Document ID: EPA-HQ-OPPT-2008-0382-0006
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2008-08-25T04:00Z

Economic Analysis for the 

TSCA Section 402 

Lead-Based Paint Program Accreditation and Certification Fee Rule

Economic and Policy Analysis Branch

Economics, Exposure and Technology Division

Office of Pollution Prevention and Toxics

U.S. Environmental Protection Agency

June 20, 2008

Table of Contents

  TOC \o "1-3" \h \z \u    HYPERLINK \l "_Toc199243746"  1.	Introduction
  PAGEREF _Toc199243746 \h  1-1  

  HYPERLINK \l "_Toc199243747"  1.1	Purpose of the Proposed Rules	 
PAGEREF _Toc199243747 \h  1-1  

  HYPERLINK \l "_Toc199243748"  1.1.1	Abatement Rule	  PAGEREF
_Toc199243748 \h  1-1  

  HYPERLINK \l "_Toc199243749"  1.1.2	LRRP Rule	  PAGEREF _Toc199243749
\h  1-2  

  HYPERLINK \l "_Toc199243750"  1.2	Purpose and Overview	  PAGEREF
_Toc199243750 \h  1-3  

  HYPERLINK \l "_Toc199243751"  2.	Abatement Fees	  PAGEREF
_Toc199243751 \h  2-1  

  HYPERLINK \l "_Toc199243752"  2.1	Annual Applications	  PAGEREF
_Toc199243752 \h  2-1  

  HYPERLINK \l "_Toc199243753"  2.2	Program Costs	  PAGEREF
_Toc199243753 \h  2-2  

  HYPERLINK \l "_Toc199243754"  2.2.1	Regional Processing Cost	  PAGEREF
_Toc199243754 \h  2-2  

  HYPERLINK \l "_Toc199243755"  2.2.2	Regional Administrative and
Enforcement Cost	  PAGEREF _Toc199243755 \h  2-7  

  HYPERLINK \l "_Toc199243756"  2.2.3	Headquarters Administrative and
Enforcement Cost	  PAGEREF _Toc199243756 \h  2-8  

  HYPERLINK \l "_Toc199243757"  2.2.4	Summary of Total Annual Cost	 
PAGEREF _Toc199243757 \h  2-9  

  HYPERLINK \l "_Toc199243758"  2.3	Proposed Fee	  PAGEREF _Toc199243758
\h  2-10  

  HYPERLINK \l "_Toc199243759"  2.4	Limitations	  PAGEREF _Toc199243759
\h  2-14  

  HYPERLINK \l "_Toc199243760"  3.	LRRP Fees	  PAGEREF _Toc199243760 \h 
3-1  

  HYPERLINK \l "_Toc199243761"  3.1	LRRP Universe	  PAGEREF
_Toc199243761 \h  3-1  

  HYPERLINK \l "_Toc199243762"  3.2	Program Costs	  PAGEREF
_Toc199243762 \h  3-4  

  HYPERLINK \l "_Toc199243763"  3.2.1	Regional Processing Cost	  PAGEREF
_Toc199243763 \h  3-4  

  HYPERLINK \l "_Toc199243764"  3.2.2	Regional Administrative and
Enforcement Cost	  PAGEREF _Toc199243764 \h  3-8  

  HYPERLINK \l "_Toc199243765"  3.2.3	Headquarters Administrative and
Enforcement Cost	  PAGEREF _Toc199243765 \h  3-9  

  HYPERLINK \l "_Toc199243766"  3.2.4	Summary of Total Annual Cost	 
PAGEREF _Toc199243766 \h  3-12  

  HYPERLINK \l "_Toc199243767"  3.3	Proposed Fee Options	  PAGEREF
_Toc199243767 \h  3-15  

  HYPERLINK \l "_Toc199243768"  3.4	Limitations	  PAGEREF _Toc199243768
\h  3-17  

  HYPERLINK \l "_Toc199243769"  4.	Small Entity Impact Analysis	 
PAGEREF _Toc199243769 \h  4-1  

  HYPERLINK \l "_Toc199243770"  4.1	Abatement Rule	  PAGEREF
_Toc199243770 \h  4-1  

  HYPERLINK \l "_Toc199243771"  4.2	LRRP Rule	  PAGEREF _Toc199243771 \h
 4-2  

  HYPERLINK \l "_Toc199243772"  4.2.1	General Approach and Assumptions	 
PAGEREF _Toc199243772 \h  4-5  

  HYPERLINK \l "_Toc199243773"  4.2.2	Small Entities Potentially
Affected by the Rule	  PAGEREF _Toc199243773 \h  4-7  

  HYPERLINK \l "_Toc199243774"  4.2.3	Impacts on Small Entities Affected
by the Rule	  PAGEREF _Toc199243774 \h  4-9  

  HYPERLINK \l "_Toc199243775"  4.3	Conclusion	  PAGEREF _Toc199243775
\h  4-12  

 

Appendix A. Total Number of Applications by Type of Application and
Number of Regions	

Appendix B. Regions 2, 4 and 9 Time-Motion Study - Oct-Nov 2007 	

Appendix C. EPA Labor Rates 	

Appendix D. Regional Responses to Administrative and Enforcement Cost
Questions 

Appendix E.  Estimating the Number of LRRP Firms with Annual Revenues of
less than $25,000	

Introduction

In response to continuing concerns about lead poisoning among American
children, Congress passed the Housing and Community Development Act of
1992, which included Title X: The Residential Lead-Based Paint Hazard
Reduction Act of 1992. Title X amended several existing housing, worker
safety, and environmental statutes and amended the Toxic Substances
Control Act (TSCA) by adding Subchapter IV: Lead Exposure Reduction.

  SEQ CHAPTER \h \r 1 This report presents an analysis of the
accreditation and certification fees to cover the costs of administering
and enforcing lead-based paint activities and renovation activities
under two rules: (i)  the Lead-based Paint Activities rule (“Abatement
rule”), and (ii) the Lead Renovation, Repair, and Painting Program
rule (“LRRP rule”).  The following chapter provides additional
background on the rules, the purpose of the fees analysis, and an
overview of the report.  

  SEQ CHAPTER \h \r 1 Purpose of the Proposed Rules

Abatement Rule

TSCA §402(a) (15 U.S.C. 2682(a)) requires the Administrator of the U.
S. Environmental Protection Agency (EPA) to promulgate regulations
governing lead-based paint activities, namely lead inspection, risk
assessment, and abatement.  Section 402(a) requires EPA to promulgate
regulations to ensure that individuals engaged in such activities are
properly trained; that training programs are accredited; and that firms
engaged in such activities are certified.  Section 402(a) also requires
EPA to establish standards for performing lead-based paint activities
that are reliable, effective, and safe.  Under Section 404 (15 U.S.C.
2684), EPA may authorize a State or an Indian Tribe to administer and
enforce its own lead-based paint program, which may be more stringent
but must be at least  “as protective as” EPA’s program under
Section 402.

On August 29, 1996, EPA published requirements for lead-based paint
activities in target housing and child-occupied facilities (61 Federal
Register 45778) at 40 CFR Part 745, Subparts L & O, under Sections 402
and 404 of TSCA.  The objective of this regulation is to ensure that
individuals conducting lead-based paint activities in target housing and
child-occupied facilities are properly trained and certified, that
training programs providing instruction in such activities are
accredited and that these activities are conducted according to
reliable, effective, and safe work practice standards.

Under Subpart L of the rule, EPA established accreditation requirements
for training programs at 40 CFR 745.225 and certification requirements
for firms and individuals at 40 CFR 745.226.  These regulations apply to
training providers, firms, and individuals performing lead-based paint
activities in target housing or child-occupied facilities.  They define
requirements in the following five lead-based paint disciplines:

Inspector;

Risk assessor;

Supervisor;

Worker; and

Project designer.

The Agency established specific work practice standards for each of
these disciplines at 40 CFR 745.227.

Under Subpart Q, EPA established the requirements that State or Tribal
programs must meet for authorization by the Administrator and the
procedures EPA will follow in approving, revising, and withdrawing
approval of State or Tribal programs. 

As seen in Figure 1-1, 39 states are authorized to operate their own
programs, as well as the District of Columbia, Puerto Rico, and three
Tribal Areas (Cherokee Nation, Lower Sioux, Upper Sioux).  The
EPA-administered universe includes Alaska, Arizona, Florida, Idaho,
Montana, Nevada, New Mexico, New York, South Carolina, South Dakota and
Wyoming. EPA will administer and enforce the 40 CFR Part 745, Subpart L
regulations only in States and Tribal areas that do not apply for and
receive EPA authorization.

Figure 1-1.  Map of EPA-Administered Section 402 Programs (white) and
Authorized State Programs (shaded).

TSCA §402(a)(3) states that EPA (or an authorized State) shall
establish fees “at such a level as is necessary to cover the costs of
administering and enforcing the standards and regulations under this
section which are applicable to such programs and contractors.”  The
final rule establishing a fee schedule for training programs seeking
accreditation and individuals and firms seeking certification was
promulgated on June 9, 1999. 

LRRP Rule

TSCA §402(c) requires EPA to revise the Abatement rule to apply it to
renovation and remodeling activities that create lead-based paint
hazards.  The LRRP rule was proposed in 2006, with a supplemental
proposal expanding the scope of the LRRP rule to include COFs in 2007,
and finalized on March 31, 2008.  Similar to the Abatement rule, the
LRRP rule applies to target housing and child occupied facilities
(COFs).    

Under the LRRP rule, beginning in April 2010, entities performing
renovation activities that that disturb painted surfaces in target
housing and COFs built before 1978 must be certified and must follow
specific work practices to minimize exposure to lead-based paint
hazards.  

This includes construction contractors (including sole practitioners) as
well as landlords and other building owners (such as school districts)
that may perform renovation activities that disturb painted surfaces
using their own staff.  It does not, however, cover work performed by
homeowners on their own homes.  The certified entity 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
training from an EPA-accredited training provider or workers who have
received on-the-job training from a certified renovator.  In addition,
the rule requires the use of these certain work practices to minimize
exposure to lead-based paint hazards.  

Purpose and Overview

This report supports EPA’s accreditation and certification fee
rulemaking for the Abatement and LRRP rule by: (1) estimating the total
costs to administer and enforce the TSCA §402 certification programs in
EPA Regions and Headquarters; (2) estimating the fees required to cover
these costs; and (3) analyzing the potential impact of these fees on
small entities.  The report is organized as follows:  

Chapter 2 describes in detail the methods used to estimate the
accreditation and certification fees for the Abatement rule.  This
includes a projection of the universe of applicants, estimate of the
program costs for both the Regions and EPA Headquarters, calculation of
fee options, and description of key limitations.  Two appendices are
presented supporting the estimate of program costs.  

Chapter 3 describes in detail the methods used to estimate the
accreditation and certification fees for the LRRP rule.  This includes a
projection of the universe of applicants, estimate of the program costs
for both the Regions and EPA Headquarters, calculation of fee options,
and description of key limitations.  

Chapter 4 presents findings of distributional analyses relevant to
rule-making requirements for small business impacts.  

Abatement Fees

 

This chapter describes the methodology EPA used to estimate the fees to
cover the costs of administering and enforcing lead-based paint
activities under the Abatement rule.   The fees for the Abatement rule
(when the rule was first promulgated in 1999) were based upon EPA
estimates.  At the time, assumptions were made on the number of
applicants and time to process the applications, conduct administrative
activities, and enforce the rule.  This analysis updates the 1999
framework with information from EPA Headquarters and the Regions on the
actual number of applications that have been processed and the
processing time.  The methodology, described below, follows the
following key steps: 

Project the annual number of applications;

Estimate the total annual program costs, including Regional and
Headquarters Costs;

Calculate the fee levels to meet the annual program costs.   

  SEQ CHAPTER \h \r 1 Annual Applications

EPA will incur costs for administering and enforcing the program only in
States and Tribal areas that do not seek or are not granted
authorization to operate their own programs.  The Federal Lead Paint
Program (FLPP) database tracks the number of applications received by
EPA and sent to the Regions for processing.  Specifically, EPA
Headquarters receives all applications for EPA-administered states and
areas, uploads the information into the FLPP database, and then
electronically sends the application to the lead region for review and
approval.  EPA assumes the difference in level of effort between Regions
due to the number of state authorized programs within each Region is
reflected in the number of applications processed in each Region.

Averaging the number of applications between fiscal year (FY) 2003 to
2006 provides a reasonable estimate of the future volume of applications
under the Abatement rule.  This assumes that future trends will be
consistent with past trends with respect to the number and types of
applications that EPA will continue to receive.  In analyzing the FLPP
data EPA considered the following:  

The number of applications reflect only those sent to “lead
Regions.”  In cases where an applicant applies to multiple
jurisdictions and regions, Headquarters will designate a “lead
Region”.  The FLPP database does not specify the additional Regions
for a given application, or the number of applications processed by each
Region for which the Region was not a lead.  Therefore, this analysis
assumes the proportion of lead to non-lead applications for each Region
is similar (see Appendix A for distribution of the number of regions by
application type).  

Applications received by Headquarters but not forwarded to the Regions
had four outcomes: returned, withdrawn, approved or disapproved. 
However, EPA estimates that on average these applications totaled
approximately 550 annually.  This analysis included the number of
applications sent to Regions because only those applications were
processed, administered and enforced.   

In estimating Regional processing cost, this analysis did not include
applications designated as “Amendments.”  These entries were assumed
to be informational only (e.g. an update in the FLPP database), and not
a significant cost to EPA Regions for time or effort.

Table 2-1 presents the average number of applications sent to each lead
Region, based on information from the FLPP database.  Overall, an annual
total of 2,772 applications were processed between FY2003 to 2006. 
Region 2 processed 72 percent of these applications.  

Table 2-1.  Table of Average Annual Number of Applications Sent to Each
Lead Region from FLPP Database for FY 2003-FY 2006

Average Annual Number of Applications Sent to Lead Region – FLPP
Database

Type of Application	Lead Region/2

	1	2	3	4	5	6	7	8	9	10	Total

Training Program Accreditation	0	9	0	4	0	1	2	1	1	0	18

Refresher Training Program Accreditation	0	8	0	4	0	1	2	1	1	2	19

Training Program RE-accreditation	0	13	0	19	0	5	10	3	14	3	67

Refresher Training Program Re-accreditation	0	7	0	18	0	5	10	3	14	2	59

Firm Certification	0	218	0	19	1	3	0	6	19	10	276

Firm Re-Certification	1	110	0	25	1	6	3	7	14	12	179

Individual Certification	1	1225	0	83	3	19	1	44	125	33	1,534

Individual RE-certification	0	401	0	84	1	19	0	17	63	41	626

Annual Average FY2003-FY2006 

(without Amendments)	2	1,989	-	257	5	58	28	80	250	103	2,772

/1 Applications were separated by disciplines within each Type of
Application and then averaged for each lead region across FY 2003-FY
2006.  Averages were then summed by each Type of Application for the
average for each Lead Region.

/2 The FLPP Database included a small number of applications processed
in Regions where all States were authorized.  Additional detail was not
provided in the FLPP Database for these applications.

Program Costs

This section describes the methodology used to estimate the costs for
administering and enforcing the Abatement rule for training providers,
firms, and individuals in States without authorized programs.

Regional Processing Cost

EPA Regions have a great deal of responsibility for implementing the
Lead-based Paint Activities program. They conduct a range of
administrative activities, which will vary for different types of
accreditation and certification. The major types of EPA Regional
activities are 1) processing applications, 2) administrative activities,
and 3) enforcement activities, which are described in detail below.   

Overall, the time to process applications reflects the time a Region
requires to review and either approve or disapprove an application. 
Specific activities may include, for example: 

Examining applications for completeness and verifying compliance with
all applicable requirements for accreditation or certification (e.g.,
course materials and curriculum or firm experience and educational
background).

Tracking accredited training programs and certified firms and other
related support activities.

An on-site review of the training programs being considered for
accreditation.

Clerical activities such as receiving, opening, logging, filing,
storing, and updating applications and other correspondence

Once an application is approved, there are additional processing
activities for producing and issuing certificates and worker
identification cards.

EPA Regions have not in the past tracked these activities.  Accordingly,
EPA estimated the average hours spent processing each type of
application using a Time-Motion Study undertaken for this analysis. 
Regions 2, 4, and 9 participated in the study; these Regions process the
highest number of applications annually (see Table 2-1).  The study was
conducted over a 30 day period between October and November 2007 to
track the amount of time needed to process applications.  

For each application processed, the Regions recorded the application
identification number, whether the region was a lead Region, application
type (including discipline), and the date approved or disapproved. Under
each activity, EPA staff recorded the number of minutes spent, as well
as the level of the staff performing the task (i.e., Clerical Senior
Environmental Employee (SEE), Clerical EPA, Technical SEE, Technical EPA
or Managerial EPA).  

As presented in Table 2-2, Region 2 tracked the largest number of
applications, totaling 343 applications.  This analysis only included
the processing time for applications which were initiated and completed
during the 30-day time period to ensure consistency in processing time. 
Appendix B contains a summary of the Time-Motion study data.  

Table 2-2.  Number of Applications Completely Processed for Regions 2,
4, and 9, during the 2007 Time-Motion Study

Application Type	Certification/ 

Re-certification	Number of Applications (Completed)

Region 2	Region 4	Region 9

Firm	Initial	27

3

Firm	Recertification	22

4

Individual	Initial	131	6	8

Individual	Recertification	156	3	11

Individual	Disapproval	5

3

Individual	Reciprocity	1

2

Training Provider	Accreditation

	3

Training Provider	Reaccreditation	1

TOTAL	343	9	34

Based on the study results, EPA calculated the average processing time
for each application type by Region (see Table 2-3).  No significant
difference was found for the processing time among the five disciplines.
 Based upon this finding, EPA assumes that the application processing
time does not vary by discipline for both training providers and
individuals.

As presented in Table 2-3, the processing time on average for each
application was significantly lower for Region 2.  This is primarily due
to systems Regions 2 has in place to process a high volume of
applications more efficiently.  Accordingly, the weighted average
processing time between Regions 4 and 9 was used to estimate the average
processing time for all the Regions, except Region 2 (i.e., “National
Estimate”).   Furthermore, given limited data from Region 4 for firms
and training providers, the processing time reported from Region 9 was
used as the national estimate.  Table 2-3.  Summary of Average
Processing Time (Level of Effort) for Regions 2, 4, and 9, including a
National Estimate.

Average Processing Time (Hours/Application)

Application Type	Certification/ 

Re-certification	Region 2	Region 4	Region 9	National Estimate (Weighted
Average Region 4 & 9) 

Firm	Initial	0.4	--	1.5	1.5

Firm	Recertification	0.4	--	1.3	1.3

Individual	Initial	0.5	1.8	1.8	1.8

Individual	Recertification	0.6	1.3	1.4	1.4

Individual	Disapproval	0.9	--	1.8	1.8

Training Provider	Accreditation	8.5	--	26.1	26.1

Training Provider	Re-Accreditation	1.5	--	4.5	4.5

Based on the small number of training provider accreditations (Region 9
completed 3) and Re-accreditations (Region 2 completed 1) completed
during the Time-Motion Study period, EPA calculated the processing time
for a Region 2 training provider accreditation and the processing time
for a Region 9 (“National Average”) training provider
re-accreditation.  EPA estimated these values by applying a ratio of
average individual and firm application processing time between Regions
2 and 9 to the processing times provided in the Time-Motion Study.

Based on EPA wage rate information for 2007 (see Appendix C), EPA
estimated the average processing cost per application for each Region. 
As presented in Table 2-4, the cost per application was significantly
lower for Region 2, correlating to the significant decrease in
processing time.  The cost for disapproval of an individual application
was somewhat higher for Region 2, but not significantly different than
an initial certification for the National Estimate.  For this reason,
EPA assumed that when estimating the cost per application, the
individual applications disapproved at the Regional level did not
require a separate calculation.  

Table 2-4.  Summary of Average Cost per Application (Level of Effort)
for Regions 2, 4, and 9, including a National Estimate.

Average Cost per Application ($/Application)

Application Type	Certification/ 

Re-certification	Region 2	Region 4	Region 9	National Estimate (Weighted
Average Region 4 & 9) 

Firm	Initial	$9	--	$27	$27

Firm	Recertification	$9	--	$25	$25

Individual	Initial	$11	$39	$33	$36

Individual	Recertification	$12	$29	$26	$27

Individual	Disapproval	$18	--	$32	$32

Training Provider	Accreditation	$159	--	$492	$492

Training Provider	Re-Accreditation	$29	--	$94	$94

As presented in Table 2-5, to estimate the total average annual
processing cost, EPA multiplied a weighted average of the unit cost per
application by the average number of applications processed during FY
2003 through FY 2006.  Because the Time-Motion study did not provide
data regarding the difference in relative burden between the initial and
refresher course, for purposes of this analysis, an estimate of 42
percent was used, based on the 1999 Abatement fees analysis.  

Given the significant difference in unit cost between Region 2 and the
National Estimate, the total average annual processing cost was derived
as by summing the total for Region 2 and all other regions, resulting in
a total average annual regional processing cost of $57,074. 

Table 2-5.  Summary of Annual Average Regional Processing Cost.

Program	Average Number of Applications (FY2003-FY2006) \1	Unit Cost
Region 2	Unit Cost (All Other Regions)	Relative Burden \4	Weighted
Average Cost Per Application	Total Average Annual Processing Cost \8

	All Regions \2	Region 2 Only	All Other Regions \3

Region 2  \5	All Other Regions  \6	ALL REGIONS \7

	Training Program Accreditation 

Initial - All Disciplines	18	9	9	$159	$492	100%	$159	$492	$330	$5,778

Refresher - All Disciplines	18	8	11	$159	$492	42%	$67	$207	$148	$2,670

Training Program Reaccreditation

Initial - All Disciplines	66	13	53	$29	$94	100%	$29	$94	$81	$5,390

Refresher - All Disciplines	59	7	52	$29	$94	42%	$12	$40	$36	$2,129

Firm Certification

Initial Certification	276	218	58	$9	$27	100%	$9	$27	$13	$3,530

Firm Re-Certification	178	110	68	$9	$25	100%	$9	$25	$15	$2,691

Individual Certification

Initial Certification - All Disciplines	1532	1225	307	$11	$36	100%	$11
$36	$16	$24,078

Individual RE-certification - All Disciplines	626	401	225	$12	$27	100%
$12	$27	$17	$10,809

Amendments	76	15	61	 	 	 	 	 	 	 

TOTAL (not including Amendments)	2,772	1,989	783	 	 	 	 	 	 
$57,074

\1 Based on average number of applications sent to lead Regions between
FY2003 and FY2006, excluding amendments.

\2 Figures may not sum due to rounding. 

\3 Region 3 is not included in this analysis because all states have
authorized programs and there were no applications processed in that
Region during the FLPP Database period from FY 2003 through FY 2006.

\4 Estimated burden for firm and individual certifications are based
upon the Individual Initial processing time in the 2007 Lead Fees
Time-Motion Study (see Time-Motion Study).  The time motion study found
that there is no difference in burden between disciplines for individual
applications.  Due to the limited number of Training Provider
Accreditations and Reaccreditations processed in the Time Motion Study,
the burden estimates are assumed to demonstrate no difference in burden
between disciplines, as demonstrated for Individual Applications. The
difference in relative burden for the refresher courses assumes the
level of effort estimated for EPA regions in 1999 is consistent with
current levels. 

\5 Based on cost per application for Region 2 in FY2007 Lead Fees
Time-Motion Study.  

\6 Based on average cost per application for Region 4 and 9 in FY2007
Lead Fees Time-Motion Study.  

\7 Weighted average cost per application based on average number of
applications from FY2003 to FY2006. 

\8 Estimated by multiplying cost per application by number of
applications for Region 2 and All Other Regions. 

Regional Administrative and Enforcement Cost 

In addition to processing costs, Regions incur costs for other
administrative activities and enforcement.  Administrative activities
include, for example, answering phone inquires from the public regarding
the Section 402 program, following up on the status of applications,
providing information to other Regions, coordinating with Headquarters,
and performing other customer service activities. Enforcement activities
include, for example, conducting audits of training providers and firms.
 

Regions 2, 4, and 9 provided an estimate of the number of hours spent
performing these activities by wage type (see Appendix D).  These
estimates, obtained through questionnaires and telephone interviews
conducted in the fall of 2007, were largely based on professional
judgment and the experience of the Regional staff that conduct and
oversee these activities.  As presented in Table 2-6, the total cost for
each activity was estimated by multiplying the level of effort for each
employee type by the EPA wage rate data in 2007 (see Appendix C).  

Table 2-6. Summary of Administrative and Enforcement Costs for Regions
2, 4, and 9

Region	Activity	Employee Type	FTEs	Cost	Total Cost by Region

2	Administrative	Technical SEE \1	1.75	$67,122	$67,122

4

Technical EPA	0.26	$19,932	$19,932

9

Technical SEE	0.38	$14,752	$18,702

9

Managerial EPA	0.02	$2,104

	9

Technical EPA	0.02	$1,846

	2	Enforcement	Technical EPA	1	$76,777	$76,777

4

Technical SEE	0.02	$885	$885

9

Technical SEE	0.40	$15,268	$18,111

9

Managerial EPA	0.02	$2,104

	9

Technical EPA	0.01	$738

	\1  Employee type for was not specified by Region 2, but assumed to be
Technical SEE.  

To estimate the average annual Regional administrative cost, EPA summed
the average annual administrative cost from Regions 2, 4, and 9, and
added an estimate for the other Regions (1, 5, 6, 7, 8, and 10). 
Consistent with the approach used for estimating the regional processing
cost, EPA assumed the cost per application for the other Regions was the
average between Regions 4 and 9. Then EPA multiplied the estimated cost
per application for the other Regions by the number of applications
processed in FY 2006 to estimate the average annual administrative cost
for the other regions.  As presented in Table 2-7, this resulted in an
estimated annual total Regional administrative cost of $151,532.

Table 2-7.  Average Annual Regional Administrative Cost.

	Region 2 \1	Region 4 \1	Region 9 \1	Other Regions 

(1,5,6,7,8 & 10) \3

 Average Annual Administrative Cost 	$67,122	$19,932	$18,702	$45,776

 	 	 	 	 

TOTAL	$151,532	 	 	 

 	 	 	 	 

Number of Applications FY 2006	1,972	210	159	431

Cost per application \2

$95	$118	$106

\1 Based on allocation of resources to administrative activities in
FY2006. 

\2 Estimated cost based on hours per application multiplied by
administrative wage per hour. 

\3 Although Regions 2 and 4 indicated that administrative costs are not
necessarily proportional to the number of applications, we use the
average administrative cost per application for Region 4 and 9 to scale
the administrative costs for the other regions (1, 5, 6, 7, 8 7 & 10). 

\4 The total number of applications for FY 2006 sent to the Regions is
2,614. EPA used FY 2006 data because the regions provided their FTE
estimates based upon FY 2006.

To estimate the average annual Regional enforcement cost, EPA summed the
average annual enforcement cost from Regions 2, 4, and 9, and added an
estimate for the other Regions (1, 5, 6, 7, 8, and 10).  EPA calculated
an average enforcement cost by averaging the Regional enforcement cost
for Regions 4 and 9.  Consistent with the approach used for Regional
processing and administrative cost, EPA assumed the cost per application
for the other Regions was the average between Regions 4 and 9. As
presented in Table 2-8, this resulted in an estimated total Regional
enforcement cost of $152,761.  However, discussions with Regions
suggested the enforcement costs are largely depended on available
funding versus the number of applications received.

Table 2-8.  Estimated Annual Regional Enforcement Cost. 

	Region 2	Region 4	Region 9	Other Regions 

(1,5,6,7,8 & 10) \1 

Total Cost 	$76,777	$885	$18,111	$56,988

TOTAL COST \2 	$152,761	Assumes other Regions (1, 5, 6, 7, 8, &10) each
have enforcement costs equal to average of Region 4 & 9. 

\1 Estimated by taking an average of Region 4 and Region 9 enforcement
costs ($9,498) and multiplying this figure by the number of additional
Regions (6).  

\2 Regions 2, 4, and 9 indicated that resources spent on enforcement
activities are based on the available funding after processing and
administrative activities are complete. 

Headquarters Administrative and Enforcement Cost

EPA Headquarters activities under the Abatement rule fall under
administrative and enforcement activities.  The administrative
activities include: 

Coordination with the Regions. Involves preparing or reviewing reports
related to the Lead-based Paint Activities program, addressing
inquiries, coordinating efforts, or assuring proper implementation of
the program. 

Maintenance of the central database and registry. Requires EPA
headquarters staff to work with the contractors to enter information
about the application (e.g., date, type, lead Region, etc.) from the
Lead-based Paint Activities program into the Federal Lead Paint Program
(FLPP) Database.  

Administration of certification examinations. Individuals seeking
certification as an inspector, risk assessor, or supervisor must pass a
certification exam in the discipline.  EPA’s activities related to
administration of the exam include filing and storing certification exam
materials, administering and grading the exams and tracking and
transmitting scores to applicants and other databases. These activities
are primarily conducted by the contractor.  

Table 2-9 presents a summary of the EPA Headquarters costs, which total
$849,214 per year.  For the Headquarters support and enforcement
activities, the costs are estimated by multiplying the amount of FTEs
required to conduct these tasks by 2007 EPA wage rates.   The FTE
estimates are based on annual historical averages since the Abatement
rule was enacted in 1999.  Similarly, the contractor support costs are
based on the average annual contract costs from 2002 (the year the FLPP
database was implemented) to 2007.  

 

Table 2-9. Summary of Headquarters Activities and Annual Costs

Annual Cost Activities	Labor type	Rate per FTE 

($/FTE)	FTE	Annual Cost ($)

Administrative: 

Headquarters Support \1	Technical (GS 11)	$76,777	1.00	$76,777

Enforcement \2	Technical (GS 12)	$95,081	0.10	$9,508

Administrative: 

Contractor Support \3	 	 	 	$762,929

Total EPA Headquarters Cost	$849,214

\1 Based on estimate of number of HQ FTE that work on Abatement rule
annually.

\2 Based on discussions with OECA staff on enforcement activities
related to the Abatement rule.

\3 Based on actual contractor support expenditures to operate and
maintain FLPP database from July 2002 to August 2007. 

Summary of Total Annual Cost

Table 2-10 presents a summary of the total annual EPA Regional and
Headquarters costs to administer and enforce the Abatement rule.  EPA
estimates a total cost of approximately $1,210,580, of which 69 percent
accounts for administrative Headquarter costs.  

In addition, it is important to account for the revenue EPA generates
from the Certification Exam fee.  The annual revenue ($54,670) is
estimated by multiplying the Certification Exam Fee ($70), by the
average number of Individual inspectors, risk assessors, and supervisors
that took the exam from FY2003 to FY2006 (781 applicants), based on the
FLPP database.  After accounting for this revenue, EPA estimates net
total costs of $1,155,910 for the Abatement rule.  As noted previously,
the costs reflect the EPA Regions that are administering the
accreditation and certification programs.  

Table 2-10. Summary of Annual Abatement Rule Costs

Activity	Annual Cost	Percentage

Regional 

Regional Processing Costs	$57,074	5%

Regional Administrative Costs	$151,532	13%

Regional Enforcement Costs (Average)	$152,761	13%

Headquarters

Headquarters Administrative Costs	$839,706	69%

Headquarters Enforcement Costs	$9,508	1%

TOTAL

Total EPA Costs	$1,210,580	100%

Revenues from Certification Exam Fee	$(54,670)	---

TOTAL NET COST TO EPA 	$1,155,910	---

Proposed Fee

The current schedule of fees for the Abatement rule is based on the 1999
Economic Analysis of the Final TSCA Section 402(a)(3) Lead-Based Paint
Accreditation and Certification Fee Rule (see Table 2-11).  To structure
the fees, EPA considered two key questions:  

How should EPA assign costs that cannot be attributed to specific
applications across fee payers? EPA incurs both fixed and variable costs
to administer and enforce the Abatement rule.  The variable costs
include the Regional processing costs, which are more directly tied to
specific applicants.  On the other hand, the fixed costs include the
Regional and Headquarters administrative and enforcement costs, which
apply across all the applications.  In the 1999 analysis EPA estimated a
fixed cost per application by dividing the total Regional and
Headquarters administrative and enforcement costs by the total number of
applications processed. Under this approach the burden of the fixed
costs are more evenly distributed over all fee payers.   

How many different categories should be used for training providers and
individuals? EPA’s current fee structure assessed a different fee for
each discipline under the training providers and individuals (i.e.,
inspector, risk assessor, supervisor, worker and project designer). 
This was primarily based on an assumption that the processing cost would
differ for various disciplines.  For example, it was assumed that the
time to process a Risk Assessor application would take approximately
twice as much time as a project designer.  Furthermore, the 1999
analysis considered pubic comments on the impact of the initial fee
estimates to certain disciplines.  Specifically, in response to the
public comments, EPA reduced the worker fees by increasing the firm
certification fee.  

In developing a revised fee structure, EPA proposes simplifying the
number of application types by assessing the same fee for all Training
Providers and for all Individuals, regardless of the type of discipline.
 As described in Section 2.2.1, analysis of the Time-Motion Study data
and discussions with Regions indicated that there is not a significant
burden differential in processing applications from different
disciplines.  

EPA considered two alternative approaches to developing the revised fee
schedule.  Fee Option 1 is based on individual cost estimates for
Training Providers, Firms and Individuals.  Fee Option 2 is based on the
total change in costs and adjusts all the current fees in proportion to
change in the total.   Fee Option 2 also incorporates a lower fee for
workers as compared to the fee for other Individuals.

Fee Option 1

Currently, EPA generates $1,222,495 in average annual revenues under the
Abatement rule.  However, EPA estimates that the annual costs under the
Abatement rule totals $1,155,910 (see Table 2-10).  As discussed in
Section 2.2.1, the variable costs reflect the Regional processing costs
for each application type.  On the other hand, the fixed costs include
the Regional and Headquarters administrative and enforcement costs,
which apply across all the applications.  To estimate the fixed costs,
EPA divided the total Regional enforcement, administrative and
Headquarters costs by the total estimated number of applicants over the
five year projection period.  This results in a fixed cost of $396 per
application.  Accordingly, as presented in Table 2-11, EPA adds the
fixed cost to the variable costs to estimate the total cost by applicant
type.  

Table 2-11:  Option 1 Fee Structure

Program	Average Processing Cost per Applicant \1

[A]	Fixed Cost \2

[B]	Total Cost/Fee [C]=[A]+[B]

Training Program Accreditation

 Initial 	$330	$396	$727

 Refresher 	$148	$396	$545

 Training Program Reaccreditation 

 Initial 	$81	$396	$478

 Refresher 	$36	$396	$433

 Firm Certification 

 Initial 	$13	$396	$409

 Recertification 	$15	$396	$412

 Individual 

 Initial 	$16	$396	$412

 Recertification 	$17	$396	$414

\1  Average processing cost based on weighted average of processing
costs for Regions 2, 4, & 9.

\2  Fixed amount and ratio method based on total estimated processing,
administrative, and enforcement costs over three years.  See "Total
Cost" worksheet for additional detail.

Fee Option 2

The second option reduces the fee for the Individual worker
certification and recertification. As discussed above, EPA reduced the
worker fees in light of public comments received during the 1999
analysis.   Using the fees estimated under Option 1, Option 2 reduces
the fee for the workers by $100 and increases the fee for Training
Providers and Firms in order to generate revenues that meet the total
costs under the Abatement rule ($1,155,910).  Table 2-12 presents a
summary of the fee estimates under this option.  

Table 2-12:  Option 2 Fee Structure

Program	Estimated Fee

[A]	Revised Fee (Reduced Worker)

[B]	Difference [C]=[B]-[A]

	Training Program Accreditation

 Initial 	$727 	$870 	$143 

 Refresher 	$545 	$690 	$145 

 Training Program Reaccreditation 

 Initial 	$478 	$620 	$142 

 Refresher 	$433 	$580 	$147 

 Firm Certification 

 Initial 	$409 	$550 	$141 

 Recertification 	$412 	$550 	$138 

 Individual 

Individual Certification (Excluding workers)	$412 	$412 	$0 

Individual Certification - Workers Only	$412 	$312 	($100)

Individual Recertification (Excluding workers)	$414 	$414 	$0 

Individual Recertification - Workers Only	$414 	$314 	($100)

Fee Option 3

Under a third option in structuring the fees, EPA followed the following
key steps:  

Calculate a weighted average fee for Training Providers, Firms, and
Individuals based on the current fee schedule and annual average
applications (see Table 2-13).  In light of public comments received
during the 1999 analysis, estimate a separate fee for Individual worker
certifications and re-certifications.  Accordingly, the weighted average
for Individual certifications and re-certifications does not include the
worker fee.  

Adjust the weighted fee by the ratio of the total net annual Abatement
rule cost estimate ($1,155,910) to the total current annual revenues
($1,222,495) or 94.6 percent (see Table 2-14).  

This methodology keeps the relative proportion of fees to cover the
costs of the Abatement rule between the applicants consistent with the
current schedule of fees.   

Table 2-13.  Current Schedule of Fees and Revenue

Program	All Regions \1	Current Schedule of Fees	Current Revenue

	Training Program Accreditation	18	 	 

Inspector	3	$2,500	$8,125

Risk Assessor	3	$1,760	$5,720

Supervisor	4	$3,250	$13,813

Worker	7	$1,760	$11,880

Project Designer	0	$1,010	$ - 

Refresher Training Program Accreditation	18

Inspector	4	$1,010	$3,788

Risk Assessor	4	$1,010	$3,788

Supervisor	5	$1,010	$4,545

Worker	6	$1,010	$5,808

Project Designer	0	$640	$160

Training Program RE-accreditation	66

Inspector	12	$1,600	$19,200

Risk Assessor	12	$1,150	$13,513

Supervisor	17	$2,050	$34,850

Worker	20	$1,150	$23,000

Project Designer	6	$710	$3,905

Refresher Training Program RE-accreditation	59

Inspector	11	$710	$7,455

Risk Assessor	10	$710	$7,278

Supervisor	15	$710	$10,828

Worker	18	$710	$12,425

Project Designer	5	$490	$2,450

Firm Certification	454

Initial	276	$540	$149,040

Firm Certification Extension	178	$430	$76,433

Individual Certification	1532

Inspector	253	$400	$101,100

Risk Assessor	265	$520	$137,540

Supervisor	264	$470	$123,963

Worker	738	$280	$206,500

Project Designer	13	$470	$6,228

Individual Recertification	626

Inspector	47	$350	$16,450

Risk Assessor	281	$420	$118,020

Supervisor	147	$390	$57,428

Worker	144	$240	$34,440

Project Designer	7	$390	$2,828

TOTAL (not including Amendments) \2	2,772 

$1,222,495

\1 Based on average number of applications sent to lead Regions between
FY2003 and FY2006, excluding amendments.

\2 Figures may not sum due to rounding.

Table 2-14. Option 3 Fee Structure

Program	Current Fee Schedule \1	Revised Fee Estimate\2

Training Providers

Initial Accreditation	$2,259	$2,136

Initial Refresher Course	$1,005	$950

Reaccreditation	$1,426	$1,348

Reaccreditation Refresher Course	$691	$654

Firms

Firm Certification	$540	$511

Firm Recertification	$430	$407

Individuals

Initial Certification (Excluding workers)	$464	$439

Initial Certification - Workers Only	$280	$265

Recertification (Excluding workers)	$404	$382

Recertification - Workers Only	$240	$227

\1 Reflects weighted average based on current fees and annual number of
applications between FY2003 to FY2006.  

\2 Revised Fee estimated by multiplying ratio of the total annual
Abatement rule costs ($1,155,910) to the total current annual revenues
($1,222,495) or 94.6 percent.  

In addition, tribes will be charged a nominal fee of $20 for Training
Provider and Firm applicants, and $10 for Individual certifications.   

Limitations

This section summarizes some of the key limitations concerning the
analysis used to estimate the fee levels under the Abatement rule.  As
discussed above, EPA relied on several key data sources, including the
FLPP database, Time-Motion study, and other data/information from EPA
Regional and Headquarters personnel.  Below we highlight the key data
limitations and assumptions: 

Applicants may apply for multiple jurisdictions and regions.  However,
one “lead region”, where the application is initially processed, is
designated by Headquarters in the FLPP database.  The FLPP data used for
this analysis only counted the number of applications sent to a lead
region.  However, Regions also process applications where they are not
considered the lead region.  Not accounting for the non-lead
applications may underestimate the total processing time and costs for
the Regions.  

This analysis did not consider applications designated as
“Amendments” in estimating the total Regional processing costs. 
Accordingly, this may underestimate the total processing time and cost
for the Regions.  

When estimating the fixed costs associated with Headquarters
administrative and enforcement activities, this analysis only considered
those applications that were sent to the Regions (or 2,772
applications).  As noted previously, EPA Headquarters receives
additional applications which may be disapproved, returned, or
withdrawn.  However, unless withdraw the applicants are required to pay
a fee to EPA.  Accordingly, accounting for these applications may reduce
the fixed Headquarters costs slightly as these costs may be spread over
a larger universe of applicants.  

The Time-Motion study was completed by Regions 2, 4, and 9 over a
one-month period.  Overall 386 applications were processed, of which 342
were processed by Region 2.  It is important to note that the study may
not reflect a representative sample of applications annually processed
by all the Regions.  Furthermore, limited data were available on
training provider accreditations and re-accreditations during the study
period.  Finally, the Time-Motion study did not account for other
activities, such as administrative and enforcement activities.  

Given the small number of training provider accreditations and
re-accreditations completed during the study period, and the small
number of accreditations and re-accreditations processed nationally each
year, there is some uncertainty in the processing times used to estimate
the associated cost.

The analysis assumes the estimated per application time and cost to
process and administer applications in Regions 4 and 9 is consistent
with all other Regions (1, 5, 6, 7, 8, and 10).  Additional data from
these other Regions would be required to confirm this assumption.  

Enforcement costs for Regions 1, 3, 5, 6, 7, 8, and 10 are based on the
average enforcement costs for Region 4 and 9.  In making this
calculation, EPA assumes that regional enforcement costs would vary
depending upon the number of applications received in that Region. 
However, discussions with Regions suggested the enforcement costs may
actually decrease if a Region processes a larger number of applications,
given funding limitations.  

Given the limitations, EPA may consider conducting a sensitivity
analysis on some key assumptions prior to finalizing the fee estimates. 

 

LRRP Fees

This chapter describes the methodology EPA used to estimate the fees to
cover the costs of administering and enforcing lead-based paint
activities under the Lead Renovation, Repair and Painting (LRRP) rule.  

When the Abatement rule was first promulgated in 1999, it was based upon
estimates.  The current cost of associated with the Abatement rule and
the revised proposed fees are presented in Chapter 2.  This chapter
modifies the Abatement rule framework with information from EPA
Headquarters and the Regions using estimates of the LRRP universe from
the Economic Analysis for the TSCA Lead Renovation, Repair, and Painting
Program Final Rule for Target Housing and Child-Occupied Facilities
(Economic Analysis for the LRRP Final Rule).  The methodology, described
below, follows the following key steps: 

Identify the universe of facilities from the Economic Analysis for the
LRRP Final Rule;

Estimate the total LRRP program costs, including Regional and
Headquarters Costs;

Calculate the fee levels to meet the program costs.   

LRRP   SEQ CHAPTER \h \r 1 Universe

The Lead, Renovation, Repair, and Painting program applies to renovation
activities in target housing and child-occupied facilities (COFs). Under
the LRRP rule, firms that are subject to the regulations need to obtain
EPA certification, ensure that at least one employee receives renovator
training from an accredited training provider, and, if necessary,
provide additional training to other workers, and ensure that the work
practices required by the rule are used for all covered renovation
activities.  Additionally, training providers teaching the certification
courses will need to obtain EPA accreditation.

The term “target housing” is defined in TSCA Section 401 as any
housing constructed before 1978, except housing for the elderly or
persons with disabilities (unless any child under 6 resides or is
expected to reside in such housing) or any 0-bedroom dwelling. A
child-occupied facility (COF) is defined as ‘‘a building, or portion
of a building, constructed prior to 1978, visited regularly by the same
child, under the age of six, on at least 2 different days within any
week (Sunday through Saturday period), provided that 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 facilities (COFs) in target housing include family
daycare providers and the homes of family, friends, and neighbors who
regularly care for someone else’s children.  

The Economic Analysis for the LRRP Final Rule estimated the universe of
affected entities for the final rule (Option F), based upon the set of
criteria for listed in Table 3-1.  Table 3-1 describes the scope; the
application of the minor maintenance exception; certification and
training periods; the additional training required for previously
trained individuals; how exterior containment requirements are described
in the rule; whether any paint removal practices are prohibited for
renovations requiring lead-safe work practices under the rule; and
whether digital photographs are required as part of trainee
registration.

Table 3-1: Final Rule Criteria for Universe of Affected Entities

The Final Rule Option (Option F)

Scope	Minor Maintenance Exception	Certification & Training Periods
Previously Trained Individuals	Exterior Containment	Prohibited Practices
\1	Digital Trainee Photos

First Year	Second Year

All rental target housing and COFs, and owner-occupied target housing
where a child under the age of 6 or a pregnant woman resides.	<6 ft2 per
room for interiors, 

<20 ft2 for exteriors.	Firm certification  and renovator training
periods are 5 years each	Certification given to those with previous
training only if they complete a refresher course.	Cover the ground a
sufficient distance to collect falling paint debris, with a minimum of
10 feet required.  	Yes ‡	Yes

\1    Practices prohibited or restricted for renovations requiring
lead-safe work practices under the rule or qualifying for the minor
maintenance exception:  Open-flame burning or torching of LBP; using
machines that remove LBP through high speed operation such as sanding,
grinding, power planning, needle gun, abrasive blasting, or
sandblasting, unless such machines are used with HEPA exhaust control;
and operating a heat gun on LBP at 1100° F or higher.

Source: U.S. Environmental Protection Agency, Economic Analysis for the
TSCA Lead Renovation, Repair, and Painting Program Final Rule for Target
Housing and Child-Occupied Facilities, March 2008

EPA relied on the Economic Analysis of the LRRP Final Rule to estimate
the number of applicants.  As presented in Table 3-2, EPA estimates 168
initial training provider accreditations, 211,721 initial firm
certifications, 235,916 renovator certifications, and 3,170 sampling
technician certifications will be received in the first year the rule is
promulgated.  

Sampling technicians conduct dust sample testing.  EPA assumes that the
stock of sampling technicians seeking registration will largely come
from technicians working in federally-assisted housing.  This analysis
used HUD data for the number of federally-assisted housing units
affected by HUD’s Final Rule on Lead-Based Paint to estimate the
number of sampling technicians in the first year of the rule. 

Table 3-2. Estimated Number of Training Providers Seeking Accreditation,
Firms Seeking Certification, Renovators Seeking Training, and Sampling
Technicians Seeking Training

Final Rule – Year 1

Total Number of Training Providers Seeking Accreditation	168

Total Number of Firms (Establishments with Employees and without)
Seeking Certification	211,721

Total Number of Renovators Seeking Training	235,916

Total Number of Sampling Technicians Seeking Certification	3,170

Source: U.S. Environmental Protection Agency, Economic Analysis for the
TSCA Lead Renovation, Repair, and Painting Program Final Rule for Target
Housing and Child-Occupied Facilities, March 2008

EPA assumes the number of new accreditations and certifications will
meet the demand for LRRP activities in the first year.  Thus, the number
of training providers, firms, renovators, and sampling technicians in
year 1 are the total number of entities accredited or certified to
conduct LRRP activities (the “stock”).  However, the Economic
Analysis of the LRRP Final Rule estimates a slight decrease in demand
for these activities by approximately 0.4 percent per year.  

The LRRP rule requires reaccreditation and recertification every five
years.  In estimating the average annual cost, EPA examined the first
five years of the program and estimated the number of firms, training
providers, renovators, and sampling technicians over a five year period.
 Accordingly, the analysis assumes that between years 1 and 5 there will
only be new accreditations and certifications.  

To meet the estimated demand between years 2 and 5, EPA assumes that new
accreditations and certifications will be required to replace firms and
training providers that “drop-out” of the LRRP program.  This
“drop-out” rate is assumed to be consistent with the “drop-out”
rate under the Abatement rule.  Using the Federal Lead Paint Program
(FLPP) data from FY 2003 through FY 2006, EPA estimated the
“drop-out” rate by calculating the ratio of new accreditations to
the total number of accreditations and reaccreditations (for training
providers), or the ratio of new certifications to the total number of
certifications and re-certifications (for firms and individuals).

Table 3-3 presents EPA’s estimate of the number of applicants under
the LRRP rule over the five-year projection period.  



Table 3-3. Estimated Number of Firms Seeking Certification, Renovators
Seeking Training, and Training Providers Seeking Accreditation for the
First Five Years

Summary of LRRP Rule	Year 1 \1	Year 2	Year 3	Year 4	Year 5

Training Providers 

New Accreditations	168	16	15	15	15

Re-Accreditations	0	0	0	0	0

Total Accreditations/Reaccreditations	168	16	15	15	15

Stock of Training Providers	168	167	167	166	165

Firms 

New Certifications	211,721	72,259	71,962	71,667	71,373

Re-Certifications	0	0	0	0	0

Total Certifications/Recertifications	211,721	72,259	71,962	71,667
71,373

Stock of Firms	211,721	210,853	209,988	209,127	208,270

Number of Renovators \2

Initial Certification	235,916	94,829 	94,440 	94,053 	93,667 

Recertification	0	0	0	0	0

Total Initial/Refresher Training for Renovators	235,916	94,829	94,440
94,053	93,667

Stock of Renovators	235,916	234,949	233,985	233,026	232,071

Number of Sampling Technicians \1, \2 

Initial Training	3,170	1,274	1,269	1,264	1,259

Refresher Training	0	0	0	0	0

Total Initial/Refresher Training	3,170	1,274	1,269	1,264	1,259

Stock of Sampling Technicians	3,170	3,157	3,144	3,131	3,118

/1 Number of estimated applications in Year 1 based on the final rule
Option F in LRRP Economic Analysis, dated March 28, 2008. The estimate
of Sampling Technicians is based on HUD data.  

/2 Individual certification from EPA not required for renovators or
sampling technicians.  These applicants are required to notify EPA of
receiving appropriate certificate from training provider. 

Program Costs

This section describes the methodology used to estimate the costs for
administering and enforcing the LRRP rule for training providers and
firms, as well as clerical processing costs for each renovator in States
without authorized programs.   

EPA Regions have a great deal of responsibility for implementing the
LRRP program. They conduct a range of administrative activities, which
will vary for different types of accreditation and certification. The
major types of EPA Regional activities are 1) processing of
applications, 2) administrative activities, and 3) enforcement
activities, which are described in detail below.

Regional Processing Cost

Overall, the time to process applications reflects the time a Region
requires to review and either approve or disapprove an application. 
Specific activities may include, for example: 

Examining applications for completeness and verifying compliance with
all applicable requirements for accreditation or certification (e.g.,
course materials and curriculum or firm experience and educational
background).

Tracking accredited training programs and certified firms and other
related support activities.

An on-site review of the training programs being considered for
accreditation.

Clerical activities such as receiving, opening, logging, filing,
storing, and updating applications and other correspondence.

To estimate the Regional processing time and cost for the LRRP rule, EPA
assumes the activities and processing time for firm and training
provider applications are equivalent to the Abatement rule.  Consistent
with the approach for estimating the processing time for the Abatement
rule (see Section 2.2), EPA estimated the average hours spent processing
individual, firm and training provider applications based on the
Time-Motion Study data.

Based on the study results, EPA calculated the average processing time
for firm and training provider applications by Region.  As presented in
Table 3-4, EPA used the same average processing time for firms and
training providers as reported in the Time-Motion Study under the
Abatement rule.  Region 4 did not process firm and training provider
applications during the Time-Motion Study period, so for the LRRP rule
estimates, EPA used the average processing time reported by Regions 2
and 9. 

Under the LRRP rule, EPA does not certify or review renovator or
sampling technician applications.  The certification that they receive
from training providers after completing their training course will
serve as their certification.  EPA will receive notification from the
training provider for each certification including a digital photo,
which Headquarters will upload to the FLPP database.  Therefore, EPA
assumed the processing costs for renovators and sampling technicians
were negligible.   

Using the average processing time reported from Regions 2 and 9, EPA
calculated a weighted average for each type of application to be used as
the national average.  Given that the average processing times were
derived from the Time-Motion Study, EPA used the number of applications
processed in the study to calculate the weighted average.  However, a
weighted average using the Time-Motion Study data was not possible for
training providers because Region 2 did not process an accreditation
during the study time period and Region 9 did not process a
re-accreditation during the study time period. To calculate the weighted
average for training provider applications, EPA used FLPP data for the
average annual number of accreditations and re-accreditations in Regions
2 and 9. 

Table 3-4.  Summary of Average Processing Time (Level of Effort) for
Regions 2 and 9, including a Weighted Average for a National Estimate.

Average Processing Time (Hours/Application)

Application Type	Certification/ 

Re-certification	Region 2	Region 9	Weighted Average by Time-Motion Study
data

(Regions 2, 9)	Weighted Average by

FLPP data

(Regions 2, 9)

Firm	Initial	0.4	1.5	0.5	--

Firm	Recertification	0.4	1.3	0.6	--

Training Provider	Accreditation	8.5	26.1	26.1	14.8

Training Provider	Re-Accreditation	1.5	4.5	1.5	2.9

Based on EPA wage rate information for 2007 (see Appendix C), EPA
estimated the average processing cost per application for each Region. 
As presented in Table 3-5, the cost per application was significantly
lower in Region 2, correlating to the significant decrease in processing
time.  The weighted average for firms was significantly closer to the
Region 2 estimate due to the high volume of applications processed in
Region 2 as compared to Region 9.

Table 3-5.  Summary of Average Processing Cost (Level of Effort) for
Regions 2 and 9, including a Weighted Average for a National Estimate.

Average Processing Cost (Hours/Application)

Application Type	Certification/ 

Re-certification	Region 2	Region 9	Weighted Average by Time-Motion Study
data

(Regions 2, 9)	Weighted Average by

FLPP data

(Regions 2, 9)

Firm	Initial	$9	$27	$11	--

Firm	Recertification	$9	$25	$12	--

Training Provider	Accreditation	$159	$492	$492	$277

Training Provider	Re-Accreditation	$29	$94	$29	$59

Table 3-6 presents the estimates for the annual Regional processing cost
for the first five years of the LRRP rule.  To estimate the annual
processing cost, EPA multiplied the weighted average unit cost per
application by the estimated number of applications from the LRRP
universe (see Section 3.1).

The difference in relative burden between the initial and refresher
courses (42 percent) is based on the 1999 Abatement fees analysis.  

Table 3-6.  Summary of Annual Average Regional Processing Cost

Program	Estimate of Regional Processing Cost	Estimated Number of
Applications Processed\1	Annual Processing Cost \2

	Average cost 	Relative Burden to distinguish Level of Effort (%)
Average cost per applicant ($)	Year 

1	Year 2	Year 3	Year 4	Year 

5	Year 1	Year 2	Year 3	Year 4	Year 5

Training Program Accreditation 

Initial 	$277	100%	$277	168	16	15	15	15	$46,517	$4,292	$4,275	$4,257
$4,240

Refresher 

42%	$116	168	16	15	15	15	$19,537	$1,803	$1,795	$1,788	$1,781

Training Program RE-accreditation

Initial	$59	100%	$59	0	0	0	0	0	$ -	$ -	$ -	$ -	$ -

Refresher

42%	$25	0	0	0	0	0	$ -	$ -	$ -	$ -	$ -

Firm Certification

Initial Certification	$11	N/A	$11	211,721	72,259	71,962	71,667	71,373
$2,283,024	$779,177	$775,982	$772,801	$769,632

Re-Certification/ Extension	$12	N/A	$12	0	0	0	0	0	$ -	$ -	$ -	$ -	$ -

TOTAL (Training Programs and Firms Only)	212,057	72,290	71,993	71,698
71,404	$2,349,078	$785,272	$782,052	$778,846	$775,653

\1 Based on average number of applications sent to lead Regions between
FY2003 and FY2006, excluding amendments. 

\2 Figures may not sum due to rounding.

Regional Administrative and Enforcement Cost

In addition to processing costs, Regions incur costs for other
administrative activities and enforcement.  Administrative activities
include, for example, answering phone inquires from the public regarding
the LRRP program, following up on the status of applications, providing
information to other Regions, coordinating with Headquarters, and
performing other customer service activities. Enforcement activities
include, for example, conducting audits of training providers and firms.
 

Administrative Costs

Because certain Regional administrative activities are associated with
applications, EPA assumed the administrative level of effort is related
to the total number of applications processed.  To calculate the
administrative level of effort for the LRRP rule, EPA assumed the
average administrative cost per application is consistent with the
Abatement rule.  As presented in Table 3-7, EPA calculated the average
administrative cost per application for the Abatement rule by dividing
the administrative cost estimate of $151,532 by the number of
applications processed in FY 2006 (2,772 applications).  EPA used FY
2006 because the administrative FTE estimates from Regions 2, 4, and 9
were based upon that year.  

Table 3-7.  Average Regional Administrative Processing Cost from
Abatement Rule

Administrative Cost FY 2006 \1	$151,532

Number of Applications FY 2006 \2	2,772

Average Administrative Cost per Application	$55

\1 Based on allocation of resources to administrative activities in
FY2006, as included in the 2008 Abatement Rule Lead Fees Analysis.
Estimated cost based on hours per applications multiplied by
administrative wage per hour.  

Then, EPA multiplied the average administrative cost per application by
the number of training provider and firm applications anticipated for
the first five years after the LRRP rule is promulgated.  Table 3-8
presents the average annual administrative cost for the first five years
as well as the number of training providers and firms from the LRRP
universe estimates used to calculate the annual administrative costs.

Table 3-8.  Average Administrative Cost for the First Five Years of the
LRRP Rule.

Program 	Year 1	Year 2	Year 3	Year 4	Year 5

 Number of Training Providers 	168	16	15	15	15

 Number of Firms 	211,721	72,259	71,962	71,667	71,373

 

Average Annual Administrative Cost	$11,584,004 	$3,951,236 	$3,935,036 
$3,918,902 	$3,902,835 

Enforcement Costs

To estimate the average annual Regional enforcement cost, EPA assumed
the FTE and cost for the LRRP rule is consistent with the Abatement
rule.  When interviewed for this study, Regions indicated that
enforcement costs under the Abatement rule, are largely dependent on
available funding, not on the number of applications received.  Table
3-9 presents the average annual Regional enforcement cost.

Table 3-9.  Average Regional Enforcement Cost for the First Five Years
of the LRRP Rule.

EPA Labor Type	FTE	Cost

EPA Technical, GS-12, Step 2	13.7	$1,302,609

Headquarters Administrative and Enforcement Cost

EPA Headquarters activities under the LRRP rule include startup,
administrative, and enforcement activities, described in detail below.  

Startup Costs

The startup activities will be related to modifying the FLPP database
for the LRRP applications, prepare new applications and instruction
forms, and prepare evaluation forms.  As presented in Table 3-10, EPA
estimates that the one-time costs associated with these activities will
total $59,562, or $14,226 annualized over five years.  

Table 3-10.  Summary of Startup Costs

One-Time Costs	Annual Cost ($)

Modifications to Database to add LRRP applicants \1	$37,500

Preparation of LRRP applications and instructions \2	 $11,031 

Preparation of LRRP evaluation forms \2	 $11,031 

TOTAL  	 $59,562 

Total One-time Costs: Annualized:  5 years, 7% 	$14,526

\1  Based on information provided by EPA to modify Abatement fees
database for LRRP rule.

\2  Inflated 1999 estimated costs based on 1999 Abatement Fees analysis
to 2008 dollars using interest rate of 7 percent.  [Awaiting additional
information from EPA to determine appropriate factor by which to scale
the costs to account for higher universe.]  

Administrative Costs 

Similar to the Abatement rule, the administrative activities associated
with the LRRP rule will primarily include: 

Coordination with the Regions. Involves preparing or reviewing reports
related to the LRRP rule, addressing inquiries, coordinating efforts, or
assuring proper implementation of the LRRP rule. 

Maintenance of the central database and registry. Requires EPA
headquarters staff to work with the contractors to enter information
about the application (e.g., date, type, lead Region, etc.) from the
LRRP applicants into the Federal Lead Paint Program (FLPP) Database.  

Consistent with administrative costs for the Abatement rule, EPA
estimates that support for these activities will require at least one
full time Technical EPA employee, totaling approximately $76,777
annually (see Table 3-11).  

Table 3-11.  Summary of EPA Headquarters Support Cost

EPA Labor Type	Rate per FTE 

($/FTE)	FTE	Total Annual Cost ($)

Technical (GS 11)	$76,777	1.00	$76,777

In addition to the Headquarters personnel, EPA will require contractor
support to manage and maintain the FLPP database.  To estimate the
contract support costs for training providers and firms, EPA calculated
the contractor support cost per application under the Abatement rule, or
$210 per application.  EPA estimated this cost by dividing the average
annual contractor support costs between FY2002 to FY2006 ($582,929) by
the total number of Abatement applications (2,772).  As noted
previously, EPA Headquarters receives additional applications which may
be disapproved, returned, or withdrawn.  However, all of the  LRRP
applicants estimated as part of the LRRP universe would need to be
approved to meet the estimated demand.   Therefore, the analysis assumes
that the proportion of total applicants received by Headquarters to
those processed by EPA Regions is consistent with the Abatement rule.  

In addition, EPA assumed the contractor costs for the FLPP database for
renovator and sampling technician notifications would be $5 per
application.  EPA multiplies the applicable unit application cost by the
total number of estimated LRRP applications for each application type to
estimate the total contractor costs.  Next, the cost to maintain the
database annually ($180,000) is added to obtain the total annual
contractor support costs.  Table 3-12 presents a summary of the
contractor support costs that EPA will incur over the five year
projection period.  

It is important to note that the total estimated contractor support
costs for the training providers and firms are significantly higher than
the Abatement rule because of the assumptions used to estimate these
costs.  Using a per application cost based on the Abatement rule may
overestimate the costs as it assumes all of the contractor support costs
(except for the maintenance costs) are variable.  Accordingly, given the
high volume of firm and training provider applicants under the LRRP rule
(211,889 applications in the first year) as compared to the Abatement
rule (2,772 annually) the contractor support costs are more significant.
 



Table 3-12.  Contractor Support Costs

	Year 1	Year 2	Year 3	Year 4	Year 5

 Number of Training Providers 	168	16	15	15	15

 Number of Firms 	211,721	72,259	71,962	71,667	71,373

 Number of Renovators 	235,916	94,829	94,440	94,053	93,667

 Number of Sampling Technicians 	3,170	1,274	1,269	1,264	1,259

 Total 	450,975	168,377	167,687	166,999	166,314

 

Per Application Cost 

(Training Providers and Firms)	$210	$210	$210	$210	$210

Per Application Cost 

(Renovators and Sampling Technicians)	$5	$5	$5	$5	$5

Contract Costs	$45,753,956	$15,679,166	$15,614,882	$15,550,861
$15,487,102

Maintenance of FLPP Database	$180,000	$180,000	$180,000	$180,000
$180,000

 

Total Contractor Support	$45,933,956 	$15,859,166 	$15,794,882
$15,730,861 	$15,667,102 

 Contractor Support

 (Training Providers and Firms)	$44,643,098	$15,275,915	$15,213,600 
$15,151,541	$15,089,737 

Contractor Support 

(Renovators)	$1,273,742	$575,518	$573,574	$571,638	$569,710

Contractor Support 

(Sampling Technicians)	$17,115	$7,733	$7,707	$7,681	$7,655

As noted previously, under the LRRP rule, because applications for
Renovators and Sampling Technicians will be processed via Training
Providers, EPA Headquarters will only incur database and maintenance
support costs for these applicants.  EPA estimates that the renovator
and sampling technician portion of these costs would total approximately
$1,273,742 and $17,115, respectively (see Table 3-12).

Enforcement Costs

Based on information in the LRRP Economic Analysis, the Office of
Enforcement and Compliance Assurance (OECA) estimates two Technical
level employees will be required to support enforcement activities
annually.  Table 3-13 presents the annual cost for headquarters
enforcement.

Table 3-13.  Enforcement Cost

Annual Cost Activities	Labor type	Rate per FTE 

($/FTE)	FTE	Annual Cost ($)

Enforcement (Administrative) \1	Technical (GS 12)	$95,081	2.00	$190,162

\1 Assume annual Regional Enforcement Cost based upon the LRRP Rule
Economic Impact Analysis (EIA).

Table 3-14 provides a summary of the EPA Headquarters costs for Training
Providers and Firms and Renovators over the five-year projection period.
  

Table 3-14.  Summary of EPA Headquarters Costs

	Year 1	Year 2	Year 3	Year 4	Year 5

Training Providers and Firms

One-time costs	$14,526	$14,526	$14,526	$14,526	$14,526

Headquarter support	$76,777	$76,777	$76,777	$76,777	$76,777

Contractor support 	$44,643,098	$15,275,915	$15,213,600 	$15,151,541
$15,089,737 

Total Administrative	$44,734,401 	$15,367,218 	$15,304,903 	$15,242,844 
$15,181,040 

Enforcement	$190,162 	$190,162 	$190,162 	$190,162 	$190,162 

TOTAL	$44,924,563 	$15,557,380 	$15,495,065 	$15,433,006 	$15,371,202 

Renovators

TOTAL	$1,273,742	$575,518	$573,574	$571,638	$569,710

Sampling Technicians

TOTAL	$17,115	$7,733	$7,707	$7,681	$7,655

Summary of Total Annual Cost

Based on the estimated Regional and Headquarters costs, Table 3-15
presents a summary of the total annual costs to administer and enforce
the LRRP rule for Training Providers and Firms.  In addition, Tables
3-16 and 3-17 summarize the costs for Renovators and Sampling
Technicians. 

Table 3-15.  Summary of Total LRRP Costs for Training Providers and
Firms

Cost	Year 1	Year 2	Year 3	Year 4	Year 5	TOTAL

Estimated Number of Applications	212,057	72,290	71,993	71,698	71,404
499,442

Total Regional Processing Costs	 $       2,349,078 	 $           785,272
	 $           782,052 	 $           778,846 	 $           775,653 	 $   
    5,470,900 

Regional Administrative Costs	 $     11,584,004 	 $       3,951,236 	 $ 
     3,935,036 	 $       3,918,902 	 $       3,902,835 	 $     
27,292,013 

Regional Enforcement Costs	 $       1,302,609 	 $       1,302,609 	 $   
   1,302,609 	 $       1,302,609 	 $       1,302,609 	 $       
6,513,046 

Headquarters Administrative Costs 	 $     44,751,517 	 $     15,374,952 
 $     15,312,611 	 $     15,250,526 	 $     15,188,695 	 $   
105,878,301 

Headquarters Enforcement Costs	 $           190,162 	 $          
190,162 	 $           190,162 	 $           190,162 	 $          
190,162 	 $            950,810 

Total Regional Enforcement, Administrative and HQ Costs	 $    
57,828,292 	 $     20,818,958 	 $     20,740,418 	 $     20,662,199 	 $ 
   20,584,301 	 $    140,634,169 

TOTAL COST TO EPA	 $     60,177,370 	 $     21,604,230 	 $    
21,522,470 	 $     21,441,045 	 $     21,359,954 	 $    146,105,069 

Table 3-16.  Summary of Total LRRP Costs for Renovators

Cost	Year 1	Year 2	Year 3	Year 4	Year 5	TOTAL

Estimated Number of Applications	235,916	94,829	94,440	94,053	93,667
612,904

Total Regional Processing Costs	--	--	--	--	--	--

Regional Administrative and Enforcement Costs	--	--	--	--	--	--

Headquarters Administrative Costs	$1,273,742	$575,518	$573,574	$571,638
$569,710	$3,564,183

Headquarters Enforcement Costs	--	--	--	--	--	--

Total Regional Enforcement, Administrative and HQ Costs	$1,273,742
$575,518	$573,574	$571,638	$569,710	$3,564,183

TOTAL COST TO EPA	$1,273,742	$575,518	$573,574	$571,638	$569,710
$3,564,183

Table 3-17.  Summary of Total LRRP Costs for Sampling Technicians

Cost	Year 1	Year 2	Year 3	Year 4	Year 5	TOTAL

Estimated Number of Applications	3,170	1,274	1,269	1,264	1,259	8,236

Total Regional Processing Costs	--	--	--	--	--	--

Regional Administrative and Enforcement Costs	--	--	--	--	--	--

Headquarters Administrative Costs	$17,115	$7,733	$7,707	$7,681	$7,655
$47,892

Headquarters Enforcement Costs	--	--	--	--	--	--

Total Regional Enforcement, Administrative and HQ Costs	$17,115	$7,733
$7,707	$7,681	$7,655	$47,892

TOTAL COST TO EPA	$17,115	$7,733	$7,707	$7,681	$7,655	$47,892



Proposed Fee Options

To estimate fees for the LRRP rule, EPA followed the approach used to
estimate fees under Option 1 of the Abatement rule (see Section 2.3). 
To structure the fees, first, EPA considered the variable and fixed
costs associated with each applicant type.  As presented in Tables 3-15,
3-16 and 3-17, EPA estimates it will incur approximately $146.1 million
in costs for Training Providers and Firms during the first five years
the LRRP rule is implemented.  Furthermore, EPA will incur approximately
$3.56 million for Renovators and $47,892 for Sampling Technicians in the
same time period.  

As discussed in Section 3.2.1, the variable costs reflect the Regional
processing costs for each application type.  On the other hand, the
fixed costs include the Regional and Headquarters administrative and
enforcement costs, which apply across all the applications.  To estimate
the fixed costs, EPA divided the total Regional enforcement,
administrative and Headquarters costs by the total estimated number of
applicants over the five year projection period.  This results in a
fixed cost of $282 for Training Providers and Firms and a fixed cost of
$211 for Renovators.  Accordingly, as presented in Table 3-18, EPA adds
the fixed cost to the variable costs to estimate the total cost by
applicant type.  

Table 3-18.  Summary of Fee Estimates

Application	Average Processing Cost per Applicant ($) \1 

[A]	Fixed Cost\2

[B]	Total Cost/Fee 

[C]=[A]+[B] \3

Training Program Accreditation

Initial	$277	$282	$558

Refresher	$116	$282	$398

Training Program Reaccreditation

Initial	$59	$282	$340

Refresher	$25	$282	$306

Firm Certification

Initial	$11	$282	$292

Recertification	$12	$282	$293

Renovator Certification

Initial	$0	$6	$6

Recertification	$0	$6	$6

Sampling Technician Certification

Initial	$0	$6	$6

Recertification	$0	$6	$6

\1  Average processing cost based on weighted average of processing
costs from the 2007 Time-Motion Study.  

\2  Fixed amount and ratio method based on total estimated processing,
administrative, and enforcement costs over three years.  

\3  Individual certification from EPA is not required for renovators or
sampling technicians. 

Next, EPA determined the best approach to capturing the Renovator and
Sampling Technician costs.  As noted previously, Renovators and Sampling
Technicians are required to work for a Firm.  Furthermore, Training
Providers will notify EPA of Renovators and Sampling Technicians
receiving appropriate certification.  Accordingly, as presented in Table
3-19 below, EPA estimates the ratio of Renovators to Training Providers
and the ratio of Renovators to Firms to determine the additional fee
that should be added to Firms or Training Providers to capture the
Renovator Costs.  

Table 3-19.  Alternative Approaches to Capturing Renovator Costs

Application	Number per Training Provider or Firm  [A]	Fee

[B]	Additional Fee 

[C]=[A]*[B]

Link to Training Provider (Initial and Reaccreditation)

Renovator	5,175	$6	$30,092

Sampling Technician	18.9	$6	$110

Total Additional Fee for Training Providers: 	$30,202

Link to Firm (Initial and Recertification)

Renovator	1.3	$6	$7.40

Sampling Technician	0.015	$6	$0.09

Total Additional Fee for Firms:	$7.50

Given that every certified firm must have a least one certified
Renovator, and the close proportion of Renovators to Firms (a ratio of
1.3, or approximately 13 Renovators for every 10 Firms), it is more
reasonable to link these costs to the Firms than to training providers
to estimate the total fee.  In addition. only a relatively few Sampling
Technicians are expected to seek certification,  (approximately 15
Sampling Technicians for every 1,000 Firms), and thus their cost would
add little to the overall firm costs (see Table 3-20). 

Table 3-20.  Total Fee for Training Providers and Firms 

Application	Fee 

[A]	Additional Fee (Renovators/Sampling Technicians)

[B]	TOTAL FEE

[C]=[A]+[B]

Training Program Accreditation

Initial	$558	$0	$558

Refresher	$398	$0	$398

Training Program Reaccreditation

Initial	$340	$0	$340

Refresher	$306	$0	$306

Firm Certification

Initial	$292	$7.50	$300

Recertification	$293	$7.50	$301

EPA also estimates that tribes will be charged a nominal fee of $20 for
Training Provider and Firm applicants, and $10 for Individual
certifications.   

Limitations

This section summarizes some of the key limitations concerning the
analysis used to estimate the fee levels under the LRRP rule.  As
discussed above, EPA relied on several key data sources, including the
Time-Motion study and other data/information from EPA Regional and
Headquarters personnel.  Below we highlight the key data limitations and
assumptions: 

EPA will incur costs for administering and enforcing the LRRP rule only
in States and Tribal areas, that do not seek or are not granted
authorization to operate their own programs.  Currently, the LRRP
universe estimates do not account for the subset of firms, renovators
and training providers that will be certified or accredited by a
state-authorized program.  The proportion of “fixed” costs covered
by each application would increase if the number of applications is
smaller than estimated in the analysis.  

Although the Time-Motion study (discussed in Section 2.2.1) was
completed to track the processing time of applications under the
Abatement rule, EPA’s estimates of the Regional processing time for
the LRRP rule was based on this study.  Furthermore, the LRRP analysis
relies upon data from Regions 2, 4, and 9 on the Regional costs to
administer Abatement rule on a per application basis.  This assumes that
the time to process and administer Training Provider, Firm and
Individual applications under the Abatement rule will be consistent with
the LRRP rule.   

The estimated contractor support costs are significantly higher than the
Abatement rule because of the assumptions used to estimate these costs. 
Using a per application cost based on the Abatement rule ($210 per
application) may overestimate the costs as it assumes all of the
contractor support costs (except for the maintenance costs) are
variable.  

Given the limitations, EPA may consider conducting a sensitivity
analysis on some key assumptions prior to finalizing the fee estimates. 
Small Entity Impact Analysis

  SEQ CHAPTER \h \r 1 This chapter presents the impact of the
accreditation and certification fees for lead-based paint activities
under the Abatement rule and the Lead, Renovation, Repair and Painting
(LRRP) rule on the financial condition of small entities.    SEQ CHAPTER
\h \r 1 The Regulatory Flexibility Act (RFA) of 1980, amended 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 governments.
 In some instances, agencies are also required to examine regulatory
alternatives that may reduce adverse economic effects on significantly
impacted small entities.  The RFA 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 number” of small entities.  Sections 603 and 604 of the
RFA require that regulatory flexibility analyses identify the types, and
estimate the numbers, of small entities to which the rule will apply;
and describe the rule requirements to which small entities will be
subject and any regulatory alternatives, including exemptions and
deferral, which would lessen the rule’s burden on small entities.

 

This rule establishes the updated accreditation and certification fees
for lead-based paint activities under the Abatement rule and renovation
activities under the LRRP rule.  For the Abatement rule, which was
promulgated on June 9, 1999, the 2008 fee rule reduces the fees, which
implies that there will be no adverse impact on small entities and in
fact, the small entities will incur cost savings. For the LRRP rule,
which does not become fully effective until April 2010, this rule
establishes fees; therefore, the impact on the small entities will be
the full amount of the fees. To fulfill the requirement of RFA, this
analysis addresses two basic questions for the LRRP rule: (1) the number
and type of small entities potentially affected and (2) the extent of
the rule’s potential economic impact on those entities as measured by
the fee-revenue ratio.

The next section discusses the small entity impact under the Abatement
rule followed by the section that presents the impact for the LRRP rule.

Abatement Rule

The 1999 lead-based paint activities  accreditation and certification
fee rule established lead fees for entities involved in lead-based paint
activities that include: 1) for-profit training providers seeking
accreditation, and 2) firms (and other organizations) performing
abatement or risk assessment and inspection services seeking
certification. The 2008 fee rule updates the fees established on June 9,
1999.  The impact on the small entities will be the change in the
accreditation and certification fees.  EPA is reducing the fees for all
training providers and individual initial certification fees excluding
workers and inspectors (  REF _Ref198024935 \h  \* MERGEFORMAT  Table
4-1 ). Consequently, EPA estimates that there will be no adverse impact
of the rule on training providers; in fact they will incur cost savings.
  

EPA also estimates that there will not be a significant impact from the
increase in fees for firms and individuals. In the 1999 small entity
impact analysis, EPA included the individual certification fee in
assessing the impact of the rule on small firms.  EPA had estimated that
the cost-revenue ratio for the full amount of the certification fee,
which is less than the re-certification fee, is not more than 0.87
percent for all firms across all revenue categories.  Firms incur a 2
percent to 28 percent cost increase in the direct fee, and indirectly
via fee increases for individuals (2 to 29 percent).  With an overall
cost-revenue ratio of well under 1 percent for the current fees, the
impact of the increase in fees will have a very small affect on small
entities.  Likewise the resulting new fees will have a small impact on
entities, especially when inflation is taken into account..  

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  1 :  Revised Fee
Schedule 

Program	Current Fee Schedule \1	Proposed Fee	Percentage Change

Training Providers

Initial Accreditation	$2,259	$870	-61%

Initial Refresher Course	$1,005	$690	-31%

Reaccreditation	$1,426	$620	-57%

Reaccreditation Refresher Course	$691	$580	-16%

Firms

Firm Certification	$540	$550	2%

Firm Recertification	$430	$550	28%

Individuals

Initial Certification (Excluding workers)	$464	$410	-12%

Initial Certification - Workers Only	$280	$310	11%

Recertification (Excluding workers)	$404	$410	2%

Recertification - Workers Only	$240	$310	29%

\1 Reflects weighted average based on current fees and annual number of
applications between FY2003 to FY2006.  The tribes are only charged a
special nominal fee of $20 per firm and $10 per individual
certification.

LRRP Rule

The LRRP rule requires that all entities that perform renovation
activities for compensation in target housing or public and commercial
buildings with Child Occupied Facilities (COFs) be certified by EPA. The
rule requires that all training providers be accredited by EPA.  The
2008 fee rule establishes the accreditation and certification fees that
will be applicable when training providers seek accreditation and
reaccreditation and firms seek certification and recertification.  The
rule effects training providers, small entities that provide childcare
for compensation, including private sector firms (e.g. daycare centers
and family daycare), small governments (particularly school districts)
and non-profit organizations; small construction-related contracting
firms that provide RRP services to residences or public and commercial
buildings containing COFs; and property managers and lessors who lease
residential space or space to COFs and use their own staff to conduct
RRP work in their buildings.  This analysis looks at the impact of this
fee on these small entities. 

Definition of a Small Facility	

The Regulatory Flexibility Act (RFA) defines a small government 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 independently owned
and operated and is not dominant in its field.    SEQ CHAPTER \h \r 1
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, with the revenue standards varying 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 enterprise may have, and still qualify as a small business.

As described in the economic analysis of the LRRP rule, the following
twelve NAICS codes are the general and specialty contractors this rule
will likely impact, and their respective SBA threshold.  These are
followed with two NAICS codes for residential real estate industries,
two NAICS codes for nonresidential real estate industries, and one NAICS
code for child day care services that are also likely to be affected by
the rule.  The last entry on the table is the NAICS code for training
providers.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  2 . SBA Revenue
Thresholds for Small Business by NAICS Code

NAICS	Industry Description	SBA Revenue Threshold (Millions $)

Small LRRP Firms

General and Specialty Contractor Industries

236118	Residential remodelers	$28.5

236220	Commercial Building Construction	$31

238170	Siding contractors	$12

238350	Finish carpentry contractors	$12

238290	Other building equipment contractors	$12

238390	Other building finishing contractors	$12

238340	Tile and terrazzo contractors	$12

238220	Plumbing and HVAC contractors	$12

238150	Glass and glazing contractors	$12

238320	Painting and wall covering contractors	$12

238210	Electrical contractors	$12

238310	Drywall and insulation contractors	$12

Property Owners and Managers

531120	Lessors of nonresidential buildings (except mini warehouses)	$6.5

531312	Nonresidential property managers	$2.0

531311	Residential Property Managers	$1.5

531110	Lessors of Residential Buildings and Dwellings	$6.0

Providers of Day Care Services, Pre-Kindergarten and Kindergarten

624410	Child day care services	$6.5

Training Providers

611519	Other Technical and Trade Schools	$6.5

Source: U.S. Small Business Administration 2004; U.S. Small Business
Administration 2006.

The RFA classifies small entities as small businesses, small non-profit
organizations, or small governments.  For purposes of this analysis,
training providers, property managers and lessors, and
construction-related contractors, are all assumed to be for profit
operations.  All daycare providers operating 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-kindergartens refer to facilities
in either public schools (governmental) or in private schools (assumed
to be non-profits).  These classifications are summarized in   REF
_Ref197930862 \h  \* MERGEFORMAT  Table 4-3 .

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  3 . Small Entity
Classifications

Type of Entity	Business	Non-Profit	Governmental

Day Care Centers	X	X	--

Kindergartens and Pre-Kindergartens in Public Schools	--	--	X

Kindergartens and Pre-Kindergartens in Private Schools	-- 	X	--

Property Managers and Lessors	X	--	--

Construction-Related Contractors	X	--	--

Training Providers	X	--	--

General Approach and Assumptions

  SEQ CHAPTER \h \r 1 This analysis measures the potential impacts of
the accreditation and certification fees on small entities in terms of
annualized fees (compliance cost for this rule) as a percentage of
annual revenues, or the cost-impact ratio.  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 attributable to a regulatory
change.  For purposes of determining small entity impacts, comparing
annual compliance costs to annual revenues provides a reasonable
indication of the magnitude of the regulatory 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 nine different groups of entities: training
providers for certification and refresher courses, public school
districts, private schools, daycare centers, family daycare,
construction contractors (residential and non-residential), and property
lessors and managers (residential and non-residential).  The goal of
this analysis is to evaluate the impacts of the LRRP rule on small
entities in a typical year. Therefore, when presenting the number of
businesses affected, the analysis presents the annual average values,
rather than first or second year numbers.  Furthermore, rather than
considering the first-year cost of initial certification or
accreditation, the fee is annualized given that firms are required to
re-certify every five years and training providers are required to seek
re-accreditation every four years.  The annualized fee depends on the
life of the entity: a firm and or training provider that is in business
for only the first year would incur the highest cost of the fee on an
annual basis while a firm (training provider) that is in business for
five years (four years) would incur the lowest fee on an annual basis. 
Therefore, this analysis presents a range of fee-revenue ratio, from the
lowest annualized cost where a firm (training provider) is in business
for five years (four years) to the highest annualized cost where a firm
or training provider is in business for only one year.   The analysis
considers the impact of re-accreditation and re-certification also for
two scenarios from the highest annualized cost, where a firm or training
provider is in business for the first year of re-certification or
re-accreditation and the life of firm (training provider) is six (five)
years to the lowest annualized cost where a firm (training provider) is
in business for five (four) years from the year of re-certification and
re-accreditation and the life of the firm (training provider) is ten
(eight) years.  

The SBA size standards are measured at the firm or parent company level,
and 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 the firm or parent
organization level for most sectors.  Census information was available
primarily at the establishment level, making an organization-level
analysis unfeasible.  The only sectors where organization-level 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
subsidiaries of larger organizations.  This assumption leads to an
overestimate of the number of small independent entities affected by the
rule.  Furthermore, since organization-level revenues of
multi-establishment businesses are higher than establishment revenues,
the use of establishment data may result in a higher cost-impact ratio
than actually exists.

The cost-impact ratios estimated for the residential and non-residential
real estate industries (NAICS 531110, 531311, 531120, 531312) in this
small entity analysis are based on employment and revenue data for
employer establishments only.  EPA assumed that the majority of
non-residential property lessors and managers are businesses with
employees.  Further, EPA assumed that a self-employed lessor or manager
is likely to hire a contractor to perform work on his property,
particularly in a non-residential building.  

Unit Cost of the Rule

Firms incur an initial certification fee for the first five years and
then incur a re-certification fee in the sixth year. Training providers,
on the other hand, incur either an initial accreditation fee for the
first four years and then incur a re-accreditation fee in the fifth
year. The analysis examines a 5-year period because the certification
and the recertification is valid for 5 years and it covers the time
period for which the accreditation and reaccreditation is valid. 
However, some firms (training providers) may not stay in business for
the full 5-year period (4-year period).  Since the annualized cost of
the fee depends on the life of the firm, as mentioned above, EPA
analyzed two ends of the range – firms and training providers that are
in business for only one year and firms (training providers) that are in
business for the entire five-year (4-year) period.    The annualized
cost of the initial fee would be the highest for a firm or training
provider that is in business only for one year after paying the initial
fee and the annualized cost of the fee would be the lowest for a firm
(training provider) that is in business for five years (four years)
after paying the initial fee. 

Thus, to estimate the impacts of the costs of the rule on small entities
in the affected industries, the following calculations were performed
for each NAICS industry:

Classify certified establishments as either small or large businesses,
depending on their revenues.  EPA combined self-employed contractors
with small employer establishments to form one small business category.
The Agency completed this step in the economic analysis of the LRRP
rule.

Characterize a “typical” small establishment (including revenues and
number of employees) in each of the affected industry sectors using
Census data. EPA completed this step for the economic analysis of the
LRRP rule.

Calculate annualized certification and accreditation fee for an entity
that is in business only in the first year (high estimate) and for a
firm that is in business for five years and  training provider that is
in business for four years (low estimate).  EPA first calculated the
present value of the fee that would be incurred in 2010 in 2007 dollars
and then annualized the fee using a 3 percent discount rate and a time
period equal to one, four and five.

Calculate annualized re-accreditation and re-certification fee for an
entity that is in business only in the first year (high estimate) after
re-accreditation or re-certification, that is for a firm that is in
business for six years and training provider that is in business for
five years, respectively, and for a firm (training provider) that is in
business for five (four) years (low estimate) after re-accreditation and
re-certification, that is for a firm that is in business for ten years
and a training provider that is in business for eight years. EPA first
calculated the present value of the fee that would be incurred in 2015
(for firms) and 2014 (for training providers) in 2007 dollars and then
annualized the fee using a 3 percent discount rate and the appropriate
time period for each type of firm and training provider..

Calculate annualized cost per entity for four types of small firms
(training providers) small in each industry sector: a) Firms and
training providers that are in business for the first year b) Firms
(training providers) that are in business for five years (four years)
c)Firms (training providers) that stay in business for five years (four
years) and one year after incurring re-certification or re-accreditation
fee  d) Firms (training providers) that are in business for the first
five years (four years) after incurring initial fee and stay in business
for five years (four years) after incurring re-certification and
re-accreditation fee.

Calculate cost-impact ratios for the four types of typical small
establishment in each industry sector by dividing the appropriate
annualized fees incurred by the establishment (Step 5) by the
establishment’s revenues (Step 2).

As mentioned above, EPA completed steps 1 and 2 in the recent economic
analysis for the LRRP rule.   REF _Ref197931019 \h  \* MERGEFORMAT 
Table 4-4  below presents the proposed fees; the low and high estimates
for the annualized cost of the fee as described in steps 3 and 4 are
presented in Table 4-7.. 

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  4 :  Proposed Fee

Type of Entity	Proposed Lead Fees1

	Certification	Re-Certification	Accreditation	Re-Accreditation

Small Firms

Renovation Firm 	$300	$300	--	--

Small Training Providers

   Initial Training	--	--	$560	$340

  Refresher Training	--	--	$400	$310

1.  The tribes are only charged a special nominal fee of $20 per firm
and $10 per individual certification.

Small Entities Potentially Affected by the Rule

The economic analysis for the LRRP rule estimated the number of small
entities affected in all industry categories except the training
providers for the 50-year analysis period. Using the third year
estimates developed in that analysis, EPA calculated the 5-year average
number of small entities affected by the lead fees rule.    In each year
of the rule, EPA expects that the number of affected entities will
decline proportionally to the demolition of older households in the
United States.  Consistent with the LRRP analysis, this analysis
estimates that the total stock of affected small entities will decline
by 0.41 percent in each year after 2010.  The 5-year average number of
affected small entities was thus calculated using the following formula:

	

		Annual Average = 

		

	where:

		A1 = First year number of firms

		r = (1 – 0.41% demolition rate), or 0.9959

		n = 5 years covered by the analysis

EPA had also estimated the average revenue for the small entities using
the U.S. Economic Census data for 2002.    REF _Ref197931277 \h  \*
MERGEFORMAT  

Table 4-5  presents the number of small entities by NAICS group and the
average revenue of these estimates adjusted to 2007 dollars.  EPA
estimates that an average of 204,801 small firms and 157 small training
providers will be impacted by the rule. Although a large number of small
entities are impacted by this rule, as we discuss in the next section,
EPA estimates that the cost impact on these entities will be very small.
 

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  5 : Average Number
of Small Entities and Average Small Entity Revenue

NAICS	Industry Description	5-Year Avg. Small Entities Affected \1
Estimated Avg. Small Entity Revenue \2

General and Specialty Contractor Industries

236118	Residential remodelers	44,915	$182,932

236220	Commercial Building Construction	101	$1,750,332

238170	Siding contractors	3,267	$201,569

238350	Finish carpentry contractors	31,894	$100,713

238290	Other building equipment contractors	1,482	$585,771

238390	Other building finishing contractors	2,029	$231,442

238340	Tile and terrazzo contractors	4,556	$130,097

238220	Plumbing and HVAC contractors	16,758	 $432,677 - $850,881 

238150	Glass and glazing contractors	1,351	$336,915

238320	Painting and wall covering contractors	17,852	$86,839 - $380,165

238210	Electrical contractors	12,329	$351,694 - $809,692

238310	Drywall and insulation contractors	7,454	$240,488

Property Owners and Managers

531120	Lessors of nonresidential buildings (except mini-warehouses)
9,141	$117,925

531312	Nonresidential property managers	2,866	$162,616

531311	Residential Property Managers	6,325	$342,477

531110	Lessors of Residential Buildings and Dwellings	17,343	$821,350

Providers of Daycare Services, Pre-Kindergarten, and Kindergarten

624410	Child daycare services	11,383	$292,629

611110	Private Schools	6,705	$1,015,686

611110	Public Schools	7,050	$16,997,060

Training Providers

611519	Other Technical and Trade Schools	157	$859,547 \3

Total	 	204,958	 

\1 EA LRRP rule 

\2 From EA, LRRP rule Updated to 2007 dollars using U.S. BLS CPI data.

\3 U.S. Census Bureau. 2006. "Establishment and Firm Size: 2002
(Including Legal Form of Organization)."  2002 Economic Census.  Updated
to 2007 dollars using U.S. BLS CPI data.

EPA also estimated the total number of small businesses, small
non-profits and small governments affected by the rule and their average
revenues (  REF _Ref197959717 \h  \* MERGEFORMAT  Table 4-6 ).  EPA
estimates that of the 204,958 small entities that would be affected by
this proposed rule, 179,820 are small businesses, 18,088 are small
non-profits and 7,050 are small governments.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  6 : Aggregate
Small Entity Numbers and Revenues

Small Entities	Number of Small Entities Affected	Average Revenue

Small Governments	7,050	$16,997,060

Non-Profit Organizations	18,088	$292,629 - $1,015,686

Small For-Profit Businesses	179,820	$93,196 -  $2,017,329

Total	204,958	$93,196 - $16,997,060

Impacts on Small Entities Affected by the Rule

EPA estimated the impacts of the rule on each of the small entities by
comparing the costs of the rule incurred by an establishment to the
establishment’s revenues for four types of entities ranging from low
to high cost impact:  a) Firms and training providers that are in
business for the first year  b) Firms (training providers) that are in
business for five years (four years) c) Firms (training providers) that
stay in business for the first five years (four years) after incurring
initial fee and one year after incurring re-certification or
re-accreditation fee -- a total of six (five) years in business  d)
Firms (training providers) that stay in business for first five years
(four years) after incurring initial fee and stay in business for
another five (four) years) after incurring re-certification and
re-accreditation fee -- a total of ten (eight) years in business).  To
measure the cost impact for each of these types of entities, EPA
calculated the appropriate annualized fee to estimate the cost-revenue
ratio using the average revenues from   REF _Ref197931277 \h  \*
MERGEFORMAT  

Table 4-5  above.  

Table 4-7 presents the annualized cost of the fee for each of these
typical entities below.  EPA notes that the entities that are in
business only for one year incur the highest fee on an annual basis
followed by entities who stay in business for five years (four years)
after paying initial fee and for one year after the re-certification or
re-accreditation fee.  Since the fee is highest for training providers,
the small training providers that stay in business for only one year
have the highest annualized fee ($528).

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  7 . Average
Annualized Cost per Entity (Steps 3, 4 and 5)

 Entities	Certification	Re-Certification	Accreditation	Re-Accreditation
Total Annualized Cost

Small LRRP Firms, Small Governments and Non-Profit Organizations

Firms in business for 1 year	$283	$0	--	--	$283

Firms in business for 5 years	$62	$0	--	--	$62

Firms in business for 6 years	$52	$45	--	--	$97

Firms in business for 10 years	$33	$29	--	--	$62

Training Providers –Initial Training

Training Providers in business for 1 year	--	--	$528	$0	$528

Training Providers in business for 4 years	--	--	$142	$0	$142

Training Providers in business for 5 years	--	--	$115	$62	$177

Training Providers in business for 8 years	--	--	$75	$41	$116

Training Providers –Refresher Training 

Training Providers in business for 1 year	--	--	$377	$0	$377

Training Providers in business for 4 years	--	--	$101	$0	$101

Training Providers in business for 5 years	--	--	$82	$57	$139

Training Providers in business for 8 years	--	--	$54	$37	$91

EPA calculated separate cost-revenue ratios for residential,
non-residential contractors and training providers, and within
non-residential contractors EPA estimated separate cost-revenue
estimates for non-residential contractors because of the difference in
the average estimated revenues across these categories (Table 4-5)  

Among the non-residential contractors, the public schools had the
highest average revenue and Public and Commercial Building (PCB)
landlords have the lowest average revenue.  In fact, the revenue of PCB
landlords was the smallest across all firms and training providers.
Accordingly, the impact of the rule is the smallest for the public
schools (ranging from low estimate of 0.0004 percent to high estimate of
0.002 percent) and highest for PCB landlords (ranging from 0.05 percent
to 0.22 percent). Within each category, EPA examined the impact on four
different types of firms and training providers ranging from low to high
estimate.  EPA estimates that PCB landlords that stayed in business for
only one year after initial certification have a cost-revenue ratio of
0.22 percent.  This is the highest cost-revenue ratio impact for any
entity across all types of industries. Thus, EPA does not expect any
significant impact of this rule on small firms.  The detailed
cost-revenue ratio across all categories is provided in detail in Table
4-8 and   REF _Ref197963087 \h  \* MERGEFORMAT  Table 4-9 .

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  8 . Cost to
Revenue Ratio for Small Firms by types of Entities (2007$)

Entity Type	Total Annualized Cost	Average Small Entity Revenue
Cost-to-Revenue Ratio

Small Residential Contractors and Real Estate Industries

Firms in business for 1 year	$283	$309,483	0.09%

Firms in business for 5 years	$62	$309,483	0.02%

Firms in business for  6 years	$97	$309,483	0.03%

Firms in business for 10 years	$62	$309,483	0.02%

Total  Regulated Small Entities 	164,545

Public and Commercial Building Contractors

Firms in business for 1 year	$283	$875,957	0.03%

Firms in business for 5 years	$62	$875,957	0.01%

Firms in business for  6 years	$97	$875,957	0.01%

Firms in business for 10 years	$62	$875,957	0.01%

Total  Regulated Small Entities 	3,111

Public and Commercial Building Landlords

Firms in business for 1 year	$283	$128,462	0.22%

Firms in business for 5 years	$62	$128,462	0.05%

Firms in business for  6 years	$97	$128,462	0.08%

Firms in business for 10 years	$62	$128,462	0.05%

Total  Regulated Small Entities 	12,007

Center Daycare

Firms in business for 1 year	$283	$292,629	0.10%

Firms in business for 5 years	$62	$292,629	0.02%

Firms in business for  6 years	$97	$292,629	0.03%

Firms in business for 10 years	$62	$292,629	0.02%

Total  Regulated Small Entities 	11,383

Private School

Firms in business for 1 year	$283	$1,015,686	0.03%

Firms in business for 5 years	$62	$1,015,686	0.01%

Firms in business for  6 years	$97	$1,015,686	0.01%

Firms in business for 10 years	$62	$1,015,686	0.01%

Total  Regulated Small Entities 	6,705 

Public School

Firms in business for 1 year	$283	$16,997,060	0.002%

Firms in business for 5 years	$62	$16,997,060	0.0004%

Firms in business for  6 years	$97	$16,997,060	0.001%

Firms in business for 10 years	$62	$16,997,060	0.000%

Total  Regulated Small Entities 	7,050 

All Small Firms

Firms in business for 1 year	$283	$904,147	0.031%

Firms in business for 5 years	$62	$904,147	0.007%

Firms in business for  6 years	$97	$904,147	0.011%

Firms in business for 10 years	$62	$904,147	0.007%

Total  Regulated Small Entities 	204,801

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  9 .
Cost-to-Revenue Ratio for Training Providers

	Total Annualized Cost	Average Small Entity Revenue	Cost-to-Revenue
Ratio

Training Providers –Initial Training

Training Providers in business for 1 year	$528	$859,547	0.061%

Training Providers  in business for 4 years	$142	$859,547	0.017%

Training Providers  in business for 5 years	$177	$859,547	0.021%

Training Providers  in business for 8 years	$116	$859,547	0.013%

Training Providers –Refresher Training

Training Providers in business for 1 year	$377	$859,547	0.044%

Training Providers  in business for 4 years	$101	$859,547	0.012%

Training Providers  in business for 5 years	$139	$859,547	0.016%

Training Providers  in business for 8 years	$91	$859,547	0.011%

Total  Regulated Small Entities 	157

EPA also estimated the aggregate small entity impact for small
governments, non-profit organizations and small for-profit businesses
(Table 4-10).  EPA estimates that small for-profit businesses would have
an average impact ranging from 0.007% to 0.220%, small non-profits would
have an average impact ranging from 0.006% to 0.097% and 7,050 and small
governments would have an average impact ranging from 0.0004% to 0.002%.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  10 . Aggregate
Small Entity Impacts

	 

Number of Small Entities Affected	 

Average Revenue	 

Annualized Fee	Cost Impact

Minimum	Maximum

Small Governments	7,050	$16,997,060	$62 - $283	0.0004%	0.002%

Non-Profit Organizations	18,088	$292,629 - $1,015,686	$62 - $283	0.006%
0.097%

Small For-Profit Businesses	179,820	$93,196 -  $2,017,329	$62 - $528
0.007%	0.220%

Total	204,958	$93,196 - $16,997,060	$62 - $528	0.0004%	0.220%

Conclusion

EPA estimates that small entities will not be adversely affected by the
change in accreditation and certification fees for the Abatement rule
because the rule is reducing in the fees for training providers,
resulting in cost savings to the small entities.  EPA estimates that
firms will also not be adversely impacted:  Firms incur a 2 percent to
28 percent cost increase in the direct fee, and indirectly via fee
increases for individuals (2 to 29 percent).  In 1999 EPA had estimated
that the highest cost-revenue ratio for firms was 0.87 percent. This
implies that the cost-revenue impact of any increase in the fees less
than the full amount of the original fees will be no more than 0.87
percent and will not be significant. 

For the LRRP rule, EPA estimates that the small entities that are
potentially directly regulated by this rule include: small for-profit
businesses (including abatement and renovation contractors,
environmental testing firms, and property owners and managers); small
nonprofits (including day care centers, private schools, and advocacy
groups); and small governments (local governments, school districts).
EPA estimates that there are an average of 204,958 small entities that
would be affected by this proposed rule.  Of these, there are an
estimated 179,820 small businesses with an average impact ranging from
0.007% to 0.220%, 18,088 small non-profits with an average impact
ranging from 0.006% to 0.097%, and 7,050 small governments with an
average impact ranging from 0.0004% to 0.002%.

Appendix A.  Total Number of Applications by Type of Application and
Number of Regions for FY2003-FY2006

Type of Application

	Number of Regions

	0	1	2	3	4	5	6	7	8	9

Training Program Accreditation	0	69	12	0	0	0	3	0	0	0

 	Inspector	0	11	3	0	0	0	1	0	0	0

 	Risk Assessor	0	11	3	0	0	0	1	0	0	0

 	Supervisor	0	15	3	0	0	0	1	0	0	0

 	Worker	0	32	3	0	0	0	0	0	0	0

 	Project Designer	0	0	0	0	0	0	0	0	0	0

Refresher Training Program Accreditation	0	70	14	0	0	0	6	0	0	0

 	Inspector	0	12	4	0	0	0	4	0	0	0

 	Risk Assessor	0	12	4	0	0	0	1	0	0	0

 	Supervisor	0	17	3	0	0	0	1	0	0	0

 	Worker	0	28	3	0	0	0	0	0	0	0

 	Project Designer	0	1	0	0	0	0	0	0	0	0

Training Program RE-accreditation	2	224	45	7	4	0	4	0	0	0

 	Inspector	0	43	10	2	1	0	1	0	0	0

 	Risk Assessor	0	42	10	2	1	0	1	0	0	0

 	Supervisor	1	62	12	2	1	0	1	0	0	0

 	Worker	1	77	13	1	1	0	1	0	0	0

 	Project Designer	0	0	0	0	0	0	0	0	0	0

Refresher Training Program Re-accreditation	2	231	44	2	4	0	5	0	0	0

 	Inspector	0	42	9	1	1	0	1	0	0	0

 	Risk Assessor	0	41	9	1	1	0	1	0	0	0

 	Supervisor	1	59	12	0	1	0	1	0	0	0

 	Worker	1	72	11	0	1	0	1	0	0	0

 	Project Designer	0	17	3	0	0	0	1	0	0	0

Firm Certification	6	2120	64	14	5	0	0	0	1	0

 	Firm Certification	5	1278	33	2	1	0	0	0	1	 

 	Firm Certification Extension	1	842	31	12	4	0	0	0	0	0

Individual Certification	41	4887	77	14	0	0	0	0	0	1

 	Inspector	4	1146	13	1	0	0	0	0	0	0

 	Risk Assessor	11	1231	39	7	0	0	0	0	0	0

 	Supervisor	21	1362	12	2	0	0	0	0	0	1

 	Worker	4	1146	13	4	0	0	0	0	0	0

 	Project Designer	1	2	0	0	0	0	0	0	0	0

Individual RE-certification	10	3224	85	24	5	2	0	0	0	0

 	Inspector	1	270	4	0	1	0	0	0	0	0

 	Risk Assessor	4	1391	35	20	4	2	0	0	0	0

 	Supervisor	3	777	22	1	0	0	0	0	0	0

 	Worker	1	754	22	2	0	0	0	0	0	0

 	Project Designer	1	32	2	1	0	0	0	0	0	0

TOTAL FY2003-FY2006 

(without Amendments)	61 	10,825 	341 	61 	18 	2	18 	 - 	1	1

Appendix B.  Regions 2, 4 and 9 Time-Motion Study - Oct-Nov 2007

	All calculated times below are minutes or hours per application

Application Type	Certification/ 

Re-certification	Discipline	REGION 2	REGION 4	REGION 9	REGION 2	REGION 4
and 9/2

Worker	Inspector	Project Designer	Risk Assessor	Supervisor	Number of
Applications (Completed)	Processing Time per Application (Minutes)
Processing Time per Application (Hours)	Number of Applications
(Completed)	Processing Time per Application (Minutes)	Processing Time
per Application (Hours)	Number of Applications (Completed)	Processing
Time per Application (Minutes)	Processing Time per Application (Hours)
Processing Time for Applications in Region 2 (Hours/Application)
WEIGHTED AVERAGE Processing Time for Applications in Region 4 and 9
(Hours/Application)

	Firm	Initial	 	 	 	 	 	27	25	0.4	 	 	 	3	88	1.5	0.4	1.5

Firm	Recertification	 	 	 	 	 	22	26	0.4	 	 	 	4	80	1.3	0.4	1.3

Individual	Initial	x	 	 	 	 	 	32	0.5	 	 	 	 	85	1.4	0.5	1.8

Individual	Initial	 	x	 	 	 	 	28	0.5	 	95	1.6	 	 	 	0.5

	Individual	Initial	 	 	 	x	 	 	32	0.5	 	110	1.8	 	120	2	0.5

	Individual	Initial	 	 	 	 	x	 	33	0.6	 	110	1.8	 	120	2	0.6

	Average/1:	131	31	1	6	105	2	8	108	2	0.5

	Individual	Recertification	x	 	 	 	 	 	38	0.5	 	70	1.2	 	86	1.4
0.5	1.4

Individual	Recertification	 	x	 	 	 	 	34	0.5	 	85	1.4	 	85	1.4
0.5

	Individual	Recertification	 	 	 	x	 	 	31	0.5	 	 	 	 	85	1.4
0.5

	Individual	Recertification	 	 	 	 	x	 	36	0.5	 	 	 	 	83	1.4
0.5

	Average/1:	156	35	1	3	78	1	11	85	1	0.5

	Individual	Disapproval	 	x	 	x	x	5	54	0.6	 	 	 	3	105	1.8	0.6	1.8

Individual	Reciprocity	 	 	 	x	 	1	69	0.6	 	 	 	2	88	1.5	0.6	1.5

Training Provider	Accreditation	x	x	 	x	x	 	-	-	 	 	 	3	1566	26.1
8.5	26.1

Training Provider	Reaccreditation	x	x	x	 	x	1	89	1.5	 	 	 	 	0	0.0
1.5	4.5

/1 Individual estimates for processing time per application were
separated by discipline, but no significant difference was found in the
processing time between disciplines. The Lead Fees Analysis, therefore,
uses the averaged values for processing time of individual applications.

/2 Regions 4 and 9 are averaged to estimate the processing time estimate
for all other regions.

Appendix C		EPA Labor Rates

EPA used the following labor rates for SEE and EPA staff to estimate the
cost per application.  EPA assumed an overhead rate of 160 percent when
calculating the loaded rate. 

Senior Environmental Employee (SEE) Wage Level

Position Level	Entry Wage	Maximum For Wage Level	Midpoint Wage, Unloaded
Midpoint Wage, Loaded

Level I – Clerical/Non-Typing	$6.92 	$9.23 	$8.08 	$12.92 

     Messenger 	  	  	 	 

     Receptionist	  	  	 	 

     Filing Clerk	  	  	 	 

    Copy Machine Operator 	  	  	 	 

Level II – Clerical/Typing	$8.36 	$11.53 	$9.95 	$15.91 

     Clerk-typist	  	  	 	 

     Administrative Assistant	  	  	 	 

     Secretary 	  	  	 	 

Level III – Technical (Non-degree) 	$9.80 	$13.25 	$11.53 	$18.44 

      Writer-Editor	  	  	 	 

      Technical researcher	  	  	 	 

      Administrative Specialist 	  	  	 	 

Level IV – Professional (Degree) 	$12.11 	$17.29 	$14.70 	$23.52 

      Engineer	  	  	 	 

      Scientist	  	  	 	 

      Web Master 	  	  	 	 

Source: National Asian Pacific Center on Aging
(http://www.napca.org/default.aspx?tabid=79), downloaded 1/30/2008

EPA Wage Level

Labor Rates	Level	1999 Hourly Rate	2008 Hourly Rate	Loaded Wage	Annual,
Loaded \1

Clerical	GS-6, Step 1	$11.00	$14.03	$22.45	$46,692

Technical	GS-11, Step 1	$18.08	$23.07	$36.91	$76,777

Technical	GS-12, Step 2	$22.40	$28.57	$45.71	$95,081

Managerial	GS-13, Step 1	$25.78	$32.88	$52.61	$109,425

	Average:	19.315	24.6375

Percent Increase in Wage from 1999 to 2008:	27.6%

\1 Assumes 2,080 hours per year for a full-time employee. 

Source: Office of Personnel Management Wage Tables, 2008 General
Schedules, (http://www.opm.gov/oca/08tables/pdf/gs_h.pdf)

Appendix D		Regional Responses to Administrative and Enforcement Cost
Questions

Administrative and enforcement cost data were gathered for Regions 2, 4,
and 9 for this analysis.  The table below outlines the data as received
from the Regions. 

Application Types	Employee Level

	SEE Clerical	SEE Technical	EPA Clerical	EPA Technical	EPA Managerial

Region 2:  Number of Hours Spent on Administrative Activities 

Number of hours spent in 2006	1.75 FTE (unspecified)

Region 2:  Number of Hours Spent on Enforcement Activities 

Number of hours spent in 2006

1 FTE

	Region 4:  Number of Hours Spent on Administrative Activities 

Number of hours spent in 2006

0

540

	Number of hours spent in 2005

0

546

	Number of hours spent in 2004

	Region 4:  Number of Hours Spent on Enforcement Activities 

Number of hours spent in 2006

48 hours**

0

	Number of hours spent in 2005

96 hours**

0

	Number of hours spent in 2004

	Region 9:  Number of Hours Spent on Administrative Activities 

Number of hours spent in 2006	0	800 (2SEEs)	0	50	40

Number of hours spent in 2005	0	400 (2SEEs)	0	100	50

Number of hours spent in 2004	0	400 (2SEEs)	0	20	40

Region 9:  Number of Hours Spent on Enforcement Activities 

Number of hours spent in 2006	0	828 (1 SEE)	0	20	40

Number of hours spent in 2005	0	1130 (1SEE)	0	40	60

Number of hours spent in 2004	0	1030 (1 SEE)	0	40	50

Appendix E		Estimation of Number of LRRP Firms with Annual Revenues of
less than $25,000 

Data from the 2002 U.S. Census of Construction form the basis for
EPA’s estimates of the number of LRRP firms that will be affected by
the LRRP rule.  For establishments with employees, the Census publishes
data on the number of establishments in various revenue brackets.  For
non-employer establishments (i.e. firms without employees), however, the
Census only publishes their average revenue, by NAICS category..  

Periodically, Harvard University’s Joint Center for Housing publishes
a report on the renovation industry.  In their latest report: 
Foundations for Future Growth in the Remodeling Industry, they published
estimates of the number of non-employer remodeling firms by revenue
bracket for firms with revenues above $25,000.  They argue that
renovators making less than $25,000/year are only part-time operations
and thus are not included in their analysis.  They do estimate, however,
that in 2002 there were approximately 330,000 non-employer residential
remodeling firms with annual revenues of $25,000 or more, and
approximately 383,000 non-payroll residential remodeling firms with
annual revenues of less than $25,000.  

The Joint Center for Housing estimates cannot be used directly for two
reasons:

Some of the contractor categories they include are not included in the
EPA estimates because these categories are not involved in operations
that are likely to disturb lead-based paint, roofers for example.

Even among the contractor categories whose activities are of a nature
that might disturb lead-based paint, if they are working in homes or
COFs that do not have lead-based paint (e.g. are built after 1978), they
do not need to be certified. 

Thus EPA made the following adjustments in estimating the number of
regulated non-employer establishments in the above and below $25K
categories:

Remove from the Joint Center list any specialty contractors not included
(e.g. concrete and structural steel).  Adjust their estimate of less
than $25K non-payroll firms in the same proportion.  Calculate a revised
total number of non-payroll firms.

Calculate the ratio of EPA total non-employer firms to the revised
non-payroll firms for general renovation, and for specialty contractors.

Apply this percentage to their estimates of total firms with annual
revenues of $25K or more – treating general building contractor as one
category and summing the specialty firms for a second category.

Subtract the resulting estimates from the EPA totals to get the number
of non-payroll firms with revenues of less than $25K in each of these
two categories.

See following tables for estimates of contracting firms and for various
property owners and managers.  There are no non-payroll firms in the
property owners and mangers categories – so the Census data can be
used directly for them.



Table E-1.  Estimation of Non Employers with Revenues of Less Than
$25,000

	Small Employer and Non-Employer Firms	 	 	 	 	 

 	Employer Firms*	Non-Employer Firms**	Total, All Firms

Industry	Total	Less than $25k	Total	Less than $25k	Total	Less than $25k

General Remodelers	13,395	51	31,519	10,727	44,915	10,778

Specialty Remodelers	25,881	444	73,193	40,035	99,074	40,479

Lessors and Property Managers	35,674	1,181	N/A	N/A	35,674	1,181

Training Providers	157	4	N/A	N/A	157	4

*  EA LRRP rule

**  Based on Joint Center data – see following tables.

	Table E-2.  Ratio of EPA LRRP Non-Employer Data to Joint Center
Non-Employer Data

	 	Total Non Employer Remodelers	>25k	<25k

	JCHS Data	640,672	296,567	344,105

	EPA data on LRRP	104,712

	Ratio	16%

	

Table E-3.   JCHS Data

 	Total	NAICS Match	Included in Estimate

	General Building Contractors	127,216	236118	Yes

	Special Trade Contractors	202,873

	Concrete and Structural Steel	2,874

	Framing	3,895

	Masonry	5,072

	Building Exterior, Glazing and Foundation	2,400	238150	Yes

	Roofing	12,315

	Siding	8,716	238170	Yes

	Plumbing, HVAC and Electrical	38,503	238220	Yes

	Drywall and Insulation	4,875	238310	Yes

	Painting	44,087	238320	Yes

	Flooring, Tile and Other

	 

	Finishing	33,950	238390	Yes

	Finish Carpentry	36,820	238350	Yes

	Site Prep and Other	9,366

 

	Total	330,089	 	 

	Table E-4.  Number of Joint Center Non-Employer Establishments
Regulated under the LRRP rule

Adjusted by Ratio	 

	General Building Contractors	20,792

	Special Trade Contractors	33,158

	Source: Joint Center for Housing Studies of Harvard University.  2007. 
Foundations for Future Growth in the Remodeling Industry.  Appendix A-8,
page 34.

 EPA Lead in Paint, Dust and Soil – Lead Professionals Website. < 
HYPERLINK "http://www.epa.gov/lead/pubs/traincert.htm" 
http://www.epa.gov/lead/pubs/traincert.htm > Viewed on May 5, 2008. 

 See U.S EPA, Lead in Paint, Dust and Soil, Training and Certification
Program for Lead-Based Paint Activities in Target Housing and Child
Occupied Facilities - Section 402/404, 64 Fed. Reg. 31,092 (June 9,
1999)  (  HYPERLINK "http://www.epa.gov/lead/pubs/leadcert.htm" 
http://www.epa.gov/lead/pubs/leadcert.htm , viewed on May 9, 2008). 

 Region 3 is not included in this analysis because all states have
authorized programs and there were no applications processed during the
analysis period from FY 2003 through FY 2006, as reported in the FLPP
Database.  Regions 1, 5 and 7 have only state-authorized programs as
well, but processed applications (e.g. from Tribal Areas) during the
time period as reported in the FLPP database.  Therefore, Regions 1, 5,
and 7 are included in this analysis because they contribute to the total
number of applications processed.

 Regions 2 and 4 indicated that administrative costs are not necessarily
proportional to the number of applications

 The alternate approach analyzed was the fixed ratio method. In this
approach, the Regional administrative costs for each type of
accreditation or certification (e.g., supervisor training program
accreditation, firm certification) would be multiplied by a fixed ratio
to determine the portion of other costs each applicant would pay.

 See Economic Analysis of the Final TSCA Section 402(a)(3) Lead-Based
Paint Accreditation and Certification Fee Rule, February, 26, 1999, page
ES-7. 

 See Economic Analysis of the Final TSCA Section 402(a)(3) Lead-Based
Paint Accreditation and Certification Fee Rule, February, 26, 1999, page
ES-7. 

 Note that given the minimal percentage of tribal entities that will
likely seek accreditation and certification, EPA has not estimated the
shortfall of revenues from tribes that would need to be captured by
other applicants to cover the costs of the Abatement rule.  

 Total costs for each applicant type reflect the contract costs plus the
maintenance cost ($180,000) weighted by the number of applications.    

 Note that given the minimal percentage of tribal entities that will
likely seek accreditation and certification, EPA has not estimated the
shortfall of revenues from tribes that would need to be captured by
other applicants to cover the costs of the LRRP rule.  

 Economic Analysis of the Final TSCA Section 402(a)(3) Lead-Based Paint
Accreditation and Certification Fee Rule. U.S. EPA, 1999.

 The tribes are charged a nominal fee of $20 per firm and $10 per
individual certification, therefore tribes will incur even greater
savings.  

 Economic Analysis of the Lead, Renovation, Repair and Painting Rule,
U.S EPA, 2008.

 For private schools, where adequate revenue data were not available,
costs are compared to annual expenditures.  

 In the case of Training Providers, accreditation is for 4 years, not 5.
 This adjustment will be made in the next version.  It will increase the
impact ratio for those Training Providers who are in business for more
than three years, but it will not change the high end of the impact
ratio – those training providers that need to pay the full cost out of
one-years’ revenues.

 Chapter 8, Economic Analysis of the Lead, Renovation, Repair and
Painting Rule, U.S EPA, 2008.

 Chapter 8, Economic Analysis of the Lead, Renovation, Repair and
Painting Rule, U.S EPA, 2008.

 Third year estimates were appropriate because although the LRRP rule
does not become effective until 2010, the LRRP rule analysis period
began in 2008.  

 Of the estimated 179,820 small general and specialty contractors,
property owners and managers and training providers, approximately
52,000 have annual revenues of less than $25,000.  See Appendix E for
details.  

 The tribes are charged a nominal fee of $20 per firm and $10 per
individual certification, therefore the cost-revenue impact for tribes
will incur even greater savings.  

 Foundations for Future Growth in the Remodeling Industry, 2007, Joint
Center for Housing Studies of Harvard University, Appendix A-8, page 34.

20 June 2008 Lead Fees Economic Analysis	

20 June 2008 Lead Fees Economic Analysis	

 PAGE   

20 June 2008 Lead Fees Economic Analysis	

50

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