# Economic Analysis of the Proposed Dust Testing and Clearance Amendments to the TSCA Lead Renovation, Repair, and Painting Program forTarget Housing and ChildOccupied Facilities

Economic and Policy Analysis Branch Economics, Exposure and Technology Division Office of Pollution Prevention and Toxics

U.S. Environmental Protection Agency

April 2010

## Acknowledgment

EPA acknowledges the analytical and draft preparation support of Abt Associates Inc. of Cambridge, Massachusetts, provided under Contract Nos. EP-W-08-10 and EP-W-05-022, in the preparation of this report.



### Notice

This is not an official guidance documen t and should not be relied upon to determine applicable regulatory requirements. This document was prepared to provide economic information for the rulemaking process, and to meet various administrative and legislative requirements. Due to the nature of the information available to EPA, the document contains various assumptions that may not reflect the regulatory determinations that an indi vidual firm would make were it to apply the rule's requirements to its specific circumstances. Persons seeking information on regulatory requirements as they apply to specific f acilities should consult 40 CFR Part 745, the preamble for the regulatory action, EPA guidance documents, and EPA’s National Lead Information Center.Economic Analysis for the L RRP Clearance Proposed Rule



### Table of Contents

Executive Summary .............................................................................................................................. ES-1 Background........................................................................................................................................ ES-1 Overview of the LRRP Clearance Rule............................................................................................ . ES-1 Options Analyzed ............................................................................................................... ............... ES-3 Number of Events............................................................................................................... ............... ES-4 Costs of the Proposed Rule..................................................................................................... ........... ES-6 Benefits.............................................................................................................................................. ES-8 Small Entity Impacts........................................................................................................... ............... ES-10

1. Introduction ................................................................................................................................ 1-1 1.1 Purpose of the LRRP Rule Revisions...................................................................................... 1-1 1.2 Goal of the Economic Analysis............................................................................................... 1-1 1.3 Organization of this Report .................................................................................................... . 1-3

2. Lead, Renovation, Repair, and Painting Industry Profile...................................................... 2-1 2.1 Contractors that Supply Renovation Services ......................................................................... 2-2 2.2 Child Care and Schools: Child Occupied Facilities ................................................................ 2-10 2.3 Nonresidential Commercial Prope rty Owners and Managers ................................................. 2-23 2.4 The Demand for Renovation Services..................................................................................... 2-24 2.5 Renovation Industry Market Structure.................................................................................... 2-26 2.6 Residential Property Owners & Managers.............................................................................. 2-28 2.7 Training Providers............................................................................................................. ...... 2-30 2.8 Summary Characteristics: Numbers of Structures in the Regulated Universe........................ 2-32

3. Problem Definition: Residential Lead-Based Paint Hazards and the Justification for Regulation ................................................................................................................................... 3-1 3.1 Lead Contamination Problem.................................................................................................. 3-1 3.2 Regulatory Background.......................................................................................................... . 3-4 3.3 Justification for Federal Regulations of Lead Exposure during Renovation........................... 3-11 3.4 Approaches for Reducing Lead Exposure Resulting from Renovation .................................. 3-16 Appendix 3A: The Role of Elasticities in Determining the Impacts of a Rule ............................... 3-19 3A.1 Elasticities of Supply and Demand ........................................................................................ .. 3-19 3A.2 How Price Elasticity of Demand Affects the RRP Rule.......................................................... 3-24 Appendix 3B: Elasticities of Demand and Supply for Housing / Renovation Services.................. 3-26

4. Costs of the Lead, Renovation, Repair, and Painting Rule Revisions ................................... 4-1 4.1 Definitions of Options............................................................................................................. 4-2 4.2 Number of Events with Dust Wipe Testing or Clearance Requirements................................ 4-4 4.3 Costs of Dust Sampling and Clearance ................................................................................... 4-34 4.4 Number of Sampling Technicians Seeking Training and Certification .................................. 4-63 4.5 Sampling Technician Training Costs ...................................................................................... 4-68Economic Analysis for the L RRP Clearance Proposed Rule



### 4.6 Total Incremental Costs of Proposed LRRP Clearance Rule.................................................. 4-70 4.7 Alternative Baseline and Options............................................................................................ 4-7 4

5. Benefits of the Proposed LRRP Clearance Rule...................................................................... 5-1 5.1 Overview of Proposed LRRP Clearance Rule in Terms of Benefits Estimation .................... 5-1 5.2 Residents and Occupants of Structures Regulated by the Proposed LRRP Clearance Rule... 5-5 5.3 Lead-Related Health Effects and Ecological Effects .............................................................. 5-12

6. Estimated Impacts of the Lead, Renovation, Repair, and Painting Rule Revisions............. 6-1 6.1 Paperwork Reduction Act ....................................................................................................... 6 -1 6.2 Regulatory Flexibility Act..................................................................................................... .. 6-15 6.3 Unfunded Mandates Reform Act (UMRA)............................................................................. 6-43 6.4 Executive Order 13132 - Federalism....................................................................................... 6-45 6.5 Executive Order 13175 - Tribal Implications.......................................................................... 6-45 6.6 Protection of Children from Environmental Health Risk and Safety Risks............................ 6-46 6.7 Executive Order 13211 - En ergy Effects ................................................................................ 6-46 6.8 National Technology Transfer and Advancement Act............................................................ 6-47 6.9 Executive Order 12898 – Environmental Justice .................................................................... 6-47 APPENDIX 6A – Estimating average per-pupil expenditures of private schools........................... 6-50Economic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-1 

## Executive Summary This report presents an economic analysis of alternative regulatory options for revising the lead, renovation, repair and painting (LRRP) program regul ations for target housing and child occupied facilities (COFs). The proposed LRRP Clearance Rule changes the LRRP program by requiring renovators to perform dust wipe testing for a subset of renovation jobs, and requiri ng them to re-clean and re-test for a second subset of renovation jobs if the te sts show that lead dust levels exceed the established clearance standards. 

### Background Past use of lead-based paint has resulted in contamin ation that continues to pose human health hazards. While intact lead-based paint is not likely to contri bute to such hazards, the deterioration of a structure over time or acute environmental stresses, such as are commonly present during renovation activities, has been found to create lead hazards. Since many buildin gs constructed before 1978 have lead-based paint, it is likely that renovation activities in pre-1978 buildings will contribute to lead hazards unless appropriate containment and cl ean-up practices are employed. The LRRP rule for target housing and COFs was prom ulgated in 2008 (73 FR 21692) and is codified in Part 745 of Title 40 of the Code of Federal Regulations (CFR). The rule was promulgated under the authority of §402(c) of the Toxic Substances Cont rol Act (TSCA). The existing LRRP regulations require entities that perform renovation, repair and pa inting work for compensation in buildings covered by the rule to become certified by EPA, ensure that their employees are trained as either renovators or workers, and use lead-safe work practices when disturbing lead-based paint.


### Overview of the LRRP Clearance Rule Figure ES-1 provides a summary of the dust wipe testing and clearance require ments of the proposed rule, and their relationship with the requirements of the 20 08 LRRP rule. The proposed LRRP Clearance Rule would require dust wipe testing on uncarpeted floor s and on window sills and troughs after the following types of renovations that disturb lead-based paint: removing more than 40 ft 2 

### of trim, molding, cabinets, or other fixtures; removing or replacing of window or door frames; scraping 60 ft 2 

### or more of painted surfaces; or using a heat gun at temperatures below 1100 degrees Fahrenheit 1 

### . Renovations using machines that remove lead-based paint through high speed operation (such as power sanders or abrasive blasting), or involving demolition or removal of more than 6 ft 2 

### of plaster walls with lead-based paint through destructive means, would require firms to demonstrate – through dust wipe testing – that they have met clearance standards before the renovation will be considered complete. (For interior surfaces, the clearance standards are 40 μ g/ft 2 

### on floors, 250 μ g/ft 2 

### on interior windowsills, and 400 μ g/ft 2 

### on window troughs.) If any of the dust wipe test results exceed the interior clearance standards, the firm will have to re-clean and re-test the area that failed. The proposed rule allows renovation firms to stop after the second failed clearance test, regardless of the result, if the renovation firm did not agree to refinish the surface that is failing clearance as part of the renovatio n contract. In such instances, the renovation firm would only have to re-clean and test the surface ag ain, no matter what the second dust wipe testing result is. In contrast, the economic analysis assumes that if the second dust wipe testing result fails the clearance test, the renovation firm would have to re -clean the surface a second time and test the surface a third time. Therefore, the economic analysis ov erestimates the cost of the clearance requirement.

1 Under the 2008 LRRP rule at 40 CFR 745.85(a)(3)(iii), operatin g a heat gun on lead-based paint is permitted only at temperatures below 1100 degrees Fahrenheit.Economic Analysis for the L RRP Clearance Proposed Rule

Figure ES-1: Summary of Required Activities for Performing Dust Wipe Testing and Clearance

Executive Summary ES-2Economic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-3 

### Options Analyzed This economic analysis considers several regulator y options, which are described below and summarized in Table ES-1 and Table ES-2

. 1. Low Thresh old Option

 Dust wipe testing is required for renovations that disturb more than 6 square feet of lead-based paint through removing trim, molding, cabinets, or other fixtures; removal or replacement of window or door frames; scraping painted surfaces; or the use of a heat gun.

 Clearance is required for renovations that disturb lead-based paint through:

- High-speed machine removal of paint larger than 6 square feet; or

- Plaster removal using destructive means, larger than 6 square feet.

2. Proposed Rule Threshold Option

 Dust wipe testing is required for renovations that disturb lead-based paint through:

- Removal of more than 40 square feet of trim, molding, cabinets, or other fixtures;

- Scraping more than 60 square feet of paint;

- Using a heat gun to remove more than 6 square feet of paint; or

- Removing a window frame or door frame.

 Clearance is required for renovations that disturb lead-based paint through:

- High-speed machine removal of more than 6 square feet of paint; or

- Demolition or removal using destructive me ans of more than 6 square feet of plaster.

3. High Threshold Option

 Dust wipe testing is required for renovations that disturb lead-based paint through:

- Removal of more than 80 square feet of trim, molding, cabinets, or other fixtures;

- Scraping more than 120 square feet of paint;

- Using a heat gun to remove more than 60 square feet of paint; or

- Disturbing paint by removing a window frame or door frame.

 Clearance is required for renovations th at disturb lead-based paint through:

- High-speed machine removal of more than 60 square feet of paint; or

- Demolition or removal using destructive me ans of more than 60 square feet of plaster.

4. Third Party Sampling Option

 Applies to the same renovations and size thresholds as the proposed rule.

 Dust wipe testing and clearance are requi red in the same instances as the proposed rule option but dust wipe sampling must be pe rformed by an independent third party.

5. Dust Wipe T esting Only Option

 Applies to the same renovations and size thresholds as the proposed rule.

 Achieving clearance is not required.

6. Clearance Only Option

 Applies to the same renovations and size thresholds as the proposed rule.

 Clearance must be achieved in all of these renovations.Economic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-4 Table ES-1: Options Included in Economic Analysis

Option Size Threshold Dust Wipe Testing and Clearance Third Party Requirement

Low Threshold Option Size thresholds are lower or equal to proposed rule No

Proposed Rule Size thresholds are as proposed No

High Threshold Option Size thresholds are higher or equal to proposed rule Dust wipe testing is required for: 1. cabinet and trim events 2. scraping of paint 3. heat gun removal of paint 4. Window frame or door frame removal events

Clearance is required for: 1. high-speed machine removal of paint 2. plaster removal using destructive means No

Third Party Sampling Option Same as Proposed. Dust wipe testing and clearance are required in the same instances as proposed but dust wipe sampling must be performed by an independent third party. Yes

Dust Wipe Testing Only Option Same as Proposed. Dust wipe testing is required in instances where dust wipe testing or clearance is required under the proposed option. No

Clearance Only Option Same as Proposed. Clearance is required in instances where dust wipe testing or clearance is required under the proposed option. No

Table ES-2: Size Thresholds of the Options Included in Economic Analysis

Threshold (square feet) Activity Event Type Low Proposed High Trim/Molding/Cabinet Removal 6 40 80 Window / Door Frame Removal n/a n/a n/a Painting w/ Scraping 6 60 120 Dust Wipe Testing Only Painting w/ Heat Gun 6 6 60 Paint Removal w/ High-Speed Machines a 6 6 60 Both Dust Wipe Testing and Clearance Plaster Removal w/ Destructive Means 6 6 60

a Under the 2008 LRRP rule at 40 CFR 745.85(a)(3)(ii), the use of machines that rem ove lead-based paint through high speed operation such as sanding, grinding, power pl aning, needle gun, abrasive blasting, or sandblasting, is prohibited unless such machines are used with HEPA exhaust control.



### Number of Events The proposed rule would affect approximately 1.6 million renovations per year. By comparison, the LRRP program applies to 18.7 million renovations each year, of which 7.4 million use lead-safe work practices (because they test positive for lead-based pain t, and are conducted in compliance with the rule).

2



### Table ES-3 indicates the estimated number of renovation events affected by the different options by type of renovation and threshold size. In about 1.5 million renovations (96% of those affected by the proposed rule), dust wipe testing would be required without a requirement to achieve clearance. The most common

2 The number of events is estimated under a baseline scenario where the opt-out provision of the 2008 LRRP rule has been eliminated, as was proposed in October 2009 (74 FR 55506).Economic Analysis for the L RRP Clearance Proposed Rule



### single event activities covered by the rule are window or door frame removal, followed by trim, molding, or cabinet removal. But the most common regulated activity overall involves multiple regulated activities occurring during the course of a single job (e.g., a re novation with both window frame removal and trim removal).

Table ES-3: Thousands of Regulated Events by Event Type and Option a – First Year

Activity Event Type Low Threshold Proposed Threshold High Threshold Heat gun, < 1000 degrees 4 4 <1 Window/door frame removal 484 514 545 Scraping 40 2 <1 Trim, molding, cabinet removal 687 437 207 Multiple activity events b 607 572 449 Dust Wipe Testing Only

Subtotal, dust wipe testing 1,822 1,528 1,201 High speed machines 4 4 2 Plaster demolition through destructive means 21 29 31 Multiple activity events b 44 36 25 Both Dust Wipe Testing and Clearance Subtotal, clearance events 69 69 58 Total, All Event Types 1,891 1,597 1,259 Totals may not add due to rounding.

a The third party sampling option, the dust wipe testing only option, and the clearance only option impact the same total number of events as the proposed threshold option.

b Multiple event types occurring during the course of a single job (e.g., a renovation with both window frame removal and trim removal). Because the probability of multiple-activity even ts varies with the size threshold, the number of events for single-event activities is not consistent across size thresholds.



### Figure ES-2 shows the distribution of events by event type for the proposed threshold.

Figure ES-2: Total First Year Events by Type - Proposed Threshold

Multiple activity events with at least one clearance event 2% of all clearance rule jobs High speed machine paint removal events only < 1% of all clearance rule jobs

Scraping events only
< 1% Clearance 4% Trim, molding, cabinet

removal events only
27% Plaster demoli ion through destructive means events only 2% of all clearance rule jobs Multiple activity dust testing events [no clearance events] 36%

Heat gun events only
< 1% Window/door frame removal events only
32%

Executive Summary ES-5Economic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-6 

### Renovations requiring clearance make up about 4% of th e renovations affected by the proposed rule (and 1% of all renovations using lead-safe work practices under the LRRP program). Multiple activity events (including combinations of clearance events and dust wipe testing only events) are the most common activities requiring clearance, followed by the demo lition or removal of plaster through destructive means, and using machines that remove paint through high speed operations. There are an estimated 1.9 million regulated events per year under the low threshold option and 1.3 million regulated events per year under the high thres hold option. The distribution of event types under these alternate options (in terms of the relative freque ncy of different single and multiple event activities) is similar to the proposed threshold option. There are an estimated 1.6 million regulated events per year under the third party sampling option, the dust wipe testing only option, and the clearance only option, the same as under the proposed threshold option. 

### Costs of the Proposed Rule Dust wipe testing costs are expected to vary accord ing to the number of samples taken, which depend on the number of rooms in the work area and whether or not the room is carpeted. For a typical one-room renovation event, four samples would be required (w indow sill, window trough, workroom floor, and adjacent room floor). For a renovation event where both the renovated room and the adjacent room are carpeted, only two samples would be required (window sill and window trough). Each additional room inside the work area will add two to three dust wipes depending on whether or not the room is carpeted and whether or not there are windows in the work area. However samples are not required for more than four rooms in a unit’s work area. All entities that conduct renovations covered by the propo sed Clearance Rule will have to use a trained dust sampling technician to take dust samples and have them tested. (A trained dust sampling technician is an individual who has successfully completed a dust sampling technician course accredited by EPA or an EPA-authorized State or Tribal program.) Renova tors can either hire a third-party dust sampling technician or have themselves or one of their em ployees trained as a dust sampling technician. Which approach they choose may depend on several factors, including the number of renovations they perform each year covered by the proposed rule. The average cost for a renovation firm to hire a third- party lead evaluation firm to take the dust wipe samples, send them to a lab for testing, and provide a one-page report is estimated to be a fixed cost of $158 and a variable cost of $26 per sample. Thus, the co st to hire a third party to take four dust samples, send them to a lab for analysis, and provide a short report is estimated to be $262. Given that some covered renovations take place in more than one room (so that more than four samples may be required, depending on whether uncarpeted fl oors and windows are present), the average cost of the dust testing requirement is nearly $300 per job if a third party dust sampling technician is used.
Firms performing multiple renovations a year where dust wipe testing is required can save money by having the renovator or a worker trained as a dust sampli ng technician. This requires taking an eight hour initial training course (and a four hour refresher c ourse every five years thereafter), at an estimated annualized cost of $146 per year. For renovators that perform multiple covered renovations per year, the savings from using their own dust sampling technician are much greater than the annualized cost of the dust sampling technician training. Dust testing for these samples will cost these renovators an average of approximately $170 per job (including training costs), a savings of $130 per job compared to using a third party dust sampling technician. The analysis assu mes that over 233,000 re novators will choose to become trained as dust sampling technicians so that they can collect samples for their own renovations. The proposed rule does not require them to become trained, but many renovators may find it more economical to do so rather than hiring a third party to take the samples.Economic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-7 

### The cost of dust wipe testing for a job will vary b ased on the number of surfaces that must be tested, and whether the dust sampling is done in-house or by a thir d-party firm. Overall, typical costs are estimated to vary from $120 to $340 per job. A typical renovator will have 3 to 38 jobs per year requiring dust wipe sampling, with an average of 7 such jobs per year. For clearance events (use of a high- speed paint removal machine or demolition or destructive removal of over 6 sq. ft. of plaster), renovators would incur simila r dust wipe testing costs, in terms of the cost per test. Re-cleaning and re-sampling are only necessary for a subset of events in which a surface fails the first round of clearance testing. In the event of a failed clearance test, only the component(s) that failed the tests must be re-cleaned. For example, if the window sill sample failed clearance but the window troughs and the floors passed, the window sill must be re-cleaned but the window troughs and the floors do not need to be re-cleaned. These re-cleaning co sts vary from job to job, depending on the number and type of components that failed and the size of the space that must be cleaned. Overall, re-cleaning costs are estimated to vary from $43 to up to $5,172 per job, although the costs for a typical job are expected to be at the very low end of the range. (The high end of the range reflects a COF where 14 rooms are renovated and where all floor, sill and trough samples fail two rounds of clearance testing and are recleaned twice. This is an overestimate, since the rule does not require a second re-cleaning or a third round of testing.)

Table ES-4 summarizes the annualized work practice costs by event t ype for the three different threshold options. This table does not include training costs for renovators who choose to become trained as a dust sampling technician, since the training costs are not specific to individual event types.

Table ES-4: Total Incremental Annualized Work Practice Costs by Event Type (3 percent discount rate, million 2008$)

Activity Event Type Low Threshold Proposed Threshold High Threshold Heat gun, < 1000 degrees <$1 $1 <$1 Window/door frame removal $70 $75 $79 Scraping $5 <$1 <$1 Trim, molding, cabinet removal $93 $59 $28 Multiple activity events a $99 $94 $75 Dust Wipe

Testing

Subtotal, dust wipe testing $268 $228 $182 High speed machines $1 $1 $1 Plaster demolition through destructive

means $4 $5 $6 Multiple activity events a $10 $9 $6 Dust Wipe Testing and Clearance Subtotal, clearance events $15 $14 $12 Total, All Event Types $283 $242 $195 Totals may not add due to rounding.

a Multiple event types occurring during the course of a single job (e.g., a renovation with both window frame removal and trim removal).



### Table ES-5 shows the total costs (including both work practice costs and training costs) for all six options. Costs are higher in the first year to refl ect the renovators who choose to become trained as dust sampling technicians in order to take their own dust wipe samples.Economic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-8 Table ES-5: Total Incremental Costs of Proposed LRRP Clearance Rule (millions 2008$) Annualized Total Option Year 1 Year 2 3% 7% Low Threshold $435 $321 $312 $336 Proposed Threshold $393 $279 $272 $293 High Threshold $343 $229 $224 $242 Third Party Sampling $451 $449 $431 $459 Dust Wipe Testing Only $388 $274 $268 $288 Clearance Only $492 $377 $367 $394



### Benefits A great deal of information on the numerous adverse h ealth effects of lead is available from decades of medical observation and scientific research. Inhaled or ingested lead is distributed throughout the body and is toxic to many organ systems. As a result, its toxicity manifests itself in the form of impacts on several organ systems. A reduction in lead exposure resulting from the rule would lead to a reduction in these adverse health effects and the costs of treati ng them. Young children (from birth through age five) are particularly sensitive to lead, which impairs a child’s neuropsychological development (frequently measured by IQ change). These cognitive and behavioral effects, discussed above , are strongly related to future productivity and expected earnings. The estimated value of an IQ poi nt is approximately $13,000, which represents the present value of a loss in expected lifetime earnings due to a one point IQ drop. This estimated value of an IQ point is limited to reduced income, and does not include other potential impacts such as additional education costs for special and remedial education, and medical costs to treat very high levels of lead. Investigating associations between lead exposure and behavior, mood, and social conduct of children has been an emerging area of research. Early studies indicat ed linkages between lower-level lead toxicity and behavioral problems (e.g., aggression, attentional problems, and hyperactivity) in children. Blood-lead and tooth-lead levels have been associated with be havioral features of atten tion-deficit hyperactivity disorder (ADHD), including distractibility, poor organiza tion, lack of persistence in completing tasks, and daydreaming, in various cohorts of children with a wide range of lead exposures. The relationship between lead exposure and delinquent and criminal behavior also has been addressed in several investigations. Studies linking attention deficits, aggressive and disruptive be haviors, and poor selfregulation with lead have raised the prospect that early exposure may result in an increased likelihood of engaging in antisocial behaviors in later life. Elevated lead levels have been associated with several measures of behavioral distur bance and delinquent behavior. Epidemiologic studies have consistently demonstrated associations between lead exposure and enhanced risk of deleterious cardiovascular outcomes, including increased blood pressure and increased hypertension. Both epidemiologic and toxicologic studies have shown th at environmentally relevant levels of lead affect many different organ systems. Neurotoxic effects in children and cardiovascular effects in adults are among those best substantiated as occurring at blood- lead concentrations as low as 5 to 10 ug/dL (or possibly lower); and these categories of effects are curre ntly of greatest public health concern. Other newly demonstrated immune and renal system eff ects among general population groups are also emerging as low-level lead exposure effects of potential public health concern. It appears that some of these effects, particularly changes in the levels of certain blood enzymes and in aspects of children'sEconomic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-9 

### neurobehavioral development, may occur at blood-le ad levels so low as to be essentially without a threshold. The proposed LRRP Clearance Rule would require dust wipe testing after many of the renovation, repair, and painting (RRP) activities regulated under the 2008 LRRP rule, and would require clearance after a smaller subset of RRP activities. The clearance re quirements of the proposed LRRP Clearance Rule are expected to result in lower exposures to dust lead by reducing the amount of dust lead left behind after RRP activities. Two types of benefits are expected to be realized from the proposed dust wipe testing requirements. The first type is the direct benefits of the information to the owners and occupants, which includes the value of the information on dust lead le vels remaining in the renovation work area. For building owners and occupants, this information is likely to improve their understanding and awareness of dust lead hazards. It will also greatly improve their ability to make further risk management decisions. This information is particularly critical where dust lead levels approach or exceed the regulatory hazard standards. The second benefit expected to be rea lized from the proposed dust wipe testing requirements stems from changed behavior on the part of renovation fi rms. EPA believes that dust wipe testing results will also provide valuable feedback to renova tion firms on how well they are cleaning up after renovations. It is likely that the specific dust lead levels contained in dust wipe testing results will increase renovation firm cleaning efficiency. Renovation fi rms will be incentivized to lower the dust lead levels remaining after renova tion jobs, even if the levels are at or near the regulatory standards. Because proper cleanup plays such a vital role in the minimi zation of dust lead hazards created by renovations, providing information on dust lead levels remaining after renovations to building owners and occupants will serve as an incentive for firms to perform pos t-renovation cleaning efficiently and thoroughly, reducing the amount of dust lead left behind after RRP. The proposed rule will protect children and adults residing in target housing and attending a COF from exposure to lead dust from renovations in a variety of situations. It will result in fewer homes being purchased with pre-existing lead hazards. It is common for home owners to perform activities that disturb paint before selling a house. The proposed rule d ecreases the likelihood of lead hazards being present when new occupants move into the home. And the proposed rule will also benefit individuals visiting a friend, relative, or caregiver’s hou se where a renovation has been performed. The number of individuals residing in target housing and attending COFs with renovations affected under the different options is shown in Table ES-6 . The proposed rule would protect 8.4 million such indivi duals per year, including 809,000 children under the age of 6 and 96,000 pregnant women. (This is important because the transplacental transfer of l ead in humans is well documented, and infants are generally born with a lead body burden reflecting th at of the mother.) The estimates are limited to residents in target housing and children attendi ng COFs, and do not include other groups such as individuals who move into housin g after a renovation has been performed, or who visit a friend or relative’s house.Economic Analysis for the L RRP Clearance Proposed Rule

Executive Summary ES-10 Table ES-6: Thousands of Occupants Per Year Protected Under Different Options

Option Activity Performed Children Under Age 6 Pregnant Women Other Individuals Age

6 and Older Total Dust Wipe Testing 855 103 7,930 8,888 Clearance 27 2 158 187 Low Threshold

Total 882 105 8,088 9,075 Dust Wipe Testing 782 94 7,294 8,170 Clearance 27 2 158 187 Proposed Threshold

Total 809 96 7,451 8,356 Dust Wipe Testing 682 81 6,377 7,140 Clearance 24 2 130 156 High Threshold Total 706 83 6,507 7,296 Dust Wipe Testing 782 94 7,294 8,170 Clearance 27 2 158 187 Third Party Sampling Total 809 96 7,451 8,356 Dust Wipe Testing Only Dust Wipe Testing 809 96 7,451 8,356 Clearance Only Clearance 809 96 7,451 8,356



### Small Entity Impacts The Regulatory Flexibility Act (RFA) of 1980, amen ded by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires regulators to assess the effects of regulations on small entities including businesses, nonprofit organizations, and govern ments. The vast majority of entities in the industries affected by the proposed rule are small. Two factors are evaluated in analyzing the rule’s im pacts on small entities, (1) the number of firms that would experience the impact, and (2) the size of the impact. Average a nnual compliance costs as a percentage of average annual revenues are used to asse ss the potential average impact of the rule on small businesses and small governments. This ratio is a goo d measure of entities’ ability to afford the costs attributable to a regulatory requirement, because comparing compliance costs to revenues provides a reasonable indication of the magnitude of the regulat ory burden relative to a commonly available measure of economic activity. Where regulatory costs represent a small fraction of a typical entity’s revenues, the financial impacts of the regulation on such entities may be considered as not significant. For non-profit organizations, impacts are measured by comparing rule costs to the organization’s annual expenditures. When expenditure data were not available, however, revenue information was used as a proxy for expenditures. It is appropriate to calculate the impact ratios using annualized costs, because these costs are more representative of the continuing co sts entities face to comply with the rule.

Table ES-7 presents the total number of small governments, non-pr ofit organizations, and small for-profit businesses, and the average cost-to-revenue ratios for each category. It is estimated that a total of approximately 203,000 small entities would be affected by the progra m, including nearly 203,000 small businesses with average impacts of 0.5 percent, about 200 small non-profits with average impacts of 0.1 percent, and over 100 small governments with average im pacts of 0.004 percent. All of the small entity impact calculations assume that the sm all entities absorb all of the rule’s costs, and that none of the costs are passed through to their customers.Economic Analysis for the L RRP Clearance Proposed Rule

Table ES-7: Aggregate Small Entity Impacts of the Proposed Rule

Total Number of Small Entities Affected (thousands) Average Impacts, All Small Entities Small Governments 0.1 0.004% N on-Profit Organizations 0.2 0.1% Small For-Profit Businesses 202.7 0.5% Total 203 0.5%



### The cost of the proposed rule to a typical small entity is estimated to average $1,200 per year, but will vary depending on the number of renovation, repair, and painting events undertaken by a small entity in the industry sector involved. As shown in Table ES-8 , the average cost impact ranges from about 0.004 percent to 1.1 percent of revenues, depending on t he industry sector.

Table ES-8: Typical-Year Number of Small Entities with RRP Events (Proposed Option) Description Entity Type Number of Small Entities (thousands) Average Cost-Impact Ratio

Residential remodelers Business 68.4 0.5% Finish carpentry contractors Business 48.6 0.8% Tile and terrazzo contractors Business 6.9 0.7% Plumbing and HVAC contractors Business 23.4 0.4% Painting and wall covering contractors Business 27.0 1.1% Electrical contractors Business 16.6 0.5% Drywall and insulation contractors Business 11.4 0.5%
Public School Districts Government 0.1 0.004%
Private Schools Non-Profit 0.1 0.08% Daycare Centers Non-Profit 0.1 0.2%
Non-Residential Landlords Business 0.1 0.4% Non-Residential Contractors (working in public or commercial building COFs) Business 0.3 0.4%
Total 203 0.5%



### Table ES-9 provides additional information on potential im pacts on small residential construction establishments. Some of the small entities subject to the rule have employees while others are nonemployers. The non-employers typically perform fewe r jobs than firms with employees, and thus have lower work practice compliance costs. However, th ey also have lower average revenues than entities with employees, so their impacts (measured as costs divided by revenues) can be higher. Impact estimates for non-employers should be interpreted w ith caution, as some non-employers may have issues related to understatement of income, which would tend to exaggerate the average impact ratio for this class of small entities. As shown in Table ES-9 , there are 151,000 non-employer renovation contractors esti mated to be affected by the removal of the opt-ou t provision. The average cost to these contractors is estimated to be $700 each. This represents 0.7% to 2.6% of reported revenu es, depending on the industry
sector.

Executive Summary ES-11Economic Analysis for the L RRP Clearance Proposed Rule

Table ES-9: Cost-to-Revenue Ratios: Small Residential Construction Establishments (Proposed Option)

Category NAICS Industry Description Number of Small Entities (thousands) Avg. CostImpact Ratio 236118 Residential remodelers 48 1.9% 238350 Finish carpentry contractors 41 2.1% 238340 Tile and terrazzo contractors 6 1.7% 238220 Plumbing and HVAC contractors 13 1.1% 238320 Painting and wall covering contractors 23 2.6% 238210 Electrical contractors 10 1.6% 238310 Drywall and insulation contractors 10 0.7% Non-Employers

Total, Small Construction Establishments 151 1.7% 236118 Residential remodelers 20 0.3% 238350 Finish carpentry contractors 8 0.4% 238340 Tile and terrazzo contractors 1 0.4% 238220 Plumbing and HVAC contractors 10 0.3% 238320 Painting and wall covering contractors 4 0.6% 238210 Electrical contractors 6 0.4% 238310 Drywall and insulation contractors 2 0.4% Employers

Total, Small Construction Establishments 52 0.4% 236118 Residential remodelers 68 0.5% 238350 Finish carpentry contractors 49 0.8% 238340 Tile and terrazzo contractors 7 0.7% 238220 Plumbing and HVAC contractors 23 0.4% 238320 Painting and wall covering contractors 27 1.1% 238210 Electrical contractors 17 0.5% 238310 Drywall and insulation contractors 11 0.5% Employers and Non-Employers Combined

Total, Small Construction Establishments 202 0.5%

Executive Summary ES-12Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 1 1-1 

## 1. Introduction This report presents an economic analysis of alternative regulatory options for revising the lead, renovation, repair and painting (LRRP) program regul ations for target housing and child occupied facilities (COFs). The LRRP rule for target housing and COFs was promulgated in 2008 (73 FR 21692) and is codified in Part 745 of Title 40 of the C ode of Federal Regulations (CFR). The rule was promulgated under the authority of §402(c) of the To xic Substances Control Act (TSCA). Section IV of TSCA was established by the Residential Lead-Based Paint Hazard Reduction Ac t of 1992, also known as Title X of the Housing and Community Devel opment Act of 1992, Public Law 102-550.
The existing LRRP regulations require entities that perform renovation, repair and painting work for compensation in buildings covered by the rule to become certified by EPA, ensure that their employees are trained as either renovators or workers, and use lead-safe work practices when disturbing lead-based paint.
Past use of lead-based paint has resulted in contamin ation that continues to pose human health hazards. While intact lead-based paint is not likely to contri bute to such hazards, the deterioration of a structure over time or acute environmental stresses, such as are commonly present during renovation activities, has been found to create lead hazards. Since many buildin gs constructed before 1978 have lead-based paint, it is likely that renovation activities in pre-1978 buildings will contribute to lead hazards unless appropriate containment and cl ean-up practices are employed.
The proposed LRRP Clearance Rule includes the fo llowing changes to the LRRP program: (1) a requirement to perform dust wipe testing for a sub set of renovation activities, and (2) a requirement to perform dust wipe testing and achieve clearance for a second subset of renovation activities where the quantity and characteristics of the dust make it hard to clean up.


### 1.1 Purpose of the LRRP Rule Revisions The LRRP rule requires certification of entities th at perform renovation, repa ir and/or painting in buildings covered by the regulations. This includes c onstruction contractors (including sole practitioners) as well as landlords and other build ing owners (such as school districts) that may perform RRP activities using their own staff. It does not, however, cover renovation, repair and painting (RRP) work performed by homeowners on their own homes. The certified en tity must ensure that all persons performing RRP activities on behalf of the entity in buildings covered by the rule are either renovators who have received formal training in EPA-approved work practices from an EPA-accredited course or workers who have received on-the-job training in these approved work prac tices. In addition, the rule requires the use of these approved work practices to ensure that proper cleanup has occurred.
The proposed rule will require renovation firms to pe rform dust wipe testing after certain types of renovation activities and to provide copies of the test results to the owners and occupants of the renovated buildings. These requirements will se rve to inform the owners and o ccupants of the remaining postrenovation lead-dust levels. In instances when clearan ce must be achieved, owners and occupants would be provided with the information th at the renovated areas met lead-dust level standards after cleaning. The increased information provided to owners and occupants of renovated buildings will further protect individuals (including children under age 6 and pregnant women), who visit, move into, or live adjacent to target housing or COFs renovated under the existing LRRP requirements, from exposure to lead hazards due to renovation activities.


### 1.2 Goal of the Economic Analysis The purpose of this report is to analyze various opt ions for the LRRP rulemaking revisions. The report addresses the requirements for economic analysis of Executive Order 12866 – Regulatory Planning andEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 1 1-2 

### Review ; the Regulatory Flexibility Act (RFA) and the Small Business Regulatory Enforcement Fairness Act (SBRFA); Executive Order 12898 – Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations ; Executive Order 13045 – Protection of Children from Environmental Health Risks and Safety Risks ; the Unfunded Mandates Reform Act; Executive Order 12875 – Enhancing the Intergovernmental Partnership ; and the Paperwork Reduction Act (PRA).
This economic analysis considers various regulatory options. The three primary options considered in this analysis only differ in the size thresholds that trigger the rule’s requirements when performing certain renovation activities. Table 1-1 summarizes the options considered in th is analysis; they are described in more detail below.

1. Low Threshold Option

 All event types requiring dust wipe testing where the amount of lead-based paint disturbed is larger than 6 square feet.

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet. 2. Proposed Threshold Option

 Dust wipe testing is required for:

- cabinet and trim events larger than 40 square feet,

- scraping of paint larger than 60 square feet,

- heat gun removal of more than 6 square feet

- Window frame or door frame removal events

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet. 3. High Threshold Option

 Dust wipe testing is required for:

- cabinet and trim events larger than 80 square feet,

- scraping or heat gun removal of paint larger than 120 square feet, and

- window frame or door frame removal events.

 Clearance is required for:

- high-speed machine removal of paint larger than 60 square feet, and

- plaster removal using destructive means, larger than 60 square feet.

There are three alternative options in addition to the three primary options: (1) an option where third party dust wipe testing and clearance is required, (2) an opti on where dust wipe testing is required in lieu of the clearance required under the proposed option, (3) an option where clearance is required in lieu of the dust wipe testing required under the proposed option.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 1 1-3 Table 1-1: Options Included in Economic Analysis



### Option Size Threshold Dust Wipe Testing and Clearance Third Party Requirement

Low Threshold Option Size thresholds are lower or equal to proposed rule No

Proposed Rule Size thresholds are as proposed No

High Threshold Option Size thresholds are higher or equal to proposed rule Dust wipe testing is required for: 1. cabinet and trim events 2. scraping of paint 3. heat gun removal of paint 4. Window frame or door frame removal
events

Clearance is required for: 1. high-speed machine removal of paint 2. plaster removal using destructive means No

Third Party Sampling Option Same as Proposed. Dust wipe testing and clearance are required in the same instances as proposed but dust wipe sampling must be performed by a third party. Yes

Dust Wipe Testing Only Option Same as Proposed. Dust wipe testing is required in instances where dust wipe testing or clearance is required under the proposed option. No

Clearance Only Option Same as Proposed. Clearance is required in instances where dust wipe testing or clearance is required under the proposed option. No



### 1.3 Organization of this Report Chapter 2 profiles the RRP industry, as well as non-profit and governmental suppliers of childcare including family daycare providers. It examines th e supply of and demand for renovation, remodeling and painting services. Using data from a variety of sour ces, including the U.S. Economic Census, the chapter discusses the size of the RRP industry and characteristics of its firms, as well as the organizational structure and competitiveness of the industry. Th e demand for RRP services is characterized and the factors that affect demand are di scussed. Other affected industries (e.g. training providers, property owners and managers) are also profiled in this chapter.
Chapter 3 characterizes the lead contamination probl em to be addressed under the proposed rule. It discusses how incomplete information and external cost s have resulted in inefficient levels of lead contamination resulting from renovation activity, an d introduces regulation as a reasonable solution for these market failures. The chapter also reviews state and local regulations that affect RRP activities and demonstrates that these are not sufficient to address the problem.
Chapter 4 describes in detail the methods used to calculate costs of the various regulatory options considered. It describes the data sources used and the methodology for es timating the two general categories of costs incurred under the proposed rule: dust sampling technician training costs, and dust wipe testing and clearance costs. The last section of the chapter estimates the costs of each option over a 50-year period and presents annualized costs at both 3 percent and 7 percent.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 1 1-4 

### Chapter 5 describes the benefits of the proposed rule in qualitative terms, including potential benefits to adults. Estimates of the number of children and a dults who may experience reduced lead exposures due to the dust wipe testing and clearance requirements are also presented.
Chapter 6 presents findings of distributional analy ses relevant to specific rule-making requirements, including small business impacts, environmental just ice, protection of children and unfunded mandates.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-1 

## 2. Lead, Renovation, Repair, a nd Painting Industry Profile The LRRP rule for target housing and child occupied facilities (COFs) was promulgated in 2008 (73 FR 21692) and is codified in Part 745 of Title 40 of the Code of Federal Regulations (CFR). The rule was promulgated under the authority of §402(c) of the To xic Substances Control Act (TSCA). Section IV of TSCA was established by the Residential Lead-Based Paint Hazard Reduction Ac t of 1992, also known as Title X of the Housing and Community Devel opment Act of 1992, Public Law 102-550.
The existing LRRP regulations apply to entities that perform renovation, repair and painting work for compensation in target housing or child occupied facilities, including building owners or managers who use their own staff to conduct RRP activities. These entities must become certified by EPA, ensure that their employees are trained as either renovators or workers, and use lead- safe work practices when disturbing lead-based paint.
On October 28, 2009, EPA issued a proposed rule to expand the coverage of the 2008 Lead Renovation, Repair and Painting Rule. The new rule proposed to eliminate a provision that exempted some housing from the rule’s requirement that contractors be trained and certified and use lead-safe work practices when renovating, repairing or painting a pre-1978 home.
The proposed LRRP Clearance Rule in cludes additional revisions to the LRRP program, including: (1) a requirement for dust wipe testing for a subset of renovation activities, and (2) a requirement for dust wipe testing and clearance for a subset of renovation activi ties in which the quantity and characteristics of the dust make it difficult to clean up.
Target housing is defined in section 401 of the Toxic Substances Control Act (TSCA) as any housing constructed before 1978, except housing for the elde rly or persons with disabilities (unless any child under age 6 resides or is expected to reside in such housing) or any 0-bedroom dwelling.

A COF is defined under the rule in Title 40 of the Code of Fede ral Regulations (CFR) §745.83, as:
Child-occupied facility means a building, or por tion of a building, cons tructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided th at each day’s visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours. Child-occupied facilities may include, but are not limited to, day care centers, preschools and kindergarten classrooms. Child-occupied facilitie s may be located in target housing or in public and commercial buildings. With respect to common areas in public and commercial buildings that contain child-o ccupied facilities, the child-o ccupied facility encompasses only those common areas that are routinely used by children under age 6, such as restrooms and cafeterias. Common areas that children under age 6 only pass through, such as hallways, stairways, and garages are not included. In a ddition, for public and co mmercial buildings that contain child-occupied facilities, the child-occupi ed facility encompasses only the exterior sides of the building that are immediately adjacent to the child-occupied facility or the common areas routinely used by children under age 6.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-2 

### The term renovation is defined in 40 CFR §745.83 to encompass a wide variety of construction activities:
Renovation means the modification of any existing structure, or portion thereof, that results in the disturbance of painted surfaces, unless that activity is performed as part of an abatement as defined by this part (40 CFR § 745.223). The term renovation includes (but is not limited to): the removal, modification or repair of painted surfaces or painted components (e.g., modification of painted doors, surface restoration, window repa ir, surface preparation activity (such as sanding, scraping, or other such activities that may ge nerate paint dust)); the removal of building components (e.g., walls, ceilings, plumbing, wi ndows); weatherization projects (e.g., cutting holes in painted surfaces to install blown-in in sulation or to gain access to attics, planing thresholds to install weather-stripping), and in terim controls that disturb painted surfaces. A renovation performed for the purpose of converting a bu ilding, or part of a building, into target housing or a child-occupied facility is a renovation under this subpart. Thus, renovation includes repair work as well as painti ng work involving sanding, scraping, or other paint removal. Renovation activities are conducted without th e intent of removing lead, but may disturb it in the process. Lead abatement activities, on the other ha nd, are conducted with the intent to remove leadbased paint or otherwise permanently eliminate a l ead-based paint hazard. Depending on the reason they are undertaken, many activities, such as replacing windows, can be either renovation or abatement. Because the rule will address renovation, rather than abatement activity, this profile characterizes the renovation industry as opposed to the abatement services industry.
The industry profile is categorized into eight sections. Section 2.1 discusses the supply of contractorprovided renovation services. Section 2.2 presents information on the numbers and types of child care facilities and schools. Section 2.3 presents information on the number and sizes of non-residential property owners and managers likely to be affected by the rule. Section 2.4 focuses on the demand-side of renovation by identifying the quantity of renovation activities performed. Section 2.5 discusses the overall market organization for the renovation industry. Section 2.6 describes the residential property owner and manager industry. Section 2.7 discusses training providers. Section 2.8 provides an overview of the structures that would be affected by the revisions to the LRRP rule.


### 2.1 Contractors that Supply Renovation Services
Data from the U.S. Economic Census were used to identify the North American Industry Classification System (NAICS) industry groups that may provide renovation, repair and painting work (U.S. Census Bureau 2004a). An establishment is assigned to a NAICS group based on the activities from which it derives the greatest share of its revenues. These activ ities may or may not make up the majority of work (i.e. labor hours) performed by the establishment, whic h may also be involved in a variety of other related (or unrelated) lines of work. The analysis identified 8 NAICS codes that are likely to include the vast majority of construction-related establishments that will be affected by the rule. Affected industry groups include two building construction sectors (NAICS 236118 – Residential Remodelers; and NAICS 236220 – Commercial and Institutional Building Construction) and six specialty trade contractor sectors.
The number of contracting establishments affected is al so discussed in Chapter 4. This profile examines the financial and employment characteristics of c onstruction establishments likely to provide renovation work in child-occupied facilities.
NAICS sectors likely to perform projects regulated under the LRRP rule, as well as examples of the work they perform, are presented in Table 2-1

.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-3 Table 2-1: Contractor Sectors li kely to be affected by the rule 2002 NAICS Examples of Work Performed
236118 - Residential Remodelers • Addition, alteration and renovation of single-family homes

• Addition, alteration and renovation of multifamily buildings

• Home improvement (e.g., adding on, remodeling, renovating) 236220 - Commercial Building Construction • Addition, alteration, maintenance and repair of commercial and institutional buildings

• Commercial and Institutional building general
contractors 238210 - Electrical Contractors • Electrical wiring contractors

• Lighting system installation

• Electrical power control panel and outlet installation 238220 – Plumbing and HVAC Contractors • Heating equipment installation

• Plumbing fixture installation

• Plumbing and heating contractors 238310 – Drywall and Insulation Contractors • Panel or rigid board insulation installation

• Mineral wool insulation installation

• Plastering (i.e., ornamental, plain) contractors 238320 – Painting and Wall Covering Contractors • House painting

• Paint and Wallpaper Stripping

• Paperhanging and removal contractors
238340 – Tile and Terrazzo Contractors • Ceramic tile installation

• Mantel, marble or stone, installation

• Mosaic work 238350 – Finish Carpentry Contractors • Door and window, prefabricated, installation

• Millwork installation

• Paneling installation Source: U.S. Census Bureau 2004aEconomic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-4 

### 2.1.1 Number of Establishments with Employees
The U.S. Economic Census tracks businesses with paid employees (employer establishments) and nonemployer establishments (self-employed contractors) separately. 1 

### This discussion deals with employer establishments only; non-employers are addressed in the next section.

Table 2-2 presents both the number of establishments and the number of employees in each NAICS group of interest. The number of establishments “includes all establishments that were in business at any time during the year are included. Construction establishments that were inactive or idle for the entire year were not included” (U.S. Census Bureau 2006a). Table 2-2 also presents the average per-establishment employment numbers by NAICS code. The average employment numbers are small for all affected sectors. Overall, Commercial Building Construction contractors have the largest number of employees per establishment (19.2 people), while Residential Remodelers have the smallest (3.9 people).

Table 2-2: Number of Employer Establishments and Employees by NAICS Code

NAICS Industry Establishments Number of Employees Average Size 236118 Residential Remodelers 82,750 320,208 3.9 236220 Commercial building construction 37,208 715,896 19.2 238210 Electrical contractors 62,586 771,184 12.3 238220 Plumbing and HVAC
contractors 87,501 974,368 11.1 238310 Drywall and insulation
contractors 19,598 311,077 15.9 238320 Painting and wall covering
contractors 38,943 234,562 6.0 238340 Tile and terrazzo
contractors 8,950 60,001 6.7 238350 Finish Carpentry
contractors 35,087 179,476 5.1 Total, All sectors 372,623 3,566,772 9.6 Source: U.S. Census Bureau 2005c



### Table 2-3 presents the total number of employees and the number of construction workers in each identified industry. The number of employees “incl udes all full-time and part-time individuals on the payrolls of construction establishments during any pa rt of the pay period which included the 12th of March, May, August, and Novemb er” (U.S. Census Bureau 2005m) . The number of construction workers “includes all payroll workers (up through th e working supervisory level) directly engaged in construction operations, such as painters, carpenters, plumbers, and electricians... journeymen, mechanics...truck drivers and helpers.” Non-construction employees include “payroll employees in executive, purchasing, accounting, ...and routine office functions” (U.S. Census Bureau 2005m). Because construction workers form the vast majority of the people who require training under the rule, their role in the composition of each sector’s labor fo rce provides an indication of the extent to which each sector will be affected by the regulations.
In total, about 3.6 million people work for the 372 ,623 establishments in the potentially affected industries. About 74 percent of these employees are construction workers. The affected sectors differ in terms of the composition of their labor force. For example, construction workers make up 84 percent of

1 Data at the firm level were not available for th ese NAICS groups when the analysis was performed.Economic Analysis for the LRRP Clearance Proposed Rule



### employees in the Drywall and Insulation contractor sector. In the Residential Remodelers sector, however, construction workers make up only 65 percent of the labor force (U.S. Census Bureau 2005c).

Table 2-3: Number of Employer Establishments, Total Employees and Employees nvolved in Construction

NAICS Description Total Number of Employees Number of Construction

Workers Construction Workers as Percent of Total Employees 236118 Residential Remode lers 320,208 207,637 65% 236220 Commercial Building Construction 715,896 478,923 67% 238210 Electrical Contractors 771,184 606,403 79% 238220 Plumbing and HVAC Contractors 974,368 712,452 73% 238310 Drywall and Insulation Contractors 311,077 261,239 84% 238320 Painting and Wall Covering Contractors 234,562 184,328 79% 238340 Tile and Terrazzo Contractors 60,001 44,729 75% 238350 Finish Carpentry Contractors 179,476 129,888 72%
Total 3,566,772 2,625,599 74% Sources: U.S. Census Bureau 2005c



### 2.1.2 Number of Non-Employer Establishments As mentioned above, the U.S. Ec onomic Census tracks non-employer establishments separately from establishments with employees. Data on the number of non-employer establishments were available from the U.S. Small Business Administration. A non-employer firm “is defined as one that has no paid employees, has annual business receipts of $1,000 or more ($1 or more in the construction industries), and is subject to federal income taxes” (U.S. Sm all Business Administration 2006a). Essentially, nonemployers are self-employed contractors. Because little financial and operational data is available for non-employers, the vast majority of this profile focuses on establishments with employees. This subsection discusses the number of non-employers in the affected industry sectors and the receipts of these establishments.
The U.S. Small Business Administration did not provide data on the number or revenues of non-employer establishments in each of the 6-digit level NAICS i ndustries addressed in this profile. Data on the number of such establishments was available for Plumbing and HVAC contractors (NAICS 238220) and Electrical contractors (NAICS 238210) only; for the remaining industries, data was provided at the more general 4-digit NAICS level. In total, ther e are over 1 million self-employed contractors.
To estimate the number of non-employer establishments in each of the 6-digit sectors, it was assumed that the distribution of non-employer establishments in each 4-digit NAICS code is the same as the distribution of establishments with payroll in the same 4-digit group. Similarly, to estimate the revenues of these establishments, it was assumed that the distribu tion of receipts in each 4-digit NAICS code is the same as the distribution of revenues of payroll establishments in the same 4-digit industry.

Table 2-4 presents the estimated number and revenues of non-employer establishments in each of the 8 sectors affected by the rule.

Chapter 2 2-5Economic Analysis for the LRRP Clearance Proposed Rule

Table 2-4: Number and Annual Revenues of Non-Employer Establishments in Affected Sectors

NAICS Description Number of Non-Employer Establishments Revenues of NonEmployer Establishments (000)
236118 Residential Remodelers 194,182 $6,187,917
236220 Commercial Building construction 74,255 $4,784,817 238210 Electrical contractors 102,219 $3,834,347
238220 Plumbing and HVAC contractors 110,183 $5,920,986
238310 Drywall and Insulation contractors 103,398 $8,798,899
238320 Painting and Wall Covering contractors 205,462 $4,823,217
238340 Tile and Terrazzo contractors 47,220 $1,684,174
238350 Finish Carpentry contractors 185,118 $5,254,955 Sources: U.S. Census Bureau 2005h, U.S. Census Bureau 2004q, U.S. Census Bureau 2005i



### 2.1.3 Financial Profile In this section, Census data is used to examine ke y financial indicators for the renovation industry. The indicators include net value of construction (val ue of construction less value of construction subcontracted out to others) and labor costs. Net valu e of construction work is used instead of the total value of construction work because it is a measure of the work actually performed by the establishment. Table 2-5 presents the average per establishment net value of construction work (NVCW) for each industry sector. The table also presents labor costs as a percent of the net value of construction for each of the affected NAICS codes.
Table 2-5: Financial Summary for Contractor Sectors Affected by the rule

2002 NAICS

code Industry Name Annual Net Value of Construction Work (000) Number of Establishments Net Value of Construction

Work per Establishment (000) Total Payroll (000) Payroll as % of Net Values of Construction Work
236118 Residential Remodelers $30,627,850 82,750 $370 $8,703,503 28 236220 Commercial Building construction $108,229,283 37,208 $2,909 $29,210,092 27 238210 Electrical contractors $77,671,846 62,586 $1,241 $29,324,486 38 238220 Plumbing and HVAC
contractors $105,323,163 87,501 $1,204 $35,942,262 34 238310 Drywall and Insulation
contractors $27,046,301 19,598 $1,380 $9,766,997 36 238320 Painting and wall covering
contractors $15,316,726 38,943 $393 $6,005,447 39 238340 Tile and Terrazzo
contractors $5,639,641 8,950 $630 $1,834,890 33 238350 Finish Carpentry
contractors $15,640, 544 35,087 $446 $4,711,739 30 Total, all industries $385,495,354 372,623 $8,573 $125,499,416 33 Source: U.S. Census Bureau 2005c



### Table 2-5 shows the wide range of values of construc tion work per establishment across all NAICS codes of interest. The average estab lishment in the Residential Remode ler industry (NAICS 236118) has the smallest net value of construction work ($370,000), followed by the Finish Carpentry contractors industry

Chapter 2 2-6Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-7 

### ($446,000). Meanwhile, the average establishment in the Commercial Building Construction industry (NAICS 236220) has the largest net value of construction value ($2,909,000), with the Drywall and Insulation contractors industry netting the second largest value ($1,380,000). It should come as no surprise that the Commercial Building Construction industr y’s net value of construction is so much larger than the Residential Remodeler industry’s net value of construction work given that commercial building construction projects tend to be substa ntially larger in scope and size than residential remodeling projects.

As demonstrated in Table 2-5 , while labor constitutes about 33% of net value of construction for all the industry sectors, the composition varies across industry sectors. The Painting and Wall Covering contractor (NAICS 238220) industry is most dependent on labor, with an overall labor cost to net value of construction ratio of 39 percent. The Commercial Building Construction industry, with an overall labor cost to net value of construction work ratio of 27 pe rcent, is the least dependent of the 12 sectors (U.S. Census Bureau 2005c). It is worth mentioning that labor (as measured by payroll) is a relatively small percentage (27% to 39%) of total net value, reflec ting the fact that a large percent of revenues go to covering the cost of materials and profit.

2.1.3.1 Establishment Size by Revenue Bracket 

### The Small Business Administration (SBA) defines a small business in both the Residential Remodeler and Commercial Building Construction industries as one that has revenues of $33.5 million dollars a year or less. The small business definition for the ten sp ecialty contractor industries is $14 million per year (U.S. Small Business Administration 2008). The SBA size standards apply to firms rather than establishments; at the time the analysis was perform ed, revenue data in the 2002 Economic Census was only available at the establishment level. Sin ce a firm may consist of one establishment, a few establishments or even a very large number of estab lishments, by using establishment rather than firm data, this analysis overestimates the number of small businesses in the affected industry.
The remainder of this section examines the number of establishments, number of employees, net value of construction work and value of business done 2 

### distributed by establishment revenue bracket. These data were available from the 2002 Economic Census at th e NAICS code level only. Establishments were classified into two revenue categories based on the to tal value of business done – those with revenues less that $10 million and those with revenues greater th an $10 million. Because the Census groups all establishments with revenues of $10 million or more into one revenue bracket, it is not possible to determine what percentage of Residential Remodeler nor Commercial Building Construction establishments have revenues of less than $33.5 milli on. Note, however, that nearly 100 percent of Residential Remodeler establishmen ts have revenues of less than $1 0 million per year. The same cannot be said for Commercial Building Construction establis hments, as 12 percent have revenues greater than $10 million per year. The percent of establishments, employees and net value of construction contributed by establishments in each revenue bracket is presented in Table 2-6

.

2 Value of business done is defined by the U.S. Census Bureau as including “ the sum of value of construction work and other business receipts. Value of business done is the su m of receipts, billings, or sales from establishments of construction business activities plus receipts from other business activities” (U.S. Census Bureau 2004d ).Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-8 Table 2-6: Small and Large Establishments as Percent of Industry

NAICS NAICS Percent of Establishments Percent of Employees Percent of Net Value of Construction Percent of Value of Business done
236118 Residential Remodelers
236118 Revenues < $10 million 100% 95% 92% 91%
236118 Revenues > $10 million 0% 5% 8% 9%
236220 Commercial Building Contractors
236220 Revenues < $10 million 88% 41% 30% 24%
236220 Revenues > $10 million 12% 59% 70% 76%
238210 Electrical Contractors
238210 Revenues < $10 million 98% 68% 61% 60%
238210 Revenues > $10 million 2% 32% 39% 40%
238220 Plumbing and HVAC Contractors
238220 Revenues < $10 million 98% 70% 63% 61%
238220 Revenues > $10 million 2% 30% 37% 39%
238310 Drywall and Insula tion Contractors
238310 Revenues < $10 million 97% 64% 60% 60%
238310 Revenues > $10 million 3% 36% 40% 40%
238320 Painting and Wall Covering Contractors
238320 Revenues < $10 million 100% 92% 88% 88%
238320 Revenues > $10 million 0% 8% 12% 12%
238340 Tile and Terazzo Contractors
238340 Revenues < $10 million 100% 91% 86% 86%
238340 Revenues > $10 million 0% 9% 14% 14%
238350 Finish Carpentry Contractors
238350 Revenues < $10 million 100% 86% 84% 83%
238350 Revenues > $10 million 0% 14% 16% 17%
Total
Total Revenues < $10 million 98% 68% 49% 58%
Total Revenues > $10 million 2% 32% 51% 42% 100 percent = establishments in this reve nue category make up over 99.5 percent, but less than 100 percent of establishments in the industry. Source: U.S. Census Bureau 2004c,d,e,f,g ,h,i,j,k,l,m; U.S. Census Bureau 2005m



### The distribution of the number of establishments for all eight NAICS codes is greatly skewed toward smaller establishments. In four out of eight indus try sectors, over 99.5 percent of establishments have revenues below $10 million. For the remaining sectors, establishments with revenues greater than $10 million make up less than 5 percent of establishments in any sector (with the exception of the Commercial Building Construction industry where 12% of establis hments earn more than $10 million in revenues 3 

### ). Thus, about 98 percent of all establishments in the affected industries have revenues well below the SBA definition of small business.
Establishments with revenues of less than $10 milli on account for between 41 and 95 percent of total employment for each sector, and about 68 percent of employment overall. The distribution of the net

3 Once again, this difference arises beca use of the larger size of a majority of Commercial bu ilding construction projects. Regardless, if only 12% earn revenues greater than $10 million, it can easily be assumed that a much smaller percentage of establishments in this industry earn revenues greater than the SBA cutoff of $33.5 million.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-9 

### value of construction work and the total value of business done is skewed toward smaller establishments in a manner similar to the distribution of employees. Establishments with revenues of less than $10 million account for between 30 and 92 percent of the net value of construction work and between 24 and 91 percent of the total value of business done in each sector. It is worth mentioning that if the Commercial Building Construction industry is removed, the lows in the previously cited categories jump to 55 percent. Overall (across all industry sectors) small businesses contribute about 60 percent of the net value of construction work and 60 percent of th e total value of business (U.S. Census Bureau 2004c,d,e,f,g,h,i,j,k,l,m; U.S. Census Bureau 2005m).

2.1.3.2 Labor and Material Costs as a Percentage of Total Value of Business Done 

### In order to better understand the potential impacts of th e rule on the affected industries, and particularly on small businesses, it is important to observe whethe r establishment costs as a percentage of the total establishments’ total revenues differ for small and large establishments. Figure 2-1 examines labor and material costs, as well as the cost of construction work subcontracted out as a percentage of the total value of business done for the twelve affected sectors. While the rule will increase the cost of material slightly, the major impact will be on labor costs, including th e training of staff. Each of the sectors was broken down into two size categories by revenue bracket: le ss than $10 million and $10 million and more. The cost of labor, of materials, and of construction wo rk subcontracted out was summed across the 12 industry sectors for large and for small establishments. These va lues were then compared to their total value of business.
Labor costs, material costs, and the cost of constr uction work subcontracted out as a percentage of total value of business done are presented in Figure 2-1 . Regardless of size of establishments, material costs tend to be a slightly larger percentage of total reve nues than do labor costs. Labor costs make up about 25 percent of revenues for small establishments and a bout 16 percent for large establishments. Based on Census data, large establishments subcontract out a much larger percentage of their work than do small businesses.Economic Analysis for the LRRP Clearance Proposed Rule

Figure 2-1: Labor and Material Costs as % of Total Value of Business Done

Labor Cost as % of

Total Value of Business Done M aterial Costs as % of Total Value of Business Done Cost of Construction Work subcontracted out as % of Total Value

of Business Done 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Type of Cost Establishments with value of Business Done of: < $10 million

Establishments with Value of Business Done of: $10 million+

Source: U.S. Census Bureau 2005a



### 2.2 Child Care and Schools: Child Occupied Facilities For the purposes of analysis, COFs are divided into the following categories 4 

### :

 Kindergartens and Pre-Kindergartens in Schools: Located in public and private schools;

 Daycare centers: Organized (licensed) facilities located in public and commercial buildings;

 Family daycare: Organized (licensed) daycare facilities located in the provider’s home; and

 Informal daycare: Informal (i.e. not licensed) day care providers, including relatives and nonrelatives. Some of these providers may be paid for their services.
There is a great deal of diversity and complexity in the childcare industry. The formal childcare sector consists primarily of two types of facilities – center-based care and family daycare. Daycare centers are typically located in commercial or educational buildings, including schools and university campuses. They include private for-profit and non-profit facilities that can operate as independent centers or as part of chains. For-profit facilities can be found in office buildings, factories, other workplace settings, or in stand-alone facilities. Non-profit facilities may be found in YMCAs or other community centers, churches, college and university campuses, as well as in office or stand-alone buildings. Government

4 The analysis is limited to kindergartens, pre-schools, dayc are centers, family daycare, and informal daycare. Due to a lack of data, it does not include other facilities that may qualify as COFs under the rule.

Chapter 2 2-10Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-11 

### education and human services agencies also provide da ycare through programs such as Head Start, as well as through kindergarten and pre-kinde rgarten programs at local schools.
Unlike center-based care, family daycare is typically offered in the home of the caregiver. Family daycare facilities tend to serve smaller groups of chil dren and have a smaller child-to-caregiver ratio (KeepKidsHealthy 2001). In addition to formal car e provided by daycare centers, schools, and family daycare, children may also be cared for informally by relatives, family friends, or other acquaintances. Informal care may be paid or unpaid, and usually ta kes place at the home of either the child or the provider.

Table 2-7 summarizes the types and numbers of faciliti es and childcare providers in this universe,grouping them by the age of their construction. It shows that the rule would apply to 1,656,000 childoccupied facilities, of which 1, 559,000 are in target housing.

Table 2-7: Total Number of Childcare Facilities in the United States, Number of Child-Occupied Facilities Potent ially Affected by the Rule Number by Date of Construction b,c,

Type Total Childcare Facilities in the United States a All Pre-1978 All Pre-1960(1) Schools with prekindergartens and/or kindergartens 79,000 46,000 25,000

(2) Pre-schools and daycare centers located outside of schools 88,000 51,000 28,000

(3) Childcare in target housing 2,398,000 1,559,000 823,000

Total 2,565,000 1,656,000 876,000

a. The Total Childcare Facilities in the United States count includes facilities constructed both before and after 1978. Facilities constructed after 1978 are not regulated under the rule. b. Not all facilities in the table have lead-based paint.

c. The number of facilities by date of construction is inclusive (pre-1960 is a subset of pre-1978). Sources: Center for the Childcare Workforce an d Human Services Policy Center 2002; U.S. Bureau of Labor Statistics 2006; U.S. Department of Education 2004; U.S. Department of Energy 2003; Wilder Research Center 2001, Wilder Research Center 2005.



### 2.2.1 Daycare Centers and Family Daycare Establishments involved in the provision of day care of infants or children are classified under NAICS 624410 – Child Day Care Services. This industry cove rs child day care centers (including those located in the provider’s home), pre-school centers, nursery schools and pre-kindergarten centers (except as part of elementary schools). In 2002, Census reported that this industry included over 55,000 firms that employed nearly 752,000 people (U.S. Census Bur eau 2005d). Furthermore, Census reports 618,947 non-employers in the industry (U.S. Census Bureau 2005k).Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-12 

### While Census covers both family and center-based childcare under NAICS 624410, there is reason to believe that Census undercounts the number of employer fi rms in this industry. This is likely to occur for two reasons. First, it is likely that the number of firms reported by Census primarily includes centers, since care provided solely by one person (as occurs at many family daycare establishments) would be classified under non-employer statistics. Second, Census classifies a business into NAICS 624410 if its primary line of business is the provision of child day care services; it is likely that many facilities have alternate primary lines of business (YMCAs and churches, for example). The number of non-employers, on the other hand, is likely to include care providers such as nannies or babysitters that do not constitute formal care, but that cannot be disentangled from the total count.
In light of the limitations of the Census data, an alte rnative data source is used for this analysis. In 2005, the National Association for Regulatory Administra tion (NARA) in conjunction with the National Childcare Information Center (NCCIC) conducted a stud y on the number and licensed capacity of daycare centers and family daycare establishments in the 50 U.S. states. Based on these data, there are approximately 115,000 licensed daycare centers in the United States. Because licensing requirements differ from state to state, this count includes 105, 444 facilities licensed as daycare centers, as well as about 10,000 facilities such as Head Start, religious daycare, and other similar establishments, which are required to obtain a license in some states, but mu st only be registered or certified in others.
According to the Department of Housing and Urban Development’s (HUD) First National Health Survey of Childcare Centers , about 22 percent of licensed daycare centers are located in elementary schools. Since throughout this analysis, schools are analy zed separately from daycare centers, the number of daycare centers was reduced by 22 percent, bringing the total number of centers to 89,260. According to NCES data on public and private schools, however, an additional 1,421 schools without kindergartens have a pre-kindergarten program (See Section 2.2.2.1 ). These 1,421 centers are also excluded from the total center counts to avoid double-counting, bringing the number of centers to 87,840.
In addition to the 115,000 centers , NARA reported a total of 166,514 licensed small family childcare homes and 47,452 large family childcare homes. 5 

### With the addition of about 16,000 family daycare homes that are reported as certified, not licensed, NA RA reports a total of 229,875 family daycare facilities.
Because some states either completely exempt family daycare with fewer than a certain number of students from licensing requirements, or offer voluntary registration, the family daycare numbers reported by NARA are likely to underestimate the total family daycare universe. As such, to estimate the number of family daycares, this analysis relied on a 2002 re port by the Center for th e Childcare Workforce, which provides data on family childcare providers caring fo r unrelated children in their own homes. Based on these data, it is estimated that there are a total of 591,071 family daycare facilities in the United States. Table 2-8 summarizes the size of the formal (center and family daycare) childcare universe.

5 Here large and small refer to the number of children enrolled. It is not the same as the large and small definitions used by SBA.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-13 Table 2-8: Number of Daycare Centers and Family Daycare Facilities in the United States Daycare Centers
(excluding schools) Total Family Daycare

Number of facilities 87,840 591,071

Sources: NARA 2006; Center for Childcare Workforce 2002

2.2.1.1 Daycare Center and Family Daycare Outlook 

### Figure 2-2 plots changes in the numbers of licensed child-occupied facilities between 1995 and 2004 using information compiled from the Childcare Licen sing Studies published annually by the Children’s Foundation and the National Association for Regulatory Administration (NARA). 6 

### These data give larger counts than the data above because they include fac ilities in Puerto Rico, Guam and the Virgin Islands. 7 

### But the trends displayed in this data are likely to be present in the smaller data set. The number of licensed Childcare Centers has grown gradually over time, from 92,000 in 1995 to 120,000 facilities in 2004. The number of Large/Group Family Childcare Homes grew in a similar manner, before tapering off in 2004. Over the time period specified, the num ber of Small Family Childcare Homes declined from 276,000 to 256,000, while exhibiting much more vari ation from year to year than the other two categories. Here, as noted earlier, large and small re fer to the number of children enrolled, not the SBA definition of a large or small entity.

6 When the Children’s Foundation closed in 2005, NARA assumed sole responsibility for collecting licensing information through the annu al study. However, because the methodol ogy was altered with the new leadership, data from the 2005 Childcare Licensing Study were not included into

. Figure 2-2

7 While the rule would apply to Puerto Rico, Guam and the Virgin Islands, they are not included in this analysis for reasons of consistency since some of the major data sour ces used elsewhere in the analysis were limited to the 50 states and the District of Columbia. Holding all other things equal, by not including COFs in Puerto Rico, Guam, and the Virgin Islands, the analysis underestimates the costs and benefits of the rule.Economic Analysis for the LRRP Clearance Proposed Rule

Figure 2-2: Number of Licensed Child-Occupied Facilities: 1995-2004

0 50,000 100,000 150,000 200,000 250,000 300,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

TimeNumber

Small Family Child Care Homes
Child Care Centers Large/Group Family Child Care Homes

Sources: National Childcare Information Center 2005



### The market for lead-safe renovation activities in CO Fs is dependent on the number of care providing facilities. Figure 2-2 indicates that while there have been some fluctuations in the underlying components of the overall market, when considered over the en tire time frame, the number of licensed COFs has been relatively stable.
While there wasn’t significant growth in childcare over the 1995-2004 timeframe, a study forecasts growth in the demand for childcare labor. Fueli ng the future demand for childcare services is the expected increase in the amount of children below 5 between 2004 and 2014. A dding to this growing demand will be an increased female labor force partic ipation rate, forcing families to find alternate care options for their children. Furthermore, many stat es will be implementing their own care programs for 3- and 4- year old children in the coming years. Th e government also plans to increase subsidies for lowincome families attending day care programs (Bureau of Labor Statistics 2005). While trends point to increased demand for childcare labor, it is difficult to assess whether this will be accompanied by an increase in the number of facilities, and to what extent these new facilities will be located in pre-1978 buildings.

2.2.1.2 Informal Daycare 

### Informal daycare is provided by unlicensed provi ders, including relatives, friends, and others. Calculations determining the number of informal da ycare providers are based on figures and percentages found in a report on the number of paid re latives and non-relatives providing childcare entitled “Estimating the Size Components of the U.S. Childcare Workforce and Caregiving Population: Key Findings from the Childcare Workforce Estimate” (Center for Childcare Work Force 2002).

Chapter 2 2-14Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-15 Target Housing COFs 

### Family daycare and informal daycare take place in target housing. Renovation events in some target housing COFs would be regulated un der the 2008 LRRP rule regardless of their status as a COF; for example, if they are owner-occupied units where a chil d under the age of six or a pregnant woman resides or if they are rental units. For a detailed explana tion of the methodology used to estimate the number of target housing COFs, please see Section 4.2 of EPA (2009). Section 2.8 presents the estimated numbers of target housing COFs affected by the rule.

2.2.2 Public and Private SchoolsThis section describes the number and size of public and private schools with kindergartens and prekindergartens.

2.2.2.1 Number of Schools 

### According to the National Center for Education St atistics, during the 2004-2005 academic year, there were 93,295 public schools with students in the United States. In total, these schools served 48.8 million students (NCES 2006a). The rule will apply only to those portions of schools that meet the COF definition. Thus, the rule is expected to prim arily impact schools that have kindergarten or prekindergarten programs. According to the NCES’s P ublic Elementary and Secondary School Universe Survey, which collects data on all operational public schools in the United States, in 2004-2005, 52,129 of the 93,295 U.S. public schools (roughly 56 percent) provided either pre-kindergarten or kindergarten services. 8 

### Of these 52,129 schools, 20,8 85 offered both pre-kindergart en and kindergar ten and 29,884 schools provided kindergarten services only. Only 1,400 schools offered pre- kindergarten, but not kindergarten services; this group of schools includ es standalone preschools operated by local school boards, as well as daycare centers lo cated in public middle schools, high schools, and ungraded schools (See Table 2-9 ). Note that these figures are not limited to schools with pre-1978 buildings.

Table 2-9: Number of Public Schools, by Type Type of Public School Number of Schools Total number of public elementary and secondary schools 93,295 Number of schools with pre-kindergartens and kindergartens 20,885 Number of schools with pre-kindergartens but no kindergartens 1,400 Number of schools with kindergartens, but no pre-kindergartens 29,844 Total number of schools with pre-kindergartens 22,285 Total number of schools with kindergartens 50,729 Total number of schools with pre-kindergartens or kindergartens 52,129 Source: NCES 2006a,b



### As shown in Table 2-10 , in 2004-2005 a total of 990,421 pre-kinde rgartners and 3,543,554 kindergartners were enrolled in pre-kindergartens and kindergartens offered at public schools, respectively. Given the number of programs described above, this means that there are roughly 44 pre-kindergarten students per school and 70 kindergarten students per school.

8 A school was considered as having a pre-kindergarten if a) pre-kindergarten enrollment was greater than zero students, or b) the school reported that the lowest grade offered was pre-kindergarten, but enrollment data were not provided. Similarly, a school was considered as having a kindergarten if a) kindergarten enrollment was greater than zero, or b) the school reported that the lowest grade offered was pre-kindergarten or kindergarten, but did not report kindergarten enrollment.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-16 Table 2-10: Enrollment in Public Pre-kindergarten and Kindergarten Program Statistics Number of Schools offering
program Number of Students Served Average Students Served per School Pre-kindergartens in public schools 22,285 990,421 44 Kindergartens in public schools 50,729 3,543,554 70 Source: NCES 2006a,b

Number of Public School Districts 

### Public schools in the United States are operated by local education agencies (LEAs), organizations “responsible for providing free public elementary/sec ondary instruction or education support services.” The National Center for Education Statistics collect s data on LEAs through its Common Core of Data (CCD) fiscal and non-fiscal surveys. NCES desi gned the Common Core of Data system to “accommodate the many and varied organizational struct ures used in the provision of public elementary and secondary education.” As such the CCD cont ains records that represent “administrative and operating units that are unlike typical public schools and school districts – for example, regional administrative service centers without students.”
According to the CCD Local Education Agency Universe Survey, in 2004-2005, 17,647 LEAs operated in the 50 contiguous states and the District of Colu mbia. Of these 17,647 agencies, 14,473 operated at least one school that offered pre-kindergarten or kindergarten services and may thus be affected by the rule.
Of the 14,473 local education agencies responsible for schools with pre-kindergarten and kindergarten programs, just under 13,200 are typical public school districts (usually county or town agencies responsible for providing education services in that location). An additional 949 agencies are charter school organizations. The remaining 333 agencies re present regional, state, and federal institutions, as well as supervisory union administrative centers. 9 

### Table 2-11 presents a detailed breakdown of the number of education agencies by agency type, as well as counts of schools with pre-kindergartens and/or kindergartens operated by each agency.

9 Supervisory union administrative centers operate schools only in Massachusetts, Vermont, and Virginia.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-17 Table 2-11: Number of Local Education Agenci es Operating Schools with Kindergartens or Pre-Kindergartens, by Agency Type

Type of Local Education Agency Number of Agencies Number of Schools with Pre-K or Kindergarten

Programs Average Number of Pre-K or K

Schools

Local School District 13,191 50,386 3.8

Supervisory Union Administrative Office 85 159 1.9

Regional Education Services Agency 167 308 1.8

State Institution 54 75 1.4

Federal Institution 27 188 7.0

Other Agency (Primarily Charter Schools) 949 1,013 1.1

Total 14,473 52,129 3.6



### Source: NCES 2006b,c

The NCES collects data on the revenues and expenditures of local education agencies through its CCD School District Finance Survey. Table 2-12 presents the total revenues, average revenues, and percent revenues derived from federal, state, and local funds for education agencies operating schools with prekindergarten and/or or kindergarten programs. All figures are based only on agencies with available data; for each agency type, the table indicates the percent of LEAs represented in the totals. Note that financial data were not available for any federal ins titutions, nor for most state institutions.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-18 Table 2-12: Total Revenues, Average Revenues and Percent of Revenues by Source for Local Education Agencies Operating with Pre-Ki ndergarten and/or Kindergarten Programs

Revenues Percent of Revenues by

Revenue Source

% LEAs with Data Total Revenues, (Millions of $) Average LEA Revenues ($) Federal State Local

Local School District 99% $440,444 $33,560,173 8% 47% 45%

Supervisory Union Administrative Office 91% $1,269 $16,481,935 8% 41% 52%

Regional Education Services Agency 95% $7,612 $48,180,367 24% 35% 41%

State Institution 7% $8 $2,115,250 12% 54% 34%

Federal Institution 0% n.a. n.a n.a n.a n.a
Other Agency (Primarily charter schools) 81% $2,074 $2,683,282 11% 68% 21%

All LEAs 98% $451,408 $31,933,217 9% 46% 45%

Source: NCES 2006b,c,d



### Table 2-13 presents the total and average expenditures of local education agencies. Total expenditures are composed of total current expenditures for elementary/secondary education, as well as other expenditures. Elementary/secondary education current expenditures include expenditures for instruction (e.g. teacher salaries), support services (including, bu t not limited to, administrative, maintenance, and operations costs), and other expenses, such as tran sportation and food services. Other expenditures include spending not related to elementary/secondary education, such as expenditures for community service, or adult education, capital outlay expenditur es, payments to other government and educational entities, and debt interest payments. In Table 2-13 current expenditures are split out by type, while the remainder (capital and non-educational) are comb ined and labeled as “all other” expenditures.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-19 Table 2-13: Total Expenses, Average Expenses, and Percent of Expenditures by Expenditure Type for Local Education Agencies

Expenses Percent of Expenditures by Expenditure Type

% LEAs with Data Total Expenses (in Millions of $) Average Expenses Instruc. Support Service Other Current All

Other

Local School District 99% $451,464 $34,399,846 52% 28% 3% 17%

Supervisory Union Administrative Office 91% $1,203 $15,628,805 57% 32% 3% 8%

Regional Education Services Agency 95% $7,154 $45,278,905 28% 33% 1% 38%

State Institution 7% $7 $1,759,000 49% 39% 0% 11%

Federal Institution 0% n.a. n.a. n.a. n.a. n.a. n.a.
Other Agency (Primarily charter schools) 81% $2,023 $2,616,922 47% 41% 3% 9%

All LEAs 98% $461,851 $32,671,971 51% 29% 3% 17%

Sources: NCES 2006b,c,d



### For most LEAs, the majority of expenditures (51 percent on average, across all LEAs) are spent on instruction. In aggregate, the category containi ng maintenance costs (i.e. support service) makes up around one-third of all expenditures. Lastly, the “a ll other” expenditures category makes up a significant percentage of the expenditures for regional education services agencies.
Under the Regulatory Flexibility Act, public school districts are considered large if they serve a population of more than 50,000. Table 2-14 presents the number of LEAs that operate schools that have pre-kindergartens and/or kindergartens, by agen cy type and the size of the population served.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-20 Table 2-14: Local Education Agencies that operate schools with Kindergartens and/or Pre-Kindergartens, by Agency Type and Size of Population Served

Type of Local Education Agency Total Number of LEAs with Pre-K

or K Programs Number of LEAs Serving < 50,000 a Small LEAs as % of all LEAs with Pre-K or K Programs

Local School District 13,191 12,130 92% Supervisory Union Administrative Office 85 84 99% Regional Education Services Agency 167 167 100%
State Institution 54 0 b 0%
Federal Institution 27 0 b 0% Other Agency (Primarily charter schools) 949 949 100%
All LEAs 14,473 13,330 92%

a. Local districts, supervisory union offices, regi onal education agencies and charter school

districts for which no population data were av ailable were assumed to serve a population of fewer than 50,000.

b. Assumes that all state and federal agencies are large.
Source: NCES 2006b,c,e,g

Private schools 

### In 2003-2004, the National Center for Education Statistics conducted a survey of private schools in the United States. NCES’s Characteristics of Private Sc hools in the United States: Results From the 2003- 2004 Private School Universe Survey (2006) presents a summary of survey results, including numbers of schools currently in operation, the number of students enrolled, and teachers employed. Table 2-15 presents summary statistics on national private schools, including a total count of all private schools, enrollment and teachers, as presented in NCES’s report.

Table 2-15: Enrollment and Teacher Statistics for Private Schools

Entity Number of Schools Total Enrollment Total Teachers Average Enrollment Average Teachers Private Schools 34,681 5,212,992 441,384 150.3 12.7 

### Sources: NCES 2006e

According to the NCES data, in 2003-2004 there were 34,681 private schools in the U.S., enrolling a total of just over 5.2 million students, with a total teachi ng staff of over 441,000. On average, there were 150 students enrolled in a private school and 13 teacher s per school. These figures must be interpreted with caution however, since they encompass elementary school s, secondary schools, etc. which, by definition, include different numbers of classes.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-21 

### While the NCES report provides some data on the number of private schools by grade level, it does not provide data on grades offered by each individual school in the survey. In order to identify schools with kindergartens only, pre-kindergartens and kindergarten s, and pre-kindergartens only, this analysis relied on the Excel database underlying NCES’s 2003-2004 repor t. This database, which contains records for 29,907 of the estimated 34,461 private schools in the Un ited States, specifies the highest and lowest grade offered at each school, as well as the number of student s enrolled in each grade. The database, however, does not include sampling weights used to adjust some of the survey results to generate final numbers presented in NCES’s report. In order to most accurately estimate the number of schools offering each combination of kindergarten or pre-kindergarten programs, as well as the number of children enrolled in these programs, this analysis:

3⁄4 used the underlying database to identify schools with pre-kindergartens only, kindergartens only, and both kindergartens and pre-kindergartens, then

3⁄4 inflated these counts to account for the 4,500 schools that were not included in the database. The numbers of schools offering each combination of programs was inflated using the ratio of the number of schools presented in the published report to the number of schools included in the database. Similarly, the number of children in each school setting, estimated based on the underlying data, was adjusted using the ratio of the number of kindergartners presented in the published report to the number of kind ergartners reported in the database. 10



### Table 2-16 breaks down the totals from the previous table to provide a count of the number of private schools with pre-kindergartens and/or kindergartens.

Table 2-16: Number of Private Schools, by Type

Type of Private School Number of schools Total number of private elementary and secondary schools 34,681 Number of schools with pre-kindergartens and kindergartens 19,305 Number of schools with pre-kindergartens and no kindergartens 21 Number of schools with kindergartens but no pre-kindergartens 7,205 Total number of schools with pre-kindergartens 19,326 Total number of schools with kindergartens 26,510 Total number of schools with pre-kindergartens or kindergartens 26,531
Source: NCES 2006e



### Of the 34,681 private schools counted in the 2003-20 04 survey, 26,531 provided either pre-kindergarten or kindergarten services. 11 

### Furthermore, of these 26,531 private schools, 19,305 provided both prekindergarten and kindergarten services. Only 21 pr ivate schools provided pre-kindergarten but not

10 In its report, NCES tracks schools where kindergarten is the highest grade offered separately from regular elementary, middle and high schools. As such, when inflating counts obtained from underlying data, the analysis calculated two sets of ratios for the numbers of schools and numbers of children enrolled – one for regular, and another for kindergarten-terminal schools.

11 A private school was identified as having a pre-kindergarten or kindergarten in the same fashion as a public school was in Section 2.2.1.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-22 

### kindergarten services 12 

### ; while 7,205 private schools offered kindergarten but not pre-kindergarten services. Note that these figures are not limited to schools in pre-1978 buildings.

Table 2-17 presents a count of the number of pre-kinderga rten and kindergarten students served in private schools, as well as the average number of students served per school.

Table 2-17: Total Number and Average Kindergarten and Pre-Kindergarten Students Served Per School Number of Schools offering Program Number of Students Served Average Students Served per School Pre-kindergartens in private schools 19,326 863,542 45

Kindergartens in private schools 26,510 555,531 21 Source: NCES 2006e



### According to Table 2-17 , there are 26,510 private schools with kindergartens, enrolling a total of 555,531 kindergarteners. Also, there are 19,326 private sc hools with pre-kindergartens, enrolling 863,542 prekindergarten students. The average number of private pre-kindergarten students per school (45) is more than double the average number of kindergarten students (21). Whereas public schools displayed nearly the opposite ratio with on average 44 pre-kindergarten students and 70 kindergarten students per school.
Non-profit organizations, including private schools, are defined as small under the Regulatory Flexibility Act if they are independently owned and operated and not dominant in their field. While determining whether a school meets this definition is difficult, it is useful to present some st atistics describing the size distribution of private schools. Table 2-18 shows the distribution of private schools by the number of students they serve. This represents the total numbe r of students served, and not just the number of kindergarten and pre-kindergarten students.

Table 2-18: Schools with Kindergarten or Pre-Kindergarten programs, by Number of Students in the School Number of Students Served <100 100-499 a 500-999 1000-1499 >1500 Total % Total % Total % Total % Total % Number of Private School 10,862 41% 13,951 53% 1,519 6% 161 1% 38 0% Note: schools that did not report the total number of st udents were considered as having less than 100 student
a. Includes all schools with missing total student data. These schools are assumed to have student enrollment equal to the average school with over 100 students, or 285.

Source: NCES 2006e



### The distribution of private schools in the U.S. is h eavily skewed toward smaller schools, with 94% of private schools serving less than 500 students and 99% of private schools serving less than 1000 students.

12 Beginning in 1995, the definition of school employed by the Private School Survey was expanded to include schools whose highest grade was kindergarten. Theref ore, these statistics are lik ely to include some prekindergartens that are more likely also classified as pr eschools in other sources (NCES 2006e). Later sections explain how the calculations avoid doub le-counting. However, because this is a small figure, it is almost negligible.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-23 

### However, these data do not indicate whether the schools are affiliated with or part of a larger organization.


### 2.3 Nonresidential Commercial Pr operty Owners and Managers Nonresidential commercial property owners and managers will be affected by the rule if they rent space to daycare facilities or other COFs in buildings construc ted prior to 1978. The number and size of firms in this industry is described below.

2.3.1 Industry Definitions and Characteristics Firms involved in the leasing of nonresidential build ings (except Miniwarehouses) are classified under NAICS 531120 – Lessors of nonresidential buildings (e xcept Miniwarehouses). In 2002, this industry included 28,426 firms that employed 154, 725 people (U.S. Census Bureau 2005b).
Firms involved in the management of non-residential properties are classified under NAICS 531312 – Nonresidential property managers. In 2002, this indus try included 10,506 firms that employed 125,616 people (U.S. Census Bureau 2005b). 13 

### Table 2-19 includes only firms with employees. The U.S. Census Bureau does not differentiate between self-employed i ndividuals that lease or manage commercial real estate as opposed to residential buildings. This an alysis assumes that non-employers primarily lease residential buildings, rather than commercial propert y. As such, non-employer establishments are not included in this profile, or in the remainder of the analysis.

Table 2-19: Summary Statistics for NAICS 531120 and NAICS 531312

NAICS Code and Description Firms Annual Revenues (000) Annual Payroll (000) Employees 531120 - Lessors of nonresidential buildings (except miniwarehouses) 28,426 $51,778,431 $5,384,512 154,725

531312 - Nonresidential property
managers 10,506 $12,297,703 $5,521,674 125,616

Total 38,932 $64,076,134 $10,906,186 280,341 Sources: U.S. Census Bureau 2005j



### The 2008 LRRP rule economic analysis (EPA 2008) indi cated that a total of 17,705 daycare centers rent space in pre-1978 buildings. Because daycare centers are only one of many types of establishments renting non-residential space, and b ecause the rule applies only to centers in buildings cons tructed prior to 1978, the analysis also assumes that each property manager or lessor firm owns only one regulated building. As such, the number of affected lessor/manager firms is equivalent to the number of daycare centers renting space, or 17,705.

2.3.2 Establishment Size and Industry Environment The U.S. Small Business Administration indicates that to qualify for small business status, a firm in NAICS 531120 must have revenues of less than $7 m illion, while firms in NAICS 531312 must have revenues of less than $2 million (U.S. Small Business Administration 2008). Average revenues in these NAICS codes are significantly below the small business designation threshold ( Table 2-20 ).

13 Firms involved in the leasing and/or management of residentia l buildings are already covered under the residential lead RRP rule.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-24 Table 2-20: Summary Statistics for NAICS 531120 and NAICS 531312 (Per Firm)

NAICS Code and Description Average Annual Revenues ($) Average Annual Payroll ($) Paid Emplo y ees Per Firm 531120 - Lessors of nonresidential buildings (except miniwarehouses) $1,821,517 $189,422 5.4

531312 - Nonresidential property
managers $1,170,541 $525,573 12.0
Sources: U.S. Census 2005j



### Census data are not specific enough to report revenues at either the $7 million dollar or $2 million dollar cutoff; Table 2-21 presents the percent of firms in NAICS 531120 and NAICS 531312 that have revenues below $5 million and $1 million respectively. Consequently, the figures in Table 2-21 are all underestimates of the true percentages of firms that qualify as small businesses.

Table 2-21: Small and Large Firms as Percent of Industry

NAICS Code: Description Percent of Firms by Revenue Bracket Percent of Industry Revenues by

Revenue Bracket Percent of Industry Emplo y ees b y Revenue Bracket
531120 Lessors of nonresidential buildings (except mini-warehouses) Firms with Revenues < $5 million 96% 32% 73% Firms with Revenues of $5 million+ 4% 68% 27% 531312 N onresidential property managers Firms with Revenues < $1 million 81% 19% 26% Firms with Revenues of $1 million + 19% 81% 74% 

### Sources: U.S. Census 2005j

Based on 2002 data, 96 percent of NAICS 531120 fi rms and 81 percent of NAICS 531312 firms have revenues below $5 million and $1 million, respectively. In the Lessors of Nonresidential Buildings industry, these firms contribute 32 percent of the industry revenues while employing 73 percent of the workforce. The revenue and employment distributi on is more skewed in the Nonresidential Property Managers sector. Small firms in this industry contribute only 19 percent of the revenues, while employing only 26 percent of the workforce.


### 2.4 The Demand for Renovation Services The demand for renovation is responsive to changes in the overall economic conditions. The same factors that stimulate economic growth, such as low unemplo yment, high consumer confidence and low interest rates, also stimulate the demand for renovation activities. For both residential and nonresidential building projects, the U.S. Census Bureau tracks information on the “value of construction put in place,” a figure composed of some of the variables previously discussed in this chapter such as labor and material costs (while also including other variables such as the c ontractors profit, the cost of architectural and engineering work, etc). Although the definition of construction includes renovations, alterations, additions, and other improvements, it does not include “maintenance and repairs to existing structures or service facilities” (U.S. Census Bureau 2006d), two co mponents of primary interest to this rule.Economic Analysis for the LRRP Clearance Proposed Rule



### Using this Census data, Figure 2-3 illustrates the relationship between the value of construction put in place for private preschools (a term that includes childcare and day-care centers, nurseries, and preschools), state and local elementary school build ings, private primary and secondary educational buildings, and real GDP (U.S. Census Bureau 2006b,c). 14 

### Both real GDP and the value of state and local construction of elementary school buildings substantially increased over the previous 12 years. Meanwhile, the value of private preschool construction and private primary and secondary educational buildings construction have seen more moderate growth, peaking around 2001 and then gradually tapering off.

Figure 2-3: Annual Value of Construction Put in Place Compared to GDP

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

YearMillions of Dollars

7,000,000 7,800,000 8,600,000 9,400,000 10,200,000 11,000,000 11,800,000

State and Local Construction of Elementary School Buildings - Read Left-Hand Vertical Scale for Values in Millions of Dollars Private Preschool Construction - Read Left-Hand Vertical Scale for Values in Millions of Dollars

Private Primary and Secondary Educational Building Construction - Read Left-Hand Scale for Values in Millions of Dollars Real Gross Domestic Product in millions of chai ned 2000 dollars - Read Right-Hand Vertical Scale for Values in Millions of Dollars
Source: U.S. Census Bureau 2006b,c; U.S. Department of Commerce 2006



### Construction is a term that encompasses not only the creation of new buildings but renovations to older structures as well. While the Census tracks this breakdown between re novation and new building construction for residential construction, it does not for non-residential construction. The U.S. Census Bureau, however, did compile statistics for the expe nditures of non-residential improvements in 1986,

14 State and Local Construction of Elementary School Buildings is meant to give an indication of public kindergarten construction, while Private Primary and Secondary Educational Building Construction is meant to give an indication of private school kindergartens. Since the variables shown in Figure 2-3 are more broadly defined than the variables of interest, they overes timate the value of cons truction put in place.

Chapter 2 2-25Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-26 

### 1989, and 1992. The U.S. Census defines im provements as “additions, alterations (renovations, remodeling, etc.) and major replacements.” While not being able to collect data on the number or extent of the individual projects, the Census was able to make some estimations in the non-residential domain, concluding that “about 23 percent of all buildings had some improvement work, while about 71 percent had some expenditures for repair” (U.S. Census Bure au 1999). The collected data, however, were not specific enough to capture improvement expenditures on COFs. Thus, Table 2-22 presents improvement expenditures as the percentage of the total value of non-residential educational building construction put in place in each of the three years for which im provement expenditure data were available.

Table 2-22: Improvement Expenditures as a Percentage of the Value of Construction Put in Place for Non-Residential Educational Buildings Type of Construction 1986 1989 1992 Private Non-Residential Educational Buildings 40% 46% 19% State and Local Non-Residential Educational Buildings 58% 35% 41% 

### Source: U.S. Census Bureau 1999, U.S. Census Bureau 2006b,c

As shown in Table 2-22 , expenditures on improvements as a percent of the total value of educational building construction put in place vary year to y ear. Expenditures on improvement made up between 35 and 58 percent of the total value of construction pu t in place in either private or state and local nonresidential buildings in the three selected years, with the data moderately variable. These figures indicate that a substantial amount of non-residential educati onal building expenditures are for activities that might disturb lead-based paint. The high frequency of th ese improvement activities points to the importance of schools in this rule.


### 2.5 Renovation Industry Market Structure The previous sections focused on the supply and demand for renovation services. This section discusses the overall market structure of the renovation industry.
Firms and consumers interact in markets for goods and services with the results of these interactions depending on the competitive characteristics of th e market. Competitive mark ets are characterized as markets with a large number of buyers (e.g., cons umers) and sellers (e.g., firms) and relatively homogeneous goods. In competitive mark ets, neither firms nor consumers can influence the price of the good by altering their supply or demand decisi ons. Oligopolistic, monopo listic and monopsonistic markets are markets where either firms or consumers ha ve market power and exhibit strategic behavior to change the price of the good sold. The competitive natu re of an industry can be estimated by examining the following market characteristics.

3⁄4 Number of establishments;

3⁄4 Specialization of establishments;

3⁄4 Number of consumers;

3⁄4 Barriers to entry;

3⁄4 Availability of substitutes; and

3⁄4 Homogeneity of the good/service.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-27 

### The data in Section 2.1 indicate that there are a large number of firms in the construction industry. Using data for the twelve NAICS codes, there are approximately 394,365 establishments with employees in construction sectors potentially affected by the ru le. Of these establishments, only 2.3 percent have annual revenues of $10 million or more. In addition, there are about 1.2 million self-employed contractors in these industries, all of which are, in all likelihood, considered small by SBA standards. Given the large number of small establishments, it is unlikely that any one firm exhibits substantial market share in the overall market for renovation services. It is possible in some geographic areas for a small number of firms or a single firm to establish a market niche, but overall the market for renovation services appears to be quite competitive on the supply side.
The relatively low barriers to entry in the renovation industry enhance the competition taking place within it. Much of the work covered by this rule does not require particularly unusual or high levels of skills. Renovation work has traditionally attracted recent immigr ants because a lack of English is not important (Farzad 2005). While any training required as part of th is rule will increase the skill level, the cost of the training is expected to be relatively low.
There are also a large number of consumers in the i ndustry. As such, no single consumer of renovation services is expected to exhibit infl uence over the price of these services.

There are three sources of substitutes for renovation se rvices. First, consumers can substitute from one contractor to another. Second, consumers can s ubstitute away from professional renovation and into DIY work. This is less likely to occur fo r COFs than for residential RRP work. Operators of COFs must be certified and have their employees trained in order to do covered RRP in the fac ility. Third, consumers can reduce the scope of the project or forgo renovation altogether. However, that is unlikely as the cost of the rule is a relatively small share of the cost of a re novation. Again, this is less likely to occur for COFs than for residential RRP work. Many states require annual inspections in COFs that assess the amount of chipped or peeling lead-based paint and dictate that appropriate measures must be taken to alleviate the risk that it imposes.

Additional characteristics of the RRP market resu lt in reduced demand elasticity. First, some differentiation in RRP services does exist. Contractor s can provide services at a higher price if they can convince consumers that their services are better or distin ctly different from their competitors. This is an important factor in anticipating the impact of the RRP requirements on contractors. The costs of safely renovating or repairing target housin g and COFs are expected to be higher than traditional methods. If the consumer is indifferent between safe- or unsafe-l ead work practices, then th ose companies that choose not to use lead-safe work practices may have a compe titive advantage in the market due to lower costs. However, if the consumer recognizes that higher qual ity renovation jobs are those jobs completed with lead-safe work practices, then firms may be able to comply with the re gulation and charge a higher price. Under such a scenario, the consumer’s marginal bene fit for an additional unit of safe renovation may be higher than for an additional unit of unsafe renovation. The consumer who has a preference for lead-safe work practices would choose to do lead-safe renovation as long as the incremental cost of the lead-safe renovation is less than the incremental benefit of su ch a renovation. Also, the market for RRP services is fragmented and there are substantial costs involve d in getting prices. Getting bids from various contractors takes time and consumers need to co mpare prices across services that differ along many dimensions. These difficulties make it easier for firm s to increase their prices to cover the costs for the new requirements.
The combination of a large number of firms, a large number of consumers, low barriers to entry, and available substitutes indicate that the renovation industry is likely to have a relatively high price elasticity of supply. The price elasticity of demand, however, may be small in absolute value.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-28 

### 2.6 Residential Property Owners & Managers Property owners and managers also will be affected by the rule if they choose to perform their own RRP projects rather than hire an outside contractor or if their renovation and maintenance costs rise as a result of the regulations.
Property owners and managers may have in-house crews that perform RRP activities. If this is the case, then the property owners and managers will directly b ear the costs of training and certifying their workers as well as the cost of safe work practices. Furthe rmore, because all firms that perform regulated RRP projects will experience an increase in costs due to trai ning of supervisors and workers and the use of safe work practices, it is assumed that costs to property ow ners and managers who hire outside contractors will increase.

2.6.1 Industry Definitions and Characteristics Establishments involved in the leasing of apartments and other residential units are classified under NAICS 531110 - Lessors of Residential Buildings and Dwelli ngs. This industry, in turn, is divided into two sub-sectors, NAICS 5311101—Lessors of Apartm ent Buildings and NAICS 5311109—Lessors of Dwellings Other than Apartment Buildings. According to the 2002 U.S. Economic Census data, together these industries include a total of 61,787 establishments that employ 292,405 people (U.S. Census Bureau 2004b).
Establishments involved in the management of residential properties are classified under NAICS 531311—Residential Property Managers. In 2002, th is industry included 26,233 establishments that employed 289,870 people (U.S. Census Bureau 2004b). Table 2-23 presents summary statistics for the businesses in NAICS 531311 as well as NAICS 531110 and its sub-sectors.

Table 2-23: Summary Statistics for NAICS 531110, NAICS 5311101 and NAICS 5311109
NAICS Code and Description Establishments Annual Revenues (000) Annual Payroll (000) Paid Employees
5311101 - Lessors of Apartment Buildings 51,502 $51,708,553 $5,831,398 257,624
5311109 - Lessors of Dwellings other than Apartment Buildings 10,285 $5,263,795 $748,821 34,781
531311 - Residential property
managers 26,223 $19,988,344 $8,193,831 289,870
Total 88,010 $76,960,692 $14,774,050 582,275
Source: U.S. Census Bureau 2004b



### 2.6.2 Establishment Size and Industry Environment The U.S. Small Business Administration indicates that to qualify for small business status, a firm in NAICS 531110 must have annual revenues of less th an $7 million, while establishments in NAICS 531311 must have revenues of less than $2 million (U.S. Small Business Administration, 2004). Although data on the number of firms by revenue bracket were not available from the 2002 U.S. Economic Census when this analysis was performed , the average revenues of establishments in these NAICS codes are significantly below the small business designation threshold ( Table 2-24 ).Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-29 Table 2-24: Summary Statistics for NAICS 531110, NAICS 5311101 and NAICS 5311109 (Per Establishment)

NAICS Code and Description Average Annual Revenues ($) Average Annual Payroll ($) Paid Emplo y ees per Establishment 5311101 - Lessors of Apartment Buildings $1,004,011 $113,227 5.0
5311109 - Lessors of dwellings other than apartment buildings $511,793 $72,807 3.4
531311 - Residential property
managers $762,245 $312,467 11.1 Source: U.S. Census Bureau 2004b



### In 1997, 98.7 percent of the then 51,572 establishments in the Lesso rs of Residential Buildings and Dwellings sector had annual revenues below $5 million and about 85 percent of the 19,000 establishments in NAICS 531311 had revenues less than $1 million (U.S. Census Bureau 2000a). 15 

### Because 2002 data on the number of establishments by revenue bracket was not available at the time the estimates were developed, 1997 data was used to estimate the percen t of establishments in each industry that qualify for small business status. Table 2-25 presents the percent of NAICS 531311 and NAICS 531110 establishments that have revenues below $1 million and $5 million, respectively. The table also presents the percent of industry revenues and employment that can be attributed to these establishments.

Table 2-25: Small and Large Establishments as Percent of Industry

NAICS

Code Description Percent of Establishments b y Revenue Bracket Percent of Industr y Revenues by Revenue Bracket Percent of Industr y Employees by Revenue Bracket 531311 Residential Property Managers Establishments with Revenues < $1 million 85 35 40 Establishments with Revenues of > $1 million 15 65 60 531110 Lessors of Residential Buildings and Dwellings Establishments with Revenues < $5 million 99 82 86 Establishments with Revenues of > $5 million 1 18 14
Source: U.S. Census Bureau 2000a



### Based on 1997 data over 85 percent of NAICS 531311 establishments, and about 99 percent of NAICS 53110 establishments have revenues below the sma ll business threshold defined by SBA. In the Residential Property Manager industry, these establishm ents contribute only 35 percent of the revenues, and employ only 40 percent of the workforce. The revenue and employment distribution is less skewed in the Lessor of Residential Buildings and Dwellings se ctor. Small establishments in this industry contribute about 82 percent of the revenues and employ 86 percent of the workforce (U.S. Census Bureau 2000a).

2.6.3 Industry Outlook The market for lead-safe renovation activities will depend in part on the state of the rental housing market—an increase in rents would provide resources to construct new housing a nd/or renovate existing

15 Includes establishments open year-round only.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-30 

### housing. According to Harvard University’s Joint Cent er for Housing Studies (JCHS), “rents fell in 9 of the 27 metropolitan areas tracked by the federal government [in 2003]. Nationally, real contract and gross rents barely increased last year.” The JCHS indi cates that both the weak labor market and increased home ownership contributed to the softening of the rental market (JCHS 2004).
At the same time as rents fell, the nation-wide rental vacancy rate increased from 8.9 percent in 2002 to 9.8 percent in 2003. The vacancy rate was slightly above 10 percent during the first three quarters of 2004 (U.S. Census Bureau 2004e). None-the-less, the JCHS predicts a strengthening of the rental market over the next ten years due to the influx of immigran ts and the aging of the “echo baby-boom generation.” The strengthening of the market may also come fro m overall economic growth and a stemming of home ownership growth due to rising inter est rates and/or house prices (JCHS 2004).


### 2.7 Training Providers Impacts of the rule will be felt beyond the constr uction industry. Certified renovators will need accredited training. Both initial and refresher trai ning courses will be required for certified renovators.

2.7.1 Definitions and Industry Characteristics It is likely that lead-based paint training courses will be provided by establishments categorized as NAICS code 611519: Other Technical and Trad e Schools. Census defines NAICS 61159 as “establishments primarily engaged in offering job or career vocational or technical courses (except cosmetology and barber training, aviation and flig ht training, and apprenticeship training). The curriculums offered by these schools are highly structured and specialized and lead to job-specific certification” and these establishments are believed to currently provide training for lead abatement professionals (U.S. Census Bureau 2004p).
According to the 2002 Economic Census, there are a total of 3,323 establishments in the U.S. certified as Other Technical and Trade Schools (see Table 2-26 ). On average, each establishment employs 15.3 people. A striking characteristic is that about 19% of these establishments are exempt from the Federal Income Tax (FIT). Exempt establishments include n on-profit organizations a nd educational institutions such as colleges or universities.

Table 2-26: Number of Establishments in NAICS 611519
Industry Number of Establishments Total Number of Employees Average Number of Employees

NAICS 611519 - Other Technical and Trade Schools 3,323 50,709 15.3

Source: U.S. Census Bureau 2004n



### Table 2-27 summarizes available financ ial information for establishments categorized under NAICS 611519. These include total revenues for the sector, average annual revenues per establishment, annual payroll for the sector, and payroll as a percent of revenue. As Table 2-27 indicates, for Other Technical and Trade schools, annual payroll is equal to about 35 percent of establishment revenue.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-31 Table 2-27: Summary Statistics for NAICS 611519

Industry Number of Establishments Annual Sector Revenue

(000) Average Revenue per Establishment (000) Avera g e Pa y roll
per Establishment (000) Labor Cost as percent of Revenue NAICS 611519 - Other Technical and Trade Schools 3,323 $4,118,995 $1,240 $429 35 %

Source: U.S. Census Bureau 2004n



### According to the U.S. Small Business Administration, in order to qualify as a small business, a firm categorized under NAICS 611519 must have annual reve nues of $7 million or less (U.S. Small Business Administration 2006a). 16 

### The 2002 Economic Census provided data on the number of firms by revenue bracket. In 2002, 94 percent of the then 2,274 firm s classified as Other Technical and Trade Schools that were in operation for the entire year had revenues under $5 million (U.S. Census Bureau 2005f). This figure indicates that a large percentage of firms had revenues under the $6.5 million threshold and thus qualified for small business status.

2.7.2 Number and Type of Training Establishments
As mentioned in Section 2.7.1 , there are over 3,000 establishments in the Other Technical and Trade school industry. It is likely that only a small por tion of these establishments are involved in lead based paint-related training. To help characterize the lead training segment of the training provider industry, a random sample of firms that offer one or more of the courses required for EPA lead abatement certification were identified as part of the economic analysis of the 2006 proposed LRRP target housing rule (EPA 2006). The goal was both to collect tuition data for currently offered lead abatement training courses and to learn what types of institutions (p rivate establishments, non-profits, unions, etc.) offer these classes.
The sample consisted of 83 establishments selected from the Lead Listing 17 

### directory of 194 training providers. 18 

### Data were collected from company web sit es (when available) and/or over the phone. Information was obtained from 68 training providers; a total of 15 training providers could not be reached. Seven of the 68 contacted providers no longer offered lead abatement training courses.
There were five types of training providers in th e sample: private for-profit establishments, non-profit establishments, educational institutions, trade unions a nd public/government training institutions. Trade unions provide tuition-free training to their members. Public/government providers train state employees and workers who qualify for financial assistance th rough government programs. They do not offer training to the general public.

16 Effective July 31 st , 2006.

17 The Lead Listing ( www.leadlisting.org ) website was run for the U.S. Department of Housing and Urban Development’s Office of Healthy Homes and Lead Hazard Control that contained a directory of lead service providers. It is no longer in operation (as of late 2004).

18 The sample included all the establishments on the list th at are certified to offer a Pr oject Designer course (42 total), as well as a random sample of 41 establishments th at were not certified to offe r this class. The data were weighted by the inversed probability of selection into the sample (P=1 for providers that offer a ProjectDesigner course and P=.270 for providers that do not offer this class). It was assumed that there was no nonresponse bias.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-32 

### Table 2-28 summarizes the number of priv ate establishments, educational institutions, non-profits, unions and public government providers that appeared in the sample. The table also presents the estimated national number of providers that fall into each of th ese categories. More than a third of lead hazard reduction training providers are private, for-profit estab lishments. The next largest group of providers is labor unions, followed by educational institutions (c olleges and universities). None of the unions, however, are certified to offer the Project Designer cour se. About 13 percent of certified providers either do not offer training at this time, or have permanently stopped offering lead courses.
More than half of the privately owned, for-profit establishments in the samp le (19 out of 35) offer environmental consulting services in addition to training. Thirteen of the 35 privately-owned providers specialize in training and do not offer other services. All of these 13 firms offer both lead and asbestos training courses, as well as, in most cases, OSHA safet y, HAZ-MAT and/or mold classes. Although there was not enough information to determine the services provided by the remaining three companies, these findings indicate that lead-based paint training provide rs generally participate in several lines of business.

Table 2-28: Estimated Number of Training Providers National Estimates Type of Provider Number in Sample Total Percent Private Providers 35 74 38 Educational Institutions 11 27 14 Non-Profit 4 19 10 Union 9 42 22 Pub/Gov Providers 2 6 3 No Longer Offer Training 7 26 13 Total Companies 68 194

a. Adjusted for non-response assuming no non-response bias and weighted based on the probability of selection into the sample 

### Source: U.S. Environmental Protection Agency 2006



### 2.8 Summary Characteristics: Numbers of Structures in the Regulated Universe This section provides summary information about the numbers of target housing and public or commercial building COFs that form the basis for the analyses presented in the subsequent chapters of this report. Each tally is then subdivided into cate gories based on the age of the building and the type of structure. After each table, there is a discussi on of how the numbers presented in that table were calculated.

Table 2-29 provides counts of the number of buildings by type and vintage of building. There are 78.0 million structures that would be covered by the LRRP rule if the proposed LRRP Opt-Out and Recordkeeping rule is finalized. These units incl ude 77.9 million target housing units and 0.1 million COFs in public or commercial buildings. About 40.2 million target housing units would be added to the regulated universe due to the elimination of the opt-out provision. Table 2-29 also shows the regulated universe under the existing 2008 LRRP rule (37.7 million target housing units and 0.1 million public and commercial buildings).Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-33 Table 2-29: Number of Structures, by Type and Age of Construction Type All Pre-1960 All Pre-1978 Target Housing where LLRP rule is applicable assuming opt-out provision removal 41,040,000 77,888,000 Target Housing where LRRP program was applicable under 2008 LRRP Rule: Rental, COF, or where a child <6 or pregnant woman resides) 20,321,000 37,665,000 Rental where a child <6 or pregnant woman resides 2,187,000 4,130,000 Rental where no child <6 or pregnant woman resides 14,180,000 26,289,000 Owner-Occupied where a child <6 or pregnant woman resides 3,529,000 6,422,000 Owner-Occupied COF where no child <6 or pregnant woman resides 424,000 824,000 Target Housing COFs 823,000 1,559,000 Renter-Occupied COF where a child <6 or pregnant woman resides 33,000 62,000 Renter-Occupied COF where no child <6 or pregnant woman resides 214,000 397,000 Owner-Occupied COF where a ch ild <6 or pregnant woman resides 152,000 276,000 Owner-Occupied COF where no child <6 or pregnant woman resides 424,000 824,000 Target Housing Universe affected by elimination of the opt-out provision (Owner-Occupied where no child <6 or pregnant woman resides that is not a COF) 20,719,000 40,222,000 Public or Commercial Building COFs 54,000 97,000 Daycare Centers* 29,000 52,000
Schools* 25,000 45,000 Kindergarten Only 12,000 21,000 Kindergarten and Pre-Kindergarten 13,000 23,000 Note: Counts include buildings with and without lead-based paint. * There are 800 pre-1978 schools that have pre-kindergartens but no kindergarten. In this table and in the cost and benefits analysis in Chapters 4 and 5, they are accou nted for as daycare centers. In the small entity impact and Unfunded Mandates Reform Act an alyses in Chapter 6 these buildings are accounted for as schools.



### 2.8.1 Target Housing This section provides a brief discussion of the estimates of the number of the target housing units presented in Table 2-29 . Estimates of the number of housing units by tenure of occupant (owner or renter), age of occupants, and pregnancy status of occupants were estimated using the 2003 American Housing Survey, which is described in more detail in Section 4.2 of the Economic Analysis for the LRRP Opt-Out and Recordkeeping Proposed Rule (EPA 2009). EPA (2009) also provides a detailed explanation of the estimated number of target housing un its that are defined as COFs. The COFs in target housing include family daycare providers and the homes of family, friends, and neighbors who regularly care for someone else’s children. These estimates include care provided for pay and not for pay, and rely primarily on estimates of the size of the childcare workforce as published by the Center for Childcare Workforce, 2002. This report includes data on the number of: (1) family childcare providers caring for unrelated children, (2) paid relatives and non-relativ es providing childcare, and (3) unpaid relatives and non-relatives providing childcare. Based on data provid ed by the Center for Childcare Workforce, a total of just under 2.4 million caregivers provide care outside of the child’s home for more than six hours perEconomic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-34 

### week. As described in detail EPA ( 2009), these data are used to estimate the number of COFs in target housing. These numbers are further reduced to estimate the number of pre-1960 and pre-1978 housing units based on American Housing Survey data.

2.8.2 Childcare Centers In 2006, the National Association for Regulatory Ad ministration (NARA) released a report entitled “The 2005 Childcare Licensing Study” providing counts of all the licensed childcare centers and family childcare homes in the United States. The NARA report indicated that there were approximately 115,000 licensed childcare centers, 66,700 of which are est imated to be built before 1978 according to Commercial Building Energy Consumption Survey (CBECS) data (DOE 2003). According to HUD's First National Health Survey of Childcare Centers (HUD 2003), approximately 24 percent of licensed centers are located in elementary schools. These 15,753 centers are assumed to be included in the estimated 40,190 elementary schools with pre-schools and kindergartens. Thus, there are a total of 50,947 pre-1978 daycare centers located outside of elementary schools. According to NCES data on public and private schools, however, an additional 824 pre-1978 schools without kindergartens have a pre-kindergarten program, which brings the total numbe r of buildings accounted for as daycare centers to 51,771 (EPA 2008).

2.8.2.1 Public Schools 

### The National Center for Education Statistics (NCES) reported that during the 2004-2005 academic year, there were more than 93,000 public schools in the United States. Of these 93,295 public schools, 52,129 had either a pre-kindergarten (PK) or kindergarten (K) program. The Common Core of Data Public Elementary/Secondary School Universe Survey data w as used to calculate the number of private schools with PK or K programs. Using this data, a school was considered as having a pre-kindergarten if a) prekindergarten enrollment was greater than zero students, or b) the school reported that the lowest grade offered was pre-kindergarten, but enrollment data were not provided. Similarly, a school was considered as having a kindergarten if a) kindergarten enrollment w as greater than zero, or b) the school reported that the lowest grade offered was pre-kindergarten or kind ergarten, but did not report kindergarten enrollment. Again, the educational building age distribution fo und in CBECS and HUD (2003) was applied to the total counts, resulting in the estimated 17,000 pre-1960, and 30,000 pr e-1978 public schools.

2.8.2.2 Private Schools 

### This analysis used NCES’s Results from the 2003-2 004 Private School Universe Survey report and the underlying dataset to estimate the number of private sc hools with kindergartens and/or pre-kindergartens. A school was considered as having a pre-kindergarten if a) pre-kindergarten enrollment was greater than zero students, or b) the school reported that the low est grade offered was pre-kindergarten, but enrollment data were not provided. Similarly, a school was considered as having a kindergarten if a) kindergarten enrollment was greater than zero, or b) the school reported that the lowest grade offered was prekindergarten or kindergarten, but did not report kind ergarten enrollment. The previously cited CBECS and HUD educational building age distribution was then applied to the private school universe to calculate the number of private schools by age of construction. This adjustment yielded 9,000 pre-1960, and 15,000 pre-1978 private schools.
For the purpose of the total cost analysis, privat e and public schools were categorized according to whether they offered kindergarten only, kindergarten and pre-kindergarten, and pre-kindergarten only.

Table 2-29 uses information drawn from Table 2-9 and Table 2-16 to obtain the total number of schools with each combination of programs. Table 2-9 and Table 2-16 indicate that there are 29,844 public schools and 7,205 private schools with kindergarten programs only, for a total of 37,049 such schools.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-35 

### Table 2-9 and Table 2-16 also indicate that there are 20,885 public schools and 19,305 private schools with both pre-kindergarten and kindergarten programs. Finally, there are a total of 1,400 public and 21 private schools with pre-kindergarten, but no kindergar ten, which are accounted for as daycare centers for the purposes of the analysis. Table 2-29 presents the total number of schools with kindergartens, kindergartens and pre-kindergartens, and pre-kindergar tens only by age of construction. Information about the age distribution of buildings was taken fro m CBECS and HUD and applied to the data to give estimates of the number of schools by the age of the building.Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-36 

### References
Bureau of Labor Statistics. 2005. “Child Day Care Services.” Available at: http://www.bls.gov/oco/cg/cgs032.htm#outlook. (Accessed: 12/12/2006)

Center for the Childcare Workforce and Human Se rvices Policy Center. 2002. “Estimating the Size Components of the U.S. Childcare Workforce and Caregiving Population: Key Findings from the Childcare Workforce Estimate (Preliminary Report).” May 2002.
Farzad, Roben. “A Housing Boom Brings Jobs and Sometimes, Abuse.” The New York Times 07 July. 2005.
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. (January 21, 2004). Mulligan, G.M., Brimhall, D., and West, J. (2005) . Childcare and Early Education Arrangements of Infants, Toddlers, and Preschoolers: 2001 (NC ES 2006-039). U.S. Department of Education, National Center for Education Statistics. Wash ington, DC: U.S. Government Printing Office. National Administration for Regulatory Administrati on. 2006. “Number of Licensed Childcare Facilities in 2005.” 2005 Childcare Licensing Study . Available at: http://www.nara.affiniscape.com/associations /4734/files/Number of Licensed Programs 2005.pdf(Downloaded 12/12/2006)
National Center for Education Statistics (NCES). 2006a. “Overview of Public Elementary and Secondary Students, Staff, Schools, School Districts, Re venues, and Expenditures: School Year 2004-2005 and Fiscal Year 2004.” Available at: http://nces. ed.gov/pubsearch/pubsinfo.asp?pubid=2007309. (Downloaded 12/22/2006).
National Center for Education Statistics (N CES). 2006b. Common Core of Data Public Elementary/Secondary School Universe Survey Data, 2004-2005.” Available at: http:///nces.ed.gov/gov/ ccd/pubschuniv.asp. (A ccessed 12/22/2006).
National Center for Education Statistics (NCES). 2006 c. Common Core of Data Local Education Agency (School District) Universe Survey Data. Av ailable at: http://nces/ed/gov/ccd/pubschuniv.asp. (Accessed 12/22/2006).
National Center for Education Statistics (NCES). 2006 d. Common Core of Data Local Education Agency (School District) Finance Survey (F-33) Data. Available at: http://nces.ed.gov/ccd/f33agency.asp. (Accessed 12/22/2006).
National Center for Education Statistics (NCES). 2006e. “Characteristics of Private Schools in the United States: Results From the 2003-2004 Private Sc hool Universe Survey.” (Accessed 12/15/2006).
National Center for Education Statistics (NCES). 2006f. 2003-2004 Private School Universe Survey Data. Received from Stephen Broughman (NCES) December 15, 2006.
National Center for Education Statistics (NC ES). 2006g. Crosswalk Between 2004-2005 Local Education Agency Universe Survey Data and Year 2000 U.S. Census Population Data. Table created at: http://www.nces.ed.gov/ccd/b at/index.asp (Accessed 12/15/2006).Economic Analysis for the LRRP Clearance Proposed Rule

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### National Childcare Information Center. 2005. “Number of Licensed Facilities: 1991-2004.” http://www.nara-licensing.org
U.S. Bureau of Labor Statistics. 2006. “Current Population Survey: Basic Monthly Survey.” January 2006.
U.S. Census Bureau. 1999. “Expenditures for Nonr esidential Improvements and Repair Statistics.” Available at: http://www.census.gov/const/ www/nrsupndx.html (Accessed 12/8/2006).

U.S. Census Bureau. 2000a. Establishment and Firm Size (Including Legal Form and Organization). 1997 Economic Census: Subject Series for Real Es tate and Rental and Leasing. Subject Series. EC97F53S-SZ.

U.S. Census Bureau. 2004a. North American Indus try Classification System – Revisions for 2002. Available at: http://www.census.gov/epcd/naics02/ (Accessed 12/4/2006).
U.S. Census Bureau. 2004b. “Sector 53: Industry Series: Summary Statistics for the US: 2002.” American Fact Finder. Available at: http://factfinder.census.gov/servlet/EconSectorServlet?caller=dataset&s v_name=*&_SectorId=53 &ds_name=EC0200A1&_lang=en&_ts=1417 36463723 (Downloaded 8/3/2005).

U.S. Census Bureau. 2004c. 2002 Economic Census: I ndustry Series: Commercial and Institutional Building Construction ECO2-231-236220 (RV). Available at: http://www.census.gov/prod/ec02/ec0223i236220.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004d. 2002 Economic Census: I ndustry Series: Drywall and Insulation Contractors ECO2-231-238310. Available at: http://www.census.gov/pr od/ec02/ec0223i238310.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004e. 2002 Ec onomic Census: Industry Series: Electrical Contractors ECO2-231- 238210. Available at: http://www.census.gov/ prod/ec02/ec0223i238210.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004f. 2002 Economic Cens us: Industry Series: Finish Carpentry ECO2-231- 238350. Available at: http://www.census.gov/ prod/ec02/ec0223i238350.pdf (Accessed 11/18/2006). U.S. Census Bureau. 2004g. 2002 Economic Census : Industry Series: Glass and Glazing Contractors ECO2-231-238150. Available at: http://www.census.gov/pr od/ec02/ec0223i238150.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004h. 2002 Economic Cens us: Industry Series: Other Building Equipment Contractors ECO2-231-238290. Available at: http://www.census.gov/prod/ec02/ec0223i238290.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004i. 2002 Economic Cens us: Industry Series: Other Building Finishing Contractors ECO2-231-238390. Available at: http://www.census.gov/prod/ec02/ec0223i238390.pdf (Accessed 11/18/2006).
U.S. Census Bureau. 2004j. 2002 Economic Census: Industry Series: Painting and Wall Covering Contractors ECO-231-238320. Available at: http://www.census.gov/prod/ec02/ec0223i238320.pdf (Accessed 11/18/2006).Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-38 

### U.S. Census Bureau. 2004k. 2002 Economic Census : Industry Series: Plumbing, Heating, and AirConditioning Contractors ECO2 -231-238220. Available at: http://www.census.gov/prod/ec02/ec0223i238220.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004l. 2002 Economic Cens us: Industry Series: Siding Contractors ECO2-231- 238170. Available at: http://www.census.gov/ prod/ec02/ec0223i238170.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004m. 2002 Ec onomic Census: Industry Series: Tile and Terrazzo Contractors ECO2-231-238340. Available at: http://www.census.gov/pr od/ec02/ec0223i238340.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2004n. “Educational Services: Industry Series: Summary Statistics for the United States: 2002.” American Fact Finder. Available at: http://factfinder.census.gov/servlet/IBQTa ble?_bm=y&-geo_id=&-ds_name=EC0261I1&- _lang=en (Downloaded 11/13/2006).
U.S. Census Bureau. 2004p. “Other Technical and Tr ade Schools - Definition.” Census Data Information. American Fact Finder. Available at: http://factfinder.census.gov/servle t/MetadataBrowserServlet?typ (Accessed 12/4/2006).
U.S. Census Bureau. 2004q. “Nonemp loyer Statistics.” Available at: http://www.census.gov/epcd/nonemploye r/download/04_data/nonemp04us.txt (Accessed 12/4/2006).

U.S. Census Bureau. 2005a. “Sector 23: Construc tion: Industry Series: Selected Statistics for Establishments by Value of Business Done: 2002.” American Fact Finder. Available at: http://factfinder.census.gov/servlet/IBQTa ble?_bm=y&-geo_id=&-ds_name=EC0223I06&- _lang=en (Downloaded 11/13/2006).
U.S. Census Bureau. 2005b. “Sector 53: Real Estate and Rental and Leasing: Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2002.” American Fact Finder. Available at: http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&- ds_name=EC0253SSSZ2&-_lang=en (Downloaded 11/13/2006).

U.S. Census Bureau. 2005c. “Section 23: Construc tion: Industry Series: Detailed Statistics for Establishments: 2002.” American Fact Finder. Available at: http://factfinder.census.gov/servlet/IBQTa ble?_bm=y&-geo_id=&-ds_name=EC0223I04A&- _lang=en (Downloaded 11/13/2006).

U.S. Census Bureau. 2005d. “Sector 62: Health Care and Social Assistance: Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2002.” American Fact Finder. Available at: http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&- ds_name=EC0262SSSZ2&-_lang=en (Downloaded 11/14/2006).

U.S. Census Bureau. 2005f. “Educational Serv ices: Subject Series – Estab and Firm Size: Receipts/Revenue Size of Firms for the United States: 2002.” American Fact Finder. Available at: http://factfinder.census.gov/servlet/IBQTa ble?_bm=y&-geo_id=&-ds_name=EC0261SSSZ4&- _lang=en (Downloaded 11/13/2006).

U.S. Census Bureau. 2005h. 2002 Economic Cens us: Construction by Subsector. Available at: http://www.census.gov/econ/census02/data/us/US000_23.HTM (Accessed 12/1/2006).
U.S. Census Bureau. 2005i. 2002 Economic Census: Construction: By Industry. Available at:Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-39 

### http://www.census.gov/econ/census02/data /us/US000_23.HTM (Accessed 8/3/2005).
U.S. Census Bureau. 2005j. “Sector 53: Real Estate and Rental and Leasing: Subject Series - Estab & Firm Size: Revenue Size of Firms for the United States: 2002.” American Fact Finder. Available
at: http://factfinder.census.gov/servlet/IBQTabl e?_bm=y&-geo_id=&-fds_name=EC0200A1&- _skip=100&-ds_name=E C0253SSSZ4&-_lang=en . (Downloaded 12/19/2006).
U.S. Census Bureau. 2005k. “Nonemployer Statisti cs – Heatlh Care and Social Assistance – United States.” http://www.census.gov/epcd/nonemployer/2002/us/US000_62.HTM . (Downloaded 3/24/2007).

U.S. Census Bureau. 2005m. 2002 Ec onomic Census: Industry Series: Residential Remodelers ECO2- 23I-236118 (RV). Available at: http://www.census.gov/prod/ec02/ec0223i236118.pdf (Accessed 11/18/2006).

U.S. Census Bureau. 2006a. “Number of Establishmen ts: General Definition.” Ce nsus Data Information. American Fact Finder. Available at: http://factfinder.census.gov/servlet/MetadataBrowserServlet ? (Accessed 12/1/2006).

U.S. Census Bureau 2006b. “Annual Value of State and Local Construction Put in Place.” Available at: http://www.census.gov/const/C30/state.xls (Downloaded 12/8/2006).

U.S. Census Bureau 2006c. “Annual Value of Priv ate Construction Put in Place.” Available at: http://www.census.gov/const/C30/private.xls (Downloaded 12/8/2006).

U.S. Census Bureau. 2006d. “Definitio ns of Construction.” Available at: http://www.census.gov/const/C30/definitions.pdf (Accessed 2/15/2006.)
U.S. Department of Commerce. 2006. Table 1.1.6. R eal Gross Domestic Product, Chained Dollars. Last revised: November 29, 2006.
U.S. Department of Education, Institute of Education Sciences. 2004. “Full-day and Half-day Kindergarten in the United States: Findings from the Early Childhood Longitudinal Study, Kindergarten Class of 1998-99” June 2004.
U.S. Department of Education, National Center for Education Statistics. Kindergarten Teachers: Public and Private School Teachers of the Kindergart en Class of 1998–99, NCES 2004–060, by Elvira Germino-Hausken, Jill Walston, and Amy H. Rathbun. Project Offi cer: Elvira Germino-Hausken. Washington, DC: 2004.
U.S. Department of Energy. 2003. Commercial Bu ildings Energy Consumption Survey (CBECS).
U.S. Department of Housing and Urban Development (HUD). 2003. Firs t National Environmental Health Survey of Childcare Centers.
U.S. Environmental Protection Agency. 1996. “Lead; Requirements for Lead-Based Paint Activities in Target Housing and Child-Occupied Fac ilities; Final Rule.” Federal Register. http://www.epa.gov/docs/fedrgstr/EPA-TOX/1996/ August/Day-29/pr-24181DIR/pr-24181.pdf (Accessed 12/8/2006).
U.S. Environmental Protection Agency. 2009. “Economic Analysis for the Lead Renovation Repair, and Painting Program Opt-Out and Recordkeeping Proposed Rule for Target Housing and Child Occupied Facilities.”Economic Analysis for the LRRP Clearance Proposed Rule

Chapter 2 2-40 

### U.S. Environmental Protection Agency. 2006. “Econo mic Analysis for the Renovation, Repair and Painting Program Proposed Rule”, February 2006.

U.S. Small Business Administration. 2006a. “Firm Size Data.” Available at: http://www.sba.gov/advo/research/data.html . (Accessed 11/30/2006).

U.S. Small Business Administration. 2006b. “Small Business Size Standards matched to North American Industry Classification System.” Available at: http://www.sba.gov/services/contractingopportunities/sizestandardstopics/tableofsize/SERV_TA BLE_HTML.html (Downloaded 11/24/2006).

U.S. Small Business Administration. 2008. “Small Business Size Standards matched to North American Industry Classification System.” Available at: http://www.sba.gov/idc/groups/public/documen ts/sba_homepage/serv_sstd_tablepdf.pdf (Downloaded 7/29/2009).
Wilder Research Center. 2001. “Staff recruitment and retention in early childhood care and education and school-age care.” April 2001.
Wilder Research Center. 2005. “Family, Friend and Ne ighbor Caregivers: Results of the 2004 Minnesota statewide household childcare survey.” December 2005.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-1 

## 3. Problem Definition: Residential Lead-Based Paint Hazards and the Justification for Regulation The purpose of this chapter is to provide backgroun d information on the existence of residential leadbased paint hazards and present an overview of the ec onomic justifications for federal regulations to address these problems. Section 3.1 characterizes the residential lead contamination problem and discusses various sources of exposure. In Section 3.2 , the regulatory background associated with residential lead-based paint hazards is presented. Section 3.3 discusses how market failure due to incomplete information and external costs result in in efficient levels of lead containment and control in renovation activities, requiring regulatory intervention. Section 3.4 describes how the proposed rule will address these market failures.


### 3.1 Lead Contamination Problem Despite recent reductions in air, water, and food contamination, important sources of lead exposure remain, due largely to the widespread presence of lead -based paint. Exposure to lead results in increased blood lead levels associated with various adverse he alth effects, including reductions in IQ and other negative cognitive effects, particularly in children. In addition, exposure to lead can result in a variety of adverse health effects in adults.

3.1.1 Exposure Sources As described in Chapter 5, lead ma y cause adverse health effects in any individual, exposed at any stage of life ( in utero through adulthood) (U.S. EPA 2005c). However, young children are particularly susceptible to lead hazards because their central nervous systems are rapidly developing, and because their behavior is likely to result in greater exposur e to lead than older individuals experience. Currently, the most significant high-dose source of l ead exposure in children under school age is leadbased paint. Through the 1940's, paint manufacturers used lead as a primary ingredient in many oil-based interior and exterior house paints. During the 1950's and 1960's, the usage gradually decreased as new paints were developed, and in 1978 the Consumer Product Safety Co mmission (CPSC) ruled that paint used for residences, toys, furniture, and public areas mu st not contain more than 0.06% lead by weight. Nevertheless, about 50 percent of housing units and public and commerc ial buildings constructed before 1980 still contain lead-based paint (U.S. HUD 2000). Ch ildren’s exposure to lead from lead-based paint is likely to be high when the paint is in a deteriorat ed state or is found on accessible, chewable, impact, or friction surfaces, making the lead paint available to children who ingest paint chips. This “pica” behavior appears to be rare, but is the likely cause of many of the highest blood lead levels observed in children. Renovation activities can create lead-based paint h azards for children by making paint chips more accessible for ingestion. These h azards can occur both within and outside the building unit being renovated. In addition to being a source of di rect exposure, lead-based paint can be the source of lead contamination in soil and dust. Children are exposed to lead from so il or dust in their homes as a result of typical handto-mouth activities. Lead-contaminated dust and soil are the major pathway through which most young children are exposed to lead from lead-based paint hazards. Renovation activities increase the level of lead dust in the facility and in th e soil, thereby increasing the risk of lead ingestion in young children. While occupational exposure is the primary exposure pathway to lead for adults, other common exposure pathways for teenagers and adults include gardeni ng, housework, drinking water and certain hobbies such as creating objects from stained-glass and making pottery. Individuals (children, teenagers and adults) are also exposed to a variety of other lead sources, some of which are localized in nature.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-2 

### Airborne lead is present in emissions from lead sm elters, battery manufacturing plants, and solid waste incinerators. The phase-out of leaded gasoline has substantially reduced airborne lead. Drinking water may become contaminated with lead after it leaves the treatment plant. Although lead levels in drinking water generally do not have a statistically significant effect on blood-lead concentrations as a result of regulations stemming from the 1986 Safe Drinking Water Act, water is still considered an important localized exposure source where lead solder and/or brass plumbing fixtures are present because of the high absorption rate of lead in water. Lead exposure through food ingestion has declined greatly due to the phase-out of lead-soldered food cans and public education. With these improvements in exposure from air, water, and food, lead-based paint remains as the largest widespread source of lead exposure.

3.1.2 Lead from Renovation Activities EPA exposure data (EPA 1997) indicate that renovatio n activities potentially increase both short-term and long-term lead exposure levels. Lead concentrations are greatest in the area where the renovation work is performed, but lead does settle into other areas of the building and potentially the surrounding area, causing longer-term exposure. The study found that , with the exception of carpet removal and drilling into plaster, all renovation activities examined deposite d significant amounts of lead onto the floors in the area where the work was being performed, ranging fr om 480 micrograms per square foot for sawing to 15,500 micrograms per square foot for paint removal. This lead may be ingested or inhaled by occupants if proper containment and clean-up practices are notused. The study found that sweeping and shopvacuum clean-up, considered to be standard practi ce in the industry, reduced the total amount of lead available to occupants. However, as the distance from the activity increased, the cleanup left a higher percentage of the lead behind so that lead hazards remained following cleanup. These findings demonstrate that these practices do not adequately reduce risks from lead dust generated by renovation activities. Lead dust settled in carpeted areas or in soil is the most difficult to remove with simple broom and vacuum clean-up and thereby creates the longest lasting exposure pathway for facility occupants. EPA conducted a field study in 2007 (Characterization of Dust Lead Levels af ter Renovation, Repair, and Painting Activities) (the ‘‘Dust Study’’) to character ize dust lead levels resulting from various renovation, repair, and painting activities (EPA 2007). This study was designed to compare environmental lead levels at appropriate stages after various types of renovati on, repair, and painting preparation activities were performed on the interiors and exteriors of target housing units and child-occupied facilities. All of the jobs disturbed more than 2 square feet of lead-based paint, so they would not have been eligible for the minor maintenance exception. The renovation activiti es were conducted by local professional renovation firms, using personnel who received lead safe work pr actices training using the curriculum developed by EPA and HUD, ‘‘Lead Safety for Remodeling, Repa ir, and Painting’’ (EPA 2003a). The activities conducted represented a range of activities that woul d be permitted under the 2006 Proposal, including work practices that are restricted or prohibited fo r abatements under 40 CFR 745.227(e)(6). Of particular interest was the impact of using specific work pr actices that renovation firms would be required to use under the proposed rule, such as the use of plastic to contain the work area and a multi-step cleaning protocol, as opposed to more typical work practices. In the Dust Study, 12 different interior and 12 diffe rent exterior renovation activities were performed at 7 vacant target housing units in Columbus, Ohio, and 8 vacant target housing units (including four apartments) in Pittsburgh, Pennsylvania. Three different interior and three different exterior renovation activities were conducted at a building representing a child-occupied facility, a vacant school in Columbus. The presence of lead-based paint was confir med by laboratory analysis before a building was assigned a particular renovation activity or set of activ ities. Before interior renovation activities were performed, the floors and windowsills in the work area and adjacent rooms were cleaned. In most cases, pre-work cleaning resulted in dust lead levels on floors of less than 10 μ g/ft 2 

### ; nearly all floors were lessEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-3 

### than 40 μ g/ft2 before work started. Most windowsills that would be used for later sampling were cleaned to dust lead levels less than 250 μ g/ft2. In the few cases where that level was not achieved on a windowsill needed for sampling, dust collection trays were used. Interior renovation activities included the following jobs:

3⁄4 Making cut-outs in the walls.

3⁄4 Replacing a window from the inside.

3⁄4 Removing paint with a high temperature (great er than 1100 degrees Fahrenheit) heat gun.

3⁄4 Removing paint with a low temperature (less than 1100 degrees Fahrenheit) heat gun.

3⁄4 Removing paint by dry scraping.

3⁄4 Removing kitchen cabinets.

3⁄4 Removing paint with a power planer. To illustrate the impact of the containment plastic and the specialized cleaning and cleaning verification protocol that would be required by the 2006 Proposal, each activity was performed a minimum of four times:

3⁄4 With the plastic containment described in the 2006 Proposal followed by the cleaning protocol described in the proposal.

3⁄4 With the plastic containment described in the 2006 Proposal followed by dry sweeping and vacuuming with a shop vacuum.

3⁄4 With no plastic containment followed by the cleaning protocol described in the 2006 Proposal.

3⁄4 With no plastic containment followed by dry sweeping and vacuuming with a shop vacuum. Dust samples were collected after the renovation work was completed, after cleaning, and after cleaning verification. If a building was being used again for th e same job under different work practices, or for a completely different job, the unit was recleaned and re tested prior to starting the next job. All buildings were cleaned and tested after the last job. For the exterior jobs, plastic sheeting was placed on th e ground to catch the debris and dust from the job, in accordance with the requirements of the proposed rule. Additional plastic sheeting was laid out beneath and beyond the ‘‘proposed rule’’ plastic. Trays to collect dust and debris we re placed on top of and underneath the ‘‘proposed rule’’ plastic. Trays were al so placed just outside of the ‘‘proposed rule’’ plastic to assess how far the dust was spreading. A ve rtical containment, as high as the work zone, was erected at the end of the additional plastic. The use of the ‘‘proposed rule’’ plastic as a ground c overing captured large amounts of leaded dust. For all job types except removing paint with a torch, ther e was a substantial difference between the amount of lead captured by the ‘‘proposed rule’’ plastic a nd the amount under the ‘‘proposed rule’’ plastic. The 2008 final LRRP rule was supported by the Dust Study discussed above. Therefore, EPA conducted a peer review in accordance with OMB’s Final Info rmation Quality Bulletin for Peer Review. EPA requested this review from the Clean Air Scientific Advisory Committee (CASAC) Lead Review Panel. The CASAC, which is comprised of seven members appointed by the EPA Administrator, was established under the Clean Air Act as an independen t scientific advisory co mmittee. The CASAC’s comments on the Dust Study, along with EPA’s responses, have been placed into the public docket for this action. More information on the CASAC cons ultation process, along with background documents, is available on EPA’s website at http://www.epa.gov/ lead/pubs/casac.htm.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-4 

### According to the peer review report, the CASAC Panel found “. . .that the [Dust Study] was reasonably well- designed, considering the complexity of the problem, and that the report provided information not available from any other source. The study indicated that the rule cleaning procedures reduced the residual lead (Pb) remaining after a renovation more than did the baseline cleaning pr ocedures. Another positive aspect of the Dust Study was that it described deviations fr om the protocol when they occurred. “

The CASAC Panel also contended that the limited da ta from residential housing units and child-occupied facilities included in the Dust Study, most likely do no t represent a statistically valid sample of housing at the national level. They noted that there are aspects of the study that would underestimate the levels of lead-loadings while other aspects of the study would overestimate the loadings. EPA agrees that the Dust Study is not nationally representative of all housing. EP A notes that there are several reasons why this is the case, including the fact that all of the housing studied was built during 1925 or earlier, and a large number of the floors were in poor condition. A major purpose of the Dust Study was to assess the proposed work practices. A statistically valid sample of housing at the national level is not needed to assess the work practices. If anything, the Dust Study is conservative with respect to the age of housing because it studied older houses and therefore is appropriate for assessing the effectiveness of the work practices.



### 3.2 Regulatory Background This section outlines the extensive history of lead-based paint regulations at the federal level. Childhood lead exposure continues to be a major public health problem among young children in the United States. Most children with blood lead levels in excess of CD C’s current level of concern have been exposed to lead in non-intact paint, interior settled dust, and dust and soil in and around deteriorating older housing (CDC 2004). The nature and extent of the problem s associated with lead-based paint in housing units have been thoroughly investigated. Approximately 40% of all U.S. housing units (about 38 million homes) have some lead-based paint. Use of lead safe work practices during renovation can advance the goal of primary prevention of lead poisoning (CDC 2004).

3.2.1 The Federal Lead-based Paint Program
Title X and the Federal goal 

### Primarily in response to the persistent health threat posed by lead-based paint, in 1992 Congress enacted Title X. Congress found that low-level lead poisoning was widespread among American children, affecting, at that time, as many as 3 million childre n under age 6; that the ingestion of household dust containing lead from deteriorating or abraded l ead-based paint was the most common cause of lead poisoning in children; and that the health and de velopment of children living in as many as 3.8 millionAmerican homes was endangered by chipping or peeling lead paint, or excessive amounts of leadcontaminated dust in their homes. Congress determined that the prior Federal response to this crisis was insufficient and established, in Title X, a nationa l goal of eliminating lead-based paint hazards as expeditiously as possible. Congress decided that the Federal government would take a leadership role in building the infrastructure necess ary to achieve this goal. The stated purposes of Title X are:

3⁄4 To develop a national strategy to build the infr astructure necessary to eliminate lead-based paint hazards in all housing as expeditiously as possible.Economic Analysis for the L RRP Clearance Proposed Rule

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### 3⁄4 To reorient the national approach to the presence of lead-based paint in housing to implement, on a priority basis, a broad program to evaluate and reduce lead-based paint hazards in the Nation’s housing stock.

3⁄4 To encourage effective action to prevent chil dhood lead poisoning by establishing a workable framework for lead-based paint hazard evaluati on and reduction and by ending the current confusion over reasonable standards of care.

3⁄4 To ensure that the existence of lead-based paint hazards is taken into account in the development of Government housing policies and in the sale, rental, and renovation of homes and apartments.

3⁄4 To mobilize national resources expeditiously, through a partnership among all levels of government and the private sector, to develop th e most promising, cost-effective methods for evaluating and reducing lead-based paint hazards.

3⁄4 To reduce the threat of childhood lead poisoning in housing owned, assisted, or transferred by the Federal Government.

3⁄4 To educate the public concerning the hazards a nd sources of lead-based paint poisoning and steps to reduce and eliminate such hazards (Resid ential Lead-Based Paint Hazard Reduction Act of 1992).

EPA’s lead-based paint program 

### Under Title X, EPA is directed to take actions that can be divided into 4 key categories:

3⁄4 Establishing a training and certification program for persons engaged in lead-based paint activities, accrediting training providers, estab lishing work practice standards for the safe, reliable, and effective identification and elimina tion of lead-based paint hazards, and developing a program to address exposure to lead-based pa int hazards from renovation and remodeling activities.

3⁄4 Ensuring that, for most housing constructed before 1978, lead-based paint information flows from sellers to purchasers, from landlords to tenants, and from renovators to owne rs and occupants.

3⁄4 Establishing standards for identifying dangerous levels of lead in paint, dust and soil.

3⁄4 Providing information on lead hazards to the pu blic, including steps that people can take to protect themselves and their families from lead-bas ed paint hazards. Each of these categories is discussed in more detail in the following sections.
a. Training and certification, accreditation, and work practice standards. Title X added a new title toTSCA entitled ‘‘Title IV Lead Exposure Reduction.’’ Most of EPA’s responsibilities for addressing leadbased paint hazards can be found in this title, w ith section 402 being one source of the rulemaking authority to carry out these responsibilities. TSCA sec tion 402(a) directs EPA to promulgate regulations covering lead-based paint activities to ensure persons performing these activities are properly trained, that training programs are accredited, and that contr actors performing these activities are certified. These regulations must contain standards for performi ng lead-based paint activities, taking into account reliability, effectiveness, and safety. On August 29, 1996, EPA promulgated final regula tions under TSCA section 402(a) governing leadbased paint inspections, lead hazard screens, risk asse ssments, and abatements in target housing (U.S. EPA 1996). TSCA section 401 defines ‘‘target housin g’’ as any housing constructed prior to 1978, except housing for the elderly or persons with disabiliti es (unless any child who is less than 6 years of age resides or is expected to reside in such housing for the elderly or persons with disabilities) or any 0-Economic Analysis for the L RRP Clearance Proposed Rule

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### bedroom dwelling. These regulations also apply to ‘‘child-occupied facilities,’’ which are defined at 40 CFR 745.223 as buildings constructed before 1978, or portions of such buildings, where children under age 6 are regularly present. TSCA section 402 define s lead-based paint activities in target housing as inspections, risk assessments and abatements. The 1996 regulations cover lead-based paint abatement activities in target housing and child-occupied faciliti es, along with limited screening activities called lead hazard screens. The regulations also established an accreditation program for training providers and a certification program for individuals and firms perfo rming these activities. Training providers who wish to provide lead-based paint traini ng for the purposes of the Federal l ead-based paint program must be accredited by EPA. Implementing regulations at 40 CFR 745.225 describe in detail the requirements for each course of study, how training programs mu st be operated, and the process for obtaining accreditation. Training programs must have a trai ning manager with experience or education in a construction or environmental field, and a principal in structor with experience or education in a related field and education or experience in teaching adults. Training programs must also have adequate facilities and equipment for delivering the training. To become accredited, an application for accreditation must be submitted to EPA on behalf of the training program. The application must either include the course materials and syllabus, or a statement that EPA model materials or materials approved by an authorized State or Tribe will be used. The application mu st also include a description of the facilities and equipment that will be used, a copy of the test blue print for each course, a description of the activities and procedures that will be used during the hands-on sk ills portion of each course, a copy of the quality control plan, and the correct amount of fees. If EPA finds that the program meets the regulatory requirements, it will accredit the training program for 4 years. To maintain accreditation, the training program must submit an application and the correct amount of fees every 4 years. Individuals and firms that perform inspections, lead hazard screens, risk assessments, or abatements in target housing or child-occupied facilities must be cer tified. Certification requirements and the process for becoming certified are described in 40 CFR 745.226. A firm that wishes to become certified must submit an application, along with the correct amount of fees, attesting that it will use only certified individuals to perform lead-based pa int activities and that it will follow the work practice standards in 40 CFR 745.227. An individual who wishes to become certified must take an accredited training course in at least one of the certified disciplines: Inspector, risk assessor, project designer, abatement worker, and abatement supervisor. The risk assessor, project designer, and abatement supervisor disciplines have additional requirements for educa tion or experience in a construction or environmental field. The inspector, risk assessor, and abatement supervisor disciplines also require the applicant to pass a certification examination administered by a third party. The regulations at 40 CFR part 745, subpart L, also contain work practice standards for performing inspections, lead hazard screens, risk assessments and abatements in target housing and child-occupied facilities. The regulations contain specific re quirements for conducting paint sampling during an inspection and specify information that must be gathered and samples that must be taken as part of a lead hazard screen or risk assessment. The requirements for abatements are also set forth in the regulations. When conducting abatements, an occupant protection plan must be prepared by a certified supervisor or project designer; certain work practices such as open -flame burning, machine sanding or abrasive blasting without high-efficiency exhaust control, dry scraping, and heat guns at high settings are prohibited; and a visual inspection and dust clearance sampling must be pe rformed after the abatement is finished to ensure that the area is ready for re-occupancy. Any sampl es collected during any of these regulated lead-based paint activities must be analyzed by a laboratory r ecognized by EPA as being capable of analyzing paint chips, dust, and soil for lead. Requirements for in spection, lead hazard screen, risk assessment or abatement reports are also described in this sectionEconomic Analysis for the L RRP Clearance Proposed Rule

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### Recognizing the importance of States and Territories in achieving the goal of eliminating lead-based paint hazards in housing, Congress specifically directed EPA to establish a model State program and a process for authorizing States to operate such programs in lie u of the Federal program. Concurrently with the subpart L rulemaking in 1996, EPA codified, at 40 CFR part 745, subpart Q, a model training and certification program and a process for enabling States, Territories, and Tribes to apply for authorization to administer their own lead-based paint activity prog rams. Providing Indian Tribes with this opportunity is consistent with EPA’s Policy for the Admi nistration of Environmental Programs on Indian Reservations (U.S. EPA 1984). EPA also provides grants under TSCA section 404 to States, Territories, and Tribes to assist them in developing and administering these programs, as well as programs implementing TSCA section 406(b). On June 9, 1999, the subpart L regulations were amended to include a fee schedule for training programs seeking EPA accreditation and for individuals and firms seeking EPA certification (U.S. EPA 1999). These fees were estab lished as directed by TSCA section 402(a)(3), which requires EPA to recover the cost of admini stering and enforcing the lead-based paint activities requirements in unauthorized States. The most recent amendment to the subpart L regulations occurred on March 20, 2009 (U.S. EPA 2009). In addition, Congress directed EPA, in TSCA section 405, to establish protocols, criteria, and minimum performance standards for analysis of lead in paint, dust, and soil. TSCA section 405 further directed EPA, in consultation with HHS, to develop a program to certify qualified laboratories. The National Lead Laboratory Accreditation Program (NLLAP) provides the public with a list of laboratories that have met EPA requirements and demonstrated the capability to accurately analyze paint chip, dust, or soil samples for lead. All laboratories recognized by NLLAP must pass on-site audits conducted by one of the two accrediting organizations currently participating in N LLAP, the American Industrial Hygiene Association (AIHA), and the American Association for Laboratory Accreditation. Recognized laboratories must also perform successfully on a continuing basis in the En vironmental Lead Proficiency Analytical Testing (ELPAT) Program established by NIOSH, AIHA, and EPA. The LRRP rule for target housing and COFs was prom ulgated in 2008 (73 FR 21692) and is codified in Part 745 of Title 40 of the Code of Federal Regulations (CFR). The rule was promulgated under the authority of §402(c) of the Toxic Substances Contro l Act (TSCA). Section IV of TSCA was established by the Residential Lead-Based Paint Hazard Re duction Act of 1992, also known as Title X of the Housing and Community Development Ac t of 1992, Public Law 102-550. The 2008 LRRP regulation requires entities that pe rform renovation, repair and painting work for compensation in buildings covered by the rule to become certified by EPA, ensure that their employees are trained as either renovators or workers, and use lead-safe work practices when disturbing lead-based paint.
b. Lead-based paint information for purchasers, renters, owners, and occupants of target housing. Another of EPA’s responsibilities under Title X is to requi re that purchasers and tenants of target housing, as well as occupants of target housing and parent s of children in COFs undergoing renovation are provided information on lead-based paint and lead-b ased paint hazards. As directed by TSCA section 406(a), CPSC, HUD, and EPA, in consultation with CD C, jointly developed a lead hazard information pamphlet entitled ‘‘Protect Your Family From Lead in Your Home’’ (‘‘PYF’’) (U.S. EPA et al 2003b). This pamphlet was designed to be distributed as pa rt of the disclosure requirements of section 1018 of Title X and TSCA section 406(b), to provide home purch asers, renters, owners, and occupants with the information necessary to allow them to make informed choices when selecting housing to buy or rent, or deciding on home renovation projects. The pamphlet contains information on the health effects of lead, how exposure can occur, and steps that can be taken to reduce or eliminate the risk of exposure during various activities in the home.Economic Analysis for the L RRP Clearance Proposed Rule

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### Pursuant to the authority provided in section 1018 of Title X, on March 6, 1996, HUD and EPA jointly promulgated regulations requiring persons who are selling or leasing target housing to provide the PYF pamphlet and information on known lead-based paint and lead-based paint hazards in the housing to purchasers and renters (HUD and U.S. EPA 1996). These joint regulations, codified at 24 CFR part 35, subpart A, and 40 CFR part 745, subpart F, describe in detail the information that must be provided before the contract or lease is signed and require that sellers, landlords, and agents document compliance with the disclosure requirements in the contract to se ll or lease the property. Title X does not provide for these requirements to be administered by States or Trib es in lieu of the Federal regulations. Therefore, HUD and EPA are responsible for administering and enforcing these disclosure obligations. TSCA section 406(b) directs EPA to promulgate regulations requiring pe rsons who perform home renovations for compensation to provide a lead hazard information pamphlet to owners and occupants of target housing being renovated. Th ese regulations, promulgated on June 1, 1998, are codified at 40 CFR part 745, subpart E (U.S. EPA 1998). The term ‘‘re novation’’ is defined, at 40 CFR 745.83, as the modification of any existing structure, or portion of a structure, that results in the disturbance of painted surfaces. Lead-based paint abatement projects are spec ifically excluded, as are small projects that disturb 2 square feet or less of painted surfaces, emergenc y projects, and renovations affecting components that have been found to be free of lead-based paint, as that term is defined in the regulations, by a certified inspector or risk assessor. Like the regulations regarding disclosure during sales or leases, these regulations require the renovation firm to documen t compliance with the requirement to provide the owner and the occupant with the PYF pamphlet. One important difference from the disclosure requirements in section 1018 of Title X is that TSCA section 404 allows States to apply for, and receive authorization to administer, the TSCA section 406(b) requirements. Two States are currently authorized to operate this program.
c. Standards for lead in paint, dust, and soil. Another responsibility assigned to EPA by Title X is the development of standards for identifying dangerous levels of lead in pain t, dust and soil. These standards, promulgated pursuant to TSCA section 403 on January 5, 2001 and codified at 40 CFR part 745, subpart D, provide various Federal agencies, including HUD, and State, local and Tribal governments with uniform benchmarks on which to base decisions on reme dial actions to safeguard children and the public from lead-based paint hazards (U.S. EPA 2001b). These st andards also allow certified inspectors and risk assessors to easily determine whether a particular s ituation presents a lead-based paint hazard and whether to recommend remedial actions such as lead-based paint abatement, cleaning of dust, or removal of soil. The standards define lead-based paint hazards in targ et housing and child-occupied facilities as paint-lead, dust-lead, and soil-lead hazards. A paint-lead hazar d is defined as any damaged or deteriorated leadbased paint, any chewable lead-b ased painted surface with evidence of teeth marks, or any lead-based paint on a friction surface if lead dust levels underneath the friction surface exceed the dust-lead hazard standards. A dust-lead hazard is surface dust that contains a mass-per-area concentration of lead equal to or exceeding 40 micrograms per square foot (μg/ft 2 

### ) on floors or 250 μg/ft 2 

### on interior windowsills based on wipe samples. A soil-lead hazard is bare soil that contains total lead equa l to or exceeding 400 parts per million (μg/g) in a play area or average of 1,200 parts per million of bare soil in the rest of the yard based on soil samples.

d. Public outreach and education . Among other things, TSCA section 405(d) directs EPA, along with the Agency for Toxic Substances and Disease Registry (ATSDR) and HUD, to sponsor public education and outreach activities to increase public awareness of the health effects of lead, the potential for exposures, the importance of screening children for elev ated blood lead levels, and measures that can be taken to reduce or eliminate lead-based paint hazards . Accordingly, EPA has worked to provide the public with information and increase public awareness of such matters. To date, these activities haveEconomic Analysis for the L RRP Clearance Proposed Rule

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### included web site management, deve lopment of public outreach strategi es, development of partnership agreements, distribution of materials, participation in national conferences and exhibits, and developing hazard information documents (and other media, such as videos), as necessary to implement Title X. EPA has collaborated closely with other Federal agencies a nd its State, Tribal, and local government partners in developing outreach campaigns. EPA has also been involved in developing mode l tool kits of various educational tools to provide to part ners, such as slogans and graphic ma terials for public buses, trains, and mass transit stations. TSCA section 405(e) further directs EPA to establis h, in connection with HUD, CDC, other Federal agencies, and State and local governments, a clear inghouse for information on lead-based paint and a hotline for the public to use for questions and requ ests for information on lead-based paint. This clearinghouse, the National Lead Information Center , handles approximately 50,000 calls per year, and disseminates up to 500,000 documents per year to the public.

Lead-based paint programs at other Federal agencies 

### In addition to EPA, other Federal agencies have impor tant roles in achieving the goals of reducing or eliminating lead-based paint hazards in housing. Other agencies specifically assigned tasks in Title X include HUD, CDC, and OSHA. The Federal agencies have long realized that they mu st work together to develop and implement Federal strategies for addressing lead-based paint hazards in order to be efficient and effective. In 1989, HUD and EPA formed an inter-agency task force to wo rk through issues associated with lead-based paint abatement. The Federal Interagency Lead Based Pa int Task Force has remain ed active throughout the years and continues to meet on a quarterly basis. Participating agencies include the Department of Defense, the Veterans Administration, the National Institute of Standards and Technology (NIST), the U.S. Public Health Service, the National Aer onautics and Space Administration (NASA), the United States Department of Agriculture (USDA), the Gove rnment Accountability Office (GAO), the National Institute for Environmental Health Sciences (NIE HS), ATSDR, CDC, CPSC, NIOSH, OSHA, HUD, and EPA. This Task Force serves as an important forum for coordinating the strategic plans of the Federal agencies who have responsibilities under Title X or who have responsibilities for maintaining and disposing of property that ma y contain lead-based paint. Title X assigned certain responsibilities to HUD. One of HUD’s functions is the administration of the Lead-Based Paint Hazard Control Grant Program establishe d by the Act. This program provides grants of $1 million to $3 million to State and local government s for control of lead-based paint hazards in privately owned, low-income owner-occupied and rent al housing that is not receiving federal assistance. These grants are also designed to stimulate the de velopment of a trained and certified hazard evaluation and control industry. Evaluation and hazard control work funded by the program must be conducted by either contractors who are certified by EPA or an EPA-approved State or Tribal program, or by contractors trained in lead-safe work practices, in the case of interim controls. Through these requirements, HUD hopes to create infrast ructure that will last beyond the life of the grant. In awarding grants, HUD promotes the use of cost-effective approaches to hazard control that can be replicated across the nation. Since 1993, approximately $971 million has been awarded to over 200 local and State jurisdictions across the country. The work approved to date will lead to the control of lead-based paint hazards in more than 70,000 homes where young childr en reside or are expected to reside. Other HUD lead grant programs include the Lead Hazard Reduc tion Demonstration program, the Lead Elimination Action Program (LEAP), the Lead Outreach program and the Lead Technical Studies program. HUD was also given regulatory authority over some asp ects of lead based paint hazard control. As noted previously, on March 6, 1996, HUD and EPA jointly pr omulgated regulations requiring the disclosure ofEconomic Analysis for the L RRP Clearance Proposed Rule

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### lead-based paint information during sale or lease transactions involving target housing. The HUD disclosure regulations are codified at 24 CFR part 35, subpart A. Subparts B through R of 24 CFR part 35 are known as the ‘‘Lead Safe Housing Rule,’’ in itially promulgated on September 15, 1999, and updated in June 2004 (HUD 2004b). Th is rule was designed to protect young children from lead-based paint hazards in target housing that is being sold by the Federal government or receives financial assistance from the government. The requirements ge nerally depend upon the level of assistance being provided, and may include such things as inspections, risk assessments, abatement, paint stabilization, or interim controls, which are temporary measures to reduce potential exposure to lead-based paint hazards. The emphasis is on reducing lead-based paint hazards, so, after paint is disturbed, a visual assessment for surface dust, debris, and residue and dust clearance testing is required to ensure that no dust lead hazards were created or left in the work area or, for rehabilitation projects of m oderate or substantial scope, in the entire housing unit. More information on the Lead Sa fe Housing Rule is available on the HUD website at http://www.hud.gov/offices/lead. Section 1017 of Title X required HUD to issue ‘‘guide lines for the conduct of federally supported work involving risk assessments, inspections, interim controls , and abatement of lead-based paint hazards.’’ In response to this directive, HUD completed the Guide lines for the Evaluation and Control of Lead-Based Paint Hazards in Housing (Guidelines), in June 1995 (HUD 1995). The Guidelines provide detailed, comprehensive, technical information on how to identify lead-based paint hazards in housing and how to control such hazards safely and efficiently. Other core activities of HUD’s lead-based paint progr am include providing technical assistance to housing authorities, nonprofit housing providers, local a nd State agencies, other Federal agencies, housing developers, inspectors, real estate professionals, cont ractors and financiers, and public health authorities; evaluating the hazard reduction methods used in the gr ant program to measure their effectiveness, cost and safety; and maintaining a community outreach program in coordination with the other Federal agencies involved in lead-based paint hazard reduction. CDC also provides significant funding for the prevention of childhood lead poisoning. CDC provides funding to support State, city and county programs in the areas of primary prevention, case management and screening, surveillance, strategic partnerships , and program evaluation. Since 2002, CDC has recommended that a blood lead level of 10 micrograms per deciliter (μg/dL) be used as a threshold for individual intervention (CDC 2002). Additional CDC r ecommendations address the type and intensity of individual intervention strategies that should be undert aken, depending upon the child’s blood lead level. These strategies range from nutritional and educational interventions, along with more frequent testing, for a child with a blood lead level of 10–14 μg/dL, to medical and environmental interventions for children with blood lead levels a bove 45 μg/dL (CDC 2002). CDC h as established a national surveillance system for children with elevated blood lead leve ls. In addition, CDC works with HUD and EPA to coordinate outreach and education campaigns. OSHA is another agency with regulatory authority under Title X. As directed by the Act, OSHA promulgated an interim final standard on May 4, 1993, which regulates lead exposures in the construction industry (OSHA 1993). This standard, codified at 29 CFR 1926.62, limits worker exposures to 50 micrograms of lead per cubic meter of air averaged over an 8–hour workday. Employers must use a combination of engineering controls and work practices to reduce employee exposure as much as possible, using appropriate respiratory protecti on where necessary to achieve the exposure limit. Employees must receive training on the health effect s of lead and how to limit exposure through proper work practices and personal prot ective equipment. Exposure monitoring and medical monitoring, including blood lead testing, are also required. Th is standard remains in effect and OSHA retains the authority to protect workers from occupational exposure to lead.Economic Analysis for the L RRP Clearance Proposed Rule

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### Many Federal agencies have been working to reduce or eliminate lead-based paint hazards in housing and to end lead poisoning. EPA, HUD, and other Federal agencies have been working for many years on the problem of lead-based paint hazards that can be created during renovation and remodeling activities in housing and child-occupied facilities. This rulemaking is an important component of the Federal strategy for eliminating lead poisoning.



### 3.3 Justification for Federal Regulations of Lead Exposure during Renovation

3.3.1 Market Failure Market failure is one of the conditions that can jus tify government regulation. Market failures can result when one or more of the following conditions are met:

• poorly defined property rights (such as negativ e externalities, common property resources, and public goods);

• imperfect markets for trading property rights (becau se of a lack of perfect information or of contingent markets;

• monopoly power;

• distortionary taxes and subsidies and other inappropriate government regulations); and

• the divergence of private and social discount rates. The occurrence of any of these conditions justifies furt her inquiry into the need for government regulation to reduce inefficiencies in the allocation of society’ s resources. This section considers whether any of these conditions are linked to lead exposures resulting from renovation in target housing and public or commercial building COFs. If so, u nderstanding the nature of the inefficiencies involved facilitates the design of more effective regulations. The specific re gulatory approach considered here involves requiring dust sampling and clearance testing following certain renovation activities. Economic efficiency suggests that in the absence of regulation dust sampling and clearance testing following renovation will occur as long as the property owners’ willingness-to-pay for reduced lead risks exceeds the cost of reducing these risks. If the pr operty owners are aware of the risks and of the availability and costs of reducing these risks, then argua bly they might be able to accurately trade off risk and cost without the aid of government regulation. However, there are two arguments for why individual property owners may not trade off risk and cost effici ently: (1) because externali ties exist, and (2) because of inadequate information.

Externalities and Public-Good Characteristics of Lead-Safe Renovation 

### One potential cause of market failure for dust sampling and clearance testing following renovations stems from externalities. An efficient outcome is achieved when the marginal willingn ess-to-pay for a service is equivalent to the marginal cost of providing that ser vice. In the case of renovation in a rental unit, the primary beneficiaries of lead-safe renovation are the occupants; however, the decision about whether or not to pay for dust sampling or clearance testing is made by the property owners or managers who have an insufficient incentive to take the benefits to their occupants into account when making this decision.

Externalities also exist in the case of renovation ev ents in owner-occupied homes. Because dust sampling and clearance testing following renovation in an owne r-occupied unit is likely to benefit not only the consumer of the renovation (the homeowner and his or her family members) but also residents of adjacent properties, future occupants, visitors, and child ren receiving child care on the premises; lead-safe renovation services are, in part, a public good. As such, even with perfect information, the maximum amount that the individual consumer of the renovation w ould be willing to pay for lead-safe work is likelyEconomic Analysis for the L RRP Clearance Proposed Rule

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### to be lower than the total amount that that particul ar consumer plus the other beneficiaries (tenants, neighbors, future occupants, etc.) would be willing-to-p ay for the service. For example, a future occupant of a housing unit for sale may experience an increased exposure to lead if a renovation that creates a lead hazard is performed before they move in. While a fu ture occupant might be willing to pay to reduce or eliminate this exposure, they would not be consulte d by the property owner making the decision. As another example, children cannot express their willingness-to-pay for risk reduction and rely on their parents’ or the property owners’ willingness-to-pay. Ev en if other parties were consulted, the transaction costs of reaching an agreement would be high, leading to an inefficient process. Another example of an externality is associated with an owner’s decision regarding which contractor to hire to perform renovation in his or her housing unit. Contractors that perform dust sampling or clearance testing following a renovation are likely to charge more for their work than establishments that do not perform this testing. This testing may also incr ease the duration of the project because dust wipe testing takes time, and because contractors may need to perfo rm additional cleaning. Since the property owner pays for the renovation, but not necessarily for the consequences of all the resulting lead exposure, he or she is faced with powerful short-term incentives (lower cost and a faster turn-around) to hire a contractor that does not perform dust sampling or clearance testing. Other parties (such as tenants, future occupants, visitors, and children receiving child care and their pa rents) pay for the consequences of lead exposures, not the property owner. This externality results in the socially inefficient outcome of too little dust sampling and clearance testing services being purchased. Inefficiencies also exist on the supply side of this market. Renovators that perform dust sampling or clearance testing incur higher costs than other cont ractors who are faced with incentives to keep their costs as low as possible. Similar to property owne rs, contractors may not incur the costs of consumer lead exposure resulting from unsafe renovation work. Because the legal system is not perfect, the contr actor’s financial responsibilities (in terms of liability costs related to customer lead exposure) are not clear and consistently enforced. The same situation occurs with respect to a property owner’s responsibiliti es to tenants, future occupants, visitors, and childcare customers. This situation is likely to result in an inefficient outcome of too little dust sampling and clearance testing services being consumed.

Inadequate Information 

### Another cause of market failure associated wth lead-safe work practices is due to inadequate information. Correct information is an important prerequisite to the demand for dust sampling or clearance testing following renovation projects. In deciding whether du st sampling or clearance testing are worth the extra cost, the property owner must know whether there is lead in the work area, what risks are implied by having renovation done in areas with lead-based paint, the significance of these risks, what can be accomplished in reducing those risks, and how much these risk reductions cost. On the supply side, contractors may be unaware of the risks they are creating.

Misinformation can lead to inefficient outcomes. Without knowing there is a lead problem, or how renovation might create lead hazards, the owner w ill have too low a demand for dust sampling or clearance testing and may be unwilling to pay additional costs for contractors to perform the testing. Furthermore, a great deal of uncertainty can exist if the consumer is unsure about the quality of lead-safe renovation services being purchased and their likely be nefits. If consumers do not have any guarantee that contractors are qualified to identify and control lead-based paint hazards, demand for these services is likely to be lower than in the presence of such a guarantee. Under the proposed LRRP Clearance Rule additional information will be available to property ow ners on the effectiveness of prospective contractors at minimizing risks from lead-based paint hazards. Speci fically, property owners will be able to judge theEconomic Analysis for the L RRP Clearance Proposed Rule

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### past performance of contractors through referrals from family, friends and neighbors, by checking references, and by reading contractor reviews availabl e through online contractor referral websites. As a result of the proposed LRRP Clearance Rule, demand is likely to increase for those contractors who develop reputations for completing renovation work without leaving hi gh levels of lead dust behind. Customer satisfaction is particularly important for the renovation industry, an industry where most firms report that over 50 percent of revenues are attributable to referrals and some firms report that up to 90 percent of their revenues are attributable to refe rrals (NARI, undated). Furthermore, if individual consumers are satisfied with a contractor’s work, they are more likely to hire that same contractor for additional work in the future. If a contractor leav es behind high dust levels, the consumer may choose to hire a different contractor for future work. The proposed LRRP Clearance Rule provides additional information to two groups: (1) renovation firms and their employees, and (2) owners and occupants of renovated structures. The proposed rule will provide additional information to renovation firms and their employees about the effectiveness of the containment and cleaning practices they are employing. Specifically, dust wipe test results that exceed dust hazard levels indicate that the containment and cleaning practices employed were inadequate while results showing no dust-lead hazards indicate that the containment and cleaning practices employed were adequate. Renovation firms can be expected to impr ove their effectiveness and efficiency for achieving dust wipe test results below dust-lead hazard levels as they receive feedback on the effectiveness of their work practices. Property owners and occupants will al so be provided with additional in formation under the proposed rule. The proposed LRRP Clearance Rule will enhance a c onsumer’s ability to select a renovation firm with a record of achieving low dust-lead levels. For exampl e, potential renovation consumers would be able to ask renovation firm references or the firms themselve s about their record for achieving low dust-lead levels dust wipe test results, as demonstrated by dus t wipe test results. After the work is completed property owners and occupants will be provided information about dust- lead levels after renovation work has been performed. This information will provide owners and occupants w ith a greater understanding and awareness of dust-lead levels, which has valu e because it provides owners and occupants with a greater ability to make further risk management deci sions. In addition, owners and occupants are more likely to provide positive referrals for those contract ors that completed the work without leaving behind high levels of lead dust, creating extra incentives for renovation firms to minimize lead dust levels.
Impacts of the Regulation on Demand for Lead-Safe Renovation Services 

### A consumer’s demand for renovation services is a function of the price of these services, the characteristics of the services (e.g., quality, lead safety etc.), and consumers’ own characteristics. For the purpose of illustration, assume that all renovation ser vices are identical except that some are performed using lead-safe containment and clean-up practices wi th dust sampling and some are not. Further assume that there is only one consumer and one supplier in the market. Of the services that are performed without lead-safe practices, some are done by the supplier, while others are do-it-yourself projects performed by the consumer. The general market failu re relationships discussed above are illustrated in Exhibit 3-1 as three markets for close substitutes. Figure (a) represents the market for lead-safe renovation projects, Figure (b) represents the professiona l market for “standard practice” renovations that do not use lead-safe work practices, and Figure (c ) represents the do-it-yourself market for “standard practice” renovations. In each market, S 0 

### represents the supply of renovation services and D 0 

### represents the demand for renovation services in the baseline with incomplete information. Note that, moving from left to right, each supply curve is lower than the pr ior one, corresponding to the lower cost in terms of materials and time combined. The area under the dema nd curve in each market represents the consumer’s willingness-to-pay for renovation services.Economic Analysis for the L RRP Clearance Proposed Rule

Exhibit 3-1: Impact of Regulation on Markets for Renovation/Remodeling Services

S 0

D 1

Work Practices Figure (b) Professional Market with “Standard” Work Practices Q Lead-Safe Q Standard Professional P Lead-Safe P Standard Professional

D 0 S 0

Q Standard Do-it-yourself 

# ?

Figure (c) Do-it-Yourself Market with “Standard” Work Practices P 0

P Standard Do -it-yourself

D 0 S 1

D 0 D 1 S 0 S 1

Q 1 Q 0 P 0 P 1

Q 0 P 0
P 1

Figure (a) Market with Lead-Safe Q 1 Q 0 S 0

D 1

Work Practices Figure (b) Professional Market with “Standard” Work Practices Q Lead-Safe Q Standard Professional P Lead-Safe P Standard Professional

D 0 S 0

Q Standard Do-it-yourself 

# ?

Figure (c) Do-it-Yourself Market with “Standard” Work Practices P 0

P Standard Do -it-yourself

D 0 S 1

D 0 D 1 S 0 S 1

Q 1 Q 0 P 0 P 1

Q 0 P 0
P 1

Figure (a) Market with Lead-Safe Q 1 Q 0



### The proposed LRRP Clearance Rule alters the nature of these three markets by providing additional information to the consumer and contractor about the risk associated with lead-based paint renovation activities and by requiring that clearance standa rds are met following certain renovations. The implementation of the LRRP program will help to es tablish a more structured market for lead-safe renovation services. Prior to April 2010 when th e LRRP program first took effect, consumers of renovation services generally had no guarantee that a contractor who claimed to provide lead-safe renovation services would actually perform the project in a lead-safe manner. The 2008 LRRP rule, which is now part of the baseline for the renovati on industry, provides some assurance to consumers about the quality of work provided by certified renova tors, through the implementation of work practice standards and training/certification requirements. The proposed LRRP Clearance Rule builds on the 2008 rule to provide additional assurances to consumer s about the quality of work provided by certified renovators, by providing quantita tive information on the lead dust levels they leave behind. EPA’s targeted outreach program is also likely to increase demand for lead-safe renovation services by raising consumer awareness about the dangers of unsafe work. Thus, demand for lead-safe renovation activities may shift with EPA’s outreach campaign or due to the provision of information about lead hazards and risks before a consumer sign a contract with a renovator. Although contractors that currently provide well-trained staff and perform lead-safe work practices are expected to find it in their vested interest to provid e the kinds of information cited above, this possibility has not closed the information gaps for the public. One impediment may be public uncertainty about the reliability of information that contractors themsel ves provide in the absence of the proposed LRRP Clearance Rule. Their information may be cons idered unreliable because consumers are not fully competent to assess the lead contamination and what needs to be done, because the businesses are subject to moral hazard (which occurs, for example, becau se businesses have a financial interest in minimizing their work practice costs), or both. Since many pr operty owners may lack easy access to independent sources of information to motivate their decisions, doing nothing may be the likely response. The

Chapter 3 3-14Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-15 

### proposed LRRP Clearance Rule aims to reduce public uncertainty by providing quantitative information to consumers about prospective renovation firms’ ab ilities to minimize dust lead levels. For example, before hiring a contractor a consumer can ask firm references or the firms themselves to provide information about their past performance in minimi zing post-verification dust-lead levels. Consumers and firms might also choose to set contract terms or prices that are contingent on the post-verification dust-lead levels, reducing renovation firms’ incentives to lower work practice costs in a manner that might increase the likelihood of leaving a dust lead hazard behind. The increased demand discussed above is shown by an upward shift of the demand curve in Figure (a) from D 0 

### to D 1 

### and an associated increase in price. Simultaneously, the demand for “standard practice” renovation services decreases with an associated d ecrease in price. Given scarce resources for enforcement, it is expected that some “standard practice” professional work will continue, even in properties where there is the potential for lead exposure. The effect of the regulation on the do-it-yourself market is ambiguous. Some propert y owners that might have hired a professional to perform “standard practice” renovation work in the baseline may decide to perform this work themselves rather than pay the additional costs for lead-safe work practices. This action would shift the supply curve back up. On the other hand, with increased information, property owners that would have performed do-it-yourself “standard” practice” renovation in the baseline may decide to either for go renovation altogether or hire a lead-safe professional, thus reducing do-it-yourself demand.
Impacts of the Regulation on the Supply of Lead-Safe Renovation Services 

### The proposed LRRP clearance rule will increase both the cost of supplying lead-safe services and standard services. In Figures (a) and (b), S 1 

### represents the supply of services with the regulations. Many firms performing lead-safe renovations will incur additi onal costs associated with having third party dust sampling performed (or training dust sampling techni cians and performing their own dust sampling), and may incur costs for re-cleaning where clearance is required. A contractor that continues to provide standard (not lead-safe) renovation services will have higher costs of operation due to potential enforcement actions and potentially higher liability. The relative size of the shifts in the two submarkets will affect the final changes in quantity and price of both lead-safe and standard renovation services. The net impact on the quantity of renovation projects pe rformed is also ambiguous. If all property owners are willing to pay the full amount for lead-safe work pr actices, then the total quantity performed across all three markets will remain constant but the average pri ce will rise. However, if some property owners are not willing to pay for the risk reduction they may c hose to forgo renovation services altogether, resulting in a net decline in renovation services provided after regulation. 1

Conclusions 

### As demonstrated in this section, due to inadequate information and the existence of externalities, the quantity of lead-safe RRP services currently provided is likely to be inefficiently low. Failure in the market for lead-safe RRP services is significant in both qualitative and quantita tive terms. Childhood lead exposure continues to be a major public health problem among young children in the United States. From 1999 to 2002, approximately 310,000 children aged 1 to 5 years, had blood-lead levels greater than 10 μ g/dL, despite the removal of lead from gasoline and a ban on lead-based paint in 1978 (CDC 2005). Most children with blood-lead levels in excess of CD C’s current level of concern have been exposed to

1 The amount by which price and quantity change in each of these markets is a function of both the amount by which the supply and/or demand functions shift and the relative elasticities of the two functions. See Appendix 3A for a discussion of how these factors affect the price of renovation services and the quantity provided by the market. Appendix 3B presents price elasticity estimates for construction and RRP.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-16 

### lead in non-intact paint, interior settled dust, and dust and soil in and around deteriorating older housing or other buildings where they spend time. Acco rding to the Center for Disease Control (CDC), “renovation and remodeling activities that disturb lead-b ased paint can create substantial amounts of lead dust in the home; such dust can then be inhaled or ingested by children” (CDC 1997). An insufficient number of lead-based paint interventions have occu rred to remove the dangers posed by uncontrolled renovation activities; renovation activit y thus continues to pose a significant risk of lead exposure.

3.3.2 Justification for Regulation at the Federal Level
In the Residential Lead-Based Paint Hazard Reduc tion Act of 1992 (Title X), the United States Congress stated that the elimination of lead-based paint hazards was a national goal. Under §402, Congress directed EPA to promulgate regula tions governing lead-based paint activ ities to ensure that individuals are properly trained, that training programs are accred ited, and that contractors engaged in such activities are certified; and to promulgate guidelines for th e conduct of such renovation and remodeling activities which may create a risk of exposure to dangerous le vels of lead. Accordingly, the 2008 LRRP rule established training, certification and accreditation requirements as well as work practice requirements for renovation work in target housing and COFs. The proposed rule revises the LRRP program by requiring dust wipe testing and clearance testing following certain renovations. Since both of these prov isions revise the existing Federal RRP regulation, it is appropriate that the changes be made at the Fe deral level, instead of the state or local level.



### 3.4 Approaches for Reducing Lead Expos ure Resulting from Renovation This section examines how the information provision and the mandatory training and work practice requirements in the proposed rule address the mark et failures discussed in the previous section.

3.4.1 Information Provision Information provision will occur in several ways under the LRRP program in conjunction with other sections of Title X. Consumers will be directly informed about lead-based paint hazards and risks associated with renovation work through educational programs, expanded notification requirements, and quantitative information about dust-lead hazards provide d after dust wipe testing and clearance. The aim of these programs will be to educate the property owne r about the risks associated with lead-based paint and lead-based paint hazards and having renovation wo rk done in areas where these are present, the significance of these risks, and how specific work practi ces can reduce those risks. In addition, requiring training of professionals who carry out renovation pr ojects and perform dust wipe testing will provide these individuals information about the hazards of lead exposure and the use of appropriate procedures to reduce exposure during their work. Similarly, the firm certification process will act as an indirect form of information provision to the consumer by assuring them that the services they are purchasing will reduce or eliminate lead exposure. The proposed rule addresses market failure due to inad equate information in two ways. First, it will enable consumers to more accurately judge the qualif ications of renovation firms before entering into a contract because of additional information that will be available as a result of the rule. In addition, they will have more complete information about the quality of the work that was performed at the completion of the job. Owners and occupants who have more co mplete information about dust lead standards will have an enhanced ability to make further risk ma nagement decisions. Second, it provides a feedback mechanism for renovation firms that is expected to result in improvements in the effectiveness and efficiency of their containment and cleaning practices. Both of these information provision activities are described below.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-17 Effect of Dust Wipe Testing and Clearance Requirements 

### The objective of requiring dust wipe testing and clearance following certain renovations is to reduce exposure to lead dust generated by renovation projects and thereby protect children and adults from the health hazards posed by lead. Due to the nature of the problem, uncertainty currently exists on the part of consumers about the quality of lead-safe renovation services and their likely benefits. The lack of information regarding the benefits of and the l ack of confidence in the quality of a good or service generally leads to a lower demand and a lower willi ngness-to-pay for that good or service. Thus, if consumers of renovation services are not aware of the dangers posed by l ead dust generated during renovation, or if they are not confident that a contr actor who claims to use lead-safe work practices has been properly trained, they may not be willing to pa y the additional costs of contractors who voluntarily abide by these work practice standards. Requiri ng dust wipe testing and clearance following renovations will provide consumers with more complete informat ion about the effectiveness of the lead safe work practices that were used. Under the proposed LRRP Clearance Rule additional information will be available to property owners on the effectiveness of prospective contractors at minimizing risks from lead-based paint hazards. Specifically, property owners will be able to judge the past performance of contractors through referrals from family, friends and neighbors, by checking references, and by reading contractor reviews available through online contractor referral websites. As a result of the proposed LRRP Clearance Rule, demand is likely to increase for those contractors who develop reputations for completing renovation work without leaving high levels of lead dust behind. Customer satisfaction is particularly important for the renovation industry, an industry where most firms report that over 50 percent of revenues are attributable to referrals and some firms report that up to 90 percent of their revenues are attributable to referrals (NARI, undate d). In addition, renovation consumers and firms would have the option to set contract terms or prices that are contingent on the dust wipe test results at the end of a job. An example of the market failure stemmi ng from inadequate information is presented in the previous section and is shown graphically in Exhibit 3-1

. The proposed rule will provide additional informatio n to renovation firms and their employees about the effectiveness of the containment and cleaning practices that they are employing. This feedback mechanism is likely to result in more effective and efficient containment and cleaning practices. If renovators were not mandated to provide this info rmation to consumers, responsible renovators might theoretically provide it voluntarily (although renovators who are not as responsible are unlikely to provide this information voluntarily). But there is no eviden ce that even responsible renovators are doing this. The failure of the marketplace to provide this inform ation on its own means that owners and occupants may not be able to react appropriately to a void or prevent risks from lead-based paint.

3.4.2 Mandatory Training and Work Practice Requirements The information provision described above will aid in reducing the extent of the market failure that currently exists for lead-safe renovation services. Howe ver, relying solely on information provision is unlikely to be sufficient to correct the market failure because of the natu re of the lead paint problem. The lead in lead-based paint cannot be seen on visual inspection, therefore, the owner and occupant do not know if lead is present and whether a lead exposure ha zard exists. Likewise, the adverse health effects are not noticeable for several years and the source may not be recognized. In such situations, education may not be sufficient and other mechanisms are needed to ensure that if a potential risk exists, it is suitably addressed. The LRRP program introduces othe r mechanisms for the elimination of lead-based paint hazards during renovation work. These include training requirements for personnel engaged in renovation work, dust wipe testing, and clearance. Work practice requirements include the use of standard practices for the containment and cleanup of lead dust and debris generated during the project,Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-18 

### the prohibition or restriction of cer tain high-hazard techniques, and the use of standard requirements for performing dust wipe sampling and clearance.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-19 

## Appendix 3A: The Role of Elastici ties in Determining the Impacts of a Rule EPA is often faced with deciding on a regulatory policy in the absence of good information about the likely effects of the policy on consumers and producers. In particular, data on the own-price elasticity of supply and demand often are uncertain. This appe ndix provides background information on the likely effects of own-price elasticity of demand and supply on the outcomes of EPA’s regulatory efforts. The bulk of the discussion focuses on the case of perfect competition, not because the majority of markets EPA is likely to affect will exhibit competitive behavi or, but simply because the theory is clearly defined in this case. However, this appendix also exam ines the likely impacts of relaxing the assumption of perfect competition. It focuses on two general classe s of regulatory options: re gulations that alter the market outcome by imposing additional costs upon produ cers, and regulations that alter the market by providing information to consumers. 

### 3A.1 Elasticities of Supply and Demand The market equilibrium for a commodity (e.g., pu rchasing renovation, remode ling or painting (RRP) work that uses lead-safe work practices) is determin ed by the intersection of the aggregate demand and supply curves. The aggregate demand curve depicts cons umer behavior and is ba sed on consumer income and preferences. Likewise, the aggregate supply curve describes the behavior of producers in the market, and is dependent upon the costs of production. At market equilibrium, the price is referred to as market clearing. In other words, at this price, the qua ntity demanded by consumers and supplied by producers are equal and neither the consumer nor producer has an y incentive to move away from this steady state as long as current demand and supply conditions prevail. However, when demand and supply conditions do change, for example when new information causes consumers to adjust their preferences and thus shift the demand curve, or changes in input prices affect costs of production and shift the supply curve, the market gravitates to a new equilibrium. This new equilibrium is represented by a new combination of market clearing price and quantity. The magnitude of the change in price and quantity is dependent not only upon the extent of the shift in the demand or supply curve, but also on the own-price elasticity of demand and supply for the commodity. The own-price elasticity of demand is defined as the ra tio of the percent change in quantity demanded to the percent change in price, and is reflected in the slope of the demand curve, similarly for the own-price elasticity of supply. By determining the level of ch ange in price and quantity, the elasticities of the two curves also determine the distribution of the burde n or benefit between the consumer and producer resulting from a change in equilibrium conditions. Analyzing changes in consumer and producer surpluses provides a means for quantif ying such distributional changes. Figure 3A-1 below provides a hypothetical example of how the effects of regulation may impact consumer and producer surpluses. In the base line, the supply curve is represented by S 1 

### , and producers supply Q 1 

### at a price P 1 

### . On all the inframarginal units supplied, producers receive a price above the cost of production. The difference between the price a nd the cost of production represents the producer surplus resulting from supplying Q 1 

### at price P 1 

### (triangle P 1 

### CD). Similarly, in the baseline consumers demand quantity Q 1 

### at price P 1 

### . For all the inframarginal units de manded, consumers would be willing to pay more than that price and thus receive a surplu s. The difference between what consumers are willing to pay as measured by the height of the demand curve, and what they have to pay is the consumer surplus (triangle ACP 1 

### ). So what are the effects of regulation? In Figur e 3A-1, the upward shift in the supply curve to S 2 

### (say from a rise in production costs due to the implementation of the RRP rule which requires use of the more costly lead-safe work practices) results in a new equilibrium at the point B, with a new market price of P 2Economic Analysis for the L RRP Clearance Proposed Rule



### and quantity of Q 2 

### . Note that producer surplus decreases from P 1 

### CD to EBP 2 

### and the consumer surplus also decreases from ACP 1 

### to ABP 2 

### . Thus, in the arbitrary case drawn in Figure 3A-1, the social costs of the regulation are born by both consumers and producers of the pollution-generating good. This result turns out to be a function of the way the supply and demand curves have been drawn, and the distribution of costs between consumers and producers depends on the slope (elasticity) of the demand and supply

curves.

Figure 3A-1: Effect on consumer and producer surplus due to a supply curve shift

A

B
C

D E

Q 1 Q

2 P 1 P 2 S 2

S 1

D



### In general, for a given production cost increase, the more elastic the demand curve, the greater the inability on the part of the producers to pass the add itional costs of production on to the consumers. As shown in Figure 3A-2 (a) and 3A-2 (b) below, th e differing slopes of the demand curve lead to differential impacts on the consumer and producer su rplus. In Figure 3A-2 (a) demand for the good is relatively price elastic, while in Figure 3A-2 (b) the good has a relatively inelastic demand. Notice that when demand is less elastic, the price increase resulti ng from a shift in supply is greater and consumers bear a greater share of the loss in consumer surplus. On the other hand, with a more elastic demand, the overall price increase is smaller and the share of total costs born by producers is larger.

Chapter 3 3-20Economic Analysis for the L RRP Clearance Proposed Rule

Figure 3A-2(a): Effect of a change in input prices when demand is elastic Figure 3A-2(b): Effect of a change in input prices when demand is inelastic

S2

S1

D

Chapter 3 3-21 Q2 Q1 P1 P2

Q2 Q1 P1 P2

D S1 S2



### The elasticity of demand is determined in genera l by the existence of suitable substitutes for a commodity. If several commodities exis t in the market that are consider ed to be close substitutes for each other, then a consumer is likely to have a great deal of choice available to him while making his consumption decision. This being the case, if the pri ce of the commodity that he is presently consuming happens to rise, he is easily able to reduce his cu rrent consumption level of that commodity and switch over to consuming more of one of the substitutes. This flexibility limits the ability of the producer to pass on the burden of the cost increase on to the consumer . Thus, the availability of close substitutes in the market explains why the demand curve for a commod ity will be relatively elastic, and why the rise in price will be relatively small. On the other hand, if substitutes are lacking for a commodity that experiences a price increase (and it is not a luxury good ), then the consumer has little choice but to carry on consuming similar quantities of the same product. T hus, in this situation he will have to shoulder a larger share of the increased costs by paying a much higher price, and this rigi dity in his consumption behavior explains the inelastic nature of the demand curve for that commodity. Recognizing that most markets are not perfectly competitive, product differentiation allows firms to charge prices higher than marginal costs and charge different prices for similar goods. The degree to which producers can pass on the cost of production depends heavily on the degree to which they can convince consumers that their product is different from ot her products. In its limit this argument is just a restatement of the fact that markets with lower elasticities of demand will experience higher price increases. If “market demand” is defined to be the demand for a single brand of good, then the number of substitutes for the good affects its demand elasticity and thus affects the degree to which the producer can pass on cost increases. If the firm can convince cons umers that the product is distinct then it in essence lowers the elasticity of demand for its product. The own price elasticity of supply, on the other hand, is dependent on the degree of specialization of inputs. If the inputs are highly specialized or firms ar e locked into long-term contracts then firms in this industry can be left with substantial sunk investment s creating high transition costs which are reflected in an inelastic supply curve. However, if supply is high ly elastic then firms can easily switch production toEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-22 

### other uses and minimize the effect of the demand shoc k. In essence the elasticity of supply measures the amount of resources lost or tied up indefinitely when consumption patterns change suddenly. The EPA seeks to reduce hazards from lead-based paint by two separate pathways of regulatory impact. First, it hopes to reduce exposure to lead-based pain t by regulating the “method of production” of RRP work in opt-out housing by establishing standards fo r such activities and through requiring certifications and/or training. This is likely to result in an in crease in the “costs of production” of RRP work thereby affecting the supply curve for such activities. Second, the rule will provide information to consumers. In this case EPA is likely to alter the market outcom es by changing the demand for products (lead-safe and non lead-safe work practices). To the extent that the demand and supply of RRP work will be affected by the rule, one must consider the price elasticities involve d to determine the distributive impact of the rule on consumers and producers. An important factor on which the price elasticity will depend is the number of substitutes that exist for the RRP service that is sought in the market. As previous ly explained, the greater the number of available substitutes, the more elastic the demand and lesser the burden of a production cost increase likely to fall on the consumer. Under this rule three classes of substitutes may be said to exist for RRP services. These are (1) professionals using lead-safe work practices, (2) professionals using non lead-safe work practices, and (3) the do-it-yourself jobs. Thus, a certain amount of flexibility is available to the consumer when it comes to hiring RRP services. Currently a sizeable number of RRP firms may not necessarily be following lead-safe work practices thereby limiting the size of the class of firms that do so . However, with the implementation of the rule, a much larger number of firms are expected to adhere to these practices in the future, thus enlarging the size of this class. In addition, this increase in the numbe r of professionals using lead-safe work practices will also have a geographical impact. Presently, the limited number of professionals who use lead-safe work practices are concentrated in a select number of locati ons where state and local regulations have fostered their development. As a result, in many parts of th e country the choice of hiring “lead-safe” professionals currently does not exist. But this situation will chan ge as a larger number of firms switch to lead-safe work practices once the rule come into effect. However, if the increase in production costs from the ru le is extremely high such a large transition of firms from using lead-unsafe to lead-safe work pr actices may not occur. This is because the cheaper option of using non-certified (non lead-safe work prac tice using) RRP workers or doing the work yourself will limit the ability of the certified (lead-safe work pr actice using) professional to charge the consumer for all or a large portion of this significant cost incr ease. In this situation a large number of lead-unsafe firms may remain in existence. Thus, one may assu me that as long as an appreciable difference exists between “costs of production” of lead-safe and non lead-safe work practices, firms of both types will continue to exist. The continued existence of fi rms using non lead-safe practices also depends on the extent and effectiveness of enforcement activities. Th e greater the cost differential between lead-safe and non lead-safe practices, the greater th e need for enforcement activities. In addition to the number of substitutes, the closeness of substitutes in their ability to replace one another needs to be judged. The important question is whet her RRP work done by uncertified professionals and the do-it-yourself efforts are substantially less safe th an the services of certified professionals. To the extent an appreciable difference ex ists between the quality of service (in terms of preventing or reducing lead-based paint hazards) provided by the two groups, th ey will not be perceived as close substitutes for each other and their demand curves will not be as elastic as they would have been if they were considered close substitutes. In such a situation, consumers f eel that a sufficiently differentiated product is being offered by the two groups, and thus their choice is limited.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-23 

### This judgment on the degree of closeness of substitute s will to some extent depend upon the importance that lead safety holds with the property owner compared to other priorities. To the extent that the priority assigned to lead exposure is relatively small, the uncertified professionals and do-it-yourself jobs will tend to be seen as closer substitutes for certified pr ofessionals, than if lead-based paint hazards are perceived as a larger threat by the property owner. Thus, the elasticity of demand will also vary according to owner priorities, and in this rega rd, the informational aspect of the rule may in fact assist in raising more awareness, resulting in lead safety being assigned a higher priority. Of a related nature, the firm certification aspect of the rule is likely to increase consumer ability to differentiate between the services being offered by the three classes of substitutes. The certification process will create a distinct divide which will permit the property owner to get a better appreciation of the varied benefits to be gained from the alternatives at hand. This is likely to reduce to some extent the perceived closeness of the substitutes and thereby ma ke the demand more inelastic for each class of RRP service.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-24 

### 3A.2 How Price Elasticity of Demand Affects the RRP Rule As discussed above, EPA foresees tw o separate pathways by which th e rule will take effect; increasing costs of production leading to a shift in supply and provision of information to consumers leading to a shift in demand. The way these two effects will play out and the role that price elasticities will play in the adjustment of prices and quantities under the two scenarios is discussed below.
3A.2.1 Effect of Rule on the Cost of Production (Supply Shift) EPA seeks to reduce exposure to lead-based paint hazar ds by the introduction of lead-safe work practices during RRP work. These practices involve the use of in creased precautions in situ ations where lead-based paint hazards may potentially be created during RRP wo rk, and as a result costs of RRP work are likely to increase above current levels. Since producers seek to maximize profits and in the baseline will produce goods using the lowest-cost combination of inputs, a rule requiring producers to change their input mix will necessarily increase the cost of production. Thus, one impact of the rule will be to increase the production costs, leading the supply curve to shift upward and to the left. Figures 3A-2(a) and 3A-2(b) demonstrate the distributiona l affects of such a hypothetical shift in supply in markets with different elasticities of demand. The price increase is much higher (P1 to P2) and the decrease in quantity demanded is much lower (Q1 to Q2) with a given shift in supply when demand is less elastic (as shown in Figure 3A-2(b)) as compared to the elastic demand scenario in Figure 3A-2(a). Thus, the consumers bear a higher share of the tota l social cost from the regulation (represented by the relatively larger decrease in the consumer surplus compar ed to that in the produ cer surplus). On the other hand, Figure 3A-2(a) shows that the higher the elas ticity of demand, the lower the overall price increase, the larger the reduction in quantity demanded, and thus the larger the share of total costs to be born by producers (represented similarly by the larger decrease in producer surplus as compared to the consumer surplus).
3A.2.2 Effect of Rule on the Provision of Information to Consumers (Demand Shift) The alternative regulatory approach is to provide information to consumers in the hopes that they will make more environmentally friendl y consumption choices. In this case EPA alters the market outcomes by changing the demand for products. Figures 3A-3(a) a nd 3A-3(b) depict such a hypothetical example. In these cases the commodity in question (non lead-safe work practices) has negative environmental effects (byproducts). By educating consumers about these byproducts and alterna tive products that have lower levels of adverse effects (lead-safe work practices), EPA can change consumer preferences and shift demand for the “bad product” inward and to the left. This lower demand curve would more accurately reflect the true “social” margin al benefits of consuming the product. What are the likely distributional and efficiency effect s of this type of regulatory policy? Figures 3A-3(a) and 3A-3(b) reveal that under both scenarios (for an elastic and inelastic supply curve), the downward shift in the demand curve will lead to a decrease in price and quantity demanded of the commodity. However, in the case of an elastic supply curve when the transition costs associat ed with switching to the production of other products is relatively low, the de crease in price of the commodity is smaller and the decrease in quantity demanded larger, as compared to the changes in the case of an inelastic supply curve involving high transition costs. Restated in terms of changes in producer and consumer surpluses, the producer surplus is reduced under each scenario, but th e elastic supply curve causes a relatively smaller burden to fall on the producer than the inelastic supply curve. Similarly, the consumer receives a reduction in social benefit under each scenario; however , the magnitude of this reduction is larger under the inelastic supply curve case.Economic Analysis for the L RRP Clearance Proposed Rule

Figure 3A-3(a): Effects of a regulation-induced change in demand when supply is elastic Figure 3A-3(b): Effects of a regulation-induced change in demand when supply is inelastic

D1

D2 S

Q1Q2 P1 P2

Q1Q2 P1
P2

D2 D1 S



### 3A.2.3 Application to Renovation In the rule, EPA is both affecting production and pr oviding information. The likely effects of the regulation on prices and welfare are difficult to discu ss without more accurate information on the supply and demand elasticities. However, some general observations are warranted. The welfare effects of the regulation will likely be driv en by the supply side rather than the demand side. This is because the elasticity of supp ly for RRP services is likely to be re latively higher than the elasticity of demand. Supply elasticities are expected to be relatively high because there are relatively few barriers to entering or leaving this industry. Little capital equipment or specialized labor skills are needed for RRP work, and what is needed is easily transf erred from non-compliant renovation to “lead-safe” projects. On the demand side, there are two primary categories of RRP events – those of a maintenance character and those of an improvement character. Maintenance activities usually cannot be postponed and thus are not particularly sensitive to price. Improvement projects, however, can more easily be postponed and thus tend to be more price elastic. Complicating matters, however, are the existence of different categories of purchasers. Some place a hi gh premium on quality and ti meliness, while others actively seek low prices. Appendix 3B discusses some of the empirical evidence on elasticities of demand and supply. However, the analysis does not suggest that the educa tion factor is unimportant. If the regulation is not accompanied by education efforts and enforcement, then EPA could unintentionally drive up demand for non-compliant renovation projects creating additional we lfare losses. These loss es are the result of the fact that if consumers were aware of the lead pa int issues their true marginal valuation for the noncompliant projects is lower than the price of these proj ects. Thus, if enforcement is not perfect, education is essential. EPA can compensate fo r the fact that it is raising the costs of lead-free renovation on the supply side by educating consumers on the environm ental effects of non-compliant renovations thereby making these cheaper, non-compliant projects less attractive.

Chapter 3 3-25Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-26 

## Appendix 3B: Elasticities of Demand and Supply for Housing / Renovation Services As described in Chapter 3 and Appendix 3A, the im pact of increases in the cost of RRP services on demand for RRP will depend on both the size of the cost increase and the elasticity of demand for these services. Likewise, the impact on the supply of RRP services will depend on both the size of the cost increase and the elasticity of supply for these services. These impacts are expressed in terms of changes in price and in the quantity of services purchased. Chapter 4 estimates the cost increases due to the requirements of the various regulatory options, b ased on the increased labor and materials costs of complying with the containment and clean-up requireme nts, as well as the training and certification costs imposed by the requirements. This appendix revi ews the existing literature on residential demand elasticities. Unfortunately, RRP has received relatively little atten tion by housing economists. While there are many studies that estimate elasticities for new construction, these studies have only limited applicability to renovation and remodeling. The income elasticity of demand for housing is generally estimated to be somewhat inelastic (in the 1.0 to 0.8 range). Th is is consistent with housing being a necessity – expenditures on housing do not increase as rapidly as income (Green and Malpezzi 2003). Demand for housing is also considered to be somewhat price in elastic, with generally accepted values either in the range of -0.5 to -1.0 or -0.75 to -1.2 (Mayo 1981, Malpezzi and Maclenna n 2001, Ellwood and Polinski 1979). One study is available that estimated a renovation demand elasticity (Gyourko and Saiz 2003). This study found renovation demand to be very inel astic, with an elasticity estimated to be –0.28. On the other hand, housing supply a ppears to be very elastic – cons istent with the highly competitive nature of the residential construction market and the large number of small contractors. Because it is very easy to enter (and to leave) the construction business, supply is very responsive to changes in prices, especially in the long run. 2 

### Based on the literature surveyed, estimates of housing supply elasticities tend to range from 1.0 to 4.0, but a couple of studies found elasticities as high as 13 or higher (DiPasquale and Wheaton 1994, Topel and Rosen 1988, Blackley 1999, Malpezzi and Maclennan 2001). No elasticity numbers specific to the supply of renovation services could be found.

Several characteristics of RRP tend to make its dema nd more price elastic than the demand for housing in general. For example:

3⁄4 The existence of close substitutes to compliant RRP. These substitutes include:

à Do-It-Yourself RRP –owners of buildings ma y be tempted to do their own RRP work without proper training and certification.

à Firms that do not complying with the regulati ons. These regulations may be difficult to enforce against contractors, particularly the large number of small contractors who may be hard to identify and monitor.

à Reductions in the scope of the projects, or postponement of the projects, to compensate for the price increase. Purchasers can reduce other RRP-related costs by substituting lower-priced fixtures/finishes and/or less extensive remodeling.

3⁄4 Many RRP projects are discretionary. The price elasticity of discretionary projects is likely to be higher than replacement projects (e.g. new roof). For discretionary RRP projects, it is relatively easy for the purchaser to reduce the scale/scope of the project, postpone the project, or never do it.

2 Note – stock adjustment models give lower elasticities than flow mode ls. Malpezzi and Maclennan (2001).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-27 

### Offsetting these characteristics that foster higher elasticities of demand, are ones that foster lower elasticities. The major one is that the product pur chased cannot be separated from the firm providing the product, which is true of all services. In addition to the various RRP events analyzed in the subsequent chapters, RRP firms themselves are relatively diffe rentiated. Some firms specialize in high-end, complicated projects (e.g. elaborate new kitchens) while other firms specialize in performing small routine tasks (repainting apartments at tenant turn-ove r). Some firms only work in historic or Victorian homes, while others will work on an y type of home. Some firms do only one type of project (e.g. replacing siding) while other firms will do any and all ty pes of RRP work. This differentiation results in lower demand elasticities, because producers may not be considered particularly close substitutes.

3⁄4 To the extent that lead-safe work can be di stinguished from non-lead-safe work, a higher price can be charged for it.

3⁄4 Many contractors already employ lead-safe practices (or at least control the dispersion of dust and clean well before leaving). The regulations will serve to reduce this differentiation. Second, the nature of RRP projects may also reduce pr ice competition. For relatively small jobs, property owners frequently will not get multiple bids – the assumed cost of the job does not warrant the effort. In this case, the compliance cost can be passed on without fear of losing the work. In the case of large jobs, where owners will get bids, compliance costs will make up a relatively small proportion of the total cost and, again, passing on the costs may be easy.Characteristics of the purchaser of the RRP services may also affect their demand price elasticity. Highincome purchasers are likely to be less price sensitive th an low-income purchasers. In addition, owners of rental properties may be more price sensitive than owner occupants because they have different objective functions. Owner-occupants operate so as to maximize their utility (their enjoyment of the house) and asset growth is likely to enter their decision as a seconda ry factor. Owners of rental housing, on the other hand, are assumed to be maximizing their profits. It is reasonable to expect that the optimal level of capital of an absentee landlord’s rental building is lower than that of an owner-occupier’s house, since the landlord’s marginal rent revenue from renovations is likely to be less than the homeowner’s marginal utility. Because of the lack of detailed price elasticity estimates for RRP, the analysis in Chapters 4, 5 and 6 does not incorporate any reduction in professional RRP activities in response to th e cost increases resulting from the regulation.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-28 

## References

Centers for Disease Control. 1997. “Children with Elevated Blood Lead Levels Attributed to Home Renovation and Remodeling Activ ities -- New York, 1993-1994.” Morbidity and Mortality Weekly Reports . 45(51&52);1120-3. Available at: http://www.cdc.gov/mmwr/preview/mmwrhtml/00045033.htm.

Centers for Disease Control. 2002. Managing Elevated Blood Lead Levels Among Young Children (March).

Centers for Disease Control. 2004. Preventing Lead Exposure in Young Children: A Housing Based Approach to Primary Prevention of Lead Poisoning: Recommendations from the Advisory Committee on Childhood Lead Poisoning Prevention (October).

Centers for Disease Control. 2005. “Bl ood Lead Levels --- United States, 1999—2002.” Morbidity and Mortality Weekly Reports. 54(20);513-516. Available at: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5420a5.htm#tab1.

National Association of the Rem odeling Industry (NARI). Undated. Interview Remodeler. Available at: http://www.nari.org/homeowners/interview/

Residential Lead-Based Paint Hazard Reduction Act of 1992, Pub. L. no. 102-550. 106 Stat. 3672 (1992).

U.S. Department of Housing and Urban Development (HUD). 1990 . Comprehensive and Workable Plan for the Abatement of Lead-Based Paint in Privately Owned Housing: Report to Congress

. Washington, DC, February.

U.S. Department of Housing and Urban Development (HUD). 1995. Guidelines for the Evaluation and Control of Lead-Based Paint Hazards in Housing (June).

U.S. Department of Housing and Urban Development (HUD). Data as of August, 2000. National Survey of Lead and Allergens in Housing. Office of Healthy Homes and Lead Hazard Control, Washington, DC.

U.S. Department of Housing a nd Urban Development (HUD). 2004b. Requirements for Notification, Evaluation, and Reduction of Lead-based Paint H azards in Housing Receiving Federal Assistance and Federally Owned Residential Property Being Sold (Lead Safe Housing Rule); Final Rule, Conforming Amendments and Corrections. Federa l Register (69 FR 34262, June 21, 2004).

U.S Department of Housing and Ur ban Development (HUD) and U.S. EPA. 1996. Lead; Requirements for Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards in Housing; Final Rule. Federal Register ( 61 FR 9064, March 6, 1996)

U.S. Department of Labor, Occ upational Safety and Health Administration (OSHA). 1993. Lead Exposure in Construction; Interim Final Rule. Federal Register (58 FR 26590, May 4, 1993).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-29 

### U.S. Environmental Protection Agency (EPA). 1984. EPA Policy for the Administration of Environmental Programs on Indian Reservations (November 8).

U.S. Environmental Protection Agency (EPA). 1995 . Lead Hazard Information Pamphlet; Notice of Availability. Federal Register (60 FR 39167, August 1, 1995).

U.S. Environmental Protection Agency (EPA). 1996. Lead; Requirements for Lead-Based Paint Activities in Target Housing and Child-Occupied Fa cilities: Final Rule. Federal Register (61 FR 5778, August 29, 1996).

U.S. Environmental Protection Agency (EPA). 1997 . Lead Exposure Associated with Renovation and Remodeling Activities: Environmental Field Samp ling Study (EFSS). EPA 747-R-96-007, May 1997. http://www.epa.gov/lead/pubs/r96-007.pdf

U.S. Environmental Protection Agency (EPA). 1998 . Lead; Requirements for Hazard Education Before Renovation of Target Housing; Final Rule. Fede ral Register (63 FR 29908, June 1, 1998).

U.S. Environmental Protection Agency (EPA). 1999 . Lead; Fees for accreditation of Training Programs and Certification of Lead-based Paint Activities Cont ractors; Final Rule. Federal Register (64 FR 31092, June 9, 1999).

U.S. Environmental Protection Agency (EPA). 2001b. Lead; Identification of Dangerous Levels of Lead; Final Rule. Federal Register (66 FR 1206, January 5, 2001)

U.S. Environmental Protection Agency (EPA). 2003a. Lead Safety for Remodeling, Repair, And Painting. Joint EPA/HUD Renovation Training Curriculum (EPA 747-B-03-001/2, July 2003).

U.S. Environmental Protection Agency (EPA). 2003b. Protect Your Family From Lead in Your Home. U.S. Environmental Protection Agency, U.S. C onsumer Product Safety Commission, and U.S. Department of Housing and Urban Devel opment, (EPA 747-K-99-001, June 2003).

U.S. Environmental Protection Agency (EPA). 2004a. Lead; Notification Requirements for Lead-Based Paint Abatement Activities and Training; Final Ru le. Federal Register (69 FR 18489, April 8, 2004)

U.S. Environmental Protection Agency (EPA). 2004b. Targeted Grants to Reduce Childhood Lead Poisoning; Notice of Funds Availability. Federal Register (69 FR 69913, December 1, 2004).

U.S. Environmental Protection Agency (EPA). 2005c. Air Quality Criteria for Lead (First External Review Draft). EPA/600/R-05/144aA-bA. December. http://cfpub2.epa.gov/ncea/cfm/ recordisplay.cfm?deid=141779

U.S. Environmental Protection Agency (EPA). 2007. Characterization of Dust Lead Levels After Renovation, Repair, And Painting Activities . November 13, 2007.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 3 3-30 

### U.S. Environmental Protection Agency (EPA). 2008. Renovate Right: Important Lead Hazard Information for Families, Child Care Provide rs and Schools (EPA 740-F-08-002, March 2008).

U.S. Environmental Protection Agency (EPA). 2009 . Lead; Fees for Accreditation of Training Programs and Certification of Lead-based Paint Activiti es and Renovation Contractors. 74 FR 11863, March 20, 2009.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-1 

## 4. Costs of the Lead, Renovation, Repair, and Painting Rule Revisions The proposed LRRP Clearance Rule includes the fo llowing changes to the LRRP program: (1) a requirement to perform dust wipe testing for a sub set of renovation activities, and (2) a requirement to perform dust wipe testing and achieve clearance for a second subset of renovation activities where the quantity and characteristics of the dust make it hard to clean up. In particular, the proposed LRRP Clearance Rule would require dust wipe testing on uncarpeted floors and on window sills and troughs after the following types of renovations that disturb lead-based paint: use of a heat gun at temperatures below 1100 degrees Fahrenheit 1 

### ; removal or replacement of window or door frames; scraping 60 ft 2 

### or more of painted surfaces; or removing more than 40 ft 2 

### of trim, molding, cabinets, or other fixtures. Renovations using machines that remove lead-based paint through high speed operation (such as power sanders or abrasive blasting), or involving demolition or rem oval of plaster walls with lead-based paint through destructive means will require firms to demonstrate – through dust wipe testing – that they have met clearance standards before the renovation will be considered complete.The costs of the proposed LRRP Clearance Rule were estimated under a baseline scenario where the optout provision of the 2008 LRRP rule has been el iminated, as was proposed in October 2009 (74 FR 55506). This choice for the baseline scenario has the advantage that the cost impacts estimated in the Economic Analysis of the proposed Opt-Out Rule (EPA 2009) and those estimated in this analysis can be added together to estimate the combined impact of both rules. 2 

### Since the proposed LRRP Clearance Rule was developed before the LRRP Opt-Out Rule was fi nalized, the costs of the proposed LRRP Clearance Rule are also estimated for the alternative baseline scenario where the opt-out provision has not been eliminated (see section 4.7).
The costs associated with the revisions to the §4 02(c) Lead, Renovation, Repair, and Painting (LRRP) Rule are divided into three categories for the purposes of this analysis: (1) dust wipe testing costs, (2) clearance costs, and (3) training costs. The general approach of the analysis is to first estimate the number of affected activities or entities and then estim ate the incremental regulatory cost per-activity or entity affected. Next, the incremental costs and the number of affected activities and entities are combined to estimate the total costs. The analysis estimates the total co sts associated with the first and second years of regulation and then extrapolates to the costs of the regulation over a fifty year period— estimated with three and seven percent discount rates. See Figure 4-1 for an illustration of the general approach used to estim ate the costs of the proposed LRRP Clearance Rule. The cost analysis uses the results of four different surveys of fewer than 10 firms each to estimate the annual frequencies for the different types of events c overed by the proposed rule. The small sample sizes in the surveys (relative to the number of firms in th e industry) may affect both the accuracy and precision of the estimates of the number of events requiring dust wiping or clearance, and thus the estimated cost of the proposed rule.

1 Under the 2008 LRRP rule at 40 CFR 745.85(a)(3)(iii), operatin g a heat gun on lead-based paint is permitted only at temperatures below 1100 degrees Fahrenheit.

2 Note that the two analyses differ in th e current dollars that are used. In addition, both analyses use 50-year time horizons, but the Opt-Out analysis time period starts in 2010 and this rule’s time period starts in 2011 – in a combined analysis they would have the same time horizon.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-2 Figure 4-1: General Approach to Cost Analysis



### The chapter is organized as follows: Section 4.1 defines the regulatory options considered in this analysis; Section 4.2 presents estimates of the number of regulated renovation, repair, and painting events where dust wipe testing or clearance will be required under the various regulatory scenarios; Section 4.3 presents the esti mated costs of performing dust wipe testing and clearance, including the associated paperwork and recordkeeping costs; Section 4.4 presents the estimated number of Sampling Technicians seeking training and certificati on; Section 4.5 presents the costs of training Sampling Technicians; Section 4.6 presents the total costs of the prop osed regulatory options. Section 4.7 presents the total costs of the proposed rule with an alternative baseline that excludes Opt-Out housing and also pr esents the costs of the rule under additional alternative options.



### 4.1 Definitions of Options This economic analysis considers various regulatory options. The three primary options considered in this analysis only differ in the size thresholds that trigger the rule’s requirements when performing certain renovation activities. The three threshold opt ions considered in this analysis are:

1. Low Threshold Option

 All event types requiring dust wipe testing where the amount of lead-based paint disturbed is larger than 6 square feet.

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet. 2. Proposed Threshold Option

 Dust wipe testing is required for:

- cabinet and trim events larger than 40 square feet,Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-3 

### - scraping of paint larger than 60 square feet,

- heat gun removal of more than 6 square feet

- Window frame or door frame removal events

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet. 3. High Threshold Option

 Dust wipe testing is required for:

- cabinet and trim events larger than 80 square feet,

- scraping or heat gun removal of paint larger than 120 square feet, and

- window frame or door frame removal events.

 Clearance is required for:

- high-speed machine removal of paint larger than 60 square feet, and

- plaster removal using destructive means, larger than 60 square feet.

Section 4.7 considers three alternative options in addi tion to the thr ee primary options: (1) an option where third party dust wipe testing (including dust-wi pe testing for clearance) is required; (2) an option that requires dust wipe testing for all of the renovatio n events covered by the proposed rule but does not require clearance for any of them; and (3) an option where clearance is required for all renovation events covered by the proposed rule. All the primary and alternative options are analyzed under the baseline scenario where the opt-out provision of the 2008 LRRP rule has been eliminat ed as proposed. Since the proposed LRRP Clearance Rule was developed before the LRRP Opt-Out Rule was finalized, section 4.7 also presents the estimated costs for the proposed LR RP Clearance Rule under an alternative baseline using the regulated universe under the 2008 LLRP Rule (which excludes opt-out eligible housing from the universe). Table 4-1

su mmarizes the options presented in the economic analysis.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-4 Table 4-1: Options Included in Economic Analysis



### Option Size Threshold Dust Wipe Testing and Clearance Third Party Requirement Baseline

Low Threshold Option Size thresholds are lower or equal to proposed rule No 2008 + Opt Out

Proposed Threshold

Option Size thresholds are as proposed No 2008 + Opt Out

High Threshold Option Size thresholds are higher or equal to proposed rule Dust wipe testing is required for: 1. cabinet and trim events 2. scraping of paint 3. heat gun removal of paint 4. Window frame or door frame removal events

Clearance is required for: 1. high-speed machine removal of paint 2. plaster removal using destructive

means No 2008 + Opt Out

Third Party Option Same as Proposed Dust wipe testing and clearance are required in the same instances as proposed Yes 2008 + Opt Out

Dust Wipe Testing Only Option Same as Proposed Dust wipe testing is required in instances where dust wipe testing or clearance are required under the proposed option No 2008 + Opt Out

Clearance Only Option Same as Proposed Clearance is required in instances where dust wipe testing or clearance are required under the proposed option No 2008 + Opt Out

Proposed Option with Alternative

Baseline Same as Proposed Same as Proposed No 2008



### 4.2 Number of Events with Dust Wipe Testing or Clearance Requi rements Two requirements of the clearance rule that will have cost implications are: (1) a requirement for dust wipe testing for a subset of renovation activities, and (2) a requirement for dust wipe testing and clearance for a second subset of renovation activities where the quantity and characteristics of the dust make it hard to clean up. In order to estimate the full extent of these costs, it is necessary to determine the total number of renovation events that will be affected by e ither of these additional requirements. This section identifies the event types where either dust wipe testing or clearance will be required, describes the methodology for estimating the frequencies of these even ts, and then presents the resulting estimates. The events with additional requirements under the clear ance rule are only a subset of the types of RRP events identified in EPA’s analysis of the 2008 LRRP rule (EPA 2008). This analysis relies both on secondary sources and primary data collected from fewer than 10 firms to estimate the frequencies of these dust wipe testing and clearance events. Table 4-2 and Table 4-3 describe the events requiring dust wipe testing or clearance in the context of the 20 08 event definitions and discuss the methodology used for estimating event frequencies.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-5 Table 4-2: Proposed Dust Wipe Testing Renovation Events

Clearance Rule Events Events Within Category from EPA 2008 (and building types events occur in) Event Frequency Estimation Method

Interior Painting with Heat Gun

Interior Painting with Scraping Interior Painting (TH & PCCOF The results from a survey of <10 painting firms are used to estimate the frequency with which paint removal practices are used and the distribution of job sizes.

Bathroom Cabinet Replacement (TH)

Kitchen Cabinet Replacement (TH) 1997 AHS data and HUD’s 2001 NSLAH da ta are used to estimate the frequency of cabinet repl acement. 58% of Kitc hen renovations involve cabinet replacement (AHS 1997). Base d on the number and size of cabinets according to HUD (2001), 100% of kitchen cabinet jobs are > 6 sq. ft., 89.5% > 40 sq. ft., and 62% > 80 sq. ft., and 42% of Bathroom renovations involve cabinet replacements, w ith an assumed 100% of these cabinet jobs greater than 6 sq. ft. and less than 40 sq. ft. Removal of Trim, Molding, Cabinets, or Fixtures Trim/Molding replacement during: Bathroom, Kitchen, Wall-Disturbing, Addition, or Interior Painting Event (TH & PCCOF) Based on survey of 6 carpentry firm s and 3 general contractors about what type of jobs they are performing when they replace trim or molding (e.g., kitchen remodeling ) and how frequently they do this during these job types.

Removal or Replacement of Windows or Door Frames Window/Door Event (TH & PCCOF) Based on survey of 6 carpentry firm s and 3 general contractors about how often doors and windows are replaced without replacing the frames.

EPA 2008 = Economic Analysis for the TSCA Lead Renovation, Repair, and Painting Progr am Final Rule for Target Housing and Child-Occupied Facilities, March 2008. TH = Target housing PCCOF = Public or Commercial Building COFEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-6 Table 4-3: Proposed Clearance Renovation Events

Clearance Rule Events Events Within Category from EPA 2008 (and building types events occur in) Event Frequency Estimation Method
Bathroom (TH)

Kitchen (TH) Wall-Disturbing (TH & Pub/Com COF) Plaster – Demolish, or Remove through Destructive Means (e.g., sledgehammer, etc.)

Addition (TH) 1997 AHS data is used to estimate the frequency of repairing/replacing/rem oving plaster walls. The percentage of plaster wall repair/replacement/rem oval jobs, by size, that involve demolishing them with destructive means is estimated from a survey of 9 carpentry and general contractor firms.

Interior Painting with HighSpeed Machine Paint Removal Interior Painting (TH & Pub/Com) The results from a survey of <10 painting firms are used to estimate the frequency with which paint remova l practices are used and the distribution of job sizes

EPA 2008 = Economic Analysis for the TSCA Le ad Renovation, Repair, and Painting Program Final Rule for Target Housing and Child

Occupied Facilities, March 2008. TH = Target housing PCCOF = Public or Commercial Building COF



### 4.2.1 Event Frequencies Based on Primary Data Collections From Fewer Than Ten Firms This section includes the descriptions of the four questionnaires used to collect pr imary data from fewer than 10 firms. Following the survey descriptions, th e survey results are presented along with the resulting estimated dust wipe testing and clearance event frequencies. The four primary data collections include: (1) one questionnaire for nine painting contractors that is used to determine the frequency of inte rior painting jobs of various sizes that use certain paint removal techniques, (2) one questionnaire for six carpentry fi rms for determining: (a) the frequency of trim and molding removal, and (b) the frequency of window a nd door frame replacement, (3) one questionnaire for three general contractors that includes all the questions asked to carpenters in addition to questions that are used to estimate the frequency of destructive rem oval of plaster walls, and (4) one questionnaire for six general contractors used to estimate the fre quency of destructive removal of plaster walls.

4.2.1.1 Contractor Firms Sample Universe 

### A geographically diverse sample of nine firms for eac h questionnaire was developed. First, nine states were randomly selected while limiting the sample to no more than one state per EPA region. Once the nine states were selected, lists of painting firms (for the paint removal survey), carpentry firms (for the carpenter survey), and general contractor firms (fo r the third and fourth survey) were obtained through Salesgenie.com, an online directory of businesses search able by state and SIC code. The simple averages of the responses for each questionnaire were calculated in order to estimate the necessary parameters. For the interior painting questionnaire, which was admini stered to firms in SIC code 172101 (Painters), the following states were selected: Louisiana, West Virgin ia, Alabama, Maine, Idaho, Hawaii, Kansas, Utah, and Indiana. For the plaster questionnaire, which was administered to firms with SIC codes 152103, 152105, 152115, and 152139 (General Contractors, Home Improvements, Handyman Services, and Remodeling & Repairing Building Contractors), th e following states were selected: Texas, Iowa, Michigan, Maine, California, Idaho, Alabama, Co lorado, and New York. The carpentry questionnaireEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-7 

### used the same random set of states as the plaster surv ey as necessitated by the use of a combined survey for three of the firms. For six of the firms, entities with SIC codes of 175102, 175105, and 175110 (Carpenters, Window Replacement, and Doors - Hangi ng and Cutting), were asked the same carpentry questions.

4.2.1.2 Interior Painting Primary Data Collection (<10 Firms)
Interior Painting Survey Instrument 

### The script presented in Figure 4-2 was used to administer th e phone interviews of representatives from nine interior painting firms. The introduction served to familiarize contractors w ith the objectives of the survey and the nature of EPA’s analysis. Information collected from questions (2) through (5) was used to estimate the frequency of interior painting events of differing sizes using a scraper for paint removal. Responses to questions (6) through (8) provide data on the frequency of heat gun usage for paint removal, and responses to questions (9) thro ugh (11) give simila r data on the frequency of high-speed machine usage. Questions (12) and (13) sp ecifically ask about alternatives to high-speed machine paint removal and the costs of such alternatives. And finally, in formation collected from questions (14) through (16) was used to estimate the frequency of removal of trim and molding (of various sizes) during interior painting jobs.

Figure 4-2: Interior Painting Survey Instrument 

### Introduction: Hello, I’m _________, calling from Abt Associates. We’re an independent research firm that is doing contract work for the Environmental Protection Agency (EPA). We’d like to ask you a few questions in order to better unders tand how often different paint removal practices are used. Your responses will be treated as confidential and your name will not be provided to the EPA. There are 16 questions in our survey and we expect it to take about 5 minutes.

If asked why: EPA will be proposing to requi re dust sampling and/or clearance testing after certain paint removal practices are used where lead-based paint ma y be present. We will use the responses to our survey to estimate how costly these requirements would be.

1. Do you perform interior painting work in buildings built before 1978 for pay?

⁭ Yes ⁭ No (end if no) 2. When you perform a painting job in a residence bu ilt before 1978, what percentage of the time do you use a hand scraper to remove old interior paint? _______ % of the time. 3. When you use a hand scraper to remove old interior paint in a building built before 1978, what percentage of the time do you scrape more than 6 square feet per job of a painted surface? _______ % of the time. 4. When you use a hand scraper to remove old interior paint in a building built before 1978, what percentage of the time do you scrape more than 60 square feet per job of a painted surface? _______ % of the time. 5. When you use a hand scraper to remove old interior paint in a building built before 1978, what percentage of the time do you scrape more than 120 square feet per job of a painted surface?Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-8 Figure 4-2: Interior Painting Survey Instrument 

### _______ % of the time. 6. When you perform a painting job in a residence bu ilt before 1978, what percentage of the time do you use a heat gun to remove old interior paint? _______ % of the time. 7. When you use a heat gun to remove old interior pa int in a building built before 1978, what percentage of the time do you remove more than 6 square feet of paint per job of a painted surface? _______ % of the time. 8. When you use a heat gun to remove old interior pa int in a building built before 1978, what percentage of the time do you remove more than 60 square feet of paint per job of a painted surface? _______ % of the time. 9. When you perform a painting job in a residence bu ilt before 1978, what percentage of the time do you use a high speed machine such as a power sander, gri nder, or planer to remove old interior paint? _______ % of the time. 10. When you use a high speed machine to remove old interior paint in a building built before 1978, what percentage of the time do you remove more than 6 sq uare feet of paint per job of a painted surface? _______ % of the time. 11. When you use a high speed machine to remove old interior paint in a building built before 1978, what percentage of the time do you remove more than 60 s quare feet of paint per job of a painted surface? _______ % of the time. 12. If you could not use high speed machines to remove old interior paint in a building built before 1978, what alternative paint removal technique would you use instead?

_________________________________. 13. On average, how much would using this alte rnative to high speed machine paint removal increase the cost of the job? $______________.
14. What percentage of your interior painting jobs i nvolve removing or replacing more than 6 square feet of trim or moldings?
_______ % 15. What percentage of your interior painting jobs involve removing or replacing more than 40 square feet of trim or moldings?
_______ % 16. What percentage of your interior painting jobs involve removing or replacing more than 80 square feet of trim or moldings?
_______ %Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-9 Interior Painting Survey Responses and Summary of Results 

### Table 4-4 presents the individual responses from firms contacted from each state for the entire interior painting questionnaire. For practices for which both an overall frequency question and relative sizespecific frequency questions were asked of firms, the percentage with which each respondent used a surface preparation practice for a certain size thres hold was imputed, and then the average was taken across respondents. In other cases, the simple averages of the freque ncies are used for estimating the number of events affected by the proposed rule. Summary statistics are calculated in Table 4-5 to show the central te ndency and range of work practice frequencies reported by respondents.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-10 Table 4-4: Individual Responses to Interi or Painting Firm Questionnaire by State

Question LA WV AL ME ID HI KS UT IN 2. Use scraper (%) 50.0% 5.0% 0.0% 0.0% 0.0% 0.0% 1.0% 1.0% 0.0% 3. Scrape > 6 ft 2 (%) 10.0% 100.0% NA NA NA NA 0.0% 1.0% NA 4. Scrape > 60 ft 2 (%) Rarely 3 Don’t Know NA NA NA NA 0.0% 0.0% NA 5. Scrape > 120 ft 2 (%) 0.0% Don’t Know NA NA NA NA 0.0% 0.0% NA 6. Use heat gun (%) 1.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 7. Heat gun > 6 ft 2 (%) 100.0% NA NA NA NA NA NA NA NA 8. Heat gun >

60 ft 2 (%) 0.0% NA NA NA NA NA NA NA NA 9. Hi-speed machine (%) 100.0% 0.0% 0.0% 0.0% 0.0% 1.0% 1.0% 0.0% 0.0%

10. Machine > 6 ft 2 (%) 0.0% NA NA NA NA 100.0% 0.0% NA NA

11. Machine >

60 ft 2 (%) 0.0% NA NA NA NA 50.0% 0.0% NA NA

12. Alternative

to hi-speed

machine Chemical Stripper NA NA NA NA Chemical Stripper Take off chips and prime over NA NA

13. Cost of alternative At least 15% more

per day NA NA NA NA $1500 or $2000 a day Don’t Know NA NA

14. Trim/ moldings > 6 ft 2 (%) 10.0% 0.0% 5.0% 0.0% 0.0% 30.0% 0.0% 0.0% 1.0%

15. Trim/ moldings > 40 ft 2 (%) 2.0% 0.0% 0.0% 0.0% 0.0% 30-50% 0.0% 0.0% 0.5%

16. Trim/ moldings > 80 ft 2 (%) 1.0% 0.0% 0.0% 0.0% 0.0% 10.0% 0.0% 0.0% 0.3%

Imputed Practice Frequencies, by Size Threshold Total scrape >

6 ft 2 (%) a 5.0% 5.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total scrape >

60 ft 2 (%) b 0.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total machine

> 6 ft 2 (%) c 0.0% 0.0% 0.0% 0.0% 0.0% 1.0% 0.0% 0.0% 0.0% Total machine

> 6 ft 2 (%) d 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 0.0% 0.0% 0.0%

a. Calculated as the product of respons es to Question 2 and Question 3. b. Calculated as the product of respons es to Question 2 and Question 4.

c. Calculated as the product of respons es to Question 9 and Question 10. d. Calculated as the product of respons es to Question 9 and Question 11.

3 This firm’s answer of “rarely” was input ted as 1% for calculations of summary statis tics. This approach was used because two other firms, when prompted to assign a percentage value to their response of “r arely” to questions both estimated 1% frequency.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-11 Table 4-5: Summary Statistics for Interior Painting Questionnaire Question Average Median Mode Minimum Maximum 2. Use scraper (%) 6.3% 0.0% 0.0% 0.0% 50.0% 3. Scrape > 6 ft 2 (%) 27.8% 5.5% None 0.0% 100.0% 4. Scrape > 60 ft 2 (%) 0.3% 0.0% 0.0% 0.0% 1.0% 5. Scrape > 120 ft 2 (%) 0.0% 0.0% 0.0% 0.0% 0.0% 6. Use heat gun (%) 0.1% 0.0% 0.0% 0.0% 1.0% 7. Heat gun > 6 ft 2 (%) 100.0% 100.0% None 100.0% 100.0% 8. Heat gun > 60 ft 2 (%) 0.0% 0.0% None 0.0% 0.0% 9. Hi-speed machine (%) 11.3% 0.0% 0.0% 0.0% 100.0% 10. Machine > 6 ft 2 (%) 33.3% 0.0% 0.0% 0.0% 100.0% 11. Machine > 60 ft 2 (%) 16.7% 0.0% 0.0% 0.0% 50.0% 12. Alternative to hi-speed machine None None None None None 13. Cost of alternative None None None None None 14. Trim/ moldings > 6 ft 2 (%) 5.1% 0.0% 0.0% 0.0% 30.0% 15. Trim/ moldings > 40 ft 2 (%) 4.7% 0.0% 0.0% 0.0% 40.0% 16. Trim/ moldings > 80 ft 2 (%) 1.3% 0.0% 0.0% 0.0% 10.0% Imputed Practice Frequencies, by Size Threshold Total Scrape > 6 ft 2 (%) a 1.1% 0.0% 0.0% 0.0% 5.0% Total Scrape > 60 ft 2 (%) b 0.1% 0.0% 0.0% 0.0% 0.5% Total Machine > 6 ft 2 (%) c 0.1% 0.0% 0.0% 0.0% 1.0% Total Machine > 6 ft 2 (%) d 0.1% 0.0% 0.0% 0.0% 0.5%

a. Calculated as the product of individual state responses to Question 2 and Question 3. b. Calculated as the product of individual state responses to Question 2 and Question 4.

c. Calculated as the product of individual state responses to Question 9 and Question 10. d. Calculated as the product of individual state responses to Question 9 and Question 11. The event frequency estimates are based on the average of the responses for each que stion, as calculated from Table 4-4. The median, mode, mi ni mum, and maximum are only pres ented for descriptive purposes.

Frequency of Interior Painting Events Requiring Dust Wipe Testing or Clearance 

### The results from the Interior Painting Firm Questionnair e can be used to estimate the frequency of events affected by the LRRP Clearance Rule. The frequency of interior painting with scraping are approximated from the responses to questions (2) through (5). Resu lts from questions (6) through (8) are used to determine the frequency of interior painting events using a heat gun. Responses from questions (9) through (11) are used for estimation of the frequency of interior painting events involving use of a highspeed machine for paint removal. Responses from qu estion (14) through (16) regarding removal or replacement of trim or moldings are used in combination with the two other questionnaires in order toestablish overall trim/molding event frequency, but these questions represent the frequency of paintingspecific trim or molding removal. Table 4-2 summarizes the survey-based estimation methodologies for interior painti ng event frequencies affected by the Clearance Rule. The results of two different methods are displayed: (1) estimating the job-size frequency as a percentage of the assumed practice frequency in the 2008 analysis, and (2) estimating the job-size frequency as a percentage of the average practice frequency reported in responses to th e Interior Painting Questionnaire (See Table 4-6).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-12 Table 4-6: Estimation of Dust Wipe Testing and Clearance Event Frequencies for Interior Painting Practice Definition Calculation Description Total Number of Events a

Dust Wipe Testing Events Interior Painting with Scraping Average of responses to question 2. 6.3% of Interior Painting

Interior Painting with Scraping > 6 Square Feet Average of responses imput ed from questions 2 and 3. 1.1% of Interior Painting

Interior Painting with Scraping > 60 Square Feet Average of responses imput ed from questions 2 and 4. 0.1% of Interior Painting

Interior Painting with Scraping > 120 Square Feet Average of responses imput ed from questions 2 and 5. None

Interior Painting with Heat Gun Average of responses to question 6. 0.1% of Interior Painting

Interior Painting with Heat Gun > 6 Square Feet Average of responses imput ed from questions 6 and 7. 0.1% of Interior Painting

Interior Painting with Heat Gun > 60 Square Feet Average of responses imput ed from questions 6 and 8. None

Removal of Trim or Molding > 6 Square Feet Average of responses to question 14. 5.1% of Interior Painting

Removal of Trim or Molding > 40 Square Feet Average of responses to question 15. 4.7% of Interior Painting

Removal of Trim or Molding > 80 Square Feet Average of responses to question 16. 1.3% of Interior Painting

Clearance Events Interior Painting with Use of High-Speed Machine for Paint Removal Average of responses to question 9. 11.3% of Interior Painting

Interior Painting with Use of High-Speed Machine > 6 Square Feet Average of responses imput ed from questions 9 and 10. 0.1% of Interior Painting

Interior Painting with Use of High-Speed Machine > 60 Square Feet Average of responses imput ed from questions 9 and 11. 0.1% of Interior Painting

a The estimated number of events is based on the average of the res ponses to the survey questions, as shown in Table 4-5.

4.2.1.3 Carpentry Primary Data Collection (<10 Firms)
Carpentry Survey Instrument 

### The following script was used for administering phone interviews of six carpentry and three general contractor firms. The introduction served to familiari ze contractors with the objectives of the survey and the nature of EPA’s analysis. Information collected from questions (1) through (4) was used to estimate the frequency of window replacement jobs that also involved window frame replacement. Responses to questions (5) through (12) provide data on the fraction of trim or molding removal activities that exceed various size thresholds in bathroom or kitchen remodeling jobs. The results of questions (13) and (14) provide insight into what other renovation events might result in removal of trim or molding.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-13 Figure 4-3: Carpentry Survey Instrument 

### Introduction: Hello, I’m _________, calling from Abt Associ ates. We’re an independent research firm that is doing contract work for the Environmental Protection Agency (EPA). We’d like to ask you a few questions in order to better understand how often different practices that sometimes disturb lead-based paint are used. Your respon ses will be treated as confidential and your name will not be provided to the EPA. There are 14 ques tions in our survey and we expect it to take about 5 minutes.

If asked why: EPA will be proposing to require dust sampling and/or clearance testing after certain renovation practices are used that may dist urb lead-based paint. We will use the responses to our survey to estimate how costly these requirements would be.

1. Do you ever perform window replacement work in buildings built before 1978 for pay?

⁭ Yes ⁭ No (if no skip to Q3)
2. What percentage of your Pre-1978 window replacement jobs involve replacing the window frame?

________ %.
3. Do you ever perform door replacement wo rk in buildings built before 1978 for pay?

⁭ Yes ⁭ No (if no skip to Q5)
4. What percentage of your Pre-1978 door re placement jobs involve replacing the door frame?

________ %.
5. Do you perform kitchen remodeling work in buildings built before 1978 for pay?

⁭ Yes ⁭ No (if no skip to Q7)
6. What percentage of your Pre-1978 kitchen re modeling jobs also involve removing or replacing more than 6 square feet of trim or moldings?

________ %.
7. What percentage of your Pre-1978 kitchen re modeling jobs also involve removing or replacing more than 40 square feet of trim or moldings?

________ %.
8. What percentage of your Pre-1978 kitchen re modeling jobs also involve removing or replacing more than 80 square feet of trim or moldings?

________ %.
9. Do you perform bathroom remodeling work in buildings built before 1978 for pay?

⁭ Yes ⁭ No (if no skip to Q11)Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-14 Figure 4-3: Carpentry Survey Instrument 

### 10. What percentage of your Pre-1978 bathr oom remodeling jobs also involve removing or replacing more than 6 square feet of trim or moldings?

________ %.
11. What percentage of your Pre-1978 bathr oom remodeling jobs also involve removing or replacing more than 40 square feet of trim or moldings?

________ %.
12. What percentage of your Pre-1978 bathr oom remodeling jobs also involve removing or replacing more than 80 square feet of trim or moldings?

________ %.
13. Do you ever replace interior trim or moldings for Pre-1978 jobs that do not also include interior painting, kitchen rem odeling, bathroom remodeling, or wall removal, replacement, or repair?

⁭ Yes ⁭ No (end survey if no)

14.
a. Please describe these jobs that require interior trim or molding replacement without interior painting, kitchen remodeling, bathroom remodeling, or wall/repair replacement.

1. ________________________________________________________
2. ________________________________________________________
3. ________________________________________________________
4. ________________________________________________________
b. When performing a Pre-1978{1st type described in 15a} job, what percentage of the time do you remove trim or moldings?

________ %.
c. When performing a Pre-1978{2nd type described in 15a} job, what percentage of the time do you remove trim or moldings?

________ %.
d. When performing a Pre-1978{3rd type described in 15a} job, what percentage of the time do you remove trim or moldings?

________ %.
e. When performing a Pre-1978{4th type described in 15a} job, what percentage of the time do you remove trim or moldings?

________ %.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-15 Carpentry Survey Responses and Summary of Results 

### Below, individual responses from firms contacted from each state are presented for the entire questionnaire in Table 4-7. Also, summary statistics are calcu lated in Table 4-7 that show the central tendency and range of work practice frequencies re ported by respondents. The averages of the frequencies will be used for estimating the number of events affected by the proposed rule.

Table 4-7: Individual Responses to Carpentry Questionnaire by State Question TX IA MI ME CA ID AL CO NY 2. Window frame (%) 100% 15% NA 100% 90% NA 20% 80% 1% 4. Door frame (%) 100% 60% 100% 80% 60% 10-20% 20% 98% 100% 6. Kitchen trim/molding > 6 ft 2 NA 15% NA 50% 60% >75% 100% 90% 100% 7. Kitchen trim/molding > 40 ft 2 NA 0% NA 10% 20% >75% 100% 50% 100% 8. Kitchen trim/molding > 80 ft 2 NA 0% NA 5% 10% >75% 100% 25% 10% 10. Bath trim/molding > 6 ft 2 0% 40% NA 50% 60% 100% 100% 80% 100% 11. Bath trim/molding > 40 ft 2 0% 0% NA 10% 20% >50% 50% 60% 5% 12. Bath trim/molding > 80 ft 2 0% 0% NA 5% 10% 40% 30% 40% 0%
14a. Alternative trim/molding jobs NA NA NA NA NA Replace b aseboards or interior

casings NA Restoration of past remodeling Paneling or sheet rock in living rooms 14b. Trim/ molding removal (%) NA NA NA NA NA 10% each NA 2% 100% In the following states, firms with SIC codes of 175102 (Carpenters), 175105 (Window Replacement), and 175110 (Doors – Hanging & Cutting) were randomly sample d: Texas, Iowa, Michigan, Maine, Idaho, and New York. In Colorado and California, firms with SIC codes of 152103 (General Contractors), 152105 (Home Improvements), 152115 (Handyman Services), and 152139 (Remodeling & Repairing Build ing Contractors), were randomly sampled.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-16 Table 4-8: Summary Statistics for Carpentry Questionnaire Question Average Median Mode Minimum Maximum Number Responses 2. Window frame (%) 58.0% 80.0% 100.0% 1.0% 100.0% 7 4. Door frame (%) 70.3% 80.0% 100.0% 15.0% 100.0% 9 6. Kitchen trim/molding > 6 ft 2 70.0% 75.0% 100.0% 15.0% 100.0% 7 7. Kitchen trim/molding > 40 ft 2 50.7% 50.0% 100.0% 0.0% 100.0% 7 8. Kitchen trim/molding > 80 ft 2 32.1% 10.0% 10.0% 0.0% 100.0% 7 10. Bath trim/molding > 6 ft 2 66.3% 70.0% 100.0% 0.0% 100.0% 8 11. Bath trim/molding > 40 ft 2 24.4% 15.0% 0.0% 0.0% 60.0% 8 12. Bath trim/molding > 80 ft 2 15.6% 7.5% 0.0% 0.0% 40.0% 8 14a. Alternative trim/molding jobs None None None None None 3 14b. Trim/ molding removal (%) 37.3% 10.0% None 2.0% 100.0% 3 The event frequency estimates are based on the average of the responses for each que stion, as calculated from Table 4-7. The

me dian, mode, minimum, and maximum are on ly presented for descriptive purposes.

Frequency of Removal or Replacement of Window or Door Frames and Trim or Molding Replacement 

### The results from the Carpentry Questio nnaire are used to estimate the fre quency of events affected by the LRRP Clearance Rule. The results from question (2) in the survey are used to estimate the frequency of removing or replacing the frame during window remova l/replacement events. Similarly, responses from question (4) are used to determine the frequency of door removal/replacement events also requiring removal of the door frame. The remainder of respon ses from the Carpentry Survey are used to estimate the frequency of removal of trim or molding in bathroom and kitchen rem odeling jobs (for each size threshold). Table 4-9 summarizes the survey-based estim ation methodologies for window and door event frequencies affected by the Clearance Rule, and Table 4-10 describes the methodology for estimating bathroom and kitchen events involvi ng removal of trim or molding.

Table 4-9: Estimation of Frequency of Removal or Replacement of Window or Door Frames Practice Definition Frequency of Practice a Ratio of Window or Door Events to Total Events b Total Number of Dust Wipe Testing Events

Removal or Replacement of Window Frame 58.0 % (Question 2) 75.0% Windows 58.0% * 75.0% = 43.5% of Window/Door Events Removal or Replacement of Door Frame 70.0% (Question 4) 25.0% Doors 70.0% * 25.0% = 17.6% of Window/Door Events a. The estimated number of events is based on the average of the responses to the survey questions, as shown in Table 4-8. b. Th e ratio of window events to door events was derived fro m data from the 1997 American Housing Survey; for public and commercial building COFs it is assumed that windows and doors are replaced at the same time, and therefore it is assumed that frame replacement occurs 70 percent of the time, the higher of the two frame replacement rates.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-17 Table 4-10: Estimation of Dust Wipe Testing Event Frequencies for Trim or Molding Removal in Kitchen and Bathroom Events

2008 Event Category Practice Definition Frequency of Practice a Total Number of Dust Wipe Testing Events Removal of Trim or Molding > 6 Square Feet 70.0% (Question 6) 70.0% of Kitchen Removal of Trim or Molding > 40 Square Feet 50.7% (Question 7) 50.7% of Kitchen Kitchen Removal of Trim or Molding > 80 Square Feet 32.1% (Question 8) 32.1% of Kitchen Removal of Trim or Molding > 6 Square Feet 66.3% (Question 10) 66.3% of Bathroom Removal of Trim or Molding > 40 Square Feet 24.4% (Question 11) 24.4% of Bathroom Bathroom Removal of Trim or Molding > 80 Square Feet 15.6% (Question 12) 15.6% of Bathroom

a The estimated number of events is based on the average of the res ponses to the survey questions, as shown in Table 4-8.

4.2.1.4 Plaster Primary Data Collection (<10 Firms)
Plaster Survey Instrument 

### The following script was used for administering a phone survey of nine general contractor firms. The introduction served to familiarize contractors with th e objectives of the survey and the nature of EPA’s analysis. Information collected from questions (1) through (4) is used to estimate the frequency of window replacement jobs that also involved window frame replacement. Responses to questions (5) through (12) provide data on the fr action of trim or molding removal activities that exceed varying size thresholds in bathroom or kitchen remodeling jobs. The results of questions (13) and (14) provide insight into what other renovation events might result in rem oval of trim or molding. The purpose of questions (15) through (19) was to determine how frequently trim or moldings are removed in wall-disturbing events. And finally, responses to questions (20) through (23) serve to estimate the frequency of destructive removal of plaster walls in different size increments.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-18 Figure 4-4: Plaster Survey Instrument 

### Introduction: Hello, I’m _________, calling from Abt Associates. We’re an independent research firm that is doing contract work for the Environmental Protection Agency (EPA). We’d like to ask you a few questions in order to better understand how often diff erent practices that sometimes disturb lead-based paint are used. Your responses will be treated as conf idential and your name will not be provided to the EPA. There are 23 questions in our survey and we expect it to take about 10 minutes. If asked why: EPA will be proposing to require dus t sampling and/or clearance testing after certain renovation practices are used that may disturb lead-based paint. We will use the responses to our survey to estimate how costly these requirements would be. 1. Do you perform wall removal, wall replacement or wall repair work in buildings built before 1978 for pay?

⁭ Yes ⁭ No (if no, end) 2. What percentage of your Pre-1978 wall removal, wall replacement or wall repair jobs also involve replacing more than 6 square feet of trim or moldings?
________ %. 3. What percentage of your Pre-1978 wall removal, wall replacement or wall repair jobs also involve replacing more than 40 square f eet of trim or moldings? ________ %. 4. What percentage of your Pre-1978 wall removal, wall replacement or wall repair jobs also involve replacing more than 80 square f eet of trim or moldings? ________ %. 5. What percentage of your Pre-1978 wall removal, wall replacement or wall repair jobs involve removing all or part of a plaster wall? ________ %. 6. What percentage of the time do you use destruc tive means, such as a sl edgehammer, when you are removing all or part of a Pre-1978 plaster wall? ________ %. 7. When removing all or part of a Pre-1978 plaster wa ll using destructive means, what percentage of the time do you remove more than 6 s quare feet of plaster wall? ________ %. 8. When removing all or part of a Pre-1978 plaster wa ll using destructive means, what percentage of the time do you remove more than 40 square feet of plaster wall? ________ %. 9. When removing all or part of a Pre-1978 plaster wa ll using destructive means, what percentage of the time do you remove more than 60 square feet of plaster wall? ________ %.

Plaster Questionnaire Responses and Summary of Results 

### Below, individual responses from firms contacted from each state are presented for the entire questionnaire in Table 4-11. For practices for which both an overall frequency q uestion and relative sizespecific frequency questions were asked of firms, the pe rcentage with which each respondent used a workEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-19 

### practice for a certain size threshold was imputed, and then the average was taken across respondents. In other cases, the simple averages of the frequencies are u sed for estimating the number of events affected by the proposed rule. Summary sta tistics are also calculated in Table 4-12 to show the central tendency and range of work practice frequencies reported by respondents. For practices which do not require combining overall and relative size-specific frequencies as described a bove, the simple averages of the frequencies will be used for estimating the number of events affected by the proposed rule.

Table 4-11: Individual Responses to Plaster Questionnaire by State Question TX IA MI ME CA ID AL CO NY

2. Wall trim/ molding > 6 ft 2 (%) 30% 40% <5% 50% 40% 100% 100% 100% 10- 15% 3. Wall trim/ molding > 40 ft 2 (%) 10% 40% 0.5% 20% 30% 50% 0% 80% 8-12%

4. Wall trim/ molding > 80 ft 2 (%) 10% 10% 0% 5% 10% 10% 0% 50- 60% 2-3% 5. Plaster wall (%) 30% 2% 1% 5% 0% 0% 0% 100% 70% 6. Destructive means (%) 10% 100% 1% 5% NA NA NA 30% 100%

7. Destructive plaster > 6 ft 2 (%) 100% Don’t Know 100% 30% NA NA NA 100% 90%

8. Destructive plaster > 40 ft 2 (%) 100% Don’t Know 10% 15% NA NA NA 80% 90%

9. Destructive plaster > 60 ft 2 (%) 0% Don’t Know 1% 10% NA NA NA 70% 90% Imputed Practice Frequencies, by Size Threshold Total destructive plaster > 6 ft 2 (%) a 3.0% 0.0% 0.0% 0.1% 0. 0% 0.0% 0.0% 30.0% 63.0% Total destructive plaster > 40 ft 2 (%) b 3.0% 0.0% 0.0% 0.0% 0. 0% 0.0% 0.0% 24.0% 63.0% Total destructive plaster > 60 ft 2 (%) c 0.0% 0.0% 0.0% 0.0% 0. 0% 0.0% 0.0% 21.0% 63.0%

a. Calculated as the product of indi vidual state responses to Question 5, Question 6, and Question 7. b. Calculated as the product of indi vidual state responses to Question 5, Question 6, and Question 8.

c. Calculated as the product of indi vidual state responses to Question 5, Question 6, and Question 9. For all states, firms with SIC codes of 152103 (General Contractors), 152105 (Home Improvements), 152115 (Handyman Services), and 152139 (Remodeling & Repairing Build ing Contractors), were randomly sampled.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-20 Table 4-12: Summary Statistics for Plaster Questionnaire Question Average Median Mode Minimum Maximum 2. Wall trim/ molding > 6 ft 2 (%) 53.1% 40.0% 100.0% 5.0% 100.0% 3. Wall trim/ molding > 40 ft 2 (%) 26.7% 20.0% 10.0% 0.0% 80.0% 4. Wall trim/ molding > 80 ft 2 (%) 11.4% 10.0% 10.0% 0.0% 55.0% 5. Plaster wall (%) 23.1% 4 2.0% 0.0% 0.0% 100.0% 6. Destructive means (%) 41.0% 20.0% 100.0% 1.0% 100.0% 7. Destructive plaster > 6 ft 2 (%) 84.0% 100.0% 100.0% 30.0% 100.0% 8. Destructive plaster > 40 ft 2 (%) 59.0% 80.0% None 10.0% 100.0% 9. Destructive plaster > 60 ft 2 (%) 34.2% 10.0% None 0.0% 90.0% Imputed Practice Frequencies, by Size Threshold Total destructive plaster > 6 ft 2 (%) a 10.7% 0.0% 0.0% 0.0% 63.0% Total destructive plaster > 40 ft 2 (%) b 10.0% 0.0% 0.0% 0.0% 63.0% Total destructive plaster > 60 ft 2 (%) c 9.3% 0.0% 0.0% 0.0% 63.0%

a. Calculated as the product of indi vidual state responses to Question 5, Question 6, and Question 7. b. Calculated as the product of indi vidual state responses to Question 5, Question 6, and Question 8.

c. Calculated as the product of indi vidual state responses to Question 5, Question 6, and Question 9. The event frequency estimates are based on the average of the responses for each que stion, as calculated from Table 4-11. The median, mode, mi ni mum, and maximum are only pres ented for descriptive purposes.

Frequency of Plaster Wall Removal Using Destructive Means 

### Responses from the Plaster Survey are used to estim ate the frequency of events affected by the LRRP Clearance Rule. Table 4-13 displays the plaster questionnaire results from above being used to calculate event frequencies for the rem oval or replacement of pl aster wall using destructive means. Frequencies are estimated for various job sizes: greater than 6 square feet, greater than 40 square feet, and greater than 60 square feet.

Table 4-13: Estimation of Frequency of Plaster Removal Using Destructive Means Practice Definition Calculation Des cription Total Number of Clearance Events a Removal or Replacement of Plaster Wall > 6 Square Feet Using Destructive Means Average of responses imputed from questions 5, 6, and 7. 10.7% of Wall Removal/Replacement

Removal or Replacement of Plaster Wall > 40 Square Feet Using Destructive Means Average of responses imputed from questions 5, 6, and 8. 10.0% of Wall Removal/Replacement

Removal or Replacement of Plaster Wall > 60 Square Feet Using Destructive Means Average of responses imputed from questions 5, 6, and 9. 9.3% of Wall Removal/Replacement

a The estimated number of events is based on the average of the res ponses to the survey questions, as shown in Table 4-12.



### Since wall removals and replacements are only a sub set of all wall-disturbing (and other renovation) events, it is necessary to convert the frequencies above into overall proportions of 2008 LRRP Events. See Table 4-14 for this conversion.

4 This value is consistent with data from HUD’s 2001 National Survey of Lead and Allergens in Housing, which reports that 31% of painted walls in pre-1978 housing are plaster. Since not all wa ll repair jobs require removing all or part of the wall, the fraction of such jobs rem oving plaster walls will be less than the percentage of houses with plaster walls.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-21 Table 4-14: Estimation of Event Frequencies for Removal or Replacement of Plaster Walls Using Destructive Means 2008 Event

Category Frequency of Wall Removal or

Replacement a Practice Definition Frequency of Practice b Total Number of Clearance Events

Removal/ Replacem ent of Plaster Wall > 6 Square Feet Using Destructive Means 10.7% * 20.0% = 2.1% 2.1% of Kitchen

Removal or Replacement of Plaster Wall > 40 Square Feet Using Destructive Means 10.0% * 20.0% = 2.0% 2.0% of Kitchen Kitchen 20% (AHS, 1997)

Removal or Replacement of Plaster Wall > 60 Square Feet Using Destructive Means 9.3% * 20.0% = 1.9% 1.9% of Kitchen

Removal or Replacement of Plaster Wall > 6 Square Feet Using Destructive Means 10.7% * 21.0% = 2.2% 2.2% of Bathroom

Removal or Replacement of Plaster Wall > 40 Square Feet Using Destructive Means 10.0% * 21.0% = 2.1% 2.1% of Bathroom Bathroom 21% (AHS, 1997)

Removal or Replacement of Plaster Wall > 60 Square Feet Using Destructive Means 9.3% * 21.0% = 2.0% 2.0% of Bathroom

Removal or Replacement of Plaster Wall > 6 Square Feet Using Destructive Means 10.7% * 25.0% = 2.7% 2.7% of Additions

Removal or Replacement of Plaster Wall > 40 Square Feet Using Destructive Means 10.0% * 25.0% = 2.5% 2.5% of Additions Additions 25% (AHS, 1997)

Removal or Replacement of Plaster Wall > 60 Square Feet Using Destructive Means 9.3% * 25.0% = 2.3% 2.3% of Additions

Removal or Replacement of Plaster Wall > 6 Square Feet Using Destructive Means 10.7% * 10.0% = 1.1% 1.1%of WallDisturbing Removal or Replacement of Plaster Wall > 40 Square Feet Using Destructive Means 10.0% * 10.0% = 1.0% 1.0% of WallDisturbingWallDisturbing 10% (AHS, 1997)

Removal or Replacement of Plaster Wall > 60 Square Feet Using Destructive Means 9.3% * 10.0% = 0.9% 0.9%of WallDisturbing

a The frequency represents the share of instances for an event category where a wall is removed or replaced according to American Housing Survey data. For example, a wall is removed or replaced in 20% of kitchen renovations and 21% of bathroom renovations. In the case of wall-disturbing events, 10% involv e removing or replacing a wall, and the remaining 90% involve less extensive work, such as cutting a hole in the wall. b Based on the Frequency of Wall Removal or Replacement in this row, and the Total Number of Clearance Events from Table 4-13

Frequency of Removal of Trim or Molding Replacement During Wall Repair/Replacement 

### The results from the Plaster Questionnaire can be u tilized to estimate the frequency of wall removal or repair events affected by the trim and mold ing specifications of the LRRP Clearance Rule. 5 

### The frequency of removal of greater than 6 square feet of trim or molding in proportion to 2008 total events can be approximated from question (2) of the plaster su rvey; the frequency of removal of greater than 40 square feet of trim or molding can be estimated from question (3); and the frequency of removal of

5 These are separate from the trim and mold ing replacements during kitchen and bathr oom renovation events th at were estimated using the Carpentry Questionnaire.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-22 

### greater than 80 square feet of trim or molding can be estimated from question (4). Table 4-15 summarizes the survey -based estimation methodologies for the even t frequencies of wall removal or repair requiring removal of trim or molding.

Table 4-15: Estimation of Frequency of Removal of Trim or Molding for Wall Replacement/Repair Events Practice Definition Frequency of Practice a Total Number of Dust Wipe Testing Events Removal of Trim or Molding > 6 Square Feet 53.1% (Plaster Survey, Question 2) 53.1% of Wall Replacement/Repair

Removal of Trim or Molding > 40 Square Feet 26.7% (Plaster Survey, Question 3) 26.7% of Wall Replacement/Repair

Removal of Trim or Molding > 80 Square Feet 11.4% (Plaster Survey, Question 4) 11.4% of Wall Replacement/Repair

a The estimated number of events is based on the average of the res ponses to the survey questions, as shown in Table 4-12.



### As in the estimation of the frequency of removal or demolition of a plaster wall using destructive means, wall removals and replacements repr esent only a subset of all wall-di sturbing (and other renovation) events. Therefore, it is necessary to convert th e frequencies above into overall proportions of walldisturbing events and additions. Th is calculation is demonstrated in Table 4-16 below.

Table 4-16: Estimation of Final Event Frequencies for Removal of Trim or Molding 2008 Event

Category Frequency of Wall Removal or

Replacement a Practice Definition Frequency of Practice b Total Number of Dust Wipe Testing Events Removal of Trim or Molding > 6 Square Feet 53.1% * 25.0% = 13.3% 13.3% of Additions Removal of Trim or Molding > 40 Square Feet 26.7% * 25.0% = 6.7% 6.7% of Additions Additions 25% (AHS, 1997) Removal of Trim or Molding > 80 Square Feet 11.4% * 25.0% = 2.8% 2.8% of Additions Removal of Trim or Molding > 6 Square Feet 53.1% * 10.0% = 5.3% 5.3% of WallDisturbing Removal of Trim or Molding > 40 Square Feet 26.7% * 10.0% = 2.7% 2.7% of WallDisturbingWallDisturbing 10% (AHS, 1997) Removal of Trim or Molding > 80 Square Feet 11.4% * 10.0% = 1.1% 1.1% of WallDisturbing

a The frequency represents the share of instances for an event category where a wall is removed or replaced according to American Housing Survey data. A wall is removed or replaced in 25% of additions In the case of wall-disturbing events, 10% involve removing or replacing a wall, and the remaining 90% in volve less extensive work, such as cutting a hole in the wall. b Based on the Frequency of Wall Removal or Replacement in this row, and the Total Number of Dust Wipe Testing Events from Table 4-15.



### 4.2.2 Event Frequencies Based on Secondary Data Sources

4.2.2.1 Cabinet Removal 

### For cabinet replacement events – which under the pro posed Clearance Rule result in additional dust wipe testing requirements – no primary data collection was used to estimate event fre quencies. According to the 1997 American Housing Survey, 58% of kitc hen renovations and 42% of bathroom renovations involve cabinet replacement. According to HUD (2001) data, 10.5% of kitchen’s have cabinets with an aggregate area larger than 6 square feet and less than 40 square feet, 27.5% have between 40 and 80Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-23 

### square feet, and 62 percent have mo re than 80 square feet. It is assumed that all bathroom cabinet removal is between 6 and 40 square feet. In order to calculate the exact frequency for each cabinet job size, the following frequencies are multiplied: th e percentage of renovations involving cabinet replacement, and the percentage of these jobs of a given square footage size threshold. These computations are presented in Table 4-17 below.

Table 4-17: Estimation of Frequency of Removal of Cabinets

2008 Event Category Practice Definition F requency of Practice Total Number of Dust Wipe Testing/ Clearance Events Removal of Cabinets > 6 Square Feet 58.0% * 100.0% = 58.0% 58.0% of Kitchen Removal of Cabinets > 40 Square Feet 58.0% * 89.5% = 51.9% 51.9% of Kitchen Kitchen

Removal of Cabinets > 80 Square Feet 58.0% * 62.0% = 36.0% 36.0% of Kitchen Removal of Cabinets > 6 Square Feet 42.0% * 100.0% = 42.0% 42.0% of Bathroom Removal of Cabinets > 40 Square Feet 42.0% * 0.0% = 0.0% None Bathroom

Removal of Cabinets > 80 Square Feet 42.0% * 0.0% = 0.0% None Sources: American Housing Survey (C ensus 1997) and National Survey of Lead and Allergens in Housing (HUD 2001)



### 4.2.3 Summary of Event Frequencies
Table 4-18 and Table 4-19 summarize the frequency estimation m ethodology for all dust wipe testing and clearance events affected by this revision to the 200 8 LRRP Rule, including options for different job size thresholds.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-24 Table 4-18: Dust Wipe Testing Renovation Events

Clearance Rule Events Event Freq uency Event Estimation Method Interior Painting With Scraping a 6.3% of Interior Painting Based on Pr imary Data Collection from <10 Firms

(>6 sq. ft. per job) 1.1% of Interior Painti ng Based on Primary Data Collection from <10 Firms (>60 sq. ft. per job) 0.06% of Interior Painti ng Based on Primary Data Collection from <10 Firms (>120 sq. ft. per job) None Based on Primary Data Collection from <10 Firms Interior Painting With Heat Gun a 0.1% of Interior Painting Based on Pr imary Data Collection from <10 Firms
(>6 sq. ft. per job) 0.1% of Interior Painting Based on Pr imary Data Collection from <10 Firms (>60 sq. ft. per job) None Based on Primary Data Collection from <10 Firms
Removal of Trim or Molding b

(> 6 sq. ft. per job) 5.1% of Interior Painting; 70.0% of Kitchen Renovations; 66.3% of Bathroom Renovations; 13.3% of Additions; 5.3% of Wall-Disturbing Events. Based on Primary Data Collection from <10 Firms

(> 40 sq. ft. per job) 4.7% of Interior Painting; 50.7% of Kitchen Renovations; 24.4% of Bathroom Renovations; 6.7% of Additions; 2.7% of Wall-Disturbing Events. Based on Primary Data Collection from <10 Firms

(> 80 sq. ft. per job) 1.3% of Interior Painting; 32.1% of Kitchen Renovations; 15.6% of Bathroom Renovations; 2.8% of Additions; 1.1% of Wall-disturbing Events. Based on Primary Data Collection from <10 Firms

Removal of Cabinets c

(> 6 sq. ft. per job) 58.0% of Kitchen Renovations 42.0% of Bathroom Renovations Based on data from the 1997 American Housing Survey and HUD’s 2001 National Survey of Lead and Allergens in Housing.

(> 40 sq. ft. per job) 51.9% of Kitchen Renovations Based on data from the 1997 American Housing Survey and HUD’s 2001 National Survey of Lead and Allergens in Housing.

(> 80 sq. ft. per job) 36.0% of Kitchen Renovations Based on data from the 1997 American Housing Survey and HUD’s 2001 National Survey of Lead and Allergens in Housing. Removal or Replacement of Windows Frames d 43.5% of Window/Door Events Based on Pr imary Data Collection from <10 Firms
Removal or Replacement of Door Frames d 17.6% of Window/Door Events Based on Pr imary Data Collection from <10 Firms

a Source: Table 4-6

. b Source: Table 4-6, Table 4-10, and Table 4-16.

c Source: Table 4-17. d Source: Table 4-9.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-25 Table 4-19: Clearance Renovation Events

Clearance Rule Events Event Freq uency Event Estimation Method Plaster – Demolish, or Remove through Destructive Means a

(> 6 sq. ft. per job) 2.1% of Kitchen Renovations; 2.2% of Bathroom Renovations; 2.7% of Additions; 1.1% of Wall-Disturbing Events. Based on Primary Data Collection from <10 Firms

(> 40 sq. ft. per job) 2.0% of Kitchen Renovations; 2.1% of Bathrooms Renovations; 2.5% of Additions; 1.0% of Wall-Disturbing Events. Based on Primary Data Collection from <10 Firms

(> 60 sq. ft. per job) 1.9% of Kitchen Renovations; 2.0% of Bathroom Renovations; 2.3% of Additions; 0.9% of Wall-Disturbing Events. Based on Primary Data Collection from <10 Firms

Interior Painting with High-Speed Machine Paint Removal b 11.3% of Interior Painting Based on Pr imary Data Collection from <10 Firms

(> 6 sq. ft. per job) 0.1% of Interior Pa inting Based on Primary Data Collection from <10 Firms (>60 sq. ft. per job) 0.1% of Interior Pa inting Based on Primary Data Collection from <10 Firms

a Source: Table 4-14 b Source: Table 4-6



### 4.2.4 Total Number of Dust Wipe Testing and Clearance Events
This section describes the methodology for applying the event frequencies described above to the numbers of events estimated for the economic analysis of the 2008 LRRP rule in order to estimate the number of dust wipe testing and clearance events.

4.2.4.1 Threshold Options for Amount of Painted Surfaces Disturbed 

### Under the proposed rule, dust wipe testing or clear ance would be required after performing certain types of RRP events where the total amount of painted surf aces disturbed is larger than a specified threshold (measured in square feet). This analysis in cludes an analysis of three threshold options:

1. Low Threshold Option

 All event types requiring dust wipe testing where the total job size is larger than 6 square feet.

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet. 2. Proposed Threshold Option

 Dust wipe testing is required for:

- cabinet and trim events larger than 40 square feet,

- scraping of paint larger than 60 square feet,

- heat gun removal of more than 6 square feet

- Window frame or door frame removal events

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet. 3. High Threshold OptionEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-26 

###  Dust wipe testing is required for:

- cabinet and trim events larger than 80 square feet,

- scraping or heat gun removal of paint larger than 120 square feet, and

- window frame or door frame removal events.

 Clearance is required for:

- high-speed machine removal of paint larger than 60 square feet, and

- plaster removal using destructive means, larger than 60 square feet.

For units undergoing regulated RRP activities, the number of events requiring either dust wipe testing or clearance was estimated. Table 4-20 presents these event types, the areas in whic h they occur, the type of cleaning verification required, and th e size thresholds relevant to each.

Table 4-20: Event Types Requiring Dust Wipe Testing and Clearance by Size Threshold

Event Area Threshold Event Type Bath Kit Add Wall WD Paint Activity Low Proposed High Cabinet Removal X X DWT 6 40 80 Trim/Molding Removal X X X X X DWT 6 40 80

Window / Door Frame Removal X DWT n/a n/a n/a
Painting w/ Scraping X DWT 6 60 120 Painting w/ Heat Gun X DWT 6 6 60

Paint Removal w/ High-Speed Machine X DWT & C 6 6 60

Plaster Removal w/ Destructive Means X X X X DWT & C 6 6 60

Bath = Bathroom renovation; Kit = Kitchen renovation; A dd = Addition; Wall = Wall disturbing event; WD = window frame or door frame event; Paint = Interior Painting DWT = Dust Wipe Testing C = Clearance



### As shown in the table, window and door frame remova l events do not have size thresholds associated with them. It is assumed that any window or door frame removal event will require dust wipe testing, though the necessary amount of dust wipe testing will be depe ndent on the number of rooms in the work area. For bathroom cabinet removal events, all such events were assumed to disturb between 6 and 40 square feet of cabinetry.

4.2.4.2 Estimating the Number of Dust Wipe Testing and Clearance Events 

### Three pieces of information were necessary to estim ate the number of dust wipe testing and clearance events for each option: (1) the probability that an even t occurs above the specified size threshold, (2) the mutually exclusive probability that an event only occurs in a single room within a unit and where no other event occurs within that unit, and (3) the joint probabilit y that either an event occurs in multiple rooms within a unit or with any combination of other events within the unit. The determination of mutually exclusive and joint events has two component s: (1) the event type (e.g., cabinet removal), andEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-27 

### (2) the room in which the event takes place (e.g., bath room). A mutually exclusive event is defined as a single event type occurring only in a single room within a unit, given that no other event types occur. Conversely, a joint event could be any combination of event types occurring within the same unit, or any combination of a single event type occurring in multip le rooms within the unit. The probabilities that events occur above different size th resholds are described in sections 4.2.1, 4.2.2, and 4.2.3
Avoiding Double Counting 

### Calculating the mutually exclusive and joint proba bilities for all event typ es was necessary to avoid double counting. For example, it was estimated that cabinets and trim are replaced during 32.8% and 66.3% of bathroom remodeling events, respectively. Simply multiplying the number of bathroom remodeling events by the sum of these probabilities (99. 1%) to estimate the number of dust wipe testing events due to cabinet or trim replacement will do uble count instances where cabinets and trim were replaced at the same time. In cases such as this, two ev ent types occur in the same room of a single unit. The unit should therefore only be counted once. Othe r joint events consist of one or more event types occurring in multiple rooms of a single unit. For example, a bathroom cabinet removal event and a kitchen trim removal event may occur during a singl e job. As in the previous example, simply multiplying the probabilities of a bathroom cabinet re moval and of a kitchen trim removal by the number of units where bathrooms and kitchens are remodeled would count such multiple-event jobs twice. To avoid double counting multiple-eve nt units, the probability of a unit having a mutually exclusive event is added to the probability of a un it having joint events. In the simplified case of two events types, E 1 

### and E 2 

### , with probabilities that each occur, p 1 

### and p 2 

### , respectively, the total number of affected units can be calculated as follows: (1) Probability of each event occurring by itself: Probability of E 1 

### only : p 1 

### (only) = p 1 

### * (1 – p 2 

### ) Probability of E 2 

### only : p 2 

### (only) = p 2 

### * (1 – p 1 

### )

(2) Probability of both events occurring together: Probability of E 1 

### and E 2 

### : p 1,2 

### (joint) = p 1 

### * p 2



### (3) Total number of units where E 1 

### and/or E 2 

### occur: Affected units = u * ( p 1 

### (only) + p 2 

### (only) + p 1,2 

### (joint) )

Where: u = the number of units where E 1 

### or E 2 

### could occur Although this example has two event types, the methodology can be extended to determine the number of affected units for any number of event types and rooms in which events o ccur. Note that for these calculations the analysis relies on the simplif ying assumption that these joint probabilities are independently distributed. In reality, these activities ar e more likely to occur together. Therefore, this simplifying assumption introduces an upward bias to estimates of the number of dust wipe and clearance events, but the magnitude of this bias is unknown.
Grouping Events into Options by Size 

### This analysis evaluates three threshold options for triggering the dust wipe testing and clearance requirements of the rule. The proposed clearance rule sets thresholds that are specific to the entire job (as opposed to being a component-specific threshold). T hus, it is possible that two smaller renovation tasks occurring in the same unit could trigger the rule’s re quirements, even if the tasks would not exceed theEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-28 

### threshold when being performed in isolation. The t asks defined in this analysis that may contribute toward the same threshold requirements are as follows:

• Removing more than 40 square feet of trim, molding, cabinets, or other fixtures

o Replace kitchen cabinets

o Replace bathroom cabinets

o Replace kitchen trim

o Replace bathroom trim

o Replace trim during painting

o Replace trim during addition

o Replace trim during other wall disturbing event

• Demolition, or removal through destructive means, of more than 6 square feet of plaster and lath building component

o Destructive removal of plaster and lath building component during kitchen remodel

o Destructive removal of plaster and lath building component during bathroom remodel

o Destructive removal of plaster and lath building component during an addition

o Destructive removal of plaster and lath building component during another walldisturbing event Thus, in order to calculate whether an entire job ex ceeded the applicable threshold it was assumed that the average size for a particular task is the midpoint between consecutive size thresholds. For example, an average size of 23 square feet was assumed for a bath room cabinet removal event, the midpoint between 6 and 40 square feet. Based on this assumption, the amount of painted surf aces disturbed was combined for multiple-event jobs to determine whether the events exceed the thresholds. For example, suppose a unit undergoes both bathroom cabinet and kitchen cabinet removal events th at are between 6 and 40 square feet. Because the estimated total job size is greater than 40 square feet (23 plus 23 equals 46), this job is assumed to exceed the proposed threshold option.
Determining Maximum Room Area Size 

### As in the estimation of work area sizes for the 2008 LRRP rule, the size of the work area requiring dust wipe testing after a multiple-event job is assumed to be equal to the maximum work area size of the individual events. This assumption accounts for the overlap of different renovation activities occurring within the same unit (for example, replacing cabinets and re-painting a kitchen). Bathroom and kitchen events are exceptions because they are separate rooms within a unit and thus cannot overlap; the sum of their work areas is compared to other event sizes. For example, if the sum of a bathroom and kitchen event is 208 square feet and a 112 square foot paintin g event is also occurring in the same unit, it is assumed that the painting was performed in the bathroom and kitchen; therefore, the event size would be 208 square feet.

4.2.4.3 Total Number of Dust Wipe Testing and Clearance Events 

### The analysis calculated the probabilities for all possi ble combinations of event types and sizes. These probabilities were then applied to the estimates of un its performing events compliant with the 2008 LRRPEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-29 

### rule and 2009 proposed opt-out rule requirements . The resulting data included the number of units requiring dust wipe testing or clearance for each size threshold option. These data were then grouped by the maximum work ar ea sizes to determine the appropriate allocation of dust wipe testing or clearance costs. 6 

### Testing costs are dependent on work area size, as larger work areas require more dust wipe tests and more re-cleaning when necessary. Testing costs also depend on the probability that a floor is carpeted because the proposed rule only requires dust wipe tests for uncarpeted floors. As the probability that a floor is carpeted differs for bathrooms and kitchens compared to events performed in other rooms, it was necessary to distinguish between bathroom, kitchen, and othe r events. In addition, firms performing RRP work in renter-occupied property will incur different paperwork costs than firms performing work in owner-occupied buildings under the proposed LRRP clearance rule, because the dus t wipe testing report must be provided to both the owner and the occupant. Table 4-21 through Table 4-24 present the resulting number of events for dust wipe testing and clearance. Events are presented by building tenu re, building type, work area size, and occurrence of a bathroom or kitchen event. Note that events in public and co mmercial building COFs are always assumed to exceed the highest size threshold option. Table 4-25 presents the total number of dust wipe testing and clearance events for by the type of activity triggering th e dust wipe testing or clearance requirements.

6 The work area sized utilized in this an alysis were estimated for EPA’s analysis of the 2008 LRRP rule, and are shown below in Table 4-40 through Table 4-49.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-30 Table 4-21: Target Housing Events (thousands): First Year, Low Threshold Option Dust Wipe Testing Clearance Total Size SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Events Excluding Kitchen or Bathroom Bath 34 2 21 21 7.8 0.4 4.8 4.7 41 2 26 25 94 Kit 102 6 33 31 1.5 0.1 0.2 0.2 104 6 33 31 173 Bath+Kit 1 0 0 0 0.3 0.0 0.0 0.0 1 0 0 0 2 S-Paint 53 3 25 38 1.3 0.1 0.5 0.8 55 3 25 39 122 M-Paint 28 2 14 24 0.5 0.0 0.2 0.4 28 2 14 25 69 L-Paint 26 1 13 23 0.4 0.0 0.2 0.4 26 2 14 24 65 S-WD 96 5 32 30 0.3 0.0 0.1 0.0 96 5 32 30 163 L-WD 101 6 32 31 0.6 0.0 0.1 0.1 101 6 32 31 171 Subtotal 441 25 170 199 12.6 0.6 6.2 6.6 453 25 176 205 860 Events Including Kitchens or Bathrooms Bath 97 4 149 89 3.7 0.2 5.8 3.3 101 4 155 93 353 Kit 116 7 141 149 4.5 0.2 4.5 4.7 121 7 145 154 427 Bath+Kit 35 4 87 31 2.7 0.3 6.3 2.1 37 5 93 33 168 S-Paint 4 0 6 3 0.2 0.0 0.3 0.2 5 0 6 4 15 M-Paint 5 0 4 5 0.3 0.0 0.2 0.3 5 0 4 6 15 L-Paint 2 0 5 2 0.2 0.0 0.4 0.1 2 0 5 2 9 S-WD 6 0 5 0 0.2 0.0 0.2 0.0 6 0 5 0 11 L-WD 16 1 10 5 0.8 0.0 0.4 0.2 17 1 10 5 33 Subtotal 281 17 405 285 12.7 0.8 18.1 10.8 294 18 423 296 1,030 All Events Total 722 42 574 483 25.3 1.4 24.3 17.4 747 43 599 501 1,890 The following abbreviations are used: SF-O indicates si ngle-family owner-occupied; MF -O indicates multi-family owner-occupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath+Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painting sized event; M-Paint indicates a medium painting sized event; L-Paint indicates a large painting sized event; S-WD indicates a small wind ow/door sized event; L-WD indicates a large window/door sized event.

A “bathroom size” or “kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: Bathroom size: wall-disturbing events, addition events Kitchen size: wall-disturbing even ts, addition events, wi ndow/door replacements Bathroom + kitchen size: wall-disturbing events, addition events

“0” and “0.0” indicate more than zero but fewer than 500 and 50 events respectively.

Events excluding kitchens or bathroom s are calculated separately from even ts including kitchens and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the house, and dust wipe samples are only taken on uncarpeted floors.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-31 Table 4-22: Target Housing Events (thousands): First Year, Proposed Option Dust Wipe Testing Clearance Total Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Events Excluding Kitchen or Bathroom Bath 17 1 11 10 8.1 0.4 5.3 4.9 25 1 16 15 58 Kit 104 6 35 32 1.7 0.1 0.3 0.3 106 6 35 32 179 Bath+Kit 1 0 0 0 0.3 0.0 0.1 0.0 1 0 0 0 1 S-Paint 42 2 19 30 1.2 0.1 0.5 0.8 43 2 20 31 96 M-Paint 22 1 11 19 0.5 0.0 0.2 0.4 22 1 11 19 54 L-Paint 20 1 10 18 0.4 0.0 0.2 0.4 21 1 11 19 51 S-WD 101 6 34 31 0.3 0.0 0.1 0.0 101 6 34 31 172 L-WD 104 6 35 32 0.6 0.0 0.1 0.1 105 6 35 32 178 Subtotal 410 23 155 173 13.2 0.6 6.9 6.9 424 24 162 180 789 Events Including Kitchens or Bathrooms Bath 52 2 80 48 3.5 0.2 5.5 3.1 56 2 86 51 195 Kit 102 6 124 133 4.4 0.2 4.6 4.8 106 6 128 137 379 Bath+Kit 35 5 87 31 2.6 0.3 6.1 2.0 38 5 93 33 169 S-Paint 4 0 5 3 0.2 0.0 0.2 0.1 4 0 5 3 12 M-Paint 4 0 3 4 0.2 0.0 0.1 0.2 4 0 3 5 12 L-Paint 2 0 4 1 0.1 0.0 0.3 0.1 2 0 4 1 8 S-WD 3 0 3 0 0.2 0.0 0.2 0.0 3 0 3 0 6 L-WD 13 1 7 4 0.8 0.0 0.4 0.2 13 1 8 4 26 Subtotal 215 14 313 224 12.1 0.8 17.4 10.5 227 15 331 234 807 All Events Total 625 37 468 397 25.3 1.4 24.3 17.4 650 39 493 414 1,596 The following abbreviations are used: SF-O indicates si ngle-family owner-occupied; MF -O indicates multi-family owner-occupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath+Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painting sized event; M-Paint indicates a medium painting sized event; L-Paint indicates a large painting sized event; S-WD indicates a small wind ow/door sized event; L-WD indicates a large window/door sized event.

A “bathroom size” or “kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: Bathroom size: wall-disturbing events, addition events Kitchen size: wall-disturbing even ts, addition events, wi ndow/door replacements Bathroom + kitchen size: wall-disturbing events, addition events

“0” and “0.0” indicate more than zero but fewer than 500 and 50 events respectively.

Events excluding kitchens or bathroom s are calculated separately from even ts including kitchens and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the house, and dust wipe samples are only taken on uncarpeted floors.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-32 Table 4-23: Target Housing Events (thou sands): First Year, High Threshold Option Dust Wipe Testing Clearance Total Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Events Excluding Kitchen or Bathroom Bath 7 0 5 4 7.5 0.4 5.0 4.5 15 1 9 9 34 Kit 108 6 37 33 1.7 0.1 0.3 0.3 109 6 37 33 186 Bath+Kit 0 0 0 0 0.3 0.0 0.2 0.0 1 0 0 0 1 S-Paint 12 1 5 8 0.5 0.0 0.3 0.4 12 1 6 9 27 M-Paint 6 0 3 5 0.2 0.0 0.1 0.2 6 0 3 5 14 L-Paint 5 0 3 5 0.2 0.0 0.1 0.2 5 0 3 5 13 S-WD 106 6 37 33 0.3 0.0 0.1 0.0 107 6 37 33 182 L-WD 107 6 37 33 0.5 0.0 0.1 0.1 108 6 37 33 184 Subtotal 351 20 126 121 11.3 0.5 6.1 5.7 363 20 132 127 642 Events Including Kitchens or Bathrooms Bath 25 1 38 22 3.0 0.1 4.8 2.7 28 1 43 25 97 Kit 84 5 102 110 3.7 0.2 4.2 4.2 87 5 106 114 312 Bath+Kit 32 4 80 29 2.1 0.3 4.8 1.6 34 4 85 30 154 S-Paint 3 0 4 3 0.1 0.0 0.2 0.1 4 0 5 3 11 M-Paint 4 0 3 4 0.2 0.0 0.1 0.1 4 0 3 4 12 L-Paint 2 0 4 1 0.1 0.0 0.2 0.1 2 0 4 1 8 S-WD 2 0 1 0 0.2 0.0 0.1 0.0 2 0 1 0 3 L-WD 10 1 6 3 0.7 0.0 0.4 0.2 10 1 6 3 20 Subtotal 161 11 238 172 10.0 0.7 14.7 9.0 171 12 253 181 617 All Events Total 512 31 364 293 21.4 1.2 20.9 14.6 534 32 385 307 1,258 The following abbreviations are used: SF-O indicates si ngle-family owner-occupied; MF -O indicates multi-family owner-occupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath+Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painting sized event; M-Paint indicates a medium painting sized event; L-Paint indicates a large painting sized event; S-WD indicates a small wind ow/door sized event; L-WD indicates a large window/door sized event.

A “bathroom size” or “kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: Bathroom size: wall-disturbing events, addition events Kitchen size: wall-disturbing even ts, addition events, wi ndow/door replacements Bathroom + kitchen size: wall-disturbing events, addition events

“0” and “0.0” indicate more than zero but fewer than 500 and 50 events respectively.

Events excluding kitchens or bathroom s are calculated separately from even ts including kitchens and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the house, and dust wipe samples are only taken on uncarpeted floors.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-33 Table 4-24: Public and Commercial Building COF Events: First Year, All Options Building Type Dust Wipe Testing Clearance Total Kindergarten (Public) 158 35 192 Kindergarten (Large Private) 23 5 27 Kindergarten (Small Private) 27 6 32 Pre-K + Kindergarten (Public) 123 27 150 Pre-K + Kindergarten (Large Private) 67 15 82 Pre-K + Kindergarten (Small Private) 34 7 41 Daycare Center (Renter-Occupied) 171 37 208 Daycare Center (Owner-Occupied) 117 26 142 Daycare Center (Non-Profit who performs some of own RRP) 149 32 181 Daycare Center (Non-Profit who uses contractors) 55 12 67 Daycare Center (In Public School) 8 2 10 Daycare Center (In Large Private School) 0 0 0 Daycare Center (In Small Private School) 0 0 0 All Events 930 203 1,134 Note: A zero indicates that fewer than one event is performed annually.

Table 4-25: Total First Year Events by Event Type Low Threshold Proposed Threshold High Threshold

Event Type Target Housing Public and Com.

Bldg. COF Total Target Housing Public and Com.

Bldg. COF Total Target Housing Public and Com.

Bldg. COF Total Dust Wipe Testing Events Heat gun, < 1000 degrees 3,633 1 3,635 3,799 1 3,800 - 1 1 Window/door frame removal 483,244 663 483,907 512,852 663 513,515 543,863 663 544,526 Scraping 39,964 89 40,053 2,089 89 2,179 - 89 89 Trim, molding, cabinet removal 687,319 176 687,495 436,450 176 436,626 206,915 176 207,092 Multiple activity
events a 607,308 - 607,308 572,232 - 572,232 449,293 - 449,293 Subtotal, dust wipe testing 1,821,468 930 1,822,398 1,527,422 930 1,528,353 1,200,071 930 1,201,002 Clearance Events High speed paint removal 3,633 160 3,793 3,799 160 3,959 2,027 160 2,187 Plaster demolition through destructive means 21,097 43 21,140 28,703 43 28,746 31,094 43 31,137 Multiple activity
events a 43,704 - 43,704 35,932 - 35,932 24,959 - 24,959 Subtotal, clearance

events 68,434 203 68,637 68,434 203 68,637 58,079 203 58,283 Total, All Event Types 1,889,902 1,134 1,891,036 1,595,856 1,134 1,596,990 1,258,151 1,134 1,259,284

a Multiple event types occurring during th e course of a single job (e.g., a reno vation with both window frame removal and trim removal). Because the probability of multiple-activity events varies w ith the size threshold, the number of events for single-event activities is not consistent across size thresholds.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-34 

### 4.3 Costs of Dust Sampling and Clearance Two requirements of the proposed LRRP Clearance Ru le that have cost implications are: (1) a requirement to perform dust wipe testing for a subset of RRP activities, and (2) a requirement to perform dust wipe testing and achieve clearance for a second s ubset of RRP activities where the quantity of lead dust and the characteristics of the dust make it hard to clean up. Figure 4-5 presents a summary of the dust wipe testing and clearance requirements.

This section outlines a methodol ogy for estimating th e costs of these requirements under the proposed LRRP Clearance Rule and presents the resulting total cost s. First, the cost of using a third party to perform dust wipe testing services following certain RRP ev ents is estimated. Next, firm costs associated with dust wipe testing when the firm’s own dust samp ling technician is used are described. Re-cleaning cost estimates and clearance failure rates for different surfaces are also presented. Finally, these costs are combined to determine the total cost of dust wipe testing and clearance requirements for all applicable
events.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-35 Figure 4-5: Summary of Required Activities for Performing Dust Wipe Testing and ClearanceEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-36 

### 4.3.1 Costs of Renovation Firm and Third Party Dust Wipe Testing
In order to est imate the costs of conducting dust wi pe testing following RRP activities, EPA administered a questionnaire to nine lead evaluation firms that incl uded questions about what the firms would charge to perform dust wipe testing and what the labor require ments and laboratory costs would be for performing the testing. The sampling procedure for lead ev aluation firm selection is discussed below. The questionnaire and a description of the purpose of each question are also provided. The final section outlines the results of the survey.

4.3.1.1 Lead Evaluation Firm Sample Universe 

### To draw the sample of lead evaluation firms, ni ne states were randomly selected while limiting the sample selection to no more than one state per EPA regi on. In addition, states were selected such that at least one and no more than two states would have lead abatement and evaluation programs administered by EPA. 7 

### The nine states selected according to these crite ria were: Minnesota, Idaho, Georgia, Maine, Colorado, Oklahoma, Virginia, Kansas, and New Jersey. Idaho was the state sel ected with a lead-based paint program administered by EPA. 8


### Once the nine states were selected, lists of lead evaluation firms from state program websites were obtained and contractors were randomly called until a firm from each selected state agreed to complete the questionnaire. One outlier response was removed from the analysis. This was the first firm that completed the questionnaire, and the survey instrument completed by this firm asked about the cost for taking dust wipe samples, analyzing them, and provi ding a short report. This firm reported extremely high costs and a substantial amount of the costs were re lated to providing the repo rt. Because the firm appears to have erroneously concl uded that an exhaustive report would be required, the wording of the questionnaire for subsequent respondents was changed from “short report” to “one-page report.” The cost estimates provided by the subsequent respondents were an order of magnitude lower than those from the first respondent. Since the first firm’s estimates appear to be uncharacteristically high due in part to this difference in wording, their responses were dropped fr om the analysis. Simple averages were calculated for each question across the eight remaining responses in order to estimate the necessary parameters.

4.3.1.2 Script for Lead Evaluation Firm Questionnaire 

### Figure 4-1 presents the script used in the survey of lead evaluation firms. The introduction served to familiarize firms with the objectives of the survey and the nature of EPA’s proposed rule revision. Information collected in question (1) provides a basis for estimating the costs of third party testing. Third party testing may be used in some cases – even if it is not required – because it will be less expensive for renovation firms that perform RRP events infrequently enough that the cost of certifying a dust sampling technician is not justified. Information collected in questions (2) and (3) allow estimation of the costs of dust wipe testing by the renovation firm. The cost is the labor time multiplied by the renovator wage rate, plus lab fees, plus the cost of materials, plus th e cost of shipping samples to the lab. Information collected in questions (4) and (5) provide informati on about the amount of lead time currently needed before conducting a third party inspection and the amount of time it takes to get test results back after dust sampling, but these questions were not used in this cost analysis.

7, 8 24% of all states have a lead-based paint certification program administered by the EPA.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-37 Figure 4-6: Lead Evaluation Firm Survey Instrument 

### Introduction: Hello, I’m _________, calling from Abt Associat es. We’re an independent research firm that is doing contract work for the Environmental Protection Agency (EPA). We’d like to ask you a few questions in order to better unde rstand how much it might cost to perform dust clearance testing after renovation activities. EPA will be proposing to require dust sampling and/or clearance testing after certain renovation practices are used that may disturb lead-based paint. We will use the responses to our survey to estimate how costly these requirements would be. Your responses will be treated as confidentia l and your name will not be provided to the EPA. There are 5 questions in our survey and we expect it to take less than 5 minutes.

Screen Q1: Does your firm perform lead evaluation such as dust sampling?
⁭ Yes ⁭ No (end survey if no)

Screen Q2: Are you knowledgeable about the costs of performing some of these services?
⁭ Yes {Skip to (1) if Yes.} ⁭ No

Screen Q3: Is there someone there I could sp eak with who is knowledgeable about the costs of performing some of these services?
⁭ Yes {re-read intro and skip to (1)} ⁭ No

Screen Q4: Is there another time I could call back to speak with someone who is knowledgeable about the costs of performing some of these services?
⁭ Yes: __________________________ ⁭ No (end survey)



### (1) What would you charge to take four dust wipe samples (one window trough, one window sill, and two floor samples), have th em sent in and analyzed by the lab, and provide a 1-page report to the contractor? $________. a. How much extra would it cost per additional dust wipe sample? $________. b. How much would it cost for only tw o dust wipe samples (window sill and trough)? $________. (2) What would the lab porti on of the above costs be? $________. (3) Excluding travel time, how much labor time would be required to take four samples, send them to the lab, and pr ovide a report to the contractor? ____ hours. (4) How much time would it take between sampling and receiving the lab results? ____ days. (5) How much lead time would your firm n eed to get an inspector to the site? ____ days.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-38 4.3.1.3 Lead Evaluation Firm Responses and Summary of Results 

### Individual survey responses are pr esented by state in Table 4-1. The table also presents summary statistics showing the average and range of dust wipe testing cost responses.

Table 4-26: Summary of Responses to Lead Evaluation Firm Questionnaire by State (1) (1a) (1b) (2) (3) (4) (5)
Individual Responses Colorado $250-$350 $20 $180-$200 $20/sample 2 hours 24 hours 2 hours - 1 day Georgia $500 $25 $425-$450 $25/sample 5 hours 3-5 business days 1-2 business days Idaho $1800-$2000 $150 $1500-$1800 $50/sample 8-15 hours 10 working days 1 day-1 week Kansas $450 $20 $400 $135 total ($20/sample) 3 hours 3 days 2 days

Maine $225 $20 $190 $20/sample 20 minutes 48 hours 24 hours Minnesota $175-$200 $45 $85-$100 $15 plus $5/sample 2 hours 1 day 1-2 business days New Jersey $175 $20 $135 $20/sample 10 minutes 4-5 business days 1-2 days

Oklahoma $110 $8.50 $92 $8.50/sample 1 hour 3 days 1 hour Virginia $150 $50 “Just different lab costs” Don’t Know 30/40 minutes - 1 hour 1 week “several days”

Summary Statistics Median $225 $20 $190 $20/sample 2 hours 3 days 1.5 days

Mean 1 $262 $26 $220 $19/sample 1 hour, 45 minutes 3 days 1.5 days Mode N.A. $20 $190 $20/sample 2 hours 1 day 1.5 days Minimum $110 $9 $92 $9/sample 10 minutes 1 day 1 hour Maximum 1 $1900 $150 $1650 $50/sample 12 hours 7 days 4 days Maximum 2 $500 $50 $438 $25/sample 5 hours 5 hours 4 days 1. Excludes the response from the firm in Idaho that was provided before the questionnaire was reworded.



### 4.3.2 Costs of Third Party Dust Wipe Testing and Clearance Responses to question 1 ar e used to estimate how much it would cost renovation firms to hire third-party lead evaluation firms to perform dust wipe testing in order to comply with the LRRP Clearance Rule. The total cost of collecting, analyzing, and reportin g four dust wipe samples as well as the marginal cost per additional sample were estimated. As shown in Table 4-27 below, third-party dust wipe testing costs are split into f ixed and variable costs.

Table 4-27: Fixed and Variable Costs of Dust Wipe Sampling

Total Cost for Four Dust Wipes Additional Cost per Wipe Fixe d Costs of Dust Wipe Testing

$262 (Question 1) $26 (Question 1a.) $262 minus four times $26 = $158



### Using the information on fixed and variable costs of dus t wipe sampling, the costs of third-party lead dust wipe testing is estimated, as illustrated in Table 4-28.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-39 Table 4-28: Summary of Per-Event Costs for Events with Third Party Dust Wipe Testing

Event Type (A) Fixed Cost Per Event (B) Number of Samples a (C) Marginal Cost Per Sample (D) Re-cleaning Costs Total

Dust Wipe Testing Events Estimated as the sum of:

• third party dust wipe testing costs ($158 from Question 1 and Question 1a)

• photocopy costs

• shipping costs ($4.95 per occupant or owner for priority mail)

• shipping labor (5 minutes) Estimated as the sum of: (1) the number of windows multiplied by two samples, (2) the number of rooms multiplied by thelikelihood of noncarpeted floors, and (3) one sample outside the work area. $26 third party dust wipe testing costs (Question 1a) None The sum of: the fixed event cost (A), and the estimated number of samples (B) times the marginal cost (C).

Clearance Events Estimated as the sum of:

• third party dust wipe testing costs ($158 from Question 1 and Question 1a) multiplied by the expected number of clearance tests

• photocopy costs multiplied by the expected number of clearance tests

• shipping costs ($4.95 per occupant or owner for priority mail)

• shipping labor (5 minutes) Estimated as the sum of: (1) the product of the number of windows, two samples per window, and one plus the combined first and second failure rate, (2) the product of the number of rooms, thelikelihood of noncarpeted floors, and one plus the combined first and second failure rates, and (3) one sample outside the work area. $26 third party dust wipe testing costs (Question 1a) The sum of the following costs: floor labor and material re-cleaning costs times the floor clearance failure rate; sill labor and material re-cleaning costs times the sill clearance failure rate; trough labor and material re-cleaning costs times the trough clearance failure rate; travel costs times the combined clearance failure
rate. The sum of: the fixed event cost (A), the estimated number of samples (B) times the marginal cost(C), and recleaning costs (D).

a For events in schools where there are more than four rooms affect ed, dust wipe samples are assumed to be taken from only four r ooms.

For clearance events where there are more than four rooms affe cted (10.3 classrooms for schools w ith kindergartens and 13.2 cla ssrooms for schools with kindergartens and pre-kindergartens), the initial dus t wipe samples are assumed to be taken from only four rooms. If all dust wipe samples show results below clearan ce levels, there is no re-clean ing. If any sample of a given type (i.e., sill, trough, or flo or) fails the clearance test, the failed surface must be re-cleaned, and all other surfaces of the same type in the untested rooms are assumed to be re -cleaned. In the event of a first-round failure, exactly four dust wipe samples of the type(s) that failed are assumed to be taken. They will i nclude the failed surfaces plus additional samples as necessary to get to a total of four samples of the same type. If any sample of a given type fails the secondround clearance test, the failed surface will be re-cleaned, and all other surfaces of the same type (i.e., sill, trough, floor ) in the remaining untested rooms will be re-cleaned.



### 4.3.3 Cost Estimation for Renovation Firms Performing Dust Wipe Testing and Clearance The costs of dust wipe sam pling for a renovation firm can be split into: (1) dust sampling material costs, (2) renovation firm labor costs, (3) shipping of samples, (4) lab costs, (5) report paperwork costs, and (6) shipping of results. 9 

### The methodology used to estimate the direct costs of dust wipe testing is presented in Table 4-29. The costs associated with dust sampling technician training are presented in sections 4.4 and 4.5. Dust wipe tes ting costs are expected to vary accordin g to the number of samples that are required, which will vary depending upon the number of rooms where samp les must be taken and whether or not carpet is

9 Most renovation firms are assumed to have a renovator become trained and certified as a Dust Sampling Technician, instead of hiring a third party firm to take the sample (see Section 4.4). These firms can take the samples and send them to the lab themselves. Because the staff are already at the renovation site, there ar e not travel costs associat ed with dust wipe testing for these events.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-40 

### present. For a typical one-room renovation event, four samples would be required (window sill, window trough, workroom floor, adjacent room floor). For a renovation event where both the renovated room and the adjacent room are carpeted, only two samples would be required (window sill and window trough). Each additional room inside the work area will add 2- 3 dust wipes depending on whether or not the room is carpeted (and whether or not there are windows in the work area), however sam ples are not required for more than 4 rooms in a unit’s work area. Labor time in the lead evaluation firm questionnaire w as defined as “the amount of labor time, excluding travel time, required to take four dust wipe samples, send them to the lab, and provide a one page report to the contractor.” Although use of this question for es timating the labor cost for events that require more or less than four samples may be limited, responses to question 1a regarding the cost of taking additional samples can be used to estimate the additional labor necessary per sample (See column C of Table 4-29).Economic Analysis for the LRRP Clearance Proposed RuleChapter 44-41Table 4-29: Summary of Dust Wipe Testing Costs (2008$)(A) Number of Samples (B) Lab andMaterial CostPer Sample(C) Marginal LaborCost Per Sample(D) Shipping Costs (E) Report PaperworkCosts Per Event(F) Fixed LaborCosts(G) TotalDust-Sampling-Only Events:Estimated as the sum of: (1) thenumber of windows multiplied bytwo samples, (2) the number ofrooms multiplied by the likelihoodof non-carpeted floors, and (3) onesample outside the work area.Estimated as the sum of:•$4.95 for shipping samplesto the lab•Costs of shipping results toowners and occupants($4.95 for each recipient)•$0.56 for ten minutes oflabor time (at the renovatorhourly wage rate of $34.92).Estimated as $0.36 tomake one copy of thefour-page report for theproperty owner.cForrental properties,estimated as $0.72 tomake two copies (forboth the owner andoccupant). It is assumedthat public orcommercial buildingCOFs will also make 2copies of the report.Estimated to be 0.83hours: calculated as1.75 hours (the totalfrom Question 3) lessthe variable labor(0.76 hours or 0.19per sample shown incolumn C) lessshipping labor (0.16hours shown incolumn D).Clearance Events:Estimated as the sum of: (1) theproduct of the number of windows,two window samples, and one plusthe combined first and secondfailure rate, (2) the product of thenumber of rooms, the likelihood ofnon-carpeted floors, and one plusthe combined first and secondfailure rates, and (3) one sampleoutside the work area.Estimated as$19 per samplefor lab fees(Question 2)plus $0.25aforthe dust wipe.The cost of anadditional samplewas estimated to be$26 for third partytesting (Question 1a).This includes $19 forlab fees (Question 2)plus $0.25afor thedust wipe, implyingthat the cost of themarginal labor perdust wipe is $6.75.Assuming a loadedwage of $34.92/hour,this implies that themarginal labor persample is about 0.19hours.Estimated as the sum of:•The expected number ofclearance tests multipliedby (1) $4.95 for shippingsamples to the lab and (2)$0.28 for 5 minutes of labortime (at a renovator wagerate)•Costs of shipping results toowners and occupants($4.95 for each recipient or$15.68bfor each recipientfor events affecting accessto the kitchen andbathroom)•$0.28 for five minutes oflabor time (at the renovatorwage rate).Estimated as the specificper-report costsdescribed for dust wipetesting events abovemultiplied by theexpected number ofclearance tests per event.Estimated to be 0.83hours calculated asabove multiplied bythe expected numberof clearance tests.Estimated as thesum of (D), (E)and (F) plus thenumber of unitsfrom (A)multiplied by thesum of the costsof (B) and (C).aThe cost of a 200 pack of Ghost Wipes (ASTM approved wipes for lead dust testing) divided by 200.b$15.68 is the average of USPS, FedEx, and UPS overnightrates for a package of 1⁄2 lbin distance zone 1 or 2cThe report is assumed to be four pages on average, this accounts for a one page job description, one page of lab results, onepage for a diagram of sample locations, and one additional pageis assumed to account for the instances where more than three pages might be necessary.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-42 

### 4.3.4 Likelihood of Clearance Failure In order to approxim ate the frequenc y that dust wipe testing will result in floor or window re-cleaning activities, a clearance failure rate must be estimated separately for each component. Post-cleaning verification lead dust levels from EPA’s Dust St udy can be used to estimate what proportion of renovation events will fail the first (or both the first and second) round of clearance. Table 4-30 describes the methodol ogy for estimating the failure rate using two different rates of floor sample failure for work areas with floors in “poor” condition and work areas with floors in “fair” or “good” condition. The Dust Study demonstrated that poor floor condition is posit ively correlated with post-cleaning-verification dust lead levels and it is likely that more floors in the dust study were in poor condition compared to those in the regulated housing stock. Therefore, this analysis estimates different clearance failure rates depending on floor condition in order to reduce the upward bias on fa ilure rates that would result if the analysis did not account for floor condition in the failure rate estimates. The Dust Study included window sill dust wipe tests, but did not include window trough dust wipe tests. However, in many instances in the Dust Study the wi ndow sills were in such poor condition that sampling trays were placed on the sills and the dust wipe samp les were taken from the sampling trays. Since these sampling trays are likely to be easier to clean than the average window sill that may be in fair or poor condition, this analysis uses the floor failure rate as a proxy for the sill and trough failure rate. The estimated average floor failure rate is 13.8 percent, which is higher than the 13.3 percent failure rate for window sill tests observed in the Dust Study.

Table 4-30: Window Sill, Window Trough, a nd Floor Sample Clearance Failure Rates

Formula Failure Rate Description/Comments Floors Overall: (Poor-condition floor failure rate)*(percentage of floors not smooth/cleanable) + (fair/good-condition floor failure rate)*(percentage of floors smooth/cleanable) 13.8% The average clearance failure rate of floors, weightedby the proportion of uncarpeted floor surfaces in pre1978 housing that are descri bed as smooth/cleanable (98.08%) versus not smooth/ cleanable (1.92%) from NSLAH data. Sample weights were used.

Poor-Condition Floors: (Number of post-verification floor samples in Phase I experiments > 40 μ g/ft2)/(total number of floor samples in Phase I experiments) 78.6% Clearance failure rate of floors for experiments in Dust Study that used plastic containment and rule cleaning practices, with pre-work floors in poor condition. There were 22 samples in this group that failed out of a total of 28 samples from 7 experiments. Fair/Good-Condition Floors: (Number of post-verification floor samples in Phase I experiments > 40 μ g/ft2)/(total number of floor samples in Phase I experiments) 12.5% Clearance failure rate of floors for experiments in Dust Study that used plastic containment and rule cleaning practices, with pre-work floors in either fair or good condition. There were 4 samples in this group that failed out of a total of 32 samples from 8 experiments. Window Sills and Troughs

n.a. 13.8% Assumed to be the sa me as the floor failure rate.



### The overall floor failure rate was estimated as a weighted average of the poor-condition floor and fair/good-condition floor failure rates. HUD’s (2001) National Survey of Lead and Allergens in Housing (NSLAH) data was used to calculate the percenta ge of pre-1978 housing with floors that are non smooth/cleanable – a proxy for poor condition floors. The overall floor clearance failure rate was estimated as the frequency of not smooth/cleanable floors (1.92%) multiplied by the poor-condition floorEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-43 

### failure rate (78.6%), and the fre quency of smooth/cleanable floors (98.08%) multiplied by the fair/goodcondition floor failure rate (12.5%). Thus, the weighted average clear ance failure rate for floor surface samples is 13.8%. This analysis makes the simplifying assumption th at following a single clearance failure and the necessary re-cleaning activities, the sample will have an equal probability of failing clearance the second time around. This assumption is made because no current studies provide information about the likelihood of a second clearance failure for lead dust wipe tests. Therefore, the second failure rate can be estimated as the first failure rate squared – that is, the likelihood of one failure multiplied by the likelihood of another failure given the first failure. Th e combined failure rate is the sum of this value and the original failure rate calculated in Table 4-30. These combined component failure rates are presented below in Table 4-31.

Table 4-31: Combined First and Second Clearance Failure Rates Sample Component Formula Combined 1 st and 2 nd Failure Rate Window Sill (0.138) + (0.138) 2 15.70% Window Trough (0.138) + (0.138) 2 15.70% Floor (0.138) + (0.138) 2 15.70%



### 4.3.5 Costs of Re-Cleaning After a Clearance Test Failure This section presents the methodology used for estima ting re-cleaning costs when a clearance failure has occurred. The re-cleaning methods prescribed by the LRRP Clearance Rule are the same as the initial cleaning methods from the 2008 LRRP Rule: thus, these co sts are estimated following the 2008 analysis methodology.

4.3.5.1 Costs of Re-Cleaning 

### Table 4-32 lists the potential re-cleaning activities associated with clearance and describes how to determine costs per square foot for these activities. It is important to note that for events that only require dust-wipe testing (use of a heat gun, removal or repl acement of windows or door frames, scraping an area of 60 sq. ft. or greater, or removal of over 40 sq. ft. of trim or molding), no re-cleaning or re-testing is required by the rule. For clearance events (use of a high-speed paint removal machine or demolition or destructive removal of over 6 sq. ft. of plaster), re-cleaning and re-sampling are necessary only for a subset of events in which any surface fails the first or second round of clearance. In the event of a failed clearance test, only the components that failed the test s must be re-cleaned. For example, if the windowsill sample failed clearance but the window troughs and the floors passed, the window sill must be recleaned but the window troughs and the floors do not need to be re-cleaned.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-44

Table 4-32: Material Cost and Labor Hours per Square Foot Required for Re-Cleaning Activities (2008$) Cost Type Material Cost/ Sq.Ft. Labor Hours/ Sq.Ft. Rule Text & Estimation Method

(1) HEPA Vacuum and Wet Wipe/Mopping (Floors) $0.022 0.005 HEPA vacuum: Thoroughly vacuum all remaining surfaces and objects in the work area, in cluding furniture and fixtures, with a HEPA vacuum.

Wet Wipe/Mopping: Mop uncarpeted floors thoroughly, using a mopping method that keeps the wash water separate from the rinse water, such as the 2-bucket mopping method, or using a wet mopping system.

Likelihood of uncarpeted floor s times 110% of the square footage of the work area. (2) HEPA Vacuum and Wet Wipe/Mopping (Window Sills) $0.022 0.005 HEPA vacuum: Thoroughly vacuum all remaining surfaces and objects in the work area, in cluding furniture and fixtures, with a HEPA vacuum.

Wet Wipe/Mopping: Wipe all remaining surfaces and objects in the work area, except for carpeted or upholstered surfaces, with a damp cloth.

The number of windows times size of windowsill (3 HEPA Vacuum and Wet Wipe/Mopping (Window Troughs) $0.022 0.1 HEPA vacuum: Thoroughly vacuum all remaining surfaces and objects in the work area, in cluding furniture and fixtures, with a HEPA vacuum.

Wet Wipe/Mopping: Wipe all remaining surfaces and objects in the work area, except for carpeted or upholstered surfaces, with a damp cloth.

The number of windows Assumptions: Labor and material costs were derived from RS Means data for the activity: “Asbestos Abatement Work Area, pre-cleaning, HEPA vacuum and we t wipe, flat surfaces”; cleaning of 110% of the total square footage accounts for additional horizontal surfaces that may require cleaning, such as floor space outside the perimeter of the work area; cleaning a window trough is more labor-intensive than other surfaces and thus it is assumed that this requires 6 minutes per square foot of vacuuming and cleaning.

Labor Hours Per Square Foot 

### The labor hours per square foot required for HEPA vacuuming and wet wiping that was estimated for the 2008 analysis was derived from RS Means data for the activity: “Asbestos Abatement Work Area, precleaning, HEPA vacuum and wet wipe, flat surfaces,” which specified 0.005 labor hours per square foot. Since following clearance failure the firm must return to the renovation work location to perform recleaning and re-testing, travel costs must be included in the total cost of re-cleaning. According to the 2008 LRRP Rule, either a certified renovator or a wo rker supervised by an on-site certified renovator must carry out cleaning activities. 10 

### Because estimated labor time for re-cleaning is under an hour for the majority of events, the analysis assumes that only the renovator will travel to re-clean the work area following clearance failure. Travel cost details are provided in Table 4-33 below.

10 Re-cleaning must be performed following the cl eaning procedures prescribed by the 2008 rule.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-45

Table 4-33: Travel Costs for Re-Cleaning (2008$) Required Persons Round Trip Mileage Travel Cost/Mile Traveling Time Value of Time/Hr. Total Travel Costs for Re-Cleaning

1 renovator 30 mi. $0.545 a 0.75 $34.92 (30 mi * $0.545) + (0.75 hr * $34.92) = $42.54 Assumptions: The worker or renovator responsible for re-c leaning the work area will travel approximately 15 miles (roughly 20 minutes) each direction to the job; a loaded hour ly wage of $34.92 is used (from construction supervisor wage rates, BLS 2008); since re-cleaning jobs usually require only an hour or less of labor time, only one person travels to perform re-cleaning. a. This mileage cost reflects the average standard mileage rate from 2008 wh ich is used for co mputing deductible costs of operating an automobile for business purposes (IR S 2008). This average value is computed as a simple average of the rate applicable from January 1 - June 30, 2008 and the rate applicable from July 1 – December 31, 2008.



### The example presented in Table 4-34 – estimating costs for a small interior painting jo b with a high-speed paint removal machine in single-family owned housin g– shows the cost of re-cleaning after failing a clearance test. The proposed rule requirements indicate that if the residual lead level in a particular dust sample equals or exceeds the applicable clearance level, the components represented by the failed sample shall be re-cleaned or re-tested. Since the thr ee dust wipe samples obtained from the work area are one each from the floor, interior window sill, and window tr ough, whichever sample fails will result in the recleaning of only that surface area. Therefore, for both window failed clearance and floor failed clearance, three estimation steps are required: summary of requi red units, cost per unit, and total activity cost.

Table 4-34: An Example of Re-Cleaning Cost Estimation – Interior Painting with HighSpeed Machine Paint Removal (2008$)

Event Cost Component (A) Summary of Required Units (B) Cost Per Unit (C) Total Cost Per Activity

Floor HEPA Vacuum and Wet Wipe/Mopping: 48% * 110% * 112 sq ft.] = 59.136 sq. ft. $0.022 + (0.005) * $34.92) = $0.197 59.136 sq. ft. HEPA vacuum * $0.197 = $11.63

Window Sill HEPA Vacuum and Wet Wipe/Mopping: 1 window * 0.667 sq. ft. = 0.667 sq. ft. $0.022 + (0.005 * $34.92) = $0.197 0.667 sq. ft. HEPA vacuum * $0.197 = $0.13Small OwnerOccupied Single Family Interior Painting with High-Speed Machine Paint Removal: Window Trough HEPA Vacuum and Wet Wipe/Mopping: 1 window * 0.667 sq. ft. = 0.667 sq. ft. $0.022 + (0.10 * $34.92) = $3.514 0.667 sq. ft. HEPA vacuum * $3.514 = $2.34

Assumptions: A small interior painting event in a single fa mily owned property has a work area of one room and 112 square feet; the likelihood of carpet is 52%; the labor cost uses a mean loaded wage rate of $34.92 based on average construction supervisor hourly wages (BLS 2008).



### Because prescribed re-cleaning activities are determined by which dust wipe in a given work area fails, the method for estimating costs is presented in three different tables ( Table 4-35, Table 4-36, and Table 4-37) for three different possible situations: a fl oor sam ple failing clearance, a window sill sample failing clearance, and a window trough sample failing clearance. If more than one component were to fail clearance, all material and labor costs from the tables could simply be combined, except for travel (since the firm would not need to travel twice to re-clean two separate components).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-46 

### Table 4-38 shows several examples of the estimated cost breakdown among materials, labor, and travel, for each possible combination of failed work area co mponents for a small interior painting event in single-family owner-occupied housing. Overall, for a single event type such as small interior painting, the variance of total re-cleaning costs is small – th is is because the bulk of re-cleaning costs comes from the travel expense portion.

Table 4-35: Costs Per Re-Cleaning – Floor Sample Clearance Failure Material Units Labor Hours HEPA Vacuum Wet Wipe / Mopping Travel Mileage HEPA Vacuum Wet Wipe Travel Time Total Costs

(1-carpet likelihood) * 110% square footage (1-carpet likelihood) * 110% square footage 30 miles 0.0025 hrs. * (1-carpet likelihood) * 110% square footage 0.0025 hrs. * (1-carpet likelihood) * 110% square footage 0.75 hrs. $0.011*vacuum and wet wipe units + $0.545 * mileage + $34.92* total labor hours Note: For kitchen events, 125% square footage wi ll be used in place of 110% square footage.

Table 4-36: Costs Per Re-Cleaning – Window Sill Sample Clearance Failure Material Units Labor Hours HEPA Vacuum Wet Wipe / Mopping Travel Mileage HEPA Vacuum Wet Wipe Travel Time Total Costs

0.667 square feet * number of windows 0.667 square feet * number of windows 30 miles 0.0025 hours * 0.667 square feet * number of windows 0.0025 hours * 0.667 square feet * number of windows 0.75 hrs. $0.011*vacuum and wet wipe units + $0.545 * mileage + $34.92* total labor hours Note: For kitchen events, 125% square footage wi ll be used in place of 110% square footage.

Table 4-37: Costs Per Re-Cleaning – Window Trough Sample Clearance Failure Material Units Labor Hours HEPA Vacuum Wet Wipe / Mopping Travel Mileage HEPA Vacuum Wet Wipe Travel Time Total Costs

0.667 square feet * number of windows 0.667 square feet * number of windows 30 miles 0.05 hours * 0.667 square feet * number of windows 0.05 hours * 0.667 square feet * number of windows 0.75 hrs. $0.011*vacuum and wet wipe units + $0.545 * mileage + $34.92* total labor hours Note: For kitchen events, 125% square footage wi ll be used in place of 110% square footage.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-47 Table 4-38: Costs Per Re-Cleaning Example – Owner-Occupied Single-Family Small Interior Painting Event Failed Component Materials Cost Labor Cost Travel Cost Total Floor $1.30 $10.33 $42.54 $54.17 Sill $0.01 $0.12 $42.54 $42.67 Trough $0.01 $2.33 $42.54 $44.88 Floor, Sill $1.32 $10.44 $42.54 $54.30 Floor, Trough $1.32 $12.65 $42.54 $56.51 Sill, Trough $0.03 $2.45 $42.54 $45.02 Floor, Sill, Trough $1.33 $12.77 $42.54 $56.64



### In order to estimate average per-event re-cleaning costs, the likelihood of clearance failure for each sample type must be accounted for (see Section 4.3.4). The analysis makes the simplifying assumption that sam ple failures are not correlated (e.g., a fl oor sample failure would not make a window trough sample failure any more likely). In order to calculate the average re-cleaning co sts for a clearance failure event, the likelihoods of each component failure are multiplied by their respective component cleaning costs, and these values are summed. Travel, which is not a component-specific re-cleaning cost, is estimated as the flat travel cost above multiplied by the likelihood of any clearance failures. The cost example of a small interior painting event presented in Table 4-38 above is extended below in Table 4-39 to show the a verage expected re-cleaning costs. While Table 4-38 shows the costs per re-cleaning for the different scen arios where it would be required, Table 4-39 presents the average expected re-cleaning costs, over all jobs, account ing for the instances wh ere no re-cleaning is required because clearance is achieved after the initial cleaning. Averaging the re-cl eaning costs across all jobs (i.e., those that require re-cleaning and those that do not) simplifies the calculations by allowing the calculation of a total cost per event that applies to all jobs.

Table 4-39: Example of Average Expected Re-C leaning Costs: Owner-Occupied Single-Family Small Interior Painting Event
Floor Re-Cleaning Sill Re-Cleaning Trough ReCleaning Travel

Material Labor Material Labor Material Labor Mileage Value of Time Total

Average Costs for a ll Clearance Events
$0.20 $1.62 $0.002 $0.02 $0. 002 $0.37 $5.77 $9.24 $17.22 Methodology
Floor failure rate * 110% uncarpeted
square footage * $0.022 Floor failure rate * 110% uncarpeted
square footage * 0.005 *
renovator wage rate Sill failure rate * total window surface area * $0.022 Sill failure rate * total window surface area * 0.005 *
renovator wage rate Trough failure rate * total window surface area * $0.022 Trough failure rate * total window surface area * 0.1 *
renovator wage rate Expectednumber of recleanings* 20 miles * $0.545 Expectednumber of recleanings* 0.5 hours*
renovator wage rate Re-cleaning material costs + re-cleaning labor costs + travel costs

In order to calculate a total cost per event that applies to all jobs, the average re-cleaning costs are calculated across all jobs (i.e., those that require re-cle aning and those that do not).



### 4.3.6 Summary of Dust Wipe Testing and Clearance Costs Per-Event Each type of event will incur a different set of cost s based on the number of dust wipe samples required, whether clearance is required, whether it is in target housing or a public or commercial building COF, andEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-48 

### other event characteristics. Table 4-40 through Table 4-49 below summarize the cost components for all event possibilities considered in this analy sis.

Table 4-40: Dust Wipe Testing Per-Event Costs Summa ry: Single-Family Owner-Occupied Target Housing

Size of Work Area for the Event 1 Number of Dust Wipe Samples 2, 3 Lab Costs 3 Dust Wipe Testing Labor Costs 3 Dust Wipe Testing Material

Costs 3 Total Shipping 3 Report Paperwork 3 Total PerEvent Cost 3 Events Excluding Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Kitchen Size (160 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Bath + Kitchen Size (208 ft 2 ) 5.44 $103.36 $64.84 $1.36 $15.72 $0.36 $185.64 Small Painting Size (112 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Medium Painting Size (308 ft 2 ) 3.63 $68.96 $52.83 $0.91 $15.72 $0.36 $138.78 Large Painting Size (504 ft 2 ) 5.64 $107.13 $66.16 $1.41 $15.72 $0.36 $190.78 Small Window Door Size (63 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Large Window Door Size (640 ft 2 ) 7.03 $133.52 $75.37 $1.76 $15.72 $0.36 $226.73 Events Including Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 3.78 $71.82 $53.83 $0.95 $15.72 $0.36 $142.68 Kitchen Size (160 ft 2 ) 3.78 $71.82 $53.83 $0.95 $15.72 $0.36 $142.68 Bath + Kitchen Size (208 ft 2 ) 6.67 $126.73 $73.00 $1.67 $15.72 $0.36 $217.48 Small Painting Size (112 ft 2 ) 3.78 $71.82 $53.83 $0.95 $15.72 $0.36 $142.68 Medium Painting Size (308 ft 2 ) 4.27 $81.04 $57.05 $1.07 $15.72 $0.36 $155.23 Large Painting Size (504 ft 2 ) 6.16 $117.08 $69.63 $1.54 $15.72 $0.36 $204.33 Small Window Door Size (63 ft 2 ) 3.78 $71.82 $53.83 $0.95 $15.72 $0.36 $142.68 Large Window Door Size (640 ft 2 ) 7.50 $142.51 $78.51 $1.88 $15.72 $0.36 $238.98

1 Event sizes were estimated for EPA’s 2008 LR RP Rule Analysis and represent the work area size and not necessarily the amount o f lead-based paint disturbed. A “bathroom size” or “kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: bathroom size: wall-disturbing events, addition events kitchen size: wall-disturbing events, addition events, window/door replacements bathroom + kitchen size: wall-disturbing events, addition events
2 The average number of required samples is presented. One sample is required outside the work area and three samples are requi red per room in the work area: (1) floor sample, (2) window sill sample, and (3) win dow trough sample. However, floor samples are not required on carpeted floors (so the minimum number of required samples may be as low as two if the work area is one room and all floors are carpeted). The estimate d numbers of rooms affected and the probability that floors ar e carpeted were estimated following the methodology developed for the 2008 LRRP rule analysis.
3 See section 4.3.3 and Table 4-29 for a description of how these costs are calculated.

Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the house, and dust wipe sa mples are only taken on uncarpeted floors.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-49 Table 4-41: Dust Wipe Testing Per-Event Costs Summa ry: Single-Family Renter-Occupied Target Housing

Size of Work Area for the Event 1 Number of Dust Wipe Samples 2, 3 Lab Costs 3 Dust Wipe Testing Labor Costs 3 Dust Wipe Testing Material

Costs 3 Total Shipping 3 Report Paperwork 3 Total PerEvent Cost 3 Events Excluding Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Kitchen Size (120 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Bath + Kitchen Size (168 ft 2 ) 5.44 $103.36 $64.84 $1.36 $20.67 $0.72 $190.95 Small Painting Size (96 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Medium Painting Size (232 ft 2 ) 3.11 $59.07 $49.38 $0.78 $20.67 $0.72 $130.61 Large Painting Size (368 ft 2 ) 4.65 $88.28 $59.58 $1.16 $20.67 $0.72 $170.41 Small Window Door Size (55 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Large Window Door Size (480 ft 2 ) 5.94 $112.78 $68.13 $1.48 $20.67 $0.72 $203.79 Events Including Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 3.78 $71.82 $53.83 $0.95 $20.67 $0.72 $147.99 Kitchen Size (120 ft 2 ) 3.78 $71.82 $53.83 $0.95 $20.67 $0.72 $147.99 Bath + Kitchen Size (168 ft 2 ) 6.67 $126.73 $73.00 $1.67 $20.67 $0.72 $222.79 Small Painting Size (96 ft 2 ) 3.78 $71.82 $53.83 $0.95 $20.67 $0.72 $147.99 Medium Painting Size (232 ft 2 ) 3.73 $70.81 $53.48 $0.93 $20.67 $0.72 $146.61 Large Painting Size (368 ft 2 ) 5.16 $97.96 $62.96 $1.29 $20.67 $0.72 $183.59 Small Window Door Size (55 ft 2 ) 3.78 $71.82 $53.83 $0.95 $20.67 $0.72 $147.99 Large Window Door Size (480 ft 2 ) 6.38 $121.30 $71.11 $1.60 $20.67 $0.72 $215.39

1 Event sizes were estimated for EPA’s 2008 LR RP Rule Analysis and represent the work area size and not necessarily the amount o f lead-based paint disturbed. A “bathroom size” or “kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: bathroom size: wall-disturbing events, addition events kitchen size: wall-disturbing events, addition events, window/door replacements bathroom + kitchen size: wall-disturbing events, addition events
2 The average number of required samples is presented. One sample is required outside the work area and three samples are requi red per room in the work area: (1) floor sample, (2) window sill sample, and (3) win dow trough sample. However, floor samples are not required on carpeted floors (so the minimum number of required samples may be as low as two if the work area is one room and all floors are carpeted). The estimate d numbers of rooms affected and the probability that floors ar e carpeted were estimated following the methodology developed for the 2008 LRRP rule analysis.
3 See section 4.3.3 and Table 4-29 for a description of how these costs are calculated.

Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the house, and dust wipe sa mples are only taken on uncarpeted floors.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-50 Table 4-42: Dust Wipe Testing Per-Event Costs Summary: Multi-Family Owner-Occupied Target Housing

Size of Work Area for the Event 1 Number of Dust Wipe Samples 2, 3 Lab Costs 3 Dust Wipe Testing Labor Costs 3 Dust Wipe Testing Material

Costs 3 Total Shipping 3 Report Paperwork 3 Total PerEvent Cost 3 Events Excluding Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Kitchen Size (80 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Bath + Kitchen Size (128 ft 2 ) 5.44 $103.36 $64.84 $1.36 $15.72 $0.36 $185.64 Small Painting Size (84 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Medium Painting Size (184 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Large Painting Size (284 ft 2 ) 3.95 $75.09 $54.97 $0.99 $15.72 $0.36 $147.13 Small Window Door Size (45 ft 2 ) 2.96 $56.24 $48.39 $0.74 $15.72 $0.36 $121.45 Large Window Door Size (320 ft 2 ) 4.40 $83.57 $57.93 $1.10 $15.72 $0.36 $158.68 Events Including Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 3.78 $71.82 $53.83 $0.95 $15.72 $0.36 $142.68 Kitchen Size (80 ft 2 ) 3.78 $71.82 $53.83 $0.95 $15.72 $0.36 $142.68 Bath + Kitchen Size (128 ft 2 ) 6.67 $126.73 $73.00 $1.67 $15.72 $0.36 $217.48 Small Painting Size (84 ft 2 ) 3.78 $71.82 $53.83 $0.95 $15.72 $0.36 $142.68 Medium Painting Size (184 ft 2 ) 3.54 $67.26 $52.24 $0.89 $15.72 $0.36 $136.46 Large Painting Size (284 ft 2 ) 4.38 $83.30 $57.84 $1.10 $15.72 $0.36 $158.31 Small Window Door Size (45 ft 2 ) 4.81 $91.41 $60.67 $1.20 $15.72 $0.36 $169.37

1 Event sizes were estimated for EPA’s 2008 LR RP Rule Analysis and represent the work area size and not necessarily the amount o f lead-based paint disturbed. A “bathroom size” or “kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: bathroom size: wall-disturbing events, addition events kitchen size: wall-disturbing events, addition events, window/door replacements bathroom + kitchen size: wall-disturbing events, addition events
2 The average number of required samples is presented. One sample is required outside the work area and three samples are requi red per room in the work area: (1) floor sample, (2) window sill sample, and (3) win dow trough sample. However, floor samples are not required on carpeted floors (so the minimum number of required samples may be as low as two if the work area is one room and all floors are carpeted). The estimate d numbers of rooms affected and the probability that floors ar e carpeted were estimated following the methodology developed for the 2008 LRRP rule analysis.
3 See section 4.3.3 and Table 4-29 for a description of how these costs are calculated.

Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the house, and dust wipe sa mples are only taken on uncarpeted floors.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-51 Table 4-43: Dust Wipe Testing Per-Event Costs Summary: Multi-Family Renter-Occupied Target Housing

Size of Work Area for the Event 1 Number of Dust Wipe Samples 2, 3 Lab Costs 3 Dust Wipe Testing Labor Costs 3 Dust Wipe Testing Material

Costs 3 Total Shipping 3 Report Paperwork 3 Total PerEvent Cost 3 Events Excluding Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Kitchen Size (80 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Bath + Kitchen Size (128 ft 2 ) 5.44 $103.36 $64.84 $1.36 $20.67 $0.72 $190.95 Small Painting Size (84 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Medium Painting Size (184 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Large Painting Size (284 ft 2 ) 3.95 $75.09 $54.97 $0.99 $20.67 $0.72 $152.44 Small Window Door Size (45 ft 2 ) 2.96 $56.24 $48.39 $0.74 $20.67 $0.72 $126.76 Large Window Door Size (320 ft 2 ) 4.40 $83.57 $57.93 $1.10 $20.67 $0.72 $163.99 Events Including Kitchens or Bathrooms Bathroom Size (48 ft 2 ) 3.78 $71.82 $53.83 $0.95 $20.67 $0.72 $147.99 Kitchen Size (80 ft 2 ) 3.78 $71.82 $53.83 $0.95 $20.67 $0.72 $147.99 Bath + Kitchen Size (128 ft 2 ) 6.67 $126.73 $73.00 $1.67 $20.67 $0.72 $222.79 Small Painting Size (84 ft 2 ) 3.78 $71.82 $53.83 $0.95 $20.67 $0.72 $147.99 Medium Painting Size (184 ft 2 ) 3.54 $67.26 $52.24 $0.89 $20.67 $0.72 $141.77 Large Painting Size (284 ft 2 ) 4.38 $83.30 $57.84 $1.10 $20.67 $0.72 $163.62 Small Window Door Size (45 ft 2 ) 4.81 $91.41 $60.67 $1.20 $20.67 $0.72 $174.68

1 Event sizes were estimated for EPA’s 2008 LR RP Rule Analysis and represent the work area size and not necessarily the amount o f lead-based paint disturbed. A “bathroom size” or “kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: bathroom size: wall-disturbing events, addition events kitchen size: wall-disturbing events, addition events, window/door replacements bathroom + kitchen size: wall-disturbing events, addition events
2 The average number of required samples is presented. One sample is required outside the work area and three samples are requi red per room in the work area: (1) floor sample, (2) window sill sample, and (3) win dow trough sample. However, floor samples are not required on carpeted floors (so the minimum number of required samples may be as low as two if the work area is one room and all floors are carpeted). The estimate d numbers of rooms affected and the probability that floors ar e carpeted were estimated following the methodology developed for the 2008 LRRP rule analysis.
3 See section 4.3.3 and Table 4-29 for a description of how these costs are calculated.

Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the house, and dust wipe sa mples are only taken on uncarpeted floors.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-52 Table 4-44: Dust Wipe Testing Per-Event Costs Summary: Public and Commercial Building COFs

Size of Work Area for the Event 1 Number of Dust Wipe Samples 2, 3 Lab Costs 3 Dust Wipe Testing Labor Costs 3 Dust Wipe Testing Material

Costs 3 Total Shipping 3 Report Paperwork 3 Total PerEvent Cost 3 Kindergarten (Public; 13,560 ft 2 ) 11.30 $214.70 $103.72 $2.83 $20.67 $0.72 $342.64 Kindergarten (Large Private; 13,560 ft 2 ) 11.30 $214.70 $103.72 $2.83 $20.67 $0.72 $342.64 Kindergarten (Small Private; 13,560 ft 2 ) 11.30 $214.70 $103.72 $2.83 $20.67 $0.72 $342.64 Pre-K + Kindergarten (Public; 15,674 ft 2 ) 11.30 $214.70 $103.72 $2.83 $20.67 $0.72 $342.64 Pre-K + Kindergarten (Large Private; 15,674 ft 2 ) 11.30 $214.70 $103.72 $2.83 $20.67 $0.72 $342.64 Pre-K + Kindergarten (Small Private; 15,674 ft 2 ) 11.30 $214.70 $103.72 $2.83 $20.67 $0.72 $342.64 Daycare Center (Renter-Occupied; 2,400 ft 2 ) 9.41 $178.82 $91.19 $2.35 $20.67 $0.72 $293.75 Daycare Center (Owner-Occupied; 2400 ft 2 ) 9.41 $178.82 $91.19 $2.35 $20.67 $0.72 $293.75 Daycare Center (Non-Profit who performs some of own RRP; 2,400 ft 2 ) 9.41 $178.82 $91.19 $2.35 $20.67 $0.72 $293.75 Daycare Center (Non-Profit who uses contractors; 2,400 ft 2 ) 9.41 $178.82 $91.19 $2.35 $20.67 $0.72 $293.75 Daycare Center (In Public School; 2,400 ft 2 ) 9.41 $178.82 $91.19 $2.35 $20.67 $0.72 $293.75 Daycare Center (In Large Private School; 2,400 ft 2 ) 9.41 $178.82 $91.19 $2.35 $20.67 $0.72 $293.75 Daycare Center (In Small Private School; 2,400 ft 2 ) 9.41 $178.82 $91.19 $2.35 $20.67 $0.72 $293.75
1 Event sizes were estimated for EPA’s 2008 LR RP Rule Analysis and represent the work area size and not necessarily the amount o f lead-based paint disturbed.
2 One sample is required outside the work area and three samples are required per room in the work area: (1) floor sample, (2) w indow sill sample, and (3) window trough sample. However, floor samples are not required on carpeted floors (so the minimum number of required sample s may be as low as two if the work area is one room and all floors are carpeted). The estimated numbers of rooms affected were estimated following the methodology developed for the 2008 LRRP rule analysis
3 See section 4.3.3 and Table 4-29 for a description of how these costs are calculated.Economic Analysis for the LRRP Clearance Proposed RuleChapter 44-53Table 4-45: Average Clearance Costs Per-Event (Averaged AcrossEvents that Pass and Fail Clearance): Single-Family Owner-Occupied Target HousingSize of Work Area for theEvent1AverageNumber ofDust WipeSamples2AverageLabCosts3,5AverageDust WipeTestingLaborCosts3,5AverageDust WipeTestingMaterialCosts3,5AverageTotalShipping3,5AverageReportPaperwork3,5AverageReCleaningMaterial4,5AverageReCleaningLabor4,5AverageReCleaningTravel4,5AverageTotal CostsPer-Event5Events Excluding Kitchens or BathroomsBathroom Size (48 ft2)3.35 $63.64 $61.11 $0.84 $18.49$0.49 $0.09 $1.08 $15.00 $160.75Kitchen Size (160 ft2)3.35 $63.64 $61.11 $0.84 $18.49$0.49 $0.30 $3.08 $15.00 $162.96Bath + Kitchen Size (208 ft2)6.22 $118.16 $87.46 $1.55 $20.49$0.58 $0.39 $4.16 $25.81 $258.61Small Painting Size (112 ft2)3.35 $63.64 $61.11 $0.84 $18.49$0.49 $0.21 $2.01 $15.00 $161.79Medium Painting Size (308 ft2)4.12 $78.36 $68.29 $1.03 $19.05$0.51 $0.57 $5.22 $18.02 $191.05Large Painting Size (504 ft2)6.45 $122.52 $89.43 $1.61 $20.61$0.58 $0.94 $8.81 $26.47 $270.97Events Including Kitchens or BathroomsBathroom Size (48 ft2)4.23 $80.44 $68.41 $1.06 $29.61$0.50 $0.17 $1.67 $17.11 $198.98Kitchen Size (160 ft2)4.23 $80.44 $68.41 $1.06 $29.61$0.50 $0.55 $5.06 $17.11 $202.75Bath + Kitchen Size (208 ft2)7.58 $143.98 $98.56 $1.89 $31.79$0.60 $0.72 $6.74 $28.90 $313.17Small Painting Size (112 ft2)4.23 $80.44 $68.41 $1.06 $29.61$0.50 $0.38 $3.39 $17.11 $200.91Medium Painting Size (308 ft2)4.82 $91.50 $74.01 $1.20 $30.09$0.53 $0.90 $7.82 $19.69 $225.73Large Painting Size (504 ft2)7.03 $133.52 $94.15 $1.76 $31.58$0.59 $1.26 $11.39 $27.77 $302.031A “bathroom size” or “kitchen size” indicates the eventsize, not the eventtype. In addition to bathroom and kitchen events, other event types having these size definitions are:bathroom size: wall-disturbing events, addition eventskitchen size: wall-disturbing events, addition events, window/door replacementsbathroom + kitchen size: wall-disturbing events, addition events2One sample is required outside the work area and three samplesare required per room in the work area: (1) floor sample, (2) window sill sample, and (3) window trough sample. However, floorsamples are not required on carpeted floors (sothe minimum number of required samples maybe as low as two if the work area isone room and all floors are carpeted). The estimatednumbers of roomsaffected and the probability that floors are carpeted were estimated following themethodology developed for the 2008 LRRP ruleanalysis3See section4.3.3 andTable 4-29 for a description ofhowthese costs are calculated.4See section4.3.5 for a description of howthese costs are calculated.5These costs vary by the size and type of the event because ofvarying clearance failure rates; estimated clearance failure rates are more likely for events where more samples are required. In addition,shipping costs are higher for clearance events where a kitchen orbathroom is inside the work area because renovators are assumed to use overnight shipping in order to allow occupants to access thework area sooner.Note: In order to calculate a total cost per event that applies to all jobs, the average re-cleaning costs are calculated across all jobs (i.e., those that requirere-cleaning and those that do not).Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchensand bathrooms have a different probability of being carpeted than therest of the house, and dust wipe samples are only taken on uncarpeted floors.Economic Analysis for the LRRP Clearance Proposed RuleChapter 44-54Table 4-46: Average Clearance Costs Per Event (Averaged Across Events that Pass and Fail Clearance): Single-Family Renter-Occupied Target HousingSize of Work Area for theEvent1AverageNumber ofDust WipeSamples2AverageLabCosts3,5AverageDust WipeTestingLaborCosts3,5AverageDust WipeTestingMaterialCosts3,5AverageTotalShipping3,5AverageReportPaperwork3,5AverageReCleaningMaterial4,5AverageReCleaningLabor4,5AverageReCleaningTravel4,5AverageTotal CostsPer-Event5Events Excluding Kitchens or BathroomsBathroom Size (48 ft2)3.35 $63.64 $61.11 $0.84 $23.44$0.97 $0.09 $1.08 $15.00 $166.18Kitchen Size (80 ft2)3.35 $63.64 $61.11 $0.84 $23.44$0.97 $0.23 $2.51 $15.00 $167.74Bath + Kitchen Size (128 ft2)6.22 $118.16 $87.46 $1.55 $25.44$1.16 $0.32 $3.58 $25.81 $263.49Small Painting Size (84 ft2)3.35 $63.64 $61.11 $0.84 $23.44$0.97 $0.18 $1.77 $15.00 $166.96Medium Painting Size (184 ft2)3.52 $66.91 $62.71 $0.88 $23.57$0.99 $0.43 $3.96 $15.68 $175.12Large Painting Size (284 ft2)5.30 $100.71 $79.10 $1.33 $24.82$1.10 $0.69 $6.52 $22.46 $236.72Events Including Kitchens or BathroomsBathroom Size (48 ft2)4.23 $80.44 $68.41 $1.06 $45.29$1.01 $0.17 $1.67 $17.11 $215.16Kitchen Size (80 ft2)4.23 $80.44 $68.41 $1.06 $45.29$1.01 $0.42 $3.99 $17.11 $217.73Bath + Kitchen Size (128 ft2)7.58 $143.98 $98.56 $1.89 $47.47$1.21 $0.58 $5.66 $28.90 $328.25Small Painting Size (84 ft2)4.23 $80.44 $68.41 $1.06 $45.29$1.01 $0.33 $2.96 $17.11 $216.61Medium Painting Size (184 ft2)4.19 $79.60 $68.23 $1.05 $45.32$1.01 $0.69 $6.06 $17.28 $219.25Large Painting Size (284 ft2)5.86 $111.34 $83.70 $1.47 $46.52$1.12 $0.95 $8.63 $23.78 $277.521A “bathroom size” or “kitchen size” indicates the eventsize, not the eventtype. In addition to bathroom and kitchen events, other event types having these size definitions are:bathroom size: wall-disturbing events, addition eventskitchen size: wall-disturbing events, addition events, window/door replacementsbathroom + kitchen size: wall-disturbing events, addition events2One sample is required outside the work area and three samplesare required per room in the work area: (1) floor sample, (2) window sill sample, and (3) window trough sample. However, floorsamples are not required on carpeted floors (sothe minimum number of required samples maybe as low as two if the work area isone room and all floors are carpeted). The estimatednumbers of roomsaffected and the probability that floors are carpeted were estimated following themethodology developed for the 2008 LRRP ruleanalysis.3See section4.3.3 andTable 4-29 for a description ofhowthese costs are calculated.4See section4.3.5 for a description of howthese costs are calculated.5These costs vary by the size and type of the event because ofvarying clearance failure rates; estimated clearance failure rates are more likely for events where more samples are required. In addition,shipping costs are higher for clearance events where a kitchen orbathroom is inside the work area because renovators are assumed to use overnight shipping in order to allow occupants to access thework area sooner.Note: In order to calculate a total cost per event that applies to all jobs, the average re-cleaning costs are calculated across all jobs (i.e., those that requirere-cleaning and those that do not).Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchensand bathrooms have a different probability of being carpeted than therest of the house, and dust wipe samples are only taken on uncarpeted floors.Economic Analysis for the LRRP Clearance Proposed RuleChapter 44-55Table 4-47: Average Clearance Costs Per Event (Averaged AcrossEvents that Pass and Fail Clearance): Multi-Family Owner-Occupied Target HousingSize of Work Area for theEvent1AverageNumber ofDust WipeSamples2AverageLabCosts3,5AverageDust WipeTestingLaborCosts3,5AverageDust WipeTestingMaterialCosts3,5AverageTotalShipping3,5AverageReportPaperwork3,5AverageReCleaningMaterial4,5AverageReCleaningLabor4,5AverageReCleaningTravel4,5AverageTotal CostsPer-Event5Events Excluding Kitchens or BathroomsBathroom Size (48 ft2)3.35 $63.64 $61.11 $0.84 $18.49$0.49 $0.09 $1.08 $15.00 $160.75Kitchen Size (80 ft2)3.35 $63.64 $61.11 $0.84 $18.49$0.49 $0.15 $1.54 $15.00 $161.27Bath + Kitchen Size (128 ft2)6.22 $118.16 $87.46 $1.55 $20.49$0.58 $0.24 $2.62 $25.81 $256.92Small Painting Size (84 ft2)3.35 $63.64 $61.11 $0.84 $18.49$0.49 $0.16 $1.60 $15.00 $161.33Medium Painting Size (184 ft2)3.35 $63.64 $61.11 $0.84 $18.49$0.49 $0.34 $3.05 $15.00 $162.96Large Painting Size (284 ft2)4.50 $85.45 $71.73 $1.12 $19.31$0.52 $0.53 $4.80 $19.44 $202.90Events Including Kitchens or BathroomsBathroom Size (48 ft2)4.23 $80.44 $68.41 $1.06 $29.61$0.50 $0.17 $1.67 $17.11 $198.98Kitchen Size (80 ft2)4.23 $80.44 $68.41 $1.06 $29.61$0.50 $0.28 $2.53 $17.11 $199.94Bath + Kitchen Size (128 ft2)7.58 $143.98 $98.56 $1.89 $31.79$0.60 $0.44 $4.20 $28.90 $310.36Small Painting Size (84 ft2)4.23 $80.44 $68.41 $1.06 $29.61$0.50 $0.29 $2.64 $17.11 $200.06Medium Painting Size (184 ft2)3.98 $75.53 $66.27 $0.99 $29.50$0.50 $0.54 $4.66 $16.49 $194.48Large Painting Size (284 ft2)4.97 $94.41 $75.63 $1.24 $30.25$0.53 $0.72 $6.34 $20.58 $229.701A “bathroom size” or “kitchen size” indicates the eventsize, not the eventtype. In addition to bathroom and kitchen events, other event types having these size definitions are:bathroom size: wall-disturbing events, addition eventskitchen size: wall-disturbing events, addition events, window/door replacementsbathroom + kitchen size: wall-disturbing events, addition events2One sample is required outside the work area and three samplesare required per room in the work area: (1) floor sample, (2) window sill sample, and (3) window trough sample. However, floorsamples are not required on carpeted floors (sothe minimum number of required samples maybe as low as two if the work area isone room and all floors are carpeted). The estimatednumbers of roomsaffected and the probability that floors are carpeted were estimated following themethodology developed for the 2008 LRRP ruleanalysis3See section4.3.3 andTable 4-29 for a description ofhowthese costs are calculated.4See section4.3.5 for a description of howthese costs are calculated.5These costs vary by the size and type of the event because ofvarying clearance failure rates; estimated clearance failure rates are more likely for events where more samples are required. In addition,shipping costs are higher for clearance events where a kitchen orbathroom is inside the work area because renovators are assumed to use overnight shipping in order to allow occupants to access thework area sooner.Note: In order to calculate a total cost per event that applies to all jobs, the average re-cleaning costs are calculated across all jobs (i.e., those that requirere-cleaning and those that do not).Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchensand bathrooms have a different probability of being carpeted than therest of the house, and dust wipe samples are only taken on uncarpeted floors.Economic Analysis for the LRRP Clearance Proposed RuleChapter 44-56Table 4-48: Average Clearance Costs Per Event (Averaged AcrossEvents that Pass and Fail Clearance): Multi-Family Renter-Occupied Target HousingSize of Work Area for theEvent1AverageNumber ofDust WipeSamples2AverageLabCosts3,5AverageDust WipeTestingLaborCosts3,5AverageDust WipeTestingMaterialCosts3,5AverageTotalShipping3,5AverageReportPaperwork3,5AverageReCleaningMaterial4,5AverageReCleaningLabor4,5AverageReCleaningTravel4,5AverageTotal CostsPer-Event5Events Excluding Kitchens or BathroomsBathroom Size (48 ft2)3.35 $63.64 $61.11 $0.84 $23.44$0.97 $0.09 $1.08 $15.00 $166.18Kitchen Size (80 ft2)3.35 $63.64 $61.11 $0.84 $23.44$0.97 $0.15 $1.54 $15.00 $166.70Bath + Kitchen Size (128 ft2)6.22 $118.16 $87.46 $1.55 $25.44$1.16 $0.24 $2.62 $25.81 $262.44Small Painting Size (84 ft2)3.35 $63.64 $61.11 $0.84 $23.44$0.97 $0.16 $1.60 $15.00 $166.77Medium Painting Size (184 ft2)3.35 $63.64 $61.11 $0.84 $23.44$0.97 $0.34 $3.05 $15.00 $168.40Large Painting Size (284 ft2)4.50 $85.45 $71.73 $1.12 $24.26$1.05 $0.53 $4.80 $19.44 $208.38Events Including Kitchens or BathroomsBathroom Size (48 ft2)4.23 $80.44 $68.41 $1.06 $45.29$1.01 $0.17 $1.67 $17.11 $215.16Kitchen Size (80 ft2)4.23 $80.44 $68.41 $1.06 $45.29$1.01 $0.28 $2.53 $17.11 $216.13Bath + Kitchen Size (128 ft2)7.58 $143.98 $98.56 $1.89 $47.47$1.21 $0.44 $4.20 $28.90 $326.65Small Painting Size (84 ft2)4.23 $80.44 $68.41 $1.06 $45.29$1.01 $0.29 $2.64 $17.11 $216.25Medium Painting Size (184 ft2)3.98 $75.53 $66.27 $0.99 $45.18$1.00 $0.54 $4.66 $16.49 $210.66Large Painting Size (284 ft2)4.97 $94.41 $75.63 $1.24 $45.93$1.07 $0.72 $6.34 $20.58 $245.921A “bathroom size” or “kitchen size” indicates the eventsize, not the eventtype. In addition to bathroom and kitchen events, other event types having these size definitions are:bathroom size: wall-disturbing events, addition eventskitchen size: wall-disturbing events, addition events, window/door replacementsbathroom + kitchen size: wall-disturbing events, addition events2One sample is required outside the work area and three samplesare required per room in the work area: (1) floor sample, (2) window sill sample, and (3) window trough sample. However, floorsamples are not required on carpeted floors (sothe minimum number of required samples maybe as low as two if the work area isone room and all floors are carpeted). The estimatednumbers of roomsaffected and the probability that floors are carpeted were estimated following themethodology developed for the 2008 LRRP ruleanalysis3See section4.3.3 andTable 4-29 for a description ofhowthese costs are calculated.4See section4.3.5 for a description of howthese costs are calculated.5These costs vary by the size and type of the event because ofvarying clearance failure rates; estimated clearance failure rates are more likely for events where more samples are required. In addition,shipping costs are higher for clearance events where a kitchen orbathroom is inside the work area because renovators are assumed to use overnight shipping in order to allow occupants to access thework area sooner.Note: In order to calculate a total cost per event that applies to all jobs, the average re-cleaning costs are calculated across all jobs (i.e., those that requirere-cleaning and those that do not).Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathrooms, because kitchensand bathrooms have a different probability of being carpeted than therest of the house, and dust wipe samples are only taken on uncarpeted floors.Economic Analysis for the LRRP Clearance Proposed RuleChapter 44-57Table 4-49: Clearance Per-Event Costs Summary: Public and Commercial Building COFsSize of Work Area for theEvent1AverageNumber ofDust WipeSamples2AverageLabCosts3,5AverageDust WipeTestingLaborCosts3,5AverageDust WipeTestingMaterialCosts3,5AverageTotalShipping3,5AverageReportPaperwork3,5AverageReCleaningMaterial4,5AverageReCleaningLabor4,5AverageReCleaningTravel4,5AverageTotal CostsPer-Event5Kindergarten (Public; 13,560ft2)19.08 $362.56 $195.78 $4.77 $31.72 $1.73 $92.36 $832.67 $59.82 $1,581.41Kindergarten (Large Private;13,560ft2)19.08 $362.56 $195.78 $4.77 $31.72 $1.73 $92.36 $832.67 $59.82 $1,581.41Kindergarten (Small Private;13,560ft2)19.08 $362.56 $195.78 $4.77 $31.72 $1.73 $92.36 $832.67 $59.82 $1,581.41Pre-K + Kindergarten (Public;15,674ft2)19.08 $362.56 $195.78 $4.77 $31.72 $1.73 $119.49 $1,077.25 $59.82 $1,853.11Pre-K + Kindergarten (LargePrivate; 15,674ft2)19.08 $362.56 $195.78 $4.77 $31.72 $1.73 $119.49 $1,077.25 $59.82 $1,853.11Pre-K + Kindergarten (SmallPrivate; 15,674ft2)19.08 $362.56 $195.78 $4.77 $31.72 $1.73 $119.49 $1,077.25 $59.82 $1,853.11Daycare Center (Renter-Occupied;2,400ft2)10.79 $204.93 $125.36 $2.70 $27.52$1.35 $6.11 $55.06 $37.06 $460.08Daycare Center (Owner-Occupied;2400ft2)10.79 $204.93 $125.36 $2.70 $27.52$1.35 $6.11 $55.06 $37.06 $460.08Daycare Center (Non-Profit whoperforms some of own RRP; 2,400ft2)10.79 $204.93 $125.36 $2.70 $27.52$1.35 $6.11 $55.06 $37.06 $460.08Daycare Center (Non-Profit whouses contractors; 2,400ft2)10.79 $204.93 $125.36 $2.70 $27.52$1.35 $6.11 $55.06 $37.06 $460.08Daycare Center (In Public School;2,400ft2)10.79 $204.93 $125.36 $2.70 $27.52$1.35 $6.11 $55.06 $37.06 $460.08Daycare Center (In Large PrivateSchool; 2,400ft2)10.79 $204.93 $125.36 $2.70 $27.52$1.35 $6.11 $55.06 $37.06 $460.08Daycare Center (In Small PrivateSchool; 2,400ft2)10.79 $204.93 $125.36 $2.70 $27.52$1.35 $6.11 $55.06 $37.06 $460.081One sample is required outside the work area and three samplesare required per room in the work area: (1) floor sample, (2) window sill sample, and (3) window trough sample. However, floorsamples are not required on carpeted floors (sothe minimum number of required samples maybe as low as two if the work area isone room and all floors are carpeted). The estimatednumbers of roomsaffected were estimated following the methodology developed for the 2008 LRRP rule analysis2In order to calculate a total cost per event that applies toall jobs, the average re-cleaning costs are calculated across alljobs (i.e., those that require re-cleaning and those that do not).3See section4.3.3 andTable 4-29 for a description ofhowthese costs are calculated.4See section4.3.5 for a description of howthese costs are calculated.5The photocopy material and shipping costs vary by the size ofthe event because estimated clearance failure rates are more likely for events where more samples are required.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-58 

### 4.3.7 Total Dust Wipe Testing and Clearance Event Costs
Total costs ar e estimated by combining the total numbe r of events affected by the proposed Clearance Rule from Section 4.2 and the per-event dust wipe testing and clearance costs fro m the tables above. Table 4-50 through Table 4-52 present the final number of events, per-event costs, and total costs for dust wipe testing and clearance. Costs are presented by building tenure, building type, work area size, and occurrence of a bathroom or kitchen event. The di fferent size threshold options are displayed in three separate tables: (1) the low threshold option, (2) the proposed option, and (3) the high threshold option.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-59 Table 4-50: Total Target Housing First Year Costs: Low Threshold Option Events (thousands) Unit Costs Total Costs (millions) Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Dust Wipe Testing Events Excluding Kitchen or Bathroom Bath 34 2 21 21 $121 $121 $127 $127 $4.1 $0.2 $2.6 $2.6 $9.5 Kit 102 6 33 31 $121 $121 $127 $127 $12.4 $0.7 $4.1 $3.9 $21.2 Bath+Kit 1 0 0 0 $186 $186 $191 $191 $0.2 $0.0 $0.0 $0.0 $0.3 S-Paint 53 3 25 38 $121 $121 $127 $127 $6.5 $0.4 $3.1 $4.9 $14.8 M-Paint 28 2 14 24 $139 $121 $131 $127 $3.8 $0.2 $1.8 $3.1 $9.0 L-Paint 26 1 13 23 $191 $147 $170 $152 $4.9 $0.2 $2.3 $3.6 $11.0 S-WD 96 5 32 30 $121 $121 $127 $127 $11.6 $0.7 $4.0 $3.8 $20.1 L-WD 101 6 32 31 $227 $159 $204 $164 $22.8 $0.9 $6.6 $5.1 $35.4 Subtotal 441 25 170 199 - - - - $66.5 $3.3 $24.6 $26.9 $ 121.3 Dust Wipe Testing Events Incl uding Kitchens or Bathrooms Bath 97 4 149 89 $143 $143 $148 $148 $13.8 $0.6 $22.0 $13.2 $49.7 Kit 116 7 141 149 $143 $143 $148 $148 $16.6 $1.0 $20.8 $22.1 $60.5 Bath+Kit 35 4 87 31 $217 $217 $223 $223 $7.5 $1.0 $19.3 $6.9 $34.7 S-Paint 4 0 6 3 $143 $143 $148 $148 $0.6 $0.0 $0.9 $0.5 $2.0 M-Paint 5 0 4 5 $155 $136 $147 $142 $0.8 $0.0 $0.5 $0.7 $2.1 L-Paint 2 0 5 2 $204 $158 $184 $164 $0.4 $0.0 $0.9 $0.3 $1.6 S-WD 6 0 5 0 $143 $148 $0.9 $0.0 $0.7 $0.0 $1.6 L-WD 16 1 10 5 $239 $169 $215 $175 $3.8 $0.1 $2.1 $0.8 $6.9 Subtotal 281 17 405 285 - - - - $44.5 $2.8 $67.2 $44.6 $ 159.0 Clearance Events Excluding Kitchen or Bathroom Bath 8 0 5 5 $161 $161 $166 $166 $1.2 $0.1 $0.8 $0.8 $2.9 Kit 1 0 0 0 $163 $161 $168 $167 $0.2 $0.0 $0.0 $0.0 $0.3 Bath+Kit 0 0 0 0 $259 $257 $263 $262 $0.1 $0.0 $0.0 $0.0 $0.1 S-Paint 1 0 1 1 $162 $161 $167 $167 $0.2 $0.0 $0.1 $0.1 $0.4 M-Paint 0 0 0 0 $191 $163 $175 $168 $0.1 $0.0 $0.0 $0.1 $0.2 L-Paint 0 0 0 0 $271 $203 $237 $208 $0.1 $0.0 $0.1 $0.1 $0.2 S-WD 0 0 0 0 $161 $166 $0.1 $0.0 $0.0 $0.0 $0.1 L-WD 1 0 0 0 $325 $221 $288 $227 $0.2 $0.0 $0.0 $0.0 $0.2 Subtotal 13 1 6 7 - - - - $2.2 $0.1 $1.1 $1.1 $4.5 Clearance Events Including Kitchens or Bathrooms Bath 4 0 6 3 $199 $199 $215 $215 $0.7 $0.0 $1.3 $0.7 $2.7 Kit 5 0 4 5 $203 $200 $218 $216 $0.9 $0.0 $1.0 $1.0 $3.0 Bath+Kit 3 0 6 2 $313 $310 $328 $327 $0.9 $0.1 $2.1 $0.7 $3.7 S-Paint 0 0 0 0 $201 $200 $217 $216 $0.0 $0.0 $0.1 $0.0 $0.2 M-Paint 0 0 0 0 $226 $194 $219 $211 $0.1 $0.0 $0.0 $0.1 $0.2 L-Paint 0 0 0 0 $302 $230 $278 $246 $0.0 $0.0 $0.1 $0.0 $0.2 S-WD 0 0 0 0 $199 $215 $0.0 $0.0 $0.0 $0.0 $0.1 L-WD 1 0 0 0 $354 $248 $327 $264 $0.3 $0.0 $0.1 $0.0 $0.5 Subtotal 13 1 18 11 - - - - $3.0 $0.2 $4.7 $2.6 $10.5 All Events Total 747 43 599 501 - - - - $116.2 $6.4 $97.6 $75.2 $ 295.3 The following abbreviations are used: SF-O indicates single -family owner-occupied; MF-O indicates multi-family owneroccupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-fa mily renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath +Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painting sized event; M-Paint indicates a small painting sized event; L-Paint indicates a small painting sized event; S-WD indicates a small wi ndow/door sized event; L-WD indicates a large window/door sized event. A “bathroom size” or kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these size definitions are: (1) Bathr oom size: wall-distur bing events, addition events, (2) Kitchen size: wall-disturbing events, addition even ts, window/door replac ements, (3) Bathroom + kitchen size: wall-disturbing events, addition events. “0” and “0.0” i ndicate more than zero but fewer than 500 and 50 events respectively. Events excluding kitchens or bathrooms are calculated separately from ev ents including kitchens and bathrooms, because kitchens an d bathrooms have a different probability of be ing carpeted than the rest of the house, and dust wipe samples are only taken on uncarpete d floors. Clearance costs include the co st of associated dust wipe testing.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-60 Table 4-51: Total Target Housing First Year Costs: Proposed Option Events (thousands) Unit Costs Total Costs (millions) Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Dust Wipe Testing Events Excluding Kitchen or Bathroom Bath 17 1 11 10 $121 $121 $127 $127 $2.1 $0.1 $1.3 $1.3 $4.8 Kit 104 6 35 32 $121 $121 $127 $127 $12.7 $0.7 $4.4 $4.0 $21.8 Bath+Kit 1 0 0 0 $186 $186 $191 $191 $0.1 $0.0 $0.0 $0.0 $0.1 S-Paint 42 2 19 30 $121 $121 $127 $127 $5.1 $0.3 $2.5 $3.8 $11.6 M-Paint 22 1 11 19 $139 $121 $131 $127 $3.0 $0.2 $1.4 $2.4 $7.0 L-Paint 20 1 10 18 $191 $147 $170 $152 $3.8 $0.2 $1.8 $2.8 $8.6 S-WD 101 6 34 31 $121 $121 $127 $127 $12.2 $0.7 $4.3 $4.0 $21.2 L-WD 104 6 35 32 $227 $159 $204 $164 $23.6 $0.9 $7.1 $5.3 $36.9 Subtotal 410 23 155 173 - - - - $62.6 $3.1 $22.9 $23.6 $ 112.1 Dust Wipe Testing Events Incl uding Kitchens or Bathrooms Bath 52 2 80 48 $143 $143 $148 $148 $7.5 $0.3 $11.9 $7.1 $26.8 Kit 102 6 124 133 $143 $143 $148 $148 $14.6 $0.9 $18.3 $19.6 $53.4 Bath+Kit 35 5 87 31 $217 $217 $223 $223 $7.6 $1.0 $19.4 $6.9 $34.9 S-Paint 4 0 5 3 $143 $143 $148 $148 $0.5 $0.0 $0.7 $0.4 $1.7 M-Paint 4 0 3 4 $155 $136 $147 $142 $0.6 $0.0 $0.4 $0.6 $1.7 L-Paint 2 0 4 1 $204 $158 $184 $164 $0.4 $0.0 $0.7 $0.2 $1.3 S-WD 3 0 3 0 $143 $148 $0.5 $0.0 $0.4 $0.0 $0.8 L-WD 13 1 7 4 $239 $169 $215 $175 $3.0 $0.1 $1.6 $0.6 $5.4 Subtotal 215 14 313 224 - - - - $34.6 $2.4 $53.5 $35.5 $ 126.0 Clearance Events Excluding Kitchen or Bathroom Bath 8 0 5 5 $161 $161 $166 $166 $1.3 $0.1 $0.9 $0.8 $3.1 Kit 2 0 0 0 $163 $161 $168 $167 $0.3 $0.0 $0.0 $0.0 $0.4 Bath+Kit 0 0 0 0 $259 $257 $263 $262 $0.1 $0.0 $0.0 $0.0 $0.1 S-Paint 1 0 1 1 $162 $161 $167 $167 $0.2 $0.0 $0.1 $0.1 $0.4 M-Paint 0 0 0 0 $191 $163 $175 $168 $0.1 $0.0 $0.0 $0.1 $0.2 L-Paint 0 0 0 0 $271 $203 $237 $208 $0.1 $0.0 $0.1 $0.1 $0.3 S-WD 0 0 0 0 $161 $166 $0.1 $0.0 $0.0 $0.0 $0.1 L-WD 1 0 0 0 $325 $221 $288 $227 $0.2 $0.0 $0.0 $0.0 $0.3 Subtotal 13 1 7 7 - - - - $2.3 $0.1 $1.2 $1.2 $4.8 Clearance Events Including Kitchens or Bathrooms Bath 4 0 5 3 $199 $199 $215 $215 $0.7 $0.0 $1.2 $0.7 $2.6 Kit 4 0 5 5 $203 $200 $218 $216 $0.9 $0.0 $1.0 $1.0 $3.0 Bath+Kit 3 0 6 2 $313 $310 $328 $327 $0.8 $0.1 $2.0 $0.7 $3.6 S-Paint 0 0 0 0 $201 $200 $217 $216 $0.0 $0.0 $0.1 $0.0 $0.1 M-Paint 0 0 0 0 $226 $194 $219 $211 $0.1 $0.0 $0.0 $0.0 $0.1 L-Paint 0 0 0 0 $302 $230 $278 $246 $0.0 $0.0 $0.1 $0.0 $0.2 S-WD 0 0 0 0 $199 $215 $0.0 $0.0 $0.0 $0.0 $0.1 L-WD 1 0 0 0 $354 $248 $327 $264 $0.3 $0.0 $0.1 $0.0 $0.5 Subtotal 12 1 17 11 - - - - $2.9 $0.2 $4.5 $2.5 $10.1 All Events Total 650 39 493 414 - - - - $102.4 $5.7 $82.0 $62.8 $ 253.0 The following abbreviations are used: SF-O indicates si ngle-family owner-occupied; MF -O indicates multi-family owner-occupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath+Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painting si zed event; M-Paint indicates a small painting sized event; L-Paint indicates a small pain ting sized event; S-WD indicates a small window/door sized event; L-WD indicates a large window/door sized event. A “bathroom si ze” or kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types ha ving these size definitions are: (1) Bathroom size: walldisturbing events, addition events, (2) Kitchen size: wall-disturbi ng events, addition events, window/door replacements, (3) Bathroom + kitchen size: wall-disturbing events, additio n events. “0” and “0.0” indicate more than zero but fewer than 500 and 50 events respectively. Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathroom s, because kitchens and bathrooms have a di fferent probability of being carpeted than the rest of the house, and dust wipe samples are only take n on uncarpeted floors. Clearance costs include the cost of associated dust wipe testing.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-61 Table 4-52: Total Target Housing Firs t Year Costs: High Threshold Option Events (thousands) Unit Costs Total Costs (millions) Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Dust Wipe Testing Events Excluding Kitchen or Bathroom Bath 7 0 5 4 $121 $121 $127 $127 $0.9 $0.0 $0.6 $0.6 $2.1 Kit 108 6 37 33 $121 $121 $127 $127 $13.1 $0.7 $4.7 $4.2 $22.7 Bath+Kit 0 0 0 0 $186 $186 $191 $191 $0.0 $0.0 $0.0 $0.0 $0.1 S-Paint 12 1 5 8 $121 $121 $127 $127 $1.4 $0.1 $0.7 $1.0 $3.2 M-Paint 6 0 3 5 $139 $121 $131 $127 $0.8 $0.0 $0.4 $0.6 $1.8 L-Paint 5 0 3 5 $191 $147 $170 $152 $1.0 $0.0 $0.5 $0.7 $2.2 S-WD 106 6 37 33 $121 $121 $127 $127 $12.9 $0.7 $4.6 $4.2 $22.4 L-WD 107 6 37 33 $227 $159 $204 $164 $24.3 $1.0 $7.5 $5.4 $38.2 Subtotal 351 20 126 121 - - - - $54.5 $2.6 $18.9 $16.7 $92.7 Dust Wipe Testing Events Incl uding Kitchens or Bathrooms Bath 25 1 38 22 $143 $143 $148 $148 $3.5 $0.2 $5.6 $3.3 $12.7 Kit 84 5 102 110 $143 $143 $148 $148 $11.9 $0.7 $15.1 $16.2 $43.9 Bath+Kit 32 4 80 29 $217 $217 $223 $223 $7.0 $0.9 $17.9 $6.4 $32.2 S-Paint 3 0 4 3 $143 $143 $148 $148 $0.5 $0.0 $0.7 $0.4 $1.6 M-Paint 4 0 3 4 $155 $136 $147 $142 $0.6 $0.0 $0.4 $0.6 $1.7 L-Paint 2 0 4 1 $204 $158 $184 $164 $0.3 $0.0 $0.7 $0.2 $1.3 S-WD 2 0 1 0 $143 $148 $0.2 $0.0 $0.2 $0.0 $0.4 L-WD 10 1 6 3 $239 $169 $215 $175 $2.3 $0.1 $1.2 $0.5 $4.1 Subtotal 161 11 238 172 - - - - $26.5 $1.9 $41.8 $27.6 $97.8 Clearance Events Excluding Kitchen or Bathroom Bath 7 0 5 5 $161 $161 $166 $166 $1.2 $0.1 $0.8 $0.7 $2.8 Kit 2 0 0 0 $163 $161 $168 $167 $0.3 $0.0 $0.1 $0.0 $0.4 Bath+Kit 0 0 0 0 $259 $257 $263 $262 $0.1 $0.0 $0.0 $0.0 $0.1 S-Paint 1 0 0 0 $162 $161 $167 $167 $0.1 $0.0 $0.0 $0.1 $0.2 M-Paint 0 0 0 0 $191 $163 $175 $168 $0.0 $0.0 $0.0 $0.0 $0.1 L-Paint 0 0 0 0 $271 $203 $237 $208 $0.1 $0.0 $0.0 $0.0 $0.1 S-WD 0 0 0 0 $161 $166 $0.1 $0.0 $0.0 $0.0 $0.1 L-WD 1 0 0 0 $325 $221 $288 $227 $0.2 $0.0 $0.0 $0.0 $0.2 Subtotal 11 1 6 6 - - - - $2.0 $0.1 $1.1 $1.0 $4.1 Clearance Events Including Kitchens or Bathrooms Bath 3 0 5 3 $199 $199 $215 $215 $0.6 $0.0 $1.0 $0.6 $2.2 Kit 4 0 4 4 $203 $200 $218 $216 $0.8 $0.0 $0.9 $0.9 $2.6 Bath+Kit 2 0 5 2 $313 $310 $328 $327 $0.6 $0.1 $1.6 $0.5 $2.8 S-Paint 0 0 0 0 $201 $200 $217 $216 $0.0 $0.0 $0.0 $0.0 $0.1 M-Paint 0 0 0 0 $226 $194 $219 $211 $0.0 $0.0 $0.0 $0.0 $0.1 L-Paint 0 0 0 0 $302 $230 $278 $246 $0.0 $0.0 $0.1 $0.0 $0.1 S-WD 0 0 0 0 $199 $215 $0.0 $0.0 $0.0 $0.0 $0.1 L-WD 1 0 0 0 $354 $248 $327 $264 $0.2 $0.0 $0.1 $0.0 $0.4 Subtotal 10 1 15 9 - - - - $2.4 $0.2 $3.8 $2.1 $8.4 All Events Total 534 32 385 307 - - - - $85.3 $4.8 $65.5 $47.4 $203.0 The following abbreviations are used: SF-O indicates si ngle-family owner-occupied; MF -O indicates multi-family owner-occupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath+Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painting si zed event; M-Paint indicates a small painting sized event; L-Paint indicates a small pain ting sized event; S-WD indicates a small window/door sized event; L-WD indicates a large window/door sized event. A “bathroom si ze” or kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types ha ving these size definitions are: (1) Bathroom size: walldisturbing events, addition events, (2) Kitchen size: wall-disturbi ng events, addition events, window/door replacements, (3) Bathroom + kitchen size: wall-disturbing events, additio n events. “0” and “0.0” indicate more than zero but fewer than 500 and 50 events respectively. Events excluding kitchens or bathrooms are calculated separately from events including kitchens and bathroom s, because kitchens and bathrooms have a di fferent probability of being carpeted than the rest of the house, and dust wipe samples are only take n on uncarpeted floors. Clearance costs include the cost of associated dust wipe testing.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-62 Table 4-53: Total Public and Commercial Building COF First Year Costs
Events Unit Costs a Total Costs Building Type DWT Clearance DWT Clearance DWT Clearance Total Kindergarten (Public) 158 35 $465 $1,876 $73,449 $64,824 $138,273 Kindergarten (Large Private) 23 5 $465 $1,876 $10,481 $9,250 $19,730 Kindergarten (Small Private) 27 6 $465 $1,876 $12,412 $10,818 $23,230 Pre-K + Kindergarten (Public) 123 27 $465 $2,147 $57,383 $57,800 $115,183 Pre-K + Kindergarten (Large Private) 67 15 $465 $2,147 $31,351 $31,579 $62,931 Pre-K + Kindergarten (Small Private) 34 7 $465 $2,147 $15,780 $16,056 $31,836 Daycare Center (Renter-Occupied) 171 37 $416 $688 $71,004 $25,674 $96,678 Daycare Center (Owner-Occ upied) 117 26 $416 $688 $48,670 $17,598 $66,269 Daycare Center (Non-Profit who performs some of own RRP) 149 32 $416 $688 $61,873 $22,372 $84,245 Daycare Center (Non-Profit who uses contractors) 55 12 $416 $688 $22,771 $8,234 $31,005 Daycare Center (In Public School) 8 2 $416 $688 $3,256 $1,177 $4,434 Daycare Center (In Large Private School) 0 0 $416 $688 $16 $6 $22 Daycare Center (In Small Private School) 0 0 $416 $688 $32 $12 $44 All Building Types 930 203 -- -- $408,479 $265,399 $673,878 a. These unit costs for events in public and commercial building COFs are third party costs since the analysis assumes that non

residential contractors and operators of public and commercial building COFs will not perform en ough dust wipe testing or clearance events annually to make training an in-house dust sampling technician worthw hile. A zero indicates that fewer than 0.5 events are performed on average each year.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-63 

### 4.4 Number of Sampling Technicians S eekin g Training and Certification The proposed LRRP clearance rule would require a ll entities that conduct certain RRP activities known to generate high levels of lead dust to either hire a third party or use an employee trained as a dust sampling technician to perform post-renovation dust sampling. A trained dust sampling technician is an individualwho has successfully completed a dust sampling technician course accredited by EPA or an EPAauthorized State or Tribal program. It is expected that two types of construction businesses will perform regulated RRP work – businesses with employees and non-employer, or self-employed, contractors. In addition, rental companies are likely to perform some of the RRP work on the properties they manage rather than hire an outside contractor. Likewise, schools and daycare centers are likely to perform some or all of their RRP work with their own staff. De pending on the average number of events triggering dust wipe testing or clearance requirements performed by an entity each year, it will be cost-effective for some entities to use third-party dust sampling technici ans and others to train their own dust sampling technician. The sections below present an analysis of which firms and entities would choose to train their own dust sampling technician as well as an estimat e of the number of personnel requiring additional training under the proposed LRRP Clearance Rule.

4.4.1 Residential Activities: Estimating the Number of Personnel Obtaining Training to Meet the Demand for Dust Wipe Testing and Clearance Services

4.4.1.1 Firms Certified Under the 2008 LRRP rule and the 2009 Proposed Opt-Out Rule 

### This analysis utilizes the total estimated numbers of firms seeking certification from the economic analysis of the 2008 LRRP rule (EPA 2008) and the ec onomic analysis of the 2009 proposed Opt-Out rule (EPA 2009). The general approach used by EPA (2008, 2009) was to obtain Census estimates of the total number of establishments in affected industries and ad just these estimates to account for the fact that not all work performed in these industries is affected by th e rule. Note that Census data are only available for establishments and not firms. These data are used as the basis for estimating the number of firms that will pursue training for a dust sampling technician. The total numbers of establishments are adjusted in three ways: (1) according to the share of their revenues that come from residential work, (2) to reflect the share of the housing stock that is affected by the 2009 proposed Opt-Out Rule, and (3) to reflect a 75 percent compliance rate following previous analyses (EPA 2008, 2009). These adjustments imply that there will be some degree of specialization in regulated work. They do not, however, imply full sp ecialization in regulated work. For example, the adjustments do not fully reflect the share of RRP work that does not disturb any painted surfaces or the disproportionate amount of residential work that is related to new construction. Adjusting for these two factors would imply more specialization and result in a lower estimate of the number of affected firms and personnel. The numbers of certified firms performing RRP in ta rget housing under the 2008 LRRP Rule and the subsequent 2009 proposed Opt-Out Rule are estimate d in three segments: (1) residential construction establishments with employees and (2) non-employer r esidential construction establishments (i.e., selfemployed contractors). Note that this analysis ex cludes the following construction and real estate sectors expected to be affected by the 2008 LRRP rule but not the proposed LRRP Clearance Rule: (1) siding contractors, (2) other building equipment contractors, (3) other building finishing contractors, (4) glass and glazing contractors. 11 

### In addition, this analysis assumes th at residential property managers and lessors do not perform the RRP activities that would require dust wipe testing or clearance under the

11 Renovators in these sectors are not expected to typically perfo rm the types of renovation events that require dust wipe testi ng or clearance under the proposed rule.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-64 

### proposed rule. These activities are primarily major renovations such as kitchen remodeling, bathroom remodeling and window and door replacement. The more minor and routine RRP activities that would be expected to be performed by property manager and l essor staff, such as re-painting a rental unit, would generally not require using the paint removal practices that trigger the proposed clearance rule requirements. To the extent that property manager and lessors have staff that perform activities that would be covered by the proposed LRRP Clearance Rule , this analysis may be slightly understating the costs of performing these activities (by not including dust sampling technician training costs for these firms). Note that another implication of this assumption is that the estimated small business impacts (presented in Chapter 6) on construction firms are highe r, since the costs associated with a larger number of events are attributed to a smaller number of firms. Table 4-54 presents the estimated number of firms in each seg ment expected to seek LRRP program ce rtification under the 2008 LRRP rule and the 2009 proposed Opt-Out rule.

Table 4-54: Total Number of Residential RRP Firms Certified under LRRP Program in First Year

NAICS Description Number of Employer Estab. in Industry Residential Adjustment Factor: Residential Revenues as a Percent of Total Value of Construction Number of Estab., Adjusted by Percentage of Housing Stock Affected (65%), Residential Adjustment

Factor, and Assumed Compliance Rate (75%) Employer Construction Establishments 236118 Residential remodelers 82,747 56% 22,590 238350 Finish carpentry 35,087 50% 8,552 238340 Tile and terrazzo 8,950 28% 1,222 238220 Plumbing and HVAC 87,501 27% 11,517 238320 Painting and wall covering 38,943 25% 4,746 238210 Electrical contractors 62,586 23% 7,018 238310 Drywall and insulation 19,598 21% 2,006 Subtotal 335,412 35% 57,651 Non-Employer Construction Establishments
236118 Residential remodelers 194,182 56% 53,012
238350 Finish carpentry 185,118 50% 45,122
238340 Tile and terrazzo 47,220 28% 6,446
238220 Plumbing and HVAC 110,183 27% 14,503
238320 Painting and wall covering 205,462 25% 25,041
238210 Electrical contractors 102,219 23% 11,462
238310 Drywall and insulation 103,398 21% 10,586 Subtotal 947,7 82 36% 166,170
All Residential RRP Firms 223,821 Source: U.S. Census Bureau 2003; U.S. Census Bureau 2005d,i,j; U.S. Small Business Administration 2005; EPA CalculationsEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-65 4.4.1.2 Estimating the Stock of Trained Dust Sampling Technicians Necessary to Meet Demand for Du st Wipe Testing and Clearance Services in Target Housing 

### The proposed LRRP Clearance rule requires firms to en sure that dust wipe testing and clearance activities covered by the rule are performed by certified dust sam pling technicians, inspectors, or risk-assessors. To estimate the number of individuals that will seek dust sampling technician training, the analysis first considered whether it would be more cost effectiv e for firms to: (1) obtain dust sampling technician training for one of their employees, or (2) use a third pa rty to conduct dust wipe testing. Thus, a firm must perform a minimum number of dust wipe testing or clearance events annually for the cost savings from performing this activity with their own employee to ou tweigh the dust sampling technician training costs. Following the analysis of the 2008 LRRP rule (EPA 2008), it is assumed that the number of events performed per firm is proportiona l to the number of employees per firm. The average employment size was calculated by dividing the number of construction employees by the number of establishments in each industry (See Table 4-55). For non-employer firms, it is assumed that one person performs all the RRP work. Table 4-55 presents both the number of dust wipe testing and clearance events for the proposed o ption.

Table 4-55: Construction Employees and Annual Dust Wipe Testing and Clearance Events Per Establishment (Proposed Option)

NAICS Description Number of Certified Estab.

in Industry Number of Construction

Workers Employed by Certified Estab. Employees Per Estab. Annual Number of Dust Wipe Testing and Clearance Events Per Estab. Employer Construction Establishments
236118 Residential remodelers 22,590 56,684 2.5 8.5 238350 Finish carpentry 8,552 31,660 3.7 12.5
238340 Tile and terrazzo 1,222 6,106 5.0 16.9 238220 Plumbing and HVAC 11,517 93,776 8.1 27.6 238320 Painting and wall covering 4,746 22,465 4.7 16.0
238210 Electrical contractors 7,017 67,993 9.7 32.8 238310 Drywall and insulation 2,006 26,744 13.3 45.1 Non-Employer Construction Establishments

236118 Residential remodelers 53,012 n.a. n.a. 3.4
238350 Finish carpentry 45,123 n.a. n.a. 3.4
238340 Tile and terrazzo 6,446 n.a. n.a. 3.4
238220 Plumbing and HVAC 14,503 n.a. n.a. 3.4
238320 Painting and wall covering 25,041 n.a. n.a. 3.4
238210 Electrical contractors 11,461 n.a. n.a. 3.4
238310 Drywall and insulation 10,585 n.a. n.a. 3.4
All Residential RRP Firms 223,821 305,428 6.4 8.2 Source: U.S. Census Bureau 2005i,j; U.S. Small Business Administration 2005; EPA Calculations *Non-employer establishments by definition have no employees; it is estimated that these es tablishments are self-employed contractors which perform 2.8 Clearance Rule events per year, or the average number for one employee in an employer construction firm.



### Given the average annual number of dust wipe testi ng and clearance events performed by each category of firm, estimates of third party and in-house dust wi pe testing costs can be compared to determine the most cost-effective approach to dust-wipe sampling. This comparison is presented in Table 4-56. SinceEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-66 

### the firm category with the maximum number of annual dust wipe testing and clearance events only has an average of 37.8 of these events annually (“Drywa ll and insulation contractors”), and each dust wipe testing event requiring four samples only takes on aver age 1.75 hours, it is reasonable to assume that no firm would need to train more than one dus t sampling technician for an annual maximum total of 66 hours of work per year. 12


### Given that the expected amount firms save by using their own dust sampling technicians is much greater than the annualized cost of dust sampling technician training ($146) 13 

### for certified firms in all of the sectors shown in Table 4-56, this analysis assumes that each establishment will choose to incur training costs for one dust sa mpling technician. Note that this result also holds true for the alternative options considered in this analysis (not shown in table).

Table 4-56: Cost Comparison for Third Party and In-House Dust Sampling Technicians (Proposed Option)

NAICS Description Annual Dust Wipe Testing and Clearance Events Annual Cost Per Firm for Third Party Services a Annual Cost PerFirm for InHouse Dust

Sampling Technician b Annual Savings Per Firm from

Using an InHouse Dust

Sampling Technician Employer Construction Establishments
236118 Residential remodelers 8.5 $2,529 $1,420 $1,109 238350 Finish carpentry 12.5 $3,731 $2,096 $1,635 238340 Tile and terrazzo 16.9 $5,037 $2,829 $2,208 238220 Plumbing and HVAC 27.6 $8,206 $4,609 $3,597 238320 Painting and wall covering 16.0 $4,771 $2,679 $2,091 238210 Electrical contractors 32.8 $9,766 $5,485 $4,281 238310 Drywall and insulation 45.1 $13,435 $7,546 $5,889 Non-Employer Construction Establishments
236118 Residential remodelers 3.4 $1,008 $566 $442
238350 Finish carpentry 3.4 $1,008 $566 $442 238340 Tile and terrazzo 3.4 $1,008 $566 $442
238220 Plumbing and HVAC 3.4 $1,008 $566 $442 238320 Painting and wall covering 3.4 $1,008 $566 $442
238210 Electrical contractors 3.4 $1,008 $566 $442 238310 Drywall and insulation 3.4 $1,008 $566 $442 All Residential RRP Firms 8.2 $2,431 $1,365 $1,065
a,b All costs are calculated using unrounded number of events; a 3 percent discount rate is used.

12 The average amount of labor time necessary for a dust sampling event with four required sample s was estimated using primary data collection of 9 lead evaluation firms. The specific results of this survey are available in Section 4.3.1.

13 This average cost is calculated by dividing the 50-year aver age dust sampling technician training costs ($29,563,881) by the 50-year average number of firms expected to se ek dust sampling technician training (202,745).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-67 

### 4.4.2 Public and Commercial Building Activities: Estimating the Number of Personnel Obtaining Training to Meet the Demand for Dust Wipe Testing and Clearance Services This analy sis compared the costs of using third party dust sampling technicians with the costs of training a dust sampling technician for those public and commer cial building owners that perform RRP using their own staff. However, since this analysis estimates that staff in public and commercial building COFs will perform activities requiring dust wipe testing or cl earance relatively infrequently, the per-event cost savings from having a trained dust sampling technician on staff are not large enough to justify the dust sampling technician training costs. The additional costs associated with using third party testing for a dust wipe testing or clearance event in a public or co mmercial building is estimated to range from $149 to $161, which is well below the estimated costs of obtai ning dust sampling technician training, $621. Thus, the analysis assumes that public and commercial build ing COFs will use third party testing in lieu of training their own dust sampling technician. The economic analysis for the 2008 LRRP rule est imated that there would be 3,223 nonresidential contractors seeking certification in the first year of the rule’s implementation, and that these contractors would perform an average of 280,434 events per year (EPA 2008). However, since this analysis estimates that non-residential contractors will perform only an average of 406 dust wipe testing or clearance events annually, or one regulated event a bout every eight years on average, the additional costs associated with third party testing, $155, are lo wer than the dust sampling training cost of $621. 14 

### , Thus, it is assumed that these nonresidential building contract ors will use third party testing rather than obtain dust sampling technician training for one of their empl oyees. Note that although the analysis makes the simplifying assumption that third party testing will al ways be used for dust wipe testing and clearance events in public and commercial buildings, in realit y some firms with trained dust sampling technicians may perform some of this work. These firms could be non-residential contractors specializing in dust wipe testing and clearance work, or they could be fi rms that also perform dust wipe testing and clearance in residential units. To the extent that third party t esting is not used, this analysis may be overstating the costs of dust wipe testing and clearance for these structures.

4.4.3 Estimating the Number of Personnel Seeking Training Each Year Under the LRRP Clearance Proposed Rule
The num ber of individuals seeking training in any give n year is estimated from the stock of firms and individuals necessary to meet demand for dust wipe testing services. (B ecause training is valid for five years, the annual number trained each year after the first year is a fraction of the total stock of trained individuals and certified firms). Note that many of the additional dust sampling tec hnicians that are expected undergo training because of the proposed LRRP Clearance Rule are likely to seek training before the provision goes into effect. However, this analysis utilizes the simplifying assu mption that any additional initial training takes place over a 12 month period starting from the date of the expansion of the regulated universe.

4.4.3.1 Training after the Initial Years 

### Following the 2008 LRRP rule analysis (EPA 2008), th is analysis assumes a steady annual number of individual trainings following the first year of re gulation with an annual decline of 0.41 percent. Note

14 This analysis assumes that private sc hools, public schools, and non-profit daycare centers which use in-house staff to perform RRP will perform all window/door carpentry work in-house. Non-residential contractor firms will perform all other RRP. Non-residential contractor firms will perform all RRP events in owner-occupied daycare centers, daycare centers that do not perform all of their own RRP (i.e., contract some of it out ), and small private schools.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-68 

### that if all the individuals needed to meet the dema nd for clearance requirements were trained in the first year, one might expect a drop in the level of training in the second year, followed by a spike in the fifth year. That is, one might expect a cyclical pattern of training to emerge. However, it is difficult to predict how cyclical the training demand might be or how this cyclicality might diminish over time. Therefore, this analysis assumes that a typical amount of traini ng occurs each year after the first year. Modeling a cyclical component would add little to the analysis without being able to estimate the extent of any cyclicality more precisely. The analysis does account for trained individuals that exit the industry each year and are replaced by new entrants. This analysis accounts for turnover in the regulated RRP industry by assuming a certain percentage of trainings each year are initial trainings. Specifically, after the first year, 86.7% percent of the dust sampling technicians seeking training are assumed to be seeking their initial certification. This percentage is based on the relative number of Abat ement Supervisors applying for initial certifications according to the Federal Lead-Based Paint Program (FLPP) database (EPA 2005). 15

4.4.3.2 Summary of Number of Individuals Trained to Per form Dust Wipe Testing and Clearance 

### Table 4-57 presents a summary of the estimated stock of dust sampling technicians that will perform RRP requiring dust wipe testing or clearance. The number of trained personnel are segmented by establishment type: employer construction, non-empl oyer construction, and residential property manager and lessor. As demonstrated in Section 4.4.2, no employees working in public an d commer cial buildings are expected to seek dust sampling technician training. In year one, a total of 223,821 trained dust sampling technicians will be necessary to perform dust wipe testing and clearance services for regulated residential RRP. As described above, this number decreases by 0.41% eac h year to account for the decline in pre-1978 building stock.

Table 4-57: Estimated Stock of Trained Dust Sampling Technicians and Certified Firms to Perform RRP, by Year

Year Stock of Trained Dust Sampling Technicians Initial Trainings Refresher Trainings
Employer Construction Establishments
Year 1 57,651 57,651 0
Year 2 57,415 9,952 1,531 Non-Employer Construction Establishments
Year 1 166,170 166,170 0
Year 2 165,489 28,685 4,413 All Establishments
Year 1 233,821 233,821 0
Year 2 222,904 38,637 5,944



### 4.5 Sampling Technician Training Costs Training costs include the cost of the time spent on training activities as well as the associated travel and tuition costs. Note that tuition costs are assumed to include the costs associated with training provider accreditation. In other words, it is assumed th at accredited training providers pass along their

15 It was found in this study of a training certification program that last ed three years that in a given year, 52% of individual s seeking training were seeking initial training, and 48% were se eking refresher training. This percentage was adjusted to apply to a 5-year training cycle (86.7 %) by multiplying 52% by five-thirds.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-69 

### accreditation fees and other administrative costs thro ugh their tuition. These accreditation fees and other administrative costs are estimated in the paperwork burden analysis but are only implicitly accounted for (as part of tuition costs) in the estimates of the total cost of the rule.

4.5.1 Training Burden Per Individual
To estim ate the incremental burden of training dust sampling technicians, several cost components are calculated including tuition rates, wage rates, and travel and expense costs. Each certified dust sampling technician will participate in 8 hours of formal initial training. Refresher dust sampling technician certification training is required every five y ears; the refresher course is four hours. Tuition for the initial certified dust sampling technician training class is estimated to be $205 and each corresponding refresher course’s tuition is estimated to be $103. This estimate relies on the assumption that the average hourly tuition is equal to the observed rates for the accredited lead abatement and evaluation courses ($23.26/hr). This value is then converted to 2008 dollars. 16 

### Additional travel and meal costs associated with training are assumed to be $134 (EPA 2006). 17 

### Digital photos of each certified dust sampling technician are also added into the additiona l costs. The total cost for a one-time use digital camera that takes 25 pictures is $14 ($0.56 per pictur e taken). The total time allotted to taking and processing these photos is estimated at 3 minutes ($1.20), wh ich results in a total cost of $1.76 (or $2 in 2008 dollars). For a class size of 10 students, 3 minutes per student is equivalent to a total time of 30 minutes to take the digital photos, associate them with the appropriate students, and insert the photos onto the training certificates. The value of the time for certified dust sampling techni cians to receive formal initial training is $279 (8 hours at a loaded wage rate of $34.92/hour); for refresher training the value is $140 (EPA 2006). Certified dust sampling technicians might be self-employed or employed by a larger company. Therefore, the value of time is likely to represent a mix of lost wages and additional overhead to firms. As shown in Table 4-58, the aggregated incremental cost of training is $621 for initial certified dust sampling technician training and $378 for refresher certified dust sampling technician training.

Table 4-58: Dust Sampling Technician Training Costs Per Individual (2008$)

Tuition Value of Time Travel and Meals Digital Photo Total Initial Training $205 $279 $134 $2 $621 Refresher Training $103 $140 $134 $2 $378 Sources: BLS 2008, IRS 2008, EPA 2006



### 4.5.2 Total Training Costs Table 4-59 presents the total training costs of the rule for the first three y ears. The number of dust sampling technicians seeking training is described in Section 4.4.3; the value of training time for dust

sam pling technicians is described in Section 4.5.1. The average training cost per renovator varies in the initial years of the regulation according to the relative number of initial and refresher trainings. After the

16 The average of the hourly tuition rate s are used rather than picking a sing le similar course because no single course is similar enough to the dust sampling technician course. For example, the initial courses are the only courses with hands-on training, but th ey are also longer than the technici an course. The refresher courses are more similar in length, but have no hands on requirements.

17 Travel costs include 2 hours of travel time ($70), meals ($10), and mileage costs (50 miles, $54).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-70 

### first year, 86.7 percent of contractors and public or commercial building renovato rs receive initial training (due to turnover in the industry) and the rest obtai n refresher training. Note that an individual who received initial training and let their certification expi re must retake the initial training. The stock of regulated structures declines by 0.41 percent annua lly which also reduces the demand for lead-safe renovation services, the number of dust sampling technicians seeking training, and the undiscounted total training costs. As shown in Table 4-59, total training costs for Year 1 will be $138, 993,017 a nd total training costs for Year 2 will be $25,475,936.

Table 4-59: Total Dust Sampling Technician Training Costs (2008$)

Year Type of Training Number of Dust Sampling Technicians Seeking Training Average Cost of Training Total Training Cost (2008$, before discounting) Year 1 Initial 223,821 $621 $138,993,017 Initial 38,637 $621 $23,993,345 Year 2
Refresher 5,944 $378 $2,246,868



### 4.6 Total Incremental Costs of Proposed LRRP Clearance Rule This section presents the total costs of the proposed LRRP Clearance Rule. Total costs are presented for the first and second years of regulation, and total 50-ye ar and annualized costs are also calculated. The total costs are calculated over a 50-year period using both 3 and 7 percent discount rates. Discounting refers to the economic conversion of future costs (a nd benefits) to their present values, accounting for the fact that society tends to value future costs or benef its less than comparable near-term costs or benefits. Discounting is important when the values of costs or benefits occur over a multiple year period and may vary from year to year. Discounting enables the accumulation of the cost and benefit values from multiple years at a single point in time, accounting for the difference in how society values those costs and benefits depending on the year in which the values are estimated to occur. The 50-year costs were estimated by developing a pr ofile of the compliance costs associated with each option over a 50-year period. (The 50-year period was c hosen to be consistent with the economic analysis done for the TSCA Section 403 Lead-Based Paint Hazard Standards.) The profile of costs over time was developed by estimating an annual decline in pr e-1978 housing stock of 0.41 percent per-year and assuming that the regulated universe would decrease by th at rate every year. That rate was calculated using the average annual compound rate of change in the pre-1980 housing stock using data from the 1990 and 2000 Decennial Census (U.S . Census Bureau 1990 a nd 2000c). This rate affects costs because it decreases the number of events and number of workers trained every year. As discussed above, first year dust sampling technician training costs account for the training and certification of all dust sampling technicians require d to meet the demand for dust wipe testing and clearance services in the first year. In subsequent ye ars, it is assumed that one fifth of the necessary stock of individuals will obtain training each year (since refr esher-training and re-certification is required every five years). The total 50-year costs and the 50-year annualized cost s are discounted using rates of 3 and 7 percent. These discount rate values reflect guidance from th e Office of Management and Budget regulatory analysis guidance document, Circular A-4 (OMB, 2003). The following formula was used to calculate the present value (PV) of the time stream of costs:Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-71 

### PV = )1( , 

### )1(

− 

### + t tx



### r Cost

where: Cost t 

### = Costs in year t; r = Discount rate (3 percent and 7 percent); and t = Year in which cost is incurred.

This analysis also presents the 50-year annualized cost s of the rule. Conceptually, the 50-year annualized cost is the level annual payment that one would have to make to pay off a debt equal to the present value total 50-year cost for a given interest rate (the discount rate). The following formula is used to cal culate the 50-year annualized cost.



### 1)1( )1(

)50( 50



### −+ +× ×= r rr PVAC

r



### where: AC = Annualized 50-Year Costs; PV r 

### = Present Value Total 50-Year Costs assuming a discount rate of r; and r = Discount rate (3 percent and 7 percent)

Table 4-60 presents the first year, second year, total 50 -y ear and 50-year annualized incremental costs of the proposed LRRP Clearance Rule. Total work practi ce costs are lower for the options with larger size thresholds for triggering the rule’s requirements. As shown in the table, training costs are not assumed to vary with the size thresholds. However, it should be noted that it is possible that fewer sampling technicians may seek training if the universe of even ts changes, in which case the difference in costs between threshold options would be larg er than estimated for this analysis.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-72

Table 4-60: Total Incremental Costs of Pr oposed LRRP Clearance Rule (millions 2008$)

Option Year 1 Year 2 50-Year Total Annualized Total Work Practice

Costs Training Costs Total Work Practice

Costs Training Costs Total 3% 7% 3% 7% Target Housing Low Threshold $295 $139 $434 $294 $26 $320 $8,023 $4,629 $312 $335 Proposed Threshold $253 $139 $392 $252 $26 $278 $6,983 $4,035 $271 $292 High Threshold $203 $139 $342 $202 $26 $228 $5,753 $3,332 $224 $241 Public and Commercial Building COFs All Thresholds 1 $1 -- $1 $1 -- $1 $17 $9 $1 $1 All Structure Types Low Threshold $296 $139 $435 $295 $26 $321 $8,040 $4,638 $312 $336 Proposed Threshold $254 $139 $393 $253 $26 $279 $6,999 $4,044 $272 $293 High Threshold $204 $139 $343 $203 $26 $229 $5,769 $3,342 $224 $242

1 It is assumed that the number of events in Public and Commercia l COFs are not affected by the size thresholds, since the larger scale of the activities that are expected to occur in these structures are assumed to exceed all size thresholds.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-73 

### Table 4-61 presents more detail on which types of even ts drive the total incremental work practice costs of the rule. The table demonstrates that despite the relatively higher costs of clearance, dust wipe testing accounts for the substantial majority of the total wo rk practice costs because of the higher frequency with which it is required. The largest contributor to total work practice costs under the low and the proposed threshold options is from dust wipe testing multiple activity events, which represent the dust wipe testing events that trigger more than one of the rule’s threshold requirements . These event types represent a smaller share of the total costs for the larger size threshold options, since fewer renovation activities trigger the rule’s requirements as the size threshold increases. For exam ple, dust wipe testing for an event where a door and 10 square feet of trim was removed would be considered a mu ltiple activity event under the low threshold option (since the trim removal and door removal both trigger the dust wipe testing requirements). However, this would be categorized as a door removal event under the proposed option (since the door removal is the only activity that tr iggers the rule’s requirements under the proposed option). This example also illustrates why total window/door frame removal event costs are higher for the higher threshold options even though the size thresholds for these activities do not vary by option.

Table 4-61: Total Incremental Annualized Work Practice Costs by Event Type (3 percent discount rate, thousands 2008$) Event Type Low Threshold Proposed Threshold High Threshold

Target Housing Public and Com. COF Total Target Housing Public and Com. COF Total Target Housing Public and Com. COF Total Dust Wipe Testing Events Heat gun, < 1000 degrees $481 $1 $481 $501 $1 $502 $0 $1 $1 Window/door frame removal $70,096 $278 $70,374 $74,407 $278 $74,686 $78,926 $278 $79,204 Scraping $5,287 $37 $5,324 $276 $37 $313 $0 $37 $37 Trim, molding, cabinet removal $93,051 $74 $93,125 $58,866 $74 $58,940 $28,238 $74 $28,312 Multiple activity
events a $99,036 - $99,036 $93,575 - $93,575 $74,898 - $74,898 Subtotal, dust wipe testing $267,949 $390 $268,340 $227,625 $390 $228,015 $182,062 $390 $182,452 Clearance Events High speed machines $650 $200 $850 $678 $200 $878 $361 $200 $561 Plaster demolition through destructive means $3,474 $54 $3,528 $4, 924 $54 $4,978 $5,459 $54 $5,512 Multiple activity
events a $10,191 - $10,191 $8,603 - $8,603 $6,132 - $6,132 Subtotal, clearance events $14,315 $254 $14,569 $14,205 $254 $14,459 $11,952 $254 $12,205 Total, All Event Types $282,265 $644 $282,909 $241,830 $644 $242,474 $194,013 $644 $194,658

a Multiple event types occurring during th e course of a single job (e.g., a reno vation with both window frame removal and trim removal).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-74 

### 4.7 Alternative Baseline and Options

4.7.1 2008 LRRP Rule Universe (Excludes Opt-Out Eligible Housing) This section presents the c osts for the alternative b aseline scenario where the opt-out provision is not eliminated as proposed in October 2009 (74 FR 55506). The primary cost estimates for the Proposed LRRP Clearance Rule were estimated under a baseline scenario where the opt-out provision of the 2008 LRRP rule has been eliminated. However, because the proposed LRRP Clearance Rule was developed before the LRRP Opt-Out Rule was finalized, the costs of the Propo sed LRRP Clearance Rule are also estimated for the alternative base line scenario where the opt-out provision has not been eliminated. Under this alternative baseline it is estimated that there would be fewer affected events and fewer sampling technicians seeking training because opt-out elig ible housing units would be able to opt-out of the requirements of the LRRP program, including the proposed LRRP Clearance Rule. Opt-out eligible housing includes owner-occupied housing units that are not COFs where no child under the age of six or pregnant woman resides. Table 4-62 presents the total estimated number of even ts and target housing wor k practice costs under this alternative baseline scenario. The estimated number of events is 1,032,606 under this scenario compared to 1,595,856 under the primary baseline scenario and th e total target housing work practice costs are $165 million under this scenario compared to $254 million under the primary baseline scenario (See Table 4-62 and Table 4-51). The public and commercial buildin g COF universe and costs are the same under both scenarios.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-75 Table 4-62: Total First Year Target Housing Costs: 2008 Rule Universe (Excludes Opt-Out Housing) Events (thousands) Unit Costs Total Costs (thousands) Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Dust Wipe Testing Events Excluding Kitchen or Bathroom Bath 3 0 11 10 $121 $121 $127 $127 $0.4 $0.0 $1.3 $1.3 $3.1 Kit 19 1 35 32 $121 $121 $127 $127 $2.3 $0.1 $4.4 $4.0 $10.8 Bath+Kit 0 0 0 0 $186 $186 $191 $191 $0.0 $0.0 $0.0 $0.0 $0.0 S-Paint 7 0 19 30 $121 $121 $127 $127 $0.9 $0.0 $2.5 $3.8 $7.2 M-Paint 4 0 11 19 $139 $121 $131 $127 $0.5 $0.0 $1.4 $2.4 $4.4 L-Paint 3 0 10 18 $191 $147 $170 $152 $0.6 $0.0 $1.8 $2.8 $5.2 S-WD 18 1 34 31 $121 $121 $127 $127 $2.1 $0.1 $4.3 $4.0 $10.6 L-WD 18 1 35 32 $227 $159 $204 $164 $4.2 $0.1 $7.1 $5.3 $16.7 Subtotal 72 4 155 173 - - - - $11.0 $0.5 $22.9 $23.6 $57.9 Dust Wipe Testing Events Incl uding Kitchens or Bathrooms Bath 9 0 80 48 $143 $143 $148 $148 $1.3 $0.0 $11.9 $7.1 $20.3 Kit 20 0 124 133 $143 $143 $148 $148 $2.8 $0.1 $18.3 $19.6 $40.9 Bath+Kit 8 1 87 31 $217 $217 $223 $223 $1.8 $0.2 $19.4 $6.9 $28.4 S-Paint 1 0 5 3 $143 $143 $148 $148 $0.1 $0.0 $0.7 $0.4 $1.2 M-Paint 1 0 3 4 $155 $136 $147 $142 $0.1 $0.0 $0.4 $0.6 $1.2 L-Paint 0 0 4 1 $204 $158 $184 $164 $0.1 $0.0 $0.7 $0.2 $1.1 S-WD 1 0 3 0 $143 $148 $0.1 $0.0 $0.4 $0.0 $0.5 L-WD 3 0 7 4 $239 $169 $215 $175 $0.7 $0.0 $1.6 $0.6 $3.0 Subtotal 43 2 313 224 - - - - $7.1 $0.4 $53.5 $35.5 $96.4 Clearance Events Excluding Kitchen or Bathroom Bath 2 0 5 5 $161 $161 $166 $166 $0.2 $0.0 $0.9 $0.8 $2.0 Kit 0 0 0 0 $163 $161 $168 $167 $0.1 $0.0 $0.0 $0.0 $0.2 Bath+Kit 0 0 0 0 $259 $257 $263 $262 $0.0 $0.0 $0.0 $0.0 $0.1 S-Paint 0 0 1 1 $162 $161 $167 $167 $0.0 $0.0 $0.1 $0.1 $0.3 M-Paint 0 0 0 0 $191 $163 $175 $168 $0.0 $0.0 $0.0 $0.1 $0.1 L-Paint 0 0 0 0 $271 $203 $237 $208 $0.0 $0.0 $0.1 $0.1 $0.2 S-WD 0 0 0 0 $161 $166 $0.0 $0.0 $0.0 $0.0 $0.0 L-WD 0 0 0 0 $325 $221 $288 $227 $0.0 $0.0 $0.0 $0.0 $0.1 Subtotal 3 0 7 7 - - - - $0.5 $0.0 $1.2 $1.2 $2.8 Clearance Events Including Kitchens or Bathrooms Bath 1 0 5 3 $199 $199 $215 $215 $0.1 $0.0 $1.2 $0.7 $2.0 Kit 1 0 5 5 $203 $200 $218 $216 $0.2 $0.0 $1.0 $1.0 $2.2 Bath+Kit 1 0 6 2 $313 $310 $328 $327 $0.2 $0.0 $2.0 $0.7 $2.9 S-Paint 0 0 0 0 $201 $200 $217 $216 $0.0 $0.0 $0.1 $0.0 $0.1 M-Paint 0 0 0 0 $226 $194 $219 $211 $0.0 $0.0 $0.0 $0.0 $0.1 L-Paint 0 0 0 0 $302 $230 $278 $246 $0.0 $0.0 $0.1 $0.0 $0.1 S-WD 0 0 0 0 $199 $215 $0.0 $0.0 $0.0 $0.0 $0.0 L-WD 0 0 0 0 $354 $248 $327 $264 $0.1 $0.0 $0.1 $0.0 $0.3 Subtotal 2 0 17 11 - - - - $0.6 $0.0 $4.5 $2.5 $7.7 All Events Total 120 6 493 414 - - - - $19.1 $0.9 $82.0 $62.8 $164.8 The following abbreviations are used: SF-O indicates single-family owner-occupied; MF-O indicates multi-family owner-occupied; SFR indicates single-family renter-occupied; MF-R indicates multi-fa mily renter-occupied; Bath indi cates a bathroom size event; K it indicates a kitchen size event, Bath+Kit indi cates an event the size of a bathroom a nd a kitchen combined; S-Paint indicates a small painting sized event; M-Paint indicates a sm all painting sized event; L-Paint indicates a small painting sized event; S-WD ind icates a small window/door sized event; L-WD indicates a large window/door sized event. A “bathroom size” or kitchen size” indicates the
event size , not the event type . In addition to bathroom and kitchen events, othe r event types having these size definitions are: (1) Bathroom size: wall-disturbing events, addition events, (2) Kitchen size: wall-disturbing even ts, addition events, window/door replacements, (3) Bathroom + kitchen size: wall-disturbing events, a ddition events. A zero indicates a small positive number ro unded to zero in the table. . Events excluding kitchens or bathrooms are calculated separately from even ts including kitchens and bathro oms, because kitchens and bathrooms have a diffe rent probability of being carpeted than the rest of the house, and dust wipe samples are only taken on uncarpeted floors. Clearance costs in clude the cost of associated dust wipe testing.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-76 

### Table 4-63 presents the estimated number of sampli ng technicians trained under the alternative baseline scenario where the opt-out provision is not eliminat ed. The estimated number of sampling technicians trained in the first year is 1 36,714 under this scenario compared to 233,821 under the primary baseline scenario and the total first year training costs ar e $85 million under this scenario compared to $139 million under the primary baseline scenario (See Table 4-63 and Table 4-59).

Table 4-63: Total Dust Sampling Technician Training Costs: 2008 Rule Universe (Excludes Opt-Out Housing - 2008$)

Year Type of Training Number of Dust Sampling Technicians Seeking Training Average Cost of Training Total Training Cost (2008$, before discounting) Year 1 Initial 136,714 $621 $84,899,362 Initial 23,600 $621 $14,655,554 Year 2
Refresher 3,631 $378 $1,372,426



### Table 4-64 presents a comparison of the costs of th e LRRP Clear ance Proposed Rule for both the primary baseline scenario and the alternative baseline scenario where the opt-out provision is not eliminated as was proposed in October 2009. Under this alternativ e baseline it is estimated that there would be fewer affected events and fewer sampling technicians seeking training, and Table 4-64 shows how much lower these costs would be under this alternative baseline scenario.

Table 4-64: Total Incremental Costs of Clearance Rule (millions 2008$)

Option Year 1 Year 2 50-Year Total Annualized Total Work Practice

Costs Training Costs Total Work Practice

Costs Training Costs Total 3% 7% 3% 7% Primary Baseline Scenario: Universe includes Opt-Out $254 $139 $393 $253 $26 $279 $6,999 $4,044 $272 $293

Alternative Baseline Scenario: 2008 Rule Universe (Excludes Opt-Out) $166 $85 $250 $165 $16 $181 $4,535 $2,619 $176 $190

Percentage Difference -35% -39% -36% -35% -39% -35% -35% -35% -35% -35%



### 4.7.2 Mandatory Third Party Third Party Dust Wipe Sampling Option This section presents the esti mated costs under an a lternative option where dust wipe sampling must be performed by a third party. Other requirements are the same as under the proposed option. Table 4-65 presents the total estimated number of even ts and target housing wor k practice costs under this alternative option. The estimated number of events is the same under this scenario compared to the primary option and the total target housing work practice costs are $450 million under this scenarioEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-77 

### compared to $254 million under the primary option (See Table 4-65 and Table 4-51). The public and

co mmercial building COF universe and costs are the same under both scenarios.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-78 Table 4-65: Total First Year Target Housing Event Costs: Third Party Dust Sampling Option Events (thousands) Unit Costs Total Costs (thousands) Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Dust Wipe Testing Events Excluding Kitchen or Bathroom Bath 17 1 11 10 $243 $243 $248 $248 $4.2 $0.2 $2.6 $2.6 $9.6 Kit 104 6 35 32 $243 $243 $248 $248 $25.4 $1.4 $8.6 $7.9 $43.4 Bath+Kit 1 0 0 0 $308 $308 $313 $313 $0.2 $0.0 $0.0 $0.0 $0.2 S-Paint 42 2 19 30 $243 $243 $248 $248 $10.1 $0.6 $4.8 $7.5 $23.0 M-Paint 22 1 11 19 $261 $243 $252 $248 $5.6 $0.3 $2.8 $4.7 $13.4 L-Paint 20 1 10 18 $313 $269 $292 $274 $6.3 $0.3 $3.1 $5.0 $14.7 S-WD 101 6 34 31 $243 $243 $248 $248 $24.4 $1.4 $8.5 $7.8 $42.1 L-WD 104 6 35 32 $349 $281 $326 $286 $36.4 $1.7 $11.3 $9.2 $58.5 Subtotal 410 23 155 173

- - - - $112.6 $5.9 $41.8 $44.6 $204.9 Dust Wipe Testing Events Incl uding Kitchens or Bathrooms Bath 52 2 80 48 $265 $265 $270 $270 $13.8 $0.6 $21.7 $12.9 $49.1 Kit 102 6 124 133 $265 $265 $270 $270 $27.0 $1.6 $33.4 $35.8 $97.8 Bath+Kit 35 5 87 31 $340 $340 $345 $345 $11.9 $1.5 $30.0 $10.7 $54.1 S-Paint 4 0 5 3 $265 $265 $270 $270 $1.0 $0.0 $1.3 $0.8 $3.1 M-Paint 4 0 3 4 $277 $258 $268 $264 $1.2 $0.1 $0.8 $1.2 $3.2 L-Paint 2 0 4 1 $326 $280 $306 $286 $0.6 $0.1 $1.2 $0.4 $2.2 S-WD 3 0 3 0 $265 $270 $0.9 $0.0 $0.7 $0.0 $1.5 L-WD 13 1 7 4 $361 $291 $338 $297 $4.6 $0.2 $2.5 $1.1 $8.3 Subtotal 215 14 313 224

- - - - $60.8 $4.1 $91.7 $62.8 $219.4 Clearance Events Excluding Kitchen or Bathroom Bath 8 0 5 5 $325 $325 $331 $331 $2.6 $0.1 $1.7 $1.6 $6.2 Kit 2 0 0 0 $328 $326 $332 $331 $0.6 $0.0 $0.1 $0.1 $0.8 Bath+Kit 0 0 0 0 $454 $453 $459 $458 $0.1 $0.0 $0.0 $0.0 $0.2 S-Paint 1 0 1 1 $326 $326 $332 $331 $0.4 $0.0 $0.2 $0.3 $0.9 M-Paint 0 0 0 0 $364 $328 $342 $333 $0.2 $0.0 $0.1 $0.1 $0.4 L-Paint 0 0 0 0 $469 $380 $423 $386 $0.2 $0.0 $0.1 $0.1 $0.4 S-WD 0 0 0 0 $326 $331 $0.1 $0.0 $0.0 $0.0 $0.1 L-WD 1 0 0 0 $535 $404 $489 $410 $0.3 $0.0 $0.1 $0.0 $0.4 Subtotal 13 1 7 7

- - - - $4.6 $0.2 $2.3 $2.3 $9.4 Clearance Events Including Kitchens or Bathrooms Bath 4 0 5 3 $359 $359 $364 $364 $1.3 $0.1 $2.0 $1.1 $4.4 Kit 4 0 5 5 $363 $360 $367 $365 $1.6 $0.1 $1.7 $1.7 $5.1 Bath+Kit 3 0 6 2 $507 $504 $512 $510 $1.3 $0.2 $3.1 $1.0 $5.6 S-Paint 0 0 0 0 $361 $360 $366 $365 $0.1 $0.0 $0.1 $0.1 $0.2 M-Paint 0 0 0 0 $393 $353 $369 $358 $0.1 $0.0 $0.1 $0.1 $0.2 L-Paint 0 0 0 0 $493 $400 $446 $405 $0.1 $0.0 $0.1 $0.0 $0.3 S-WD 0 0 0 0 $359 $365 $0.1 $0.0 $0.1 $0.0 $0.1 L-WD 1 0 0 0 $557 $423 $509 $428 $0.4 $0.0 $0.2 $0.1 $0.7 Subtotal 12 1 17 11

- - - - $4.9 $0.3 $7.3 $4.2 $16.8 All Events Total 650 39 493 414

- - - - $182.9 $10.5 $143.1 $113.9 $450.4 The following abbreviations are used: SF-O indicates single-family owner-occupied; MF-O indicates multi-family owneroccupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath +Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painti ng sized event; M-Paint indicates a small painting sized event; L-Paint indicates a small painting sized event; S-WD indi cates a small window/door sized event; L- WD indicates a large window/door sized event. A “bathroom size” or kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these si ze definitions are: (1) Bathroom size: wa ll-disturbing events, addition events, (2) Kitchen size: wall-disturbing events, add ition events, window/door replacements, (3) Ba throom + kitchen size: wall-disturbing events, addition events. A zero indicates a small positive number rounded to zero in the table. . Events excluding kitchens or bathrooms are calculated separately from events including kitche ns and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the hous e, and dust wipe samples are only taken on uncarpeted floors. Clearance costs include the cost of associated dust wipe testing.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-79 

### Because this option assumes that all dust wipe testi ng and clearance events will be performed by third party firms, the costs associated with dust sampling technicians are implicitly included in the additional costs associated with third party testing. Table 4-66 presents a comparison of the costs of th e LRRP Clear ance Proposed Rule for both the primary option and the alternative option where all dust sampli ng following target housing events is performed by third party establishments instead of residential RRP fi rms. Under this alternative option it is estimated that there would be the same number of affected events and higher overall costs.

Table 4-66: Total Incremental Costs of Clearance Rule (2008$): Mandatory Third Party Dust Sampling Option

Option Year 1 Year 2 50-Year Total Annualized Total Work Practice

Costs Training Costs Total Work Practice

Costs Training Costs Total 3% 7% 3% 7% Proposed Rule: In-house Dust Wipe Sampling Allowed $254 $139 $393 $253 $26 $279 $6,999 $4,044 $272 $293

Alternative Option: Mandatory Third Party Dust Wipe Sampling $451 $451 $449 $449 $11,095 $6,334 $431 $459

Percentage Difference n.a. 15% n.a. 61% 59% 57% 59% 57%



### 4.7.3 Dust Wipe Testing Only Option This section presents the esti mated costs under an a lternative option where only dust wipe testing is required in all instances where either dust wipe testi ng or clearance is required under the proposed rule (i.e., clearance is not required for any RRP events). Table 4-67 presents the total estimated number of even ts and target housing wor k practice costs under this alternative option. The estimated number of even ts is the same under the dust wipe testing option compared to the primary option, although all events previously requiring clearance will now only require dust wipe testing. The total target housing work practice costs are $249 million under this scenario compared to $254 million under the primary option (See Table 4-67 and Table 4-51). The public and

co mmercial building COF universe and costs unde r the alternative option are presented in Table 4-68.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-80 Table 4-67: Total First Year Target Housing Costs: Dust Wipe Testing Option Events (thousands) Unit Costs Total Costs (millions) Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Events Excluding Kitchen or Bathroom Bath 25 1 16 15 $121 $121 $127 $127 $3.1 $0.2 $2.0 $1.9 $7.2 Kit 106 6 35 32 $121 $121 $127 $127 $12.9 $0.7 $4.4 $4.1 $22.1 Bath+Kit 1 0 0 0 $186 $186 $191 $191 $0.2 $0.0 $0.0 $0.0 $0.2 S-Paint 43 2 20 31 $121 $121 $127 $127 $5.2 $0.3 $2.5 $3.9 $11.9 M-Paint 22 1 11 19 $139 $121 $131 $127 $3.1 $0.2 $1.5 $2.5 $7.2 L-Paint 21 1 11 19 $191 $147 $170 $152 $3.9 $0.2 $1.8 $2.8 $8.8 S-WD 101 6 34 31 $121 $121 $127 $127 $12.2 $0.7 $4.4 $4.0 $21.3 L-WD 105 6 35 32 $227 $159 $204 $164 $23.8 $1.0 $7.1 $5.3 $37.1 Subtotal 424 24 162 180
-- -- -- -- $64.4 $3.1 $23.8 $24.5 $115.7 Events Including Kitchens or Bathrooms Bath 56 2 86 51 $143 $143 $148 $148 $8.0 $0.3 $12.7 $7.5 $28.6 Kit 106 6 128 137 $143 $143 $148 $148 $15.2 $0.9 $19.0 $20.3 $55.4 Bath+Kit 38 5 93 33 $217 $217 $223 $223 $8.2 $1.1 $20.7 $7.4 $37.3 S-Paint 4 0 5 3 $143 $143 $148 $148 $0.5 $0.0 $0.7 $0.4 $1.8 M-Paint 4 0 3 5 $155 $136 $147 $142 $0.7 $0.0 $0.5 $0.7 $1.8 L-Paint 2 0 4 1 $204 $158 $184 $164 $0.4 $0.0 $0.8 $0.2 $1.5 S-WD 3 0 3 0 $143 $0 $148 $0 $0.5 $0.0 $0.4 $0.0 $0.9 L-WD 13 1 8 4 $239 $169 $215 $175 $3.2 $0.1 $1.7 $0.7 $5.7 Subtotal 227 15 331 234
-- -- -- -- $36.6 $2.5 $56.6 $37.3 $132.9 All Events Total 650 39 493 414 -- -- -- -- $101.0 $5.6 $80.3 $61.7 $248.7 The following abbreviations are used: SF-O indicates single-family owner-occupied; MF-O indicates multi-family owneroccupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath +Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painti ng sized event; M-Paint indicates a small painting sized event; L-Paint indicates a small painting sized event; S-WD indi cates a small window/door sized event; L- WD indicates a large window/door sized event. A “bathroom size” or kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these si ze definitions are: (1) Bathroom size: wa ll-disturbing events, addition events, (2) Kitchen size: wall-disturbing events, add ition events, window/door replacements, (3) Ba throom + kitchen size: wall-disturbing events, addition events. A zero indicates a small positive number rounded to zero in the table. . Events excluding kitchens or bathrooms are calculated separately from events including kitche ns and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the hous e, and dust wipe samples are only taken on uncarpeted floors. Clearance costs include the cost of associated dust wipe testing.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-81 Table 4-68: Total First Year Public and Commercial Building COF Costs: Dust Wipe Testing Option Building Type Events Unit Costs Total Costs Kindergarten (Public) 192 $465 $89,531 Kindergarten (Large Private) 27 $465 $12,775 Kindergarten (Small Private) 32 $465 $15,096 Pre-K + Kindergarten (Public) 150 $465 $69,908 Pre-K + Kindergarten (Large Private) 82 $465 $38,195 Pre-K + Kindergarten (Small Private) 41 $465 $19,259 Daycare Center (Renter-Occupied) 208 $416 $86,526 Daycare Center (Owner-Occupied) 142 $416 $59,310 Daycare Center (Non-Profit who performs some of own RRP) 181 $416 $75,398 Daycare Center (Non-Profit who uses contractors) 67 $416 $27,749 Daycare Center (In Public School) 10 $416 $3,968 Daycare Center (In Large Private School) 0 $416 $20 Daycare Center (In Small Private School) 0 $416 $39 All Building Types 1134 -- $497,774 a. These unit costs for events in public and commercial building COFs are third party costs since the analysis assumes that non-resident ial contractors and operators of public and commercial building COFs will not perform enough dust wipe testing events annually to make training an in-house dust sampling technician worthwhile.



### Because under this option all residential construction est ablishments will still be expected to train an inhouse dust sampling technician, total training costs will be the same under both the primary option and alternative option. Therefore – as under the primary option – the estimated number of sampling technicians trained in the first year will be 233, 821 and training costs will amount to $139 million.
Table 4-69 presents a comparison of the costs of th e LRRP Clear ance Proposed Rule for both the primary option and the alternative option under which all events affected by the rule would only require dust wipe testing. Under this alternative option it is estimated that there would be the same total number of affected events, the same total number of sampling technicians and training costs, and lower average per-event
costs.

Table 4-69: Total Incremental Costs of Du st Wipe Testing Only Option (million $)

Option Year 1 Year 2 50-Year Total Annualized Total Work Practice

Costs Training Costs Total Work Practice

Costs Training Costs Total 3% 7% 3% 7% Proposed Rule: Dust Wipe Testing and Clearance $254 $139 $393 $253 $26 $279 $6,999 $4,044 $272 $293

Alternative Option: Dust Wipe Testing Only $249 $139 $388 $248 $26 $274 $6,888 $3,981 $268 $288

Percentage Difference -2% 0% -1% -2% 0% -2% -2% -2% -2% -2%Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-82 

### 4.7.4 Clearance for All Events Option This section presents the esti mated costs under an a lternative option where clearance is required in all instances where either dust wipe testing or cl earance is required under the proposed rule. Table 4-70 presents the total estimated number of even ts and target housing wor k practice costs under this alternative option. The estimated number of events is the same under this scenario compared to the primary option, although all events previously only requiring dust wipe testi ng will now require achieving clearance. The total target housing event costs ar e $351 million under this scenario compared to $254 million under the primary option (See Table 4-70 and Table 4-51). Public and commercial building COF universe and costs under the alternative option are presented in Table 4-71.

Table 4-70: Total First Year Target Housing Costs: Clearance Option Events (thousands) Unit Costs Total Costs (thousands) Type SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R SF-O MF-O SF-R MF-R Total Events Excluding Kitchen or Bathroom Bath 25 1 16 15 $161 $161 $166 $166 $4.1 $0.2 $2.6 $2.6 $9.5 Kit 106 6 35 32 $163 $161 $168 $167 $17.3 $1.0 $5.9 $5.3 $29.5 Bath+Kit 1 0 0 0 $259 $257 $263 $262 $0.2 $0.0 $0.0 $0.0 $0.3 S-Paint 43 2 20 31 $162 $161 $167 $167 $6.9 $0.4 $3.3 $5.1 $15.8 M-Paint 22 1 11 19 $191 $163 $175 $168 $4.2 $0.2 $2.0 $3.3 $9.7 L-Paint 21 1 11 19 $271 $203 $237 $208 $5.6 $0.2 $2.5 $3.9 $12.2 S-WD 101 6 34 31 $161 $161 $166 $166 $16.2 $0.9 $5.7 $5.2 $28.1 L-WD 105 6 35 32 $325 $221 $288 $227 $34.0 $1.3 $10.1 $7.3 $52.7 Subtotal 424 24 162 180 -- -- -- -- $88.6 $4.2 $32.1 $32.7 $157.7 Events Including Kitchens or Bathrooms Bath 56 2 86 51 $199 $199 $215 $215 $11.1 $0.5 $18.5 $11.0 $41.0 Kit 106 6 128 137 $203 $200 $218 $216 $21.6 $1.3 $28.0 $29.7 $80.5 Bath+Kit 38 5 93 33 $313 $310 $328 $327 $11.8 $1.5 $30.6 $10.8 $54.6 S-Paint 4 0 5 3 $201 $200 $217 $216 $0.8 $0.0 $1.1 $0.7 $2.5 M-Paint 4 0 3 5 $226 $194 $219 $211 $1.0 $0.0 $0.7 $1.0 $2.7 L-Paint 2 0 4 1 $302 $230 $278 $246 $0.6 $0.0 $1.2 $0.4 $2.2 S-WD 3 0 3 0 $199 $215 $0.7 $0.0 $0.6 $0.0 $1.3 L-WD 13 1 8 4 $354 $248 $327 $264 $4.7 $0.2 $2.6 $1.0 $8.5 Subtotal 227 15 331 234 -- -- -- -- $52.2 $3.5 $83.1 $54.5 $193.4 All Events Total 650 39 493 414 -- -- -- -- $140.8 $7.8 $115.3 $87.2 $351.1 The following abbreviations are used: SF-O indicates single-family owner-occupied; MF-O indicates multi-family owneroccupied; SF-R indicates single-family renter-occupied; MF-R indicates multi-family renter-occupied; Bath indicates a bathroom size event; Kit indicates a kitchen size event, Bath +Kit indicates an event the size of a bathroom and a kitchen combined; S-Paint indicates a small painti ng sized event; M-Paint indicates a small painting sized event; L-Paint indicates a small painting sized event; S-WD indi cates a small window/door sized event; L- WD indicates a large window/door sized event. A “bathroom size” or kitchen size” indicates the event size , not the event type . In addition to bathroom and kitchen events, other event types having these si ze definitions are: (1) Bathroom size: wa ll-disturbing events, addition events, (2) Kitchen size: wall-disturbing events, add ition events, window/door replacements, (3) Ba throom + kitchen size: wall-disturbing events, addition events. A zero indicates a small positive number rounded to zero in the table. . Events excluding kitchens or bathrooms are calculated separately from events including kitche ns and bathrooms, because kitchens and bathrooms have a different probability of being carpeted than the rest of the hous e, and dust wipe samples are only taken on uncarpeted floors. Clearance costs include the cost of associated dust wipe testing.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-83 Table 4-71: Total First Year Public and Commercial Building COF Costs: Clearance Option Building Type Events Unit Costs Total Costs Kindergarten (Public) 192 $1,876 $360,887 Kindergarten (Large Private) 27 $1,876 $51,496 Kindergarten (Small Private) 32 $1,876 $60,849 Pre-K + Kindergarten (Public) 150 $2,147 $322,609 Pre-K + Kindergarten (Large Private) 82 $2,147 $176,259 Pre-K + Kindergarten (Small Private) 41 $2,147 $88,878 Daycare Center (Renter-Occupied) 208 $688 $143,119 Daycare Center (Owner-Occupied) 142 $688 $98,102 Daycare Center (Non-Profit who performs some of own RRP) 181 $688 $124,713 Daycare Center (Non-Profit who uses contractors) 67 $688 $45,898 Daycare Center (In Public School) 10 $688 $6,564 Daycare Center (In Large Private School) 0 $688 $32 Daycare Center (In Small Private School) 0 $688 $65 All Building Types 1134

-- $1,479,470 a. These unit costs for events in public and commercial building COFs are third party costs since the analysis assumes that non-resident ial contractors and operators of public and commercial building COFs will not perform enough dust wipe testing events annually to make training an in-house dust sampling technician worthwhile.



### Because under this option all reside ntial construction establishments w ill still be expected to train only one in-house dust sampling technician, total training costs will be the same under both the primary option and alternative option. Therefore – as under the primary option – the estimated number of sampling technicians trained in the first year will be 233, 821, and training costs will amount to $139 million.
Table 4-72 presents a comparison of the costs of th e LRRP Clear ance Proposed Rule for both the primary option and the alternative option under which all events affected by the rule would require full clearance. Under this alternative option it is estimated that ther e would be the same total number of affected events, the same number of sampling technicians seeking traini ng and total training costs, and higher average perevent costs.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-84 Table 4-72: Total Incremental Costs of Cl earance for All Events Option ($ million)

Option Year 1 Year 2 50-Year Total Annualized Total Work Practice

Costs Training Costs Total Work Practice

Costs Training Costs Total 3% 7% 3% 7% Proposed Rule: Dust Wipe Testing and Clearance $254 $139 $393 $253 $26 $279 $6,999 $4,044 $272 $293

Alternative Option: Clearance for all Events in Proposed Rule $353 $139 $492 $351 $26 $377 $9,431 $5,432 $367 $394

Percentage Difference 39% 0% 25% 39% 0% 35% 35% 34% 35% 34%Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 4 4-85 

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Chapter 4 4-86 

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U.S. EPA. 2009c. “Locate Certified Abatement Firms.” Available at: http://cfpub.epa.gov/flpp/search.cfm?App licant_T ype=firm (Accessed 9/20/2009) U.S. Office of Management and Budget. 2003. Circular A-4. U.S. Small Business Administration. 2005. “Non-Employer Statistics.” Firm Size Data. http://www.sba.gov/advo/research/data.html. (Downloaded 8/3/2005). U.S. Internal Revenue Service (IRS). 2007. Revenue Procedure 2007-70. Available at: http://www.irs.gov/pub/irs-drop/rp- 07-70.pdf (Accessed 12/16/2009). U.S. Internal Revenue Service (IRS). 2008. Ann ouncement 2008-63: Optional Standard Mileage Rates. Available at: http://www.irs.gov/pub/irs- drop/a-08-63.pdf (Accessed 12/16/2009). U.S. Postal Service (USPS). 2009. “Prices: Current prices for domestic and international service.” Available at: http://www.usps.com/prices/welcome.htm?fro m=home_mailandshipping&page=pricecomparison s (Accessed 10/1/2009). Whitestone Research. The Whitestone Building Main tenance and Repair Cost Reference 2006-2007. 11th Annual Edition. August 2006.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-1 

## 5. Benefits of the Proposed LRRP Clearance Rule A great deal of information on the numerous adverse h ealth effects of lead is available from decades of medical observation and scientific research. Inhaled or ingested lead is distributed throughout the body and is toxic to many organ systems. As a result, its toxicity manifests itself in the form of impacts on several organ systems. A reduction in lead exposur e resulting from the proposed rule would lead to a reduction in these adverse health effects and the costs of treating them. Young children (from birth through age five) are particularly sensitive to lead, which impairs a child’s neuropsychological development (frequently measured by IQ change). This chapter presents a discussion of the benefits associated with reducing lead exposure through revi sing the lead, renovation, repair, and painting (LRRP) program regulations, by estimating the numbers of the populations expected to be affected. The proposed LRRP Clearance Rule would require du st wipe testing after many of the RRP activities regulated under the 2008 LRRP rule, and would require clearance after a smaller subset of RRP activities. The clearance requirements of the proposed LRRP Cl earance Rule are expected to result in lower exposures to dust lead by reducing the amount of dus t lead left behind after renovation, repair, and painting (RRP). Two types of benefits are expected to be realized from the proposed dust wipe testing requirements. The first type is the direct benefits of the information to the owners and occupants, which includes the value of the information on dust lead levels remaining in the renovation work area. For building owners and occupants, this information is likely to improve their understanding and awareness of dust lead hazards. It will also greatly improve their ability to make further risk management decisions. This information is particularly critical where dust lead levels approach or exceed the regulatory hazard standards. The second benefit expected to be rea lized from the proposed dust wipe testing requirements stems from changed behavior on the part of renovation fi rms. EPA believes that dust wipe testing results will also provide valuable feedback to renova tion firms on how well they are cleaning up after renovations. It is likely that the specific dust lead levels contained in dust wipe testing results will increase renovation firm cleaning efficiency. Renovation fi rms will be incentivized to lower the dust lead levels remaining after renova tion jobs, even if the levels are at or near the regulatory standards. Because proper cleanup plays such a vital role in the minimi zation of dust lead hazards created by renovations, providing information on dust lead levels remaining after renovations to building owners and occupants will serve as an incentive for firms to perform pos t-renovation cleaning efficiently and thoroughly, reducing the amount of dust lead left behind after RRP. An overview of the proposed LRRP Clearance Rule, as it applies to this benefits estimation, is provided in Section 5.1 . Section 5.2 presents the estimated number of child ren, pregnant woman, and adults who reside in or occupy (i.e., attend school or receive chil dcare in) the structures affected by the proposed rule. Finally, in Section 5.3 , the human health and ecological conseque nces of lead exposure are summarized. This analysis does not quantify the value of the bene fits of the proposed rule, but presents estimated numbers of some of the populations expected to be affected.


### 5.1 Overview of Proposed LRRP Clearance Rule in Terms of Benefits Estimation The proposed LRRP Clearance Rule in cludes several revisions to the 2008 Lead Renovation, Repair, and Painting Program (RRP) rule that established accreditation, training, certification, and recordkeeping requirements as well as work practice standards for persons performing renovations for compensation in most pre-1978 housing and child-occupied facilities. EPA is particularly concerned about dust lead hazards generated by renovations because of the we ll-documented toxicity of lead, especially to younger children. The proposed LRRP Clearance Rule includ es additional requirements designed to ensure that lead-based paint hazards generated by renovation work are adequately cleaned after renovation work isEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-2 

### finished and before the areas are re-occupied. Speci fically, EPA is proposing to require dust wipe testing after many renovations covered by the RRP rule. For a subset of jobs involving demolition or removal of plaster through destructive means or the disturban ce of paint using machines designed to remove paint through high-speed operation, such as power sanders or abrasive blasters, this proposal would also require the renovation firm to demonstrate, through dust wipe testing, that dust-lead levels remaining in the work area are below regulatory levels. With regard to potential implications of lead eff ects on IQ, the Air Quality Criteria Document recognizes the ‘‘critical’’ distinction between population and indi vidual risk, identifying issues regarding declines in IQ for an individual and for the population. The Crite ria Document further states that a ‘‘point estimate indicating a modest mean change on a health inde x at the individual level can have substantial implications at the population level’’ (CD, p. 8–77). A downward shift in the mean IQ value is associated with both substantial decreases in percentages achievi ng very high scores and substantial increases in the percentage of individuals achieving very low scores (AQCD, p. 8–81). For an individual functioning in the low IQ range due to the influence of developmenta l risk factors other than lead, a lead-associated IQ decline of several points might be sufficient to drop that individual into the range associated with increased risk of educational, vocational, and social failure (AQCD, p. 8–77). Other cognitive effects observed in studies of child ren have included effects on attention, executive functions, language, memory, learning and visuospatial processing (AQCD, sections 5.3.5, 6.2.5 and 8.4.2.1), with attention and executive function eff ects associated with lead exposures indexed by blood lead levels below 10 μ g/dL (AQCD, section 6.2.5 and pp. 8–30 to 8–31). The evidence for the role of lead in this suite of effects includes experimental anim al findings (discussed in AQCD, section 8.4.2.1; p. 8– 31), which provide strong biological plausibility of lead effects on learning ability, memory and attention (AQCD, section 5.3.5), as well as associated mechanistic findings. These cognitive and behavioral effects, discussed above , are strongly related to future productivity and expected earnings (Salkever 1995). Based on Salkever’s coefficients, the estimated value of an IQ point is $14,280 (2008 dollars). This IQ value is modeled as the present value of a loss in expected lifetime earnings due to a one point IQ drop. The present value is calculated assuming that children would be affected by lead at 3 years of age, the median of the range when children ar e most susceptible to lead hazards; that while most people start working at age 18, average income in the early adult years is reduced because some are still in school ; and that retirement occurs at the age of 67. This estimated value of an IQ point is limited to reduced income, and does not include other potential impacts such as additional education costs for special and remedial edu cation, and medical costs to treat very high levels of lead. Both epidemiologic and toxicological studies have shown that environmentally relevant levels of lead affect many different organ systems (EPA 2006b, p.E-8). It appears that some of these effects, particularly changes in the levels of certain blood enzymes and in aspects of children's neurobehavioral development, may occur at blood-lead levels so lo w as to be essentially without a threshold (EPA 2004). Epidemiologic studies have consistently demonstrated associations between lead exposure and enhanced risk of deleterious cardiovascular outcomes, including increased blood pressure and increased hypertension (EPA 2006b). A meta-analysis of numer ous studies estimates that a doubling of blood-lead level (e.g., from 5 to 10 μ g/dL) is associated with ~1.0 milli meter of mercury (mm Hg) increase in systolic blood pressure and ~0.6 mm Hg increase in diastolic pressure. The evidence for an association of lead with cardiovascular morbidity and mortality is limited but supportive (EPA 2006b, p. E-10). The Criteria Document states ‘‘although an increase of a few mmHg in blood pressure might not be of concern for an individual’s well-being, the same incr ease in the population mean might be associated withEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-3 

### substantial increases in the percentages of individuals with values that are suffici ently extreme that they exceed the criteria used to diagno se hypertension’’ (EPA 2006b, p. 8–77).

Neurotoxic effects in children and cardiovascular effect s in adults are among those best substantiated as occurring at blood-lead concentrations as low as 5 to 10 ug/dL (or possibly lower); and these categories of effects are currently clearly of greatest public health concern (EPA 2006b, p 8-60). Other newly demonstrated immune and renal system effects am ong general population groups are also emerging as low-level lead exposure effects of potential pub lic health concern (EPA 2006b, p 8-60). Some studies have examined the question of whethe r the neurological effects of exposures in early childhood are ameliorated when blood-lead levels decline. The data are mixed on this issue. In a study that treated lead-exposed children with a chelati ng agent, Ruff (1993) found that children whose bloodlead levels had the greatest decline showed the most improvement in cognitive scores. In contrast, Rogan (2001) found that treatment with a chelating agent lowered blood-lead levels in children but did not appear to improve neurological function. Liu (2002) also found that chelation therapy at age 2, while lowering blood-lead levels, did not improve neurological function in children at 5 years of age. While the study did detect a relationship between declining bl ood-lead and improved neurological function, this association was observed only in the untreated group, l eading the authors to speculate that some other factor besides declining lead levels from chelation th erapy (such as greater parental involvement), led to the neurological gains. Dietrich (2004) had similar findings in the same cohort of children at 7 years of age. One study cited in ATSDR (1999) showed impair ed motor and cognitive function at a current mean level of 2.9 μ g/dL, about 20 years after exposure when blood-lead levels were 40-50 μ g/dL (Stokes 1998). The negative impact of lead on IQ and other neur obehavioral outcomes persist in most recent studies following adjustment for numerous confounding factors including social class, quality of caregiving, and parental intelligence. Moreover, these effects appear to persist into adolescence and young adulthood in the absence of marked reductions in environmental e xposure to lead (EPA 2006b, p. 6-76). This further supports the concern that early exposures to lead ma y lead to irreversible damage and supports the benefits of regulatory interventions to prevent and/or reduce lead exposure. Renovation activities that disturb lead-based paint crea te high dust-lead levels which are not removed through typical cleaning practices. EPA’s Dust Stu dy (EPA 2007) found that dust-lead levels created by renovation activities ranged from 422 to 32,633 μ g/ft 2 

### . While dry sweeping and the use of a regular shop vacuum resulted in a reduction in these levels, a significant amount of leaded dust remained. All residents of the household or occupants of the building can be exposed to this dust, regardless of age. EPA’s Exposure Factors Handbook (EPA 1997) contains recommended soil and dust ingestion estimates for adults, and EPA’s Child-Specific Exposur e Factors Handbook (EPA 2008a), which includes recommended soil and dust ingestion estimates fo r children between the ages of 6 and 21.

5.1.1 Regulatory Options for Proposed LRRP Clearance Rule The economic analysis presented in this report consid ers various regulatory options. The three primary options considered in this analysis only differ in the size thresholds that trigger the rule’s requirements when performing certain renovation activities. The thr ee threshold options considered in this analysis

are:
1. Low Threshold Option

 All event types requiring dust wipe tes ting where the total amount of lead-based paint disturbed is larger than 6 square feet.

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-4 

### 2. Proposed Threshold Option

 Dust wipe testing is required for:

- cabinet and trim events larger than 40 square feet,

- scraping of paint larger than 60 square feet,

- heat gun removal of more than 6 square feet

- Window frame or door frame removal events

 Clearance is required for:

- high-speed machine removal of paint larger than 6 square feet, and

- plaster removal using destructive means, larger than 6 square feet. 3. High Threshold Option

 Dust wipe testing is required for:

- cabinet and trim events larger than 80 square feet,

- scraping or heat gun removal of paint larger than 120 square feet, and

- window frame or door frame removal events.

 Clearance is required for:

- high-speed machine removal of paint larger than 60 square feet, and

- plaster removal using destructive means, larger than 60 square feet. This analysis considers three alternative options in addition to the three primary options: (1) an option where third party dust wipe testing and clearance is required, (2) an option where dust wipe testing is required in lieu of the clearance required under the pr oposed option, and (3) an option where clearance is required in lieu of the dust wipe testing required under the proposed option. The number of individuals affected under these alternative options are the sa me as those affected under the proposed option. Therefore, separate estimates of affected populati ons are not presented for these alternative options. All the primary and alternative options are analyzed under the baseline scenario where the opt-outprovision of the 2008 LRRP rule has been eliminated as proposed (the opt out provision allows owneroccupied housing units where no child under the age of six or pregnant woman resides to opt out of the rule’s requirements). Since the LRRP Opt-Out Rule is not a final rule, the analysis also presents estimates of the populations affected by the proposed LRRP Clearance Rule under the alternative baseline assuming the regulated universe under the 2008 LRRP Rule (which excludes opt-out eligible housing from the universe). Table 5-1 summarizes the options presented in the economic analysis.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-5 Table 5-1: Options Included in Economic Analysis



### Option/Baseline Size Threshold Dust Wipe Testing and Clearance Third Party Requirement Baseline

Low Threshold Option Size thresholds are lower or equal to proposed rule No 2008 + Opt Out

Proposed Threshold

Option Size thresholds are as proposed No 2008 + Opt Out

High Threshold Option Size thresholds are higher or equal to proposed rule Dust wipe testing is required for: 1. cabinet and trim events 2. scraping of paint 3. heat gun removal of paint 4. Window frame or door frame removal events

Clearance is required for: 1. high-speed machine removal of paint 2. plaster removal using destructive means No 2008 + Opt Out

Third Party

Option Same as Proposed Dust wipe testing and clearance are required in the same instances as proposed Yes 2008 + Opt Out

Dust Wipe Testing Only Option Same as Proposed Dust wipe testing is required in instances where dust wipe testing or clearance are required under the proposed option No 2008 + Opt Out

Clearance Only Option Same as Proposed Clearance is required in instances where dust wipe testing or clearance are required under the proposed option No 2008 + Opt Out

Proposed Option with Alternative Baseline Same as Proposed Same as Proposed No 2008



### 5.2 Residents and Occupants of Structur es Regulated by the Proposed LRRP Clearance Rule The residents and occupants of the structures regulat ed under the proposed LRRP Clearance Rule include: (1) children residing in target housing, (2) children receiving childcare in target housing, (3) children attending daycare in a public or commercial buildin g, (4) children attending school in a public or commercial building, (5) adults residing in target h ousing, (6) adults working in a public or commercial building COF. This section presents the estimated numbe r of individuals who reside in or occupy these regulated structures and presents the estimated number of these individuals residing in or occupying a structure where dust wipe testing or clearance is expected to be performed.

Section 5.2.1 describes the methods and sources for these estimates and section 5.2.2 presents the resulting estimated populations.

5.2.1 Methodology and Sources for Estimating Affected Populations This analysis presents the estimated number of ta rget housing residents, children receiving childcare in target housing, and children attending daycare or schools in public and commercial buildings. The number of adults who work in a public or commercia l building COF was not estimated for this analysis, but these individuals would also be expected to benefit from the proposed rule.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-6 5.2.1.1 Estimating the Number of Target Housing Residents 

### The 2003 American Housing Survey (AHS) (U.S. Cens us, 2003) was used to estimate the number of individuals residing in target housing where dust wi pe testing and clearance events occur. The AHS includes household level microdata with informati on on the number and ages of housing occupants, household-level renovation data, and ot her housing characteristics. Chap ter 4 of this report provides a description of how EPA estimated the frequencies of dust wipe testing and clearance activities using AHS data and questionnaires administered to fewer than 10 respondents. This methodology was used to determine which respondent households in the AHS da ta were performing regulated renovation activities, and therefore the number and demographics of the o ccupants residing in these households can easily be determined since this is reported at the house hold level. For example, some households reported remodeling their kitchen in the American Housing Su rvey, and a subset of these households are estimated to trigger the dust wipe testing requirements associated with trim and cabinet replacement (as described in Chapter 4). Since the American Housing Survey includes information on the number and ages of housing occupants, the number and ages of individuals affected by the rule in these households can be estimated.

5.2.1.2 Estimating the Number of Children Receiving Childcare in Target Housing 

### EPA estimated the number of children receiving childcar e in target housing affected by the dust wipe testing and clearance requirements in three steps: (1) the number of target housing unit COFs and the frequency of regulated activities was estimated; (2) th e number of children receiving childcare in target housing was estimated; and (3) the estimated frequencies of the activities in target housing were applied to number of children receiving childcare in these targ et housing units to estimate the number of children affected by the proposed rule.
Step One: Estimate Number of Target Housing COFs and the Frequency of Regulated Activities 

### The estimate of the number of target housing units that are COFs was developed for the economic analysis of the 2008 LRRP Rule. EPA (2008b) prov ides a detailed explanation of these estimates which is summarized here. The COFs in target housing in clude family daycare providers and the homes of family, friends, and neighbors who regularly care for someone else’s children. The estimates include care provided for pay and not for pay, and rely primarily on estimates of the size of the childcare workforce as published by the Center for Childcare Workforce, 2002. This report includes data on the number of: (1) family childcare providers caring for unrelated child ren, (2) paid relatives and non-relatives providing childcare, and (3) unpaid relatives and non-relatives providing childcare. Based on data provided by the Center for Childcare Workforce, a total of just under 2.4 million caregivers provide care outside of the child’s home for more than six hours per week. As described in detail by EPA (2008b), these data are used to estimate the number of COFs in target housing. These numbers are further reduced to estimate the number of pre-1978 housing units based on American Housing Survey data. The frequency of dust wipe testing and clearance is assu med to be the same in target housing COFs as estimated for other target housing.

Step Two: Estimate Number of Childre n Receiving Childcare in Target Housing 

### Data from Table 2 of Mulligan et al (2001) were used to determine the number of children under six years of age in Target Housing COFs. Population data from Mulligan et al (2001) for target housing includes children in the care of relatives and non-relatives as well as the proportion (5 percent) of children in centers identified as being in private settings (i.e., family care). 1 

### Other adjustments were made to exclude

1 This analysis assumes that all daycare centers are locat ed in public or commercial buildings (i.e., not in residential buildings). Due to differences in licensi ng requirements and survey questionnaire design, some sources used in this analysis categori ze children cared for in residential setti ngs as being in center-based care.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-7 

### paid care by a non-relative (e.g., a nanny) in the child ’s home. Relative and non-relative care were further classified into paid and non-paid care. Based on in formation presented in Mulligan et al (2001), the following adjustments were made for each category:

1. Paid non-relative care not in the child’s home (i.e., family care):

a. 81 percent of non-relative care occurs in lo cation outside of the child’s home. b. 5 percent of center-based care occurs in a private setting – assumed to be non-relative care outside child’s home.

c. 90 percent of non-relative care is paid.

2. Unpaid non-relative care (not in the child’s home):

a. 81 percent of non-relative care occurs in lo cation outside of the child’s home. b. 5 percent of center based care occurs in a private setting – assumed to be non-relative care outside child’s home.

c. 10 percent of non-relative care is unpaid paid.

3. Paid relative care:

a. 28 percent of relative care is paid.

4. Unpaid relative care:

a. The difference between all relative care and paid relative care.
Step 3: Apply the Estimated Event Frequencies to the Estimated Populations 

### The frequencies of regulated activities described in st ep one are applied to the estimated populations to estimate the number of children affected by the dust wipe testing and clearance requirements.

5.2.1.3 Estimating Populations of Children Attending Schools in Public or Commercial Building COFs 

### The population of children attending schools was estimated from the Common Core of Data – Public Elementary/Secondary School Universe Survey Data (NCES, 2006b). The building age distribution percentages found in the CBECS data were used to calculate the number of children in pre-1978 buildings (58 percent). See Chapter 4 of this report for a description of the how the frequencies of RRP, dust wipe testing, and clearance were estimated for schools in public or commercial buildings.

5.2.1.4 Estimating Populations of Children Attending Daycare in Public or Commercial Building COFs 

### Data from Table 2 of Mulligan et al. (2005) were used to determine the number of children under six years of age in childcare centers. Center-based arrangements include day care centers, Head Start programs, preschools, pre-kindergartens, and other early childhood programs. Table 4 of Mulligan et. al indicated that 6,695,000 children were in center-based care. To avoid double counting with other structures wher e childcare is provided, children in center-based childcare reported to be in pre-kindergarten and ki ndergarten and target hous ing settings were removed from the daycare center count. The following adjustments were made: 1. Subtract from childcare center population the proportion of children in pre-kindergarten and kindergarten (27 percent)

Whenever possible, these daycare facilities and the childre n they serve were included in the family daycare, rather than in daycare center counts.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-8 

### 2. Subtract from childcare center population the proportion of children in private or target housing settings (5 percent) The building age distribution percentages found in the CBECS data were used to calculate the number of children in pre-1978 buildings (58 percent).

5.2.2 Estimated Affected Populations
Table 5-2 through Table 5-5 present the number of individuals affected during the first year of the rule by the proposed LRRP Clearance Rule under the three prim ary options considered in this analysis. (The other three options – third party sampling, dust wipe testing only, and clearance only) protect the same number of individuals as the proposed option, although the level of protection may differ.) The first row of these tables presents the number of children who reside in or occupy (i.e., receive childcare or attend school in) regulated structures during the first year of the rule. The number of children affected by dust wipe testing and clearance activities is both presented separately and combined. In addition, the tables break out the estimated populations according to whethe r or not the dust wipe testing or clearance applies to windows only or to both windows and floors (because when floors are carpeted, the requirements only apply to window sills and troughs).

Table 5-2: Number of Children Under the Age of Six Residing or Occupying Regulated Target Housing or Public or Commercial Building COFs by Type of Dust Wipe Testing or Clearance Activity Performed: Low Threshold Option (First Year, thousands) Target Housing Public and Commercial Buildings Activity Performed Residents Daycare Attendees Daycare Attendees School Attendees Total Number of Children (<6)

All Occupants of Regulated St ructures 17,772 3,448 2,647 3,429 27,296 Dust Wipe Testing Window Tests Only 1 303 20 5 7 335 Window and Floor Tests 2 450 45 11 14 519 Subtotal 753 65 16 21 855 Clearance Window Clearance Only 1 5 1 1 1 8 Window and Floor Clearance 2 12 2 2 3 19 Subtotal 17 2 3 4 27 Dust Wipe Testing or Clearance Window Test/Clearance Only 1 307 21 7 9 343 Window and Floor Test/Clearance 2 463 46 13 17 538 Subtotal 770 67 19 25 882

1 These events are performed where floors are carpeted and therefore floors would not be subject to dust wipe testing or clearanc e requirements.
2 These events are performed where floors are not carpeted and therefore floors would be subject to dust wipe testing or clearance requirements.

Note: A zero indicates a positive number less than 500.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-9 Table 5-3: Number of Children Under the Age of Six Residing or Occupying Regulated Target Housing or Public or Commercial Building COFs by Type of Dust Wipe Testing or Clearance Activity Performed: Proposed Threshold Option (First Year, thousands) Target Housing Public and Commercial Buildings Activity Performed Residents Daycare Attendees Daycare Attendees School Attendees Total Number of Children (<6)

All Occupants of Regulated St ructures 17,772 3,448 2,647 3,429 27,296 Dust Wipe Testing Window Tests Only 1 289 18 5 7 320 Window and Floor Tests 2 401 37 11 14 462 Subtotal 690 55 16 21 782 Clearance Window Clearance Only 1 5 1 1 1 8 Window and Floor Clearance 2 12 2 2 3 19 Subtotal 17 2 3 4 27 Dust Wipe Testing or Clearance Window Test/Clearance Only 1 294 19 7 9 328 Window and Floor Test/Clearance 2 413 39 13 17 481 Subtotal 707 57 19 25 809

1 These events are performed where floors are carpeted and therefore floors would not be subject to dust wipe testing or clearanc e requirements.
2 These events are performed where floors are not carpeted and therefore floors would be subject to dust wipe testing or clearance requirements.

Note: A zero indicates a positive number less than 500.

Table 5-4: Number of Children Under the Age of Six Residing or Occupying Regulated Target Housing or Public or Commercial Building COFs by Type of Dust Wipe Testing or Clearance Activity Performed: High Threshold Option (First Year, thousands) Target Housing Public and Commercial Buildings Activity Performed Residents Daycare Attendees Daycare Attendees School Attendees Total Number of Children (<6)

All Occupants of Regulated St ructures 17,772 3,448 2,647 3,429 27,296 Dust Wipe Testing Window Tests Only 1 260 15 5 7 287 Window and Floor Tests 2 342 29 11 14 395 Subtotal 602 44 16 21 682 Clearance Window Clearance Only 1 4 1 1 1 7 Window and Floor Clearance 2 10 1 2 3 17 Subtotal 14 2 3 4 24 Dust Wipe Testing or Clearance Window Test/Clearance Only 1 264 15 7 9 294 Window and Floor Test/Clearance 2 352 31 13 17 412 Subtotal 616 46 19 25 706

1 These events are performed where floors are carpeted and therefore floors would not be subject to dust wipe testing or clearanc e requirements.
2 These events are performed where floors are not carpeted and therefore floors would be subject to dust wipe testing or clearance requirements.

Note: A zero indicates a positive number less than 500.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-10 Table 5-5: Number of Individuals Age of Six and Older Residing in Regulated Target Housing, by option (First Year, thousands) Low Threshold Option Proposed Option High Threshold Option Activity Performed Age 6 and Older 3 Pregnant Women Age 6 and Older 3 Pregnant Women Age 6 and Older 3 Pregnant Women All Occupants of Regulated Stru ctures 209,040 2,467 209,040 2,467 209,040 2,467 Dust Wipe Testing Window Tests Only 1 3,356 42 3,204 40 2,873 35 Window and Floor Tests 2 4,677 60 4,183 53 3,586 45 Subtotal 8,033 103 7,388 94 6,458 81 Clearance Window Clearance Only 1 46 1 48 1 39 1 Window and Floor Clearance 2 114 2 112 1 93 1 Subtotal 160 2 160 2 132 2 Dust Wipe Testing or Clearance Window Test/Clearance Only 1 3,403 43 3,252 41 2,912 36 Window and Floor Test/Clearance 2 4,790 62 4,295 55 3,678 47 Subtotal 8,193 105 7,547 96 6,590 83

1 These events are performed where floors are carpeted and therefore floors would not be subject to dust wipe testing or clearanc e requirements.
2 These events are performed where floors are not carpeted and ther efore floors would be subject to dust wipe testing or clearan ce requirements.
3 The Age 6 and Older columns also include pregnant women. Note: A zero indicates a positive number less than 500.



### The information provided as a result of the proposed dust wipe testing requirement s will generate benefits by increasing building owners’ and occupants’ understanding and awar eness of dust lead hazards, and improving their ability to make further risk manage ment decisions. The proposed dust wipe testing requirements may also change the behavior of reno vation firms. The information from the dust wipe testing may help renovation firms to improve their cl eaning efficiency by providing feedback on how well they are cleaning up after renovations. In addition, the information provision may result in indirect benefits due to behavioral cha nges by owners and occupants such as performing additional cleaning or taking steps to control or remove the lead-based pain t. These behavioral changes can result in additional costs as well as in benefits from reductions in exposure. Because the current state of knowledge about the econom ics of information is not highly developed, this analysis does not attempt to quantify the direct, informational benefits of the dust wipe testing requirements. In addition, due to the inherent uncerta inty in predicting the chain of events, this analysis does not attempt to predict either the benefits or the costs of the behavioral changes resulting from the information provision. In addition to information provision, the proposed ru le requires additional cleaning to be performed for certain jobs where dust levels exceed one of the h azard standards. However, EPA’s Dust Study (EPA 2007) did not include these jobs (demolition or removal of plaster through destructive means, and the use of machines that remove lead-based paint through hi gh speed operation with HE PA exhaust control). This analysis does not quantify the benefits of this additional cleaning because data are not available to accurately characterize the dust lead levels generate d by these renovation activities, or how they will be affected by the proposed Clearance rule’s requirements. EPA’s 2008 RRP rule took effect in April 2010, so those requirements are part of the baseline for this analysis. Most of the experiments in EPA’s Dust St udy that followed work practices equivalent to those required by the 2008 RRP rule resulted in post-verifi cation dust-lead levels that were below the lead hazard standard levels developed u nder TSCA section 403. But the proportion of Dust Study experimentsEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-11 

### that exceeded the hazard standard is not a proxy for the fraction of the population that would benefit as a result of the proposed rule. As explained below, w ithout the Clearance rule in place some renovators may not be as effective at reducing dust-lead levels as the Dust Study indicates; some of the jobs covered by the proposed Clearance rule differ from those in the Dust Study; and exposures to low levels of lead (below the hazard standards) can still result in adverse health effects. Thus, many occupants of target housing and COFs where Clearance rule renovations occur may receive some type of benefits. First, some renovators following the work practices in the 2008 RRP rule may not achieve the same dustlead reductions as the Dust Study indicates. The Dust Study renovators may have been particularly careful in following the work practices because the dus t levels were being tested after the work was completed. Since the Clearance rule would require du st wipe testing after the work is completed, the results of the Dust Study may be more representative of dust levels with the Clearance rule in place than without it. Second, the Dust Study did not address all the same job categories as the proposed Clearance rule. For example, the Dust Study did not include the demolition or removal of plaster through destructive means. If these Clearance rule jobs generate higher dust-lead levels than the experiments in the Dust Study, or leave behind dust particles that are more difficult to clean up because of their fine size or other characteristics, then occupants will have higher lead exposures than the Dust Study experiments would indicate. Finally, it is not appropriate to treat the regulatory hazards standards as a threshold below which there are no benefits to reducing lead exposure. While levels approaching or exceeding the hazard standards are of particular concern, it appears that some of the adverse health effects caused by exposure to lead (particularly changes in the levels of certain blood enzymes and in aspects of children's neurobehavioral development) may occur at blood-lead levels so low as to be essentially without a threshold. Thus, there are health benefits to reducing lead levels to be low the hazard standard. If renovators or consumers decide to clean to lead levels below the hazard sta ndard based on the dust wipe testing information, that would provide additional health benefits to the occupants. Under the proposed rule, reoccupancy of the work ar ea can occur immediately after the dust wipe samples are collected. However, there is a delay between when the samples are taken and when the dust wipe testing results are communicated to owners and occupant s. If a fixed site laboratory is used, there may be time needed to send the samples to the laboratory; for the laboratory to analyze the samples and return the results; for the inspector, risk assessor, or dust sampli ng technician to prepare a dust wipe testing report and provide it to the renovation firm; and for the re novation firm to provide the report to the owner and occupants. In cases where the occupants re-enter the work area before receiving the dust wipe testing report, and where renovators, owners, or occupants act to re duce lead levels or exposures as a result of the information, the delay between sampling and the recei pt of the report by owners and occupants can reduce the health benefits compared to a situati on where occupants do not re-enter the work area until after the report has been received. Preventing occupants in these cases from reoccupying th e work area until they receive the testing results would create additional benefits due to reduced expos ures. But in some cases the delay while waiting for the test results could be significantly longer than the time spent conducting the renovation. (A covered renovation might be completed in as little as a day, wh ile in some cases owners and occupants might not receive the test results until a week or more after the samples are taken.) Preventing occupants from reentering the space while the test results are pending would be disruptive and might cause them to incurEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-12 

### additional costs, such as renting alternate space. This analysis does not estimate the benefits or costs of an alternative prohibiting occupancy of the work area until the test results have been received.


### 5.3 Lead-Related Health Effects and Ecological Effects Lead exposure can cause many adverse health and ecological effects. This section supplements the benefits chapter by providing a broader, qualitative discussion of lead-related effects (including adult effects and ecological effects), based on EPA’s Air Quality Criteria for Lead. The information provided in this section is an ex cerpt from the Executive Summary of the document Air Quality Criteria for Lead (United States Enviro nmental Protection Agency, October 2006, EPA/600/R5/144aF, this document is available at http://c fpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=158823). Specifically, the information provided in this secti on is directly from the following sections of the Executive Summary: E.4 Health Effects Associated with Lead Exposure E.5 Human Population Groups at Special Ri sk and Potential Public Health Impacts

E.6 Environmental Effects of Lead

5.3.1 Background The purpose of the 2006 Lead Air Quality Criteria document (AQCD) is to critically assess the latest scientific information on lead. The final version of the revised Lead AQCD mainly assesses pertinent literature published or accepted for p ublication through December 2005. The First External Review Draft (dated December 2005) of the revised Lead AQCD underwent public comment and was reviewed by the Clean Air Scientific Advisory Committee (CASAC) at a public meeting held in Durham, NC on February 28-Ma rch 1, 2006. The public comments and CASAC recommendations received were taken into account in making appropriate revisions and incorporating them into a Second External Review Draft (dated May, 2006) which was released for further public comment and CASAC review at a public meeting held June 28-29, 2006. In addition, still further revised drafts of the Integrative Synthesis chapter and th e Executive Summary were th en issued and discussed during an August 15, 2006 CASAC teleconference ca ll. Public comments and CASAC advice received on these latter materials, as well as Second External Re view Draft materials, were taken into account in making and incorporating further revisions into this final version of the Lead AQCD.

5.3.2 Health Effects Associated with Lead Exposure Both epidemiologic and toxicological studies have shown that environmentally relevant levels of lead affect many different organ systems. Research completed since the 1986 AQCD/Addendum and 1990 Supplement indicates that lead eff ects occur at blood-lead levels ev en lower than those previously reported for many endpoints. Remarkable progress h as been made since the mid-1980s in understanding the Pb effects on health. Recent studies have focused on details of the associations, including the shapes of concentration-response relationships, especially at levels well within the ra nge of general population exposures, and on those biological and/or socio-envir onmental factors that eith er increase or decrease an individual’s risk. Key findings and conclusions regarding important outcomes of newly available toxicological and epidemiologic studies of Pb health effects are highlighted below.

5.3.2.1 Neurotoxic Effects



### • Neurobehavioral effects of Pb-exposure early in development (during fetal, neonatal, and later postnatal periods) in young infants and children (< 7 years old) have been observed with remarkable consistency across numerous studies involving varying study designs, differentEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-13 

### developmental assessment protocols, and di verse populations. Negative Pb impacts on neurocognitive ability and other ne urobehavioral outcomes are robust in most recent studies even after adjustment for numerous potentially confoundi ng factors (including quality of care giving, parental intelligence, and socioeconomic status). These effects generally appear to persist into adolescence and young adulthood.

• The overall weight of the available evidence pr ovides clear substantiation of neurocognitive decrements being associated in young children with blood-Pb concentrations in the range of 5-10
μ g/dL, and possibly somewhat lower. Some newly available analyses appear to show Pb effects on the intellectual attainment of preschool and sch ool age children at population mean concurrent blood-Pb levels ranging down to as low as 2 to 8 μ g/dL. A decline of 6.2 points in full scale IQ for an increase in concurrent blood Pb levels from 1 to 10 μ g/dL has been estimated, based on a pooled analysis of results derived from seven we ll-conducted prospective epidemiologic studies.

• In the limited literature examining the effects of environmental Pb exposure on adults, mixed evidence exists regarding associations between Pb and neurocognitive performance. No associations were observed between cognitiv e performance and blood Pb levels; however, significant associations were observed in relation to bone Pb concentrations, suggesting that longterm cumulative Pb exposure may contribut e to neurocognitive deficits in adults.

• Animal toxicology data indicate that developm ental Pb exposures creating steady-state blood-Pb concentrations of ~10 μ g/dL result in behavioral impairments that persist into adulthood in rats and monkeys. No evident threshold has yet been found; and Pb-induced deficits, for the most part, have been found to be very persistent, ev en with various chelation treatments. However, experimental studies indicate that environmenta l enrichment during development can partially mitigate the effects of Pb on cognitive function. In rats, neurobehavioral de ficits that persisted well into adulthood were observed with prenatal , preweaning, and postweaning Pb exposure. In monkeys, such neurobehavioral deficits were obser ved both with in utero-only exposure and with early postnatal-only exposure when peak blood-Pb levels did not exceed 15 μ g/dL and steadystate levels were ~11 μ g/dL.

• Learning impairment has been observed in animal studies at blood levels as low as 10 μ g/dL, with higher level learning showing greater im pairment than simple learning tasks. The mechanisms associated wi th these deficits include: response pr eservation; insensitivity to changes in reinforcement density or con tingencies; deficits in attention; reduced ability to inhibit inappropriate responding; impulsivity; and distractibility.

• Lead affects reactivity to the environment and social behavior in both rodents and nonhuman primates at blood Pb levels of 15 to 40 μ g/dL. Rodent studies also show that Pb exposure potentiates the effects of stress in females.

• Auditory function has also been shown to be impaired at blood Pb levels of 33 μ g/dL, while visual functions are affected at 19 μ g/dL.

• Neurotoxicological studies in animals clearly demonstrated that Pb mimics calcium and affects neurotransmission and synaptic plasticity.

• Epidemiologic studies have identified genetic polymorphisms of two genes that may alter susceptibility to the neurodevelopmen tal consequences of Pb exposure in children. Variant alleles of the ALAD gene are associated with differences in absorption, retention, and toxicokinetics of Pb. Polymorphisms of the vitamin D receptor ge ne have been shown to affect the rate ofEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-14 

### resorption and excretion of Pb over time. These studies are only suggestive, and parallel animal studies have not been completed.

5.3.2.2 Cardiovascular Effects



### • Epidemiologic studies have consistently demons trated associations between Pb exposure and enhanced risk of deleterious cardiovascular outcomes, including increased blood pressure and incidence of hypertension. A meta-analysis of numerous studies estimates that a doubling of blood-Pb level (e.g., from 5 to 10 μ g/dL) is associated with ~1.0 mm Hg increase in systolic blood pressure and ~0.6 mm Hg increase in diastolic pressure. Studies have also found that cumulative past Pb exposure (e.g., bone Pb) may be as important, if not more, than present Pb exposure in assessing cardiovascular effects. Th e evidence for an association of Pb with cardiovascular morbidity and mortality is limited but supportive.

• Experimental toxicology studies have confirme d Pb effects on cardiovascular functions. Most have shown that exposures creating blood-Pb levels of ~20 to 30 μ g/dL for long periods result in arterial hypertension that persists long after cessation of Pb exposure in genetically normal animals. One study reported blood pressure increases at blood-Pb levels as low as 2 μ g/dL in rats. A number of in vivo and in vitro studies provide compelling evidence for the role of oxidative stress in the pathogenesis of Pb-induced hypertensi on. However, experimental investigations of cardiovascular effects of Pb in animals are unclear as to why low, but not high, levels of Pb exposure cause hypertension in experimental animals.

5.3.2.3 Renal Effects



### • In the general population, both circulating and cumulative Pb was found to be associated with longitudinal decline in renal function. Effects on creatine clearance have been reported in human adult hypertensives to be associated with gene ral population mean blood-Pb levels of only 4.2
μ g/dL. The public health significance of such e ffects is not clear, however, in view of more serious signs of kidney dysfunction being seen in occupationally exposed workers only at much higher blood-Pb levels (>30-40 μ g/dL).

• Experimental studies using laboratory animals demonstrated that the initial accumulation of absorbed Pb occurs primarily in the kidneys. This takes place mainly through glomerular filtration and subsequent reabsorption, and, to a small extent, through direct absorption from the blood. Both low dose Pb-treated animals and high dose Pb-treated animals showed a “hyperfiltration” phenomenon during the first 3 months of Pb exposure. Investigations into biochemical alterations in Pb-induced renal toxi city suggested a role for oxidative stress and involvement of NO, with a significant increase in nitrotyrosine and substantial fall in urinary excretion of NOx.

• Iron deficiency increases intestinal absorption of Pb and the Pb content of soft tissues and bone. Aluminum decreases kidney Pb content and serum cr eatinine in Pb-intoxicated animals. Age also has an effect on Pb retention. There is higher Pb retention at a very young age and lower bone and kidney Pb at old age, attributed in part to increased bone resorption and decreased bone accretion and, also, kidney Pb.

5.3.2.4 Immune System Effects



### • Findings from recent epidemiologic studies suggest that Pb exposure may be associated with effects on cellular and humoral immunity. These include changes in serum immunoglobulin levels. Studies of biomarkers of humoral immunity in children have consistently found significantEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-15 

### associations between increasing blood-Pb concentra tions and serum IgE levels at blood-Pb levels <10 μ g/dL.

• Toxicologic studies have shown that Pb targets immune cells, causing suppression of delayed type hypersensitivity response, elevation of Ig E, and modulation of macrophages into a hyperinflammatory phenotype. These types of changes can cause increased risk of atopy, asthma, and some forms of autoimmunity and reduced resist ance to some infectious diseases. Lead exposure of embryos resulting in blood-Pb levels <10 μ g/dL can produce persistent later-life immunotoxicity.

5.3.2.5 Effects on Heme Synthesis



### • Lead exposure has been associated with disruption of heme synthesis in both children and adults. A 10% probability of anemia (hematocrit <35%) is estimated to be associated with a blood-Pb level of ~20 μ g/dL at age 1 year. Increases in blood Pb concentration of about 20-30 μ g/dL are sufficient to halve erythrocyte ALAD activity an d sufficiently inhibit ferrochelatase to double erythrocyte protoporphyrin levels.

• Toxicological studies demonstrated that Pb in toxication interferes with red blood cell (RBC) survival and alters RBC mobility. Hematological parameters, such as mean corpuscular volume, mean corpuscular hemoglobin, and mean cor puscular hemoglobin concentration, are also significantly decreased upon exposure to Pb. These e ffects are due to internalization of Pb by RBC. The transport of Pb across the RBC membrane is energy-independent and carrier-mediated; and the uptake of Pb appears to be mediated by an anion exchanger through a vanadate-sensitive pathway.

• Erythrocyte ALAD activity ratio (ratio of activat ed/non activated enzyme activity) has been shown to be a sensitive, dose-re sponsive measure of Pb exposure, regardless of the mode of administration of Pb. Competitive enzyme kinetic analyses in RBCs from both humans and Cynomolgus monkeys indicated similar inhibition profiles by Pb.

5.3.2.6 Effects on Bones and Teeth



### • Experimental studies in animals demonstrate that Pb substitutes for calcium and is readily taken up and stored in the bone and teeth of animal s, potentially allowing bone cell function to be compromised both directly and indirectly by exposure. Relatively short-term exposure of mature animals to Pb does not result in significant gr owth suppression. However, chronic Pb exposure during times of inadequate nutrition has been shown to adversely influence bone growth, including decreased bone density, decreased trabecular bone, and growth plates.

• Exposure of developing animals to Pb during g estation and the immediate postnatal period has clearly been shown to significantly depress ear ly bone growth in a dose-dependent fashion, though this effect is not manifest below a certain threshold.

• Systemically, Pb has been shown to disrupt mi neralization of bone during growth, to alter calcium binding proteins, and to increase calcium and phosphorus concentration in the blood stream, in addition to potentially altering bone cell differentiation and function by altering plasma levels of growth hormone and calciotropic hormones such as vitamin D3 [1,25- (OH2)D3.

• Periods of extensive bone remodeling, such as o ccur during weight loss, advanced age, altered metabolic state, and pregnancy and lactation are all associated with mobilization of Pb stores from bone of animals.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-16 

### • Numerous epidemiologic studies and, separately, animal studies (both post-eruptive Pb exposure and pre- and perinatal Pb expos ure studies) suggest that Pb is a caries-promoting element. However, whether Pb incorporation into th e enamel surface compromises the integrity and resistance of the surface to dissolution, and ultim ately increases risk of dental decay, is unclear.

• Increased risk of dental caries has been associated with Pb exposu re in children and adults. Lead effects on caries were observed in populations whose mean blood-Pb levels were less than 10
μ g/dL.

5.3.2.7 Reproductive and Developmental Effects



### • Epidemiologic evidence suggests small associati ons between Pb exposur e and male reproductive outcomes, including perturbed semen quality and increased time to pregnancy. There are no adequate epidemiologic data to evaluate associ ations between Pb exposure and female fertility. Most studies have yielded no associations, or w eak associations, of Pb exposure with thyroid hormone status and male repr oductive endocrine status in highly exposed occupational populations.

• New toxicologic studies support earlier conclusions, presented in the 1986 Lead AQCD, that (a) Pb can produce both temporary and persisting e ffects on male and female reproductive function and development and (b) Pb disrupts endocrine function at multiple points along the hypothalamic-pituitary-gonadal axis. Although there is evidence for a common mode of action, consistent effects on circulating testosterone levels are not always observed in Pb-exposed animals. Inconsistencies in reports of circulati ng testosterone levels complicate derivation of a dose-response relationship for this endpoint.

• Lead-induced testicular damage (ultrastructural ch anges in testes of monkeys at blood-Pb >35 to 40 μ g/dL) and altered female sex hormone release, imprinting during early development, and altered female fertility all suggest Pb-induced reproductive effects. However, Pb exposure does not generally produce total sterility. Pre- and postnat al exposure to Pb has been demonstrated to result in fetal mortality and produce a variety of sublethal effects in the offspring. Many of the Pb-induced sublethal developmental effects occur at maternal blood-Pb levels that do not result in clinical (overt) toxicity in the mothers. Terat ogenic effects resulting from Pb exposure reported in a few studies appear to be confounded by maternal toxicity.

5.3.2.8 Effects on Other Organ Systems



### • Lead impacts the hypothalamic-pitu itary-adrenal axis, elevating cor ticosterone leve ls and altering stress responsivity. This may be a potential m echanism contributing to Pb-induced hypertension, with further possible roles in the etiology of diabetes, obesity and other disorders.

• Studies of hepatic enzyme levels in serum suggest that liver injury may be present in Pb workers; however, associations specifically with Pb e xposures are not evident. Children exposed to relatively high levels of Pb (blood Pb >30 μ g/dL) exhibit depressed levels of circulating 1,25- dihydroxy vitamin D (1,25-OH-D). However, associations between serum vitamin D status and blood Pb were not evident in a study of calci um-replete children who had average lifetime bloodPb concentrations <25 μ g/dL.

• Field studies that evaluated hepatic enzyme levels in serum suggest that liver injury may be present in Pb workers; however, associations speci fically with Pb exposures have not been well established.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-17 

### • Simultaneous induction of the activities of phase II drug metabolizing enzymes and decreased phase I enzymes with a single exposure to Pb nitrat e in rat liver suggest that Pb is capable of causing biochemical phenotype similar to hepatic nodules.

• Newer studies examined the induction of GST-P at both transcriptional and translational levels using in vitro systems and indicated a role for Pb-nitrate and Pb-acetate in the induction process.

• Lead-induced alterations in cholesterol metabolis m appear to be mediated by the induction of several enzymes related to cholesterol metabolism and the decrease of 7 α -hydroxylase, a cholesterol-catabolizing enzyme. This regulati on of cholesterol homeostasis is modulated by changes in cytokine expression and related signaling.

• Newer experimental evidence suggests that Pb-i nduced alterations in liver heme metabolism involve perturbations in ALAD activity, porphyrin metabolism, alterations in Transferrin gene expression, and associated changes in iron metabolism.

• Gastrointestinal (GI) absorption of Pb is influen ced by a variety of factors, including chemical and physical forms of the element in ingested medi a, age at intake, and various nutritional factors. The degeneration of intestinal mucosal epithe lium leading to potential malabsorption and alterations in the jejunal ultrastructure (possibl y associated with distortion of glycocalyx layer) have been reported in the intestine of Pb-exposed rats.

• Nutritional studies that varied Pb, Ca, and vitami n D levels in the diet have demonstrated competition of Pb with Ca absorption. Supplementation with vitamin D has been reported to enhance intestinal absorption of Ca and Pb . Physiological amounts of vitamin D, when administered to vitamin D-deficient rats, resulted in elevated Pb and Ca levels. In the case of severe Ca deficiency, Pb ingestion results in a marked decrease in serum 1,25 hydroxy vitamin D.

5.3.2.9 Genotoxic and Carcinogenic Effects



### • Epidemiologic studies of highly exposed occupati onal populations suggest a relationship between Pb and cancers of the lung and the stomach; how ever the evidence is limited by the presence of various potential confounders, including metal coex posures (e.g., to arsenic, cadmium), smoking, and dietary habits. The 2003 NTP and 2004 IARC reviews concluded that Pb and Pb compounds were probable carcinogens, based on limited evidence in humans and sufficient evidence in animals. Similarly, Pb and Pb compounds would likely be classified as likely to be carcinogenic to humans according to the new 2005 EPA Cancer Assessment Guidelines for Carcinogen Risk Assessment, based on animal data even though the human data are inadequate.

• Studies of genotoxicity consistently find associ ations of Pb exposure with DNA damage and micronuclei formation; however, the associations with the more established indicator of cancer risk, chromosomal aberrations, are inconsistent.

• Pb is an animal carcinogen and extends our unde rstanding of mechanisms involved to include a role for metallothionein. Specifically, the recent da ta show that metallothionein may participate in Pb inclusion bodies and, thus, serves to prev ent or reduce Pb-induced tumorigenesis.

• In vitro cell culture studies that evaluated the pot ential for Pb to transform rodent cells are inconsistent, and careful study of a time course of exposure is necessary to determine whether Pb actually induces transformation in cultured rodent cells. There is increased evidence suggesting that Pb may be co-carcinogenic or promotes the carcinogenicity of other compounds. Cell culture studies do support a possible epigenetic m echanism or co-mutagenic effects.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-18 5.3.2.10 Lead-Binding Proteins



### • Proteins depending upon sulfur-containing side chai ns for maintaining conformity or activity are vulnerable to inactivation by Pb, due to its strong sulfur-binding affinity.

• The enzyme, ALAD, a 280 kDa protein, is inducible and is the major Pb-binding protein within the erythrocyte.

• The Pb-binding protein in rat kidney has been identified as a cleavage product of α -2- microglobulin. The low molecular weight Pb-binding proteins in human kidney have been identified as thymosin β 4 (molecular weight 5 kDa) and acyl-CoA binding protein (molecular weight 9 kDa). In human brain, Pb-binding proteins include thymosin β 4 and an unidentified protein of 23 kDa.

• Animal toxicology studies with metallothionein -null mice demonstrated a possible role for metallothionein as a renal Pb-binding protein.

5.3.2.11 Human Population Groups At Special Risk And Potential Public Health Impacts



### • Children, in general and especially low SES (o ften including larger proportions of AfricanAmerican and Hispanic) children, have been we ll-documented as being at increased risk for Pb exposure and Pb-induced adverse health effects. This is due to several factors, including enhanced exposure to Pb via ingestion of soil- Pb and/or dust-Pb due to normal hand-to-mouth activity and/or pica.

• Even children with low Pb exposure levels (having blood Pb of 5-10 μ g/dL or, possibly, somewhat lower) are at notable risk, due to apparent non-linear dose -response relationships between blood Pb and neurodevelopmental outcomes. It is hypothesized that initial neurodevelopmental lesions occurring at blood-Pb levels <10 μ g/dL may disrupt different developmental processes in the nervous syst em than more severe high level exposures.

• Adults with idiosyncratic exposures to Pb th rough occupations, hobbies, make-up use, glazed pottery, native medicines, and other sources are at risk for Pb toxicity. Certain ethnic and racial groups are known to have cultural practices that involve ingestion of Pb-containing substances, e.g., ingestion of foods or beverages stored in Pb-glazed pottery or imported canned food from countries that allow Pb-soldered cans.

• Cumulative past Pb exposure, measured by bone Pb, may be a better predictor of cardiovascular effects than current blood-Pb levels. African-A mericans are known to have substantially higher baseline blood pressure than other ethnic groups, so Pb’s impact on an already higher baseline could indicate a greater susceptibility to Pb for this group.

• Effects on adults of low-level Pb exposures also in clude some renal effects (i.e., altered creatinine clearance) at blood-Pb levels <5 ug/dL. Lead exposure combined with other risk factors, such as diabetes, hypertension, or chronic renal insufficien cy may result in clinically relevant effects in individuals with two or more other risk factors.

• At least two genetic polymorphisms, of the AL AD and the vitamin D receptor gene, have been suggested to play a role in susceptibility to Pb. In one study, African-American children were found to have a higher incidence of being homozyg ous for alleles of the vitamin D receptor gene thought to contribute to greater Pb blood levels. This work is preliminary and further studies will be necessary to determine implications of genetic differences that may make certain populations more susceptible to Pb exposure.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-19 

### • What was considered “low” for Pb exposure levels in the 1980s is an order of magnitude higher than the current mean level in the U.S. populatio n, and current average blood-Pb levels in U.S. populations remain perhaps as much as two orde rs of magnitude above preindustrial “natural” levels in humans. There is no level of Pb exposure that has yet been identified, with confidence, as being clearly not being associated with possible ri sk of deleterious health effects. Some recent studies of Pb neurotoxicity in infants have observed effects at population average blood-Pb levels of only 1 or 2 μ g/dL; and some cardiovascular, renal, a nd immune outcomes have been reported at blood-Pb levels below 5 μ g/dL.

• Public health interventions have resulted in declin es, over the last 25 years, of more than 90% in the mean blood-Pb level within all age and gender subgroups of the U.S. population, substantially decreasing the numbers of individuals at likely risk for Pb-induced toxicities. Nevertheless, estimates of the magnitude of potential public hea lth impacts of Pb exposure can be substantial for the U.S. population. For example, in estimating the effect of Pb exposure on intelligence, it was projected that the fraction of individuals with an IQ >120 would decrease from ~9% with no Pb exposure to less than 3% at a blood-Pb level of 10 μ g/dL. Also, the fraction of individuals with an IQ >130 points was estimated as being likely to decrease from 2.25% to 0.5% with a blood-Pb level change from 0 to 10 μ g/dL. In addition, an estimate of hypertension-related risk for serious cardiovascular events (coronary disease, stroke, peripheral artery disease, cardiac failure) indicates that a decrease in blood Pb from 10 to 5 μ g/dL could result in an annual decrease of 27 events per 100,000 women and 39 events per 100,000 men.

5.3.3 Environmental Effects of Lead

5.3.3.1 Terrestrial Ecosystems 

### Methodologies Used in Terrestrial Ecosystem Research

• Electron probe microanalysis (EPMA) techniques provide the greatest information on metal speciation. Other techniques, such as EXAFS (e xtended X-ray absorption fine structure) and EXANES (extended X-ray absorption near edge sp ectroscopy), show great promise and will be important in solving key mechanistic questions.

• In situ methodologies have been developed to lower soil-Pb relative bioavailability. These amendments typically fall within the categori es of phosphate, biosolid, and Al/Fe/Mn-oxide amendments. Some of the drawbacks to soil amendm ent include phosphate toxicity to plants and increased arsenic mobility at high soil phosphate concentrations. The use of iron (III) phosphate seems to mitigate arsenic mobility, however incr eased concentrations of phosphate and iron limit their application when drinking water quality is a concern.
Distribution of Atmospherically Deli vered Lead in Terrestrial Ecosystems

• Total Pb deposition during the 20th century has been estimated at 1 to 3 g Pb m -2 

### , depending on elevation and proximity to urban areas. Total cont emporary loadings to terrestrial ecosystems are ~1 to 2 mg m -2 

### year -1 

### . This is a relatively small annual flux of Pb compared to the reservoir of ~0.5 to 4 g m -2 

### of gasoline additive-derived Pb already deposited in surface soils over much of the United States.

• Dry deposition can account for 10% to >90% of total Pb deposition. Because Clean Air Act Legislation has preferentially reduced Pb associated with fine particles, relative contributions of dry deposition have changed in the last few decades.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-20 

### • Although inputs of Pb to ecosystems are cu rrently low, Pb export from watersheds via groundwater and streams is substa ntially lower than inputs. Therefore, even at current input levels, watersheds are ac cumulating anthropogenic Pb.

• Species of Pb delivered to terrestrial ecosystems can be inferred by emission source. For example, Pb species emitted from automobile exhaust are dom inated by particulate Pb halides and double salts with ammonium halides (e.g., PbBrCl, PbBrCl 2 

### NH 4 

### Cl), while Pb emitted from smelters is dominated by Pb-sulfur species. Halides from automobile exhaust break down rapidly in the atmosphere, via redox reactions in the presence of atmospheric acids. Lead phases in the atmosphere, and presumably the compounds deliver ed to the surface of the earth (i.e., to vegetation and soils), are suspected to be in the form of PbSO4, PbS, and PbO.

• The importance of humic and fulvic acids and hy drous Mn- and Fe-oxides for scavenging Pb in soils was discussed in some detail in the 1986 Lead AQCD. The importance of these Pb binding substrates is reinforced by studies repor ted in the more contemporary literature.

• The amount of Pb that has leached into mineral soil appears to be on the order of 20 to 50% of the total anthropogenic Pb deposition.

• The vertical distribution and mobility of atmosphe ric Pb in soils was poorly documented prior to 1986. Techniques using radiogenic Pb isotopes have been developed to differentiate between gasoline-derived Pb and natural, geogenic (nativ e) Pb. These techniques provide more accurate determinations of the depth-distribution and pot ential migration velocities for atmospherically delivered Pb in soils.

• Selective chemical extractions have been used extensively over the past 20 years to quantify amounts of a particular metal phase in soil or sed iment rather than total metal concentration. However, some problems persist with the selective extraction technique: (a) extractions are rarely specific to a single phase; and (b) in addition to the nonselectivity of reagents, significant metal redistribution has been found to occur during sequential chemical extractions. Thus, although chemical extractions provide some useful info rmation on metal phases in soil or sediment, the results should be treated as “operationally defined,” e.g., “H 2 

### O 2 

### -liberated Pb” rather than “organic Pb.”

• Soil solution dissolved organic matter content a nd pH typically have very strong positive and negative correlations, respectively, with th e concentration of dissolved Pb species.
Effects of Lead on Natural Terrestrial Ecosystems

• Atmospheric Pb pollution has resulted in the accumulation of Pb in terrestrial ecosystems throughout the world. In the United States, anth ropogenically-derived Pb represents a significant fraction of the total Pb burden in soils, even in sites remote from smelte rs and other industrial plants. However, few significant effects of Pb pollu tion have been observed at sites that are not near point sources of Pb.

• Evidence from precipitation collection and sediment analyses indicates that atmospheric deposition of Pb has declined dramatically (>95%) at sites unaffected by point sources of Pb, and there is little evidence that Pb accumulated in so ils at these sites represents a threat to ground water or surface water supplies.

• The effects of Pb and other chemical emissions on terrestrial ecosystems ne ar smelters and other industrial sites decrease downwind from the Pb source. Several studies using the soil burden as an indicator have shown that much of the contamina tion occurs within a radius of 20 to 50 kmEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-21 

### around the emission source. Elevated metal concentr ations around smelters have been found to persist despite significant reductions in emissions. The concentrations of Pb in soils, vegetation, and fauna at these sites can be two to three orde rs of magnitude higher th an in reference areas. Assessing the risks specifically associated with Pb is difficult, because th ese sites also experience elevated concentrations of other metals and because of effects related to SO2 emissions. The confounding effect of other pollutants makes the assessment of Pb-specific exposure-response relationships impossible at the whole ecosystem level.

• In the most extreme cases, near smelter sites, the death of vegetation causes a near-complete collapse of the detrital food web, creating a terr estrial ecosystem in which energy and nutrient flows are minimal.

• More commonly, stress in soil microorganisms and detritivores can cause reductions in the rate of decomposition of detrital organic matter. Although there is little evidence of significant bioaccumulation of Pb in natural terrestrial ecosy stems, reductions in microbial and detritivorous populations can affect the success of their predators. Thus, at present, industrial point sources represent the greatest Pb-related threat to the main tenance of sustainable, healthy, diverse, and high-functioning terrestrial ecosystems in the United States.
Terrestrial Species Response/Mode of Action

• Plants take up Pb via their foliage and through their root systems. Surface deposition of Pb onto plants may represent a significant contribution to the total Pb in and on the plant, as has been observed for plants near smelters and along roadsides.

• There are two possible mechanisms (symplastic or apoplastic) by which Pb may enter the root of a plant. The symplastic route is through the cell membranes of root hairs; this is the mechanism of uptake for water and nutrients. The apoplastic r oute is an extracellular route between epidermal cells into the intercellular spaces of the root cortex. The symplastic route is considered the primary mechanism of Pb uptake in plants.

• Recent work supports previous conclusions that th e form of metal tested, and its speciation in soil, influence uptake and toxicity to plants and i nvertebrates. The oxide form of Pb is less toxic than the chloride or acetate forms, which are less toxic that the nitrate form of Pb. However, these results must be interpreted with caution, as the c ounter ion (e.g., the nitrate ion) may also be contributing to the observed toxicity.

• Lead may be detoxified in plants by deposition in root cell walls, and this may be influenced by calcium concentrations. Other hypotheses put forward recently include the presence of sulfur ligands and the sequestration of Pb in ol d leaves as detoxification mechanisms. Lead detoxification has not been studied extensively in invertebrates. Glutathione detoxification enzymes were measured in two species of spid er. Lead may be stored in waste nodules in earthworms or as pyromorphite in the nematode.

• Lead effects on heme synthesis (as measured primarily by ALAD activity and protoporphyrin concentration) were documented in the 1986 Lead AQCD and continue to be studied. However, researchers caution that changes in ALAD and othe r enzyme parameters are not always related to adverse effects, but may simply indicate exposure. Other effects on plasma enzymes, which may damage other organs, have been reported. Lead also may cause lipid peroxidation, which may be alleviated by vitamin E, although Pb poisoning may still result. Changes in fatty acid production have been reported, which may influence immune response and bone formation.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-22 

### • Insectivorous mammals may be more exposed to Pb than herbivores, and higher trophic-level consumers may be less exposed than lower trophic- level organisms. Nutritionally deficient diets (including low calcium) cause increased uptake of Pb and greater toxicity in birds.

• Interactions of Pb with other metals are inc onsistent, depending on th e endpoint measured, the tissue analyzed, the animal speci es, and the metal combination.
Exposure/Response of Terrestrial Species

• Recent critical advancements reported in the curre nt Lead AQCD in understanding toxicity levels relies heavily on the work completed by a multi-stak eholder group, consisti ng of federal, state, consulting, industry, and academ ic participants, led by the EPA to develop Ecological Soil Screening Levels (Eco-SSLs).

• Eco-SSLs are concentrations of contaminants in soils that would result in little or no measurable effect on ecological receptors. The Eco-SSLs are in tentionally conservative in order to provide confidence that contaminants that could present an unacceptable risk are not screened out early in the evaluation process. That is, at or below these levels, adverse effects are considered unlikely. Due to conservative modeling assumptions (e.g., me tal exists in most toxic form or highly bioavailable form, high food ingestion rate, high so il ingestion rate) that are common to screening processes, several Eco-SSLs are derived below the average background soil concentration for a particular contaminant.

• The Eco-SSLs for terrestrial plants, birds, mamma ls, and soil invertebrates are 120, 11, 56, and 1700 mg Pb/kg soil, respectively.

5.3.3.2 Aquatic Ecosystems 

### Methodologies Used in Aquatic Ecosystem Research

• Many of the terrestrial methods can also be applied to suspended solids and sediments collected from aquatic ecosystems. Just as in the terrestrial environment, the speciation of Pb and other trace metals in natural freshwaters and seawater plays a crucial role in determining their reactivity, mobility, bioavailability, and toxicity. Many of the same speciation techniques employed for the speciation of Pb in terrestrial ecosystems are applicable in aquatic ecosystems.

• There is now a better understanding of the potentia l effects of sampling, sample handling, and sample preparation on aqueous-phase metal speciation. Thus, a need has arisen for dynamic analytical techniques that are able to capture a metal's speciation, in-situ and in real time.

• With few exceptions, ambient water quality crite ria (AWQC) are derived based on data from aquatic toxicity studies conducted in the laborat ory. In general, both acute (short term) and chronic (long term) AWQCs are developed. Depending on the species, the toxicity studies considered for developing acute criteri a range in length from 48 to 96 hours.

• Acceptable chronic toxicity studies should encomp ass the full life cycle of the test organism, although for fish, early life stage or partial life cycle toxicity studies are considered acceptable. Acceptable endpoints include reproduction, growth and development, and survival, with the effect levels expressed as the chronic value.

• The biotic ligand model (BLM), which considers the binding of free metal ion to the site of toxic action and competition between metal species and ot her ions, has been developed to predict the toxicity of several metals under a variety of water quality conditions. However, there are limitations to this tool in deriving AWQC becau se, currently, limited work has been conducted inEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-23 

### developing chronic BLMs (for any metals, let alone Pb) and the acute BLMs to date do not account for dietary metal exposures.
Distribution of Lead in Aquatic Ecosystems

• Atmospheric Pb is delivered to aquatic ecosyste ms primarily through depos ition (wet and/or dry) or through erosional transport of soil particles.

• A significant portion of Pb in the aquatic environm ent exists in the undissolved form (i.e., bound to suspended particulate matter). The ratio of Pb in suspended solids to Pb in filtrate varies from 4:1 in rural streams to 27:1 in urban streams.

• The oxidation potential of Pb is high in slightly acidic solutions, and Pb 2+ 

### binds with high affinity to sulfur-, oxygen-, and nitrogen-containing ligands . Therefore, speciation of Pb in the aquatic environment is controlled by many factors (e.g., pH, redox, dissolved organic carbon, sulfides). The primary form of Pb in aquatic environments is divalent (Pb 2+ 

### ), while Pb 4+ 

### exists only under extreme oxidizing conditions. Labile forms of Pb (e.g., Pb 2+ 

### , PbOH + 

### , PbCO 3 

### ) are a significant portion of the Pb inputs to aquatic systems from atmospheric washout. Lead is typically present in acidic aquatic environments as PbSO 4 

### , PbCl4, ionic Pb, cationic forms of Pb-hydroxide, and ordinary Pb-hydroxide (Pb(OH) 2 

### ). In alkaline waters, common species of Pb include anionic forms of Pb-carbonate (Pb(CO 3 

### )) and Pb(OH) 2 

### .

• Lead concentrations in lakes and oceans were generally found to be much lower than those measured in the lotic waters assessed by NAWQA . In open waters of the North Atlantic the decline of Pb concentrations has been associated with the phasing out of l eaded gasoline in North America and Western Europe. However, in estuari ne systems, it appears that similar declines following the phase-out of leaded g asoline are not necessarily as rapid.

• Based on a synthesis of NAWQA data from the United States, Pb concentrations in surface waters, sediments, and fish tissues (whole body) respectively range from: 0.04 to 30 μ g/L (mean = 0.66, median = 0.50, 95th %tile = 1.1); 0.5 to 12,000 mg/kg (mean = 120, median = 28, 95th %tile = 200); and 0.08 to 23 mg/kg (mean = 1.03, median = 0.59, 95th %tile = 3.24).
Effects of Lead on Natural Aquatic Ecosystems

• Lead exposure may adversely affect organisms at di fferent levels of organization, i.e., individual organisms, populations, communities, or ecosystem s. Generally, however, there is insufficient information available for single materials in controlled studies to permit evaluation of specific impacts on higher levels of organi zation (beyond the individual organism). Potential effects at the population level or higher are, of necessity, extrapolated from individual level studies. Available population, community, or ecosystem level studies are typically conducted at sites that have been contaminated or adversely affected by multiple stressors (several chemicals alone or combined with physical or biological stressors). Theref ore, the best-documented links between Pb and effects on the environment are with effects on individual organisms.

• Natural systems frequently contain multiple me tals, making it difficult to attribute observed adverse effects to single metals. For example, ma cro invertebrate communities have been widely studied with respect to metals contamination and community composition and species richness. In these studies, multiple metals were evaluated a nd correlations between observed community level effects were ascertained. The results often indicate a correlation between the presence of one or more metals (or total metals) and the negative effects observed. While, correlation may imply a relationship between two variables, it does not imply causation of effects.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-24 

### • In simulated microcosms or natural systems, e nvironmental exposure to Pb in water and sediment has been shown to affect energy flow and nutrient cycling and benthic community structure.

• In field studies, Pb contamination has been show n to significantly alter the aquatic environment through bioaccumulation and a lterations of community structure and function.

• Exposure to Pb in laboratory studies and simula ted ecosystems may alter species competitive behaviors, predator-prey inter actions, and contaminant avoidan ce behaviors. Alteration of these interactions may have negative effects on species abundance and community structure.

• In natural aquatic ecosystems, Pb is often found coexisting with other metals and other stressors. Thus, understanding the effects of Pb in natural systems is challenging given that observed effects may be due to cumulative toxicity from multiple stressors.
Aquatic Species Response/Mode of Action

• Recent research has suggested that due to the low solubility of Pb in water, dietary Pb (i.e., Pb adsorbed to sediment, particulate matter, and fo od) may contribute substantially to exposure and toxicity in aquatic biota.

• Generally speaking, aquatic organisms exhibit three Pb accumulation strategies: (1) accumulation of significant Pb concentrations with a low rate of loss, (2) excretion of Pb roughly in balance with availability of metal in the environment, and (3) weak net accumulation due to very low metal uptake rate and no significant excretion.

• Protists and plants produce intracellular polypeptid es that form complexes with Pb. Macrophytes and wetland plants that thrive in Pb-contaminated regions have de veloped translocation strategies for tolerance and detoxification.

• Like aquatic plants and protists, aquatic animals detoxify Pb by preventing it from being metabolically available, though their mechanisms for doing so vary. Invertebrates use lysosomalvacuolar systems to sequester and process Pb within glandular cells. They also accumulate Pb as deposits on and within skeletal tissue, and some can efficiently excrete Pb. Fish scales and mucous chelate Pb in the water column, and potentially reduce visceral exposure.

• Numerous studies have reported the effects of Pb exposure on blood chemistry in aquatic biota. Plasma cholesterol, blood serum protein, albumin, and globulin concentrations were identified as bioindicators of Pb stress in fish.

• Nutrients affect Pb toxicity in aquatic organisms. Some nutrients seem capable of reducing toxicity. Exposure to Pb has not been shown to reduce nutrient uptake ability, though it has been demonstrated that Pb exposure may lead to increased production and loss of organic material (e.g., mucus and other complex organic ligands).

• Avoidance responses are actions performed to evad e a perceived threat. Some aquatic organisms have been shown to be quite adept at avoiding Pb in aquatic systems, while others seem incapable of detecting its presence.

• The two most commonly reported Pb-element in teractions are between Pb and calcium and between Pb and zinc. Both calcium and zinc are essential elements in organisms and the interaction of Pb with these ions can lead to adverse effects both by increased Pb uptake and by a decrease in Ca and Zn required for normal metabolic functions.
Exposure/Response of Aquatic SpeciesEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-25 

### • The 1986 Lead AQCD reviewed data in the contex t of sublethal effects of Pb exposure. The document focused on describing the types and rang es of Pb exposures in ecosystems likely to adversely impact domestic animals. As such, the 1986 AQCD did not provide a comprehensive analysis of the effects of Pb to most aquatic primary producers, consumers, and decomposers.

• Waterborne Pb is highly toxic to aquatic organisms, with toxicity varying with the species and life stage tested, duration of exposure, form of Pb tested, and water quality characteristics.

• Among the species tested, aquatic invertebrates, such as amphipods and water fleas, were the most sensitive to the effects of Pb, with adverse effects being reported at concentrations as low as 0.45 μ g/L (range: 0.45 to 8000 μ g/L).

• Freshwater fish demonstrated adverse effects at concentrations ranging from 10 to >5400 μ g/L, depending generally upon water quality parameters.

• Amphibians tend to be relatively Pb tolerant; however, they may exhibit decreased enzyme activity (e.g., ALAD reduction) and changes in behavior (e.g., hypoxia response behavior).

5.3.3.3 Critical Loads for Lead in Terrestrial and Aquatic Ecosystems



### • Critical loads are defined as threshold deposition ra tes of air pollutants that current knowledge indicates will not cause long-term adverse effects to ecosystem structure and function. A critical load is related to an ecosystem's sensitivity to anthropogenic inputs of a specific chemical.

• The critical loads approach for sensitive ecosystem s from acidification has been in use throughout Europe for about 20 years. Its application to Pb and other heavy metals in Europe is more recent. European critical load values for Pb have been developed but are highly specific to the bedrock geology, soil types, vegetation, and historical deposition trends in each European country. To date, the critical loads framework has not been used for regulatory purposes in the United States for any chemical. Considerable research is necessary before critical load estimates can be formulated for ecosystems extant in the United States.

• Speciation strongly influences the toxicity of Pb in soil and water and partitioning between dissolved and solid phases determin es the concentration of Pb in soil drainage water, but it has not been taken into account in most of the critical load calculations for Pb performed to date.

• Runoff of Pb from soil may be the major source of Pb into aquatic systems. However, little attempt has been made to include this source in to critical load calculations for aquatic systems due to the complexity of including this source in the critical load models. In summary, due to the deposition of Pb from past prac tices (e.g., leaded gasoline, ore smelting) and the long residence time of Pb in many aquatic and terr estrial ecosystems, a legacy of environmental Pb burden exists, over which is superimposed much lower contemporary Pb loadings. The potential for ecological effects of the combined legacy and cont emporary Pb burden to occur is a function of the bioavailability or bioaccessibility of the Pb, which, in turn, is highly depe ndent upon numerous site factors (e.g., soil organic carbon content, pH, wate r hardness). Moreover, while the more localized ecosystem impacts observed around smelters are often striking, these perturbations cannot be attributed solely to Pb. Many other stressors (e.g., other heavy metals, oxides of sulfur and nitrogen) can also act singly or in concert with Pb to cause such notable environmental impacts.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-26 

## References:
Agency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for lead. U.S. Department of Health and Human Services, Public Health Service. http://www.atsdr.cdc.gov/toxprofiles/tp13.html Center for the Child Care Workforce and Human Services Policy Center. 2002. "Estimating the Size and Components of the U.S. Child Care Workforce and Caregiving Population: Key Findings from the Child Care Workforce Estimate (Preliminary Report)," May 2002. Clean Air Scientific Advisory Committee (CASAC) L ead Review Panel. 2007a. Letter to Stephen Johnson. March 27, 2007. Available at: http://yosemite.epa.gov/sab/sabproduct.nsf/ 989B57DCD436111B852572AC0079DA8A/$File/casac07-003.pdf Clean Air Scientific Advisory Committee (CASAC) L ead Review Panel. 2007b. Letter to Stephen Johnson. September 27, 2007. Available at http://yosemite.epa.gov/sab/sabproduct.nsf/ 2DCD6EF49CDD37B285257364005F93E4/$File/casac07-007.pdf
Dietrich, K. M., et al. 2004. Effect of Chela tion Therapy on the Neuropsychology and Behavioral Development of Lead-Exposed Children After School Entry. Pediatrics, 114(1): 19-26. Knight, TE, and Kumar, MS. 2003. Lead toxicosis in cats-a review. J Feline Med Surg. October 5, (5):249-55. Kowalczyk, DF. 1976. Lead poisoning in dogs at the University of Pennsylvania Veterinary Hospital. J Am Vet Med Assoc., March 1, 168(5):428-32. Liu, X., et al. 2002. Do Children with Falling Bl ood Lead Levels Have Impr oved Cognition? Pediatrics, 110(4): 787-791. Mulligan, G.M., Brimhall, D., and West, J. (2005). Child Care and Early Education Arrangements of Infants,Toddlers, and Preschoolers: 2001 (NC ES 2006-039). U.S. Department of Education, National Center for Education Statistics. Wash ington, DC: U.S. Government Printing Office.
Needleman, H. L.; Riess, J. A.; Tobin, M. J.; Biesecke r, G. E.; Greenhouse, J. B. (1996) Bone Pb levels and delinquent behavior. JAMA J. Am. Med. Assoc. 275: 363-369. Rogan, W. J., et al. 2001. The effect of chelation therapy with succimer on neuropsychological development in children exposed to lead. Ne w England Journal of Medicine, 344(19): 1421- 1426. Ruff, H. A., et al. 1993. Declining blood lead levels and cognitive changes in moderately lead-poisoned children. The Journal of the American Medical Association, 269(13): 1641-1646. Salkever, D. S. 1995. Updated estimates of earnings benefits from reduced exposure of children to environmental lead. Environmental Research, 70(1): 1-6. Stokes, L., et al. 1998. Neurotoxicity in young adults 20 years after childhood exposure to lead: the Bunker Hill experience. Occupational Environmental Medicine, 55: 507-516. U.S. Bureau of Labor Statistics. 2006. "Current Population Survey: Basic Monthly Survey." January 2006. U.S. Census Bureau. 2003. American Housing Survey (AHS).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 5 5-27 

### U.S. Department of Education. 2005. National Cent er for Education Statistics Early Childhood Program Participation Survey (NCES 2006-075). Washington, DC. (http://nces.ed.gov/nhes/dataproducts.asp#2005dp) U.S. Environmental Protection Agency (EPA). 1997. Exposure Factors Handbook. Office of Research and Development, National Center for Envir onmental Assessment. EPA/600/P-95/Fa, Fb, and Fc. U.S. Environmental Protection Agency (EPA). 2004. IRIS Database for Risk Assessment. Office of Research and Development, National Center for Environmental Assessment. Updated July 8, 2004. http://www.epa.gov/iriswebp/iris/index.html U.S. Environmental Protection Agency (EPA). 2006a . Economic Analysis for the Renovation, Repair, and Painting Program Proposed Rule, February 2006. U.S. Environmental Protection Agency (EPA). 200 6b. Air Quality Criteria for Lead (Final). EPA/600/R-5/144aF. Office of Research and Development. October. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=158823 U.S. Environmental Protection Agency (EPA). 2007. Revised Final Report on Characterization of Dust Lead Levels after Renovation, Re pair, and Painting Activities. Prepared by Battelle (Columbus, OH) for the Office of Pollution Prevention and Toxics (Washington, D.C.). November 13, 2007. U.S. Environmental Protection Agency (EPA). 2008a. Child-Specific Exposure Factors Handbook. Office of Research and Development, National Centerfor Environmental Assessment. EPA/600/R0/096F. September 2008. U.S. Environmental Protection Agency (EPA). 2008b. Economic Analysis for the TSCA Lead Renovation, Repair, and Painting Program Final Rule for Target Housing and Child-Occupied Facilities. April 2008. Wilder Research Center. 2005. "Family, Friend and Nei ghbor Caregivers: Results of the 2004 Minnesota statewide household child care survey." December 2005. Wilder Research Center. 2001. "Staff recruitment and retention in early childhood care and education and school-age care." April 2001.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-1 

## 6. Estimated Impacts of the Lead, Renovation, Repair, and Painting Rule Revisions In addition to the cost and benefit analyses presented in Chapters 4 and 5, several other types of impacts are important to consider in evaluating the effects of a regulation. This chapter presents the incremental impact of the proposed revisions to the Lead Renovation, Repair and Painting (LRRP) Rule on:

• Paperwork burden, as required by the Paperwork Reduction Act (PRA)

• Financial condition of small entities, as required by the Regulatory Flexibility Act (RFA)

• Whether the regulation has a disproportionate e ffect on low-income and or minority persons

• The environmental health risk or safety risk to children due to the regulation, as required by Executive Order 13045–Protection of Children Fr om Environmental Health & Safety Risks

• State, local, and Tribal governments, and th e private sector, as required by Executive Order 13175–Consultation and Coordination w ith Indian Tribal Governments

• Federalism, as required by Executive Order 13132–Federalism

• The relationship between the Federal government a nd the Indian tribes, or on the distribution of power and responsibilities between the Fe deral government and Indian tribes

• Energy effects, as required by Executive Order 13211–Actions That Significantly Affect Energy Supply, Distribution, or Use and

• Whether voluntary consensus standards are used in its regulatory activities.
The proposed LRRP Clearance Rule includes the fo llowing changes to the LRRP program: (1) a requirement for dust wipe testing for a subset of renovation activities, and (2) a requirement for dust wipe testing and clearance for a subset of renovation activities where the quantity and characteristics of the dust make it hard to clean up. The demand for certified dus t sampling technicians is predicted to increase as a result of the implementation of the Clearance Rule provi sion, and therefore more individuals are expected to seek dust sampling technician training. Additionall y, a specific set of events already regulated under the 2008 LRRP Rule will incur additional per-event dust wipe testing and clearance costs.


### 6.1 Paperwork Reduction Act The Paperwork Reduction Act of 1995 (PRA) (supersed ing the PRA of 1980), as implemented by the Office of Management and Budget (OMB), requires that agencies submit a supporting statement to OMB for any information collection that solicits the same da ta from more than nine parties. The PRA seeks to ensure that Federal agencies balance their need to collect informati on with the paperwork burden imposed on the public by the collection.

The definition of “information collection” includ es activities required by regulations such as permit development, monitoring, recordkeeping, and reporting. The term “burden” refers to the “time, effort, or financial resources” the public expends to provide inform ation to or for a Federal agency, or to otherwise fulfill statutory or regulatory requirements. PRA pa perwork burden is measured in terms of annual time and financial resources the public devotes to meet one-time and recurring information requirements (44 U.S.C. 3502(2); 5 C.F.R. 1320.3(b)).
Information collection activities may include:

• reviewing rule requirements;

• using technology to collect, process, and disclose information;Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-2 

### • adjusting existing practices to comply with requirements;

• searching data sources;

• recordkeeping;

• completing and reviewing the response; and

• transmitting or disclosing information. Agencies must provide information to OMB on the pa rties affected, the annual reporting burden, and the annualized cost associated with responding to information collection requirements.
The proposed LRRP Clearance Rule would result in additional paperwork-related burden for the three types of entities:

1. The dust sampling technician would be required to collect dust samples, prepare a dust wipe testing report, and provide it to the renovation firm (Section 6.1.1 ). (In instances where the renovator is also the dust sampling technician , this item and the following one would be combined.)

2. Renovation firms would be required to provide copies of the dust wipe testing report to owners and occupants.

3. Training providers would incur additional pape rwork burden related to course accreditation and notification (Section 6.1.2 ).

6.1.1 Paperwork Burden and Costs for Dust Wipe Testing Report The proposed LRRP Clearance Rule would require the certified dust sampling technician to prepare a dust wipe testing report and provide it to the renovation firm within three days of the date that the dust wipe test results are obtained. If the dust wipe test re sults are to be determined by a fixed-site laboratory, the samples have to be sent to the laboratory within one business day of the date they are collected. The dust wipe testing or clearance report would include the name and signature of each certified person collecting the samples or performing the testing, the name and address of each certified firm employing the persons conducting the sampling or testing, the st art and completion dates of the renovation, a brief written description of the renovation, the results of th e visual inspection, a detailed written description of the specific sampling or testing locations or a detailed drawing that clearly identifies the location of each sample or test, the name of the NLLAP-recognized entity analyzing the r esults, the results of each sample or test, and the clearance standard that is applicable to each sample or test.

6.1.1.1 Number of Firms Performing Dust Wipe Testing and Clearance Events 

### As discussed in Section 4.4, there are 223,821 entiti es performing events requiring dust wipe testing or clearance in residential housing during the first year of the rule. It is estimated that firms working in public and commercial building child-occupied faciliti es will perform one event that requires dust wipe testing or clearance per year. The number of child-occupied facilities using in-house staff to perform these types of events is estimated to be 686 in the first year of the rule. There will be an estimated 448 events performed by non-residential contractors in year 1. Table 6-1 presents the total number of firms expected to incur paperwork burden and costs due to the proposed rule.Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-1: Total Number of Firms Performing Events Requiring Dust Wipe Testing or Clearance Year 1 Year 2 Year 3 Number of Affected Firms
Residential Contr actors 223,821 222,903 221,989 Public and Commercial Building Operators a 686 683 680 Non-Residental Contractors b 448 446 444 Total - All Events 224,955 224,032 223,113 a. RRP is performed by the owner of a public or commercial building where a COF is located. b. RRP is performed by a contractor in a public or commercial building where a COF is located.

6.1.1.2 Paperwork Burden and Unit Costs


### Two types of costs are estimated in this analysis:

• Labor costs associated with collecting dust wipe samples, shipping samples to the lab, preparing the dust wipe testing or clearance report, and pr oviding reports to owners and occupants of structures where dust wipe testing or clearance was performed.

• Material costs associated with collecting, sh ipping, and analyzing dust wipe samples, and photocopying and mailing the report.

Labor Costs 

### The lead evaluation firm survey of nine establishm ents described in Chapter 4 asked respondents how much labor time would be necessary for taking four du st wipe samples, sending them to the lab, and providing a report to the contractor. The average re sponse was 1.75 hours. Subtracting the estimated marginal labor time for four samples (0.19 hours pe r sample; see Section 4.3.3) and the assumed labor time for shipping results (0.083 hours), the average labor time for writing a short report as described above would be 0.9 hours, or 54 minutes. Thus, EPA estimates that dust sampling technicians will spend an average of 0.83 hours during each sampling event collecting samples (based on a typical time of 0.19 hours per sample), about 0.9 hours preparing the repo rt, and renovators will spend about five minutes shipping samples or reports, for an average renovation firm burden of 1.8 hours per event.

The burden attributed to renovation firms includes th e time required to perform the dust sampling, ship the samples to the laboratory, and prepare and send a summary report to the necessary parties. All renovation firms are required to provide a copy of th e dust wipe testing report to the owner and if different, the occupant of the building being renovate d or the operator of the child-occupied facility.
EPA assumes that renovation firms working in resi dential housing will have certified dust sampling technicians on staff to perform the dust sampling and re port preparation activities. Residential contractors are estimated to perform an average of 7 renovations per year where dust wipe testing will be required, with an average burden of 1.8 hours per event.
Entities performing work in public and commercial build ing child-occupied facilities are expected to hire third-party lead evaluation firms to perform dust sampling. Therefore, these entities will only incur a labor burden of 5 minutes for shipping the dust sampling report to owners and occupants. The cost of hiring a third-party firm is accounted for as a material cost.

Material Costs 

### In addition to the time needed to collect dust wipe sam ples, ship them to the lab, and prepare and mail a summary report, entities performing RRP events will also incur the costs of the lab analysis, dust wipe sample materials, shipping charges, and report materials. Based on a survey of nine establishments, EPA
Chapter 6 6-3Economic Analysis for the L RRP Clearance Proposed Rule



### estimates a lab cost of $19.00 per sample. EPA estimates the cost of the dust wipes to be $0.25 per wipe. Based on per-page photocopy costs, EPA estimates that a single copy of the dust wipe testing report (assumed to average four pages in length, accounting for a one page job description, one page of lab results, one page for a diagram of sample locations, and one additional page to account for the instances where more than three pages might be necessary, su ch as a renovation event occurring in multiple rooms) costs $0.36. EPA estimates a shipping cost of $4.95 based on the rate for Priority Mail using the U.S. Postal Service. After events requiring clearance to be achieved, EPA assumes renovation firms will send reports via overnight mail; EPA estimates the overnight shipping cost to be $15.68.
EPA assumes that renovation firms working in resi dential housing will have certified dust sampling technicians on staff to perform the dust sampling and report preparation activities. Entities performing work in public and commercial build ing child-occupied facilities are exp ected to hire third-party lead evaluation firms to perform dust sampling. Therefor e, these entities will incur labor costs associated with sending the dust sampling report to building owners and operators, whereas the cost of hiring a third-party firm is accounted for as a material cost.
Because the written report labor time, shipping labor tim e, and paper copy and shipping material costs of clearance events are all dependent upon the expected number of clearance failure s, per-event paperwork burden estimates must be calculated separately for each size and type of event, as described in the cost analysis in Chapter 4. Table 6-2 presents the average per-entity bur den and the total labor burden on firms to comply with th e proposed Clearance Rule. Table 6-3 presents the average labor, material, and total per-entity costs.

Table 6-2: Total Paperwork Burden
Year 1 Year 2 Year 3 Average Burden Hours per Response
Residential Contr actors 1.80 1.80 1.80 Public and Commercial Building Operators a 0.08 0.08 0.08 N on-Residential Contractors b 0.08 0.08 0.08 All Firms 1.80 1.80 1.80 Total Burden Hours
Residential Contractor s 2,878,970 2,867,166 2,855,411 Public and Commercial Building Operators a 57 57 57 N on-Residential Contractors b 37 37 37 Total - All Events 2,879,064 2,867,260 2,855,505

a. RRP is performed by the owner of a public or commercial building where a COF is located. b. RRP is performed by a contractor in a public or commercial building where a COF is located.

Chapter 6 6-4Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-3: Average Paperwork Cost Per Entity
Year 1 Year 2 Year 3 Average Labor Cost per Entity
Residential Contr actors $449.17 $449.17 $449.17 Public and Commercial Building Operators a $2.91 $2.91 $2.91
N on-Residential Contractors b $2.91 $2.91 $2.91
All Firms $446.92 $446.92 $446.92 Average Material Cost per Entity
Residential Contr actors $674.30 $674.30 $674.30 Public and Commercial Building Operators a $493.35 $493.35 $493.35
N on-Residential Contractors b $480.27 $480.27 $480.27
All Firms $673.36 $673.36 $673.36 Total Cost per Entity
Residential Contractor s $1,123.47 $1,123.47 $1,123.47 Public and Commercial Building Operators a $496.26 $496.26 $496.26
N on-Residential Contractors b $483.18 $483.18 $483.18
Total - All Firms $1,120.28 $1,120.28 $1,120.28

a. RRP is performed by the owner of a public or commercial building COF. b. RRP is performed by a contractor in a public or commercial building COF.

6.1.1.3 Total Paperwork Costs for RRP Establishments 

### The proposed LRRP Clearance Rule would apply to esta blishments affected by the 2008 LRRP rule and to establishments predicted to seek certification as a result of the proposed elimination of the opt-out provision. Under the proposed option, the entire stoc k of construction firms working in target housing necessary to meet demand would incur dust wipe testing and clearance costs starting in the first year. Other entities doing RRP in public and commercial building COFs, such as public schools, private schools, daycare centers, non-residential property mana gers and lessors, and non-residential contractors would also be affected by the proposed LRRP Clear ance Rule. Given the relative infrequency of dust wipe testing and clearance events in public and co mmercial buildings, entities working in public and commercial building COFs are not expected to perform more than one activity requiring dust wipe testing or clearance per year. Therefore, the number of a ffected entities is estimated as the number of buildings with a renovation event requiring dust wipe testing or clearance in the first year.
Per-establishment paperwork costs and per-establishmen t paperwork burdens (defined as the total number of hours spent complying with paperwork requirements associated with the proposed rule) were estimated by dividing the total costs and burden by the number of certified entities expected to be affected by the proposed LRRP Clearance Rule. Table 6-4 through Table 6-6 present these final per-entity values separately for residential construction firms, non-resi dential contractors, and entities performing RRP in public and commercial building COFs.

Chapter 6 6-5Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-4: Residential Contractor Per-Establishment Paperwork Costs, by Year

Total Paperwork Costs a Total Paperwork

Burden (hours) Number of Certified Residential RRP Firms b Per-Estab. Paperwork

Burden (hours) Per-Estab. Labor Cost Per-Estab. Material Cost Per-Estab. Total Paperwork Cost Year 1 $251,456,179 2,878,970 223,821 13 $449 $674 $1,123 Year 2 $250,424,833 2,867,166 222,903 13 $449 $674 $1,123 Year 3 $249,397,982 2,855,411 221,989 13 $449 $674 $1,123

Table 6-5: Public and Commercial Building COF Operator Per-Entity Paperwork Costs, by Year

Total Paperwork Costs Total Paperwork

Burden (hours) Number of Certified Entities Per-Estab. Paperwork

Burden (hours) Per-Estab. Labor Cost Per-Estab. Material Cost Per-Estab. Total Paperwork Cost Year 1 $340,434 57 686 0.08 $3 $493 $496 Year 2 $339,039 57 683 0.08 $3 $493 $496 Year 3 $337,649 57 680 0.08 $3 $493 $496

Table 6-6: Non-Residential Contractor Per-Establishment Paperwork Costs, by Year

Total Paperwork Costs Total Paperwork

Burden (hours) Number of Certified Entities Per-Estab. Paperwork

Burden (hours) Per-Estab. Labor Cost Per-Estab. Material Cost Per-Estab. Total Paperwork Cost Year 1 $216,465 37 448 0.08 $3 $480 $483 Year 2 $215,577 37 446 0.08 $3 $480 $483 Year 3 $214,693 37 444 0.08 $3 $480 $483



### 6.1.2 Training Provider Paperwork Burden and Costs
EPA has also estimated the information collection burden imposed on training providers. Additional training providers are estimated to become accredited as a result of the LRRP Clearance Rule; therefore, there will be incremental paperwor k burden for accreditation and re-accre ditation. Further, since the proposed LRRP Clearance Rule implies an increase in dust sampling training course demand, it is estimated that training providers would incur an incremental paperwork burden related to course notification. To comply with the 2008 LRRP rule, training providers must keep records on both the courses they provide and the students they train. In addition, they must notify EPA before offering each course (to facilitate EPA’s enforcement activities) an d after each course (so EPA has a record of the individuals who have completed the course).

Chapter 6 6-6Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-7 6.1.2.1 Burden Associated with Course Accreditation 

### It is assumed that 168 training providers, the approxi mate number accredited to provide lead abatement training, will be accredited to provide dust sampling tec hnician training. As described in Section 2.9.1 of the Economic Analysis for the Final Rule, 94 percent of firms in the Other Technical and Trade Schools industry category are small businesses (EPA 2008). Therefore, it is assumed that 94 percent of the 168 training providers, or 158, are small. It is assumed that Training Providers will spend eight hours 1 

### familiarizing themselves with the rule and determining the rule’s applicability to their services in the year that they receive initial accreditation. Training pr oviders will spend an additional four hours of professional time and two hours of clerical time completing the accreditation statement in the year they receive initial accreditation, and every three years th ereafter for re-accreditation. They will spend one additional hour of clerical time each year on an nual recordkeeping associated with accreditation.

Table 6-7 presents the estimation of training provider burden for accreditation. In year 1, it is assumed that 168 training providers will seek initial accreditation. For each year thereafter, one quarter of the necessary stock of training providers will seek accred itation. Based on EPA’s Federal Lead-Based Paint Program (FLPP) database, fifty-five percent of that quarter will seek in itial accreditation, and the remainder will seek re-accreditation. In addition, th e necessary stock of training providers will diminish by 0.41 percent, annually, to reflect the estimated housing demolition rate.

1 Time assumptions are based on in formation provided in EPA’s (2005) Supporting Statement for OM B Review under The Paperwork Reduction Act: TSCA Sections 402/404 Training, Certific ation, Accreditation and Standards for Lead-Based Paint Activities. (EPA ICR No. 1715.09, OMB Control No:2070-0155).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-8 T able 6-7: Training Providers: Accreditation Burden Estimates Number of Training Providers Year 1 Year 2 Year 3 Receiving Initial A ccreditation 168 23 23 Receiving Re-Accreditation 0 19 19

Already Accredited 0 125 124

T otal 168 167 166 Accreditation/Re-Accreditation Burden- Hours per Training Provider

Accreditation Year ReAccreditation Year Other Years
Rule Familiarization 8 0 0 Accreditation Statement 4 4 0

Clerical Time- Statement 2 2 0 Clerical Time- Recordkeeping 1 1 1 Total 15 7 1 Total Accreditation Burden- Hours Year 1 Year 2 Year 3
Rule Familiarization 1,344 184 184 Accreditation Statement 672 168 168

Clerical Time- Statement 336 84 84 Clerical Time- Recordkeeping 168 167 166 Total 2,520 603 602 Sources: Economic Analysis for the Final Rule (EPA 2008).

6.1.2.2 Costs Associated with Course Accreditation 

### The loaded wage rate for training provider clerical staff is $25.56 per hour. The loaded wage rate for professional training staff is $48.67 per hour. It is assumed that professional staff will familiarize themselves with the rule and will prepare the accreditation statement. Material costs of accreditation include one postage stamp ($0.42), one enve lope ($0.02), and two copies ($0.18). Table 6-8 presents the total costs associated with training provider course accreditation.Economic Analysis for the L RRP Clearance Proposed Rule

T able 6-8: Training Providers: Accreditation Cost Estimates Number of Training Providers Year 1 Year 2 Year 3 Receiving Initial A ccreditation 168 23 23 Receiving Re-Accreditation 0 19 19

Already Accredited 0 125 124

T otal 168 167 166 Accreditation/Re-Accreditation Cost per Training Provider

Accreditation Year ReAccreditation Year Other Years
Rule Familiariza tion $389.34 $0.00 $0.00 Accreditation Statement $194.67 $194.67 $0.00

Clerical Time- Statement $51.11 $51.11 $0.00 Clerical Time- Recordkeeping $25.56 $25.56 $25.56 Material Costs $0.62 $0.62 $0.00 Total Cost $661.30 $271.96 $25.56 Total Accreditation Cost – 2008 Dollars Year 1 Year 2 Year 3
Rule Familiarization $65,409 $8,955 $8,955 Accreditation Statement $32,705 $8,176 $8,176 $8,586 $2,147 $2,147 Clerical Time- Recordkeeping $4,294 $4,269 $4,243 Material Costs $104 $26 $26 Total $111,098 $23,572 $23,547 Sources: Economic Analysis for the Final Rule (EPA 2008).

6.1.2.3 Burden Associated with Notification Requirements 

### It is assumed that the pre-notification for each class requires an average of 0.15 hours and that each postnotification requires 1.54 hours. The post notifications are more time consuming because the training provider must send records pertaining to each stude nt who attended the course. Approximately 12 percent of courses will also require a re-notification, which is also estimated to take 0.15 hours. These activities add up to an average of 1.7 clerical hours per course. The number of courses offered per year depends on the number of individuals who need to be trained. As the proposed 2009 LRRP Clearance Rule would increase the demand for dust wipe testing and clearance services, 223,821 dust sampling technicians are predicted to seek training in the firs t year and 44,581 in the second year. It is assumed that training providers would offer an extra 53 courses in the first year, or a total of 158 hours, for the added dust sampling technician demand. 2 

### It is assumed that each notification requires one photocopy, one envelope, and one stamp; thus approximately two of each of these items are required per course.

Table 6-9 and Table 6-10 present the burden incurred by training providers due to the notification requirements.

2 This assumes an average class size of 25.

Chapter 6 6-9Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-9: Training Providers: Notification Burden

Events per Training Provider Category Year 1 Year 2 Year 3 Avg. Reporting Hours/Event Recordkeeping Hours/Event Total Hours/Event
Pre-notification 53 11 11 25 0.15 0.01 0.16 Re-notification 6 1 1 3 0.15 0.01 0.16 Post-notification 53 11 11 25 1.54 0.01 1.55 Digital Photo 53 11 11 25 1.25 0.00 1.25 Annual Total 165 34 34 78 Note(s): Numbers may not calculate due to rounding.

Table 6-10: Training Providers: Notification Burden Estimates Year 1 Year 2 Year 3 Burden per Training Provider 158 33 33 Number of Training Providers 168 167 166 Total Burden Hours 26,527 5,473 5,440 Note(s): Numbers may not calculate due to rounding.

6.1.2.4 Costs Associated with Notification Requirements 

### Clerical staff will prepare and mail notifications a nd will perform recordkeeping activities. The loaded wage rate for training provider clerical staff is $25. 56 per hour. Training provider notification costs also include $0.42 per postage stamp a nd $0.02 per envelope for mailing notif ications and $0.09 per one page copy of each notification for the firm’s records. Tr aining providers are also required to take a digital photo of each dust sampling technician receiving certifica tion. The use of a one-time digital camera costs $20.58 per 25 photos 3 

### and takes approximately three minutes per photo or 1.25 hours per 25 photos.
Table 6-11 and Table 6-12 present the costs incurred by training providers due to the notification requirements.

Table 6-11: Training Providers: Notification Cost per Event

Events per Training Provider Category Year 1 Year 2 Year 3 Avg. Reporting Cost/Event Recordkeeping Cost/Event Materials Cost/Event Total Cost/Event
Pre-notification 53 11 11 25 $3.83 $0.26 $0.53 $4.62
Re-notification 6 1 1 3 $3.83 $0.26 $0.53 $4.62
Post-notification 53 11 11 25 $39.36 $0.26 $0.53 $40.14 Digital Photo 53 11 11 25 $31.94 $0.00 $19.91 $52.00
Annual Total 53 11 11 25 $3.83 $0.26 $0.53 $4.62 Note(s): Numbers may not calculate due to rounding.

3 The analysis assumes a total cost of $2.00 per photo; adjusted for inflation, this equates to a material cost of $19.91 for 25 photos.

Chapter 6 6-10Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-11 Table 6-12: Training Providers: Notification Cost Estimates Year 1 Year 2 Year 3 Burden per Training Provider $5,158 $1,070 $1,070 Number of Training Providers 168 167 166 Total Burden Hours $866,487 $178,767 $177,696 Note(s): Numbers may not calculate due to rounding.

6.1.2.5 Total Paperwork Costs for Training Providers 

### As shown in Table 6-13 , the incremental cost to training providers in the first year is approximately $1.0 million. Costs to training providers would be approximately $0.2 million in years 2 and 3.

Table 6-13: Total Cost Incurred by Training Providers Year 1 Year 2 Year 3
Accreditation Cost $111,098 $23,572 $23,547 Notification Cost $866,487 $178,767 $177,696 Total Cost $977,586 $202,339 $201,243 Note(s): Numbers may not calculate due to rounding.



### 6.1.3 Agency Burden and Cost There are also government costs to administer the program. States, Tribes, and Territories are allowed, but are under no obligation, to apply for and receive au thorization to administer these requirements. EPA will directly administer programs for States, Tribes, and Territories that do not become authorized. Because the number of States, Tribes, and Territories that will become authorized is not known, administrative costs are estimated assuming that EPA will administer the program everywhere. To the extent that other government entities become author ized, EPA’s administrative costs will be lower. States, Tribes, and Territories that choose to implemen t the rule themselves are expected to incur similar costs on a per-unit basis.
EPA will incur costs to process training provider accreditations and notifications for dust sampling technician training. To reduce the burden on the regulated community, EPA does not require formal certification for dust sampling technicians (this cost is implicit in the fee charged to renovation firms). However, EPA will incur incremental costs of contr actor support and database maintenance as a result of the increase in dust sampling technician certification.
For the purpose of estimating costs, it is assumed that EPA Regions will incur variable processing costs, and fixed administrative and enforcement costs. Regional administrative activities include answering phone inquires from the public regarding the LRRP program, following up on the status of applications, providing information to other regi ons, coordinating with headquarters, and performing other customer service activities. Enforcement activities include conducti ng audits of training providers and firms. In addition, it is assumed that EPA Headquarters will incu r fixed administrative costs related to coordination with regions and maintenance of the central datab ase and registry. EPA Headquarters will also support enforcement activities.
Accreditation cost estimates are based on responses from a Time-Motion Study conducted in support of the 2009 Economic Analysis for the TSCA secti on 402 Lead-Based Paint Program Accreditation and Certification Fee Rule (i.e., the Fee Rule). In the Time-Motion Study, data were collected from three EPA Regions: Region 2, Region 4, and Region 9. Re gions were asked to provide the number of hours and personnel required to process applications under the TSCA section 402(a) Lead-Based PaintEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-12 

### Activities program (i.e., the Abatement Rule). While TSCA section 402(a) defines training and certification requirements for five different categories of lead abatement professionals, the type of administrative activities associated with the TSCA secti on 402(a) rule are similar to those expected for the Renovation, Repair and Painting Rule. See the 2009 Fee Rule for an in-depth explanation of fee structure methodology and calculations.

6.1.3.1 Agency Costs of Accrediting Training Providers 

### To estimate cost of processing accreditation applicatio ns for the LRRP rule, EPA followed the approach used to estimate these costs for the Abatement rule. To estimate these costs, EPA first considered the variable and fixed costs associated with each appli cant type. The variable costs reflect the regional processing costs for each application type. The fixed costs include the regional and headquarters administrative and enforcement costs, which apply ac ross all the applications. EPA divided the total regional enforcement and administrative costs and the headquarters costs by the total estimated number of applicants over the five year projection period for the 2008 LRRP Rule.

Table 6-14 presents the Agency cost per training provider developed in the Economic Analysis for the Fees Rule.

Table 6-14: Fee Schedule for Accrediting Training Providers

Calculated Fee Actual Fee

Estimated Initial Accreditation $558 $560 Estimated Re-Accreditation $398 $400 Sources: The Economic Analysis for the TSCA section 402 Lead-Based Paint Program Accreditation and Certification Fee Rule (EPA 2009)



### As described above, it is estimated that 168 training providers would become accredited in Year 1. In Year 2, 42 training providers are expected to seek accr editation or re-accreditation, and in Year 3, 42 training providers are expected to be acc redited or re-accredited. As shown in Table 6-15 , based on these estimates, it will cost EPA less than $0.1 million to pr ocess dust sampling technician notifications in Year 1. EPA’s costs for notification processing are estimated to approximately $20,500 in Years 2 and 3.

Table 6-15: Total EPA Costs of Training Provider Accreditations

Year 1 Year 2 Year 3 Initial Accreditation 168 23 23 Re-Accreditation 0 19 19 Total Cost of Accreditation $94,080 $20,480 $20,480 Note(s): Numbers may not calcu late due to rounding. Sources: Analysis for Clearance Proposed Rule (EPA 2010); The Economic Analysis for the TSCA section 402 Lead-Based Paint Program Accreditation and Certification Fee Rule (EPA 2009)Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-13 6.1.3.2 Agency Cost of Processing Training Notifications 

### EPA will incur the cost of processing notifications s ubmitted by training providers prior to and following each course session. It is assumed that EPA technica l staff with a fully loaded hourly wage of $36.91 4 

### will spend an average of two mi nutes processing each notification.
It is estimated that there will be 18,876 training notif ications in Year 1, 3,894 in Year 2, and 3,871 in Year 3. As shown in Table 6-16 it will cost EPA $23,226 to process training notifications in the first year of the rule, $4,792 in Year 2, and $4,763 in Year 3.

T able 6-16: Total EPA Cost of Training Notifications – 2008 Dollars
Year 1 Year 2 Year 3 Process Training Notification $23,226 $4,792 $4,763 Note(s): Numbers may not cal culate due to rounding. Sources: Economic Analysis fo r the Clearance Proposed Rule (EPA 2010); U.S. Office of Personnel Management: 2008 General Schedule - Base Annual (OPM 2008).

6.1.3.3 Agency Costs of Certifying Dust Sampling Technicians 

### Under the 2008 LRRP Rule, dust sampling technicians are not required to apply to EPA for formal certification. However, EPA Headquarters will incur administrative costs related to contract support and maintenance of the central database and registry. EP A estimates the contractor support cost to be $5 per dust sampling technician notification. Central datab ase maintenance, which is a fixed cost, is spread across all dust sampling technicians.
To estimate the costs of processing notifications for the LRRP rule, EPA followed the approach used to estimate the costs of processing notifications for the Abatement rule. To estimate these costs EPA considered both the variable and fixed costs associated with each applicant ty pe. The variable costs reflect the regional processing costs for each applicati on type. The fixed costs include the regional and headquarters administrative and enforcement costs, wh ich apply across all the applications. EPA divided the total regional enforcement and administrative co sts and the headquarters costs by the total estimated number of applicants over the five year period that the training is valid.
Fixed costs for sampling technicians were estimated by dividing the headquarters administrative costs by the total number of applicants over the five year peri od that the training is va lid to obtain an estimated cost of $6 5 

### . As sampling technicians are not required to obtain formal certification, their costs are recouped by the fee charged to RRP firms. See th e 2009 Fee Rule for an in-depth explanation of fee structure methodology and calculations. Table 6-17 presents the Agency cost per dust sampling technician developed in the Economic Analysis for the Fees Rule.

4 EPA used the Office of Personnel Management’s General Salary Table 2008-GS to estimate government employee wage rates. EPA used the wage for a GS-11, Step 1 employee and loaded the wage using the standard gove rnment multiplier of 1.6 to cover overhead and fringe benefits.

5 See Economic Analysis for the TSCA Section 402 Lead-Base d Paint Program Accreditati on and Certification Fee Rule (EPA, 2009).Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-14 Table 6-17: EPA Costs for Processing Dust Sampling Technician Notifications

Total Cost
Estimated Cost Per Initial Training $6 Estimated Cost Per Refresher Training $6 Sources: The Economic Analysis for the TSCA section 402 Lead-Based Paint Program Accreditation and Certification Fee Rule (EPA 2009)



### It is estimated that 223,821 dust sampling technicians would become certified in Year 1. In Year 2, 44,581 technicians are expected to seek certification or re-certification, and in Year 3, 44,398 technicians are expected to be certified or re-certified. As shown in Table 6-18 , based on these estimates, it will cost EPA $1.3 million to process dust sampling technician notifications in Year 1. EPA’s costs for notification processing are estimated to be less than $0.3 million in Years 2 and 3.

T able 6-18: Total EPA Costs of Dust Sampling Technician Notifications

Year 1 Year 2 Year 3 Number of Dust Sampling Technicians 223,821 44,581 44,398 Total Cost $1,342,926 $267,486 $266,388 Note(s): Numbers may not calcu late due to rounding. Sources: Analysis for Clearan ce Proposed Rule (EPA 2010); The Economic Analysis for the TSCA section 402 Lead-Based Pa int Program Accreditation and Certification Fee Rule (EPA 2009)



### 6.1.4 Total Paperwork Burden and Costs for RRP Firms and Training Providers
Table 6-19 presents the estimated total paperwork burden and costs incurred by all RRP firms and training providers in each of the first three years of the proposed revisions’ implementation. The Agency estimated that approximately 224,200 entities would be affected by the proposed LRRP Clearance Rule annually. EPA estimated the total annualized burden of the information collection activities due to the proposed rule at 2.9 million hours.
For training providers, total notification and accred itation burden was estimated by multiplying the perentity burden estimates in Table 6-8 and Table 6-9 by the number of training providers in each year. For entities performing RRP in target housing and pub lic and commercial buildin g COFs, total reporting burden was estimated by multiplying the per-establishment burden estimates by the number of establishments affected in each year . For the rule requirements, a total event paperwork burden was first estimated by multiplying the number of events discussed in Chapter 4 by the total hours spent per-event complying with the paperwork require ments of the proposed Clearance Rule in each year. Next, the total event paperwork burden was divided by the estimated number of certified RRP establishments in year 1 to produce burden hours per entity. Finally, the es timate for the burden hours per entity in year 1 was multiplied by the total number of entities in years 2 and 3, yielding the total paperwork burden. A similar methodology was used to calculate total paperwork costs.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-15 Table 6-19: Total Paperwork Burden and Costs Incurred by Training Providers and RRP Firms Year 1 Year 2 Year 3 Total Burden Hours Training Provider Accreditation 2,520 603 602 Training Provider Notifications 26,517 5,473 5,440 RRP Firms 2,879, 064 2,867,260 2,855,505 Total 2,908,101 2,873,336 2,861,547 Total Paperwork Cost Training Provider Accreditation $111,098 $23,572 $23,547 Training Provider Notifications $866,208 $178,767 $177,696 RRP Firms $252,012,587 $250,978,569 $249,949,032
Total $252,989,894 $251,180,908 $250,150,274 Note(s): Numbers may not calculate due to rounding.



### Table 6-20 presents the total paperwork costs estimated to be incurred by EPA under the proposed LRRP Clearance Rule.

Table 6-20: Total EPA Costs Year 1 Year 2 Year 3 Training Provider Accreditation $94,080 $20,480 $20,480 Training Provider Notifications $23,226 $4,792 $4,763 Dust Sampling Technician Notifications $1,342,926 $267,486 $266,388 Total $1,460,232 $292,758 $291,631 Note(s): Numbers may not calculate due to rounding.



### 6.2 Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) of 1980, amen ded by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires regulators to assess the effects of regulations on small entities including businesses, nonprofit organizations, and governme nts. In some instances, agencies are also required to examine regulatory alternatives that may reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA, however, does not specifically define “a significant economic impact on a substantial num ber” of small entities. Sections 603 and 604 of the RFA require that regulatory flexibility analyses id entify the types and estimate the numbers of small entities to which the rule will apply. It also requires a description of the rule requirements to which small entities will be subject and any regulatory alternatives, including exem ptions and deferral, which would lessen the rule’s burden on small entities.
The 2008 LRRP Rule requires that all entities that perform renovation, repair and painting work for compensation in target housing or public and comme rcial buildings with COFs become certified by EPA, ensure that their employees are trained as either re novators or workers, and use lead-safe work practices when disturbing lead-based paint, other than events that qualify for the minor maintenance exception.
This analysis considers the incremental impacts of the proposed LRRP Clearance Rule on small entities in the affected construction, real estate, and child-occupied facility industry sectors. The proposed LRRP Clearance Rule requires dust wipe testing or cl earance after certain renovation activities where theEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-16 

### quantity and characteristics of the dust make sufficien t cleaning difficult. It is predicted that this proposed rule would result in additional individuals seeking dust sampling technician training. It also would result in additional dust sampling, re-clean ing, lab, and paperwork costs incurred by firms frequently performing these types of high -dust-generating renovation activities.
Therefore, the proposed LRRP Clear ance Rule affects many of the same small entities affected by the 2008 LRRP rule: entities that provide childcare for compensation including private sector firms (e.g. daycare centers and family daycare); small governme nts (particularly school districts) and non-profit organizations; small construction-re lated contracting firms that provide RRP services to residences or public or commercial buildings containing COFs; and property managers and lessors who rent target housing or lease space to COFs and use their own st aff to conduct RRP work in their buildings.
The impacts on training providers are not analyzed because the rule will result in an increased demand for their services. Therefore training providers will incur po sitive rather than negative impacts. Although the rule may also result in additional costs for training providers (i.e. costs of additional recordkeeping and submitting notifications), training providers are expected to recoup these costs via tuition fees. These tuition fees are accounted for in the estimation of tr aining costs that are incurred by the other entities subject to the rule.

6.2.1 Definitions of Small Entity The Regulatory Flexibility Act defines a small govern ment as a government of a city, county, town, school district or special district with a population of less than 50,000. A small non-profit organization is defined as any not-for-profit enterprise which is inde pendently owned and operated and is not dominant in its field. The RFA relies on the definition of a “small business” found in the Small Business Act, which authorizes the Small Business Administration (SBA) to develop definitions for “small business.” For this analysis, EPA uses SBA’s definition of a small business for each industry.
For many industry sectors, the SBA definition of a small business is based on revenues, where revenue standards vary by industry. In establishing revenue standards, SBA considers a number of economic and market characteristics that may allow a firm to exercise dominance in an industry. These standards represent the maximum revenue that a for-profit ente rprise may have and still qualify as a small business.

Table 6-21 lists the eight NAICS codes of the general a nd specialty contractors this rule will likely impact. Their respective SBA thresholds are also listed. Table 6-21 also lists two NAICS codes for residential real estate industries, two NAICS cod es for nonresidential real estate industries, and one NAICS code for child day care services that are also lik ely to be affected by the rule. Note that this analysis excludes the following construction sectors exp ected to be affected by the 2008 LRRP rule but not the proposed LRRP Clearance Rule: (1) siding contractors, (2) other building equipment contractors, (3) other building finishing contr actors, and (4) glass and glazing contractors. These contractors do not typically perform the types of renovations covered by the proposed rule.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-17 Table 6-21: SBA Revenue Thresholds for Small Business by NAICS Code

NAICS Industry Description SBA Revenue Threshold (Millions $) General and Specialty Contractor Industries 236118 Residential remodelers $33.5
236220 Commercial Building Construction $33.5 238350 Finish carpentry contractors $14
238340 Tile and terrazzo contractors $14
238220 Plumbing and HVAC contractors $14
238320 Painting and wall covering contractors $14 238210 Electrical contractors $14
238310 Drywall and insulation contractors $14 Property Owners and Managers 531120 Lessors of nonresidential buildings (except miniwarehouses) $7 531312 Nonresidential property managers $2 531311 Residential Property Managers $2 531110 Lessors of Residential Buildings and Dwellings $7 Providers of Day Care Services, Pre-Kindergarten and Kindergarten 624410 Child day care services $7 Source: U.S. Small Business Administration, 2008



### The RFA classifies small entities as small businesses, small non-profit organizations, or small governments. Property managers and lessors, and construction-related cont ractors, are all assumed to be for profit operations. All daycare providers opera ting in individual homes (frequently referred to as family daycare) are assumed to be for-profit operations . Daycare centers can be operated by for-profit or non-profit organizations. Kindergartens and pre-kinder gartens refer to facilities in either public schools (governmental) or in private schools (assumed to be non-profits). These classifications are summarized in the following table.

Table 6-22: Small Entity Classifications Type of Entity Business Non-Profit Governmental Construction-Related Contractors X -- -- Day Care Centers X X --Kindergartens and PreKindergartens in Public Schools -- -- X

Kindergartens and PreKindergartens in Private Schools -- X --

Property Managers and Lessors X -- --



### 6.2.2 General Assumptions and Approach This analysis measures the potential incremental impacts of the proposed LRRP Clearance Rule on small businesses in terms of annual compliance costs as a percen tage of annual revenues, referred to as the costEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-18 

### impact ratio. 6 

### This approach is based on the premise that the cost impact percentage is an appropriate measure of an entity’s ability to afford the costs a ttributable to a regulatory change. For purposes of determining small entity impacts, comparing annua l compliance costs to annual revenues provides a reasonable indication of the magnitude of the regul atory burden relative to a commonly available and objective measure of a company’s business volume. Where regulatory costs represent a very small fraction of a typical establishment’s revenue, the impacts of a regulation are likely to be minimal.
This analysis considers seven different groups of entities: public school districts, private schools, daycare centers, construction contractors (residential and non- residential), and property lessors and managers (residential and non-residential). The goal of this an alysis is to evaluate the incremental impacts of the proposed LRRP Clearance Rule on small entities in a typical year. In order to develop a realistic portrayal of the long-term effects of the rule on sma ll entities, annualized costs of the rule, rather than first-year costs, are used to measure its impacts. Furthermore, when presenting the number of businesses affected, the analysis presents the annual average num ber of businesses, rather than first or second year estimates of affected businesses.

The SBA size standards are measured at the firm or parent company level. Conceptually, the small entity analysis would also be conducted at that level. Due to data limitations, this small entity analysis is conducted at the establishment level rather than at th e firm or parent company level for most sectors. Census information was available primarily at the es tablishment level, making a firm or parent company analysis unfeasible. The only sectors where firm-lev el data are used are non-residential managers and lessors, and public schools. Because establishments, and not organizations, are analyzed, an assumption is made that none of the small establishments are s ubsidiaries of larger organizations. This assumption leads to an overestimate of the number of small i ndependent establishments affected by the rule. Furthermore, since organization-level revenu es of multi-establishment businesses are higher than establishment revenues, the use of establishment data may result in higher cost-impact ratios than actually exist.
The cost-impact ratios estimated for the non-residential real estate industries (NAICS 531110, 531311, 531120, 531312) in this small entity analysis are b ased on employment and revenue data for employer establishments only. It is assumed that the majority of non-residential property lessors and managers are businesses with employees. Further, the analysis assum es that a self-employed lessor or manager is likely to hire a contractor to perform work on his propert y, particularly in a non-residential building.

6.2.2.1 Costs Incurred by Small Establishments 

### To estimate the costs incurred by the small entities subj ect to the requirements of the rule, this analysis calculates the number of dust sampling technicians trai ned and number of dust wipe testing or clearance events performed by each of the small entities in a typical year. The renovation events using a heat gun for paint removal, removing or replacing window or door frames, removing paint through scraping, or removing trim or molding will only require dust wipe testing. Clearance (which includes dust wipe testing) is only necessary for events using machines that disturb lead-based paint through high-speed operation or events involving demolition or removal of plaster through destructive means. Therefore, the following analysis presents incremental costs for these events under the proposed LRRP Clearance Rule.
Average Annualized Unit Cost Estimates 

### Unit training costs were calculated by annualizing the total 50-year costs of training dust sampling technicians performing RRP projects in target housin g or public or commercial building COFs, then

6 For private schools, where adequate revenue data were no t available, costs are compared to annual expenditures.Economic Analysis for the L RRP Clearance Proposed Rule



### dividing this total by the average annual number of dust sampling technicians trained by these establishments. Similarly, the annualized total costs of complying with dust wipe testing and clearance provisions were divided by the average annual number of events. This single set of average annualized unit costs was used to calculate total costs to small entities working in target housing and public and commercial building COFs. The use of annual numbers of firms, individuals, and events in calculating average annualized costs takes into account the fact that the pre-1978 housing and building stock is expected to decrease by 0.41 percent per year due to demolition of a portion of the building stock.
The numbers of events, individuals, and firms were averaged over the 50 years covered in this analysis using the following formula:

50 [ A1+(A2*(1-r n 

### ))/(1-r)] Annual Average =

Where: A1 = First year number of events, individuals or firms
A2 = Second year number of events, individuals or firms
r = (1 – 0.41% demolition rate), or 0.9959
n = 50 years covered by the analysis

Table 6-23 presents these calculations and the resulting average annualized unit costs. Because the different types of COF operators ge nerally perform renovations with ve ry different job sizes, per-event unit costs were calculated separately for each group doing RRP in public and commercial building COFs.

Table 6-23: Average Annualized Unit Cost Calculations under the Proposed LRRP Clearance Rule

Unit Cost Total Annualized 50-

Year Cost a 50-year Average Number of Individuals Trained or

Events Performed Average cost per individual or event b

Dust Sampling Technician Training $29,563,881 202,745 individuals trained $146 Target Housing Event $241,830,056 1,445,580 events performed $167

N on-Residential Contractor Event $244,690 406 events performed $603
N on-Residential Lessor and Property Manager Event $74,336 152 events performed $490

N on-Profit Daycare Center In-House Event $64,776 132 events performed $490

Private School In-House Event $63,586 81 events performed $789

Public School In-House Event $196,762 257 events performed $766

a. These costs were estimated using a 3% discount rate. b. Averages may not equal numbers calculated from the totals in the table because they are calculated from totals before rounding.



### 6.2.3 Residential Contractors Establishments that perform RRP work in target housing will incur the costs of training, as well as the per-event costs of dust wipe testing or clearance following certain renovation activities. In order to distribute the total costs of the rule between sm all and large establishments, EPA assumed that the compliance cost incurred by each establishment is a function of the number of regulated renovation
Chapter 6 6-19Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-20 

### events that the establishment performs in a typical ye ar. For each of the eight residential contractor NAICS groups, EPA calculated the average annualized numbers of trained dust sampling technicians for small entities and the number of proposed LRRP Cl earance Rule events being performed by small entities. These averages were calculated separately for non-employer and employer firms. Using the average annualized unit costs, EPA calculated the aver age annualized total costs to small entities affected by the proposed LRRP Clearance Rule. The use of annualized costs provides a more accurate representation of the long-term (typical year) impacts of the rule than would be provided by first or second year costs.
The following six steps were used to calculate the cost-impact ratios for the residential contractor industries. To estimate the impacts of the proposed rule on small entities in the affected industries, the following calculations were performed for each NAICS industry:
Step 1: Certified establishments were classified as either small or large businesses depending on their revenues. Non-employer contractors were considered separately from small employer establishments and therefore there are two small business categories for each residential contractor NAICS group.
Step 2: Census data were used to characterize a “typical” small establishment (in terms of revenues and number of employees) in each of the affected industry sectors.
Step 3: The average number of regulated events pe rformed by an establishmen t each year was estimated by multiplying the ratio of regulated events to personnel by the establishment employment size.
Step 4: An average cost per event, and the training cost per dust sampling technician were calculated using the total annualized 50-year costs to entities wo rking in target housing, the 50-year average number of renovation events requiring dust wipe testing or clearance, and the 50-year average number of dust sampling technicians obtaining training.
Step 5: For small entities performing regulated ac tivities, total establishment compliance costs were calculated by multiplying the number of events perform ed and the number of technicians trained by the corresponding average annualized costs.
Step 6: Cost-impact ratios were calculated for a typical small establishment in each industry sector by dividing the average compliance costs incurred by each establishment (Step 5) by the establishment’s revenues (Step 2). These cost impact ratios were calculated both for non-employer and small employer NAICS groups separately and combined.

6.2.3.1 Number of Small Residential Contractors and Real Estate Entities Affected by the Proposed LRRP Clearance Rule 

### The data used in this analysis were drawn primarily from the 2002 U.S. Economic Census. As discussedin Chapter 2, Census data were used to estimate the number of non-employer establishments (selfemployed contractors) in the affected construction in dustries. The 2002 Census also provides data on the number, revenue and employment of establishments w ith payroll by revenue bracket for each construction industry sector affected by the rule. In Chapter 2, these data were used to classify construction establishments into two main size classes – establishm ents with annual revenues of less than $10 million, and establishments with annual revenues of $10 million or more. The percent of establishments, employees, net value of construction and total valu e of business contributed by establishments in each revenue bracket can be found in Chapter 2.

Because 2002 Census data on the number of establishm ents by revenue bracket was not available at the time the estimates were developed, 1997 Census data was used to estimate the percent of establishments in each industry that qualify for small business status . These percentages, as well as the percent ofEconomic Analysis for the L RRP Clearance Proposed Rule



### industry revenues and employment contributed by small and large establishments, are presented in Chapter 2.

The Small Business Administration revenue thresholds for establishments in the construction sectors are currently set at $33.5 million for Residential Rem odelers and at $14 million for the seven specialty contractor industries. However, in applying the U. S. Economic Census data to the SBA definition of small business, it is not possible to estimate the ex act number of construction establishments that have revenues below the SBA threshold because the U.S. Economic Census groups all establishments with revenues of $10 million or more into one revenue br acket. Applying the U.S. Economic Census data therefore requires either under or overestimating the number of small businesses affected by the rule. On the one hand, using data for th e entire industry would overestimat e the number of small businesses affected by the rule. It would also underestimate the rule’s impact on small businesses because the impacts would be calculated using the revenues of la rge businesses in addition to small businesses. On the other hand, applying the closest, albeit lower, re venue bracket would underestimate the number of small businesses affected by the rule while at the sa me time overestimating the impacts. For example, because the $10 million cut-off is below the SBA thres hold for the Residential Remodeler industry, using the U.S. Economic Census data may lead to an underestimate of the number of small businesses in this sector, although likely a small underestimate. 7 

### At the same time, using these data may lead to a slight overestimate of the impacts of the rule, as the aver age revenues of small businesses will appear smaller when larger establishments (those with revenues of $10 to $33.5 million) are left out. See Section 6.2.2 for a discussion of assumptions that may result in an overestimation of the number of affected small businesses. Moreover, using data on all businesses regardless of size would defeat the purpose of estimating impacts on small business. EPA has chosen to be more conservative in estimating the cost impacts of the rule on small businesses by using the $10 million threshold for construction industry

sectors.

In order to estimate the number of certified small esta blishments with paid employees, EPA assumed that the number of certified small employers is proporti onal to the total number of small employer establishments in the industry. The total number of certified establishments in each industry (calculated in Chapter 4) was multiplied by the percentage of estab lishments in that industry with revenues below the revenue thresholds described above. For the eight residential construction industry sectors, the resulting number of small employer establishments was added to the total number of certified self-employed contractors to obtain the total number of small certified establishments.

Table 6-24 shows the 50-year average number of small businesses affected by the proposed rule. The number of affected businesses is predicted to decreas e proportionally to the number of regulated events, which in turn decline at an annual rate of 0.41 percent (see Chapter 4 for discussion).

Table 6-24: 50-Year Average Number of Small Residential Contractors Affected
N on-Employer Establishments a 150,522 Employer Establishments 51,715 Total Small Establishments 202,237

a. Also referred to as “self-employed” individuals. Source: EPA Calculations

7 Because 99.7 percent of Residential Remodeler esta blishments earn less than $10 million per year, any underestimate of the number of establishments is likely to be minimal. Chapter 6 6-21Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-22 6.2.3.2 Training Costs – Small Residential Contractors

Number of Individuals Trained – Residential Contractors 

### As described above, the number of certified small establishments with paid employees was estimated assuming that the number of certified small employer s is proportional to the total number of small employer establishments in the industry. The tota l number of certified establishments in each industry (calculated in Chapter 4) was multiplied by the per centage of establishments in that industry with revenues below the revenue thres holds described above in section 6.2.3 . The number of small employer establishments in each NAICS group expected to obtain certification is presented in Table 6-25 . Each of these establishments is assumed to seek dust sampling technician training for one employee.
To estimate the number of employees of an average small establishment in each affected industry, EPA used U.S. Economic Census data to determine th e portion of each industry’s employees that work for small businesses. This percentage was applied to the estimated number of trained dust sampling technicians and workers in each sector to calculate the number of trained dust sampling technicians and workers employed by small certified establishments. For each of the construction and real estate industry sectors, the total number of employees (including no n-employers) was divided by the total number of small establishments to calculate an average small business employment size.

Table 6-25 presents the 50-year average number of small certified employer firms, each of which is assumed to employ one trained dust sampling technici an. Only entities that would use their own dust sampling technician for compliance with the proposed LRRP Clearance Rule would incur additional training costs. As described in Chapter 4, it was foun d to be cost-effective for all residential non-employer and employer construction firms to train their own dus t sampling technician rather than use third party dust wipe testing services. It was also shown that n one of these establishments are expected to perform enough dust wipe testing or clearance events annually to justify training more than one dust sampling technician.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-23 Table 6-25: 50-Year Average Number of Dust Sampling Technicians Trained by Small Employer Establishments

NAICS Description Annualized Number of Trained Dust Sampling

Technicians, Small

Establishments a 236118 Residential remodelers 20,408 238350 Finish carpentry contractors 7,717 238340 Tile and terrazzo contractors 1,101 238220 Plumbing and HVAC contractors 10,214 238320 Painting and wall covering contractors 4,288 238210 Electrical contractors 6,221 238310 Drywall and insulation contractors 1,766 Total, Small Employer Establishments 51,715

a. Since employer construction establishments are assumed to have need for one trained dust sampling technician, the total number of trained employees working for small construction establishments is simply the sum of the number of certified small employers. Source: U.S. Census Bureau 2000d; U.S. Census Bureau 2004; U.S. Census Bureau 2005 b-e,g,h; U.S. Small Business Administration 2005.



### Table 6-26 presents the 50-year average number of dust sampling technicians trained for non-employer residential contractor establishments. Since non-empl oyer establishments consist of single individuals, each self-employed individual must obtain dust sampling technician training.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-24 Table 6-26: 50-Year Average Number of Dust Sampling Technicians Trained by Small Non-Employer Construction Establishments

NAICS Description Annualized Number of Trained Dust Sampling

Technicians, Small

Establishments a 236118 Residential remodelers 48,020 238350 Finish carpentry contractors 40,873 238340 Tile and terrazzo contractors 5,839 238220 Plumbing and HVAC contractors 13,137 238320 Painting and wall covering contractors 22,683 238210 Electrical contractors 10,382 238310 Drywall and insulation contractors 9,589 Total, Non-Employer Establishments 150,522

a. Since non-employer construction establishments are assumed to have need for one trained dust sampling technician, the total number of trained employees working for small construction establishments is simply the sum of the number of certified self-employed contractors. Source: U.S. Census Bureau 2000d; U.S. Census Bureau 2004; U.S. Census Bureau 2005 b-e,g,h; U.S. Small Business Administration 2005.

Total Training Costs to Small Residential Contractors 

### To estimate small residential contractor trai ning costs, the numbers of individuals in Table 6-25 and Table 6-26 were multiplied by the average annualized costs of training a single certified dust sampling technician from Table 6-23 . The resulting average annualized training costs are presented in Table 6-27

.

Table 6-27: Average Annualized Training Costs for Small Residential Contractors



### Regulatory Option Annualized Number of Trained Dust Sampling Technicians Total Certified Technician Training Cost a 

### Average Training Cost Per Establishment

Proposed rule 202,237 $29,489,816 $146 a. A 3 percent discount rate is used for estimating total costs.

6.2.3.3 Dust Wipe Testing and Clearance Costs – Small Residential Contractors
Number of Events Performed Annually by Small Residential Contractors 

### As discussed in Section 6.2.2 and the beginning of this section, this analysis attributes the dust wipe testing and clearance costs of the proposed rule to establishments on a per-event basis. In order to estimate the total number of events performed by establishments in each of the affected industries and in order to distribute these events between small and la rge establishments, EPA assumed that the number of events performed by each establishment is proporti onal to the number of people the establishment employs. Furthermore, EPA assumed that the numbe r of events performed by each trained employee will be the same across all industries. If a certain indus try performs fewer events than estimated here, the impacts on these establishments will be slightly smaller and the impacts on the other construction industries will be slightly larger.Economic Analysis for the L RRP Clearance Proposed Rule



### The number of events per small establishment in a particular industry was calculated as follows:

Chapter 6 6-25 

### EPA estimated the 50-year average number of events per employee by calculating the ratio of the total number of regulated events to the total number of construction workers (using the 50-year averages). Because the number of establishments, as estimated in Chapter 4, was assumed to be proportional to the regulated housing stock and the number of regulated events, the number of RRP events per employee does not change over time.
To estimate the average number of events performed by a small establishment in a given industry, the establishment’s average employment si ze was multiplied by the average number of events per individual.

Table 6-28 presents the 50-year average estimated num ber of events per small establishment.

Table 6-28: 50-Year Average Annual Number of Events performed by Small Residential Contractors for the Proposed LRRP Clearance Rule

Regulatory Option Average Small Employment Size Average Number of Annual Events

Per Employee Total Annual Number of Events Per Small Establishment 

### Proposed rule 1.8 3.4 6.1

Total Clearance Rule Costs – Residential Contractors 

### Table 6-23 presents the annualized average per-event costs of the proposed rule. For affected entities, these costs include the cost of performing dust wipe testing following certain renovation activities and complying with the re-cleaning and clearance requi rements for another set of renovation practices. Multiplying the average event cost per small establishm ent by the total 50-year average number of small entities (see Section 6.2.3.1 ) yields the total incremental dust wipe testing and clearance costs of the proposed LRRP Clearance Rule. These costs are presented in Table 6-29

.

Table 6-29: Average Annualized Dust Wipe Test ing and Clearance Costs for Small Residential Contractors
Regulatory Option Avg. Number of Events per Small Estab. AnnualizedAverage PerEvent Cost b 50-year Avg. Number of Small Estab. Total Event Costs a Avg. Event Costs per Small Estab.


### Proposed 6.1 $167 202,237 $206,429,441 $1,021

a. Total costs are calculated using unrounded unit costs; a 3 percent discount rate is used. b. Includes the cost of performing dust wipe testing for a subset of renovation events and dust sampling, recleaning, and clearance for a separa te subset of renovation events.

6.2.3.4 Residential Contractors 

### Cost-impact ratio analysis compares the cost of a regul ation to an establishment’s total revenues, not just to its revenues from the regulated activity. As such, for construction establishments, the costs of the rule were compared to the total value of business done rather than just to the total value of construction work. For real estate establishments, total revenues were used. Because no revenue data are available N umber of Events = (Events/Employee) X (Average Es tablishment Employment Size)Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-26 

### specifically for establishments expected to seek certification under the regulations, EPA assumed that average revenues of these businesses do not differ significantly from industry averages.
EPA calculated the revenues of a small certified construction business as a weighted average of small employer and non-employer revenues. The 2002 U.S. Economic Census presents data on the number and total value of business done by construction establishm ents with total annual revenues of $0 to $10 million and $10 million or more. To estimate the av erage revenues of small employers in each of the affected construction sectors, the total value of busin ess done by establishments in the $0 to $10 million bracket was divided by the total number of establishm ents in that bracket. Since the Census presents revenue figures in year 2002 dollars, the resulting av erage revenues were inflated to 2008 dollars using the Consumer Price Index. 8 

### Per-establishment revenues for non-employers were estimated for the cost impact ratio analysis by dividing non-employer reve nues (inflated to 2008 dollars) by the number of nonemployer establishments in each industry. Averag e revenues of certified small establishments are presented in Table 6-30 . Because 2002 data on the number of establishments by revenue bracket was not available at the time the estimates were developed, 1997 data was used to estimate the percent of establishments in each industry that qualify for small business status. EPA also used 1997 Census data to calculate the percent of industry revenues contribut ed by these establishments. These percentages were then applied to the 2002 numbers of establishments and industry revenue figures to estimate the number and revenues of small and large employers in each industry. Average small employer revenues (calculated by dividing the revenues of establishm ents in each industry and revenue bracket by the corresponding number of establishments) were inflated to 2008 dollars using the Consumer Price Index. The resulting estimates are presented in Table 6-30

.

Table 6-30: Average Revenues of Small Businesses Affected by the Proposed Clearance Rule

NAICS Industry Description Small Business Revenues

(2008$) 236118 Residential remodelers $201,669 238350 Finish carpentry contractors $111,032 238340 Tile and terrazzo contractors $143,466 238220 Plumbing and HVAC contractors $476,976 238320 Painting and wall covering contractors $95,731 238210 Electrical c ontractors $387,707 238310 Drywall and insulation contractors $265,127 Total Average, Construction Establishments $214,391 Weighted average of employer and non-employer revenues. Source: U.S. Census Bureau 2005b,d,e; U.S. Small Business Administration 2005; U.S. Census Bureau 2004; U.S. Census Bureau 2000d.

6.2.3.5 Impacts on Small Residential Contractors 

### Impacts of the rule on small residential contractors were measured by comparing the costs of the rule incurred by an establishment to the establishment’s reve nues. The impacts on small residential contractor

8 Annual values from the CPI-U se ries (All items, US city average, Series Id: CUUR0000SA0) were used to inflate dollar values to 2008 dollars.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-27 

### establishments were estimated by first taking the su m of the total annualized event and training costs incurred by these entities and dividing these total costs by the number of establishments. Average costs per establishment were then divided by average revenues to calculate a cost-to-revenue ratio. These calculations, and the resulting cost-to-revenue ratios, are presented in Table 6-31

.

Table 6-31: Cost-to-Revenue Ratios for Small Residential Contractors
Regulatory Option Total Affected Small Entities Total Cost of Rule to Small Entities, Annualized a Average Cost of Rule per Small Entity Estimated Avera g e Small Entity

Revenues Cost-toRevenue Ratio
Proposed rule 202,237 $235,919,257 $1,167 $214,391 0.544%

a. A 3 percent discount rate is used.



### Table 6-32 presents the impacts of the rule on small residential contractors, by NAICS group, for nonemployer and employer establishments both separately and combined. Impact estimates for nonemployers should be interpreted with caution, as so me non-employers may have issues related to underreporting of income, which would tend to exaggerate the average impact ratio for this class of small entities. According to GAO, many sole proprietors underreport their income , with a small proportion accounting for the bulk of understatements (GAO 1994 a nd 2007). According to IRS estimates reported by GAO, sole proprietors underreported their net income by 57 percent in 2001 (GAO 2007). The IRS estimates address net income (i.e., revenues minus e xpenses), while the small entity analysis compares compliance costs to revenues. According to IRS figures, underreporting of gross income makes up at least half of the misreporting of net income. A key reason for this underreporting is that the income of the self-employed is not subject to withholding and only a portion of that income is subject to information reporting by third parties (GAO 2007). The IRS estimates that at least 61 percent of sole proprietors underreported their income, and the IRS recognizes that these are underestimates because detecting underreported income is difficult, especially cash receipts (GAO 2007). Although at least 61 percent of sole proprietors had understated taxes, the amounts were skewed with half of sole proprietors understating less than $903.Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-32: Cost-to-Revenue Ratios: Small Resi dential Construction Establishments (Proposed Option)

NAICS Industry Description Number of Small Entities Costs a Revenues CostImpact Ratio Non-Employers 236118 Residential remodelers 48,020 $34,185,929 $1,811,671,241 1.89% 238350 Finish carpentry contractors 40,873 $29,098,396 $1,373,680,993 2.12% 238340 Tile and terrazzo contractors 5,839 $4,156,563 $246,542,544 1.69% 238220 Plumbing and HVAC contractors 13,137 $9,352,522 $835,804,455 1.12% 238320 Painting and wall covering contractors 22,683 $16,148,118 $630,410,871 2.56% 238210 Electrical contractors 10,382 $7,391,113 $461,069,222 1.60% 238310 Drywall and insulation contractors 9,589 $6,826,244 $966,038,669 0.71% Total, Small Construction Establishments 150,522 $107,158,886 $6,325,217,995 1.69% Employers 236118 Residential remodelers 20,408 $30,592,288 $11,988,045,317 0.26% 238350 Finish carpentry contractors 7,717 $15,073,799 $4,021,354,972 0.37% 238340 Tile and terrazzo contractors 1,101 $2,999,533 $749,095,264 0.40% 238220 Plumbing and HVAC contractors 10,214 $35,242,942 $10,302,305,492 0.34% 238320 Painting and wall covering contractors 4,288 $11,192,013 $1,951,464,139 0.57% 238210 Electrical contractors 6,221 $24,619,776 $5,975,872,677 0.41% 238310 Drywall and insulation contractors 1,766 $9,040,021 $2,044,473,203 0.44% Total, Small Construction Establishmen ts 51,715 $128,760,371 $37,032,611,063 0.35% Employers and Non-Employers Combined 236118 Residential remodelers 68,428 $64,778,217 $13,799,716,558 0.47% 238350 Finish carpentry contractors 48,590 $44,172,194 $5,395,035,965 0.82% 238340 Tile and terrazzo contractors 6,940 $7,156,096 $995,637,808 0.72% 238220 Plumbing and HVAC contractors 23,352 $44,595,464 $11,138,109,947 0.40% 238320 Painting and wall covering contractors 26,970 $27,340,131 $2,581,875,010 1.06% 238210 Electrical contractors 16,603 $32,010,890 $6,436,941,899 0.50% 238310 Drywall and insulation contractors 11,355 $15,866,265 $3,010,511,872 0.53% Total, Small Construction Establishments 202,237 $235,919,257 $43,357,829,058 0.54% a. Total costs are calculated using a 3 percent discount rate.



### 6.2.4 Non-Residential Contractors Non-residential contractors (i.e., those working in public or commercial build ing COFs) are currently regulated under the 2008 LRRP Rule. Jobs that are not performed in-house by public and private schools, non-residential property managers/lessors, or daycare centers will be performed by general and specialty contractors including painters, electricians, plum bers/HVAC specialists, a nd non-residential building contractors. Under the proposed rule, 448 establishments are expected to incur dust wipe testing and clearance costs in the first year. Because different cont ractors are generally expected to work in public or commercial buildings and target housing, this analysis considers impacts on these groups of establishments separately.
Because renovation events in public or commercial build ing COFs are generally larger compared to those in target housing, this analysis assumes that only c ontractors with employees will work on COFs in public

Chapter 6 6-28Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-29 

### or commercial buildings. 9 

### Furthermore, the types of jobs performed in public or commercial building COFs are generally less varied than those in target housing. Events in COFs are assumed to consist primarily of painting, window/door replacement, and plumbing and electrical projects. As such, it is likely that most of these projects will be perform ed by painting, plumbing/HVAC, electrical, and commercial building contractors (NAICS 238320, 238220, 238210 and 236220, respectively). As illustrated in Chapter 4, non-residential contractors will not typically perform enough dust wipe testing or clearance events annually to make it cost-effective fo r them to train their own dust sampling technician. While non-residential contractors are not expected to in cur training costs, they are assumed to incur third party dust wipe testing and clearance costs for the ev ents in public and commercial buildings that they perform.

6.2.4.1 Number of Small Non-Residential Contractor s Affected by the Proposed LRRP Clearance Rule 

### To estimate the number of construction establishments working in public or commercial building COFs, the number of affected jobs they perform, and th eir average revenues, the following assumptions were made:

3⁄4 The number of contractors in each sector is proportional to the number of jobs likely to be performed by each type of contractor.

3⁄4 These currently regulated contractors are only assumed to perform projects in public or commercial building COFs. In reality, however, these additional contractors may perform some residential work and some commercial work, while contractors with employees that wereincluded in the residential contractor section of this analysis may also do some of the nonresidential COF work. As such, to define the si ze and revenue of the average small firm working in public or commercial building COFs, the numbe rs of certified non-residential contractors with employees were added to the pool of pre-existing certified residential employer establishments in the corresponding sectors. The percent of small es tablishments in each sector, percent of workers employed (and thus jobs performed) by these est ablishments, and percent of total value of business earned by these establishments were calcul ated using 2002 Economic Census data on the number of small establishments and employees work ing for small establishments (U.S. Census Bureau 2005a). Average revenues of small establis hments were estimated by dividing the total value of business earned by establishments with revenues below $10 million in each sector by the total number of establishments with revenues below $10 million in that sector. The results of these calculations are presented for in Table 6-34 . Note that because only establishments with employees are assumed to work in public or commercial building COFs, average revenues of small establishments in Table 6-34 are higher than the average revenues of residential construction establishments, which include self-employed contractors.

Table 6-33 presents the distribution of events by COF type, shows the ratio of contractor to in-house events, and presents estimates of the total number of contractor events in the first year. Table 6-34 displays the estimated number and characteristics of sm all non-residential contractor firms affected by the 2008 LRRP Rule. Although 3,223 non-residential property manage r and lessor firms are regulated under the 2008 LRRP Rule, only a fraction of these firm s will perform renovation in public and commercial building COFs requiring dust wipe testing or clearance in a given year. It is estimated that an average of 448 non-residential contractors will be affected by the proposed rule in an average year.

9 In contrast, the analysis of target housing contractor s assumes that both employer and non-employer (i.e., selfemployed) contractors will work on COFs in target housing.Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-33: Estimated Number of First-Year Non-Residential Contractor Events

Type of COF Total Number of Events Percent of Events Performed by Non-Residential

Contractors Total Number of Contractor Events


### Public Schools

Kindergarten (Public) 192 20% 39 Pre-K + Kindergarten (Public) 150 18% 28 Daycare Center (In Public School) 10 19% 2 

### Private Schools

Kindergarten (Large Private) 27 20% 6 Pre-K + Kindergarten (Large Private) 82 18% 15 Kindergarten (Small Private) 32 100% 32 Pre-K + Kindergarten (Small Private) 41 100% 41 Daycare Center (In Large Private School) 0 19% 0 Daycare Center (In Small Private School) 0 100% 0 

### Daycare Centers

Daycare Center (Renter-Occupied) 208 19% 40 Daycare Center (Owner-Occupied) 142 100% 142 Daycare Center (Non-Profit who performs some of own RRP) 181 19% 35 Daycare Center (Non-Profit who uses contractors) 67 100% 67 Total Jobs 1134 39% 448 This analysis assumes that privat e schools, public schools, and non-profit daycare centers which use in-house staff to perform RRP will perform all window/door carpe ntry work every year in-house. Non-residential contractor firms will perform all other RRP. Non-resident ial contractor firms will perform all RRP events in owner-occupied daycare centers, daycare centers that do not perform some of their own RRP, and small private schools.

Table 6-34: Estimated Numbers and Characteri stics of Small Non-R esidential Contractors

NAICS Contractor Description Estab., Residential Estab.,NonResidential Est., Total Percent Small Number Small Percent Workers at Small

Estab. Average Revenues of Small Estab. 238220 - Plumbing/ HVAC 11,200 1,482 12,681 97.9% 12,410 70.1% $850,881

238210 - Electrical
contractors 6,824 1,482 8,306 97.9% 8,132 67.9% $809,692

236220 - Commercial building contractors 0 105 105 88.1% 93 41.4% $1,750,332
238320 - Painting/ wall covering 4,615 155 4,770 99.7% 4,757 91.5% $380,165
Total/ Weighted Avg. Small Non-Residential Contractor Firm 22,639 3,223 25,862 98.2% 25,391 69.2% $752,783

Chapter 6 6-30Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-31 6.2.4.2 Dust Wipe Testing and Clearance Costs – Non-Residential Contractors
Number of Events Performed by Small Esta blishments – Non-Resi dential Contractors 

### On average, 69 percent of the 448 non-residential contr actor dust wipe testing or clearance events in the first year are performed by small businesses. Since th e number of affected firms is defined to be the number of firms performing a dust wipe testing or cl earance event in the first year, the number of jobs performed is equivalent to the num ber of establishments affected. Table 6-35 presents the total number of small contractor establishments incurring event cost s and the number of events in the first year.

Table 6-35: First Year Number of Small Non-Residential Contractor Establishments and Jobs Performed Total, non-residential CO F contractor Small, non-residential COF contractor Regulatory

Option Establishments Events Establishments Events Proposed 448 448 281 281



### To estimate typical annual small businesses impacts, th is analysis estimated the 50-year average number of certified firms and regulated events given that the number of certified firms is expected to decrease proportionally to the size of the regulated housing stock. These estimates are presented in Table 6-36

.

Table 6-36: 50-Year Average Annual Numb er of Small Certified Establishments and Jobs Performed

Regulatory Option Number of Firms with Clearance Rule Costs Number of Jobs Performed

Proposed rule 281 281

Total Clearance Rule Costs – Non-Residential Contractors 

### To estimate total event costs incurred by small non -residential construction establishments working in public or commercial building COFs, the 50-Year av erage annual number of events performed by these establishments (1 per firm) was multiplied by the average annualized per-event cost ($603; see Table 6- 23 ). Table 6-37 presents the resulting annualized total and av erage costs of the Clearance Rule to small non-residential construction establishments.

Table 6-37: Average Annualized Dust Wipe Testing and Clearance Costs for Small NonResidential Contractors

Regulatory Option Average Annual Events

Performed Annualized Avg. Per-Event Cost Total Event Costs a Average Event Costs per Small Establishment Proposed rule 281 $603 $169,235 $603 a. Total costs are calculated using unrounded unit costs of third party dust sampling services; a 3 percent discount rate is used.Economic Analysis for the L RRP Clearance Proposed Rule

6.2.4.3 Impacts of the Proposed LRRP Clearance Rule on Non-Residential Contractors 

### Impacts of the rule on small non-residential contractor s are measured by comparing the costs of the rule incurred by an establishment to the establishment’ s revenues. The impacts on small non-residential contractors were estimated by first dividing the to tal dust wipe testing and clearance costs under the proposed option by the number of establishments. Aver age costs per establishment were then divided by average revenues to calculate a cost-to-revenue ratio. These calcu lations, and the resulting cost-torevenue ratios, are presented in Table 6-38

.

Table 6-38: Cost-to-Revenue Ratios for Non-Residential Contractors

Regulatory

Option Total Small Contractor Establishments Total Cost of Rule to Small Contractor Establishments Average Cost of Rule per Small

Contractor Establishments Average Small Contractor Establishment Revenues Cost-toRevenue Ratio

Proposed rule 281 $169,235 $603 $139,188 0.433%



### 6.2.5 Non-Residential Property Lessors and Managers Non-residential property lessors and managers ar e currently regulated under the 2008 LRRP Rule. Lessors and managers of pre-1978 pub lic or commercial buildings that rent space to daycare centers and perform regulated projects on their own properties will incur dust wipe testing and clearance costs under the proposed LRRP Clearance Rule. The analysis in Chapter 4 demonstrated that non-residential property managers and lessors are not expected to typically perform enough dust wipe testing or clearance eventsannually to justify obtaining dust sampling technician training for one of their employees. Instead, nonresidential real estate firms are assumed to incur only third party dust wipe testing costs for the dust wipe testing events (and third party and re-cleaning cost s for the clearance events) in public and commercial buildings that they perform. As discussed in Chap ter 4, this analysis estimates that 13,279 daycare centers will rent space in pre-1978 non-residential buildi ngs in the first year. On average (over 50 years), 12,028 daycare centers are expected to rent sp ace in pre-1978 buildings each year. Because daycare centers are only one of many types of establishments renting non-residential space and because the LRRP Rule applies only to centers in buildings constructe d prior to 1978, the analysis also assumes that each property manager or lessor firm owns only one non-r esidential building containing a COF. As such, the number of affected lessor/manager firms is equivalent to the number of affected daycare centers renting space or 12,028 firms. Due to the lack of data on the extent to which these firms perform renovation work in their own buildings, this an alysis assumes that they will behave similarly to the operators of other public or commercial buildings with child-occupied f acilities, namely that they will perform all of their own painting and window/door carpentry projects.

6.2.5.1 Number of Non-Residential Property Lessors and Managers Affected by the Proposed LRRP Clearance Rule 

### Although 12,028 non-residential prope rty manager and lessor firms are regulated under the 2008 LRRP Rule, only a fraction of these firms are operators of daycare center buildings which will undergo renovation requiring dust wipe testing or clearance in a given year. It is estimated that an average of 152 daycare center buildings renting space will be affected by the proposed rule in an average year.
Lessors and managers of non-residential properties fall under NAICS 531120 and 531312, respectively. In order to estimate the number of regulated firms in each of these sectors, it is assumed that the percent of regulated firms in each industry is equivalent to th e total percent of non-residential real estate firms in

Chapter 6 6-32Economic Analysis for the L RRP Clearance Proposed Rule



### that industry. In other words, since Lessors of Non-Residential Buildings (NAICS 531120) make up 73 percent of establishments in NACIS 531120 and 531312 combined, 73 percent of the 12,028 lessor/manager firms affected by the proposed LRRP Clearance Rule are also assumed to fall in this sector, while the remaining 27 percent are assume d to fall under NAICS 531312 (Calculated based on U.S. Census Bureau 2005f).
As discussed in Section 2.4.2 of Chapter 2, 96 percent of Lessors of Non-Residential Real Estate, and 81 percent of Non-Residential Property Managers qualif y for small business status under the SBA definition of a small business in these sectors (U.S. Census Bure au 2005f). This analysis assumes that the size distribution of regulated firms mirrors the size dist ribution of the entire non-residential property lessor and manager industry. Table 6-39 presents the resulting estimates of the number of small non-residential property lessors and managers affected by the proposed LRRP Clearance Rule in a typical year.

Table 6-39: Average Annual Number of Small Non-Residential Property Lessors and Managers Performing RRP Events Requiring Dust Wipe Testing or Clearance A. Total number of firms leasing to daycare centers 152 B. Number of firms in NAICS 531120 (73% of A) 111 C. Number of firms in NAICS 531312 (27% of A) 41 D. Number of firms in NAICS 531120 that are small (96% of B) 106 E. Number of firms in NAICS 531312 that are small (81% of C) 33 Total Number of Regulated Small Firms (D+E) 140 Regulated Small Firms as % of All Regulated Firms 92%

Chapter 6 6-33 6.2.5.2 Dust Wipe Testing and Clearance Costs – Non-Residential Property Lessors and Managers 

### Given the relative infrequency of dust wipe testing and clearance events, each affected property lessor or manager is assumed to perform no more than one even t per year. Thus, the estimation of costs incurred by each regulated property lessor or manager est ablishment is based on the average dust wipe testing/clearance costs per event.
The total number of regulated events was multiplie d by the average annualized per-event costs (see Table 6-23 ) to calculate these firms’ tota l annualized event costs. Table 6-40 presents these estimates, as well as the average rule costs per small firm.

Table 6-40: Dust Wipe Testing and Clearan ce Costs of Small No n-Residential Property Lessor and Manager Establishments

Regulatory Option Total In-House Events a Annualized Avg. Costs Per Event Total Event Costs b Average Clearance Costs per Small Firm Proposed rule 140 $490 $68,327 $490 a. This number was calculated as th e average number of events per firm (1.0) times the number of small non-residential property lessors and managers. b. Total costs are calculated using unrounded unit costs of third party dust sampling services; a 3 percent discount rate is used.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-34 6.2.5.3 Impacts of the Proposed LRRP Clearance Rule on Non-Residential Property Lessors and Managers 

### This small entity analysis measures the incrementa l impacts of the proposed LRRP Clearance Rule on small non-residential property lessors and managers by comparing rule costs incurred by these firms to the weighted average revenue of small firms in NAICS 531120 and 531312, calculated based on 2002 Census Data. The weighted average revenue figure of $111,460 was inflated to 2008 dollars using the Consumer Price Index to obtain estimated revenues of $139,118. The impacts on small non-residential property lessors and managers were estimated by fi rst dividing total event co sts incurred by these entities by the number of establishments. Average costs per establishment were then divided by average revenues to calculate a cost-to-revenue ratio.
The average annual numbers of businesses affected, av erage annualized per-business costs and revenues, and the resulting cost-to-revenue ratio are presented in Table 6-41

.

Table 6-41: Cost-to-Revenue Ratios for Non-Residential Property Managers and Lessors

Regulatory

Option Total Small Lessor/ Manager Firms Total Cost of Rule to Small Lessor/ Manager Firms Average Cost of Rule per Small Lessor/ Manager Firm Average Small Lessor/ Manager Firm Revenues Cost-toRevenue Ratio

Proposed rule 140 $68,327 $490 $139,188 0.352%



### 6.2.6 Daycare Centers (Small Non-Profits)

6.2.6.1 Number of Small, Non-Profit Daycare Centers Affected by the Proposed LRRP Clearance Rule 

### As discussed in Chapter 2, ther e are an estimated 87,840 daycare centers in the United States. These daycare centers include facilities that provide day care outside of a residential home and outside of schools. Assuming a 75 percent compliance rate, and adjusting the total number of centers for building age using HUD data on the age of education buildings , an estimated 38,210 daycare centers would be affected by the proposed rule in the first year. 10 

### As discussed in Chapter 4, because of their locations, for-profit daycare centers are expected to hire outside contractors to perform their renovations and repairs or to have their landlord handle these activities. The costs and impacts for these events are accounted for in the sections of this chapter addressing contractors and landlord s. Daycare centers located in religious establishments such as churches or synagogues, however, frequently use their own staff to perform some of their RRP events. According to th e HUD survey of child care centers (HUD 2003), approximately 73 percent of day care centers located in churches and other religious establishments use their own (or the religious organiza tion’s) staff to perform painting projects. This analysis assumes that, similar to public school districts and private schools, these establishments will also use their own staff to perform all window/door carpentry work.
The number of non-profit daycare centers is estimat ed as the number of daycare centers located in religious establishments, which are identified in th e data from the HUD survey of child care centers (HUD 2003). According to these data, 41 percent of all da ycare centers are situated in churches or other buildings owned by religious establishments (the US Census reports that about 35 percent of daycare

10 Based on 2003 HUD data, 58 percent of all education buildings were constructed before 1978, and 55 percent of the pre-1978 buildings were constructed before 1960.Economic Analysis for the L RRP Clearance Proposed Rule



### centers located outside of schools are non-profits (U .S. Census Bureau 2005c)). The other 59 percent of daycare centers are assumed to use outside contractor s for their RRP work rather than in-house staff. Because the estimate of centers that are in religious settings is relatively large a nd there is no independent data on other non-profits, this analysis estimates that about 30 percent of daycare centers (0.73*0.41=.299) will perform their own renovation work and thus incur direct work practice and training
costs. 11 

### Because all of these establishments are tr eated as though they are operated by religious organizations, all daycare centers considered in the small entity analysis are considered to be non-profit organizations. As the RFA defines independently ow ned and operated not-for-profit enterprises that are not dominant in their field as “small organizations ,” all the non-profit organizations operating these daycare centers are assumed to qualify as small entities. This assumption may overestimate the number of impacted small non-profits, since some of these non-profit organizations may not be small entities.

Table 6-42 presents the number of daycare centers perform ing regulated activities in a typical year, the total number of daycare centers operated by non-profit organizations (based on the number in religious organizations), and the number expected to perform some renovation work in-house. The estimation of the annual average numbers of centers accounts for th e fact that, after the first year, the number of regulated daycare centers is expected to decrease by 0.41 percent per year due to building demolition.

Table 6-42: Average Annual Number of Non-Profit Daycare Centers Performing their Own Work Regulatory Option (A) Total Number of Daycare

Centers (B) Number of Centers in Non-Profit Organizations (41% of A) (C) Number of CentersDoing RRP Work Inhouse (73% of B)
Proposed rule 34,612 14,339 10,481



### Although 10,481 non-profit daycare centers are regulated structures under the 2008 LRRP Rule, only a fraction of these buildings will undergo renovation requiri ng dust wipe testing or clearance in a typical year. It is estimated that an average of 132 non-profit daycare center buildings doing RRP work in-house will be affected by the proposed rule in a typical year.

6.2.6.2 Dust Wipe Testing and Clearance Costs – Non-Profit Daycare Centers 

### The estimated dust wipe testing and clearance costs incurred by each daycare center are based on the average per-event cost of renovation events requiring dust wipe testing or clearance. The analysis in Chapter 4 demonstrated that daycare centers are not expected to typically perform enough dust wipe testing or clearance events annually to justify obtaining dust sampling technician training for one of their employees. Instead, daycare centers are assumed to in cur only third party dust wipe testing and clearance costs for the events that they perform.
Total Clearance Rule Costs – Non-Profit Daycare Centers 

### Staff in non-profit daycare centers (such as those operated by religious establishments) are expected to perform in-house all painting and window/door carpentry work in their building. Each affected firm is assumed to perform one event per year.

11 Given the small size of the HUD surv ey sample, and the difference between the HUD and Census figures, the estimate may include some non-profits operating daycare facilities that are not in religious settings but performtheir own repair work. Other non-profit daycare facilities may be hiring outside contractors, the same as forprofit daycare facilities are assumed to do.

Chapter 6 6-35Economic Analysis for the L RRP Clearance Proposed Rule



### As discussed in Section 6.2.2 , the average annualized cost per event in daycare center buildings is $490 (see Table 6-23 ). Multiplying this average cost by the tota l 50-year average annual number of events in daycare centers that perform their own work yields the total annualized event costs incurred by these centers in an average year. Since centers are assu med to perform no more than one event per year, the annual number of events is equal to the number of cent ers performing dust wipe testing or clearance in an average year. These average total a nd per-center costs are presented in Table 6-43

.

Table 6-43: 50-Year Average Annualized Dust Wipe Testing and Clearance Costs for Small Non-Profit Daycare Centers

Regulatory Option Total In-House Events Annualized Avg. Cost per Event Total Event Costs a Average DWT and Clearance Costs per Small Center Proposed rule 132 $490 $64,776 $490 a. Total costs are calculated using unrounded unit costs of third party dust sampling services; a 3 percent discount rate is used.

6.2.6.3 Non-Profit Daycare Center Expenditures 

### In analyzing impacts of the proposed LRRP Clearance Rule on an entity, the analysis conceptually should compare rule costs to the revenues or expenditures of an entire organization. As such, costs of the rule to non-profit daycare centers should be compared to the revenues or expenditures of the parent organization (such as the religious organization that operates them), ra ther than a single center. Due to a lack of data both on the structure of these organizations and on th eir finances, such a comparison was not possible. Instead, this analysis is based on daycare center revenues. Ten state childcare industry impact studies were reviewed to obtain daycare center revenue data. 12 

### Nine of these studies did not differentiate between revenues of non-profit and for-profit centers. The Virginia Economic Impact of the Child Care Industry report (Voices of Virginia’s Children 2004), however, provided revenue data specific to religiously affiliated daycare centers. The state re ported annual total revenues of $236 million for its 929 religious daycare facilities or average revenues (infla ted to 2008$) of $317,062 (U.S. Bureau of Labor Statistics 2006). This figure was used to measure the incremental impacts of the proposed LRRP Clearance Rule on non -profit centers.

6.2.6.4 Impacts on Non-Profit Daycare Centers 

### The impacts on non-profit daycare centers were estimat ed by first dividing total annualized costs incurred by these entities by the number of centers. Averag e costs per center were then divided by average revenues to calculate a cost-to-revenue ratio. These calculations and the resulting ratios are presented in Table 6-44

.

Table 6-44: Cost-to-Revenue Ratios for Non-Profit Daycare Centers

Regulatory

Option Total Daycare Centers Affected Total Cost of Rule to Daycare

Centers Average Cost of Rule per Da y care Center Estimated Avera g e Daycare Center Revenues Cost-toRevenue Ratio
Proposed rule 132 $64,776 $490 $317,062 0.154%

12 Data were available for the following states: Oklahoma, New Jersey, Iowa, Hawaii, Ohio, Kansas, South Carolina, West Virginia, Louisiana, Virginia, New York, South Dakota, Indiana, Maine and Massachusetts.

Chapter 6 6-36Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-37 

### 6.2.7 Public Schools (Small Governments) The RFA defines a small government jurisdiction as the government of a city, county, town, school district or special district with a population of l ess than 50,000. This economic analysis relies on National Center for Education Statistics (NCES) Common Core of Data (CCD) survey data to estimate the number of school districts that have schools with pre-kinderg arten or kindergarten programs, the number of such schools per district, and district revenues. 13 

### Furthermore, for most districts, a cross-reference system with the 2000 Decennial Census provides a means for est imating the size of the population served by the district.

6.2.7.1 Number of Small Public School Districts Affected by the Proposed LRRP Clearance Rule

Number of Small Public School Districts 

### As discussed in Chapter 2, there are approximately 18,000 public school districts in the United States. Based on CCD data, 14,473 of these school districts have at least one school with a kindergarten or pre-K program; in total, these districts have 52,129 su ch schools (NCES 2006b,c). Of the 14,473 school districts, 13,330 serve a population of fewer than 50,000 people. These 13,330 districts have a total of 26,779 schools with kindergartens or pre-kindergartens (NCES 2006b,c,g). These counts are not limited to pre-1978 schools.
Since the Regulatory Flexibility Analysis is only concerne d with the direct costs of regulation, this small entity analysis only considers the costs that school districts will incur if they perform regulated renovation, repair, or painting projects using their own maintenance staff instead of hiring a contractor. Costs and impacts associated with work performed by a contractor are accounted for in the contractor section of this analysis.
As discussed in Chapter 4, this analysis assumes that public schools will perform all painting and carpentry events using in-house staff. 14 

### Thus, small school districts that have at least one pre-1978 building may incur costs under the proposed rule.
Number of Small Public Schools Affected by the Proposed LRRP Clearance Rule 

### The number of small school districts with at least one building regulated under the 2008 LRRP Rule was estimated based on the number of school buildings in the district and the likelihood that any one of the buildings is old enough to be regulated. Using 2003 HUD data, 58 percent of school buildings are estimated to have been built before 1978, and 55 pe rcent of the pre-1978 buildings are estimated to have built before 1960 (U.S. HUD 2003). Thus, for exampl e, the probability that any particular school building was built after 1978 is 0.42 (1-0.58). The like lihood that a district has no pre-1978 buildings is a function of the number of buildings and 0.42 as follows 15 

### : (0.42)^X, where X is the number of schools with kindergarten or pre-kindergarten in the district

13 It is possible that government agencies also operate some of the childcare facilities included in the daycare center counts throughout this economic analysis. Due to insufficient data, it was not possible to estimate the number of such government-run facilities, or the number or size of the agencies that operate them. As such, this small government impact analysis is limited to public school districts.

14 The analysis assumes that all electrical, plumbing and HVAC work are contracted out.

15 It is assumed that the age of each building is independent of the age of all other buildings in the district. This may somewhat overestimate the number of districts that have at least one pre-1978 buildings. But data are not available to calculate the joint probabilities.Economic Analysis for the L RRP Clearance Proposed Rule



### For example, a district with three buildings has a (0.42)*(0.42)*(0.42) = 0.074 probability of containing no pre-1978 buildings. Using this approach, 92.6 percent of districts with three buildings are estimated to have at least one building that is pre-1978. To estimate the average number of pre-1978 buildings in a 3- building district with at least one pre-1978 building, the total number of buildings in 3-building districts was multiplied by the percent of all schools construc ted before 1978 (58 percent) and divided by the number of districts with at least one pre-1978 building.

Table 6-45 presents the 50-year average numbers of small school districts with at least one pre-1978 building and the average number of build ings in these districts. The use of 50-year average, rather than first or second year numbers accounts for the fact that, after the first year, the numbers of regulated districts and pre-1978 schools are expected to decrease by 0.41 percent per year due to building demolition.

Table 6-45: Number of Regulated School Districts and Public School Buildings
Number of School Districts with at Least 1

Regulated Building a Total Number of Regulated Buildings

in these Districts Average Number of Regulated Buildings per District

Total Districts 7,051 20,541 2.9 Small Districts 6,492 10,552 1.6 a. A regulated building is defined as having a kindergarten or pre-kindergarten program.



### Although 10,552 buildings in small public school dist ricts are regulated under the 2008 LRRP Rule, only a fraction of these buildings will unde rgo renovation requiring dust wipe testing or clearance in a typical year. It is estimated that an average of 257 public sc hool buildings (large and small) will be affected by the proposed rule in a typical year. Based on the number of buildings in small districts relative to the total number of public school buildings, 132 public school bu ildings in small districts are expected to be affected by the rule in a typical year. Given the relative infrequency of dust wipe testing and clearance events, each affected small public school district is ass umed to perform no more than one event per year. Thus, 132 public school districts are expected to be affected by the rule in a typical year.

6.2.7.2 Dust Wipe Testing and Clearance Costs – Public Schools 

### Since each affected public school district is assumed to perform one event per year, the estimation of costs incurred by each affected district is based on the average costs per event. The analysis in Chapter 4 demonstrated that public schools are not expected to typically perform enough dust wipe testing or clearance events annually to justify obtaining dus t sampling technician training for one of their employees. Instead, public schools are assumed to incu r only third party dust wipe testing and clearance costs for the events that they perform.

Total Clearance Rule Costs – Public Schools 

### As discussed in 6.2.2 , the average annualized cost per event in public schools is $766 (see Table 6-23 ). Multiplying this average cost by the average annual number of events in small school districts yields the total annualized event costs incurred by small distri cts in a typical year. These costs, and resulting average costs per district, are presented in Table 6-46

.

Chapter 6 6-38Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-46: Average Annualized Dust Wipe Testing and Clearance Costs for Public Schools in Small Districts

Regulatory Option Total In-House Events Annualized Avg. Clearance Cost per Event Total Event Costs a Average Event Costs per Small District Proposed rule 132 $766 $101,077 $766 a. Total costs are calculated using unrounded unit costs of third party dust sampling services; a 3 percent discount rate is used.

6.2.7.3 Public School Revenues 

### The impact of the proposed rule on small government jurisdictions is estimated by comparing the estimated incremental costs of the proposed rule to the annual government revenues of small regulated jurisdictions. Revenue data for school districts is available from NCES’s Common Core of Data “ Local Education Agency (School Dist rict) Finance Survey (F-33)” dataset (NCES 2006d). Small districts include local school boards, superv isory unions, regional education agencies, and other agencies, which primarily include charter schools. Revenue data are ava ilable for the vast majority of districts. Average revenues for all small districts were estimated by a) calculating the average revenues of each type of district based on available data, b) multiplying the average revenues by the total number of districts of that type, then c) calculating the sum of the resulting total revenues and dividing by the total number of small districts. This approach presumes that there is no non-response bias among districts within each category.

Table 6-47 presents small district revenue calculations and resulting estimates. The total estimated average revenues in column 7 ($15.5 million) are adjust ed to 2008 dollars before being used to estimate cost-to-revenue ratios in Section 6.2.7.4

.

Table 6-47: Estimated Annual Revenues for Small Public School Districts (2005$)

District Type Total Small Districts Small Districts w/ Revenue Data Total Small District Revenues Reported (Million $) Average Reported Revenues (Million $) Estimated Total Revenues (Million $) Estimated Average Revenues (Million $) Local School District (A) a 10,930 10,868 $179,530 $16.5 $180,554 $16.5 Local School District (B) a 1,200 1,197 $13,926 $11.6 $13,961 $11.6 Supervisory Union 84 76 $1,186 $15.6 $1,311 $15.6 Regional Education Agency 167 158 $7,612 $48.2 $8,046 $48.2 Other (Charter School) 949 773 $2,074 $2.7 $2,546 $2.7
Total 13,330 13,072 $204,329 $15.6 $206,419 $15.5 a. There are two different types of local school districts in NCES data – independent districts and districts that are connected to a supervisory union of fice. These local school districts are combined in Chapters 2 and 4, but are treated separately in estimating weighted average revenues.

Chapter 6 6-39Economic Analysis for the L RRP Clearance Proposed Rule

6.2.7.4 Impact of the Proposed LRRP Clearance Rule on Small Public School Districts 

### Table 6-46 presents the total annualized event costs incurre d by small public school districts as well as the average annualized costs per small district. Average a nnualized costs are then divided by annual district revenues, as shown in Table 6-48 , to obtain a cost-to-revenue ratio.

Table 6-48: Cost-to-Revenue Ratios for Small Public School Districts (2008$)

Regulatory Option Total Affected Small Districts Total Cost of Rule to Small Districts Average Cost of Rule per Small District Estimated Avera g e Small District

Revenues (Million $) Cost-toRevenue Ratio

Proposed rule 132 $101,077 $766 $17,071,289.68 0.004%



### 6.2.8 Private Schools (Small Non-Profits)

6.2.8.1 Number of Small Private Schools 

### As discussed in Chapter 2, according to the 2003-2004 NCES Private School Universe Survey Data, there are a total of 26,531 private schools with kindergarten or pre-kindergarten programs in the United States (NCES 2006e,f). Based on HUD data, 58 percent, or 15,387 of these schools we re constructed before 1978. Because no data source providing the number of private schools at different revenue levels was identified, all private schools are considered to be sma ll entities. In other words, the analysis assumes that each private school is independently run and is not part of a larger organization. As such, the analysis may overestimate the number of affected non-profit organizations and the impacts of the rule on these entities.
Similar to public schools, private schools will only incur direct costs as a result of this rule if they use their own maintenance staff to perform regulated RRP work. Schools that perform regulated jobs inhouse will incur dust wipe testing and clearance costs as a result of the proposed rule. This analysis assumes that private schools with fewer than 100 stud ents will contract out all of their renovation and repair work because of their small size, and costs and impacts associated with work performed by a contractor are accounted for in the contractor section of this analysis. Private schools serving more than 100 students are assumed to use their own staff to perform all painting and window/door carpentry work and to hire contractors to perform all other regulated RRP activities.
As discussed in detail in Chapter 2, based on NCES’s Private School Universe survey data, 41 percent of private schools with a kindergarten and/or pre-kindergarten have fewer than 100 students. Table 6-49 presents the total number of private schools regulated in a typical year, the number of schools with fewer than 100 students, and the number of schools with mo re than 100 students. The use of average annual numbers accounts for the fact that after the first year, the numbers of pre-1978 schools are expected to decrease by 0.41 percent per year due to building demolition.

Table 6-49: Average Annual Number of Private Schools with Kindergarten or PreKindergarten

Regulatory Option Total Number of Private Schools with

Kindergarten or Pre-Kindergarten Percent of Private Schools with <100 Students Number of Private Schools with <100 Students Number of Private Schools with >100 Students Proposed rule 10,454 41% 4,280 6,174 Chapter 6 6-40Economic Analysis for the L RRP Clearance Proposed Rule



### Although 6,174 private schools are regulated unde r the 2008 LRRP Rule, only a fraction of these buildings will undergo renovation requiring dust wipe testing or clearance in a typical year. It is estimated that an average of 81 private school buildin gs doing RRP work in-house will be affected by the proposed rule in a typical year.

6.2.8.2 Dust Wipe Testing and Clearance Costs – Private Schools 

### Given the relative infrequency of dust wipe testing and clearance events, each affected private school is assumed to perform one event per year. The analysis in Chapter 4 demonstrated that private schools are not expected to typically perform enough dust wipe testing or clearance events annually to justify obtaining dust sampling technician training for one of their employees. Instead, private schools are assumed to incur only third party dust wipe testing and clearance costs fo r the events that they perform. Table 6-50 presents the total number of private schools regulated in the first year, the total number of events performed in these schools, and the total annuali zed costs associated with these events. Total costs are estimated by multiplying the average annual number of events by the average annualized cost per dust sampling or clearance event ($789; see Table 6-23 ). Average annualized costs per private school are calculated by dividing total rule costs by the number of affected schools.

Table 6-50: Average Dust Wipe Testing and Clearance Costs for Private Schools

Discount Rate Number of Private Schools w>100 Students Total AnnualNumber of Inhouse Events Total Annualized Event Costs a Average Annualized Event Costs per School Proposed rule 81 81 $63,586 $789 a. Total costs are calculated using unrounded unit costs of third party dust sampling services; a 3 percent discount rate is used.

6.2.8.3 Impact of the Proposed LRRP Clearance Rule on Private Schools 

### Conceptually, impacts on non-profit establishments su ch as schools might be measured in terms of the ratio of rule costs to annual operating expenses. Du e to the scarcity of data on private school operating expenditures (schools are excluded from the U.S. Eco nomic Census, and NCES do es not have a financial data set for private schools), annual private school expenditures are approximated based on estimated operating expenses per student obtained from a 1995 study by NCES entitled Estimates of Expenditures for Private K-12 Schools and information on the number of students enrolled at each school as reported in NCES’s 2003-2004 Private School Universe Survey data set.
Based on NCES data (1995), this analysis estimates th at private school expenditures average about $3,727 (2008$) per child per year. Appendix 6A explains the derivation of this estimate in detail.
To estimate average private school expenditures for schools with over 100 students operating prekindergarten or kindergarten programs, the average number of students per school meeting this criteria was calculated based on 2003-2004 NCES survey data (NCES 2006f). Schools for which no total student enrollment data was available were assumed to have the average enrollment at schools with more than 100 students where student data was provided. Us ing these assumptions, the average private school with over 100 students was estimated to serve 283 students pe r year. As such, average expenditures for private schools are estimated to be $3,727*283, or $1,054,684.

Chapter 6 6-41Economic Analysis for the L RRP Clearance Proposed Rule



### Impacts on private schools were estimated by dividing the total annualized dust sampling and clearance costs incurred by these schools by the number of regu lated schools. Average costs per school were then divided by average expenditures to calculate a co st-to-expenditure ratio. These calculations and the resulting ratio are presented in Table 6-51

.

Table 6-51: Cost-to-Expense Ratios for Private Schools

Regulatory

Option Total Affected Private Schools with > 100 kids Total Cost of Rule to Private Schools Average Cost of Rule per Private school Estimated Avera g e Small School Expenditures Cost-toExpenditure Ratio Proposed rule 81 $63,586 $789 $1,054,684 0.075%



### 6.2.9 Summary of the Proposed LRRP Clearance Rule Impacts on Small Governments, Non-Profit Organizations, and Small For-Profit Businesses The vast majority of entities in the industries affected by the proposed ru le are small. As a result of the proposed revisions, approximately 203,002 small entities would incur additional costs.

6.2.9.1 Incremental Impacts of the Proposed Rule 

### The average annualized incremental cost of the proposed rule to a typical small entity is estimated to range from $490 to $1,928 depending on the number of renovation, repair, and painting events undertaken by a small entity in the industry sector involved. As shown in Table 6-52 , the incremental cost impact of the proposed LRRP Clearance Rule on small current ly regulated entities ranges from about 0.004 percent to 1.059 percent of revenues, de pending on the industry sector.

Table 6-52: Typical-Year Number of Small Entities with RRP Events Description Entity Type Number of Small Entities Cost-Impact Ratio



### Public and Commercial Building Child-Occupied Facilities

Public School Districts Government 132 0.004% Private Schools Non-Profit 81 0.075% Daycare Centers Non-Profit 132 0.154% Non-Residential Landlords Business 140 0.352% Non-Residential Contractors (working in public or commercial building COFs) Business 281 0.433% 

### Residential Contractors (working in target housing)

Residential remodelers Business 68,428 0.469% Finish carpentry contractors Business 48,590 0.819% Tile and terrazzo contractors Business 6,940 0.719% Plumbing and HVAC contractors Business 23,352 0.400% Painting and wall covering contractors Business 26,970 1.059% Electrical contractors Business 16,603 0.497% Drywall and insulation contractors Business 11,355 0.527%
Total 203,002 0.516%

Chapter 6 6-42Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-43 

### Table 6-53 presents the total number of small governments, non-profit organizations, and small for-profit businesses, and the average cost-to-revenue ratios for each category. It is estimated that a total of 203,002 small entities would be affected by the program, in cluding 202,657 small businesses with average impacts of 0.544 percent, 213 small non-profits with av erage impacts of 0.101 percent, and 132 small governments with average impacts of 0.004 percent.

Table 6-53: Aggregate Small Entity Impacts

Total Number of Small Entities Affected Average Impacts, All Small Entities Small Governments 132 0.004% N on-Profit Organizations 213 0.101% Small For-Profit Businesses 202,657 0.544% Total 203,002 0.516%



### 6.3 Unfunded Mandates Reform Act (UMRA)
Title II of the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, fo r rules with “Federal mandates” that might result in expenditures by State, local, and Tribal governments, in the aggregat e, or by the private sector, of $100 million or more (when adjusted annually for inflation) in any one year. 16


### Before promulgating a regulation for which a writte n statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a r easonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burde nsome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply wh en they are inconsistent with applicable law. Moreover, section 205 allows EPA to a dopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the rule an explanation of why that alternative was not adopted. Before EPA establishes any regulatory requirements that might significantly or uniquely affect small governments, including Tr ibal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling o fficials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant intergovernmental mandates, and informing, edu cating, and advising small governments on compliance with regulatory requirements. This section identifies the government entities that may be affected by the proposed revisions to the 2008 LRRP rule.

6.3.1 Affected Government Entities The proposed revisions to the 2008 LRRP rule will affect activities in publicly owned child-occupied facilities, specifically publicly owned housing a nd public schools. 17 

### As with the private sector, the

16 When the original $100 million UMRA threshold is adjusted for inflation from 1995 to 2008 dollars using an implicit price deflator for gross domestic product, the result is a threshold of $130 million.

17 It is possible that government agencies also operate some of the childcare facilities included in the daycare center counts throughout this economic analysis. Due to insufficient data, it was not possible to estimate the number of such government-run facilities, or the number or size of the agencies that operate them. As such, this Unfunded Mandates Reform Act discussion is limited to public school districts.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-44 

### proposed LRRP Clearance Rule will increase the cost of operating these facilities by requiring dust wipe testing or clearance after a subset of their in-house ren ovation activities. Each school district that uses its own in-house staff to perform covered RRP activities in regulated buildings is required to comply with the Clearance Rule provisions. Since the cost compar ison in Chapter 4 indicated that public schools are not likely to choose to obtain training for an in-house dust sampling technician, state and local governments will only incur incremental costs of payi ng for third party dust wipe testing and clearance services following the affected renovation events.
While most of what is commonly referred to as pub lic housing is owned by state or local governments and provided for the benefit of low-income and/or elderly households, other pu blic entities (such as public colleges and universities) may provide housing regulated under the LRRP rule. As with the private sector, the proposed LRRP Clearance Rule will increase the cost of operating this housing by requiring that dust wipe testing and clearance be performed. Th e increased cost is estimated to be $167 on average per renovation in Target Housing. 18



### 6.3.2 Expenditures by State, Local, and Tribal Governments – Public School Districts State, local, and Tribal governments will incur the in cremental costs imposed by the proposed revisions to the 2008 LRRP rule when public school di stricts engage in certain RRP activities. 19 

### Based on available data and the economic analysis presented in Chapter 4 and Section 6.1 , it is assumed that all public school districts will perform all painting and window/door carpentry tasks themselves. Public schools are assumed to hire third-party contractors to perform th e remainder of their RRP work. Since all public school districts are assumed to use their own staff to perform some of their RRP activities, all public school districts would need to comply with the dust wipe testing and clearance requirements outlined in Chapter 4. 20 

### Although 7,051 districts and 20,541 buildi ngs were regulated under the 2008 LRRP Rule, the very low expected number of dust wipe testi ng and clearance events in public and commercial building COFs implies a lower number of affected en tities. The number of districts affected by the proposed LRRP Clearance Rule is estimated as the an nual average number of buildings performing an inhouse RRP event which would require dust wipe testing or clearance. Table 6-54 presents the estimated total annualized incremental costs of the proposed rule that would be incurred by public school districts under the proposed option.

18 This average cost is calculated as the total target housin g event costs in the first year divided by the total number of target housing events in the first year.

19 As discussed in Chapter 4, states would be able to ap ply for, and receive authori zation to administer these proposed requirements, but would be under no obligation to do so.

20 It is important to note that this analysis uses a 75 percent compliance rate. See Chapter 4 and the small entity analysis (Section 6.1) for a more comprehe nsive discussion of these cost estimates.Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-54: Total Annualized Incrementa l Costs to All Public School Districts

Regulatory

Option Average Annual Number of

Districts Affected a Average Annual Number of Buildings Affected a Total Average Annual Number of

Events Average Annualized

Cost Per District (2008$) Total Annualized Cost (2008$) b

Proposed

option 257 257 257 $766 $196,762

a. In the first year, the proposed LRRP Clearance Rule is e xpected to affect 283 public sc hool districts and buildings. Every year thereafter, the number of affected districts and schools is expected to decrease by 0.41 percent as older buildings are demolished. The use of 50-year average numbe rs of districts and schools cap tures this annual decrease. b. Total costs are calculated using un-rounded un it costs; a 3 percent discount rate is used.



### The cost to revenue ratio for affected school distri cts is 0.002 percent under the proposed option. These calculations are summarized in Table 6-55

.

Table 6-55: Cost-to-Revenue Ratios for Affected Public Schools (2008$)

Regulatory

Option Average Annual Regulated Districts Total Annualized Cost of Rule to Districts a Average Annualized Cost of Rule per

District Estimated Avera g e District Revenues (mil) Cost-toRevenue Ratio

Proposed 257 $196,762 $766 $35.2 0.002%

a. Total costs are calculated using un-rounded unit costs; a 3 percent discount rate is used.



### 6.4 Executive Order 13132 - Federalism Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), directs federal agencies to consider whether a rule has federalism implications (i.e. whether it has substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132).
As discussed in Chapter 4, states would be able to apply for and receive authorization to administer these requirements but would be under no obl igation to do so. In the absence of a state authorization, EPA will administer these requirements. While the cost analys is assumes that EPA will administer and enforce the program in all places, it also assumes that states would incur similar costs if they administer and enforce the regulation. To the extent that they operate targ et housing or child-occupied facilities, states may incur costs due to the requirement that dust wipe testing and clearance procedures be followed after certain high-dust-generating renovation activities. Given th e low frequency of these events, this rule is not expected to have a significant impact on states.


### 6.5 Executive Order 13175 - Tribal Implications Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (59 FR 22951, November 6, 2000), directs federal agencies to c onsider whether a rule has tribal implications (i.e. whether it has substantial direct effects on tribal governments, on the relationship between the Federal government and the Indian tribes, or on the distribu tion of power and responsib ilities between the Federal government and Indian tribes).

Chapter 6 6-45Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-46 

### Under the proposed LRRP Clearance Rule, Tribes would be able to apply for and receive authorization to administer these requirements on Tribal lands, but Trib es would be under no obligation to do so. In the absence of a Tribal authorization, EPA will administer these requirements.
To the extent that Tribes operate target housing or child-occupied facilities, they may incur costs due to the requirement that dust wipe testing and clearan ce procedures must be followed after certain high-dustgenerating renovation activities. Given the low frequency of these events, this rule is not expected to have a significant impact on Tribal Governments.


### 6.6 Protection of Children from Environm ental Health Risk and Safety Risks Under Executive Order 13045, a regulation must be re viewed if the regulatory action is economically significant and concerns an environmental health risk or safety risk that may disproportionately affect children. Since children are particularly susceptible to the IQ loss and adverse health effects caused by exposure to lead dust, a significant objective of the proposed revisions to the 2008 LRRP rule is the protection of children’s health. Implementing the Clearance Rule provision protects children under the age of six by ensuring that their homes, schools, or daycares, are truly free from lead hazards before a child may re-occupy the space. Th is analysis summarizes the effects of the regulation on children under the age of six in target housing units and in COFs in public or commercial buildings.

6.6.1 Children Affected by the Proposed Clearance Rule Revision The 2008 LRRP Rule included all COFs in public a nd commercial buildings, all rental units, plus all target housing COFs, and all owner-occupied target h ousing units where a child under the age of 6 or a pregnant woman resides within pre-1987 buildings. A target housing unit where a child visits regularly, but spends fewer that 6 hours a week is not cons idered a child-occupied facility, and will only be regulated if the opt-out provision is eliminated as ha s been proposed (providing that there is no child under the age of six or pregnant woman that resides in the unit). Thus, children visiting these housing units may also benefit from the proposed LRRP Cl earance Rule through a reduction in potential exposures to lead dust during these visits.
It is expected that the proposed LRRP Clearance Rule will benefit child ren both located in target housing and public and commercial building COFs. Increasing the awareness of lead hazards through dust wipe testing reports and ensuring elimination of hazards prior to re-occupancy through clearance testing will increase the health outcomes of these groups of children. In the first year of the proposed rule, 1.1 million children are expected to reside or occupy (i.e., r eceive childcare or attend school in) structures where dust wipe testing or clearance was performed following a renovation that disturbed lead based paint.


### 6.7 Executive Order 13211 - Energy Effects Executive Order 13211, entitled Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), directs fede ral agencies to identify actions that will have a significant adverse energy effect. Adverse effects are defined as:

• Reductions in crude oil supply in excess of 10,000 barrels per day;

• Reductions in fuel production in excess of 4,000 barrels per day;

• Reductions in coal production in excess of 5 million tons per year;

• Reductions in natural gas production in excess of 25 million mcf per year;

• Reductions in electricity production in excess of 1 billion kilowatt-hours per year or in excess of 500 megawatts of installed capacity;

• Increases in energy use required by the regulatory ac tion that exceed any of the thresholds above;

• Increases in the cost of energy production in excess of one percent;

• Increases in the cost of energy dist ribution in excess of one percent; orEconomic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-47 

### • Other similarly adverse outcomes. The regulations under considerati on will not significantly reduce energy production nor significantly increase energy costs.


### 6.8 National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) direct s federal agencies to u se voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus sta ndards are technical standards (e.g., materials specifications, test methods, sampling procedures, a nd business practices) that are developed or adopted by voluntary consensus standards bodies. The NTT AA directs federal agencies to provide Congress, through OMB, explanations when the Agency decid es not to use available and applicable voluntary consensus standards.
This proposed rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.


### 6.9 Executive Order 12898 – Environmental Justice Under Executive Order 12898, when promulgating a regulation, EPA investigates whether there are disproportionately high and adverse human health or environmental effects on minority and low-income populations. The LRRP regulation requires that establishments, when undertaking certain types of renovation activities in regulated facilities, reduce the risk of exposure to lead by using dust wipe testing and clearance practices following cleaning verification to ensure the safety of the work area prior to reoccupancy. This environmental justice analysis firs t summarizes a few important points to consider when viewing the results. Next a summary of the impact s from the regulation on minority and low-income populations in target housing units and child-occupied facilities is presented. Racial minorities and lowincome households stand to accrue benefits as a re sult of the proposed revision to the LRRP rule.
The dust wipe sampling, laboratory testing, report-writing, and re-cleaning required by the proposed rule will increase the costs for renovation, repair and pain ting activities that are already regulated under the 2008 LRRP rule and the subsequent proposed Opt-Out rule. These additional costs may lead some lower income homeowners of properties in lower income neighborhoods to avoid usin g certified renovators or recommended practices. When taking an average of cost s to all residential RRP events in target housing affected by the rule, the incremental costs of the dust wipe testing and clearance requirements would be $160. 21 

### These costs are likely to be a small part of the total cost of the major renovation, repair, and painting projects that are affected by the proposed rule. EPA believes that these costs are unlikely to result in significant changes in consumer behavior.

6.9.1 Target Housing Dust Wipe Testing and Clearance Events This section evaluates the distribution of regulated renovation events in target housing units and the individuals protected across three race and two in come groups. Although it would be preferable to perform a joint environmental justice analysis for the race and income groups, relevant data are not available to make these population inferences. Theref ore, the analysis was performed separately for the race and income groups.

21 This average cost is calculated as the total target housin g event costs in the first year divided by the total number of target housing events in the first year.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-48 6.9.1.1 Low Income 

### EPA defines low income individuals as individuals w hose income are below the level set by the federal government’s official poverty definition. Based on data from the 2000 Decennial Census , 12.4% of individuals were living below the poverty level (U.S. Census Bureau 2000a). The analysis evaluates whether implementation of the LRRP Clearance Rule revision will have a disproportionately greater effect on low income individuals.
For the purposes of the target housing portion of this analysis, EPA defines low income individuals as individuals whose income are below the level set by the federal government’s official poverty definition. Based on data from the 2000 Decennial Census , 12.4% of individuals were living below the poverty level (U.S. Census Bureau 2000a). It is therefore relevant to determine if the potential costs and benefits resulting from the LRRP regulations will have a di sproportionately greater effect on low income individuals.

The data in Table 6-56 presents the numbers of households below the poverty level that own or rent their home. As a result of the proposed LRRP Clearance Ru le revision, the likelihood of high levels of lead dust remaining in residential housi ng post-renovation decreases significantly, and occupants become more aware of potential lead hazards. Only households built prior to 1978 would potentially be affected by the proposed revisions. About 4.5 percent of pre-1980 owner-occupied housing units have residents below the poverty line.

Table 6-56: Annual Number of Children that are Protected by the Clearance Rule Revision Owner-Occupied Housing Renter-Occupied Housing

Year Housing

Built Total Below Poverty Percentage of All Pre2000 Owner Housing Below Poverty Total Below Poverty Percentage of All Pre2000 Rental Housing Below Poverty

Pre-2000 4,371,712 6.26% 8,086,254 22.67% Pre-1980 3,133,302 4.49% 6,059,817 16.99% Pre-1960 1,765,185 2.53% 3,100,214 8.69% Pre-1950 1,167,604 1.67% 2,093,142 5.87% Source: U.S. Census Bureau 2000b.

6.9.1.2 Race: 

### This section of the environmental justice analysis considers the impacts of the proposed revisions across three race categories. The data in Table 6-57 compares the percentages of owners and renters for three categories of race, “White Alone,” “Black/African American Alone,” and “Asian Alone.” The 2000 Census data shows that Black/African American house holds and Asian households are almost as likely to reside in owner housing as rental housing.Economic Analysis for the L RRP Clearance Proposed Rule

Table 6-57: Number and Percentage of Householders by Race by Tenure in 2000

Race Total Percentage Owner Percentage Renter

White Alone 83,715,168 71.27% 28.73%

Black/African American Alone 11,977,309 46.33% 53.67%

Asian Alone 3,117,356 53.24% 46.76%

Source: U.S. Census Bureau 2000c.



### 6.9.2 Conclusions The proposed rule seeks to provide greater assurance th at dust-lead hazards created by renovations are adequately cleaned up, primarily by requiring renova tion firms to provide building owners and occupants with information on dust lead levels remaining in th e work area after many renovation projects, but also by requiring renovation firms to demonstrate that th ey have achieved regulatory clearance levels after some of the dustiest renovations. As such, EPA concl udes that the proposed revisions to the rule will not lead to disproportionately high and adverse human he alth or environmental effects on minority and low income populations in regu lated target housing units.

Chapter 6 6-49Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-50 

### APPENDIX 6A – Estimating average per-pupil expenditures of private schools This appendix outlines the methodology used to estim ate total annual private school expenditures for the small entity analysis. Total annual school expenditu res were estimated based on per-student operating expense data and information on the number of st udents enrolled. This analysis used per-pupil expenditure values for 1991-92, first calculated in a working paper published by the National Center for Education Statistics (NCES) entitled “Estimates of Expenditures for Private K-12 Schools” (NCES 1995). The two mean per-pupil expenditure values (one for elementary schools and one for combined schools) presented were combined into one value - the privat e school per-pupil expenditure value - using selected weights. Finally, this value was inflated to 2005 dolla rs using the CPI. The in flated value was used to estimate the total expenditures of private schools with various sized student bodies.
The NCES working paper divided 1991-92 Private School Survey (PSS) data into 19 mutually exclusive and exhaustive sectors of schools based on grade level (elementary, secondary, and combined elementary and secondary), and religious or othe r affiliation. The paper relied on e xpenditure data collected by threeschool associations (The National Catholic Education Association (NCEA), the Lutheran ChurchMissouri Synod (LCNS), and the National Association of Independent Schools (NAIS)) to calculate average annual per-student expenditures for their associated schools. Data from the three surveyed school associations accounted for 45% of the total privat e school as presented in the PSS (NCES 1995). For the remaining schools, NCES estimated two sets of pe r-student expenditures using data obtained from Catholic and Lutheran schools (referred to as the Cat holic and Lutheran School Models, respectively). Table 6A-1 presents the number of schools and the annual per-student expenditures for the 19 sectors of schools using the Lutheran school data to estimate missing expenditure values.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-51 Table 6A-1: Estimated Per-pupil Expenditures of Private Schools by School Level and School Type (Based on the Lutheran Model)
School Level and School Type Number of Schools Estimated Mean Per Pupil Expenditures

Elementary Schools

Catholic 7,645 $1,895 Lutheran 1,563 $2,003 NAIS Religious 124 $6,313 NAIS Non-Sectarian 325 $8,807 Other Religious 5,240 $2,003 Other Non-Sectarian 2,084 $2,003 Special Education 114 $8,807 All Schools 17,093 $2,125 Secondary Schools

Catholic 1,244 $3,909 Lutheran 87 $4,527 NAIS Religious 91 $16,523 NAIS Non-Sectarian 208 $58,730 Other Religious 477 $4,527 Other Non-Sectarian 342 $4,527 Special Education 171 $17,261 All Schools 2,620 $5,510

Combined Schools
NAIS Religious 95 $9,052 NAIS Non-Sectarian 346 $9,662 Other Religious 4,085 $4,527 Other Non-Sectarian 943 $4,527 Special Education 817 $9,662 All Schools 6,285 $5,766

Sources: NCES 1995



### The per-student expenditure estimates presented are based on the Lutheran School Model rather than the Catholic School Model because, based on the eviden ce presented in NCES’s study, Lutheran school data are likely to be more accurate. Specifically, wh en assessing the quality of the data, the working paper authors express concern over potential non-response bias and sampling error in the Catholic elementary and secondary school data. In addition, a comparis on of the total operating expenses of private elementary and secondary schools generated by each model with an alternate estimate calculated annually by NCES indicated that while that both the Catholic and the Lutheran School Model estimates are below the alternative NCES estimates, the Lutheran School Model is the closer of the two. 22 

### Therefore the Lutheran School Model was used in this analysis.
To estimate per-student expenditures for schools likely to be affected by the proposed revisions to the LRRP Rule, the school sectors most likely to contain schools with pre-kindergarten and kindergarten

22 The NCES estimate inflates private school data collected in the late 1970’s.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-52 

### programs were identified in the NCES study. Table 6A-2 shows Table 6A-1 with an additional column indicating whether or not the estimated mean for thatsector was included in the calculation for mean perprivate-school-pupil expenditure based on the assumpti ons made about the likelihood of that sector containing a kindergarten or pre-kindergarten program. An “x” indicates that the mean per-pupil expenditure value is included in the calculation.

Table 6A-2: Estimated Per-pupil Expenditures of Private Schools by School Level, School Type, and Inclusion in the Calculation (Based on Lutheran School Model)

School Level and School Type Number of Schools Estimated Mean Perpupil Expenditures Included in the Calculation
Elementary Schools
Catholic 7,645 $1,895 Lutheran 1,563 $2,003 x NAIS Religious 124 $6,313 NAIS Non-Sectarian 325 $8,807 Other Religious 5,240 $2,003 x Other Non-Sectarian 2,084 $2,003 x Special Education 114 $8,807 All Schools 17,093 $2,125 Secondary Schools Catholic 1,244 $3,909 Lutheran 87 $4,527 NAIS Religious 91 $16,523 NAIS Non-Sectarian 208 $58,730 Other Religious 477 $4,527 Other Non-Sectarian 342 $4,527 Special Education 171 $17,261 All Schools 2,620 $5,510 Combined Schools NAIS Religious 95 $9,052 NAIS Non-Sectarian 346 $9,662 Other Religious 4,085 $4,527 x Other Non-Sectarian 943 $4,527 x Special Education 817 $9,662 All Schools 6,285 $5,766 Sources: NCES 1995



### Of the 19 sectors, 6 are for secondary schools only. Since the working paper notes that secondary schools 23 

### spend more than twice as much as elementary schools spend per pupil, and are the least likely, by definition, to contain a COF, they are excluded from the calculation of the mean per-pupil expenditure value.

23 Defined as having a highest grade less than or equal to 12 th and a lowest grade of greater than or equal to 6 th

.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-53 

### For elementary schools 24 

### , the $2,003 mean per-pupil expenditure co st was selected. This value represents 8,887 of the 17,093 (52%) elementary schools presente d in the working paper. Though Catholic schools represent approximately 45 percent of all elementary schools, their associated mean per-pupil expenditure estimate is not used due to the potential bias discusse d above. The remaining elementary school per-pupil expenditure values are between 3 and 4 times larger than the chosen value; however these means represent schools unlikely to be affected by the LRRP rule. For example, the mean per-pupil expenditure values presented for NAIS schools (449 of the 561 remaining schools) are much higher since “a relatively large proportion of NAIS schools are boarding schools and expenditures for dormitories are apparently included in the total operating expend itures for these schools.” It is unlikely that a COF would be found in a boarding school. The remaining 112 schools are speci al education elementary schools, which are more costly because of their unique needs and are also l ess likely to contain a COF. Furthermore, as the working paper notes, “preschool is probably less expens ive than other grades,” and therefore, it is likely that the average across all elementary school s ($2,125) would overstate expenditures.
For combined schools, the $4,527 mean per-pupil expenditure cost is used. 25 

### This value represents 5,028 of the 6,285 (80%) combined schools presented in the working paper. The other mean per-pupil values are roughly double this value, pulling the mean for all combined schools up to $5,766. This higher value is not used as it most likely overstates the expenditur es given that boarding schools and special education schools are again included in the calculation.
In order to obtain one private school per-pupil expe nditure value, the previously discussed elementary school and combined school data were weighted. The weights were based on the current proportions of elementary schools and combined schools with either a pre-kindergarten or kindergarten program. In order to calculate the weights, this analysis used the data set underlying the National Center for Education Statistics (NCES) report entitled “Characteristics of Pr ivate Schools in the United States: Results From the 2003-2004 Private School Universe Survey.” Note that it was assumed that per-student expenditures at K-terminal schools were the same as in elementary schools. 26


### In 2003-2004, there were a total of 18,289 private elementary schools and 4,338 private combined schools with pre-K or kindergarten programs. Thus, a weight of 0.81 (18,289/22,627) w as attached to the mean per-pupil elementary school expenditure value and a we ight of 0.19 (4,338/22,627) was attached to the mean per-pupil combined school expenditure value. This calculation yields a final private school perpupil expenditure value of $2,426.
Because the study is based on 1991-1992 PSS data, it was assumed that expenditure values were in 1992 dollars. Taking into account inflation, $2,426 in 1992 do llars is equivalent to $3 ,377 in 2006 dollars (U.S. Bureau of Labor Statistics 2006).

24 Defined as having a highest grade of less than or equal to 8 th

.

25 A combined school is defined as having a highest grade less than or equal to 12 th and a lowest grade less than or equal to 5 th

.

26 A K-terminal school is defined as a school for which kindergarten is the highest grade. In the 2003-2004 PSS, Kterminals represented an estimated 22% of all private schools with either a kindergarten or pre-kindergarten
program.Economic Analysis for the L RRP Clearance Proposed Rule

Chapter 6 6-54 

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