 

33 474 507 0.5% 0 0 0 0.0%

Including Baseline Set-Aside Offices in Analysis 

243 722 965 0.9% 51 169 221 0.2%

Results are the same for both the ADA national and Colorado distributions of chairs by office.

Percentages of affected offices are calculated as a fraction of total small business offices estimated to incur costs under the Proposed Dental Amalgam Rule.

Source: EPA analysis, 2011
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As shown in Table 7-1, with the baseline set-aside offices excluded from the analysis, EPA estimates that 507 

dental offices would incur costs exceeding one percent of revenue.14 These offices represent 0.5 percent of the 

small business offices estimated to incur costs under the Proposed Dental Amalgam Rule. EPA estimates that no 

small entities would incur costs exceeding 3 percent of revenue for the proposed rule.

With the baseline set-aside offices included in the analysis, EPA estimates that 965 dental offices would incur 

costs exceeding one percent of revenue. These offices represent 0.9 percent of small business offices estimated to 

incur costs under the Proposed Dental Amalgam Rule. EPA estimates that 221 dental offices would incur costs 

exceeding 3 percent of revenue, representing 0.2 percent of small business offices estimated to incur costs under 

the Proposed Dental Amalgam Rule. 

From this analysis, given the very small percentage of small businesses dental offices potentially incurring costs 

in excess of the 1 and 3 percent of revenue thresholds, EPA estimates that the proposed Dental Amalgam Rule

would not impose a Significant Impact on a Substantial Number of Small Entities. 

 

14 These findings do not vary by distribution of chairs by office.