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Appendix D: Socioeconomic Impact Analysis Report D ecember 18, 2008



# APPENDIX D

SOCIOECONOMIC IMPACT ANALYSIS REPORT

FOR REVISED PROPOSED

AMENDMENTS TO RULE 4607

DECEMBER 18, 2008

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For Revised Proposed Amendments t o Rule 4607 

## This page intentionally blank.

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# DRAFT RULE 4607 GRAPHIC ARTS:

SOCIOECONOMIC ANALYSIS

SEPTEMBER 22, 2008

Prepared for 

## San Joaquin Valley Unified Air Pollution Control Di strict

Prepared by 

## Applied Development Economics

100 Pringle Avenue, Suite 560  Walnut Creek, California 94596  (925) 934-8712

2151 River Plaza Drive, Suite 150  Sacramento, CA 95833  (916) 923-1562

www.adeusa.com

## SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Appendix D: Socioeconomic Impact Analysis Report D ecember 18, 2008

Applied Development Economics, Inc. D-4 Final Draft Staff Report with Appendices

For Revised Proposed Amendments t o Rule 4607 

# CONTENTS

1. Description of the Proposed Rule...................

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

2. Impact of Proposed Rule Amendments................. .............................................. 7

Methodology ........................................

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

Regional Demographic Trends ........................ ............................................. 8

Regional Economic Trends........................... ................................................ 9

Description of Affected Industries................. .............................................. 11

3. Socioeconomic Impact Analysis ...................

................................................... ....... 16

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For Revised Proposed Amendments t o Rule 4607 

# EXECUTIVE SUMMARY

The San Joaquin Valley Unified Air Pollution Contro l District (“District”) seeks to amend

Rule 4607 (Graphic Arts) to implement the emission control requirements stated in the 2007

Ozone Plan, as well as the Control Technique Guidel ines (CTG) promulgated by the EPA.

Many of the changes under consideration are contain ed in graphic arts rules or permit

conditions in other air districts in California, me aning that, if amended, Rule 4607 would

meet RACT requirements in accordance with CAA 182(b )(2) and 182(f) and BACM

requirements in accordance with Federal Register 8/ 18/1994. The socioeconomic analysis is

based on the July 1, 2008 version of the draft amen dments to Rule 4607.

Proposed amendments to Rule 4607 potentially affect s a narrow set of industries, namely

those industries within printing (NAICS Code 32311) . The report tracks economic trends

for the printing industry and its sub-industries ov er the ten-year period from 1997 to 2007.

While employment grew annually by eight percent bet ween 1997 and 2002, the analysis

shows that this industry has contracted since 2002 in terms of number of businesses and

employment. One area of growth was in flexographic printing (NAICS 323112), which

increased in terms of employment between 2002 and 2 007 by over 20 percent a year. The

proposed amendments to Rule 4607 for the most part affects establishments in lithographic

and flexographic printing industries.

In addition to employment trends, the analysis also tracks trends with respect to revenues

and profits. As the analysis shows, the printing industry in the region is a $416 million

industry, with commercial lithographic printing (NA ICS 323110) as the largest segment at

$263 million.

With respect to how the proposed rule will affect p rinters in the region, early indications are

that if Rule 4607 is amended, affected printing ind ustries (namely flexographic and

lithographic printers) would experience between 3.6 and six percent increase in cost of ink.

These printing industries generate respectively an estimated $11.3 million and $2.5 million in

net profits.

As a result of the proposed amendments, the ten fle xographic printing establishments will

experience an increase in aggregate costs ranging f rom $53,200 to $88,600, which amount to

2.2 percent and 3.6 percent of net profits. These impacts are below the threshold of

significance employed for the purposes of evaluatin g impacts. As a result, flexographic

printers are not significantly impacted by the prop osed rule. Likewise for lithographic

printers, whose aggregate costs amount to approxima tely one percent of net profits. The

analysis also demonstrates that small businesses ar e not disproportionately impacted by

proposed amendments to Rule 4607.

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Applied Development Economics, Inc. D-6 Final Draft Staff Report with Appendices

For Revised Prop osed Amendments to Rule 4607 

# 1. DESCRIPTION OF THE PROPOSED RULE

The San Joaquin Valley Unified Air Pollution Contro l District (“District”) seeks to amend

Rule 4607 (Graphic Arts) to implement the emission control requirements stated in the 2007

Ozone Plan, as well as the Control Technique Guidel ines (CTG) promulgated by the EPA.

Many of the changes under consideration are contain ed in graphic arts rules or permit

conditions in other air districts in California, me aning that, if amended, Rule 4607 would

meet RACT requirements in accordance with CAA 182(b )(2) and 182(f) and BACM

requirements in accordance with Federal Register 8/ 18/1994.

Amended Rule 4607 will specify the Best Available R etrofit Control Technology. As used in

this project, “Best Available Retrofit Control Tech nology” means an emission limitation that

is based on the maximum degree of reduction achieva ble, taking into account environmental,

energy, and economic impacts by each class or categ ory of source (CH&SC 40406).

At this time, District staff is recommending an exe mption, except for recordkeeping, for

digital printers and digital printing operations, a s defined in Section 3.0 of Rule 4607. This

exemption is similar to that proposed by the Bay Ar ea Air Quality Management District. The

South Coast Air Quality Management District does no t address digital printing in their rule.

It has been determined that the number of commercia l digital printing operations in the

SJVAB is not great, therefore, VOC emissions from d igital printing operations are not

considered large. Digital printing is a growing ind ustry, however, and staff does intend to

further study digital printing technologies and con trols and will revisit possible digital

printing controls in the future.

## SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

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For Revised Prop osed Amendments to Rule 4607 

# 2. IMPACT OF PROPOSED RULE AMENDMENTS

This section of the socioeconomic analysis describe s demographic and economic trends in

the San Joaquin Valley region. Following an overvie w of the socioeconomic analysis

methodology, the first part of this section compare s the region against California and

provides a context for understanding demographic an d economic changes that have

occurred within the Central Valley between 1997 and 2007. After an overview of regional

industries, we focus on industries impacted by the proposed amendments to Rule 4607. For

the purposes of this report, the San Joaquin Valley region consists of Fresno, Kern (parts),

Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare Counties.

FIGURE 1

MAP OF SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CON TROL DISTRICT

Source: ADE, Inc.



# METHODOLOGY

The socioeconomic analysis of the proposed amendmen ts to Rule 4607 involves the use of

information provided directly by District, as well as secondary data used to describe the

industries affected by the proposed rule amendments . Based on information provided by

District staff, ADE determined that the impacts wou ld affect businesses in a narrow set of

related industries, namely printing. With this inf ormation we profiled impacted businesses

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For Revised Prop osed Amendments to Rule 4607 

## and industries, analyzing data on the number of job s, sales levels, the typical profit ratios and

other economic indicators for businesses in the reg ion.

With data from the US Economic Census and other sou rces such as US IRS, California

Employment Development Department, and County Busin ess Patterns, ADE was able to

estimate revenues and profit ratios for industries impacted by the proposed rule

amendments. In calculating aggregate revenues gener ated by regional businesses in affected

industries, ADE first estimated annual revenue base d upon available data, particularly the US

Economic Census. ADE calculated ratios of profit p er dollar of sales for the businesses and

industries on which the analysis focused. ADE also used a regional IMPLAN input-output

model to calculate certain inputs such as printing ink used by industries subject to the

proposed amendments to Rule 4607.

The result of the socioeconomic analysis shows what proportion of profit the compliance

costs represent. Based on a given threshold of sign ificance, ADE discusses in the report

whether the affected businesses and industries are likely to reduce jobs as a means of

recouping the cost of compliance or as a result of reducing business operations. Where

applicable, ADE also examines whether affected indu stries can pass costs to consumers. To

the extent that such job losses appear likely and s ignificant, the indirect multiplier effects of

the job losses area estimated using a regional IMPL AN input-output model.

When analyzing the socioeconomic impacts of propose d new rules and amendments, ADE

works closely within the parameters of accepted met hodologies discussed in a 1995

California Air Resources Board report called “Devel opment of a Methodology to Assess the

Economic Impact Required by SB513/AB969” (by Peter Berck, PhD, UC Berkeley

Department of Agricultural and Resources Economics, Contract No. 93-314, August, 1995).

The author of this report reviewed a methodology to assess the impact that California

Environmental Protection Agency proposed regulation s would have on the ability of

California businesses to compete. The California Ai r Resources Board (ARB) has

incorporated the methodologies described in this re port in its own assessment of

socioeconomic impacts of rules generated by ARB. On e methodology relates to determining

a level above or below which a rule and its associa ted costs is deemed to have significant

impacts. When analyzing the degree to which its rul es are significant or insignificant, ARB

employs a threshold of significance that ADE follow s. Berck reviewed the threshold in his

analysis and wrote, “The Air Resources Board’s (ARB ) use of a 10 percent change in [Return

on Equity] ROE (i.e. a change in ROE from 10 percent to a ROE of 9 percent) as a

threshold for a finding of no significant, adverse impact on either competitiveness or jobs

seems reasonable or even conservative.”



# REGIONAL DEMOGRAPHIC TRENDS

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For Revised Prop osed Amendments to Rule 4607 

## The San Joaquin Valley Region experienced significa nt growth from 1997 to 2007. Between

1997 and 2002, the eight county region increased by 1.8 percent annually, from 3.1 million in

1997 to almost 3.5 million in 2002. From 2002 to 20 07, the population grew to 3.9 million

for an annual increase of approximately 2.5 percent . Over the same period, California grew

at a slower rate of 1.4 percent per year. Kern Cou nty, Madera, Merced, and San Joaquin

Counties grew at rates faster than the regional ave rage between 2002-2007.

TABLE 1

POPULATION TRENDS: SAN JOAQUIN VALLEY REGION AND CA LIFORNIA, 1997-2007

------------------- Year -------------- ------- Ch ange ------- - Annual % Change -

1997 2002 2007 97-02 02-07 97-02 02-07

California 32,670,019 35,088,671 37,662,518 2,418,6 52 2,573,847 1.4% 1.4%

Region 3,147,776 3,445,018 3,900,965 297,242 455,94 7 1.8% 2.5%

Fresno 774,208 827,310 917,515 53,102 90,205 1.3% 2.1%

Kern 629,227 688,875 801,648 59,648 112,773 1.8% 3.1%

Kings 116,727 133,553 151,381 16,826 17,828 2.7% 2.5%

Madera 111,892 130,373 148,721 18,481 18,348 3.1% 2.7%

Merced 200,169 219,554 251,510 19,385 31,956 1.9% 2.8%

San Joaquin 537,669 596,907 679,687 59,238 82,780 2.1% 2.6%

Stanislaus 421,946 469,969 521,497 48,023 51,528 2.2% 2.1%

Tulare 355,938 378,477 429,006 22,539 50,529 1.2% 2.5%



### Source: ADE, Inc., based on California Department o f Finance



# Regional Economic Trends

Economic development practitioners and planners hav e traditionally divided economies into

two broad industrial categories—the economic base a nd local support industries. Economic

base industries are the drivers of local and region al economies in that these industries draw

income into a local economy by selling products out side of the local economy, much like the

export industries of a national economy. Accrued ea rnings then circulate throughout the

local area in the form of wages and salaries; inves tments; purchases of fixed assets, goods,

and services; and generation of more jobs and wealt h.

The economic base is typically comprised of industr ies within the manufacturing, mineralsresource extraction, and agricultural sectors. Ther e are also the “local support industries”

such as retail or service sectors, the progress of which is a function of the economic base

and demographic changes, and more so the latter tha n the former. As population increases

in a given area, demand for services–such as realto rs, teachers, and healthcare–increases, as

does demand for basic retail items like groceries, gas for commuting, or clothing at the local

apparel shops.

Agriculture is the economic base of the San Joaquin Valley region by virtue of the amount of

goods this sector produces and exports throughout t he nation and the globe. Twelve percent

of all workers in the region are employed by indust ries within agriculture, as Table 2 shows.

However, in 1997 slightly almost 16 percent of all workers worked in agriculture. By 2002,

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For Revised Prop osed Amendments to Rule 4607 

## this ratio stood at 13 percent. In fact, over the f ive-year period between 2002 and 2007,

employment in agriculture barely increased, growing by 0.2 percent per year.

Between 2002 and 2007, local support industries gai ned in prominence within the San

Joaquin Valley region. Service-rendering industries employed the most workers as a

proportion of total employment in the region. As Ta ble 2 shows, service-rendering industries

comprise 62 percent of all jobs, including public s ector positions. In other words, 955,079

jobs out of a total of 1,530,284 jobs are in servic e-rendering industries. Excluding the public

sector, service-rendering jobs account for 45 perce nt of all jobs in 2007. In 2002, servicerendering industries (excluding the public sector) represented 44 percent of all jobs,

indicating that the transition toward a services ec onomy was in place as early as the mid to

late 1990s with the significant increase in the num ber of people during that time.

Increases in employment in service-rendering indust ries are consistent with regional

population growth. In the region, local support ind ustries of construction, education and

health, and financial activities increased annually by 3.9 percent, 3.2 percent, and 1.5 percent

respectively between 2002 and 2007.

Close examination of Table 2 shows that the region experienced respectable growth in

manufacturing, as employment in this sector grew an nually by 1.2 percent between 2002 and

2007. In comparison, manufacturing jobs declined an nually by 0.7 percent between 1997 and

2002. Another regional bright spot was transportati on\utilities, as jobs increased by a healthy

clip of 3.2 percent per year between 2002 and 2007.

‘This section is blank on purpose”

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Applied Development Economics, Inc. D-11 Final Draft Staff Report with Appendices

For Revised Prop osed Amendments to Rule 4607 TABLE 2

EMPLOYMENT PROFILE OF THE SAN JOAQUIN VALLEY REGION , 1997-2007

Industry 1997 2002 2007 % of Total

Private &

Public

Employment

in 2007:

Region % of Total

Private &

Public

Employment

in 2007:

California Annual

Percent

Chg,

97-02 Annual

Percent

Chg,

02-07

Total, all private industries 1,121,188 1,159,334 1 ,273,164 0.7% 1.9%

Goods-Producing 581,277 540,028 575,205 -1.5 % 1.3%

Agriculture 207,186 181,777 183,335 12.0% 2.0% -2.6% 0.2%

Natural Resources and Mining 217,333 184,4 35 197,798 12.9% 2.6% -3.2% 1.4%

Construction 43,999 64,992 78,704 5.1% 5.7 % 8.1% 3.9%

Manufacturing 112,759 108,824 115,368 7.5% 9.3% -0.7% 1.2%

Service-Providing 539,911 619,306 697,959 2. 8% 2.4%

Trade, Transportation, & Utilities 189,894 209,335 237,788 2.0% 2.6%

Retail 116,765 131,458 145,700 9.5% 1 0.8% 2.4% 2.1%

Wholesale 33,993 37,443 44,832 2.9% 4 .6% 2.0% 3.7%

Transport\Warehouse\Utilities 39,136 40,434 47,256 3.1% 3.1% 0.7% 3.2%

Information 14,485 14,682 15,225 1.0% 3.0% 0.3% 0.7%

Financial Activities 40,287 45,345 48,778 3.2% 5.8% 2.4% 1.5%

Professional\Business Services 81,314 98,2 03 108,007 7.1% 14.4% 3.8% 1.9%

Education and Health Services 96,624 115,5 21 135,197 8.8% 10.4% 3.6% 3.2%

Leisure and Hospitality 79,462 89,736 101, 415 6.6% 9.9% 2.5% 2.5%

Other Services 37,845 46,484 51,549 3.4% 4 .9% 4.2% 2.1%

Federal Government 26,013 29,186 27,784 1.8% 1.6% 2 .3% -1.0%

State Government 23,886 29,000 30,945 2.0% 2.9% 4.0 % 1.3%

Local Government 155,836 185,774 198,391 13.0% 11.0 % 3.6% 1.3%

Total, all public\private industries 1,326,923 1,40 3,294 1,530,284 100.0% 102.0% 1.1% 1.7%



### Source: ADE, Inc. from data supplied by the Labor M arket Information Division of the California Employ ment Development Department



# DESCRIPTION OF AFFECTED INDUSTRIES

Proposed amendments to Rule 4607 potentially affect s a narrow set of industries, namely

those industries within printing (NAICS Code 32311) . Table 3 below identifies economic

trends for the printing industry and its sub-indust ries over the ten-year period from 1997 to

2007. While employment grew annually by eight perce nt between 1997 and 2002, the table

shows that this industry has contracted since 2002 in terms of number of businesses and

employment, going from 215 establishments to 168 es tablishments. Data come from the

California Employment Development Department (EDD), and are for businesses whose

primary economic activity is any one of the ten pri nting sub-industries identified below in

Table 3. The table also shows that, in inflation-ad justed terms, workers’ respective average

pay also went down for the most part. One area of g rowth was in flexographic printing

(NAICS 323112), which increased in terms of employm ent by over 20 percent a year. The

proposed amendments to Rule 4607 for the most part affects establishments in lithographic

and flexographic printing industries.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICTAppendix D: Socioeconomic Impact Analysis Report December 18, 2008Applied Development Economics, Inc.D-12 Final Draft Staff Report with Appendices For Revised Prop osed Amendments to Rule 4607Table 3San Joaquin Valley Region: Printing Industry Trends, 1997-2007-------------- 1997 ----------- --------------2002 ---------- -------------- 2007 ---------- Annual Percent Chge 97-02 Annual Percent Chge 02-07Estab Emp Avg Pay Estab Emp Avg Pay Estab Emp Avg Pay Estab Emp Avg Pay Estab Emp Avg Pay32311 Printing 167 2,358 $34,277 215 3,499 $36,376 168 2,997 $35,909 5.2% 8.2% 1.2% -4.8% -3.1% -0.3%323110 Lithographic Printing 74 1,739 $37,024 661,988 $37,255 47 1,752 $37,068 -2.3% 2.7% 0.1% -6.6% -2.5% -0.1%323111 Gravure Printing 1 10 $34,639 1 10 $34,465 0.0% 0.0% -0.1%323112 Flexographic Printing 10 133 $39,080 10390 $38,885 0.0% 23.9% -0.1%323113 Commercial Screen Printing 13 166 $28,59429 262 $28,486 27 221 $26,983 17.4% 9.6% -0.1% -1.4% -3.4% -1.1%323114 Quick Printing 74 371 $23,717 68 376 $26,964 50 269 $28,162 -1.7% 0.2% 2.6% -6.0% -6.5% 0.9%323115 Digital Printing 5 51 $39,080 5 51 $40,817 0.0% 0.0% 0.9%323116 Manifold Business Forms 8 371 $46,5275 51 $48,595 -9.0% -32.6% 0.9%323117 Books Printing 3 31 $34,639 3 31 $36,179 0.0% 0.0% 0.9%323118 Blankbook, Binders, etc. 1 10 $34,6391 10 $36,179 0.0% 0.0% 0.9%323119 Other Commercial Printing 6 82 $35,298 24267 $35,191 19 211 $35,723 32.0% 26.6% -0.1% -4.6%-4.6% 0.3%Source: ADE, Inc., based on California EmploymentDevelopment Department

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For Revised Prop osed Amendments to Rule 4607 

## Similar to Table 3 above, Table 4 below further dis cusses the economic context within

which District officials are contemplating amendmen ts to the Graphic Arts regulation. Table

4 includes estimates on revenues generated by exist ing printing businesses. Estimates are

based on data from the 2002 Economic Census, partic ularly for the Fresno-Madera

Metropolitan Statistical Area, which, in conjunctio n with state-level data, were then adjusted

in order to estimate regional trends. In addition t o generating sub-industry specific revenue

per worker ratios for purposes of estimating aggreg ate revenues, the consultant adjusted

these ratios for small-sized businesses using a com bination of the US Census’ County

Business Patterns and Non-Employer Statistics. Tha t same source included data on cost of

materials. The consultant utilized the IMPLAN input -output model to determine what share

of materials is printing ink. The table also inclu des estimates on impacted establishments’

respective net profits, the rate of which comes fro m the US Internal Revenue Service for the

five-period between 2000 and 2005.

As Table 4 shows, the printing industry in the regi on is a $416 million industry, with

commercial lithographic printing (NAICS 323110) as the largest segment at $263 million.

As Table 5 shows, currently, there are 67 establish ments in the region that are subject to the

rule right now. These establishments are in the Di strict’s permits database that tracks

businesses that utilize equipment subject to region al air quality regulation. Of the 67

establishments, 42 are not

in the printing industries. As indicated later, t he proposed

amendments will not affect the 42 non-printing busi nesses, as the rule will primarily affect

flexographic and lithographic printers.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICTAppendix D: Socioeconomic Impact Analysis Report December 18, 2008Applied Development Economics, Inc.D-14 Final Draft Staff Report with Appendices For Revised Prop osed Amendments to Rule 4607Table 4San Joaquin Valley Region: Printing Industry Economic Profile, 2007--------- Materials ---------TotalEstablishmentsEmploymentEstimatedRevenuesCost ofMaterialsInkMaterials(8%)After TaxNet Profits32311Printing1682,997$415,591,945$127,348,363$10,187,869$17,870,454323110Lithographic Printing471,752$262,848,883$76,529,098$6,122,328$11,302,502323111Gravure Printing110$1,580,539$440,048$35,204$67,963323112Flexographic Printing10390$57,203,209$18,460,000$1,476,800$2,459,738323113Commercial Screen Printing27221$22,184,221$6,721,333$537,707$953,922323114Quick Printing50269$26,132,486$9,608,667$768,693$1,123,697323115Digital Printing551$6,571,701$1,863,244$149,060$282,583323116Manifold Business Forms551$10,549,662$6,721,333$537,707$453,635323117Books Printing331$3,360,187$1,513,974$121,118$144,488323118Blankbook, Binders110$901,122$94,667$7,573$38,748323119Other Commercial Printing19211$24,259,935$5,396,000$431,680$1,043,177Source: ADE, Inc., based on California EDD, US Economic Census 2002, US Bureau of Labor Statistics, IMPLAN Input-Output Model IMPRO2.0, and US Internal Revenue ServiceTable 5Non-Printing Industries Using Equipment Subject toGraphic Arts RuleIndustry DescriptionEstablishmentsUnitsWood Container and Pallet Manufacturing11Wood Furniture Manufacturing319Paper (except Newsprint) Mills113Sutup Paperboard Box Manufacturing12Corrugated and Solid Fiber Box Manufacturing853Nonflolding Sanitary Food Container Manufacturing11Folding Paperboard Box Manufacturing13Plastics, Foil, and Coated Paper Bag Manufacturing14Corrugated and Solid Fiber Box Manufacturing12Newspaper Publishers69Asphalt Shingle and Coating Materials Manufacturing11All Other Plastics Product Manufacturing11Metal Can Manufacturing11Air Purification Equipment Manufacturing12Petroleum Bulk Stations and Terminals16Family Clothing Stores11Graphic Design Services28Correctional Institutions314Others723SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICTAppendix D: Socioeconomic Impact Analysis Report December 18, 2008Applied Development Economics, Inc.D-15 Final Draft Staff Report with Appendices For Revised Prop osed Amendments to Rule 4607Total, industries other than printing42164ALL (including printing industries)67267

## SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

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Fo r Revised Proposed Amendments to Rule 4607 

# 3. SOCIOECONOMIC IMPACT ANALYSIS

This section of the report examines the socioeconom ic impact analysis of proposed

amendments to Rule 4607. District staff indicates that the rule will primarily affect

flexographic and lithographic printers. Early indi cations are that if Rule 4607 is amended,

these printing industries would experience between 3.6 and six percent increase in cost of

ink.

Table 6

Cost Increases Stemming From Adoption of

Graphic Arts Rule

Flexographic\Lithographic

Printers 3.6% - 6.0% Increase In InkRelated Costs



### Source: San Joaquin Valley Unified Air Pollution Co ntrol District



## Table 7 below compares cost increases borne by flex ographic and lithographic printers

against their respective net profit estimates. As indicated above in Table 5, flexographic and

lithographic printers in the region generate an est imated $11.3 million and $2.5 million in net

profits. As a result of the proposed amendments, t he ten flexographic printing

establishments will experience an increase in aggre gate costs ranging from $53,200 to

$88,600, which amount to 2.2 percent and 3.6 percen t of net profits. These impacts are

below the threshold of significance employed for th e purposes of evaluating impacts. As a

result, flexographic printers are not significantly impacted by the proposed rule. Likewise

for lithographic printers, whose aggregate costs am ount to approximately one percent of net

profits. Table 8 below also demonstrates that smal l businesses are not disproportionately

impacted by proposed amendments to Rule 4607.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICTAppendix D: Socioeconomic Impact Analysis December18, 2008D-17 Final Draft Staff Report with Appendices For Revised Proposed Amendments to Rule 4607Table 7Socioeconomic Impacts of Graphic Arts Rule, Printing IndustryCost IncreaseScenariosImpact to NetProfitsSignificanceTotalEstablishmentsInk @3.6%ChangeInk @6%ChangeInk @3.6%ChangeInk @6%ChangeInk @3.6%ChangeInk @6%Change32311Printing168$273,569$455,9481.5%2.6%nono323110Lithographic Printing47$220,404$367,3401.2%1.0%nono323111Gravure Printing1323112FlexographicPrinting10$53,165$88,6082.2%3.6%nono323113Screen Printing27323114Quick Printing50323115Digital Printing5323116Manifold Business Forms5323117Books Printing3323118Blankbook, Looseleaf Binders1323119Other Commercial Printing19Source: ADE, Inc., based on California EDD, US Economic Census 2002, US Bureau of LaborStatistics, IMPLAN Input-Output Model IMPRO 2.0, and US Internal Revenue ServiceTable 8Socioeconomic Impacts of Graphic Arts Rule, Printing Industry: Small Business Disproportionate ImpactAnalysis---------------- Lithographic Printers ----------------------------- Flexographic Printers -------------All LithographicPrintingEstablishments Employ <50 Employ >50All FlexographicPrintingEstablishments Employ <50 Employ >50Establishment474331082Employment1,752 547 59239094296Revenues262,848,883 63,353,321 199,495,562$57,203,209$13,485,667$43,717,543Ink Materials6,122,328 1,911,480 2,068,732$1,476,800$355,947$1,120,853Net Profits11,302,502 3,269,464 3,946,522$2,459,738$579,884$1,879,8543.6% Cost Increase132,750 68,813 74,474$53,165$12,814$40,3516.0% Cost Increase108,465 114,689 124,124$88,608$21,357$67,2513.6% Cost Increase: Impact1.2% 2.1% 1.9%2.2%2.2%2.1%6.0% Cost Increase: Impact1.0% 3.5% 3.1%3.6%3.7%3.6%Significant: 3.6% Cost Increase no no no no no no

6.0% Cost Increase no no no no no noSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICTAppendix D: Socioeconomic Impact Analysis December18, 2008D-18 Final Draft Staff Report with Appendices For Revised Proposed Amendments to Rule 4607